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Exhibit 10.1

 
DEEP CORE INC.
 
CONVERTIBLE PROMISSORY NOTE
 

US$___________   Dated as of February __, 2012

 
Deep Core Inc., a Cayman Islands exempt company (the “Company”), for value
received, hereby promises to pay to ______________________, or its registered
assigns (the “Holder”), the sum of ________ U.S. Dollars (US$___________) on the
terms and conditions set forth in this Convertible Promissory Note (the
“Note”).  Payment for all amounts due hereunder shall be made by mail to the
registered address of Holder.  In connection with the issuance of the Note, the
Company and the Holder will enter into a Registration Rights Agreement, which is
attached hereto as Exhibit A (the “Registration Rights Agreement”).  The Holder
is aware that Company will be issuing additional convertible promissory notes
substantially similar to this Note to other parties.
 
The following is a statement of the rights of Holder of this Note and the
conditions to which this Note is subject, and to which Holder hereof, by the
acceptance of this Note, agrees:
 
1.           Due Date.  The principal hereof and any unpaid accrued interest
hereon, as set forth below, shall be due and payable (the “Due Date”) on the
earliest to occur of:  (i) June 23, 2012; (ii) as provided in Section 5(a)
below, concurrent with the closing of an acquisition of the Company (the
“Acquisition”) by a publicly traded corporation eligible for quotation on the
OTC Bulletin Board and OTCQB (the “Pubco”); and (iii) when declared due and
payable by Holder upon the occurrence of an Event of Default (as defined below).
 
2.           Interest.  The Company shall pay interest at the rate of the lower
of (i) ten percent (10%) per annum; or (ii) the maximum allowable rate under
applicable laws (such rate, the “Interest Rate”) on the principal of this Note
outstanding during the period beginning on the date of this Note and ending on
the date that the principal amount of this Note is repaid in full.  Interest
shall be calculated on the basis of a 360-day year for the actual number of days
elapsed.  Interest accruing on this Note shall be due and payable at the Due
Date.  The Company shall pay the interest due on this Note by delivering to
Holder cash.  All payments hereunder are to be applied first to reasonable costs
and fees referred to herein, second to the payment of accrued interest, and the
remaining balance to the payment of principal.
 
3.           Events of Default.  If any of the events specified in this Section
3 shall occur (herein individually referred to as an “Event of Default”), Holder
may, so long as such condition exists, declare the entire principal and unpaid
accrued interest hereon immediately due and payable, by notice in writing to the
Company:
 
(a)           Default in the payment of the principal or unpaid accrued interest
of this Note when due and payable after written notice and an opportunity to
cure such breach;
 
(b)           A material breach of any representation, warranty, or covenant
under this Note, which failure or default is not cured within ten (10) days
after the Holder has given the Company written notice thereof;
 
(c)           The institution by the Company of proceedings to be adjudicated as
bankrupt or insolvent, or the consent by it to institution of bankruptcy or
insolvency proceedings against it or the filing by it of a petition or answer or
consent seeking reorganization or release under the applicable bankruptcy laws
of the jurisdiction of its incorporation, or the consent by it to the filing of
any such petition or the appointment of a receiver, liquidator, assignee,
trustee or other similar official of the Company, or of any substantial part of
its property, or the making by it of an assignment for the benefit of creditors,
or the taking of corporate action by the Company in furtherance of any such
action;
 
 
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(d)           If, within sixty (60) calendar days after the commencement of an
action against the Company, without the consent or acquiescence of the Company
(and service of process in connection therewith on the Company) seeking any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such action shall
not have been resolved in favor of the Company or all orders or proceedings
thereunder affecting the operations or the business of the Company stayed, or if
the stay of any such order or proceeding shall thereafter be set aside, or if,
within sixty (60) calendar days after the appointment without the consent or
acquiescence of the Company of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated; or
 
(e)           If a judgment or judgments or order for the payment of money in
excess of $50,000 in the aggregate shall be rendered against the Company and the
same shall not, within thirty (30) days after the entry thereof, have been
discharged or execution thereof stayed or bonded pending appeal (even if not
fully covered by insurance) or unless such judgment is fully covered by
collectible insurance and such insurer has within such period acknowledged such
coverage in writing.
 
