Attached files
| file | filename |
|---|---|
| EX-10.2 - FORM OF WARRANT - Petro River Oil Corp. | ex10-2.htm |
| 8-K - FORM 8-K - Petro River Oil Corp. | ptrc8k_june132017.htm |
| EX-10.4 - FORM OF ASSIGNMENT OF OVERRIDING ROYALTY INTERESTS - Petro River Oil Corp. | ex10-4.htm |
| EX-10.3 - FORM OF SECURITY AGREEMENT - Petro River Oil Corp. | ex10-3.htm |
| EX-10.1 - FORM OF SECURITIES PURCHASE AGREEMENT - Petro River Oil Corp. | ex10-1.htm |
EXHIBIT 10.5
SECURED PROMISSORY NOTE
|
$2,000,000
|
June __,
2017
|
For
value received, Petro River Oil Corp., a Delaware corporation (the
“Company”),
hereby promises to pay to the order of Petro Exploration Funding,
LLC or its registered assigns (the “Holder”), at
the address of c/o 20 E 20th Street, New York,
New York, NY 10003, the principal sum of $2,000,000 on the dates
specified herein, with interest as specified herein.
This
Note is subject to the following additional provisions, terms and
conditions:
ARTICLE
1. DEFINITIONS.
Section 1.1. Definitions.
Defined terms used herein but not defined shall have the meaning
ascribed in the Securities Purchase Agreement dated June 13, 2017
(the “Purchase Agreement”) between the Company and
Holder.
Section
1.2. Certain
Definitions
“Applicable
Rate” means 10% per annum.
“Bankruptcy
Law” means Title 11, United State Code or any similar
federal or state law for the relief of debtors.
“Business Day”
means any day that is not a Saturday or Sunday or a day on which
banks are required or permitted to be closed in New York, New
York.
“Collateral”
shall have the meaning ascribed in the Security
Agreement.
“Default Rate”
means 18% per annum.
“Distribution
Event” means any insolvency, bankruptcy, receivership,
liquidation, reorganization or similar proceeding (whether
voluntary or involuntary) relating to the Company or its property,
or any proceeding for voluntary or involuntary liquidation,
dissolution or other winding up of the Company, whether or not
involving insolvency or bankruptcy.
“Maturity
Date” means June 30, 2020.
“Maximum Rate”
means the maximum nonusurious interest rate permitted under
applicable law.
“Note” means
this Promissory Note made by the Company payable to the Holder,
together with all amendments and supplements hereto, all
substitutions and replacements hereof, and all renewals,
extensions, increases, restatements, modifications, rearrangements
and waivers hereof from time to time.
“Proceeds”
has the meaning set forth in the Uniform Commercial Code in the
State of New York.
“Security
Agreement” means the Security Agreement dated as of
the date hereof between the Company and Holder.
“Transfer” has
the meaning set forth in Section 4.2(b).
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ARTICLE
2. BASIC TERMS.
Section
2.1. Principal.
(a) Scheduled Repayment. To the
extent not previously paid, the entire unpaid principal balance of
this Note shall be due and payable on the Maturity
Date.
(b) Prepayment. Upon
five days’ prior written notice, the Company may make
voluntary prepayments in whole or in part of the unpaid principal
hereunder from time to time at without penalty or
premium.
Section
2.2. Interest.
(a) The Company agrees
to pay interest in respect of the unpaid principal amount of this
Note at a rate per annum equal to the lesser of the Applicable Rate
or the Maximum Rate. Upon the occurrence and during the continuance
of an Event of Default, which has not been cured, the Company
agrees to pay during the period of the continuance of such Event of
Default interest on the unpaid principal amount of this Note at a
rate per annum equal to the lesser of the Default Rate and the
Maximum Rate.
(b) Interest payments
shall be paid on June 1, 2018, and each 6 month anniversary
thereafter until earlier of (i) outstanding principal balance of
this Note shall be paid in full or the Maturity Date.
(c) Interest shall be
calculated on the basis of a 365-day year.
Section
2.3. Payments
in General. All payments of principal and interest on this
Note shall be in such coin or currency of the United States of
America as at the time of payment shall be legal tender for payment
of public and private debts. If any payment (whether of principal,
interest or otherwise) on this Note is due on a day which is not a
Business Day, such payment shall be due and payable on the next
succeeding Business Day. All payments under this Note shall be made
by wire transfer or check in accordance with Holder’s
instructions.
