NEITHER THIS
NOTE NOR THE STOCK INTO WHICH THIS NOTE IS CONVERTIBLE
(COLLECTIVELY, THE “SECURITIES”) HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO BORROWER THAT
REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER SUCH ACT.
SECURED CONVERTIBLE PROMISSORY
NOTE
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$190,000.00
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March 20, 2009
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FOR VALUE RECEIVED, Steel Vault Corporation, a
Delaware corporation located at 1690 South Congress Drive,
Suite 200, Delray Beach, Florida 33445 (the
“Borrower”), promises to pay to Blue Moon Energy
Partners LLC, a Florida limited liability company, or any
subsequent holder upon a permitted assignment of this Note (the
“Lender”), located at 1690 South Congress Drive,
Suite 200, Delray Beach, Florida 33445, or at such other
location designated by the Lender, the principal amount of ONE
HUNDRED NINETY THOUSAND AND NO/100 U.S. DOLLARS (U.S.$190,000.00)
(the “Principal Amount”), upon the terms and conditions
specified below. Notwithstanding the foregoing, no payment of
principal or interest shall be required to the extent that such
principal and interest has been converted into equity securities of
the Borrower pursuant to the terms hereof.
1. Repayment
or Conversion .
(a) Repayment . The entire unpaid
Principal Amount under this Note and all accrued and unpaid
interest thereon shall be due and payable ON DEMAND of the Lender,
which demand may be made at any time on or after March 20,
2011 (the “Maturity Date”), unless the Principal Amount
and all accrued but unpaid interest thereon is converted pursuant
to the provisions of Section 1(b) below.
(i) By Lender . Lender shall have
the right, at any time, in its sole discretion to convert all of
the unpaid Principal Amount and accrued and unpaid interest thereon
into that number of shares of the Borrower’s common stock
(the “Conversion Shares”) determined as follows (the
“Conversion Formula”):
The unpaid
Principal Amount and accrued and unpaid interest on the date of
conversion divided by 120% of the Price (as defined below), subject
to equitable adjustment for any stock split, combination,
recapitalization, reorganization or other similar event. For
example, if Lender elects to convert this Note into shares of
Borrower’s common stock on June 1, 2009 and the unpaid
Principal Amount and accrued and unpaid interest on such date is
$191,000 and the Price multiplied by 120% is $0.44, Borrower shall
issue 434,091 Conversion Shares to Lender.
(ii) By Borrower . Upon the
occurrence of a Change in Control of Borrower (as defined in
Borrower’s 2009 Stock Incentive Plan), or if the average of
the high and low trading prices of Borrower’s common stock as
quoted on the Over The Counter Bulletin Board (or any other
applicable trading exchange) is greater than 120% of the Price for
any twenty consecutive trading days, Borrower shall have the right
at any time thereafter in its sole discretion to convert all of the
unpaid Principal Amount and accrued and unpaid interest thereon
into Conversion Shares pursuant to the Conversion
Formula.
(iii) In the event that Lender or Borrower,
as applicable, elect to effect a conversion hereunder, Lender shall
deliver to Borrower the original of this Note, and Borrower shall
deliver to Lender a certificate representing the Conversion Shares
into which this Note was converted.
(iv) For purposes herein,
“Price” means the average of the high and low trading
prices of Borrower’s common stock as quoted on the Over The
Counter Bulletin Board (or any other applicable trading exchange)
for the twenty consecutive trading day period immediately preceding
the date of this Note. Price is $0.37.
2. Prepayment . This Note may be
prepaid in whole or in part at any time without penalty.
3. Interest . This Note shall
accrue interest at a rate equal to five percent (5%) per annum
compounded monthly.
4. Events of Default . The entire
unpaid Principal Amount and all accrued and unpaid interest shall
become immediately due and payable upon (i) admission by the
Borrower of its inability to pay its debts generally as they become
due or otherwise acknowledges its insolvency, (ii) the filing
of a petition in bankruptcy by the Borrower, (iii) the
execution by the Borrower of a general assignment for the benefit
of creditors, (iv) the filing against the Borrower of a
petition in bankruptcy or a petition for relief under the
provisions of the federal bankruptcy code or another state or
federal law for the relief of debtors and the continuation of such
petition without dismissal for a period of ninety (90) days or
more, or (v) in the event that the Principal Amount and all
accrued and unpaid interest thereon shall not have been paid in
full on or before the Maturity Date.
5. Collection . If action is
instituted to collect this Note, the Borrower promises to pay
to
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