Document:

Exhibit
10.2

 

PLEDGE
AND SECURITY AGREEMENT

THIS
PLEDGE AND SECURITY AGREEMENT (“Security Agreement”) dated the 29th day of September, 2021, made by Empire
Petroleum Corporation, a Delaware corporation (“Pledgor”), in favor of ENERGY EVOLUTION MASTER FUND,
LTD., a Cayman Islands exempted company (“Lender”). Capitalized terms utilized but not defined herein shall have
the meaning as set forth under the terms of the Loan Modification Agreement (“Modification Agreement”) between EMPIRE
NEW MEXICO LLC, a Delaware limited liability company d/b/a Green Tree New Mexico (“Company”), Pledgor and Lender,
dated on or near the date hereof.

 

W
I T N E S S E T H:

That
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor hereby agrees with Lender
as follows:

1.     
       Pledge and Grant of Security Interest. As collateral security
for all of the Obligations, Pledgor hereby pledges and assigns to Lender, and grants to Lender a continuing security interest in,
the following (collectively, the “Pledged Collateral”):

(a)             
One hundred percent (100%) of Pledgor’s membership interests (collectively the “Pledged Interest”) in Company,
Parent’s wholly owned subsidiary, including, but not limited to, the present right to make claim for, collect, receive and give
receipt for any of the sums, amounts, income, revenues, issues and profits and any other sums of money payable to or receivable under
that certain Limited Liability Company Agreement of Company dated as of March 10, 2021, as the same may amended (the “Company
Agreement”), to bring actions and proceedings thereunder or for the enforcement thereof, and to do any and all things which
Pledgor is or may become entitled to under Company Agreement and all of Pledgor’s claims, demands and causes of actions with respect
to the Pledged Interest, and all of Pledgor’s right, title and interest in any fund or account balance set aside for the payment
thereof; moneys and proceeds of every kind and nature, due or to become due to Pledgor at any time, now or hereafter, together with the
certificates representing the Pledged Interests (if any), all options and other rights, contractual or otherwise, with respect thereto
and all dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the Pledged Interests; any and all of Pledgor’s rights to vote, control or otherwise direct the
actions of Company or its managers, directors, employees, agents or representatives; and any and all of Pledgor’s right to be and
act as a member of Company, without restriction or reservation;

(b)           
  All additional interests in Company from time to time issued to or acquired by Pledgor by virtue of its ownership of the
Pledged Interests as a result of any dividend or distribution in connection with any increase or reduction of capital,
reclassification, merger, consolidation, sale of assets, combination of membership interests, membership interest split, spin-off,
split-off, or other form or recapitalization, the certificates representing such additional financial interests and all dividends,
distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of such additional financial interests; and

(c)             
All proceeds of any and all of the foregoing; in each case, whether now owned or hereafter acquired by Pledgor and howsoever its interest
therein may arise or appear (whether by ownership, security interest, claim or otherwise).

 

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2.   
         Security for Obligations. The security interest created hereby in the
Pledged Collateral constitutes continuing collateral security for all of the following obligations, whether now existing or
hereafter incurred (the “Obligations”):

(a)             
The prompt payment, as and when due and payable, of the “Obligations” (in this instance as used and defined in the Loan Modification)
under the Note (as modified by the Modification Agreement and as maybe further modified, extended or amended the “Loan”);
and

(b)            
The due performance and observance by Pledgor of all of its respective obligations and undertakings under or pursuant to this Security
Agreement, the Modification Agreement and any other Loan Document.

3.            
Delivery of the Pledged Collateral.

(a)             
All certificates representing the Pledged Interests, if any, shall be delivered to Lender on or prior to the execution and delivery of
this Security Agreement. All other certificates and instruments constituting Pledged Collateral from time to time shall be delivered
to Lender promptly upon the receipt thereof by or on behalf of Pledgor, and until such delivery shall be held in trust for the benefit
of Lender. All such certificates and instruments shall be held by or on behalf of Lender pursuant hereto and shall be delivered in suitable
form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Lender.

(b)            
If Pledgor shall receive, by virtue of its being or having been an owner of any Pledged Collateral, any (i) membership interest
certificate (including, without limitation, any certificate representing a dividend or distribution in connection with any increase or
reduction of capital, reclassification, merger, consolidation, sale of assets, combination of membership interests, split membership
interest, spinoff or split-off), promissory note or other instrument; (ii) option or right, whether as an addition to, substitution
for, or in exchange for, any Pledged Collateral, or otherwise; (iii) dividends or distributions payable in cash (except as otherwise
set forth in Section 6 hereof) or in securities or other property; or (iv) dividends or other distributions in connection with a
partial or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in surplus, Pledgor
shall receive such membership interest certificate, promissory note, instrument, option, right, payment or distribution in trust for
the benefit of Lender, shall segregate it from Pledgor’s other property and shall deliver it forthwith to Lender in the exact form
received, with any necessary endorsement and/or appropriate membership interest powers duly executed in blank, to be held by Lender as
Pledged Collateral and as further collateral security for the Obligations.

(c)             
If any of the Pledged Interests are not certificated, Pledgor shall, at Lender’s request, and at Pledgor’s expense, cause
each such Pledged Interest to be certificated in accordance with all applicable laws and shall deliver the certificate(s) evidencing
such Pledged Interests to Lender together with any necessary endorsement and/or membership interest powers duly executed in blank, to
be held by Lender as Pledged Collateral and as further collateral security for the Obligations.