Section
2.4. Surrender
of Note on Transfer. This Note shall, as a condition to
transfer, be surrendered to the Company in exchange for a new Note
in a principal amount equal to the principal amount remaining
unpaid on the surrendered Note, and with the same terms and
conditions as this Note. In case the entire principal amount of
this Note is prepaid, this Note shall be surrendered to the Company
for cancellation and shall not be reissued.
Section
2.5. Security.
To secure the indebtedness evidenced by this Note, all interest
hereon, and all other fees and expenses related to the loan
evidenced by this Note, including all costs and expenses incurred
by Holder in the collection of the foregoing, the Company hereby
grants to Holder a security interest as set forth in the Security
Agreement.
Section
2.6. Covenants.
(a) The Company agrees
to pay all obligations when due and perform fully all of the
Company’s duties under and in connection with this
Note.
(b) The Company agrees
to (i) take all actions reasonably requested by Holder to perfect
for Holder a first priority security interest in the Inventory, and
(ii) refrain from encumbering, or, other than in the ordinary
course of business consistent with past practice, selling any of
the Collateral, or permitting the Collateral or any interest in the
Collateral to be encumbered, or seized, or, other than in the
ordinary course of business consistent with past practice,
transferred or otherwise disposed of.
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ARTICLE
3. DEFAULT AND REMEDIES.
Section
3.1. Events
of Default. An “Event of
Default” occurs if:
(a) the Company
defaults in the payment of principal or interest on the Note when
the same becomes due and payable;
(b) the Company
defaults in the punctual performance of any other obligation,
covenant, term or provision contained in this Note; or
(c) the Company (i)
commences a voluntary case concerning itself under any Bankruptcy
Law now or hereafter in effect, or any successor thereof; (ii) is
the object of an involuntary case under any Bankruptcy Law; or
(iii) commences any Distribution Event or is the object of an
involuntary Distribution Event.
Section 3.2. Remedies.
(a) If an Event of
Default (other than an Event of Default under Section 3.1(c)) shall
occur, the Holder may declare by notice in writing given to the
Company, the entire unpaid principal amount of the Note, together
with accrued but unpaid interest thereon, to be immediately due and
payable, in which case the Note shall become immediately due and
payable, both as to principal and interest, without presentment,
demand, default, notice of intent to accelerate and notice of such
acceleration, protest or notice of any kind, all of which are
hereby expressly waived, anything herein or elsewhere to the
contrary notwithstanding.
(b) If an Event of
Default under Section
3.1(c) shall occur, the entire unpaid principal amount of
the Note, together with accrued but unpaid interest thereon, shall
automatically become immediately due and payable, both as to
principal and interest, without presentment, demand, default,
notice of intent to accelerate and notice of such acceleration,
protest or notice of any kind, all of which are hereby expressly
waived, anything herein or elsewhere to the contrary
notwithstanding.
(c) If any Event of
Default shall have occurred, the Holder may proceed to protect and
enforce its rights either by suit in equity or by action at law, or
both, and take any of the following actions (but it is expressly
agreed and acknowledged that the Holder is under no duty to take
any such actions):
(i) require
the Company to give possession or control of the Collateral to the
Holder;
(ii) take
control of Proceeds (as defined in the Security Agreement) and use
any such cash Proceeds to reduce any part of the indebtedness
evidenced by this Note, all interest hereon or related fees and
expenses;
(iii) sell,
or instruct any agent or broker to sell, all or any part of the
Collateral in a public or private sale and apply all proceeds to
the payment or other satisfaction of the indebtedness evidenced by
this Note, all interest hereon or related fees and expenses in such
order and manner as the Holder shall, in its discretion,
choose;
(iv) take
any action the Company is required to take or any other necessary
or desirable action to obtain, preserve, and enforce this Note, and
to maintain and preserve the Collateral, without notice to the
Company;
(v) transfer
any of the Collateral, or evidence thereof, into the Holder’s
own name or that of its nominee and receive the Proceeds therefrom
and hold the same as security for the indebtedness evidenced by
this Note, interest hereon and related fees and expenses, or apply
the same thereon;
(vi) take
control of funds generated by the Collateral , and use such funds
to reduce any part of the indebtedness evidenced by this Note,
interest hereon or related fees and expenses; and
(vii) exercise
all other rights that a secured creditor may exercise with respect
to any of the Collateral.
