Document:

ex10-17.htm

 

Exhibit 10.17

 Initially Issued August 9, 2012

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

STOCK PURCHASE WARRANT

To Purchase Common Stock of

WORTHINGTON ENERGY, INC.

For value received, the Worthington Energy, Inc. a Nevada corporation (the "Company") hereby grants to Ronald W. Moeckel  (the "Investor"), and his assigns, the right to purchase from the Company  250,000 shares of Common Stock (the "Shares").  The exercise price per Share shall be $0.01 per Share.

The amount and kind of securities purchasable under this Warrant, and the Purchase Price, are subject to adjustment as provided below.

1.             Title of Warrant.  Prior to the expiration hereof and subject to compliance with applicable laws, this Warrant and all rights hereunder are transferable, in whole or in part, at the office or agency of the Company referred to in Section 2(a) below, by the registered holder hereof (the "Holder") in person or by duly authorized attorney, upon surrender of this Warrant and the Assignment Form attached hereto properly endorsed.

2.             Exercise of Warrant.

 

(a)    The purchase rights represented by this Warrant are exercisable by the Holder, in whole or in part, at any time before the close of business on October 9, 2015 by the surrender of this Warrant and the Notice of Exercise attached hereto duly executed at the office of the Company (or such other office or agency of the Company as it may designate in writing to the Holder at the address of the Holder appearing on the books of the Company), and upon payment of the Purchase Price of the shares thereby purchased (by cash, check, or cancellation of indebtedness of the Company to the Holder, if any, at the time of exercise in an amount equal to the purchase price of the shares thereby purchased); whereupon the Holder shall be entitled to receive a certificate for the number of shares of Common Stock so purchased.  The Company agrees that upon due exercise of this Warrant by the Holder, the shares so purchased shall be and be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant is exercised.

  

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(b)    In lieu of the cash payment set forth in Section 2(a) above, the Holder shall have the right ("Conversion Right") to convert this Warrant in its entirety (without payment of any kind) into that number of Shares of Common Stock equal to the quotient obtained by dividing the Net Value (as defined below) of the Shares by the Fair Market Value (as defined below) of one share of Common Stock.  As used herein, (A) the Net Value of the Shares means the aggregate Fair Market Value of the Common Stock subject to this Warrant minus the aggregate purchase price; and (B) the Fair Market Value of one share of Common means the 5 day closing average price of the Company’s Common Stock immediately preceding the conversion.

(c)    Certificates for shares purchased hereunder shall be delivered to the Holder within a reasonable period of time after the date on which this Warrant is exercised.

 

(d)    The Company covenants that all shares of Common Stock  which  may be issued upon the exercise of this Warrant will be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

3.             No Fractional Shares or Scrip.  No fractional shares or scrip representing fractional share shall be issued upon the exercise of this Warrant.  With respect to any fraction of a share called for upon the exercise of this Warrant, an amount equal to such fraction multiplied by the current Purchase Price at which each share may be purchased hereunder shall be paid in cash to the Holder.

4.             Charges, Taxes and Expenses.  Issuance of certificates for shares of Common Stock upon the exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided however that in the event certificates for shares of Common Stock are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder; and provided further that upon any transfer involved in the issuance or delivery of any certificates for shares of Common Stock, the Company may require reimbursement for any transfer tax.

5.             No Rights as Shareholder.  This Warrant does not entitle the Holder to any voting rights or other rights as a Shareholder of the Company prior to the exercise hereof.

 

6.             Exchange and Registry of Warrant.  This Warrant is exchange­able, upon the surrender hereof by the Holder at the above-mentioned office or agency of the Company, for a new Warrant of like tenor and dated as of such exchange.  The Company shall main­tain at such office or agency a registry showing the name and address of the Holder.  This Warrant may be surrendered for exchange, transfer or exercise, in accordance with its terms, at such office or agency of the Company, and the Company shall be entitled to rely in all respects, prior to written notice to the contrary, upon such registry.

