Exhibit 10.1

 

EXCHANGE AND SETTLEMENT AGREEMENT

 

THIS EXCHANGE AND SETTLEMENT AGREEMENT (the “Agreement”) is dated this 24th day
of September, 2020, by and between Infinity Energy Resources, Inc., a Delaware
corporation (the “Company”), and SKM Partnership, Ltd., a Texas limited
partnership (“Holder”). The Company and the Holder are sometimes each referred
to herein as a “Party” and collectively as the “Parties.”

 

WHEREAS, the Holder beneficially owns and holds an 8% promissory note issued by
the Company to the Holder, dated as of December 27, 2013, in the original
principal amount of $1,050,000, a copy of which is annexed as Exhibit A hereto
(the “Original Note”), the outstanding principal balance of which is $1,000,000,
as of the date hereof, accrued and unpaid interest thereon of $481,000;

 

WHEREAS, the Holder desires to exchange (the “Exchange”) the Original Note for
(a) a cash payment by the Company to the Holder in the amount of $100,000 (the
“100,000 Cash Payment”) and (b) 737,532 newly issued shares (the “Exchange
Shares”) of common stock, par value $0.0001 of the Company (the “Common Stock”),
and the Company has agreed to (a) make the $100,000 Cash Payment and (b) issue
the Exchange Shares to the Holder in exchange for the Original Note, all on the
terms and conditions set forth in this Agreement in reliance on the exemption
from registration provided by Section 3(a)(9) of the Securities Act of 1933, as
amended (the “Securities Act”);

 

WHEREAS, in connection with the Exchange and the settlement between the Parties
provided herein, the Company and the Holder have agreed to terminate (i) that
certain Preemptive Rights Agreement between the parties, dated as of December
27, 2013, a copy of which is annexed as Exhibit B hereto (the “Preemptive Rights
Agreement”), (ii) that certain Revenue Sharing Agreement between the Parties,
date as of May 30, 2014, as amended by First Amendment to the Revenue Sharing
Agreement between the Parties, dated November 19, 2014, copies of which are
annexed as Exhibit C hereto (the “Revenue Sharing Agreement”) and (iii) that
certain Indemnity Agreement between the parties, dated as of December 27, 2013,
a copy of which is annexed as Exhibit D hereto; and

 

WHEREAS, in connection with the Exchange and the settlement between the Parties
provided herein, the Holder and the Company have agreed to provide mutual
limited releases, in the forms annexed hereto as Exhibit E (the “Holder’s
Release”) and Exhibit F (the “Company’s Release”), respectively, releasing each
of them from all liabilities and obligations to the other, as between them,
other than liabilities and obligations owed under this Agreement and the
transactions contemplated herein;

 

NOW, THEREFORE, in consideration of the terms and conditions contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Company and the Holder hereby agree as follows:

 

Section 1. Exchange. Subject to and upon the terms and conditions set forth in
this Agreement, the Holder agrees to surrender to the Company the Original Note
or, if the Original Note cannot be found by the Holder, an Affidavit of Lost
Promissory Note in the form of Exhibit G annexed hereto, and, in exchange
therefor, the Company shall convey to the Holder (a) the $100,000 Cash Payment
and (b) the Exchange Shares.

 

 

 

 

1.1 Closing. On the Closing Date (as defined below), the Company will convey and
deliver (or cause to be conveyed and delivered) (a) the $100,000 Cash Payment by
wire transfer to the Holder, pursuant to the wire instructions set forth in
Schedule 1 to this Agreement, and (ii) the Exchange Shares to the Holder by
deposit/withdrawal at custodian in accordance with the instructions also set
forth in Schedule 1 to this Agreement, which Exchange Shares shall be issued
without a restricted legend, pursuant to applicable exemptions from registration
under Section 3(a)(9) of the Securities Act (“Section 3(a)(9)”) and Rule 144
promulgated under the Securities Act (“Rule 144”), and shall be freely tradable
by the Holder and the Holder will surrender to the Company the Original Note,
for cancellation and duly execute and deliver to the Company a Securityholder
Rule 144 Representation Letter in the form annexed hereto as Exhibit H (the “144
Rep letter”). The closing of the Exchange shall occur concurrently with the
execution of this Agreement by the Parties, or as soon thereafter as the Parties
hereto may mutually agree in writing (the “Closing Date”), subject to the
provisions of Section 4 and Section 5 herein.

