Document:

mfin-ex411_498.htm

 

Exhibit 4.11

AMENDMENT NO. 7 TO NOTE

AMENDMENT NO. 7 TO NOTE (this “Amendment”), dated and effective as of March 27, 2020, is made by and between the U.S. SMALL BUSINESS ADMINISTRATION (“SBA”), an agency of the United States, and its successors and assigns, and FRESHSTART VENTURE CAPITAL CORPORATION (the “Licensee”), a Small Business Investment Company, licensed under the Small Business Investment Act of 1958, as amended, whose principal office is located at 437 Madison Avenue, New York, NY 10022.

RECITALS

WHEREAS, the Licensee issued that certain Note, effective as of March 1, 2017 in the principal amount of $34,024,755.58 (thirty-four million twenty-four thousand seven hundred fifty-five and 58/100 dollars) in favor of SBA (the “Existing Note”).

 

WHEREAS, SBA and the Licensee have agreed, subject to the terms and conditions of this Amendment, that the Existing Note be amended to reflect certain agreed upon revisions to the terms of the Existing Note.

 

NOW THEREFORE, SBA and the Licensee hereby agree, in consideration of the mutual premises and mutual obligations set forth herein, that the Existing Note is hereby amended as follows:

SECTION 1.  Defined Terms.  Except as otherwise indicated herein, all words and terms defined in the Existing Note shall have the same meanings when used herein.

SECTION 2.  Amendments.  

	
 
	
a.
	
In the last sentence of the second paragraph of the Existing Note the phrase, “April 1, 2020” is hereby deleted in its entirety and replaced with the following: 

“June 1, 2020”

	
 
	
b.
	
In the third paragraph of the Existing Note the phrase, “April 1, 2020” is hereby deleted in its entirety and replaced with the following: 

“June 1, 2020”

SECTION 3.  Representations and Warranties.  Each party hereby represents and warrants to the other party that it is in compliance with all the terms and provisions set forth in the Existing Note on its part to be observed or performed and hereby confirms and reaffirms each of its representations and warranties contained in the Existing Note.

SECTION 4.  Limited Effect.  Except as expressly amended and modified by this Amendment, the Existing Note shall continue to be, and shall remain, in full force and effect in accordance with its terms (and as duly amended).

1

 

 

SECTION 5.  Counterparts.  This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.  Delivery of an executed signature page of this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of an executed original counterpart of this Amendment.

 

SECTION 6.  Governing Law.  Pursuant to Section 101.106(b) of Part 13 of the Code of Federal Regulations, this Amendment is to be construed and enforced in accordance with the Act, the Regulations and other Federal law, and in the absence of applicable Federal law, then by applicable New York law to the extent it does not conflict with the Act, the Regulations or other Federal law.

 

[SIGNATURES APPEAR ON NEXT PAGE]

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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

FRESHSTART VENTURE CAPITAL CORPORATION

 

 

By: /s/Thomas J. Munson

Name: Thomas J. Munson

Title: SVP

 

U.S. SMALL BUSINESS ADMINISTRATION

 

By: /s/Jacob Lewis

Name: Jacob Lewis for Thomas G. Morris

Title: Director Office of Liquidation

 

  

3mfin-ex1042_497.htm

 

Exhibit 10.42

AMENDMENT NO. 8 TO LOAN AGREEMENT

AMENDMENT NO. 8 TO LOAN AGREEMENT (this “Amendment”), dated and effective as of March 27, 2020, is made by and between the U.S. SMALL BUSINESS ADMINISTRATION (“SBA”), an agency of the United States, and its successors and assigns, and FRESHSTART VENTURE CAPITAL CORPORATION (the “Licensee”), a Small Business Investment Company, licensed under the Small Business Investment Act of 1958, as amended, whose principal office is located at 437 Madison Avenue, New York, NY 10022.

RECITALS

WHEREAS, SBA and the Licensee are parties to that certain Loan Agreement, effective as of January 25, 2017 (as amended, the “Existing Agreement”);

WHEREAS, SBA and the Licensee have agreed, subject to the terms and conditions of this Amendment, that the Existing Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Agreement.