4.            
Representations and Warranties.  Pledgor represents and warrants as follows:

(a)             
The Pledged Interest has been duly authorized and validly issued, are fully paid and non-assessable, and constitute validly issued, outstanding
membership interest of Company.

(b)            
Pledgor is the legal and beneficial owner of the Pledged Collateral free and clear of any lien, security interest or other charge or
encumbrance except for the security interest created by this Security Agreement.

 

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(c)             
 The execution, delivery and performance by Pledgor of this Security Agreement and any transactions contemplated hereunder are within
the powers of Pledgor and have been duly authorized by all necessary action. This Security Agreement has been duly executed and delivered
by Pledgor and constitutes a legal, valid and binding agreement of Pledgor, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy or other similar laws affecting the rights and remedies of creditors generally
as well as to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(d)            
The exercise by Lender of its rights and remedies hereunder will not contravene any law or governmental regulation or any contractual
restriction binding on or affecting Pledgor or any of its properties and will not result in or require the creation of any lien, security
interest or other charge or encumbrance upon or with respect to any of its properties.

(e)             
No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required
either (i) for the pledge hereunder by Pledgor of, or the grant by Pledgor of the security interest created hereby in, the Pledged
Collateral or (ii) except as may be required by laws affecting the offering and sale of securities generally, for the exercise by
Lender of its rights and remedies hereunder.

(f)             
This Security Agreement creates a valid security interest in favor of Lender in the Pledged Collateral. The taking possession by Lender
of the certificates representing the Pledged Interests, if any, and all other certificates, instruments and cash constituting Pledged
Collateral from time to time, and the filing of a UCC-1 financing statement with the Secretary of State of the State of Delaware describing
the Pledged Collateral will perfect, and establish the first priority of, Lender’s security interest hereunder in the Pledged Collateral,
securing the Obligations. Except as set forth in this Section 4(f), no action is necessary or desirable to perfect or otherwise
protect such security interest.

(g)            
The office where Pledgor keeps its records concerning the Pledged Collateral is located at the address specified for Pledgor in Section
11 hereof.

5.            
Covenants as to the Pledged Collateral. So long as any of the Obligations shall remain outstanding, Pledgor
will, unless Lender shall otherwise consent in writing:

(a)             
give Lender at least thirty (30) days’ prior written notice of any change in the location of the office where it keeps its records
concerning the Pledged Collateral;

(b)            
keep adequate records concerning the Pledged Collateral and permit Lender, its agents or representatives, at any reasonable time and
from time to time to examine and make copies of and abstracts from such records;

(c)             
at Pledgor’s expense, promptly deliver to Lender a copy of each notice or other communication received by it in respect of the
Pledged Collateral, and of each financial statement from time to time furnished or made available to it by Company; and, at Lender’s
request, permit Lender to inspect all records of Company which Pledgor is entitled to inspect (provided that such inspection by Lender
is not in conflict with applicable law);

(d)            
at Pledgor’s expense, defend Lender’s right, title and security interest in and to the Pledged Collateral against the claims
of any person or entity;

(e)             
at Pledgor’s expense, at any time and from time to time, promptly execute and deliver all further instruments and documents and
take all further action that may be necessary or desirable or that Lender
may request in order to (i) perfect and protect the security interest created or purported to be created hereby; (ii) enable
Lender to exercise and enforce its rights and remedies hereunder in respect of the Pledged Collateral; or (iii) otherwise effect
the purposes of this Security Agreement, including, without limitation, delivering to Lender irrevocable proxies in respect of the Pledged
Collateral in accordance with Section 6 hereof.

 

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(f)             
not sell, assign, exchange or otherwise dispose of any of the Pledged Collateral, or any interest therein, except in furtherance of Section
6(a) of the Modification Agreement;

(g)            
not create or suffer to exist any lien, security interest or other charge or encumbrance upon or with respect to any Pledged Collateral
except for the pledge hereunder and the security interest created hereby;

(h)            
not make or consent to any amendment or other modification or waiver with respect to any Pledged Collateral or enter into any agreement
or permit to exist any restriction with respect to any pledged collateral other than pursuant hereto;

(i)              
not permit the issuance of (i) any additional shares of any class of membership interests of Company, (ii) any securities convertible
voluntarily by the holder thereof or automatically upon the occurrence or non-occurrence of any event or conditions into, or exchangeable
for any such membership interests, or (iii) any warrants, options, contracts, or other commitments entitling any party to purchase
or otherwise acquire any such membership interests;

(j)              
not take or fail to take any action which would in any manner impair the value or enforceability of Lender’s security interest
in any Pledged Collateral;

(k)            
 not amend Company’s Certificate of Formation or the Company Agreement without Lender’s express consent (not to be unreasonably
withheld) and, provided further, Lender shall not withhold consent of such changes as are reasonably necessary for Company to perform
its obligations under Section 6(a) of the Modification Agreement; and

(l)              
not permit the Pledged Interests to become certificated.

