EXHIBIT 10.1
 
THIS CONVERTIBLE NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”) NOR UNDER ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED,
SOLD, ASSIGNED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR (2) THE COMPANY RECEIVES AN OPINION OF
COUNSEL TO THE COMPANY OR OTHER COUNSEL TO THE HOLDER OF THIS NOTE WHICH OTHER
COUNSEL IS SATISFACTORY TO THE COMPANY THAT THIS NOTE AND/OR SUCH COMMON STOCK
MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR TRANSFERRED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR APPLICABLE STATE SECURITIES
LAWS.
 
NEWGEN TECHNOLOGIES, INC.
 
 

February 15, 2007
Charlotte, North Carolina
     
$850,000.00

 
10% CONVERTIBLE UNSECURED PROMISSORY NOTE
 
NEWGEN TECHNOLOGIES, INC. (the “Company”), for value received, hereby promises
to pay to the order of Noel M. Corcoran, or his permitted assign (the “Holder”)
on May 14, 2007 (the “Maturity Date”), at the principal offices of the Company,
the aggregate principal amount of $850,000.00 in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, together with interest on the outstanding
principal amount hereof accruing at the rate of ten percent (10%) per annum from
the date hereof, payable, at the option of the Company, either (i) monthly in
arrears commencing the first date of March 2007, by the fifth day of the
successive calendar month, or (ii) on the Maturity Date, subject, in each case,
to the further terms of this 10% Convertible Unsecured Promissory Note (this
“Note”). Principal shall be payable on the Maturity Date in like coin or
currency to the Holder hereof at the office of the Company as hereinafter set
forth, provided that any payment otherwise due on a Saturday, Sunday or legal
bank holiday may be paid on the following business day. In the event that for
any reason whatsoever any interest or other consideration payable with respect
to this Note shall be deemed to be usurious by a court of competent jurisdiction
under the laws of the State of New York or the laws of any other state governing
the repayment hereof, then so much of such interest or other consideration as
shall be deemed to be usurious shall be held by the Holder as security for the
repayment of the principal amount hereof and shall otherwise be waived.
 
This Note is being issued by the Company to the Holder in order to evidence the
working capital loans extended to the Company by the Holder as of the date
hereof.

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1.     Transfers of Note to Comply with the 1933 Act
 
The Holder agrees that this Note may not be sold, transferred, pledged,
hypothecated or otherwise disposed of except as follows: (1) to a person whom
the Note may legally be transferred without registration and without delivery of
a current prospectus under the Securities Act with respect thereto and then only
against receipt of an agreement of such person to comply with the provisions of
this Section 1 with respect to any resale or other disposition of the Note; or
(2) to any person upon delivery of a prospectus then meeting the requirements of
the Securities Act relating to the Note and the offering thereof for such sale
or disposition, and thereafter to all successive assignees.
 
2.      Prepayment; Conversion
 
(a)    The Company may, without premium or other prepayment penalty, prepay all
or a portion of the outstanding principal of this Note, and in connection
therewith, shall provide written notice to the Holder of such prepayment.
Following the date of the notice of prepayment, the Holder shall have a period
of fifteen (15) calendar days to exercise the conversion rights provided in
Section 2(b) hereof. After the lapse of such 15 day period, unless the Company
shall have failed to tender to the Holder the amount to be prepaid and accrued
interest under this Note, the Holder shall have no further rights of conversion
with respect to the principal amount being prepaid. Upon any prepayment of all
or part of the principal amount of this Note, all accrued, but unpaid, interest
shall concomitantly be paid to the Holder.
 