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ARTICLE
4. MISCELLANEOUS.
Section 4.1.
Amendment. This Note may be
amended, modified, superseded or cancelled, and any of the terms,
covenants, representations, warranties or conditions hereof and
thereof may be waived, only by a written instrument executed by the
Holder and the Company.
Section 4.2. Successors
and Assigns.
(a) The
rights and obligations of the Company and the Holder under this
Note shall be binding upon, and inure to the benefit of, and be
enforceable by, the Company and the Holder, and their respective
permitted successors and assigns.
(b) The Company may not sell, assign (by
operation of law or otherwise), transfer, pledge, grant a security
interest in or delegate (collectively “Transfer”)
any of its rights or obligations under this Note unless the Holder
has granted its prior written consent and any such purported
Transfer by the Company without obtaining such prior written
consent shall be null and void ab initio.
Section 4.3. Defenses. Except as expressly set forth herein, the
obligations of the Company under this Note shall not be subject to
reduction, limitation, impairment, termination, defense, set-off,
counterclaim or recoupment for any reason.
Section 4.4. Replacement of
Note. Upon receipt by the
Company of evidence, satisfactory to it, of the loss, theft,
destruction, or mutilation of this Note and (in the cases of loss,
theft or destruction) of any indemnity reasonably satisfactory to
it, and upon surrender and cancellation of this Note, if mutilated,
the Company will deliver a new Note of like tenor in lieu of this
Note. Any Note delivered in accordance with the provisions of
this Section 4.4
shall be dated as of the date of this
Note.
Section 4.5. Attorneys’ and Collection
Fees. Each party will bear its
own fees and expenses incurred in connection with the preparation,
execution and performance of this Note and the transactions
contemplated hereby, including all fees and expenses of agents,
representatives, financial advisors, legal counsel and accountants.
Notwithstanding the foregoing, in the event this Note shall not be
paid when due and payable (whether upon demand, by acceleration or
otherwise), the Company shall be liable for and shall pay to Holder
all collection costs and expenses incurred by Holder, including
reasonable attorney’s fees.
Section 4.6. Governing
Law. This Note and the validity
and enforceability hereof shall be governed by and construed and
interpreted in accordance with the laws of the State of New
York.
Section 4.7. Waivers. Except as may be otherwise provided herein, the
makers, signers, sureties, guarantors and endorsers of this Note
severally waive demand, presentment, notice of dishonor, notice of
intent to demand or accelerate payment hereof, notice of
acceleration, diligence in collecting, grace, notice, and protest,
and agree to one or more extensions for any period or periods of
time and partial payments, before or after maturity, without
prejudice to the Holder.
Section 4.8. No Waiver by
Holder. No failure or delay on
the part of the Holder in exercising any right, power or privilege
hereunder and no course of dealing between the Company and the
Holder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege.
Section 4.9. No
Impairment. The Company will
not, by amendment of its certificate of incorporation or through
any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed
hereunder by the Company, but will at times in good faith assist in
the carrying out of all the provisions of this
Note.