6.          
  Voting Rights, Distributions, Dividends,
Etc. in Respect of the Pledged Collateral.

(a)             
Prior to the occurrence of an Event of Default (as defined in Section 8 hereof):

(i)              
Pledgor may exercise any and all voting and other consensual rights pertaining to the Pledged Collateral or any part thereof for any
purpose not inconsistent with the terms of this Security Agreement or the other Loan Documents; provided, however, that Pledgor will
not exercise or refrain from exercising any such right, as the case may be, if Lender gives Pledgor notice that, in Lender’s judgment,
such action would have a material adverse effect on the value of any Pledged Collateral;

(ii)            
Pledgor may receive and retain any and all dividends or interest paid in respect of the Pledged Collateral; provided, however,
that any and all

(1)            
dividends, distributions and interest (paid or payable other than in cash) and instruments and other property received, receivable or
otherwise distributed in respect of or in exchange for, any Pledged Collateral, and

 

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(2)            
 cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Pledged Collateral shall be, and shall forthwith
be delivered to Lender to hold as Pledged Collateral and shall, if received by Pledgor, be received in trust for the benefit of Lender,
shall be segregated from the other property or funds of Pledgor, and shall be forthwith delivered to Lender in the exact form received
with any necessary endorsement and/or appropriate stock powers duly executed in blank, to be held by Lender as Pledged Collateral and
as further collateral security for the Obligations; and

(iii)          
Lender will execute and deliver (or cause to be executed and delivered) to Pledgor all such proxies and other instruments as Pledgor
may reasonably request for the purpose of enabling Pledgor to exercise the voting and other rights which it is entitled to exercise pursuant
to paragraph (i) of this Section 6(a).

(b)            
Upon the occurrence of an Event of Default (as defined in Section 8 hereof), all rights of Pledgor to receive such dividend payments
and distributions as related to the Pledged Collateral shall cease, and all such rights shall thereupon become vested in Lender which
shall thereupon have the sole right to receive the distributions and dividends related to the Pledged Collateral.

7.            
Additional Provisions Concerning the Pledged Collateral.

(a)             
Pledgor hereby agrees to take any action and to execute any instruments which may be necessary or advisable to accomplish the purposes
of this Security Agreement.

(b)            
Pledgor hereby irrevocably appoints Lender Pledgor’s attorney-in-fact and proxy, with full authority in the place and stead of
Pledgor and in the name of Pledgor or otherwise, from time to time in Lender’s discretion, to give any notice, take any action
and execute any instrument which Lender may deem necessary or advisable to accomplish the purposes of this Security Agreement (subject
to the rights of Pledgor under Section 6(a) hereof), including, without limitation, (i) to receive, endorse and collect all
instruments made payable to Pledgor representing any dividend or other distribution in respect of the Pledged Collateral or any part
thereof and to give full discharge for the same, and (ii) to give any notice, request any information, take any action and execute
any instrument which Lender deems necessary to perfect, preserve and protect its position as lienholder with respect to the Pledged Collateral.

(c)             
If Pledgor fails to perform any agreement or obligation contained herein, Lender itself may perform, or cause performance of, such agreement
or obligation, and the expenses of Lender incurred in connection therewith shall be payable by Pledgor pursuant to Section 10 hereof.

(d)            
Lender shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession
if the Pledged Collateral is accorded treatment substantially equal to that which Lender accords its own property, it being understood
that Lender shall not have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities,
tenders or other matters relating to any Pledged Collateral, whether or not Lender has or is deemed to have knowledge of such matters,
or (ii) taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral.

8.           
Events of Default. An Event of Default shall be deemed to have occurred hereunder upon the occurrence of a failure or default
in the full, faithful and prompt payment or performance of any one or more of the Obligations, and shall include, but shall not be limited
to:

 

 

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(a)             
 Any default in the full and prompt payment when due of all or any part of any indebtedness or obligation constituting part of the Obligations
within 7 days after being provided written notice by Lender of such default; or

(b)            
Any failure by Pledgor to cure any material default of any covenant, agreement, obligation, condition or undertaking under any Loan Documents
or any other instrument or document now or hereafter securing all or any part of the Obligations within 30 days after being provided
written notice by Lender of such default, except in the case of the payment of money or installment thereof when due and payable for
which a 7-day cure period shall apply; or

(c)             
Any failure by Pledgor to cure any material default of any representation or warranty of Pledgor under any Loan Documents or any other
instrument or document now or hereafter securing all or any part of the Obligations within 30 days after being provided written notice
by Lender of such default; or

(d)            
Any representation or warranty by Pledgor set out herein or in any other instrument or document executed by Pledgor in connection herewith
shall prove to be false or misleading in any material respect as of the time made; or

(e)             
An Event of Default under the Loan Modification Agreement or any other Loan Document.

