Document:

EXHIBIT 10.10.BH

 

8% CONVERTIBLE TERM NOTE

 

	
  $100,000

  	
   

  	
  November 4, 2003

  

 

ELECTROPURE, INC., a
California corporation, (the “Company”), for the value received, hereby
unconditionally and absolutely promises to pay to the order of ANTHONY M.
FRANK KEOGH PLAN UTA CHARLES SCHWAB & CO., INC., or holder
(collectively, the “Holder”), upon presentation and surrender
of this Note at its office at 23456 South Pointe Drive, Laguna Hills,
California 92653, or such other place as the Company may, from time to time,
designate, the sum of One Hundred Thousand ($100,000), in lawful
money of the United States, on November 4, 2004, or if such day is not a
regular business day, then on the next business day thereafter (the “Maturity
Date”).

 

1.             CONVERSION.

 

The Holder of this Note shall have the right, at its option, at any
time up until 5:00 P.M. Los Angeles time on the fifth (5th) day immediately
before the Maturity Date (except that, with respect to any portion of this Note
which shall be called for prepayment, such right shall as to such portion
terminate at 5:00 P.M. Los Angeles time on the fifth (5th) day immediately
prior to the Prepayment Date (as defined in Section 2 hereof)), to convert all
or any portion of the principal amount of this Note, including interest accrued
thereon, subject to the terms and provisions of this Section 1, into common
stock of Electropure, Inc. at the then fair market value (closing bid price) on
the date of such conversion.

 

2.             PAYMENTS
AND PREPAYMENTS.

 

(a)           All
payments and prepayments of principal and interest shall be made in immediately
available funds on or before the Maturity Date to the Holder at 1 Maritime
Plaza, Suite 825, San Francisco, California 
94111.

 

(b)           The
unpaid principal amount of the Note from time to time outstanding shall bear
interest from the date of this Note at the rate of Eight Percent (8%) per annum
until paid.  Interest shall be computed
for the actual number of days elapsed on the basis of a year consisting of 360
days.

 

(c)           The
Company may prepay at any time in advance of the Maturity Date all or any part
of this Note, plus accrued interest on the portion of the principal being
prepaid.  Interest on the portion of the
Note prepaid shall cease to accrue on and after the date of such prepayment.

 

3.             NOTICES
TO NOTEHOLDER.

 

So long as this Note shall be outstanding, if the Company (i) shall pay
any dividend or make any distribution upon the Company Stock or (ii) shall
effect a capital reorganization, reclassification of capital stock,
consolidation or merger with or into another corporation, sale, lease or
transfer of all or substantially all of the property and assets of the Company
to another corporation, or voluntary or involuntary dissolution, liquidation or
winding up of  the Company, then in any
such case, the Company shall cause to be mailed by certified mail to the
Holder, at least fifteen days prior to the date specified in (x) or (y) below,
as the case may be, a notice containing a brief description of the proposed
action and stating the date on which (x) a record is to be taken for the
purpose of such dividend or distribution, or (y) such reclassification,
reorganization, consolidation, merger,

 

 

conveyance, lease, dissolution,
liquidation or winding up is to take place and the date, if any is to be fixed,
as of which the holders of Common Stock or other securities shall receive cash
or other property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or winding up.

 

4.             EVENTS
OF DEFAULT.  If one or more of
the following described events shall occur (each an “Event of Default”):

 

(a)           The
Company shall fail to pay the principal of, or interest on, this Note within
five (5) days after the Holder has given written notice to the Company that the
same has become due; or

 

(b)           The
Company shall fail to perform or observe any of the provisions contained in any
Section of this Note and such failure shall continue for more than thirty (30)
days after the Holder has given written notice to the Company; or

 

(c)           Any
material representation or warranty made in writing by or on behalf of the
Company in this Note shall prove to have been false or incorrect in any
material respect, or omits to state a material fact required to be stated
therein in order to make the statements contained therein, in the light of the
circumstances under which made, not misleading, on the date as of which made,
and the Company shall have failed to cure such false or incorrect statement
within thirty (30) days after the Holder has given written notice to Borrower;
or

 

