Exhibit 10.9
Senior Note dated October 5, 2002 in the amount of $382,500 between NatureWell,
Incorporated ("Debtor") and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Holder")
SENIOR NOTE
$382,500 La Jolla, California October 5, 2002
FOR VALUE RECEIVED, the undersigned, NatureWell, Incorporated, a Delaware
corporation ("Debtor"), promises to pay to the order of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an
individual, or order ("Holder"), at____________ /illegible/_______, or such
other place as Holder may designate in writing, the principal amount of Three
Hundred Eighty-Two Thousand Five Hundred Dollars ($382,500), together with
interest on the unpaid principal balance from time to time outstanding, at a
rate (the "Interest Rate") equal to Ten Percent (10%) per annum.
1. REPAYMENT SCHEDULE. Principal and interest are payable in United
States currency and shall be due and payable pursuant to the schedule on
Exhibit A. Interest shall be computed on a simple interest basis by applying
the ratio of the annual interest rate divided by the number of days in the year
times the outstanding principal balance times the actual number of days the
principal balance is outstanding.
2. SECURITY AGREEMENT. This Senior Note is secured by that certain
Security Agreement (the "Security Agreement") of even date herewith between
Holder and Debtor granting Holder a senior security interest in Debtor's
certain assets (the "Assets") and such other items set forth more fully in the
Security Agreement (collectively, the "Collateral"). If Debtor (i) defaults
under the terms of this Senior Note or the Security Agreement, or (ii) sells,
conveys, alienates, assigns, further encumbers, or transfers the Assets or any
portion thereof, or any interest therein, or enters into an agreement to do so,
or becomes divested of title or any interest in any manner or method, whether
voluntarily or involuntarily or by operation of law, Holder shall have the
right to declare the entire principal and accrued interest of this Senior Note
immediately due and payable without notice or demand and no waiver of this
right shall be effective in writing unless signed by ▇▇▇▇▇▇.
3. SENIOR INDEBTEDNESS. Debtor covenants and agrees that the payment
from whatever source of the indebtedness of Debtor evidenced by this Senior
Note, including the principal of and interest and any other amounts payable
hereon, shall be senior in right of payment, to the extent and in the manner
hereinafter set forth, to the payment in full of all Other Indebtedness (as
defined below).
"Other Indebtedness" means all indebtedness from banks or other
institutional financiers and other obligations payable directly or indirectly
by Debtor, whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed by Debtor, including, but not limited to,: (i)
the principal of and interest on all loans, letters of credit and other
extensions of credit; (ii) the principal of and interest on all other
indebtedness of Debtor, and (iii) amounts payable to trade creditors.
4. PREPAYMENT. Debtor has the right to prepay in whole or in part the
unpaid principal balance of this Senior Note at any time.
5. LATE CHARGES. Debtor acknowledges that any late payment to Holder
will cause Holder to incur costs not contemplated by this Senior Note.
Therefore, if payment is not made within fifteen (15) days after the due date
for that payment, Debtor shall pay to Holder an additional sum of five percent
(5%) of the overdue amount as a late charge. The parties agree that this late
charge represents a fair and reasonable sum considering all of the
circumstances existing on the date of this Senior Note. Acceptance of any late
charges shall not constitute a waiver of default with respect to the overdue
amount, and shall not prevent Holder from exercising any of the other rights
and remedies available to it.
6. DEFAULT. Debtor will be in default if any of the following occur:
(a) Debtor fails to make any payment when due; or
(b) Any assignment by Debtor for the benefit of creditors, or
admission in writing of Debtor's inability to pay its debts as they become due,
or filing by or against Debtor of a petition in bankruptcy, or adjudication of
Debtor as bankrupt or insolvent, or filing by or against Debtor of any petition
or answer seeking for Debtor any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, or filing any answer admitting or failing to
deny the material allegations of a petition filed against it for any such
relief, or seeking or consenting to or acquiescing in the appointment of any
trustee, receiver or liquidator of itself or of all or any substantial part of
its properties, or its directors or stockholders taking any action looking to
its dissolution or liquidation, or its ceasing doing business as a going
concern.
