Document:

Exhibit 10.34

 

FORBEARANCE AGREEMENT FOR

AMERICAN EAGLE ENERGY CORPORATION

 

This FORBEARANCE AGREEMENT
(this “Agreement”) is entered into as of April 2, 2015 (the “Forbearance Effective Date”),
by and among American Eagle Energy Corporation (the “Issuer”), the Guarantors party to the Indenture (as hereinafter
defined) (collectively, with Issuer, the “Credit Parties”) and holders of Notes or investment managers to holders
of the Notes issued under the Indenture that are parties hereto (each, a “Noteholder” and together, the “Noteholders”).

 

RECITALS

 

A.           Issuer,
the other Credit Parties and U.S. Bank National Association, as trustee (in such capacity, the “Trustee”) are
parties to that certain Indenture, dated as of August 27, 2014 (the “Indenture”), pursuant to which, among other
things, the Issuer issued the Notes.

 

B.           As
of the date hereof, the Defaults and Events of Default identified below that have occurred, may occur, or continuing to occur prior
to or during the Forbearance Period (as hereinafter defined) are collectively defined below as “Specified Defaults”.

 

C.           The
Issuer has requested that, during the Forbearance Period, the Noteholders agree to forbear from exercising certain of their default-related
rights and remedies against the Issuer and the other Credit Parties with respect to the Specified Defaults, notwithstanding the
existence of the Specified Defaults and subject to the terms and conditions set forth herein.

 

D.           Subject
to the terms and conditions set forth herein, and conditioned on the Credit Parties complying with their respective obligations
hereunder, the Noteholders have agreed to forbear from exercising certain of their default-related rights and remedies against
the Issuer and the other Credit Parties with respect to the Specified Defaults, in order to permit the Noteholders and the Credit
Parties to negotiate and effectuate a restructuring of the financial affairs of the Credit Parties.

 

NOW, THEREFORE, in consideration
of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

Section
1.          

 

Definitions

 

Unless otherwise defined
elsewhere in this Agreement, capitalized terms used herein shall have the meanings ascribed to them in the Indenture.

 

    	 

    	 

    

 

“Forbearance
Default” shall mean the occurrence of one or more of the following: (i) failure by the Credit Parties to comply with
any provision of this Agreement; or (ii) the occurrence of any default or Event of Default under the Indenture or any other Loan
Document that is not a Specified Default.

 

“Loan Documents”
means the Indenture together with all other agreements, instruments, and other documents executed in connection with or relating
to the Obligations or the Collateral.

 

“Remaining Accrued
and Unpaid Interest” means the (i) Aggregate Accrued and Unpaid Interest minus the (ii) Partial Interest Payment.

 

“Specified Defaults”
shall include any defaults or Events of Defaults (i) under any of: Sections 6.01(1), 6.01(2), 601(3), and 6.01(6) of the Indenture;
and (ii) under that certain Credit Agreement, dated August 27, 2014, by and among the Issuer, SunTrust Bank, as Administrative
Agent and Lender, and SunTrust Robinson Humphrey, Inc. (the “SunTrust Credit Agreement”).

 

Section
2.          

 

Confirmation by Issuer
of Obligations and Specified Defaults

 

Each Credit Party acknowledges
and agrees that: (i) as of March 31, 2015, the aggregate principal balance of the outstanding Obligations under the Indenture is
$175,000,000; and (ii) the interest, including default interest accruing pursuant to the Indenture, that was due and payable as
of March 31, 2015 was $9,838,888.89 (the “Aggregate Accrued and Unpaid Interest”), of which $4,000,000 (“Partial
Interest Payment”) has been initiated for payment or will be paid on or prior to April 2, 2015 to the Trustee (without
any withholding, offset, reduction, or abatement by the Credit Parties) for the benefit of all holders of the Notes.

 

The foregoing amounts
do not include fees, expenses and other amounts that are chargeable or otherwise reimbursable under the Indenture and the other
Loan Documents.  None of the Issuer or the other Credit Parties has any current rights of offset, defenses, claims or counterclaims
with respect to any of the Obligations.

 

(a)          Each
Credit Party: (i) acknowledges and agrees that (A) each of the Specified Defaults constitutes a material Event of Default that
has occurred and is continuing as of the date hereof or may occur during the Forbearance Period, as the case may be, and (B) none
of the Specified Defaults has been cured as of the date hereof or is expected to be cured during the Forbearance Period; and (ii)
represents and warrants to the Noteholders that, except for the Specified Defaults, no other Events of Default have occurred and
are continuing as of the date hereof, or, after due inquiry by the Credit Parties, are expected to occur during the Forbearance
Period, as the case may be. The Credit Parties represent and warrant that, when it was filed with the Securities and Exchange Commission,
the Issuer’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, did not contain any untrue statement
of a material fact and did not omit to state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and that, to the knowledge of the Credit Parties after due inquiry, there has not been
any event, occurrence, or development since January 1, 2015 that would cause any information or statement contained in such Annual
Report to be untrue or misleading, other than the Specified Defaults. The Credit Parties further acknowledge that the Noteholders
and the Trustee’s security interests in the Collateral continue to be valid, binding, and enforceable security interests
(subject to the senior priority SunTrust Credit Agreement which has not been drawn during the Forbearance Period, shall not be
drawn during the Forbearance Period, and which, during the Forbearance Period, the Issuer shall not attempt to refinance or otherwise
transfer or assign) that secure the Obligations, and no tax or judgment liens are currently of record against Issuer or any other
Credit Party.

 

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(b)          Other
than the Specified Defaults, any misrepresentation of the Issuer or any other Credit Party hereunder, or any failure of such party
to comply with the covenants, conditions and agreements in this Agreement, the Indenture, other Loan Documents or in any other
agreement, document, or instrument at any time executed and/or delivered by Issuer or any other Credit Party with, to or in favor
of any Noteholder or the Trustee shall constitute an immediate Forbearance Default hereunder, and shall have the same force and
effect as an Event of Default under the Indenture and the other Loan Documents.

