Exhibit 10.1
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. IT MAY NOT BE SOLD, OFFERED
FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN EXEMPTION THEREFROM. THE
COMPANY MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT ANY
PROPOSED TRANSER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT.
SUBORDINATE SECURED PROMISSORY NOTE

      $1,275,000   March 23, 2009
Denver, Colorado

     FOR VALUE RECEIVED, Infinity Energy Resources, Inc., a Delaware corporation
(the “Company”), promises to pay to the order of Off-Shore Finance, LLC, a
Nevada limited liability company (the “Holder”), the principal sum of One
Million Two Hundred Seventy Five Thousand Dollars (US$1,275,000) or, if less,
the aggregate unpaid principal amount loaned and outstanding when due, whether
upon the Maturity Date, as defined below, acceleration, redemption or otherwise
(the “Note”) (in each case in accordance with the terms thereof). Payment of the
Note will be secured by (i) two second-lien Deeds of Trust and Security
Agreements dated March 23, 2009 (collectively, the “Security Agreement”), by and
between Infinity Oil and Gas of Texas, Inc. and Infinity Oil and Gas of Wyoming,
Inc., respectively, and the Buyer, covering certain collateral as more
particularly described therein and (ii) a Commercial Guaranty by each of
Infinity Oil and Gas of Texas, Inc. and Infinity Oil & Gas of Wyoming, Inc. in
favor of Holder (the “Commercial Guaranties”) and the Note is further subject to
a Subordination and Intercreditor Agreement dated March 23, 2009 (the
“Subordination Agreement”), by and among the Holder, the Company and Amegy. This
Note is issued in connection with that certain Securities Purchase Agreement,
dated March 23, 2009 between the Company and the Holder (the “Purchase
Agreement”) and any terms used but not defined in this Note shall have the
definitions assigned to them in the Purchase Agreement.
     The Company agrees to pay interest on the outstanding unpaid principal
amount of the Note at a rate of 6.0% per annum (“Interest”) from the date of
borrowing, and continuing until paid in accordance with the provisions of this
Note, subject, however, to the provisions of the Subordination Agreement.
Interest on this Note shall be computed on the basis of a 360-day year and
actual days elapsed. Amounts are deemed borrowed under the Note as follows:
     1. For amounts loaned under Section 2 hereof, as of the date such funds are
deposited in the Company’s operating account at U.S. Bank.
     2. For amounts required to be funded by Holder by Amegy under
Section 1.3(c) of the Off-Shore Escrow Agreement, as of the date such funds are
transferred out of the Off-Shore Escrow Account.

 

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     The Loan Origination Fee and all Commitment Fees (as charged to the Company
from time to time as provided in the Purchase Agreement) shall be deemed accrued
interest hereunder.
     1. Payment of Principal and Interest. The entire unpaid balance of
principal and all unpaid and accrued interest shall become fully due and payable
on March 23, 2012 (the “Maturity Date”) or such earlier date as the maturity
hereof shall be accelerated in accordance with the terms of Section 3 below. The
principal and unpaid accrued Interest under this Note may be prepaid, in whole
or in part, in cash, at any time and from time to time, without penalty, in the
sole discretion of the Company by fifteen (15) days prior notice.
     2. Draw Down Procedure. The Holder shall make loans to the Company upon the
Company’s request and in accordance with this Section 2, from time to time until
the Maturity Date, provided that in no event shall the aggregate principal
amount of such loans at any time exceed $1,275,000. A request for a loan, in
substantially the form attached hereto as Exhibit 1, shall be executed by the
Company’s Chief Executive Officer or Chief Financial Officer and be delivered to
the Holder, specifying the requested amount and date of the loan (a “Loan
Request”). Prior to making any Loan Requests, the Company shall have submitted a
budget to the Holder and Amegy for approval, setting forth the proposed use of
the funds being borrowed hereunder (the “Approved Budget”). All items under the
Approved Budget shall relate to the Company’s direct and indirect expenditures
in connection with the concessions in the Tyra and Perlas Blocks, offshore
Nicaragua, as awarded to the Company by the Republic of Nicaragua in 2003, as
hereafter amended and modified (the “Nicaragua Concessions”). Each Loan Request
shall identify how the requested loan amount fits within the Approved Budget.
Any Loan Request which either alone or with previous loan amounts designated for
the same purpose exceeds the corresponding Approved Budget line item by ten
percent (10%) or more shall require the Holder to convene a meeting of its
executive committee to consider the Loan Request, and approval of such amounts
shall be in the reasonable discretion of the Holder’s executive committee. The
Approved Budget may be periodically revised with the written approval of the
Holder, Amegy and Infinity. Loans shall be made by the Holder to the Company not
less than five (5) business days after a Loan Request has been delivered to the
Holder, and the amount of the Loan Request shall be deposited into the Company’s
operating account at U.S. Bank.
     3. Events of Default; Acceleration. (a) An “Event of Default” under this
Note shall occur upon the occurrence of any of the following events: (i) failure
to make any payment of any amount owed to the Holder pursuant to this Note when
the same shall be due and payable and such failure continues for ten (10) days
after written notice thereof to the Company; (ii) appointment of a receiver for
any part of the property of, or assignment for the benefit of creditors by, the
Company; (iii) the commencement of any proceedings under any bankruptcy or
insolvency laws by the Company; (iv) the commencement of any involuntary
proceedings under any bankruptcy or insolvency laws against the Company if the
same have not been fully discharged within sixty (60) days after the
commencement thereof; or (v) the Company defaults in the performance of or
compliance with any material term, covenant or agreement contained in this Note,
if any, and such failure continues for ten (10) days after written notice
thereof to the Company.