9.            
Remedies Upon Default. Upon the occurrence of an Event of Default:

(a)             
Lender may (i) exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party on default under the Uniform Commercial Code in effect in the State
of Delaware (the “Code”); and (ii) without limiting the generality of the foregoing and without notice except as specified
below, sell the Pledged Collateral or any part thereof in one or more parcels at public or private sale, at any exchange or broker’s
board or elsewhere, at such price or prices and on such other terms as Lender may deem commercially reasonable, for cash or on credit
or for future delivery. Pledgor agrees that at least five (5) days’ notice to Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute reasonable notification. Lender shall not be obligated to make
any sale of Pledged Collateral regardless of notice of sale having been given. Lender may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place
to which it was so adjourned. Notwithstanding anything herein to the contrary, Pledgor recognizes that Lender may deem it impracticable
to effect a public sale of all or any part of the Pledged Interest or any other securities constituting Pledged Collateral and that Lender
may, therefore, determine to make one or more private sales of any such securities to a restricted group of purchasers who will be obligated
to agree, among other things, to acquire such securities for their own account, for investment and not with a view to the distribution
or resale thereof. Pledgor acknowledges that any such private sale may be at prices and on terms less favorable to the seller than the
prices and other terms which might have been obtained at a public sale and, notwithstanding the foregoing, agrees that Lender shall have
no obligation to delay sale of any such securities for the period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act of 1933, as amended (the “Securities Act”). A sale so conducted
shall not be deemed to be commercially unreasonable, within the meaning of the Code, by virtue of the failure to register such securities
or to offer them publicly in the manner permitted only with respect to registered securities. Pledgor further acknowledges and agrees
that any offer to sell such securities which has been (i) publicly advertised on a bona fide basis in a newspaper or other publication
of general circulation (to the extent that such an offer may be so advertised without prior registration under the Securities Act), or
(ii) made privately in the manner described above to not less than six (6) bona fide offerees shall be deemed to involve a “public
sale” for the purposes of the Code (or any successor or similar applicable statutory provision) as then in effect,
notwithstanding that such sale may not constitute a “public offering” under the Securities Act, and that Lender may, in such
event, bid for the purchase of such securities.

 

 

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(b)            
Any cash held by Lender as Pledged Collateral and all cash proceeds received by Lender in respect of any sale of, collection from, or
other realization upon, all or any part of the Pledged Collateral may, in the discretion of Lender, be held by Lender as collateral for,
and/or then or at any time thereafter applied (after payment of any amounts payable to Lender pursuant to Section 10 hereof) in
whole or in part by Lender against, all or any part of the Obligations in such order as Lender shall elect. Any surplus of such cash,
cash proceeds or assets, if any, held by Lender and remaining after payment in full of all of the Obligations shall be paid over to Pledgor
or to whomsoever may be lawfully entitled to receive such surplus.

10.     
     Indemnity and Expenses.

(a)             
Pledgor agrees to indemnify Lender from and against any and all claims, losses and liabilities growing out of or resulting from this
Security Agreement (including, without limitation, enforcement of this Security Agreement), except claims, losses or liabilities resulting
from Lender’s gross negligence or willful misconduct. 

(b)            
Pledgor will upon demand pay to Lender the amount of any and all expenses, including the reasonable fees and disbursements of Lender’s
counsel and of any experts and agents, which Lender may incur in connection with (i) the administration of this Security Agreement;
(ii) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, any Pledged Collateral;
(iii) exercise or enforcement of any of the rights of Lender hereunder; or (iv) the failure by Pledgor to perform or observe
any of the provisions hereof, except expenses resulting from Lender’s gross negligence or willful misconduct.

11.         
Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed, certified
mail, return receipt requested, or telegraphed or delivered, if to Pledgor, to it at: 2200 S. Utica Place, Suite 150 Tulsa, OK 74114;
to Lender, 25025 I-45 North, Suite 420, The Woodlands, Texas 77380; or as to either such person at such other address as shall be designated
by such person in a written notice to such other person complying as to delivery with the terms of this Section 11. All such notices
and other communications shall be effective (i) if mailed, when received or three business days after mailing, whichever is
earlier; or (ii) if delivered, upon delivery.

12.          
Security Interest Absolute. All rights of Lender, all security interests and all obligations of Pledgor hereunder shall be absolute
and unconditional irrespective of:

(a)             
any lack of validity or enforceability of the Loan Documents, or any other agreement or instrument relating thereto;

(b)            
any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the Obligations, or any other
amendment or waiver of or consent to any departure from the Note, or any other agreement or instrument relating thereto or to any of
the Obligations;

(c)             
any increase in, addition to, or exchange, release or non-perfection of, any other collateral, or any release or amendment or waiver
of or consent to departure from agreement, for all or any of the Obligations;

(d)            
any other circumstance which might otherwise constitute a defense available to, or a discharge of, Pledgor or any other party liable,
directly or indirectly, absolutely or contingently, with respect to all or any part of the Obligations; or

(e)             
 the absence of any action on the part of Lender to obtain payment or performance of the Obligations from any person or entity.

 

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13.          
Miscellaneous.

(a)             
No amendment or waiver of any provision of this Security Agreement, and no consent to any departure by Pledgor therefrom, shall in any
event be effective unless the same shall be in writing and signed by Lender and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

(b)            
No failure on the part of Lender to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.
Lender’s rights and remedies provided herein and in any other instrument or document now or hereafter securing all or any part
of the Obligations are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law.

(c)             
Any provision of this Security Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or invalidity without invalidating the remaining portions hereof or thereof or affecting
the validity or enforceability of such provision in any other jurisdiction.

(d)            
This Security Agreement shall be binding on Pledgor and its successors and permitted assigns and shall inure, together with all rights
and remedies of Lender hereunder, to the benefit of Lender and its successors, transferees and assigns. Without limiting the generality
of the foregoing, Lender may assign or otherwise transfer all or part of its rights to all or any part of the Obligations to any other
person or entity, and such other person or entity shall thereupon become vested with all of the benefits in respect thereof granted to
Lender herein or otherwise. None of the rights or obligations of Pledgor hereunder may be assigned or otherwise transferred without the
prior written consent of Lender.

(e)             
Upon payment and satisfaction in full of the Obligations, this Security Agreement and the security interest created hereby shall terminate
and all rights to the Pledged Collateral shall revert to Pledgor. Lender will thereupon, at Pledgor’s request and expense, (i) return
to Pledgor such of the Pledged Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof;
and (ii) execute and deliver to Pledgor such documents as Pledgor shall reasonably request to evidence such termination.

(f)             
This Security Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, except to the extent
that the validity or perfection of the security interest created hereby, or remedies hereunder, in respect of any particular Pledged
Collateral are, under mandatory provisions of law, governed by the laws of a jurisdiction other than the State of Delaware.

(g)            
The captions or headings of the Sections of this Security Agreement are inserted merely for convenience of reference and shall not be
deemed to limit or modify the terms and provisions hereof. As used herein, the singular number shall include the plural, the plural the
singular, and the use of any gender shall be applicable to all genders, as the context shall require.

(h)            
Any payment of principal and/or interest on any of the Obligations shall toll any statute of limitations which would otherwise be applicable.

(i)              
This Security Agreement may be executed and delivered (including by facsimile or Portable Document Format (pdf) transmission) in one
or more counterparts, all of which will be considered

 

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one
and the same agreement and will become effective when one or more counterparts have been signed by each of the parties and delivered
to the other parties. Facsimile or pdf transmission of any signed original document or retransmission of any signed facsimile or pdf
transmission will be deemed the same as delivery of an original. At the request of any party, the other parties will confirm facsimile
or pdf transmission by signing a duplicate original document.

 

[signature
page follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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IN
WITNESS WHEREOF, the duly authorized representatives of Pledgor and Lender have executed this Security Agreement on this the day and
year first above written.

 

	 	Pledgor:

     

    EMPIRE
    PETROLEUM CORPORATION

     

     

    By:
    /s/ Michael R. Morrisett

    Michael
    R. Morrisett, President

     

     

    LENDER:

     

    ENERGY
    EVOLUTION MASTER FUND, LTD.

     

     

    By:
    /s/ Sterling Mulacek

    Sterling
    Mulacek, Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10Exhibit
10.3

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED
FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) THEY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES ACT, OR (II) THE COMPANY SHALL HAVE BEEN FURNISHED AN OPINION OF COUNSEL, SATISFACTORY
TO COUNSEL FOR THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER ANY OF SUCH ACTS.

	No. Energy Evolution Master Fund-1	 	September 30, 2021

 

EMPIRE PETROLEUM CORPORATION

COMMON SHARE WARRANT CERTIFICATE

Warrant to Purchase up to 500,000 Common
Shares

Expiring December 31, 2023

THIS CERTIFIES THAT Energy Evolution Master
Fund, LTD, a Cayman Islands exempt company or, pursuant to Section 5.1(a), its Affiliates, nominees or assignees (the “Warrant
Holder”), in consideration for entering into that certain Loan Modification Agreement dated as of September 29, 2021 (the “Loan
Modification”), by and between the Warrant Holder, Green Tree and Empire Petroleum Corporation, a Delaware corporation (the “Company”),
at any time on any Business Day on or prior to 5:00 p.m., Central Time, on December 31, 2023 (the “Expiration Date”), is
entitled to subscribe for and purchase from Empire Petroleum Corporation, a Delaware corporation (the “Company”), up to 500,000
Common Shares (as defined in Section 1) at a price per Common Share equal to the Exercise Price (as defined in Section 1); provided,
however, that the number of Common Shares issuable upon any exercise of this Warrant (as defined in Section 1) shall be adjusted and
readjusted from time to time in accordance with Section 4 below. 

1. Certain Definitions.

The following terms, as used herein, have
the following meanings:

“Accredited Investor”
means an accredited investor as that term is defined in Rule 501(a) of Regulation D promulgated by the Commission.

“Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control
with such Person.

“Business Day”
means any day except a Saturday, Sunday, or other day on which commercial banks in Houston, Texas, are authorized by law to close.

“Capital Reorganization”
has the meaning set forth in Section 4.2.

“Commission”
means the Securities and Exchange Commission.

“Common Share
Reorganization” has the meaning set forth in Section 4.1.

“Common Shares”
means the Company’s currently authorized class of Common Stock, par value $0.001.

“Company”
has the meaning set forth in the preamble to this Warrant Certificate.

“Green Tree”
means Empire New Mexico LLC, d/b/a Green Tree New Mexico, LLC, a Delaware limited liability company and wholly-owned subsidiary of the
Company.

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any successor Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Exchange Act shall include a reference
to the comparable section, if any, of any such successor Federal statute.

 

 

    	 

    	 

    

 

“Exercise Price”
means $5.00 per share, applicable after the 4 to 1 reverse stock split to be authorized upon filing of the Amended and Restated Certificate
of Incorporation approved by the board of directors and shareholders of Parent on or about August 27, 2021 and August 31, 2021, respectively,
(the “Reverse Stock Split”), subject to adjustment from time to time pursuant to Section 4.

“Loan Modification”
has the meaning set forth in the preamble to this Warrant Certificate

“Notice of Exercise”
has the meaning set forth in Section 2(a).

“Person”
means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality thereof.

“Securities Act”
means the Securities Act of 1933, as amended, or any successor Federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time. Reference to a particular section of the Securities Act shall include a reference to the
comparable section, if any, of any such successor Federal statute.

