LOAN AGREEMENT
This Loan Agreement (this “Agreement”) is made as of the 10th day of April,
2018, by and between VISIONARY PRIVATE EQUITY GROUP I, LP, a Missouri limited
partnership (the “Lender”), and VICTORY ENERGY CORPORATION, a Nevada corporation
(the “Borrower”). Capitalized terms used, but not otherwise defined, herein have
the meanings ascribed to them in the Settlement Agreement (as defined below).
RECITALS
A.On or about the date hereof, Borrower and Lender are entering into a
Settlement Agreement and Mutual Release (the “Settlement Agreement”). The
Settlement Agreement contemplates that the Lender may lend funds to the Borrower
during the period between the date hereof and the date of the consummation of
the Private Placement to cover the Borrower’s working capital needs during that
period.
B.The Borrower has requested a loan (the “Loan”) from the Lender in the amount
of up to Two Million Dollars ($2,000,000) (the “Loan Amount”). The Lender has
indicated that upon the request of the Borrower it may, in its sole discretion,
advance amounts to the Borrower up to the Loan Amount.
C.The Loan will be secured by a first priority security interest in all of the
assets of the Borrower including, without limitation, the License.
AGREEMENTS
In consideration of the foregoing recitals, which are incorporated herein by
this reference, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrower and the Lender agree as
follows:
1.DEFINITIONS
1.1        General Application and Interpretation. Unless a clear contrary
intention appears, as used herein (a) the singular includes the plural and vice
versa, (b) reference to any document means such document as amended from time to
time, (c) “include” or “including” means including without limiting the
generality of any description preceding such term, (d) the word “or” is not
exclusive, unless otherwise expressly stated, (e) the terms “hereof,” “herein,”
“hereby,” and derivative or similar words refer to this entire Agreement, and
(f) headings are for convenience only and do not constitute a part of this
Agreement.
2.    LOAN
2.1        Loan. On the terms and subject to the conditions hereinafter set
forth, the Lender may, in its sole discretion and upon the written request of
the Borrower, loan to the Borrower up to the sum of $2,000,000.

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2.2        Note. Each advance of the Loan shall be evidenced by, and the
Borrower shall deliver to the Lender immediately upon receipt of each advance
from the Lender, a secured convertible promissory note in the form attached
hereto as Exhibit A (the “Note”), duly executed by Borrower, dated of even date
herewith. The Note will reflect an original issue discount of ten percent (10%)
such that the principal amount of the Note shall be ten percent (10%) more than
the amount advanced. The Note shall not bear any interest in addition to the
original issue discount. The principal amount of the Note shall be due and
payable in the manner and at the times set forth in the Note. Should the
principal of the Note become due and payable on any day other than a business
day, the maturity thereof shall be extended to the next succeeding business day.
All payments on the Note shall be made to the Lender at its address as specified
in the Note in federal or other immediately available funds, and payments shall
be applied first to the payment of any costs and expenses owed by the Borrower
to the Lender with respect thereto, then to accrued interest and then to
principal. The Borrower agrees that if documentary stamp taxes and intangible
taxes are applicable with respect to the execution or delivery of the Note, the
Borrower shall pay such tax and consents to the Lender advancing such amount
pursuant to the Note for the benefit of the Lender in connection with the
payment of such tax.
3.    REPRESENTATIONS AND WARRANTIES
3.1        Lender represents that it has the requisite power to enter into this
Agreement and to carry out its obligations hereunder and that the terms of this
Agreement have been fully disclosed to its general partner and that the
requisite approvals have been obtained, prior to its execution.
3.2        Borrower represents that it has the requisite power to enter into
this Agreement and to carry out its obligations hereunder and that the terms of
this Agreement have been fully disclosed to its board of directors, and that the
requisite approvals have been obtained, prior to its execution.
3.3        Each party represents that this Agreement has been duly executed and
delivered and constitutes a valid and binding obligation enforceable in
accordance with its terms.
4.    SECURITY
On the date hereof, the Borrower is signing and delivering to the Lender the
Note, Section 4 of which constitutes a Security Agreement pursuant to which the
Borrower is granting to the Lender a first priority security interest in all of
the assets of the Borrower.

