Exhibit 10.64
 
BIONEUTRAL GROUP, INC.
 
$78,164.38
 
TWELVE PERCENT (12%) CONVERTIBLE NOTE
DATED FEBRUARY 28, 2014
 
THIS NOTE (the "Note") is a duly authorized Convertible Note of BIONEUTRAL
GROUP, INC., a(n) NEVADA corporation (the "Company").
 
FOR VALUE RECEIVED, the Company promises to pay Magna Group, LLC (the "Holder"),
the principal sum of $78,164.38 (the "Principal Amount") or such lesser
principal amount following the conversion or conversions of this Note in
accordance with Paragraph 2 (the "Outstanding Principal Amount") on February 28,
2015 (the "Maturity Date"), and to pay interest on the Outstanding Principal
Amount ("Interest") in a lump sum on the Maturity Date, at the rate of twelve
percent (12%) per Annum (the "Rate") from the date of issuance.
 
Accrual of Interest shall commence on the date of this Note and continue until
the Company repays or provides for repayment in full the Outstanding Principal
Amount and all accrued but unpaid Interest. Accrued and unpaid Interest shall
bear Interest at the Rate until paid, compounded monthly. The Outstanding
Principal Amount of this Note is payable on the Maturity Date in such coin or
currency of the United States as at the time of payment is legal tender for
payment of public and private debts, at the address last appearing on the Note
Register of the Company as designated in writing by the Holder from time to
time. The Company may prepay principal and interest on this Note at any time
before the Maturity Date.
 
The Company will pay the Outstanding Principal Amount of this Note on the
Maturity Date, free of any withholding or deduction of any kind (subject to the
provision of paragraph 2 below), to the Holder as of the Maturity Date and
addressed to the Holder at the address appearing on the Note Register.
 
This Note is subject to the following additional provisions:
 
1.            All payments on account of the Outstanding Principal Amount of
this Note and all other amounts payable under this Note (whether made by the
Company or any other person) to or for the account of the Holder hereunder shall
be made free and clear of and without reduction by reason of any present and
future income, stamp, registration and other taxes, levies, duties, cost, and
charges whatsoever imposed, assessed, levied or collected by the United States
or any political subdivision or taxing authority thereof or therein, together
with interest thereon and penalties with respect thereto, if any, on or in
respect of this Note (such taxes, levies, duties, costs and charges being herein
collectively called "Taxes").
 
2.            The Holder of this Note is entitled, at its option, at any time
after the issuance of this Note, to convert all or any lesser portion of the
Outstanding Principal Amount and accrued but unpaid Interest into Common Stock
at a conversion price (the "Conversion Price") for each share of Common Stock
equal to a price which is a 45% discount from the lowest Trading Price in the
five (5) days prior to the day that the Holder requests conversion, unless
otherwise modified by mutual agreement between the Parties (the "Conversion
Price") (The Common stock into which the Note is converted shall be referred to
in this agreement as "Conversion Shares"). If the Issuer's Common stock is
chilled for deposit at DTC and/or becomes chilled at any point while this
Agreement remains outstanding, an additional 8% discount will be attributed to
the Conversion Price defined hereof. The Issuer will not be obligated to issue
fractional Conversion Shares. The Holder may convert this Note into Common Stock
by surrendering the Note to the Company, with the form of conversion notice
attached to the Note as Exhibit B, executed by the Holder of the Note evidencing
such Holder's intention to convert the Note. Additionally, in no event shall the
Conversion Price be less than $0.00004. If the Borrower is unable to issue any
shares under this provision due to the fact that there is an insufficient number
of authorized and unissued shares available, the Holder promises not to force
the Borrower to issue these shares or trigger an Event of Default, provided that
Borrower takes immediate steps required to get the appropriate level of approval
from shareholders or the board of directors, where applicable to raise the
number of authorized shares to satisfy the Notice of Conversion.
 
The Company will not issue fractional shares or scrip representing fractions of
shares of Common Stock on conversion, but the Company will round the number of
shares of Common Stock issuable up to the nearest whole share. The date on which
a Notice of Conversion is given shall be deemed to be the date on which the
Holder notifies the Company of its intention to so convert by delivery, by
facsimile transmission or otherwise, of a copy of the Notice of Conversion.
Notice of Conversion may be sent by email to the Company, attn: Mr. Mark
Lowenthal, CEO. The Holder will deliver this Note, together with original
executed copy of the Notice of Conversion, to the Company within three (3)
business days following the Conversion Date. At the Maturity Date, the Company
will pay any unconverted Outstanding Principal Amount and accrued Interest
thereon, at the option of the Company, in either (a) cash or (b) Common Stock
valued at a price equal to the Conversion Price determined as if the Note was
converted in accordance with its terms into Common Stock on the Maturity Date.
 
