EXHIBIT 10.3
THIS NOTE AND THE COMMON STOCK OF THE COMPANY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. AS AMENDED (the "ACT"), OR QUALIFIED UNDER ANY STATE
SECURITIES LAWS AND HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH
A VIEW TO OR FOR SALE IN CONNECTION WITH ANY DISTRIBUTION THEREOF. THIS NOTE AND
THE COMMON STOCK OF THE COMPANY MAY NOT BE SOLD, ASSIGNED, OR OTHERWISE
TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER
CONCURRED IN BY COUNSEL FOR THE COMPANY THAT REGISTRATION AND QUALIFICATION ARE
NOT REQUIRED.
PENGE CORP.
PROMISSORY NOTE
$ 150,000 Issue Date: November 21, 2006
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FOR VALUE RECEIVED, Penge Corp., a Delaware corporation (the "Company"), hereby
promises to pay to the order of Xxxx Xxxxxxxx (the "Holder") in lawful money of
the United States at the address of the Holder set forth below, the principal
amount of One Hundred Fifty Thousand Dollars ($150,000), with simple interest at
the rate of twelve percent (12.0%) per annum.
Interest will be calculated on a 365-day year for the actual number of days
elapsed and shall commence on the Issue Date and continue on the outstanding
principal until paid in full or converted as provided below.
l. PURCHASE TERMS. This note (the "Note") is issued pursuant to the terms
outlined below
o The note is an approximately 24 month note.
o The note carries quarterly interest payments due the 1st of each quarter
beginning March 1, 2007 with interest prorated based on receipt of funds.
o A $150,000 balloon of the principal is due on November 1, 2008
o The Holder will receive a UCC1 lien filed in the state of Texas against
$300,000+ of nursery collateral listed below.
o The Holder will receive personal guarantees from Xxxx Xxxxxxx, CEO, and XX
Xxxxxx, President of Penge Corp.
o The Holder will receive a stock bonus of Penge Corp common stock of 50,000
shares.
2. MATURITY DATE. The entire outstanding principal balance of this Note, and any
unpaid accrued interest, shall be due and payable in full on November 1, 2008
unless prepaid or converted by the Holder prior to the Maturity Date pursuant to
the terms of this Note.
3. PAYMENT. All amounts payable hereunder shall be paid by the Company in
immediately available and freely transferable funds at the place designated by
the Holder to the Company for such payment.
4. SUCCESSORS AND ASSIGNS. All covenants, agreements and undertakings in this
Note by or on behalf of any of the parties shall bind and inure to the benefit
of the respective successors and assigns of the parties whether so expressed or
not.
5. SEVERABILITY. If any provision of the Note is held to be illegal, invalid or
unenforceable under any present or future law, then: (i) such provision, or any
portion thereof, shall be fully severable; (ii) this Note will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof; (iii) the remaining provisions of this Note shall
remain in full force and effect and shall not be affected by the illegal.
invalid or unenforceable provision or its severance from this Note; and (iv) in
lieu of such illegal, invalid or unenforceable provision there will
automatically be added as a part of this Note a legal, valid and enforceable
provision on terms as substantially similar as possible to the terms of the
illegal, invalid or unenforceable provision.
6. AMENDMENT. This Note and any provision hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the Company
and the Holder.
7. GOVERNING LAW. The terms of this Note shall be construed in accordance with
the Laws of the State of Delaware as applied to contracts entered into by
Delaware residents within the State of Delaware, which contracts are to be
performed entirely within the State of Delaware.
8. NOTICE. Any notice or other communication provided for under this Note shall
be in writing and shall be sent by (a) personal delivery, (b) registered or
certified mail (return receipt requested) or (c) nationally recognized overnight
courier service, to Company or to the Purchaser at their respective addresses
set forth on the signature pages of the Agreement. A notice or other
communication shall be deemed to have been duly received (a) if personally
delivered, on the date of such delivery, (b) if mailed, on the date set forth on
the signed return receipt or (c) if delivered by overnight courier, on the date
of actual delivery (as evidenced by the receipt of the overnight courier
service).
9. COLLATERAL. The Company agrees to provide the collateral listed below:
All trees, shrubs, and other inventory on Penge Corp's Texas Landscape
Center at 0000 Xxxxx Xxxxxxxxxxx, Xxxxxxx, Xxxxx 00000 as collateral for this
note and agreement (approximately $300,000 - $350,000 in value).
In the event of default, the Company also agrees to assist the Holder in picking
up the already potted trees and liquidating them to existing Company customers
and to other retail outlets that the Company is familiar with.
The collateral will be secured by UCC-l filing within 10 days of the signing of
this note, filed by the Company in the state where the collateral is located.
10. CONVERSION OF THE NOTE TO PENGE COMMON STOCK. The note holder will also
receive a two year option to convert this debt into Penge Corp. common stock.
The conversion price is fixed at $0.55 cents for the life of this note.
o The Holder may elect to exercise the option to convert to stock by
notifying the Company in writing during the exercise periods, of their
intention to convert part or all of this promissory note into common stock.
o The Company agrees to give the Holder piggy back registration rights and to
register the shares into the next available registration statement at no
cost to the Holder.
o The Company agrees to give the Holder the right to convert any part of
the loan to stock at any time within the loan period. The Holder may
convert any part of the loan as many times as the Holder elects during
the period.
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date
first written above.
PENGE CORPORATION
By: /s/_____________________________
Name: XX Xxxxxx
Title: President, Penge Corp
Date: November 21, 2006
PERSONAL GUARANTEES
By: /s/_____________________________
Name: XX Xxxxxx
By: /s/_____________________________
Name: Xxxx Xxxxxxx
Date: November 21, 2006
LENDER:
Signature: /s/ __________________________________________________
Name: Xxxx Xxxxxxxx
Address: 0000 Xxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000
Date: November 21, 2006
