Exhibit 10.3
NON-NEGOTIABLE CONVERTIBLE PROMISSORY NOT
NEITHER THIS PROMISSORY NOTE NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS PROMISSORY NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE.
NEITHER THIS PROMISSORY NOTE NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS PROMISSORY NOTE MAY BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE PROMISSORY NOTE OR SUCH COMMON STOCK UNDER SUCH ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE ACT.
ROCKY MOUNTAIN MINERALS, INC.
NON-NEGOTIABLE CONVERTIBLE PROMISSORY NOTE
April 30, 2007
1. Loan. FOR VALUE RECEIVED, the undersigned, Rocky Mountain Minerals,
Inc., a Wyoming corporation, with its address at 2480 North Tolemac Way,
Prescott, Arizona 86305 (referred to herein as "Borrower"), promises to pay
Great Missenden Holdings Pty Ltd, with an address at Level 25, 500 Collins
Street, Melbourne, Victoria, Australia, 3000 ("Lender"), the aggregate unpaid
principal of all Loans (as hereinafter defined) made from Lender to Borrower on
June 30,2008 (the "Maturity Date"), subject to Borrower's prepayment rights as
set forth below, and interest on the unpaid principal balance of this promissory
note ("Note") at a rate equal to nine (9%) percent per annum. The principal
balance then outstanding under this Note plus accrued but unpaid interest shall
be paid in full on the Maturity Date.
Lender shall advance to Borrower the principal sum of Three Hundred
Thousand ($300,000) US Dollars as follows: $75,000 on April 30, and $75,000 on
each of May 31,2007, June 30,2007, and August 31,2007 (the "Loans"); provided,
however, that the Borrower may, in its sole discretion, waive the advancement of
any or all of the aforementioned installments upon written notice given to
Lender 2 days prior to the applicable advance, in which case Lender shall not be
entitled to make such advance. The Borrower shall record the date and amount of
all such advances and send a written confirmation thereof to Lender.
Notwithstanding any other provision hereof, interest paid or
becoming due hereunder shall in no event exceed the maximum rate permitted by
applicable law. All amounts due hereunder are payable in lawful money of the
United States of America to the Lender at the address above indicated.
2. Conversion. (a) Subject to subparagraph (h) below, at any time
before the Maturity Date, the Lender shall have the right, in its sole
discretion, to convert the entire then outstanding principal balance of this
Note (if such balance is outstanding at the time of such conversion) into shares
of the Borrower's common stock, $.001 par value per share ("Common Stock") of
the Borrower, at a conversion price equal to US $0.025 (the "Conversion Price")
per share, subject to adjustment as described below. It is understood and agreed
that such Conversion shall not avoid the obligation of the Lender to advance the
full amount of the Loans.
(b) Lender may convert the above specified amount of this Note at
the then applicable Conversion Price by the surrender of this Note (properly
endorsed) at the principal office of the Borrower, or at such other agency or
office of the Borrower in the United States of America as the Borrower may
designate by notice in writing to the Lender at the address of Lender appearing
herein. In the event of the conversion of this Note, a certificate or
certificates for the securities into which this Note is so converted, as
applicable, registered in the name of the Lender, shall be delivered to the
Lender as soon as practicable after the receipt by Borrower of this Note and
Lender's written request for conversion.
(c) If the Borrower, at any time while this Note is outstanding,
(A) shall pay a stock dividend or otherwise make a distribution on shares of its
Common Stock, which dividend or distributions is payable in shares of Common
Stock, (B) subdivide outstanding shares of Common Stock into a larger number of
shares or (C) combine (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, then the Conversion
Price as then in effect shall be adjusted by multiplying it by a fraction, of
which the numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding after such event.
