Exhibit 10.1
THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT FOR THIS NOTE, OR AN EXEMPTION FROM
REGISTRATION THEREUNDER.
CONVERTIBLE PROMISSORY
NOTE
$
Huntington Woods,
Michigan
For value received,
SELLMYBUSINESSNOW.COM , Inc., a Michigan corporation (the
"Company"),promises to pay to
,
a Michigan resident
("Holder"), the aggregate outstanding principal
amount of
THOUSAND 00/100 DOLLARS ($
)
(the "Borrowing") under this Note. The unpaid principal
balance of this Note along with accrued interest shall be paid on
the earlier of (a) the Company registers any of its securities
under the Securities Act of 1933 or (b) eighteen months after the
date of this Note ("Maturity Date"). This Note shall bear interest
at the amount or rate equal to ten percent (10%) per
annum.
This Note is issued pursuant to that
certain Loan Agreement by and among the Company, the Holder and
others dated as of the November
, 2007 (the "Loan
Agreement"). This Note is
subject to the following terms and
conditions:
1.
Default. The Borrowing, together with accrued and
unpaid interest thereon, if any, shall become immediately due and
payable upon (a) the failure of the Company to pay all outstanding
principal and accrued, but unpaid interest, within ten (10) days of
when it is due; or (b) a breach of the Loan Agreement (each, an
"Event of Default"). Upon an Event of Default, the outstanding
principal amount hereof, plus any heretofore accrued but unpaid
interest, shall bear interest at a rate equal to twelve percent
(12%) per annum, subject to the limitations of Section 9
hereof.
2.
Conversion. This Note is convertible into shares of
the Company's common stock on the terms, and subject to the
conditions, set forth in this Section 2.
(a)
Conversion at Election of Holder. Commencing on the
date hereof and through the Maturity Date, at any time, the Holder
may convert all of the outstanding principal amount of this Note
into
shares of common stock of the Company ("Shares").
(b)
Conversion Notice. The Company shall be given notice
of the intent of Holder to convert this Note under Section 2(a) by
way of the form of conversion notice attached hereto as Annex
A (a "Conversion Notice").
(c)
Issuance of Shares. Upon the occurrence of a
conversion specified in this Section 2, this Note shall be
converted into the applicable Shares without any further action
required by any party. Lender shall surrender this Note and the
Conversion Notice at the office of the Company. Upon receipt of
this Note and the Conversion Notice, then on the date of conversion
specified in the Conversion Notice (in any case, the "Conversion
Date"), the rights of Holder (other than its rights to receive the
Shares) shall cease, and, as soon as possible on or after the
Conversion Date, and in any event within ten (10) Business Days of
the Conversion Date, the Company shall, issue and deliver to Holder
a certificate representing the Shares the Holder owns by virtue of
such conversion. In addition, on the Conversion Date, the Company
shall pay to Holder all unpaid interest accrued on the unpaid
principal balance of this Note from the date of the last interest
payment to the date of conversion, and all other amounts payable
hereunder of the Loan.
(d)
Cancellation of Note. Upon the conversion of the
entire unpaid principal amount of the Note pursuant to this Section
2, this Note shall be canceled and shall be deemed of no further
force or effect, other than with respect to Lender's rights to
receive the Shares in accordance with Section 2(c) and Lender's
rights with respect to a default by any Borrower under this Note,
the Loan Agreement or any other Loan Documents.
3.
Payment; Prepayment. All payments shall be made in
lawful money of the United States of America at such place as
Holder hereof may from time to time designate in writing to the
Company. Payment shall be credited first to the accrued interest
then due and payable and the remainder applied to principal. The
Company may prepay the interest on the Borrowing without penalty at
any time during the term of this Note and any prepayment shall be
applied to accrued interest on the unpaid Borrowing. The Company
may not prepay the principal balance.
4.
Transfer; Successors and Assigns. The terms and
conditions of this Note shall inure to the benefit of and be
binding upon the respective successors and permitted assigns of the
parties. This Note shall not be transferred or assigned by the
Company without the Holder's express written permission. Subject to
applicable securities laws and the terms and conditions thereof,
this Note may be transferred only upon surrender of the original
Note for registration of transfer, duly endorsed, or accompanied by
a duly executed writte
