Document:

Exhibit 10.1

 

Execution Version

 

THIS PROMISSORY NOTE (“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

PROMISSORY NOTE

 

	
Principal Amount: $300,000
    	
 
    	
Dated as of August 2, 2016
    
	
 
    	
 
    	
New York, New York
    

 

Silver Run Acquisition Corporation, a Delaware corporation (the “Maker”), promises to pay to the order of Silver Run Sponsor, LLC or its registered assigns or successors in interest (the “Payee”), or order, the principal sum of Three Hundred Thousand Dollars ($300,000) or such lesser amount as shall have been advanced by Payee to Maker and shall remain unpaid under this Note on the Maturity Date (as defined below) in lawful money of the United States of America, on the terms and conditions described below. All payments on this Note shall be made by check or wire transfer of immediately available funds or as otherwise determined by the Maker to such account as the Payee may from time to time designate by written notice in accordance with the provisions of this Note.

 

1.             Principal. The entire unpaid principal balance of Note shall be payable on the earlier of: (i) December 31, 2016, or (ii) the date on which Maker consummates its proposed acquisition of a majority of the outstanding membership interests in Centennial Resource Production, LLC (the “Initial Business Combination”), as contemplated by that certain Agreement to Assign, dated as of July 21, 2016, by and between the Maker and New Centennial, LLC (such earlier date, the “Maturity Date”). The principal balance may be prepaid at any time. Under no circumstances shall any individual, including but not limited to any officer, director, employee or shareholder of the Maker, be obligated personally for any obligations or liabilities of the Maker hereunder.

 

2.             Drawdown Requests. Maker and Payee agree that Maker may request, from time to time, up to Three Hundred Thousand Dollars ($300,000) in draw downs under this Note to be used for on-going operational expenses and certain other expenses of the Maker in connection with the Initial Business Combination. Principal of this Note may be drawn down from time to time prior to the Maturity Date upon written request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown Request must state the amount to be drawn down, and must not be an amount less than Ten Thousand Dollars ($10,000). Payee shall fund each Drawdown Request no later than three (3) business days after receipt of a Drawdown Request; provided, however, that the maximum amount of drawdowns outstanding under this Note at any time may not exceed Three Hundred Thousand Dollars ($300,000). No fees, payments or other amounts shall be due to Payee in connection with, or as a result of, any Drawdown Request by Maker.

 

3.             Interest. No interest shall accrue on the unpaid principal balance of this Note.

 

4.             Application of Payments. All payments shall be applied first to payment in full of any costs incurred in the collection of any sum due under this Note, including (without limitation) reasonable attorney’s fees, then to the payment in full of any late charges and finally to the reduction of the unpaid principal balance of this Note.

 

 

5.             Events of Default. The following shall constitute an event of default (“Event of Default”):

 

(a)           Failure to Make Required Payments. Failure by Maker to pay the principal amount due pursuant to this Note within five (5) business days of the date specified above.

 

(b)           Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary case under any applicable bankruptcy, insolvency, reorganization, rehabilitation or other similar law, or the consent by it to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) of Maker or for any substantial part of its property, or the making by it of any assignment for the benefit of creditors, or the failure of Maker generally to pay its debts as such debts become due, or the taking of corporate action by Maker in furtherance of any of the foregoing.

 

(c)           Involuntary Bankruptcy, Etc. The entry of a decree or order for relief by a court having jurisdiction in the premises in respect of Maker in an involuntary case under any applicable bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Maker or for any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days.

 

6.             Remedies.

 

(a)           Upon the occurrence of an Event of Default specified in Section 5(a) hereof, Payee may, by written notice to Maker, declare this Note to be due immediately and payable, whereupon the unpaid principal amount of this Note, and all other amounts payable hereunder, shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the documents evidencing the same to the contrary notwithstanding.

 

(b)           Upon the occurrence of an Event of Default specified in Sections 5(b) or 5(c), the unpaid principal balance of this Note, and all other sums payable with regard to this Note, shall automatically and immediately become due and payable, in all cases without any action on the part of Payee.

 

7.             Waivers. Maker and all endorsers and guarantors of, and sureties for, this Note waive presentment for payment, demand, notice of dishonor, protest, and notice of protest with regard to the Note, all errors, defects and imperfections in any proceedings instituted by Payee under the terms of this Note, and all benefits that might accrue to Maker by virtue of any present or future laws exempting any property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy or sale under execution, or providing for any stay of execution, exemption from civil process, or extension of time for payment; and Maker agrees that any real estate that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued hereon, may be sold upon any such writ in whole or in part in any order desired by Payee.