(d)           The
Company shall be adjudicated a bankrupt or insolvent, or admit in writing its
inability to pay its debts as they mature, or make an assignment for the
benefit of creditors; or the Company shall apply for or consent to the
appointment of a receiver, trustee, or similar officer for it or for all or any
substantial part of its property; or such receiver, trustee or similar officer
shall be appointed without the application or consent of the Company and such
appointment shall continue undischarged for a period of thirty (30) days; or
the Company shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding relating
to it under the laws of any jurisdiction; or any such proceeding shall be
instituted (by petition, application or otherwise) against the Company and
shall remain undismissed for a period of ninety (90) days; or any judgment, writ,
warrant of attachment or execution or similar process shall be issued or levied
against a substantial part of the property of the Company and such judgment,
writ, or similar process shall not be released, vacated or fully bonded within
ninety (90) days after its issue or levy; or

 

(e)           The
Company shall be enjoined, restrained or in any way prevented by a court order
from continuing to conduct all or any material part of its business affairs;

 

(f)            Any
suit, action or other proceeding (judicial or administrative) commenced against
the Company, or with respect to any assets of the Company, shall threaten to
have a material adverse effect on their future operations, including, without
limitation a final judgment or settlement in excess of $25,000 in excess of
insurance shall be entered in, or agreed to in respect of any such suit, action
or proceeding.

 

THEN, or at
any time thereafter, and in each and every case:

 

2

 

(1)           Where
the Company is in default under the provisions of Section 3(d) hereof, the
entire unpaid principal amount of the Note, all interest accrued and unpaid
thereon, and all other amounts payable to the Holder hereunder shall
automatically become and be forthwith due and payable without offset or
counterclaim of any kind and without presentment, demand, protest or notice of
any kind, and without regard to the running of the statute of limitations, all
of which are hereby expressly waived by the Company; and

 

(2)           In
any other case referred to in this Section 3, the Holder may, by written notice
to the Company, as the case may be, declare the entire unpaid principal amount
of this Note, all interest accrued and unpaid hereon, and all other amounts
payable hereunder to be forthwith due and payable, whereupon the same shall
become immediately due and payable, without offset or counterclaim of any kind
and without presentment, demand, or protest, and without regard to the running
of any statutes of limitation, all of which are hereby expressly waived by the
Company.

 

Any declaration made pursuant to Section 3(2) hereof is subject to the
condition that, if at any time after the principal of this Note shall have
become due and payable, and before any judgment or decree for the payment of
the moneys so due, or any thereof, shall have been entered, all arrears of
principal and interest upon this Note (except that principal of this Note which
by such declaration shall have become payable) shall have been duly paid, and
every Event of Default shall have been made good, waived or cured, then and in
every such case the Holder shall be deemed to have rescinded and annulled such
declaration and its consequences; but no such rescission or annulment shall
extend to or affect any subsequent Event of Default or impair any right
consequent thereon.

 

5.             CORPORATE
OBLIGATION.         It is
expressly understood that this Note is solely a corporate obligation of the
Company and that any and all personal liability, either at common law or in
equity, or by constitution or statute, of, and any and all rights and claims
against, every stockholder, officer, or director, as such, past, present or
future, are expressly waived and released by the Holder as a part of the
consideration for the issuance hereof.

 

6.             AUTHORIZATION;
NO CONFLICT.             The
borrowings hereunder, the execution and delivery of the Note and the
performance by the Company of its obligations under this Agreement and the Note
are within the corporate powers of the Company, have been authorized by all
necessary corporate action, have received all necessary governmental approval
(if any shall be required) and do not and will not contravene or conflict with
any provision of law or of the charter or by-laws of the Company or of any
agreement binding upon the Company.

 

7.             TRANSFER.         Subject
to the appropriate provisions hereof, this Note or any portion of the principal
amount hereof (or any remaining balance if any pre-payments have occurred
pursuant to Section 1 hereof) is transferable on the records of the Company
upon presentation of this Note, properly endorsed, at its principal office;
upon such presentation and transfer a new Note or Notes will be issued.  For the purposes of payment and all other
purposes, the Company shall deem and treat the person in whose name this Note
is registered as the absolute owner hereof and the Company shall not be
affected by any notice to the contrary.