 

1.2 Section 3(a)(9). Assuming the accuracy of all of the representations and
warranties of each of the Company and the Holder set forth in Section 2 and
Section 3 of this Agreement, the Parties acknowledge and agree that the Exchange
qualifies as an exchange of securities under Section 3(a)(9).

 

1.3 Rule 144. Assuming the accuracy of all of (a) the representations and
warranties of each of the Company and the Holder set forth in Section 2 and
Section 3 of this Agreement and (ii) the Holder’s representations and warranties
in the Rule 144 Rep Letter, the Parties acknowledge and agree that the Exchange
Shares may be issued without restricted legends, pursuant to Rule 144.

 

1.4 Termination of Certain Agreements. The Parties acknowledge and agree that
effective, as of the Closing Date, the Preemptive Rights Agreement, the Revenue
Sharing Agreement, the Indemnity Agreement and any and all other agreements and
documents executed in connection with the issuance of the Original Note shall
each be terminated and of no further force or effect and neither Party shall
have any further rights, liabilities or obligations under either the Preemptive
Rights Agreement, the Revenue Sharing Agreement, the Indemnity Agreement or any
of such other agreements or documents thereafter.

 

1.5 Mutual Releases. On the Closing Date, (a) the Holder shall duly execute and
deliver to the Company the Holder’s Release and (b) the Company shall duly
execute and deliver to the Holder the Company’s Release (collectively, the
“Releases”).

 

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Section 2. Representations and Warranties of the Company. The Company represents
and warrants to the Holder that:

 

2.1 Organization and Qualification. The Company is an entity duly incorporated
or otherwise organized, validly existing and in good standing under the laws of
the jurisdiction set forth on Schedule 2.1 annexed to this Agreement, with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. The Company is not in violation or
default of any of the provisions of its certificate of incorporation, bylaws or
other organizational or charter documents. The Company is duly qualified to
conduct business and is in good standing as a foreign corporation in each
jurisdiction set forth on Schedule 2.1 annexed to this Agreement, representing
the only jurisdiction(s) in which the nature of the business conducted or
property owned by the Company makes such qualification necessary, except where
the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in a material adverse effect on the
results of operations, assets, business, prospects or condition (financial or
otherwise) of the Company, taken as a whole (a “Material Adverse Effect”).

 

2.2 Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
this Agreement, including, without limitation, (a) the payment of the $100,000
Cash Payment, (b) the issuance of the Exchange Shares in exchange for the
Original Note and (c) the release provided in the Company’s Release
(collectively, the “Exchange Documents”) and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and each of the other Exchange Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of the Company and no
further action is required by the Company, the Company’s board of directors or
the Company’s stockholders in connection herewith or therewith. This Agreement
and each other Exchange Document to which it is a party has been (or upon
delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company enforceable against it in accordance with its
terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally; (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies; and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

 

2.3 Issuance of Exchange Shares. The issuance of the Exchange Shares by the
Company is duly authorized and, upon conveyance in accordance with the terms
hereof, the Exchange Shares shall be validly issued, fully paid and
non-assessable and free from all free and clear of any mortgage, lien, pledge,
charge, security interest, encumbrance, title retention agreement, option,
rights, proxies, equity or other adverse claim thereto (collectively, “Liens”).
Upon issuance in accordance herewith, the Exchange Shares, when issued, will be
validly issued, fully paid and nonassessable and free from all Liens with
respect to the issue thereof, with the Holder being entitled to all rights
accorded to a holder of the Exchange Shares. Upon issuance and conveyance in
accordance herewith, the conveyance by the Company of the Exchange Shares in
exchange for the Original Note will not require registration under the
Securities Act as a result of the exemption provided by Section 3(a)(9)
thereunder.

