Exhibit
10.4


 


THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF
WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.


 


Original
Issue Date: December 27, 2016


 


Principal
Amount: $1,000,000


 


5%
SENIOR, unsecured PROMISSORY NOTE


DUE
MAY 31, 2017


 


THIS
5% SENIOR, UNSECURED PROMISSORY NOTE is one of a series of duly authorized and validly issued 5% Senior, Unsecured Promissory
Notes of GlyEco, Inc., a Nevada corporation (the “Company”), having its principal place of business at 230
Gill Way, Rock Hill, SC 29730, designated as its 5% Senior, Unsecured Promissory Note due May 31, 2017 (this 5% Senior, Unsecured
Promissory Note, the “Note” and, collectively with the other Notes of such series, the “Notes”).


 


FOR
VALUE RECEIVED, the Company promises to pay to [______] or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $1,000,000 on May 31, 2017 (the “Maturity Date”)
or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder
on the then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following
additional provisions:


 


Section
1.          Definitions. For the purposes hereof, in addition to
the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth
in the Subscription Agreement (as defined below) and (b) the following terms shall have the following meanings:


 




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“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in
Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the
Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof
any such case or proceeding that is not dismissed within sixty (60) days after commencement, (c) the Company or any Significant
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it
or any substantial part of its property that is not discharged or stayed within sixty (60) calendar days after such appointment,
(e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company
or any Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring
of its debts or (g) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent
to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any
of the foregoing.


 


“Board
of Directors” means the Board of Directors of the Company.


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.


 


“Change
of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof
by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act)
of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise)
of in excess of 50% of the voting securities of the Company, provided that the foregoing shall not apply to acquisitions by the
Holder or any of its Affiliates, (b) the Company merges into or consolidates with any other Person, or any Person merges into
or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior
to such transaction own less than 66% of the aggregate voting power of the Company or the successor entity of such transaction,
(c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company
immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately after
the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board
of Directors which is not approved by at least one of those individuals who are members of the Board of Directors on the Original
Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board
of Directors was approved by one of the members of the Board of Directors who was a member on the date hereof), or (e) the execution
by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth
in clauses (a) through (d) above.


 


“Event
of Default” shall have the meaning set forth in Section 4(a).


 




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“Mandatory
Default Amount” means the payment of (i) 125% of the outstanding principal amount of this Note and accrued and (ii)
unpaid interest hereon, in addition to the payment of all other amounts, costs, expenses and liquidated damages due in respect
of this Note.


 


“New
York Courts” shall have the meaning set forth in Section 6(d).


 


“Note
Register” shall have the meaning set forth in Section 2(b).


 


“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Notes.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Subscription
Agreement” means the Subscription Agreement, dated on or about the date hereof, between the Company and the original
Holder, as amended, modified or supplemented from time to time in accordance with its terms.


 


Section
2.          Interest.


 


a)
       Interest in Cash. Interest on the aggregate outstanding principal amount of this
Note shall accrue at the rate of 5% per annum and shall be payable in cash on the Maturity Date or as otherwise set forth herein.


 


b)
       Interest Calculations. Interest shall be calculated on the basis of a 360-day
year, consisting of twelve 30 calendar day periods, and shall accrue daily commencing on the Original Issue Date until payment
in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which
may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered on
the records of the Company regarding registration and transfers of this Note (the “Note Register”).


 


c)
       Late Fee. All overdue accrued and unpaid interest to be paid hereunder shall
entail a late fee at an interest rate equal to the lesser of 12% per annum or the maximum rate permitted by applicable law (the
“Late Fees”) which shall accrue daily from the date such interest is due hereunder through and including the
date of actual payment in full.


 


d)
       Optional Prepayment. At any time upon ten (10) days written notice to the Holder,
the Company may prepay any portion of the principal amount of this Note and any accrued and unpaid interest. If the Company exercises
its right to prepay the Note, the Company shall make payment to the Holder of an amount in cash equal to the sum of (i) the then
outstanding principal amount of this Note and (ii) the accrued and unpaid interest on such outstanding principal amount.


 




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Section
3.          Registration of Transfers and Exchanges.


 


a)
       Different Denominations. This Note is exchangeable for an equal aggregate principal
amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will
be payable for such registration of transfer or exchange.


 


b)
      Investment Representations. This Note has been issued subject to certain investment
representations of the original Holder set forth in the Subscription Agreement and may be transferred or exchanged only in compliance
with the Subscription Agreement and applicable federal and state securities laws and regulations.


 


c)
       Reliance on Note Register. Prior to due presentment for transfer to the Company
of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the
Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether
or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.


 


Section
4.          Events of Default.


