Attached files
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| S-1/A - REGISTRATION STATEMENT - Clear Skies Solar, Inc | v163565_s1a.htm |
| EX-23 - CONSENTS OF DAVIS ACCOUNTING GROUP P.C. - Clear Skies Solar, Inc | v163565_ex23-1.htm |
Exhibit
10.49
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE
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 AND THE SECURITIES ISSUABLE UPON CONVERSION OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.
8%
UNSECURED NOTE
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$__________
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Dated:
__________, 2009
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FOR
VALUE RECEIVED, Clear Skies Solar, Inc., a Delaware corporation (the “Maker”), with its
primary offices located at 200 Old Country Road, Mineola, New York 11501,
promises to pay to the order of Green Energy Trust, (the “Payee”) or its
registered assigns (with the Payee, the “Holder”), upon the
terms set forth below, the principal sum of ______ dollars ($________) plus
interest on the unpaid principal sum outstanding at the rate of 8% per annum
(this “Note”).
1. Payments.
(a) Unless
an Event of Default shall have previously occurred and be continuing or this
Note shall be converted by the Holder into Common Stock of the Company or any
successor-in-interest or parent of the Company), the full amount of principal
and accrued interest under this Note shall be due and payable two years from the
date hereof (the “Maturity
Date”).
(b) The
Maker shall pay interest to the Holder on the then outstanding principal amount
of this Note at the rate of 8% per annum, payable quarterly from the date hereof
commencing __________ (each such payment date, an “Interest Payment
Date”) (if any Interest Payment Date is not a Business Day, then the
applicable payment shall be due on the next succeeding Business Day), in cash
or, at the Maker’s option, in duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock at a price equal to $0.15 (the “Interest Conversion
Rate”, and the dollar amount to be paid in shares, the “Interest Share
Amount”) or a combination thereof. Interest on this Note shall
commence to accrue as of the date hereof (the “Original Issue
Date”).
(c) Subject
to the terms and conditions herein, the decision whether to pay interest
hereunder in cash, shares of Common Stock or a combination thereof shall be at
the discretion of the Maker. At least 5 Business Days prior to each
Interest Payment Date, the Maker shall deliver to the Holder a written notice of
its election to pay interest hereunder on the applicable Interest Payment Date
either in cash, shares of Common Stock or a combination thereof and the Interest
Share Amount as to the applicable Interest Payment Date, provided that the Maker
may indicate in such notice that the election contained in such notice shall
apply to future Interest Payment Dates until revised by a subsequent
notice.
(d) Interest
shall be calculated on the basis of a 360-day year, consisting of twelve 30
calendar day periods, and shall accrue daily commencing on the Original Issue
Date until payment in full of the outstanding principal, together with all
accrued and unpaid interest, and other amounts which may become due hereunder,
has been made. Interest hereunder will be paid to the Person in whose
name this Note is registered on the records of the Maker regarding registration
and transfers of this Note (the “Note Register”).
Except as otherwise provided herein, if at any time the Maker pays interest
partially in cash and partially in shares of Common Stock to the holders of the
Notes, then such payment of cash shall be distributed ratably among the holders
of the then-outstanding Notes based on their (or their predecessor’s) initial
purchases of Notes pursuant to the Purchase Agreement.
(e) All
overdue accrued and unpaid principal and interest to be paid hereunder shall
entail a late fee at the rate of 12% per annum (or such lower maximum amount of
interest permitted to be charged under applicable law) which will accrue daily,
from the date such principal and/or interest is due hereunder through and
including the date of payment. The Maker may prepay any portion of or
the entire the principal amount of this Note without premium or penalty at any
time at the Maker’s option on ten days advanced written notice to
Holder.