 

(c)          The
Credit Parties acknowledge and agree that (i) the Noteholders have the authority to accelerate the Obligations by written notice
to the Credit Parties in accordance with section 6.02 of the Indenture, (ii) immediately upon the termination of the Forbearance
Period, the Noteholders will be deemed to have duly given notice in accordance with the requirements of the Indenture, including
Section 6.02, of acceleration of the Obligations, and (iii) immediately upon the termination of the Forbearance Period, the Obligations
shall be accelerated and the Credit Parties shall recognize the Obligations as duly accelerated in accordance with Section 6.02
of the Indenture without the requirement of further demand, presentment, protest, or notice of any kind.

 

Section
3.          

 

Forbearance; Forbearance
Default Rights and Remedies.

 

(a)          Effective
as of the Forbearance Effective Date, each of the Noteholders agrees that (i) until the expiration or termination of the Forbearance
Period, it will temporarily forbear from exercising its default-related rights and remedies against Issuer or any other Credit
Party solely with respect to the Specified Defaults, and (ii) to the extent that the Trustee accelerates the Notes during the Forbearance
Period, each of the Noteholders (which cumulatively hold in excess of fifty percent of all Notes issued) shall vote to decelerate
or reverse the acceleration; provided, however,

 

(i)          past-due
Obligations, including the Remaining Accrued and Unpaid Interest shall continue to bear interest at the Default Rate until paid
in accordance with the Indenture;

 

(ii)         each
Credit Party shall comply with all limitations, restrictions or prohibitions that would otherwise be effective or applicable under
the Indenture or any of the other Loan Documents during the continuance of any Event of Default;

 

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(iii)        nothing
herein shall restrict, impair or otherwise affect any Noteholder’s or Trustee’s right to file, record, publish or deliver
a notice of default or document of similar effect under any state foreclosure law.

 

(b)          As
used herein, the term “Forbearance Period” shall mean the period beginning on the Forbearance Effective Date
and ending on the earliest to occur of (the occurrence of an event specified in clause (i), (ii), (iii) or (iv) below, a “Termination
Event”): (i) the occurrence of any Event of Default under subsections 6.01(10) or 6.01(11) of the Indenture or the commencement
of an involuntary proceeding or filing of an involuntary petition against the Credit Parties under any federal, state or foreign
bankruptcy, insolvency, receivership or similar law (collectively, a “Bankruptcy Default”), (ii) May 15, 2015,
(iii) April 2, 2015, unless the Issuer shall have initiated payment the Partial Interest Payment to the Trustee on or prior to
such time on such date, or (iv) the occurrence of a Forbearance Default.

 

(c)          Upon
the occurrence of a Termination Event, the agreement of the Noteholders hereunder to forbear from exercising their respective default-related
rights and remedies shall immediately terminate without the requirement of any demand, presentment, protest, or notice of any kind,
all of which Issuer and the other Credit Parties each waives. Issuer and the other Credit Parties each agrees that any or all of
the Noteholders or Trustee may at any time thereafter proceed to exercise any and all of their respective rights and remedies under
any or all of the Indenture, any other Loan Document and/or applicable law, including, without limitation, their respective rights
and remedies with respect to the Specified Defaults. Without limiting the generality of the foregoing, upon the occurrence of a
Termination Event, the Noteholders and Trustee may, in their sole discretion and without the requirement of any demand, presentment,
protest, or notice of any kind, (i) continue to charge interest on any or all of the Obligations (including the Remaining Accrued
and Unpaid Interest) at the Default Rate in accordance with the Indenture, (ii) commence any legal or other action to collect any
or all of the Obligations from Issuer, any other Credit Party and/or any Collateral, (iii) foreclose or otherwise realize on any
or all of the Collateral, and/or appropriate, setoff or apply to the payment of any or all of the Obligations, any or all of the
Collateral, and (iv) take any other enforcement action or otherwise exercise any or all rights and remedies provided for by any
or all of the Indenture, any other Loan Documents and/or applicable law, all of which rights and remedies are fully reserved by
the Noteholders and Trustee.

 

(d)          Any
agreement to extend the Forbearance Period, if any, shall be in the sole discretion of each Noteholder and must be set forth in
writing and signed by a duly authorized signatory of each such Noteholders.

 

(e)          The
Issuer and the other Credit Parties each acknowledges that none of the Noteholders, nor the Trustee, has made any assurances concerning
(i) any possibility of an extension of the Forbearance Period, (ii) the manner in which or whether the Specified Defaults may be
resolved or (iii) any additional forbearance, waiver, restructuring or other accommodations.

 

(f)          The
parties hereto agree that the running of all statutes of limitation or doctrine of laches applicable to all claims or causes of
action that any Noteholder or the Trustee may be entitled to take or bring in order to enforce its rights and remedies against
Issuer or any other Credit Party is, to the fullest extent permitted by law, tolled and suspended during the Forbearance Period.

 

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(g)          The
Issuer and the other Credit Parties each acknowledges and agrees that any financial accommodation that any Noteholder or the Trustee
makes on or after the Forbearance Effective Date has been made by such party in reliance upon, and in consideration for, among
other things, the general releases and indemnities contained in Section 5 hereof and the other covenants, agreements, representations
and warranties of Issuer and the other Credit Parties hereunder.

 

Section
4.          

