Document:

ex10-5.htm

Exhibit 10.5

FORM OF SUBSIDIARY GUARANTY

This Subsidiary Guaranty (the “Guaranty”) is made and entered into on  , 20__, by and between _____________________, a ______________ [corporation] with its principal place of business located at ______________________ (the “Guarantor”), and VICTORY ENERGY CORPORATION and its endorsees, transferees, successors and assigns (collectively, the “Lender”).

BACKGROUND

On February 26, 2015, the Lender entered into a Pre Merger Loan and Funding Agreement (the “Loan Agreement”) with Lucas Energy, Inc. (the “Debtor”) pursuant to which the Lender agreed to loan up to $2,000,000.00 to Debtor, as evidenced by Debtor’s Secured Delayed Draw Term Note to the Lender dated February 26, 2015 (the “Note”).  Capitalized terms used and not otherwise defined herein have the meanings set forth in the Note or the Loan Agreement.

The Guarantor is a newly-formed, wholly-owned subsidiary of Debtor.  As such, Debtor or the Guarantor is required to enter into certain agreements (including this Guaranty) with the Lender pursuant to Section 4(h) of the Loan Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of their respective promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties, the parties hereby agree as follows:

1.           Guaranty.     The Guarantor hereby unconditionally, absolutely and irrevocably guarantees and promises to pay to the Lender, on demand and without offset, in lawful money of the United States, any and all present or future indebtedness and/or obligations of Debtor owing to the Lender under the Closing Documents and any amendments thereto, including, but not limited to, the repayment to the Lender of all sums which are presently due and owing or which may in the future become due and owing by Debtor under the Note or otherwise (the “Guarantied Obligations”).  The Guarantied Obligations shall be interpreted in the most comprehensive sense and shall include, without limitation, any and all advances, debts, obligations, and liabilities of Debtor, heretofore, now, or hereafter made, incurred, or created, whether voluntarily or involuntarily (including, without limitation, any and all attorneys’ fees, costs, premiums, charges, and/or interest owed by Debtor to the Lender, arising under or in connection with the Closing Documents), whether due or not due, absolute or contingent, liquidated or unliquidated, determined or undetermined, whether Debtor may be liable individually or jointly with others, whether recovery upon such indebtedness may be or hereafter becomes barred by any statute of limitations or whether such indebtedness may be or hereafter become otherwise unenforceable, and includes Debtor's prompt, full and faithful performance, observance and discharge of each and every term, condition, agreement, representation, warranty, undertaking and provision to be performed by Debtor under the Closing Documents.  The Guarantor hereby acknowledges that it is a wholly-owned subsidiary of the Debtor and that the Guarantor derives benefit from the financial accommodations provided by the Lender  to Debtor arising under the Closing Documents.

 

  

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2.           Irrevocability.

 

(a)            This Guaranty shall be and remain effective as long as any of the Guarantied Obligations remains unpaid or unperformed, and, prior to full and final payment and performance of the Guarantied Obligations, this Guaranty shall be irrevocable and any attempt by the Guarantor to terminate Guarantor's liability hereunder other than by full and final payment and performance of the Guarantied Obligations shall be of no force or effect.

 

(b)           This Guaranty shall continue in full force and effect until the Guarantied Obligations are fully paid, performed and discharged.  The Guarantied Obligations shall not be considered fully paid, performed and discharged unless and until all payments by Debtor to the Lender are no longer subject to any right on the part of any individual or entity whomsoever, including, but not limited to, Debtor, Debtor as a debtor-in-possession, and/or any trustee in bankruptcy, to set aside such payments or seek to recoup the amount of such payments, or any part thereof.  The foregoing shall include, by way of example and not by way of limitation, all rights to recover preferences voidable under Title 11 of the United States Code.  In the event that any such payments by Debtor to the Lender are set aside after the making thereof, in whole or in part, or settled without litigation, to the extent of such settlement, all of which is within the Lender's discretion, the Guarantor shall be liable for the full amount the Lender is required to repay, plus costs, interest, attorneys' fees and any and all other expenses which the Lender reasonably paid or incurred in connection therewith.

