Document:

GULFSLOPE ENERGY, INC. - 8-K

Exhibit 10.1

 

	Execution Version

 

TERM LOAN AGREEMENT

 

dated as of March 1, 2019

 

among

 

GulfSlope
Energy, Inc.,

 

as the Borrower,

 

and

 

Delek
GOM Investments, LLC,

 

as Lender

 

     

     

    

 

TABLE OF CONTENTS

 

Page

 

	Article I Definitions and Accounting Matters	5
	Section 1.01     Certain Defined Terms	5
	Section 1.02     Terms Generally; Rules of Construction	17
	Section 1.03     Accounting Terms and Determinations; GAAP	17
	Section 1.04     Divisions	18
	 	 
	Article II The Loans	18
	Section 2.01     Commitments	18
	Section 2.02     Funding	18
	Section 2.03     Advances	18
	Section 2.04     Repayment of Loans	18
	Section 2.05     Interest	19
	Section 2.06     Termination of Commitments	19
	Section 2.07     Maturity Date	19
	Section 2.08     Prepayments	19
	Section 2.09     [Intentionally Omitted]	20
	Section 2.10     Payments Generally	20
	Section 2.11     Taxes	21
	Section 2.12     Illegality	21
	Section 2.13     Delivery of Warrant	21
	 	 
	Article III Conditions Precedent	22
	Section 3.01     Conditions to Funding	22
	Section 3.02     Conditions to Funding of Additional Loans	22
	 	 
	Article IV Representations and Warranties	23
	Section 4.01     Organization; Powers	23
	Section 4.02     Authority; Enforceability	23
	Section 4.03     Approvals; No Conflicts	23
	Section 4.04     Litigation	23
	Section 4.05     No Indebtedness for Borrowed Money or Off-Balance Sheet Liabilities	24
	Section 4.06     Environmental Matters	24
	Section 4.07     Compliance with Laws and Agreements; No Defaults	24
	Section 4.08     Investment Company Act	24
	Section 4.09     Taxes	25
	Section 4.10     ERISA; Employees	25
	Section 4.11     Disclosure; No Material Misstatements	25
	Section 4.12     Insurance	25
	Section 4.13     Restriction on Liens Under Security Documents	25
	Section 4.14     Equity Interests; Subsidiaries	25
	Section 4.15     Location of Business and Offices	26
	Section 4.16     Properties; Titles, Etc	26
	Section 4.17     [Intentionally Omitted]	27
	Section 4.18     Solvency	27
	Section 4.19     Use of Proceeds; Federal Reserve Regulations	27
	 	 
	Article V Affirmative Covenants	27
	Section 5.01     Information	27
	Section 5.02     [Intentionally Omitted]	28

 

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	Section 5.03     Notices of Material Events	28
	Section 5.04     Existence; Conduct of Business	28
	Section 5.05     Payment of Taxes and Obligations	29
	Section 5.06     Enforcement of Rights	29
	Section 5.07     [Intentionally Omitted]	29
	Section 5.08     [Intentionally Omitted]	29
	Section 5.09     Books and Records; Inspection Rights	29
	Section 5.10     Compliance with Laws	29
	Section 5.11     [Intentionally Omitted]	29
	Section 5.12     [Intentionally Omitted]	29
	Section 5.13     Maintenance of Liens	29
	Section 5.14     Further Assurances	29
	Section 5.15     Post Closing Deliveries	30
	Section 5.16     Senior Indebtedness	30
	Section 5.17     Tax Partnership	30
	 	 
	Article VI Negative Covenants	30
	Section 6.01     Indebtedness	30
	Section 6.02     Liens	31
	Section 6.03     Distributions and Redemptions; Restricted Payments	31
	Section 6.04     Investments, Loans and Advances	31
	Section 6.05     Nature of Business	31
	Section 6.06     No Subsidiaries or Joint Ventures	31
	Section 6.07     [Intentionally Omitted]	31
	Section 6.08     Sale and Leaseback Transactions	31
	Section 6.09     Use of Proceeds; Federal Reserve Regulations	32
	Section 6.10     Sale or Discount of Receivables	32
	Section 6.11     Mergers, Etc	32
	Section 6.12     Sale of Properties	32
	Section 6.13     [Intentionally Omitted]	32
	Section 6.14     [Intentionally Omitted]	32
	Section 6.15     Transactions with Affiliates	32
	Section 6.16     Equity Interests	33
	Section 6.17     Limitation on Accounts	33
	Section 6.18     Hedging Agreements	33
	Section 6.19     [Intentionally Omitted]	33
	Section 6.20     Junior Payments, etc	33
	Section 6.21     Negative Pledge Agreements	33
	 	 
	Article VII Events of Default; Remedies	33
	Section 7.01     Events of Default	33
	Section 7.02     Remedies	35
	 	 
	Article VIII Miscellaneous	35
	Section 8.01     Notices	35
	Section 8.02     Waivers; Amendments	36
	Section 8.03     Expenses, Indemnity; Damage Waiver	37
	Section 8.04     Successors and Assigns	38
	Section 8.05     Survival; Revival; Reinstatement	38
	Section 8.06     Counterparts; Integration; Effectiveness	39
	Section 8.07     Severability	39
	Section 8.08     Right of Setoff	39

 

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	Section 8.09     GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS	40
	Section 8.10     Headings	41
	Section 8.11     Interest Rate Limitation	41
	Section 8.12     EXCULPATION PROVISIONS	41
	Section 8.13     No Third Party Beneficiaries	42
	Section 8.14     USA Patriot Act Notice	42
	Section 8.15     Relationship of Parties	42
	Section 8.16     Confidentiality	42
	Section 8.17     Lender’s Acknowledgement of Cure	42

 

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ANNEXES, EXHIBITS AND SCHEDULES

 

	Exhibit A	[Intentionally Omitted]
	Exhibit B	[Intentionally Omitted]
	Exhibit C	Form of Warrant
	Exhibit D	Form of Borrowing Request
	Exhibit E	Form of Subordination Agreement
	 	 
	Schedule 4.05	Scheduled Unsecured Debt

 

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THIS TERM LOAN AGREEMENT
(this “Agreement,” as it may be amended or modified from time to time as provided below) dated as of
March 1, 2019, is among GulfSlope Energy, Inc., a Delaware corporation, with its principal place of business at 1331 Lamar
Street, Suite 1665, Houston Texas, 77010 (the “Borrower”), and Delek GOM Investments, LLC, a Delaware
limited liability company, with a registered office address c/o Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801
(the “Lender”).

 

RECITALS

 

WHEREAS, the Borrower,
the Lender, and Texas South Energy, Inc., a Nevada corporation, with its principal place of business at 4550 Post Oak Place Dr.,
Suite 300, Houston, Texas 77027 (“Texas South”) have entered into that certain (a) Joint Operating Agreement
dated January 1, 2018 (the “JOA” or “Joint Operating Agreement”), and (b) Participation
Agreement dated and effective as of January 1, 2018 (the “Participation Agreement”), pursuant to which,
among other things, the Lender agrees to bear its share of costs and expenses of each Phase I ITW in respect of the Phase I Prospects;

 

WHEREAS, immediately
prior to the Closing, the Borrower owes certain amounts to the Joint Account (as defined in Exhibit C to the Joint Operating Agreement);

 

WHEREAS, the Borrower
has requested that the Lender provide multiple draw term loans in an aggregate stated principal amount of up to $11,000,000 to
the Borrower, secured by the Properties and substantially all of the other properties and assets of the Borrower (other than Excluded
Assets);

 

WHEREAS, the Lender
has agreed to make these loans subject to the terms and conditions of this Agreement; and

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants and agreements herein contained, the Borrower and the Lender, intending
to be legally bound, agree as follows:

 

Article
I

 

Definitions and Accounting Matters

 

Section 1.01         Certain Defined Terms. In addition to the terms defined above, as used in this Agreement, the following terms have
the meanings specified below:

 

“Additional
Loans” is defined in Section 2.03(b).

 

“Affiliate”
means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified, where “Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise, and “controlling” and “controlled”
have correlative meanings.

 

“Agreement”
is defined in the introduction to this Agreement.

 

“Applicable
Law” means, for any Person, property or circumstance, any Law applicable to that Person, property or circumstance.

 

“Asset
Sale” means any conveyance, sale, lease, sublease, assignment, transfer or other disposition (including by way of
merger or consolidation and including any sale and leaseback) of any Property or any other property by the Borrower.

 

“Availability
Period” means the period commencing on the Closing Date and ending on the date that is five Business Days prior to
the Maturity Date.

 

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“Bankruptcy
Event” shall be deemed to occur, with respect to any Person, if: (a) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of such Person or
its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar Law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for such Person or for a substantial part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered; (b) such Person
shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar Law now or hereafter in effect, (ii) consent to the institution
of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (a) above, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower
or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it
in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting
any of the foregoing; (c) any holder (other than the Lender or any Affiliate thereof) of Equity Interests of such Person shall
make any request or take any action for the purpose of calling a meeting of the holders of Equity Interests of such Person to consider
a resolution to dissolve and wind-up the Borrower’s affairs; or (d) such Person shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due.

 

“Board”
means the Board of Governors of the Federal Reserve System of the United States of America or any successor Governmental Authority.

 

“BOEM”
means the Bureau of Ocean Energy Management of the United States Department of the Interior or any Governmental Authority succeeding
to its authority. References to “BOEM” include, as applicable, reference to the Minerals Management Service as BOEM’s
predecessor or any other entity which succeeds to any functions or duties of either the Mineral Management Service or BOEM.

 

“Borrower”
is defined in the introduction to this Agreement.

 

“Borrowing
Request” means a request by the Borrower for Additional Loans in accordance with Section 2.03(b).

 

“BSEE”
means the Bureau of Safety and Environmental Enforcement of the United States Department of the Interior or any Governmental Authority
succeeding to its authority.

 

“Business
Day” means any day that is not a Saturday, Sunday or other day on which national banks or banks in the State of Israel
or Houston, Texas are authorized or required by Law to remain closed.

 

“Capital
Leases” means, in respect of any Person, all leases that shall have been, or should have been, in accordance with
GAAP, recorded as capital leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of
rent thereunder.

 

“Casualty
Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent
domain or by condemnation or similar proceeding of, any of the Properties.

 

“Change
in Control” means (a) any “person” or “group” (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) other than the Initial Subordinated Lender and the Lender (i) is or shall become the “beneficial
owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more on a
fully diluted basis of the economic or voting interests in the Borrower’s Equity Interests or (ii) acquires direct or indirect
Control (as defined in the defined term

 

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Affiliate)
of the Borrower; (b) a “change of control” or similar event, howsoever described, shall occur as provided in (i) any
document governing any Subordinated Debt, or (ii) any preferred stock (or the documentation governing the same); or (c) the Initial
Subordinated Lender ceases to own directly at least 10% of the Equity Interests of the Borrower.

 

“Closing”
means the occurrence of the advance of the Initial Loans under this Agreement.

 

“Closing
Date” means the date on which the Closing occurs under this Agreement.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Commitment”
means, as to the Lender, $11,000,000.

 

“Common
Stock” is defined in the Warrant.

 

“Control
Agreement” means one or more account control agreements to be executed and delivered among the Borrower, the Lender,
and each bank at which such Borrower maintains any deposit account or securities account, as may be reasonably acceptable to the
Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Default”
means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.

 

“dollars”
or “$” refers to lawful money of the United States of America.

 

“Environmental
Laws” means any and all Laws pertaining in any way to pollution, health, safety, the environment, natural resources,
or Hazardous Materials, including the Oil Pollution Act of 1990, the Clean Air Act, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980, the Federal Water Pollution Control Act, the Occupational Safety and Health Act of 1970,
the Resource Conservation and Recovery Act of 1976, the Safe Drinking Water Act, the Toxic Substances Control Act, the Superfund
Amendments and Reauthorization Act of 1986, the Hazardous Materials Transportation Law and other environmental conservation or
protection Laws.

 

“Environmental
Permit” means any Permit required by or issued under any Environmental Law.

 

“Equity
Interests” of any Person means any and all shares of capital stock (whether denominated as common stock or preferred
stock), units, interests, rights to purchase, warrants, options, participation or other equivalents of or interests in (however
designated) equity of such Person, including any preferred stock, but excluding any debt securities convertible into equity.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974.

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated
as a single employer under Section 414(b) or (c) of the Code, or solely for the purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

 

“ERISA
Event” means (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations
issued under ERISA, with respect to a Plan (other than event for which the 30-day notice period is waived), (b) any failure by
any Plan to satisfy the minimum funding standard (within the meaning of Section 412 of the Code or Section 302 of ERISA)
applicable to that Plan, whether or not waived, (c) the failure to make a required contribution to any Plan that would result in
the imposition of a lien or other encumbrance under Section 430 of the Code or Section 303 or 4068 of ERISA, or arising of such
lien or encumbrance, (d) the filing pursuant to Section 412 of the Code or Section 302(c) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan, (e) a

 

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determination
that any Plan is, or is expected to be, in “at-risk” status (as defined in Section 303(i)(4) of ERISA or Section 430(i)(4)
of the Code), (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with
respect to the termination of any Plan or the withdrawal or partial withdrawal of the Borrower or any of its ERISA Affiliates
from any Plan or Multiemployer Plan, (g) the receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan administrator
of any notice relating to the intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan, (h) the
receipt by the Borrower or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Borrower
or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA or in endangered or critical
status, within the meaning of Section 305 of ERISA, (i) the failure by the Borrower, or any ERISA Affiliate to make any required
contribution to a Multiemployer Plan, (j) the occurrence of a non-exempt “prohibited transaction” with respect to
a Plan with respect to which the Borrower is a “disqualified person” (within the meaning of Section 4975 of the
Code) or with respect to which the Borrower would otherwise be liable, or (k) the Borrower, or an ERISA Affiliate incurring any
liability to the PBGC under Title IV of ERISA with respect to any Plan (other than premiums due and not delinquent under Section
4007 of ERISA).

 

“Event
of Default” is defined in Section 7.01.

 

“Excepted
Liens” means: (a) Liens for Taxes, assessments or other governmental charges or levies that are not delinquent or
that are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance
with GAAP; (b) landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s,
mechanics’, suppliers’, workers’, materialmen’s, customs authorities’ or other like Liens arising
by operation of Law in the ordinary course of business, each of which is in respect of obligations that are not delinquent or that
are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with
GAAP; (c) judgment and attachment Liens not giving rise to an Event of Default, provided that any appropriate legal
proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period
within which such proceeding may be initiated shall not have expired, (d) Liens arising solely by virtue of any statutory
or common-law provision relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit
accounts or other funds maintained with a creditor depository institution, provided that no such deposit account is a dedicated
cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations
promulgated by the Board and no such deposit account is intended by the Borrower to provide collateral to the depository institution;
(e) the Liens granted in favor of the Lender securing the Obligations; (f)  Liens incurred or pledges or deposits made
in connection with workers’ compensation, unemployment insurance and other types of social security, old age pension, public
liability obligations or similar legislation, and deposits securing liabilities to insurance carriers under insurance or self-insurance
arrangements in respect of such obligations, or to secure (or secure the Liens securing) liability for reimbursement or indemnification
obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers
providing property, casualty or liability insurance to the Borrower; (g) deposits and other Liens securing (or securing the
bonds or similar instruments securing) the performance of tenders, statutory obligations, plugging and abandonment obligations,
surety, stay, customs and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds
and other similar obligations (including cash, cash equivalents and letters of credit issued in lieu of such bonds or to support
the issuance thereof) incurred in the ordinary course of business, including those incurred to secure health, safety and environmental
obligations in the ordinary course of business, to secure any surety and bonding requirements; (h) ground leases, subleases,
licenses or sublicenses entered into by the Borrower in the ordinary course of business in respect of real property on which facilities
owned or leased by the Borrower are located; (i) (1) any interest or title of a lessor,

 

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sublessor,
licensor or sublicensor under any lease, liens reserved in oil, gas or other Hydrocarbons, minerals, leases for bonus, royalty
or rental payments and for compliance with the terms of such lease and (2) any interest or title of a lessor, sublessor, licensor
or sublicensor or secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under any lease,
sublease, license or sublicense entered into by the Borrower in the ordinary course of business or otherwise permitted by this
Agreement; (j) Liens which arise in the ordinary course of business under operating agreements, joint venture agreements
(in the case of joint ventures, solely with respect to Liens that arise out of contractual restrictions), participation agreements,
oil and gas partnership agreements, oil and gas leases, farm-out agreements, farm-in agreements, division orders, contracts for
the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual
interest agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, development
agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other
disposal agreements, seismic or other geophysical permits or agreements, and other agreements that are usual or customary in the
oil and gas business (including the Operative Documents) and are for claims that are not delinquent or that are being contested
in good faith and by appropriate proceedings for which appropriate reserves have been established to the extent required by and
in accordance with GAAP, provided that any such Lien referred to in this clause does not materially impair the use of the
property covered by such Lien for the purposes for which such property is held by the Borrower; (k) Liens on pipelines and
pipeline facilities that arise by operation of law or other like Liens arising by operation of law in the ordinary course of business
and incident to the exploration, development, operation and maintenance of Oil and Gas Properties, each of which is in respect
of obligations that do not constitute Indebtedness for borrowed money and are not yet overdue for a period of more than 30 days
or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance
with GAAP; (l) easements, rights-of-way, licenses, restrictions (including zoning restrictions), title defects, exceptions,
deficiencies or irregularities in title, encroachments, protrusions, servitudes, permits, conditions and covenants and other similar
charges or encumbrances (including in any rights-of-way or other property of the Borrower for the purpose of pipelines, transmission
lines, transportation lines, distribution lines for the removal of gas, oil or other minerals, and other like purposes, or for
joint or common use of real estate, rights of way, facilities and equipment) not interfering in any material respect with the
business of the Borrower, taken as a whole; and (m) any right reserved to or vested in any Governmental Authority to control
or regulate the use of any real property that does not materially interfere with the ordinary conduct of the business of the Borrower;
provided, however, that a Lien described in clauses (a), (b), (c), (d), (g), (j) and (k) is not an “Excepted Lien”
from and after the time (if any) that foreclosure or execution on the Lien occurs, a court authorizes such a foreclosure or execution,
or formal steps are taken under nonjudicial or executory process to foreclose or execute on the Lien or other action is taken
that, in either case, materially interferes with the ownership, possession, use or operation of the property subject to the Lien;
provided, further, that no intention to subordinate the first-priority Lien granted in favor of the Lender is to be hereby implied
or expressed by the permitted existence of any other such Excepted Liens.