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          (b) If any Event of Default shall occur and be continuing, the Holder
may, at any time, at its option by prior written notice to the Company, declare
this Note to be immediately due and payable. The Company shall reimburse the
Holder for all court costs and the reasonable out-of-pocket fees and expenses of
the Holder and its legal counsel paid by the Holder in connection with the
Holder’s collection of any amounts due and payable to the Holder.
          (c) Upon this Note becoming due and payable under this Section 3, this
Note will forthwith mature and the entire unpaid principal amount of this Note,
plus all accrued and unpaid interest, shall all be immediately due and payable.
     4. Priority of Note. Except with respect to the debt evidenced by the
Company’s Loan Agreement with Amegy dated January 9, 2007, as amended and
supplemented by the First, Second and Third Forbearance Agreements (“Senior
Debt”), which is senior to the Note in all respects, no indebtedness of the
Company will rank senior to or pari passu with the Note in right of payment,
whether with respect of payment of principal, interest, damages or upon
liquidation or dissolution or otherwise.
     5. Voting Rights. The Holder shall have no voting rights as the Holder of
this Note.
     6. Release. Upon the payment in full of the amounts specified in this Note,
the Company shall be released from all its obligations and liabilities under
this Note.
     7. Governing Law; Waiver of Jury Trial. This Note shall be governed by, and
construed and enforced in accordance with, the laws of the State of Colorado,
excluding conflict of laws principles that would cause the application of laws
of any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR
ANY TRANSACTION CONTEMPLATED HEREBY.
     8. Agreement, Amendment and Waiver. This Note and the agreements, documents
and instruments referenced herein and therein contain the entire understanding
of the parties with respect to the matters covered herein and therein and
constitute the entire agreement of the parties with respect to the transactions
contemplated hereby and supersede all other prior agreements or understandings
among the parties hereto with respect to the subject matter hereof. This Note
may be amended only upon the written consent of the Company and the Holder.
     9. Severability. Any provision of this Note which is prohibited or
unenforceable in any jurisdiction where such provision would otherwise be
applied shall, as to such provision and such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Note or affecting the validity or enforceability of
such provision in any other jurisdiction.
     10. Successors and Assigns. Neither this Note nor any of the rights,
interests or obligations hereunder may be assigned in whole or in part by either
the Company or the Holder without the prior express written consent of the other
party (or its permitted assigns). Except as otherwise provided herein, the terms
and conditions of this Note shall inure to the benefit of, and be binding upon,
the respective successors and assigns of the Company and the Holder. Nothing

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in this Note, express or implied, is intended to confer upon any party other
than the Company, the Holder or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this Note.
     11. Waiver. The Company waives delivery, acceptance, performance,
presentment and demand for payment, notice of dishonor, protest and notice of
protest of this Note, and any defense by reason of extension of time for payment
or other indulgences. The right to plead any and all statutes of limitations as
a defense to any demands hereunder is hereby waived by the Company to the
fullest extent permitted by law. The acceptance of any partial payment or other
payment which does not fully pay all amounts then due hereunder and fully cure
all defaults hereunder shall not constitute a waiver of the right to payment of
the balance of such payment or other amount then or thereafter due, of any
default hereunder, of the right to declare a default hereunder or cause the
entire unpaid balance hereof to become immediately due and payable in full, or
of any other right or remedy.
     12. Note Record. The Holder shall, and is hereby authorized, to record on
the Note Record attached to this Note as Exhibit 2, the date and principal
amount of each loan and the date and amount of each principal payment hereunder;
provided, however, that neither the failure to so record nor any error in this
recordation shall affect the Company’s obligations under this Note.
     13. Computation of Time. If any event or performance under this Note is
scheduled or required to occur on a date which is on a Saturday, Sunday, or
legal state or federal holiday in Denver, Colorado, the event or performance
shall be required to occur on the next day which is not a Saturday, Sunday or
legal state or federal holiday in Denver, Colorado.
[Signatures on Following Page]

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     In Witness Whereof, the Company has executed this Note as of the date first
above written.

            INFINITY ENERGY RESOURCES, INC.
      /s/ Stanton E. Ross       By: Stanton E. Ross, its Chief Executive
Officer           

Accepted and Agreed as of the date
first written above:

            OFF-SHORE FINANCE, LLC
      /s/ Daniel J. Haake       By: Daniel J. Haake, Managing Member           

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