 
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3.            No provision of this Note shall alter or impair the obligation of
the Company, which is absolute and unconditional, to the payment of the
Outstanding Principal Amount of this Note at the Maturity Date, and in the coin
or currency herein prescribed. This Note and all other Notes now or hereafter
issued on similar terms are direct obligations of the Company. In the event of
any liquidation, reorganization, winding up or dissolution, repayment of this
Note shall not be subordinate in any respect to any other indebtedness of the
Company outstanding as of the date of this Note or hereafter incurred by the
Company.
 
Such non-subordination shall extend without limiting the generality of the
foregoing, to all indebtedness of the Company to banks, financial institutions,
other secured lenders, equipment lessors and equipment finance companies, but
shall exclude trade debts. Any warrants, options or other securities convertible
into stock of the Company issued before the date hereof shall rank pari passu
with the Note in all respects
 
4.            If at any time or from time to time after the date of this Note,
the Common Stock issuable upon the conversion of the Note is changed into the
same or different numbers of shares of any class or classes of stock, whether by
recapitalization or otherwise, then in each such event the Holder shall have the
right thereafter to convert the Note into the kind of security receivable in
such recapitalization, reclassification or other change by holders of Common
Stock, all subject to further adjustment as provided herein. In such event, the
formulae set forth herein for conversion and redemption shall be equitably
adjusted to reflect such change in number of shares or, if shares of a new class
of stock are issued, to reflect the market price of the class or classes of
stock issued in connection with the above described transaction.
 
5.            Events of Default.
 

 
5.1.
A default shall be deemed to have occurred upon any one of the following events:

 

 
5.1.1.
Withdrawal from registration of the Issuer under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), either voluntary or involuntary.

 

 
5.1.2.
Issuer filing for bankruptcy protection under the federal bankruptcy laws, the
calling of a meeting of creditors, or any act of insolvency under any state law
regarding insolvency, without written notification to the Investor within five
business days of such filing, meeting or action.

 

 
5.1.3.
The Borrower fails to issue shares of Common Stock to the Holder (or announces
or threatens in writing that it will not honor its obligation to do so) upon
exercise by the Holder of the conversion rights of the Holder in accordance with
the terms of this Note, fails to transfer or cause its transfer agent to
transfer (issue) (electronically or in certificated form) any certificate for
shares of Common Stock issued to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note, the Borrower directs
its transfer agent not to transfer or delays, impairs, and/or hinders its
transfer agent in transferring or issuing (electronically or in certificated
form) any certificate for shares of Common Stock to be issued to the Holder upon
conversion of or otherwise pursuant to this Note as and when required by this
Note, or fails to remove (or directs its transfer agent not to remove or
impairs, delays, and/or hinders its transfer agent from removing) any
restrictive legend (or to withdraw any stop transfer instructions in respect
thereof) on any certificate for any shares of Common Stock issued to the Holder
upon conversion of or otherwise pursuant to this Note as and when required by
this Note (or makes any written announcement, statement or threat that it does
not intend to honor the obligations described in this paragraph) and any such
failure shall continue uncured (or any written announcement, statement or threat
not to honor its obligations shall not be rescinded in writing) for three (3)
business days after the Holder shall have delivered a Notice of Conversion.

 
 
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5.1.4
Failure to pay the principal and unpaid but accrued interest on the Note when
due.

 

 
5.1.5.
Any dissolution, liquidation, or winding up of Borrower or any substantial
portion of its business.

 

 
5.1.6.
Any cessation of operations by Borrower or Borrower admits it is otherwise
generally unable to pay its debts as such debts become due, provided, however,
that any disclosure of the Borrower's ability to continue as a "going concern"
shall not be an admission that the Borrower cannot pay its debts as they become
due.

 

 
5.1.7.
The failure by Borrower to maintain any material intellectual property rights,
personal, real property or other assets which are necessary to conduct its
business (whether now or in the future).

  

 
5.1.8.
The Borrower effectuates a reverse split of its Common Stock without twenty (20)
days prior written notice to the Holder.

