SUPPLEMENTARY AGREEMENT
SUPPLEMENTARY AGREEMENT (this “Supplementary Agreement”), dated April 10, 2018,
among VICTORY ENERGY CORPORATION, a Nevada corporation (“Victory”) and ARMACOR
VICTORY VENTURES, LLC, a Delaware limited liability company (“AVV”). Victory and
AVV are referred to individually as a “Party” and, collectively, as the
“Parties.”
RECITALS
A.The Parties hereto entered into a Transaction Agreement, dated August 21, 2017
(the “Transaction Agreement”), pursuant to which, among other things, Victory
issued to AVV 800,000 shares (the “Series B Shares”) of its newly designated
Series B Convertible Preferred Stock (The “Series B Convertible Preferred
Stock”).
B.The parties desire to supplement the Transaction Agreement with the additional
agreements herein contained and to address breaches or potential breaches under
the Transaction Agreement and to resolve the respective claims without admitting
liability therefor, and in order to avoid the uncertainty, expense and burden of
litigation.
C.The Parties have negotiated a settlement of their respective claims or
potential claims pursuant to which they desire to cancel the Series B Shares
held by AVV and issue to AVV in lieu thereof 20,000,000 shares (the “Shares”) of
Victory’s common stock, $0.001 par value (the “Common Stock”) pursuant to the
terms herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises herein contained, the
Parties hereto, intending to be legally bound hereby agree as follows:
1.Cancellation of the Series B Shares. For and in satisfaction of the mutual
promises and releases contained, herein upon effectiveness of this Supplementary
Agreement, Victory shall immediately cancel or cause its transfer agent to
cancel, as applicable, the Series B Shares, which constitute the only issued and
outstanding shares of Series B Preferred Stock. AVV hereby agrees to surrender
the Series B Shares to the Company free and clear of all claims, charges, liens,
contracts, rights, options, security interests, mortgages, encumbrances and
restrictions of every kind and nature (collectively, “Claims”) for cancellation.
After such cancellation, AVV acknowledges and agrees that all such Series B
Shares shall no longer be outstanding and AVV shall have no further rights with
respect to (a) any of the Series B Shares, (b) the equity ownership in the
Company represented thereby, or (c) the acquisition of any additional equity
interest in the Company, including pursuant to the Transaction Agreement. AVV
hereby represents and warrants that AVV owns the Series B Shares beneficially
and of record, free and clear of all Claims. AVV has never transferred or agreed
to transfer the Series B Shares, other than pursuant to this Agreement. There is
no restriction affecting the ability of AVV to transfer the legal and beneficial
title and ownership of the Series B Shares to the Company for cancellation.
Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the performance of this Agreement in
compliance with its terms and conditions by AVV will conflict with or result in
any violation of

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any agreement, judgment, decree, order, statute or regulation applicable to AVV,
or any breach of any agreement to which AVV is a party, or constitute a default
thereunder, or result in the creation of any Claim of any kind or nature on, or
with respect to AVV or AVV’s assets, including.

2.Issuance of Common Stock. Victory shall promptly issue, or cause its transfer
agent to issue, as applicable, to AVV Twenty Million (20,000,000) Shares of its
Common Stock. These Shares of Common Stock constitute shares of restricted stock
and the certificate representing these Shares will bear a customary securities
legend referring to applicable transfer restrictions under federal securities
laws.

