Exhibit 10.2

 

SENIOR SECURED TERM NOTE

 

$5,000,000.00__, 2018 (the “Issuance Date”)

 

FOR VALUE RECEIVED, BioHiTech Global, Inc., a Delaware corporation (“BHT
Global”), BHT Financial, LLC, a Delaware limited liability company, BioHiTech
America, LLC, a Delaware limited liability company, BioHiTech Europe, PLC, a
United Kingdom private limited company, E.N.A. Renewables, LLC, a Delaware
limited liability company, and New Windsor Resource Recovery, LLC, a Delaware
limited liability company (collectively, jointly and severally referred to and
obligated hereunder as, the “Borrowers” and each, a “Borrower”), promises to pay
to the order of Michaelson Capital Special Finance Fund II, L.P., a Delaware
limited partnership (“Holder”), or its registered assigns, in lawful money of
the United States of America the principal sum of Five Million Dollars
($5,000,000), or such lesser amount as shall equal the outstanding principal
amount hereof, together with interest from the date of this Senior Secured Term
Note (this “Note”) on the unpaid principal balance at a rate equal to ten and
one quarter percent (10.25%) per annum (the “Contract Rate”), computed on the
basis of thirty (30) days per month and a year of 360 days. All unpaid
principal, together with any then unpaid and accrued interest and other amounts
payable hereunder, shall be due and payable on the earlier of (i) __, 2023 (the
“Maturity Date”), or (ii) when, upon the occurrence and during the continuance
of an Event of Default, such amounts are declared due and payable by Holder or
made automatically due and payable, in each case, in accordance with the terms
of the Agreement and the other NPA Documents.

 

This Note is being executed and delivered pursuant to that certain Note Purchase
and Security Agreement, dated as of the date hereof, by the Borrowers and Holder
(the “Agreement”). This Note is subject to, and qualified by, the terms and
conditions of the Agreement, a copy of which may be examined during normal
business hours at the Borrowers’ offices. Holder is entitled to the benefits of
the Agreement and all schedules and exhibits thereto, and reference is made
thereto for a description of all rights and remedies thereunder. Neither
reference to the Agreement, nor any provision thereof or security for the other
obligations evidenced hereby, shall affect or impair the absolute and
unconditional obligation of the Borrowers to pay the principal amount hereof,
together with all interest accrued thereon and expenses owed hereunder, when
due. Capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Agreement.

 

The following is a statement of the rights of Holder and the conditions to which
this Note is subject:

 

1.            Payments.

 

(a)          Payments of Interest. Commencing on February 1, 2018 (for the
initial payment for the period of the Issuance Date through February 28, 2018)
and continuing until the entire Obligations shall have been paid in full,
interest shall be due and payable monthly in immediately available funds, in
advance, on the first day of each calendar month. Any interest that is not paid
when due shall itself earn interest at the rate provided herein until the same
has been paid in full.

 

   

 

 

(b)          Payment of Principal. The principal amount of this Note shall be
paid in the amounts and on the dates specified in the Agreement.

 

(c)          Default Rate of Interest. Interest shall accrue on the unpaid
principal amount hereunder at an annual interest rate equal to the sum of the
Contract Rate plus seven percent (7%) per annum (the “Default Rate”) (i) upon
the occurrence and during the continuance of an Event of Default or (ii) after
entry of a judgment or judgments against any Borrower. The Default Rate shall be
applicable from the date the applicable Event of Default occurs until it is
cured or waived in writing by Holder, as determined by Holder, or, if not first
cured or waived in writing by Holder, until all amounts owing have been
unconditionally and irrevocably paid in full. Any such judgment(s) shall bear
interest at the Default Rate until satisfied in full.