 

NOW THEREFORE, SBA and the Licensee hereby agree, in consideration of the mutual premises and mutual obligations set forth herein, that the Existing Agreement is hereby amended as follows:

SECTION 1.  Defined Terms.  Except as otherwise indicated herein, all words and terms defined in the Existing Agreement shall have the same meanings when used herein.

SECTION 2.  Amendments.  

a.In the first sentence of Section 3 of the Existing Agreement the phrase, “April 1, 2020” is hereby deleted in its entirety and replaced with the following: 

“June 1, 2020”

b.In the second sentence of Section 3 of the Existing Agreement the phrase, “April 1, 2020” is hereby deleted in its entirety and replaced with the following: 

“June 1, 2020”

c.In the second sentence of Section 4 of the Existing Agreement the phrase, “April 1, 2020” is hereby deleted in its entirety and replaced with the following: 

“June 1, 2020”

SECTION 3.  Representations and Warranties.  Each party hereby represents and warrants to the other party that it is in compliance with all the terms and provisions set forth in the Existing Agreement on its part to be observed or performed and hereby confirms and reaffirms each of its representations and warranties contained in the Existing Agreement.  Without limiting the 

 

 

foregoing, Licensee represents and warrants to SBA that its consent to receivership and stipulation that are part of the Existing Agreement and that were executed on January 25, 2017 remain valid and enforceable against it by SBA.

SECTION 4.  Limited Effect.  Except as expressly amended and modified by this Amendment, the Existing Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms (and as duly amended).

SECTION 5.  Counterparts.  This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.  Delivery of an executed signature page of this Amendment in Portable Document Format (PDF) or by facsimile transmission shall be effective as delivery of an executed original counterpart of this Amendment.

 

SECTION 6.  Governing Law.  Pursuant to Section 101.106(b) of Part 13 of the Code of Federal Regulations, this Amendment is to be construed and enforced in accordance with the Act, the Regulations and other Federal law, and in the absence of applicable Federal law, then by applicable New York law to the extent it does not conflict with the Act, the Regulations or other Federal law.

 

[SIGNATURES APPEAR ON NEXT PAGE]

 

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

FRESHSTART VENTURE CAPITAL CORPORATION

 

 

By: /s/Thomas J. Munson

Name: Thomas J. Munson

Title: SVP

 

U.S. SMALL BUSINESS ADMINISTRATION

 

By: /s/ Jacob Lewis

Name: Jacob Lewis for Thomas G. Morris

Title: Director Office of LiquidationExhibit
4.1

 

DESCRIPTION
OF THE REGISTRANT’S SECURITIES

REGISTERED
PURSUANT TO SECTION 12 OF THE

SECURITIES
EXCHaNGE ACT OF 1934

 

 

Carbon
Energy Corporation has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act): common stock. Although described below, our preferred stock is not registered under Section 12 of the
Exchange Act. The terms of these securities may also be affected by the General Corporation Law of the State of Delaware.

 

The
following descriptions of our common stock and preferred stock are summaries and do not purport to be complete and are subject
to and qualified by reference to the provisions of applicable law, our amended and restated certificate of incorporation, as amended,
our certificate of designations relating to our preferred stock and our amended and restated bylaws, as amended, each of which
is incorporated by reference as an exhibit to our Annual Report on Form 10-K. These summaries may not contain all the information
that is important to you. We encourage you to read our amended and restated certificate of incorporation, as amended, our certificate
of designations relating to our Preferred Stock and our amended and restated bylaws, as amended, for additional information and
the applicable provisions of the Delaware General Corporation Law (the “DGCL”).

 

General

 

Our
authorized capital stock consists of 35,000,000 shares of Common Stock, $0.01 par value per share (“Common Stock”)
and 1,000,000 shares of Series B Convertible Preferred Stock, $0.01 par value per share (“Preferred Stock”).

Our
Common Stock is quoted through the OTC Markets under the symbol “CRBO”.

 

Common
Stock

 

Voting
Rights. Holders of Common Stock are entitled to one vote per share on all matters to be voted upon by the stockholders.
Holders of Common Stock do not have cumulative voting rights in the election of directors.