3.Covenants of AVV.  AVV hereby covenants to use its best efforts to: (a) have
its designee members of Victory’s board of directors vote in favor of a $5
million private placement of Victory’s Common Stock at a price per share of
$0.75, which will include 50% warrant coverage at an exercise price of $0.75 per
share (the “Proposed Private Placement”); (b) invest a minimum of $500,000, or
facilitate such minimum investment from one or more third parties that it
introduces to Victory (in each case, including $255,000 contributed by a third
party facilitated by AVV to date) in the Proposed Private Placement and work
with Victory to help obtain additional capital investments; (c) secure a
definitive purchase agreement between Victory and an Oklahoma oilfield services
company (“Target”) on terms outlined in the nonbinding letter of intent, dated
march 8, 2018 between AVV and Target with such modifications as may be
reasonably requested by Victory, including the following: (i) the initial
payment under the definitive agreement will not occur until at least 90 days
following the closing, (ii) the governing law and jurisdiction for litigation
will be changed to Texas, and (iii) each owner and key employee of Target will
sign a 5 year non-competition agreement with Victory; (d) obtain a binding
commitment from a new coatings customer located in Ecuador, with a minimum
initial purchase order of $50,000, establishing a new under water use case for
Victory’s licensed coating technology; and (e) continue to support all efforts
to accelerate the proposed business opportunities with the previously
identified, Houston based oil field services company that has been down-hole
testing the Victory licensed RFID Enclosure product, Mid-Pipe Coating product
and Hard-Banding coating product with their customers.  

4.Sales of Victory Securities; Rule 144; Transfer Restrictions.
 
a.    Victory and AVV acknowledge and agree that as of the date of this
Supplementary Agreement, AVV is an “affiliate” of Victory within the meaning of
Rule 144 promulgated under the Securities Act of 1933, as amended (“Rule 144”),
because (i) AVV is the owner of more than ten percent (10%) of the issued and
outstanding common stock of Victory, and (ii) AVV has designated two members of
the board of directors of AVV one or both of which are also control persons of
AVV.

b.     At any time that AVV is not an affiliate of Victory, Victory shall, to
the extent permitted under applicable law and consistent with Rule 144 or
similar rules of the Securities and Exchange Commission, provide, or cause its
legal counsel to provide, to Victory’s transfer agent any legal opinion or
instructions as may be necessary to enable AVV to transfer any shares of Victory
common stock under Rule 144 following the termination of the holding period
required under said Rule 144 and in accordance with and subject to the other
requirements of Rule 144; provided,

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however, that during periods when AVV is an affiliate of Victory, Victory shall
nevertheless provide such instructions or cause its counsel to provide an
opinion letter to Victory’s transfer agent as may be necessary to enable AVV to
transfer any shares of Victory common stock under Rule 144 following the
termination of the holding period required under said Rule 144, but subject to
applicable volume limitations of Rule 144 and otherwise in accordance with and
subject to the other requirements of Rule 144.
  
c.    AVV agrees that so long as it remains an affiliate of Victory, it shall
not transfer or sell any securities of Victory that it holds, including the
Shares, except in accordance with Victory’s Insider Trading Policy, a copy of
which has been delivered to AVV. Furthermore, AVV agrees that the Shares and all
other securities of Victory that are held by AVV are subject to the terms of the
Lock Up Agreement and that no sales shall occur except in compliance with the
Lock Up Agreement.

d.    AVV shall obtain the prior written consent of Victory (which consent will
not be unreasonably withheld or delayed) to any transfer, assignment, sale,
loan, short sale, gift-over, pledge, encumbrance, hypothecation, exchange or
other disposition (whether by sale, liquidation, dissolution, dividend or
distribution), or offer or solicitation to do any of the foregoing (a
“Transfer”) of the Shares or any other securities of Victory held by AVV other
than sales of such Shares or other securities in market transactions through the
over-the-counter market or any national securities exchange on which Victory’s
common stock then trades that are effected through broker-dealers who receive no
more than customary commissions for effecting such sales. Victory shall respond
by indicating in writing to AVV that it either gives or withholds its consent
within five (5) days of the receipt of a written (including by electronic mail)
request of AVV seeking the consent of Victory under this Agreement.
  
4.    Effectiveness Contingency. This Supplementary Agreement is binding on all
Parties hereto, provided, however, that this Supplementary Agreement shall not
become effective unless and until Victory enters into a simultaneously effective
settlement and mutual release agreement with Visionary Private Equity Group I,
LP, a Missouri limited partnership (“VPEG”), pursuant to which, among other
things, Victory agrees to issue 1,880,267 shares of Victory’s Common Stock and
1,880,267 warrants to purchase Common Stock at a strike price of $0.75 per
share, in consideration and full satisfaction of the outstanding debt of Victory
held by VPEG in the aggregate principal amount and accrued interest of
$1,410,200.