 

(d)          Other Payment Provisions. Each payment hereunder shall be made not
later than 2:00 p.m. (New York City Time) on the date when due, without offset,
in lawful money of the United States of America. The Borrowers hereby authorize
Holder to charge BHT Global’s deposit account located at Comerica Bank (Bank
Routing Number: [___________]; Account # [____________]) for any payments due
from the Borrowers under this Note or any of the other NPA Documents. The
foregoing authorization, however, does not obligate Holder to charge and does
not limit the Borrowers’ obligation to make any payment when due to the extent
that such account has insufficient funds to cover the payment then due or Holder
is otherwise not able to effect a charge on such account (in which such event
Holder shall promptly so advise the Borrowers). The Borrowers shall execute and
deliver any such other document or authorization reasonably requested by Holder
with respect to the establishment of this automatic debit arrangement. All
payments will be applied first to costs and fees owing hereunder, second to the
payment of accrued interest and the rest to the payment of principal. If the
date for any payment or prepayment hereunder falls on a day which is not a
Business Day, then for all purposes of this Note the same shall be deemed to
have fallen on the next following Business Day, and such extension of time shall
in such case be included in the computation of payments of interest.

 

(e)          Late Charge. If any payment payable under the terms of this Note is
not received by Holder on or before three (3) Business Days beyond the due date
thereof, the Borrowers shall be obligated to pay to Holder, in addition to the
required installment amount and any additional interest accruing thereon, a
“late payment charge” equal to the product of five percent (5%) times the amount
of the overdue payment, to partially defray Holder’s costs associated with such
late payment.

 

2.            Prepayments. This Note is subject to Section 1.5 (“Mandatory
Prepayments”) and Section 1.6 (“Optional Prepayments”) of the Agreement relating
to the prepayment of all, but not less than all, of the outstanding principal
amount by the Borrowers. In the event of a prepayment of principal, the
Borrowers shall pay the Prepayment Premium, if applicable, as provided in
Section 1.7 of the Agreement at the time of such prepayment.

 

3.            Collateral. This Note is secured by the Collateral under the terms
of the Agreement and the other NPA Documents.

 

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4.            Default and Remedies. The occurrence of a Default or an Event of
Default under the Agreement shall constitute a default hereunder and shall
entitle Holder to exercise the rights and remedies specified in the Agreement
and the other NPA Documents, as well as those available at law or in equity.
These rights and remedies include, but are not limited to, the right of Holder
to accelerate the maturity of the Note and all other Obligations and to sell or
otherwise dispose of any or all of the Collateral by public or private sale, in
each case, subject to and in accordance with the Agreement and the NPA
Documents.

 

5.            Miscellaneous.

 

(a)          Assignment. No assignment or transfer of this Note or the
Borrowers’ obligations hereunder is permitted without the prior written consent
of Holder, and any purported assignment or transfer without the prior written
consent of Holder shall be invalid ab initio.

 

(b)          Business Purpose of Loan. The Borrowers represent and warrant that
this Note evidences a loan made to the Borrowers for the purpose of carrying on
a business or commercial enterprise.

 

(c)          Waiver and Amendment. Any provision of this Note may be amended,
waived or modified only upon the written consent of the Borrowers and Holder.

 

(d)          Notice, Etc. All notices and other communications provided for
hereunder shall be in writing and shall be provided pursuant to Section 10.6 of
the Agreement.

 

(e)          Binding Effect on Successors. This Note shall be binding upon any
corporation or other entity succeeding the Borrowers by merger, consolidation or
acquisition of all or substantially all of the Borrowers’ assets.

 

(f)          Usury. This Note is subject to the express condition that at no
time shall the Borrowers be obligated or required to pay interest hereunder at a
rate which could subject Holder to either civil or criminal liability as a
result of being in excess of the maximum rate which Borrowers are permitted by
law to contract or agree to pay. If, by the terms of this Note, the Borrowers
are at any time required or obligated to pay interest at a rate in excess of
such maximum rate, the rate of interest hereunder shall be deemed to be
immediately reduced to such maximum rate and interest payable hereunder shall be
computed at such maximum rate and the portion of all prior interest payments in
excess of such maximum rate shall be applied and shall be deemed to have been
payments in reduction of the principal balance of this Note.