 

“Excluded
Assets” shall mean the following:

 

(a)          any
assets (including Excepted Liens) over which the granting of Liens under the Security Documents in such assets would be prohibited
by contract or agreement (to the extent existing (x) on the Closing Date or (y) at the time such assets are acquired and not entered
into in contemplation of such acquisition), Applicable Law or regulation (other than to the extent that such prohibition would
be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other Applicable
Law) or would require the consent of any Person (other than the Borrower or any of its Affiliates) that has not been obtained (to
the extent such consent right (x) existed on the Closing Date or (y) at the time such assets are acquired and not in contemplation
thereof) or would require the consent of any Governmental Authority or regulatory body unless such consent has been

 

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obtained
(in each case, other than to the extent that such consent requirement would be rendered ineffective pursuant to Section 9-406,
9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction or any other Applicable Law); provided that any such asset
or, to the extent severable, any portion thereof, will be an Excluded Asset only to the extent and for so long as such prohibition
or consent requirement is effective and will cease to be an Excluded Asset and will become subject to the Lien granted under the
Security Documents, immediately and automatically, at such time as such prohibition or consent requirement is no longer effective;

 

(b)          any
lease, license, contract, property right, general intangible, agreement, asset or property to which the Borrower is a party or
has rights, or which is otherwise subject to a purchase money security interest or similar arrangement, or any of its rights or
interests thereunder, if and only for so long as the grant of a Lien under the Security Documents would constitute or result in
a breach, termination or default under, or would invalidate, any such lease, license, contract, property right, general intangible,
agreement, asset or property or purchase money arrangement or create a right of termination in favor of any party thereto (other
than the Borrower) (other than to the extent that any term of such lease, license, contract, property right, general intangible,
agreement, asset or property or purchase money arrangement would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408
or 9-409 of the UCC of any relevant jurisdiction or any other Applicable Law); provided that such lease, license, contract,
property right or agreement or purchase money arrangement or, to the extent severable, any portion thereof, will be an Excluded
Asset only to the extent and for so long as the consequences specified above will result and will cease to be an Excluded Asset
and will become subject to the Lien granted under the Security Documents, immediately and automatically, at such time as such consequences
will no longer result;

 

(c)          any
intent-to-use application trademark application prior to the filing of a “Statement of Use” or “Amendment to
Allege Use” with respect thereto, to the extent, if any, that, and solely during the period, if any, in which, the grant
of a security interest therein would impair the validity or enforceability of such intent-to-use trademark application under applicable
federal Law;

 

(d)          any
governmental permits, franchises, approvals, charters, authorizations or licenses or state or local permits, franchises, approvals,
charters, authorizations or licenses, to the extent a grant of a Lien under the Security Documents in any such permit, franchise,
approval, charter, authorization or license is prohibited or restricted thereby (other than to the extent that any such prohibition
or restriction would be rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the UCC of any relevant jurisdiction
or any other Applicable Law); provided that any such permit, franchise, approval, charter, authorization or license or,
to the extent severable, any portion thereof, will be an Excluded Asset only to the extent and for so long as such prohibition
or restriction is effective and will cease to be an Excluded Asset and will become subject to the Lien granted under the Security
Documents, immediately and automatically, at such time as such prohibition is no longer effective;

 

(e)          that
certain Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands Act bearing Serial Number OCS-G 36357, dated
effective as of December 1, 2018, by and between the United States of America, as Lessor, and GulfSlope Energy, Inc., as Lessee,
covering all of Block 376, Vermilion Area, South Addition, OCS Leasing Map, Louisiana Map No. 3B, containing approximately 5,000.00
acres; and

 

(f)           that
certain Oil and Gas Lease of Submerged Lands under the Outer Continental Shelf Lands Act bearing Serial Number OCS-G 36361, dated
effective as of November 1, 2018, by and between the United States of America, as Lessor, and GulfSlope Energy, Inc., as Lessee,
covering all of Block 371, Eugene Island Area, South Addition, OCS Leasing Map, Louisiana Map No. 4A, containing approximately
5,000.00 acres.

 

“Exercise
Notice Date” is defined in the Warrant.

 

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“Exercise
Price” is defined in the Warrant.

 

“Excluded
Taxes” means any of the following Taxes required to be withheld or deducted from a payment to Lender: (a) Taxes imposed
on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, (b) U.S. federal withholding
Taxes imposed on amounts payable to or for the account of Lender pursuant to a law in effect on the date (i) Lender acquires an
interest in the Loan, or (ii) Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.11,
amounts with respect to such Taxes were payable either to Lender’s assignor immediately before Lender became a party hereto
or to Lender immediately before it changed its lending office, (c) Taxes attributable to Lender’s failure to comply
with Section 2.11(e) or Section 8.04(b)(iii), as applicable, and (d) any withholding Taxes imposed under
FATCA.

 

“Excluded
Accounts” means (i) segregated deposit accounts constituting (and the balance of which consists solely of funds set
aside in connection with) payroll accounts and accounts dedicated to the payment of accrued employee benefits, medical, dental
and employee benefits claims to employees of the Borrower, (ii) cash collateral accounts subject to Liens permitted by this Agreement,
and (iii) other deposit accounts that the Borrower and the Lender mutually agree in writing to designate as an Excluded Account.

 

“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof,
any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices
adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such
Sections of the Code.

 

“Funding
Date” means the date on which any advance of the Loans pursuant to Section 2.02 occurs.

 

“GAAP”
means generally accepted accounting principles in the United States of America as in effect from time to time subject to the terms
and conditions set forth in Section 1.03.

 

“Governmental
Authority” means the government of the United States of America, any other nation, or any political subdivision of
either, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Hazardous
Material” means any substance regulated or as to which liability might arise under any Environmental Law including:
(a) any chemical, compound, material, product, byproduct, substance or waste designated, classified, regulated, defined as or included
in the definition or meaning of “hazardous substance,” “hazardous material,” “hazardous waste,”
“solid waste,” “toxic waste,” “extremely hazardous substance,” “toxic substance,”
“contaminant,” “pollutant,” “waste,” or words of similar meaning or import in any Environmental
Law; (b) Hydrocarbons, petroleum products, petroleum substances, natural gas, oil, oil and gas waste, crude oil, and any components,
fractions, byproducts, breakdown products, or derivatives thereof; and (c) radioactive materials, explosives, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon, infectious or medical wastes.

 

“Hydrocarbon
Interests” shall mean all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases,
oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty
interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.

 

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“Hydrocarbons”
shall mean oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons,
other mineral products and all products refined or separated therefrom.

 

“Indebtedness”
means, for any Person, any of the following or, if applicable, the sum of the following (without duplication): (a) all obligations
for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments; (b) all obligations
(whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts
payable and accrued expenses, liabilities or other obligations of such Person to pay the deferred purchase price of property or
services; (d) all obligations under Capital Leases; (e) all obligations under Synthetic Leases; (f) all Indebtedness (as defined
in the other clauses of this definition) of others secured by (or for which the holder of that Indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on any property of that Person, whether or not that Indebtedness is assumed by
that Person, to the extent of the lesser of the amount of that Indebtedness and the fair market value of the property encumbered
by such Lien; (g) all Indebtedness (as defined in the other clauses of this definition) of others guaranteed by that Person or
in which that Person otherwise assures a creditor against loss of the Indebtedness (howsoever that assurance shall be made) to
the extent of the lesser of the amount of that Indebtedness and the maximum stated amount of that guarantee or assurance against
loss; (h) all obligations or undertakings of that Person to maintain or cause to be maintained the financial position or covenants
of others or to purchase the Indebtedness or property of others; (i) obligations to deliver commodities, goods or services, including,
without limitation, Hydrocarbons, in consideration of one or more advance payments; (j) obligations to pay for goods or services
even if those goods or services are not actually received or utilized by that Person; (k) any Indebtedness (as defined in the other
clauses of this definition) of a partnership for which that Person is liable either by agreement, by operation of Law or by a Law
but only to the extent of that liability; and (l) the undischarged balance of any production payment created by that Person or
for the creation of which that Person directly or indirectly received payment. The Indebtedness of any Person shall include all
obligations of that Person of the character described above to the extent that Person remains legally liable in respect of that
obligation notwithstanding that any such obligation is not included as a liability of that Person under GAAP.

 

“Initial
Loan” is defined in Section 2.03(a).

 

“Initial
Subordinated Debt” means Indebtedness of the Borrower due and owing to the Initial Subordinated Lender on or about
the date hereof that is subordinated pursuant to the Subordination Agreement.

 

“Initial
Subordinated Lender” means John N. Seitz.

 

“Investment”
means, for any Person: (a) the acquisition (whether for cash, property, services or securities or otherwise) of Equity Interests
of any other Person or any agreement to make any such acquisition (including any “short sale” or any sale of any securities
at a time when such securities are not owned by the Person entering into such short sale); (b) the making of any deposit with,
or advance, loan or capital contribution to, assumption of Indebtedness of, purchase or other acquisition of any other Indebtedness
or equity participation or interest in, or other extension of credit to, any other Person (including the purchase of property from
another Person subject to an understanding or agreement, contingent or otherwise, to resell that property to that Person, but excluding
any such advance, loan or extension of credit having a term not exceeding 30 days representing the purchase price of inventory
or supplies sold by that Person in the ordinary course of business); (c) the purchase or acquisition (in one or a series of transactions)
of property of another Person that constitutes a business unit, or (d) the entering into of any guarantee of, or other contingent
obligation (including the deposit of any Equity Interests to be sold) with respect to, Indebtedness or other liability of any other
Person and (without duplication) any amount committed to be advanced, lent or extended to that Person.

 

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“JOA”
or “Joint Operating Agreement” is defined in the recitals to this Agreement.

 

“Law”
means any statute, law, treaty, rule, code, ordinance, requirement, rule, regulation, Permit, franchise, rule of common law, authorization,
directive, certificate, or other requirement of any Governmental Authority, any interpretation of any of the foregoing by any Governmental
Authority, or any binding judgment, decision, decree, injunction, writ, order or like action of any court, arbitrator or other
Governmental Authority, and includes any and all Environmental Laws.

 

“Lease”
is defined under the Participation Agreement.

 

“Lender”
is defined in the introduction to this Agreement and any of its assignees as permitted under Section 8.04.

 

“Lien”
means any interest in property securing an obligation owed to, or a claim by, a Person other than the owner of the property, whether
that interest is based on the common law, statute or contract, and whether that obligation or claim is fixed or contingent, and
including the lien or security interest arising from a mortgage, deed of trust, lien, charge, encumbrance, pledge, security agreement,
security interest, hypothecation, assignment, deposit arrangement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes, the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing), and in the
case of Equity Interests and securities, any purchase option, call or similar right or preferential arrangement of a third party
with respect to such Equity Interests and securities. The term “Lien” includes easements, restrictions, servitudes,
permits, conditions, covenants, exceptions or reservations.

 

“Loan”
means any of the loans made by the Lender to the Borrower pursuant to this Agreement.

 

“Loan Documents”
means this Agreement, the Notes, the Warrant, the Registration Rights Agreement, each Borrowing Request, the Subordination Agreement,
the Security Documents, and each other agreement or document executed by the Borrower or its Affiliates in connection with the
Loans and designated a Loan Document by the Lender.

 

“Material
Adverse Effect” means a material adverse change in, or a material adverse effect on, (a) the business, operations,
properties, condition (financial or otherwise) or of the Borrower, (b) the ability of the Borrower to perform any of its obligations
under any Transaction Document, (c) the validity or enforceability of any Loan Document or (d) the rights and remedies of or benefits
available to the Lender under any Loan Document.

 

“Maturity
Date” means the date that is six months after the Closing Date.

 

“Mortgage”
means collectively, the deeds of trust, trust deeds, deeds to secure debt, hypothecations, security agreements, financing statements,
fixture filings, and mortgages made by the Borrower in favor or for the benefit of the Lender creating and evidencing a Lien on
any Property as required under, and executed and delivered pursuant to Section 5.14(c), in form and substance reasonably
satisfactory to the Lender with such terms and provisions as may be required by the Applicable Laws of the relevant jurisdiction,
as the same may from time to time be amended, restated, supplemented or otherwise modified.

 

“Mortgage
Amendment” is defined in Section 5.14(c).

 

“Mortgaged
Property” is defined in Section 5.14(c).

 

“Multiemployer
Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

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“Net Cash
Proceeds” relating to any Asset Sale means the cash proceeds received by the Borrower (including cash proceeds subsequently
received (as and when received by the Borrower) in respect of non-cash consideration initially received) net of (a) all reasonable
and documented attorneys’ fees, accountants’ fees, investment banking fees and other customary expenses, fees and commissions
actually incurred by the Borrower in respect thereof, (b) Taxes paid as of the date of receipt of such Net Cash Proceeds as a result
of such Asset Sale by any of the Borrower and (c) other selling expenses approved by the Lender.

 

“Note”
means any of the promissory notes of the Borrower described in Section 2.04(b), together with all amendments, modifications,
replacements, extensions and rearrangements.

 

“Obligations”
means any and all amounts owing or to be owing by the Borrower (whether direct or indirect (including those acquired by assumption),
absolute or contingent, due or to become due, now existing or hereafter arising) to the Lender under any Loan Document; and all
renewals, extensions and/or rearrangements of any of the above.

 

“Oil and
Gas Properties” shall mean (a) Hydrocarbon Interests; (b) the properties now or hereafter pooled or unitized with
Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and
the units created thereby (including, without limitation, all units created under orders, regulations and rules of any Governmental
Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other
agreements, including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the production,
sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons
in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and
all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all
tenements, hereditaments, appurtenances and properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon
Interests; (g) all Leases, and (h) all properties, rights, titles, interests and estates described or referred to above, including
any and all property, real or personal, now owned or hereinafter acquired and situated upon, used, held for use or useful in connection
with the operating, working or development of any of such Hydrocarbon Interests or properties and including any and all oil wells,
gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors,
pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines,
boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases,
rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to
any and all of the foregoing.

 

“Operative
Documents” means the Joint Operating Agreement and the Participation Agreement, but excludes any Loan Documents.

 

“Organizational
Documents” means any certificate of formation, certificate of incorporation, articles of incorporation, limited liability
company agreement, partnership agreement, bylaws or other organizational documents or any agreement entered into by any Person
with respect to its Equity Interests.

 

“Other
Taxes” means any and all present or future stamp, court or documentary, intangible, recording, filing or similar
Taxes or any other excise or property Taxes, charges or similar levies arising from any payment made under, or from the execution,
delivery, performance, registration or enforcement of, from the receipt or perfection of a security interest under, or otherwise
with respect to, this Agreement and any other Loan Document.

 

“Participation
Agreement” is defined in the recitals to this Agreement.

 

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“Patriot
Act” means the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001).

 

“PBGC”
means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.

 

“Permit”
means any permit, identification number, bond, registration, license, notice, approval, consent, exemption, variance, franchise,
lease, approval, notification, certification, registration, qualification, easement, right of way, Lien and other right, privilege,
approval or authorization required or issued by any Governmental Authority (including BOEM and/or BSSM) or otherwise under any
Law (including Environmental Law).

 

“Permitted
Unsecured Debt” is defined in Section 6.01(g).

 

“Person”
means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

 

“Phase
I ITW” has the meaning given to that term in the Participation Agreement.

 

“Phase
I Prospects” has the meaning given to that term in the Participation Agreement.

