Unassociated Document


    

      EXHIBIT
        10.21

       

      THIS
        NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS
        AMENDED (THE “ACT”), OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE
        TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
        REGISTERED UNDER THE ACT AND SUCH LAWS OR (1) REGISTRATION UNDER
        APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED, AND (2) AN
OPINION
        OF COUNSEL SATISFACTORY TO THE COMPANY IS FURNISHED TO THE
        COMPANY TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT
        REQUIRED.

       

      ORGANIC
        FARM MARKETING, LLC

      CONVERTIBLE
        NOTE

       

      
        	 	
                December
                  18, 2007

              
	
                $800,000.00

              	
                Thorp,
                  Wisconsin

              


      

       

      ORGANIC
        FARM MARKETING, LLC, a Wisconsin limited liability company (the “Company”),
        for value received, hereby promises to pay to the order of ADVANCED BIOTHERAPY,
        INC. a Delaware corporation (“Advanced Biotherapy,” together with its successors
        and permitted assigns, collectively, the “Holder”), the maximum
        principal sum of Eight Hundred Thousand Dollars ($800,000.00) (or such lesser
        amount as
        may
        have been advanced hereunder), and to pay interest (computed on the basis
        of
        actual days elapsed
        in a 365-day year) on the unpaid principal balance of each advance from the
        date
        of such advance
        at a rate per annum equal to ten percent (10%) (such principal and accrued
        interest together
        shall be known as the “Principal Sum”). Interest shall be payable quarterly in
        arrears commencing on January 17, 2008, and continuing on each April 17,
        July 17, October 17 and January
        17 thereafter until the maturity date set forth below; provided, however,
        that
        the Company
        may, at its option, in lieu of making any cash payment of interest as
        contemplated herein, by written notice to the Holder given not less than
        three
        (3) days prior to the interest payment date, elect to add the interest
        installment to the outstanding principal balance of this Note.
        If
        any interest installment is not paid hereunder when due, the Holder may,
        at its
        option, elect
        to
        add such interest installment to the outstanding principal balance of the
        Note
        or treat such
        failure as an Event of Default.

       

      The
        Principal Sum shall be payable in full on May 17, 2009. Amounts advanced
        under
        this Note and repaid may not be
        redrawn.

       

      If
        the
        Principal Sum is not paid in full on the due date thereof (whether by maturity
        or acceleration), and upon and during the continuance of any Event of Default
        (as defined herein), the
        Principal Sum (to the extent permitted by applicable law) shall bear interest
        thereafter at a rate
        per
        annum equal to thirteen percent (13%) until such payment is paid in full
        or such
        Event of Default
        is cured or waived.

       

      Notwithstanding
        any provision of this Note to the contrary: (i) in no event shall the
interest
        rate on this Note be a rate per annum in excess of the maximum interest rate
        permissible under
        applicable law, and (ii) to the extent that interest (or other amounts paid
        pursuant to this Note
        that
        are deemed to be interest under applicable law) results in interest payments
        in
        excess of those
        permitted under applicable law, such excess payments shall be applied first
        to
        the payment of
        the
        unpaid Principal Sum, second to the payment of any other amounts due from
        the
        Company to
        the
        Holder, and third, if no other obligations are owing to the Holder, then
        refunded to the Company.
        The Company agrees that if such excess payments are applied in the manner
        provided for
        in
        this paragraph, then to the fullest extent permitted by applicable law, the
        Holder shall not be
        subject to any
        penalty provided for by any applicable law relating to charging or collecting
        interest
        in excess of that permitted by applicable law.

       

      
        
          
          

        

        
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      The
        unpaid principal balance of this Note together with all interest accrued
        thereon
        shall, at
        the
        option of the Holder, become immediately due and payable upon any of the
        following events
        (each, an “Event of Default”):

       

      (i) The
        Company shall default in the payment of interest or principal hereunder
        and such default shall continue for a period of five (5) days;

       

      (ii) (ii)
        Any
        representation or warranty made by the Company in this Note, the Investment
        Agreement dated as of December 18, 2007 (“Investment Agreement”) between the
        Company and Advanced Biotherapy, or any other document executed in connection
        therewith, including, without limitation, the secured promissory note issued
        by
        the Company in favor of Advanced Biotherapy (collectively, the “Related
        Documents”) proves to have been untrue, incomplete or misleading in any material
        respect when made or when deemed to have been made (including, but not
limited
        to, upon any advance hereunder);