5.    FURTHER ASSURANCES
The Borrower shall from time to time, at its sole expense, promptly execute and
deliver all further instruments and documents, and take all further actions, as
may be necessary and desirable, or that the Lender may reasonably request, in
order to enable Lender to exercise and enforce their rights and remedies
hereunder.

6.    EVENTS OF DEFAULT

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The occurrence of any Event of Default under the Note shall be an Event of
Default under this Agreement.
7.    MISCELLANEOUS
7.1        Severability. If any provision of this Agreement or any other of the
other documents being entered into in connection with this Agreement shall be
determined by any court having jurisdiction to be unlawful or unenforceable,
such provision shall be deemed separate and apart from all other provisions of
this Agreement, and all remaining provisions of this Agreement shall be fully
enforceable.
7.2        Notices. All notices and other communications that are required or
permitted to be given to the parties under this Agreement shall be sufficient in
all respects if given in writing and delivered in person, by electronic mail, by
telecopy, by overnight courier, or by certified mail, postage prepaid, return
receipt requested, to the receiving party at the address specified on the
signature page to this Agreement or to such other address as such party may have
given to the other by notice pursuant to this Section. Notice shall be deemed
given on the date of delivery, in the case of personal delivery, electronic
mail, or telecopy, or on the delivery or refusal date, as specified on the
return receipt in the case of certified mail or on the tracking report in the
case of overnight courier.
7.3        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 Agreement. The Parties agree that the exclusive jurisdiction
for any legal proceeding arising out of or relating to this Settlement 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.
7.4        Counterparts and Facsimile or Electronic Signatures. This Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original and all of which, taken together, shall constitute one agreement. A
facsimile or electronic signature, including through technology such as
DocuSign, to this Agreement shall be deemed an original and binding upon the
party against whom enforcement is sought.
[SIGNATURE PAGE FOLLOWS]

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

LENDER:

VISIONARY PRIVATE EQUITY GROUP I, LP, BY: VISIONARY PE GP I, LLC,
its General Partner

By: /s/ Ronald Zamber__________
Name: Ronald Zamber
Title: Senior Managing Director

Address:    1520 South Fifth Street
Suite 308
St. Charles, MO 63303

BORROWER:

VICTORY ENERGY CORPORATION

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

Address:    3355 Bee Caves Road
Suite 608                
Austin, TX 78746            

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EXHIBIT A

FORM OF NOTE

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” FOR U.S. FEDERAL INCOME
TAX PURPOSES. THE ISSUER WILL MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE: (1) THE
ISSUE PRICE AND ISSUE DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT ON THE NOTE, (3) THE YIELD TO MATURITY OF THE NOTE, AND (4) ANY OTHER
INFORMATION REQUIRED TO BE MADE AVAILABLE BY U.S. TREASURY REGULATIONS UPON
RECEIVING A WRITTEN REQUEST FOR SUCH INFORMATION AT THE FOLLOWING ADDRESS: 3355
BEE CAVES ROAD, SUITE 608, AUSTIN, TX 78746.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF
COUNSEL, IN A FORM ACCEPTABLE TO THE MAKER, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER SAID ACT.

SECURED CONVERTIBLE
ORIGINAL ISSUE DISCOUNT PROMISSORY NOTE

Principal Amount: $[*]                          [Date]

Loan Amount: $[*]
    
FOR VALUE RECEIVED, on the [*] day of [*], 2018 (the “Funding Date”), the
undersigned, VICTORY ENERGY CORPORATION, a Nevada corporation (the “Maker”),
promises to pay to the order of VISIONARY PRIVATE EQUITY GROUP I, LP, a Missouri
limited partnership, or its assigns (collectively, the “Holder”), the principal
sum of [*] ($[*]) (the “Principal Amount”), in lawful money of the United
States, together with all costs and expenses due hereunder calculated in the
manner hereinafter set forth in this Secured Convertible Original Issue Discount
Promissory Note (the “Note”).
This Note is being issued in connection with the entry by the Maker and the
Holder into a Loan Agreement, dated April 10, 2018 (the “Loan Agreement”) and is
being secured by the security interest granted by the Maker to the Holder
pursuant to Section 4 of this Note. Capitalized terms used, but not otherwise
defined, herein have the meanings ascribed to such terms in the Loan Agreement.