 

Dividend
Rights. Holders of Common Stock are entitled to receive ratably dividends if, as and when dividends are declared from
time to time by our Board of Directors out of funds legally available for that purpose, after all dividends required to be paid
on outstanding Preferred Stock (as described below), if any, have been fully paid. Under Delaware law, we can only pay dividends
either out of “surplus” or out of the current or the immediately preceding year’s net profits. Surplus is defined
as the excess, if any, at any given time, of the total assets of a corporation over its total liabilities and statutory capital.
The value of a corporation’s assets can be measured in a number of ways and may not necessarily equal their book value.

 

Liquidation
Rights. Upon liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary, the holders of
Common Stock are entitled to receive ratably the funds remaining for distribution to the stockholders after payment of liabilities
and accrued but unpaid dividends and liquidation preferences on any outstanding Preferred Stock.

 

Other
Matters. Our Common Stock has no preemptive, subscription or conversion rights. There are no redemption or sinking fund
provisions applicable to our Common Stock. All outstanding shares of our Common Stock are fully paid and non-assessable.

 

     

     

    

 

Preferred
Stock

 

Pursuant
to our amended and restated certificate of incorporation, shares of preferred stock will be issuable from time to time, in one
or more series, with the designations and the powers, preferences and relative, participating, optional or other special rights,
and qualifications, limitations, or restrictions thereof, including without limitation, the dividend rate, conversion rights,
redemption price and liquidation preference, of such preferred stock, and to fix the number of shares constituting any such series
thereof as our Board of Directors from time to time may adopt by resolution (and without further stockholder approval), subject
to certain limitations. Each series will consist of that number of shares as will be stated and expressed in the certificate of
designations providing for the issuance of the stock of the series, which number may be increased or decreased from time to time
by our Board of Directors (but not below the number of shares thereof then outstanding). If the number of shares of any series
is to be so decreased, the shares constituting such decrease shall resume the status of undesignated shares of preferred stock.
All shares of any one series of preferred stock will be identical.

 

Our
Board of Directors has authorized the issuance of 50,000 shares of Preferred Stock, all of which are currently issued and outstanding.
Although our Preferred Stock is not registered under Section 12 of the Exchange Act, the following description of the Preferred
Stock is included because various terms of the Preferred Stock could impact our Common Stock.

 

Voting
Rights. Holders of Preferred Stock are entitled to the number of votes equal to the number of shares of our Common Stock
into which their shares of Preferred Stock are to be converted at the record date for the determination of the stockholders entitled
to vote on the matter in question, or, if no such record date is established, at the record date provided by the DGCL for any
vote or action by written consent. Except as provided by the DGCL or our amended and restated certificate of incorporation, the
Preferred Stock shall be entitled to vote on all matters submitted to a vote of stockholders, voting together with our Common
Stock as a single class.

 

Dividend
Rights. Holders of Preferred Stock are entitled to receive, when and as declared by the Board of Directors and declared
by us, out of funds that are legally available therefor, cash dividends of six percent (6%) of the Preferred Stock issue price
of $100.00 per share per annum on each outstanding share of Preferred Stock. Such dividends shall be fully cumulative and accumulate
daily, whether or not we have profits, surplus or other funds legally available for the payment of dividends thereon by the Board
of Directors. Such dividends shall accrue from the date of issuance of the relevant shares of Preferred Stock and shall cease
to accrue on the date immediately preceding a date of redemption or conversion. After payment of all accrued dividends on shares
of Preferred Stock, shares of Preferred Stock will not participate in dividends payable in respect of our Common Stock or redemptions
of shares of our Common Stock.

 

Liquidation
Rights. Upon liquidation, prior to any payment to the holders of our Common Stock or any other class or series of stock
ranking junior to the Preferred Stock on liquidation, the holders of shares of the Preferred Stock then outstanding shall be entitled
to be paid out of our assets legally available for distribution to our stockholders, an amount per share equal to the sum of the
Preferred Stock issue price of $100.00 per share, plus all accrued but unpaid dividends payable in respect of such share of Preferred
Stock (such sum, the “Liquidation Preference”). If our assets available for distribution to the holders
of shares of Preferred Stock shall be insufficient to permit payment in full to such holders of the sums which such holders are
entitled to receive in such case, then all of the assets available for distribution to holders of shares of Preferred Stock shall
be distributed among and paid to such holders ratably in proportion to the amounts that would be payable to such holders if such
assets were sufficient to permit payment in full. Following payment of the Liquidation Preference, our entire remaining assets
and surplus funds legally available for distribution upon liquidation will be distributed ratably among the holders of our Common
Stock in proportion to the shares of Common Stock then held by them.