 

3.           Primarily Liable.

 

(a)           The Guarantor agrees that it is directly and primarily liable to the Lender, that the Guarantied Obligations hereunder are independent of the obligations of Debtor, or of any other guarantor, and that a separate action or actions may be brought and prosecuted against the Guarantor, whether action is brought against Debtor or any other guarantor or whether Debtor or any other guarantor is joined in any such action or actions.  The Guarantor agrees that any releases which may be given by the Lender to Debtor or any other guarantor or endorser shall not release the Guarantor from this Guaranty.

 

(b)           As a condition to payment or performance by the Guarantor under this Guaranty, the Lender shall not be required to, and the Guarantor hereby waives any and all rights to require the Lender to: (i) prosecute or seek to enforce any remedies against Debtor or any other individual or entity liable to the Lender on account of the Guarantied Obligations and/or (ii) require the Lender to seek to enforce or resort to any remedies with respect to any security interests, liens or encumbrances granted to the Lender by Debtor or any other individual or entity on account of the Guarantied Obligations.

 

4.           Acceleration.  In the event that any bankruptcy, insolvency, receivership or similar proceeding is instituted by or against the Guarantor and/or Debtor or in the event that either the Guarantor or Debtor becomes insolvent, makes an assignment for the benefit of creditors, or attempts to effect a composition with creditors, or upon any default of Guarantor’s obligations hereunder, then, at the Lender’s election, without notice or demand, the obligations of the Guarantor created hereunder shall become due, payable and enforceable against the Guarantor whether or not the Guarantied Obligations are then due and payable.

 

  

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5.           Non-Impairment.  The Guarantor also agrees that this Guaranty shall not be impaired by any waiver, modification, supplement, extension, accord and satisfaction, amendment or termination of any contract or agreement (or any portion thereof) to which the Lender and Debtor may hereafter agree, nor by any modification, release, or other alteration of any of the Guarantied Obligations or of any security therefor, nor by any agreements or arrangements whatsoever with Debtor or anyone else.

 

6.           Altering the Guarantied Obligations.  The Guarantor hereby authorizes the Lender, without notice or demand and without affecting its liability hereunder, from time to time to:

 

(a)           renew, compromise, extend, accelerate, amend, waive or otherwise change the time for payment or any of the other provisions of any of the Guarantied Obligations, or any part thereof, including, without limitation, increasing or decreasing the rate of interest thereof;

 

(b)           take and hold security for the payment of the Guarantied Obligations, and exchange, enforce, waive, and release any such security;

 

(c)           apply such security and direct the order or manner of sale thereof as the Lender in its discretion may determine;

 

(d)           release or substitute any one or more endorser(s) or guarantor(s); and

 

(e)           assign, without notice, this Guaranty in whole or in part and/or the Lender's rights hereunder to anyone at any time.

 

The Guarantor agrees that the Lender may do any or all of the foregoing in such manner, upon such terms, and at such times as the Lender, in its discretion, may deem advisable, without, in any way or respect, impairing, affecting, reducing or releasing the Guarantor from its obligations hereunder and the Guarantor hereby consents to each and all of the foregoing acts, events and/or occurrences.

7.           Waivers.

 

(a)           The Guarantor hereby waives any right to assert against the Lender any defense (legal or equitable), set-off, counter-claim, and/or claim which the Guarantor may now or at any time hereafter have against Debtor and/or any other individual or entity liable to the Lender in any way or manner, except the defense of discharge by payment in full.

 

(b)           The Guarantor hereby waives all defenses, counterclaims and off-sets of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity and/or enforceability of any of the Closing Documents.