 

 
5.1.9 
In the event that the Borrower proposes to replace its transfer agent, the
Borrower fails to provide, prior to the effective date of such replacement,
fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to the Purchase Agreement (including but not limited to the
provision to irrevocable reserve shares of Common Stock in the Reserved Amount)
signed by the successor transfer agent to Holder and the Borrower.

 

 
5.1.10
The failure by Borrower to pay any and all Post-Closing Expenses as defined in
section 15.

 

 
5.1.11
From and after the initial trading, listing or quotation of the Common Stock on
a Principal Market, an event resulting in the Common Stock no longer being
traded, listed or quoted on a Principal Market; failure to comply with the
requirements for continued quotation on a Principal Market; or notification from
a Principal Market that the Borrower is not in compliance with the conditions
for such continued quotation and such non-compliance continues for seven (7)
trading days following such notification.

 

 
5.1.12
If the Company does not submit their quarterly or annual report (10-Q or 10-K or
the equivalent), and therefore, the Company files a late notification (NT 10-Q
or NT 10-K or the equivalent), and then the Company does not file the
appropriate quarterly or annual report within ten (10) business days from the
specific late notification.

 

 
5.1.13
If the Company files a late notification (NT 10-Q or NT 10-K) for any quarterly
or annual report for any two (2) consecutive periods.

 
 
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5.2.
Default remedies. Upon the occurrence and during the continuation of any Event
of Default specified in Section 5.1. (solely with respect to failure to pay the
principal hereof or interest thereon when due at the Maturity Date), the Note
shall become immediately due and payable and the Borrower shall pay to the
Holder, in full satisfaction of its obligations hereunder, an amount equal to
the Default Sum (as defined herein). UPON THE OCCURRENCE AND DURING THE
CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 5.1., THE NOTE SHALL
BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN
FULL SATISFACTION OF ITS OBLIGTAIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE
DEFAULT SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence
and during the continuation of any Event of Default specified in Sections 5.1.
(solely with respect to failure to pay the principal hereof or interest thereon
when due on this Note, 5.1.1, 5.1.2, 5.1.5, 5.1.6, 5.1.7, 5.1.8, 5.1.9, 5.1.10,
5.1.11, 5.1.12, 5.1.13 exercisable through the delivery of written notice to the
Borrower by such Holders (the "Default Notice"), and upon the occurrence of an
Event of Default specified in the remaining sections of Section 5.1. (other than
failure to pay the principal hereof or interest thereon at the Maturity Date
specified in Section 5.1. hereof), the Note shall become immediately due and
payable and the Borrower shall pay to the Holder, in full satisfaction of its
obligations hereunder, an amount equal to the greater of (i) 150% times the sum
of (w) the then outstanding principal amount of this Note plus (x) accrued and
unpaid interest on the unpaid principal amount of this Note to the date of
payment (the "Mandatory Prepayment Date") plus (y) Default Interest, if any, on
the amounts referred to in clauses (w) and/or (x) (the then outstanding
principal amount of this Note to the date of payment plus the amounts referred
to in clauses (x) and (y) shall collectively be known as the "Default Sum") or
(ii) the "parity value" of the Default Sum to be prepaid, where parity value
means (a) the highest number of shares of Common Stock issuable upon conversion
of or otherwise pursuant to such Default Sum, treating the Trading Day
immediately preceding the Mandatory Prepayment Date as the "Conversion Date" for
purposes of determining the lowest applicable Conversion Price, unless the
Default Event arises as a result of such breach in respect of a specific
Conversion Date in which case such Conversion Date shall be the Conversion Date,
multiplied by (b) the highest Closing Price for the Common Stock during the
period beginning on the date of first occurrence of the Event of Default and
ending one day prior to the Mandatory Prepayment Date (the "Default Amount") and
all other amounts payable hereunder shall immediately become due and payable,
all without demand, presentment or notice, all of which hereby are expressly
waived, together with all costs, including, without limitation, legal fees and
expenses, of collection, and the Holder shall be entitled to exercise all other
rights and remedies available at low or in equity.

 
If the Borrower fails to pay the Default Amount within five (5) business days of
written notice that such amount is due and payable, then the Holder shall have
the right at any time, so long as the Borrower remains in default (and so long
and to the extent that there are sufficient authorized shares), to require the
Borrower, upon written notice, to immediately issue, in lieu of the Default
Amount, the number of shares of Common Stock of the Borrower equal to the
Default Amount divided by the Conversion Price then in effect.
 