 

“Plan”
means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412
of the Code or Section 302 of ERISA, and in respect of which the Borrower or any of its respective ERISA Affiliates is (or,
if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.

 

“Properties”
means all Leases, “Prospects” (as defined in the Participation Agreement), “Development Systems” (as defined
in Exhibit F to the Joint Operating Agreement), platforms, wells, facilities, fixtures, other corporeal property, whether movable
or immovable, whether now or hereafter placed on the property covered by the Leases or the Contract Area (as defined in the Joint
Operating Agreement) or maintained or used in connection with the ownership, use or exploitation of the Leases or the Contract
Area, and other surface and sub-surface equipment of any kind or character located on or attributable to the Leases or the Contract
Area and the cash or other proceeds realized from any sale, transfer, disposition or conversion thereof.

 

“Prospect
Payment Default” is defined in Section 8.17.

 

“Registration
Rights Agreement” means that the registration rights agreement with respect to the shares of Common Stock that are
issuable under the Warrant that will be entered into by the Borrower and the Lender pursuant to Section 5.15(b) hereof.

 

“Regulations
T, U or X” means Regulations T, U and/or X of the Board, as the same may be amended, supplemented or replaced from
time to time.

 

“Related
Parties” means, with respect to any specified Person, its Affiliates and the respective directors, officers, employees,
agents and advisors (including attorneys, accountants and experts) of it and its Affiliates.

 

“Release”
means any depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging, migrating,
injecting, escaping, leaching, dumping, or disposing.

 

“Responsible
Officer” means, as to any Person, the Chief Executive Officer, the President, the Chief Financial Officer or any
Vice President of that Person. Unless otherwise specified, all references to a Responsible Officer shall mean a Responsible Officer
of the Borrower.

 

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“Restricted
Payment” means any dividend or other distribution (whether in cash, securities or other property, but excluding dividends
or other distributions paid solely in equity securities that do not result in a Change in Control) with respect to any Equity Interests
in the Borrower, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit,
on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the
Borrower or any option, warrant or other right to acquire any such Equity Interests in the Borrower.

 

“Scheduled
Unsecured Debt” is defined in Section 4.05.

 

“SEC”
means the Securities and Exchange Commission or any successor Governmental Authority.

 

“Security
Agreement” means a Security Agreement in a form reasonably satisfactory to the Borrower and Lender.

 

“Security
Documents” means the Mortgages, the Security Agreement, any Control Agreements, and any and all other agreements,
financing statements, instruments, consents or certificates now or hereafter executed and delivered by the Borrower or any other
Person in connection with, or as security for the payment or performance of the Obligations, the Notes, this Agreement and the
other Loan Documents.

 

“Subordinated
Debt” means the Initial Subordinated Debt and any Indebtedness incurred by the Borrower which is unsecured and subordinated
in right of payment in full to the Obligations.

 

“Subordination
Agreement” means a Subordination Agreement substantially in the form of Exhibit E entered into by the Initial
Subordinated Lender in favor of the Lender, dated on or about the date hereof.

 

“Subsidiary”
of any Person means any other Person of which (a) more than 50% of the total ordinary voting power of Equity Interests entitled
(without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of that Person
(or Persons performing similar functions) or (b) more than 50% of the capital accounts, distribution rights or general or limited
partner interests, as applicable, is, in the case of clauses (a) and (b), at the time owned or controlled, directly or indirectly,
by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person.

 

“Synthetic
Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with
GAAP, treated as operating leases on the financial statements of the Person liable (whether contingently or otherwise) for the
payment of rent thereunder and which were properly treated as indebtedness for borrowed money for purposes of U.S. federal income
Taxes, if the lessee in respect thereof is obligated to either purchase for an amount in excess of, or pay upon early termination
an amount in excess of, 80% of the residual value of the property subject to such operating lease upon expiration or early termination
of such lease.

 

“Tax Partnership
Agreement” is defined in Section 5.17.

 

“Taxes”
means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Texas
South” is defined in the recitals to this Agreement.

 

“Transaction
Documents” means the Loan Documents and the Operative Documents.

 

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“Transactions”
means the execution, delivery and performance of this Agreement and each other Transaction Document by each party to such documents,
the borrowing of Loans, the use of the proceeds thereof, the grant of Liens by the Borrower on the Properties pursuant to the Security
Documents, the subordination of Indebtedness due and owing to the Initial Subordinated Lender pursuant to the Subordination Agreement,
and any other transaction related to or entered into in connection with any of the foregoing.

 

“Warrant”
means the Warrant to Purchase Common Stock, dated as of the date hereof, in the form attached hereto as Exhibit C.

 

“Warrant
Distribution” is defined in Section 4.14.

 

“Warrant
Shares” is defined in Section 4.14.

 

“Withdrawal
Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

“Withholding
Taxes” is defined in Section 2.11.

 

Section 1.02        
Terms Generally; Rules of Construction. The definitions of terms in this Agreement shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” as used in this
Agreement shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed
to have the same meaning and effect as the word “shall”. Unless the context requires otherwise, (a) any definition
of or reference to any agreement, instrument or other document herein shall be construed as referring to that agreement, instrument
or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on amendments,
supplements or modifications set forth in the Loan Documents), (b) any reference to any Law shall be construed as referring to
that Law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time, (c) any reference to
any Person shall be construed to include that Person’s successors and assigns (without limiting the restrictions contained
in the Loan Documents), (d) with respect to the determination of any time period, the word “from” means “from
and including” and the word “to” means “to and including” (e) any reference herein to Articles, Sections,
Annexes, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Annexes, Exhibits and Schedules to,
this Agreement and (f) the terms “knowledge,” “to the knowledge of,” or similar terms mean matters with
in the actual knowledge of a Responsible Officer or any other individual with a title or position similar or corresponding to the
foregoing of the Borrower or its Affiliates. No provision of this Agreement or any other Loan Document shall be interpreted or
construed against any Person solely because that Person or its legal representative drafted that provision.

 

Section 1.03       
Accounting Terms and Determinations; GAAP. Unless otherwise specified in this Agreement, all accounting terms used
in the Loan Documents shall be interpreted, all determinations with respect to accounting matters under the Loan Documents shall
be made, and all financial statements and certificates and reports as to financial matters required to be furnished to the Lender
under the Loan Documents shall be prepared, in accordance with GAAP, except for changes in which the Borrower’s independent
certified public accountants concur and that are disclosed to Lender; provided, however, for the purposes of determining the outstanding
amount of any Indebtedness (including, for the avoidance of doubt, the Obligations), any original issue discount with respect to
that Indebtedness shall not be deducted in determining the outstanding amount of that Indebtedness.

 

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Section 1.04        
Divisions. For all purposes under the Loan Documents, nothing in this Agreement shall permit the Borrower to (a)
divide into two or more Persons pursuant to a “plan of division” or similar method, or (b) create, or reorganize into,
one or more series, in each case, as contemplated under the Laws of any jurisdiction.

 

Article
II

 

The Loans

 

Section 2.01        
Commitments. Subject to the terms and conditions and relying upon the representations and warranties set forth in
this Agreement, the Lender agrees to make Loans to the Borrower in the stated principal amount up to the aggregate amount equal
to its Commitment, subject to the provisions of Section 2.03.

 

Section 2.02        
Funding. The Lender shall make its Loans available to the Borrower on each applicable Funding Date by wire transfer
of an amount equal to the Initial Loan provided for in Section 2.03(a) or equal to any Additional Loan requested pursuant
to the applicable Borrowing Request under Section 2.03(b), in each case, in immediately
available funds by 11:00 a.m., New York City time on such Funding Date, to an account of the Borrower designated by the Borrower.
Amounts paid or prepaid in respect of the Loans may not be reborrowed.

 

Section 2.03      
  Advances.

 

(a)          Initial Advance. At the Closing, the Lender shall make Loans in an amount equal to $5,800,000 (the “Initial
Loans”) to the Borrower.

 

(b)          Subsequent Advances.

 

(i)           
The Borrower may request additional Loans from the Lender (each, an “Additional Loan”), provided
that the proposed Funding Date for such Additional Loan shall occur during the Availability Period.

 

(ii)           To request an Additional Loan, the Borrower shall deliver a duly completed and executed Borrowing Request to the Lender
not later than 9:00 a.m., New York City time, on the fifth day prior to the proposed Funding Date for that Additional Loan. The
Borrowing Request may not be delivered until the conditions set forth in Section 3.02 have been satisfied or waived
in accordance with Section 8.02. The Borrowing Request shall be substantially in the form of Exhibit D, shall be dated
as of the proposed Funding Date, which date shall be a Business Day during the Availability Period, shall be certified by a Responsible
Officer and shall be irrevocable and binding on the Borrower. The Borrower shall not issue more than two Borrowing Requests in
any calendar month.

 

(iii)          Upon receipt of a Borrowing Request for the applicable Additional Loan and fulfillment or waiver of the applicable conditions
set forth in Section 3.02, the Lender shall make its Loan on the applicable Funding Date in accordance with Section 2.02.

 

Section 2.04        
Repayment of Loans.

 

(a)          Promise to Repay. The Borrower unconditionally promises to pay to the Lender the stated principal amount of each
Loan as provided for in Section 2.07.

 

(b)          Notes. If requested by the Lender, the Loans made by the Lender shall be evidenced by a single promissory note of
the Borrower in a principal amount equal to its Commitment

 

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dated
as of the date of this Agreement, duly completed and in form and substance reasonably satisfactory to the Lender (“Note”).

 

Section 2.05        
Interest.

 

(a)          Pre-Default Rate. Subject to the provisions of Section 2.05(b), the Loans shall bear interest at a rate
per annum equal to five percent (5.0%) per annum.

 

(b)          Post-Default Rate. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing, then all
the Loans outstanding shall bear interest, after as well as before judgment, at a rate per annum equal to 2.0% plus the rate provided
for in Section 2.05(a), from the date of the event or circumstance (disregarding any provisions regarding notice or
passage of time) until, in each case, such event or condition has been cured.

 

(c)          Interest Payment. Accrued interest on each Loan shall be payable in arrears on the Maturity Date; provided, however,
that (i) interest accrued pursuant to Section 2.05(b) shall be payable on demand, and (ii) in the event of any repayment
or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of the repayment
or prepayment.

 

(d)         Interest Rate Computations. All interest hereunder shall be computed on the basis of a year of 365 days (or 366 days
in a leap year).

 

Section 2.06        
Termination of Commitments. If the Initial Loan has not been made, the Commitments shall automatically terminate
at 6:00 p.m., New York City time, on March 4, 2019. Any unborrowed Commitments shall terminate on the expiration of the Availability
Period.

 

Section 2.07        
Maturity Date. The principal balance of the Loans shall be due and payable, together with accrued and unpaid interest,
fees and expenses in respect of the Loans, on the Maturity Date.

 

Section 2.08        
Prepayments.

 

(a)          Optional Prepayment. The Borrower shall have the right at any time and from time to time (before or after the occurrence
and continuance of an Event of Default) to prepay the Loan in whole or in part. Each such partial prepayment of principal shall
be in an amount that is (i) an integral multiple of $100,000 and not less than $500,000 or (ii) equal to the total remaining principal,
interest, fees and expenses outstanding. The Borrower shall notify the Lender of any prepayment under this Section 2.08
not later than 3:00 p.m., New York City time, on (x) the fifth Business Day before the date of prepayment in the case of prepayments
made pursuant to this Section 2.08(a), and (y) the date of such prepayment in the
case of prepayments made pursuant to Section 2.08(b). Each such notice shall be irrevocable unless the Borrower provides
that the prepayment is conditioned upon the prior or concurrent consummation of new credit facilities or another transaction, the
net cash proceeds of which will be used to make any such optional prepayment pursuant to this Section 2.08(a)
(in which case, such notice shall be revocable). Each such notice shall specify the prepayment date, the principal amount of Loans
to be repaid and, in the case of a mandatory prepayment made pursuant to Section 2.08(b), a reasonably detailed calculation
of the amount of such prepayment.

 

(b)         Mandatory Prepayments.

 

(i)           Asset Sales. Within three Business Days after the receipt by the Borrower of any Net Cash Proceeds of any Asset Sale,
the Borrower shall make prepayments in accordance with Section 2.08(c) in an aggregate amount equal to the lesser of
(A) 100% of such Net Cash Proceeds and (B) the amount of the then-outstanding Obligations.

 

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(ii)          Receipt of Insurance Proceeds. Within three Business Days after the receipt by the Borrower or any of its Affiliates
of any proceeds (including insurance proceeds) from a Casualty Event, the Borrower shall make prepayments in accordance with Section 2.08(c)
in an aggregate amount equal to the lesser of (A) 100% of such proceeds and (B) the amount of the then-outstanding Obligations.

 

(iii)         [Intentionally Omitted]

 

(iv)         Indebtedness; Equity Issuances. Within three Business Days after each date upon which the Borrower receives any cash
proceeds from any incurrence by the Borrower of Indebtedness other than the Loans (other than the Initial Subordinated Debt and
Scheduled Unsecured Debt as of the date hereof) or issuance of Equity Interests (other than any sale of Equity Interests by the
Borrower under the Warrant), the Borrower shall prepay the Loan in an amount equal to the net cash proceeds thereof (after paying
or reserving for the costs and expenses (including legal fees and expenses) associated with any such incurrence of Indebtedness
or issuance of Equity Interests, provided that, the Borrower may apply up to an aggregate amount of $500,000 of such net
cash proceeds received from any such incurrence (including any Permitted Unsecured Debt) or issuance towards the Borrower’s
general corporate purposes.

 

(v)          Refunds, Rebates, etc. Within three Business Days after each date upon which the Borrower receives any cash proceeds
from any payments, refunds, rebates or other similar payments and amounts under the Operative Documents, or from any of its suppliers,
customers, or any other third party or other source, the Borrower shall prepay the Loan in an amount equal to such proceeds.

 

(c)          Application of Prepayments. Each prepayment of Loans shall be applied ratably to the Loans. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.05.

 

Section 2.09        
[Intentionally Omitted].

 

Section 2.10        
Payments Generally.

 

(a)          The Borrower shall make each payment required to be made by it under the Loan Documents prior to 12:00 noon, New York City
time, on the date when due, in immediately available funds to an account of the Lender as designated by the Lender, without defense,
deduction, recoupment, set-off or counterclaim. Fees, once paid, shall be fully earned and shall not be refundable under any circumstances.
Any amounts received after that time may, in the discretion of the Lender, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest. If any payment under the Loan Documents shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of that extension. All payments hereunder shall be made in dollars.

 

(b)          The Lender which is also the holder of the Warrant may, at the Lender’s sole option, in accordance with Section 1(c)
of the Warrant, exercise the Warrant in whole for the number of shares of Common Stock then issuable under the Warrant (as adjusted
pursuant to the Warrant) and pay the Aggregate Exercise Price (as defined in the Warrant) for the exercise of the Warrant by extinguishing
all Obligations of the Borrower then outstanding under this Agreement as of the Exercise Notice Date.

 

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Section 2.11        
Taxes.

 

(a)          Payments Free of Taxes. Payments by or on behalf of the Borrower under any Loan Document shall be made free and clear
of and without reduction for or on account of any Taxes; provided, however, that if any Taxes are required by Applicable Law to
be withheld (“Withholding Taxes”) from any amount payable to the Lender, (i) the Borrower shall make
such deductions of Withholding Taxes, (ii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority
in accordance with Applicable Law, and (iii) except in the case where such Withholding Tax is an Excluded Tax, the sum payable
to the Lender shall be increased as necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.11(a)), the Lender receives an amount
equal to the sum it would have received had no such deductions been made.

 

(b)         Payment of Other Taxes by the Borrower. The Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with Applicable Law.

 

(c)          Indemnification by the Borrower. Except in the case of Excluded Taxes, the Borrower shall indemnify the Lender, on
or before the fifth Business Day after notice so demanding, for the full amount of any Withholding Taxes and Other Taxes (including
Withholding Taxes and Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.11)
paid by the Lender, regardless of whether the Withholding Taxes and Other Taxes were correctly or legally imposed or asserted by
the relevant Governmental Authority. A certificate as to the amount of the payment or liability delivered to the Borrower by the
Lender shall be conclusive absent manifest error.

 

(d)         Evidence of Payments. As soon as practicable after any payment of Withholding Taxes or Other Taxes by the Borrower
to a Governmental Authority, the Borrower shall deliver to the Lender the original or a certified copy of a receipt issued by the
Governmental Authority evidencing the payment, a copy of the return reporting the payment or other evidence of such payment satisfactory
to the Lender in its sole discretion.

 

(e)          Tax Form. The Lender shall deliver to the Borrower on or prior to the Closing Date an executed copy of IRS Form W-9
or W-8, as applicable.

 

Section 2.12         Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for the
Lender to honor its obligation to make or maintain Loans, then the Lender promptly shall notify the Borrower and such Lender’s
obligation to make its Loans shall be suspended until such time as such Lender may again make and maintain its Loans.

 

Section 2.13        
Delivery of Warrant.