5.    Releases.
        
a.    Release by AVV. For the consideration and mutual promises specified herein
and other good and valuable consideration the receipt and sufficiency of which
is hereby acknowledged, AVV hereby releases and discharges Victory and all of
its successor(s), predecessor(s)-in-interest, subsidiaries, related and
affiliated companies and entities, and each of the foregoing companies’ and
entities’ respective divisions, officers, directors, shareholders, partners,
limited partners, joint ventures, agents, employees, representatives,
independent contractors, payroll companies, attorneys, insurers, licensees and
assigns, past, present or future (“Released Parties”) from all causes of action
of any kind whatsoever, at law or in equity, whether

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known or unknown, that AVV has against the Released Parties as of the date of
this Supplementary Agreement.

b.    Release by Victory. For the consideration and mutual promises specified
herein and other good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, Victory hereby releases and discharges AVV and all
of its Released Parties from all causes of action of any kind whatsoever, at law
or in equity, that Victory has against AVV as of the date of this Supplementary
Agreement.
c.    Release of Unknown Claims. The Parties expressly waive and assume the risk
of any and all claims for damages which exist as of the date of this
Supplementary Agreement, but they do not know or suspect to exist, whether
through ignorance, oversight, error, negligence, or otherwise, and which, if
known, would materially affect its decision to enter into this Supplementary
Agreement.
6.     Waiver of Suit. For the consideration and mutual promises specified
herein and other good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, the Parties agree to waive, release, promise and
agree not to bring or pursue any judicial, quasi-judicial or administrative
action against any of the other Parties for any reason whatsoever arising out of
any matter released hereunder up to and including the date of this Supplementary
Agreement, including, without limitation, any claim released by this
Supplementary Agreement. Each Party further acknowledges and agrees that it has
not already filed or otherwise commenced any such action.
7.    Representations and Warranties.
a.    AVV represents that it has the requisite power to enter into this
Supplementary Agreement and to carry out its obligations hereunder and that the
terms of this Supplementary Agreement have been fully disclosed to its
Directors, and that the requisite approvals have been obtained, prior to its
execution.
b.    Victory represents that it has the requisite power to enter into this
Supplementary Agreement and to carry out its obligations hereunder and that the
terms of this Supplementary Agreement have been fully disclosed to its
Directors, and that the requisite approvals have been obtained, prior to its
execution.
d.    Each Party represents that this Supplementary Agreement has been duly
executed and delivered and constitutes a valid and binding obligation
enforceable in accordance with its terms.
e.     AVV represents that it understands that none of the Shares being issued
hereby have been registered under the Securities Act or under the “blue sky” or
similar laws of any jurisdiction, that the Shares will be “restricted
securities” within the meaning of Rule 144 under the Securities Act and will
bear a restrictive legend accordingly, and that the Shares may be resold only if
registered pursuant to the provisions of the Securities Act and such other laws,
if applicable, or if an exemption from registration is available. AVV
understands that its acquisition of the Shares

