Purchase and Sale of the Note; Security Clause Samples
The 'Purchase and Sale of the Note; Security' clause defines the terms under which a promissory note is bought and sold between parties, and establishes the security interest granted to protect the lender. Typically, this clause outlines the purchase price, the transfer of ownership of the note, and specifies the collateral or assets pledged as security for repayment. Its core function is to formalize the transaction and ensure the lender has a legal claim to certain assets if the borrower defaults, thereby reducing the lender's risk.
Purchase and Sale of the Note; Security. Subject to the terms and conditions of this Agreement, on the Closing Date, the Company shall sell and issue to the Investor, the Note in the Principal Amount in exchange for the Purchase Price. The Company shall also pledge to the Investor, pursuant to terms of the form of Pledge Agreement attached to the Conversion and Loan Modification Agreement as Annex “C”, all of the membership interests in the Company’s wholly-owned subsidiary, Provident Energy of Montana, LLC, a Montana limited liability corporation that owns the Two Medicine Cut Bank Sand Unit in Pondera and Glacier Counties, Montana, to secure payment of the indebtedness evidenced by the Note (the “Security Interest”). As an indirect beneficiary of the Investor’s purchase of the Note and as further security for payment of the indebtedness evidenced by the Note, the Company’s parent corporation, Arkanova Energy Corporation (“AEC”), has agreed to guarantee the payment of the Note by the execution and delivery to the Investor at the Closing of the form of Guaranty attached to the Conversion and Loan Modification Agreement as Annex “D”.
Purchase and Sale of the Note; Security. Subject to the terms and conditions of this Agreement, on the Closing Date (as defined herein), the Company shall sell and issue to the Investor, the Note in the Principal Amount in exchange for the additional principal amount of US$1,500,000.00. The Company shall also pledge to the Investor, pursuant to terms of the form of an amended and restated pledge agreement to be entered into as of the date hereof (the “Pledge Agreement”) attached as Annex “C” to a loan modification agreement entered into as of the date hereof (the “Modification Agreement”), all of the membership interests in the Company’s wholly-owned subsidiary, Provident Energy of Montana, LLC, a Montana limited liability corporation that owns the Two Medicine Cut Bank Sand Unit in Pondera and Glacier Counties, Montana, to secure payment of the indebtedness evidenced by the Note (the “Security Interest”). As an indirect beneficiary of the Investor’s purchase of the Note and as further security for payment of the indebtedness evidenced by the Note, the Company’s parent corporation, Arkanova Energy Corporation (“AEC”), has agreed to guarantee the payment of the Note by the execution and delivery to the Investor at the Closing the guaranty to be entered into as of the date hereof (the “Guaranty”) in the form attached to the Modification Agreement as Annex “D”.