(d) Except for the merger described in subparagraph (h) below, in
case of any consolidation or merger of the Borrower with or into another
corporation or entity, or the conveyance of all or substantially all of the
assets of the Borrower to another corporation or entity, in either case
resulting in a conversion, extinguishment or exchange of the outstanding shares
of Common Stock, or any other re-classification of the Common Stock not
described above, this Note shall thereafter be convertible into the number of
shares of stock or other securities or property to which a holder of the number
of shares of Common Stock of the Borrower deliverable upon conversion of this
Note immediately prior to such consolidation, merger, conveyance or
reclassification would have been entitled upon such consolidation, merger,
conveyance or reclassification; and, in any such case, appropriate adjustment
shall be made in the application of the provisions herein set forth with respect
to the rights and interest thereafter of the holders of this Note, to the end
that the provisions set forth herein shall be thereafter applicable, as nearly
as reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the conversion of this Note.
(e) Any adjustment to the Conversion Price made pursuant to the
adjustment provisions of this Section 2 shall become effective immediately after
the record date for the
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determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
(f) The Borrower 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 this Note, each as herein
provided, free from preemptive rights or any other actual contingent purchase
rights of persons other than the Lender, not less than such number of shares of
the Common Stock as shall be issuable upon the conversion of the outstanding
principal amount of this Note, to the extent such conversion is permitted
hereunder. The Borrower covenants that all shares of Common Stock that shall be
so issuable shall, upon issue, be duly and validly authorized, issued and fully
paid, nonassessable.
(g) Except with respect to the merger described in subparagraph
(h) below, if (i) the Borrower shall declare a dividend (or any other
distribution) on the Common Stock; (ii) the Borrower shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (iii) the
Borrower shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (iv) there shall be a reclassification of the Common
Stock, any consolidation or merger to which the Borrower is a party, any sale or
transfer of all or substantially all of the assets of the Borrower, or any
compulsory share exchange, in each such case whereby the Common Stock is
converted into other securities, cash or property; or (v) the Borrower shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of
the affairs of the Borrower; then, in each case, the Borrower shall cause to be
filed at each office or agency maintained for the purpose of conversion of this
Note, and shall cause to be mailed to the Lender at its last address as shall
appear upon this Note records of the Borrower, at least 10 calendar days prior
to the applicable record or effective date hereinafter specified, a notice
stating (i) the date on which a record is to be taken for the purpose of
receiving such dividend, distribution, redemption, rights or warrants, or if a
record is not to be taken, the date as of which the holders of the Common Stock
of record to be entitled to such dividend, distribution, redemption, rights or
warrants are to be determined, or (ii) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective or close, and the date as of which
it is expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up, provided, that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice.
(h) In the event that the shareholders of Borrower adopt and
approve a plan of merger pursuant to which the Borrower merges with and into a
wholly owned Delaware subsidiary ("Newco"), and pursuant to such plan of merger,
the holders of the common stock of the Borrower are to receive shares of common
stock of Newco, then effective immediately prior, and subject to, the
consummation of such merger, this Note shall automatically convert in full
(including all
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outstanding principal and interest thereon) into such number shares of
Borrower's common stock which would entitle the Lender to receive in such merger
such number of shares of Newco's common stock equal to one percent of the total
outstanding shares of Newco's common stock immediately following the merger for
each $30,000 of outstanding principal under this Note at the time of such
merger, up to a total often percent. Upon such automatic conversion, this Note
shall terminate and be cancelled in full, without any further action by Lender
or Borrower, and all of Borrower's obligations and liabilities hereunder shall
terminate in full upon such automatic conversion.
(i) The issuance of certificates for shares of the Common Stock or
other securities on conversion of this Note shall be made without charge to the
Lender for any documentary stamp or similar taxes that may be payable in respect
of the issue or delivery of such certificate, provided that the Borrower shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in
a name other than that of the Lender and the Borrower shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Borrower or its designee
the amount of such tax or shall have established to the satisfaction of the
Borrower that such tax has been paid.
(j) Upon conversion hereunder, the Borrower may issue stock
certificates representing fractions of shares of the Common Stock.