(b)    At any time, or from time to time, prior to the repayment of this Note by
the Company on or before the Maturity Date, the Holder may elect to convert some
or all of the principal and accrued and unpaid interest hereunder into shares
(“Conversion Shares”) of the Company’s common stock, par value $.001 per share
(the “Common Stock”) at a per share rate equal to 80% of the average three (3)
day trading price of the Common Stock (on the OTC-BB or other exchange on which
the Common Stock is then trading) during the three trading days immediately
prior to the date of such election, subject to adjustment as provided in Section
2A below (the “Conversion Rate”). Any such election to convert shall be effected
via the surrender of this Note, along with a completed conversion notice in the
form attached hereto indicating the amount of principal and accrued interest
that the Holder wishes to convert, to the Company. The Company shall issue the
Conversion Shares to Holder within fifteen calendar days of its receipt of such
conversion notice. Upon partial conversion of this Note, within fifteen calendar
days of its receipt of the conversion notice, the Company shall re-issue, free
of charge to the Holder, a replacement note in an amount equal to the remaining
principal amount of this Note not so converted but which shall otherwise contain
the identical terms hereof. Any such replacement note shall be deemed for all
purposes hereof to be included in a reference hereunder to this “Note”.
 
2A.    Adjustment for Dividends, Reclassifications, etc. 
 
In the event that the Company shall, at any time prior to the exercise of
conversion rights hereunder: (i) declare or pay to the holders of the Common
Stock a dividend payable in any kind of shares of capital stock of the Company;
(ii) combine, subdivide or otherwise reclassify its Common Stock into the same
or a different number of shares with or without par value, or into shares of any
class or classes; (iii) transfer its property as an entirety or substantially as
an entirety to any other company; or (iv) make any distribution of its assets to
holders of its Common Stock as a liquidation or partial liquidation dividend or
by way of return of capital; then, in each case, the Conversion Rate, and the
number and kind of shares of Common Stock receivable upon conversion of this
Note, in effect at the time of the record date for such dividend or
distribution, or of the effective date of such subdivision, combination or
reclassification, shall be proportionally adjusted so that the Holder upon the
subsequent exercise of conversion rights, shall receive, in addition to or in
substitution for the shares of Common Stock to which he would otherwise be
entitled upon such exercise, such additional shares of capital stock or scrip of
the Company, such reclassified shares of capital stock of the Company, such
shares of the securities or property of the Company resulting from such
transfer, or such assets of the Company, which he would have been entitled to
receive had he exercised these conversion rights prior to the happening of any
of the foregoing events. Such adjustment shall be made successively whenever any
of the foregoing events shall occur.

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3.     Notices to be Provided by Company
 
The Company covenants and agrees that, so long as any principal of, or interest
on, this Note shall remain unpaid, unless the Holder shall otherwise consent in
writing, it will comply with the following notice requirements:
 
(a)    Notice Regarding Defaults. The Company will furnish to the Holder as soon
as possible, and in any event within thirty (30) days after obtaining knowledge
of the occurrence of (A) an “Event of Default“ (as hereinafter defined in
Section 4(a) hereof) or (B) an event which, with the giving of notice or the
lapse of time or both, would constitute an Event of Default, the written
statement of the Chief Executive Officer or the Chief Financial Officer of the
Company, setting forth (x) the details of such Event of Default or other event
and (y) the action which the Company proposes to take with respect thereto.
 
(b)     Notice Regarding Dividends, Merger, Etc. If, at any time while this Note
is outstanding, the Company shall pay any dividend payable in cash or in Common
Stock, shall offer to the holders of its Common Stock for subscription or
purchase by them any shares of stock of any class or any other rights, or shall
enter into an agreement to merge or consolidate with another corporation, the
Company shall cause notice thereof to be mailed to the Holder of this Note at
his address appearing on the registration books of the Company, at least ten
(10) days prior to the record date as of which holders of Common Stock shall
participate in such dividend, distribution or subscription or other rights or at
least ten (10) days prior to the effective date of the merger or consolidation.
Failure to give notice as required by this Section 3(b), or any defect therein,
shall not affect the legality or validity of any dividend, distribution or
subscription or other right.
 