 

  

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(c)           The Guarantor hereby waives any right of subrogation the Guarantor has or may have as against Debtor with respect to the Guarantied Obligations.  In addition, the Guarantor hereby waives any right to proceed against Debtor, now or hereafter, for contribution, indemnity, reimbursement, and any other suretyship rights and claims, whether direct or indirect, liquidated or contingent, whether arising under express or implied contract or by operation of law, which the Guarantor may now have or hereafter have as against Debtor with respect to the Guarantied Obligations.  The Guarantor also hereby waives any right to recourse to, or with respect to, any asset of Debtor.  The Guarantor agrees that in light of the immediately foregoing waivers, the execution of this Guaranty shall not be deemed to make the Guarantor a “creditor” of Debtor, and that for purposes of Sections 547 and 550 of the United States Bankruptcy Code (11 U.S.C. Sections 547, 550), the Guarantor shall not be deemed a “creditor” of Debtor.

 

(d)           The Guarantor hereby waives all presentments, demands for performance, notices of non-performance, protests, notices of protest, notices of dishonor, notices of default, notice of acceptance of this Guaranty, and notices of the existence, creation, or incurring of new or additional indebtedness, and all other notices or formalities to which the Guarantor may be entitled.

 

(e)           The Guarantor also waives all rights and defenses that the Guarantor may have because the Guarantied Obligations are now or hereafter secured by real property.  This means, among other things: (i) the Lender may collect from the Guarantor without first foreclosing on any real or personal property collateral pledged by Debtor and (ii) if the Lender forecloses on any real property collateral pledged by Debtor, (A) the amount of the debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price and (B) the Lender may collect from the Guarantor even if the Lender, by foreclosing on the real property collateral, has destroyed any right the Guarantor may have to collect from Debtor.  This is an unconditional and irrevocable waiver of any rights and defenses the Guarantor may have because Debtor’s debt is or may hereafter be secured by real property.

 

(f)           The Guarantor waives all rights and defenses arising out of an election of remedies by the Lender, even though that election of remedies, such as non-judicial foreclosure with respect to security for the Guarantied Obligations, has destroyed Guarantor's rights of subrogation and reimbursement against the principal by the operation of applicable law or otherwise.

 

(g)           The Guarantor waives any right to claim that the Lender has failed to proceed in a commercially reasonable manner in connection with the Lender’s foreclosure upon any security pledged by Debtor.

 

(h)           WITHOUT LIMITING THE GENERALITY OF ANY OTHER WAIVER OR OTHER PROVISION SET FORTH IN THIS GUARANTY, THE GUARANTOR HEREBY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY AND ALL BENEFITS OR DEFENSES ARISING DIRECTLY OR INDIRECTLY UNDER ANY APPLICABLE STATE LAW.

 

  

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8.           Subordination.  Any and all present and future debts and obligations of Debtor to the Guarantor are hereby postponed in favor of and subordinated to the full payment and performance of all present and future debts and obligations of Debtor to the Lender.  All monies or other property of the Guarantor at any time in the Lender's possession may be held by the Lender as security for any and all obligations of the Guarantor to the Lender no matter how or when arising, whether absolute or contingent, whether due or to become due, and whether under this Guaranty or otherwise.  The Guarantor also agrees that the Lender's books and records showing the account between the Lender and Debtor shall be admissible in any action or proceeding and shall be binding upon the Guarantor for the purpose of establishing the terms set forth therein and shall constitute prima facie proof thereof.

 

9.           Debtor’s Financial Condition.  The Guarantor is presently informed of the financial condition of Debtor and of all other circumstances which a reasonable inquiry would reveal and which bear upon the risk of nonpayment of the Guarantied Obligations.  The Guarantor hereby covenants that it will continue to keep itself informed of Debtor's financial condition, the status of other guarantors, if any, and of all other circumstances which bear upon the risk of nonpayment.  Absent a written request for such information by the Guarantor to the Lender, the Guarantor hereby waives its right, if any, to require the Lender to disclose to it any information which the Lender may now or hereafter acquire concerning such condition or circumstances including, but not limited to, the release of or revocation by any other guarantor.

