Exhibit 10.5


 


PAYMENT OF THE INDEBTEDNESS EVIDENCED
BY THIS INSTRUMENT OR DOCUMENT AND THE RIGHTS OF THE HOLDER HEREOF ARE SUBORDINATED AND SUBJECT TO THE RIGHTS OF THE SENIOR HOLDER
AS DEFINED IN AND ACCORDING TO THE TERMS OF A SUBORDINATION AGREEMENT, DATED FEBRUARY 2, 2018, AMONG BIOHITECH GLOBAL, INC. AND
ITS SUBSIDIARIES, THE HOLDER AND MICHAELSON CAPITAL SPECIAL FINANCE FUND II, L.P.


 


JUNIOR PROMISSORY NOTE


 


	$1,044,477.00	February 2, 2018 (“Issuance Date”)


 


FOR VALUE RECEIVED,
BioHiTech Global, Inc., a Delaware corporation, having an address at 80 Red Schoolhouse Road, Suite 101, Chestnut Ridge, NY
10977 (“Borrower”) promises to pay to the order of Frank E. Celli, with an address at 27 Bradley Lane,
Montvale, NJ 07645 (“Holder”), or his registered assigns, in lawful money of the United States
of America the principal sum of One Million Forty Four Thousand Four Hundred Seventy Seven Dollars ($1,044,477), from the existing,
outstanding indebtedness of the Borrower to the Holder set forth in that certain Fourth Amended and Restated Secured Promissory
Note dated February 1, 2017, up to the amount of Four Million Five Hundred Dollars ($4,500,000) (the “Original Note”),
or such lesser amount as shall equal the outstanding principal amount hereof (such amount, the Outstanding Principal Amount”),
together with interest from the Issuance date of this Junior 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 (i) February 2, 2024 or (ii) on demand of the
Holder following the repayment and satisfaction of that certain $5,000,000 Senior Secured Term Promissory Note dated February 2,
2018 (the “Michaelson Note”) between Borrower, 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, as borrowers, and Michaelson Capital Special Finance Fund II, L.P., a Delaware limited partnership (“MCSFF”)
as Holder (the “Maturity Date”). The Original Note is being modified, amended and restated by this Note.
Nothing in this Note shall be deemed to constitute a novation, termination, waiver, release satisfaction, accord and satisfaction
of the Original Note or any indebtedness evidenced thereby (other than the reduction of the principal amount of the Original Note
to the amount set forth above)


 


1.          Payment
Terms.


 


a.           Current
accrued interest on the Outstanding Principal Amount shall bear monthly compounding interest a rate equal to the Contract Rate,
computed on the basis of thirty (30) days per month and a year of 360 days and will be due and payable on the Maturity Date.


 


b.           Provided
the Michaelson Note is not outstanding, the Outstanding Principal Amount, and any accrued but unpaid interest, will automatically
mature and be due and payable on the earliest of (a) the Maturity Date, (b) a Change of Control (as defined below), or (c) an Event
of Default (as defined in Section 4). For purposes of this Note: the term “Change of Control” means the consummation
of: (A) a sale of all or substantially all of the assets of Borrower; (B) the failure of the owners of Borrower as of the date
of this Note to own at least 51% of the issued and outstanding equity interests of Borrower; or (C) any reorganization, merger
or consolidation of Borrower, other than a reorganization, merger or consolidation in which more than 50% of the combined voting
power of the outstanding voting securities of the surviving or resulting entity immediately following the reorganization, merger
or consolidation is held by the persons who, immediately prior to the reorganization, merger or consolidation, were the holders
of the voting securities of Borrower (it being understood that a transaction or a series of transactions involving additional cash
investments in Borrower shall not constitute a Change of Control).


 




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c.           If
any payment under this Note shall become due on a Saturday, Sunday or public holiday under the laws of the State of New York, such
payment shall be made on the next succeeding business day and such extension of time shall be included in computing interest in
connection with such payment. Payments received will be applied to charges, fees and expenses (including attorneys’ fees),
accrued interest and principal in any order Holder may choose, in its sole discretion.


 


d.           Provided
that the Michaelson Note is not outstanding, the Outstanding Principal Amount may be prepaid in whole at any time or in part from
time to time without penalty or premium.


