exv10w1






Exhibit
10.1




NEITHER THIS NOTE NOR THE STOCK INTO WHICH THIS NOTE IS CONVERTIBLE (COLLECTIVELY, THE
“SECURITIES”) HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”). THE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, OR AN OPINION OF COUNSEL SATISFACTORY TO BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.



SECURED CONVERTIBLE PROMISSORY NOTE




			
	 	 	 
	$190,000.00
	 	March 20, 2009






FOR VALUE RECEIVED, Steel Vault Corporation, a Delaware corporation located at 1690 South
Congress Drive, Suite 200, Delray Beach, Florida 33445 (the “Borrower”), promises to pay to Blue
Moon Energy Partners LLC, a Florida limited liability company, or any subsequent holder upon a
permitted assignment of this Note (the “Lender”), located at 1690 South Congress Drive, Suite 200,
Delray Beach, Florida 33445, or at such other location designated by the Lender, the principal
amount of ONE HUNDRED NINETY THOUSAND AND NO/100 U.S. DOLLARS (U.S.$190,000.00) (the “Principal
Amount”), upon the terms and conditions specified below. Notwithstanding the foregoing, no payment
of principal or interest shall be required to the extent that such principal and interest has been
converted into equity securities of the Borrower pursuant to the terms hereof.




1. Repayment or Conversion.



(a) Repayment. The entire unpaid Principal Amount under this Note and all accrued and
unpaid interest thereon shall be due and payable ON DEMAND of the Lender, which demand may be made
at any time on or after March 20, 2011 (the “Maturity Date”), unless the Principal Amount and all
accrued but unpaid interest thereon is converted pursuant to the provisions of Section 1(b) below.




(b) Conversion.



(i) By Lender. Lender shall have the right, at any time, in its sole discretion to
convert all of the unpaid Principal Amount and accrued and unpaid interest thereon into that number
of shares of the Borrower’s common stock (the “Conversion Shares”) determined as follows (the
“Conversion Formula”):




The unpaid Principal Amount and accrued and unpaid interest on the date of conversion
divided by 120% of the Price (as defined below), subject to equitable adjustment for any
stock split, combination, recapitalization, reorganization or other similar event. For
example, if Lender elects to convert this Note into shares of Borrower’s common stock on
June 1, 2009 and the unpaid Principal Amount and accrued and unpaid interest on such date is
$191,000 and the Price multiplied by 120% is $0.44, Borrower shall issue 434,091 Conversion
Shares to Lender.


 


 









 





(ii) By Borrower. Upon the occurrence of a Change in Control of Borrower (as defined
in Borrower’s 2009 Stock Incentive Plan), or if the average of the high and low trading prices of
Borrower’s common stock as quoted on the Over The Counter Bulletin Board (or any other applicable
trading exchange) is greater than 120% of the Price for any twenty consecutive trading days,
Borrower shall have the right at any time thereafter in its sole discretion to convert all of the
unpaid Principal Amount and accrued and unpaid interest thereon into Conversion Shares pursuant to
the Conversion Formula.



(iii) In the event that Lender or Borrower, as applicable, elect to effect a conversion
hereunder, Lender shall deliver to Borrower the original of this Note, and Borrower shall deliver
to Lender a certificate representing the Conversion Shares into which this Note was converted.



(iv) For purposes herein, “Price” means the average of the high and low trading prices of
Borrower’s common stock as quoted on the Over The Counter Bulletin Board (or any other applicable
trading exchange) for the twenty consecutive trading day period immediately preceding the date of
this Note. Price is $0.37.



2. Prepayment. This Note may be prepaid in whole or in part at any time without
penalty.



3. Interest. This Note shall accrue interest at a rate equal to five percent (5%) per
annum compounded monthly.



4. Events of Default. The entire unpaid Principal Amount and all accrued and unpaid
interest shall become immediately due and payable upon (i) admission by the Borrower of its
inability to pay its debts generally as they become due or otherwise acknowledges its insolvency,
(ii) the filing of a petition in bankruptcy by the Borrower, (iii) the execution by the Borrower of
a general assignment for the benefit of creditors, (iv) the filing against the Borrower of a
petition in bankruptcy or a petition for relief under the provisions of the federal bankruptcy code
or another state or federal law for the relief of debtors and the continuation of such petition
without dismissal for a period of ninety (90) days or more, or (v) in the event that the Principal
Amount and all accrued and unpaid interest thereon shall not have been paid in full on or before
the Maturity Date.



5. Collection. If action is instituted to collect this Note, the Borrower promises to
pay to the Lender all reasonable costs and expenses (including reasonable attorneys’ fees) incurred
in connection with such action.



6. Security. This Note and the obligations hereunder are secured by that certain
Security Agreement (the “Security Agreement”) of even date herewith in the form attached hereto as
Exhibit A, between Lender and Borrower, which encumbers Borrower’s real and personal
property as more particularly described therein.



7. Waivers. No delay on the part of the Lender in exercising any right or remedy
hereunder shall operate as a waiver of such right or remedy. No single or partial exercise of a
right or remedy shall preclude other or further exercise of that or any other right or remedy. The
failure of the Lender to insist upon the strict performance of any term of this Note, or to
exercise any right or remedy hereunder, shall not be construed as a waiver or relinquishment by
the Lender for the future of that term, right or remedy. No waiver of any right of the Lender
hereunder shall be effective unless in writing executed by the Lender.