2. 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):
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(i) any
default in the payment of the principal of, or the interest on, this Note, as
and when the same shall become due and payable;
(ii) Maker
shall fail to observe or perform any obligation or shall breach any term or
provision of this Note and such failure or breach shall not have been remedied
within ten Business Days after the date on which notice of such failure or
breach shall have been delivered;
(iii) Maker
shall commence, or there shall be commenced against Maker a case under any
applicable bankruptcy or insolvency laws as now or hereafter in effect or any
successor thereto, or Maker 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 there is commenced against Maker any
such bankruptcy, insolvency or other proceeding which remains undismissed for a
period of 60 days; or Maker is adjudicated insolvent or bankrupt; or any order
of relief or other order approving any such case or proceeding is entered; or
Maker 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 makes a general assignment for the benefit of
creditors; or Maker 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
shall call a meeting of its creditors with a view to arranging a composition,
adjustment or restructuring of its debts; or Maker 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 for the
purpose of effecting any of the foregoing;
(iv) Maker
shall default in any of its respective obligations 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 indebtedness aggregating more than $250,000 becoming or
being declared due and payable prior to the date on which it would otherwise
become due and payable; or
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(v) The
Maker shall (a) be a party to any Change of Control Transaction (as defined
below), (b) agree to sell or dispose all or in excess of 50% of its assets in
one or more transactions (whether or not such sale would constitute a Change of
Control Transaction), (c) redeem or repurchase more than a de minimis number of
shares of Common Stock or other equity securities of Maker, or (d) make any
distribution or declare or pay any dividends (in cash or other property, other
than common stock) on, or purchase, acquire, redeem, or retire any of Maker's
capital stock, of any class, whether now or hereafter outstanding. “Change of Control
Transaction” means the occurrence of any of: (i) an acquisition after the
date hereof by an individual or legal entity or “group” (as described in Rule
13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended)
of effective control (whether through legal or beneficial ownership of capital
stock of Maker, by contract or otherwise) of in excess of 50% of the voting
securities of Maker, (ii) a replacement at one time or over time of more than
one-half of the members of Maker's board of directors which is not approved by a
majority of those individuals who are members of the board of directors on the
date hereof (or by those individuals who are serving as members of the board of
directors on any date whose nomination to the board of directors was approved by
a majority of the members of the board of directors who are members on the date
hereof), (iii) the merger of Maker with or into another entity that is not
wholly-owned by Maker, consolidation or sale of 33% or more of the assets of
Maker in one or a series of related transactions, or (iv) the execution by Maker
of an agreement to which Maker is a party or by which it is bound, providing for
any of the events set forth above in (i), (ii) or (iii).
(b)
If any Event of Default occurs and shall be continuing, the full principal
amount of this Note, together with all accrued interest thereon, shall become,
at the Holder's election, immediately due and payable in cash, at the Mandatory
Default Amount. As used herein, “Mandatory Default
Amount” means the sum of (i) 115% of the outstanding principal amount of
this Note, plus all accrued and unpaid interest hereon and (ii) all other
amounts, costs and expenses due in respect of this Note. Commencing 5 Business
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 12% per annum, or such lower maximum amount of interest permitted to be
charged under applicable law.
(c) The
Holder need not provide and Maker hereby waives any presentment, demand, protest
or other notice of any kind, and the Holder may immediately and without
expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable law. Such
declaration may be rescinded and annulled by Holder at any time prior to payment
hereunder. No such rescission or annulment shall affect any subsequent Event of
Default or impair any right consequent thereon.
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3. Conversion of
Note. The Holder of
this Note may, at its sole option, elect by written notice to the Company given
at any time on or before the Maturity Date, to convert any or all of the face
amount of the Notes, plus any accrued and unpaid interest thereon, into Common
Stock of the Company or any parent or successor-in-interest to the Company, at a
conversion price equal to $.___ per share. Upon such conversion, this
Note will be immediately cancelled upon delivery of these securities as well as
all accrued interest. The number of shares issuable upon exercise of
this note and the exercise price per share will be subject to weighted average
anti-dilution adjustment in the event that the Maker issues after February 1,
2009 Common Stock or Common Stock equivalents (excluding issuance pursuant to
Employee Stock Option Plans, strategic acquisitions, joint ventures, mergers or
other corporate transactions not otherwise related to capital raising
transactions) at a price per share less than the then current conversion price,
and to other normal and customary anti-dilution adjustments upon certain events
(including stock splits, stock dividends, consolidations, recapitalizations and
similar transactions).Fractional shares of Common Stock shall not be issued on
conversion.
4. Negative
Covenants. So long as any portion of this Note is
outstanding, the Maker will not and will not permit any of its Subsidiaries to
directly or indirectly:
a) amend
its certificate of incorporation, bylaws or other charter documents so as to
adversely affect any rights of the Holder;
b) repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de
minimis number of securities;
c) enter
into any agreement with respect to any of the foregoing; or
d) pay
cash dividends or distributions on any equity securities of the
Maker.
5. No Waiver of Holder's
Rights. All payments of principal and interest
shall be made without setoff, deduction or counterclaim. No delay or failure on
the part of the Holder in exercising any of its options, powers or rights, nor
any partial or single exercise of its options, powers or rights shall constitute
a waiver thereof or of any other option, power or right, and no waiver on the
part of the Holder of any of its options, powers or rights shall constitute a
waiver of any other option, power or right. Maker hereby waives presentment of
payment, protest, and all notices or demands in connection with the delivery,
acceptance, performance, default or endorsement of this Note. Acceptance by the
Holder of less than the full amount due and payable hereunder shall in no way
limit the right of the Holder to require full payment of all sums due and
payable hereunder in accordance with the terms hereof.