 


a)
       “Event of Default” means, wherever used herein, any of the following
events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of
law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental
body):


 


		i.	any
                                         default in the payment of (A) the principal amount of any Note or (B) interest, liquidated
                                         damages and other amounts owing to a Holder on any Note, as and when the same shall become
                                         due and payable (whether on the Maturity Date or by acceleration or otherwise) which
                                         default, solely in the case of an interest payment or other default under clause (B)
                                         above, is not cured within three (3) Business Days;



 


		ii.	the
                                         Company shall fail to observe or perform any other covenant or agreement contained in
                                         the Notes which failure is not cured, if possible to cure, within the earlier to occur
                                         of (A) five (5) Business Days after notice of such failure sent by the Holder or by any
                                         other Holder to the Company and (B) ten (10) Business Days after the Company has become
                                         or should have become aware of such failure;



 




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		iii.	a
                                         default or event of default (subject to any grace or cure period provided in the applicable
                                         agreement, document or instrument) shall occur under (A) any of the Transaction Documents
                                         (as defined in the Subscription Agreement) or (B) any other material agreement, lease,
                                         document or instrument to which the Company or any Subsidiary is obligated (and not covered
                                         by clause (vi) below), which in the case of clause (B) is not being disputed in good
                                         faith by the Company;



 


		iv.	any
                                         representation or warranty made in this Note, any other Transaction Documents, or any
                                         report, financial statement or certificate made or delivered to the Holder or any other
                                         Holder pursuant hereto or thereto shall be untrue or incorrect in any material respect
                                         as of the date when made or deemed made;



 


		v.	the
                                         Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation
                                         S-X) shall be subject to a Bankruptcy Event;



 


		vi.	the
                                         Company or any Subsidiary shall default on any of its obligations under any mortgage,
                                         credit agreement or other facility, indenture agreement, factoring agreement or other
                                         instrument under which there may be issued, or by which there may be secured or evidenced,
                                         any indebtedness for borrowed money or money due under any long term leasing or factoring
                                         arrangement that (a) involves an obligation greater than $50,000, whether such indebtedness
                                         now exists or shall hereafter be created, and (b) results in such indebtedness becoming
                                         or being declared due and payable prior to the date on which it would otherwise become
                                         due and payable;



 


		vii.	the
                                         Company shall be a party to any Change of Control Transaction;



 


		viii.	any
                                         formal action knowingly intended to effectuate any of the foregoing;



 


		ix.	the
                                         occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or
                                         damage to, any property of the Company or any Subsidiary having an aggregate fair value
                                         or repair cost (as the case may be) in excess of $100,000 individually or in the aggregate,
                                         and any such levy, seizure or attachment shall not be set aside, bonded or discharged
                                         within thirty (30) days after the date thereof; or



 


		x.	any
                                         monetary judgment, writ or similar final process shall be entered or filed against the
                                         Company, any subsidiary or any of their respective property or other assets for more
                                         than $50,000, and such judgment, writ or similar final process shall remain unvacated,
                                         unbonded or unstayed for a period of forty-five (45) calendar days.



 




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b)
      Remedies Upon Event of Default. If any Event of Default occurs, then the outstanding
principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof
through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory
Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest
rate on this Note shall accrue at an additional interest rate equal to the lesser of 1% per month (12% per annum) or the maximum
rate permitted under applicable law (the “Default Interest Rate”). Upon the payment in full of the Mandatory
Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration
described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice
of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder
at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as
the Holder receives full payment pursuant to this Section 4(b). No such rescission or annulment shall affect any subsequent Event
of Default or impair any right consequent thereon; provided, however, that if this Note has not been fully repaid at the
Maturity Date, then any balance due, including accrued interest thereon shall become due and payable at the Default Interest Rate
and payable in four (4) equal installments, in each of the four (4) months that follows the Maturity Date. For the avoidance of
doubt, if on the Maturity Date there is $500,000 in principal amount of Notes and $100,000 in interest due on the Maturity Date,
then the amount due each month under this provision shall be $127,500 plus interest at 1% per month in each of the months subsequent
to the Maturity Date.


 


Section
5.          Miscellaneous. 


 


a)
       Notices. Any and all notices or other communications or deliveries to be provided
by the Holder hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service, addressed to the Company, at the address set forth above, or such other facsimile number or address as the Company
may specify for such purposes by notice to the Holder delivered in accordance with this Section 5(a). Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile,
or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the
Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at
the principal place of business of such Holder, as set forth in the Subscription Agreement. Any notice or other communication
or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30
p.m. (New York City time) on any date, (ii) the next Business Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Business
Day or later than 5:30 p.m. (New York City time) on any Business Day, (iii) the second (2nd) Business Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such
notice is required to be given.


 




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b)
      Absolute Obligation. Except as expressly provided herein, no provision of this Note
shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated
damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed.
This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter
issued under the terms set forth herein.         


 


c)
       Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed,
the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu
of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost,
stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof,
reasonably satisfactory to the Company.


 


d)
      Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State
of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning
the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought
against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced
in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect
to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York
Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action
or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed
by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution
of such action or proceeding.


 




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e)
      Waiver. No
provision of this Note may be waived, modified, supplemented or amended except in a written instrument signed, in the case of
an amendment, by the Company and the holders of at least 67% in interest of the Notes then outstanding or, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right. 


 


f)         Severability.
If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury,
the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead,
or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would
prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and
the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder,
but will suffer and permit the execution of every such power as though no such law has been enacted.


 


g)       Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be
cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the
Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of
this Note.  The Company covenants to the Holder that there shall be no characterization concerning this instrument other
than as expressly provided herein. Amounts set forth or provided for herein with respect to payments and the like (and the
computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be
inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be
entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened
breach, without the necessity of showing economic loss and without any bond or other security being required. The Company
shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm
the Company’s compliance with the terms and conditions of this Note.


 




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h)        Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day.


 


i)         Headings.
The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit
or affect any of the provisions hereof.


 


*********************


 


(Signature
Pages Follow)


 




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IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above
indicated.


 





	 	GLYECO, inc.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	Facsimile No. for delivery of Notices: __________________




  




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