 

(a)          On or about the date of this Agreement, the Borrower shall issue to the Lender a warrant to purchase 138,095,238 shares
of Common Stock at an Exercise Price of $0.042 per share (each as subject to any adjustments provided for therein), substantially
in the form of Exhibit C attached hereto (the “Warrant”), with an expiration date of March 4, 2020.

 

(b)         At any time the Lender exercises the Warrant, the number of Warrant Shares issuable upon exercise of the Warrant shall be
equal to the Exercise Shares (as defined in the Warrant) as of the Exercise Notice Date.

 

(c)         At any time the Lender makes an Additional Loan to the Borrower and the Lender does not hold an outstanding Warrant on the
Funding Date of such Additional Loan, the Borrower shall issue to the Lender a warrant to purchase the number of shares of Common
Stock equal to the quotient of the amount of such Additional Loan divided by $0.042 at an Exercise Price of $0.042 per

 

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share
(each as subject to any adjustments provided for therein), substantially in the form of Exhibit C attached hereto, with an expiration
date of March 4, 2020.

 

Article
III

 

Conditions Precedent

 

Section 3.01        
Conditions to Funding. The obligations of the Lender to make the Initial Loan and any Additional Loans shall not
become effective until the first date on which each of the following conditions is satisfied (or waived in accordance with Section 8.02):

 

(a)          The Lender shall have received from each party to this Agreement counterparts (in such number as may be requested by the
Lender) of this Agreement signed on behalf of that party.

 

(b)         If requested by the Lender, the Lender shall have received a duly executed Note payable to the order of the Lender in a
principal amount equal to its Commitment dated as of the date of this Agreement.

 

(c)          The Lender shall have received from each party duly executed counterparts (in such number as may be requested by the Lender)
of each of the Subordination Agreement, the Security Agreement, and the Warrant.

 

(d)         [Intentionally Omitted.]

 

(e)          The Lender shall have received a certificate of the Secretary of the Borrower setting forth (i) resolutions of its board
of directors or similar organizational body with respect to the authorization of the Borrower to execute and deliver the Loan Documents
to which it is a party and to enter into the transactions contemplated in those documents and to consummate the Transactions, (ii) the
officers of the Borrower (A) who are authorized to sign the Loan Documents to which it is a party and (B) who will, until replaced
by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents
and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, and (iii)
specimen signatures of those authorized officers, in each case, certified as being true and complete in form and substance reasonably
acceptable to the Lender. The Lender may conclusively rely on this certificate.

 

(f)          At the time of and immediately after giving effect to the advance of Loans, no Default or Event of Default shall have occurred
and be continuing.

 

(g)         The representations and warranties of each party to each Loan Document shall be true and correct in all material respects
on and as of the Closing Date, except to the extent any such representations and warranties are expressly limited to an earlier
date, in which case, such representations and warranties shall be true and correct in all material respects as of such specified
earlier date.

 

Section 3.02        
Conditions to Funding of Additional Loans. The obligations of the Lender to provide Additional Loans under Section 2.03(b)
after the Closing Date is subject to the satisfaction (or waiver in accordance with Section 8.02) of the each of the
following conditions:

 

(a)          The Lender shall have received a Borrowing Request complying with the requirements of Section 2.03(b)(ii) for
the applicable Additional Loan on or before the fifth day before the proposed Funding Date for that Additional Loan.

 

(b)         At the time of and immediately after giving effect to the advance of the applicable Additional Loan, no Default or Event
of Default shall have occurred and be continuing.

 

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Article
IV

 

Representations and Warranties

 

The Borrower represents
and warrants to the Lender that:

 

Section 4.01        
Organization; Powers. On the Closing Date, the Borrower is a limited liability company duly organized, validly existing
and in good standing under the Laws of the State of Delaware and has all requisite power and authority to own its assets and to
carry on its business as now conducted and as to be conducted after giving effect to the Closing. On the Closing Date, the Borrower
has all governmental licenses, authorizations, consents and approvals necessary, and is qualified to do business in, and is in
good standing in, every jurisdiction where qualification is required, in each case, except where the failure to have such licenses,
authorization, consents or approvals or to be so qualified could not reasonably be expected to have a Material Adverse Effect.

 

Section 4.02        
Authority; Enforceability. The execution, delivery and performance of each Loan Document, including the issuance
of the Warrant and the reservation for issuance of the Warrant Shares to which the Borrower is a party, are within the Borrower’s
powers and have been duly authorized by all necessary limited liability company action. Each Loan Document to which the Borrower
is a party has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other Laws
affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at Law.

 

Section 4.03        
Approvals; No Conflicts. The execution and delivery of the Loan Documents on the Closing Date (i) do not require
any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any other third
Person (including shareholders or any class of directors, whether interested or disinterested, of the Borrower), nor is any such
consent, approval, registration, filing or other action necessary for the validity or enforceability of any such Loan Document
or the consummation of the transactions contemplated thereby, including the issuance and exercise of the Warrant, except, in each
case such as have been obtained or made and are in full force and effect, (ii) will not violate any Applicable Law or the Borrower’s
Organizational Documents or any order of any Governmental Authority, (iii) will not violate or result in a default under any material
agreement or other material instrument binding upon the Borrower or the Properties, or give rise to a right thereunder to require
any material payment to be made by the Borrower, and (iv) will not result in the creation or imposition of any Lien on any property
of the Borrower (other than the Liens created by the Loan Documents).

 

Section 4.04        
Litigation. On and as of the Closing Date, there are no actions, suits, investigations or proceedings by or before
any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or the Properties (except as the same may relate to Texas South) that purport to affect or pertain to this Agreement
or any other Transaction Document that could reasonably be expected to have a Material Adverse Effect.

 

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Section 4.05        
No Indebtedness for Borrowed Money or Off-Balance Sheet Liabilities. On and as of the Closing Date, the Borrower
does not have any (i) Indebtedness for borrowed money (other than the Initial Subordinated Debt, the Loans and the Indebtedness
for borrowed money described on Schedule 4.05 as of the date hereof (the “Scheduled Unsecured Debt”)),
(ii) any off-balance sheet liabilities or (iii) material contingent liabilities (other than such material contingent liabilities
as described in the Borrower’s most-recently filed 10-K or 10-Q).

 

Section 4.06        
Environmental Matters.

 

(a)          The Borrower, its operations, and the Properties (and the operation thereof) are, and have been, in compliance with all
applicable Environmental Laws and Environmental Permits in all material respects on and as of the Closing Date.

 

(b)          On and as of the Closing Date, the Borrower has not received any notice or otherwise has knowledge that any existing Environmental
Permit related to the existence, location, ownership, use, operation and maintenance of the Properties will be revoked or that
any application for any new Environmental Permit or renewal of any existing Environmental Permit will be protested or denied, in
each case, except as could not reasonably be expected to have a Material Adverse Effect.

 

(c)          On and as of the Closing Date, there are no actions, claims, demands, demand letters, suits, orders, inquiries, proceedings,
notices of non-compliance or violation, notices of liability or potential liability, investigations, consent orders or consent
agreements concerning any violation of, or any liability (including as a potentially responsible party or any other contingent
liability) under, any applicable Environmental Laws that is pending or, to the Borrower’s knowledge, threatened against the
Borrower, its operations, or the Properties that would reasonably be expected to have a Material Adverse Effect.

 

(d)         On and as of the Closing Date, there has not been any Release of any Hazardous Material at, to, on, under, about or from
any of the Properties that would reasonably be expected to result in a Material Adverse Effect.

 

(e)          On and as of the Closing Date, none of the Borrower, the Properties or the Borrower’s operations are subject to any
order, decree or judgment pursuant to Environmental Law that, if violated, would reasonably be expected to have a Material Adverse
Effect.

 

Section 4.07        
Compliance with Laws and Agreements; No Defaults.

 

(a)          On and as of the Closing Date, the Borrower is in compliance with all Laws applicable to it or the Properties and, after
giving effect to this Agreement and the application of the Initial Loans, all agreements and other instruments binding upon it
or the Properties, except in each case where the failure to comply would reasonably be expected to have a Material Adverse Effect.

 

(b)          The Borrower is not in default on and as of the Closing Date under, nor to the Borrower’s knowledge has any event
or circumstance occurred that, but for the expiration of any applicable grace period or the giving of notice, or both, would constitute
a default under any indenture, note, credit agreement or instrument pursuant to which any Indebtedness for borrowed money is outstanding
or by which the Borrower or any of the Properties is bound.

 

(c)          No Default has occurred and is continuing on the Closing Date.

 

Section 4.08        
Investment Company Act. The Borrower is not an “investment company” or a company “controlled”
by an “investment company,” within the meaning of, or subject to regulation under, the Investment Company Act of 1940.

 

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Section 4.09        
Taxes. On and as of the Closing Date, the Borrower has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all material Taxes required to have been paid by it, except Taxes
that are being contested in good faith by appropriate proceedings and for which the Borrower has set aside on its books adequate
reserves in accordance with GAAP. On and as of the Closing Date, to the Borrower’s knowledge, no Tax Lien has been filed.

 

Section 4.10        
ERISA; Employees.

 

(a)          Each Plan is established and maintained in substantial compliance with its terms, ERISA and, where applicable, the Code,
except to the extent the failure to establish or maintain a Plan in substantial compliance would not reasonably be expected to
have a Material Adverse Effect.

 

(b)          No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to have a Material Adverse Effect.

 

(c)          Full payment when due has been made of all amounts that the Borrower or any of their respective ERISA Affiliates is required
under the terms of each Plan or Applicable Law to have paid as contributions to that Plan as of the date of this Agreement.

 

(d)          Neither the Borrower nor any ERISA Affiliate sponsors, maintains or contributes to, or has at any time in the six-year period
preceding the date hereof sponsored, maintained, contributed to or been obligated to contribute to, any Plan or Multiemployer Plan.

 

(e)          There are no actions, suits or claims pending against or involving a Plan (other than routine claims for benefits) or, to
the knowledge of the Borrower, or any ERISA Affiliate, threatened, which would reasonably be expected to be asserted successfully
against any Plan and, if so asserted successfully, would reasonably be expected either singly or in the aggregate to have a Material
Adverse Effect.

 

Section 4.11        
Disclosure; No Material Misstatements. On and as of the Closing Date, none of the reports, financial statements,
certificates or other information that has been furnished by the Borrower or its Affiliates (but limited to the Borrower’s
knowledge in the case of reports, financial statements, certificates or other information prepared by a third party and not by
the Borrower) to the Lender or any of their Affiliates or consultants in connection with the negotiation of this Agreement or any
other Loan Document or delivered under any Loan Document (as modified or supplemented by other information so furnished) contains
any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however, that, with respect to projected financial information,
the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable
at the time.

 

Section 4.12        
Insurance. On and as of the Closing Date, the Borrower has insurance coverages meeting or exceeding the requirements
of Operative Documents.

 

Section 4.13        
Restriction on Liens Under Security Documents. On and as of the Closing Date, the Borrower is not a party to any
agreement or arrangement, or subject to any order, judgment, writ or decree, that either restricts or purports to restrict its
ability to grant Liens to the Lender on or in respect of the Properties as provided in the Security Documents.

 

Section 4.14        
Equity Interests; Subsidiaries. On or as of the Closing Date:

 

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(a)          except as set forth in the Borrower’s most recently filed 10-K, 10-Q, Proxy Statement or as otherwise set forth in
writing to the Lender, the Borrower does not have outstanding on the Closing Date any securities convertible into or exchangeable
for any of its Equity Interests or any rights to subscribe for or to purchase, or any warrants or options for the purchase of,
or any agreements providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any character
relating to such Equity Interests (other than as created pursuant to the Warrant and Participation Agreement). The Borrower has
no Subsidiaries;

 

(b)          all of the issued and outstanding Equity Interests of the Borrower are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all applicable federal and state and foreign securities laws, were not issued
in violation of or subject to any preemptive rights or other rights to subscribe for or purchase securities that have not been
waived in writing. The Borrower has reserved for issuance a number of shares of Common Stock sufficient to cover all shares issuable
upon the exercise of the Warrant (the “Warrant Shares”) (computed without regard to any limitations on
the number of shares that may be issued on exercise thereof). The Warrant, the Warrant Shares and any other distributions required
to be made now or in the future pursuant to the Warrant (the “Warrant Distributions”) have been duly
authorized. Upon the issuance in accordance with the terms of this Agreement, the holder of the Warrant will be entitled to the
rights set forth in the Warrant. Upon exercise in accordance with the Warrant, the Warrant Shares will be validly issued, fully
paid and non-assessable and free from all taxes and Liens with respect to the issue thereof, with the holders thereof being entitled
to all rights accorded to a holder of Common Stock. The issuance by the Borrower of the Securities is exempt from registration
under the Securities Act (pursuant to Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder) and applicable state securities
laws; and

 

(c)          the issuance and delivery of the Warrant does not and, assuming full exercise of the Warrant, the exercise of the Warrant,
will not: (i) require approval from any Governmental Authority; (ii) obligate the Borrower to issue shares of Common Stock or other
securities to any Person (other than the Lender); and (iii) will not result in a right of any holder of the Borrower’s securities
to adjust the exercise, conversion, exchange or reset price under and will not result in any other adjustments (automatic or otherwise)
under, any securities of the Borrower.

 

Section 4.15        
Location of Business and Offices. On and as of the Closing Date, the Borrower’s jurisdiction of organization
is Delaware, the name of the Borrower as listed in the public records of its jurisdiction of organization is GulfSlope Energy, Inc.,
and the Borrower’s principal place of business and chief executive offices are located at the address specified in Section 8.01.

 

Section 4.16        
Properties; Titles, Etc.

 

(a)          On and as of the Closing Date, all leases and agreements necessary for the conduct of the business of the Borrower are valid
and subsisting, in full force and effect, and there exists no default or event or circumstance which with the giving of notice
or the passage of time or both would give rise to a default under any such lease or agreement, except in each case as could not
reasonably be expected to have a Material Adverse Effect.

 

(b)          On and as of the Closing Date, the Borrower is qualified under Applicable Law (including with BOEM and/or BSEE) to own the
Properties.

 

(c)          On and as of the Closing Date, the Borrower (i) owns or is licensed to use, all trademarks, tradenames, copyrights,
patents and other intellectual property material to its business, and the use thereof by the Borrower will not infringe upon the
rights of any other Person, and (ii) owns or has valid licenses or other rights to use all databases, geological data, geophysical
data, engineering data, seismic data, maps, interpretations and other technical information used in its business, subject to the

 

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limitations
contained in the agreements governing the use of the same, in each case, except as could not reasonably be expected to have a
Material Adverse Effect.

 

(d)          On and as of the Closing Date, the Borrower has good and marketable title to the Properties, free and clear of all Liens,
other than Excepted Liens. As used in this Agreement, “good and marketable title” means title that is reasonably free
from risk of litigation over possible defects, such that a court of law or equity would require a buyer to accept.

 

(e)          On and as of the Closing Date, the Borrower is not obligated under any right of first refusal, option or other contractual
right to sell, assign or otherwise dispose of any of its Property or any interest therein.

 

(f)          On and as of the Closing Date, the Borrower has not received any notice of, or has any knowledge of, any pending or contemplated
condemnation proceeding affecting the Properties or any sale or disposition thereof in lieu of condemnation.

 

Section 4.17        
[Intentionally Omitted].

 

Section 4.18        
Solvency. Immediately after giving effect to the Closing, the aggregate assets (after giving effect to amounts that
could reasonably be received by reason of indemnity, offset, insurance or any similar arrangement), at a fair valuation, of the
Borrower will exceed the aggregate Indebtedness of the Borrower, as the Indebtedness becomes absolute and matures.

 

Section 4.19       
Use of Proceeds; Federal Reserve Regulations. The proceeds of the Loans will be applied in accordance with Section 6.09.
The Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulations T, U or X of
the Board). No part of the proceeds of any Loan will be used for any purpose which violates the provisions of Regulations T, U
or X of the Board.

 

Article
V

 

Affirmative Covenants

 

Until the Commitments
have expired or been terminated and the principal of and interest on each Loan and all fees and expenses payable hereunder and
all other amounts payable under the Loan Documents shall have been paid in full, the Borrower covenants and agrees with the Lender
that:

 

Section 5.01        
Information. The Borrower will furnish to the Lender:

 

(a)          Financial Reports. Promptly (without giving effect to any extensions pursuant to Rule 12b-25 of the Exchange Act)
all reports required to be filed with the SEC pursuant to the Exchange Act, and the Borrower shall not terminate the registration
of the Equity Interests under the Exchange Act or otherwise terminate its status as an issuer required to file reports under the
Exchange Act, even if the securities laws would otherwise permit any such termination. Each of such reports above will comply in
all material respects with the applicable requirements of the Exchange Act. The consolidated financial statements included in such
reports will comply in all material respects with applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. The Borrower hereby agrees that the Borrower shall send to the Lender copies of any notices and other
information made available or given to the holders of the Equity Interests of the Borrower generally, contemporaneously with the
Borrower’s making available or giving such notices and other information to such holders of Equity Interests (it being understood
and agreed that delivery shall be deemed to have occurred if such notices or other information is posted to EDGAR).

