Exhibit 10.1
"Neither this note nor the securities into
which it is convertible have been
registered under the Securities Act of
1933, as amended (the "Act") or any
state securities laws. This note and the
securities into which it is
convertible are subject to certain
investment restrictions and the repurchase
provisions set forth in the Second Amended
and Restated Articles of
Incorporation of the Issuer, as the same
may be amended and/or restated from
time to time. this note and The securities into
which it is convertible may
not be sold, offered for sale or
transferred in the absence of either an
effective registration under the Act and
applicable state securities laws, or
an opinion of counsel satisfactory to the
issuer that such registration is not
required.
LEGACY CARD COMPANY, INC.
CONVERTIBLE PROMISSORY NOTE
$ 1,000,000.00
__April 18, 2005__
FOR VALUE
RECEIVED, Legacy Card Company, Inc., a Nevada corporation (the
"Company"), promises to pay to the order of
, or its
authorized successors or assigns (the
"Holder"), in lawful money of the United
States of America and in immediately
available funds, the principal sum of
Dollars ($
), or so much thereof as may be
outstanding from time to time (the
"Outstanding Principal Amount"), together
with interest thereon as set forth herein
(this "Note"). This
Note is one of
several convertible promissory notes being
issued by the Company on the date
hereof in a bridge financing with aggregate
proceeds of at least One Million
and 00/100 Dollars ($1,000,000.00), (this
Note and the other convertible
promissory notes issued pursuant to such
bridge financing shall collectively
be referred to as the "Notes").
Each of the Notes
shall be identical to the
other Notes except with respect to the
principal amount and the name of the
holder.
1. Defined Terms. For purposes of this Note, the
terms listed below shall
have the respective meanings set forth
below:
1.1 "Articles of Formation" means the
Company's Articles of Formation,
as the same may be amended and/or restated
from time to time.
1.2 "Conversion Price" means $1.10 per
share, or such other adjusted
price per share to be paid for the
Conversion Shares upon conversion of the
Outstanding Principal Amount of this Note,
and any accrued and unpaid interest
thereon, pursuant to the provisions of
Section 7 below.
1.3 "Conversion Shares" means the
fully paid and nonassessable shares
of the Company into which the Outstanding
Principal Amount of this Note, and
any accrued and unpaid interest thereon,
shall be automatically convertible
pursuant to the provisions of Section 7
below.
1.4 "Investor Representative" means
__________________________ whom
the Holders agree will act on behalf of
each Holder and all of the Holders
with respect to any matter relating to this
Note or the Subscription Agreement
and Letter of Investment Intent signed by
the original Holder.
1.5 "Maturity Date" means __________,
2005, that date which is six
calendar months after the date of issue
hereof; provided, however, that such
date will automatically be extended for,
and a Maturity Date will not occur
until, an additional twenty-five (25) days
thereafter if the Company has set a
date for its shareholders meeting to
approve the Reverse Merger Transaction
and has mailed its notice of meeting and
solicitation materials to
shareholders prior to the expiration of the
initial ninety (90) day period.
1.6 "Public Company" means a
corporation which has its common stock
registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and is
subject to the periodic reporting
requirements, and has timely filed such
reports, during the past 12 months,
pursuant to Sections 13 and 14 of the
Exchange Act, or a corporation that
voluntarily files reports under Section
15(d) of the Exchange Act, and has
timely filed such reports during the past
12 months, the capital stock of
which corporation is traded on a nationally
recognized securities medium, not
less than the National Association of
Securities Dealers, Inc.'s OTC
Electronic Bulletin Board and with which
the Company's Board of Directors
agrees to conduct a Reverse Merger
Transaction and closes the same.
1.7 "Public Company Stock" means all
outstanding capital stock of the
Public Company.
1.8 "Reverse Merger Transaction" means
the consummation and closing of
a reverse merger transaction, contemplated
to be effected in the form of a tax
free "A" reorganization pursuant to I.R.C.
Section 368(a)(2)(E), with the
Public Company, upon the completion of
which the Company shall survive as a
subsidiary of the Public Company, and
resulting in the current shareholders of
the Company (including holders of all
outstanding options, warrants, the
Conversion Shares and all securities that
are convertible into equity of the
Company.
1.9 "Reverse Merger Date" means the
date on which the Company
completes the closing of a Reverse Merger
Transaction.
2. Maturity. Except as set forth in Sections 7
and 8 hereof, the entire
Outstanding Principal Amount, together with
all accrued and unpaid interest
thereon, shall be due and payable upon
written demand from the Investor
Representative to the Company, at any time
on or after the Maturity Date.
3. Interest. This Note shall bear interest on
the Outstanding Principal
Amount at the rate of eight percent (8%)
per annum from the date of issue
until this Note is paid in full or
converted.
4. Unsecured Debt. This Note is unsecured in all
respects and shall rank
equal in right of payment to all other
unsecured debt of the Company.
5. No Prepayment Without
Consent. This Note may
not be prepaid by the
Company without the prior written consent
of the Investor Representative.
Upon obtaining the written consent from the
Investor Representative, all Notes
may be prepaid, in whole or in part
(including all or part of the Outstanding
Principal Amount of the Notes and accrued
Interest therein), as provided in
such written consent.
6. Payment. Unless earlier converted
automatically in accordance with
Section 7 hereof, payment of the
Outstanding Principal Amount of the Note and
Interest accrued thereon shall be made at
the business address of the Holder
hereof, upon written demand from the
Investor Representative to the Company,
at any time after the Maturity Date.
If the payments to be
made by the
Company shall become due on a date which is
not a business day, such payment
may be made on the next succeeding business
day, with the same force and
effect as if made on the originally stated
date and no interest will accrue
for the period after such originally stated
date. All computations
of
interest payable under this Note shall be
made on the basis of the actual
number of calendar days elapsed divided by
360. All payments
hereunder shall
be applied first to any unpaid accrued
interest, and second to repayment of
the Outstanding Principal Amount.
All payments by the
Company under this Note
shall be made without set-off, defense or
counterclaim and shall be free and
clear and without any deduction or
withholding for any taxes or fees of any
nature whatever, unless the obligation to
make such deduction or withholding
is imposed by law.
7. Conversion; Issuance of
Stock.
7.1 Automatic Conversion. In the event that the Company
completes a
Reverse Merger Transaction or otherwise
itself becomes a Public Company on or
prior to the Maturity Date, the Outstanding
Principal Amount of this Note, and
any accrued and unpaid interest thereon,
shall be automatically converted,
without any act by the Company, the
Investor Representative or the Holder
hereof and at a price per share equal to
the Conversion Price, into Conversion
Shares, which Conversion Shares shall
thereafter be immediately and
automatically exchanged for Public Company
Stock, concurrently with and upon
the terms and subject to conditions of the
Reverse Merger Transaction.
7.2
Manner of Automatic Conversion and Exchange.
(a)