6. Modifications. No
term or provision contained herein may be modified, amended or waived except by
written agreement or consent signed by the party to be bound
thereby.
7. Cumulative Rights and
Remedies; Usury. The rights and remedies of Holder
expressed herein are cumulative and not exclusive of any rights and remedies
otherwise available under this Note, the Security Agreement, or applicable law
(including at equity). The election of Holder to avail itself of any one or more
remedies shall not be a bar to any other available remedies, which Maker agrees
Holder may take from time to time. If it shall be found that any interest due
hereunder shall violate applicable laws governing usury, the applicable rate of
interest due hereunder shall be reduced to the maximum permitted rate of
interest under such law.
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8. Use of
Proceeds. Maker shall use the proceeds from this Note
hereunder for working capital purposes and for the satisfaction of any portion
of Maker’s or subsidiary’s debt for trade payables in the ordinary course of
Maker's business and prior practices and to settle any outstanding
litigation.
9. Collection
Expenses. If Holder shall commence an action or
proceeding to enforce this Note, then Maker shall reimburse Holder for its costs
of collection and reasonable attorneys fees incurred with the investigation,
preparation and prosecution of such action or proceeding.
10. Severability. If
any provision of this Note is declared by a court of competent jurisdiction to
be in any way 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.
11. Successors and
Assigns. This Note shall be binding upon Maker and its
successors and shall inure to the benefit of the Holder and its successors and
assigns. The term “Holder” as used herein, shall also include any endorsee,
assignee or other holder of this Note.
12. Lost or Stolen Promissory
Note. If this Note is lost, stolen, mutilated or
otherwise destroyed, Maker shall execute and deliver to the Holder a new
promissory note containing the same terms, and in the same form, as this Note.
In such event, Maker may require the Holder to deliver to Maker an affidavit of
lost instrument and customary indemnity in respect thereof as a condition to the
delivery of any such new promissory note.
13. Governing
Law. All questions concerning the construction,
validity, enforcement and interpretation of this Note shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each of
Maker and Holder agree that all legal proceedings concerning the
interpretations, enforcement and defense of this Note shall be commenced in the
state or federal courts sitting in the City of New York, Borough of Manhattan
(the "New York Courts"). Each of Maker and Holder hereby irrevocably submit to
the exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder (including with respect to the enforcement of this Note), and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court or that such suit, action or proceeding is improper. Each of
Maker and Holder hereby irrevocably waive personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail, return receipt
requested postage prepaid or overnight delivery (with evidence of delivery) to
the other at the address in effect for notices to it under this Note and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Each of Maker and Holder
hereby irrevocably waive, to the fullest extent permitted by applicable law, any
and all right to trial by jury in any legal proceeding arising out of or
relating to this Note or the transactions contemplated hereby.
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14. Notice. Any and
all notices or other communications or deliveries to be provided by the Holder
hereunder, including, without limitation, any conversion notice, shall be in
writing and delivered personally, by facsimile, sent by a nationally recognized
overnight courier service or sent by certified or registered mail, return
receipt requested and postage prepaid, addressed to the Maker at the address set
forth above, or such other address or facsimile number as the Maker may specify
for such purposes by notice to the Holder delivered in accordance with this
paragraph. Any and all notices or other communications or deliveries
to be provided by the Maker hereunder shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier
service or sent by certified or registered mail, return receipt requested,
postage prepaid, addressed to the Holder at the address of the Holder appearing
on the books of the Maker, or if no such address appears, in care of John
Popescu, Trustee, 755 Hilltop Court, Coram, NY 11727-3651. Any notice
or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission if delivered by hand
or by telecopy that has been confirmed as received by 5:00 P.M. on a business
day, (ii) one business day after being sent by nationally recognized overnight
courier or received by telecopy after 5:00 P.M. on any day, or (iii) five
business days after being sent by certified or registered
mail, postage and charges prepaid, return receipt
requested. The Holder is to be immediately notified by the Maker of
the existence or occurrence, of any Event of Default.
The undersigned has executed this Note
as a maker and not as a surety or guarantor or in any other
capacity.
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CLEAR
SKIES SOLAR, INC.
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By:
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Name:
Ezra Green
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Title:
Chairman and Chief Executive
Officer
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