Document:

EXHIBIT
10.7

 

THIS
PROMISSORY NOTE (“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”).  THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED
IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

PROMISSORY
NOTE

 

	Principal
    Amount: $300,000.00	dated
    as of August 31, 2020
	 	 
	 	 Omaha
    Nebraska

 

Yellowstone
Acquisition Company, a Delaware corporation (the “Maker”), promises to pay to the order of BOC Yellowstone,
LLC or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of Three
Hundred Thousand ($300,000.00) Dollars or such lesser amount as shall have been advanced by Payee to Maker and shall remain unpaid
under this Note on the Maturity Date (as defined below) in lawful money of the United States of America, on the terms and conditions
described below.  All payments on this Note shall be made by check or wire transfer of immediately available funds or
as otherwise determined by the Maker to such account as the Payee may from time to time designate by written notice in accordance
with the provisions of this Note

 

1.
Principal.  The entire unpaid principal balance of Note shall be payable on the earlier of: (i) December 31,
2020, or (ii) the date on which Maker consummates an initial public offering of its securities (such earlier date, the “Maturity
Date”).  The principal balance may be prepaid at any time.  Under no circumstances shall any individual,
including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally for any obligations
or liabilities of the Maker hereunder.

 

2.
Drawdown Requests.  Maker and Payee agree that Maker may request, from time to time, up to Three Hundred Thousand
($300,000.00) Dollars in drawdowns under this Note to be used for costs and expenses related to Maker’s formation and the
proposed initial public offering of its securities (the “IPO”).  Principal of this Note may be drawn
down from time to time prior to the Maturity Date upon written request from Maker to Payee (each, a “Drawdown Request”).  Each
Drawdown Request must state the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000).  Payee
shall fund each Drawdown Request no later than three (3) business days after receipt of a Drawdown Request; provided, however,
that the maximum amount of drawdowns outstanding under this Note at any time may not exceed Three Hundred Thousand ($300,000.00)
Dollars.  No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any Drawdown
Request by Maker.

 

3.
Interest.  No interest shall accrue on the unpaid principal balance of this Note.

 

4.
Application of Payments.  All payments shall be applied first to payment in full of any costs incurred in the collection
of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of
any late charges and finally to the reduction of the unpaid principal balance of this Note.

 

5.
Events of Default.  The following shall constitute an event of default (“Event of Default”):

 

(a)
Failure to Make Required Payments.  Failure by Maker to pay the principal amount due pursuant to this Note within
five (5) business days of the date specified above.

 

(b)
Voluntary Bankruptcy, Etc.  The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency,
reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its
property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts
as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.

 

     

     

    

 

(c) 
Involuntary Bankruptcy, Etc.  The entry of a decree or order for relief by a court having jurisdiction in the
premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing
a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part
of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days.

 

6.
Remedies.

 

(a)
Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker,
declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts
payable thereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.

 

(b)
Upon the occurrence of an Event of Default specified in Sections 5(b) or 5(c), the unpaid principal balance of this
Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all
cases without any action on the part of Payee.

 

7.
Waivers.  Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment,
demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any
proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present
or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property,
from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension
of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof,
on any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.

 

8.
Unconditional Liability.  Maker hereby waives all notices in connection with the delivery, acceptance, performance,
default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the
liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or
modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications
that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers,
endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.

 

9.
Notices.  All notices, statements or other documents which are required or contemplated by this Agreement shall
be: (i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service
or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently
provided to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic
mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated
in writing by such party.  Any notice or other communication so transmitted shall be deemed to have been given on the
day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile
or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after
mailing if sent by mail.

 

10.
Construction.  THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEBRASKA, WITHOUT REGARD
TO CONFLICT OF LAW PROVISIONS THEREOF.

 

11.
Severability.  Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction.

 

    2

     

    

 

12.
Trust Waiver.  Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title,
interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account to be established
in which the proceeds of the IPO conducted by the Maker (including the deferred underwriters discounts and commissions) and the
proceeds of the sale of the warrants issued in a private placement to occur prior to the consummation of the IPO are to be deposited,
as described in greater detail in the registration statement and prospectus to be filed with the Securities and Exchange Commission
in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against
the trust account for any reason whatsoever.

 

13.
Amendment; Waiver.  Any amendment hereto or waiver of any provision hereof may be made with, and only with, the
written consent of the Maker and the Payee.

 

14.
Assignment.  No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party
hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment
without the required consent shall be void.

 

[Signature
page follows]

 

    3

     

    

 

IN
WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned
as of the day and year first above written.

 

	 	YELLOWSTONE
    ACQUISITION COMPANY
	 	 	 
	 	By:	/s/
    Alex B. Rozek
	 	Name: 	Alex
    B. Rozek
	 	Title:	Co-President

 

 

 

[Signature
Page to Promissory Note]

 

4ex_205032.htm

Exhibit 10.1

 

 

OPTION AGREEMENT – LOGAN 2 PROJECT

 

This Option Agreement (“OA”) is made on the date set forth below by and between Alpha Energy, Inc., a Colorado Corporation whose address is 4162 Meyerwood Drive, Houston, TX 77025 (“Alpha”) and Kadence Petroleum, LLC, an Oklahoma Limited Liability Company whose address is 3305 E 33rd, Oklahoma City, OK  73120 (“Kadence”). Alpha and Kadence are each a “Party” and together called the “Parties”.

 

Recitals

 

	 	
			A.

				
			The Parties entered into a Purchase and Sale Agreement signed January 28, 2019 (the “2019 PSA”); and

			

 

	 	
			B.

				
			Article II of the 2019 PSA identified certain subject oil and gas interests (the “Project”); and

			

 

	 	
			C.