 

Supplemental Terms, Conditions and Covenants During
the Forbearance Period

 

In order to induce the
Noteholders to forbear from the exercise of their rights and remedies as set forth in this Agreement, the Credit Parties hereby
agree to comply with the following terms, conditions and covenants, in each case notwithstanding any provision to the contrary
set forth in this Agreement, the Indenture or any other Loan Document:

 

(a)          Each
of Issuer and the other Credit Parties shall, and shall cause its officers, directors, employees and advisors to, cooperate fully
with the Noteholders and their Representatives in furnishing information as and when reasonably requested by any Noteholder or
their representatives regarding the Collateral or Issuer’s or any other Credit Party’s financial affairs, finances,
financial condition, business and operations. The Noteholders shall have reasonable access during normal business hours to the
offices, properties, officers, key employees, accountants, auditors, and other representatives, books and records of the Credit
Parties during the Forbearance Period;

 

(b)          The
Credit Parties will deliver to the Noteholders a detailed, weekly cash budget setting forth the Credit Parties projected weekly
expenses through the week ended May 16, 2015, which shall permit a variance that is no less favorable than a 10% negative cumulative
variance on a rolling basis based on the “ending cash” line and excluding any variance previously approved by the Noteholders
(the “Budget”) in a form and methodology satisfactory to the Noteholders, an initial version of which has been
provided to and approved by the Noteholders. In addition to any and all reporting requirements set forth in the Indenture, on a
weekly basis during the Forbearance Period, the Credit Parties shall provide the Noteholders a report, in a form and methodology
acceptable to the Noteholders, comparing the Credit Parties’ actual cash receipts and disbursements on a line-by-line category
basis for the immediately preceding week in the Budget compared to projected cash receipts and disbursements such categories for
such week as set forth in the Budget. The Credit Parties shall only make expenditures that are in accordance with the Budget. The
Credit Parties may not modify the Budget without the consent of the Noteholders;

 

(c)          On
April 6, 2015, and each Monday thereafter during the Forbearance Period, the Credit Parties will deliver to the Noteholders the
following weekly financial reports as of the close of business for the immediately preceding calendar week, all in form, content
and detail satisfactory Noteholders: (i) an accounts receivable aging report; (ii) a cash receipts report; (iii) an accounts payable
aging report; and (iv) a report of accounts payable and accrued liabilities;

 

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(d)          As
soon as practicable and in any case on or prior to April 10, 2015, the Issuer shall enter into a written agreement reasonably acceptable
to the Noteholders, on terms and conditions reasonably acceptable to the Noteholders, to retain a restructuring advisor, temporary
chief financial officer, consultant, financial advisor and/or other third-party professional or similar consultant reasonably acceptable
to the Noteholders (the “Financial Advisor”), who shall report to the Board of Directors of Issuer. All times during
the Forbearance Period Issuer shall continue to retain the Financial Advisor acceptable to the Noteholders on terms and conditions
reasonably acceptable to the Noteholders;

 

(e)          During
the Forbearance Period, the Credit Parties shall not be permitted to sell, assign, transfer, lease or sublease any assets owned,
maintained, leased or otherwise controlled by any of them outside of the ordinary course of business, unless or until they obtain
the prior written consent of Noteholders, which consent may be withheld by any Noteholder in its sole discretion;

 

(f)          During
the Forbearance Period, the Credit Parties shall (i) continue to pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all of its liabilities and obligations arising in the ordinary course of business during
the Forbearance Period as contemplated by the Budget, and (ii) without duplication of (i), not default on any of its obligations
to any third party, the payment or satisfaction of which is contemplated by the Budget;

 

(g)          During
the Forbearance Period, the Credit Parties shall not grant a security interest in any of their assets to other creditors without
the prior written approval of the Noteholders, which consent may be withheld by any Noteholder in its sole discretion;

 

(h)          The
Credit Parties shall not make any payment to holders of Notes in total or partial satisfaction of the Remaining Accrued and Unpaid
Interest amount without the consent of each of the Noteholders;

 

(i)          The
Credit Parties shall immediately notify the Noteholders in writing if any person or entity asserts any lien, encumbrance, security
interest, or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process or any
claim of control) against any of them or any of their property or assets (each, an “Adverse Claim”) promptly
when the Credit Parties learn of such Adverse Claim;

 

(j)          The
Credit Parties shall immediately notify the Noteholders in writing of any action by any creditor of the Credit Parties (including,
without limitation, trade creditors and unsecured creditors) with respect to the collection or enforcement of debt of, or the commencement
or threat of any action against, the Credit Parties or the Collateral, including, but not limited to, the (i) acceleration of indebtedness,
(ii) actual, attempted, or threatened filing of an involuntary bankruptcy petition, (iii) the actual, attempted, or threatened
termination of, or withholding of services under, an executory contract between the Credit Parties and such creditor;

 

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(k)          The
Credit Parties shall continue to perform and observe all covenants, terms and conditions in and other obligations contained in
all of the Loan Documents and this Agreement, except with respect to the Specified Defaults;

 

(l)          The
Credit Parties shall deposit all cash, cash equivalents, checks, notes, drafts, instruments, refunds, deposits, production proceeds
attributable to oil and gas proceeds and all other proceeds of Collateral into “Controlled Accounts,” as such term
is defined under the SunTrust Credit Agreement;

 

(m)          If
the Credit Parties determine to file voluntary petitions for relief under title 11 of chapter 11 of the United States Code, the
Credit Parties agree that they shall use their reasonable efforts to file such petitions in the United States Bankruptcy Court
for the Southern District of New York;

 

(n)          The
Credit Parties shall continue to be bound by and comply with the terms of that certain letter agreement between the Issuer and
Andrews Kurth LLP, dated as of March 6, 2015; and

 

(o)          The
Credit Parties shall continue to be bound by and comply with the terms of the non-disclosure agreements between the Issuer and
each Noteholder, each of which are dated as of March 22, 2015.

 

Section
5.          