6.            Prepayment. At any time that the Note remains outstanding, upon
three business days' written notice (the "Prepayment Notice") to the Holder, the
Company may pay 150% of the entire Outstanding Principal Amount of the Note plus
any accrued but unpaid Interest. If the Company gives written notice of
prepayment, the Holder continues to have the right to convert principal and
interest on the Note into Conversion Shares until three business days elapses
from the Prepayment Notice.
 
7.            Anti-Dilution. If, at any time the Note is outstanding, the Issuer
issues Common Stock, or grants options or warrants, at a price per share that is
less than the Conversion Price on the date of such issuance or grant, the
Conversion Price will be adjusted to such lower price for the remainder of the
term of the Note.
 
8.            The Company covenants that until all amounts due under this Note
are paid in full, by conversion or otherwise, unless waived by the Holder or
subsequent Holder in writing, the Company shall:
 
give prompt written notice to the Holder of any Event of Default or of any other
matter which has resulted in, or could reasonably be expected to result in a
materially adverse change in its financial condition or operations;
 
give prompt notice to the Holder of any claim, action or proceeding which, in
the event of any unfavorable outcome, would or could reasonably be expected to
have a Material Adverse Effect (as defined below) on the financial condition of
the Company;
 
at all times reserve and keep available out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of this Note into
Common Stock, such number of its duly authorized shares of Common Stock as shall
from time to time be sufficient to effect the conversion of the Outstanding
Principal Amount of this Note into Common Stock.
 
"Material Adverse Effect" means (i) any condition, occurrence, state of facts or
event having, or insofar as reasonably can be foreseen would likely have, any
material adverse effect on the legality, validity or enforceability of the
Transaction Documents or the transactions contemplated thereby, (ii) any
condition, occurrence, state of facts or event having, or insofar as reasonably
can be foreseen would likely have, any effect on the business, operations,
properties or financial condition of the Company that is material and adverse to
the Company and its Subsidiaries, taken as a whole, and/or (iii) any condition,
occurrence, state of facts or event that would, or insofar as reasonably can be
foreseen would likely, prohibit or otherwise materially interfere with or delay
the ability of the Company to perform any of its obligations under any of the
Transaction Documents to which it is a party.
 
 
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9.             Upon receipt by the Company of evidence from the Holder
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note,
 
(i)    in the case of loss, theft or destruction, upon provision of indemnity
reasonably satisfactory to it and/or its transfer agent, or
 
(ii)   in the case of mutilation, upon surrender and cancellation of this Note,
then the Company at its expense will execute and deliver to the Holder a new
Note, dated the date of the lost, stolen, destroyed or mutilated Note, and
evidencing the outstanding and unpaid principal amount of the lost, stolen,
destroyed or mutilated Note.
 
   10.           If any term in this Note is found by a court of competent
jurisdiction to be unenforceable, then the entire Note shall be rescinded, the
consideration proffered by the Holder for the remaining Debt acquired by the
Holder not converted by the Holder in accordance with this Note shall be
returned in its entirety and any Conversion Shares in the possession or control
of the Investor shall be returned to the Issuer.
 
11.          The Note and the Agreement between the Company and the Holder
(including all Exhibits thereto) constitute the full and entire understanding
and agreement between the Company and the Holder with respect to the subject
hereof Neither this Note nor any term hereof may be amended, waived, discharged
or terminated other than by a written instrument signed by the Company and the
Holder.
 
12.          This Note shall be governed by and construed in accordance with the
internal laws of the State of New York.
 
13.          Legal Opinion. The Issuer's counsel has provided an opinion
regarding the applicable exemption from registration under the Securities Act
for the issuance of the Conversion Shares pursuant to the terms and conditions
of this Agreement and the Note, which provides that upon conversion at any time
following the date hereof, the shares received as a result of the conversion
shall be issued unrestricted in accordance with the appropriate exemption. If
the Issuer declines to provide, or requests that Investor counsel prepare an
opinion, the Issuer agrees to bear the cost of the letter.
 
14.          Conditions. The Issuer acknowledges the Investor's participation in
respect to this Agreement is on a conditions permitting basis. In the event that
the transaction risk profile substantially changes, market pricing or implied
volatility substantially change, due diligence raises concerns or any other
conditions material to the successful closing of the transaction change, the
Investor reserves the right to terminate the Agreement at any time before
delivering to the Non Affiliate Debtholder the cash consideration as described
hereof.
 
