Exhibit 10. 1
 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

Principal Amount:
$____                                                                                                Issue
Date: ___, 2010

SECURED CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, AMERICAN ENERGY FIELDS, INC., a Delaware corporation
(hereinafter called “Borrower”), hereby promises to pay to the order of ____, at
______ (the “Holder”), without demand, the sum of _____ (“Principal Amount”),
with interest accruing thereon, on the sixth month anniversary of the Issue Date
(the “Maturity Date”), if not sooner paid or converted.

The following terms shall apply to this Note:

ARTICLE I

GENERAL PROVISIONS

1.1           Interest Rate.   Interest payable on this Note shall accrue at the
annual rate of ten percent (10%) and be payable on the Maturity Date,
accelerated or otherwise, when the principal and remaining accrued but unpaid
interest shall be due and payable, or sooner as described below.

1.2           Payment Grace Period.  The Borrower shall not have any grace
period to pay any monetary amounts due under this Note.  During the pendency of
an Event of Default (as described in Article III), a default interest rate of
eighteen percent (18%) per annum shall be in effect.

1.3           Conversion Privileges.  The Conversion Rights set forth in Article
II shall remain in full force and effect immediately from the date hereof and
until the Note is paid in full regardless of the occurrence of an Event of
Default.  This Note shall be payable in full on the Maturity Date, unless
previously converted into Common Stock in accordance with Article II hereof.

1.4           Prepayment.  This Note may be prepaid by the Borrower in whole, at
any time, or in part, from time to time, without penalty or premium, upon thirty
(30) days prior written notice to the Holder.  Upon receipt of such notice, the
Holder may determine to convert the Note pursuant to Article II.

1.5           Incentive Shares.  Upon issuance of this Note, the Borrower will
issue to the Holder 25,000 shares of Borrower’s common stock, which shall be
fully-paid and non-assessable.

 
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ARTICLE II

CONVERSION RIGHTS

The Holder shall have the right to convert the principal and any interest due
under this Note into Shares of the Borrower's Common Stock, $.001 par value per
share (“Common Stock”) as set forth below.

2.1.           Conversion into the Borrower's Common Stock. 

(a)           The Holder shall have the right from and after the date of the
issuance of this Note and then at any time until this Note is fully paid, to
convert any outstanding and unpaid principal portion of this Note, and accrued
interest, at the election of the Holder (the date of giving of such notice of
conversion being a "Conversion Date") into fully paid and non-assessable shares
of Common Stock as such stock exists on the date of issuance of this Note, or
any shares of capital stock of Borrower into which such Common Stock shall
hereafter be changed or reclassified, at the Conversion Price (as defined in
Section 2.1(b) hereof), determined as provided herein.  Upon delivery to the
Borrower of a completed Notice of Conversion, a form of which is annexed hereto
as Exhibit A, Borrower shall issue and deliver to the Holder within three (3)
business days after the Conversion Date (such third day being the “Delivery
Date”) that number of shares of Common Stock for the portion of the Note
converted in accordance with the foregoing.  At the election of the Holder, the
Borrower will deliver accrued but unpaid interest on the Note, if any, through
the Conversion Date directly to the Holder on or before the Delivery Date.  The
number of shares of Common Stock to be issued upon each conversion of this Note
shall be determined by dividing that portion of the principal of the Note and
interest, if any, to be converted, by the Conversion Price.

(b)          Subject to adjustment as provided in Section 2.1(c) hereof, the
conversion price per share shall initially be equal to $1.00 (“Conversion
Price”).

(c)          The Conversion Price and number and kind of shares or other
securities to be issued upon conversion determined pursuant to Section 2.1(a),
shall be subject to adjustment from time to time upon the happening of certain
events while this conversion right remains outstanding, as follows:

A.           Merger, Sale of Assets, etc.  If (A) the Borrower effects any
merger or  consolidation of the Borrower with or into another entity, (B) the
Borrower effects any sale of all or substantially all of its assets in one or a
series of related transactions,  (C) any tender offer or exchange offer (whether
by the Borrower or another entity) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other
securities, cash or property, (D) the Borrower consummates a stock purchase
agreement or other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of arrangement) with one or
more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Borrower, or (F) the Borrower effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other securities,
cash or property (in any such case, a “Fundamental  Transaction”), this Note, as
to the unpaid principal portion thereof and accrued interest thereon, shall
thereafter be deemed to evidence the right to convert into such number and kind
of shares or other securities and property as would have been issuable or
distributable on account of such Fundamental Transaction, upon or with respect
to the securities subject to the conversion right immediately prior to such
Fundamental Transaction. The foregoing provision shall similarly apply to
successive Fundamental Transactions of a similar nature by any such successor or
purchaser.