7. HOLDER'S RIGHTS. Upon default, ▇▇▇▇▇▇ may declare the entire unpaid
principal balance on this Senior Note together with interest on any unpaid
balance at the rate of eighteen percent (18%) per year immediately due, without
notice, and then Debtor will pay that amount.
If any Event of Default occurs, neither the failure of Holder to
promptly exercise its right to declare the outstanding principal of and accrued
and unpaid interest on this Senior Note to be immediately due and payable, nor
the failure of Holder to exercise any other right or remedy that it may have
for default, nor the acceptance by Holder of late payments, nor the failure of
Holder to demand strict performance of any obligation of Debtor hereunder,
shall constitute a waiver of any such rights while such default continues, nor
a waiver of such rights in connection with any future default on the part of
Debtor. Furthermore, acceptance by Holder of partial payments following due
acceleration of the indebtedness evidenced hereby shall not constitute a waiver
by Holder of the acceleration of such indebtedness.
8. MAXIMUM RATE. All agreements which either are now or which shall
become agreements between Debtor and Holder are expressly limited so that in no
contingency or event whatever, whether by reason of deferment or advancement of
the indebtedness represented by this Senior Note, acceleration of the maturity
date of this Senior Note, or otherwise, shall the amount paid or agreed to be
paid to Holder for the use, forbearance or detention of the indebtedness
evidenced by this Senior Note exceed the maximum amount of interest permissible
under applicable law. If at any time, from any circumstance whatsoever,
fulfillment of any provision of this Senior Note or any other agreement between
Debtor and Holder shall result in or involve payments or performance which
would exceed the maximum legal interest rate, then ipso facto, the obligation
to be fulfilled shall be reduced so as not to exceed such maximum legal
interest rate.
9. WAIVER. No delay or omission on the part of any holder hereof in
exercising any right or option herein given to such holder shall impair such
right or option to be considered as a waiver thereof or acquiescence in any
default hereunder. Debtor hereby waives any applicable statute of limitations,
presentment, demand for payment, protest and notice of dishonor.
10. ATTORNEY'S FEES. In the event of any dispute, action, or other
proceeding brought by either party against the other under this Senior Note,
the prevailing party shall be entitled to recover all costs and expenses
incurred in connection with such dispute, action, or other proceeding,
including, without limitation, the fees and costs of its attorneys, whether or
not such dispute, action, or other proceeding proceeds to formal resolution or
judgment.
11. CUMULATIVE. ▇▇▇▇▇▇'s rights and remedies under this Senior Note and
applicable law shall be cumulative and not in the alternative.
12. GOVERNING LAW. This Senior Note shall be construed in accordance
with, and governed by the laws of the State of California without regard to the
conflicts of law provisions thereof.
13. SUCCESSORS. The provisions of this Senior Note shall inure to the
benefit of ▇▇▇▇▇▇'s successors and assigns, and are binding on ▇▇▇▇▇▇'s
successors.
14. TIME OF ESSENCE. Time is of the essence under this Senior Note.
15. SEVERABILITY. Every provision of this Senior Note is intended to be
several. If any provision of this Senior Note is determined by a court of
competent jurisdiction to be illegal, invalid or unenforceable, such
illegality, invalidity or unenforceability shall not affect the other
provisions of this Senior Note, which shall remain binding and enforceable.
IN WITNESS WHEREOF the parties have entered into this Senior Note as of
the date first above written.
DEBTOR: HOLDER:
NatureWell, Incorporated,
a Delaware corporation
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /S/ ▇▇▇▇▇ Arabia
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior V.P. ▇▇▇▇▇ ▇. Arabia
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EXHIBIT A
Payment Schedule
One-half (1/2) of the face value of this Senior Note shall be due and payable
on October 5, 2003 and one-half (1/2) of the face value of this Senior Note,
plus all accrued but unpaid interest, shall be due and payable on October 5,
2004.
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