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Exhibit 10.1
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF
1933, AS AMENDED (THE "ACT"). THE SECURITIES REPRESENTED HEREBY
MAY NOT BE SOLD,
OFFERED FOR SALE, TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED
IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, EVIDENCE
SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT
OR UNLESS SOLD
PURSUANT TO RULE 144 OF THE ACT.
BEACON ENTERPRISE SOLUTIONS GROUP INC.
CONVERTIBLE PROMISSORY NOTE
$______________ Louisville, Kentucky
December __, 2007
Beacon Enterprise Solutions Group Inc., a Nevada corporation
(the
"Company"), the principal office of which is located at 124
North First Street,
Louisville, Kentucky 40202 for value received, hereby promises
to pay to the
order of [HOLDER], whose address is [_______________], or his
registered assigns
(the "Holder"), the sum of [______________ ($________)], and any
unpaid accrued
interest hereon, as set forth below, on December 31, 2007 (the
"Maturity Date").
This note (the "Note") is one of the Convertible Promissory
Notes (the "2007
Notes") issued, under the terms of that certain Securities
Exchange Agreement,
dated December [20], 2007, in exchange for those Convertible
Promissory Notes
issued by the Company between June 1, 2007 and November 30,
2007.
The following is a statement of the rights of the Holder and
the
conditions to which this Note is subject, and to which the
Holder, by the
acceptance of this Note, agrees:
1. Interest and Payments. The Company shall pay interest at the
Prime Rate
of interest in effect from time to time as reported in the Wall
Street Journal
(the "Interest Rate") on the principal of this Note outstanding
during the
period beginning on the date hereof and ending on the Maturity
Date. Accrued
interest under this Note shall be compounded annually. Interest
payable under
this Note shall be computed on the basis of a year of 360 days
and actual days
elapsed occurring in the period for which payable. Interest
shall be payable
when the unpaid principal balance of the Note is paid.
Upon an Event of Default (as defined below), interest shall
accrue at the
Interest Rate plus three percent (3%) (the "Default Rate") on
the balance of the
outstanding principal amount and all accrued interest thereon
until such balance
is paid.
The Holder shall receive a payment of all accrued interest on
the Note as
of the date of such closing and thereafter shall receive monthly
interest
payments, which shall be due and payable on the 15th day of
every month until
the Maturity Date, at which time the entire outstanding
principal amount and all
accrued interest thereon shall be due and payable.
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All payments made on this Note shall be applied, at the option
of the
Holder, first to late charges and collection costs, if any, then
to accrued
interest and then to principal. After the Maturity Date or upon
an Event of
Default, interest shall continue to accrue on this Note at the
Default Rate set
forth above and shall be payable on demand of the Holder.
Notwithstanding anything in this Note to the contrary, the
interest rate
charged hereon shall not exceed the maximum rate allowable by
applicable law. If
any stated interest rate herein exceeds the maximum allowable
rate, then the
interest rate shall be reduced to the maximum allowable rate,
and any excess
payment of interest made by the Company at any time shall be
applied to the
unpaid balance of any outstanding principal of this Note.
2. Events of Default. If any of the events specified in this
Section 2
shall occur (herein individually referred to as an "Event of
Default"), persons
holding more than fifty percent (50%) of the then outstanding
principal balance
of the 2007 Notes (the "Majority Holders") may, so long as such
condition
exists, declare the entire outstanding principal and unpaid
accrued interest on
this Note and the other 2007 Notes immediately due and payable,
by notice in
writing to the Company.
(i) The institution by the Company of proceedings to be
adjudicated
as bankrupt or insolvent, or the consent by it to the
institution of bankruptcy
or insolvency proceedings against it or the filing by it of a
petition or answer
consenting to or seeking reorganization or release under the
federal Bankruptcy
Act, or any other applicable federal or state law, or the
consent by it to the
filing of any such petition or the appointment of a receiver,
liquidator,
assignee, trustee or other similar official for the Company, or
for any
substantial part of its property, or the making by it of an
assignment for the
benefit of creditors, or the taking of corporate action by the
Company in
furtherance of any such action;
(ii) If, within sixty (60) days after the commencement of an
action
against the Company (and service of process in connection
therewith on the
Company) seeking any bankruptcy, insolvency, reorganization,
liquidation,
dissolution or similar relief under any present or future
statute, law or
regulation, such action shall not have been resolved in favor of
the Company or
all orders or proceedings thereunder affecting the operations or
the business of
the Company stayed, or if the stay of any such order or
proceeding shall
thereafter be set aside, or if, within sixty (60) days after the
appointment
without the consent or acquiescence of the Company of any
trustee, receiver or
liquidator of the Company or of all or any substantial part of
the properties of
the Company, such appointment shall not have been vacated,
or
(iii) Failure by the Company to make any payment when due on
this
Note or any other material breach of this Note.
3. Conversion.
3.1 Voluntary Conversion. The Holder may, upon delivery of
written
notice to the Company, elect to convert the entire outstanding
principal amount
of the Note into Shares (as defined below), and demand payment
of all accrued
but unpaid interest thereon.
