Exhibit 4.1
Promissory Note issued to Sausalito
Capital Partners I, LLC
THE SECURITIES REPRESENTED BY
THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR
UNDER THE PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT
HAVE BEEN ACQUIRED BY THE REGISTERED HOLDER HEREOF FOR PURPOSES OF
INVESTMENT AND IN RELIANCE ON STATUTORY EXEMPTIONS UNDER THE 1933
ACT, AND UNDER ANY APPLICABLE STATE SECURITIES LAWS. THESE
SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT
IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE 1933
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT.
10% CONVERTIBLE PROMISSORY
NOTE
San Rafael, California
July 5, 2006
FOR VALUE RECEIVED, Domestic Energy
Partners, LLC., a Utah limited liability company (“
Borrower ”), hereby promises to pay to the order of
Sausalito Capital Partners I, LLC (“ Lender ”),
a Nevada limited liability company, in lawful money of the United
States at the address of Lender set forth herein, the principal
amount of $500,000.00 (the “ Loan ”), together
with Interest. This Promissory Note (“ Note
”) has been executed by Borrower on the date set forth above
(the “ Effective Date ”).
1.
Interest . The Loan shall bear interest at a rate
of ten percent (10%) (“Default Interest Rate”),
compounded monthly (“Interest”) from the Effective Date
and continuing until payment in full of the Loan. Upon the
occurrence of a default event (“Event of Default”) and
for so long as such Event of Default continues, Interest shall
accrue on the outstanding Loan amount at the Default Interest
Rate.
2.
Maturity Date
. Subject to Section 3, all or
any portion of the Loan, all accrued Interest thereon and all other
sums due hereunder, shall be due and payable on demand by Lender on
the Maturity Date.
3.
Conversion
. In Lender’s
discretion, at any time prior to the consummation of the Private
Placement, Lender may convert all of the outstanding principal
amount of this Note into twenty five percent (25%) of the fully
diluted common stock of the Company (the “Common
Stock”) following the merger of the Borrower into a piggy
back-qualified shell company which is currently trading
(“Shell”).
4.
Application of
Payments .
4.1.
Except as otherwise expressly
provided herein, payments under this Note shall be applied (i)
first to the repayment of any sums incurred by Lender for the
payment of any expenses in enforcing the terms of this Note, (ii)
then to the payment of the Default Interest Rate, (iii) then to the
payment of the Interest Rate, and (iv) then to the reduction of the
Loan.
4.2.
Upon payment in full of the Loan and
applicable accrued and unpaid Interest thereon, this Note shall be
marked “Paid in Full” and returned to
Borrower.
5.
Waiver of Notice
. Borrower hereby waives
diligence, notice, presentment, protest and notice of
dishonor.
6.
Transfer . This Note may be transferred by Lender
at any time, provided that such transfer complies with applicable
securities laws.
7.
Events of Default
. The occurrence of any of
following events, not cured in any applicable cure period, shall
constitute an Event of Default of Borrower:
7.1.
The failure to make when due any
payment described in this
