Document:

mdwt_Ex10_4

		

			Exhibit 10.4

		

		
			LOAN TERMINATION AGREEMENT
		

		
			THIS LOAN TERMINATION AGREEMENT is made as of April 24, 2020 (the “Agreement”), by and between Midwest Holding Inc., a Nebraska corporation (“Midwest”), and Xenith Holdings LLC, a Delaware limited liability company  (“Xenith”).  Midwest and Xenith are also referred to as a “Party” and collectively referred to herein as the “Parties”.
		

		
			RECITALS
		

		
			A. Midwest and Xenith are parties to that certain Loan, Convertible Preferred Stock and Convertible Senior Secured Note Purchase Agreement, dated as of May 9, 2018 (the “Loan Agreement”), whereby Midwest (i) issued the shares of its Class C Preferred Stock to Xenith and (ii) could borrow up to $23,500,000 from Xenith;
		

		
			B. Xenith has converted all shares of the outstanding Class C Preferred Stock into shares of Midwest’s voting common stock;
		

		
			C. The Parties desire to discontinue and terminate the loan arrangements under the Loan Agreement and the Notes on the terms and conditions set forth herein; and
		

		
			D.Capitalized terms used but not defined herein shall have the meanings given them in the Loan Agreement.
		

		
			NOW THEREFORE, for good and valuable consideration including the releases below,  the receipt and sufficiency of which are hereby acknowledged by the Parties, the Parties agree as follows:
		

		
			AGREEMENT
		

		
			1. No Outstanding Borrowings.   Midwest and Xenith agree that there are no outstanding borrowings or amounts owed under the Loan Agreement or the Notes and all amounts previously borrowed by Midwest, including all accrued interest, has been repaid or forgiven.
		

		
			2. Termination of Loan Arrangements.  The Parties hereby agree that (i) all loan arrangements, rights and obligations in the Loan Agreement, including but not limited to Sections 2(b) through 2(g), 3, 7, 9(b) and 9(c) therein, and all Notes and Security Agreements  are hereby terminated in their entirety and of no further force and effect as of the date hereof; (ii) neither Midwest nor Xenith shall have any further obligation to each other regarding any and all loans made pursuant to the Loan Agreement and the Notes, and Xenith hereby releases any security interest it may have in the Collateral (as that term is defined in the Security Agreement); (iii) Xenith authorizes Midwest to file any UCC termination statements necessary to effect such termination; (iv) Midwest will file any and all UCC termination statements necessary to effect such termination; and (v) Xenith will execute and deliver to Midwest any additional documents or instruments as Midwest shall reasonably request to evidence such termination. The termination of the loan arrangements, rights and obligations in the Loan Agreement and the termination of the Notes and the Security Agreements, and the mutual releases set forth in Section 3 hereof, shall represent full and complete satisfaction of all loan obligations of the Parties under the Loan Agreement,  Notes and Security Agreements and their related exhibits, documents and instruments.
		

		
			

		 

		

			 

		

		

			 

		

		

		
			3. Mutual Release.  Each of Midwest and Xenith, in consideration of the mutual promises set forth in this Agreement, irrevocably and unconditionally release and forever discharge each other and their affiliated entities and each of their respective agents, directors, officers, managers, employees, representatives, attorneys, predecessors, successors and assigns, and all persons acting by, through, under or in concert with any of them (“Releasees”) of and from any and all claims, assertion of claims, expenses, debts, demands, actions, causes of action, suits, liabilities, and/or expenses (including attorneys’ fees) of any nature whatsoever (“Claims”), whether or not now known, suspected or claimed, which they ever had, now have, or hereafter acquire, both at law and in equity, arising out of any fact or matter in any way existing as of the date hereof, relating to any and all claims arising out of or related to (a) any loans and loan arrangements, rights and obligations contained in the Loan Agreement and the Notes and (b) the Security Agreements. Each Party covenants and agrees never to commence, voluntarily aid in any way prosecute or cause to be commenced or prosecuted against the Releasees hereunder any action or other proceeding based upon any such Claims.
		

		
			4. Representations and Warranties. Each of Midwest and Xenith represent and warrant to each other as follows:
		

		
			4.1 No Litigation or Claims.  As of the date hereof, neither Party nor any of its affiliates has any claim, action, suit, complaint, charge, litigation, arbitration, prosecution, hearing or other proceeding of any nature, in law or in equity, or other proceeding pending or threatened before or by any court or other administrative or regulatory authority, agency, or other similar entity pursuant to the Loan Agreement, Notes and/or Security Agreements, and, to its knowledge, no event has occurred or circumstances exist that would reasonably be expected to give rise to, or serve as a basis for, any of the foregoing.
		