 
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B.           Reclassification, etc.  If the Borrower at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes that may be issued or
outstanding, this Note, as to the unpaid principal portion thereof and accrued
interest thereon, shall thereafter be deemed to evidence the right to purchase
an adjusted number of such securities and kind of securities as would have been
issuable as the result of such change with respect to the Common Stock
immediately prior to such reclassification or other change.

C.           Stock Splits, Combinations and Dividends.  If the shares of Common
Stock are subdivided or combined into a greater or smaller number of shares of
Common Stock, or if a dividend is paid on the Common Stock in shares of Common
Stock, the Conversion Price shall be proportionately reduced in case of
subdivision of shares or stock dividend or proportionately increased in the case
of combination of shares, in each such case by the ratio which the total number
of shares of Common Stock outstanding immediately after such event bears to the
total number of shares of Common Stock outstanding immediately prior to such
event.
 
D.           Maturity Reset.   In the event this Note is not converted and the
Borrower does not repay this Note in full on or prior to the Maturity Date, then
the Conversion Price shall automatically be reduced (and under no circumstances
increased) to 90% of the average of the closing bid prices of the Common Stock,
as reported by Bloomberg L.P. for the principal market on which the Borrower’s
shares of Common Stock are quoted, for the five trading days preceding (but not
including) the date the Notice of Conversion is sent by the Holder.

(d)          Whenever the Conversion Price is adjusted pursuant to Section
2.1(c) above, the Borrower shall promptly mail to the Holder a notice setting
forth the Conversion Price after such adjustment and setting forth a statement
of the facts requiring such adjustment.

(e)          Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable.  Borrower agrees that its
issuance of this Note shall constitute full authority to its officers, agents,
and transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the conversion of this Note.

2.2           Method of Conversion.  This Note may be converted by the Holder in
whole or in part as described in Section 2.1(a) or Section 2.4 hereof.  Upon
partial conversion of this Note, a new Note containing the same date and
provisions of this Note shall, at the request of the Holder, be issued by the
Borrower to the Holder for the principal balance of this Note and interest which
shall not have been converted or paid.

2.3.           Maximum Conversion.  The Holder shall not be entitled to convert
on a Conversion Date that amount of the Note in connection with that number of
shares of Common Stock which would be in excess of the sum of (i) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock of the Borrower on such Conversion Date.  For
the purposes of the provision to the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.  Subject to
the foregoing, the Holder shall not be limited to aggregate conversions of
4.99%.  The Holder shall have the authority and obligation to determine whether
the restriction contained in this Section 2.3 will limit any conversion
hereunder and to the extent that the Holder determines that the limitation
contained in this Section applies, the determination of which portion of the
Notes are convertible shall be the responsibility and obligation of the
Holder.  The Holder may waive the conversion limitation described in this
Section 2.3, in whole or in part, upon and effective after 61 days prior written
notice to the Borrower to increase such percentage to up to 9.99%.
 
 
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2.4.           Qualified Financing.  In addition to the conversion rights set
forth in Section 2.1, the Holder shall have the right to convert the principal
and any interest due under this Note into shares of Common Stock of the Borrower
as follows:  In the event of the closing by the Borrower of a Qualified
Financing (as defined below) prior to the Maturity Date or the conversion of
this Note, the Holder shall have the option to convert all or a portion of the
outstanding principal of, and accrued interest on, this Note on a
dollar-for-dollar basis into the shares of the Borrower issued and sold to the
investors in the Qualified Financing (“QF Securities”) at a conversion price
equal to the purchase price per share of the QF Securities paid by the investors
in the Qualified Financing.  A “Qualified Financing” shall mean the closing of
an equity investment in the form of the Borrower’s capital stock occurring after
the date hereof in which the Borrower receives from one or more investors (which
investors may include the Holder) with gross proceeds to the Company of at least
$1,250,000 (not including any debt conversion).  Upon conversion of this Note in
accordance with this Section 2.4, the Holder shall become party to a purchase
agreement and all related agreements, each in customary form, along with the
investors participating in such Qualified Financing.

ARTICLE III
 
EVENT OF DEFAULT

The occurrence of any of the following events of default ("Event of Default")
shall, at the option of the Holder hereof, make all sums of principal and
interest then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable, upon demand, without presentment, or grace period,
all of which hereby are expressly waived, except as set forth below:

3.1           Failure to Pay Principal or Interest.  The Borrower fails to pay
any installment of principal, interest or other sum due under this Note when
due.

3.2           Breach of Covenant.  The Borrower breaches any material covenant
or other term or condition of this Note in any material respect (other than a
payment default described in Section 3.1) and such breach, if subject to cure,
continues for a period of five (5) business days after written notice to the
Borrower from the Holder.