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1.Term; Original Issue Discount; Payments

(a)The term of this Note is from the Funding Date until [*], 2018; provided,
however, that upon written notice from the Holder to the Maker following the
closing of the Private Placement, the Holder may demand immediate full repayment
of all obligations under this Note (the “Maturity Date”). The Maturity Date may
be extended by a written agreement between the Holder and the Maker.
(b)This Note is being issued at an original issue discount of ten percent (10%).
No additional interest (other than Default Interest (as defined below)) shall
accrue hereon. This Note has been issued with “original issue discount” for U.S.
Federal income tax purposes. The Maker will make available to any holder of this
note: (1) the issue price and issue date of the Note, (2) the amount of original
issue discount on the Note, (3) the yield to maturity of the Note, and (4) any
other information required to be made available by U.S. Treasury Regulations
upon receiving a written request for such information at the following address:
3355 Bee Caves Road, Suite 608, Austin, TX 78746.
(c) The Maker shall pay to the Holder the unpaid Principal Amount in full on the
Maturity Date.
2.Acceleration and Events of Default

In the event that any of the following (each, an “Event of Default”) shall
occur:

(a)The Maker shall default in the payment of the Principal Amount of this Note
as and when the same shall become due and payable, whether by acceleration or
otherwise; or
(b)The Maker shall default in any material manner in the observance or
performance of any covenants or agreements set forth in this Note or the Loan
Agreement (all as may be amended, restated, extended, supplemented or otherwise
modified from time to time, herein collectively called, the “Loan Documents”);
or
(c)The Maker shall: (i) admit in writing its inability to pay its debts as they
become due; (ii) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Maker or any of its
property, or make a general assignment for the benefit of creditors; (iii) in
the absence of such application, consent or acquiesce in, permit or suffer to
exist the appointment of a trustee, receiver, sequestrator or other custodian
for the Maker or for any part of its property; or (iv) permit or suffer to exist
the commencement of any bankruptcy, reorganization, debt arrangement or other
case or proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of the Maker, and, if such case
or proceeding is not commenced by the Maker or converted to a voluntary case,
such case or proceeding shall be consented to or acquiesced in by the Maker or
shall result in the entry of an order for relief;
then, and so long as such Event of Default is continuing for a period of two (2)
business days in the case of non-payment under Section 2(a) or 2(b) (and the
event which would constitute such Event

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of Default, if curable, has not been cured), by written notice to the Maker from
the Holder, then the Holder shall have the right to declare all obligations of
the Maker under this Note to become immediately due and payable without
presentment, demand, protest or any other action nor obligation of the Holder of
any kind, all of which are hereby expressly waived, and Holder may exercise any
other remedies the Holder may have at law or in equity. If an Event of Default
specified in Section 2(c) above occurs, the principal amount of this Note shall
automatically, and without any declaration or other action on the part of any
Holder, become immediately due and payable.

Upon the occurrence of an Event of Default, interest upon the unpaid Principal
Amount shall begin to accrue at a rate equal to the lesser of (a) eight (8)
percent per annum or (b) the maximum interest rate allowed from time to time
under applicable law (“Default Interest Rate”), and shall continue at the
Default Interest Rate until the Event of Default is cured or full payment is
made of the unpaid Principal Amount. If any judgment is rendered in favor of the
Holder against the Maker, said judgment shall bear interest at the Default
Interest Rate or the maximum rate permitted by applicable law from time to time,
in effect as of the date of this Note.

3.Prepayment Without Penalty

Maker shall have the right at any time to prepay, in whole or in part, the
Principal Amount without penalty, subject to the qualification, however, that no
partial prepayment of the Principal Amount shall in any way release, discharge
or affect the obligation of the Maker to make full payment in the amount of the
balance of said Principal Amount on the Maturity Date. If Maker desires to
prepay this Note, Maker shall provide the Holder with reasonable advance written
notice such that Holder will have the opportunity to convert this Note in
accordance with Section 5 hereof prior to any such prepayment.

