Exhibit 10.20

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PROMISSORY NOTE

 

 

 

 

 

 

From

:

 

AMERICAN EXPLORATION CORPORATION

 

 

To

:

 

MAINLAND RESOURCES, INC.

 

 

 

 

Mainland Resources, Inc.

21 Waterway Avenue, Suite 300, The Woodlands, Texas, U.S.A., 77380

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PROMISSORY NOTE

 

 

Between the BORROWER and the LENDER

Aggregate Principal Sum of up to U.S. $60,000.00

 

Principal:        U.S. $60,000.00.                                      Made at
Vancouver, British Columbia, Canada.

Maturing:        December 31, 2010.

                        THIS PROMISSORY NOTE is provided, dated and made
effective as of the 27th day of September, 2010 (the "Effective Date").

 

FROM

:

AMERICAN EXPLORATION CORPORATION

, a company
incorporated under the laws of the State of Nevada, U.S.A., and
having an address for notice and delivery located at 407 2nd Street
S.W., Calgary, Alberta, Canada, T2P 2Y3

(the "Borrower");

TO

:

MAINLAND RESOURCES, INC.

, a company incorporated
under the laws of the State of Nevada, U.S.A., and having an
address for notice and delivery located at 21 Waterway Avenue,
Suite 300, The Woodlands, Texas, U.S.A., 77380

(the "Lender").

(the Borrower and the Lender being hereinafter singularly also
referred to as a "Party" and collectively referred to as the "Parties"
as the context so requires).

 

                        WHEREAS:

                        The Borrower is a corporation duly incorporated under
the laws of the State of Nevada, U.S.A., is a reporting company and issuer in
each of the United States and in British Columbia, respectively, and has its
common shares listed for trading on the OTCBB over-the-counter bulletin board;

                        The Lender is a corporation duly incorporated under the
laws of the State of Nevada, U.S.A., is a reporting company and issuer in each
of the United States and in British Columbia, respectively, and has its common
shares listed for trading on the OTCBB over-the-counter bulletin board;

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                        In accordance with the terms and conditions of a certain
"Merger Agreement and Plan of Merger" dated March 22, 2010, as amended by each
of a certain "Letter Agreement" and an "Amending Agreement" dated July 28, 2010
and September 7, 2010, respectively, as entered into between the Parties hereto,
the Parties intend to merge pursuant to the Nevada Revised Statutes with the
Lender as the surviving corporation (collectively, the "Merger");

                        Prior to the intended closing of the Merger, and in
order to assist the Borrower with various costs associated with the completion
of the proposed Merger, the Lender had hereby agreed to advance, by way of loan
or loans to the Borrower (collectively, the "Loan"), the aggregate principal sum
of U.S. $60,000.00 (the "Principal Sum"), together with interest accruing on the
Principal Sum at the rate of twelve percent (12%) per annum, calculated daily
and payable in full monthly during the continuance of any portion of the Loan
being outstanding hereunder (the "Interest") and prior to maturity; and

                        The Parties hereby acknowledge and agree that there have
been various discussions, negotiations, understandings and agreements between
them relating to the principle terms and conditions of the within Loan of the
Principal Sum monies as contemplated therein and, correspondingly, that it is
their intention by the terms and conditions of this "Promissory Note" (the
"Promissory Note") to clarify their respective duties and obligations with
respect to the within Loan to be provided hereunder;

 

                        FOR VALUABLE CONSIDERATION, receipt whereof is hereby
acknowledged, the undersigned, Borrower, hereby promises to pay to the Lender,
or the holder of this Promissory Note, in accordance with the terms and
conditions referenced herein, the aggregate Principal Sum of U.S. $60,000.00,
together with Interest payable thereon and commencing on the above-referenced
Effective Date of this Promissory Note at the rate of twelve percent (12%) per
annum, calculated daily and payable in full monthly during the continuance of
any portion of the Principal Sum being outstanding hereunder prior to maturity;
in the manner as set forth immediately hereinbelow.

                        Subject to the following, the Principal Sum, together
with all outstanding Interest thereon as specified hereinabove, is hereby
irrevocably and unconditionally due and payable by the Borrower to the Lender at
or before 5:00 p.m. (Vancouver, British Columbia, time) on December 31, 2010
(the "Final Principal Sum Payment Date"). The Parties hereby acknowledge and
agreed that, should the Merger be completed prior to the Final Principal Sum
Payment Date, the within Loan will, subject to the prior advice of the Lender's
professional advisors, acting reasonably, either be deemed cancelled or
construed as an inter-company loan as between the Parties for which no repayment
will be required.

                        The holder of this Promissory Note may, from time to
time, grant written indulgences with respect to certain payment amounts or
periods but such indulgences will not in any way affect the undersigned's
liability upon this Promissory Note nor will such indulgences vary any other
term to which indulgence has not specifically been granted. No indulgence will
be enforceable against the holder unless granted in writing.

                        The undersigned hereby waives demand, presentment for
payment, notice of non-payment and protest.

                        If any provision of this Promissory Note is held to be
invalid, illegal or unenforceable, then such will not affect or impair the
validity, legality or enforceability of the remaining provisions.

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                        WITNESS the hand of the authorized representative of the
undersigned Borrower given under seal as of the Effective Date determined
hereinabove.

The COMMON SEAL of
AMERICAN EXPLORATION
CORPORATION,
the Borrower herein,
was hereunto affixed in the presence of:

"Steve Harding"                              
Authorized Signatory

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(C/S)

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