Exhibit 10.1
 
CONVERTIBLE PROMISSORY NOTE
$_________

FOR VALUE RECEIVED, OriginOil, Inc., a Nevada corporation, (the “Borrower”) with
approximately 26,798,724 shares of common stock issued and outstanding, promises
to pay to _______________ a ____________, or its assignees (the “Lender”) the
Principal Sum along with the Interest and any other fees according to the terms
herein (this “Note”). This Note shall become effective on May 28, 2013 (the
“Effective Date”).

The Principal Sum is ______________ ($__________) plus accrued and unpaid
interest. 

1.           Maturity Date. The Maturity Date is six (6) months from the
Effective Date and is the date upon which the Principal Sum of this Note and
unpaid interest and fees (the “Note Amount”) shall be due and payable.

2.                 Interest. This Note shall bear interest at the rate of Ten
Percent (10%) per year.

3.           Conversion. The Lender has the right, at any time after the
Effective Date, at its election, to convert all or part of the Note Amount into
shares of fully paid and non-assessable shares of common stock of the Borrower
(the “Common Stock”). The conversion price shall be the lesser of (a) $0.45 per
share of Common Stock or (b) Fifty Percent (50%) of the lowest trade price of
Common Stock recorded on any trade day after the Effective Date (the “Conversion
Price”). The Conversion Price shall be subject to a conversion floor price
described in Section 4 of this Note.  The conversion formula shall be as
follows: Number of shares receivable upon conversion equals the dollar
conversion amount divided by the Conversion Price. A conversion notice (the
“Conversion Notice”) may be delivered to Borrower by method of Lender’s choice
(including but not limited to email, facsimile, mail, overnight courier, or
personal delivery), and all conversions shall be cashless and not require
further payment from the Lender. If no objection is delivered from the Borrower
to the Lender, with respect to any variable or calculation reflected in the
Conversion Notice within 24 hours of delivery of the Conversion Notice, the
Borrower shall have been thereafter deemed to have irrevocably confirmed and
irrevocably ratified such notice of conversion and waived any objection thereto.
The Borrower shall deliver the shares of Common Stock from any conversion to the
Lender (in any name directed by the Lender) within three (3) business days of
Conversion Notice delivery. The Borrower represents that it is participating in
the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, and upon request of the Lender and provided that the shares to be
issued are eligible for transfer under Rule 144 of the Securities Act of 1933,
as amended (the “Securities Act”), or are effectively registered under the
Securities Act, the Borrower shall cause its transfer agent to electronically
issue the Common Stock issuable upon conversion to the Lender through the DTC
Direct Registration System (“DRS”). The Conversion Price shall be subject to
equitable adjustments for stock splits, stock dividends or rights offerings by
the Borrower relating to the Borrower’s securities or the securities of any
subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events.

4.           Conversion Floor. The Borrower has the right to enforce a
conversion floor price of $0.40 per share (the “Conversion Floor Price”). If
Borrower receives a Conversion Notice in which the Conversion Price is less than
the Conversion Floor Price and elects to enforce the Conversion Floor Price,
then the Lender will incur a conversion loss, which the Borrower must make whole
by paying the amount of the conversion loss by cash payment, and any such cash
payment must be made by the third day from the time of the Conversion Notice.
The conversion loss shall be defined as follows:

Conversion Loss = [(High trade price on the day of conversion) x (Number of
shares that would have been issued if there was no floor)] – [(High trade price
on the day of conversion) x (number of shares being issued with the floor)].

In the event that any Borrower default occurs among any of the agreements
between the Borrower and Lender, inclusive of the terms of conversion, the terms
of this Section 4 shall automatically and permanently terminate.

In the event that the Borrower either (a) issues stock at any price in any type
of issuance or sale including but not limited to sale, conversion, exchange, and
compensation to any party (including the Lender) below the Conversion Floor
Price, or (b) if the Borrower enters into any agreement that may in the future
provide for such issuance at any price, in any type of issuance or sale
including but not limited to sale, conversion, exchange, and compensation to any
party (including the Lender) below the Conversion Floor Price, then the terms of
this Section 4 shall automatically and permanently terminate. In the event that
the Borrower enters into any agreement that provides for a floorless conversion,
or floorless convertible, or floorless exchangeable security, then the terms of
this Section 4 shall automatically and permanently terminate.