 

10.         Miscellaneous.

 

(a)           Each of the rights, powers and remedies of the Lender provided in this Guaranty or now or hereafter existing at law or in equity shall be cumulative and concurrent, and the exercise by the Lender of any one or more of such rights, powers or remedies shall not preclude the Lender’s simultaneous or later exercise of any or all such other rights, powers, or remedies.  No failure or delay on the part of the Lender to exercise any right, power or remedy shall operate as a waiver thereof, and no notice or demand which may be given or made upon the Guarantor by the Lender shall limit or impair the Lender’s right to take any action or to exercise any right, power or remedy without notice or demand.

 

(b)           This Guaranty shall continue and remain in full force and effect until the Guarantied Obligations, together with all accrued interest and costs of collection, have been paid in full and satisfied.

 

(c)           This Guaranty contains the entire understanding of the parties with respect to its subject matter and supersedes all prior agreements, negotiations and understandings, written or oral, with respect to such subject matter.  No provision of this Guaranty shall be waived or amended other than by an instrument in writing signed by the party to be charged with enforcement.

 

(d)           This Guaranty shall be deemed to have been made in the state of Texas and the validity of this Guaranty, its construction, interpretation and enforcement, and the rights of the Guarantor and the Lender and concerning any collateral securing this Guaranty, shall be determined under, governed by and construed in accordance with the laws of the state of Texas.  The Guarantor agrees that all actions or proceedings arising in connection with this Guaranty shall be tried and litigated only in the state and federal courts located in Harris County, Texas.  The Guarantor waives any right it may have to assert the doctrine of forumnonconveniens or to object to such venue and hereby consents to any court ordered relief.

 

  

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(e)           This Guaranty may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement.

 

(f)           Any notices required or permitted to be given under the terms of this Agreement shall be in writing and sent by U. S. Mail or delivered personally or by overnight courier or via facsimile or e-mail (if via facsimile or e-mail, to be followed within one (1) business day by an original of the notice document via overnight  courier) and shall be effective (i) five (5) business days after being placed in the mail, if sent by registered mail, return receipt requested, (ii) upon receipt, if delivered personally, (iii) upon delivery by facsimile or e-mail (if received between 8:00 a.m. and 5:00 p.m. PST; otherwise delivery shall be considered effective the following business day) or (iv) one (1) business day after delivery to a courier service for overnight delivery, in each case properly addressed to the party to receive the same. The addresses for such communications shall be as set forth on the signature pages to this Agreement.  Each party shall provide written notice to the other party of any change in address.

 

(g)           The headings of this Guaranty are for convenience of reference and shall not form a part of, or affect the interpretation of this Guaranty.  No uncertainty or ambiguity herein shall be construed or resolved against the Guarantor or the Lender, whether under any rule of construction or otherwise.  This Guaranty shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties.

 

(h)           If any provision of this Guaranty shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Guaranty in that jurisdiction or the validity or enforceability of any provision of this Guaranty in any other jurisdiction.

 

(i)           No party shall assign this Guaranty or any rights or obligations hereunder without the prior written consent of the other parties hereto; provided, however, the Lender may assign some or all of its rights and obligations hereunder to any assignee of all or any part of the Note in accordance with the terms of the Loan Agreement.

 

(j)           This Guaranty is intended for the benefit of the parties hereto and their respective successors and permitted assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other individual or entity.

 

(k)           Each party shall do and perform, or cause to be done and performed, at its expense (subject to any contrary provision in the Loan Agreement), all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Guaranty and the consummation of the transactions contemplated hereby.