15.          Post-Closing Expenses. The Issuer will bear any and all
miscellaneous expenses that may arise as a result of this Agreement
post-closing. These expenses include, but are not limited to, the cost of legal
opinion production, transfer agent fees, equity issuance fees, etc. The failure
to pay any and all Post-Closing Expenses will be deemed a default as described
in Section 5.1.10 herein.
 
16.          Miscellaneous
 

 
16.1.
Counterparts. This Agreement may be executed in any number of counterparts by
original, facsimile or email signature. All executed counterparts shall
constitute one Agreement not withstanding that all signatories are not
signatories to the original or the same counterpart. Facsimile and scanned
signatures are considered original signatures.

 

 
16.2.
Severability. This Agreement is not severable. If any term in this Agreement is
found by a court of competent jurisdiction to be unenforceable, then the entire
Agreement shall be rescinded, the consideration proffered by the Investor for
the remaining Debt acquired by Investor not converted by the Investor in
accordance with this Agreement shall be returned in its entirety and any
Conversion Shares in the possession or control of the Investor shall be returned
to the Issuer.

 
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16.3.
Legal Fees. Except as provided in Section 15 of this agreement, each Party will
bear its own legal expenses in the execution of this Agreement. If the Issuer
defaults and the Investor is required to expend funds for legal fees and
expenses, such costs will be reimbursed to the Investor, solely by the Issuer.

 

 
16.4
Trading Activities. Neither the Holder nor their affiliates has an open short
position in the common stock of the Company and the Holder agree that they shall
not, and that they will cause their affiliates not to, engage in any short sales
of or hedging transactions with respect to the common stock of the Company.

 

 
16.5.
Modification. This Agreement and the Note may only be modified in a writing
signed by all Parties.

 
17.           Exclusivity. The Company will not complete any transactions with
outside parties in regards to the sale of the Outstanding Debt or Payables
(other than to the Holder) owed by the Company between the time this Agreement
has been signed and August 7th,, 2014, or pursue similar exchange transactions
with other parties.
 
18.           Right of First Refusal. The Buyer will have a "Right of First
Refusal" on the subsequent sale of any and all debt owed by the Company as long
as any debt owed to Magna Group, LLC is still outstanding.
 
The Right of First Refusal will works as follows:
 
Should the Seller contemplate the sale of any debt of the Company, the Holder
will have a 72 hour Right of First Refusal to purchase said debt. The Seller
will provide the Holder with a term sheet, via e-mail to
(research@magnagroupllc.com), outlining the general terms under which it may
sell the debt. Upon receipt, the Investor will have 72 hours to match the offer.
 
19.           Damages. Any breach of Section 17 or Section 18 of this Agreement
will result in a penalty fee equal to 50% of the total outstanding balance of
the Assignment Agreement held by the Investor; which is to be paid for by the
Company.
 
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
by an officer thereunto duly authorized, as of the date first written above.
 

BIONEUTRAL GROUP, INC.      
By:   ______________________________________
 
Mark Lowenthal, CEO
 

 
 
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Exhibit B.
 
NOTICE OF CONVERSION
 
The undersigned hereby elects to convert $                        of the
principal amount of the Note (defined below) into Shares of Common Stock of
BIONEUTRAL GROUP, INC., a(n) NEVADA Corporation (the "Borrower") according to
the conditions of the Convertible Note of the Borrower dated as of February 28,
2014 (the "Note"). No fee will be charged to the Holder or Holder's Custodian
for any conversion, except for transfer taxes, if any.
 
Box Checked as to applicable instructions:
 

 
o
The Borrower shall electronically transmit the Common Stock issuable pursuant to
this Notice of Conversion to the account of the undersigned or its nominee with
DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").

 
Name of DTC Prime Broker:__________________
 
Account Number: __________________________
 

 
o
The undersigned hereby requests that the Borrower issue a certificate or
certificates for the number of shares of Common Stock set forth below (which
numbers are based on the Holder's calculation attached hereto) in the name(s)
specified immediately below:

 
Magna Group, LLC
EIN #: 27-2162659
 

Date of
Conversion:                                                                                                                          
Conversion
Price:                                                                                                      
                       
Shares to Be
Delivered:                                                                                                                   
Remaining Principal Balance
Due After This
Conversion:                                                               
 
Signature                                                                                                                   
Print Name:  Joshua Sason

 
 
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