5.           Conversion Delays. If Borrower fails to deliver shares in
accordance with the timeframe stated in Section 3, the Lender, at any time prior
to selling all of those shares, may rescind any portion, in whole or in part, of
that particular conversion attributable to the unsold shares and have the
rescinded conversion amount returned to the Principal Sum with the rescinded
conversion shares returned to the Borrower (under the Lender’s and the
Borrower’s expectations that any returned conversion amounts shall tack back to
the original date of this Note). In addition, for each conversion, in the event
that shares are not delivered by the fourth business day (inclusive of the day
of conversion), a penalty of $2,000 per day shall be assessed for each day after
the third business day (inclusive of the day of the conversion) until share
delivery is made; and such penalty shall be added to the Principal Sum of this
Note (under the Lender’s and the Borrower’s expectations that any penalty
amounts shall tack back to the original date of this Note).

6.           Limitation of Conversions. In no event shall the Lender be entitled
to convert any portion of this Note in excess of that portion of this Note upon
conversion of which the sum of (1) the number of shares of Common Stock
beneficially owned by the Lender and its affiliates (other than shares of Common
Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of this Note or the unexercised or unconverted portion of
any other security of the Borrower subject to a limitation on conversion or
exercise analogous to the limitations contained herein) and (2) the number of
shares of Common Stock issuable upon the conversion of the portion of this Note
with respect to which the determination of this proviso is being made, would
result in beneficial ownership by the Lender and its affiliates of more than
4.99% of the outstanding shares of Common Stock. For purposes of the proviso of
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise
provided in clause (1) of such proviso, provided, further, however, that the
limitations on conversion may be waived by the Lender upon, at the election of
the Lender, not less than 61 days prior notice to the Borrower, and the
provisions of the conversion limitation shall continue to apply until such 61st
day (or such later date, as determined by the Lender, as may be specified in
such notice of waiver).
 
 
 
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7.           Payment. The Borrower may not prepay this Note prior to the
Maturity Date. Within six (6) days prior to the Maturity Date, Borrower shall
provide Lender with a written notice to pay the Note Amount on the Maturity
Date.  Within three (3) days of receiving written notice, the Lender shall elect
to either (a) accept payment of the Note Amount or (b) convert any part of the
Note Amount into shares of Common Stock. If the Lender elects to convert part of
the Note Amount into shares of Common Stock, then the Borrower shall pay the
remaining balance of the Note Amount by the Maturity Date.

8.           Piggyback Registration Rights. The Borrower shall include on the
next registration statement the Borrower files with the SEC (or on the
subsequent registration statement if such registration statement is withdrawn)
all shares of Common Stock issuable upon conversion of this Note unless such
shares of Common Stock are eligible for resale under Rule 144. Failure to do so
shall result in liquidated damages of Twenty Five Percent (25%) of the
outstanding principal balance of this Note being immediately due and payable to
the Lender at its election in the form of cash payment or addition to the
balance of this Note.

9.           Terms of Other Financings.  So long as this Note, or other
convertible note transactions currently in effect between the Lender and
Borrower, are outstanding (the “Outstanding Notes”), upon any issuance
(including this Note) by the Borrower or any of its subsidiaries of any security
with any term more favorable to the holder of such security or with a term in
favor of the holder of such security that was not similarly provided to the
Lender in the Outstanding Notes, then such additional or more favorable term
shall, at Lender’s option, become a part of any or all of the Outstanding Notes
with the Lender. The Borrower shall promptly notify the Lender of any additional
or more favorable terms and respond promptly to Lender’s periodic inquiry about
any favorable additional terms. The types of terms contained in another security
that may be more favorable to the holder of such security include, but are not
limited to, terms addressing conversion discounts, conversion price, conversion
look back periods, interest rates, original issue discounts, loan default fees,
stock sale price, private placement price per share, and warrant coverage. For
purposes of clarification, the issuance of any common stock resulting from the
conversion of another security, whether issued and outstanding before or after
the Effective Date, at a net effective price per share below the Conversion
Price shall result in an adjustment of the Conversion Price to such lower price
per share.