 

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(b)          Notice of Casualty Events. Promptly, and in any event on or before the fifth Business Day after the occurrence of
a Casualty Event in an amount reasonably excepted to be exceed $750,000, notice of that occurrence, or the commencement of any
action or proceeding that could reasonably be expected to result in a Casualty Event in an amount greater than $750,000, together
with a certificate of a Responsible Officer setting forth the details of the Casualty Event and, in the case of a Casualty Event,
the actions to be taken by the Borrower with respect to the Casualty Event.

 

(c)          ERISA. Promptly, and in any event within 15 days after the Borrower knows or has reason to know of the occurrence,
or forthcoming occurrence, of any ERISA Event, a certificate of the chief financial officer of the Borrower describing such ERISA
Event, what action the Borrower, or any ERISA Affiliate has taken, is taking or proposes to take with respect to such ERISA Event
and if applicable, a copy of any notice filed with the PBGC or the IRS pertaining to such ERISA Event and any notices received
by such Borrower, or ERISA Affiliate from the PBGC or any other governmental agency with respect thereto.

 

(d)          Certain Accounts: On and after the Closing Date, the Borrower shall use all reasonable efforts to have Zions Bancorporation,
NA, doing business as Amegy Bank, NA grant the Lender ongoing electronic access (in respect of funds and balances credited thereto
and for informational purposes only, but excluding any other rights, including, without limitation, to withdraw or direct any application
of such funds and balances) with regards to any account opened in connection with the Operative Documents, including, without limitation,
each account notified in writing by the Lender to the Borrower, provided that until such electronic access is granted, upon
request of the Lender, the Borrower shall provide copies of bank statements.

 

(e)          Other Requested Information. Promptly, and in any event on or before the third Business Day following any request
therefor, such other information regarding the operations, business affairs and financial condition of the Borrower, or compliance
with the terms of this Agreement or any other Loan Document, as the Lender may reasonably request.

 

Section 5.02        
[Intentionally Omitted].

 

Section 5.03        
Notices of Material Events. The Borrower shall promptly, but in no event later than the fifth Business Day after
gaining knowledge, notify the Lender of the occurrence of any Default. Each notice delivered under this Section 5.03
shall be accompanied by a statement of a Responsible Officer setting forth the details of the Default event and any action taken
or proposed to be taken with respect thereto.

 

Section 5.04        
Existence; Conduct of Business. The Borrower will do or cause to be done all things necessary to (a) preserve,
renew and keep in full force and effect its legal existence as a Delaware corporation and (b) maintain its qualification to
do business in each other jurisdiction in which the Properties are located or the ownership of the Properties requires such qualification,
except where the failure to maintain such qualification could not be reasonably expected to have a Material Adverse Effect.

 

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Section 5.05        
Payment of Taxes and Obligations. The Borrower shall (or shall cause the following to be done on its behalf) (i) timely
file all material Tax returns (unless the failure timely to file any such Tax return could not reasonably be expected to result
in a Material Adverse Effect), (ii) timely pay all material Taxes, assessments and other governmental charges or levies imposed
upon it or upon its income, profits or property, and (iii) pay and discharge when due all material liabilities owed by it
on ordinary trade terms to vendors, suppliers and other Persons providing goods and services used by it in the ordinary course
of its business; provided, however, that the Borrower may delay discharging any of the foregoing so long as it is in good faith
contesting the validity thereof by appropriate proceedings and has set aside on its books adequate reserves therefor.

 

Section 5.06        
Enforcement of Rights. The Borrower will take commercially reasonably steps to enforce its rights under the Joint
Operating Agreement.

 

Section 5.07        
[Intentionally Omitted].

 

Section 5.08        
[Intentionally Omitted].

 

Section 5.09        
Books and Records; Inspection Rights. The Borrower will keep proper books, records and accounts in which full, true
and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will permit
any representatives designated by the Lender to visit and inspect the Properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable
times and as often as reasonably requested following prior notice of three Business Days.

 

Section 5.10        
Compliance with Laws. The Borrower will comply in all respects with all Laws (including Environmental Laws) applicable
to it or the Properties and will maintain all bonds, Permits and approvals required by or posted in favor of any Governmental Authority
(including BOEM and/or BSEE), in each case, except where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.

 

Section 5.11        
[Intentionally Omitted].

 

Section 5.12        
[Intentionally Omitted].

 

Section 5.13        
Maintenance of Liens. The Borrower will take or cause to be taken all action required or desirable to maintain the
Liens of the Security Documents and the first priority thereof (subject to Excepted Liens). The Borrower will from time to time
execute or cause to be executed any and all further instruments (including financing statements, continuation statements and similar
statements with respect to any Security Documents) and register and record those documents and instruments in such offices requested
by the Lender for those purposes.

 

Section 5.14        
Further Assurances.

 

(a)          The Borrower will promptly execute and deliver to the Lender all such other documents, agreements and instruments reasonably
requested by the Lender to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the
Borrower in the Loan Documents, including the Notes, or to further evidence and more fully describe the collateral intended as
security for the Obligations, or to correct any omissions in this Agreement or the Security Documents, or to state more fully the
obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Agreement or any of the Security
Documents or the first priority thereof, or to make any recordings, file any notices or obtain any consents, all as may be necessary
or appropriate, as reasonably determined by the Lender, in connection therewith.

 

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(b)          The Borrower hereby authorizes the Lender to file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Properties without the signature of the Borrower where permitted by Law. A carbon, photographic
or other reproduction of the Security Documents or any financing statement covering the Properties or any part thereof shall be
sufficient as a financing statement where permitted by Law.

 

(c)          On or prior to March 8, 2019 the Borrower will cause the Properties to be subject to a Lien and Mortgage (each, a “Mortgaged
Property”) in favor of the Lender and deliver or cause to be delivered to the Lender the following either or both,
as required by the Lender (A) counterparts of a Mortgage with respect to such Mortgaged Property duly executed and delivered by
the Borrower, or (B) an amendment to any existing Mortgage adding such Mortgaged Property to the existing Mortgage (a “Mortgage
Amendment”) duly executed and delivered by the Borrower, in either case, in form suitable for filing or recording
in all filing or recording offices (including any required and/or non-required filings in respect of the BOEM filing or recording
office) as necessary in order to create a valid and subsisting perfected Lien on such Mortgaged Property and/or rights described
therein in favor of the Lender.

 

Section 5.15        
Post Closing Deliveries. Deliver or cause to be delivered to Lender, in form and substance reasonably satisfactory
to the Lender, the following, in each case, on or prior to the date that is 21 days after the Closing Date:

 

(a)          Control Agreements relating to any deposit account of the Borrower other than Excluded Accounts; and

 

(b)          the Registration Rights Agreement with the Lender.

 

Section 5.16        
Senior Indebtedness. The Borrower shall ensure that the Obligations constitute senior indebtedness of the Borrower.

 

Section 5.17        Tax Partnership. The Borrower shall use commercially reasonable efforts to
deliver a tax partnership agreement with the Lender (in a form and substance reasonably satisfactory to the Lender) setting forth
the parties agreement to enter into a partnership solely for U.S. federal income and certain state income tax purposes with respect
to the parties activities and operations pursuant to the JOA and the Participation Agreement (the “Tax Partnership
Agreement”) and any necessary conforming changes to the JOA (including Article 20 of the JOA) and the Participation
Agreement as a result of such Tax Partnership Agreement.

 

Article
VI

 

Negative Covenants

 

Until the Commitments
have expired or terminated and the principal of and interest on each Loan and all fees and expenses payable hereunder and all other
amounts payable under the Loan Documents have been paid in full, the Borrower covenants and agrees with the Lender that:

 

Section 6.01        
Indebtedness. The Borrower will not incur, create, assume or suffer to exist any Indebtedness, except:

 

(a)          the Obligations arising under the Loan Documents;

 

(b)          Indebtedness associated with bonds or surety obligations required by Governmental Authorities in connection with the ownership,
operation and maintenance of the Properties and any other Oil and Gas Properties of the Borrower;

 

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(c)          endorsements of negotiable instruments for collection in the ordinary course of business;

 

(d)          the Initial Subordinated Debt subordinated pursuant to the Subordination Agreement provided that the holder of such
Initial Subordinated Debt is the Initial Subordinated Lender;

 

(e)          the Scheduled Unsecured Debt in an aggregate amount not to exceed the amount set forth on Schedule 4.05 as of the
date hereof;

 

(f)          Indebtedness incurred in the ordinary course of business in respect of obligations of the Borrower to pay the deferred purchase
price of goods or services or progress payments in connection with such goods and services; and

 

(g)          unsecured Indebtedness incurred by the Borrower in an aggregate amount not to exceed $500,000 at any one time outstanding
(“Permitted Unsecured Debt”) provided that such Permitted Unsecured Debt shall be applied in accordance
with the proviso described in Section 2.08(b)(iv).

 

Section 6.02        
Liens. The Borrower will not create, incur, assume or permit to exist any Lien on any of the Properties or other
assets or properties of the Borrower, whether now owned or subsequently acquired, except Excepted Liens.

 

Section 6.03       
Distributions and Redemptions; Restricted Payments. The Borrower will not declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, return any capital to its stockholders or make any distribution of its property
to its Equity Interest holders.

 

Section 6.04       
Investments, Loans and Advances. The Borrower will not make or permit to remain outstanding any Investments in or
to any Person, except for accounts receivable arising in the ordinary course of business and as expressly permitted under the Security
Documents.

 

Section 6.05        
Nature of Business. The Borrower will not (a) change its name or any trade name used to identify it in the conduct
of its business or in the ownership of the Properties, (b) change the location of its chief executive office or principal place
of business, unless the Borrower has given the Lender written notice of such change at least ten Business Days prior to such change,
(c) change its identity or corporate structure in the jurisdiction in which it is incorporated or formed, (d) change its jurisdiction
of organization, (e) change its federal taxpayer identification number, (f) amend or otherwise modify its Organizational Documents
if such amendment or modification could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect
or could have a material adverse effect on the Lender or (g) change its fiscal year, unless the Borrower has given the Lender written
notice of such change at least ten Business Days prior to such change.

 

Section 6.06        
No Subsidiaries or Joint Ventures. The Borrower will not create, form or acquire any Subsidiary or enter into any
partnership or joint venture; provided that for the avoidance of doubt, neither the Operative Document nor any other operating
agreements, participation agreements, farm-out agreements, farm-in agreements, division orders, unitization and pooling declarations
and agreements, area of mutual interest agreements or similar agreements that are customary in the oil and gas industry shall constitute
a partnership or joint venture for purposes of this Section 6.06.

 

Section 6.07        
[Intentionally Omitted].

 

Section 6.08        
Sale and Leaseback Transactions. Except for the transactions contemplated by the Operative Documents, the Borrower
will not enter into any arrangement, directly or indirectly, with any person whereby it shall sell or transfer any property, real
or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property
or other property

 

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which
it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

 

Section 6.09        
Use of Proceeds; Federal Reserve Regulations. The Borrower will not permit the proceeds of the Loans to be used for
any purpose other than to pay (i) fees and expenses associated with the Transactions, (ii) the Borrower’s share of its costs
and expenses under the Operative Documents, (iii) amounts payable by the Borrower under any seismic licenses or software and (iv)
such other costs and expenses under the Joint Operating Agreement as may be mutually agreed in writing between the Lender and the
Borrower. Neither the Borrower nor any Person acting on behalf of the Borrower has taken or will take any action which might cause
any of the Loan Documents to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of
the Securities Exchange Act of 1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter
be in effect. If requested by the Lender, the Borrower will furnish to the Lender a statement to the foregoing effect in conformity
with the requirements of FR Form U-1 or such other form referred to in Regulations T, U or X of the Board, as the case
may be.

 

Section 6.10        
Sale or Discount of Receivables. The Borrower will not discount or sell (with or without recourse) any of its notes
receivable or accounts receivable.

 

Section 6.11        
Mergers, Etc. The Borrower will not merge into or with or consolidate with any other Person, or permit any other
Person to merge into or consolidate with it, or sell, transfer or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of the Properties to any other Person, unless the Obligations are repaid in full concurrently
with the consummation of such merger, consolidation, sale, transfer or other disposition.

 

Section 6.12        
Sale of Properties. The Borrower will not sell, assign, convey, lease, allow the use of or otherwise transfer any
Properties, other than (a) inventory and other goods held for sale, including Hydrocarbons, obsolete, worn out, used or surplus
equipment, and other assets (other than accounts receivable) in the ordinary course of business (including equipment that is no
longer necessary for the business of the Borrower or is replaced by equipment of at least comparable value and use), (b) the
entry into any farm-out agreements, operating agreements, and other agreements in the ordinary course of business and customary
in the oil and gas industry for the purpose of developing such Oil and Gas Properties and any assignments, transfers or other dispositions
of Properties and any other assets or properties of the Borrower pursuant thereto, and (c) transfers of property that is subject
to a Casualty Event or in connection with any condemnation proceeding, provided that the net cash proceeds of such Casualty
Event, if any, received by the Borrower are applied in accordance with this Agreement.

 

Section 6.13        
[Intentionally Omitted].

 

Section 6.14        
[Intentionally Omitted].

 

Section 6.15        
Transactions with Affiliates. The Borrower will not enter into any transaction, including any purchase, sale, lease
or exchange of property or the rendering of any service, with any of its Affiliates, except for (a) transactions on terms that
are substantially as favorable to the Borrower as it would obtain at the time in a comparable arm’s-length transaction with
a Person that is not an Affiliate, as determined by the board of directors or managers of the Borrower in good faith, (b) the Transaction
Documents and the transactions they contemplate, (c) the Initial Subordinated Debt and the transactions thereunder, and (d) employment
and severance arrangements and health, disability and similar insurance or benefit plans between the Borrower and its directors,
officers or employees (including management and employee benefit plans or agreements or similar agreements pertaining to the repurchase
of Equity Interests with current or former employees, officers or directors and equity option or incentive plans and other compensation
arrangements) in the ordinary course of business or as otherwise approved by the board of directors of the Borrower.

 

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Section 6.16        
Equity Interests. The Borrower will not create or acquire any Subsidiary or acquire any Equity Interests in any other
Person. Except as provided in the Warrant and Participation Agreement, the Borrower will not (a) not create, incur, assume or permit
to exist any Lien on any of its Equity Interests, whether now owned or subsequently acquired, except Excepted Liens, or (b) issue
(directly or indirectly through an increase in the liquidation value) (i) any preferred stock or (ii) any redeemable common stock
or other redeemable common Equity Interests other than common stock or other redeemable common Equity Interests that is or are
redeemable at the sole option of the Borrower.

 

Section 6.17        
Limitation on Accounts. The Borrower shall not maintain any deposit, securities or commodities accounts other than
Excluded Accounts or as permitted under the Security Agreement.

 

Section 6.18         Hedging Agreements. The Borrower will not enter into any swap agreements, option contracts, synthetic option contracts,
futures contracts, options on futures contracts, spot or forward contracts, caps, floors, collars, or any other derivative transaction
or hedging arrangement of any type or nature whatsoever, whether related to interest rates, commodity prices or other matters.

 

Section 6.19        
[Intentionally Omitted].

 

Section 6.20        
Junior Payments, etc. The Borrower will not directly or indirectly, prepay, repay, pay, redeem, purchase, defease
or otherwise satisfy in any manner (whether of principal or interest and regardless of amount), any Subordinated Debt, Scheduled
Unsecured Debt or Permitted Unsecured Debt.

 

Section 6.21       
Negative Pledge Agreements. The Borrower will not create, incur, assume or suffer to exist any contract, agreement
or understanding (other than the Loan Documents) that in any way prohibits or restricts the granting, conveying, creation or imposition
of any Lien on any of the Properties or any other assets or properties in favor of the Lender or which requires the consent of
or notice to other Persons in connection therewith.