				
			The 2019 PSA terminated under its own terms on March 29, 2019 (Article IX (b)).

			

 

Agreement

 

In consideration of the mutual promises set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

	 	
			1.

				
			OPTION – Kadence hereby grants a six (6) month Option from the date of this OA (the “Option Period”) to Alpha to fulfill the terms outlined in Paragraph 2 below regarding a purchase of the Project. Kadence agrees that during the Option Period it will not sell or agree to sell the Project to a third party. In exchange for this agreement not to sell on the part of Kadence, Alpha will pay KadenceUS$10,000 per month during the Option Period (“Monthly Payment”). The first Monthly Payment shall be due upon execution of this OA by both Parties, and subsequent Monthly Payments shall be due on the first day of each month following (commencing with October 1, 2020) by wire transfer to an account designated by Kadence. The Monthly Payments are non-refundable and shall be applied against the Option Payment (see Paragraph 2 below).

			

 

	 	
			2.

				
			OPTION FULFILMENT – Alpha shall be considered to have exercised its Option if, prior to the end of the Option Period, it tenders Kadence the difference between $50,000.00 and the sum of its total Monthly Payments to that date (the “Option Payment”). In the event Alpha exercises the Option by payment of the Option Payment, a new PSA covering the Project shall be executed by the Parties following the general terms of the 2019 PSA, updated as may be necessary (the “2020 PSA”, as detailed in Paragraph (3)). The Parties shall work diligently and in good faith to agree on a mutually acceptable new PSA.

			

 

	 	
			3.

				
			2020 PSA – In addition to other emendations that may be legally required, the 2020 PSA shall include the following terms:

			

 

	 	
			a)

				
			CLOSING DATE – Closing for the purchase of the Project shall be held within one (1) month of the payment of the Option Payment. All other dates in the 2019 PSA shall be adjusted accordingly.

			

 

	 	
			b)

				
			PROJECT PAYMENT – At closing, Alpha shall tender to Kadence a cash payment of US$350,000.00 (the “Project Payment”). Prior to Project Payment being tendered by Alpha and in keeping with Section 5.2 of the 2019 PSA, Kadence shall furnish Alpha with items listed in Exhibit “A” (attached hereto, and as may be reasonably amended from time to time by mutual agreement of the Parties).

			

 

 

 

 

	 	
			c)

				
			PRODUCTION PAYMENT – Alpha shall agree at Closing to make a monthly payment equal to three percent (3%) of the net revenue stream (to be calculated as agreed to in the 2020 PSA) from any new wells (not workovers, restarts, or recompletions) drilled in the Project area after the Closing until such time as Kadence shall have accrued US$800,000.00 from such new wells (the “Production Payment”). Together, the Option Payment, Production Payment, and Project Payment shall satisfy the Purchase Price as defined in Article II (2.3) of the 2019 PSA.

			

 

	 	
			d)

				
			PAYABLES – Any outstanding debts or payables carried by Kadence pursuant the Project shall be deducted from the Project or Production Payments.

			

 

	 	
			4.

				
			Terms set forth in this OA are valid only through Friday, September 11, 2020. If Alpha has not received a copy of this Agreement fully executed by Kadence on or before 5 pm Central time on that date, then this Agreement shall automatically terminate and shall be of no further force and effect.

			

 

	 	
			5.

				
			In order to provide notice to third parties of the option provided by this OA, upon execution hereof by the Parties, Alpha shall have the right to record a mutually acceptable Memorandum of this OA in the real property records of the county in which the Project is located.

			

 

 

Executed and Agreed to by the Parties this 8th of September 2020, by:

 

 

 

	Kadence Petroleum, LLC	 	Alpha Energy, Inc.	 
	 	 	 	 
	 	 	 	 
	/s/ Brian Tribble	 	/s/ Jay Leaver	 
	Brian Tribble, Managing Member	 	Jay Leaver, President	 

 

 

 

 

EXHIBIT “A” TO THE ALPHA-KADENCE OPTION  AGREEMENT

 

 

DOCUMENTS NECESSARY FOR THE CONTEMPLATED ASSET PURCHASE TO PROCEED

 

 

General title concerns not adequately addressed during 2019 Due Diligence:

 

	 	
			1.

				
			A valid Certificate of Good Standing for Kadence issued by the Secretary of State of Oklahoma.

			

 

	 	
			2.

				
			An Assignment of interests under the November 2, 2017 Bill of Sale from Abundance to Kadence Operating, LLC (“BOS”), recorded by the County Clerk.

			

 

	 	
			3.

				
			An Agreement or Bill of Sale showing transfer from Kadence Operating, LLC to Kadence.

			

 

	 	
			4.

				
			A recorded Assignment of interests under the applicable instrument of (3) above.

			

 

	 	
			5.

				
			A Statement of Authority (SOA), notarized and recorded, affirming the identity of the legally authorized representative of Kadence.

			

 

	 	
			6.

				
			A Division of Interest (“DOI”) statement covering all working interest owners in the Project, including copies of assignments, name, and address.

			

 

 

 

General items to update 2019 PSA:

 

	 	
			7.

				
			A signed and notarized Affidavit by Kadence affirming that:

			

 

	 	
			a)

				
			all Assets listed in the 2019 PSA under Article II are still owned by it {If not, please list discrepancies}; AND

			

 

	 	
			b)

				
			Kadence has not entered into any other Agreement that may be relevant to the proposed transaction with Alpha {if so, please provide a copy of that Agreement for Alpha to review}; AND

			

 

	 	
			c)

				
			The Subject Interests defined in Article II of the 2019 PSA are not subject to any liens or other legal encumbrances {if so, please provide relevant documentation}, AND

			

 

	 	
			d)

				
			Kadence can renew as of a current date the representations made in Article III of the 2019 PSA.

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