 

  

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(l)           If either party to this Guaranty shall bring any action for relief against the other arising out of or in connection with this Guaranty, in addition to all other remedies to which the prevailing party may be entitled, the losing party shall be required to pay to the prevailing party a reasonable sum for attorney's fees and costs actually incurred in bringing or defending such action and/or enforcing any judgment granted therein, all of which shall be deemed to have accrued upon the commencement of such action and shall be paid whether or not such action is prosecuted to judgment.  Any judgment or order entered in such action shall contain a specific provision providing for the recovery of attorney's fees and costs actually incurred in enforcing such judgment.  For the purposes of this paragraph, attorney's fees shall include, without limitation, fees incurred with respect to the following:  (i) post-judgment motions, (ii) contempt proceedings, (iii) garnishment, levy and debtor and third party examinations, (iv) discovery, (v) bankruptcy litigation and (vi) any appellate proceedings.

 

(m)           THE PARTIES EACH WAIVE, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO THIS GUARANTY.

 

  

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IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to be duly executed by their respective authorized persons on the date first written above.

	  	
The Guarantor:

	  
	  	  	  	  
	  	
[NAME OF SUBSIDIARY]

	  
	  	  	  	  
	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  
	  	  	
Title:

	  
	  	  	  	  
	  	
The Lender:

	  
	  	  	  	  
	  	
VICTORY ENERGY CORPORATION

	  
	  	  	  	  
	  	
By:

	  	  
	  	  	
Name:

	  
	  	  	
Title:

	  

 

 

 

 8ex10-6.htm

Exhibit 10.6

 

 

 

	
The Parties to that Certain 

Pre Merger Collaboration Agreement,

dated February 26, 2015

	March 3, 2015   

 

Re: Amendment No. 1 to Pre Merger Collaboration Agreement, dated February 26, 2015 (the “Collaboration Agreement”), among VICTORY ENERGY CORPORATION, LUCAS ENERGY, INC., AURORA ENERGY PARTNERS, NAVITUS ENERGY GROUP, and AEP ASSETS, LLC.

Gentlemen:

On February 26, 2015, each of the Parties entered into the Collaboration Agreement.  The Parties now desire to amend the Collaboration Agreement as set forth in this amendment (the “Amendment”).  Capitalized terms used, but not otherwise defined herein, have the meanings ascribed to them in the Collaboration Agreement.

	
  

	
1.

	
Victory to Acquire Well Rights Instead of Sub.  The Parties hereby amend the Collaboration Agreement so that Lucas assigns the Well Rights to Victory instead of Sub.  Accordingly, the Transfer Documents set forth in Exhibit B to the Collaboration Agreement are hereby amended and restated as the new Transfer Documents set forth as Attachment 1 to this Amendment.

	
  

	
2.

	
Transfer of Well Rights to Aurora and Sub following Funding.  Sub shall continue to be responsible for satisfying the Well Funding Requirements as specified in Section 3 of the Collaboration Agreement.  Upon complete payment and satisfaction of the Well Funding Requirements, Victory shall contribute the Well Rights to Aurora and, in turn, Aurora shall immediately contribute such Well Rights to Sub.

	
  

	
3.

	
Amendment to Section 4 of Collaboration Agreement.  Section 4 of the Collaboration Agreement is hereby amended so that Victory shall become the maker of the Note instead of Sub. Accordingly, the form of Note set forth in Exhibit C to the Collaboration Agreement is hereby amended and restated as the new form of Note set forth as Attachment 2 to this Amendment.

	
  

	
4.

	
No other Amendments.  Except as aforesaid, the Collaboration Agreement remains unmodified and in full force and effect.

 

[Signature page follows]

 

  

Victory Energy Corporation (OTCQX: VYEY)

 

3355 Bee Caves Road, Suite 608, Austin, TX  78746     Phn (512) 347-7300    Fax (866) 234-9806

  

  

  

 

 

Very truly yours,

VICTORY ENERGY CORPORATION

By:  /s/ Fred Smith                                  

Name: Fred Smith

Title: Chief Financial Officer

Accepted and agreed to as of the date first above written:

	
NAVITUS ENERGY GROUP

 

By: JAMES CAPITAL CONSULTING LLC,

its Managing Partner

 

By:  /s/ Ronald W. Zamber                               

Name: Ronald W. Zamber

Title: Manager

 

 

	
LUCAS ENERGY, INC.