		
			4.2Authority, Execution and Enforceability.   Each Party has full power and authority to execute, deliver and perform this Agreement. All necessary action, corporate or otherwise, has been taken by each Party to authorize the execution, delivery and performance of this Agreement. This Agreement constitutes a valid, binding and enforceable obligation of each Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting generally the enforcement of creditors’ rights and subject to a court’s discretionary authority with respect to the granting of a decree ordering specific performance or other equitable remedies.
		

		
			4.3 No Violation.   The execution and delivery of this Agreement by each Party will not violate or breach in any material respect or constitute a material default under: (i) any federal, state or local laws, rules or regulations, or any judgments, decrees, injunctions or order of any regulatory authority to which either Party is subject; (ii) the organizational documents of either Party; or (iii) any agreement, contract, instrument, order, arbitration award, judgment, or decree to which either Party is a party or by which it is bound.
		

		
			4.4 Consents.  No third-party approval or consent is required to be obtained by or on behalf of either Party in connection with the execution, delivery or performance of or the consummation of the transactions contemplated by this Agreement.
		

		
			5. General Provisions.
		

		
			

		 

		

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			5.1 Counterparts; Facsimile Signatures.   This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and it shall not be a condition to the effectiveness of this Agreement that each Party shall have executed the same counterpart. This Agreement may be executed by facsimile or other electronic signatures.
		

		
			5.2 Applicable Law, Jurisdiction and Venue.   This Agreement shall be governed by, interpreted under and enforced in accordance with the laws of the State of Nebraska, without regard to the principles of conflict of laws that would cause the application of the laws of any other jurisdiction. The parties consent and agree that all legal proceedings relating to the subject matter of this Agreement shall be maintained in courts sitting within the State of Nebraska, and the parties further consent and agree that jurisdiction and venue for such proceedings shall lie exclusively with such courts.
		

		
			5.3 Successors and Assigns.   This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
		

		
			5.4 Headings and Subheadings.   The various headings and subheadings in this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provision hereof.
		

		
			5.5 Entire Agreement.  This Agreement constitutes the complete and exclusive statement of the agreement between the parties as to the subject matter of this Agreement. This Agreement supersedes all proposals, whether oral or written, and all other communications between and among the Parties relating to the subject matter of this Agreement. No addition to or modification of any of the foregoing provisions shall be binding upon any party unless made in writing and signed by all parties to this Agreement.
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

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			IN WITNESS WHEREOF, the Parties have executed this Loan Termination Agreement as of the date first written above.
		

		
			 
		

		
			Xenith Holdings LLC
		

		
			By Vespoint LLC, its Managing Member
		

		
			 
		

		
			 
		

		
			By:  /s/ Michael Minnich                           
		

		
			Name: Michael Minnich
		

		
			Title: Co-CEO
		

		
			 
		

		
			 
		

		
			 
		

		
			Midwest Holding Inc.
		

		
			 
		

		
			By:   /s/ Mark A. Oliver                           
		

		
			Name: Mark A. Oliver
		

		
			Title: President
		

		
			 
		

		 

		

			Signature Page to Loan Termination AgreementGulfslope
Energy, Inc. 8-K

Exhibit
10.1

 

PROMISSORY NOTE

 

	Principal

        $100,300.00
	Loan Date

        04-16-2020
	Maturity

        04-16-2022
	CL
    Transaction No	Product

        SBA Paycheck Protection
	Loan
    Account No
	References in the boxes
                                                                                                                        above are for Lender's use only and do not limit the applicability of this document to any particular loan or item. Any item
                                                                                                                        above containing "***" has been omitted due to text length limitations.

 

 

	Borrower:	GulfSlope
Energy, Inc.

1331 Lamar Street, Suite
1665 Houston, TX 77010

	 	Lender:	Zions Bancorporation, N.A. dba Amegy Bank Corporate Branch - SBA Business
    BankingP.
                                         O. Box 27459 1717 W. Loop South Houston, TX 77227-7459

 

 

Principal Amount: $100,300.00Interest
Rate: 1.000%Date of Note: April 16, 2020

PROMISE TO PAY.
GulfSlope Energy, Inc. ("Borrower") promises to pay to Zions Bancorporation, N.A. dba Amegy Bank ("Lender"),
or order, in lawful money of the United States of America, the principal amount of One Hundred Thousand Three Hundred & 00/100
Dollars ($100,300.00), together with interest on the unpaid principal balance from April 16, 2020, calculated as described in
the "INTEREST CALCULATION METHOD" paragraph using an interest rate of 1.000% per annum, until maturity. The interest
rate may change under the terms and conditions of the "INTEREST AFTER DEFAULT" section.