 

8.             Unconditional Liability. Maker hereby waives all notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Note, and agrees that its liability shall be unconditional, without regard to the liability of any other party, and shall not be affected in any manner by any indulgence, extension of time, renewal, waiver or modification granted or consented to by Payee, and consents to any and all extensions of time, renewals, waivers, or modifications that may be granted by Payee with respect to the payment or other provisions of this Note, and agrees that additional makers, endorsers, guarantors, or sureties may become parties hereto without notice to Maker or affecting Maker’s liability hereunder.

 

 

9.             Notices. All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.

 

10.          Construction. THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.

 

11.          Severability. Any provision contained in this Note which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

12.          Trust Waiver. Notwithstanding anything herein to the contrary, the Payee hereby waives any and all right, title, interest or claim of any kind (“Claim”) in or to any distribution of or from the trust account established in which the proceeds of the initial public offering (the “IPO”) conducted by the Maker (including the deferred underwriters discounts and commissions) and the proceeds of the sale of the warrants issued in a private placement at the time of the IPO were deposited, as described in greater detail in the registration statement and prospectus filed with the Securities and Exchange Commission in connection with the IPO, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the trust account for any reason whatsoever.

 

13.          Amendment; Waiver. Any amendment hereto or waiver of any provision hereof may be made with, and only with, the written consent of the Maker and the Payee.

 

14.          Assignment. No assignment or transfer of this Note or any rights or obligations hereunder may be made by any party hereto (by operation of law or otherwise) without the prior written consent of the other party hereto and any attempted assignment without the required consent shall be void.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this Note to be duly executed by the undersigned as of the day and year first above written.

 

	
 
    	
SILVER RUN ACQUISITION   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Stephen S. Coats
    
	
 
    	
 
    	
Name:    Stephen S. Coats
    
	
 
    	
 
    	
Title:       Secretary
    

 

 

Acknowledged and Agreed to

as of the date first written above.

 

SILVER RUN SPONSOR, LLC

By SILVER RUN SPONSOR MANAGER, LLC

 

 

	
By:
    	
/s/ Thomas J. Walker
    	
 
    
	
Name:
    	
Thomas J. Walker
    	
 
    
	
Title:
    	
Managing DirectorExhibit 10.1

 

Settlement Agreement

(Summary Translation)

 

This settlement agreement (this “Agreement”) was entered
into by and among the following parties (the “Parties,” and each a “Party”) in Yunyan District, Guiyang
City, China on July 31, 2016:

 

Party A: Guizhou Taibang Biological Products Co., Ltd.

 

Party B: Guiyang Dalin Biologic Technologies Co., Ltd.

 

Party C: Guizhou Jie’an Company

 

Party D: Shenzhen Yigong Shengda Technology Co., Ltd.

 

WHEREAS:

 

		1.	Party B, Party C and Party D are shareholders
                                         of Party A registered with the administration of industry and commerce (“AIC”).

 

		2.	In December 2013, Party C commenced
                                         a lawsuit against Party A in relation to the validity of certain shareholders’
                                         resolutions of Party A. Party C requested that the court (1) confirm the legitimacy and
                                         validity of the shareholders’ resolutions of Party A dated May 28, 2007 and April
                                         23, 2010; and (2) order Party A to register Party C’s equity contribution of 1.8
                                         million dollars, equivalent to 12.169% of the enlarged share capital of Party A (the
                                         “First Case”). On September 2, 2015, the Higher People's Court of Guizhou
                                         Province ruled that the decisions of the trial and appellate courts be rescinded and
                                         the First Case be remanded to the original people’s court for a retrial. The First
                                         Case is still being reviewed by the original people’s court and no judgment has
                                         been given.

 

		3.	In September 2014, each of Party C
                                         and Party D commenced a lawsuit against Party A in relation to the validity of certain
                                         shareholders’ resolutions of Party A. Party C and Party D requested that the court
                                         confirm that the shareholders’ resolutions of Party A dated November 13, 2013 and
                                         March 18, 2014 are invalid (the “Second Case”). The Intermediate People's
                                         Court of Guiyang City ruled that the original judgment be rescinded and the case be remanded
                                         to the people’s court for a retrial. The Second Case is still being reviewed by
                                         the people’s court and no judgment has been given.