 

General Release

 

(a)          In
consideration of, among other things, the Noteholders’ execution and delivery of this Agreement, each of the Issuer and the
other Credit Parties, on behalf of itself and its agents, representatives, officers, directors, advisors, employees, subsidiaries,
affiliates, successors and assigns (collectively, the “Releasors”), hereby forever agrees and covenants not
to sue or prosecute against any Releasee (as hereinafter defined) and hereby forever waives, releases and discharges each Releasee
(as hereinafter defined) from any and all claims (including, without limitation, crossclaims, counterclaims, rights of set-off
and recoupment), actions, causes of action, suits, debts, accounts, interests, liens, promises, warranties, damages and consequential
damages, demands, agreements, bonds, bills, specialties, covenants, controversies, variances, trespasses, judgments, executions,
costs, expenses or claims whatsoever, that such Releasor now has or hereafter may have, of whatsoever nature and kind, whether
known or unknown, whether now existing or hereafter arising, whether arising at law or in equity (collectively, the “Claims”),
against any or all of the Noteholders and Trustee in any capacity and their respective affiliates, subsidiaries, shareholders,
partners and “controlling persons” (within the meaning of the federal securities laws), and their respective successors
and assigns and each and all of the officers, directors, employees, shareholders, partners, agents, attorneys, advisors and other
representatives of each of the foregoing (collectively, the “Releasees”), based in whole or in part on facts,
whether or not now known, existing on or before the Forbearance Effective Date, that relate to, arise out of or otherwise are in
connection with: (i) any or all of the Indenture or transactions contemplated hereby or any actions or omissions in connection
herewith or (ii) any aspect of the dealings or relationships between or among Issuer and the other Credit Parties, on the one hand,
and any or all of the Noteholders and Trustee, on the other hand, relating to any or all of the documents, transactions, actions
or omissions referenced in clause (i) hereof.

 

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(b)          Each
of the Issuer and other Credit Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby
absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law,
in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by
Issuer or any other Credit Party pursuant to Section 5(a) hereof.  If Issuer, any other Credit Party or any of its successors,
assigns or other legal representatives violates the foregoing covenant, the Credit Parties, each for itself and its successors,
assigns and legal representatives, jointly and severally agree to pay, in addition to such other damages as any Releasee may sustain
as a result of such violation, all attorneys' fees and costs incurred by any Releasee as a result of such violation.

 

Section
6.          

 

Ratification of Liability.  Each
of the Issuer and the other Credit Parties, as debtors, grantors, pledgors, guarantors, assignors, or in other similar capacities
in which such parties grant liens or security interests in their properties or otherwise act as accommodation parties or guarantors,
as the case may be, under the Indenture and Loan Documents, hereby ratifies and reaffirms all of their payment and performance
obligations (including, but not limited to, Obligations under the Indenture and the Remaining Accrued and Unpaid Interest) and
obligations to indemnify, contingent or otherwise, under each of such documents to which it is a party, and ratifies and reaffirms
their grants of liens on or security interests in their properties pursuant to such documents to which they are a party, respectively,
as security for the Obligations under or with respect to the Indenture, and confirms and agrees that such liens and security interests
hereafter secure all of the Obligations, including, without limitation, all additional Obligations hereafter arising or incurred
pursuant to or in connection with this Agreement, the Indenture or any other Loan Document.

 

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Section
7.          

 

Reference To And Effect
Upon The Indenture

 

(a)          All
terms, conditions, covenants, representations and warranties contained in the Indenture and other Loan Documents, and all rights
of the Noteholder and the Trustee and all of the Obligations, shall remain in full force and effect.  Each of the Issuer and
the other Credit Parties hereby confirms that the Indenture and the other Loan Documents are in full force and effect and that
neither the Issuer nor any other Credit Party has any current right of setoff, recoupment or other offset or any defense, claim
or counterclaim with respect to any of the Obligations, the Indenture or any other Loan Document.

 

(b)          Except
as expressly set forth herein, the execution, delivery and effectiveness of this Agreement shall not directly or indirectly (i)
create any obligation to continue to defer any enforcement action after the occurrence of any Default or Event of Default, (ii)
constitute a consent or waiver of any past, present or future violations of any provisions of the Indenture or any other Loan Document
nor constitute a novation of any of the Obligations under the Indenture or other Loan Document, (iii) amend, modify or operate
as a waiver of any provision of the Indenture or any other Loan Document or any right, power or remedy of any Noteholder or the
Trustee, (iv) constitute a consent to any merger or other transaction or to any sale, restructuring or refinancing transaction
or (v) constitute a course of dealing or other basis for altering any Obligations or any other contract or instrument.  Except
as expressly set forth herein, each Noteholder and the Trustee reserves all of its respective rights, powers, and remedies under
the Indenture, the other Loan Documents and applicable law.

 

(c)          This
Agreement shall not be deemed or construed to be a satisfaction, reinstatement, novation or release of the Indenture or any other
First Lien Document.

 

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Section
8.          

 

Governing Law; Consent
to Jurisdiction and Venue.  THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN ALL MATTERS ARISING OUT OF, IN CONNECTION WITH
OR RELATING TO THIS AGREEMENT, WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES THAT COULD RESULT IN THE APPLICATION OF ANY OTHER
LAW.  ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK LOCATED IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE ISSUER AND EACH OTHER CREDIT PARTY HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS; PROVIDED THAT NOTHING
IN THIS AGREEMENT SHALL LIMIT THE RIGHT OF ANY NOTEHOLDER OR THE TRUSTEE TO COMMENCE ANY PROCEEDING IN THE FEDERAL OR STATE COURTS
OF ANY OTHER COMPETENT JURISDICTION.  THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING
OF ANY SUCH ACTION OR PROCEEDING IN SUCH JURISDICTIONS.  EACH CREDIT PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF ANY
AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND OTHER DOCUMENTS AND OTHER SERVICE OF PROCESS OF ANY KIND AND CONSENTS TO SUCH SERVICE
IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA WITH RESPECT TO OR OTHERWISE ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT BY ANY MEANS PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, INCLUDING BY THE MAILING THEREOF (BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID) TO THE ADDRESS OF THE ISSUER SPECIFIED IN THE INDENTURE (AND SHALL BE EFFECTIVE WHEN SUCH MAILING
SHALL BE EFFECTIVE, AS PROVIDED THEREIN).  EACH CREDIT PARTY AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
 NOTHING CONTAINED IN THIS SECTION 8 SHALL AFFECT THE RIGHT OF ANY NOTEHOLDER OR THE TRUSTEE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY APPLICABLE REQUIREMENTS OF LAW OR COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY
IN ANY OTHER JURISDICTION.

