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.
16% SECURED PROMISSORY
NOTE
AMERICA WEST
SERVICES, INC.
DUE May 27, 2011
|
|
|
Original Issue Date: May 27, 2009
|
US $_________
|
|
|
|
This Secured Promissory Note is one of a
series of duly authorized and issued secured promissory notes
of America West Services, Inc. , a Nevada corporation (the
“ Company ”), designated its Secured Promissory
Notes due May 27, 2011 (the “ Note ”), issued to
_____________ , an individual (together with his permitted
successors and assigns, the “ Holder ”) in
accordance with exemptions from registration under the Securities
Act of 1933, as amended (the “ Securities Act ”)
and pursuant to the terms and provisions and in reliance upon the
representations and warranties set forth in that certain Loan
Agreement (as amended, modified, restated and replaced from time to
time, the " Loan Agreement ") of even date among the
Company, the Holder, and Denly Utah Coal, LLC , a Texas
limited liability company (" Denly "), John Thomas
Bridge and Opportunity Fund, L.P. , a Delaware limited
partnership (" JTF "), James Moore (" Moore ")
and Thomas Murch (" Murch ") (together with their
permitted successors and assigns, collectively, the “
Other Holders ”), America West Resources, Inc.
, a Nevada corporation (the " Guarantor "), and JTF
as collateral agent for the Holder and Other Holders.
Capitalized terms used herein which are not otherwise defined
are used with the same meanings given such terms in the Loan
Agreement.
Article
I.
Section
1.01
Principal and Interest
. For value received, the Company
hereby promises to pay to the order of the Holder, in lawful money
of the United States of America and in immediately available funds
the principal sum of
___________________________________________, or the
outstanding principal amount advanced hereunder, whichever is the
lesser, and accrued but unpaid interest on the earliest of (i) May
27, 2011 (the “ Maturity Date ”), or (ii) the
occurrence of an Event of Default (as defined in Section
3.01 ) or (iii) the occurrence of a Redemption Event (as
defined in Section 1.02 ), with partial payments being
required upon each Partial Redemption Event (as defined in
Section 1.02 ). Interim payments of interest shall be
due and payable monthly, beginning August 22, 2009, and continuing
on the same day of each succeeding month.
(a)
The unpaid principal balance of this Note
shall accrue interest at the rate of 16% per annum until the
Maturity Date or such earlier date as the same may become payable
hereunder.
(b)
On the earlier of a Redemption Event and
the Maturity Date, the entire unpaid principal and accrued interest
shall be paid to the Holder.
(c)
Except as otherwise set forth in this
Note, the Company may not prepay any portion of the principal
amount of this Note without the prior written consent of the
Holder.
Section
1.02
Redemption . Upon the closing of (i) any debt financing of
$10,000,000 or more either by the Guarantor or its Subsidiaries or
the last of any such debt financings which taken together equal
$10,000,000 or more either by the Guarantor or its Subsidiaries, or
(ii) any equity financing of $10,000,000 or more by the Company or
its subsidiaries or the last of any such equity financings which
taken together equal $10,000,000 or more either by the Guarantor or
its Subsidiaries, or (iii) the last of any combination of debt
financings and equity financings either by the Guarantor or its
Subsidiaries which taken together equal $10,000,000.00 or more (a
“ Redemption Event ”), the Company shall pay in
full all of the principal and interest under then accrued and
unpaid on this Note. Upon the closing of an equity financing
(or a series of equity financings) in an amount of at least
$3,000,000 and up to $10,000,000 by the Guarantor or its
Subsidiaries (a “ Partial Redemption Event ”),
the Company shall pay an amount equal to 25% of the proceeds of the
financing or series of financings and such amount shall be applied
first to accrued interest then unpaid and next to principal of this
Note.
Section 1.03
Absolute Obligation/Ranking
. Except as expressly provided
herein, no provision of this Note shall alter or impair the
obligation of the Company, which is absolute and unconditional, to
pay the principal of, and interest on, this Note at the time,
place, and rate, and in the coin or currency, herein prescribed.
This Note is a direct debt obligation of the Company.
This Note ranks pari passu with all other Notes now or
hereinafter issued by the Company pursuant to the provisions of the
Loan Agreement, upon the same terms and conditions of this Note
(the “ Other Notes ”).
Section 1.04
Different Denominations
. This Note is exchangeable for an
equal aggregate principal amount of 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.
2
Section 1.05
Investment Representations
. Holder hereby makes the following
representations and warranties:
(a)
Investment Purpose
. Holder is acquiring the Note, and
the AmWest Shares for its own account for investment only and not
with a view towards, or for resale in connection with, the public
sale or distribution thereof, except pursuant to sales registered
or exempted under the Securities Act. The Holder agrees not
to sell, hypothecate or otherwise transfer the Holder’s
securities unless such securities are registered under the federal
and applicable state securities laws or unless, in the opinion of
counsel satisfactory to the Company, an exemption from such law is
available.
(b)
Accredited Investor
Qualifications. The
Holder (i) if a natural person, represents that the Holder has
reached the age of 21 and has full power and authority to execute
and deliver this Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof;
(ii) if a corporation, partnership, or limited liability company or
partnership, or association, joint stock company, trust,
unincorporated organization or other entity, represents that such
entity was not formed for the specific purpose of acquiring the
Note, such entity is duly organized, validly existing and in good
standing under the laws of the state of its organization, the
consummation of the transactions contemplated hereby is authorized
by, and will not result in a violation of state law or its charter
or other organizational documents, such entity has full power and
authority to execute and deliver this Agreement and all other
related agreements or certificates and to carry out the provisions
hereof and thereof and to purchase and hold the Note, the execution
and delivery of this Agreement has been duly authorized by all
necessary action, this Agreement has been duly executed and
delivered on behalf of such entity and is a legal, valid and
binding obligation of such entity; or (iii) if executing this
Agreement in a representative or fiduciary capacity, represents
that it has full power and authority to execute and deliver this
Agreement in such capacity and on behalf of the subscribing
individual, ward, partnership, trust, estate, corporation, or
limited liability company or partnership, or other entity for whom
the Holder is executing this Agreement, and such individual,
partnership, ward, trust, estate, corporation, or limited liability
company or partnership, or other entity has full right and power to
perform pursuant to this Agreement and make an investment in the
Company, and represents that this Agreement constitutes a legal,
valid and binding obligation of such entity. The execution
and delivery of this Agreement will not violate or be in conflict
with any order, judgment, injunction, agreement or controlling
document to which the Holder is a party or by which it is
bound.
(c)
Solicitation . The Holder is unaware of, is in no way
relying on, and did not become aware of the offering of the Note
through or as a result of, any form of general solicitation or
general advertising