 

Article
VII

 

Events of Default; Remedies

 

Section 7.01        
Events of Default. One or more of the following events shall constitute an “Event of Default”:

 

(a)          the Borrower shall fail to pay any principal of or interest on any Loan or any fee or any other amount payable under any
Loan Document, when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment
thereof, by acceleration or otherwise and such failure shall continue unremedied for a period of, with respect to any payment of
principal, one day or more, and with respect to any interest, fee or other amount, five days or more;

 

(b)         any representation or warranty made by Borrower in this Agreement, any other Loan Document or in any certificate or other
document furnished pursuant to or in connection with this Agreement or other Loan Document, shall prove to have been incorrect
in any material respect when made;

 

(c)          [intentionally omitted];

 

(d)          the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.03,
Section 5.04, or in Article VI;

 

(e)          the Borrower shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other
than those that would constitute an Event of Default under Section 7.01(a) or Section 7.01(d)), and such
failure to perform shall continue unremedied for a

 

    33

     

    

 

period
of 15 days after the earlier to occur of (i) notice thereof from the Lender to the Borrower (which notice will be given at the
request of the Lender) and (ii) a Responsible Officer of the Borrower otherwise becoming aware of the failure; provided, however,
that, except in the case of a failure to perform under Section 5.13, this 15-day period shall be extended, but in
no event to beyond 30 days, (A) if that failure could not reasonably have been cured within that 15-day period, (B) if before
the expiration of that 15-day period, the Borrower delivers to the Lender a plan to remedy that failure, (C) as long as it is
likely that the Borrower can remedy that failure within that period as extended and (D) as long as the Borrower is diligently
pursuing that remedy;

 

(f)           the Borrower shall become subject to a Bankruptcy Event;

 

(g)          the Borrower:

 

(i)            shall be in material breach of, or in default under, an Operative Document and such breach or default shall not be remediable
or, if remediable, shall continue unremedied for a period of 30 days from the time the Borrower obtains knowledge thereof; provided
that, a written assertion of material breach by Texas South in respect to the withholding of information required to be provided
to Texas South by the Borrower under such Operative Document shall not constitute an Event of Default hereunder; or

 

(ii)           assigns or transfers all or any part of its rights and obligations in, to or under any Operative Document other than as
permitted hereunder and thereunder;

 

(h)          a Change in Control shall have occurred;

 

(i)           (i) the Borrower shall fail to pay one or more final judgments aggregating in excess of $1,000,000 (to the extent not covered
by a reputable and creditworthy insurer as to which the insurer has not disclaimed coverage), which judgments are not paid or discharged,
and there shall be any period of 30 consecutive days following entry of each such final judgment or decree during which a stay
of enforcement of such final judgment or decree, by reason of pending appeal or otherwise, shall not be in effect or (ii) any one
or more non-monetary judgments shall be rendered against the Borrower and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon any assets of the Borrower to enforce any such judgment;

 

(j)           any of the Loan Documents shall for any reason, except to the extent permitted by the terms thereof, cease to be in full
force and effect and valid, binding and enforceable in accordance with their terms against any party to those agreements (or any
party thereto shall so assert) or shall be repudiated by any party thereto, or cease to create a valid and perfected Lien of the
priority required thereby on any portion of the collateral purported to be covered thereby, except to the extent permitted by the
terms of this Agreement, or any party to a Loan Document shall so assert, or any Subordinated Debt shall cease (or any party thereto
shall so assert) to be validly subordinated to the Obligations under the Subordination Agreement or any documentation evidencing
such Subordinated Debt;

 

(k)          [intentionally omitted]; or

 

(l)           an
ERISA Event shall have occurred that, when taken together with all other such ERISA Events, could reasonably be expected to result
in liability of the Borrower in an aggregate amount exceeding $750,000.

 

    34

     

    

 

Section 7.02        
Remedies.

 

(a)          In the case of an Event of Default other than one described in Section 7.01(f) at any time thereafter during
the continuance of such Event of Default, the Lender may, by notice to the Borrower, take either or both of the following actions
(without limiting the Lender’s rights under Section 7.02(b)), at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Notes and the Loans then outstanding
to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be
declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and expenses and other obligations of the Borrower hereunder and under the Notes and the other Loan
Documents, shall become due and payable immediately, without presentment, demand, protest, notice of intent to accelerate, notice
of acceleration or other notice of any kind, all of which are hereby waived by the Borrower; and in case of an Event of Default
described in Section 7.01(f), the Commitments shall automatically terminate and the Notes and the principal of the
Loans then outstanding, together with accrued interest thereon and all fees and expenses and other obligations of the Borrower
accrued hereunder and under the Notes and the other Loan Documents, shall automatically become due and payable, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Notwithstanding anything to the contrary
in this Agreement or any other Loan Document, any notice or cure period provided for in this Agreement or any other Loan Document
shall run concurrently with any notice or cure period provided for under Applicable Law.

 

(b)          In the case of the occurrence of an Event of Default, the Lender will have all other rights and remedies available at Law
and equity subject to the applicable terms of the Security Documents.

 

(c)          All proceeds realized from the liquidation or other disposition of collateral or otherwise received after maturity of the
Loans, whether by acceleration or otherwise, shall be applied:

 

(i)            first, to payment or reimbursement of that portion of the Obligations constituting fees, expenses and indemnities
payable to the Lender;

 

(ii)           second, to payment of accrued interest on the Loans;

 

(iii)          third, to payment of principal outstanding on the Loans; and

 

(iv)          fourth, any excess, after all of the Obligations shall have been indefeasibly paid in full in cash, shall be paid
to the Borrower or as otherwise required by any Law.

 

Article
VIII

 

Miscellaneous

 

Section 8.01        
Notices.

 

(a)          Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to Section 8.01(b)),
all notices and other communications provided for in the Loan Documents shall be in writing and shall be delivered by hand or overnight
courier service or sent by
facsimile transmission to it as follows:

 

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(i)            If to the Borrower, at:

 

1331 Lamar Street

Suite 1665

Houston, Texas 77010

John Malanga, Chief Financial Officer

Tel: (281) 918-4103

Email: john.malanga@gulfslope.com

 

with a copy to:

 

Mayer Brown LLP

Attention: Tristan Propst

Suite 3400

700 Louisiana Street

Tel: (713) 238-2657

Fax: (713) 238-4657

Email: tpropst@mayerbrown.com

 

(ii)           If to the Lender, at:

 

c/o Corporation
Trust Center

1209 Orange Street

Wilmington, Delaware 19801

 

and a copy to:

 

Leora Pratt Levin

VP & General Counsel

Delek Group Ltd

19, Abba Eban blvd.
P.O.B 2054

Herzliya 4612001, Israel

Tel: (+972 9) 8638492

Direct: (+972 9) 8638491

Fax: (+972 9) 8854955

E-mail: leorapl@delek-group.com

 

(b)          Notices and other communications to the Lender under the Loan Documents may be delivered or furnished by electronic communications
pursuant to procedures approved by the Lender.

 

(c)          Any party to the Loan Documents may change its address or telecopy number for notices and other communications under by
notice to the other parties to the Loan Documents. All notices and other communications given to any party to the Loan Documents
in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

 

Section 8.02        
Waivers; Amendments.

 

(a)          No failure on the part of the Lender to exercise and no delay in exercising, and no course of dealing with respect to, any
right, power or privilege, or any abandonment or discontinuance of steps to enforce any such right, power or privilege, under any
of the Loan Documents shall operate as a waiver of any such right, power or privilege, nor shall any single or partial exercise
of any right, power or privilege under any of the Loan Documents preclude its subsequent or further exercise or the exercise of
any other right, power or privilege. The rights and remedies of the Lender under the Loan Documents are cumulative and are not
exclusive of any rights or remedies that it would otherwise have. No waiver of

 

    36

     

    

 

any
provision of this Agreement or any other Loan Document or consent to any departure by the Borrower from their provisions shall
in any event be effective unless the same shall be permitted by Section 8.02(b), and then the waiver or consent shall
be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Lender may have had notice or
knowledge of the Default at the time.

 

(b)          Neither any Transaction Document nor any provision of any Transaction Document may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Lender.

 

Section 8.03        
Expenses, Indemnity; Damage Waiver.

 

(a)          The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Lender and its Affiliates prior to or in
connection with Closing, including the fees, charges and disbursements of counsel and other outside consultants for the Lender,
the travel, photocopy, mailing, courier, telephone and other similar expenses, the preparation, negotiation, execution and delivery
of this Agreement and the other Loan Documents and any amendments, modifications or waivers of or consents related to their provisions
(regardless of whether the transactions contemplated by the Transaction Documents shall be consummated), (ii) all reasonable costs,
expenses, Taxes, assessments and other charges incurred by the Lender prior to or in connection with the Closing in connection
with any filing, registration, recording or perfection of any security interest contemplated by this Agreement or any Security
Document or any other document referred to in them, (iii) all reasonable out-of-pocket expenses incurred by the Lender and its
Affiliates, including the fees, charges and disbursements of any counsel for the Lender, in connection with any amendment, waiver,
consent or similar event in connection with this Agreement or any other Transaction Document and (iv) all reasonable out-of-pocket
expenses incurred by the Lender and its Affiliates, including the fees, charges and disbursements of any counsel for the Lender,
in connection with the enforcement or protection of its rights in connection with this Agreement or any other Transaction Document,
including its rights under this Section 8.03, or in connection with the Loans made, including, all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect of the Loans. All amounts due under this Section 8.03
shall be payable not later than five Business Days after written demand therefor.

 

(b)          THE BORROWER SHALL INDEMNIFY THE LENDER, AND EACH RELATED PARTY OF THE LENDER (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”)
AGAINST, AND DEFEND AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED
EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY
INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION, DELIVERY OR THE PERFORMANCE OF THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, OR (ii) ANY ASSERTION THAT
THE LENDER WAS NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY DOCUMENTS, WHETHER BASED ON CONTRACT, TORT
OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY TO THIS AGREEMENT. TO THE EXTENT THE INDEMNITY IN SECTION
8.03(b) CONFLICTS WITH ANY INDEMNITY CONTAINED IN ARTICLE 19 OF THE JOINT OPERATING AGREEMENT, THE PARTIES HERETO AGREE THAT
THE APPLICABLE INDEMITY CONTAINED IN ARTICLE 19 OF THE JOINT OPERATING AGREEMENT SHALL CONTROL TO THE EXTENT OF SUCH CONFLICTS.

 

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Section 8.04        
Successors and Assigns.

 

(a)          The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted by this Agreement. Neither the Borrower nor the Lender may assign or otherwise transfer any of
its rights or obligations under any of the Loan Documents without the prior written consent of the other party (and any attempted
assignment or transfer by the Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied,
shall be construed to confer upon any Person (other than the parties to this Agreement, their respective successors and assigns
permitted hereby) and, to the extent expressly contemplated hereby, the Related Parties of the Lender, any legal or equitable right,
remedy or claim under or by reason of this Agreement.

 

(b)          The Lender may assign to an assignee that is an Affiliate of a Lender that has elected to be treated as a corporation for
United States Tax purposes, provided that:

 

(i)            there shall be only one Lender under this Agreement at any time;

 

(ii)           the assignee shall execute and deliver to the Lender a customary assignment and assumption agreement and all other customary
documentation relating to such assignment, together with a processing and recordation fee of $3,500; and

 

(iii)          the assignee shall provide the Borrower on or prior to the date of such assignment, an executed copy of IRS Form W-9 or
W-8, as applicable.

 

From and after
the effective date specified in such assignment and assumption agreement, the assignee shall be a party to this Agreement and have
the rights and obligations as the Lender under this Agreement, and the assigning Lender shall be released from its obligations
under this Agreement and shall cease to be a party to this Agreement but shall continue to be entitled to the benefits of Section 2.11
and Section 8.03).

 

(c)            Notwithstanding any other provisions of this Section 8.04, no transfer or assignment of the interests or obligations
of the Lender shall be permitted if such transfer or assignment would require the Borrower to file a registration statement with
the SEC or to qualify the Loans under the “Blue Sky” Laws of any state.

 

Section 8.05        
Survival; Revival; Reinstatement.

 

(a)          All covenants, agreements, representations and warranties made by the Borrower in the Loan Documents and in the certificates
or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered
to have been relied upon by the other parties to this Agreement and shall survive the execution and delivery of this Agreement
and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding
that the Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any Loan is
made, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or
any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated.
The provisions of Section 2.11, Section 7.02, and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated by the Loan Documents, the repayment of the Loans
and the Commitments or the termination of this Agreement, any other Loan Document or any of their provisions.

 

(b)         To the extent that any payments on the Obligations or proceeds of any collateral are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to

 

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a
trustee, debtor in possession, receiver or other Person under any bankruptcy Law, common law or equitable cause, then to that
extent, the Obligations so satisfied shall be revived and continue as if the payment or proceeds had not been received and the
Lender’s Liens, security interests, rights, powers and remedies under this Agreement and each Loan Document shall continue
in full force and effect. In such an event, each Loan Document shall be automatically reinstated and the Borrower shall take such
action as may be requested by the Lender to effect the reinstatement.

 

(c)          Notwithstanding anything to the contrary in the Loan Documents and for the avoidance of doubt, the holder of the Warrant
and parties to the Registration Rights Agreement shall be entitled to exercise all rights and remedies available to them under
law and at equity and under the Warrant and the Registration Rights Agreement for any breaches of provisions that survive the payment
in full of the Obligations, if any.

 

Section 8.06        
Counterparts; Integration; Effectiveness.

 

(a)          This Agreement may be executed in counterparts (and by different parties to this Agreement on different counterparts), each
of which shall constitute an original, but all of which when taken together shall constitute a single contract.

 

(b)          This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter
of the Loan Documents and supersede any and all previous agreements and understandings, oral or written, relating to the subject
matter of the Loan Documents. This Agreement and the other Loan Documents represent the final agreement among the parties to the
Loan Documents and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.

 

(c)          Except as provided in Section 3.01, this Agreement shall become effective when it shall have been executed by
the Lender and when the Lender shall have received counterparts that, when taken together, bear the signatures of each of the other
parties to this Agreement, and thereafter shall be binding upon and inure to the benefit of the parties to this Agreement and their
respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or electronic
mail shall be effective as delivery of a manually executed counterpart of this Agreement.

 

Section 8.07       
Severability. Any provision of this Agreement or any other Loan Document held to be invalid, illegal or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining provisions of the Loan Documents; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate that provision in any other jurisdiction.

 

Section 8.08        
Right of Setoff. If an Event of Default shall have occurred and be continuing, the Lender and each of its Affiliates
is hereby authorized at any time and from time to time, to the fullest extent permitted by Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time held and other obligations of whatsoever kind at
any time owing by that Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations
of the Borrower owed to that Lender now or subsequently existing under this Agreement or any other Loan Document, irrespective
of whether or not such Lender shall have made any demand under this Agreement or any other Loan Document and although those obligations
may be unmatured. The rights of the Lender under this Section 8.08 are in addition to other rights and remedies (including
other rights of setoff) which such Lender or its Affiliates may have.

 

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Section 8.09        
GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.

 

(a)          EXCEPT TO THE EXTENT (IF ANY) PROVIDED OTHERWISE IN A PARTICULAR LOAN DOCUMENT, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

(b)         ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS MAY BE BROUGHT, IF AT ALL, IN THE COURTS OF THE STATE
OF NEW YORK AND OF ANY FEDERAL COURT LOCATED IN THE STATE OF NEW YORK (OR ANY APPELLATE COURT FROM ANY THEREOF), AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH PARTY TO THIS AGREEMENT HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THOSE COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, THAT IT NOW
OR SUBSEQUENTLY MAY HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. IN THE CASE OF THE BORROWER ONLY,
THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE AND DOES NOT PRECLUDE A PARTY FROM OBTAINING JURISDICTION OVER THE BORROWER IN
ANY OTHER COURT OTHERWISE HAVING JURISDICTION.

 

(c)          EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE COURTS SPECIFIED ABOVE
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT THE ADDRESS
SPECIFIED IN Section 8.01 OR SUCH OTHER ADDRESS AS IS SPECIFIED PURSUANT TO Section 8.01, WHICH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER MAILING. THIS Section 8.09(c)
SHALL NOT AFFECT THE RIGHT OF A PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANOTHER PARTY IN ANY APPROPRIATE JURISDICTION.

 

(d)          EACH PARTY TO THIS AGREEMENT HEREBY (i) KNOWINGLY, VOLUNTARILY, INTENTIONALLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM IN ANY SUCH PROCEEDING; (ii) CERTIFIES THAT NO PARTY TO THIS AGREEMENT OR ANY REPRESENTATIVE
OR AGENT OR COUNSEL FOR ANY PARTY TO THIS AGREEMENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, (iii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS CONTAINED IN THIS SECTION 8.09, AND (IV) ACKNOWLEDGES THAT THIS SECTION 8.09 WAS NEGOTIATED
BY IT AND THAT ITS COUNSEL HAS HAD AN OPPORTUNITY TO REVIEW THIS AGREEMENT.

 

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Section 8.10        
Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only,
are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

Section 8.11        
Interest Rate Limitation. It is the intention of the parties to this Agreement that the Lender shall conform strictly
to usury Laws applicable to it. Accordingly, if the transactions contemplated by the Transaction Documents would be usurious as
to the Lender under Applicable Law (including the Laws of the United States of America and the State of New York or any other jurisdiction
whose Laws may be mandatorily applicable that Lender notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in any of the Transaction Documents or any agreement entered into in connection with or
as security for the Loans, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under Law
applicable to the Lender that is contracted for, taken, reserved, charged or received by that Lender under any of the Loan Documents
or agreements or otherwise in connection with the Notes shall under no circumstances exceed the maximum amount allowed by that
Applicable Law, and any excess shall be canceled automatically and if previously paid shall be credited by that Lender on the principal
amount of the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid
in full, refunded by that Lender to the Borrower); and (ii) in the event that the maturity of the Notes is accelerated due to any
Event of Default under this Agreement or otherwise, or in the event of any required or permitted prepayment, then any consideration
that constitutes interest under Applicable Law may never include more than the maximum amount allowed by that Applicable Law, and
excess interest, if any, provided for in this Agreement or otherwise shall be canceled automatically by a particular Lender as
of the date of acceleration or prepayment and, if previously paid, shall be credited by that Lender on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations shall have been or would thereby be paid in full,
refunded by that Lender to the Borrower). All sums paid or agreed to be paid to the Lender for the use, forbearance or detention
of sums due under the Transaction Documents shall, to the extent permitted by Law applicable to that Lender, be amortized, prorated,
allocated and spread throughout the stated term of the Loans evidenced by the Notes until payment in full so that the rate or amount
of interest on account of any Loans does not exceed the maximum amount allowed by that Applicable Law.