 

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2.4 No Conflicts. The execution, delivery and performance by the Company of this
Agreement and the other Exchange Documents to which it is a party, the issuance
of the Exchange Shares and the consummation by it of the transactions
contemplated hereby and thereby do not and will not conflict with or violate any
provision of the Company’s certificate of incorporation, bylaws or other
organizational or charter documents.

 

2.5 Acknowledgment Regarding the Exchange. The Company acknowledges and agrees
that the Holder is acting solely in the capacity of an arm’s length third party
with respect to this Agreement and the transactions contemplated hereby. The
Company further acknowledges the Holder is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby, and any advice given by the
Holder or any of its representatives or agents in connection with this Agreement
is merely incidental to the Exchange.

 

2.6 No Commission; No Other Consideration. The Company has not paid or given,
and has not agreed to pay or give, directly or indirectly, any commission or
other remuneration for soliciting the Exchange. The Exchange Shares are being
conveyed exclusively for the exchange of the Original Note and no other
consideration has or will be paid for the Exchange Shares.

 

2.7 Section 3(a)(9) Representation. The Company has not, nor has any person
acting on its behalf, directly or indirectly made any offers or sales of any
security or solicited any offers to buy any security under circumstances that
would cause the Exchange and the issuance of the Exchange Shares pursuant to
this Agreement to be integrated with prior offerings by the Company for purposes
of the Securities Act which would prevent the Exchange from qualifying for an
exemption from registration pursuant to Section 3(a)(9) of the Securities Act,
nor will the Company take any action or steps that would cause the Exchange,
issuance and delivery of the Exchange to be integrated with other offerings to
the effect that the delivery of the Exchange Shares to the Holder would not be
exempt from registration under Section 3(a)(9) of the Securities Act.

 

2.8 No Third-Party Advisors. Other than legal counsel, the Company has not
engaged any third parties to assist in the solicitation with respect to the
Exchange.

 

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2.9 SEC Reports; Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company under the Securities Act and the Exchange Act of 1934, as amended (the
“Exchange Act”), including pursuant to Section 13(a) or 15(d) of the Exchange
Act, for the two years preceding the date hereof (or such shorter period as the
Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by
reference therein, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension.
Such extensions include those granted pursuant to Section 36 of the Securities
Exchange Act of 1934, as amended (Release No. 34-88465) regarding exemptions
granted to certain public companies (the “Order”) issued because of the COVID-19
pandemic.

 

2.10 [Reserved]

 

2.11 Filings, Consents and Approvals. Other than as set forth on Schedule 2.11,
or any filings required to be made with the SEC or any state securities
commission, in connection with the transactions contemplated under this
Agreement, the Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or any natural person, firm, partnership, association,
corporation, company, trust, business trust or other entity (each, a “Person”)
in connection with the execution, delivery and performance by the Company of the
Exchange Documents.

 

2.12 Capitalization. The capitalization of the Company is as set forth in the
SEC Reports. No Person has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions
contemplated by the Exchange Documents. Except as set forth on Schedule 2.12,
there are no outstanding options, warrants, scrip rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the Company is
or may become bound to issue additional shares of Common Stock, stock options or
securities convertible into shares of Common Stock. The issuance of the Exchange
Shares will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Holder) and will not result in a right
of any holder of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. All of the outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase securities.
No further approval or authorization of any stockholder, the Company’s board of
directors or others is required for the issuance of the Exchange Shares. There
are no stockholders’ agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.

 

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2.13 [Reserved].

 

2.14 DTC Eligibility. The Company, through the Company’s transfer agent (the
“Transfer Agent”), currently participates in the DTC Fast Automated Securities
Transfer (FAST) Program and the Common Stock can be transferred electronically
to third parties via the DTC Fast Automated Securities Transfer (FAST) Program.

