Exhibit 10.1
PROMISSORY NOTE
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$5,560,557.75
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November 1, 2008
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FOR VALUE RECEIVED, Environmental Energy
Services, Inc., a Delaware corporation (hereinafter referred to as
the “Maker”), promises to pay to the order of A. Leon
Blaser and Bruce Blaser (“Holder”), or assigns, at 3350
Americana Terrace, Suite 200, Boise, Idaho 83706, or at such other
place as the Holder may from time to time designate in writing to
the Maker, in lawful money of the United States of America, the
principal sum of Five Million, Five Hundred and Sixty Thousand,
Five Hundred and Fifty-Seven dollars and Seventy-Five Cents
($5,560,557.75) at a rate of interest thereon from the date of this
Note at Twelve percent (12%) per annum.
Monthly payments of principal and
interest in the amount of $175,000 per month are payable on this
Note to the extent the Maker has, in the judgment of its board of
directors, adequate funds on hand. Each monthly payment will
be due on the first day of each calendar month, beginning with
April 1, 2009 and continuing on the first day of each succeeding
month, until this Note is paid in full. All payments will be
applied first to accrued but unpaid interest, and thereafter to
principal on this Note. Notwithstanding anything above, this
Note shall mature on December 31, 2028, at which time all principal
and accrued interest will be due and payable in full.
This Note is secured by 15,000,000 shares
of common stock of Blaze Energy Corp. pursuant to a Pledge
Agreement of even date herewith.
The indebtedness evidenced by this Note
may be prepaid in whole or in part at any time without penalty or
premium after thirty (30) days prior notice to the Holder, during
which time the Holder shall be entitled to convert this Note into
shares of Common Stock of the Maker as hereinafter
provided.
If from any circumstances whatsoever
fulfillment of any provision of this Note at the time performance
of such provision shall be due shall involve transcending the limit
prescribed by any applicable usury statute or any other applicable
law, with regard to obligations of like character and amount, then,
ipso facto , the obligation to be fulfilled shall be reduced
to the limit of such validity, so that in no event shall any
exaction be possible under this Note or under any other instrument
evidencing or securing the indebtedness evidenced hereby, that is
in excess of the current limit of such validity, but such
obligation shall be fulfilled to the limit of such
validity.
Presentment for payment, demand, protest
and notice of demand, notice of dishonor and notice of nonpayment
and all other notices are hereby waived by Maker. No failure
to accelerate the debt evidenced hereby by reason of default
hereunder, acceptance of a past due installment, or indulgences
granted from time to time shall be construed (1) as a novation of
this Note or as a restatement of the indebtedness evidenced hereby
or as a waiver of such right of acceleration or of the right of the
Holder thereafter to insist upon strict compliance with the terms
of this Note,
1
or (2) to prevent the exercise of such
right of acceleration or any other right granted hereunder or by
applicable law; and Maker hereby expressly waives the benefit of
any statute or rule of law or equity now provided, or which may
hereafter be provided, which would produce a result contrary to or
in conflict with the foregoing. No extension of the time for
the payment of this Note or any installment due hereunder, made by
agreement with any person now or hereafter liable for the payment
of this Note shall operate to release, discharge, modify, change or
affect the original liability of the Maker under this Note, either
in whole or in part, unless the Holder agrees otherwise in writing.
This Note may not be changed orally, but only by an agreement
in writing signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
Maker hereby waives and renounces for
itself, its heirs, successors and assigns, all rights to the
benefits of any statute of limitations, any moratorium,
reinstatement, marshaling, forbearance, valuation, stay, extension,
redemption, appraisement and exemption now provided, or which may
hereafter by provided, by the Constitution and laws of the United
States of America and of the State of Idaho, against the
enforcement and collection of the obligations evidenced by this
Note except as described above.
Up to $1,000,000 of the principal amount
of this Note may be converted at the office of Maker, and at such
other place or places, if any, as the Board of Directors of the
Maker may designate, into fully paid and non-assessable shares
(calculated as to each conversion to the nearest l/100th of a
share) of Common Stock of the Maker. The number of shares of Common
Stock issuable upon conversion of this Note shall be equal to the
amount of principle for which a notice of conversion is sent
divided by the Conversion Price in effect at the time of conversion
determined as hereinafter provided. The price at which shares of
Common Stock shall be delivered upon conversion (the "Conversion
Price") shall be initially two cents ($0.02) per share of Common
Stock; provided, however, that such Conversion Price shall be
subject to adjustment from time to time in certain instances as
hereinafter provided. No payment or adjustment shall be made in
respect of dividends previously declared and paid on the Common
Stock upon conversion of part, or all, of this Note into shares of
Common Stock. If the Maker elects to prepay part or all of this
Note, such right of conversion shall cease and terminate, as to the
portion designated for prepayment, at the close of business on the
prepayment date, unless the Maker defaults in the prepayment.
Further, if conversion is designated, only the face amount of the
Note herein shall be used to calculate the number of shares issued
hereunder. No fractional shares of Common Stock will be issued, and
instead the number of shares of Common Stock to be issued on
conversion of this Note will, to the extent necessary, be rounded
up to the nearest whole number of shares.
Before the Holder of this Note shall be
e