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Section
4.10. Limitation on Interest. Notwithstanding
any other provision of this Note, interest on the indebtedness
evidenced by this Note is expressly limited so that in no
contingency or event whatsoever, whether by acceleration of the
maturity of this Note or otherwise, shall the interest contracted
for, charged or received by the Holder exceed the maximum amount
permissible under applicable law. If from any circumstances
whatsoever fulfillment of any provisions of this Note or of any
other document evidencing, securing or pertaining to the
indebtedness evidenced hereby, at the time performance of such
provision shall be due, shall involve transcending the limit of
validity prescribed by law, then, ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if
from any such circumstances the Holder shall ever receive anything
of value as interest or deemed interest by applicable law under
this Note or any other document evidencing, securing or pertaining
to the indebtedness evidenced hereby or otherwise an amount that
would exceed the highest lawful rate, such amount that would be
excessive interest shall be applied to the reduction of the
principal amount owing under this Note or on account of any other
indebtedness of the Company to the Holder, and not to the payment
of interest, or if such excessive interest exceeds the unpaid
balance of principal of this Note and such other indebtedness, such
excess shall be refunded to the Company. In determining whether or
not the interest paid or payable with respect to any indebtedness
of the Company to the Holder, under any specific contingency,
exceeds the highest lawful rate, the Company and the Holder shall,
to the maximum extent permitted by applicable law, (a) characterize
any non-principal payment as an expense, fee or premium rather than
as interest, (b) exclude voluntary prepayments and the effects
thereof, (c) amortize, prorate, allocate and spread the total
amount of interest throughout the term of such indebtedness so that
the actual rate of interest on account of such indebtedness does
not exceed the maximum amount permitted by applicable law, and/or
(d) allocate interest between portions of such indebtedness, to the
end that no such portion shall bear interest at a rate greater than
that permitted by applicable law. The terms and provisions of this
paragraph shall control and supersede every other conflicting
provision of this Note and all other agreements between the Company
and the Holder.
Section 4.11. Severability. If one or more provisions
of this Note are held to be unenforceable under applicable law,
such provision(s) shall be excluded from this Note and the balance
of this Note shall be interpreted as if such provision(s) were so
excluded and shall be enforceable in accordance with its
terms.
Section 4.12. Construction. This Note has been freely
and fairly negotiated among the parties. If an ambiguity or
question of intent or interpretation arises, this Note will be
construed as if drafted jointly by the parties and no presumption
or burden of proof will arise favoring or disfavoring any party
because of the authorship of any provision of this Note. Unless the
context requires otherwise, any agreements, documents, instruments
or laws defined or referred to in this Note will be deemed to mean
or refer to such agreements, documents, instruments or laws as from
time to time amended, modified or supplemented, including (a) in
the case of agreements, documents or instruments, by waiver or
consent and (b) in the case of laws, by succession of comparable
successor statutes. All references in this Note to any particular
law will be deemed to refer also to any rules and regulations
promulgated under that law. The words “include,
“includes” and “including will be deemed to be
followed by “without limitation.” The word
“or” is used in the inclusive sense of
“and/or” unless the context requires otherwise.
References to a Person are also to its permitted successors and
assigns. Pronouns in masculine, feminine and neuter genders will be
construed to include any other gender, and words in the singular
form will be construed to include the plural and vice versa, unless
the context requires otherwise. When a reference in this Note is
made to an Article, Section, Exhibit, Annex or Schedule, such
reference is to an Article or Section of, or Exhibit, Annex or
Schedule to, this Note unless otherwise indicated. The words
“this Note,” “herein,”
“hereof,” “hereby,” “hereunder”
and words of similar import refer to this Note as a whole and not
to any particular subdivision unless expressly so
limited.
Section 4.13. Right of Setoff. Notwithstanding the
terms of this Note or any other agreement or document, the Holder
and each of its affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, and
without prior notice to the Company, any such notice being
expressly waived by the Company, to set off and appropriate and
apply any and all obligations and indebtedness (in whatever
currency) at any time owing by the Holder or such affiliate to or
for the credit or the account of the Company against any and all of
the obligations of the Company now or hereafter existing under this
Note to the Holder or its affiliates, whether direct or indirect,
absolute or contingent, matured or unmatured, and irrespective of
whether or not the Holder or its affiliates shall have made any
demand under this Note and although such obligations of the Company
are owed to a subsidiary, office or affiliate of the Holder
different from the subsidiary, office or affiliate obligated on
such obligations or indebtedness. The rights of the Holder and its
affiliates under this Section 4.13 are in addition to
other rights and remedies (including other rights of set-off) that
the Holder or such affiliates may have. The Holder agrees to notify
the Company promptly after any such set off and appropriation and
application; provided, however, that the failure to
give such notice shall not affect the validity of such set off and
appropriation and application.
[Signature Page Follows]
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EXECUTED as of the
date first written above.
PETRO
RIVER OIL CORP.
By:_________________________________
Stephen
Brunner
President
The
Holder hereby accepts this Note this ___ day of June,
2017
PETRO
EXPLORATION FUNDING, LLC
By:
________________________________
Scot
Cohen
Manager
SIGNATURE PAGE TO
SECURED PROMISSORY NOTE
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