 


2.          Late
Payments; Default Rate. If Borrower fails to make any payment of principal, interest or other amount coming due pursuant
to the provisions of this Note within ten (10) calendar days of the date due and payable, Borrower shall also pay to Holder a late
charge equal to 5.0% of the amount of such payment (the “Late Charge”). Such ten (10) day period shall not be
construed in any way to extend the due date of any such payment. Following the occurrence of an Event of Default, this Note shall
bear interest at a rate per annum (based on a year of 360 days and actual days elapsed) which shall be 5.0% in excess of the Contract
Rate, but not more than the maximum rate allowed by law (the “Default Rate”). The Default Rate shall continue
to apply whether or not judgment shall be entered on this Note. Both the Late Charge and the Default Rate are imposed as liquidated
damages for the purpose of defraying Holder’s expenses incident to the handling of delinquent payments, but are in addition
to, and not in lieu of, Holder’s exercise of any rights and remedies hereunder or under applicable law, and any fees and
expenses of any agents or attorneys which Holder may employ. In addition, the Default Rate reflects the increased credit risk to
Holder of carrying a loan that is in default. Borrower agrees that the Late Charge and Default Rate are reasonable forecasts of
just compensation for anticipated and actual harm incurred by Holder, and that the actual harm incurred by Holder cannot be estimated
with certainty and without difficulty.


 


3.          Subordination.


 


Holder hereby agrees,
at any time and from time to time, to subordinate Holder’s rights under this Note, including the right of payment hereunder,
to any existing indebtedness of Borrower due to MCSFF (such indebtedness, the “Michaelson Debt”) and to Comerica
Bank (the “Comerica Debt” and collectively, with the Michaelson Debt, the “Senior Debt”).
From and after the date hereof, Holder agrees to enter into and execute any documents, agreements or instruments reasonably requested
by MCSFF and Comerica Bank to reflect the fact that this Note, the right of payment hereunder and the indebtedness evidenced hereby
shall be subordinate to the Senior Debt. Borrower hereby covenants and agrees that the indebtedness evidenced by this Note shall
be senior in payment and priority to all indebtedness of Borrower other than the Senior Debt.


 




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4.          Events
of Default. Each of the following shall constitute an event of default under this Note (each, an “Event of Default”):


 


a.           Borrower’s
failure to pay any amount due under this Note within ten (10) days after its due date;


 


b.           Borrower’s
failure to observe or perform any covenant or other agreement with Holder contained in this Note, which failure is not cured within
thirty (30) days after written notice of such failure (specifying in reasonable detail the facts and circumstances surrounding
such failure) is provided to Borrower by Holder;


 


c.           The
filing by or against Borrower of any proceeding in bankruptcy, receivership, insolvency, reorganization, liquidation, conservatorship
or similar proceeding, and such proceeding is not dismissed or stayed within ninety (90) days of the commencement thereof;


 


d.           Any
assignment by Borrower of its assets or properties for the benefit of creditors, or any levy, garnishment, attachment or similar
proceeding is instituted against Borrower or its assets or properties; and


 


e.           The
occurrence of a material adverse effect, as determined by Holder, in Holder’s sole and absolute discretion, with respect
to (i) the business, assets, properties or financial condition of Borrower, (ii) Borrower’s ability to repay the Outstanding
Principal Amount, or (iii) the validity or enforceability of this Note or the rights and remedies of Holder hereunder.


 


5.          Power
to Confess Judgment. Borrower hereby empowers any attorney of any court of record, after demand is made hereunder, to
appear for Borrower and, with or without complaint filed, confess judgment, or a series of judgments, against Borrower in favor
of Holder or any holder hereof for the entire principal balance of this Note, all accrued interest and all other amounts due hereunder,
together with costs of suit and an attorney’s commission of $5,000 added as a reasonable attorney’s fee, and for doing
so, this Note or a copy verified by affidavit shall be a sufficient warrant. Borrower hereby forever waives and releases all errors
in said proceedings and all rights of appeal and all relief from any and all appraisement, stay or exemption laws of any state
now in force or hereafter enacted. Interest on any such judgment shall accrue at the Default Rate.


 


No single exercise
of the foregoing power to confess judgment, or a series of judgments, shall be deemed to exhaust the power, whether or not any
such exercise shall be held by any court to be invalid, voidable, or void, but the power shall continue undiminished and it may
be exercised from time to time as often as Holder shall elect until such time as Holder shall have received payment in full of
the debt, interest and costs. Notwithstanding the attorney’s commission provided for in the preceding paragraph (which is
included in the warrant for purposes of establishing a sum certain), the amount of attorneys’ fees that Holder may recover
from Borrower shall not exceed the actual and reasonable attorneys’ fees incurred by Holder.