 

2.15 Material Changes; Undisclosed Events, Liabilities or Developments. Since
the date of the latest audited financial statements included in Form 10-K and
the unaudited financial statements included in quarterly filings on Form 10-Q
included within such SEC Reports, except as specifically disclosed in a
subsequent SEC Report filed prior to the date hereof: (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the SEC,
(iii) the Company has not altered its method of accounting, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or
redeem any shares of its capital stock and (v) the Company has not issued any
equity securities to any officer, director or Affiliate (as defined below),
except pursuant to existing Company stock option plans. The Company does not
have pending before the SEC any request for confidential treatment of
information. Except for the issuance of the Exchange Shares contemplated by this
Agreement, the payment of the $100,000 Cash Payment and any other material terms
of this Agreement, no event, liability, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or its businesses, properties, operations, assets or
financial condition, that would be required to be disclosed by the Company under
applicable securities laws at the time this representation is made or deemed
made that has not been publicly disclosed at least one (1) Trading Day prior to
the date that this representation is made, which for purposes of this Agreement,
“Trading Day” shall refer to any day on which The NASDAQ Stock Market LLC is
open for trading business. “Affiliate” means, with respect to any Person (as
defined below), any other Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person, it being understood
for purposes of this definition that “control” of a Person means the power
directly or indirectly either to vote 10% or more of the stock having ordinary
voting power for the election of directors of such Person or direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.

 

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2.16 Litigation. Other than as set forth in the SEC Reports, there is no action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to
the knowledge of the Company, threatened against or affecting the Company or any
of its properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Exchange Documents or the
Exchange Shares or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect.

 

2.17 Compliance. Except as set forth in the SEC Reports, the Company is not: (a)
in material default under or in material violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would
result in a material default by the Company), nor has the Company received
notice of a claim that it is in material default under or that it is in material
violation of, any indenture, loan or credit agreement or any other agreement or
instrument set forth in the Company’s most recent Annual Report on Form 10-K to
which it is a party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (b) in material violation of any
judgment, decree or order of any court, arbitrator or other governmental
authority or (c) to its knowledge, in violation of any statute, rule, ordinance
or regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to environmental protection,
occupational health and safety, product quality and safety and employment and
labor matters, except in each case as could not have or reasonably be expected
to result in a Material Adverse Effect.

 

2.18 Regulatory Permits. The Company possesses all certificates, authorizations
and permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct its businesses as described in the
SEC Reports, except where the failure to possess such permits could not
reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and the Company has not received any notice of proceedings relating
to the revocation or modification of any Material Permit.

 

2.19 Transactions with Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to any
transaction with the Company (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from providing for the borrowing of money from or lending of
money to, or otherwise requiring payments to or from any officer, director or
such employee or, to the knowledge of the Company, any entity in which any
officer, director, or any such employee has a substantial interest or is an
officer, director, trustee, stockholder, member or partner, in each case in
excess of $120,000 other than for: (i) payment of salary or consulting fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.

 

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2.20 Certain Fees. No brokerage or finder’s fees or commissions are or will be
payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Exchange Documents.

 

2.21 No Integrated Offering. Assuming the accuracy of the Holder’s
representations and warranties set forth in Section 3, neither the Company, nor
any of its Affiliates, nor any Person acting on their respective behalf has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would cause the
Exchange to be integrated with prior offerings by the Company for purposes of
(a) the Securities Act which would require the registration of any such
securities under the Securities Act, or (ii) any applicable shareholder approval
provisions of any trading market on which any of the securities of the Company
are listed or designated.

 

2.22 Acknowledgment Regarding Holder’s Exchange of the Original Note. To the
knowledge of the Company the Holder is acting solely in the capacity of an arm’s
length party with respect to the Exchange Documents and the transactions
contemplated thereby.

 

2.23 Office of Foreign Assets Control. Neither the Company, and to the Company’s
knowledge, nor any director, officer, agent, employee or Affiliate of the
Company, is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department.