“Warrant”
means the rights granted to the Warrant Holder pursuant to this Warrant Certificate.

“Warrant Certificate”
means this Common Share Warrant Certificate.

“Warrant Holder”
has the meaning set forth in the preamble to this Warrant Certificate.

“Warrant Shares”
means 500,000 Common Shares issued or issuable upon exercise of this Warrant, subject to adjustment from time to time pursuant to Section
4.

2. Exercise.

(a)       At
any time, the Warrant Holder may exercise this Warrant by delivering to the Company a duly executed notice (a “Notice of Exercise”)
in the form of Annex A specifying the number of Warrant Shares as to which this Warrant is being exercised along with payment, made 100%
to Green Tree of the aggregate amount equal to the product of: (i) the Exercise Price times (ii) the number of Warrant Shares as to which
the Warrant is being exercised.

The Company shall
cause Green Tree to (1) retain for its own account and not dividend or distribute to the Company or any other person all monies paid to
Green Tree by the Warrant Holder on any exercise of this Warrant, and (2) apply such monies solely to meet Green Tree’s financial
obligations.

(b)       Notwithstanding
anything to the contrary set forth in this Warrant Certificate, at no time may all or a portion of the Warrant be exercised if the number
of shares of Common Shares to be issued pursuant to such exercise would cause the Warrant Holder’s beneficial ownership to exceed,
when aggregated with all other shares of Common Shares beneficially owned (as determined in accordance with Section 13(d) of the Exchange
Act and the rules thereunder) by the Warrant Holder at such time, a number of shares of Common Shares that totals more than 49.99% of
all of the Common Shares issued and outstanding at such time. For purposes of this Section 2(b), in determining the number of outstanding
Common Shares, the Warrant Holder may rely on the number of outstanding Common Shares as reflected in (1) the Company’s most recent
Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Commission, as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company setting forth the number of outstanding Common Shares. For any reason
at any time, upon the written request of the warrant Holder, the Company shall within one Business Day confirm in writing to the Warrant
Holder the number of shares of outstanding Common Shares.

(c)       As
soon as practicable, but not later than five (5) Business Days after the Company shall have received such Notice of Exercise and payment
of the aggregate Exercise Price made to Green Tree, the Company shall execute and deliver or cause to be executed and delivered, in accordance
with such Notice of Exercise, a certificate or certificates representing the number of Common Shares specified in such Notice of Exercise
issued in the name of the Warrant Holder. This Warrant shall be deemed to have been exercised and such share certificate or certificates
shall be deemed to have been issued, and such Warrant Holder shall be deemed for all purposes to have become a holder of record of Common
Shares, as of the date that such Notice of Exercise and payment of the aggregate Exercise Price shall have been received by Green Tree
in the manner set forth in Sections 2(a) and 2(c) above.

(d)       The
Warrant Holder shall surrender this Warrant Certificate to the Company when it delivers the Notice of Exercise, and in the event of a
partial exercise of the Warrant, the Company shall execute and deliver to the Warrant Holder, at the time the Company delivers the share
certificate or certificates issued pursuant to such Notice of Exercise, a new Warrant Certificate for the unexercised portion of this
Warrant Certificate, but in all other respects identical to this Warrant Certificate.

 

 

    	 

    	 

    

(e)       The
Company shall pay all expenses, taxes and other charges payable in connection with the preparation, issuance and delivery of certificates
for the Warrant Shares and a new Warrant Certificate, if any, except that if the certificates for the Warrant Shares or the new Warrant
Certificate, if any, are to be registered in a name or names other than the name of the Warrant Holder, funds sufficient to pay all transfer
taxes payable as a result of such transfer shall be paid by the Warrant Holder at the time of its delivery of the Notice of Exercise or
promptly upon receipt of a written request by the Company for payment.

(f)       No
fractional Common Shares will be issued in connection with any exercise of the Warrant, and any fractional Common Share (resulting from
any adjustment pursuant to Section 4 or otherwise) in the aggregate number of Common Shares being purchased upon any exercise of the Warrant
shall be eliminated.

3. Validity of Warrant and Issuance of Common Shares.

The Company represents and warrants that
this Warrant has been duly authorized and is validly issued. The Company further represents and warrants that on the date hereof it has
duly authorized and reserved, and the Company hereby agrees that it will at all times until the Expiration Date have duly authorized and
reserved, such number of Common Shares as will be sufficient to permit the exercise in full of the Warrant, and that all such Common Shares
are and will be duly authorized and, when issued upon exercise of the Warrant, will be validly issued, fully paid and nonassessable, and
free and clear of all security interests, claims, liens, equities and other encumbrances.

4. Adjustment Provisions.

The number of Warrant Shares that may be
purchased upon any exercise of the Warrant, shall be subject to change or adjustment as follows:

4.1.
Common Share Reorganization. If the Company shall subdivide its outstanding Common Shares into a greater number of shares, by way
of share split, share dividend or otherwise, or consolidate its outstanding Common Shares into a smaller number of shares (any such event
being herein called a “Common Share Reorganization”), then (a) the definition of Exercise Price shall be adjusted, effective
immediately after the effective date of such Common Share Reorganization, so that each amount contained in the definition of the Exercise
Price is equal to such amount multiplied by a fraction, the numerator of which shall be the number of Common Shares outstanding on such
effective date before giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares
outstanding after giving effect to such Common Shares Reorganization, and (b) the number of Common Shares subject to purchase upon exercise
of this Warrant shall be adjusted, effective at such time, to a number determined by multiplying the number of Common Shares subject to
purchase immediately before such Common Share Reorganization by a fraction, the numerator of which shall be the number of shares outstanding
after giving effect to such Common Share Reorganization and the denominator of which shall be the number of Common Shares outstanding
immediately before giving effect to such Common Share Reorganization. The parties agree that the number and Exercise Price for the Warrant
Shares was negotiated and valued at the post-Reverse Stock Split number of Common Shares and Exercise Price. Accordingly, the Reverse
Stock Split shall not constitute a Common Share Reorganization under this Section 4.1. Conversely, if the Reverse Stock Split has not
occurred at the time this Warrant is exercised then the parties agree that the Exercise Price and the number of Common Shares subject
to purchase shall be adjusted as a Common Share Reorganization, as though the Common Shares of the Company were subject to a stock
split in which each share of Common Stock shall be replaced with four shares of Common Stock (i.e. a 4 for 1 stock split).

4.2. Capital Reorganization.
If there shall be any consolidation or merger to which the Company is a party, other than a consolidation or a merger of which the Company
is the continuing corporation and that does not result in any reclassification of, or change (other than a Common Share Reorganization)
in, outstanding Common Shares, or any sale or conveyance of the property of the Company as an entirety or substantially as an entirety,
or any recapitalization of the Company (any such event being called a “Capital Reorganization”), then, effective upon the
effective date of such Capital Reorganization, the Warrant Holder shall no longer have the right to purchase Common Shares, but shall
have instead the right to purchase, upon exercise of this Warrant, the kind and amount of Common Shares and other securities and property
(including cash) which the Warrant Holder would have owned or have been entitled to receive pursuant to such Capital Reorganization, if
the Warrant had been exercised immediately prior to the effective date of such Capital Reorganization.

4.3. Adjustment Rules.

(a)       Any
adjustments pursuant to this Section 4 shall be made successively whenever any event referred to herein shall occur, except that, notwithstanding
any other provision of this Section 4, no adjustment shall be made to the number of Warrant Shares to be delivered to the Warrant Holder
(or to the Exercise Price) if such adjustment represents less than one-percent (1%) of the number of Warrant Shares previously required
to be so delivered, but any lesser adjustment shall be carried forward and shall be made at the time and together with the next subsequent
adjustment which together with any adjustments so carried forward shall amount to one-percent (1%) or more of the number of Warrant Shares
to be so delivered.

 

 

    	 

    	 

    

 

(b)       If
the Company shall take a record of the holders of its Common Shares for any purpose referred to in this Section 4, then (i) such record
date shall be deemed to be the date of the issuance, sale, distribution or grant in question and (ii) if the Company shall legally abandon
such action prior to effecting such action, no adjustment shall be made pursuant to this Section 4 in respect of such action.

(c)       As
a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 4, the Company shall take
any action which may be necessary, including obtaining regulatory approvals or exemptions, in order that the Company may thereafter validly
and legally issue as fully paid and nonassessable all Common Shares which the Warrant Holder is entitled to receive upon exercise of this
Warrant.

5. Transfer of Warrant.

5.1. No Transfer
Without the Consent of the Company. This Warrant is personal to the Warrant Holder and this Warrant Certificate and the rights of
the Warrant Holder hereunder may not be sold, assigned, transferred or conveyed, in whole or in part, except (a) to an Affiliate, nominee
or assignee of the Warrant Holder that is an Accredited Investor or (b) with the prior written consent of the Company, which shall not
be unreasonably withheld.

5.2. Permitted Transfers.
Upon transfer of the Warrant permitted under Section 5.1 above, the Warrant Holder must deliver to the Company a duly executed Warrant
Assignment in the form of Annex B attached hereto with funds sufficient to pay any transfer tax imposed in connection with such assignment.
Upon surrender of this Warrant to the Company, the Company shall execute and deliver a new Warrant in the form of this Warrant, with appropriate
changes to reflect such assignment, in the name or names of the assignee or assignees specified in the fully executed Warrant Assignment
or other instrument of assignment and, if the Warrant Holder’s entire interest is not being transferred or assigned, in the name
of the Warrant Holder, and this Warrant shall promptly be canceled. In connection with any transfer or exchange of this Warrant permitted
hereunder, the transferring Warrant Holder shall pay all costs and expenses relating thereto, including, without limitation, all transfer
taxes, if any, and all reasonable expenses incurred by the Company (including legal fees and expenses). Any new Warrant issued shall be
dated the date hereof. The terms “Warrant” and “Warrant Holder” as used herein include all Warrants into which
this Warrant (or any successor Warrant) may be exchanged or issued in connection with the permitted transfer or assignment of this Warrant,
any successor Warrant and the holders of those Warrants, respectively.

6. Lost Mutilated or Missing Warrant Certificates.

Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant Certificate and, in the case of loss, theft or destruction,
upon receipt of indemnification satisfactory to the Company, or, in the case of mutilation, upon surrender and cancellation of the mutilated
Warrant Certificate, the Company shall execute and deliver a new Warrant Certificate of like tenor and representing the right to purchase
the same aggregate number of Warrant Shares. The recipient of any such Warrant Certificate shall reimburse the Company for all reasonable
expenses incidental to the replacement of such lost, mutilated or missing Warrant Certificate.