10.           Lender’s Representations. The Lender hereby represents and
warrants to the Borrower that (i) it is an “accredited investor” as such term is
defined in Rule 501(a) of Regulation D promulgated under the Securities Act,
(ii) it understands that this Note and the shares of Common Stock underlying
this Note (collectively, the “Securities”) have not been registered under the
Securities Act by reason of a claimed exemption under the provisions of the
Securities Act that depends, in part, upon the Lender’s investment intention; in
this connection, the Lender hereby represents that it is purchasing the
Securities for the Lender’s own account for investment and not with a view
toward the resale or distribution to others; provided, that Lender may syndicate
participations in the Securities among a limited number of participants who all
meet the suitability standards of an “accredited investor” as defined in Rule
501(a) of Regulation D of the Securities Act and will share among themselves and
the Lender an economic interest in the Securities on a pari passu, pass through
basis with investment intent, such that the availability of the private
placement exemption for the issuance of the Note under Rule 506 of Regulation D
of the Securities Act is preserved, (iii) the Lender, if an entity, further
represents that it was not formed for the purpose of purchasing the Securities,
(iv) the Lender acknowledges that the issuance of this Note has not been
reviewed by the United States Securities and Exchange Commission (the “SEC”) nor
any state regulatory authority since the issuance of this Note is intended to be
exempt from the registration requirements of Section 4(2) of the Securities Act
and Rule 506 of Regulation D, and (v) the Lender acknowledges receipt and
careful review of this Note, the Borrower’s filings with the SEC (including
without limitation, any risk factors included in the Borrower’s most recent
Annual Report on Form 10-K), and any documents which may have been made
available upon request as reflected therein, and hereby represents that it has
been furnished by the Borrower with all information regarding the Borrower, the
terms and conditions of the purchase and any additional information that the
Lender has requested or desired to know, and has been afforded the opportunity
to ask questions of and receive answers from duly authorized officers or other
representatives of the Borrower concerning the Borrower and the terms and
conditions of the purchase.

11.           Borrower’s Representations.  The Borrower is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with full power and authority to own, lease, license and use its
properties and assets and to carry out the business in which it proposes to
engage.  The Borrower has the requisite corporate power and authority to
execute, deliver and perform its obligations under this Note and to issue and
sell this Note. All necessary proceedings of the Borrower have been duly taken
to authorize the execution, delivery, and performance of this Note. When this
Note is executed and delivered by the Borrower, it will constitute the legal,
valid and binding obligation of the Borrower enforceable against the Borrower in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors' rights and
remedies.

12.           Default. The following are events of default under this Note: (i)
the Borrower shall fail to pay any principal under this Note when due and
payable (or payable by conversion) thereunder; or (ii) the Borrower shall fail
to pay any interest or any other amount under this Note when due and payable (or
payable by conversion) thereunder; or (iii) a receiver, trustee or other similar
official shall be appointed over the Borrower or a material part of its assets
and such appointment shall remain uncontested for twenty (20) days or shall not
be dismissed or discharged within sixty (60) days; or (iv) the Borrower shall
become insolvent or generally fails to pay, or admits in writing its inability
to pay, its debts as they become due, subject to applicable grace periods, if
any; or (v) the Borrower shall make a general assignment for the benefit of
creditors; or (vi) the Borrower shall file a petition for relief under any
bankruptcy, insolvency or similar law (domestic or foreign); or (vii) an
involuntary proceeding shall be commenced or filed against the Borrower; or
(viii) the Borrower shall lose its status as “DTC Eligible” or the Borrower’s
shareholders shall lose the ability to deposit (either electronically or by
physical certificates, or otherwise) shares into the DTC System; or (ix) the
Borrower shall become delinquent in its filing requirements as a fully-reporting
issuer registered with the SEC; or (x) the Borrower shall commit a material
breach of any of its covenants, representations or warranties in this Note.

13.           Remedies. In the event of any default, the Note Amount shall
become immediately due and payable at the Mandatory Default Amount. The
Mandatory Default Amount shall be 150% of the Note Amount. Commencing five (5)
days after the occurrence of any event of default that results in the eventual
acceleration of this Note, the interest rate on the Mandatory Default Amount
shall accrue at a default interest rate equal to the lesser of ten percent (10%)
per annum or the maximum rate permitted under applicable law. In connection with
such acceleration described herein, the Lender need not provide, and the
Borrower hereby waives, any presentment, demand, protest or other notice of any
kind, and the Lender 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. While the Mandatory Default Amount is
outstanding and default interest is accruing, the Lender shall have all rights
as a holder of this Note until such time as the Lender receives full payment
pursuant to this paragraph, or has converted all the remaining Mandatory Default
Amount and any other outstanding fees and interest into Common Stock under the
terms of this Note. In the event of any default and at the request of the
Lender, the Borrower shall file a registration statement with the SEC to
register all shares of Common Stock issuable upon conversion of this Note that
are otherwise eligible to have their restrictive transfer legend removed under
Rule 144 of the Securities Act. Nothing herein shall limit Lender’s right to
pursue any other remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Borrower’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of this Note as required pursuant to the
terms hereof.

14.           No Shorting. Lender agrees that so long as this Note from Borrower
to Lender remains outstanding, the Lender shall not enter into or effect “short
sales” of the Common Stock or hedging transaction which establishes a net short
position with respect to the Common Stock of the Borrower. The Borrower
acknowledges and agrees that upon delivery of a Conversion Notice by the Lender,
the Lender immediately owns the shares of Common Stock described in the
Conversion Notice and any sale of those shares issuable under such Conversion
Notice would not be considered short sales.