 

Section 3. Representations and Warranties of the Holder. The Holder represents
and warrants to the Company that:

 

3.1 Ownership of the Original Shares. The Holder is the legal and beneficial
owner of the Original Note. The Holder paid for the Original Note and has
continuously held the Original Note since its purchase. The Holder owns the
Original Note outright and free and clear of any Liens.

 

3.2 No Public Sale or Distribution. The Holder is acquiring the Exchange Shares
in the ordinary course of business for its own account and not with a view
toward, or for resale in connection with, the public sale or distribution
thereof; provided, however, that by making the representations herein, the
Holder does not agree to hold the Exchange Shares for any minimum or other
specific term and reserves the right to dispose of the Exchange Shares at any
time in accordance with an exemption from the registration requirements of the
Securities Act and applicable state securities laws. Except as contemplated
herein, the Holder does not presently have any agreement or understanding,
directly or indirectly, with any Person to distribute, or transfer any interest
or grant participation rights in, the Original Note or the Exchange Shares.

 

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3.3 Accredited Investor and Affiliate Status. The Holder is an “accredited
investor” as that term is defined in Rule 501 of Regulation D under the
Securities Act. The Holder is not, and has not been, for a period of at least
three months prior to the date of this Agreement (a) an officer or director of
the Company, (b) an “affiliate” of the Company (as defined in Rule 144) or (c) a
“beneficial owner” of more than ten percent (10%) of the Common Stock (as
defined for purposes of Rule 13d-3 of the Exchange Act).

 

3.4 Reliance on Exemptions. The Holder understands that the Exchange is being
made in reliance on specific exemptions from the registration requirements of
United States federal securities laws and that the Company is relying in part
upon the truth and accuracy of, and the Holder’s compliance with, the
representations, warranties, agreements, acknowledgments and understandings of
the Holder set forth herein in order to determine the availability of such
exemptions and the eligibility of the Holder to complete the Exchange and to
acquire the Exchange Shares.

 

3.5 Information. The Holder has been furnished with all materials relating to
the business, finances and operations of the Company and materials relating to
the Exchange which have been requested by the Holder. The Holder has been
afforded the opportunity to ask questions of the Company. Neither such inquiries
nor any other due diligence investigations conducted by the Holder or its
representatives shall modify, amend or affect the Holder’s right to rely on the
Company’s representations and warranties contained herein. The Holder
acknowledges that all of the documents filed by the Company with the SEC under
Sections 13(a), 14(a) or 15(d) of the Exchange Act that have been posted on the
SEC’s EDGAR site are available to the Holder, and the Holder has not relied on
any statement of the Company not contained in such documents in connection with
the Holder’s decision to enter into this Agreement and the Exchange.

 

3.6 Risk. The Holder understands that its investment in the Exchange Shares
involves a high degree of risk. The Holder is able to bear the risk of an
investment in the Exchange Shares including, without limitation, the risk of
total loss of its investment. The Holder has sought such accounting, legal and
tax advice as it has considered necessary to make an informed investment
decision with respect to the Exchange.

 

3.7 No Governmental Review. The Holder understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement in connection with the Exchange or the
fairness or suitability of the investment in the Exchange Shares nor have such
authorities passed upon or endorsed the merits of the Exchange Shares.

 

3.8 Organization; Authorization. The Holder is duly organized, validly existing
and in good standing under the laws of its state of formation and has the
requisite organizational power and authority to enter into and perform its
obligations under this Agreement.

 

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3.9 Authorization; Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Holder and shall constitute
the legal, valid and binding obligations of the Holder enforceable against the
Holder in accordance with its terms. The execution, delivery and performance of
this Agreement by the Holder and the consummation by the Holder of the
transactions contemplated hereby (including, without limitation, the irrevocable
surrender of the Original Note) will not result in a violation of the
organizational documents of the Holder.