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involves a high degree of risk and that it may lose its entire investment in the
Shares. AVV is a sophisticated party that has the ability to protect its own
interests and conduct its own due diligence without being provided a private
placement memorandum or similar disclosure document. AVV is an “accredited
investor” as that term is defined in Rule 501(a) of Regulation D under the
Securities Act.
8.    Entire Agreement. This Supplementary Agreement constitutes the entire,
exclusive and final agreement among the Parties and supersedes any and all prior
agreements, discussions, representations and warranties among the Parties with
respect to the matters set forth herein. The Parties have not relied upon any
statements or representations made by any Party outside the content of this
Supplementary Agreement.
9.    Choice of Law and Jurisdiction. The laws of the State of Texas shall apply
to and control any interpretation, construction, performance or enforcement of
this Supplementary Agreement. The Parties agree that the exclusive jurisdiction
for any legal proceeding arising out of or relating to this Supplementary
Agreement shall be the State or Federal courts located in Travis County, Texas
and the Parties hereby waive any challenge to personal jurisdiction or venue in
that court.
10.    Counterparts. This Supplementary Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Counterparts may be
delivered via facsimile, electronic mail (including pdf or any electronic
signature complying with the U.S. federal ESIGN Act of 2000, e.g.,
www.docusign.com) or other transmission method and any counterpart so delivered
shall be deemed to have been duly and validly delivered and be valid and
effective for all purposes.
11.    Severability. If any provision of this Supplementary Agreement is
determined to be unlawful or otherwise unenforceable, the remaining provisions
of this Supplementary Agreement shall nevertheless continue in full force and
effect.
12.    Parties in Interest; Assignment. This Supplementary Agreement is binding
upon the Parties and their respective successors, heirs, legal representatives
and permitted assigns.
13.    No Admission of Liability or Wrongdoing. This Supplementary Agreement and
the negotiations and discussions leading up to this Supplementary Agreement
effect the settlement of claims which are denied and contested, and do not
constitute, nor shall they be construed as, an admission of liability by the
Parties. This Supplementary Agreement is made solely for the purpose of avoiding
the burden and expense of litigation, which would be imposed on the Parties if
the disputes between them remained unsettled. This Supplementary Agreement does
not constitute an admission by any of the Parties hereto that they have engaged
in any unlawful act. Each of the Parties hereto expressly deny that they have
engaged in any unlawful act and deny liability for all claims any other Party
had, has, or may have against them.
14.    Construction. This Supplementary Agreement shall not be construed against
the Party preparing it, but shall be construed as if the Parties collectively
prepared it and any uncertainty or ambiguity shall not be interpreted against
any Party.

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15.    Modifications; Waiver. This Supplementary Agreement may not be modified
orally. No breach of any provision hereof may be waived unless in writing.
Waiver of any breach shall not be deemed to be a waiver of any other breach of
the same or of any other provision hereof. All modifications to this
Supplementary Agreement must be in writing and signed by the Parties to be
charged.
16.    No Assignments.
a.     Victory hereby represents and warrants that there has been no assignment
or transfer whatsoever of any of the claims released herein. Victory agrees to
defend and indemnify AVV and the other persons and entities released herein
against any claim based upon, arising out of or in connection with any such
assignment or transfer.
b.     AVV hereby represents and warrants that there has been no assignment or
transfer whatsoever of any of the claims released herein. AVV agrees to defend
and indemnify Victory and the other persons and entities released herein against
any claim based upon, arising out of or in connection with any such assignment
or transfer.
17.    Attorneys’ Fees. If any action is brought for the enforcement of this
Supplementary Agreement or in connection with any dispute arising out of it or
the claims which are the subject of this Supplementary Agreement, the prevailing
Party shall be entitled to recover reasonable attorneys' fees and any other
costs incurred in such litigation in addition to any other relief to which the
prevailing Party may be entitled.
18.    Advice of Counsel. Each Party to this Supplementary Agreement has had the
opportunity to discuss the matter with legal counsel, and enters into this
Supplementary Agreement only after such consultation.
19.     Waiver of Jury Trial. EACH PARTY EXPRESSLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS SUPPLEMENTARY AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.
20.    Notices. All notices and other communications hereunder shall be in
writing to the Parties at the addresses specified on the signature pages hereto.
[Signature page follows]

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IN WITNESS WHEREOF, the Parties have caused this Supplementary Agreement to be
duly executed and delivered as of the date set forth above.

VICTORY ENERGY CORPORATION

By: /s/ Kenny Hill    
Name: Kenneth Hill
Title: Chief Executive Officer

Address: 3355 Bee Caves Road            
Suite 608                
Austin, TX 78746            
Fax: (866) 234-9806
Email: Kenny@vyey.com

ARMACOR VICTORY VENTURES, LLC

By: /s/ Ricardo Salas    
Name: Rick Salas
Title: President

Address: 26497 Rancho Parkway South
Lake Forest, CA 92630    
Fax: (949) 315-3096
Email: rick.salas@liquidmetal-coatings.com

    

[Signature Page to Supplementary Agreement]