 




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6.          Remedies.


 


a.           Upon
the occurrence and during the continuance of an Event of Default, Holder, at Holder’s option, may declare the entire Outstanding
Principal Amount, together with interest thereon, reasonable attorneys’ fees and costs of collection, to be immediately due
and payable, and such amounts shall become immediately due and payable without notice, demand, presentment or any further action
on the part of Holder. In addition, Holder may exercise all other rights and remedies Holder may have under law or in equity. Any
and all remedies of Holder hereunder shall be cumulative in all respects.


 


b.           The
failure of Holder to exercise Holder’s option to accelerate this Note as provided above, or to exercise any other option
or remedy granted to Holder hereunder, in any one or more instances, or the acceptance by Holder of partial payments or partial
performance, shall not constitute a waiver by Holder of any Event of Default, and all such options and remedies shall remain continuously
in full force and effect. Acceleration of maturity, once claimed hereunder by Holder, may at Holder’s option be rescinded
by written acknowledgment to that effect, but the tender and acceptance of partial payment or partial performance alone shall not
in any way affect or rescind such acceleration of maturity.


 


c.           Holder
shall not be deemed, by any act or omission, to have waived any of Holder’s rights or remedies hereunder unless such waiver
is in writing and signed by Holder, and then only to the extent specifically set forth in the writing. A waiver on one event shall
not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event.


 


7.          Waivers
by Borrower. Borrower hereby waives and releases all errors, defects and imperfections in any proceedings instituted by
Holder under the terms of this Note, as well as all benefit that might accrue to Borrower by virtue of any present or future laws
exempting the assets or properties of Borrower, or any part of the proceeds arising from any sale of such assets or properties,
from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension
of time for payment; and Borrower agrees that the assets and properties of Borrower may be levied upon pursuant to a judgment obtained
by virtue hereof, on any writ of execution issued thereon, may be sold upon any such writ in whole or in part in any order desired
by Holder. Borrower waives presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest and notice
of protest of this Note, and all other notices in connection with the delivery, acceptance, performance, default or enforcement
of the payment of this Note, and agrees that the liability of Borrower shall be unconditional, without regard to the liability
of any other party.


 


8.          Representations
and Warranties. Borrower represents and warrants as of the date hereof the following:


 


a.           Authority;
Enforceability. Borrower has full power and authority to execute and deliver this Note and to perform its obligations hereunder.
Borrower has duly executed and delivered this Note, and this Note constitutes its legal, valid and binding obligations enforceable
in accordance with their terms.


 


b.           Actions,
Suits or Proceedings. There are no actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against
or affecting it or any of its property, or before or by any governmental authority, and, Borrower is not in default with respect
to any order, writ, injunction, decree or demand of any court or any governmental authority.


 




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c.           No
Conflicts. The execution, delivery and performance of this Note will not (i) conflict or be inconsistent with, or result in
any breach of, or constitute a default under, or result in the creation or imposition of (or create the obligation to create or
impose) any lien or encumbrance (except as set forth herein) under any deed of trust, indenture, mortgage, lease, bank loan or
credit agreement, or other agreement, contract or instrument to which Borrower is a party or by which it or its property may be
bound (other than such conflicts, inconsistencies, breaches or defaults that have been waived in writing by the appropriate party);
or (ii) contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court
or governmental instrumentality.


 


d.           Approvals.
No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have
been obtained or made prior to the date hereof), or exemption by, any governmental or public body or authority, or any subdivision
thereof, or any other Person (other than MCSFF and Comerica) is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of this Note or (ii) the legality, validity, binding effect or enforceability of this Note.


 


9.          Miscellaneous
Provisions.


 


a.           Notices.
All notices, demands, requests, consents, approvals and other communications required or permitted hereunder must be in writing
and will be effective upon receipt. Such notices and other communications may be hand delivered, sent by first class mail, sent
by electronic transmission with confirmation of delivery and a copy sent by first class mail, or sent by nationally recognized
overnight courier service, to the addresses for Holder and Borrower set forth above or to such other address as either may give
to the other in writing for such purpose. If a notice is sent via first class mail, it will be deemed to have been received two
days after being deposited in the mail. If a notice is sent by nationally recognized overnight courier service, it will be deemed
to have been received one day after being deposited with such courier service.


 


b.           Severability;
Construction. If any provision of this Note is found to be invalid by a court of law, all the other provisions of this Note
shall remain in full force and effect. Whenever the singular number is used in this Note and when required by the context, the
same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa.