       

      (iii) The
        Company fails to observe or perform any covenant or agreement set forth
        in
        this Note, the Investment Agreement or the Related Documents and, if such
        failure is capable of being cured and is not otherwise subject to a cure
        period
        under the applicable document, shall continue for a period of thirty (30)
        days;

       

      (iv) (I)
        The
        Company shall commence any case, proceeding or other action (A) under any
        existing or future law of any jurisdiction, domestic or foreign, relating
        to
bankruptcy,
        insolvency, reorganization or relief of debtors,
        seeking
        to have an order for relief
        entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent,
        or seeking
        arrangement, adjustment, composition or other relief with respect to its
        debts,
        or (B) seeking appointment of a receiver, trustee, custodian or other similar
        official for it or for
        all
        or any substantial part of its assets, or the Company shall make a general
        assignment
        for the benefit of its creditors; (II) there shall be commenced against the
        Company
        any case, proceeding or other action of the nature referred to in clause
        (I),
above,
        which (A) results in the order of an order for relief or any such adjudication
        or appointment,
        or (B) remains undismissed, undischarged or unbonded for a period of sixty
        (60)
        days; (III) there shall be commenced against the Company any case, proceeding
        or
        other action seeking issuance of a warranty of attachment, execution, distraint
        or similar process
        against all or any substantial part of its assets which results in the entry
        of
        an order
        for
        any such relief which shall not have been vacated, discharged, or stayed
        or
bonded
        pending appeal within sixty (60) days from the entry thereof; (IV) the Company
        shall
        take any action or furtherance of, or indicating its consent to, approval
        of, or
        acquiescence in, any of the acts set forth in clauses (I), (II), or (III),
        above; or (V) the Company
        shall generally not, or shall be unable to, or shall admit in writing its
        inability to,
        pay
        its debts as they become due;

       

      (v) The
        occurrence of any of the following: (I) an event or series of events by which
        any person, entity or group of persons or entities who are not holders of
        the
Company’s
        Units on the date of this Note shall, as a result of a tender or exchange
        offer,
open
        market purchases, privately negotiated purchases, merger, consolidation or
        otherwise,
        have become the beneficial owner (within the meaning of Rule 13d-3 under
        the
        Securities Exchange Act of 1934), of more than fifty percent (50%) of the
        Units
of
        the
Company
        at any time outstanding entitled to vote generally in the election of the
        Company’s
        directors; (II) the Company is merged with or into another entity with the
        effect
        that immediately after such transaction the equity owners of the Company
        immediately
        prior to such transaction hold less than a majority of the equity interests
        entitled
        to vote generally in the election of the directors of the entity surviving
        the
transaction;
        or (III) the direct or indirect sale, lease, exchange or other transfer of
        all
        or substantially
        all of the assets of the Company;

       

      
        
          
          

        

        
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      (vi) A
        final
        judgment or judgments is or are entered against the Company in the
        aggregate amount of One Hundred
        Thousand
        Dollars ($100,000) or more on a claim or
        claims
        not covered by insurance;

       

      (vii) This
        Note, the Investment Agreement or any of the Related Documents shall
        be
        declared invalid, void or unenforceable, or the validity or enforceability
        thereof shall
        be
        contested or challenged by the Company, or any determination of partial
invalidity,
        voidness or unenforceability shall be made which would, individually or in
        the
aggregate,
        materially reduce the principal benefits of any provision of this Note, the
        Investment
        Agreement or any of the Related Documents to the Holder, or make the
remedies
        generally afforded thereby inadequate for the practical realization thereof;
        or

       

      (viii) The
        holder of any indebtedness owed by the Company in excess of Seventy-Five
        Thousand Dollars ($75,000) accelerates the payment of such indebtedness
for
        any
        reason or the Company defaults in the payment of any indebtedness with an
        unpaid
        principal amount in excess of Seventy-Five Thousand Dollars ($75,000), and
        such
default
        remains unremedied beyond the applicable grace period therefor.

       

      All
        payments on or in respect of this Note, including principal, interest and
        premium thereon,
        shall be made in such coin and currency of the United States of America as
        at
        the time of
        payment is legal tender for the payment of public and private debts by check
        mailed and addressed
        to the registered holder hereof at the address shown in the register maintained
        by the Company
        for such purpose, or, at the option of the Holder, in such manner and at
        such
        other place
        in
        the United States of America as the Holder shall have designated to the Company
        in writing.
        Whenever a payment to be made hereunder shall be due on a day which is not
        a
        business day, such payment shall be made on the next succeeding business
        day and
        such extension
        of time shall be included in the computation of the payment of interest
        hereunder.

       

      The
        Company shall not make any prepayment of any portion of the outstanding
        principal balance
        hereof prior to May 17, 2009 unless the Company has first given not less
        than
        fifteen (15)
        days
        prior written notice thereof to the Holder, and before the Company may make
        any
        such payment,
        the Holder shall have the right in his sole discretion to convert a portion
        of
        the Princi-pal
        Sum
        equal to such prepayment amount in accordance with the conversion procedures
        set
forth
        below in lieu of permitting such prepayment.

       

      The
        Company hereby waives diligence, presentment, demand, protest and notice
        of
        every kind
        whatsoever. The failure of the Holder to exercise any of its rights hereunder
        in
        any particular
        instance shall not constitute a waiver of the same or of any other right
        in that
        or any subsequent
        instance.

       

      This
        Note
        shall be binding upon the Company, its successors and permitted assigns,
        and
        shall inure to the benefit of the Holder, its successors and permitted
        assigns.

       

      
        
          
          

        

        
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      The
        Company agrees to pay all costs of enforcement and collection, including
        reasonable attorneys’
        fees, upon any Event of Default hereunder.

       

      The
        Company’s obligation under this Note are secured by a General Business Security
Agreement
        dated as of even date herewith in favor of Holder.

       

      This
        Note
        is a contract made under and governed by, and shall be construed and enforced
        in
        accordance with, the laws of the State of Delaware, without regard to conflict
        of laws principles.


      Conversion
        Procedures

       

      This
        Note
        shall be subject to the conversion procedures set forth below:

       

      1. Conversion.
        From
        and after June 18, 2008, Holder shall have the right and option, at any time
        or
        times and without the payment of any additional consideration, to convert
        all or
        any portion of the Principal Sum into
        fully-paid and nonassessable Units of the Company.

       

      2. Conversion
        Price.
        The
        Principal Sum shall be convertible into the number of Units that
        results from dividing the Principal Sum submitted for conversion in the
        Conversion Notice (as
        defined below) by the Conversion Price. As of the date hereof, the Conversion
        Price is Ten Dollars ($10.00) but is subject to adjustment as provided in
        Section 3 hereof.

       

      3. Adjustments
        to Conversion Price.
        If and
        whenever on or after the original date of this
        Note, the Company issues or sells any Additional Units (as herein defined)
        for a
        Net Consideration per Unit which is less than the Conversion Price in effect
        immediately prior to the issuance of such Additional Units, then in each
        such
        case the Conversion Price shall be adjusted
        to equal the Net Consideration per Unit paid for such Additional Units. For
        purposes hereof,
        the “Additional Units” shall mean the Company’s Units and any options to
        purchase the Company’s Units or securities directly or indirectly exchangeable
        for or convertible into the
        Company’s Units. The term “Net Consideration” shall mean the amount equal to the
        total amount
        of
        consideration paid for Additional Units and the Net Consideration per Unit
        shall
mean
        the
        total amount of consideration paid for Additional Units divided by the number
        of
Additional
        Units acquired or deemed acquired. For purposes of determining the Net
        Consideration
        paid for Additional Units: (i) options to acquire Units and other securities
        directly or indirectly exchangeable for or convertible into the Company’s Units
        shall be treated as though exercised, exchanged or converted, on the date
        of
        their issuance, into the maximum number of Units into which they are
        convertible, or for which they are exercisable or exchangeable, at the
then
        minimum commitment conversion or exchange price (without regard to any potential
        antidilution
        adjustments); (ii) consideration for Units shall be deemed to include, in
        the
        case of such
        options or exchangeable or convertible securities, their then minimum exercise,
        conversion
        or exchange price (without regard to any potential anti-dilution adjustments);
        and (iii)
        if
        additional Units are issued without consideration, the Net Consideration
        shall
        be deemed equal
        to
        $0.01 per Unit. If, prior to the issuance or sale of the Additional Units,
        the
        Holder has converted
        all or any portion of this Note into Units, then the Company shall issue
        to the
Holder,
        at the time of issuance or sale of the Additional Units and without any
        additional consideration to Holder, the number of Units derived by (i) dividing
        the Conversion Price paid by
        the
        Holder for such Units by such adjusted Conversion Price; (ii) multiplying
        the
        result computed in clause (i) above by the
        number of Units into which this Note was previously converted by the Holder;
        and
(iii)
        subtracting the number of Units into which the Holder previously shall have
        converted this Note, or a portion thereof. By way of example only, assume
        the
Principal
        Sum submitted for conversion was $500,000, the Holder converted the Note
        at the
initial
        Conversion Price of $10 into 50,000 Units and the Company subsequently issued
        Additional
        Units at a Net Consideration per Unit of $8.00. In that instance, the Company
        would issue to the Holder an additional 12,500 Units.