4.Security Agreement

(a)    Grant of Security Interest. To secure the prompt repayment of each and
all of the obligations of the Maker hereunder to the Holder and its assigns, the
Maker hereby pledges, grants, assigns and transfers to the Holder and its
assigns a continuing lien on and security interest in and to all of the
following property of the Maker (collectively the “Collateral”):
(i)    All accounts, accounts receivable, contract rights, general intangibles
related to or arising from any account, debit balances, note, documents, chattel
paper, instruments, acceptances, drafts or other forms of obligations and
receivables of the Maker arising from the sale or lease of inventory or
rendition of services by the Maker, or on behalf of the Maker, in the ordinary
course of its business or otherwise (all of the foregoing being herein
collectively called “Accounts”), whether or not the same are listed on any
schedules, assignments or reports furnished to the Holder from time to time,
whether such Accounts are now existing or are created at any time hereafter, and
all proceeds therefrom including without limitation, proceeds of insurance
thereon and all guaranties, securities, and liens which the Maker may hold for
the payment of any Accounts, including without limitation, all rights of
stoppage in transit, replevin and reclamation and all other rights and remedies

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of unpaid vendor or lienor, and any liens held by the Maker as a mechanic,
contractor, subcontractor, processor, materialman, machinist, manufacturer,
artisan, or otherwise.
(ii)    All documents, instruments, documents of title, policies and
certificates of insurance, guaranties, securities, chattel paper, deposits,
proceeds of insurance, cash, liens or other property relating to Accounts and
owned by the Maker or in which the Maker has an interest, which are now or may
hereafter be in the possession of the Maker or as to which the Maker may now or
hereafter control possession by documents of title or otherwise.
(iii)    All books records, customer lists, supplier lists, ledgers, evidences
of shipping invoices, purchase orders, sales orders, computer records, lists,
software, programs, and all other such evidences of the Maker’s business records
related to the Accounts, including all cabinets, drawers, etc. that may hold
same, all whether now existing or hereafter arising or acquired.
(iv)    All of the Maker’s tangible property of whatever nature or description,
whether real or personal, now or hereafter used, owned, held or leases,
including without limitation all furniture, fixtures, equipment, inventory and
supplies.
(v)    All of the Maker’s intangible property of whatever nature or description,
including without limitation, all intellectual property, trade names,
trademarks, service marks, computer programs (including source code and object
code), patents and copyrights now owned or hereafter acquired and, specifically
including, without limitation, the License (as defined in the Transaction
Agreement).
(vi)    All renewals, substitutions, replacements, additions, accessions,
proceeds, and products of any and all the foregoing.
The Maker’s grant of such security interests to the Holder shall secure the
payment and performance of the indebtedness, obligations and liabilities of the
Maker to the Holder of every kind and description, direct and indirect, absolute
and contingent, due or to become due, now existing or hereafter arising, that
relate to this Note and the rights and remedies created hereunder, and all legal
and other professional fees incurred in connection with any of the foregoing.
The security interest granted to the Holder hereunder shall be prior to all
other interests in the Collateral.
(b)    The Maker hereby agrees that the Holder shall have all the rights and
remedies of a secured party under the Uniform Commercial Code as in effect from
time to time in the State of Texas. The Maker agrees that at any time, and from
time to time, at the request of the Holder, the Maker shall execute and deliver
(or cause to be executed and delivered) any and all such further instruments
and/or documents (including without limitation, UCC-1 financing statements) as
the Holder may consider reasonably necessary or desirable in order to
effectuate, complete, perfect or preserve and maintain the lien created hereby.
Upon any failure by the Maker to do so, the Holder may make, execute, record,
file, re-record or refile any and all such instruments and documents for and in
the name of the Maker; the Maker hereby irrevocably appoints the Holder as the
agent and attorney-in-fact of the Maker to do so; and the Maker shall reimburse
the Holder, on demand, for

