Exhibit 10.2
Form of Note
THIS NOTE HAS BEEN MADE FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO OR
FOR SALE IN CONNECTION WITH THE DISTRIBUTION THEREOF AND HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THIS NOTE MAY NOT BE
SOLD, TRANSFERRED, OR ASSIGNED (“TRANSFER”) UNLESS IT IS SUBSEQUENTLY REGISTERED
OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE AND THE MAKER CONSENTS IN
WRITING TO SUCH TRANSFER. THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSCENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN
OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT
TO RULE 144 UNDER SAID ACT. ANY SUCH SALE, ASSIGNMENT OR TRANSFER MUST ALSO BE
MADE IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.

          September  _____  , 2007       $540,000

SMART MOVE, INC.
 
7% Unsecured Convertible Note (“Note”)
Due September 2, 2010
Smart Move, Inc., a Delaware corporation (“Maker” or the “Company”), for value
received, promises to pay to the order of                     , whose address is
                                        (the “Holder”), the principal sum of
Five Hundred Forty Thousand ($540,000) Dollars with an annualized rate of
interest from the date hereof of seven percent (7%) per annum until maturity.
Interest shall be due and payable quarterly in arrears on the first day of
March, June, September and December of each year and at the Maturity Date or
upon any prepayment or acceleration of the maturity of this Note. Such interest
payments shall be made in cash or, subject to the Company’s election to offer to
pay interest by means of a stock issuance and the Holder’s acceptance of such
offer, in shares of Common Stock corresponding to the amount of accrued interest
at the same $1.80 Conversion Price applicable to the principal of this Note. The
entire Principal shall be due and payable to the Holder on or before
September 2, 2010. Maker may at any time or from time to time, upon giving
Holder at least forty-five (45) days advance written notice of Maker’s intention
to do so, make a voluntary prepayment, whether in full or in part, of this Note,
without premium or penalty.

1.  
NOTE

This Note in the principal amount of Five Hundred Forty Thousand ($540,000)
Dollars is the [Initial] Closing Note purchased by the Holder pursuant to that
certain Note and Warrant Purchase Agreement dated September  _____  , 2007. This
Note is unsecured.

2.  
CONVERSION AT OPTION OF HOLDER; AUTOMATIC CONVERSION

  A.  
Conversion at Option of Holder. The Holder shall have the right (the “Conversion
Right”) at any time or from time to time prior to the day this Note is paid in
full, to convert all or any part of the outstanding and unpaid principal amount
of this Note as shall remain unpaid at the effective date of the conversion,
into, fully paid and non-assessable shares of Common Stock, par value $.0001 per
share, at a conversion price of $1.80 per share (the “Conversion Price”). The
Conversion Right may be exercised notwithstanding Maker’s issuance of a notice
of intention to make a voluntary prepayment, and the effective date of an
elective conversion is the date of Holder’s delivery of a “Conversion Notice” in
the form attached hereto.

 

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  B.  
Automatic Conversion. The Note will automatically convert into shares of the
Company’s common stock on the date when closing bid price of a share of the
Company’s common stock equals $3.75 per share or greater for twenty (20) of
thirty (30) consecutive trading days on the American Stock Exchange, provided
that the underlying shares have either been registered for resale by the holders
of the securities pursuant to certain piggyback registration rights granted to
the Holder as described in paragraph D below or are eligible to be sold under
and subject to Rule 144 under the Securities Act of 1933.

  C.  
Mechanics of Conversion. The Holder shall effect any elective conversions by
delivering to the Company a completed notice in the form attached hereto as
Exhibit “A” (a “Conversion Notice”). Unless the Holder is converting the entire
principal amount outstanding under this Note or an Automatic Conversion has
occurred, the Holder is not required to physically surrender this Note to the
Company in order to effect conversions. Conversions hereunder shall have the
effect of lowering the outstanding principal amount of this Note plus any
accrued and unpaid interest thereon paid in equity securities in an amount equal
to the applicable conversion. The Company shall maintain records showing the
principal amount converted and the date of such conversions and will promptly
notify Holder if an Automatic Conversion occurs. Upon conversion of the entire
unpaid principal amount of this Note and any accrued, unpaid interest, whether
in connection with a conversion at the option of Holder pursuant to exercise of
the Conversion Right or pursuant to an Automatic Conversion, this Note shall be
surrendered by the Holder to the Company for cancellation and a certificate
representing the Common Stock issued to Holder therefor shall be delivered to
Holder. No fractional shares or scrip shall be issued upon any conversion of
this Note. Instead of any fractional shares that would otherwise be issuable
upon conversion of this Note, the Company shall pay a cash adjustment in respect
of such fractional interest in an amount equal to that fractional interest of
the Conversion Price at which the Note was converted.