 

Section
9.          

 

Construction.
 This Agreement and all other agreements and documents executed and/or delivered in connection herewith have been prepared
through the joint efforts of all of the parties hereto.

 

Section
10.         

 

Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but all
such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.  Any
party hereto may execute and deliver a counterpart of this Agreement by delivering by facsimile or other electronic transmission
a signature page of this Agreement signed by such party, and any such facsimile or other electronic signature shall be treated
in all respects as having the same effect as an original signature.

 

Section
11.         

 

Severability.
 The invalidity, illegality, or unenforceability of any provision in or obligation under this Agreement in any jurisdiction
shall not affect or impair the validity, legality, or enforceability of the remaining provisions or obligations under this Agreement
or of such provision or obligation in any other jurisdiction.  If feasible, any such offending provision shall be deemed modified
to be within the limits of enforceability or validity; however, if the offending provision cannot be so modified, it shall be stricken
and all other provisions of this Agreement in all other respects shall remain valid and enforceable.

 

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Section
12.         

 

Time of Essence.
 Time is of the essence in the performance of each of the obligations of Issuer and the other Credit Parties hereunder and
with respect to all conditions to be satisfied by such parties.

 

Section
13.         

 

Further Assurances.
 Issuer and each other Credit Party agrees to take all further actions and execute all further documents as any Noteholder
may from time to time reasonably request to carry out the transactions contemplated by this Agreement and all other agreements
executed and delivered in connection herewith.

 

Section
14.         

 

Section Headings.
 Section headings in this Agreement are included herein for convenience of reference only and shall not constitute part of
this Agreement for any other purpose.

 

Section
15.         

 

Notices. All notices,
requests, and demands to or upon the respective parties hereto shall be given as follows:

 

To the Issuer:

 

Baker & Hostetler
LLP

Attn: Jorian Rose &
Elizabeth Green

45 Rockefeller Plaza

New York, NY 10111-01000

Email: egreen@bakerlaw.com

jrose@bakerlaw.com

 

To the Noteholders:

 

Andrews Kurth LLP

Attn: Paul N. Silverstein

450 Lexington Avenue,
15th Floor

New York, NY 10017

Email: paulsilverstein@andrewskurth.com

 

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Section
16.         

 

Waivers by Issuer
and other Credit Parties.

 

Waiver of Jury Trial
Right And Other Matters.  EACH OF THE ISSUER AND THE OTHER CREDIT PARTIES HEREBY WAIVES (i) ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, OR PROCEEDING ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS
AND ANY OTHER TRANSACTION CONTEMPLATED HEREBY AND THEREBY, WHICH WAIVER APPLIES TO ANY ACTION, SUIT OR PROCEEDING WHETHER SOUNDING
IN TORT, CONTRACT OR OTHERWISE; (ii) PRESENTMENT, DEMAND AND PROTEST, AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NONPAYMENT,
MATURITY, RELEASE WITH RESPECT TO ALL OR ANY PART OF THE OBLIGATIONS OR ANY COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS,
INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY ANY NOTEHOLDER OR THE TRUSTEE; (iii) NOTICE PRIOR TO TAKING POSSESSION
OR CONTROL OF THE COLLATERAL OR ANY BOND OR SECURITY THAT MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING ANY NOTEHOLDER OR THE
TRUSTEE TO EXERCISE ANY OF THEIR RESPECTIVE RIGHTS AND REMEDIES; (iv) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION
LAWS AND ALL RIGHTS WAIVABLE UNDER ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE; AND (v) ISSUER AND THE OTHER CREDIT PARTIES EACH ACKNOWLEDGES
THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO NOTEHOLDER’ ENTERING INTO THIS AGREEMENT AND THAT SUCH PARTIES ARE
RELYING UPON THE FOREGOING WAIVERS IN THEIR FUTURE DEALINGS WITH ISSUER AND THE OTHER CREDIT PARTIES.  EACH OF THE ISSUER
AND THE OTHER CREDIT PARTIES WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS
KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

Section
17.         

 

Assignments; No Third
Party Beneficiaries.  This Agreement shall be binding upon and inure to the benefit of Issuer, the other Credit Parties,
the Noteholders and their respective successors and assigns; provided, that neither the Issuer nor any other Credit Party shall
be entitled to delegate any of its respective duties hereunder or to assign any of its respective rights or remedies set forth
in this Agreement without the prior written consent of the Noteholders in their sole discretion.

 

Section
18.         

 

Joint and Several Liability.       The
Credit Parties agree that they shall be jointly and severally liable for all obligations of the Issuer and the other Credit Parties
under this Agreement.

 

Section
19.         

 

Liability of Noteholders.         The
liability of any Noteholders shall be several and not joint, both as to the Noteholders and as to any of the several funds managed
or advised by an investment manager signatory of any of the Noteholders.

 

    	12

    	 

    

 

Section
20.         

 

Non-Circumvention.
 The purpose of the Forbearance Agreement is to provide a period for the Noteholders and the Issuer to negotiate appropriate
terms for a restructuring of the Issuer’s balance sheet. During the Forbearance Period, the Noteholders shall not take any
action in furtherance of enforcement of their Notes inconsistent with the terms of this Forbearance Agreement, and shall not otherwise
commence an involuntary bankruptcy proceeding during the Forbearance Period if the Noteholders could not otherwise commence an
involuntary bankruptcy proceeding under this Forbearance Agreement. The Credit Parties shall endeavor to operate the business in
the ordinary course (at all times in accordance with the Budget) and shall not entertain discussions with or otherwise seek capital
from any third-party source.