 

		4.	In October 2014, each of Party C and
                                         Party D commenced a lawsuit against Party A in relation to certain AIC registrations.
                                         Party C and Party D requested that the court revoke the AIC registration in relation
                                         to changes in equity and registered capital (the “Third Case”). On May 19,
                                         2015, the Intermediate People's Court of Guiyang City ruled that such AIC registration
                                         be revoked. Party A has applied to the Higher People's Court of Guizhou Province for
                                         review. The Third Case is still being reviewed by the higher people’s court and
                                         no judgment has been given.

 

     

     

    

 

		5.	In order to effectively resolve the
                                         disputes among the Parties, and maintain Party A’s stability and promote Party
                                         A’s development, the Parties unanimously agree to settle their disputes by way
                                         of withdrawal of equity investments in Party A by Party C and Party D and reduction of
                                         registered capital of Party A.

 

NOW THEREFORE, the Parties hereby agree as
follows:

 

Article I Definitions

 

		1.1.	Definitions. Except as otherwise provided in the text herein,
                                         the terms in this Agreement are defined as follows.

 

		1.1.1.	Guizhou Eakan: means Guizhou Eakan Pharmaceutical Co.,
                                         Ltd., a former shareholder of Party A.

 

		1.1.2.	Equity transfer: means the
                                         transfer by Guizhou Eakan of all of its equity interests held in Party A to Party B pursuant
                                         to the Registered Equity Purchase Agreement and Unregistered Equity Purchase Agreement
                                         entered into by Party B and Guizhou Eakan on August 21, 2014.

 

		1.1.3.	Registration Authority: means
                                         the Industrial and Commercial Bureau of Guiyang City.

 

		1.1.4.	Law: means all the laws,
                                         regulations, rules, orders, codes and the rules, regulations and orders of any governmental
                                         organizations.

 

		1.1.5.	Capital Reduction Documents:
                                         means legal documents signed by the Parties in relation to Party A’s reduction
                                         of registered capital.

 

		1.1.6.	Capital Reduction Completion
                                         Date:  means the date when Party A completes the AIC registration in relation
                                         to the Capital Reduction, and receives a renewed business license issued by the Registration
                                         Authority.

 

		1.1.7.	Capital Reduction: means
                                         withdrawal of equity investments (including equity and associated interests) in Party
                                         A by each of Party C and Party D in exchange of the return of investment payments from
                                         Party A.

 

		1.1.8.	Enforcement Fees:  means
                                         RMB22,639,227.00 set aside from Party A’s bank account by court orders as a result
                                         of the original judgments of the First Case (overruled by the higher court of Guizhou)
                                         from February to May 2015 and the accrued interests (calculated based on the term loan
                                         interest rate published by the People’s Bank of China).

 

     

     

    

 

		1.2.	The headings in this Agreement are for the sake of convenience
                                         and shall not affect the interpretation and understanding of the contents of this Agreement.

 

Article II Settlement

 

		2.1.	Party C and Party D shall have no
                                         dispute as to the paid-in capital and the amount and percentage of capital contribution
                                         by each shareholder, and covenant that they shall have no claims against Party A after
                                         the date hereof.

 

		2.2.	Within 5 days after the date hereof,
                                         each Party shall apply to the courts to withdraw their claims and terminate the proceedings.

 

		2.3.	Party C and Party D shall withdraw
                                         all the investments in Party A, including all the equity and associated interests. Party
                                         A shall undergo the procedures of Capital Reduction and apply to the Registration Authority
                                         for AIC registration. After the Capital Reduction, Party B shall become Party A’s
                                         sole remaining shareholder.

 

Article III Paid-in Capital and Amount and
Percentage of Capital Contribution

 

		3.1.	Party C and Party D acknowledge that the Equity Transfer is valid
                                         and that Party B has legally received the equity interest initially transferred from
                                         Guizhou Eakan.

 

		3.2.	The registered capital of Party A in the Registration Authority
                                         is RMB55 million. Party A has completed the following capital contributions, and the
                                         Parties acknowledge that such capital contributions are valid:

 

		(1)	On May 30, 2007, Party A transferred
                                         the capital reserve of RMB10 million to the registered capital, resulting in the paid-in
                                         capital of RMB65 million.

 

		(2)	According to the shareholders’
                                         resolutions dated May 28, 2007, April 23, 2010, November 13, 2013, and March 18, 2014,
                                         Party A increased the registered capital by RMB16.4 million, in which Party B paid RMB10.8
                                         million. Guizhou Eakan paid RMB3.8 million (which is already transferred to Party B),
                                         and Party C paid RMB1.8 million. Such capital contribution has been paid fully, resulting
                                         in the paid-in capital of RMB81.4 million.