PAYMENT. Borrower
will pay this loan in 18 payments of $5,644.58 each payment. Borrower's first payment is due November 16, 2020, and all subsequent
payments are due on the same day of each month after that. Borrower's final payment will be due on April 16, 2022, and will be
for all principal and all accrued interest not yet paid. Payments include principal and interest. Unless otherwise agreed or required
by applicable law, payments will be applied to first to any accrued unpaid interest; then to principal which is currently due;
then to pay any late fees; and then to further reduce the principal balance. Borrower will pay Lender at Lender's address shown
above or at such other place as Lender may designate in writing.

INITIAL DEFERMENT PERIOD.
No payments are due on this loan for 6 months from the date of first disbursement of this loan. Interest will continue to
accrue during the deferment period.

Loan Forgiveness. Borrower
may apply to Lender for forgiveness of the amount due on this loan in an amount equal to the sum of the following costs incurred
by Borrower during the 8-week period beginning on the date of first disbursement of this loan:

		a.	Payroll
                                         costs

		b.	Any
                                         payment of interest on a covered mortgage obligation (which shall not include any prepayment
                                         of or payment of principal on a covered mortgage obligation)

		c.	Any
                                         payment on a covered rent obligation

		d.	Any
                                         covered utility payment

The amount of loan
forgiveness shall be calculated (and may be reduced) in accordance with the requirements of the Paycheck Protection Program, including
the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (P.L. 116-136). Not more
than 25% of the amount forgiven can be attributable to non-payroll costs.

Maturity. This Note will
mature two years from date of first disbursement of this loan.

Repayment Terms.
The interest rate on this Note is one percent per year. The interest rate is fixed and will not be changed during the life
of the loan.

Non-Recourse. Lender
and SBA shall have no recourse against any individual shareholder, member or partner of Borrower for non-payment of the loan,
except to the extent that such shareholder, member or partner uses the loan proceeds for an unauthorized purpose.

DEFAULT RATE. The
Default Rate on this Agreement and the Note is equal to the lesser of (a) 18.000% per annum or (b) the maximum rate permitted
by applicable law. If a default (as described in the paragraph below titled "Default") has occurred or if Borrower is
in default as described below, Lender may charge interest on the Note and the Indebtedness at the Default Rate.

POST MATURITY RATE
ON INSURANCE PREMIUMS. Notwithstanding any provisions to the contrary, the Post Maturity Rate on insurance premiums, which
are amounts added to the principal balance of this Note due to Lender's payment of insurance premiums, will accrue based on the
prematurity rate of this Note.

INTEREST RATE MODIFICATION.
Notwithstanding anything to the contrary contained herein, if the Small Business Administration ("SBA") purchases
the guaranteed portion of the unpaid principal balance of this Note, the interest rate on this Note shall be fixed at the rate
in effect at the time of the earliest uncured payment default hereunder. If there is no uncured payment default, the rate shall
become fixed at the rate in effect at the time of said purchase by the SBA.

INTEREST CALCULATION
METHOD. Interest on this Note is computed on a 365/365 simple interest basis; that is, by applying the ratio of the interest rate
over the number of days in a year (365 for all years, including leap years), multiplied by the outstanding principal balance,
multiplied by the actual number of days the principal balance is outstanding. All interest payable under this Note is computed
using this method.

PREPAYMENT. Borrower
may pay without penalty all or a portion of the amount owed earlier than it is due. Prepayment in full shall consist of payment
of the remaining unpaid principal balance together with all accrued and unpaid interest and all other amounts, costs and expenses
for which Borrower is responsible under this Note or any other agreement with Lender pertaining to this loan, and in no event
will Borrower ever be required to pay any unearned interest. Early payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments under the payment schedule. Rather, early payments will reduce
the principal balance due and may result in Borrower's making fewer payments. Borrower agrees not to send Lender payments marked
"paid in full", "without recourse", or similar language. If Borrower sends such a payment, Lender may accept
it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to
Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates
that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations
or as full satisfaction of a disputed amount must be mailed or delivered to: Zions Bancorporation, N.A. dba Amegy Bank, PO Box
25822 Salt Lake City, UT 84125-0822.

LATE CHARGE. If a payment
is 10 days or more late, Borrower will be charged 5.000% of the unpaid portion of the regularly scheduled

    	 

    	 	PROMISSORY NOTE
 (Continued)	Page 2

    

payment.