 

Section
21.         

 

Final Agreement.
 This Agreement, the Indenture, the other Loan Documents, and the other written agreements, instruments, and documents entered
into in connection therewith (collectively, the “Issuer/Noteholder Documents”) set forth in full the terms of
agreement among the parties hereto and thereto with respect to the subject matter thereof and are intended as the full, complete,
and exclusive contracts governing the relationship among such parties with respect to the subject matter thereof, superseding all
other discussions, promises, representations, warranties, agreements, and understandings between the parties with respect thereto.
 Except as provided therein, no term of the Issuer/Noteholder Documents may be modified or amended, nor may any rights thereunder
be waived, except in a writing signed by the party against whom enforcement of the modification, amendment, or waiver is sought.
 Any waiver of any condition in, or breach of, any of the foregoing in a particular instance shall not operate as a waiver
of other or subsequent conditions or breaches of the same or a different kind.  Any Noteholder’s exercise or failure
to exercise any rights or remedies under any of the foregoing in a particular instance shall not operate as a waiver of its right
to exercise the same or different rights and remedies in any other instances.  There are no oral agreements among the parties
hereto.

 

[Signature pages to follow]

 

    	13

    	 

    

  

IN WITNESS WHEREOF, this
Forbearance Agreement has been executed by the parties hereto as of the date first written above.

 

	
        AMERICAN EAGLE ENERGY CORPORATION,

        as Issuer
	 	
        AMZG, INC.

        as Credit Party

	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 
	Name:	 	Name:
	 	 	 
	Its:	 	Its:

  

SIGNATURE PAGE TO

FORBEARANCE AGREEMENT

 

    	 

    	 

    

 

 

IN WITNESS WHEREOF, this
Forbearance Agreement has been executed by the parties hereto as of the date first written above.

 

	
        ARISTEIA CAPITAL, L.L.C.,

        as Noteholder
	 	
        BENNETT MANAGEMENT CORPORATION,

        as Noteholder

	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 
	Name:	 	Name:
	 	 	 
	Its:	 	Its:

 

	
        NORTHEAST INVESTORS TRUST,

        as Noteholder
	 	
        KAYNE ANDERSON CAPITAL ADVISORS, L.P.,

        as Noteholder

	 	 	 	 	 
	By:	 	 	By:	 
	 	 	 
	Name:	 	Name:
	 	 	 
	Its:	 	Its:Exhibit 4.1

 

 

THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE TRANSFERRED UNTIL (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") SHALL HAVE BECOME EFFECTIVE WITH RESPECT THERETO OR (ii) RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED IN CONNECTION WITH SUCH PROPOSED TRANSFER NOR IS IN VIOLATION OF ANY APPLICABLE STATE SECURITIES LAWS.  THIS LEGEND SHALL BE ENDORSED UPON ANY NOTE ISSUED IN EXCHANGE FOR THIS NOTE.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

	
Principal Amount: [$______]

	
Issue Date:  February 2, 2015

 

LINGERIE FIGHTING CHAMPOINSHIPS, INC.

5% CONVERTIBLE PROMISSORY NOTE

            FOR VALUE RECEIVED, LINGERIE FIGHTING CHAMPIONSHIPS, INC., a corporation organized under the laws of the State of Nevada (hereinafter called "Borrower" or the "Company"), hereby promises to pay [_], or his permitted registered assigns or successors in interest or order (the "Holder"), without demand, the sum of [___________________________ (US$______)] (the "Principal Amount"), with simple interest at the annual rate of five percent (5%) on the Maturity Date (as hereinafter defined) if and to the extent not sooner paid or converted.  The "Maturity Date" of this Note shall be September 31, 2015 subject to acceleration as provided in Section 2 hereof.  This Note (the "Note") may be repaid early upon 30 business days advance notice to the Borrower.  This Note is convertible into the Company's Common Stock (the "Conversion Shares") at a conversion price of $.001 per share (the "Conversion Price") (subject to adjustment, as provided herein).

This Note is one of several separate identical Notes issued at or about the date hereof, for an aggregate principal amount of $5,250, convertible into an aggregate of 5,250,000 Conversion Shares of the Company (or its successor in interest) all of which shall be repaid and converted and treated pari pasu with one another and senior in priority and repayment to all other notes or similar debts of the Borrower, unless agreed to otherwise by the Holder(s) thereof.  This Note is a senior obligation of the Borrower, and constitutes an unconditional obligation of Borrower for the payment of money. The following terms shall apply to this Note:

ARTICLE I

INTEREST

1.1.              Interest Rate.   Interest on this Note shall be simple interest and accrue at the annual rate of five percent (5%) per annum.  Interest will be payable on the Maturity Date, accelerated or otherwise, at which time the Principal Amount and remaining accrued but unpaid interest shall be due and payable, or sooner as described below.  All computations of interest payable hereunder shall be on the basis of a 365-day year and actual days elapsed in the period for which such interest is payable. Accrued interest on the outstanding Principal Amount shall be due and payable on the Maturity Date in cash.

1.2.              Default Interest Rate.  Following the occurrence and during the continuance of an Event of Default (as defined below), which, if susceptible to cure is not cured within the cure periods (if any) set forth in Article II, otherwise then commencing from the end of the applicable cure period the annual interest rate on this Note shall (subject to the limitations set forth in Section 3.7) be the lesser of ten percent (10%) per annum or the highest rate permissible by law, and be due on demand.

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1.2.              Note shall (subject to the limitations set forth in Section 3.7) be the lesser of ten percent (10%) per annum or the highest rate permissible by law, and be due on demand.