  

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7.             Loss, Theft, Destruction or Mutilation of Warrant.  Upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant, and in case of loss, theft or destruction, of indemnity or security rea­son­ably satisfactory to it, and upon reimbursement to the Company of all reasonable expenses incidental thereto, and upon surrender and cancellation of such Warrant, if mutilated, the Company will make and deliver a new Warrant of like tenor and dated as of such cancellation, in lieu of this Warrant.

8.             Saturdays, Sundays, Holidays, etc.  If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall be a Saturday or a Sunday or shall be a legal holiday, then such action may be taken or such right may be exercised on the next succeeding day not a legal holiday.

9.             Adjustment and Termination.

 

(a)    Early Termination on Merger, etc.  If at any time the Company proposes to (i) merge with or into any other corpora­tion, effect a reorganization, or sell or convey all or substan­tially all of its assets to any other entity in a transaction in which the shareholders of the Company immediately before the transaction own immediately after the transaction less than a majority of the outstanding voting securities of the surviving entity (or its parent) (a "Merger Transaction"), or (ii) effect a registered public offering of its shares, then the Company shall give the holder of this Warrant ten (10) days notice of the proposed effective date of the transaction and, if the Warrant has not been exercised by the effective date of the transaction, it shall terminate.

 

(b)    Reclassification, etc.  If the Company at any time shall, by subdivision, combination or reclassification of securi­ties or otherwise, change any of the securities to which purchase rights under this Warrant exist into the same or a different number of securities of any class or classes, the Shares of Common Stock for which this Warrant is exercis­able shall thereafter be convertible into the kind and number of Common Stock or other securities or property of the Company or otherwise to which the Holder would have been entitled if immedi­ately prior to such change the Holder had acquired the Common Stock for which this Warrant is exercisable.  If shares of the Company's Common Stock or other securities purchasable hereunder are subdivided or combined into a greater or smaller number of securities, the Purchase Price under this Warrant shall be proportionately reduced in case of subdivision of shares of Common Stock or proportionately increased in the case of combination of shares of Common Stock.  No adjustment on account of cash dividends or interest on the Shares of Common Stock interests or other securities purchasable hereunder will be made to the Purchase Price under this Warrant.

 

(c)    Notice of Adjustment.  Upon any adjustment of the securities issuable upon exercise of this Warrant, Purchase Price for the shares, and/or any increase or decrease in the number of shares purchasable upon the exercise of this Warrant, the Company shall give written notice thereof, by first class mail, postage prepaid, addressed to the Holder at the address of the Holder as shown on the books of the Company.

  

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(d)    Authorized Shares.  The Company covenants that during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock or other securities purchasable hereunder a sufficient number of shares to provide for the issuance of Shares of Common Stock or other securities upon the exercise of any purchase rights under this Warrant.

 

10.           Miscellaneous.

 

(a)    Issue Date.  The provisions of this Warrant shall be construed and shall be given effect in all respect as if it had been issued and delivered by the Company on the date hereof.  This Warrant shall be binding upon any successors or assigns of the Company.  This Warrant shall constitute a contract under the laws of the State of Nevada and for all purposes shall be construed in accordance with and governed by the laws of said state

 

(b)    Restrictions.  The Holder of this Warrant, by accep­tance hereof, makes the representations of an Investor under Sec­tion 3 of the Purchase Agreement and shall confirm such representations upon any exercise of this Warrant.  The Holder acknowledges that the securities acquired upon the exercise of this Warrant may have restrictions upon its resale imposed by state and federal securities laws.

 

(c)    Modification and Waiver.  This Warrant and any pro­vi­sions hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

(d)    Notices.  All notices, reports and other communica­tions required or permitted hereunder shall be in writing and may be delivered in person, by telecopy with written confirmation, overnight delivery service or U.S. mail, in which event it may be mailed by first-class, certified or registered, postage prepaid, addressed to the Holder at its address as shown on the books of the Company or to the Company at its address of record.

 

  

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Each such notice, report or other communication shall for all purposes under this Warrant be treated as effective or having been given when delivered if delivered personally or, if sent by mail, at the earlier of its receipt or 72 hours after the same has been deposited in a regularly maintained receptacle for the deposit of the United States mail, addressed and mailed as aforesaid, or, if sent by telecopier with written confirmation, at the earlier of (i) 24 hours after confirmation of transmission by the sending telecopier machine or (ii) delivery of written confirmation.

Dated: August 9, 2012

	 	

WORTHINGTON ENERGY, INC

	 	 
	 	 
	  	

By: ________________________________________________

	  	  
	  	

Title:  ______________________________________________

  

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ASSIGNMENT FORM

(To assign the foregoing Warrant, execute

this form and supply the required information.

Do not use this form to purchase shares.)

FOR VALUE RECEIVED, the undersigned hereby, sells, assigns and transfers unto:

 

	

                 ____________________________________________________________________________________________

	 
	

whose address is   ____________________________________________________________________________________________                                                                                                                                       

	(Please Print)

                            

and whose Social Security or other Taxpayer Identification Number is:  ____________________                                                                                                                                        

the foregoing Warrant and all rights thereunder, hereby consti­tuting and appointing ______________________________________ to transfer said Warrant on the books of the Company, will full power of substitution in the premises.

Dated: ______________, 20__.

	  	
Holder's Signature: ____________________________________________________

	  	  
	  	
Holder's Name: _______________________________________________________

	  	

(Please Print)

	  	  
	 	

Holder's Address: _____________________________________________________

	  	

(Please Print)

Signature Guaranteed: ____________________________________________

 

NOTE:  The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without altera­tion or enlargement or any change whatever, and must be guaranteed by a bank or trust company or by a member of the National Associa­tion of Securities Dealers, Inc.  Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

  

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NOTICE OF EXERCISE

To:           Worthington Energy, Inc.

200 Montgomery Street Suite #1094

San Francisco, CA 94104

(1)           The undersigned hereby elects to purchase ______________ shares of Common Stock of (the "Shares") of Worthington Energy, Inc. pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price in full, together with all applicable transfer taxes, if any.

(2)           Please issue a certificate or certificates representing the Shares in the name of the undersigned or in such other name as is specified below:

	 
	
(Print Name)

	  
	
(Print Address)

	  
	 

(3)           The undersigned confirms that the Shares are being acquired for the account of the undersigned for investment only and not with a view to, or for resale in connection with, the distribu­tion thereof and that the undersigned has no present intention of distributing or selling the Shares.

	 	 	  
	
(Date)

	 	
(Signature)

	  	 	  
	  	 	
(Print Name)

 

 

7ex10-18.htm

 

Exhibit 10.18

THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT)

 

 

  US $100,000.00

WORTHINGTON ENERGY, INC.

6% CONVERTIBLE REDEEMABLE SECURED NOTE

DUE JULY 24, 2013

FOR VALUE RECEIVED the Company promises to pay to the order of GEL Properties, LLC and its authorized successors and permitted assigns ("Holder"), the aggregate principal face amount of One Hundred Thousand dollars exactly (U.S. $100,000.00) as follows: (i) Twenty Five Thousand Dollars ($25,000.00) on July 24, 2013; (ii) Twenty Five Thousand Dollars ($25,000.00) on July 31, 2013 ("Maturity Date") (iii) Twenty Five Thousand Dollars ($25,000.00) on August 8, 2013 and (iv) Twenty Five Thousand Dollars ($25,000.00) on
August 15, 2013 and to pay interest on the principal amount outstanding hereunder at the rate of 6% per annum commencing on each payment date;  The Company acknowledges that it has received $21,750 from each of the four tranches and has paid $1,750 in legal fees for each tranche for the negotiation of this transaction as well as $2,000 on behalf of the Company for fees previously owed to counsel for a total of $25,000 for each tranche paid to the Company. The interest will be paid to the Holder in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note.  The principal of, and interest on, this Note are payable at 16192 Coastal Highway, Lewes, DE, 19958, initially, and if changed, last appearing on the records of the Company as designated
in writing by the Holder hereof from time to time.  The Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, to the Holder of this Note by check or wire transfer addressed to such Holder at the last address appearing on the records of the Company.  The forwarding of such check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by such check or wire transfer.  Interest shall be payable in Common Stock (as defined below) pursuant to paragraph 4(b) herein.