7. Miscellaneous.

7.1. Successors and
Assigns. All the provisions of this Warrant Certificate by or for the benefit of the Company or the Warrant Holder shall bind and
inure to the benefit of their respective successors and permitted assigns.

7.2. Waivers; Amendments.
Any provision of this Warrant Certificate may be amended or modified with (but only with) the written consent of the Company and the Warrant
Holder. Any amendment, modification or waiver effected in compliance with this Section 7.3 shall be binding upon the Company and the Warrant
Holder. No failure or delay of the Company or the Warrant Holder in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereon or the exercise of any other right or power. The rights and remedies
of the Company and the Warrant Holder hereunder are cumulative and not exclusive of any rights or remedies which each would otherwise
have.

7.3. No Rights as
a Shareholder. The Warrant shall not entitle the Warrant Holder, prior to the exercise of the Warrant, to any rights as a holder of
shares of the Company.

7.4. Separability.
In case any one or more of the provisions contained in this Warrant shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. The parties
shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

7.5. Governing Law.
This Warrant shall be construed and enforced in accordance with the laws of the State of Delaware without regard to principles of conflicts
of law, except as otherwise required by mandatory provisions of law.

 

 

 

    	 

    	 

    

 

7.6. Section Headings.
The section headings used herein are for convenience of reference only and shall not be construed in any way to affect the interpretation
of any provisions of the Warrant.

 

[Signature on Next Page]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant Certificate to be duly executed and attested by an officer of the Company, all as of the day and year
first above written.

 

	 	EMPIRE PETROLEUM
CORPORATION
	 	 
	 	 
	 	 
	 	By: 	/s/ Michael R. Morrissett
	 	Name:     

        Title:
	Michael R. Morrissett
President
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	By:	/s/ Thomas W. Pritchard
	 	Name:

        Title:
	Thomas W. Pritchard

                                                                 CEO

	 	 	 
	 	 	 
	 	 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 

    	 

    

 

ANNEX A

Form of Notice of Exercise

Date: __________

To: Empire Petroleum Corporation

Reference is made to the Common Share
Purchase Warrant No. Energy Evolution Master Fund-1 dated September 30, 2021 May 6, 2021, issued to the undersigned by Empire
Petroleum Corporation. Terms defined therein are used herein as therein defined.

The undersigned, pursuant to the provisions
set forth in the Warrant Certificate, hereby irrevocably elects and agrees to purchase the number of Common Shares at the Exercise Price(s)
set forth below, and makes payment herewith by check payable to the order of Empire New Mexico LLC in an amount equal to $ __________.

	 	Number of Warrant Shares	 	Applicable Exercise
Price	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

 

If said number of shares is less than all
of the shares purchasable hereunder, the undersigned hereby requests that a new Warrant Certificate representing the remaining balance
of the Warrant Shares be issued to me.

The undersigned hereby represents that it
is exercising the Warrant for its own account for investment purposes and not with the view to any sale or distribution and that the Warrant
Holder will not offer, sell or otherwise dispose of the Warrant or any underlying Warrant Shares in violation of applicable securities
laws.

 

Energy Evolution Master Fund, LTD

 

By: ________________________

Name: ______________________

Title: _______________________

 

 

 

 

 

 

    	 

    	 

    

ANNEX B

Form of Warrant Assignment

Date:__________

Reference is made to the Common Share Purchase
Warrant No. Energy Evolution Master Fund-1 dated September 30, 2021, issued to the undersigned by Empire Petroleum Corporation. Terms
defined therein are used herein as therein defined.

FOR VALUE RECEIVED __________________ (the
“Assignor”) hereby sells, assigns and transfers all of the rights of the Assignor as set forth in the Warrant Certificate
with respect to the number of Warrant Shares covered thereby as set forth below, to the Assignee(s) as set forth below:

 

	Name of Assignee	 	Address	 	Number of Applicable

Warrant Shares
	 	Exercise Price
of

Warrant Shares 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

 

All notices to be given by the Company to
the Assignor as Warrant Holder shall be sent to the Assignee(s) at the above listed address(es), and, if the number of Warrant Shares
being hereby assigned is less than all of the Warrant Shares covered by the Warrant Certificate held by the Assignor, then also to the
Assignor.

In accordance with Section 5 of the Warrant
Certificate, the Assignor requests that the Company execute and deliver a new Warrant Certificate or Warrant Certificates in the name
or names of the Assignee or Assignees, as is appropriate, or, if the number of Warrant Shares being hereby assigned is less than all of
the Warrant Shares covered by the Warrant held by the Assignor, new Warrant Certificates in the name or names of the Assignee or the Assignees,
as is appropriate, and in the name of the Assignor.

The undersigned represents that the Assignee
has represented to the Assignor that the Assignee or each Assignee, as is appropriate, is acquiring the Warrant for its own account or
the account of an Affiliate for investment purposes and not with the view to sell or distribute, and that the Assignee or each Assignee,
as is appropriate, will not offer, sell or otherwise dispose of the Warrant or the Warrant Shares except under circumstances as will not
result in a violation of applicable securities laws.

 

ENERGY EVOLUTION Master FUND, LTD

 

By: ________________________

Name: ______________________

Title: _______________________

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