 

 

 

 

By:  /s/ Anthony C. Schnur                

Name: Anthony C. Schnur

Title: CEO

 

	
AURORA ENERGY PARTNERS

 

By: VICTORY ENERGY CORPORATION,

its Managing Partner

 

 

 

 

By:  /s/ Fred Smith                                  

Name: Fred Smith

Title: Chief Financial Officer

	
AEP ASSETS, LLC

 

By: AURORA ENERGY PARTNERS,

its Managing Member

 

By: VICTORY ENERGY CORPORATION,

its Managing Partner

 

By:  /s/ Fred Smith                                  

Name: Fred Smith

Title: Chief Financial Officer

 

Victory Energy Corporation (OTCQX: VYEY)

 

3355 Bee Caves Road, Suite 608, Austin, TX  78746     Phn (512) 347-7300    Fax (866) 234-9806

  

  

 

ATTACHMENT 1

 

NOTICE OF CONFIDENTIALLY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:  YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

	
STATE OF TEXAS

	  	
§

	  
	  	  	
§

	  
	
COUNTIES OF LAVACA AND

	  	  	  
	
GONZALES

	  	
§

	  

PARTIAL ASSIGNMENT AND BILL OF SALE OF WELLBORE RIGHTS

 

This Assignment and Bill of Sale of Wellbore Rights (“Assignment”), dated effective as of February 27, 2015 (the “Effective Date”), is from LUCAS ENERGY, INC., a Nevada corporation, whose mailing address is 3555 Timmons Lane, Suite 1550, Houston, Texas 77027 (hereinafter referred to as “Assignor”), to VICTORY ENERGY CORPORATION, a Texas limited liability company, whose mailing address is 3355 Bee Caves Road, Suite 608, Austin, Texas 78746 (hereinafter referred to as “Assignee”),

 

WHEREAS, Assignor owns certain leasehold working interest in and to the Dingo Unit and the Platypus Hunter Unit, each located partially in both Gonzales and Lavaca Counties, Texas, along with the Dingo Unit 1H , the Dingo Unit 2H, and the Dingo Unit 3H (the “Dingo Unit 1H, 2H & 3H Wellbores”),and with the Platypus Hunter 2H and the Platypus Hunter 3H (the “Platypus Hunter 2H & 3H Wellbores”), being more particularly described on the respective exhibits “A-1” and “A-2” attached hereto.

 

NOW THEREFORE, Assignor, for and in consideration of the payment by Assignee of the sum of Ten Dollars ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does herby agree to convey all the certain leasehold working interest owned by Lucas in and to the Dingo Unit 1H, 2H, and 3H Wellbores along with the Platypus Hunter 2H & 3H Wellbores, as proposed, along with all right, title and interest owned by Lucas lying within 100’ laterally perpendicular to the wellbores as drilled (the “Wellbore Rights”).

 

Assignor herein expressly excepts, reserves and retains all of its remaining right, title and interest in and to and lands expressed on Exhibits A-1 and A-2 not associated with the Wellbore Rights, as well as all equipment and facilities not associated with Dingo Unit 1H, 2H & 3H Wellbores, and the Platypus Hunter 2H & 3H Wellbores.

Partial Assignment and Bill of Sale                                                                                   

 

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This Partial Assignment and Bill of Sale of Wellbore Rights shall be binding upon and inure to the benefit of Assignee and Assignor and their respective successors, heirs and assigns.

 

This Partial Assignment and Bill of Sale of Wellbore Rights is made and accepted without any representations and warranties, expressed or implied, except warranty of title by, and through and under Assignor, but not otherwise.

 

This Partial Assignment and Bill of Sale of Wellbore Rights may be executed in any number of counterparts, and each counterpart may be recorded separately or may be combined to form one (1) instrument for recording purposes.

