EXHIBIT 10.16
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
$100,000 Issue Date: April 15, 2005
FOR VALUE RECEIVED, Penge Corp., a Nevada corporation (the "Company"), hereby
promises to pay to the order of Xxxxx Xxxxxx (the "Holder") in lawful money of
the United States at the address of the Holder set forth below, the principal
amount of One Hundred Thousand Dollars ($100,000) 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 a twenty four month note.
o The note carries quarterly interest payments due on the 1st of
each quarter beginning August 1st, 2005.
o A $100,000 balloon of the principal is due 24 months after funds
are received by the Company.
o The Holder will receive a UCC1 lien filed in the state of
Arizona against $400,000 in inventory.
2. MATURITY DATE. The entire outstanding principal balance of this Note, and any
unpaid accrued interest, shall be due and payable in full on the date that is 24
months after funds are received by the Company 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.
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7. GOVERNING LAW. The terms of this Note shall be construed in accordance with
the Laws of the State of Nevada as applied to contracts entered into by Nevada
residents within the State of Nevada, which contracts are to be performed
entirely within the State of Nevada.
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 14,400 trees on Xxxxx's Major Trees
Arizona Farm as collateral for this note and agreement. These trees sold in 2004
for an average wholesale price of $26 per tree. So 14,400 trees @ $26 per tree
equals approximately $400,000 worth of wholesale value being provided to the
Holder as collateral (Four times the $100,000 value of the note).
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 Holder could
liquidate the product at $.25 on the dollar (around $6.25 per tree) and recoup
100% of principal.
The trees will be secured by UCC-l filing within 20 days of the funding of this
note, filed by the Company in the state of Arizona.
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the date
first written above.
PENGE CORPORATION
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
Title: CEO
Date: April 15, 2005
Lender:
Name: Xxxxx Xxxxxx
Signature: /s/ Xxxxx Xxxxxx
----------------------
Date: _________________________
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