FORM OF NOTE
Exhibit
10.02
FORM
OF NOTE
12%
CONVERTIBLE NOTE DUE NOVEMBER 2007
No.
[_____]
|
______________,
2006
|
$[________]
|
FOR
VALUE
RECEIVED, the undersigned, Xxxxxxx Drilling Corporation, Inc. (the “Company”), a
corporation organized and existing under the laws of the State of Nevada, hereby
promises to pay _________________________________, or registered assigns, the
principal sum of [_______________________________] DOLLARS on November 1, 2007
with interest (computed on the basis of a 360-day year of twelve 30-day months)
on the unpaid balance thereof at the rate of 12% per annum from the date hereof.
This Note is one of a series of 12% Convertible Notes due November 1, 2007
(the
“Notes”) issued pursuant to the Securities Purchase Agreement, dated as of
October 31, 2006 (as from time to time amended, the “Purchase Agreement”), among
the Company and the Purchasers named therein and is entitled to the benefits
thereof. This Note is subject to the terms and conditions of the Purchase
Agreement and in the case of a perceived conflict between this Note and the
Purchase Agreement, the provision of the Purchase Agreement shall govern.
Capitalized terms used herein without definition have the meanings assigned
thereto in the Purchase Agreement.
The
Company shall make quarterly interest payments hereunder on each the first
Business Day of February, April, July and November, commencing February 1,
2007,
in the amounts of the accrued but unpaid interest. The quarterly payments may
be
made in Common Stock at the request of the Holder.
Payments
of principal and interest on this Note are to be made in lawful money of the
United States of America as specified in the Purchase Agreement or at such
other
place as the Company shall have designated by written notice to the Holder
of
this Note as provided in the Purchase Agreement.
Each
Holder of this Note will be deemed, by its acceptance hereof to have made the
representations set forth in Article 4 of the Purchase Agreement.
Upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
Holder hereof or such holder’s attorney duly authorized in writing, a new Note
for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the
Company and any paying agent or registrar for the Notes may treat the person
in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company and any paying
agent or registrar for the Notes will not be affected by any notice to the
contrary.
This
Note
is also subject to optional prepayment, in whole or from time to time in part,
at any time during the term of the Note.
This
Note
is convertible into Common Stock of the Company at the times and on the terms
specified in the Purchase Agreement.
At
the
option of the Holders of not less than 50% of the aggregate principal amount
of
the Notes then outstanding, and subject to Company’s right to cure set forth
below, the entire principal balance and accrued interest owing shall become
due
and payable by written notice, on the occurrence at any time of any of the
following events:
(a) |
Default
shall be made in the payment of principal of the Note when and as
the same
shall become due and payable, either at maturity or by acceleration
or
otherwise;
|
(b) |
Default
shall be made in the payment of interest on the Notes when the same
becomes due and payable and the default continues of a period of
5
days;
|
(c) |
Default
shall be made in the due performance or observance of any other covenant,
agreement or provision herein to be performed or observed by the
Company
or a material breach shall exist in any representation or warranty
contained herein or in the Purchase Agreement, and notice thereof
to the
Company from any Holder or Holders of Notes aggregating not less
than 10%
of the aggregate principal amount of the Notes then outstanding;
provided,
however, that if any such default or material breach shall be such
that it
cannot be cured or corrected within such 30-day period, such period
shall
be extended for such additional period of time as shall be necessary
to
effect such cure or correction if curative or corrective action is
instituted within said 30-day period and thereafter diligently
pursued;
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(d) |
a
default under any bonds, debentures, notes or other evidences of
indebtedness for money borrowed of the Company or the Subsidiary
or under
any mortgages, indentures, instruments or other agreements under
which
there may be issued or by which there may be secured or evidenced
any
indebtedness for money borrowed by the Company or the Subsidiary,
whether
such indebtedness now exists or shall hereafter be created, which
indebtedness, individually or in the aggregate, has a principal amount
outstanding in excess of $1,000,000;
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(e) |
judgment
or judgments for the payment of money in an amount, individually
or in the
aggregate, of at least $1,000,000 shall be rendered against the Company
and shall remain unsatisfied and unstayed for a period of twenty
(20)
days;
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(f) |
the
Company or the Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
|
1. commences
a voluntary case,
2. consents
to the entry of an order for relief against it in an involuntary
case,
3. consents
to the appointment of a Custodian of it or for all or substantially all of
its
property, or
4. makes
a
general assignment for the benefit of its creditors; or
(g) |
court
of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:
|
1. is
for
relief against the Company or the Subsidiary in an involuntary
case,
2. appoints
a Custodian of the Company or the Subsidiary or for all or substantially all
of
the property of any of them, or
3. orders
the winding up or liquidation of the Company or the Subsidiary,
and
the
order or decree remains unstayed and in effect for 60 days.
The
term
“Bankruptcy
Law”
means
title 11, U.S. Code or any similar Federal or State law for the relief of
debtors and the term “Custodian”
means
any receiver, agent, assignee, liquidator or other similar official under any
Bankruptcy Law.
Upon
notice of default as provided for herein, subject to the Company’s right to cure
set forth herein, principal and interest shall be due and payable without
presentment, protest, or further demand or notice of any kind, all of which
are
hereby expressly waived.
No
right
or remedy herein is intended to be exclusive of any other right or remedy,
and
every right and remedy shall, to the extent permitted by law, be cumulative
and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No
delay
or omission to exercise any right or remedy accruing upon any event of default
shall impair any such right or remedy or constitute a waiver of any such event
of default or acquiescence therein.
If
this
Note is given to an attorney for collection, or if suit is brought for
collection, or if it is collected through bankruptcy, or other judicial
proceedings, then the Company shall pay Holder all costs of collection,
including reasonable attorneys’ fees and court costs, in addition to other
amounts due.
If
any
principal, interest (including any overdue interest) or other amount due
hereunder is not paid when due and within the applicable grace period provided
therefor, then the Company shall pay interest at the Default Rate on the
outstanding principal balance of this Note, from the due date of such payment
(without regard to any applicable grace period) until the date such payment
is
made. In addition, if any principal, interest (including any overdue interest)
or other amount due hereunder is not paid when due and within the applicable
grace period provided therefor, then the Company shall pay a late charge equal
to two percent (2.0%) of the amount of such payment not paid when due, which
late charge shall be due and payable on the first Business Day after such
payment was not paid when due. For purposes of the foregoing, “Default
Rate”
means
fifteen percent (15.0%).
Interest
on the debt evidenced by this Note shall not exceed the maximum amount of
non-usurious interest that may be contracted for, taken, reserved, charged,
or
received under law; any interest in excess of that maximum amount shall be
credited on the principal of the debt or, if that has been paid, refunded.
On
any acceleration or required or permitted prepayment, any such excess shall
be
canceled automatically as of the acceleration or prepayment or, if already
paid,
credited on the principal of the debt, or if the principal of the debt has
been
paid, refunded. This provision overrides other provisions in this and all other
instruments concerning the debt.
Notwithstanding
the foregoing, the Company covenants (to the extent that it may lawfully do
so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any usury, stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Agreement; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage
of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power, but will suffer and permit the execution of every such
power as though no such law had been enacted.
This
Note
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of Texas excluding
choice-of-law principles of the law of such State that would require the
application of the laws of a jurisdiction other than such State.
IN
WITNESS WHEREOF, the undersigned has executed this Note on and as of the date
first above written.
XXXXXXX
DRILLING CORPORATION
By:
Name:
Title: