Document:

Exhibit

REPLACEMENT FORBEARANCE AGREEMENT

THIS REPLACEMENT FORBEARANCE AGREEMENT (this “Agreement”) dated as of August 21, 2015, is by and between AURORA ENERGY PARTNERS, a Texas general partnership (“Borrower”), and TEXAS CAPITAL BANK, NATIONAL ASSOCIATION (“Lender”).

WITNESSETH:

WHEREAS, Borrower and Lender are parties to that certain Credit Agreement dated as of February 20, 2014 (as has been or may be further amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”);

WHEREAS, certain Events of Default have occurred as a result of (a) the failure by Borrower to pay the “Deficiency” (as defined in that certain letter from Lender to Borrower dated as of April 13, 2015, which letter shall hereinafter be referred to as the “Deficiency Notice”) in full in violation of Section 2.9(f)(ii)(A) of the Credit Agreement, (b) the failure by Borrower to deliver the quarterly financial statements of Victory and its Subsidiaries and related Compliance Certificate for the fiscal quarter ended March 31, 2015, in violation of Sections 7.1(b) and (c) of the Credit Agreement, (c) the failure by Borrower to deliver the quarterly financial statements of Navitus and its Subsidiaries for the fiscal quarter ended March 31, 2015, in violation of Section 7.1(t) of the Credit Agreement, (d) the failure by Borrower to maintain a ratio of EBITDAX to Cash Interest Expense of at least 3.50 to 1.00 for the Test Periods ended March 31, 2015, and June 30, 2015, in violation of Section 9.1 of the Credit Agreement, (e) the failure by Borrower to maintain a Current Ratio of at least 1.00 to 1.00 for the fiscal quarter ended June 30, 2015, in violation of Section 9.2 of the Credit Agreement, (f) the failure by Borrower timely to pay accrued interest on June 1, 2015, July 1, 2015, and August 1, 2015, in violation of Section 2.7(a) of the Credit Agreement, and (g) the failure by Borrower to make the payments required under Section 2.9(e) of the Credit Agreement on or before June 1, 2015, July 1, 2015, and August 1, 2015 (collectively, the “Existing Events of Default”);

WHEREAS, the parties hereto executed and delivered that certain Forbearance Agreement dated as of June 15, 2015 (the “Prior Forbearance Agreement”), but such Prior Forbearance Agreement never became effective in accordance with the terms thereof; and

WHEREAS, Borrower has requested that Lender forbear from exercising its rights and remedies with respect to the Existing Events of Default as hereinafter provided, and Lender, subject to the terms and conditions contained herein, has agreed to such forbearance to be effective as of the date thereof;

NOW, THEREFORE, in consideration of the mutual covenants and the fulfillment of the conditions set forth herein, the parties hereby acknowledge and agree that the Prior Forbearance Agreement is of no force and effect and further agree as follows:

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1.    Definitions.  All capitalized terms defined in the Credit Agreement and not otherwise defined in this Agreement shall have the same meanings as assigned to them in the Credit Agreement when used in this Agreement, unless the context hereof shall otherwise require or provide.

2.    Forbearance.  Unless the Forbearance Period is sooner terminated as provided herein, Lender hereby agrees to forbear from the exercise of any of its rights and remedies under the Credit Agreement and the other Loan Documents in connection with the Existing Events of Default for a period beginning as of the date hereof through and including August 31, 2015 (the “Forbearance Period”).

(a)    Forbearance Limited to Existing Events of Default.  Lender’s forbearance shall be limited solely to the exercise of its rights and remedies arising under the Loan Documents as a result of the Existing Events of Default, and Lender shall not be deemed to have waived any rights or remedies it may have with respect to any other Default or breach occurring thereunder during the Forbearance Period, or any breach of this Agreement.

(b)    No New Defaults.  During the Forbearance Period, there shall occur no Default under any Loan Document or this Agreement, nor shall there be a breach or failure of any warranty, representation or covenant as described in this Agreement.

(c)    Notice Requirements Satisfied.  Each of Borrower and each Guarantor acknowledges that all notice requirements embodied in the Loan Documents and imposed upon Lender in connection with the Existing Events of Default, and the exercise of its remedies therefor (together with all applicable cure and/or grace periods) have been satisfied (or shall be deemed to have been satisfied by this Agreement) without exception, and that upon the expiration or earlier termination of the Forbearance Period, Lender shall, with respect to the Existing Events of Default, have the full right and power to exercise all remedies granted to it thereunder without further notice to Borrower and Guarantors or any of them and subject to no other conditions precedent.

(d)    Agreement in the Nature of Forbearance Only.  Each of Borrower and each Guarantor hereby acknowledges that Lender’s obligations under this Agreement are in the nature of a conditional forbearance only, and that Lender has not made any agreement or commitment to modify or extend the Loan Documents beyond the Forbearance Period, and that, upon the termination of the Forbearance Period, Lender shall have the immediate and unconditional right to exercise its remedies under the Loan Documents.

(e)    Termination of the Forbearance Period.  The Forbearance Period shall end on the first to occur of the following:

(i)    End of Forbearance Period.  The expiration of the Forbearance Period.

(ii)    Breach.  A breach by Borrower or any Guarantor of any of the conditions, covenants, representations and/or warranties set forth in this Agreement.

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(iii)    New Default.  The occurrence of any new Default under any one or more of the Loan Documents, which shall not include Existing Events of Default.

(iv)    Creditor Enforcement Action.  Any creditor(s) of Borrower or any Guarantor take(s) or threaten(s) any enforcement action against Borrower or any Guarantor which, in Lender’s reasonable judgment, would materially interfere with the operation of Borrower’s or any Guarantor’s business or Lender’s ability to collect the Obligations.

(v)    Bankruptcy.  Borrower or any Guarantor institutes or consents to the institution of any proceeding under any Debtor Relief Law or any proceeding under any Debtor Relief Law relating to Borrower or any Guarantor is instituted without the consent of Borrower or such Guarantor.

(vi)    Proceeding by Borrower or any Guarantor.  Borrower or any Guarantor initiates any judicial, administrative or arbitration proceeding against Lender.

Upon termination of the Forbearance Period, Lender’s agreement to forbear shall terminate automatically without further act or action by Lender, and Lender shall be entitled to exercise any and all rights and remedies available under the Loan Documents and this Agreement, at law, in equity, or otherwise without any further lapse of time, expiration of applicable grace periods, or requirements of notice, all of which are hereby expressly waived by Borrower and each Guarantor.

3.    Conditions of Forbearance.  Lender’s agreement to forbear from exercising any of its rights and remedies as a result of the Existing Events Default shall be subject to and conditioned upon each of the following:

(a)    On or before August 31, 2015, Borrower shall have made a payment to Lender of at least $260,000 (which, for the avoidance of doubt, shall be in addition to any amounts required to be paid under Section 7 hereof) in partial payment of the Obligations.

(b)    Within fifteen (15) days of the date hereof, Borrower shall deliver to Lender satisfactory title information on the Penn Virginia Properties (as hereinafter defined).
(c)    Lender shall have received such other documents, instruments and certificates as reasonably requested by Lender.

4.    Consent of Guarantors.  Each Guarantor hereby consents, acknowledges and agrees to terms of the forbearance set forth herein and hereby confirms, reaffirms and ratifies in all respects the Guaranty to which it is a party (including without limitation the continuation of such Guarantor’s payment and performance obligations thereunder upon and after the effectiveness of this Agreement) and the enforceability of such Guaranty against such Guarantor in accordance with its terms.
5.    Ratification of Loan Documents.  Each of Borrower, each Guarantor and Lender further agree that the Liens, assignments and security interests created by the Loan Documents (subject to any express release agreement between Borrower or any Guarantor and Lender) shall 

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continue and carry forward until the Obligations are paid and performed in full.  Each of Borrower and each Guarantor further agrees that such Liens, assignments and security interests are hereby ratified and affirmed as valid and subsisting against the Collateral described in the Loan Documents and that this Agreement shall in no manner vitiate, affect or impair the Credit Agreement or the other Loan Documents (except as expressly modified in this Agreement) and that such Liens, assignments, and security interests shall not in any manner be waived, released, altered or modified.  Each of Borrower and each Guarantor acknowledges and agrees that as of the effective date of this Agreement, to its current and actual knowledge, there are no offsets, defenses or claims against any part of the Obligations.

6.    Representations and Warranties.  Borrower hereby certifies that, after giving effect to this Agreement:
(a)    The representations and warranties of Borrower contained in Article 6 of the Credit Agreement, or which are contained in any document furnished at any time under or in connection with the Credit Agreement, that are qualified by materiality are true and correct on and as of the date hereof, and each of the representations and warranties of Borrowers contained in Article 6 of the Credit Agreement, or which are contained in any document furnished at any time under or in connection with the Credit Agreement, that are not qualified by materiality are true and correct in all material respects on and as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct, or true and correct in all material respects, as the case may be, as of such earlier date;
(b)    this Agreement has been duly authorized, executed and delivered by Borrower and each Guarantor and constitutes a legal, valid and binding obligation of such Persons, except as may be limited by general principles of equity or by the effect of any applicable Debtor Relief Laws; and
(c)    after giving effect to this Agreement and except for the Existing Events of Default, no Default exists.
7.    Conditions to Effectiveness.  This Agreement shall not be effective until the following conditions precedent have been satisfied:
(a)    Lender shall have received counterparts of this Agreement executed by Borrower and each Guarantor;

(b)    No Default shall exist except the Existing Events of Default;

(c)    Lender shall have received payment of at least $70,081.23 in partial payment of the Obligations plus accrued, but unpaid interest on the Obligations.

(d)    Lender shall have received payment of a forbearance fee in the amount of $2,500.

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(e)    Borrower and Guarantors shall have paid all costs and expenses incident to the preparation hereof and the consummation of the transaction contemplated hereby, including, but not limited to, reasonable fees and expenses of Winstead PC, legal counsel to Lender (which fees and expenses, as to legal counsel of Lender, shall be paid directly to legal counsel of Lender immediately upon presentation of a bill for legal services rendered); and

(f)    Lender shall have received such other documents, instruments and certificates as reasonably requested by Lender.

Upon the satisfaction of the conditions set forth in this Section 7, this Agreement shall be effective as of the date hereof.
8.    Limitation on Agreements.  The amendments and agreements set forth herein are limited in scope as described herein and shall not be deemed (a) to be a consent under, or waiver of, any other term or condition of the Credit Agreement or any of the other Loan Documents, or (b) to prejudice any right or rights which Lender now has or may have in the future under, or in connection with the Loan Documents, as amended or modified by this Agreement, the other Loan Documents or any of the documents referred to herein or therein.

9.    Governing Law.  This Agreement shall in all respects be governed by, and construed in accordance with, the Laws of the State of Texas.

10.    Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

11.    Loan Document.  This Agreement is a Loan Document and is subject to all provisions of the Credit Agreement applicable to Loan Documents, all of which are incorporated in this Agreement by reference the same as if set forth in this Agreement verbatim.

12.    Enforceability.  Should any one or more of the provisions of this Agreement be determined to be illegal or unenforceable as to one or more of the parties hereto, all other provisions nevertheless shall remain effective and binding on the parties hereto.

13.    No Novation.  This Agreement is given as a modification of, and not as a payment of, the Obligations and is not intended to constitute a novation of the Credit Agreement or any of the other Loan Documents.  All of the Obligations shall continue.
14.    Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of Borrower, each Guarantor, Lender and their respective successors, assigns and legal representatives; provided, however, neither Borrower nor any Guarantor, without the prior consent of Lender, may assign any of its rights, powers, duties or obligations hereunder.

15.    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original (including electronic copies) but all of which together shall 

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constitute one and the same instrument.  Telecopies and PDFs of signatures shall be effective as manually executed originals.
16.    Expenses.  Without limiting the provisions of Section 11.1 of the Credit Agreement, Borrower and Guarantors agree to pay all out of pocket costs and expenses (including without limitation reasonable fees and expenses of any counsel, financial advisor, industry advisor and agent for Lender) incurred before or after the date hereof by Lender and its affiliates in connection with the preparation, negotiation, execution, delivery and administration of this Agreement and the Loan Documents.

17.    Release.  As a material part of the consideration for Lender entering into this Agreement, Borrower and each Guarantor (collectively, “Releasor”) agree as follows (the “Release Provision”):

(a)    Releasor hereby releases and forever discharges Lender and Lender’s predecessors, successors, assigns, officers, managers, directors, shareholders, employees, agents, attorneys, representatives, parent corporations, subsidiaries, and affiliates (hereinafter all of the above collectively referred to as “Lender Group”) jointly and severally from any and all claims, counterclaims, demands, damages, debts, agreements, covenants, suits, contracts, obligations, liabilities, accounts, offsets, rights, actions, and causes of action of any nature whatsoever occurring prior to the date hereof, including, without limitation, all claims, demands, and causes of action for contribution and indemnity, whether arising at law or in equity, presently possessed, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, presently accrued, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted (“Claims”), which Releasor may have or claim to have against any of Lender Group.

(b)    Releasor agrees not to sue any of Lender Group or in any way assist any other person or entity in suing Lender Group with respect to any Claim released herein.  The Release Provision may be pleaded as a full and complete defense to, and may be used as the basis for an injunction against, any action, suit, or other proceeding which may be instituted, prosecuted, or attempted in breach of the release contained herein.

(c)    Releasor acknowledges, warrants, and represents to Lender Group that:

(i)    Releasor has read and understands the effect of the Release Provision.  Releasor has had the assistance of independent counsel of its own choice, or has had the opportunity to retain such independent counsel, in reviewing, discussing, and considering all the terms of the Release Provision; and if counsel was retained, counsel for Releasor has read and considered the Release Provision and advised Releasor to execute the same.  Before execution of this Agreement, Releasor has had adequate opportunity to make whatever investigation or inquiry it may deem necessary or desirable in connection with the subject matter of the Release Provision.

(ii)    Releasor is not acting in reliance on any representation, understanding, or agreement not expressly set forth herein.  Releasor acknowledges 

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that Lender Group has not made any representation with respect to the Release Provision except as expressly set forth herein.

(iii)    Releasor has executed this Agreement and the Release Provision thereof as its free and voluntary act, without any duress, coercion, or undue influence exerted by or on behalf of any person.

(iv)    Releasor is the sole owner of the Claims released by the Release Provision, and Releasor has not heretofore conveyed or assigned any interest in any such Claims to any other person or entity.

(d)    Releasor understands that the Release Provision was a material consideration in the agreement of Lender to enter into this Agreement.

(e)    It is the express intent of Releasor that the release and discharge set forth in the Release Provision be construed as broadly as possible in favor of Lender Group so as to foreclose forever the assertion by Releasor of any Claims released hereby against Lender Group.

(f)    If any term, provision, covenant, or condition of the Release Provision is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the remainder of the provisions shall remain in full force and effect.

18.    WAIVER OF JURY TRIAL.  TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND GUARANTORS HEREBY IRREVOCABLY AND EXPRESSLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT HEREOF OR THEREOF.

THIS AGREEMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG 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 AMONG THE PARTIES.
[Remainder of page intentionally left blank.  Signature pages follow.]

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EXECUTED to be effective as of the date first above written.
BORROWER:

AURORA ENERGY PARTNERS

By:    Victory Energy Corporation,
its Managing Partner

By:    /s/ Kenneth Hill
Kenneth Hill
CEO

Signature Page

LENDER:

TEXAS CAPITAL BANK, NATIONAL ASSOCIATION

By:    /s/ Frank K. Stowers   
Frank K. Stowers
Senior Vice President

Signature Page

Ratification of Guaranties
Each of the undersigned, as Guarantors of the obligations under one or more Guaranties (each, a “Guaranty”), hereby (a) consents and agrees to this Replacement Forbearance Agreement, including, without limitation, the terms and provisions of Sections 2, 4, 5, 13, 14, 16, 17 and 18 thereof, and (b) confirms and agrees that its Guaranty is and shall continue to be in full force and effect and is ratified and confirmed in all respects, except that, on and after the effective date of the Replacement Forbearance Agreement each reference in any Guaranty to “the Credit Agreement,” “thereunder,” “thereof,” “therein” or any other expression of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement as modified by the Replacement Forbearance Agreement.
VICTORY ENERGY CORPORATION

By:    /s/ Kenneth Hill
Kenneth Hill
CEO

Signature Page

NAVITUS ENERGY GROUP

By:    James Capital Consulting, LLC,
its Managing Partner

By:    /s/ Ronald W. Zamber
Ronald W. Zamber
Manager

Signature Pageex4-1.htm

Exhibit 4.1

 

THIS NOTE AND ANY RESULTING EQUITY INSTRUMENT HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES ARE “RESTRICTED” AND MAY NOT BE OFFERED OR SOLD UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION D OR PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH THE ACT.

 

 

 

CONVERTIBLE CORPORATE

PROMISSORY NOTE

(Secured)

 

Amount: $1,600,000

 

Date: August 20, 2015

 

FOR VALUE RECEIVED, the undersigned, Principal Solar, Inc., a Delaware corporation (“Debtor”), promises to pay to the order of Arowana International Limited (“Lender”), at Level 11, 153 Walker Street, North Sydney NSW 2060, Australia, or at such other place or to such other party as Lender may from time to time designate to Debtor in writing, on or before the 31st day of December, 2016 (the “Final Maturity Date”), the principal sum of One Million Six hundred Thousand Dollars U.S. ($1,600,000), or so much thereof as may be outstanding from time to time (the “Loan Amount”), together with per annum interest on the outstanding principal balance existing from time to time from the date hereof as hereinafter provided.

 

ARTICLE I

TERMS OF THE NOTE

 

Section 1.1.    Interest. The sums advanced under this Convertible Corporate Promissory Note (“Note”) shall bear simple interest on the outstanding Loan Amount at the rate of six percent (6%) per annum. In no event shall the rate of interest charged hereunder exceed the maximum rate permitted by law. Interest shall be calculated on the basis of a 365-day year, counting the actual number of days elapsed.

 

Section 1.2.     Maturity. This Note shall mature on the Final Maturity Date. 

 

Section 1.3.     Payments. On the Final Maturity Date, the entire outstanding Loan Amount plus all accrued but unpaid interest shall be due and payable. 

 

Section 1.4.     Use of Advances / Collateral. Advances made pursuant to this Note are limited in use to investments in, and this Note is secured by, Debtor's interests, existing now or hereafter created in, Innovative Solar 31, LLC; Innovative Solar 33, LLC; and Innovative Solar 47, LLC (collectively the "Collateral"), as evidenced by Debtor’s execution of its Corporate Security Agreement (together with this Note the "Loan Document(s)") contemporaneous with the Debtor’s execution of this Note, and is otherwise non-recourse against Debtor or its other assets either existing now or hereafter created.

 

 

Principal Solar, Inc. Convertible Corporate Promissory Note

 

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Section 1.5.     Prepayments. Debtor shall have the privilege of prepaying this Note, in whole or in part, without any pre-payment premium or penalty, at any time prior to the Final Maturity Date.

 

Section 1.6.     At the option of the Lender, principal and interest due and payable at the Final Maturity Date or such earlier date as may be agreed upon by the parties hereto, may be converted into Limited Liability Company Membership Interests in Principal Sunrise V at a conversion price determined with reference to the unlevered after tax project IRR that reflects the Lender’s investment valuation of Principal Sunrise V at the time of its investment.

 

Section 1.7.     Subject to satisfactory completion of its due diligence, Lender commits to contribute equity capital in amounts sufficient to fund project development to completion of Principal Sunrise V and other projects funded by the proceeds hereof. If, following Lender's completion of its due diligence on Principal Sunrise V, the parties hereto agree the project does not meet its investment return requirements, the parties agree to work in good faith to identify a substitute solar project as security hereunder.

 

ARTICLE II

INCORPORATED DOCUMENTS

 

Section 2.1.     Debtor’s Corporate Security Agreement, as referenced in foregoing Section 1.4.

 

ARTICLE III

ACCELERATION

 

Section 3.1.     Acceleration. Upon the occurrence of an Event of Default, Lender may, at its sole option, terminate Debtor’s right to obtain extensions of credit and may declare the entire Loan Amount outstanding hereunder, together with all accrued interest thereon, to be immediately due and payable without notice, and said indebtedness may be collected by appropriate proceedings in law or equity. No delay on the part of Lender in exercising said option shall operate as a waiver, or preclude exercise of such option during the existence of such Event of Default or upon the occasion of a later Event of Default.

 

Section 3.2.     Events of Default.

 

3.2.1 Debtor and Lender shall enter into a strategic relationship providing Lender an opportunity to invest in the project equity in each of three Collateral projects, or equivalent substitute projects. Failure of the Debtor and Lender to reach such agreement on or before September 30, 2015, which such date may be extended by mutual agreement, shall be an Event of Default giving rise to Debtor's forfeiture of the Collateral to Lender, and the satisfaction and cancellation of the Note.

 

 

Principal Solar, Inc. Convertible Corporate Promissory Note

 

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3.2.2 Use of advances for purposes other than investments in the Collateral.

 

 

3.2.3 Non-payment of Principal or Interest when due.

 

ARTICLE IV

ENFORCEMENT COSTS

 

Section 4.1.     Enforcement Costs. Debtor agrees to pay immediately upon demand all reasonable costs and expenses of Lender, including reasonable attorneys’ fees, (i) if, after an Event of Default, this Note be placed in the hands of an attorney or attorneys for collection, (ii) if Lender finds it necessary or desirable upon an Event of Default to secure the services or advice of one or more attorneys with regard to collection of this Note against Debtor, any guarantor or any other party liable therefor or for protection of its rights under this Note or any Loan Document, or (iii) if Lender seeks to have this Note, or any part thereof, abandoned by any estate in bankruptcy, or attempts to have lifted by any bankruptcy or other court, any stay or injunction prohibiting the enforcement or collection of the Note, and any subsequent proceedings or appeals from any order or judgment entered in any such proceeding.

 

If Lender shall be made a party to or shall intervene in any action or proceeding, whether in court or before any governmental authority, affecting any collateral for this Note or the title thereto or the interest of the Lender under any Loan Document, Lender shall be reimbursed by Debtor immediately upon demand for all reasonable costs, charges, and attorneys’ fees incurred by Lender in any such case, and the same shall be secured by the other Loan Documents as a further charge and lien upon all collateral for this Note.

 

As used in this Note, the term “reasonable attorneys’ fees” shall mean those fees actually charged by attorneys selected by Lender, based upon standard rates of said attorneys for services actually rendered, as opposed to any statutory presumption that may then be in effect in the State of Texas.

 

ARTICLE V

WAIVERS

 

Section 5.1.     Waivers. Lender, at its option, may make extensions of the time for the payment of the indebtedness evidenced by this Note, or reduce the payments thereon, release any collateral securing such indebtedness, or accept a renewal note or notes therefor, all without notice, and Debtor and endorsers hereby consent to any such extensions, reductions, releases or renewals, all without notice, and agree that any such action shall not release them from any liability hereunder. Debtor and endorsers jointly and severally waive presentment for payment, notice of dishonor, notice of nonpayment of this Note, and diligence in the collection thereof as conditions of liability under this instrument.

 

 

Principal Solar, Inc. Convertible Corporate Promissory Note

 

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ARTICLE VI

NOTICES

 

Section 6.1.     Notices.

 

(a)     If to Debtor:

 

Michael Gorton 

Principal Solar, Inc.

2560 King Arthur Blvd Suite 124 PMB 65

Lewisville, TX 75056

 

 

Facsimile: 855.774.7799

 

with a copy to:

 

Quentin Faust

Partner

Settle & Pou PC

3333 Lee Pkwy # 800

Dallas TX 752189

 

 

Facsimile: (214) 526-4145

 

All notices to Lender shall be sent to:

 

Kevin Chin

Arowana International Limited

Level 11, 153 Walker Street

North Sydney NSW 2060

Australia

 

 

ARTICLE VII

APPLICABLE LAW AND VENUE

 

Section 7.1.     Applicable Law. This Note is subject to the laws of the Great State of Texas, USA, and the conflicts of law principles of the state of Texas.

 

Section 7.2.     Venue.     The venue for any lawsuits brought on this Note shall be brought in the state district courts of Dallas County, Texas, sitting in the city of Dallas, Texas.

 

ARTICLE VIII

RIGHTS OF LENDER UNASSIGNABLE

 

Section 8.1.     Successors and Assigns. The rights of Lender hereunder are not assignable by Lender, without the written permission of the Debtor.

 

 

 

 

 

Signature page follows.

 

 

 

Principal Solar, Inc. Convertible Corporate Promissory Note

 

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Exhibit 4.1

 

 

DEBTOR:

 

Principal Solar, Inc. 

a Delaware corporation

 

 

By: /s/ Michael Gorton

Michael Gorton

Chief Executive Officer

 

 

LENDER:

 

Arowana International Limited 

An Australian corporation

 

 

By: /s/ Kevin Chin

Kevin Chin

Chief Executive Officer

 

 

 

 

 

 

Principal Solar, Inc. Convertible Corporate Promissory Note

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