Document:

EXHIBIT 10.45

 

SECURED PROMISSORY NOTE 

 

Hydrocarb Energy Corporation 

800 Gessner Suite 375

  HOUSTON, TX 77024

 

APRIL 18, 2014

 

For Value Received, Hydrocarb Energy Corporation, ("Maker") promises to pay to Kent P. Watts, an individual (the "Payee"), at such place as Payee may designate from time to time in writing, the principal sum of Six Hundred Thousand Dollars ($600,000.00) or so much of that sum as may be advanced under this Promissory Note.

 

$100,000 of this Note has already been advanced and is evidenced by an existing note payable to Payee by the Maker. The next installment of $200,000 shall occur immediately upon the signing of the Note and the remaining $300,000 shall occur on before May 20, 2014.

 

Interest shall accrue on the unpaid principal balance at six and one quarter percent (6.25%) until the principal is paid in full.

Payments of principal and interest shall be made as provided below in the paragraph entitled “Payment of Principal and Interest.”

Payment of Principal and Interest

Commencing from funding of each amount of this note following the date of this Promissory Note, and continuing on the first day of each month thereafter Maker shall pay to Payee monthly payments of interest only for three (3) months following the date of this Promissory Note. Thereafter on the fourth month from closing of each funding, a thirty-six month amortization of principal shall begin and thereafter principal and interest shall be due payable on the first of every month thereafter until the principal balance is paid in full. In the event that payment of this note has not been received by Payee within (15) days following its due date then the loan will be considered in arrears and in default under the terms of this Note.

 

Promissory Note

 

Advances under this Note may be requested orally by Maker. The Maker acknowledges that there is an existing note of $100,000 payable to Payee and that this debt has been rolled into this Note. The unpaid principal balance owing on this Note may be evidenced by endorsement or amendments to the Note or by Payee's internal records. Payee shall have no obligation to advance funds under this Note if Maker is in default under the terms of the Note or any agreement that Maker has with Payee, Maker ceases doing business or is insolvent.

 

1

Prepayment Privilege

Principal and/or interest may be prepaid in whole or in part at any time without penalty.

 

Acceleration

In the event that Maker shall default in the payment of interest or principal when due, and if such default shall continue for thirty (30) days following written notice from Payee to Maker, the whole sum of the principal balance and all accrued interest thereon shall become immediately due and payable at the option of Payee upon notice to Maker.

Miscellaneous

Principal and interest are payable in lawful money of the United States.  If Payee institutes a judicial action to collect on this Promissory Note, Maker promises to pay reasonable attorneys' fees awarded by the court.  

The Payee is not obligated to make any advances after June 30, 2014. This note is secured by the Maker’s direct and indirect interests in assets owned by Galveston Bay Energy LLC (the “GBE Assets”) subject to any other lienholder’s superior rights if any.  Payee has the right to file a first lien security interest on GBE Assets when other liens have been paid in full.   

 

	
Maker:

	 		 
	 	 		 
	
Hydrocarb Energy Corporation

	
800 Gessner Suite 375

	HOUSTON, TX 77024
	 	 		 
	
BY:

	
/s/ Charles Dommer

	 
	 	
Charles Dommer, President

 

	
Payee:

	
 

	
 

	
 

	
 

	
BY:

	
/s/ Kent P. Watts

	
 

	
 

	
Kent P. Watts

	
 

 

 

2EXHIBIT 10.46

 

SALES AGREEMENT 

AND NOTE 

September 6, 2013

 

WHEREAS,  Hydrocarb  Corporation,  a Nevada Corporation  (herein  referred  to as  the "Seller") is the owner of 575,000 common stock shares of Duma Energy Corporation (OTCBB:DUMA), (herein referred to as the "Stock"); and Kirby L. Caldwell (herein referred to as the "Buyer") is an individual with Texas driver's license number 18709117; and

WHEREAS Seller wishes to sell and Buyer wishes to buy the Stock, and

SO NOW THEREFORE, as acceptable sole consideration  for the purchase of the Stock, Buyer hereby promises to pay up to but not over $1,000,000 in total to Seller under the following terms:

	 	
1.

	
95% of the proceeds  up to $1,000,000  payable within one week upon the sale of the Stock  by Buyer to any third party; and/or

	 	
2.

	
Up to a total of $1,000,000 payable within 90 days (or one week for any Stock sold in the open market) from the date that Duma Energy Corporation is listed on a major stock exchange, being either the NASDAQ or the NYSE.