 

Executed by Assignor and Assignees on the dates reflected in their respective acknowledgments, but effective as of the date stated above.

 

	  	
“ASSIGNOR”

	  	  
	  	
LUCAS ENERGY, INC.

	  	  
	  	  
	  	
By:________________________________

	  	  
	  	
Printed Name:_______________________

	  	  
	  	
Title:______________________________

	  	  
	  	  
	  	
“ASSIGNEE”

	  	  
	  	
VICTORY ENERGY CORPORATION

	  	  
	  	  
	  	
By:_________________________________

Partial Assignment and Bill of Sale                                                                                    

  

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ACKNOWLEDGMENTS

 

STATE OF TEXAS

 

COUNTY OF HARRIS

 

This instrument was acknowledged before me on this _____ day of February, 2015 by ___________________________, who is _____________ of LUCAS ENERGY, INC., a Nevada corporation, on behalf of said corporation.

	
My Commission Expires:___________

	  	
____________________________________

	  	  	
Notary Public for the State of Texas

	  	  	
County of Harris

	  	  	
Printed Name:________________________

 

STATE OF TEXAS

 

COUNTY OF TRAVIS

 

This instrument was acknowledged before me on this _____ day of February, 2015 by __________________, who is ______________ of VICTORY ENERGY CORPORATION, a Texas limited liability company, on behalf of said limited liability company.

	
My Commission Expires:___________

	  	
____________________________________

	  	  	
Notary Public for the State of Texas

	  	  	
County of Travis

	  	  	
Printed Name:________________________

Partial Assignment and Bill of Sale                                                                                   

  

Page 3

  

 

Partial Assignment and Bill of Sale                                                                                     

  

Page 4

  

 

Partial Assignment and Bill of Sale                                                                         

  

Page 5

  

 

NOTICE OF CONFIDENTIALLY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:  YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

 

	
STATE OF TEXAS

	  	
§

	  
	  	  	
§

	  
	
COUNTY OF KARNES

	  	§	  

PARTIAL ASSIGNMENT AND BILL OF SALE OF WELLBORE RIGHTS

 

This Assignment and Bill of Sale of Wellbore Rights (“Assignment”), dated effective as of February 27, 2015 (the “Effective Date”), is from LUCAS ENERGY, INC., a Nevada corporation, whose mailing address is 3555 Timmons Lane, Suite 1550, Houston, Texas 77027 (hereinafter referred to as “Assignor”), to VICTORY ENERGY CORPORATION, a Texas limited liability company, whose mailing address is 3355 Bee Caves Road, Suite 608, Austin, Texas 78746  (hereinafter referred to as “Assignee”),

 

WHEREAS, Assignor owns an undivided fifty percent (50%) working interest in the Boggs Unit in Karnes County, Texas, that certain proposed Boggs Unit 1H Wellbore (the “1H Wellbore”) and that certain proposed Boggs Unit 2H Wellbore (the “2H Wellbore”), being more particularly described on the respective exhibits “A-1” and “A-2” attached hereto.

 

NOW THEREFORE, Assignor, for and in consideration of the payment by Assignee of the sum of Ten Dollars ($10.00), and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does herby agree to convey an undivided fifty percent (50%) working interest in and to the 1H and 2H Wellbores, as proposed or subsequently amended, along with all right, title and interest owned by Lucas lying within 100’ laterally perpendicular to the wellbores as drilled (the “Wellbore Rights”).

 

Assignor herein expressly excepts, reserves and retains all of its remaining right, title and interest in and to and lands expressed on Exhibits A-1 and A-2 not associated with the Wellbore Rights, as well as all equipment and facilities not associated with 1H and 2H Wellbores.

 

 

This Partial Assignment and Bill of Sale of Wellbore Rights shall be binding upon and inure to the benefit of Assignee and Assignor and their respective successors, heirs and assigns.

 

Partial Assignment and Bill of Sale

  

Page 1

  

This Partial Assignment and Bill of Sale of Wellbore Rights is made and accepted without any representations and warranties, expressed or implied, except warranty of title by, and through and under Assignor, but not otherwise.