 

Conversion
Rights.  Each share of Preferred Stock is convertible by the holder of such share at any time at the option of the holder
into a number of shares of our Common Stock determined by dividing the Liquidation Preference by the conversion price, determined
as provided below, in effect at the time of the conversion (the “Conversion Price”). The Conversion
Price of the Preferred Stock is equal to the greater of $8.00 per share or the price that is fifteen percent (15%) less than the
lowest price per share of shares sold in a single transaction, or series of related transactions, with aggregate gross proceeds
to us of at least $50,000,000.00 (a “Next Equity Financing”). Additionally, each share of Preferred
Stock will be automatically converted into Common Stock upon and in connection with the closing of the Next Equity Financing.
The number of shares of Common Stock into which each share of Preferred Stock shall be automatically converted will be determined
by dividing the Liquidation Preference by the Conversion Price.

 

    2

     

    

 

Redemption
Rights. Subject to the holders’ right of voluntary conversion, we shall, following April 5, 2021 and upon providing
each holder of Preferred Stock no less than 30 days’ notice thereof, at any time thereafter (and from time to time), be
entitled at our option to redeem, out of funds legally available therefor, all or any portion of the Preferred Stock. Each share
of Preferred Stock shall be redeemed for an amount in cash or property equal to either its applicable Liquidation Preference or
its issue price of $100.00 per share (the “Partial Redemption Price”). If we choose to redeem shares
of the Preferred Stock by paying the Partial Redemption Price, the accrued but unpaid dividends as of the date of redemption of
such shares shall remain outstanding in the amount thereof as of the date of redemption of such shares and shall accrue interest
at the rate of 6% per annum, and the payment thereof shall continue to have priority over any dividend to the holders of our Common
Stock.

 

Other
Matters. The Preferred Stock has no preemptive or subscription rights. There are no sinking fund provisions applicable to
the Preferred Stock. All outstanding shares of the Preferred Stock are fully paid and non-assessable.

 

Certain
Corporate Anti-Takeover Provisions

 

Certain
provisions in our amended and restated certificate of incorporation and amended and restated bylaws may be deemed to have an anti-takeover
effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best
interests, including attempts that might result in a premium being paid over the market price for the shares held by stockholders.

 

Preferred
Stock

 

Our
amended and restated certificate of incorporation contains provisions that permit our Board of Directors to issue, without any
further vote or action by the stockholders, shares of Preferred Stock in one or more series and, with respect to each such series,
to fix the number of shares constituting the series and the designations and the powers, preferences and relative, participating,
optional or other special rights, and qualifications, limitations, or restrictions thereof, including without limitation, the
dividend rate, conversion rights, redemption price and liquidation preference, of such Preferred Stock, and to fix the number
of shares constituting any such series

 

Removal
of Directors; Vacancies

 

Our
stockholders will be able to remove any director or the entire Board of Directors with or without cause by the vote of the holders
of a majority of the shares entitled to vote for the election of directors. Vacancies on our Board of Directors may be filled
only by the affirmative vote of a majority of the remaining directors, although less than a quorum, or by a sole remaining director.

 

No
Cumulative Voting

 

Our
amended and restated certificate of incorporation provides that stockholders do not have the right to cumulate votes on behalf
of any candidate in the election of directors. Cumulative voting rights would have been available to the holders of our Common
Stock if our amended and restated certificate of incorporation had not specifically provided that cumulative voting was not available.

 

Forum
Selection

 

Our
amended and restated bylaws provide that unless we consent in writing to the selection of an alternative forum, a state or federal
court located within the State of Delaware will be the sole and exclusive forum for:

 

		●	any
                                         derivative action or proceeding brought on our behalf;

 

		●	any
                                         action asserting a claim of breach of a fiduciary duty owed by any of our or our subsidiaries’
                                         directors, officers or employees to us or our stockholders;

 

		●	any
                                         action asserting a claim arising pursuant to any provision of the DGCL; or

 

		●	any
                                         action asserting a claim governed by the internal affairs doctrine, in each such case
                                         subject to such court’s having personal jurisdiction over the indispensable parties
                                         named as defendants therein.