INTEREST AFTER
DEFAULT. Upon default, including failure to pay upon final maturity, the total sum due under this Note will continue to accrue
interest at the interest rate under this Note.

DEFAULT. Each of the
following shall constitute an event of default ("Event of Default") under this Note:

Payment Default. Borrower
fails to make any payment when due under this Note.

Other Defaults.
Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Note or in
any of the related documents or to comply with or to perform any term, obligation, covenant or condition contained in any other
agreement between Lender and Borrower.

Default in Favor
of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's property
or Borrower's ability to repay this Note or perform Borrower's obligations under this Note or any of the related documents.

False Statements.
Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Note
or the related documents is false or misleading in any material respect, either now or at the time made or furnished or becomes
false or misleading at any time thereafter.

Insolvency. The
dissolution or termination of Borrower's existence as a going business, the insolvency of Borrower, the appointment of a receiver
for any part of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement
of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Creditor or Forfeiture
Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession
or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the loan. This
includes a garnishment of any of Borrower's accounts, including deposit accounts, with Lender. However, this Event of Default
shall not apply if there is a good faith dispute by Borrower as to the validity or reasonableness of the claim which is the basis
of the creditor or forfeiture proceeding and if Borrower gives Lender written notice of the creditor or forfeiture proceeding
and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender,
in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting
Guarantor. Any of the preceding events occurs with respect to any guarantor, endorser, surety, or accommodation party of any
of the indebtedness or any guarantor, endorser, surety, or accommodation party dies or becomes incompetent, or revokes or disputes
the validity of, or liability under, any guaranty of the indebtedness evidenced by this Note.

Change In Ownership. Any
change in ownership of twenty-five percent (25%) or more of the common stock of Borrower.

Adverse Change.
A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance
of this Note is impaired.

Insecurity. Lender in
good faith believes itself insecure.

Cure Provisions.
If any default, other than a default in payment, is curable and if Borrower has not been given a notice of a breach of the
same provision of this Note within the preceding twelve (12) months, it may be cured if Borrower, after Lender sends written notice
to Borrower demanding cure of such default: (1) cures the default within fifteen (15) days; or (2) if the cure requires more than
fifteen (15) days, immediately initiates steps which Lender deems in Lender's sole discretion to be sufficient to cure the default
and thereafter continues and completes all reasonable and necessary steps sufficient to produce compliance as soon as reasonably
practical.

LENDER'S RIGHTS.
Upon default, Lender may declare the entire indebtedness, including the unpaid principal balance under this Note, all accrued
unpaid interest, and all other amounts, costs and expenses for which Borrower is responsible under this Note or any other agreement
with Lender pertaining to this loan, immediately due, without notice, and then Borrower will pay that amount.

WHEN FEDERAL LAW
APPLIES. When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations.
Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing liens, and
other purposes. By using such procedures, SBA does not waive any federal immunity from state or local control, penalty, tax, or
liability. As to this Note, Borrower may not claim or assert against SBA any local or state law to deny any obligation, defeat
any claim of SBA, or preempt federal law.

ATTORNEYS' FEES;
EXPENSES. Lender may hire an attorney to help collect this Note if Borrower does not pay, and Borrower will pay Lender's reasonable
attorneys' fees. Borrower also will pay Lender all other amounts Lender actually incurs as court costs, lawful fees for filing,
recording, releasing to any public office any instrument securing this Note; the reasonable cost actually expended for repossessing,
storing, preparing for sale, and selling any security; and fees for noting a lien on or transferring a certificate of title to
any motor vehicle offered as security for this Note, or premiums or identifiable charges received in connection with the sale
of authorized insurance.

GOVERNING LAW.
This Note will be governed by federal law applicable to Lender and, to the extent not preempted by federal law, the laws of the
State of Texas without regard to its conflicts of law provisions. This Note has been accepted by Lender in the State of Texas.

CHOICE OF VENUE. If
there is a lawsuit, and if the transaction evidenced by this Note occurred in Harris County, Borrower agrees upon Lender's request
to submit to the jurisdiction of the courts of Harris County, State of Texas.

RIGHT OF SETOFF.
To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff
would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the debt against any and all such accounts.

LOAN PREPAYMENT.
Notwithstanding any provision in this Note to the contrary, Borrower may prepay this Note. Borrower may prepay twenty percent
(20%) or less of the unpaid principal balance at any time without notice. If Borrower prepays more than twenty percent (20%) and
the Loan has been sold on the secondary market, Borrower must: (a) give Lender written notice, (b) pay all accrued interest; and
(c) if the prepayment is received less then 21 days from the date Lender receives the notice, pay an amount equal to 21 days interest
from the date Lender receives the notice, less any interest accrued during the 21 days and paid under subparagraph (b) above.
If Borrower does not prepay with 30 days from the date Lender receives the notice, Borrower must give Lender a new notice.