3.  
RESERVATION OF AUTHORIZED SHARES; EFFECT OF RECAPITALIZATION; PIGGYBACK
REGISTRATION RIGHTS

  A.  
Reservation of Authorized Shares. The Company agrees and represents that until
this Note is paid in full or converted, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Common Stock upon the full conversion of this Note. The
Company further agrees and represents that upon issuance, such shares will be
duly and validly issued, fully paid and non-assessable and that the Company will
instruct its transfer agent to issue certificates for the Common Stock issuable
upon conversion of this Note.

  B.  
Effect of Capital Reorganization or Reclassification.  If the number of
outstanding shares of Common Stock of the Company shall be increased or
decreased as a result of a stock split, a reverse stock split or similar
recapitalization or reclassification of stock not involving any change in the
shareholder’s equity or the aggregate market value of shares outstanding as a
result thereof, the per share Conversion Price shall be proportionately adjusted
so that the percentage of the Common Stock acquirable by the Holder upon
conversion immediately prior to the event and immediately following the event
remains the same.

  C.  
Piggyback Registration Rights. If the Company proposes to register any of its
stock or other securities under the 1933 Act (including for this purpose a
registration effected by the Company for stockholders other than the Holder, but
excluding any registration statement relating either to the sale of securities
to employees of the Company pursuant to a stock option, stock purchase or
similar plan, a registration made on Form S-4 or any successor forms then in
effect, or an SEC Rule 145 transaction), the Company shall, at such time,
promptly give Holder written notice of such registration. Upon the written
request of Holder given within thirty (30) days after such notice by the
Company, the Company shall cause to be registered under the 1933 Act, the number
of shares acquired or acquirable by Holder upon conversion that Holder has
requested to be registered, provided, however, that if the offering is an
underwritten offering, and the underwriter for the offering requires a
limitation of the number of shares to be included in such registration, such
limitation shall be applied on a pro-rata basis among all other holders of
piggyback registration rights. The expense of any such registration shall be
paid by the Company.

 

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4.  
EVENTS OF DEFAULT

A default shall be defined as one or more of the following events (“Event of
Default”) occurring and continuing:

  (a)  
The Maker shall fail to pay any interest payment on this Note when due for a
period of thirty (30) days after notice of such default has been sent by the
Holder to the Maker.

  (b)  
The Maker shall dissolve or terminate the existence of the Maker.

  (c)  
The Maker shall file a petition in bankruptcy, make an assignment for the
benefit of its creditors, or consent to or acquiesce in the appointment of a
receiver for all or substantially all of its property, or a petition for the
appointment of a receiver shall be filed against the Maker and remain unstayed
for at least ninety (90) days.

Upon the occurrence of an Event of Default, the Holder of this Note may, by
written notice to the Maker, declare the unpaid principal amount and all accrued
interest of the Note immediately due and payable.

5.  
SECURITY FOR PAYMENT OF THE NOTE(S)

This Note is unsecured.

6.  
EFFECTIVE DATE OF THE NOTE

The Effective Date of this Note for purposes of its status as a binding legal
obligation of the Maker is the date hereof, which is also the date after which
interest shall accrue on the unpaid principal balance hereof.

7.  
STATUS OF HOLDER

The Maker may treat the Holder of this Note as the absolute owner of this Note
for the purpose of making payments of principal or interest and for all other
purposes, and shall not be affected by any notice to the contrary, unless the
Maker so consents in writing.

8.  
SECURITIES ACT RESTRICTIONS

This Note has not been registered for sale under the Act. This Note may not be
sold, offered for sale, pledged, assigned or otherwise disposed of, unless
certain conditions are satisfied, as more fully set forth in the Note and
Warrant Purchase Agreement. The shares of Common Stock issuable upon conversion
of this Note may not be sold or transferred unless (i) they first shall have
been registered under the Securities Act of 1933, as amended, and applicable
state securities laws,(ii) the Company shall have been furnished with an opinion
of legal counsel (in form, substance and scope reasonably acceptable to Company)
to the effect that such sale or transfer is exempt from the registration
requirements of the Act or (iii) they are sold pursuant to Rule 144 under the
Act. Each certificate for shares of Common Stock issuable upon conversion of
this Note that have not been so registered and that have not been sold pursuant
to an exemption that permits removal of the legend, shall bear a legend
substantially in the following form, as appropriate:

 

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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSCENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL IN FORM, SUBSTANCE AND SCOPE
REASONABLY ACCEPTABLE TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. ANY SUCH SALE,
ASSIGNMENT OR TRANSFER MUST ALSO BE MADE IN COMPLIANCE WITH APPLICABLE STATE
SECURITIES LAWS.”