 

		(3)	According to the shareholders’
                                         resolutions dated September 8, 2015 and November 20, 2015, Party A increased the registered
                                         capital by RMB25 million, which was paid by Party B. Such capital contribution has been
                                         paid fully, resulting in the paid-in capital of RMB106.4 million.

 

     

     

    

 

		(4)	According to the shareholders’
                                         resolutions dated September 8, 2015 and April 28, 2016, Party A increased the registered
                                         capital by RMB25 million, which was paid by Party B. Such capital contribution has been
                                         paid fully, resulting in the paid-in capital of RMB131.4 million.

 

Each of Party C and Party D acknowledge
that the board resolutions, shareholders’ resolutions and other legal documents in relation to the above capital contributions
of Party A are valid.

 

		3.3.	The Parties unanimously acknowledge that the current paid-in
                                         capital of Party A is RMB131.4 million and the amount and percentage of capital contribution
                                         of each shareholder is as follows:

 

	Shareholder	 	Method of Payment	 	Capital
Contribution
 (RMB: ten thousand dollars)	 	Percentage
	Party B	 	 	Cash	 	 	 	11,205	 	 	 	85.274	%
	Party D	 	 	Cash	 	 	 	1,170	 	 	 	8.904	%
	Party C	 	 	Cash	 	 	 	765	 	 	 	5.822	%
	Total	 	 	 	 	 	 	13,140	 	 	 	100	%

 

Article IV Termination of Legal Proceedings

 

		4.1.	Within 5 days after the date hereof,
                                         Party C shall apply to the court to withdraw the First Case and the Second Case.

 

		4.2.	Within 5 days after the date hereof,
                                         Party D shall apply to the court to withdraw the Second Case.  

 

		4.3.	Within 5 days after the date hereof,
                                         Party C and Party D shall apply to the Higher People's Court of Guizhou Province to withdraw
                                         the Third Case. If the Higher People's Court of Guizhou Province refuses the withdrawal,
                                         Party A shall apply to withdraw the retrial application in relation to the Third Case.

 

		4.4.	The costs arising out from the legal
                                         proceedings (including litigation fee, attorney fee, etc.) shall be borne by each Party
                                         incurring such costs.

 

Article V Capital Reduction Plan

 

		5.1.	Capital Reduction Amounts

 

Based on Party A’s owner’s
equity as of June 30, 2016, Party A shall pay RMB164.07 million to Party C and RMB250.93 million to Party D for their withdrawal
of investments (including equity and associated interests).

 

     

     

    

 

		5.2.	Accounting Treatment

 

Party A’s paid-in capital
shall reduce by RMB19.35 million, capital reserve shall reduce by RMB280.27 million, surplus reserve shall reduce by RMB7.84 million,
undistributed profits shall reduce by RMB107.54 million. The total amount of Party A’s owner’s equity shall reduce
by RMB415 million.

 

		5.3.	Return and Setoff of Enforcement Fees

 

		5.3.1.	Within 5 days after the date hereof,
                                         Party C shall return the Enforcement Fees to Party A.

 

		5.3.2.	If Party C fails to return the entirety
                                         of the Enforcement Fees, Party A has the right to offset the outstanding amount of the
                                         Enforcement Fees (including interest) against the payment to be made in relation to the
                                         Capital Reduction.

 

		5.4.	Procedures of Capital Reduction

 

After the date hereof, all Parties
shall commence the procedures of Capital Reduction, including signing the relevant shareholders’ resolutions, issuing written
notice to Party A’s creditors, publishing notices on newspapers, etc.

 

		5.5.	Amendment to Business Registration

 

		5.5.1.	Following 45 days after the publication
                                         of notice of Capital Reduction, Party A shall apply to the Registration Authority for
                                         registration of capital and registration of alteration of shareholders. All Parties agree
                                         that Party A shall apply for the registration of registered capital/paid-in capital of
                                         RMB112.05 million and the sole remaining shareholder shall be Party B.

 

		5.5.2.	Party C and Party D shall assist
                                         Party A as soon as possible for the registration procedures so that Party B shall be
                                         the sole remaining shareholder of Party A. Party C and Party D covenant, in response
                                         to the demand of the Registration Authority or Party A, to sign or submit relevant documents
                                         within 5 days after being aware of such requirements and assist Party A in completing
                                         the AIC registration.