WAIVER OF CLAIMS.
The undersigned hereby (i) represents that neither the undersigned nor any affiliate or principal of the undersigned has any defenses
to or setoffs against any Indebtedness or other obligations owing by the undersigned, or by the undersigned’s affiliates
or principals, to Lender or Lender’s affiliates (the "Obligations"), nor any claims against Lender or Lender’s
affiliates for any matter whatsoever, related or unrelated to the Obligations, and (ii) releases Lender and Lender’s affiliates,
officers, directors, employees and agents from all claims, causes of

    	 

    	 	PROMISSORY NOTE
 (Continued)	Page 3

    

action, and costs,
in law or equity, known or unknown, whether or not matured or contingent, existing as of the date hereof that the undersigned
has or may have by reason of any matter of any conceivable kind or character whatsoever, related or unrelated to the Obligations,
including the subject matter of this Agreement. The foregoing release does not apply, however, to claims for future performance
of express contractual obligations that mature after the date hereof that are owing to the undersigned by Lender or Lender’s
affiliates. As used in this paragraph, the word “undersigned” does not include Lender or any individual signing on
behalf of Lender. The undersigned acknowledges that Lender has been induced to enter into or continue the Obligations by, among
other things, the waivers and releases in this paragraph.

STATE SPECIFIC PROVISION.
Notwithstanding the foregoing, the interest on this Note shall never exceed the maximum rate permitted by the usury laws of
Texas or any pre-empting federal law, if any, applicable to this kind of loan at the time of fluctuation in said interest rate.

The undersigned hereby
waives presentment, demand, protest or notice of nonpayment and intent to accelerate this Note and/or demand for payment of past
due installments as a condition precedent to acceleration.

ELECTRONIC DELIVERY
OF DOCUMENTS. (a) The provisions of this section shall be applicable in the event that Borrower delivers any financial statements
of Borrower, Guarantor, or any other person or entity ("Financial Statements") or any other documents or information
regarding Borrower or any other person or entity to Lender pursuant to this Note, collectively, the ("Financial Information")
in electronic form (by "email").

(b)           
The Financial Information delivered in electronic form shall, for all purposes, be the same
as if, and shall have the same validity, force and effect as if, such Financial Information had been delivered in paper or other
tangible form. Each item of Financial Information delivered in electronic form shall be deemed to have been originally signed
by Borrower for all purposes (including all purposes and interpretations of federal and state law), whether or not there is an
electronic name or signature of Borrower thereon, and Borrower waives any right it may have to claim that the electronic documents
are not original documents or valid documents.

(c)           
Borrower shall deliver Financial Information to Lender in, and only in, a format that Lender
may both retain in its own records (i.e. save as a file on its own system) and print. In the event that at any time, under the
electronic format then currently used by Lender, Lender is unable to save or print Financial Information delivered in electronic
form, Borrower shall no longer be permitted to deliver Financial Information in electronic form.

(d)           
This section constitutes an agreement between the parties to conduct transactions by electronic
means pursuant the Texas Uniform Electronic Transactions Act, Chapter 43, Texas Business & Commerce Code (the "Act"),
and the provisions of the Act shall be applicable to the delivery of Financial Information by Borrower to Lender in electronic
form.

DOCUMENT IMAGING.
Lender shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements, instruments,
documents, and items and records governing, arising from or relating to any of Borrower's loans, including, without limitation,
this document and the Related Documents, and Lender may destroy or archive the paper originals. The parties hereto (i) waive any
right to insist or require that Lender produce paper originals, (ii) agree that such images shall be accorded the same force and
effect as the paper originals, (iii) agree that Lender is entitled to use such images in lieu of destroyed or archived originals
for any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that
any executed facsimile (faxed), scanned, or other imaged copy of this document or any Related Document shall be deemed to be of
the same force and effect as the original manually executed document.

ON-LINE BANKING
LOAN PAYMENTS. From time to time, Lender may (but shall not be required to) permit loan payments to be made through its online
banking website. Lender may impose and change limitations on making online loan payments, such as minimum or maximum payment amounts,
the types of accounts from which loan payments may be made, and the types of payments that may be made online (i.e., ordinary
installment payments, principal-only payments, or other types of payments). Whether online payments are permitted, and Lender's
applicable terms and restrictions if such payments are permitted, will be reflected in the features available online when a user
logs into the online banking website.

