104ContingentPayUnsecuredNote-Victory-V5






CONTINGENT PROMISSORY NOTE




		
	Date:
	March 3, 2015




Maker:        Victory Energy Corporation, a Nevada Corporation (“Victory”)


Maker’s Mailing Address:     3355 Bee Caves Road, Suite 608
Austin, Texas  78746
Attention:  Kenneth Hill, CEO


Holder/Payee:        Louise H. Rogers, as her separate property (“Rogers”)


Holder/Payee’s Mailing Address:    c/o Sharon E. Conway
ATTORNEY AT LAW
2441 High Timbers, Suite 410
The Woodlands, Texas  77380-1052


The terms “Victory” and “Rogers” and other nouns and pronouns include the plural if more than one exists.  The terms “Victory” and “Rogers” also include their respective heirs, personal representatives, and assigns.  Victory and Rogers are collectively referred to in this Note as the “Parties.”


Place for Payment (including county):    2512 Alta Mira
Tyler, Smith County, Texas  75701-7301
(Paid via wire transfer or check as set forth below)


		
	Principal Amount:
	Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00)




		
	Interest Rate:
	Eighteen percent (18%) per annum.  Interest accruing under this Note shall be computed on the basis of a 360-day year and shall be assessed for the actual number of days elapsed.




Contingent Note, Maturity Date, and Terms of Payment:


This Note is contingent and shall only be payable if any of the following events occurs, and interest begins to accrue immediately upon the occurrence of the earlier of the following events (collectively the “Contingency Events”):


(1) the termination of the Letter of Intent or of the Definitive Agreement between Victory, Lucas Energy, Inc. (“Lucas”), and AEP Assets, LLC (“AEP”) (and any other applicable parties) as those documents are defined in the Pre-Merger Collaboration Agreement entered into by Victory, Lucas, and AEP (and any and all other parties) and dated on or around the same date as this Note (the “Collaboration Agreement”); or


(2) upon the failure of AEP to satisfy the Well Funding Requirements set forth in the Collaboration Agreement and that failure is not cured within sixty days of AEP receiving notice from Lucas of the failure.


Maturity Date:    The entire amount of principal and accrued interest is due and payable on or before the 90th day following the earlier occurrence of any one of the Contingency Events (“Maturity Date”).


Late Payments:  If the payment or any portion of it is late, it shall be subject to a fee of three percent of the total amount of the payment (principal and interest) that is late.


Payments of Principal:  All payments of principal shall be made by wire transfer using the following wiring instructions:


Bank Name:              Bank of New York                         
ABA Routing Number:      021000018                                      
Account Number:          Beneficiary Acct #8900512385 Pershing, LLC  
FFC A/C #:              NW7-263093                                  
Customer/Account Name:       Louise H. Rogers                            


Any and all wire transfer fees shall be paid for by Victory and the amount wired shall be adjusted in the amount necessary to ensure that the total amount received into Rogers’ account is the total amount of the interest and principal (if applicable) due.


Payments of Interest:  All interest payments shall be made by Victory check on good funds made payable to “Louise H. Rogers, as her separate property,” and shall be sent via Federal Express to Mrs. Rogers at her address in Tyler, Texas, set forth above.  Victory shall ensure that the Federal Express package delivery date is on or before the due date for the interest payment.  If the payment is not received by Rogers on or before the due date, it is considered late.


Notice of Payment:  Immediately upon receiving confirmation that each wire transfer of a principal payment has been completed, Victory shall send via e-mail to Rogers’ attorney, Sharon E. Conway, a copy of the confirmation.  Contemporaneously with sending each interest payment, Victory shall scan the payment check and the transmittal letter to Mrs. Rogers into PDF format and shall e-mail the scanned copies of the check and transmittal letter, along with the Federal Express tracking number for delivery, to Ms. Conway.  These notifications allow Ms. Conway to verify timely payment.  Failure to send either of these confirmations to Ms. Conway shall constitute an Event of Default.