This Note is subject to the following additional provisions:

  

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1.           This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same.  No service charge will be made for such registration or transfer or exchange, except that Holder shall pay any tax or other governmental charges payable in connection therewith.

2.           The Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.

3.           This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended ("Act") and applicable state securities laws.  Any attempted transfer to a non-qualifying party shall be treated by the Company as void.  Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is duly registered on the Company's records as the owner hereof for all other purposes, whether or not this Note be
overdue, and neither the Company nor any such agent shall be affected or bound by notice to the contrary.  Any Holder of this Note electing to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective transferee of this Note, also is required to give the Company written confirmation that this Note is being converted ("Notice of Conversion") in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such Notice of Conversion shall be the Conversion Date.

4.           (a)           The Holder of this Note is entitled, at its option, at any time six months after payment of amounts being converted under this Note, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company's common stock (the "Common Stock") without restrictive legend of any nature, at a conversion price
("Conversion Price") for each share of Common Stock equal to 70% of the lowest closing bid price of the Common Stock as reported on the National Quotations Bureau Pink Sheets on which the Company’s shares are traded or any exchange upon which the Common Stock may be traded in the future ("Exchange") with a floor of $0.00001 per share, for any of the five trading days including the day upon which a Notice of Conversion is received by the Company, provided such Notice of Conversion is delivered by fax or other electronic method of communication to the Company between the hours of 4 P.M. Eastern Standard or Daylight Savings Time and 8 P.M. Eastern Standard or Daylight Savings Time, or the trading day on which a Notice of Conversion is received by the
Company provided such Notice of Conversion is delivered by fax or other electronic communication to the Company between the hours of 4 P.M. Eastern Standard or Daylight Savings Time and 8 P.M. Eastern Standard or Daylight Savings Time. The Conversion Price may be adjusted downward if, within 3 business days of the transmittal of the Notice of Conversion to the Company, the Common Stock has a closing bid which is 5% or lower than that set forth in the Notice of Conversion.  Alternatively, if the shares have not been delivered by such time, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion.  Once the Holder has received such shares of Common Stock, the Holder shall surrender this Note to the
Company, executed by the Holder evidencing such Holder's intention to convert this Note or a specified portion hereof, and accompanied by proper assignment hereof in blank.  Accrued but unpaid interest shall be subject to

conversion.  No fractional shares or scrip representing fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share.

  

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(b)           Interest on any unpaid principal balance of this Note shall be paid at the rate of 6% per annum.  Interest shall be paid by the Company in Common Stock ("Interest Shares").  The Holder may, at any time, send in a Notice of Conversion to the Company for Interest Shares based on the formula provided in Section 4(a) above.  The dollar amount converted into Interest Shares shall be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.

(c)           At any time the Company shall have the option to redeem this Note and pay to the Holder 150% of the unpaid principal amount of this Note, in full. The Company shall give the Holder 5 days written notice and the Holder during such 5 days shall have the option to convert this Note or any part thereof into shares of Common Stock at the Conversion Price set forth in paragraph 4(a) of this Note.

(d)           Upon (i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related transactions, (ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock, or (iii) any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification, conversion or exchange of outstanding
shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale Event"), then, in each case, the Company shall, upon request of the Holder, redeem this Note in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion Price.

(e)           In case of any Sale Event in connection with which this Note is not redeemed or converted, the Company shall cause effective provision to be made so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased upon exercise of the Note and at the
same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.

5.           No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

  

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6.           The Company hereby expressly waives demand and presentment for payment, notice of non-payment, protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.

7.           The Company agrees to pay all costs and expenses, including reasonable attorneys' fees and expenses, which may be incurred by the Holder in collecting any amount due under this Note.