RIGHT OF SETOFF.
To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender (whether
checking, savings, or some other account). This includes all accounts borrower holds jointly with someone else and all accounts
Borrower may open in the future. However, this does not include any IRA or Keogh accounts, or any trust accounts for which setoff
would be prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums
owing on the indebtedness against any and all such accounts, and, at Lender's option, to administratively freeze all such accounts
to allow Lender to protect Lender's charge and setoff rights in this paragraph.

NOTICE OF FINAL
AGREEMENT. THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THIS LOAN CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES RELATING TO THIS LOAN.

REPORTING NEGATIVE
INFORMATION. We (Lender) may report information about your (Borrower's) account to credit bureaus. Late payments, missed payments,
or other defaults on your account may be reflected in your credit report.

ON-LINE BANKING
- ADVANCES. From time to time, Lender may (but shall not be required to) permit advances to be requested or drawn through
its online banking website. Lender may impose and change limitations on online advance requests, such as minimum or maximum advance
dollar amounts, and the types of accounts into which advances may be transferred. Whether online advances are permitted, and Lender's
applicable terms and restrictions if such advances are permitted, will be reflected in the features available online when a user
logs into the online banking website.

DISPUTE RESOLUTION PROVISION. This
Dispute Resolution Provision contains a jury waiver, a class action waiver, and an arbitration clause (or judicial reference agreement,
as applicable), set out in four Sections. READ IT CAREFULLY.

This dispute resolution provision shall
supersede and replace any prior "Jury Waiver," "Judicial Reference," "Class Action Waiver," "Arbitration,"
"Dispute Resolution," or similar alternative dispute agreement or provision between or among the parties.

Notwithstanding anything to the contrary
herein, the parties acknowledge and agree that the Dispute Resolution Provision contained herein is not enforceable at any time
that the SBA is the holder of the Promissory Note which evidences the Loan.

SECTION 1. GENERAL PROVISIONS GOVERNING ALL DISPUTES.

1.1          
PRIOR DISPUTE RESOLUTION AGREEMENTS SUPERSEDED. This Dispute Resolution Provision shall supersede
and replace any prior “Jury Waiver,” “Judicial Reference,” “Class Action Waiver,” “Arbitration,”
“Dispute Resolution,” or similar alternative dispute agreement or provision between or among the parties.

1.2          
“DISPUTE” defined. As used herein, the
word “Dispute” includes, without limitation, any claim by either party against the other party related to this Agreement,
any Related Document, and the Loan evidenced hereby. In addition, “Dispute” also includes any claim by either party
against the other party regarding any other agreement or business relationship between any of them, whether or not related
to the Loan or other subject matter of this Agreement. “Dispute” includes, but is not limited to, matters
arising from or relating to a deposit account, an application

    	 

    	 	PROMISSORY NOTE
 (Continued)	Page 4

    

for or denial of credit,
warranties and representations made by a party, the adequacy of a party’s disclosures, enforcement of any and all of the
obligations a party hereto may have to another party, compliance with applicable laws and/or regulations, performance or services
provided under any agreement by a party, including without limitation disputes based on or arising from any alleged tort or matters
involving the employees, officers, agents, affiliates, or assigns of a party hereto.

If a third party is
a party to a Dispute (such as a credit reporting agency, merchant accepting a credit card, junior lienholder or title company),
each party hereto agrees to consent to including that third party in any arbitration or judicial reference proceeding for resolving
the Dispute with that party.

 

1.3          
Jury Trial Waiver. Each party waives their respective
rights to a trial before a jury in connection with any Dispute, and all Disputes shall be resolved by a judge sitting
without a jury. If a court determines that this jury trial waiver is not enforceable for any reason, then at any time
prior to trial of the Dispute, but not later than 30 days after entry of the order determining this provision is unenforceable,
any party shall be entitled to move the court for an order, as applicable: (A) compelling arbitration and staying or dismissing
such litigation pending arbitration (“Arbitration Order”) under Section 2 hereof, or (B) staying such litigation and
compelling judicial reference under Section 3 hereof.

1.4          
CLASS ACTION WAIVER. If permitted by applicable law, each party waives the
right to litigate in court or an arbitration proceeding any Dispute as a class action, either as a member of a class or as a representative,
or to act as a private attorney general.

1.5          
SURVIVAL. This Dispute Resolution Provision shall
survive any termination, amendment or expiration of this Agreement, or any other relationship between the parties.