4.           Holder’s Rights Upon Event of Default.  Upon the occurrence and
continuance of any Event of Default, Holder in its sole and absolute discretion
shall have the right to:
 
(a)           convert all of the principal amount and unpaid accrued interest
attributable to this Note into shares of the Company at a conversion price of
$0.01 per share;
 
(b)           declare all unpaid interest and principal immediately due and
payable and exercise all other legal rights in connection therewith, without
presentment, demand, or protest, all of which are hereby expressly waived; or
 
(c)           in case any one or more Events of Default shall occur and be
continuing and acceleration of this Note or any other indebtedness of the
Company to Holder shall have occurred, Holder may, among other things, proceed
to protect and enforce its rights by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any agreement
contained herein, or for an injunction against a violation of any of the terms
hereof or thereof or in and of the exercise of any power granted hereby or
thereby or by law. No right conferred upon Holder hereby shall be exclusive of
any other right referred to herein or therein or now or hereafter available at
law, in equity, by statute or otherwise.
 
5.           Conversion.
 
(a)           Mandatory Conversion.  Notwithstanding anything herein to the
contrary, in the event of the Acquisition occurring while this Note is
outstanding, the outstanding principal balance and unpaid accrued interest on
this Note shall automatically convert into shares of the Pubco’s $.001 par value
common stock (the “Pubco Shares”) which shall be issued pursuant to the private
placement to be conducted concurrently with the closing of the Acquisition (the
“Private Placement”). The number of Pubco Shares to be issued upon such
conversion (the “Conversion Shares”) shall be equal to the quotient obtained by
dividing (a) the outstanding principal and unpaid accrued interest due on this
Note on the date of conversion, by (b) the conversion price of the lower of the
lower of (i) $0.40 per share and (ii) the price per share of the Pubco Shares
sold pursuant to the terms of the Private Placement.
 
(b)           Identical Terms.  The Conversion Shares received by Holder
pursuant to the conversion of this Note hereunder shall have identical rights,
preferences and privileges as the Pubco Shares received by investors subscribing
for the Private Placement.
 
(c)           Conversion Procedure.  If this Note is to be converted, written
notice shall be delivered to the Company by the Holder, at its address set forth
on the signature page hereto notifying the Company of the conversion to be
effected, specifying the principal amount of this Note to be converted and the
amount of accrued interest to be converted.  Holder will surrender this Note to
the Company within five (5) business days after receiving such notice and the
Conversion Shares will be delivered to the Holder after receipt of this Note by
the Company.
 
(d)           Delivery of Conversion Shares.  As promptly as practicable after
the conversion of this Note but in no event later than ten (10) calendar days
after the date of delivery of the notice to the Company under Section 5(c), the
Company at its expense will cause Pubco to  issue and deliver to Holder the
Conversion Shares.  Upon conversion of this Note, the Company shall take all
such actions as are necessary in order to ensure that the Conversion Shares
issuable with respect to such conversion shall be validly issued, fully paid and
nonassessable by Pubco, and this Note shall be cancelled.
 
 
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(e)           Mechanics and Effect of Conversion.  No fractional amount of the
Conversion Shares shall be issued upon conversion of this Note.  In lieu of the
Pubco issuing any fractional amount to Holder upon the conversion of this Note,
the Company shall cause Pubco to pay to Holder the amount of outstanding
principal and interest that is not so converted, such payment to be in the form
as provided below.  Upon conversion of this Note, the Company shall be forever
released from all of its obligations and liabilities under this Note (to the
extent of the amounts converted), except that the Company shall be obligated to
pay Holder, within ten (10) business days after the date of such conversion, any
interest accrued and unpaid or unconverted to and including the date of such
conversion, and no more.