 

Section 8.12        
EXCULPATION PROVISIONS. EACH OF THE PARTIES TO THIS AGREEMENT SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT
AND THE OTHER TRANSACTION DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE
OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT
LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS;
AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS; AND THAT IT RECOGNIZES
THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT
IN SOME ASPECTS OF THE TRANSACTIONS AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH THAT LIABILITY. EACH PARTY TO
THIS AGREEMENT AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT
THE PROVISION IS NOT “CONSPICUOUS.”

 

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Section 8.13       
No Third Party Beneficiaries. This Agreement, the other Loan Documents, and the agreement of the Lender to make Loans
are solely for the benefit of the Borrower, and no other Person (including any obligor, contractor, subcontractor, supplier or
materialsman) shall have any rights, claims, remedies or privileges under any Loan Document against the Lender for any reason whatsoever.
Except for indemnities and waivers of the Borrower in this Article VIII, there are no third party beneficiaries.

 

Section 8.14       
USA Patriot Act Notice. The Lender hereby notifies the Borrower that, pursuant to the requirements of the Patriot
Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow that Lender to identify the Borrower in accordance with such
act.

 

Section 8.15       
Relationship of Parties. The relationship of the Lender and the Borrower is solely one of lender and borrower and
this Agreement does not constitute a partnership, tenancy-in-common, joint tenancy or joint venture between the Lender and the
Borrower, nor does this Agreement create an agency or fiduciary relationship between the Lender and the Borrower. The Borrower
is not the representative or agent of the Lender and the Lender is not a representative or agent of the Borrower. The parties hereto
intend that the relationship among them shall be solely that of creditor and debtor. The Lender shall not in any way be responsible
or liable for the debts, losses, obligations or duties of the Borrower.

 

Section 8.16       
Confidentiality. The Lender agrees to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any
regulatory authority or any self-regulatory authority, (c) to the extent required by Applicable Law or regulations or by any subpoena
or similar legal process, (d) to any other party to this Agreement or any other Loan Document, (e) in connection with the exercise
of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially
the same as those of this Section 8.16, to any assignee of or any prospective assignee of, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section 8.16 or (ii) becomes available to the Lender on a nonconfidential
basis from a source other than the Borrower. For the purposes of this Section 8.16, “Information” means
all information received from the Borrower or any Affiliate relating to the Borrower or any Affiliate and their businesses, other
than any such information that is available to the Lender on a nonconfidential basis prior to disclosure by the Borrower or any
Affiliate; provided that, in the case of information received from the Borrower or any Affiliate after the date hereof,
such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality
of Information as provided in this Section 8.16 shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord
to its own confidential information.

 

Section 8.17       
Lender’s Acknowledgement of Cure. The Lender hereby acknowledges and agrees that, upon the application of the
Initial Loans, the breach by Borrower arising or resulting from Borrower’s failure to timely pay its share of the payment
obligations due prior to the Closing Date for the drilling, completion, plugging, and abandonment of the Phase I ITWs for the Phase
I Prospects (the “Prospect Payment Default”) shall be cured and no breach or default arising from
such Prospect Payment Default shall thereafter be continuing.

 

[SIGNATURES BEGIN NEXT PAGE]

 

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IN WITNESS WHEREOF,
the parties hereto have duly executed this Agreement as of the date first set forth above.

	 	 	 	 
	 	DELEK GOM INVESTMENTS, LLC
	 	 	 
	 	By:	/s/ Leora
    Pratt Levin	 
	 	Name: Leora Pratt Levin
	 	Title: Authorized Person
	 	 	 
	 	GULFSLOPE ENERGY, INC.
	 	 	 
	 	By:	/s/ John
    N. Seitz	 
	 	Name: John N. Seitz
	 	Title: CEO

 

[Signature Page to Term Loan Agreement]GULFSLOPE ENERGY, INC. - 8-K

Exhibit 10.2

 

EXECUTION VERSION

 

NEITHER THIS WARRANT, NOR THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS WARRANT (COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARE
SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THIS
WARRANT IS SUBJECT TO THE TRANSFER RESTRICTIONS SET FORTH HEREIN

 

GULFSLOPE ENERGY, INC.

 

Form
Of Warrant To Purchase Common Stock

 

Warrant No.: 

Number of Shares of Common Stock: 

Date of Issuance: (“Issuance Date”)

 

GulfSlope Energy, Inc.,
a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, DELEK GOM INVESTMENTS, LLC, the registered holder hereof or its permitted assigns
(the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York
time, on the Expiration Date, (as defined below), up to [●] fully paid nonassessable shares of Common Stock (as defined below),
subject to adjustment as provided herein (the “Warrant Shares”). Except as otherwise defined herein, capitalized
terms in this Warrant to Purchase Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or
replacement hereof, this “Warrant”), shall have the meanings set forth in Section 17.

 

This Warrant was issued
pursuant to that certain Term Loan Agreement, dated as of March 1, 2019 (as may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof, the “Term Loan Agreement”), by and between
the Company and Holder, and in conjunction with a registration rights agreement with respect to the Warrant Shares (as modified
from time to time in accordance with the terms thereof, the “Registration Rights Agreement”) to be entered into
by the Company and the Holder within twenty-one (21) days of the Issuance Date.

 

1.            EXERCISE
OF WARRANT.

 

(a)       Mechanics
of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder at any time on or after
the Issuance Date, in whole, by (i) delivery (whether via facsimile, electronic mail or otherwise) of a written notice, in the
form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise
this Warrant and (ii) (A) payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise
multiplied by the number of Warrant Shares then issuable under this Warrant (the “Aggregate Exercise Price”)
in cash by wire transfer of immediately available funds (a “Cash Exercise”) or (B) if the provisions of Section
1(c) are applicable, by notifying the Company that this Warrant is being exercised pursuant to a Loan Reduction Exercise (as defined
in Section 1(c)). The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder, nor
shall any ink-original signature or medallion guarantee (or other type of guarantee or notarization) with respect to any Exercise
Notice be required. On or before the first Trading Day following the date on which the Company has received the

 

    

     

    

 

applicable Exercise
Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation of receipt of the Exercise
Notice, in the form attached to the Exercise Notice, to the Holder and the Company’s transfer agent (the “Transfer
Agent”). (i) In the case of a Cash Exercise, (A) so long as the Holder delivers the Aggregate Exercise Price on or prior
to the second Trading Day following the date on which the Exercise Notice has been delivered to the Company, then on or prior to
the third Trading Day following the date on which the Exercise Notice has been delivered to the Company, or (B) if the Holder does
not deliver the Aggregate Exercise Price on or prior to the second Trading Day following the date on which the Exercise Notice
has been delivered to the Company, then on or prior to the second Trading Day following the date on which the Aggregate Exercise
Price is delivered, or (ii) in the case of a Loan Reduction Exercise, on or prior to the third Trading Day following the date on
which the Exercise Notice has been delivered to the Company, the Company shall cause the Transfer Agent to register by book entry,
as described in Section 1(g) below, the transfer and delivery of the Warrant Shares issuable to the Holder upon such exercise and
deliver to the Holder an Ownership Notice (as defined in Section 1(g)) relating to such Warrant Shares. Notwithstanding the preceding
sentence, in the event the Holder exercises the Warrant in connection with a pending sale transaction of the Warrant Shares issuable
to the Holder upon such exercise, the Company shall use commercially reasonable efforts to cause the Transfer Agent to register
such transfer and effect delivery of the Warrant Shares no later than the Trading Day on which the Company has received the Exercise
Notice and Aggregate Exercise Price (in the case of a Cash Exercise). Upon delivery of the Exercise Notice and Aggregate Exercise
Price (in the case of a Cash Exercise) to the Company, the Holder shall be deemed for all corporate purposes to have become the
holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date registration
of such Warrant Shares in the Holder’s name or delivery of the Ownership Notice in respect thereof to Holder occurs. The
Company shall pay any stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of
the Transfer Agent) which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.
The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms and subject to the conditions
hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or
consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim or recoupment; provided, however, that the Company shall not be required to deliver Warrant
Shares with respect to a Cash Exercise prior to the Holder’s delivery of the Aggregate Exercise Price. All Warrant Shares
issued upon the exercise of this Warrant pursuant to the terms hereof shall be validly issued, fully paid and non-assessable, issued
without violation of any preemptive or similar rights of any stockholders of the Company and free and clear of all liens imposed
by or through the Company.

 

(b)       Exercise
Price. For purposes of this Warrant, “Exercise Price” means $0.042, subject to adjustment as provided
herein.

 

(c)       Loan
Reduction Exercise. In lieu of paying the Aggregate Exercise Price in cash, Holder, at its option, may exercise this Warrant
in whole through an extinguishment of the then outstanding Obligations (as defined in the Term Loan Agreement) of the Company in
accordance with Section 2.10(b) of the Term Loan Agreement (a “Loan Reduction Exercise”).

 

The parties hereto intend that for all
applicable income tax purposes, the Loan Reduction Exercise of this Warrant shall be treated by the parties as a deemed Cash Exercise
of the Warrant by the Holder followed by a payment on the Loans (as defined in the Term Loan Agreement) by the Company in an amount
equal to the Aggregate Exercise Price. Unless otherwise required by applicable tax law at the time this Warrant is exercised or
by a “determination” as defined in Section 1313 of the Code, the Company and the Holder shall not take any actions
or positions that are inconsistent with the preceding sentence.

 

(d)       Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares, the
Company shall promptly issue to the Holder

 

    

     

    

 

the number of Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 11.

 

(e)       No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share that the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise
Price.

 

(f)        Exchange
Act Filings. The Holder agrees and acknowledges that it shall have sole responsibility for making any applicable filings with
the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Sections 13 and 16 of the Exchange Act as
a result of its acquisition of any Warrant and the Warrant Shares and any future retention or transfer thereof.

 

(g)       Book
Entry; Ownership Notice. Any Warrant Shares issued hereunder shall be in uncertificated, book-entry form, as permitted by the
Company’s Bylaws and the Delaware General Corporation Law. The Transfer Agent shall maintain the register for the Common
Stock and such book-entry system. Upon any exercise of this Warrant, the Company shall deliver (or cause the Transfer Agent to
deliver) to the Holder a screen shot of the Transfer Agent’s records or such other instrument as the Transfer Agent shall
typically issue in such circumstance indicating the registration of transfer to the Holder by book entry of the number of shares
of Common Stock issuable to the Holder upon such exercise of the Warrant (an “Ownership Notice”). The Transfer
Agent’s records and any Ownership Notices shall contain the legend set forth in Section 18(d) (or an equivalent notation
reflecting the transfer restrictions described in such legend) until such time as the legend may be removed in accordance with
Section 18(d).

 

(h)       Reservation
of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized
but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise
of this Warrant as herein provided, the number of shares of Common Stock which are then issuable and deliverable upon the exercise
of this entire Warrant. The Company covenants that all shares of Common Stock so issuable and deliverable shall, upon issuance
and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and
fully paid and nonassessable. If, notwithstanding the foregoing, and not in limitation thereof, at any time while this Warrant
remains outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon exercise of this Warrant at least a number of shares of Common Stock (the “Required
Reserve Amount”) equal to the maximum number of shares of Common Stock as shall from time to time be necessary to effect
the exercise of all this Warrant (without regard to any limitations on exercise contained herein) (an “Authorized Share
Failure”), then the Company shall promptly take all action necessary to increase the Company’s authorized shares
of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for this entire Warrant. Without
limiting the generality of the foregoing sentence, to the extent necessary to remedy the Authorized Share Failure, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than 75 days after the occurrence of such
Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement
and use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and
shall cause its board of directors to recommend to the stockholders that they approve such proposal. Notwithstanding the foregoing,
if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a majority of the shares
of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares of Common Stock,
the Company may satisfy this obligation by obtaining such

 

    

     

    

 

consent and submitting for filing with the SEC an Information Statement
on Schedule 14C. The Company shall not effect any subdivision (by way of stock split, stock dividend, recapitalization or otherwise)
of its outstanding Common Stock into a greater number of shares of Common Stock which would result, pursuant to Section 2(a), in
a reduction of the Exercise Price below the par value of the shares of Common Stock then in effect unless on or prior to such subdivision
or action the par value of such shares of Common Stock is reduced to the extent necessary (or another adjustment reasonably acceptable
to the Required Holders and the Company is made) to permit the adjustments under Section 2(a) which would otherwise be made in
connection therewith, but for the restriction of Section 2(b), and to permit the Warrants to be exercised into Warrant Shares that
are fully paid after giving effect to such adjustments.

 

2.            ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.

 

(a)       Adjustment
Upon Subdivision or Combination of Shares of Common Stock. If the Company at any time on or after the Issuance Date subdivides
(by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision will be proportionately reduced and the number of
Warrant Shares will be proportionately increased. If the Company at any time on or after the Issuance Date combines (by combination,
reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Exercise Price in
effect immediately prior to such combination will be proportionately increased and the number of Warrant Shares will be proportionately
decreased. Any adjustment under this Section 2(a) shall become effective at the close of business on the date the subdivision or
combination becomes effective.

 

(b)       Par
Value. Notwithstanding anything to the contrary in this Warrant, in no event shall the Exercise Price be reduced below the
par value of the Company’s Common Stock.

 

(c)       Special
Distributions. In case the Company shall declare a dividend or make any other distribution (excluding dividends payable in
shares of its Common Stock and other dividends or distributions referred to in Section 2(a)), including, without limitation, in
property or assets, to all holders of Common Stock (a “Non-Cash Distribution”), then the board of directors
of the Company shall make provision so that upon the exercise of the Warrant, the Holder or the Holder’s subsequent permitted
transferee(s) shall be entitled to receive such dividend or distribution that the Holder would have received had the Warrant been
exercised in whole immediately prior to the record date for such dividend or distribution. In case the Company shall declare a
dividend or make any other distribution in cash or cash equivalents to all holders of Common Stock (a “Cash Distribution”
and together with a Non-Cash Distribution, a “Special Distribution”), then the Exercise Price in effect immediately
prior to such Cash Distribution will be reduced by the per share amount of any such Cash Distribution. When a Special Distribution
is made, the Company shall promptly notify the Holder of such event in writing and the dividend or other distribution that the
Holder is entitled to receive.

 

(d)       Voluntary
Adjustment By Company. The Company may at any time during the term of this Warrant reduce the then current Exercise Price to
any amount and for any period of time deemed appropriate by the Board of Directors of the Company.

 

(e)       Adjustment
for Outstanding Obligations at Exercise Notice Date. If at the time the Holder exercises this Warrant in whole and the number
of Warrant Shares then issuable under the Warrant (prior to any adjustment pursuant to this Section 2(e)) is not equal to the quotient
of the Obligations (as defined in the Term Loan Agreement) of the Company outstanding under the Term Loan Agreement at the date
of the Exercise Notice (the “Exercise Notice Date”) divided by $0.042 (such quotient, the “Exercise
Shares”), then the number of Warrant Shares issuable under this Warrant shall be

 

    

     

    

 

increased or decreased as necessary
for the Warrant Shares issuable upon exercise of the Warrant as of the Exercise Notice Date to be equal to the Exercise Shares.

 

3.            FUNDAMENTAL
TRANSACTIONS. Prior to the occurrence of any Fundamental Transaction, the Company shall make appropriate provision to ensure
that the Successor Entity shall deliver upon exercise of this Warrant, in lieu of the shares of the Common Stock (or other securities,
cash, assets or other property purchasable upon the exercise of the Warrant prior to such Fundamental Transaction), such shares
of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights),
if any, that the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Warrant
been exercised immediately prior to the record date for such Fundamental Transaction, as adjusted in accordance with the provisions
of this Warrant. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the
obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.
Upon consummation of the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall
be issued upon exercise of this Warrant at any time after the consummation of the Fundamental Transaction, in lieu of the shares
of the Common Stock (or other securities, cash, assets or other property purchasable upon the exercise of the Warrant prior to
such Fundamental Transaction), such shares of stock, securities, cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights), if any, that the Holder would have been entitled to receive upon the happening of such
Fundamental Transaction had this Warrant been exercised immediately prior to the record date for such Fundamental Transaction,
as adjusted in accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder,
prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon an exercise
of this Warrant in whole within 90 days after the consummation of the Fundamental Transaction but, in any event, prior to the Expiration
Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property) purchasable upon the exercise
of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever
(including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had the Warrant been exercised in whole immediately prior to the record date for such Fundamental
Transaction. The provisions of this Section 3 shall apply similarly and equally to successive Fundamental Transactions and Corporate
Events and any adjustment under this Section 3 shall be without duplication for any adjustment or distribution made under Section
2.