8.           If one or more of the following described "Events of Default" shall occur:

(a)           The Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company; or

(b)           Any of the representations or warranties made by the Company herein or in any certificate or financial or other written statements heretofore or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note shall be false or misleading in any respect; or

(c)           The Company shall fail to perform or observe, in any respect, any covenant, term, provision, condition, agreement or obligation of the Company under this Note; or

(d)           The Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for  bankruptcy relief, consent to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws as applicable; or

(e)           A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within thirty (30) days after such appointment; or

(f)           Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company; or

(g)           One or more money judgments, writs or warrants of attachment, or similar process, in excess of ten thousand dollars ($10,000) in the aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or

(h)           Bankruptcy, reorganization, insolvency or liquidation proceedings, or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be

instituted voluntarily by or involuntarily against the Company; or

 

  

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(i)           The Company shall have its Common Stock delisted from an exchange (including the OTCBB exchange) or, if the Common Stock trades on an exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days;

(j)           If a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board; or

(j)           The Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 5 business days of its receipt of a Notice of Conversion.

Then, or at any time thereafter, unless cured, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce any and all
of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law.  Upon an Event of Default, interest shall be accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law.

If the Holder shall commence an action or proceeding to enforce any provisions of this Note, including without limitation engaging an attorney, then the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

 

9.           In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.

10.           Neither this Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and the Holder.

11.           The Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information indicating it is no longer a “shell issuer.  Further. The Company will instruct its counsel to either (i) write a 144- 3(a)(9) opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.

12.           The Company will issue irrevocable transfer agent instructions reserving

40,000,000 shares of Common Stock for conversion under this Note.  The reserve shall be replenished as needed to allow for conversions of this Note.  Upon full conversion of this Note, the reserve representing this Note shall be cancelled. The Holder will send the Company a notice of conversion upon every conversion from this collateral reserve conversion showing the amount of principal and interest paid down and the number of shares converted as a result.  Any shares remaining after the amounts due under this Note has been fully converted will be returned to the Company or applied to the conversion of outstanding notes issued by the Company. The Holder may also use
these resolutions to convert any other convertible debt instruments that are outstanding with the Company. The Holder may need to send the Company transfer agent and its broker an initial conversion notice for the total amount of the shares being escrowed so they may be deposited this initial conversion notice shall have no effect upon the actual shares being converted.

 

  

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13.           This Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed within the State of New York and shall be binding upon the successors and assigns of each party hereto.  The Holder and the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York.  This Agreement may be executed in counterparts, and the facsimile transmission of an executed counterpart to this Agreement shall be effective as an
original.

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized.

Dated:   ____________________                                        

	  	
WORTHINGTON ENERGY, INC.

	  	  
	  	
By: __________________________________

	  	  
	  	
Title: _________________________________

 

  

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EXHIBIT A

NOTICE OF CONVERSION

 (To be Executed by the Registered Holder in order to Convert the Note)

The undersigned hereby irrevocably elects to convert $___________ of the above Note into _________ Shares of Common Stock of Worthington Energy, Inc.  (“Shares”) according to the conditions set forth in such Note, as of the date written below.

If Shares are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with respect thereto.

 

	
Date of Conversion: __________________________________________________________________________________

	
Applicable Conversion Price:  ___________________________________________________________________________

	
Signature:  _________________________________________________________________________________________

	 
[Print Name of Holder and Title of Signer]

	
Address:   __________________________________________________________________________________________

	                   __________________________________________________________________________________________
	  
	
SSN or EIN: ______________________________________

	
Shares are to be registered in the following name:  _____________________________________________________________

	  
	
Name:  _____________________________________________________________________________________________

	
Address:  ___________________________________________________________________________________________

	
Tel:  __________________________________

	
Fax:  __________________________________

	
SSN or EIN: _____________________________

	  
	
Shares are to be sent or delivered to the following account:

	  
	
Account Name:  _______________________________________________________________________________________

	
Address:  ____________________________________________________________________________________________

 

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