(f)           Reservation of Stock Issuable Upon Conversion.  The Company shall
cause Pubco, before the conversion of this Note into Conversion Shares or other
securities pursuant to the terms set forth herein, increase the number of
authorized but unissued Conversion Shares or other securities as necessary, and
at all times reserve and keep available out of such duly authorized but unissued
Conversion Shares or other securities, such number of its duly authorized
Conversion Shares or other securities as shall be sufficient to effect the
conversion of this Note pursuant to the terms set forth herein.  If at any
relevant time the number of authorized but unissued shares of Conversion Shares
or other securities shall not be sufficient to effect the conversion of the
entire outstanding principal amount of this Note, in addition to such other
remedies as shall be available to Holder, the Company will use its best efforts
to cause Pubco to take such corporate action as may be necessary to increase its
authorized but unissued Conversion Shares or other securities to such number of
shares as shall be sufficient for such purposes.

 
6.           Prepayment.  The Company may not (without prior written approval of
Holder) at any time prepay in whole or in part, the principal sum, plus accrued
interest to date of such prepayment, of this Note.
 
               7.           Representations and Warranties.  The Company hereby
represents and warrants:
 
(a)           Due Organization and Qualification.  The Company is an exempted
company duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the Cayman Islands, with the requisite power and
authority to own and use its properties and assets and to carry on its business
as currently conducted.  The Company is in no violation or default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents.  The Company is duly qualified to
conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of this Note or the Registration Rights
Agreement (the “Transaction Documents”), (ii) a material adverse effect on the
results of operations, assets, business, prospects or condition (financial or
otherwise) of the Company, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations
under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and to the Company’s knowledge no proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit
or curtail such power and authority or qualification.
 
(b)           Authorization; Enforcement.  The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder.  The execution and delivery of each of the
Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, its board of directors or its stockholders in connection
therewith.  Each Transaction Document has been (or upon delivery will have been)
duly executed by the Company and, when delivered in accordance with the terms
hereof and thereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
 
(c)           No Conflicts.  The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of this Note and the
consummation by the Company of the other transactions contemplated hereby and
thereby do not and will not (i) conflict with or violate any provision of the
Company’s articles of incorporation, bylaws or other organizational or charter
documents, or (ii) conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company is subject (including
applicable securities laws and regulations), or by which any property or asset
of the Company is bound or affected.
 
 
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 (d)           Litigation.  There is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(collectively, an “Action”), which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
securities or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect.  Neither the
Company, nor any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under applicable
securities laws or a claim of breach of fiduciary duty.
 
 (e)           Acquisition.  The Company anticipates enter into a definitive
acquisition agreement for the Acquisition within six (6) months of the date of
this Note.  The Company will use its best efforts to close the Acquisition on or
before June 2012.
 
8.           Investment Representations.
 
(a)           Holder confirms that it has been given sufficient access to
information regarding the Company and in connection with its decision to receive
this Note, including any common stock or conversion shares issuable pursuant to
this Note (collectively, the “Securities”), as consideration under this
Agreement, including the opportunity to ask questions of, and receive answers
from, persons acting on behalf of Company and concerning Company’s financial
affairs, prospects and condition.
 
(b)           Holder represents and warrants that Holder, by reason of its
business or financial expertise, has the capacity to protect its own interests
in connection with its acquisition of the Securities; and (ii) Holder is an
“accredited investor” as defined in Rule 501 of Regulation D of the Securities
Act of 1933 of the United States, as amended (the “Securities Act”).
 
(c)           Holder represents, warrants and covenants that it shall acquire
the Securities issuable under this Agreement for its own account and not for the
account or on behalf of others, and it is doing so with the intent of retaining
such Securities as an investment and without the current intent to redistribute
such Securities.
 
(d)           Holder acknowledges that: (i) no securities commission or similar
authority has reviewed or passed on the merits of the Securities issuable under
this Note; (ii) there is no government or other insurance covering such
Securities; and (iii) there are risks associated with the acquisition of the
Securities.
 
(e)           Holder acknowledges that (i) it must and shall bear the economic
risk of holding the Securities, which may be for an indefinite period of time,
because at the time such Securities are issued they will not have been
registered under the Securities Act or any other securities law and, therefore,
cannot be sold unless they are subsequently registered under applicable
securities laws or an exemption from such registration is available; (ii) the
Securities may not be resold or transferred on the official stock transfer
records of Company without furnishing to Company an opinion of counsel
reasonably acceptable to Company that such sale or transfer of the Securities
will not violate the registration provisions of applicable securities laws; and
(iii) certificates representing the Securities shall have endorsed on them a
restrictive legend to this effect.
 