SECTION 2. Arbitration
IF JURY WAIVER UNENFORCEABLE (EXCEPT CALIFORNIA). If (but only if) a state or federal court located outside the state of California
determines for any reason that the jury trial waiver in this Dispute Resolution Provision is not enforceable with respect to a
Dispute, then any party hereto may require that said Dispute be resolved by binding arbitration pursuant to this Section 2 before
a single arbitrator. An arbitrator shall have no authority to determine matters (i) regarding the validity, enforceability, meaning,
or scope of this Dispute Resolution Provision, or (ii) class action claims brought by either party as a class representative on
behalf of others and claims by a class representative on either party’s behalf as a class member, which matters may be determined
only by a court without a jury. By agreeing to arbitrate a Dispute, each party gives up any right that party may have to
a jury trial, as well as other rights that party would have in court that are not available or are more limited in arbitration,
such as the rights to discovery and to appeal.

Arbitration shall be
commenced by filing a petition with, and in accordance with the applicable arbitration rules of, National Arbitration Forum (“NAF”)
or Judicial Arbitration and Mediation Service, Inc. (“JAMS”) (“Administrator”) as selected by the initiating
party. However, if the parties agree, arbitration may be commenced by appointment of a licensed attorney who is selected by the
parties and who agrees to conduct the arbitration without an Administrator. If NAF and JAMS both decline to administer arbitration
of the Dispute, and if the parties are unable to mutually agree upon a licensed attorney to act as arbitrator with an Administrator,
then either party may file a lawsuit (in a court of appropriate venue outside the state of California) and move for an Arbitration
Order. The arbitrator, howsoever appointed, shall have expertise in the subject matter of the Dispute. Venue for the arbitration
proceeding shall be at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where
Lender or Bank is headquartered. The arbitrator shall apply the law of the state specified in the agreement giving rise to the
Dispute.

After entry of an Arbitration
Order, the non-moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to commence
arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing
not to commence arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings,
for failure to state a claim, or for full or partial summary judgment; (ii) will render a decision and any award applying applicable
law; (iii) will give effect to any limitations period in determining any Dispute or defense; (iv) shall enforce the doctrines
of compulsory counterclaim, res judicata, and collateral estoppel, if applicable; (v) with regard to motions and the arbitration
hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the state specified in the agreement
giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining from
a court of competent jurisdiction (notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited
to injunctive relief, property preservation orders, foreclosure, eviction, attachment, replevin, garnishment, and/or the appointment
of a receiver, (ii) pursuing non-judicial foreclosure, or (iii) availing itself of any self-help remedies such as setoff and repossession.
The exercise of such rights shall not constitute a waiver of the right to submit any Dispute to arbitration.

Judgment upon an arbitration
award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000, any party shall
be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including
Administrator, arbitrator, and attorney’s fees and costs) exceeds $4,000,000, the arbitrator will issue a written, reasoned
decision supporting the award, including a statement of authority and its application to the Dispute. A request for de novo appeal
must be filed with the arbitrator within 30 days following the date of the arbitration award; if such a request is not made within
that time period, the arbitration decision shall become final and binding. On appeal, the arbitrators shall review the award de
novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in any manner to the
original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator
has no such rules, then the JAMS arbitration appellate rules shall apply.

Arbitration under this
provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9

U.S.C. § 1 et seq. If
the terms of this Section 2 vary from the Administrator’s rules, this Section 2 shall control.

SECTION 3. JUDICIAL
REFERENCE IF JURY WAIVER UNENFORCEABLE (CALIFORNIA ONLY). If (but only if) a Dispute is filed in a state or federal court
located within the state of California, and said court determines for any reason that the jury trial waiver in this Dispute Resolution
Provision is not enforceable with respect to that Dispute, then any party hereto may require that Dispute be resolved by judicial
reference in accordance with California Code of Civil Procedure, Sections 638, et seq., including without limitation whether
the Dispute is subject to a judicial reference proceeding. By agreeing to resolve Disputes by judicial reference, each party
is giving up any right that party may have to a jury trial. The referee shall be a retired judge, agreed upon by the parties,
from either the American Arbitration Association (AAA) or Judicial Arbitration and Mediation Service, Inc. (JAMS). If the parties
cannot agree on the referee, the party who initially selected the reference procedure shall request a panel of ten retired judges
from either AAA or JAMS, and the court shall select the referee from that panel. (If AAA and JAMS are unavailable to provide this
service, the court may select a referee by such other procedures as are used by that court.) The referee shall be appointed to
sit with all of the powers provided by law, including the power to hear and determine any or all of the issues in the proceeding,
whether of fact or of law, and to report a statement of decision. The parties agree that time is of the essence in conducting
the judicial reference proceeding set forth herein. The costs of the judicial reference proceeding, including the fee for the
court reporter, shall be borne equally by the parties as the costs are incurred, unless otherwise awarded by the referee. The
referee shall hear all pre-trial and post-trial matters (including without limitation requests for equitable relief), prepare
a statement of decision with written findings of fact and conclusions of law, and apportion costs as appropriate. The referee
shall be empowered to enter equitable relief as well as legal relief, provide all temporary or provisional remedies, enter equitable
orders that are binding on the parties and rule on any motion that would be authorized in a trial, including without limitation
motions for summary adjudication. Only for this Section 3, “Dispute” includes matters regarding the validity, enforceability,
meaning, or scope of this Section, and (ii) class action claims brought by either party as a class representative on behalf
of others and claims by a class representative on either party’s behalf as a class member. Judgment upon the award shall
be entered in the court in