(k) Nothing herein shall limit any right granted to Lender by any
other instrument or document or by law or equity.
3. Prepayment. Borrower may, at any time prior to the Maturity Date,
prepay the principal balance of this Note, in whole or in part. Any such
prepayment shall be accompanied by accrued interest on any portion of the
principal of this Note being prepaid. Borrower shall exercise its right of
prepayment by mailing a notice to Lender of the amount of this Note being
prepaid, 30 days in advance of the intended prepayment, and by delivering a
check representing the appropriate consideration for the prepayment within 45
days after such notice. No prepayment shall be permitted as to any principal
amount for which Lender has requested conversion under Section 2 above prior to
the end of the 30-day period following the giving of the notice of prepayment by
Borrower.
4. Events of Default. Each of the following events, if occurring while
any of the principal or interest of this Note remains unpaid, shall constitute
an "Event of Default" hereunder: the Borrower or any of its active subsidiaries
shall commence, or there shall be commenced against the Borrower or any such
active subsidiary a case under any applicable bankruptcy or insolvency laws as
now or hereafter in effect or any successor thereto, or the Borrower 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 Borrower or any
active subsidiary thereof or there is commenced against the Borrower or any
active subsidiary thereof any such bankruptcy, insolvency or other proceeding
which remains undismissed for a period of 60 days; or the Borrower or any active
subsidiary thereof is adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such case or proceeding is
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entered; or the Borrower or any active subsidiary thereof 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 Borrower or any active subsidiary thereof makes a general assignment for the
benefit of creditors; or the Borrower or any active subsidiary thereof shall by
any act or failure to act expressly indicate its consent to, approval of or
acquiescence in any of the foregoing; or any corporate or other action is taken
by the Borrower or any active subsidiary thereof for the purpose of effecting
any of the foregoing.
Immediately upon the occurrence of an Event of Default, at Lender's
option, (i) the Maturity Date shall be deemed to have occurred automatically and
(ii) the entire principal amount of this Note then outstanding, all other
amounts payable by the Borrower hereunder shall automatically become and be due
and payable, without presentment, demand, protest or any notice of any kind, all
of which are hereby expressly waived by the Borrower, anything herein to the
contrary notwithstanding. Upon the occurrence and during the continuation of an
Event of Default, the Lender shall have, in addition to all other rights and
remedies under this Note and related documents, all other rights and remedies
provided under each applicable jurisdiction and other applicable laws, which
rights shall be cumulative.
5. Representations of Borrower. The Borrower hereby represents and
warrants to the Lender as follows:
(a) as of the date hereof (i) there are 100,712,038 shares of
Common Stock and 44,000,000 shares of Preferred Stock issued and outstanding,
and (ii) the Lender's total aggregate current liabilities are approximately US$
46,000.00 (the "Liabilities").
(b) The proceeds received by the Borrower from this Note shall not
be used to pay any of the Liabilities.
6. Representations of Lender. The Lender acknowledges that the Borrower
will rely on the information and on the representations set forth herein, and
hereby represents, warrants and agrees that:
(a) The Lender is an "Accredited Investor", as that term is
defined under Section 501 (a) of Regulation D under the Act. Lender understands
and agrees that it is a condition to the conversion of this Note that Lender
must be an accredited investor at the time of the conversion of this Note, or
that such conversion shall be pursuant to another available exemption.
(b) The Lender has not received any general solicitation or
general advertising regarding the issuance of this Note.
(c) The Lender has sufficient knowledge and experience in
financial and business matters so that he or it is able to evaluate the merits
and risks of this Note as well as substantial experience in previous private and
public purchases of securities. The Lender is not relying upon any
recommendations or advice in connection with the investment contemplated
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hereby, other than those made by Lender's own financial advisors and/or
attorneys, whom Lender has consulted or had the opportunity to consult with in
connection with the investment contemplated by this Note.