 

    3

     

    

 

Our
amended and restated bylaws also provide that any person or entity purchasing or otherwise acquiring any interest in shares of
our capital stock will be deemed to have notice of this forum selection provision contained therein. However, it is possible that
a court could find our forum selection provision to be inapplicable or unenforceable.

 

Amendment
of Our Certificate of Incorporation

 

Our
amended and restated certificate of incorporation provides that the amended and restated certificate of incorporation can be amended
with the affirmative vote of a majority of the outstanding Common Stock entitled to vote thereon, provided that with respect to
any proposed amendment of the certificate of incorporation (including any certificate of designation relating to any series or
class of Preferred Stock) which would alter or change the powers, preferences or special rights of any class or series of Preferred
Stock so as to adversely affect them, the approval of a majority of the votes entitled to be cast by the holders of the shares
of such class or series of Preferred Stock affected by the proposed amendment, voting separately as a class, shall be obtained
in addition to the approval of a majority of the votes entitled to be cast by the holders of our Common Stock.

 

Amendment
of Our Bylaws

 

Our
amended and restated bylaws provide that the amended and restated bylaws can be amended by the affirmative vote of a majority
of the outstanding stock entitled to vote thereon or by the affirmative vote of a majority of our Board of Directors or by unanimous
written consent of our Board of Directors.

 

Limitation
of Liability and Indemnification

 

Our
amended and restated bylaws limit the liability of our directors to the maximum extent permitted by Delaware law. Delaware law
provides that directors will not be personally liable for monetary damages for breach of their fiduciary duties as directors,
except with respect to liability:

 

		●	for
                                         any breach of the director’s duty of loyalty to us or our stockholders;

 

		●	for
                                         acts or omissions not in good faith or that involve intentional misconduct or a knowing
                                         violation of law;

 

		●	for
                                         any unlawful payments of dividends or unlawful stock repurchases or redemption as provided
                                         in Section 174 of the DGCL; or

 

		●	for
                                         any transaction from which the director derived any improper personal benefit.

 

However,
if the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then
the liability of our directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. The modification
or repeal of this provision of our amended and restated certificate of incorporation will not adversely affect any right or protection
of a director existing at the time of such modification or repeal.

 

Our
amended and restated certificate of incorporation and amended and restated bylaws provide that we will, to the fullest extent
from time to time permitted by law, indemnify our directors and officers against all liabilities and expenses in any suit or proceeding,
arising out of their status as an officer or director or their activities in these capacities. We will also indemnify any person
who, at our request, is or was serving as a director, officer, trustee, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise. We may, by action of our Board of Directors, provide indemnification to our employees
and agents within the same scope and effect as the foregoing indemnification of directors and officers. In addition, we have entered
into separate indemnification agreements with each of our directors and executive officers, which are broader than the specific
indemnification provisions contained in the DGCL. These indemnification agreements require us, among other things, to indemnify
our directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other
than liabilities arising from willful misconduct.

 

The
right to be indemnified includes the right of an officer or a director to be paid expenses, including attorneys’ fees, in
advance of the final disposition of any proceeding, provided that, if required by law, we receive an undertaking to repay such
amount if it will be determined that he or she is not entitled to be indemnified.

 

    4

     

    

 

Our
Board of Directors may take such action as it deems necessary to carry out these indemnification provisions, including adopting
procedures for determining and enforcing indemnification rights and purchasing insurance policies. Our Board of Directors may
also adopt bylaws, resolutions or contracts implementing indemnification arrangements as may be permitted by law. Neither the
amendment nor the repeal of these indemnification provisions, nor the adoption of any provision of our amended and restated certificate
of incorporation inconsistent with these indemnification provisions, will eliminate or reduce any rights to indemnification relating
to such person’s status or any activities prior to such amendment, repeal or adoption.

 

We
believe these provisions will assist in attracting and retaining qualified individuals to serve as directors and officers.

 

Transfer
Agent and Registrar

 

The
transfer agent and registrar for our Common Stock is Continental Stock Transfer & Trust Company.

 

 

5

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