 

4.            NO
DUPLICATIVE ADJUSTMENT; LIMIT ON ADJUSTMENTS. Any adjustments or distribution rights under any provision of Sections 2 or 3
shall be made without duplication for any other adjustment under any other provision of Section 2 or 3. In addition, if the Holder
or the Company reasonably believes, based on the written opinion of legal counsel, that any regulatory or stockholder approval,
including under applicable antitrust laws or applicable rules and regulations of any national securities exchange or over-the-counter
market on which the Common Stock is listed for trading, is required prior to the Holder acquiring any securities or other property
to which it is entitled, the Holder or the Company may delay such issuance to the Holder until such approval has been obtained
(or, in the case of applicable antitrust laws, the required filings have been completed and any applicable waiting period has expired).
The Company shall use commercially reasonable efforts to comply promptly with all applicable regulatory requirements related to
obtaining such approvals.

 

    

     

    

 

5.            NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation or Bylaws,
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale
of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, and will at all times in good faith carry out all of the provisions of this Warrant and take all action as may be required
to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par
value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii)
shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock,
solely for the purpose of effecting the exercise of the Warrants, the number of shares of Common Stock as shall from time to time
be necessary to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).

 

 6.           WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of capital stock
of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in
such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to
vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock,
consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise,
prior to the issuance to the Holder of the Warrant Shares which such Person is then entitled to receive upon the due exercise
of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities
are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder
with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously with
the giving thereof to the stockholders.

 

7.            REGISTRATION
AND REISSUANCE OF WARRANTS.

 

(a)       Registration
of Warrant. The Company shall register this Warrant, upon the records to be maintained by the Company for that purpose (the
“Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat
the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary. The Company shall also register any transfer, exchange,
reissuance or cancellation of any portion of this Warrant in the Warrant Register.

 

(b)       Transfer
of Warrant. Subject to the terms and conditions hereof, including the restrictions on transfer set forth in Section 7(c), this
Warrant and all rights hereunder are transferable, in whole or in part, without charge to the Holder, upon surrender of this Warrant
with a properly executed assignment (in the form attached hereto as Exhibit B) at the principal office of the Company. Any
transfer or assignment of this Warrant (and the Warrant Shares issuable upon exercise of this Warrant) shall be made only in compliance
with all applicable securities laws and, if requested by the Company, following delivery to the Company of a legal opinion reasonably
satisfactory to the Company confirming such compliance. If this Warrant is to be transferred in accordance with the terms hereof,
the Holder shall (i) surrender this Warrant to the Company together with all applicable transfer taxes, whereupon the Company will
promptly issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(f)), registered as the Holder
may request, representing the right to purchase the

 

    

     

    

 

number of Warrant Shares being transferred by the Holder and, if less than
the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(e)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred and (ii) provide advance
written notice to the Company of the Warrant being transferred, the name and notice details of the transferee and an instrument
duly executed by the transferee whereby such transferee makes the representations set forth in Section 18 of this Warrant and agrees
to be bound by all obligations of the Holder under this Warrant. Any transfer of the Warrant or Warrant Shares which is not made
in accordance with the terms of this Section 7 shall be void.

 

(c)       Restrictions
on Transfer. The Warrant and the Warrant Shares issuable and deliverable upon exercise of this Warrant may be transferred or
assigned to any Person without the consent of the Company; provided that any such transferee shall agree in writing to be bound
by all obligations of the Holder under this Warrant.

 

(d)       Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and, in the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form or the provision of reasonable security by the Holder to the Company and, in the case
of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant
(in accordance with Section 7(f)) representing the right to purchase the Warrant Shares then underlying this Warrant.

 

(e)       Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company together with all applicable transfer taxes, for a new Warrant or Warrants (in accordance with Section 7(f)) representing
in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will
represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, that the Company shall not be required to issue Warrants for fractional shares of Common Stock hereunder.

 

(f)        Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
shall (i) be of like tenor with this Warrant, (ii) represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(b) or Section
7(d), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant),
(iii) have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date and (iv) have
the same rights and conditions as this Warrant.

 

8.            NOTICES. Whenever
notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the information set forth in the Warrant Register. The Company shall provide the Holder with prompt written notice of all
actions taken pursuant to this Warrant, including, in reasonable detail, a description of such action and the reason or reasons
therefore. Without limiting the generality of the foregoing, the Company will give written notice to the Holder following any
adjustment of the Exercise Price or Warrant Shares issuable upon exercise hereof, setting forth in reasonable detail, and certifying,
the calculation of such adjustment.

 

9.            AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant may be amended or waived and the Company may
take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained
the written consent of the Required Holders. Any amendment or waiver approved by the

 

    

     

    

 

Required Holders and any other approval or
consent granted by the Required Holders hereunder shall be effective and binding on all current and future holders of the Warrant.

 

10.          GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws
of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State
of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The
City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably waives
personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof
to the Company at the address set forth on the signature page for the Company below or such other address as the Company subsequently
delivers to the Holder and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing
contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the
Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral or
any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER
OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

11.          DISPUTE
RESOLUTION. Any dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant Shares must
be raised by the Required Holders or the Company. In the case of any such dispute, the Company shall submit the disputed determinations
or arithmetic calculations, as the case may be, to the Holder, via facsimile within two Trading Days of receipt of the Exercise
Notice giving rise to such dispute. If the Required Holders and the Company are unable to agree upon such determination or calculation
of the Exercise Price or the Warrant Shares within five Trading Days of such disputed determination or arithmetic calculation being
submitted to the Holder, then the Company and the Holder shall, within two Trading Days submit via facsimile their respective disputed
determinations of the Exercise Price to an independent, reputable investment bank selected by the Company and approved by the Required
Holders. The Company shall cause the investment bank to perform the determinations or calculations and notify the Company and the
Holder of the results no later than ten Trading Days from the time it receives the disputed determinations or calculations. Such
investment bank’s determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable
error. The expenses of the investment bank will be borne equally by the Holder and the Company. Nothing in this Section 11 shall
be deemed to modify or mitigate the terms of Section 1(d) hereof.

 

12.          REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition
to all other remedies available under this Warrant, at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company
to comply with the terms of this Warrant. The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that,
in the event of any such 

 

     

     

    

 

breach
or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to seek an injunction
restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

 

13.          LIMITATION
ON LIABILITY. No provisions hereof, in the absence of affirmative action by the Holder to purchase Warrant Shares hereunder,
shall give rise to any liability of the Holder to pay the Exercise Price or as a stockholder of the Company (whether such liability
is asserted by the Company or creditors of the Company).

 

14.          SUCCESSORS
AND ASSIGNS. This Warrant shall bind and inure to the benefit of and be enforceable by the Company and the Holder and their
respective successors and permitted assigns.

 

15.          SEVERABILITY;
CONSTRUCTION; HEADINGS. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provisions(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provisions(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provisions(s).
This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any person
as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant.

 

16.          [Reserved].

 

17.          CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:

 

(a)       “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used herein, the term “control” means the
possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise. For the avoidance of doubt, for purposes of this Warrant, the
Company, on the one hand, and the Holder, on the other, shall not be considered Affiliates.

 

(b)       “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.

 

(c)       “Common
Stock” means (i) the Company’s common stock, $0.001 par value per share, and (ii) any capital stock into which
such Common Stock shall have been changed or any share capital resulting from a reclassification of such Common Stock.

 

(d)       “Eligible
Market” means the Principal Market, the OTC QX, the NYSE American, The Nasdaq Global Select Market, The Nasdaq Global
Market, The Nasdaq Capital Market or The New York Stock Exchange, Inc.

 

    

     

    

 

(e)       “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations at the SEC promulgated
thereunder.

 

(f)        “Expiration
Date” means the March 4, 2020 or, if such date falls on a day other than a Business Day or on which trading does
not take place on the Principal Market (a “Holiday”), the next day that is not a Holiday.

 

(g)       “Fundamental
Transaction” means that, after the Issuance Date, the Company shall, directly or indirectly, in one or more related
transactions, (i) consolidate or merge with or into another Person, (ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company to another Person, (iii) allow another Person to make a purchase,
tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby
such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held
by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock purchase agreement or other business combination immediately prior to such stock purchase or business combination),
(v) reorganize, recapitalize or reclassify its Common Stock or (vi) any “person” or “group” (as these terms
are used for purposes of Sections 13(d) and 14(d) of the Exchange Act), other than the Company, the Holder or any Related Party
thereof, is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock (excluding any debt securities
convertible into equity) normally entitled to vote in the election of directors (“Voting Stock”) of the Company
(or its successor by merger, consolidation or purchase of all or substantially all of its assets) (for purposes of this clause,
such person or group shall be deemed to beneficially own any Voting Stock held by a Parent Entity, if such person or group “beneficially
owns” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, more than 50% of the voting power of the
Voting Stock of such Parent Entity) or 50% of the aggregate economic interests in the Company (or its successor by merger, consolidation
or purchase of all or substantially all of its assets).

 

(h)       “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.

 

(i)        “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common
stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental
Transaction.

 

(j)        “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.

 

(k)       “Principal
Market” means OTC Markets (QB Marketplace Tier).

 

(l)        “Related
Party” means, with respect to any specified Person, such Person’s affiliates and the respective directors,
officers, employees, agents and advisors of such Person and such Person’s affiliates.

 

    

     

    

 

(m)      “Required
Holders” means holders of the Warrants representing at least a majority of shares of Common Stock underlying the
Warrants then outstanding.

 

(n)       “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations at the SEC promulgated thereunder.

 

(o)       “Successor
Entity” means one or more Person or Persons (or, if so elected by the Required Holders, the Parent Entity) formed
by, resulting from or surviving any Fundamental Transaction or one or more Person or Persons (or, if so elected by the Required
Holders, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

 

(p)       “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not
the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the
Common Stock is then traded.

 

18.          REPRESENTATIONS
AND WARRANTIES. The Holder represents, warrants and covenants to the Company as follows:

 

(a)       Accredited
Investor Status; Sophisticated Purchaser. The Holder is an “accredited investor” within the meaning of Rule 501
under the Securities Act and is able to bear the risk of its investment in this Warrant and the Warrant Shares issuable and deliverable
upon exercise of this Warrant. The Holder has such knowledge and experience in financial and business matters that it is capable
of evaluating the merits and risks of the purchase of this Warrant and the Warrant Shares issuable and deliverable upon exercise
of this Warrant.

 

(b)       Information.
The Holder has been afforded the opportunity to ask questions of, and obtain information from, the Company. The Holder understands
that its acquisition of this Warrant and the Warrant Shares issuable and deliverable upon exercise of this Warrant involves a high
degree of risk. The Holder has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of this Warrant and the Warrant Shares issuable and deliverable upon exercise
of this Warrant.

 

(c)       Filings.
The Holder shall cooperate reasonably with the Company (at the Company’s sole cost and expense) to provide any information
necessary for any applicable securities filings of the Company.

 

(d)       Legends.
The Holder understands that, until such time, if any, as the Warrant or the Warrant Shares issuable and deliverable upon exercise
of this Warrant have been registered pursuant to the provisions of the Securities Act, or the Warrant or Warrant Shares issuable
and deliverable upon exercise of this Warrant are eligible for resale pursuant to Rule 144 promulgated under the Securities Act
without any restriction as to the number of securities as of a particular date that can then be immediately sold, or as provided
in this Section 18(d), the Warrant (and any Warrant Shares) will bear the following restrictive legend (in addition to any legend
required under applicable state securities laws):

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER
ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE

 

    

     

    

 

SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE COMPANY MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. TRANSFER OF THE SECURITIES IS ALSO IS SUBJECT TO THE TRANSFER RESTRICTIONS
SET FORTH IN A WARRANT DATED MARCH 4, 2019, A COPY OF WHICH IS AVAILABLE WITH THE SECRETARY OF THE COMPANY.

 

and other legends set
forth in or required by state securities laws applicable to the Holder.

 

The legend
set forth in this Section 18(d) shall be removed by the Company from the book-entry position on the Company’s register for
such Warrant or Warrant Shares upon delivery to the Company of an opinion by counsel, reasonably satisfactory to the Company, that
a registration statement under the Securities Act is at that time in effect with respect to the legended security or that such
security can be freely transferred in a public sale without such a registration statement being in effect and that such transfer
shall not jeopardize the exemption or exemptions from registration pursuant to which the Company issued the Warrant or Warrant
Shares.

 

(e)       Holder
Representation. The Holder is acquiring the Warrant and the Warrant Shares issuable and deliverable upon exercise of this Warrant
for its own account and not with a view to distribution in violation of any securities laws. The Holder has been advised and understands
that none of the Warrants or shares of Common Stock issuable upon exercise of the Warrants have been registered under the Securities
Act or under the “blue sky” laws of any jurisdiction and may be resold only if registered pursuant to the provisions
of the Securities Act (or if eligible, pursuant to the provisions of Rule 144 promulgated under the Securities Act or pursuant
to another available exemption from the registration requirements of the Securities Act). The Holder has been advised and understands
that the Company, in issuing the Warrants and any Warrant Shares issuable and deliverable upon exercise of this Warrant, is relying
upon, among other things, the representations and warranties of the Holder contained in this Section 18 in concluding that such
issuance is a “private offering” and is exempt from the registration provisions of the Securities Act.

 

(f)        Rule
144. The Holder understands that there is no public trading market for the Warrants, that none is expected to develop and that
the Warrants must be held indefinitely unless and until the Warrants are registered under the Securities Act or an exemption from
registration is available. The Holder has been advised of and is aware of the provisions of Rule 144 promulgated under the Securities
Act.

 

(g)       Reliance
by the Company. The Holder understands that the Warrants are being offered and sold in reliance on a transactional exemption
from the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy
of the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine
the applicability of such exemptions and the suitability of the Holder to acquire the Warrants.

 

19.          REGISTRATION
RIGHTS AGREEMENT. This Warrant and the Warrant Shares issuable upon exercise hereof shall be subject to the terms and conditions
of the Registration Rights Agreement to be entered into by the Company and Holder and the Holder shall be entitled to all of the
rights and subject to all of the obligations under such Registration Rights Agreement. The Warrant Shares shall be deemed “Registrable
Securities” as defined in such Registration Rights Agreement.

 

[Signature Page Follows]

 

    

     

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

  

	 	GULFSLOPE ENERGY, INC.
	 	 	 
	 	By:	 /s/ John N. Seitz
	 	Name: John N. Seitz
	 	Title: CEO

 

    

     

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS WARRANT TO PURCHASE COMMON STOCK (THE “WARRANT”)

 

GULFSLOPE ENERGY, INC.

 

The undersigned holder
hereby exercises the right to purchase the number of shares of Common Stock issuable under the Warrant (as adjusted pursuant to
the Warrant, the “Warrant Shares”) of GulfSlope Energy, Inc., a Delaware corporation (the “Company”),
evidenced by the attached Warrant. Capitalized terms used herein and not otherwise defined shall have the respective meanings set
forth in the Warrant.

 

1.       Exercise
Price. The Holder intends that payment of the Exercise Price shall be made as:

 

____________ a “Cash
Exercise” with respect to all Warrant Shares issuable upon the exercise of the Warrant; and/or

 

____________ a “Loan
Reduction Exercise” with respect to all Warrant Shares issuable upon exercise of the Warrant.

 

2.       Payment
of Exercise Price. In the event that the holder has elected a Cash Exercise with respect to all of the Warrant Shares to be
issued pursuant hereto, the holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in
accordance with the terms of the Warrant.

 

3.       Delivery
of Warrant Shares. The Company shall deliver (or cause to be delivered) to the holder __________ Warrant Shares by book entry
in accordance with the terms of the Warrant.

 

4.       Representations
and Warranties. By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that the representations
and warranties of the Holder set forth in Section 18 of the Warrant.

 

Date: _______________, ______

 

	 	 	 
	Name of Registered Holder	 
	 	 	 
	By: 	 	 
		Name:	 
		Title:	 

 

    

     

    

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exercise Notice.

 

	 	GULFSLOPE ENERGY, INC.
	 	 	 
	 	By:	 
	 		Name:
	 		Title:

 

    

     

    

 

EXHIBIT B

 

FORM OF ASSIGNMENT

 

ASSIGNMENT

 

FOR VALUE RECEIVED,
__________hereby sells, assigns and transfers all of the rights of the undersigned under the attached Warrant (Warrant No. ___) with respect
to the number of shares of the Common Stock covered thereby set forth below, unto:

 

	
        Names
of Assignee 
	
        Address 
	
        No.
of Shares 

	 	 	 
	 	 	 
	 	 	 

 

	Dated:	 	Signature	 
	 	 	 	 
	 	 	Witness

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