 

3.10 Prior Investment Experience. The Holder acknowledges that it has prior
investment experience, including investment in securities of the type being
exchanged, including the Original Note and the Exchange Shares, and has read all
of the documents furnished or made available by the Company to it and is able to
evaluate the merits and risks of such an investment on its behalf, and that it
recognizes the highly speculative nature of this investment.

 

3.11 Tax Consequences. The Holder acknowledges that the Company has made no
representation regarding the potential or actual tax consequences for the Holder
which will result from entering into the Agreement and from consummation of the
Exchange. The Holder acknowledges that it bears complete responsibility for
obtaining adequate tax advice regarding the Agreement and the Exchange.

 

3.12 No Registration, Review or Approval. The Holder acknowledges, understands
and agrees that the Exchange Shares is being exchanged hereunder pursuant to an
exchange offer exemption under Section 3(a)(9) of the Securities Act.

 

3.13 Expiration of Warrant. The Holder hereby acknowledges, understands and
agrees that the Common Stock Purchase Warrant, dated as of December 27, 2013, a
copy of which is annexed hereto as Exhibit I (the “Warrant”), issued to the
Holder to purchase up to 100,000 shares of Common Stock (giving effect to all
stock splits, reverse stock splits and other recapitalizations of the Company’s
Common Stock, since the date of issuance), expired by its terms on March 12,
2017, and that the Warrant is of no further force and effect and the Holder has
no further rights thereunder including, without limitation, the right to
exercise the Warrant to purchase any shares of Common Stock.

 

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Section 4. Conditions Precedent to Obligations of the Company. The obligation of
the Company to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of each of the following conditions, provided that
these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion by providing the Holder with prior
written notice thereof:

 

4.1 Delivery. The Holder shall have delivered to the Company (a) this Agreement,
including, without limitation, the Holder’s Release, each duly executed by the
Holder and (b) the Original Note, with all applicable executed transfer powers,
for cancellation by the Company.

 

4.2 No Prohibition. No order of any court, arbitrator, or governmental or
regulatory authority shall be in effect which purports to enjoin or restrain any
of the transactions contemplated by this Agreement.

 

4.3 Representations. The representations and warranties of the Holder (a) shall
be true and correct in all material respects when made and on the Closing Date
(unless as of a specific date therein) for such representations and warranties
contained herein that are not qualified by “materiality” and (b) shall be true
and correct when made and on the Closing Date (unless as of specific date
therein) for such representations and warranties contained herein that are
qualified by “materiality.

 

4.4 All Obligations. All obligations, covenants and agreements of the Holder
required to be performed at or prior to the Closing Date shall have been
performed.

 

Section 5. Conditions Precedent to Obligations of the Holder. The obligation of
the Holder to consummate the transactions contemplated by this Agreement is
subject to the satisfaction of each of the following conditions, provided that
these conditions are for the Holder’s sole benefit and may be waived by the
Holder at any time in its sole discretion by providing the Company with prior
written notice thereof:

 

5.1 Delivery. The Company shall have delivered to the Holder (a) this Agreement,
including, without limitation, the Company’s Release, each duly executed by the
Company; (b) the $100,000 Cash Payment; and (c) the Exchange Shares.

 

5.2 No Prohibition. No order of any court, arbitrator, or governmental or
regulatory authority shall be in effect which purports to enjoin or restrain any
of the transactions contemplated by this Agreement.

 

5.3 Representations. The representations and warranties of the Company (a) shall
be true and correct in all material respects when made and on the Closing Date
(unless as of a specific date therein) for such representations and warranties
contained herein that are not qualified by “materiality” or “Material Adverse
Effect” and (b) shall be true and correct when made and on the Closing Date
(unless as of specific date therein) for such representations and warranties
contained herein that are qualified by “materiality” or “Material Adverse
Effect.”

 

5.4 All Obligations. All obligations, covenants and agreements of the Company
required to be performed at or prior to the Closing Date shall have been
performed.

