ex10_3.htm


    
      

    

    
      Exhibit
10.3

      


      THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION
OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN SECURED BY SUCH SECURITIES.

      


      Original
Issue Date: October 22,
2009

      


      $1,500,000

      


      7.5%
CONVERTIBLE NOTE


      DUE
OCTOBER 31, 2014

      


      THIS
Convertible Note of Exobox Technology, Corp., a Nevada corporation (the “Company”), designated
as its 7.5% Convertible Note, due October 31, 2014 (the “Convertible
Note”).

      


      FOR VALUE
RECEIVED, the Company promises to pay to SPQR Energy, Inc. or its registered
assigns (the “Holder”), the
principal sum of $1,500,000 on October 31, 2014 (the “Maturity Date”), and
to pay accrued interest to the Holder quarterly beginning on January 31, 2010 on
the then outstanding principal amount of this Convertible Note at the rate of
7.5% per annum, payable in cash or the Company’s common stock as set forth in
Section 6.

      


      This
Convertible Note is subject to the following terms and conditions:

      


      Section
1.               This
Convertible Note is exchangeable for an equal aggregate principal amount of
Convertible Notes of different authorized denominations, as requested by the
Holder surrendering the same.  No service charge will be made for such
registration of transfer or exchange.

      


      Section
2.              
This Convertible Note may be transferred or exchanged only in compliance with
applicable federal and state securities laws and regulations.  Prior
to due presentment to the Company for transfer of this Convertible Note, the
Company and any agent of the Company may treat the Person in whose name this
Convertible Note is duly registered on the Convertible Note register as the
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this Convertible Note is overdue, and neither the
Company nor any such agent shall be affected by notice to the
contrary.

      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Section
3.               Events of
Default.

      


      (a)           “Event of Default”,
wherever used herein, means any one of the following events (whatever the reason
and whether it shall be voluntary or involuntary or effected by operation of law
or pursuant to any judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):

      


      (i)           
any default in the payment of the principal amount of, or interest on, the
Convertible Note;

      


      (ii)           the
Company shall commence, or there shall be commenced against the Company a case
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any successor thereto, or the Company  commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Company or there
is commenced against the Company any such bankruptcy, insolvency or other
proceeding which remains undismissed for a period of 60 days; or the Company is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the
Company  suffers any appointment of any custodian or the like for it
or any substantial part of its property which continues undischarged or unstayed
for a period of 60 days; or the Company makes a general assignment for the
benefit of creditors; or the Company shall fail to pay, or shall state that it
is unable to pay, or shall be unable to pay, its debts generally as they become
due; or the Company; or any corporate or other action is taken by the Company or
any subsidiary thereof for the purpose of effecting any of the foregoing;
or

      


      (iii)          final
judgment for the payment of money in excess of $500,000 shall be rendered
against the Company and the same shall remain undischarged for a period of 60
days during which execution shall not be effectively stayed;

      


      (b)           If
any Event of Default occurs, the full principal amount of this Convertible Note,
together with interest and other amounts owing in respect thereof, to the date
of acceleration shall become immediately due and payable in cash; provided,
however, that the Holder shall have the right to convert all or a portion of
such principal of the Convertible Note into shares of Common Stock pursuant to
the terms set forth in Section 4 below (and to receive cash on the (i) accrued
interest and (ii) principal amount Holder elects not to
convert).  Commencing 5 days after the occurrence of any Event of
Default that results in the eventual acceleration of this Convertible Note, the
interest rate on this Convertible Note shall accrue at the rate of 18% per
annum, or such lower maximum amount of interest permitted to be charged under
applicable law.  The Holder need not provide and the Company hereby
waives any presentment, demand, protest or other notice of any kind, and the
Holder 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.  Such declaration may be rescinded and
annulled by Holder at any time prior to payment hereunder and the Holder shall
have all rights as a Convertible Note holder until such time, if any, as the
full payment under this Section shall have been received by it.  No
such rescission or annulment shall affect any subsequent Event of Default or
impair any right consequent thereon.

      


      Section
4.               Conversion.

      


      (a)           The
Holder shall be entitled, at its option, to convert all or any part of the
principal amount of this Convertible Note into shares of the Company’s common
stock, at a price (the “Conversion Price”) of
$0.21 per share of the Company’s common stock.  No fraction of shares
or scrip representing fractions of shares will be issued on conversion, but the
number of shares issuable shall be rounded to the nearest whole
share.  The number of shares of the Company’s common stock issuable
upon a conversion hereunder shall be determined by the quotient obtained by
dividing (x) the outstanding principal amount of this Convertible Note to be
converted as set forth in the applicable Conversion Notice by (y) the Conversion
Price.  To convert this Convertible Note, the Holder hereof shall
deliver written notice (the “Conversion Notice”),
to the Company at its address as set forth herein.  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.  Except as otherwise provided herein, the Company shall not
have the right to object to the conversion or the calculation of the applicable
conversion price, absent manifest error.  Any conversion of any
portion of the Convertible Note shall be deemed to be a pre-payment of
principal, without any penalty, and shall be credited against any future
payments of principal in the order that such payments become due and
payable.

      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      (b)           If
the Company at any time after the date of issuance of this Convertible Note
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of the Company’s 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 Convertible 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.  Any adjustment under this Section 4(b)
shall become effective at the close of business on the date the subdivision or
combination becomes effective.

