Summary of ORIGINOIL INC - Yahoo! Finance

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligati

Item 1.01 Entry into a Material Definitive Agreement

On February 4, 2013, OriginOil, Inc. (the "Company") issued original issue discount convertible promissory notes ("Notes") to accredited investors in an aggregate principal amount of $66,000 for an aggregate purchase price of $50,000 in a private placement. In addition, the Company has agreements in principle with accredited investors for the purchase of additional Notes in an aggregate principal amount of $66,000 for an aggregate purchase price of $50,000 in a private placement.

The Notes provide for a one-time interest charge of 10% of the aggregate principal amount of the Notes. The Notes may be converted into shares of the Company's common stock at a conversion price of $0.4375 (subject to adjustment for stock splits, dividends, combinations and other similar transactions).

The Notes mature 90 days from the date of issuance. If the Company does not repay the Notes on maturity, then the maturity date shall be automatically extended for up to three further 30 day periods and an extension fee of 25% of the then outstanding principal, interest and other fees shall be added to the principal amount of the Notes at the end of each 30 day period that the Notes are still outstanding.

The Notes provide that if shares issuable upon conversion of the Notes are not timely delivered then the Company shall be subject to a penalty of $2,000 per day until share delivery is made. The Notes include customary default provisions related to payment of principal and interest and bankruptcy or creditor assignment. In addition, it shall constitute an event of default under the Notes if the Company shall not be DTC eligible or the Company shall be delinquent in its filings with the Securities and Exchange Commission. In the event of default under the Notes, the Company shall be required to repay a mandatory default amount in cash equal to 200% of the outstanding principal amount of the Notes plus accrued and unpaid interest and other fees due thereon and such mandatory default amount shall bear interest at 10% per annum.

The Company also granted to the purchasers of the Notes piggyback registration rights, under which the Company is required to include all shares issuable upon conversion of the Note in any future registration statement filed by the Company subject to customary exceptions. In addition, for as long as the Notes or other convertible notes in effect between the purchaser and the Company are outstanding, if the Company issues any security with terms more favorable than the terms of the Notes or a term was not similarly provided to the purchaser of the Notes, then such more favorable or additional term shall, at the purchaser's option, become part of the Notes.

The foregoing is qualified in its entirety by the form of Note attached as Exhibit 10.1, which is incorporated herein by reference.

The securities above were offered and sold pursuant to an exemption from the registration requirements under Section 4(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder since, among other things, the transactions did not involve a public offering and the securities were acquired for investment purposes only and not with a view to or for sale in connection with any distribution thereof.