12% Secured Convertible Note

Exhibit 10.1

Form of Note

October ___, 2007		$25,000

SMART MOVE, INC.

 
12% Secured Convertible Note (“Note”)
Due October 31, 2008

           Smart Move, Inc., a Delaware corporation (“Maker” or the “Company”), for value received, promises to pay to the order of___, whose address is ___(the “Holder”), the principal sum of Twenty Five Thousand ($25,000) Dollars with an annualized rate of interest from the date hereof of twelve percent (12%) per annum until maturity. Interest shall be due and payable at maturity or upon any prepayment or acceleration of the maturity of this Note. Interest shall be paid in cash or, subject to the Company’s election to offer to pay interest by means of a stock issuance and the Holder’s acceptance of such offer, in shares of Common Stock corresponding to the amount of accrued interest at the same $1.00 Conversion Price applicable to the principal of this Note. The entire Principal and all accrued, unpaid interest shall be due and payable to the Holder on or before October 31, 2008, provided that Maker may at any time or from time to time, upon giving Holder at least forty-five (45) days advance written notice of Maker’s intention to do so, make a voluntary prepayment, whether in full or in part, of this Note, without premium or penalty.

1.

NOTE; SECURITY FOR REPAYMENT

     This Note in the principal amount of Twenty Five Thousand ($25,000) Dollars is being issued to the Holder under and pursuant to the terms of a Subscription Agreement of even date herewith and is secured by a second lien security interest in certain of the Maker’s assets pledged as collateral, consisting of 35 flatbed trailers, 65 forklifts, all GPS units in use or held for use, the Maker’s accounts receivable and office furniture and software, and equity ownership of subsidiaries of the Maker subordinate only to the existing secured indebtedness of the Maker to Silicon Valley Bank, a commercial lender to the Maker, in the current approximate principal amount of $500,000.

2.

CONVERSION AT OPTION OF HOLDER; AUTOMATIC CONVERSION

A.

Conversion at Option of Holder. The Holder shall have the right (the “Conversion Right”) at any time or from time to time prior to the day this Note is paid in full, to convert all or any part

			of the outstanding and unpaid principal amount of this Note as shall remain unpaid at the effective date of the conversion, into, fully paid and non-assessable shares of Common Stock, par value $.0001 per share, at a conversion price of $1.00 per share (the “Conversion Price”). The Conversion Right may be exercised notwithstanding Maker’s issuance of a notice of intention to make a voluntary prepayment, and the effective date of an elective conversion is the date of Holder’s delivery of a “Conversion Notice” in the form attached hereto.
	B.		Automatic Conversion. The Note will automatically convert into shares of the Company’s common stock on the date when closing bid price of a share of the Company’s common stock equals $3.00 per share or greater for thirty (30) consecutive trading days on the American Stock Exchange, provided that the underlying shares have either been registered for resale by the holders of the securities pursuant to certain piggyback registration rights granted to the Holder as described in paragraph D below or are eligible to be sold under and subject to Rule 144 under the Securities Act of 1933.
	C.		Mechanics of Conversion. The Holder shall effect any elective conversions by delivering to the Company a completed notice in the form attached hereto as Exhibit “A” (a “Conversion Notice”). Unless the Holder is converting the entire principal amount outstanding under this Note or an Automatic Conversion has occurred, the Holder is not required to physically surrender this Note to the Company in order to effect conversions. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note plus any accrued and unpaid interest thereon paid in equity securities in an amount equal to the applicable conversion. The Company shall maintain records showing the principal amount converted and the date of such conversions and will promptly notify Holder if an Automatic Conversion occurs. Upon conversion of the entire unpaid principal amount of this Note and any accrued, unpaid interest, whether in connection with a conversion at the option of Holder pursuant to exercise of the Conversion Right or pursuant to an Automatic Conversion, this Note shall be surrendered by the Holder to the Company for cancellation and a certificate representing the Common Stock issued to Holder therefor shall be delivered to Holder. No fractional shares or scrip shall be issued upon any conversion of this Note. Instead of any fractional shares that would otherwise be issuable upon conversion of this Note, the Company shall pay a cash adjustment in respect of such fractional interest in an amount equal to that fractional interest of the Conversion Price at which the Note was converted.

3.

RESERVATION OF AUTHORIZED SHARES; EFFECT OF RECAPITALIZATION; PIGGYBACK REGISTRATION RIGHTS

	A.		Reservation of Authorized Shares. The Company agrees and represents that until this Note is paid in full or converted, the Company will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Company further agrees and represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable and that the Company will instruct its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note.
	B.		Effect of Capital Reorganization or Reclassification .  If the number of outstanding shares of Common Stock of the Company shall be increased or decreased as a result of a stock sp