4.     Events of Default and Remedies
 
(a)    Any one or more of the following events which shall have occurred and be
continuing shall constitute an event of default (“Event of Default“):
 
(i)     Default in the payment of interest upon this Note, as and when the same
shall become due, if such failure to pay is not cured within fifteen (15)
business days after the occurrence thereof;
 
(ii)     Default in the payment of the principal of this Note, as and when the
same shall become due, if such failure to pay is not cured within fifteen (15)
business days after the occurrence thereof;

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(iii)     Default in the payment of any other obligation of the Company in an
amount in excess of $5,000,000;
 
(iv)     One or more final judgments or orders for the payment of money in
excess of $5,000,000 shall be rendered against the Company, and either (A)
enforcement proceedings shall have been commenced by any creditor upon any such
judgment or order, or (B) there shall be any period of thirty (30) days during
which enforcement of any such judgment or order shall have not been discharged,
stayed or fully satisfied.
 
(v)     The Company or any of its subsidiaries (A) shall institute any
proceeding or voluntary case seeking to adjudicate it bankrupt or insolvent, or
seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of any order for relief or the appointment of a receiver,
trustee, custodian or other similar official for such the Company or any
subsidiary or for any substantial part of its property, or shall consent to the
commencement against it of such a proceeding or case, or shall file an answer in
any such case or proceeding commenced against it consenting to or acquiescing in
the commencement of such case or proceeding, or shall consent to or acquiesce in
the appointment of such a receiver, trustee, custodian or similar official; (B)
shall be unable to pay its debts as such debts become due, or shall admit in
writing its inability to apply its debts generally after the application of
funds advanced hereunder; (C) shall make a general assignment for the benefit of
creditors; or (D) shall take any action to authorize or effect any of the
actions set forth above in this Section 4(a)(v); or
 
(vi)     Any proceeding shall be instituted against the Company seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for the Company or for
any substantial part of its property, and either such proceeding shall not have
been dismissed or shall not have been stayed for a period of sixty (60) days or
any of the actions sought in such proceeding (including, without limitation, the
entry of any order for relief against it or the appointment of a receiver,
trustee, custodian or other similar official for it or for any substantial part
of its property) shall occur.
 
(b)    If an Event of Default described above has occurred, then the Holder may,
without further notice to the Company, declare the principal amount of this Note
at the time outstanding, together with accrued unpaid interest thereon, and all
other amounts payable under this Note to be forthwith due and payable, whereupon
such principal, interest and all such amounts shall become and be forthwith due
and payable. During the period in which an Event of Default remains uncured, the
interest rate of this Note shall increase by the amount of 3%.
 
5.      Restrictions on Transfer of Conversion Shares
 
The Holder hereby acknowledges that the Conversion Shares shall be subject to
the resale restrictions governing the disposition thereof under Rule 144 under
the Securities Act, and that the stock certificate(s) for the Conversion Shares
shall bear applicable restrictive legends required under the Securities Act and
state blue sky laws evidencing the Conversion Shares’ status as “restricted
securities” (as defined under Rule 144 under the Securities Act). The Company’s
transfer agent shall place stop transfer orders against the stock certificates
for the Conversion Shares, which shall remain in place until the receipt of an
opinion of counsel as to the Holder’s compliance with Rule 144 under the
Securities Act with respect to a prospective disposition of the Conversion
Shares.

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6.     Miscellaneous
 
(a)     This Note has been issued by the Company pursuant to authorization of
the Board of Directors of the Company.
 
(b)    Payments of principal and interest shall be made as specified above to
the registered Holder of this Note. No interest shall be due on this Note for
such period of time that may elapse between the Maturity Date of this Note and
its presentation for payment.
 
(c)    The Holder shall not, by virtue hereof, be entitled to any rights of a
stockholder of the Company, whether at law or in equity, and the rights of the
Holder are limited to those expressed in this Note until such time as the Holder
shall convert the Note into Conversion Shares, if ever.
 
(d)    Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Note, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Note, if mutilated, the Company shall execute
and deliver a new Note of like tenor and date.
 