 

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5.5 No Suspension. From the date hereof to the Closing Date, trading in the
Common Stock shall not have been suspended by the SEC or any trading market and,
at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported
by such service, or on any trading market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the
reasonable judgment of the Holder makes it impracticable or inadvisable to
consummate the Exchange and accept the Exchange Shares at the closing.

 

Section 6. Other Agreements between the Parties.

 

6.1       Integration. The Company shall not sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the Exchange of
the Original Note in a manner that would require the registration under the
Securities Act of the exchange of the Exchange Shares or that would be
integrated with the offer of the Exchange Shares for purposes of the rules and
regulations of any trading market such that it would require shareholder
approval prior to the closing of such other transaction unless shareholder
approval is obtained before the closing of such subsequent transaction.

 

6.2       Replacement of Securities. If any certificate or instrument evidencing
any of the Exchange Shares is mutilated, lost, stolen or destroyed, the Company
shall convey or cause to be conveyed in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement securities.

 

Section 7. [Reserved].

 

Section 8. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement
shall be construed under the laws of the State of Delaware, without regard to
principles of conflicts of law or choice of law that would permit or require the
application of the laws of another jurisdiction. The Company and the Holder each
hereby agrees that all actions or proceedings arising directly or indirectly
from or in connection with this Agreement shall be litigated only in the Federal
District Court located in the State of Kansas. The Company and the Holder each
consents to the exclusive jurisdiction and venue of the foregoing courts and
consents that any process or notice of motion or other application to either of
said courts or a judge thereof may be served inside or outside the State of
Kansas by generally recognized overnight courier or certified or registered
mail, return receipt requested, directed to such party at its or his address set
forth below (and service so made shall be deemed “personal service”) or by
personal service or in such other manner as may be permissible under the rules
of said courts. THE COMPANY AND THE HOLDER EACH HEREBY WAIVES ANY RIGHT TO A
JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

 

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Section 9. Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party hereto
and delivered to the other party hereto; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

 

Section 10. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

Section 11. Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.

 

Section 12. No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party hereto.

 

Section 13. Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Holder, the Company, their
respective Affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties hereto with respect to
the matters covered herein and therein. No provision of this Agreement may be
amended other than by an instrument in writing signed by the Company and the
Holder. No provision hereof may be waived other than by an instrument in writing
signed by the party hereto against whom enforcement is sought.

 

Section 14. Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (a) upon receipt, when
delivered personally; (b) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (c) one calendar day (excluding
Saturdays, Sundays, and national banking holidays) after deposit with an
overnight courier service, in each case properly addressed to the party to
receive the same.

 

13

 

 

The addresses and facsimile numbers for such communications shall be:

 

If to the Company:

Infinity Energy Resources, Inc.

Attn: Stanton E. Ross, Chief Executive Officer

11900 College Blvd., Suite 310

Overland Park, KS 66210

 

If to the Holder:

 

to the address set forth on its signature page attached hereto.

 

or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.

 

Section 15. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties and their respective successors and assigns,
including any purchasers of the Exchange Shares. Subject to its compliance with
applicable federal and state securities laws, the Holder may assign some or all
of its rights hereunder without the consent of the Company, in which event such
assignee shall be deemed to be the Holder hereunder with respect to such
assigned rights.

 

Section 16. No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the Parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

 

Section 17. Survival of Representations. The representations and warranties of
the Company and the Holder contained in Sections 2 and 3, respectively, will
survive the closing of the transactions contemplated by this Agreement, until
December 31, 2019.

 

Section 18. Further Assurances. Each Party hereto shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as any other party hereto may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

 

[Signature Pages Follow]

 

14

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Exchange Agreement as
of the date first written above.

 

Infinity Energy Resources, Inc.         By:     Name: Stanton Ross   Title:
Chief Executive Officer  

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Exchange Agreement as
of the date first written above.

 

SKM Partnership, Ltd.         By:     Name: Scott Martin   Title:    

 

Address for notice purposes:

 

SKM Partnership, Ltd.

 

5621 Tupper Lake Dr.

Houston, TX 77056

Attention: Scott D. Martin