15.           Assignability. The Borrower may not assign this Note. This Note
shall be binding upon the Borrower and its successors and shall inure to the
benefit of the Lender and its successors and assigns and may be assigned by the
Lender to anyone of its choosing without Borrower’s approval subject to
applicable securities laws.

16.           Governing Law. This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of Nevada, without regard to
the conflict of laws principles thereof. Any action brought by either party
against the other concerning the transactions contemplated by this Agreement
shall be brought only in the state courts of Nevada or in the federal courts
located in Clark County, in the State of Nevada. Both parties and the
individuals signing this Agreement agree to submit to the jurisdiction of such
courts.

17.           Delivery of Process by the Lender to the Borrower. In the event of
any action or proceeding by the Lender against the Borrower, and only by the
Lender against the Borrower, service of copies of summons and/or complaint
and/or any other process which may be served in any such action or proceeding
may be made by the Lender via U.S. Mail, overnight delivery service such as
FedEx or UPS, email, fax, or process server, or by mailing or otherwise
delivering a copy of such process to the Borrower at its last known attorney as
set forth in its most recent SEC filing.

18.           Attorney Fees. In the event any attorney is employed by either
party to this Note with regard to any legal or equitable action, arbitration or
other proceeding brought by such party for the enforcement of this Note or
because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Note, the prevailing party in such
proceeding shall be entitled to recover from the other party reasonable
attorneys' fees and other costs and expenses incurred, including but not limited
to post judgment costs, in addition to any other relief to which the prevailing
party may be entitled.
 
 
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19.           Transfer Agent Instructions. In the event that an opinion of
counsel, such as but not limited to a Rule 144 opinion, is needed for any matter
related to this Note or the Common Stock the Lender has the right to have any
such opinion provided by its counsel. If the Lender chooses to have its counsel
provide such opinion, then the Lender shall provide the Borrower with written
notice. Within three (3) business days of receiving written notice, the Borrower
shall instruct its transfer agent to rely upon opinions from the Lender’s
counsel (the “Transfer Agent Reliance Letter”). A penalty of $2,000 per day
shall be assessed for each day after the third business day (inclusive of the
day of request) until the Transfer Agent Reliance Letter is delivered. If the
Lender requests that the Borrower’s counsel issue an opinion, then the Borrower
shall cause the issuance of the requested opinion within three (3) business
days. A penalty of $2,000 per day shall be assessed for each day after the third
business day (inclusive of the day of request) until the requested opinion is
delivered. The Lender and the Borrower agree that all penalty amounts shall be
added to the Principal Sum of this Note and shall tack back to the Effective
Date of this Note, with respect to the holding period under Rule 144. In the
event that the Borrower proposes to replace its transfer agent, the Borrower
shall provide, prior to the effective date of such replacement, a fully executed
Irrevocable Transfer Agent Reliance Letter in a form as initially delivered
pursuant to this Note. The Borrower warrants that it will not direct its
transfer agent not to transfer or delay, impair, and/or hinder its transfer
agent in transferring (or issuing)(electronically or in certificated form) any
certificate for the Securities to be issued to the Lender and it will not fail
to remove (or direct its transfer agent not to remove or impair, delay, and/or
hinder its transfer agent from removing) any restrictive legend (or to withdraw
any stop transfer instructions in respect thereof) on any certificate for the
Securities when required by this Note. The Borrower acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to the Lender by
vitiating the intent and purpose of the transactions contemplated hereby.
Accordingly, the Borrower acknowledges that the remedy at law for a breach of
its obligations under this Note may be inadequate and agrees, in the event of a
breach or threatened breach by the Borrower of these provisions, that the Lender
shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate transfer, without the necessity
of showing economic loss and without any bond or other security being required.

20.           Disclosure of Material Non-Public Information. Borrower agrees not
to disclose any ma­terial non-public information to the Lender at any time. If
the Borrower inadvertently discloses any material non-public information to the
Lender, then the Borrower shall promptly publicly disclose that information by
filing a Form 8-K with the SEC and by any other means necessary to make that
information known to the public.

21           Notices. Any notice required or permitted hereunder (including
Conversion Notices) must be in writing and either personally served, sent by
facsimile or email transmission, or sent by overnight courier. Notices shall be
deemed effectively delivered at the time of transmission if by facsimile or
email, and if by overnight courier the business day after such notice is
deposited with the courier service for delivery.

IN WITNESS WHEREOF, the authorized agents of the Borrower and the Lender have
caused this Note to be duly executed as of the Effective Date.

 
 
OriginOil, Inc. (the “Borrower”)

By_____________________________
     Riggs Eckelberry
     Chief Executive Officer

_____________ (the “Lender”)

By _____________________________
 
 

 
 
 
 
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