Annual Interest Rate on Matured,
		
	Unpaid Amounts (Default Rate):
	Eighteen Percent (18%) per TEXAS FINANCE CODE Chapters 306 and 303




Promise to Pay.    Victory promises to pay to the order of Louise H. Rogers at the place for payment and according to the terms of payment the principal amount plus interest at the rates stated above.  Any amounts under this Note remaining unpaid as of the due date shall be due and payable no later than the Maturity Date.


Application of Payments.    Payments under this Note shall be applied first to accrued and unpaid interest and the balance, if any, to principal.  Any allowed or mandatory prepayment of this Note shall also be accompanied by the payment of all accrued and unpaid interest on the amount prepaid.  Partial prepayments of this Note shall be applied to the installments in the inverse order of their maturities.


Waiver of Demand, Presentment, etc.    Failure by Victory to timely make the payment of this Note on or before the Maturity Date constitutes default of this Note.  Victory and each surety, guarantor, and endorser all waive any and all notices, demands for payment, presentations for payment, notices of intent to accelerate maturity, notices of acceleration, protests, notices of protest, and notice of dishonor.  Victory also waives any notice of intent to file suit and diligence by Rogers in taking any action to collect amounts due under this Note.  No delay by Rogers in exercising any right or remedy available to her to enforce this Note shall constitute a waiver of the right or remedy.  A waiver on one occasion shall not operate as a bar to or waiver of any right or remedy of Rogers on any future occasion.


Usury Compliance.    The Parties to this Note intend to comply with the usury laws applicable to this Note.  Accordingly, the Parties agree that no provision in this Note or in any related documents (if any) shall require or permit the collection of interest in excess of the maximum rate permitted by law.  If any excess interest is provided for or contracted for in this Note, or charged to Victory or any other person responsible for payment, or received by Rogers, or if any excess interest is adjudicated to be provided for or contracted for under this Note or adjudicated to be received by Rogers or her assignee or successor, then the Parties expressly agree that this paragraph shall govern and control and that neither Victory nor any other party liable for payment of the Note shall be obligated to pay the amount of excess interest, and the Note shall be modified as necessary to reflect this agreement and not voided.  Any excess interest that may have been collected shall be, at Rogers’ option, either applied as credit against any unpaid principal amount due or refunded to Victory.  The effective rate of interest shall be automatically subject to reduction to the maximum lawful contract rate allowed under the usury laws of the State of Texas as they are now or subsequently construed by the courts of the State of Texas.


Attorney’s Fees and Costs of Collection upon Default.  If this Note is given to an attorney for collection, or if suit is brought for collection, or if it is collected through probate, bankruptcy, or other judicial proceeding, then Victory shall pay all of Rogers’ actual attorney’s fees, all costs of collection, all expenses of litigation, and all costs of court incurred in addition to any and all other amounts due.


Governing Law; Venue and Jurisdiction; Waiver of Jury Trial.  This Note shall be governed by the laws of the State of Texas.  The Parties agree that venue for any lawsuit under this Note is proper in Montgomery County, Texas, and Victory expressly waives any objection to venue in Montgomery County, Texas, based on forum non conveniens.  All Parties agree that jurisdiction for any dispute under this Note lies in the state district courts of Montgomery County, Texas.  All Parties agree to waive their respective rights to trial by jury of any dispute under this Note and that all disputes will be submitted to the court for determination.


Amendment and Assignment.  This Note may not be amended or modified in any manner without the express written consent of Rogers or her attorney.  Victory may not assign any of its rights or obligations under this Note without the express written consent of Rogers.  Rogers may assign any or all of her rights and obligations under this Note.  Any assignment by Rogers remains subject to the occurrence of a Contingency Event as set forth above.


Maker:


VICTORY ENERGY CORPORATION






By:    ______________________________    Date of Signature:  March 3, 2015
FRED SMITH
Chief Financial Officer

Contingent Promissory Note
Rogers - Victory Energy Corporation - Lucas Energy/March 3, 2015    Page 1 of 1