3.3           Breach of Representations and Warranties.  Any material
representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto shall be false or
misleading in any material respect as of the date made.

3.4           Liquidation.   Any dissolution, liquidation or winding up of
Borrower or any substantial portion of its business.
 
3.5           Cessation of Operations.   Any cessation of operations by Borrower
or Borrower admits it is otherwise generally unable to pay its debts as such
debts become due.
 
3.6           Receiver or Trustee.  The Borrower or any Subsidiary of Borrower
shall make an assignment for the benefit of creditors, or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial part of
its property or business; or such a receiver or trustee shall otherwise be
appointed.
 
 
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3.7           Bankruptcy.  Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law,
or the issuance of any notice in relation to such event, for the relief of
debtors shall be instituted by or against the Borrower or any Subsidiary of
Borrower.

3.8           Judgments.  Any money judgment, writ or similar final process
shall be entered or filed against Borrower or any of its property or other
assets for more than $50,000, unless stayed vacated or satisfied within thirty
(30) days.

3.9           Non-Payment.   A default by the Borrower under any one or more
obligations in an aggregate monetary amount in excess of $50,000 for more than
twenty (20) days after the due date, unless the Borrower is contesting the
validity of such obligation in good faith.

3.10           Delisting.   Delisting of the Common Stock from any Principal
Market; failure to comply with the requirements for continued listing on a
Principal Market for a period of five (5) consecutive trading days; or
notification from a Principal Market that the Borrower is not in compliance with
the conditions for such continued listing on such Principal Market.

3.11           Stop Trade.  An SEC or judicial stop trade order or Principal
Market trading suspension that lasts for five or more consecutive trading days.

ARTICLE IV

SECURITY INTEREST

4.           Security Interest/Waiver of Automatic Stay.   (a) As security for
the prompt and complete payment and performance in full of all the obligations
under this Note, the Borrower hereby assigns, conveys, mortgages, pledges,
hypothecates and transfers to the Holder and hereby grants to the Holder a
security interest in and continuing lien on all of the Borrower’s right, title
and interest in, to and under all assets of the Borrower, in each case whether
now owned or existing or hereafter acquired or arising, and wherever located
(all of which being hereinafter collectively called the “Collateral”).

(b) The Borrower acknowledges and agrees that should a proceeding under any
bankruptcy or insolvency law be commenced by or against the Borrower, or if any
of the Collateral should become the subject of any bankruptcy or insolvency
proceeding, then the Holder should be entitled to, among other relief to which
the Holder may be entitled, an order from the court granting immediate relief
from the automatic stay pursuant to 11 U.S.C. Section 362 to permit the Holder
to exercise all of its rights and remedies pursuant to this Note and/or
applicable law. THE BORROWER EXPRESSLY WAIVES THE BENEFIT OF THE AUTOMATIC STAY
IMPOSED BY 11 U.S.C. SECTION 362.  FURTHERMORE, THE BORROWER EXPRESSLY
ACKNOWLEDGES AND AGREES THAT NEITHER 11 U.S.C. SECTION 362 NOR ANY OTHER SECTION
OF THE BANKRUPTCY CODE OR OTHER STATUTE OR RULE (INCLUDING, WITHOUT LIMITATION,
11 U.S.C. SECTION 105) SHALL STAY, INTERDICT, CONDITION, REDUCE OR INHIBIT IN
ANY WAY THE ABILITY OF THE HOLDER TO ENFORCE ANY OF ITS RIGHTS AND REMEDIES
UNDER APPLICABLE LAW.  The Borrower hereby consents to any motion for relief
from stay that may be filed by the Holder in any bankruptcy or insolvency
proceeding initiated by or against the Borrower and, further, agrees not to file
any opposition to any motion for relief from stay filed by the Holder.  The
Borrower represents, acknowledges and agrees that this provision is a specific
and material aspect of the loan, and that the Holder would not agree to the
terms of the loan if this waiver were not a part of this Note. The Borrower
further represents, acknowledges and agrees that this waiver is knowingly,
intelligently and voluntarily made, that neither the Holder nor any person
acting on behalf of the Holder has made any representations to induce this
waiver, that the Borrower has been represented (or has had the opportunity to be
represented) in the signing of this Note and in the making of this waiver by
independent legal counsel selected by the Borrower and that the Borrower has
discussed this waiver with counsel.
 