 

		5.6.	Payment Methods

 

		5.6.1.	Party A shall within 1 working day
                                         after the date hereof, pay the first installment of RMB35,581,395 to Party C and the
                                         first installment of RMB54,418,605 to Party D in relation to the Capital Reduction. The
                                         total amount of the first installment payment shall be RMB90 million. 

 

     

     

    

 

		5.6.2.	If Party A fails to complete the
                                         Capital Reduction within 2 months after the date hereof, the first installment payment
                                         shall be treated as shareholder loans to Party C and Party D, which (together with accrued
                                         interests, calculated based on the term loan interest rate published by the People’s
                                         Bank of China) shall be returned to Party A within 1 month.

 

		5.6.3.	In the case the first installment
                                         payments are not repaid in full, Party A shall have the right to offset the outstanding
                                         amount from the distributable dividends in Party A to Party C and/or Party D, as applicable.

 

		5.6.4.	Party A shall, within 5 working
                                         days after the Capital Reduction Completion Date, pay the balance of the amounts in relation
                                         to the Capital Reduction to Party C and Party D.

 

Article VI Other Arrangements

 

		6.1.	Tax and Fees

 

		6.1.1.	All fees and tax arising out or
                                         in connection with the Capital Reduction shall be borne by the Parties according to Laws.

 

		6.1.2.	If any Party fails to pay the tax
                                         as required by Laws and causes actual financial loss to another Party, such Party shall
                                         fully indemnify the loss suffered by such other Party.

 

		6.2.	Liabilities

 

		6.2.1.	If Party A fails to pay the amounts
                                         in relation to the Capital Reduction in accordance with this Agreement, Party A shall
                                         be responsible for overdue payments and a penalty interest calculated at a daily rate
                                         of 0.03%.

 

		6.2.2.	If Party C and Party D fail to apply
                                         to the court for withdrawal of legal proceedings or fail to sign or provide the requisite
                                         documentation which causes the failure of the completion of the Capital Reduction within
                                         2 months after the date hereof, each of Party A and Party B shall have the right to rescind
                                         this Agreement, and hold Party C and Party D liable for breach of agreement.

 

		6.3.	Capital Reduction Documents

 

The Parties shall separately sign
Capital Reduction Documents, which shall not contradict with this Agreement, and shall not diminish or replace the legal effect
of this Agreement.

 

     

     

    

 

Article VII Representations and
Warranties

 

		7.1.	Each of Party C and Party D represents
                                         and warrants that it is the legal owner of its equity interest in Party A and its equity
                                         in Party A is not pledged, mortgaged or otherwise encumbered, nor subject to any material
                                         legal, arbitral or administrative proceedings (other than the First Case, the Second
                                         Case and the Third Case). Party C and Party D shall be responsible for any disputes with
                                         third parties.

 

		7.2.	Following the completion of the Capital
                                         Reduction, Party C and Party D shall have no more disputes with Party A or Party B, and
                                         shall make no claims against Party A or Party B other than the amounts in relation to
                                         the Capital Reduction under this Agreement.

 

Article VIII Applicable Laws
and Dispute Resolution

 

		8.1.	Applicable Laws

 

The entry, validity, interpretation,
performance, implementation and dispute resolution of this Agreement shall be governed by the Laws of the People’s Republic
of China and shall be interpreted accordingly.

 

		8.2.	Dispute Resolution

 

Any disputes arising from this
Agreement shall be resolved through amicable negotiation, failing which, any Party may submit and resolve the disputes at the
Shanghai International Economic and Trade Arbitration Commission or the Shanghai International Arbitration Centre, according to
the applicable arbitration rules. The venue of arbitration is Shanghai, China. The arbitral award is final and binding upon the
Parties.

 

[Signature
page follows]

 

     

     

    

 

Party A: Guizhou Taibang Biological Products Co., Ltd. (Seal)

 

	/s/ Yang Gang 	(Authorized representative)

 

Party B: Guiyang Dalin Biologic Technologies Co., Ltd. (Seal)

 

	/s/ Yang Ming 	(Authorized representative)

 

Party C: Guizhou Jie’an Company (Seal)

 

	/s/ Duan Gang 	(Authorized representative)

 

Party D: Shenzhen  Yigong Shengda Technology Co., Ltd.
(Seal)

 

	/s/ Duan Gang 	(Authorized representative)

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