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all costs and expenses incurred by the Holder in connection therewith, such
amount being added to the indebtedness arising under the Note.
(c)    The security interest created hereunder shall terminate upon the payment
in full by the Maker to the Holder of any and all indebtedness, obligations and
liabilities arising from, or in any way related to, the Note.
(d)    Events of Default; Acceleration of Maturity. If an Event of Default shall
have occurred and be continuing (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any governmental authority), then, in addition to the remedies
provided for elsewhere in this Note and without limitation thereof, at the
option of the Holder exercised by written notice to the Maker, the Holder may
(A) foreclose the liens and security interests created under this Note or under
any other agreement relating to the Collateral, by any available judicial
process, (B) enter any premises where any of the Collateral may be located for
the purpose of taking possession or removing the same, and (C) sell, assign,
lease or otherwise dispose of the Collateral or any part thereof, either at
public or private sale or at any broker’s board, in lots or in bulk, for cash,
on credit or otherwise, with or without representations or warranties, and upon
such terms as shall be acceptable to the Holder, all at the sole option of the
Holder and as the Holder, in its sole discretion, may deem advisable and to the
extent permitted by law, the Holder may bid or become a purchaser at any such
sale, and the Holder shall have the right, at its option, to apply or be
credited with the amount of all or any part of the obligations owing by the
Maker to the Holder under this Note, against the purchase price bid by the
Holder at any such sale. The net cash proceeds resulting from the collection,
liquidation, sale, lease or other disposition of the Collateral (including,
without limitation a sale where the Holder is the purchaser) shall be applied
first to the expenses (including reasonable attorneys’ and other professional
fees) of retaking, holding, storing, processing and preparing the Collateral for
sale, selling, collecting, liquidating and the like, and then to the
satisfaction of all such obligations, application as to particular obligations
or against principal or any interest to be in the sole discretion of the Holder.
The Holder shall give the Maker at least five (5) Business Days prior written
notice of the time and place of any public sale of Collateral.
(e)    Suits for Enforcement. In case any one or more of the Events of Default
shall have occurred and be continuing, the Holder may proceed to protect and
enforce rights of the Holder either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant or agreement in this
Note or in aid of the exercise of any power granted in this Note, including
without limitation, possession or foreclosure on the Collateral securing the
Note, or the Holder may proceed to enforce the payment of the Note or to enforce
any other legal or equitable right of the Holder.
(f)    Remedies Cumulative. No remedy herein conferred upon the Holder is
intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.

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(g)    Remedies Not Waived. No course of dealing between the Maker and the
Holder and no delay in exercising any rights hereunder shall operate as a waiver
of any rights of the Holder.
(h)    Notice of Action of Claimed Defaults. If a holder of other obligations of
the Maker shall give any notice of a claimed default or event of default (as
those terms may be defined in the relevant documentation) or shall take any
other action with respect to a claimed default or event of default, immediately
upon obtaining knowledge thereof, the Maker shall give the Holder written notice
specifying such action and the nature and status of the claimed default or event
of default.

5.Conversion

(a)    Generally. The Holder shall have the right, exercisable at any time from
and after the Maturity Date and prior to payment in full of the Principal
Amount, to convert all or any portion of the Principal Amount then outstanding,
plus all accrued but unpaid interest at the Default Interest Rate (the “Default
Interest”), into shares of the Maker’s common stock, par value $0.001 per share
(the “Common Stock”) at a conversion price (the “Conversion Price”) equal to
$0.75 per share or, such lower price as shares of Common Stock are sold to
investors in the Private Placement, subject to adjustment in accordance with
Section 5(d) herein (the Common Stock underlying the Note being referred to
herein as the “Shares”). If the Holder exercises its right to convert the Note
into Shares pursuant to this Section 5, the Maker shall issue to the Holder on
the date of such conversion a warrant (the “Warrant”) to purchase a number of
shares of Common Stock equal to the number of Shares issuable upon such
conversion of the Note, the terms of which shall be mutually agreeable to the
parties; provided that the warrant shall have a five (5) year term and the
exercise price shall be $0.75 per share (or such lower exercise price per share
of Common Stock as may be afforded to investors in the Private Placement) with
the ability of the Holder to exercise the warrant on a cashless basis.
(b)    Mechanics of Conversion. The conversion of this Note shall be conducted
in the following manner: upon any conversion of any portion of the outstanding
Principal Amount of this Note, plus all accrued but unpaid Default Interest
thereon: (i) the Holder shall deliver a completed and executed Notice of
Conversion attached hereto as Exhibit A and, if such conversion is for the
entire outstanding Principal Amount due under this Note surrender and deliver
this Note, duly endorsed, to the Maker’s office or such other address which the
Maker shall designate against delivery of the certificates representing the
Shares to be delivered; (ii) the Maker shall, within three (3) business days of
receipt of the Notice of Conversion cause the Maker’s transfer agent to issue
such required number of Shares as set forth in the Conversion Notice. The Holder
shall not be required to physically surrender this Note to the Maker until all
of the Principal Amount and accrued and unpaid interest under this Note have
been converted into Shares or been paid in full, in which case, the Holder shall
surrender this Note to the Maker for cancellation within three (3) business days
of the date the final Notice of Conversion is delivered to the Maker. Partial
conversions of this Note shall have the effect of lowering the outstanding
Principal Amount due hereunder. The Holder and the Maker shall maintain records
showing the number of Shares purchased and the date of such purchases. In the
event of any dispute or discrepancy, the records of the Maker shall be
controlling and determinative in the absence of manifest error. The Holder and
any assignee, by acceptance of this Note, acknowledge and agree that, by reason
of the provisions of this paragraph,