3.2 Conversion Procedure. Upon the election of the Holder to
convert
this Note pursuant to Section 3.1, the entire principal amount
of this Note
shall be converted into the
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number of shares of Common Stock of the Company ("Shares") equal
to (x) the
outstanding principal amount of this Note as of the date of the
election to
convert, divided by (y) $0.60 (as adjusted proportionately from
time to time
upon any stock split, stock dividend, adjustment, combination or
division
affecting shares of Common Stock) and upon such other terms and
conditions as
applicable to the Shares with respect to any such transaction.
All accrued but
unpaid interest shall be paid to the holder at the time of
conversion.
Otherwise, all unpaid principal and unpaid accrued interest on
the Note will be
due and payable on the Maturity Date except to the extent the
Holder has elected
to convert its Note into Shares as provided herein.
3.3 Delivery of Evidence of Ownership. As promptly as
practicable
after the conversion of this Note, the Company at its expense
will issue and
deliver to the Holder a certificate or certificates and any
other documents
necessary to evidence ownership of the number of Shares issuable
upon such
conversion upon surrender of this Note, duly endorsed, at the
principal office
of the Company.
3.4 No Impairment. The Company will not, by amendment of its
organizational documents or through any reorganization,
recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or
sale of
securities or any other voluntary action, avoid or seek 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 Section 3 and in the taking of all such
action as may be
necessary or appropriate in order to protect the conversion
rights of the Holder
against impairment.
3.5 Full Conversion. Upon conversion of the entire outstanding
principal
of this Note and payment of the accrued interest thereon, the
Company shall be
forever released from all its obligations and liabilities under
this Note.
4. Assignment. The rights and obligations of the Company and the
Holder
shall be binding upon and benefit the successors, assigns,
heirs, administrators
and transferees of the parties. The Note shall not be
transferred by the Holder,
in whole or in part, unless a warrant exercisable for a ratable
portion of the
Warrant Shares ( in the Warrant held by the Holder), and on the
same other terms
as such Warrant, is also transferred.
5. Waiver and Amendment. The provisions of this Note may be
amended,
waived or modified upon the written consent of the Company and
the Majority
Holders, and all such amendments, waivers and modifications
shall be binding on
all holders of the 2007 Notes.
6. Prepayment. The Holder may require the Company to prepay the
Note at
any time after the later of the completion of an equity offering
in which gross
proceeds of $3.5 million are raised or January 31, 2008, and
before the Maturity
Date, and the Company shall pay the Holder the entire
outstanding principal
amount hereunder and all accrued interest thereon not more than
thirty (30) days
after the delivery of written notice to the Company of such
demand for
prepayment. Neither the principal amount of nor any accrued
interest on the Note
may be prepaid by the Company without the Holder's written
consent to any such
prepayment.
7. Treatment of Note. To the extent permitted by generally
accepted
accounting principles, the Company will treat, account and
report the Note as
debt and not equity for
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accounting purposes and with respect to any returns filed with
federal, state or
local tax authorities.
8. Notices. Any notice, request or other communication required
or
permitted hereunder shall be in writing and shall be deemed to
have been duly
given when (i) delivered by hand (with written confirmation of
receipt), or (ii)
when received by the addressee, if sent by a nationally
recognized overnight
delivery service (receipt requested), in each case to the
appropriate addresses
set forth herein. Any party hereto may by notice so given change
its address for
future notice hereunder.
9. Waivers. The Company hereby waives presentment, demand,
protest and
notice of dishonor and protest, and also waives all other
exemptions; and agrees
that extension or extensions of the time of payment of this Note
or any
installment or part thereof may be made before, at or after
maturity by
agreement by the Holder. The Company shall pay to the Holder,
upon demand, all
costs and expenses, including, without limitation, attorney's
fees and legal
expenses that may be incurred by the Holder in connection with
the enforcement
of this Note.
10. Governing Law. This Agreement shall be governed by and
construed in
accordance with the laws of the Commonwealth of Kentucky,
excluding that body of
law relating to conflict of laws.
11. Heading; References. All headings used herein are used for
convenience
only and shall not be used to construe or interpret this Note.
Except where
otherwise indicated, all references herein to Sections refer to
Sections hereof.
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IN WITNESS WHEREOF, the Company has caused this Note to be
issued this
__th day of December, 2007.
BEACON ENTERPRISE SOLUTIONS GROUP INC.
By:
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Bruce Widener, Chief Executive Officer
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THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED
FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN
EFFECT WITH RESPECT TO THE WARRANT UNDER SUCH ACT AND APPLICABLE
LAWS OR SOME
OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
AND APPLICABLE
LAWS.
No. W-100__ Warrant to Purchase Shares
WARRANT TO PURCHASE SHARES
of
BEACON ENTERPRISE SOLUTIONS GROUP INC.
This certifies that, for value received, _____________, or its
registered
assigns ("Holder"), is entitled, subject to the terms set forth
below, to
purchase from Beacon Enterprise Solutions Group Inc., a Nevada
corporation (the
"Company"), the number of Warrant Shares (as defined below) as
set forth in
Section 2 of this Warrant, upon surrender of this Warrant, at
the principal
office of the Company, with the Notice of Exercise attached
hereto duly
executed, a
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