    	 

    	 	PROMISSORY NOTE
 (Continued)	Page 5

    

 

which such proceeding
was commenced and all parties shall have full rights of appeal. This provision will not be deemed to limit or constrain Bank or
Lender’s right of offset, to obtain provisional or ancillary remedies, to interplead funds in the event of a dispute, to
exercise any security interest or lien Bank or Lender may hold in property or to comply with legal process involving accounts
or other property held by Bank or Lender.

Nothing herein shall
preclude a party from moving (prior to the court ordering judicial reference) to dismiss, stay or transfer the suit to a forum
outside California on grounds that California is an improper, inconvenient or less suitable venue. If such motion is granted,
this Section 3 shall not apply to any proceedings in the new forum.

This Section 3 may
be invoked only with regard to Disputes filed in state or federal courts located in the State of California. In no event shall
the provisions in this Section 3 diminish the force or effect of any venue selection or jurisdiction provision in this Agreement
or any Related Document.

SECTION 4. Reliance.
Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce a jury waiver,
class action waiver, arbitration provision or judicial reference provision in the event of suit, and (ii) acknowledges that it
and the other party have been induced to enter into this Agreement by, among other things, material reliance upon the mutual waivers,
agreements, and certifications in the four Sections of this DISPUTE RESOLUTION PROVISION.

SUCCESSOR INTERESTS.
The terms of this Note shall be binding upon Borrower, and upon Borrower's heirs, personal representatives, successors and
assigns, and shall inure to the benefit of Lender and its successors and assigns.

GENERAL PROVISIONS.
NOTICE: Under no circumstances (and notwithstanding any other provisions of this Note) shall the interest charged, collected,
or contracted for on this Note exceed the maximum rate permitted by law. The term "maximum rate permitted by law" as
used in this Note means the greater of (a) the maximum rate of interest permitted under federal or other law applicable to the
indebtedness evidenced by this Note, or (b) the higher, as of the date of this Note, of the "Weekly Ceiling" or the
"Quarterly Ceiling" as referred to in Sections 303.002,

303.003 and 303.006
of the Texas Finance Code. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. Borrower
does not agree or intend to pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive
(collectively referred to herein as "charge or collect"), any amount in the nature of interest or in the nature of a
fee for this loan, which would in any way or event (including demand, prepayment, or acceleration) cause Lender to charge or collect
more for this loan than the maximum Lender would be permitted to charge or collect by federal law or the law of the State of Texas
(as applicable). Any such excess interest or unauthorized fee shall, instead of anything stated to the contrary, be applied first
to reduce the principal balance of this loan, and when the principal has been paid in full, be refunded to Borrower. The right
to accelerate maturity of sums due under this Note does not include the right to accelerate any interest which has not otherwise
accrued on the date of such acceleration, and Lender does not intend to charge or collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to Lender for the use, forbearance or detention of sums due hereunder shall,
to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of the loan evidenced
by this Note until payment in full so that the rate or amount of interest on account of the loan evidenced hereby does not exceed
the applicable usury ceiling. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing
them. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment,
demand for payment, notice of dishonor, notice of intent to accelerate the maturity of this Note, and notice of acceleration of
the maturity of this Note. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party
who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan or release any party or guarantor
or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral without the consent of
or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other
than the party with whom the modification is made. The obligations under this Note are joint and several.

PRIOR TO SIGNING
THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A
COMPLETED COPY OF THIS PROMISSORY NOTE.

 

BORROWER:

 

GULFSLOPE ENERGY, INC.

 

By: __________________________

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