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the Principal Amount due hereunder at any given time may be less than the amount
stated on the face hereof.
(c)    Reservation of Common Stock. The Maker covenants that during the period
the conversion right exists, the Maker will reserve from its authorized and
unissued Common Stock a sufficient number of shares of Common Stock, free from
preemptive rights, to provide for the issuance of Shares upon the full
conversion of this Note and exercise of the Warrant. In addition, if the Maker
shall issue any securities or make any change to its capital structure which
would change the number of Shares into which the Note shall be convertible at
the then current Conversion Price, the Maker shall at the same time make proper
provision so that thereafter there shall be a sufficient number of shares of
Common Stock authorized and reserved, free from preemptive rights, for
conversion of the outstanding Note and exercise of the Warrant.
(d)    Adjustments to Conversion Price.
(i)    Adjustments for Stock Splits and Combinations and Stock Dividends. If the
Maker shall at any time or from time to time after the date hereof, effect a
stock split or combination of the outstanding Common Stock or pay a stock
dividend in shares of Common Stock, then the Conversion Price shall be
proportionately adjusted. Any adjustments under this Section 5(d)(i) shall be
effective at the close of business on the date the stock split or combination
becomes effective or the date of payment of the stock dividend, as applicable.
(ii)    Merger Sale, Reclassification, etc. In case of any (A) consolidation or
merger (including a merger in which the Maker is the surviving entity), (B) sale
or other disposition of all or substantially all of the Maker’s assets or
distribution of property to shareholders (other than distributions payable out
of earnings or retained earnings), or reclassification, change or conversion of
the outstanding securities of the Maker or of any reorganization of the Maker
(or any other corporation the stock or securities of which are at the time
receivable upon the conversion of this Note) or any similar corporate
reorganization on or after the date hereof, then and in each such case the
Holder of this Note, upon the conversion hereof at any time thereafter shall be
entitled to receive, in lieu of the stock or other securities and property
receivable upon the conversion hereof prior to such consolidation, merger, sale
or other disposition, reclassification, change, conversion or reorganization,
the stock or other securities or property to which such Holder would have been
entitled upon such consummation if such Holder had converted this Note
immediately prior thereto.
(e)    Elimination of Fractional Interests. No fractional shares of Common Stock
shall be issued upon conversion of this Note, nor shall the Maker be required to
pay cash in lieu of fractional interests, it being the intent of the parties
that all fractional interests shall be eliminated and that all issuances of
Common Stock shall be rounded up to the nearest whole share.
6.Legal Rate of Interest

Nothing herein contained shall be construed or so operate as to require payment
of interest at a rate greater than the highest permitted rate under applicable
law, or to make any payment or to do any act contrary to applicable law. To this
end, if during the course of any litigation involving the enforceability of the
obligations under this Note, a court having jurisdiction of the subject matter

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or of the parties to said litigation shall determine that either the original
issue discount or default interest rate as set forth herein, or the effect of
said discount or rate in relation to the particular circumstances of default
resulting in said litigation, are separately or collectively usurious, then the
original issue discount or interest rate set forth herein shall be reduced, or
the operation and effect thereof ameliorated, to achieve the highest interest
rate or charge which shall not be usurious.

7.Costs of Collection

The Maker agrees to pay to the Holder, in addition to the amounts due hereunder,
all costs and expenses incurred by the Holder to collect any and all sums due
under this Note, including the Holder’s attorneys’ fees, regardless of whether
any action or proceeding is commenced. Further, the Maker agrees to pay all
applicable documentary stamp taxes and intangible taxes applicable to this Note.