 

	/s/ Kent P. Watts		/s/ Kirby L.Caldwell
	
Kent P. Watts, Chief Executive Officer for Seller

		Kirby L.Caldwell, BuyerEX-10.1

 Exhibit 10.1 

UNITED SECURITY BANCSHARES, INC. 

2013 INCENTIVE PLAN 

NONQUALIFIED STOCK OPTION AGREEMENT 

(Executive Officers and Directors – Immediate Vesting) 

This Nonqualified Stock Option Agreement (this “Agreement”) is made and entered into as of [DATE] by and
between UNITED SECURITY BANCSHARES, INC., a Delaware corporation (the “Company”) and [PARTICIPANT NAME] (the “Participant”). 

Grant Date: August 1, 2014 

Exercise Price per Share:
                                         
            
 Number of Option Shares:
                                         
          
 Expiration Date: July 31, 2024 

1. Grant of Option. 

1.1 Grant; Type of Option. The Company hereby grants to the Participant an option (the “Option”) to
purchase the total number of shares of Common Stock of the Company equal to the number of Option Shares set forth above, at the Exercise Price set forth above. The Option is granted pursuant to the terms of the United Security Bancshares, Inc. 2013
Incentive Plan (the “Plan”). The Option is intended to be a Nonqualified Stock Option and not an Incentive Stock Option within the meaning of Section 422 of the Internal Revenue Code. 

1.2 Subject to Plan. The grant of the Option is subject to the terms and conditions of the Plan. Capitalized terms used
but not defined herein shall have the meaning ascribed to them in the Plan. 
 2. Exercise Period; Vesting. 

2.1 Vesting Schedule. The Option shall be 100% vested and exercisable on the Grant Date. 

2.2 Expiration. The Option shall expire on the Expiration Date set forth above, or earlier as provided in this
Agreement or the Plan. 
 3. Termination of Continuous Service. 

3.1 Termination for Reasons Other Than Disability, Death or Retirement. If the Participant’s Continuous Service is
terminated for any reason other than Disability, death or retirement, the Participant may exercise the Option, but only within such period of time ending on the earlier of (a) the date three months following the termination of the
Participant’s Continuous Service or (b) the Expiration Date. 
 3.2 Termination Due to Disability. If the
Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant (or, in the event that the Disability is caused by the Participant’s incapacity, the Participant’s personal representative)
may exercise the Option, but only within such period of time ending on the earlier of (a) the date 12 months following the Participant’s termination of Continuous Service or (b) the Expiration Date. 

3.3 Termination Due to Death. If the Participant’s Continuous Service terminates as a result of the
Participant’s death, the Option may be exercised by the Participant’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by the person designated pursuant to Section 6 hereof to exercise the
Option upon the Participant’s death, but only within the time period ending on the earlier of (a) the date 12 months following the Participant’s termination of Continuous Service or (b) the Expiration Date. 

3.4 Termination Due to Retirement. If the Participant’s Continuous Service terminates as a result of the
Participant’s retirement, the Participant may exercise the Option at any time until the Expiration Date. For purposes of this Agreement, “retirement” shall mean the termination of Participant’s Continuous Service upon retirement
at age 65 or later in accordance with the policies of the Company. 

  
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 3.5 Extension of Termination Date. If following the Participant’s
termination of Continuous Service for any reason the exercise of the Option is prohibited because the exercise of the Option would violate the registration requirements under the Securities Act or any other state or federal securities law or the
rules of any securities exchange or interdealer quotation system, then the Option shall terminate on the earlier of (a) the Expiration Date or (b) the expiration of a period after termination of the Participant’s Continuous Service
that is three (3) months after the end of the period during which the exercise of the Option would be in violation of such registration or other securities law requirements. 

4. Manner of Exercise. 

4.1 Election to Exercise. To exercise the Option, the Participant (or in the case of exercise after the
Participant’s death or incapacity, the Participant’s executor, administrator, heir, legatee or personal representative, as the case may be) must deliver to the Company an executed stock option exercise agreement in such form as is approved
by the Committee from time to time (the “Exercise Agreement”), which shall set forth, inter alia: 

(a) the Participant’s election to exercise the Option; 

(b) the number of shares of Common Stock being purchased; 

(c) any restrictions imposed on the shares; and 

(d) any representations, warranties and agreements regarding the Participant’s investment intent and access to
information as may be required by the Company to comply with applicable securities laws. 
 If someone other than the
Participant exercises the Option, then such person must submit documentation reasonably acceptable to the Company verifying that such person has the legal right to exercise the Option. 

