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Exhibit 10.6
Beacon Enterprise Solutions Group Inc.
SECURED PROMISSORY NOTE
$300,000.00 December 20, 2007
FOR VALUE RECEIVED, Beacon Enterprise Solutions Group Inc., an
Indiana
corporation (the "Buyer"), promises to pay to the order of
ADVANCE DATA SYSTEMS,
INC. (the "Holder") the principal sum of THREE HUNDRED THOUSAND
DOLLARS
($300,000.00) (the "Principal Amount"), together with interest
accruing on the
unpaid portion of the Principal Amount from the date hereof
until the Maturity
Date (as defined in Section 2(a)), at an annual rate equal to
the "Prime Rate"
as published in The Wall Street Journal from time to time (the
"Interest Rate").
Accrued interest under this Note shall be compounded
annually.
1. Terms. This Note is issued and delivered by the Buyer
pursuant to
Section 1.3 of that certain Asset Purchase Agreement dated
October 15, 2007 (as
the same may be amended, restated, supplemented or otherwise
modified from time
to time, the "Purchase Agreement"), by and among the Buyer and
the Holder.
Unless otherwise set forth herein, all capitalized terms used
herein without
definition shall have the meanings given to such terms in the
Purchase
Agreement. This Note is secured by certain Collateral, as
described in that
certain Security Agreement of even date herewith (the "Security
Agreement"), by
and between the Buyer and the Holder.
2. Payments.
(a) Subject to the adjustments provided for in Section 2(b)
below
and any rights of set-off that the Buyer may have under the
terms of the
Purchase Agreement, the Buyer shall make monthly payments of
principal and
interest, in the amortized amount of $7,219.00, to the Holder on
the last day of
each month, commencing December 31, 2007 and ending on November
30, 2011 (the
"Maturity Date").
(b) In the event that on December 31, 2008, the actual
revenue
generated by the Collateral during the period commencing on
December 31, 2007
and ending on December 30, 2008 (the "Actual Revenue") is less
than $1,800,000
(the "Minimum Revenue"), then the Principal Amount hereunder
shall be deemed to
be reduced to an amount equal to the initial Principal Amount
set forth above,
multiplied by the greater of: a) a fraction the numerator of
which is equal to
the Actual Revenue and the denominator of which is equal to the
Minimum Revenue;
or b) forty percent (40%). (That is, the Principal Amount shall
not be reduced
to an amount less than $120,000.00 hereby.) No such adjustment
shall take place
in the event that the Actual Revenue exceeds the Minimum
Revenue. To the extent
that the monthly amounts previously paid exceed the amount of
such recalculated
monthly payments, the aggregate amount of such excess payments
prior to the time
of the recalculation shall be a credit against further payments
due hereunder,
to be applied ratably against future payment amounts hereunder.
If the
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aggregate amount of excess payments prior to the time of the
recalculation
exceeds the aggregate of future payments hereunder, then the
Holder shall refund
the appropriate difference to the Buyer. The Buyer shall
recalculate the monthly
payments for the remainder of the term of this Note and shall
send the Holder a
statement of its computations in support of the recalculated
monthly payment
amount.
(c) The Buyer may apply any rights of set-off that the Buyer
may
have under the terms of the Purchase Agreement by providing
notice of its
exercise of such rights of set-off to the Holder (and, if
applicable, the
shareholders of the Holder) with the Claim Notice described in
the Purchase
Agreement; provided, however, that if it is ultimately
determined that Buyer was
not entitled to such set-off, Buyer shall immediately pay to
Holder any and all
amounts claimed by Buyer under such set-off rights. The amount
of any set-off to
which Buyer is ultimately determined to be entitled shall be
treated as a
prepayment of the amounts otherwise due and payable under the
Note.
(d) All payments due and payable from the Buyer to Holder under
this
Note shall be made in lawful currency of the United States of
America at the
address of Holder as set forth in Section 10.7 of the Purchase
Agreement, or
such other place as Holder shall designate in writing, and, at
Holder's option,
shall be payable by check or wire transfer.
(e) The Buyer shall make additional payments of principal to
the
Holder equal to three and 2/10 percent (3.2%) of the net amount
in excess of One
Million Dollars ($1,000,000) received by the Buyer from the
proceeds of any sale
and issuance of equity after the Closing Date (as defined in the
Purchase
Agreement), until the obligations under this Note are paid in
full.
3. Prepayments. The Buyer may prepay all or any portion of the
outstanding
Principal Amount, or any accrued and unpaid interest thereon, of
this Note.
4. Events of Default.
(a) An "Event of Default" under this Note shall mean the
occurrence
of any of the following:
(i) Failure to Make Payments When Due. Failure of the Buyer
to
pay any principal, interest or other amount due under this Note
when due,
whether at stated maturity, by declaration, acceleration, demand
or otherwise,
and the failure of the Buyer to cure such default within ten
(10) business days
thereafter.
(ii) Breach of Covenants. Any other material failure by the
Buyer to perform its obligations under this Note (other than the
making of
payments under this Note), and the failure of the Buyer to cure
such default
within ten (10) business days of written notice of such default
by Holder to the
Buyer, in each case as determined by the Collateral Agent (as
defined in the
Security Agreement);
(iii) Acceleration of Other Indebtedness. Any event or
condition shall occur which results in the acceleration of the
maturity of any
indebtedness (other than this Note)
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of the Buyer or enables the holder of such indebtedness or any
person acting on
s
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