 

(g)          Waivers. The Borrowers hereby waive (a) presentment, demand and
protest, and notice of presentment, dishonor, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all of the Obligations, the NPA
Documents or this Note; (b) all rights to notice and a hearing prior to Holder’s
taking possession or control of, or to Holder’s replevy, attachment or levy
upon, the Collateral or any bond or security that might be required by any court
prior to allowing Holder to exercise any of its remedies; and (c) the benefit of
all valuation, appraisal and exemption laws.

 

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(h)          Governing Law; Jurisdiction; Severability; Jury Trial. This Note
shall be construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation, and performance of this Note shall
be governed by, the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. The Borrowers
hereby irrevocably submit to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or that the venue
of such suit, action of proceeding is improper. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. In the event that any provision of this Note is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform with such statute or rule of law. Any such provision which
may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision of this Note. Nothing contained herein
shall be deemed or operate to preclude Holder from bringing suit or taking other
legal action against the Borrowers in any other jurisdiction to collect on the
Borrowers’ obligations to Holder, to realize on any collateral or any other
security for such obligations, or to enforce a judgment or other court ruling in
favor of Holder. THE BORROWERS HEREBY IRREVOCABALY WAIVE ANY RIGHT THEY MAY
HAVE, AND AGREE NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

(i)          Severability. In the event any one or more of the provisions
contained in this Note shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision had never been
contained herein or therein.

 

(j)          Expenses. The Borrowers agree to pay Holder, on demand, for all
costs and expenses, including, but not limited to, reasonable attorneys’ fees,
incurred in the collection, enforcement, modification, restatement, replacement
or amendment of this Note.

 

(k)          Registration and Transfer of this Note. The Borrowers shall keep at
their principal executive office a register in which the Borrowers shall provide
for the registration and transfer of this Note. Any transfer of this Note is
subject to compliance with applicable securities laws and regulations.
Notwithstanding the generality of the foregoing, no transfer may be effected
except in compliance with the terms and restrictions on transfer of this Note
set forth in the Agreement. Holder of this Note, at Holder’s option, may in
person or by duly authorized attorney surrender this Note for exchange at the
principal office of the Borrowers, to receive in exchange therefor a new Note,
as may be requested by Holder, of the same series and in the same unpaid
principal amount as the aggregate unpaid principal amount of the Note so
surrendered; provided, however, that any transfer tax relating to such
transaction shall be paid by Holder requesting the exchange. Each such new Note
shall be dated as of the date to which interest has been paid and shall be in
such principal amount and registered in such name or names as Holder may
designate in writing.

 

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(l)          Lost Documents. Upon receipt by the Borrowers of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note or
any Notes exchanged for it, and of indemnity satisfactory to it, and upon
reimbursement to the Borrowers of all reasonable expenses incidental thereto,
and upon surrender and cancellation of such Note, if mutilated, the Borrowers
will make and deliver in lieu of such Note a new Note of the same series and of
like tenor and unpaid principal amount and dated as of the date to which
interest has been paid on the unpaid principal amount of the Note in lieu of
which such new Note is made and delivered.

 

(m)          Instrument Under Seal. This Note is being executed as an instrument
under seal.

 

(n)          No Strict Construction. This Note shall be construed without regard
to any presumption or rule requiring construction or interpretation against the
party drafting an instrument or causing any instrument to be drafted.

 

(o)          Joint and Several Liability. All agreements, conditions,
obligations and liabilities of the Borrowers under this Note shall be the joint
and several obligations of BioHiTech Global, Inc., BHT Financial, LLC, BioHiTech
America, LLC, BioHiTech Europe, PLC, E.N.A. Renewables, LLC, and New Windsor
Resource Recovery, LLC.

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, the Borrowers have caused this Senior Secured Term Note to
be executed and issued under their seal as of the date first written above.

 

    BIOHITECH GLOBAL, INC.     BHT FINANCIAL, LLC     BIOHITECH AMERICA, LLC    
BIOHITECH EUROPE, LTD     E.N.A. RENEWABLES, LLC     NEW WINDSOR RESOURCE
RECOVERY, LLC         By:       Name:  Frank E. Celli     Title:    Chief
Executive Officer