      


      Section 5.    This
Convertible Note is a direct obligation of the Company, and the obligation of
the Company to repay this Convertible Note is absolute and unconditional, but is
expressly subordinated to all currently outstanding secured and unsecured
indebtedness of the Company outstanding on the date hereof. The repayment terms
hereof agreed to be paid to Holder for making  the loan evidenced by
this Convertible Note reflect the substantial risks Holder is assuming by virtue
of such subordination and Holder’s further agreement evidenced hereby that no
recourse shall be had for the payment of the principal of, or interest on the
Convertible Note, or for any claim based hereon, or otherwise in respect hereof,
against any shareholder, officer or director, as such, past, present or future,
of the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the express terms hereof and
as part of the consideration for the repayment terms here or hereof, expressly
waived and released.

      


      Section 6.     Interest on
the amount advanced will accrue on this Convertible Note at the rate of seven
point five percent (7.5%) per annum, and be payable quarterly, in cash or the
Company’s common stock at the Interest Conversion Price (as defined below). The
“Interest Conversion Price” shall be deemed to be the Closing Price (as defined
below) of the Company’s common stock on the fifth trading dys prior to the date
the interest payment is due.  The “Closing Price” shall mean the last
reported sales price on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, on Nasdaq, or, if the Common Stock
is not listed or admitted to trading on any national securities exchange or
quoted on Nasdaq, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Corporation for that purpose.

      


      Section
7.              Any
payment made by the Company to the Holder, on account of this Convertible Note
shall be applied in the following order of priority: (i) first, to any amounts
other than principal and accrued interest, if any, hereunder, (ii) second, to
accrued interest, if any, through and including the date of payment, and (iv)
then, to principal of the Convertible Note.

      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Section
8.             
The outstanding principal of this Convertible Note may be prepaid in cash in
whole or in part at the option of the Company without
penalty.   All payments contemplated to be made “in cash” and
shall be made in immediately available good funds of United States of America
currency by wire transfer to an account designated in writing by the Holder to
the Company (which account may be changed by notice similarly given). For
purposes of the Convertible Note, the phrase "date of payment" means the date
good funds are received in the account designated by the notice which is then
currently effective.

      


      Section
9.              This
Convertible Note shall be governed by and interpreted in accordance with the
laws of the State of Texas for contracts to be wholly performed in such state
and without giving effect to the principles thereof regarding the conflict of
laws. Each of the parties consents to the exclusive jurisdiction of the state
courts of the State of Texas located in Harris County and the United States
District Court for the Southern District of Texas in connection with any dispute
arising under this Agreement and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non convenes, to
the bringing of any such proceeding in such jurisdictions.

      


      Section
10.            The
Company covenants that it will at all times reserve and keep available out of
its authorized and unissued shares of Common Stock solely for the purpose of
issuance upon Conversion of the Convertible Note, free from preemptive rights or
any other actual contingent purchase rights of persons other than the Holder,
not less than such number of shares of the Common Stock as shall be issuable
upon the conversion of the outstanding principal amount of the Convertible
Note.  The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly and validly authorized, issued
and fully paid and nonassessable.

      


      Section 11.            Upon
a Conversion hereunder the Company shall not be required to issue stock
certificates representing fractions of shares of the Company’s common stock, but
may if otherwise permitted, make a cash payment in respect of any final fraction
of a share.  If the Company elects not, or is unable, to make such a
cash payment, the Holder shall be entitled to receive, in lieu of the final
fraction of a share, one whole shares of the Company’s common
stock.

      


      Section
12.            Any
and all notices or other communications or deliveries to be provided by the
Holder hereunder, including, without limitation, any notice of conversion, shall
be in writing and delivered personally, by facsimile, sent by a nationally
recognized overnight courier service, addressed to the Company, at 2121 Sage
Road, Suite, 200, Houston, Texas 77056, facsimile number 713-626-7890, Attn: CEO
or such other address or facsimile number as the Company may specify for such
purposes by notice to the Holder delivered in accordance with this
Section.  Any and all notices or other communications or deliveries to
be provided by the Company hereunder shall be in writing and delivered
personally, to Holder at 19607 Piney Place Ct., Houston, Texas 77094, facsimile
number 832-553-2803, Attn: CEO or such other address or facsimile number as the
Holder may specify for such purposes by notice to the Company delivered in
accordance with this Section.  Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. Houston, Texas time), (ii) the date after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (Houston, Texas
time) on any date and earlier than 11:59 p.m. (Texas time) on such date, (iii)
the second Business Day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given. Whenever any payment or other
obligation hereunder shall be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day.

      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Section
13.            If
this Convertible Note shall be mutilated, lost, stolen or destroyed, the Company
shall execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Convertible Note, or in lieu of or in substitution
for a lost, stolen or destroyed Convertible Note, a new Convertible Note for the
principal amount of this Convertible Note so mutilated, lost, stolen or
destroyed but only upon receipt of evidence of such loss, theft or destruction
of such Convertible Note, and of the ownership hereof, and indemnity, if
requested, all reasonably satisfactory to the Company.

      


      Section
14.            If
any provision of this Convertible Note is invalid, illegal or unenforceable, the
balance of this Convertible Note shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances.  If it shall be
found that any interest or other amount deemed interest due hereunder violates
applicable laws governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate of interest.
The Company covenants (to the extent that it may lawfully do so) that it shall
not at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would prohibit or forgive the Company from paying all or any portion of the
principal of or interest on this Convertible Note as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this indenture, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any
such law, and covenants that it will not, by resort to any such law, hinder,
delay or impeded the execution of any power herein granted to the Holder, but
will suffer and permit the execution of every such as though no such law has
been enacted.

      


      IN
WITNESS WHEREOF, the Company has caused this Convertible Note to be duly
executed by a duly authorized officer as of the date first above
indicated.

      


      


      
        	 
      	
                EXOBOX
      TECHNOLOGIES, CORP.

              
	 	 	 
	 	 	 
	 
      	
                By:

              	 
      	 
	 
      	
                Name:

              	 
      	 
	 
      	
                Title: