Exhibit 10.2

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE
SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
THE COMPANY, (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A
THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, (D) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE,
FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION,
IN EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
U.S. SECURITIES ACT.

 

8% CONVERTIBLE PROMISSORY NOTE

 

MAXWELL RESOURCES, INC.

 

DUE

 

Original Issue Date:    US$                  

 

This Convertible Promissory Note (the “Note”) is duly authorized and issued by
Maxwell Resources, Inc., a Nevada corporation ( “Company”), to (together with
permitted successors and assigns, “Holder”) in accordance with exemptions from
registration under the Securities Act of 1933, as amended (the “Securities
Act”).

 

Article I.

 

Section 1.01        Principal and Interest. For value received, Company promises
to pay Holder the principal sum of            ($        ) on the earlier of
(i)            (the “Maturity Date”), or (ii) an Event of Default (as defined in
Section 3.01). The unpaid principal balance of the Note shall accrue interest at
8% per annum. On the Maturity Date, the entire unpaid principal amount and
accrued interest shall be paid to the Holder unless this Note is converted in
accordance with Section 1.02 herein. The Company may prepay any portion of the
principal amount of this Note without the prior written consent of the Holder.

 

Section 1.02        Conversion. Holder shall be entitled, at his option, to
convert all or any part of the principal amount of the Note into Company’s
common stock (the “Conversion Shares”) at a variable conversion price (the
“Conversion Price”) as set forth below. The number of shares issuable upon a
conversion shall be determined by the quotient obtained by dividing (1) the
outstanding principal amount of the Note (or, if applicable, the portion thereof
to be converted) plus any accrued interest thereon, and (2) the Conversion
Price. To convert this Note, Holder hereof shall deliver written notice thereof,
substantially in the form of Exhibit A to this Note, with appropriate insertions
(the “Conversion Notice”), to the Company. The date upon which the conversion
shall be effective (the “Conversion Date”) shall be deemed to be the date set
forth in the Conversion Notice. Any conversion of any portion of the Note shall
be deemed to be a pre-payment of principal, without penalty or premium. The
Conversion Price shall be the lesser of (i) 50% of the average of the lowest
three (3) closing bid prices for the Company’s common stock during the ten (10)
trading days prior to the Conversion Date or (ii) $.0075 per share. If Holder
elects to convert only a portion of the Note, then Company shall reissue a new
note in substantially the same form as this Note to reflect the new principal
amount.

 

 

 

 

Article II.

 

Section 2.01        Events of Default. Each of the following events shall
constitute a default under this Note (each an “Event of Default”):

 

(a)            failure by the Company to pay any amount due within five (5) days
of the due date;

 

(b)            failure by the Company to cause stock to be issued to Holder
within five (5) days of the Company’s receipt of a Conversion Notice;

 

(c)            failure by the Company for five (5) days after notice to it to
comply with any of its other agreements in the Note;

 

Section 2.02        If any Event of Default occurs, all amounts due or
contemplated to be due under the Note shall become immediately due and payable
without notice or demand (an “Acceleration Event”). Upon occurrence of an
Acceleration Event, interest on this Note shall begin to accrue at the rate of
15% per annum. Holder need not provide and Company hereby waives any
presentment, demand, protest, notice of acceleration, notice of intent to
accelerate, or any other notice of any kind.

 

Article III.

 

Section 3.01        Adjustments and Limits on Conversion

 

(a)            Adjustment of Conversion Price upon Subdivision or Combination of
Common Stock. If Company at any time after the date of issuance of this Note
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of common stock into a greater
number of shares, the Conversion Price in effect immediately prior to such
subdivision will be proportionately reduced. If the Company at any time after
the date of issuance of this Note combines (by combination, reverse stock split
or otherwise) one or more classes of its outstanding shares of common stock into
a smaller number of shares, the Conversion Price in effect immediately prior to
such combination will be proportionately increased.

 

(b)            Conversion Limitation. Notwithstanding anything contained herein
to the contrary, Holder shall not be entitled to convert pursuant to the terms
of the Note an amount that would be convertible into that number of Conversion
Shares which, when added to the number of shares of Company’s common stock
(“Common Stock”) otherwise beneficially owned by such Holder would exceed 4.99%
of the outstanding shares of Common Stock of the Borrower at the time of
conversion. For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and Regulation 13d-3 thereunder.

 

2

 

 

Section 3.02        Lock-Up. Notwithstanding anything contained herein to the
contrary, the Holder agrees that, without the express written permission of the
Company pursuant to a resolution of the Board of Directors of the Company, it
shall not transfer, offer, pledge, sell, contract to sell, grant any of the
Shares for the sale of or otherwise dispose of, directly or indirectly, any of
the Shares held by such Holder through the date which is one year from the
Conversion date. The Shares or any securities issued in exchange of the Shares
shall be returned to the Company for cancellation upon the Holder’s breach of
this Section 3.02 of this Agreement.

 

Article IV.

 

Section 4.01        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
Texas, without regard to the principles of conflicts of law thereof. Any lawsuit
arising out of or relating to this Note shall be brought in Dallas County,
Texas, and the parties irrevocably submits to the exclusive jurisdiction of such
courts and irrevocably waive any defense or other matter relating to personal
jurisdiction, venue, or forum non conveniens.

 

Section 4.02        Jury Waiver. Each party hereto hereby irrevocably waives, 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.

 

Section 4.03        Attorneys’ Fees. The parties agree that in any action or
proceeding to enforce any provision of this Note, the prevailing party shall be
entitled to an award of attorneys’ fees, costs, and expenses incurred.

 

Section 7.05        Severability. The invalidity of any provision of this Note
shall not invalidate or otherwise affect any other provision of this Note.

 

Section 7.06       Entire Agreement and Amendments. This Note represents the
entire agreement between the parties and there are no representations,
warranties or commitments, except as set forth herein. This Note may be amended
only by an instrument in writing executed by the parties hereto.

 

3

 

 

IN WITNESS WHEREOF, with the intent to be legally bound hereby, Company executes
this Note as of the date first written above.

 

  MAXWELL RESOURCES, INC.         By:     Name: Mike Edwards   Title: Chief
Executive Officer

 

4

 

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be executed by the Holder in order to convert the Note)

 

TO:  

 

The undersigned hereby irrevocably elects to convert
$                                           of the principal amount of the above
Note into Shares of Common Stock of Maxwell Resources, Inc., according to the
conditions stated therein, as of the Conversion Date written below.

 

Conversion Date:   Applicable Conversion Price:   Signature:   Name:   Address:
  Amount to be converted: $ Amount of Note unconverted: $ Conversion Price: $
Number of shares of Common Stock to be issued including as payment of interest,
if applicable:   Please issue the shares of Common Stock in the following name
and to the following address:   Issue to the following account of the Holder:  
Authorized Signature:   Name:   Title:   Phone Number:   Broker DTC Participant
Code:   Account Number: