Document:

Exhibit

LOAN AGREEMENT
This Loan Agreement (this “Agreement”) is made as of the 10th day of April, 2018, by and between VISIONARY PRIVATE EQUITY GROUP I, LP, a Missouri limited partnership (the “Lender”), and VICTORY ENERGY CORPORATION, a Nevada corporation (the “Borrower”).  Capitalized terms used, but not otherwise defined, herein have the meanings ascribed to them in the Settlement Agreement (as defined below).
RECITALS
A.On or about the date hereof, Borrower and Lender are entering into a Settlement Agreement and Mutual Release (the “Settlement Agreement”).  The Settlement Agreement contemplates that the Lender may lend funds to the Borrower during the period between the date hereof and the date of the consummation of the Private Placement to cover the Borrower’s working capital needs during that period.
B.The Borrower has requested a loan (the “Loan”) from the Lender in the amount of up to Two Million Dollars ($2,000,000) (the “Loan Amount”).  The Lender has indicated that upon the request of the Borrower it may, in its sole discretion, advance amounts to the Borrower up to the Loan Amount.
C.The Loan will be secured by a first priority security interest in all of the assets of the Borrower including, without limitation, the License. 
AGREEMENTS
In consideration of the foregoing recitals, which are incorporated herein by this reference, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Borrower and the Lender agree as follows:
1.DEFINITIONS
1.1        General Application and Interpretation.  Unless a clear contrary intention appears, as used herein (a) the singular includes the plural and vice versa, (b) reference to any document means such document as amended from time to time, (c) “include” or “including” means including without limiting the generality of any description preceding such term, (d) the word “or” is not exclusive, unless otherwise expressly stated, (e) the terms “hereof,” “herein,” “hereby,” and derivative or similar words refer to this entire Agreement, and (f) headings are for convenience only and do not constitute a part of this Agreement.
2.    LOAN
2.1        Loan.  On the terms and subject to the conditions hereinafter set forth, the Lender may, in its sole discretion and upon the written request of the Borrower, loan to the Borrower up to the sum of $2,000,000.

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2.2        Note.  Each advance of the Loan shall be evidenced by, and the Borrower shall deliver to the Lender immediately upon receipt of each advance from the Lender, a secured convertible promissory note in the form attached hereto as Exhibit A (the “Note”), duly executed by Borrower, dated of even date herewith.  The Note will reflect an original issue discount of ten percent (10%) such that the principal amount of the Note shall be ten percent (10%) more than the amount advanced.  The Note shall not bear any interest in addition to the original issue discount.  The principal amount of the Note shall be due and payable in the manner and at the times set forth in the Note.  Should the principal of the Note become due and payable on any day other than a business day, the maturity thereof shall be extended to the next succeeding business day.  All payments on the Note shall be made to the Lender at its address as specified in the Note in federal or other immediately available funds, and payments shall be applied first to the payment of any costs and expenses owed by the Borrower to the Lender with respect thereto, then to accrued interest and then to principal.  The Borrower agrees that if documentary stamp taxes and intangible taxes are applicable with respect to the execution or delivery of the Note, the Borrower shall pay such tax and consents to the Lender advancing such amount pursuant to the Note for the benefit of the Lender in connection with the payment of such tax.
3.    REPRESENTATIONS AND WARRANTIES
3.1        Lender represents that it has the requisite power to enter into this Agreement and to carry out its obligations hereunder and that the terms of this Agreement have been fully disclosed to its general partner and that the requisite approvals have been obtained, prior to its execution.
3.2        Borrower represents that it has the requisite power to enter into this Agreement and to carry out its obligations hereunder and that the terms of this Agreement have been fully disclosed to its board of directors, and that the requisite approvals have been obtained, prior to its execution.
3.3        Each party represents that this Agreement has been duly executed and delivered and constitutes a valid and binding obligation enforceable in accordance with its terms.
4.    SECURITY
On the date hereof, the Borrower is signing and delivering to the Lender the Note, Section 4 of which constitutes a Security Agreement pursuant to which the Borrower is granting to the Lender a first priority security interest in all of the assets of the Borrower.

5.    FURTHER ASSURANCES
The Borrower shall from time to time, at its sole expense, promptly execute and deliver all further instruments and documents, and take all further actions, as may be necessary and desirable, or that the Lender may reasonably request, in order to enable Lender to exercise and enforce their rights and remedies hereunder.  

6.    EVENTS OF DEFAULT

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The occurrence of any Event of Default under the Note shall be an Event of Default under this Agreement.
7.    MISCELLANEOUS
7.1        Severability.  If any provision of this Agreement or any other of the other documents being entered into in connection with this Agreement shall be determined by any court having jurisdiction to be unlawful or unenforceable, such provision shall be deemed separate and apart from all other provisions of this Agreement, and all remaining provisions of this Agreement shall be fully enforceable.
7.2        Notices.  All notices and other communications that are required or permitted to be given to the parties under this Agreement shall be sufficient in all respects if given in writing and delivered in person, by electronic mail, by telecopy, by overnight courier, or by certified mail, postage prepaid, return receipt requested, to the receiving party at the address specified on the signature page to this Agreement or to such other address as such party may have given to the other by notice pursuant to this Section.  Notice shall be deemed given on the date of delivery, in the case of personal delivery, electronic mail, or telecopy, or on the delivery or refusal date, as specified on the return receipt in the case of certified mail or on the tracking report in the case of overnight courier.
7.3        Choice of Law and Jurisdiction. The laws of the State of Texas shall apply to and control any interpretation, construction, performance or enforcement of this Agreement.  The Parties agree that the exclusive jurisdiction for any legal proceeding arising out of or relating to this Settlement Agreement shall be the State or Federal courts located in Travis County, Texas and the Parties hereby waive any challenge to personal jurisdiction or venue in that court.   
7.4        Counterparts and Facsimile or Electronic Signatures.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one agreement.  A facsimile or electronic signature, including through technology such as DocuSign, to this Agreement shall be deemed an original and binding upon the party against whom enforcement is sought.
[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

LENDER:

VISIONARY PRIVATE EQUITY GROUP I, LP, BY: VISIONARY PE GP I, LLC, 
its General Partner

By:  /s/ Ronald Zamber__________
Name: Ronald Zamber
Title: Senior Managing Director

Address:    1520 South Fifth Street
Suite 308
St. Charles, MO 63303 

BORROWER:

VICTORY ENERGY CORPORATION

By: /s/ Kenny Hill____________
Name: Kenneth Hill
Title: Chief Executive Officer

Address:    3355 Bee Caves Road
Suite 608                
Austin, TX 78746            

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EXHIBIT A

FORM OF NOTE

THIS NOTE HAS BEEN ISSUED WITH “ORIGINAL ISSUE DISCOUNT” FOR U.S. FEDERAL INCOME TAX PURPOSES. THE ISSUER WILL MAKE AVAILABLE TO ANY HOLDER OF THIS NOTE: (1) THE ISSUE PRICE AND ISSUE DATE OF THE NOTE, (2) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THE NOTE, (3) THE YIELD TO MATURITY OF THE NOTE, AND (4) ANY OTHER INFORMATION REQUIRED TO BE MADE AVAILABLE BY U.S. TREASURY REGULATIONS UPON RECEIVING A WRITTEN REQUEST FOR SUCH INFORMATION AT THE FOLLOWING ADDRESS: 3355 BEE CAVES ROAD, SUITE 608, AUSTIN, TX 78746.

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE MAKER, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

SECURED CONVERTIBLE 
ORIGINAL ISSUE DISCOUNT PROMISSORY NOTE

Principal Amount: $[*]                                       [Date]

Loan Amount: $[*]
    
FOR VALUE RECEIVED, on the [*] day of [*], 2018 (the “Funding Date”), the undersigned, VICTORY ENERGY CORPORATION, a Nevada corporation (the “Maker”), promises to pay to the order of VISIONARY PRIVATE EQUITY GROUP I, LP, a Missouri limited partnership, or its assigns (collectively, the “Holder”), the principal sum of [*] ($[*]) (the “Principal Amount”), in lawful money of the United States, together with all costs and expenses due hereunder calculated in the manner hereinafter set forth in this Secured Convertible Original Issue Discount Promissory Note (the “Note”).
This Note is being issued in connection with the entry by the Maker and the Holder into a Loan Agreement, dated April 10, 2018 (the “Loan Agreement”) and is being secured by the security interest granted by the Maker to the Holder pursuant to Section 4 of this Note.  Capitalized terms used, but not otherwise defined, herein have the meanings ascribed to such terms in the Loan Agreement.

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1.Term; Original Issue Discount; Payments

(a)The term of this Note is from the Funding Date until [*], 2018; provided, however, that upon written notice from the Holder to the Maker following the closing of the Private Placement, the Holder may demand immediate full repayment of all obligations under this Note (the “Maturity Date”).  The Maturity Date may be extended by a written agreement between the Holder and the Maker.   
(b)This Note is being issued at an original issue discount of ten percent (10%).  No additional interest (other than Default Interest (as defined below)) shall accrue hereon. This Note has been issued with “original issue discount” for U.S. Federal income tax purposes. The Maker will make available to any holder of this note: (1) the issue price and issue date of the Note, (2) the amount of original issue discount on the Note, (3) the yield to maturity of the Note, and (4) any other information required to be made available by U.S. Treasury Regulations upon receiving a written request for such information at the following address: 3355 Bee Caves Road, Suite 608, Austin, TX 78746. 
(c) The Maker shall pay to the Holder the unpaid Principal Amount in full on the Maturity Date.
2.Acceleration and Events of Default  

In the event that any of the following (each, an “Event of Default”) shall occur:

(a)The Maker shall default in the payment of the Principal Amount of this Note as and when the same shall become due and payable, whether by acceleration or otherwise; or
(b)The Maker shall default in any material manner in the observance or performance of any covenants or agreements set forth in this Note or the Loan Agreement (all as may be amended, restated, extended, supplemented or otherwise modified from time to time, herein collectively called, the “Loan Documents”); or
(c)The Maker shall: (i) admit in writing its inability to pay its debts as they become due; (ii) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Maker or any of its property, or make a general assignment for the benefit of creditors; (iii) in the absence of such application, consent or acquiesce in, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Maker or for any part of its property; or (iv) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Maker, and, if such case or proceeding is not commenced by the Maker or converted to a voluntary case, such case or proceeding shall be consented to or acquiesced in by the Maker or shall result in the entry of an order for relief; 
then, and so long as such Event of Default is continuing for a period of two (2) business days in the case of non-payment under Section 2(a) or 2(b) (and the event which would constitute such Event 

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of Default, if curable, has not been cured), by written notice to the Maker from the Holder, then the Holder shall have the right to declare all obligations of the Maker under this Note to become immediately due and payable without presentment, demand, protest or any other action nor obligation of the Holder of any kind, all of which are hereby expressly waived, and Holder may exercise any other remedies the Holder may have at law or in equity.  If an Event of Default specified in Section 2(c) above occurs, the principal amount of this Note shall automatically, and without any declaration or other action on the part of any Holder, become immediately due and payable.

Upon the occurrence of an Event of Default, interest upon the unpaid Principal Amount shall begin to accrue at a rate equal to the lesser of (a) eight (8) percent per annum or (b) the maximum interest rate allowed from time to time under applicable law (“Default Interest Rate”), and shall continue at the Default Interest Rate until the Event of Default is cured or full payment is made of the unpaid Principal Amount. If any judgment is rendered in favor of the Holder against the Maker, said judgment shall bear interest at the Default Interest Rate or the maximum rate permitted by applicable law from time to time, in effect as of the date of this Note.

3.Prepayment Without Penalty

Maker shall have the right at any time to prepay, in whole or in part, the Principal Amount without penalty, subject to the qualification, however, that no partial prepayment of the Principal Amount shall in any way release, discharge or affect the obligation of the Maker to make full payment in the amount of the balance of said Principal Amount on the Maturity Date.  If Maker desires to prepay this Note, Maker shall provide the Holder with reasonable advance written notice such that Holder will have the opportunity to convert this Note in accordance with Section 5 hereof prior to any such prepayment.

4.Security Agreement

(a)    Grant of Security Interest.  To secure the prompt repayment of each and all of the obligations of the Maker hereunder to the Holder and its assigns, the Maker hereby pledges, grants, assigns and transfers to the Holder and its assigns a continuing lien on and security interest in and to all of the following property of the Maker (collectively the “Collateral”): 
(i)    All accounts, accounts receivable, contract rights, general intangibles related to or arising from any account, debit balances, note, documents, chattel paper, instruments, acceptances, drafts or other forms of obligations and receivables of the Maker arising from the sale or lease of inventory or rendition of services by the Maker, or on behalf of the Maker, in the ordinary course of its business or otherwise (all of the foregoing being herein collectively called “Accounts”), whether or not the same are listed on any schedules, assignments or reports furnished to the Holder from time to time, whether such Accounts are now existing or are created at any time hereafter, and all proceeds therefrom including without limitation, proceeds of insurance thereon and all guaranties, securities, and liens which the Maker may hold for the payment of any Accounts, including without limitation, all rights of stoppage in transit, replevin and reclamation and all other rights and remedies 

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of unpaid vendor or lienor, and any liens held by the Maker as a mechanic, contractor, subcontractor, processor, materialman, machinist, manufacturer, artisan, or otherwise.
(ii)    All documents, instruments, documents of title, policies and certificates of insurance, guaranties, securities, chattel paper, deposits, proceeds of insurance, cash, liens or other property relating to Accounts and owned by the Maker or in which the Maker has an interest, which are now or may hereafter be in the possession of the Maker or as to which the Maker may now or hereafter control possession by documents of title or otherwise.
(iii)    All books records, customer lists, supplier lists, ledgers, evidences of shipping invoices, purchase orders, sales orders, computer records, lists, software, programs, and all other such evidences of the Maker’s business records related to the Accounts, including all cabinets, drawers, etc. that may hold same, all whether now existing or hereafter arising or acquired.
(iv)    All of the Maker’s tangible property of whatever nature or description, whether real or personal, now or hereafter used, owned, held or leases, including without limitation all furniture, fixtures, equipment, inventory and supplies.
(v)    All of the Maker’s intangible property of whatever nature or description, including without limitation, all intellectual property, trade names, trademarks, service marks, computer programs (including source code and object code), patents and copyrights now owned or hereafter acquired and, specifically including, without limitation, the License (as defined in the Transaction Agreement).
(vi)    All renewals, substitutions, replacements, additions, accessions, proceeds, and products of any and all the foregoing.
The Maker’s grant of such security interests to the Holder shall secure the payment and performance of the indebtedness, obligations and liabilities of the Maker to the Holder of every kind and description, direct and indirect, absolute and contingent, due or to become due, now existing or hereafter arising, that relate to this Note and the rights and remedies created hereunder, and all legal and other professional fees incurred in connection with any of the foregoing.  The security interest granted to the Holder hereunder shall be prior to all other interests in the Collateral.
(b)    The Maker hereby agrees that the Holder shall have all the rights and remedies of a secured party under the Uniform Commercial Code as in effect from time to time in the State of Texas.  The Maker agrees that at any time, and from time to time, at the request of the Holder, the Maker shall execute and deliver (or cause to be executed and delivered) any and all such further instruments and/or documents (including without limitation, UCC-1 financing statements) as the Holder may consider reasonably necessary or desirable in order to effectuate, complete, perfect or preserve and maintain the lien created hereby.  Upon any failure by the Maker to do so, the Holder may make, execute, record, file, re-record or refile any and all such instruments and documents for and in the name of the Maker; the Maker hereby irrevocably appoints the Holder as the agent and attorney-in-fact of the Maker to do so; and the Maker shall reimburse the Holder, on demand, for 

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all costs and expenses incurred by the Holder in connection therewith, such amount being added to the indebtedness arising under the Note.
(c)    The security interest created hereunder shall terminate upon the payment in full by the Maker to the Holder of any and all indebtedness, obligations and liabilities arising from, or in any way related to, the Note.
(d)    Events of Default; Acceleration of Maturity. If an Event of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any governmental authority), then, in addition to the remedies provided for elsewhere in this Note and without limitation thereof, at the option of the Holder exercised by written notice to the Maker, the Holder may (A) foreclose the liens and security interests created under this Note or under any other agreement relating to the Collateral, by any available judicial process, (B) enter any premises where any of the Collateral may be located for the purpose of taking possession or removing the same, and (C) sell, assign, lease or otherwise dispose of the Collateral or any part thereof, either at public or private sale or at any broker’s board, in lots or in bulk, for cash, on credit or otherwise, with or without representations or warranties, and upon such terms as shall be acceptable to the Holder, all at the sole option of the Holder and as the Holder, in its sole discretion, may deem advisable and to the extent permitted by law, the Holder may bid or become a purchaser at any such sale, and the Holder shall have the right, at its option, to apply or be credited with the amount of all or any part of the obligations owing by the Maker to the Holder under this Note, against the purchase price bid by the Holder at any such sale.  The net cash proceeds resulting from the collection, liquidation, sale, lease or other disposition of the Collateral (including, without limitation a sale where the Holder is the purchaser) shall be applied first to the expenses (including reasonable attorneys’ and other professional fees) of retaking, holding, storing, processing and preparing the Collateral for sale, selling, collecting, liquidating and the like, and then to the satisfaction of all such obligations, application as to particular obligations or against principal or any interest to be in the sole discretion of the Holder.  The Holder shall give the Maker at least five (5) Business Days prior written notice of the time and place of any public sale of Collateral.  
(e)    Suits for Enforcement.  In case any one or more of the Events of Default shall have occurred and be continuing, the Holder may proceed to protect and enforce rights of the Holder either by suit in equity or by action at law, or both, whether for the specific performance of any covenant or agreement in this Note or in aid of the exercise of any power granted in this Note, including without limitation, possession or foreclosure on the Collateral securing the Note, or the Holder may proceed to enforce the payment of the Note or to enforce any other legal or equitable right of the Holder.
(f)    Remedies Cumulative.  No remedy herein conferred upon the Holder is intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise.

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(g)    Remedies Not Waived.  No course of dealing between the Maker and the Holder and no delay in exercising any rights hereunder shall operate as a waiver of any rights of the Holder.
(h)    Notice of Action of Claimed Defaults.  If a holder of other obligations of the Maker shall give any notice of a claimed default or event of default (as those terms may be defined in the relevant documentation) or shall take any other action with respect to a claimed default or event of default, immediately upon obtaining knowledge thereof, the Maker shall give the Holder written notice specifying such action and the nature and status of the claimed default or event of default.

5.Conversion 

(a)    Generally.  The Holder shall have the right, exercisable at any time from and after the Maturity Date and prior to payment in full of the Principal Amount, to convert all or any portion of the Principal Amount then outstanding, plus all accrued but unpaid interest at the Default Interest Rate (the “Default Interest”), into shares of the Maker’s common stock, par value $0.001 per share (the “Common Stock”) at a conversion price (the “Conversion Price”) equal to $0.75 per share or, such lower price as shares of Common Stock are sold to investors in the Private Placement, subject to adjustment in accordance with Section 5(d) herein (the Common Stock underlying the Note being referred to herein as the “Shares”).  If the Holder exercises its right to convert the Note into Shares pursuant to this Section 5, the Maker shall issue to the Holder on the date of such conversion a warrant (the “Warrant”) to purchase a number of shares of Common Stock equal to the number of Shares issuable upon such conversion of the Note, the terms of which shall be mutually agreeable to the parties; provided that the warrant shall have a five (5) year term and the exercise price shall be $0.75 per share (or such lower exercise price per share of Common Stock as may be afforded to investors in the Private Placement) with the ability of the Holder to exercise the warrant on a cashless basis.  
(b)    Mechanics of Conversion.  The conversion of this Note shall be conducted in the following manner: upon any conversion of any portion of the outstanding Principal Amount of this Note, plus all accrued but unpaid Default Interest thereon: (i) the Holder shall deliver a completed and executed Notice of Conversion attached hereto as Exhibit A and, if such conversion is for the entire outstanding Principal Amount due under this Note surrender and deliver this Note, duly endorsed, to the Maker’s office or such other address which the Maker shall designate against delivery of the certificates representing the Shares to be delivered; (ii) the Maker shall, within three (3) business days of receipt of the Notice of Conversion cause the Maker’s transfer agent to issue such required number of Shares as set forth in the Conversion Notice.  The Holder shall not be required to physically surrender this Note to the Maker until all of the Principal Amount and accrued and unpaid interest under this Note have been converted into Shares or been paid in full, in which case, the Holder shall surrender this Note to the Maker for cancellation within three (3) business days of the date the final Notice of Conversion is delivered to the Maker.  Partial conversions of this Note shall have the effect of lowering the outstanding Principal Amount due hereunder.  The Holder and the Maker shall maintain records showing the number of Shares purchased and the date of such purchases.  In the event of any dispute or discrepancy, the records of the Maker shall be controlling and determinative in the absence of manifest error.  The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, 

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the Principal Amount due hereunder at any given time may be less than the amount stated on the face hereof.
(c)    Reservation of Common Stock.  The Maker covenants that during the period the conversion right exists, the Maker will reserve from its authorized and unissued Common Stock a sufficient number of shares of Common Stock, free from preemptive rights, to provide for the issuance of Shares upon the full conversion of this Note and exercise of the Warrant.  In addition, if the Maker shall issue any securities or make any change to its capital structure which would change the number of Shares into which the Note shall be convertible at the then current Conversion Price, the Maker shall at the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion of the outstanding Note and exercise of the Warrant.
(d)    Adjustments to Conversion Price. 
(i)    Adjustments for Stock Splits and Combinations and Stock Dividends.  If the Maker shall at any time or from time to time after the date hereof, effect a stock split or combination of the outstanding Common Stock or pay a stock dividend in shares of Common Stock, then the Conversion Price shall be proportionately adjusted. Any adjustments under this Section 5(d)(i) shall be effective at the close of business on the date the stock split or combination becomes effective or the date of payment of the stock dividend, as applicable.
(ii)    Merger Sale, Reclassification, etc.  In case of any (A) consolidation or merger (including a merger in which the Maker is the surviving entity), (B) sale or other disposition of all or substantially all of the Maker’s assets or distribution of property to shareholders (other than distributions payable out of earnings or retained earnings), or reclassification, change or conversion of the outstanding securities of the Maker or of any reorganization of the Maker (or any other corporation the stock or securities of which are at the time receivable upon the conversion of this Note) or any similar corporate reorganization on or after the date hereof, then and in each such case the Holder of this Note, upon the conversion hereof at any time thereafter shall be entitled to receive, in lieu of the stock or other securities and property receivable upon the conversion hereof prior to such consolidation, merger, sale or other disposition, reclassification, change, conversion or reorganization, the stock or other securities or property to which such Holder would have been entitled upon such consummation if such Holder had converted this Note immediately prior thereto.  
 (e)    Elimination of Fractional Interests.  No fractional shares of Common Stock shall be issued upon conversion of this Note, nor shall the Maker be required to pay cash in lieu of fractional interests, it being the intent of the parties that all fractional interests shall be eliminated and that all issuances of Common Stock shall be rounded up to the nearest whole share.
6.Legal Rate of Interest

Nothing herein contained shall be construed or so operate as to require payment of interest at a rate greater than the highest permitted rate under applicable law, or to make any payment or to do any act contrary to applicable law. To this end, if during the course of any litigation involving the enforceability of the obligations under this Note, a court having jurisdiction of the subject matter 

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or of the parties to said litigation shall determine that either the original issue discount or default interest rate as set forth herein, or the effect of said discount or rate in relation to the particular circumstances of default resulting in said litigation, are separately or collectively usurious, then the original issue discount or interest rate set forth herein shall be reduced, or the operation and effect thereof ameliorated, to achieve the highest interest rate or charge which shall not be usurious.

7.Costs of Collection

The Maker agrees to pay to the Holder, in addition to the amounts due hereunder, all costs and expenses incurred by the Holder to collect any and all sums due under this Note, including the Holder’s attorneys’ fees, regardless of whether any action or proceeding is commenced. Further, the Maker agrees to pay all applicable documentary stamp taxes and intangible taxes applicable to this Note.  

8.Binding Nature; Assignment

This Note shall bind the Maker and its principals, receivers, administrators, successors and assigns, and shall inure to the benefit of the Holder and principals, receivers, administrators, successors and assigns.  This Note and the obligations hereunder may not be assigned by the Maker or assumed by another party without the prior specific written consent of the Holder.  This Note and the entitlements hereunder may be assigned by the Holder without the consent of the Maker.

9.Waivers by Maker

The Maker hereby waives demand, presentment for payment, notice of protest, and notice of dishonor or nonpayment of this Note.

10.Notice

Any claim, notice, request, instruction or demand required to be given or elected to be given, in connection with this Note shall be in writing and sent via personal delivery or overnight courier or via email with confirmation of receipt, to the Maker or the Holder at the addresses set forth in the Loan Agreement, or such other address to be designated in writing by Maker or Holder.
11.Jury Trial Waiver

The Maker and the Holder each hereby knowingly and voluntarily waive trial by jury and the right thereto in any action or proceeding of any kind, arising under or out of, or otherwise related to or connected with this Note.

12.Governing Law; Mediation

This Agreement shall be governed by and construed under the laws of the State of Texas without regard to the choice of law principles thereof.  

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13.Complete and Voluntary Agreement

This Note, along with the Loan Documents, constitutes the entire understanding of the parties on the subjects covered. The Maker expressly acknowledges and warrants that he/she/it has read and fully understands the terms of this Note; that the Maker has had the opportunity to seek legal counsel of his/her/its own choosing and to have the terms of this Note fully explained to him/her/it; that the Holder has advised the Maker to consult with an attorney prior to signing this Note; that the Maker is not executing this Note in reliance on any promises, representations or inducements other than those contained herein; and that the Maker is executing this Note voluntarily, free of any duress or coercion. If there is any ambiguity between the terms and provisions of this Note and the Loan Documents, then the terms and provisions of the Note shall prevail and control such ambiguity.

14.Miscellaneous

(a)The Maker shall, upon the Holder’s written request, promptly make, execute and deliver to the Holder any and all further documents or instruments the Holder may consider necessary or desirable in order to effectuate, complete or perfect the Maker’s obligations under this Note.
(b)If any provision of this Note is held to be unenforceable for any reason, such provision shall be adjusted rather than voided, if possible, in order to achieve the intent of the Maker and the Holder to the fullest extent possible.  In any event, all other provisions of this Note shall be deemed valid and enforceable to the fullest extent possible.
15.WAIVER OF TRIAL BY JURY
8.    
9.    THE MAKER AND THE HOLDER (BY ACCEPTANCE OF THIS INSTRUMENT) HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO.

[SIGNATURES FOLLOW]

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IN WITNESS WHEREOF, the Maker has signed this Note as of the Funding Date first set forth above.
MAKER:  

VICTORY ENERGY CORPORATION

By:                    
Name: Kenneth Hill
Title: Chief Executive Officer

EXHIBIT A

VICTORY ENERGY CORPORATION
NOTE CONVERSION NOTICE

Reference is made to the Secured Convertible Original Issue Discount Promissory Note in the original principal amount of $[*] of Victory Energy Corporation, a Nevada corporation (the “Maker”), issued to the undersigned (the “Note”).  

In accordance with and pursuant to the terms of the Note, the undersigned hereby elects to convert the entire outstanding principal amount due and owing under the Note[, together with all accrued but unpaid Default Interest thereon,] into shares of Common Stock, $0.001 par value per share, of the Maker (the “Common Stock”), by tendering the original of the Note for cancellation.

Please confirm the following information:

Principal Amount Outstanding
under the Note:                 

[Accrued but unpaid Default Interest
under the Note:______________________]

Conversion Price:                

Number of Shares to be issued:________________________    

Please issue the Shares into which the Note is being converted in the following name and to the following address:

Issue to:                    

Address:_____________________________
______________________________
______________________________

                    
Name of Holder:                
                    
 
Signature of Holder:                

Title:                                             

Date:                                            

1ex-10.1

 ASSET PURCHASE AGREEMENT
 

 This Purchase Agreement (this “Agreement”) is made as of this 6th day of April, 2018, between Spindle, Inc., a Nevada corporation (“Buyer”) and [redacted:  business confidential information] a Delaware Limited Liability Company (the “Seller”).
 

 RECITALS
 

 Seller owns certain assets relating to the payments industry (the “Assets”) and desires and intends to sell the Assets to Buyer at the price and on the terms and subject to the conditions set forth below, in furtherance of a binding term sheet between the parties and filed with the Securities and Exchange Commission on December 11, 2017, as subsequently extended.
 

 The Buyer desires and intends to acquire the Assets from the Seller at the price and on the terms and subject to the conditions set forth below.
 

 AGREEMENT
 

 NOW THEREFORE, in consideration of the covenants and conditions set forth herein, the parties agree as follows:
 

 1.
 Purchase and Sale of Assets
 

 Subject to the terms and conditions of this Agreement, at the Closing (as defined in Section 4 of this Agreement), the Seller will sell, convey, transfer, and assign, upon the terms and conditions hereinafter set forth, to Buyer, free and clear of all liens, pledges, claims, and encumbrances of every kind, nature and description, and Buyer shall purchase and accept from the Seller the Assets.
 

 2.
 Purchase Price
 

 Buyer shall purchase the Assets for aggregate consideration (the “Purchase Price”) as follows, unless adjusted in accordance with Section 7.2 of this Agreement.
 

 2.1
 Consideration
 

 (a)
 The Buyer shall pay to the Seller, at the time of Closing, the sum of [redacted:  business confidential information] (the “First Payment”).
 

 (b)
 The Buyer shall pay to the Seller, no later than eight (8) weeks after Closing, the sum of [redacted:  business confidential information] (the “Second Payment”).
 

 (c)
 The Buyer shall pay to the Seller, no later than sixteen (16) weeks after Closing, the sum of [redacted:  business confidential information] (the “Third Payment”).
 

 (d)
 The Buyer shall pay to the Seller, no later than twenty-four (24) weeks after Closing, the sum of [redacted:  business confidential information] (the “Fourth Payment”).
 

 
 

 2.2
 Recourse
 

 The Closing shall not occur unless and until Buyer can make the First Payment.  Should Buyer fail to make the Second Payment, Third Payment, or Fourth Payment by the times stated in Section 2.1, Buyer shall be entitled to a 45-day cure period in which to make such payment, provided that Buyer continues to undertake reasonable measures to seek additional financing and to generate cash from its business operations.  If payment is not made by the end of the cure period, Buyer shall issue a Promissory Note to Seller for such payment, with 5% interest and secured by certain Assets.
 

 3.
 Assets
 

 The assets of the Seller (“Assets”) include but are not limited to those listed in Schedule 3 to this Agreement.
 

 4.
 Closing
 

 The consummation of the purchase and sale of transactions contemplated herein (the “Closing”) shall take place on May 15, 2018, or at such other time and place as the Buyer and the Seller agree upon orally or in writing. The date upon which the Closing occurs is referred to herein as the “Closing Date.”  The transaction shall have an effective date of January 1, 2018 regardless of the Closing Date.
 

 5.
 Representations and Warranties of the Seller
 

 The Seller represents and warrants to the Buyer as of the date hereof (which representations and warranties shall survive the Closing as provided in Section 13.1 of this Agreement) as follows:
 

 5.1
 Seller Matters
 

 5.1.1
 Good Title
 

 The Seller owns the Assets free and clear of any lien, encumbrance, adverse claim, restriction on sale, transfer, preemptive right, option or other right to purchase, other than a certain right of refusal held by [redacted:  business confidential information] for a period of 30 days from execution of this Agreement, and upon the consummation of the sale of the Assets as contemplated hereby, the Buyer will have good title to the Assets, free and clear of any lien, encumbrance, adverse claim, restriction on sale or transfer, preemptive right, option or other right to purchase.
 

 5.1.2
 Authority
 

 The Seller has all requisite power, right and authority to enter into this Agreement and the documents contemplated hereby (the “Transaction Documents”) to which it is a party, to consummate the transactions contemplated hereby and thereby,
 

 2
 

 
 and to sell and transfer the Assets without the consent or approval of any other person, corporation, partnership, joint venture, organization, other entity or governmental or regulatory authority (“Person”). The Seller has taken, or will take prior to the Closing, all actions necessary for the authorization, execution, delivery and performance of this Agreement and the other Transaction Documents.
 

 5.1.3
 Due Diligence
 

 The Seller has been solely responsible for its own due diligence investigation of the Buyer and its business, and its analysis of the merits and risks of the investment made pursuant to this Agreement, and is not relying on anyone else’s analysis or investigation of the Buyer, its business or the merits and risks of the Common Stock other than professional advisors employed specifically by the Seller to assist the Seller. The Seller believes it has been given access to full and complete information regarding the Buyer, including, in particular, the current financial condition of the Buyer and the risks associated therewith, and has utilized such access to its satisfaction for the purpose of obtaining information about the Buyer; particularly, the Seller has communicated and met with senior executives of the Buyer, for the purpose of asking questions of, and receiving answers from, such persons.
 

 5.2
 Corporate Authority
 

 Seller has full corporate power and authority to execute and deliver this Agreement and the documents contemplated hereby to which it is a party and to perform its obligations hereunder and thereunder. The execution and delivery by Seller of this Agreement, the performance by the Seller of its obligations hereunder and thereunder and the consummation by the Seller of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action. This Agreement constitutes a valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms.
 

 5.3
 Consents and Approvals
 

 No consent, approval or authorization of, or declaration, filing or registration with, any governmental body is required for the execution, delivery and performance by the Seller of this Agreement and the Transaction Documents to which it is a party or for the consummation by the Seller of the transactions contemplated hereby and thereby.  No consent, approval or authorization of any third party is required for the execution, delivery and performance by the Seller of this Agreement and the Transaction Documents to which it is a party and the consummation by the Seller of the transactions contemplated hereby and thereby.
 

 5.4
 Financial Statements
 

 The Seller will provide to Buyer tax returns, payment processing residuals statements, and other financial data as requested by Buyer or a third-party valuation consultant for purposes of conducting a valuation prior to Closing.
 

 

 3
 

 
 

 5.5
 Title to Property; Encumbrances
 

 (a)
 Seller has good and marketable title to all of its owned properties and assets, including all Assets identified in Schedule 3 to this Agreement, free and clear of any payment obligation to any third party or any other lien or encumbrance.
 

 (b)
 With respect to properties and assets it leases, the Seller is in compliance with such leases and holds a valid leasehold interest free of all liens, claims or encumbrances. The Seller is not in default under any lease nor does the Seller have knowledge of any event which, after notice or the passage of time or both, will or may constitute a default under any lease.
 

 5.6
 Contracts
 

 Schedule 5.6 contains a complete and accurate list of all contracts, agreements, arrangements and understandings oral or written, to which the Seller is a party or by which the Seller is bound, including, without limitation, all security agreements, intellectual property licenses and other license agreements, credit agreements, instruments relating to the borrowing of money, leases, rental agreements, purchase orders, sales orders and sale and distribution agreements (“Contracts”). The Contracts are valid, binding and enforceable in accordance with their terms against each party thereto and are in full force and effect; the Seller has performed all obligations imposed on it thereunder. There are not, under any of the Contracts, any defaults or events of default on the part of the Seller or, to the Seller’s knowledge, any other party thereto. True and complete copies of each Contract have been delivered to Buyer. No consent is required from any Person under any of the Contracts in connection with the consummation of the transactions contemplated by this Agreement, and the Seller has not received notice, nor is the Seller otherwise aware, that any party to any such contract intends to cancel, terminate or refuse to renew such contract or to exercise or decline to exercise any option or right thereunder.
 

 5.7
 Patents, Trademarks and Intellectual Property
 

 (a)
 The Seller has sufficient title and ownership of all patents, trade names, trademarks, service marks, copyrights, net names, trade secrets, information, proprietary rights and processes necessary for its business as now conducted and as presently proposed to be conducted without any conflict with or infringement of the rights of others (the “Intellectual Property”).
 

 (b)
 None of the Intellectual Property or the Seller’s rights thereto are being infringed or otherwise violated by any person or entity.
 

 (c)
 The use of the Intellectual Property by the Seller in the operation of its business as now conducted or as proposed to be conducted does not infringe or otherwise violate any rights of any person or entity, and there is no pending or threatened claim, demand, cause of action, suit or proceeding, hearing or investigation (each a “Claim”) alleging any such infringement or violation.
 

 4
 

 
 In addition, there is no pending or threatened claim alleging any defect in or invalidity, misuse or unenforceability of, or challenging the ownership or use of or the Seller’s rights, with respect to any of the Intellectual Property and there is no basis for any such Claim. Furthermore, there is no other Claim made by any person or entity pertaining to the Intellectual Property. None of the Intellectual Property is subject to any judgement, order, award, writ, injunction or decree of any governmental body or arbitrator.
 

 5.8
 Licenses, Permits, Authorizations, etc.
 

 The Seller has received all governmental approvals, authorizations, consents, licenses, orders, registrations and permits of all agencies, whether federal, state, local or foreign (“Permits”) related to the operation of the Seller’s business. The Seller is in compliance with the terms of all Permits, and all Permits are valid and in full force and effect, and no proceeding is pending or threatened, the object of which is to revoke, limit or otherwise affect any Permit. The Seller has not received any notifications of any asserted failure to obtain any Permit.
 

 5.9
 Compliance With Laws
 

 The Seller is and has been in compliance with all laws, statutes, rules, ordinances and regulations promulgated by any governmental body and all judgments applicable to the operation of its business, to its employees or to its property. The Seller has not received notice of any alleged violation (whether past or present and whether remedied or not), nor is the Seller aware of any basis for any claim of any such violation, of any such law, statute, rule, ordinance, regulation or judgment.
 

 5.10
 Full Disclosure
 

 No information furnished by or on behalf of the Seller to Buyer or its representatives in connection with this Agreement or the transactions contemplated by this Agreement is false or misleading. In connection with such information and with this Agreement and the transactions contemplated hereby, the Seller has not made any untrue statement of financial or material fact or omitted to state a fact necessary in order to make the statements made or information delivered, in the light of the circumstances under which they were made or delivered, not misleading.
 

 5.11
 Customers and Suppliers
 

 There is no indication that any customer or supplier of the Seller intends to terminate or modify its relationship with the Seller, or that the consummation of the transactions contemplated by this Agreement and the Transaction Documents will adversely affect the post-Closing relationship of the Buyer with any of the Seller’s customers or suppliers.
 

 5.12
 No Broker
 

 No broker, finder or other financial consultant has acted on behalf of the Seller in connection with this Agreement. The Seller shall indemnify and hold Buyer harmless from any brokers, finders or other consultant fees or commissions incurred or accrued in connection with this Agreement or the transactions contemplated by this Agreement by the Seller.
 

 5
 

 
 

 6.
 Representations and Warranties of Buyer
 

 The Buyer represents and warrants to the Seller and the Seller as follows:
 

 6.1
 Organization, Good Standing, etc.
 

 The Buyer is a corporation, duly organized, validly existing and in good standing under the laws of the State of Nevada. Buyer has all requisite power and authority to own, operate and lease its assets and to carry on its business as it is now conducted.
 

 6.2
 Authority
 

 The Buyer has full power and authority to execute and deliver this Agreement and the Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder. The execution and delivery by the Buyer of this Agreement and Transaction Documents to which it is a party, the performance by the Buyer of its obligations hereunder and thereunder and the consummation by the Buyer of the transactions contemplated hereby and thereby have been duly authorized. This Agreement constitutes a valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms, and the Transaction Documents to which the Buyer is a party, when executed and delivered by the Buyer, will constitute valid and binding obligations of the Buyer, enforceable against the Buyer in accordance with their respective terms.
 

 6.3
 No Conflict
 

 The execution, delivery and performance of this Agreement and/or the Transaction Documents by the Buyer and the consummation of the transactions contemplated hereby or thereby by the Buyer will not (a) violate, conflict with, or result in any breach of, any provision of the Buyer’s articles of incorporation or bylaws; (b) violate, conflict with, result in any breach of, or constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under any contract or judgment to which the Buyer is a party or by which it is bound or (c) violate any applicable law, statute, rule, ordinance or regulation of any governmental body.
 

 7.
 Conditions Precedent to Buyer’s Obligations
 

 The Buyer’s obligations under this Agreement are subject to the satisfaction of each of the following conditions, each of which is material, for the sole benefit of the Buyer and may be waived only in writing by the Buyer:
 

 7.1
 Representations and Warranties
 

 The representations of the Seller contained in Section 5 of this Agreement shall be true on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of the Closing Date.
 

 

 6
 

 
 

 7.2
 Valuation
 

 The Buyer shall have received the result of a third-party valuation (“Valuation”) to support a value of the Assets, or certain of the Assets, of [redacted:  business confidential information] or higher.  Such valuation shall be conducted by a person or entity selected in sole discretion of Buyer and at Buyer’s expense.  Seller shall include [redacted:  business confidential information] in cash as part of the Assets.  The purchase price of the Assets shall be adjusted upwards on a dollar for dollar basis should more than [redacted:  business confidential information] in cash be included in the Assets, and shall be adjusted downwards on a dollar for dollar basis should less than [redacted:  business confidential information] in cash be included in the Assets.  Any such adjustment shall be made to the Fourth Payment.
 

 7.3
 Approvals
 

 All transfers of Permits and all approvals, applications or notices to public agencies, federal, state, local or foreign, the granting or delivery of which is necessary for the consummation of the transactions contemplated hereby shall have been obtained, and all waiting periods specified by law with respect thereto shall have passed.  Approval of Buyer’s Board of Directors shall have been obtained, and approval of any creditors obtained to the extent such approval may be required.  All such transfers and approvals shall be reasonably satisfactory in all respects to the Buyer.
 

 7.4
 Cash for Asset Purchase
 

 The Buyer shall have received the sum [redacted:  business confidential information] cash through the issuance of common stock or other means.
 

 7.5
 Delivery of Certificates
 

 The Seller shall have delivered to the Buyer any certificates or other instruments representing the Assets.
 

 7.6
 Employment of [redacted:  business confidential information]
 

 [Redacted:  business confidential information] have agreed to employment with the Buyer.
 

 7.7
 Due Diligence
 

 The results of the Buyer’s due diligence investigation of the Seller’s Assets shall be satisfactory in all respects to the Buyer, including provision of all requested business information, documents and materials.
 

 

 

 7
 

 
 

 7.8
 No Adverse Changes
 

 From the date of this Agreement to the Closing Date, there shall not have been any material adverse change in (a) the business, operations, assets, liabilities, earnings, condition (financial or otherwise) or prospects of the Seller, and no material adverse change shall have occurred (or be threatened) in any domestic or foreign laws affecting the Seller or in any third party contractual or other business relationships of the Seller.
 

 8.
 Covenants
 

 From the date of this Agreement through the Closing Date, the Seller shall conduct its business in the ordinary course consistent with the Seller’s past practice and shall not engage in any extraordinary transaction without the Buyer’s prior written Consent. Without limiting the foregoing, the Seller shall not, without the Buyer’s prior written consent,
 

 (a)
 dispose of any assets except in the ordinary course of business;
 

 (b)
 increase the annual level of compensation of any person, materially increase the annual level of compensation of any other employee or grant any unusual or extraordinary bonuses, benefits or other forms of direct or indirect compensation to any employee, officer, director or consultant;
 

 (c)
 initiate, increase, terminate, amend or otherwise modify any plan for the benefit of employees;
 

 (d)
 issue any equity securities or options, warrants, rights or convertible securities;
 

 (e)
 cause assets of the Seller to be distributed to any of its Sellers or other persons except by way of regular compensation;
 

 (f)
 borrow any funds, under existing credit lines or otherwise, except as reasonably necessary for the ordinary operation of the Seller’s business in a manner, and in amounts, in keeping with historical practices; or
 

 (g)
 forgive or cancel any indebtedness or waive any claims or rights of material value (including, without limitation, any indebtedness owing by any Seller, officer, director, employee or affiliate of the Seller).
 

 9.
 Further Action
 

 Upon the terms and subject to the conditions hereof, each of the parties shall (a) make promptly its respective filings, and thereafter make any other required submissions, under applicable laws with respect to the transactions contemplated hereby and shall cooperate with the Buyer with respect to such filings and submissions and (b) use its best efforts to take, or cause to be taken, all appropriate action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated hereby, including, without limitation, using its best efforts to obtain all waivers, licenses, permits, consents, approvals, authorizations, qualifications and orders of 
 

 8
 

 
 governmental authorities and parties to contracts as are necessary for the consummation of the transactions contemplated hereby. In case at any time after the Closing Date any further action is necessary or desirable to carry out the purposes of this Agreement, each party to this Agreement shall use its best efforts to take all such action. Neither party shall undertake any course of action inconsistent with this Agreement or that would make any representations, warranties or agreements made by such party in this Agreement untrue or any conditions precedent to this Agreement unable to be satisfied at or prior to the Closing.
 

 10.
 Taxes
 

 The Seller shall be responsible for the payment of all transfer, sales and use and documentary taxes, filing and recording fees and similar charges that may be payable in connection with the transactions contemplated by this Agreement.
 

 11.
 Transaction Costs
 

 Each party shall be responsible for its own costs and expenses incurred in connection with the preparation, negotiation and delivery of this Agreement and the Transaction Documents, including but not limited to attorneys’ and accountants’ fees and expenses; except that in no event shall any of such costs or expenses be borne by or charged to the Seller.
 

 12.
 Attorneys’ Fees and Costs
 

 In the event that a party commences a legal proceeding (including arbitration pursuant to Section 14.2 of this Agreement) to enforce its rights under this Agreement, the substantially prevailing party shall be entitled to recover its attorneys’ fees and costs from the non-prevailing party or parties, including those incurred in any arbitration, bankruptcy or appeal procedure.
 

 13.
 Survival and Indemnification
 

 13.1
 Survival
 

 The covenants and agreements of the Buyer and Seller contained in this Agreement shall survive the Closing and shall continue until all obligations with respect thereto shall have been performed or satisfied or shall have been terminated in accordance with their terms, except that the representation and warranties in Section 5.1.1 shall survive forever, and such representations and warranties shall not be deemed waived or otherwise affected by any investigation made or any knowledge acquired with respect thereto.
 

 13.2
 In General
 

 (a) The Seller shall indemnify, defend and hold harmless Buyer from and against all claims, damages, losses, liabilities, costs, expenses (including, without limitation, settlement costs and any legal, accounting or other expenses for investigating or defending any actions or threatened actions) (“Damages”) incurred by the Seller prior to the Closing Date or resulting from:
 

 

 9
 

 
 

 (i) any breach by the Seller of any representation or warranty in this Agreement
 

 (ii) any breach of any covenant, agreement or obligation of the Seller contained in this Agreement;
 

 (iii) any misrepresentation contained in any statement, certificate or schedule furnished by or on behalf of the Seller pursuant to this Agreement or in connection with the transactions contemplated thereby;
 

 (iv) any state and local income, sales, business and occupation, franchise, or other activity-based tax liabilities incurred by the Seller on or prior to the Closing Date, and any taxes arising out of or resulting from the payment of the Purchase Price; or
 

 (v) any claims or legal proceedings against the Seller arising prior to the Closing Date, other than claims from third parties regarding the execution of this Agreement or the entry into of the transaction contemplated by this Agreement.
 

 (b) The Buyer shall indemnify, defend and hold harmless Seller from and against all claims, damages, losses, liabilities, costs, expenses (including, without limitation, settlement costs and any legal, accounting or other expenses for investigating or defending any actions or threatened actions) (“Damages”) incurred by the Buyer prior to the Closing Date or resulting from:
 

 (i) any breach by the Buyer of any representation or warranty in this Agreement;
 

 (ii) any breach of any covenant, agreement or obligation of the Buyer contained in this Agreement;
 

 (iii) any misrepresentation contained in any statement, certificate or schedule furnished by or on behalf of the Buyer pursuant to this Agreement or in connection with the transactions contemplated thereby;
 

 (iv) any state and local income, sales, business and occupation, franchise, or other activity-based tax liabilities incurred by the Buyer on or prior to the Closing Date; or
 

 (v) any claims or legal proceedings against the Buyer arising prior to the Closing Date.
 

 13.3
 Claims for Indemnification
 

 Whenever any claim shall arise for indemnification under Section 13 of this Agreement, the party seeking indemnification (the “Indemnified Party”) shall promptly notify the party from whom indemnification is sought (the “Indemnifying Party”) of the existence of the claim and, when known, the facts constituting the basis for such claim.
 

 10
 

 
 In the event any such claim for indemnification is made resulting from or in connection with any claim or legal proceedings by a third party, the notice to the Indemnifying Party shall specify, if known, the amount or an estimate of the amount of the liability arising from such claim. The Indemnified Party shall not settle or compromise any claim by a third party for which it is entitled to indemnification without the prior written consent of the Indemnifying Party, which consent shall not unreasonably be withheld, unless suit shall have been instituted against it and the Indemnifying Party shall not have taken control of such suit after notification as provided in Section 13.4 of this Agreement.
 

 13.4
 Defense by Indemnifying Party
 

 In connection with any claim giving rise to indemnity resulting from or arising out of any claim or legal proceeding by a person or entity who is not a party to this Agreement, the Indemnifying Party at its sole cost and expense may, upon written notice to the Indemnified Party, assume the defense of any such claim or legal proceeding if it acknowledges to the Indemnified Party in writing its obligations to indemnify the Indemnified Party with respect to all elements of such claim. The Indemnified Party shall be entitled to participate in (but not control) the defense of any such action, with its counsel and at its own expense. If the Indemnifying Party does not assume the defense of any such claim or resulting litigation within thirty (30) days after the date that notice of such claim is received from the Indemnified Party, (a) the Indemnified Party may defend against such claim or litigation, in such manner as it may deem appropriate, including, but not limited to, settling such claim or litigation, after giving notice of the same to the Indemnifying Party, on such terms as the Indemnified Party may deem appropriate, and (b) the Indemnifying Party shall be entitled to participate in (but not control) the defense of such action, with its counsel and at its own expense. If the Indemnifying Party thereafter seeks to question the manner in which the Indemnified Party defended such third party claim or the amount or nature of any such settlement, the Indemnifying Party shall have the burden to prove by a preponderance of the evidence that the Indemnified Party did not defend or settle such third party claim in a reasonably prudent manner.
 

 14.
 Miscellaneous
 

 14.1
 Assignment
 

 No party may assign any of its rights or obligations hereunder without the prior written consent of the other party. This Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns.
 

 14.2
 Arbitration
 

 Any claims or disputes arising out of this Agreement which cannot be resolved amicably between the parties shall be settled by submission to the American Arbitration Association (the “AAA”) for binding arbitration to be conducted in Mesa, Arizona, or upon mutual agreement of the parties any other location. The arbitration shall be conducted by one arbitrator mutually agreed upon by the parties, or, if the parties cannot agree, chosen in accordance with the AAA rules, and resolution of the dispute by such arbitrator shall be binding and conclusive upon the parties.
 

 11
 

 
 On prior leave of the arbitrator, the parties may engage in limited discovery, including limited depositions. Any award made pursuant to this Section 14.2 may be entered in and enforced by any court having jurisdiction, and the parties consent and commit themselves to the jurisdiction of the courts of the State of Arizona for the purpose of the enforcement of any such award. The arbitrator shall award attorneys’ fees and costs to the substantially prevailing party in accordance with Section 12 of this Agreement. The fees of the arbitrator shall be borne equally by the parties except that, in the discretion of the arbitrator, any award may include a party’s share of such fees.
 

 14.3
 Entire Agreement
 

 This Agreement embodies and constitutes the entire understanding among the parties with respect to the transactions contemplated by this Agreement, and all prior or contemporaneous agreements, understandings, representations and statements between the parties, oral or written, are merged into and superseded by this Agreement.
 

 14.4
 Modification and Waiver
 

 Neither this Agreement nor any of its provisions may be modified, amended, discharged or terminated except in writing signed by the party against which the enforcement of such modification, amendment, discharge or termination is sought, and then only to the extent set forth in such writing. No failure of a party to insist upon strict performance by the other party of any of the terms and conditions of this Agreement shall constitute or be deemed to be a waiver of any such term or condition, or constitute an amendment or waiver of any such term or provision by course of performance, and each party, notwithstanding any failure to insist upon strict performance, shall have the right thereafter to insist upon strict performance by the other party of any and all of the terms and conditions of this Agreement. Any party may, in its sole and absolute discretion, waive, only in writing, any condition set forth in this Agreement to such party’s obligations under this Agreement which is for the sole benefit of the waiving party, in which event the non-waiving party or parties shall be obligated to close the transaction upon all of the remaining terms and conditions of this Agreement.
 

 14.5
 Notices
 

 Any notice required or permitted under this Agreement shall be in writing, and shall be delivered personally or sent by first class certified mail, or by air courier, postage or other charges prepaid, to the parties at the following addresses:
 

 	 	 	
	 to the Seller:
	  
	 [redacted:  business confidential information]

	  
	  

	 to Buyer:
	  
	 Spindle, Inc.
 201 S. Alma School Road
 Suite 12500
 Mesa, AZ 85210
 Attention: Chief Financial Officer

 

 

 

 12
 

 
 

 or to such other address or addresses as the parties may from time to time specify in writing. Notice shall be provided by air courier and shall be deemed effective upon the earlier of actual delivery to the recipient or six days after the date on which such notice was delivered to the courier service. If notice is sent in any manner other than as provided by this Section 14.5, notice shall be deemed received when actually received by the party to whom the notice was delivered.
 

 14.6
 Governing Law; Severability
 

 This Agreement shall be governed for all purposes by the laws of the State of Nevada applicable to agreements executed and to be wholly performed in Nevada. Nothing contained in this Agreement shall be construed so as to require the commission of any act contrary to law, and whenever there is any conflict between any provision contained in this Agreement and any present or future statute or law, ordinance or regulation or judicial ruling or governmental decision with the force of law contrary to which the parties have no legal right to contract, the latter shall prevail, but the provision of the Agreement which is affected shall be limited only to the extent necessary to bring it within the requirements of such law, ruling or decision without invalidating or affecting the remaining provisions of the Agreement.
 

 14.7
 Counterparts
 

 This Agreement may be executed in counterparts, each of which shall be an original, but such documents shall constitute one and the same document.
 

 14.8
 Contract Interpretation
 

 The parties acknowledge that they have caused this Agreement to be reviewed and approved by legal counsel of their own choice. This Agreement has been specifically negotiated, and any presumption that an ambiguity contained in this Agreement shall be construed against the party that caused this Agreement to be drafted shall not apply to the interpretation of this Agreement.
 

 14.9
 Other Parties
 

 Nothing contained in this Agreement shall be construed as giving any person, firm, corporation or other entity, other than the parties to this Agreement and their successors and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any term or condition contained in this Agreement.
 

 14.10
 Incorporation by Reference
 

 All attached exhibits and schedules are incorporated as terms of this Agreement by this reference.
 

 

 [Signature page follows]
 

 13
 

 
 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective representatives hereunto authorized as of the day and year first above written.
 

  	 	 	
	 THE SELLER:

	  

	 [redacted:  business confidential information]a Delaware Limited Liability Company

	  
	  

	 By:
	  
	  

	  
	  
	 [redacted:  business confidential information]

	  
	  
	 Its Authorized Manager

	  

	  

	 BUYER:

	  

	 SPINDLE, INC.
 a Nevada corporation

	  
	  

	 By:
	  
	  

	  
	  
	 CEO

	  
	  
	 Its Authorized Officer

  
 

 

 

 

 

 

 

 

 

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