4.2 Payment of Exercise Price. The entire Exercise Price of the Option shall be payable in full at the time of exercise
to the extent permitted by applicable statutes and regulations, either: 
 (a) in cash or by certified or bank check at the
time the Option is exercised; or 
 (b) upon the following terms, if approved by the Committee in its discretion: 

 

	 	(i)	 by delivery to the Company of other shares of Common Stock, held by the Participant for at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting purposes) and duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Exercise Price (or portion thereof) due for the
number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares of Common Stock that the Participant has held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) and that have an aggregate Fair Market Value on the date of attestation equal to the Exercise Price (or portion thereof) and receives a number of shares of Common Stock equal
to the difference between the number of shares thereby purchased and the number of identified attestation shares of Common Stock (a “Stock for Stock Exchange”); 

 

	 	(ii)	 through a “cashless exercise program” established with a broker; 

 

	 	(iii)	 by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the
aggregate Exercise Price at the time of exercise; 

  

	 	(iv)	 by any combination of the foregoing methods; or 

  

	 	(v)	 in any other form of legal consideration that may be acceptable to the Committee. 

  
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 4.3 Withholding. Prior to the issuance of shares upon the exercise of the
Option, the Participant must make arrangements satisfactory to the Company to pay or provide for any applicable federal, state and local withholding obligations of the Company. The Participant may satisfy any federal, state or local tax withholding
obligation relating to the exercise of the Option by any of the following means: 
 (a) tendering a cash payment; 

(b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the exercise of the Option; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or 

(c) delivering to the Company previously owned and unencumbered shares of Common Stock. 

In addition, the Company has the right to withhold any amounts described in this Section from any compensation paid to the Participant,
subject to Section 409A of the Code. 
 4.4 Issuance of Shares. Provided that the Exercise Agreement and payment
are in form and substance satisfactory to the Company, the Company shall within a reasonable time thereafter issue the shares of Common Stock registered in the name of the Participant, the Participant’s authorized assignee, or the
Participant’s legal representative, and shall deliver certificates representing the shares with the appropriate legends affixed thereto, or otherwise cause the shares of Common Stock registered in the name of the Participant to be recorded in
the Company’s book-entry system maintained by the Company’s transfer agent. No fractional shares of Common Stock shall be issued or delivered pursuant to the exercise of the Option. The Committee shall determine whether cash, additional
Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated. 

5. No Right to Continued Employment; No Rights as Shareholder. Neither the Plan nor this Agreement shall confer upon the Participant
any right to be retained in any position, including as an Employee, Consultant or Director of the Company or any Affiliate of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to
terminate the Participant’s Continuous Service at any time, with or without Cause. The Participant shall not have any rights as a shareholder with respect to any shares of Common Stock subject to the Option prior to the date of exercise of the
Option, including, but not limited to, with respect to any dividends or other distributions for which the record date is prior to the date on which the Option is exercised. 

6. Transferability. Except as otherwise provided in this Agreement or the Plan, the Option is not transferable by the Participant other
than by will or by applicable laws of descent and distribution and, during the lifetime of the Participant, shall be exercisable only by the Participant. No assignment or transfer of the Option, or the rights represented thereby, whether voluntary
or involuntary, by operation of law or otherwise (except as otherwise provided in this Agreement or the Plan) shall vest in the assignee or transferee any interest or right herein whatsoever, but immediately upon such assignment or transfer the
Option shall terminate and become of no further effect. Notwithstanding the foregoing, an Option may, in the sole discretion of the Committee, be transferrable to a Permitted Transferee upon written approval by the Committee. In addition, the
Participant may, by delivering written notice to the Company in a form satisfactory to the Company, designate a third party who, in the event of the death of the Participant, shall thereafter be entitled to exercise the Option. 

7. Change in Control. In the event of a Change in Control, the Committee may, in its discretion and upon at least ten
(10) days’ advance notice to the Participant, cancel the Option and pay to the Participant (in cash, stock or any combination thereof) the value of the Option based upon the price per share of Common Stock received or to be received by
other shareholders of the Company in the event, subject to Section 409A of the Code. Notwithstanding the foregoing, if at the time of a Change in Control the Exercise Price of the Option equals or exceeds the price paid for a share of Common
Stock in connection with the Change in Control, the Committee may cancel the Option without the payment of consideration therefor. 
 8.
Adjustments. The shares of Common Stock subject to the Option may be adjusted or terminated in any manner as contemplated by Section 11 of the Plan. The Company shall give each Participant notice of any such adjustment, and, upon notice,
such adjustment shall be conclusive and binding for all purposes. 
 9. Tax Liability. Notwithstanding any action the Company takes
with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and
the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting, or exercise of the Option or the subsequent sale of any shares acquired on exercise; and
(b) does not commit to structure the Option to reduce or eliminate the Participant’s liability for Tax-Related Items. 

