THE JACKSON RIVERS COMPANY
CONVERTIBLE NOTE
$250,000.00
January 2, 2006
THE
JACKSON RIVERS COMPANY, (OTCBB: JKRI) a Florida corporation
(the
Company"), for value received hereby promises to pay to the order
of VANTAGE
POINT CONSULTING and or assignee ("Payee"), the Principal Amount of
Two Hundred
Fifty Thousand and No/100 Dollars ($250,000.00), as per the Fee
Agreement
executed on November 12, 2005 and incorporated herein as Exhibit A,
on or before
the Due Date of this Note at the office of the Payee at 550 Greens
Parkway,
Suite 230, Houston, Texas 77067, with accrued interest payments
& principal from
the date of issuance of this Note at the rate of eight percent
(8.0%) per annum
due and payable on or before January 1, 2007 (the "Due Date").
For the
purpose of calculating interest for any period for which
interest
shall be payable, such interest shall be calculated on the basis of
a 30 day
month and a 360 day year. Except as otherwise provided herein, all
sums of past
due principal and interest shall bear interest at the maximum rate
of interest
permitted by applicable law.
1.
Covenants.
The Company covenants that so long as this Note shall be
outstanding:
(a) The Company shall maintain an office at 550 Greens Parkway,
Suite 230,
Houston, Texas 77067, or at such other place as the Company may
designate
by written notice given pursuant to the terms hereof, where
notices,
presentations and demands to or upon the Company in respect of
this Note
may be made or given.
(b) The Company shall promptly cause to be paid and discharged
all
lawful
taxes, assessments and governmental charges or levies imposed
upon
the
Company or any subsidiary or upon the income and profits of, or
upon
any
property belonging to the Company or any subsidiary before the
same
shall
become in default, as well as all lawful claims for labor,
materials
and
supplies which, if unpaid, might become a lien or charge upon
such
property
or any part thereof; provided, however, that the Company shall
not be
required to cause to be paid and discharged any such tax,
assessment,
charge, levy or claim so long as the amount or validity
thereof
shall be contested in good faith by appropriate proceedings,
and
the
Company or such subsidiary, as the case may he, shall set aside on
its
books
reserves with respect thereto which the Company and the
independent
public
accountants who are at the time employed to audit the books and
accounts
of the Company or such subsidiary consider adequate.
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(c) The Company shall at all times cause its physical property
and
the
physical property of its subsidiaries used or desirable in the
conduct
of the
business of the Company or its subsidiaries to be maintained,
preserved,
protected and kept in good repair, working order and condition,
and from
time to time cause to be made all needful and proper repairs,
replacements, betterments and improvements thereto, so that the
business
carried on
in connection therewith may in the opinion of the Company be
properly
and advantageously conducted at all times; provided, however,
that
nothing in this Paragraph 1(c) shall require the Company or any
subsidiary
to maintain, preserve, protect or keep in good repair, working
order or
condition any physical property which, in the sole discretion
of
the
Company, is obsolete or surplus or unfit for use or may not be
used
advantageously in the conduct of the business of the Company or
such
subsidiary, as the case may be.
(d) The Company shall at all times keep, and cause each
subsidiary
to keep,
true and complete books of record and accounts in accordance
with
generally
accepted accounting principles and practices and file timely
all
required
reports with the Securities and Exchange Commission.
(e) The Company shall at all times cause to be done all things
necessary
to preserve and keep in full force and effect its corporate
existence,
rights, and franchises, and the corporate existences, rights
and
franchises of each subsidiary, and comply with and cause each
subsidiary
to comply with, all laws and governmental requirements
applicable
to the Company or such subsidiary; provided, however, that
nothing in
this Paragraph 1(e) shall (i) require the Company or any
subsidiary
to maintain, preserve or renew any right or franchise which in
the
opinion of the Board of Directors of the Company is not necessary
or
desirable
in the conduct of the business of the Company or of such
subsidiary, as the case may be; or (ii) prevent the termination of
the
corporate
existence of any subsidiary if in the opinion of the Board of
Directors
of the Company such termination is in the best interest of the
Company
and not disadvantageous to the Payee; or (iii) prevent any
consolidation or merger involving the Company or a subsidiary.
2.
Piggy Back
Registration Rights. The Shares issued to the Payee shall
be entitled to "Piggy Back Registration Rights" pursuant to a
registration of the Company's securities made effective during
the
term of this Note. Upon effectiveness of said Registration
Statement, Payee's Shares shall be immediately registered and
therefore eligible for trading under any and all restrictions
that
may apply.
(a) The Payee is
an "accredited investor" as defined under Rule
501 under the Securities Act.
(b) The Payee
acknowledges that the Shares have not been
registered under the Securities Act or the securities laws of
any state and are being offered pursuant to applicable
exemptions from such registration for nonpublic offerings as
"restricted securities" as defined by Rule 144 promulgated
pursuant to the Securities Act. The Shares may not be resold
in the absence of an effective registration thereof under the
Securities Act and applicable state securities laws unless, in
the opinion of the Company's counsel, an applicable exemption
from registration is available.
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(c) The Payee is
acquiring the Shares for its own account, for
investment purposes only and not with a view to, or for sale
in connection with, a distribution, as that term is used in
Section 2(11) of the Securities Act, in a manner which would
require registration under the Securities Act or any state
securities laws.
(d) The Payee
understands and acknowledges that the Shares will
bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED FOR
VALUE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION THEREOF
UNDER THE SECURITIES ACT OF 1933 AND/OR THE SECURITIES ACT OF
ANY STATE HAVING JURISDICTION OR AN OPINION OF COUNSEL
ACCEPTABLE TO THE CORPORATION THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT OR ACTS.
(e) The Payee
acknowledges that an investment in the Shares is not
liquid and is transferable only under limited conditions. The
Payee
acknowledges that such securities must be held
indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is
available. The Payee is aware of the provisions of Rule 144
promulgated under the Securities Act, which permits limited
resale of securities purchased in a private placement subject
to the satisfaction of certain conditions and that such Rule
is not now available and, in the future, may not become
available for resale of the Shares.
(f) Payee
Sophistication and Ability to Bear Risk of Loss. The
Payee acknowledges that it is able to protect its interests in
connection with the acquisition of the Shares and can bear the
economic risk of investment in such securities without
producing a material adverse change in Payee's financial
condition. The Payee otherwise has such knowledge and
experience in financial or business matters that it is capable
of evaluating the merits and risks of the investment in the
Shares.
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(g) Purchases by
Groups. The Payee represents, warrants, and
covenants that it is not acquiring the Shares as part of a
group within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended.
3.
Conversion
of Note.
(a) On or after the Due Date or upon an effective registration
of
the Company's
stock, the Payee may convert all or part of the remaining
principal
balance, plus accrued interest, of this Note into the common
stock, par
value $0.001 per share, of the Company (the "Common Stock"). In
the event
of a conversion, the number of shares of the Common Stock to be
issued
shall be determined by dividing (i) the unpaid principal balance
of
this Note,
plus any accrued interest by (ii) eighty percent (80%) of the
average of
the lowest three closing bid prices in past 20 trading days
immediately preceding any such conversion. All such Common
Stock
conversions shall not exceed 4.99% of the then outstanding Common
Stocks
of the
Company. If this Note is surrendered for conversion, it shall
be
duly
endorsed, or be accompanied by a written instrument of transfer in
a
form
satisfactory to the Company duly executed by the holder of this
Note.
For
convenience, the conversion of all or a portion, as the case may
be,
of the principal, plus
accrued interest, of this Note into the Common
Stock is
hereinafter sometimes referred to as the con