 
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ARTICLE V

MISCELLANEOUS

5.1           Failure or Indulgence Not Waiver.  No failure or delay on the part
of the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.  All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
 
5.2           Notices.  All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii)
deposited in the mail, registered or certified, return receipt requested,
postage prepaid, (iii) delivered by reputable air courier service with charges
prepaid, or (iv) transmitted by hand delivery, telegram, or facsimile, addressed
as set forth below or to such other address as such party shall have specified
most recently by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the first business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The addresses for
such communications shall be: (i) if to the Borrower to: American Energy Fields,
Inc., 3266 W. Galveston Drive #101, Apache Junction, AZ 95120, Attn: Joshua
Bleak, President and CEO, facsimile: _______, with a copy by fax only
to:  Harvey Kesner, Esq., Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd
Floor, New York, NY 10006, facsimile: (212) 930-9725, and (ii) if to the Holder,
to the name, address and facsimile number set forth on the front page of this
Note.
 
5.3           Waivers and Amendments.  The Borrower hereby waives presentment,
demand for performance, notice of non-performance, protest, notice of protest
and notice of dishonor.  No delay on the part of the Holder in exercising any
right hereunder shall operate as a waiver of such right or any other right.  Any
term of this Note may be amended or waived only with the written consent of the
Borrower and the Holder.  Notwithstanding the foregoing, in the event that at
any time prior to date that this Note is paid in full or converted into QF
Securities, the Borrower issues any additional convertible bridge notes on terms
more favorable to the holders thereof than contained in this Note, than the
terms and conditions of this Note shall automatically be deemed to be revised to
correspond to such more favorable terms.
 
5.4           Amendment Provision.  The term “Note” and all reference thereto,
as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented.
 
5.5           Assignability.  This Note shall be binding upon the Borrower and
its successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns.  The Borrower may not assign its obligations under this
Note.
 
5.6           Cost of Collection.  If default is made in the payment of this
Note, Borrower shall pay the Holder hereof reasonable costs of collection,
including reasonable attorneys’ fees.
 
 
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5.7           Governing Law.  This Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws principles that would result in the application of the substantive laws of
another jurisdiction.  Any action brought by either party against the other
concerning the transactions contemplated by this Agreement must be brought only
in the civil or state courts of New York or in the federal courts located in the
State and county of New York.  Both parties and the individual signing this
Agreement on behalf of the Borrower agree to submit to the jurisdiction of such
courts.  The prevailing party shall be entitled to recover from the other party
its reasonable attorney's fees and costs.  In the event that any provision of
this Note is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or unenforceability of any other provision
of this Note. Nothing contained herein shall be deemed or operate to preclude
the Holder from bringing suit or taking other legal action against the Borrower
in any other jurisdiction to collect on the Borrower's obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other decision in favor of the Holder.  This Note shall be
deemed an unconditional obligation of Borrower for the payment of money and,
without limitation to any other remedies of Holder, may be enforced against
Borrower by summary proceeding pursuant to New York Civil Procedure Law and
Rules Section 3213 or any similar rule or statute in the jurisdiction where
enforcement is sought.  For purposes of such rule or statute, any other document
or agreement to which Holder and Borrower are parties or which Borrower
delivered to Holder, which may be convenient or necessary to determine Holder’s
rights hereunder or Borrower’s obligations to Holder are deemed a part of this
Note, whether or not such other document or agreement was delivered together
herewith or was executed apart from this Note.
 
5.8           Maximum Payments.  Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum rate permitted by applicable law.  In the event that the
rate of interest required to be paid or other charges hereunder exceed the
maximum rate permitted by applicable law, any payments in excess of such maximum
rate shall be credited against amounts owed by the Borrower to the Holder and
thus refunded to the Borrower.
 
5.9           Non-Business Days.   Whenever any payment or any action to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due or action shall be required on the
next succeeding business day and, for such payment, such next succeeding day
shall be included in the calculation of the amount of accrued interest payable
on such date.
 
5.10          Redemption.  This Note may not be redeemed or called without the
consent of the Holder.

5.11          Shareholder Status.  The Holder shall not have rights as a
shareholder of the Borrower with respect to unconverted portions of this Note.

 
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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized officer as of the ____ day of _____, 2010.

AMERICAN ENERGY FIELDS, INC.

By: ________________________________
      Name:
      Title:

 
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NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)
 
The undersigned hereby elects to convert $_________ of the principal and
$_________ of the interest due on the Note issued by AMERICAN ENERGY FIELDS,
INC. (the “Borrower”) on October ___, 2010 into shares of the Borrower’s Common
Stock according to the conditions set forth in such Note, as of the date written
below.

 
Date of
Conversion:____________________________________________________________________

Conversion
Price:______________________________________________________________________

Number of Shares of Common Stock Beneficially Owned on the Conversion Date:

___________________________________________

Shares To Be
Delivered:_________________________________________________________________

Signature:____________________________________________________________________________

Print
Name:__________________________________________________________________________

Address:_____________________________________________________________________________

   ____________________________________________________________________________

 
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