       

      
        
          
          

        

        
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      4. Conversion
        Procedure.
        Before
        the Holder shall be entitled to convert the Principal Sum
        into
        Units, the Holder shall give written notice to the Company that the Holder
        elects to convert
        this Note and shall state the amount of indebtedness hereunder being converted
        (the “Conversion
        Notice”) and shall surrender this Note at the office of the Company. Within
twenty-four
        (24) hours after receiving the Conversion Notice, the Company shall promptly
        issue and
        deliver to the Holder evidence of the Units to which the Holder shall be
        entitled. Such conversion
        shall be deemed to have been made immediately prior to the close of business
        on
        the date
        of
        such surrender of this Note, and the person or persons entitled to receive
        the
        Units issuable
        upon such conversion shall be treated for all purposes as the record holder
        or
        holders of such
        Units on such date. If Holder shall submit for conversion less than the entire
        Principal Sum hereunder,
        the Company shall promptly issue and deliver a new Note in the amount of
        the
Principal
        Sum remaining owing hereunder and in the form of the Note as
        exchanged.

       

      5. Issuance
        of Units.
        The
        issuance of Units upon conversion of this Note will be made without
        charge to the Holder for any issuance tax or other governmental charge in
        respect thereof or
        other
        cost incurred by the Company in connection with such conversion and the related
        issuance
        of Units. Upon the conversion of this Note, the Company will take all such
        actions as are
        necessary in order to insure that the Units issuable with respect to such
        conversion will be validly issued, fully paid and nonassessable and free
        and
        clear of all liens and restrictions other than
        as
        provided in the Operating Agreement (as defined in the Investment Agreement).
        The Company
        will not close its books against the transfer of this Note or of Units issued
        or
        issuable upon
        conversion of this Note in any manner which interferes with the timely
        conversion of this Note.
        If
        any fractional interest in Units would, except for the provisions of this
        Section 4, be deliverable upon any conversion of this Note, upon the request
        of
        the Holder, the Company, in lieu
        of
        delivering the fractional share therefor, may pay an amount to the Holder
        equal
        to the Conversion
        Price of such fractional interest as of the date of conversion (as determined
        by
        the mutual
        agreement of the Company and the Holder). Investor acknowledges and agrees
        that
        any issuance of Units upon conversion of this Note shall be contingent upon
        Investor executing a Joinder Agreement pursuant to which Investor agrees
        to be
        bound by the terms and conditions of the Operating Agreement as in effect
        on the
        date hereof, and amendments thereto as to which Investor has consented in
        writing. 

       

      6. Notification
        by the Company of Certain Changes.
        The
        Company will give written notice to the Holder at least thirty (30) days
        prior
        to the date on which the Company closes its books
        or
        takes a record (i) with respect to any dividend or distribution upon Units,
        (ii)
        with respect to any pro rata subscription offer to holders of Units, or (iii)
        for determining rights to vote
        with
        respect to any capital reorganization, reclassification, consolidation, merger
        or sale of all
        or
        substantially all of the Company’s assets to another person or entity which is
        effected in such a way that holders of Units are entitled to receive (either
        directly or upon subsequent liquidation)
        stock, securities or assets with respect to or in exchange for Units or any
        dissolution, liquidation
        or winding-up of the Company.