9.  
ATTORNEYS’ FEES

The prevailing party in an action to enforce this Note shall be entitled to
reasonable attorneys’ fees, costs and collection expense.

10.  
MISCELLANEOUS.

(a) Successors and Assigns. The Holder may not assign, transfer or sell this
Note to any party without the express written consent of the Maker, such consent
not to be unreasonably withheld or delayed. This Note shall be binding upon and
shall inure to the benefit of the parties and their respective heirs, successors
and assigns. Subject to the foregoing permitted transfers and status of lawful
successors, this Note shall not be enforceable by any other third party.
(b) Entire Agreement. This Note contains all oral and written agreements,
representations and arrangements between the parties with respect to its subject
matter, and no representations or warranties are made or implied, except as
specifically set forth herein. No modification, waiver or amendment of any of
the provisions of this Note shall be effective unless in writing and signed by
both parties to this Note.
(c) Notices. Any notice or other communication to be given hereunder shall be in
writing and personally delivered or delivered via overnight mail, with written
receipt therefor, or by a nationally recognized overnight delivery service,
charges and postage prepaid, properly addressed to the party to receive such
notice, at the following address for such party (or at such other address as
shall be specified by like notice given to the appropriate party):

         
if to Holder:
       
 
       
 
       
 
       
 
       
 
       
 
       
if to the Company:
  Smart Move, Inc.    
 
  5990 Greenwood Plaza Blvd., Suite 390    
 
  Greenwood Village, CO 80111    
 
  Attn: Executive Officers    

Such notice shall be effective upon personal or overnight delivery or five
(5) days after mailing by certified mail.

 

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(d) Section Headings. The headings of the various sections of the Note have been
inserted as a matter of convenience for reference only and shall be of no legal
effect.
(e) Severability. If any provision of this Note is invalid, illegal or
unenforceable, the balance of this Note shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances. If it shall be found
that any interest or other amount deemed interest due hereunder shall violate
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
(f) Applicable Law. This Note shall be deemed to have been made in the State of
Colorado, and any and all performance hereunder, or breach thereof, shall be
interpreted and construed pursuant to the laws of the State of Colorado without
regard to conflict of laws rules applied in the State of Colorado. The parties
hereto hereby consent to personal jurisdiction and venue exclusively in the
State of Colorado with respect to any action or proceeding brought with respect
to this Note.
(g) Waiver of Jury Trial.  THE PARTIES HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF THIS
AGREEMENT.
 
(h) Lost, Stolen or Mutilated Note. If this Note is lost, stolen, mutilated or
destroyed, the Company will, on such reasonable terms with respect to indemnity
or otherwise as it may in its discretion impose, issue a new note of like
denomination, tenor, and date as this Note.  Any such new note shall constitute
an original contractual obligation of the Company, and the lost, stolen,
mutilated or destroyed, as applicable, Note shall be null and void.
IN WITNESS WHEREOF, the Company has caused this Unsecured Convertible Note to be
duly executed by a duly authorized officer as of the date set forth above.

             
 
            Maker:   Accepted by Holder: Smart Move, Inc.        
 
                      By:       Print Name:
 
           
Name:
           
 
           
Title:
      Date:    
 
           
Date:
           
 
           

 

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EXHIBIT “A”
 
NOTICE OF CONVERSION
 
(To be executed by the Holder in order to elect to convert the Note)
TO:  
The undersigned hereby irrevocably elects to convert the principal amount of the
above Note into Shares of Common Stock of SMART MOVE, INC., according to the
conditions stated therein, as of the Conversion Date written below.

                 
 
               
Conversion Date:
               
Applicable Conversion Price:
          $ 1.80  
Signature:
               
Name:
               
Address:
               
Note amount converted:
          $    
Number of shares of Common Stock to be issued:
               
Please issue the shares of Common Stock in the
               
following name and to the following address:
               
Issue to:
               
Authorized Signature:
               
Name:
               
Title:
               
Phone Number:
               
Broker DTC Participant Code:
               
Account Number:
               

If this name is different from the name of the Holder, the Holder will have to
show compliance for such transfer with federal and applicable state securities
laws or in accordance with the plan of distribution in any Registration
Statement.
By submitting this Notice of Conversion, the undersigned Holder represents and
warrants to the Company that Holder is an accredited investor as that term is
defined in SEC Rule 501(a) or otherwise able to evaluate the risks and merits of
an investment, that the Holder is a sophisticated investor as required by SEC
Rule 506, that it has completed such investigation into the Company and the
securities being acquired pursuant to this Notice of Conversion as the
undersigned (in consultation with its advisors) has determined appropriate, and
that it is submitting this Notice of Conversion of its own volition and free
will.

             
By:
        Date:    
 
           
Name:
             
Address:
             
 
           
 
           
 
            Social Security Number          

 

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