 

3

 

8.             MISCELLANEOUS.

 

(a)           Notwithstanding
the foregoing, the Company promises to pay interest after maturity (whether by
acceleration or otherwise, and before as well as after judgment) at the same
rate as above provided prior to maturity on balances, if any, then outstanding.

 

(b)           Interest
under this Note shall be computed on the basis of a thirty (30) day month and a
year of 360 days for the actual number of days elapsed.

 

IN WITNESS
WHEREOF, the Company has caused this Note to be executed in Laguna Hills,
California as of the day and year first above written.

 

	
  COMPANY:

  	
  HOLDER:

  
	
   

  	
   

  
	
  ELECTROPURE, INC.

  	
  ANTHONY M. FRANK
  KEOGH PLAN,

  
	
   

  	
  UTA CHARLES SCHWAB
  & CO., INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By

  	
     /S/
  FLOYD PANNING

  	
   

  	
  By

  	
     /S/
  ANTHONY M. FRANK

  	
   

  
	
   

  	
  Floyd Panning,
  President

  	
   

  	
  Anthony M. Frank

  
	
   

  	
  23456 South Pointe Drive

  	
   

  	
  1 Maritime Plaza, Suite 825

  
	
   

  	
  Laguna Hills, CA  92653

  	
   

  	
  San Francisco, CA  94111

  
								

 

4EXHIBIT 10.10.BI

 

8% CONVERTIBLE TERM NOTE

 

	
  $100,000

  	
   

  	
  November 21, 2003

  

 

ELECTROPURE, INC., a
California corporation, (the “Company”), for the value received, hereby
unconditionally and absolutely promises to pay to the order of ANTHONY M.
FRANK, or holder (collectively, the “Holder”), upon presentation
and surrender of this Note at its office at 23456 South Pointe Drive, Laguna
Hills, California 92653, or such other place as the Company may, from time to
time, designate, the sum of One Hundred Thousand ($100,000), in lawful
money of the United States, on November 21, 2004, or if such day is not a
regular business day, then on the next business day thereafter (the “Maturity
Date”).

 

1.             CONVERSION.

 

The Holder of this Note shall have the right, at its option, at any
time up until 5:00 P.M. Los Angeles time on the fifth (5th) day immediately
before the Maturity Date (except that, with respect to any portion of this Note
which shall be called for prepayment, such right shall as to such portion
terminate at 5:00 P.M. Los Angeles time on the fifth (5th) day immediately
prior to the Prepayment Date (as defined in Section 2 hereof)), to convert all
or any portion of the principal amount of this Note, including interest accrued
thereon, subject to the terms and provisions of this Section 1, into common
stock of Electropure, Inc. at the then fair market value (closing bid price) on
the date of such conversion.

 

2.             PAYMENTS
AND PREPAYMENTS.

 

(a)           All
payments and prepayments of principal and interest shall be made in immediately
available funds on or before the Maturity Date to the Holder at 1 Maritime
Plaza, Suite 825, San Francisco, California 
94111.

 

(b)           The
unpaid principal amount of the Note from time to time outstanding shall bear
interest from the date of this Note at the rate of Eight Percent (8%) per annum
until paid.  Interest shall be computed
for the actual number of days elapsed on the basis of a year consisting of 360
days.

 

(c)           The
Company may prepay at any time in advance of the Maturity Date all or any part
of this Note, plus accrued interest on the portion of the principal being
prepaid.  Interest on the portion of the
Note prepaid shall cease to accrue on and after the date of such prepayment.

 

3.             NOTICES
TO NOTEHOLDER.

 

So long as this Note shall be outstanding, if the Company (i) shall pay
any dividend or make any distribution upon the Company Stock or (ii) shall
effect a capital reorganization, reclassification of capital stock,
consolidation or merger with or into another corporation, sale, lease or transfer
of all or substantially all of the property and assets of the Company to
another corporation, or voluntary or involuntary dissolution, liquidation or
winding up of  the Company, then in any
such case, the Company shall cause to be mailed by certified mail to the
Holder, at least fifteen days prior to the date specified in (x) or (y) below,
as the case may be, a notice containing a

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