ARTICLE II

CONVERSION RIGHTS

2.1.            Holder's Conversion Rights. This Note may be mandatorily converted in the event of a merger, acquisition, share exchange or similar combination between the Company and a publicly reporting and trading corporation (the "Acquiror") with the shareholders of the Company, including the Holder, becoming the controlling shareholders of such acquiring company (a "Merger") or voluntarily converted at the discretion of the Holders in the event of a Default.

2.2.            Mechanics of Holder's Conversion.

(a)            In the event that the Holder elects to convert after a Default, any amounts outstanding under this Note into Common Stock the Holder shall give notice of such election by delivering an executed and completed notice of conversion (a "Notice of Conversion") substantially in form as annexed as Exhibit A hereto,  together with the Holder's original Note to the Company, which Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued interest.  On each Conversion Date (as hereinafter defined) and in accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the Principal Amount and accrued and unpaid interest, shall issued a replacement Note therefor, and shall deliver such replacement Note to the Holder in accordance with the requirements of the Purchase Agreement.

(b)            In the event of a Merger, this Note shall, without the requirement of any notice to any party or any action by any party,  be deemed automatically assumed and converted into shares of the Acquiror into such number of shares of the acquiring company as the Holder would have received had he/she/it converted immediately prior to the Closing of the Merger.

(c)            No fractional Conversion Shares shall be issued upon conversion of this Note. Instead of any fractional shares that would otherwise be issuable upon conversion of this Note, the Company shall pay a cash adjustment in respect of such fractional share in an amount equal to the same fraction of the Voluntary Conversion Price or Mandatory Conversion Price then in effect.

2.3.            Adjustments to Conversion Price.

(a)            The number of Conversion Shares to be issued upon each conversion of this Note shall be determined by dividing that portion of the Principal Amount and interest to be converted, if any, by the then applicable Voluntary Conversion Price or Mandatory Conversion Price.

            (b)            The Voluntary Conversion Price or Mandatory Conversion Price, as applicable, and number and kind of shares or other securities to be issued upon conversion shall be subject upon the happening of certain events while this conversion right remains outstanding, as follows:

i.            Merger, Sale of Assets, etc.  If (A) the Company effects any merger or  consolidation of the Company with or into another entity, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions,  (C) any tender offer or exchange offer (whether by the Company or another entity) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, (D) the Company consummates a stock purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more persons or entities whereby such other persons or entities acquire more than the 50% of the outstanding Common Stock (not including any shares of Common Stock held by such other persons or entities making or party to, or associated or affiliated with the other persons or entities making or party to, such stock purchase agreement or other

2

business combination), (E) any "person" or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate Common Stock of the Company, or (F) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental  Transaction"), this Note, as to the unpaid principal portion thereof and accrued interest thereon, shall thereafter be deemed to evidence the right to convert into such number and kind of shares or other securities and property as would have been issuable or distributable on account of such Fundamental Transaction, upon or with respect to the securities subject to the conversion right immediately prior to such Fundamental Transaction.  The foregoing provision shall similarly apply to successive Fundamental Transactions of a similar nature by any such successor or purchaser.  Without limiting the generality of the foregoing, the anti-dilution provisions of this Section shall apply to such securities of such successor or purchaser after any such Fundamental Transaction.

ii.            Reclassification, etc.  If the Company at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid principal portion hereof and accrued interest hereon, shall thereafter be deemed to evidence the right to convert into an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change.

iii.            Stock Splits, Combinations and Dividends.  If the Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock by issuance of Common Stock, the Voluntary Conversion Price or the Mandatory Conversion Price, as applicable, shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event.

(c)            Whenever a conversion price, whether a Voluntary Conversion Price or Mandatory Conversion Price, is adjusted pursuant to this Section 2.3, the Company shall promptly mail to the Holder a notice setting forth the Voluntary Conversion Price or Mandatory Conversion Price after such adjustment and setting forth a statement of the facts requiring such adjustment.

2.5            Issuance of Replacement Note.  Upon any loss or destruction of this Note, a replacement Note containing the same date and provisions of this Note shall be issued by the Company to the Holder for the outstanding Principal Amount of this Note and accrued interest which shall not have been converted or paid.

ARTICLE III

EVENTS OF DEFAULT

The occurrence of any of the following events of default (each, an "Event of Default") shall, at the option of the Holder hereof, make all sums of principal and interest then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable, upon demand, without presentment, or grace period, all of which hereby are expressly waived, except as set forth below:

3.1            Failure to Pay Principal or Interest.  The Borrower fails to pay any the Principal Amount, interest or other sum due under this Note when due (including, without limitation, failure to repay the Note and interest in full upon the happening of a Qualified Offering),  and such failure continues for a period of five (5) calendar days after receipt by the Borrower of written notice of such default.

3.2            Breach of Covenant.  The Borrower materially breaches any covenant or other term or condition of this Note in any material respect and such breach, if subject to cure, continues for a period of 10 business days after written notice to the Borrower from the Holder.

 

3

3.3            Breach of Representations and Warranties.  Any material representation or warranty of the Borrower made herein or in its reports as filed with the Securities and Exchange Commission, shall be false or misleading in any material respect as of the Issue Date, except to the extent such representation or warranty is made as of a different date in which case such representation or warranty shall have been false or misleading in any material respect as of such date.

3.4            Receiver or Trustee.  The Borrower or any subsidiary of Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for them or for a substantial part of their property or business; or such a receiver or trustee shall otherwise be appointed and not dismissed within 30 calendar days.

3.5            Judgments.  Any money judgment, writ or similar final process shall be entered or filed against Borrower or any subsidiary of Borrower or any of their property or other assets for more than $25,000 and shall remain unvacated, unbonded, unappealed, unsatisfied, or unstayed for a period of 30 calendar days.

3.6            Non-Payment.   A default by the Borrower under any one or more obligations (including, without limitation, any office lease or pre-existing loan currently outstanding) in an aggregate monetary amount in excess of $10,000 for more than 30 calendar days after the due date, unless the Borrower is contesting the validity of such obligation in good faith and has segregated cash funds equal to not less than one-half of the contested amount.