This Partial Assignment and Bill of Sale of Wellbore Rights may be executed in any number of counterparts, and each counterpart may be recorded separately or may be combined to form one (1) instrument for recording purposes.

 

Executed by Assignor and Assignees on the dates reflected in their respective acknowledgments, but effective as of the date stated above.

 

 

 

	  	
“ASSIGNOR”

	  	  
	  	
LUCAS ENERGY, INC.

	  	  
	  	  
	  	
By:________________________________

	  	  
	  	
Printed Name:_______________________

	  	  
	  	
Title:______________________________

	  	  
	  	  
	  	
“ASSIGNEE”

	  	  
	  	
VICTORY ENERGY CORPORATION

	  	  
	  	  
	  	
By:_________________________________

 

 

Partial Assignment and Bill of Sale

  

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ACKNOWLEDGMENTS

 

STATE OF TEXAS

 

COUNTY OF HARRIS

 

This instrument was acknowledged before me on this _____ day of February, 2015 by ___________________________, who is _____________ of LUCAS ENERGY, INC., a Nevada corporation, on behalf of said corporation.

	
My Commission Expires:___________

	  	
____________________________________

	  	  	
Notary Public for the State of Texas

	  	  	
County of Harris

	  	  	
Printed Name:________________________

 

STATE OF TEXAS

 

COUNTY OF TRAVIS

 

This instrument was acknowledged before me on this _____ day of February, 2015 by __________________, who is ______________ of VICTORY ENERGY CORPORATION, a Texas limited liability company, on behalf of said limited liability company.

	
My Commission Expires:___________

	  	
____________________________________

	  	  	
Notary Public for the State of Texas

	  	  	
County of Travis

	  	  	
Printed Name:________________________

 

 

 

Partial Assignment and Bill of Sale

  

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Partial Assignment and Bill of Sale

  

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Partial Assignment and Bill of Sale

  

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ATTACHMENT 2

 

CONTINGENT PROMISSORY NOTE

	
Date:

	
March 3, 2015

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

 

	
Maker’s Mailing Address:

	

3355 Bee Caves Road, Suite 608

	  	

Austin, Texas  78746

	  	
Attention:  Kenneth Hill, CEO

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

	
Holder/Payee’s Mailing Address:

	
c/o Sharon E. Conway

	  	
Attorney at Law

	  	
2441 High Timbers, Suite 410

	  	
The Woodlands, Texas  77380-1052

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

	
Place for Payment (including county):

	
2512 Alta Mira

	  	
Tyler, Smith County, Texas  75701-7301

	  	
(Paid via wire transfer or check as set forth below)

	
Principal Amount:

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

	  	  
	
Interest Rate:

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

Contingent Note, Maturity Date, and Terms of Payment:

 

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

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

 

Contingent Promissory Note

Rogers - Victory Energy Corporation - Lucas Energy/March 3, 2015

  

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

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

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

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

 

	
Bank Name:

	
  Bank of New York

	
ABA Routing Number:

	
  XXXXXXXXX

	
Account Number:

	
  Beneficiary Acct #XXXXXXXXXX 

	
FFC A/C #:

	
  XXX-XXXXXX

	
Customer/Account Name:

	
  Louise H. Rogers

 

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

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

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

 

 

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Annual Interest Rate on Matured,

	
Unpaid Amounts (Default Rate):

	
Eighteen Percent (18%) per Texas Finance Code Chapters 306 and 303

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

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

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

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

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

 

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

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

Maker:

Victory Energy Corporation

 

 

	
By:

	
______________________________

	  	
Date of Signature:  March 3, 2015

	  	FRED SMITH	  	  
	  	
Chief Financial Officer

	  	  

 

 

 

 

 

 

Contingent Promissory Note

Rogers - Victory Energy Corporation - Lucas Energy/March 3, 2015

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