(d) The Lender understands that an investment in the
Borrower involves significant risk. The Lender does not require the funds
evidenced by this Note for his liquidity or other needs, possesses the ability
to bear the economic risk of holding this Note or the Common Stock issuable upon
conversion thereof indefinitely and can afford a complete loss of its investment
in this Note or such Common Stock.
(e) Prior to the issuance of this Note and prior to
conversion, the Lender has or will have had full opportunity to ask questions of
and receive answers from the Borrower and its officers and authorized
representatives regarding the terms and conditions of this Note and the
transactions contemplated hereby, as well as the affairs of the Borrower and
related matters. The Lender confirms that he does not desire to receive any
further information.
(f) The Lender understands that the Conversion Price has
been arbitrarily determined and does not necessarily bear any relationship to
investment criteria such as projected earnings, discounted cash flow, book value
or other measures of value.
(g) The Lender understands that this Note has not been filed
with or reviewed by the U.S. Securities and Exchange Commission (the
"Commission") nor the securities department of any state because of the private
or limited nature of this offering as defined by applicable laws, and that this
Note and the Common Stock issuable upon conversion thereof have not been
registered with the Commission under the Act nor with the securities department
of any state in reliance upon an exemption therefrom for non-public offerings.
(h) The Lender represents and warrants that this Note and
the Common Stock issuable upon conversion thereof are or will be acquired for
investment purposes and not with a view to or for sale or distribution. The
Lender represents that there is no contract, undertaking, agreement or
arrangement with any person to sell, transfer or pledge to such person or anyone
else this Note or the Common Stock issuable upon conversion thereof or any part
thereof, and the Lender has no present plans to enter into such contract,
undertaking, agreement or arrangement and will neither directly or indirectly
seek to assign, transfer or sell the same in any way inconsistent with the
legend which is being placed on this Note.
7. Notices. Any and all notices or other communications or deliveries
to be provided by the Lender hereunder shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier
service or sent by certified or registered mail, postage prepaid, addressed to
the Borrower, at the address set forth above, facsimile number 61-3-8610-4799,
Attn: President, or such other address or facsimile number as the Borrower may
specify for such purposes by notice to the Lender delivered in accordance with
this paragraph. Any and all notices or other communications or deliveries to be
provided by the Borrower hereunder shall be in writing and delivered personally,
by facsimile, sent by a nationally recognized overnight courier service or sent
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by certified or registered mail, postage prepaid, addressed to the Lender, at
the address set forth above, facsimile number: 61-3-9629-6278. Any notice or
other communication or deliveries hereunder shall be deemed given and effective
on the earliest of (i) the date of transmission if delivered by hand or by
facsimile that has been confirmed as received by 5:00 P.M. on a business day,
(ii) one business day after being sent by nationally recognized overnight
courier or received by telecopy after 5:00 P.M. on any day, or (iii) five
business days after being sent by certified or registered mail, postage and
charges prepaid, return receipt requested.
8. Amendments and Waivers. Any provision of this Note may be modified
and compliance with any provision may be waived by the written consent of the
Borrower and the Lender.
9. Governing Law. This Note and the provisions hereof are to be
construed according to and are governed by the laws of the State of New York,
other than those which would defer to the substantive laws of another
jurisdiction. Any dispute arising hereunder shall be subject to adjudication
solely in the federal and state courts of the State of Wyoming in New York
County. The Borrower and Lender hereby consent to the exclusive jurisdiction of
such courts, waiving any claim of inconvenient forum.
IN WITNESS WHEREOF, the Borrower and Lender have caused this Note to
be duly executed as of the date first above indicated.
BORROWER:
ROCKY MOUNTAIN MINERALS, INC.
By: /s/ Mark Muzzin
---------------------------
Name: Mark Muzzin
Title: President
LENDER:
GREAT MISSENDEN HOLDINGS PTY LTD.
By: /s/ Ernest Geoffrey Albers
---------------------------
Name: Ernest Geoffrey Albers
Title: Chairman
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