(e)    This Note shall be construed and enforced in accordance with the laws of
the State of New York, without giving effect to any choice of law or conflict of
law rules or provisions (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York. The Company and the Holder hereby consent to
the jurisdiction of the Courts of the State of New York and the United States
District Court for the Southern District of New York in connection with any
action concerning the provisions of this Note.
 
(f)     Except as otherwise expressly provided herein, the provisions of this
Note may be amended if, and the Company may take any action herein prohibited or
omit to perform any act herein required to be performed by it if, and only if,
the Company has obtained the written consent of the then registered Holder of
this Note.
 
(g)    If any term or provision of this Note shall be held invalid, illegal or
unenforceable, the validity of all other terms and provisions hereof shall in no
way be affected thereby.
 
(h)     All communications provided hereunder shall be in writing and, if to the
Company, delivered or mailed by registered or certified mail or facsimile to:
NewGen Technologies, Inc. c/o Mr. Bruce Wunner, 6000 Fairview Road, 12th Floor,
Charlotte, North Carolina 28210, Facsimile: 704-552-3705 with a copy to Reed
Smith LLP, 599 Lexington Avenue, New York, New York, 10022, Attention: Gerard S.
DiFiore, Esq., Facsimile (212) 521-5450, or, if to the Holder, delivered or
mailed by registered or certified mail or facsimile to: Mr. Noel Corcoran, +353
(-1) -846 1859 facsimile: +353 (-1) -846 1905 or at the address shown for the
Holder in the registration books maintained by the Company.
 
(i)     The Company may consider and treat the entity in whose name this Note
shall be registered as the absolute Holder hereof for all purposes whatsoever
(whether or not this Note shall be overdue) and the Company shall not be
affected by any notice to the contrary. Subject to the limitations stated in
Section 1 hereof, the registered Holder of this Note shall have the right to
transfer this Note by assignment, and the transferee hereof shall, upon his, her
or its registration as holder of this Note become vested with all of the powers
and rights of the Holder hereof. Registration of a new Holder of this Note shall
take place upon presentation of this Note to the Company at its principal
offices, together with a duly authenticated assignment in which the transferee
hereof agrees to be bound by the terms hereof. In case of transfer by operation
of law, the transferee agrees to notify the Company of such transfer and of his,
her or its address and to submit appropriate evidence regarding the transfer
(including an agreement to be bound by the terns hereof) so that this Note may
be registered in the name of the transferee. This Note is transferable only on
the books of the Company by the Holder hereof, on the surrender hereof, duly
endorsed. Communications sent to any registered Holder shall be effective as
against any transferee of the Note not registered as the Holder as of the time
of the sending of the communication.

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IN WITNESS WHEREOF, the Company has caused this 10% Convertible Unsecured
Promissory Note to be signed and delivered in its name by its Chief Executive
Officer as of the date first above written.

        NEWGEN TECHNOLOGIES, INC.  
   
   
    By:   /s/ S. Bruce Wunner  

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S. Bruce Wunner   Vice Chairman and CEO

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NOTICE OF CONVERSION
 
(To be executed and delivered by the registered Holder in order to convert all
or part of the interest or principal due under the Note and to be accompanied by
the surrendered Note)

 
The undersigned hereby elects to convert $___________ of the principal and
$___________ of the interest due on the 10% Convertible Unsecured Promissory
Note (the “Note”), dated February 15, 2007, in a principal amount of
$850,000.00, issued by NEWGEN TECHNOLOGIES, INC. (the “Company”) into shares of
Common Stock of the Company at a per share Conversion Rate equal to 80% of the
average three (3) day trading price of the Company’s Common Stock (on the OTC-BB
or other exchange on which the Company’s Common Stock is then trading) during
the three trading days immediately prior to the date hereof (subject to
adjustment as specified in the Note), subject to the further conditions set
forth in the Note, as of the date hereof.
 
 
 

Date of Conversion:                        Number of Shares To Be Delivered:
           Signature:            Print Name:             Address:             
      

 

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