       

      7. Rounding.
        All
        calculations under this Note shall be made to the nearest cent or to the
        nearest
        one-hundredth of a Unit, as the case may be.

       

      8. Notices.
        Any
        notices required or permitted to be given under this Note shall be delivered
        personally, by FedEx,
        UPS Overnight, Airborne or other nationally recognized delivery service (with
        evidence of delivery), if to the Company,
        to its principal office, and if to the holder of this Note, to the following
        address:

       

      
        
          
            
            

          

          
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      Advanced
        Biotherapy, Inc.

      141
        West
        Jackson, Suite 2182

      Chicago,
        Illinois 60604

      Attention:
        Christopher W. Capps

        
        Chief Executive Officer

       

      Notices
        shall be deemed given upon personal delivery or the date of delivery after
        having been sent by reputable overnight courier (with evidence of
        delivery).

       

      9. Protection
        of Conversion Rights.
        The
        Company shall not amend its Articles of Organization,
        Operating Agreement or participate in any reorganization, transfer of assets,
        consolidation, merger, dissolution, issuance or sale of securities or any
        other
        voluntary action for the
        purpose of avoiding or seeking to avoid the observance or performance of
        any of
        the terms to be
        observed or performed hereunder by the Company, but will at all times in
        good
        faith assist in the
        carrying out of all the provisions of this Note and will take all actions
        that
        may be necessary or
        appropriate in order to protect the rights of the holder of this Note to
        convert
        the Principal Sum
        against impairment.

       

      10. Assignment.
        Subject
        to the requirements described in Section 12 below, the
        rights and obligations of the Company and the Holder shall be binding upon
        and
        benefit the successors,
        assigns and transferees of the parties.

       

      11. Waiver
        and Amendment.
        No
        provision of this Note may be waived, amended or modified
        without the prior written consent of the Company and the Holder.

       

      12. Transfer
        of this Note or Securities Issuable Upon Conversion.
        With
        respect to any offer,
        sale or other disposition of this Note or securities into which such Note
        may be
        converted, the
        Holder will give written notice to the Company prior thereto, describing
        briefly
        the proposed offer, sale or other disposition and providing a draft of an
        opinion
        of counsel for the holder that such disposition qualifies for an exemption
        from
        registration under applicable federal and state securities law, and if such
        opinion of counsel is not reasonably satisfactory
        to the Company, the Company shall so notify the holder promptly after such
        determination
        has been made. Each Note thus transferred and each certificate representing
        the
securities
        thus transferred shall bear a legend as to the applicable restrictions on
        transferability in
        order
        to ensure compliance with the Act, unless in the opinion of counsel for the
        Company such
        legend is not required.

       

      13. Treatment
        of Note.
        To the
        extent permitted by generally accepted accounting principles,
        the Company will treat, account and report this Note as debt and not equity
        for
accounting
        purposes and with respect to any returns filed with federal, state or local
        tax
authorities.

       

      14. No
        Member Rights.
        Without
        limitation to any rights that the Holder may have outside
        of this Note, nothing contained in this Note shall be construed as conferring
        upon the Holder or any other person the right to vote or to consent or to
        receive notice as a Member in respect
        of meetings of Members for the election of directors or managers of the Company
        or any other matters or
        any
        rights whatsoever as a member of the Company; and no dividends or distributions
        otherwise made to members of the Company shall be payable
        or accrued in respect of this Note or the interest represented hereby or
        the
        Units obtainable
        hereunder until, and only to the extent that, this Note shall have been
        converted.

       

      
        
          
          

        

        
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      Note
        Purchase Agreement.
        This
        Note is issued pursuant to the Investment Agreement and
        all
        capitalized terms not otherwise defined herein shall have the same meaning
        ascribed to them in the Investment Agreement. This
        Note
        is considered the “December Convertible Note” under the Investment
        Agreement.

       

      ORGANIC
        FARM MARKETING, LLC

      


      


      By                            

          Chad
        L.
        Pawlak, Sr., President

       


      
        
          
          

        

        
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