Exhibit 10.16
CONVERTIBLE PROMISSORY NOTE
THE OFFER AND SALE OF THIS NOTE AND THE ISSUANCE OF THE SECURITIES ISSUABLE UPON CONVERSION
OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED, OFFERED OR OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE AND THE TRANSFER, SALE, ASSIGNMENT OR PLEDGE IS MADE IN STRICT
COMPLIANCE WITH SUCH EXEMPTION.
FOR VALUE RECEIVED, the undersigned, BETA OIL & GAS, INC., a Nevada corporation
(“Maker” or the “Company”) hereby promises to pay to PETROHAWK ENERGY, LLC, a Delaware limited
liability company (“Payee”), not later than 2:00 P.M. (Houston, Texas time), on the date when due, in
immediately available funds in Houston, Texas, at Payee’s offices at 1100 Louisiana, Suite 4400, Houston,
Texas 77002 or such other address, given to Maker by Payee, the principal sum of THIRTY FIVE MILLION
AND NO/100 DOLLARS ($35,000,000), together with interest, as hereinafter described. Whenever any
payment of principal of, or interest on, this Note shall be due on a day which is not a Business Day, the date for
payment thereof shall be extended to the next succeeding Business Day. If the date for payment of principal is
extended by operation of law or otherwise, interest thereon shall be payable for such extended time.
This Note has been executed and delivered pursuant to, and is subject to and governed by, the terms of
that certain Securities Purchase Agreement dated as of December 12, 2003, by and between Maker and Payee
(the “Agreement”). This Note is the “Note” referred to in the Agreement. Unless otherwise defined herein or
unless the context hereof otherwise requires, each term used herein with its initial letter capitalized has the
meaning given to such term in t