(f)           Holder acknowledges that Company is relying on the
representations, warranties, covenants and acknowledgments in this Section 8 to
ensure that any the Securities issued under the terms of this Agreement can be
issued in reliance on exemptions from registration requirements under applicable
securities laws.
 
9.           Successors and Assigns; Assignment.  Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.  Nothing in this Note, express or implied, is intended to
confer upon any party, other than the parties hereto and their successors and
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Note, except as expressly provided herein.  The Company may not assign this
Note or any of the rights or obligations referenced herein without the prior
written consent of Holder, which consent may not be unreasonably withheld,
delayed, or denied.
 
 
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10.           Waiver and Amendment.  Any provision of this Note may be amended,
waived or modified upon the written consent of the Company and Holder.
 
11.           Waiver of Notice.  The Company expressly waives presentment for
payment, protest and demand, notice of protest, demand and dishonor and
expressly agrees that this Note may be extended from time to time without in any
way affecting the liability of the Company.  No delay or omission on the part of
Holder in exercising any right hereunder shall operate as a waiver of such right
or of any other right under this Note.  The obligations of the Company under
this Note shall not be subject to reduction, limitation, impairment,
termination, defense, set-off, counterclaim or recoupment for any reason.
 
12.           Treatment of Note.  Prior to the Acquisition and to the extent
permitted by generally accepted accounting principles, the Company will treat,
account and report this Note as debt and not equity for accounting purposes and
with respect to any returns filed with applicable tax authorities.
 
13.           Notices.  Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if sent by nationally recognized courier
service or mailed by registered or certified mail, postage prepaid, to the
respective addresses of the parties as set forth on the signature page hereof or
if sent by facsimile to the respective facsimile numbers of the parties set
forth on the signature page hereof.  Any party hereto may by notice so given
change its address for future notice hereunder.  Notice shall conclusively be
deemed to have been given and received when personally delivered or three (3)
business days after deposited in the mail or one business day after sent by
courier or upon confirmation of facsimile delivery in the manner set forth
above.
 
14.           No Stockholder Rights.  Nothing contained in this Note shall be
construed as conferring upon Holder or any other person the right to vote or to
consent or to receive notice as a stockholder in respect of meetings of
stockholders for the election of directors of the Company or any other matters
or any rights whatsoever as a stockholder of the Company; and no dividends or
interest shall be payable or accrued in respect of this Note or the interest
represented hereby or the securities into which this Note is convertible
hereunder until, and only to the extent that, this Note shall have been
converted.
 
15.           Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the Cayman Islands, excluding that body of law
relating to conflict of laws.
 
16.           Heading; References.  All headings used herein are used for
convenience only and shall not be used to construe or interpret this
Note.  Except as otherwise indicated, all references herein to Sections refer to
Sections hereof.
 
17.           Usury.  In the event any interest is paid on this Note which is
deemed to be in excess of the then legal maximum rate, then that portion of the
interest payment representing an amount in excess of the then legal maximum rate
shall be deemed a payment of principal and applied against the principal of this
Note.
 
18.           Attorney’s and Collection Fees.  Should the indebtedness evidenced
by this Note or any part hereof be collected at law or in equity or in any
bankruptcy, receivership or other court proceedings, or this Note be placed in
the hand of attorneys for collection, the Company agrees to pay, in addition to
principal and Interest due and payable hereon, all costs of collection,
including reasonable attorneys’ fees and expenses, incurred by Holder in
collecting or enforcing this Note.
 
 
 
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    IN WITNESS WHEREOF, the Company has caused this Note to be issued as of the
date first written above.
 

 

 
DEEP CORE INC.
a Cayman Islands exempt company
     
 
    By:          Grant W. Draper     Its: President and Chief Executive Officer
                 

 
 

 
Name of Holder: ________________________
Address:  ______________________________
_____________________________________
_____________________________________
_____________________________________
Telephone:  ____________________________
Facsimile:  ____________________________

 
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