8.Binding Nature; Assignment

This Note shall bind the Maker and its principals, receivers, administrators,
successors and assigns, and shall inure to the benefit of the Holder and
principals, receivers, administrators, successors and assigns. This Note and the
obligations hereunder may not be assigned by the Maker or assumed by another
party without the prior specific written consent of the Holder. This Note and
the entitlements hereunder may be assigned by the Holder without the consent of
the Maker.

9.Waivers by Maker

The Maker hereby waives demand, presentment for payment, notice of protest, and
notice of dishonor or nonpayment of this Note.

10.Notice

Any claim, notice, request, instruction or demand required to be given or
elected to be given, in connection with this Note shall be in writing and sent
via personal delivery or overnight courier or via email with confirmation of
receipt, to the Maker or the Holder at the addresses set forth in the Loan
Agreement, or such other address to be designated in writing by Maker or Holder.
11.Jury Trial Waiver

The Maker and the Holder each hereby knowingly and voluntarily waive trial by
jury and the right thereto in any action or proceeding of any kind, arising
under or out of, or otherwise related to or connected with this Note.

12.Governing Law; Mediation

This Agreement shall be governed by and construed under the laws of the State of
Texas without regard to the choice of law principles thereof.

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13.Complete and Voluntary Agreement

This Note, along with the Loan Documents, constitutes the entire understanding
of the parties on the subjects covered. The Maker expressly acknowledges and
warrants that he/she/it has read and fully understands the terms of this Note;
that the Maker has had the opportunity to seek legal counsel of his/her/its own
choosing and to have the terms of this Note fully explained to him/her/it; that
the Holder has advised the Maker to consult with an attorney prior to signing
this Note; that the Maker is not executing this Note in reliance on any
promises, representations or inducements other than those contained herein; and
that the Maker is executing this Note voluntarily, free of any duress or
coercion. If there is any ambiguity between the terms and provisions of this
Note and the Loan Documents, then the terms and provisions of the Note shall
prevail and control such ambiguity.

14.Miscellaneous

(a)The Maker shall, upon the Holder’s written request, promptly make, execute
and deliver to the Holder any and all further documents or instruments the
Holder may consider necessary or desirable in order to effectuate, complete or
perfect the Maker’s obligations under this Note.
(b)If any provision of this Note is held to be unenforceable for any reason,
such provision shall be adjusted rather than voided, if possible, in order to
achieve the intent of the Maker and the Holder to the fullest extent possible.
In any event, all other provisions of this Note shall be deemed valid and
enforceable to the fullest extent possible.
15.WAIVER OF TRIAL BY JURY
8.    
9.    THE MAKER AND THE HOLDER (BY ACCEPTANCE OF THIS INSTRUMENT) HEREBY
KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM
BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY HERETO.

[SIGNATURES FOLLOW]

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IN WITNESS WHEREOF, the Maker has signed this Note as of the Funding Date first
set forth above.
MAKER:

VICTORY ENERGY CORPORATION

By:                    
Name: Kenneth Hill
Title: Chief Executive Officer

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EXHIBIT A

VICTORY ENERGY CORPORATION
NOTE CONVERSION NOTICE

Reference is made to the Secured Convertible Original Issue Discount Promissory
Note in the original principal amount of $[*] of Victory Energy Corporation, a
Nevada corporation (the “Maker”), issued to the undersigned (the “Note”).

In accordance with and pursuant to the terms of the Note, the undersigned hereby
elects to convert the entire outstanding principal amount due and owing under
the Note[, together with all accrued but unpaid Default Interest thereon,] into
shares of Common Stock, $0.001 par value per share, of the Maker (the “Common
Stock”), by tendering the original of the Note for cancellation.

Please confirm the following information:

Principal Amount Outstanding
under the Note:                 

[Accrued but unpaid Default Interest
under the Note:______________________]

Conversion Price:                

Number of Shares to be issued:________________________    

Please issue the Shares into which the Note is being converted in the following
name and to the following address:

Issue to:                    

Address:_____________________________
______________________________
______________________________

                    
Name of Holder:                
                    

Signature of Holder:                

Title:                                             

Date:                                            

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