  
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 10. Compliance with Law. The exercise of the Option and the issuance and transfer of
shares of Common Stock shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and state banking and securities laws and with all applicable requirements of any stock exchange on which the
Company’s shares of Common Stock may be listed. No shares of Common Stock shall be issued pursuant to this Option unless and until any then-applicable requirements of state or federal laws and regulatory agencies have been fully complied with
to the satisfaction of the Company and its counsel. Further, the Company may require the Participant to execute and deliver to the Company a letter of investment intent in such form and containing such provisions as the Committee may require prior
to Participant’s purchase of any Common Stock pursuant to an Option. The Participant understands that the Company is under no obligation to register the shares of Common Stock with the Securities and Exchange Commission, any state securities
commission or any stock exchange to effect such compliance. If, after reasonable efforts, the Company is unable to obtain from any regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance
and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell such Common Stock upon exercise of any Option unless and until such authority is obtained. 

11. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Secretary
of the Company at the following address: 
 United Security Bancshares, Inc. 

c/o Secretary 

131 West Front Street 

P.O. Box 249 

Thomasville, AL 36784 

Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed to the
Participant at the Participant’s address as shown in the records of the Company. Either party may designate another address in writing (or by such other method approved by the Company) from time to time. 

12. Governing Law. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of Delaware
without regard to that state’s conflict of law principles. 
 13. Interpretation. Any dispute regarding the interpretation of
this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company. 

14. Options Subject to Plan. This Agreement is subject to the Plan as approved by the Company’s shareholders. The terms and
provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and
provisions of the Plan shall govern and prevail. 
 15. Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement shall be binding upon the Participant and the
Participant’s beneficiaries, executors, administrators, representatives and the person(s) to whom the Option may be transferred pursuant to Section 6 of this Agreement or by will or the laws of descent or distribution. 

16. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or
enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law. 

17. Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in
its discretion; provided, however, that the rights of the Participant under this Agreement shall not be impaired by any such amendment, cancellation or termination of the Plan unless (a) the Company requests the consent of the
Participant and (b) the Participant consents in writing. The grant of the Option in this Agreement does not create any contractual right or other right to receive any Options or other Awards in the future. Future Awards, if any, shall be at the
sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment with the Company. 

  
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 18. Amendment. The Committee has the right at any time, and from time to time, to amend,
alter, suspend, discontinue or cancel the Option, prospectively or retroactively; provided, however, that no such amendment shall adversely affect the Participant’s material rights under this Agreement without the Participant’s
written consent, and any such amendment shall be in accordance with Section 409A of the Code. 
 19. No Impact on Other
Benefits. The value of the Participant’s Option is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit. 

20. Time Periods; Counting. For purposes of this Agreement, any time period specified in terms of days shall be counted from the day
following that of the event marking the start of the time period and shall end on the day following the last day of the period specified. When the time period is expressed in months, it shall be counted from date to like date except where a terminal
date so fixed exceeds the number of days in a calendar month, in which case, the time period shall end on the last day of the month. When the last day of a time period is a Saturday, Sunday or legal holiday recognized by the Board of Governors of
the Federal Reserve System, the time period shall be extended to the first working day of the Company following such day. 
 21.
Headings. The headings in this Agreement are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof. 

22. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. Counterpart signature pages to this Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, shall have the same effect as physical delivery of the paper document bearing an original signature. 

23. Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and
understands the terms and provisions thereof, and accepts the Option subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may be adverse tax consequences upon exercise of the Option or
disposition of the underlying shares of Common Stock and that the Participant should consult a tax advisor prior to such exercise or disposition. 

24. Section 409A. The Option is intended to be exempt from or comply with Section 409A of the Code to the extent subject
thereto, and, accordingly, to the maximum extent permitted, the Option shall be interpreted and administered to be in compliance therewith. Any action taken under this Agreement shall be in accordance with Section 409A. 

[SIGNATURE PAGE FOLLOWS] 

  
 5 

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

			
	 UNITED SECURITY BANCSHARES, INC.,

	 a Delaware corporation

		
	 By:
	 	  

	 Name:

	 Title:

	
	 [PARTICIPANT NAME]

		
	 By:
	 	  

	 Name:

  
 6

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