3.7            Bankruptcy.  Bankruptcy, insolvency, reorganization, or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower or any Subsidiary of Borrower and if instituted against them are not dismissed within 60 calendar days of initiation.

3.8            Sale of Assets;Acquisisiton of Business. A disposition of all or substantially all of the assets of the Borrower, change in the business of the Borrower or acquisition of assets by the Borrower resulting in a material change in its business.

3.9            Use of Proceeds. Proceeds of this Note not being utilized substantially in accordance with the intended uses agreed to by the parties in writing, and for no other purposes.

In the event of Default, and in addition to any other remedies at law or in equity, the Holder may elect to convert all or a portion of the Note and enforce in collection the remaining part of this Note by its terms.

ARTICLE IV

MISCELLANEOUS

4.1            Failure or Indulgence Not Waiver.  No failure or delay on the part of Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.  All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

4.2            Notices.  All notices and other communications required or permitted hereunder shall be in writing and shall be effective when delivered personally, provided that a copy is mailed by registered mail, return receipt requested, or when received by the addressee, if sent by Express Mail, Federal Express or other express delivery service (receipt requested) in each case to the appropriate address set forth below:

If to the Borrower:                       Lingerie Fighting Championships, Inc.

 

4

                                                Attention:  Shaun Donnelly

eMail: shaun@lingeriefc.com

                          If to the Purchaser:

With a copy to:                               Mark Crone, Esq.

CKR Law, LLP

1330 Avenue of the Americas

New York, New York 10019

Fax:212-400-6901

4.3            Amendment Provision.  The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented or reissued, then as so amended or supplemented or reissued.

4.4            Assignees.  This Note, and the conversion rights described herein, shall not be assignable by the Holder without the prior written consent of the Borrower, which shall not be unreasonably withheld. Subject to the restrictions of the preceding sentence, the rights and obligations of the Borrower and the Holder shall be binding upon and benefit the successors, assign, heirs, administrators and transferees of the parties.

4.5            Cost of Collection.  In the event that Holder is required to take legal or other action to enforce its rights or obtain collection under this Note,  Borrower shall pay the Holder hereof all costs of collection, or enforcement of the terms hereof, including attorneys' fees.

4.6            Governing Law.  This Note shall be governed by and construed in accordance with the laws of the State of New York.  Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the State Supreme Court of the State of New York, County of New York.  Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the jurisdiction of such courts.  The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.  In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or unenforceability of any other provision of this Note.  THE PARTIES IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY JURY.

4.7            Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law (such as, without limitation, the usury laws), any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower, or if no further amounts are owed by the Borrower to the Holder, shall be refunded to the Borrower.  Borrower hereby irrevocable consents to the reformation of this Note, as may be necessary by a court of law, so as to enable enforcement of this Note pursuant to summary judgment or summary proceeding.  For avoidance of doubt, in the event that, for any reason, a finding by a court having jurisdiction over this Note is made that limits enforceability as a result of excessive interest or other origination or investment banking fees pursuant to the laws of any jurisdiction, then, such defense shall not be deemed to bar a summary proceeding or summary judgment on the Note but rather, the Note shall be fully and absolutely enforceable as to all principal and, the court having jurisdiction shall, after an inquest, have power to reform the Note so as to reduce interest amount to such amount as is immediately enforceable pursuant to summary judgment or summary proceeding and grant such award, plus any legal or enforcement fees of Holder(s).

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4.8.            Construction and Enforcement. Each party acknowledges that its legal counsel participated in the preparation of this Note and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Note to favor any party against the other. This Note reflects an investment made by Holder or its assignor to the Borrower.  This Note is intended as, and shall be deemed an unconditional obligation of Borrower for the payment of money only and, without limitation to any other remedies of Holder (such as, without limitation, summary judgment after initiation of a proceeding, or equitable remedies), shall be enforceable against Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213 or any similar rule or statute in the jurisdiction where enforcement is sought.  For purposes of such rule or statute, any other document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient or necessary to determine Holder's rights hereunder or Borrower's obligations to Holder are deemed a part of this Note, whether or not such other document or agreement was delivered together herewith or was executed apart from this Note.

4.9            Redemption/Conversion.  (a) This Note may be prepaid by the Borrower, in whole or in part, at any time and from time to time, without premium or penalty, upon 20 days' prior written notice to the Holder, provided, however, that in the event of a pre-payment, the Note shall become convertible during the foregoing 20 day period.

4.10            Issuance of Replacement Note.  Upon any loss or destruction of this Note, a replacement Note containing the same date and provisions of this Note shall be issued by the Company to the Holder for the outstanding Principal Amount of this Note and accrued interest which shall not have been converted or paid.

4.11            Representations and Warranties; Due Authority.  The Borrower warrants and represents that: (i) the Borrower has the due authority to enter into, issue and perform its obligations under this Note, (ii) the entry into this Note has been duly authorized by the board of directors of the Borrower and all and all corporate actions and consents (including third party consents) necessary for the execution, delivery and performance by Borrower of its obligations hereunder have been obtained, (iii) the issuance by the Borrower of this Note does not conflict with or result in a default under, the Borrower's Articles of Incorporation, as amended and restated to date (including any certificates of designation thereto), its By-laws or any shareholders agreement to which it is a party or any other agreement to which the Borrower is a party or order that it is subject to.  This Note is fully enforceable against the Borrower.

4.12            Non-Business Days.  Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the State of New York, such payment may be due or action shall be required on the next succeeding business day and, for such payment, such next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.

[Signature pages follow]

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IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the 2nd day of February 2015.

LINGERIE FIGHTING CHAMPIONSHIPS, INC.

By:________________________________

Name: Shaun Donnelly

Title:  CEO

[Signature Page to 5% Convertible Promissory Note of Lingerie Fighting Championships, Inc.]

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