THIS SECURITY HAS NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.
KEYON COMMUNICATIONS HOLDINGS,
INC.
SENIOR SUBBORDINATED SECURED
PROMISSORY NOTE
|
$___________
|
_______, 2009
|
FOR VALUE RECEIVED, KeyOn
Communications Holdings, Inc., a Delaware corporation (the “
Maker ”), with its principal offices located at 11742
Stonegate Circle, Omaha, NE 68164, promises to pay to the order of
________________, or its registered assigns (the “
Payee ”), upon the terms set forth below, the
principal sum of ______________ ($________) (this “
Note ”), together with compounded monthly interest
from the date of this Note on the unpaid principal balance at a
rate equal to seventeen percent (17%) per annum, computed on the
basis of the actual number of days elapsed and a year of 365 days.
Terms used herein but not otherwise defined herein shall have the
meanings given to such terms in the Loan and Security Agreement,
dated as of August __, 2008, between the Maker, the Guarantors and
the Secured Parties (as such terms are defined in such Loan and
Security Agreement) ( the “Loan and Security Agreement
”).
1.
Payments .
(a)
All unpaid principal, together
with any then accrued but unpaid interest and any other amounts
payable hereunder, shall be due and payable on the earlier of (i)
the completion of a Sale of Securities Proceeds (as hereinafter
defined) or (ii) September 30, 2009 (the “ Maturity
Date ”), except as otherwise
provided in this Section. This Note
is one of a series of up to $1,750,000 Maximum Credit Amount of
Notes of like tenor that may be issued to various other Holders
pursuant to the Loan and Security Agreement.
(b) Except
as otherwise set forth in this Note, the Maker shall not be
required to pay interest to the Payee on the aggregate then
outstanding principal amount of this Note.
(c) The
Maker hereby agrees to prepay this Note from funds received by
Maker pursuant to the sale or a series of sales of any debt (not
including any lines of credit) or Securities, including Common
Stock or Common Stock Equivalents, of the Maker (“ Sale of
Securities Proceeds ”) so long as such sale results in
aggregate gross proceeds to the Maker of $5,000,000 or more. All
funds received pursuant to this Section 1(d) shall be paid by the
Maker to the Payee within 5 business days of their receipt.
Provided however, if the Sale of Securities Proceeds does not
permit the re-payment of the Note in cash, the Note may be repaid
in stock, at a price to be negotiated in good faith between the
Payee and the Directors.
2.
Secured Obligation . The obligations of the Maker under this
Note are secured by all of the assets of the Maker and its
subsidiaries pursuant to the Loan and Security Agreement, subject
to certain subordination obligations of the Maker and its
subsidiaries to other secured lenders.
3.
Prepayment . The Maker may prepay any portion of the
principal amount of this Note upon at least 3 business days’
notice to the Payee. Any such prepayments shall be pro rata among
all holders of the series of Notes of which this Note is a
part.
4.
Conversion . The Holder may convert all or any portion of
the principal and accrued interest due and owing under this Note at
any time prior to Maturity into Common Stock of the Maker at a
price per share of $0.25.
5.
Warrants . The Holder and Maker shall enter into a Warrant
Agreement which shall provide the Holder with warrants equal to 50%
of the principal amount of the Note at an exercise price of $0.50
per share.
6.
Events of Default .
(a) “ Event of Default
”, wherever used herein, means any one of the following
events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):
(i)
any default in the
payment of the principal of this Note, as and when the same shall
become due and payable;
(ii) Maker
shall fail to observe or perform any material obligation or shall
breach any material term or provision of this Note and such failure
or breach shall not have been remedied within 10 days after the
date on which notice of such failure or breach shall have been
delivered;
(iii) Maker
or any of its subsidiaries shall fail to observe or perform any of
their respective material obligations owed to Payee or any other
material covenant, agreement, representation or warranty contained
in, or otherwise commit any breach hereunder or in any of the
Transaction Documents or any other agreement executed in connection
herewith and such failure or breach shall not have been remedied
within 10 days after the date on which notice of such failure or
breach shall have been delivered;
(iv) Maker or
any of its subsidiaries shall commence, or there shall be commenced
against Maker or any subsidiary a case under any applicable
bankruptcy or insolvency laws as now or hereafter in effect or any
successor thereto, or Maker or any subsidiary commences any other
proceeding under any reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect
relating to Maker or any subsidiary, or there is commenced against
Maker or any subsidiary any such bankruptcy, insolvency or other
proceeding which remains undismissed for a period of 60 days; or
Maker or any subsidiary is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or
proceeding is entered; or Maker or any subsidiary suffers any
appointment of any custodian or the like for it or any substantial
part of its property which continues undischarged or unstayed for a
period of 60 days; or Maker or any subsidiary makes a general
assignment for the benefit of creditors; or Maker or any subsidiary
shall fail to pay, or shall state that it is unable to pay, or
shall be unable to pay, its debts generally as they become due; or
Maker or any subsidiary shall call a meeting of its creditors with
a view to arranging a composition, adjustment or restructuring of
its debts; or Maker or any subsidiary shall by any act or failure
to act expressly indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate or other
action is taken by Maker or any subsidiary for the purpose of
effecting any of the foregoing;
(v) Maker
or any subsidiary shall default in any of its respective
obligations in excess of $500,000 under any other note or any
mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be
issued, or by
which there may be secured or
evidenced any indebtedness for borrowed money or money due under
any long term leasing or factoring arrangement of Maker or any
subsidiary, whether such indebtedness now exists or shall hereafter
be created and such default shall result in such indebtedness
becoming or being declared due and payable prior to the date on
which it would otherwise become due and payable; or
(vi) Trading
in the Common Stock shall have been suspended by the Securities and
Exchange Commission, the National Association of Securities
Dealers, Inc., or the Company’s principal Trading Market for
any period in excess of 5 Trading Days.
(b) If any Event of Default occurs,
the full principal amount of this Note shall become, at the Payee's
election, immediately due and payable in cash. Commencing 5 days
after the occurrence of any Event of Default that results in the
acceleration of this Note, the interest rate on this Note shall
accrue at the rate of 20% per annum, or such lower maximum amount
of interest permitted to be charged under applicable law. The Payee
need not provide and Maker hereby waives any presentment, demand,
protest or other notice of any kind, and the Payee may immediately
subject to any grace period, enforce any and all of its rights and
remedies hereunder and all other remedies available to it under
applicable law. Such declaratio