 


c.           Successors
and Assigns. This Note shall bind Borrower and its successors and assigns, and the benefits hereof shall inure to the benefit
of Holder and its successors and assigns; provided, however, that Borrower may not assign this Note in whole or in part without
Holder’s written consent and Holder may assign this Note in whole or in part without Borrower’s written consent.


 


d.           Governing
Law. This Note will be interpreted and the rights and liabilities of Borrower and Holder determined in accordance with the
laws of the State of New York, excluding its conflicts of law rules.


 




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e.           No
Presumption. Borrower and Holder have participated jointly in the negotiation and drafting of this Note, and, in the event
an ambiguity or question of intent or interpretation arises, this Note shall be construed as jointly drafted by Borrower and Holder
and no presumption or burden of proof shall arise favoring or disfavoring either party by virtue of the authorship of any provision
of this Note.


 


f.            Waiver
of Jury Trial. Borrower irrevocably waives any and all rights Borrower may have to a trial by jury in any action, proceeding
or claim of any nature relating to this Note, any documents executed in connection with this Note or any transaction contemplated
in any of such documents. Borrower acknowledges that the foregoing waiver is knowing and voluntary.


 


g.           No
Waiver by Holder. No failure or delay on the part of Holder in exercising any right, power or privilege hereunder, and no course
of dealing between the Borrower and Holder shall operate as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or preclude any other or further exercise thereof or the exercise of any other right, power or privilege
hereunder. The rights, powers and remedies herein expressly provided are cumulative and not exclusive of any rights, powers or
remedies which Holder would otherwise have. No notice to or demand on Borrower in any case shall entitle Borrower to any other
or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Holder to any other or further
action in any circumstances without notice or demand. The acceptance by Holder of any payment hereunder which is less than payment
in full of all amounts due and payable at the time of such payment shall not, unless otherwise expressly agreed to by Holder in
writing at such time, constitute a waiver of the right to exercise any of Holder’s rights, remedies, recourses or powers
at that time, or any subsequent time, or nullify any prior exercise of any such right, remedy, recourse or power, except as and
to the extent otherwise required by applicable law.


 


h.           Survival.
All indemnities set forth herein including, shall survive the execution and delivery of this Note and the making and repayment
of the loan hereunder.


 


i.             Entirety.
This Note represents the final agreement between Holder and Borrower and may not be contradicted by evidence of prior, contemporaneous,
or subsequent oral agreements by such parties. There are no unwritten oral agreements between Holder and Borrower.


 


[signature page follows]


 




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WITNESS the
due execution hereof as a document under seal, as of the date first written above, with the intent to be legally bound hereby.


 





	 	BORROWER:	 
	 	 	 	 
	 	BIOHITECH GLOBAL, INC.	 
	 	 	 	 
	 	By:	 	(SEAL)
	 	 	Brian C. Essman, CFO	 







 


	Acknowledged and agreed to:	 
	 	 
	 	 
	FRANK E. CELLI	 


 


	
        STATE OF                                                         )

                                                                                     )

        COUNTY
        OF                                                 
            )

         

        On this, the 2nd day
        of February, 2018, before me, a Notary Public, the undersigned officer, personally appeared Brian C. Essman, who acknowledged himself
        to be the CFO of BioHiTech Global, Inc., a Delaware corporation, and that he, as such officer, being authorized to do so, executed
        the foregoing instrument for the purposes therein contained by signing on behalf of the company as such officer and further acknowledged
        that he executed the same with the knowledge and intent that the foregoing instrument contains a grant by corporation of powers
        of attorney including a warrant of attorney conferring authority to confess judgment.

         

        IN WITNESS WHEREOF, I
        hereunto set my hand and official seal.

        _______________________

        Notary Public

         

        My commission expires:
	
        STATE OF                                              )

                                                                          )

        COUNTY OF                                           )

         

        On this, the 2nd day
        of February, 2018, before me, a Notary Public, the undersigned officer, personally appeared Frank E. Celli, personally known to
        me or proved to me on the basis of satisfactory evidence, to be the individual whose name is subscribed to the within instrument
        and acknowledged to me that he executed the same in his capacity, and that by his signature on the instrument, the individual or
        the person upon behalf of which the individual acted, executed the instrument.

         

        IN WITNESS WHEREOF, I
        hereunto set my hand and official seal.

         

        _________________________

        Notary Public

         

        My commission expires:

         




 




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