 


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8. Severability. The unenforceability or invalidity of any provision or provisions of
this Note as to any persons or circumstances shall not render that provision or those provisions
unenforceable or invalid as to any other provisions or circumstances, and all provisions hereof, in
all other respects, shall remain valid and enforceable.



9. Warrant. The Borrower shall, simultaneous with the execution of this Note, execute
and deliver to Lender a common stock purchase warrant in the form attached hereto as Exhibit
B (the “Warrant”) for 108,000 shares (the “Warrant Shares”).



10. Registration. If at any time Borrower proposes to register shares of its common
stock under the Securities Act, in connection with the public offering of such shares for cash (a
“Proposed Registration”) other than a registration statement on Form S-8 or Form S-4 or any
successor or other forms promulgated for similar purposes, Borrower shall, at such time, promptly
give Lender written notice of such Proposed Registration. Lender shall have ten (10) days from its
receipt of such notice to deliver to Borrower a written request specifying the amount of
Registrable Securities that Lender intends to sell and Lenders’ intended method of distribution.
Upon receipt of such request, Borrower shall use its commercially reasonable efforts to cause all
Registrable Securities which Borower has been requested to register to be registered under the
Securities Act to the extent necessary to permit their sale or other disposition in accordance with
the intended methods of distribution specified in the request of Lender; provided,
however, that the Company shall have the right to postpone or withdraw any registration
effected pursuant to this Section 10 without obligation to Lender. If, in connection with any
underwritten public offering for the account of Borrower or for stockholders of Borrower that have
contractual rights to require Borrower to register shares of common stock, the managing
underwriter(s) thereof shall impose a limitation on the number of shares of common stock which may
be included in a registration statement because, in the judgment of such underwriter(s), marketing
or other factors dictate such limitation is necessary to facilitate such offering, then Borrower
shall be obligated to include in the registration statement only such limited portion of the
Registrable Securities with respect to which Lender has requested inclusion hereunder as such
underwriter(s) shall permit. For purposes herein, “Registrable Securities” means the Conversion
Shares and the Warrant Shares and any other shares of common stock issuable pursuant to the
exercise of the Warrants (without regard to any limitation on such exercise), and any shares of
capital stock issued or issuable from time to time (with any adjustments) in replacement of, in
exchange for or otherwise in respect of the Conversion Shares or the Warrant Shares;
provided, however, that “Registrable Securities” shall not include any such shares
that have been sold pursuant to Rule 144 of the Securities Act.



11. Amendment. This Note and the Warrant shall not be amended without the express
written consent of Borrower and Lender.



12. No Impairment. The Borrower will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of capital stock or assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms set forth herein or in the Warrant, but
will at all times in good faith assist in the carrying out of all such terms and in the taking of
all such action as may be necessary or appropriate in order to protect the rights of Lender
hereunder.


 


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13. Interest Savings Clause. If any interest payment (or other payment which is
deemed by law to be interest) due hereunder is determined to be in excess of the then legal maximum
rate, then that portion of each interest payment representing an amount in excess of the then legal
maximum rate shall instead be deemed a payment of principal and applied against the principal of
the obligations evidenced by this Note.



14. Assignment. This Note is assignable and transferable by Lender with the
Borrower’s written consent, which consent shall not to be unreasonably withheld.



15. Notices. All notices, demands and requests of any kind to be delivered to any
party in connection with this Agreement shall be in writing and shall be deemed to have been duly
given if personally delivered, sent by facsimile or if sent by nationally-recognized overnight
courier or by registered or certified mail, return receipt requested and postage prepaid, to the
address set forth herein or to such other address as the party to whom notice is to be given may
have furnished to the other parties hereto in writing in accordance with the provisions of this
Section 15. Any such notice or communication shall be deemed to have been received (i) in the case
of personal delivery, on the date of such delivery, (ii) in the case of facsimile, when receipt is
confirmed, (iii) in the case of nationally-recognized overnight courier, on the next business day
after the date when sent and (iv) in the case of mailing, on the third business day following that
on which the piece of mail containing such communication is posted.



16. Legal Matters. The validity, construction, enforcement, and interpretation of
this Note are governed by the laws of the State of Florida and the federal laws of the United
States of America, excluding the laws of those jurisdictions pertaining to resolution of conflicts
with laws of other jurisdictions. The parties hereby expressly waive presentment, demand for
payment, dishonor, notice of dishonor, protest, notice of protest, and any other formality. The
Borrower and the Lender (a) consent to the personal jurisdiction of the state and federal courts
having jurisdiction in Palm Beach County, Florida, (b) stipulate that the proper, exclusive, and
convenient venue for any legal proceeding arising out of this Agreement is Palm Beach County,
Florida, for state court proceedings, and the Southern District of Florida, for federal district
court proceedings, and (c) waive any defense, whether asserted by a motion or pleading, that Palm
Beach County, Florida, or the Southern District of Florida, is an improper or inconvenient venue.



17. Further Assurances. From time to time, the Lender, at the Borrower’s reasonable
request, shall execute and deliver such other instruments and do and perform such other acts and
things in connection with the exercise of this Note.



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IN WITNESS WHEREOF, this Note has been executed by the Borrower and delivered to the Lender as
of the date first above written.



	 	 	 	 	 
	 	
BORROWER:



STEEL VAULT CORPORATION

 	 
	 	By:  	/s/ William J. Caragol
 	 
	 	 	William J. Caragol 	 
	 	 	Chief Executive Officer 	 




 


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