Contract
Exhibit 10.2
THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO HOLDER THAT SUCH REGISTRATION IS NOT REQUIRED.
Principal Amount $1,280,000.00
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Original Issue Date: August 2, 2016
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ROYALE ENERGY, INC.
AMENDED AND RESTATED CONVERTIBLE NOTE
FOR VALUE RECEIVED, Royale Energy, Inc., a California corporation (the “Borrower”), hereby promises to pay to the order of Xxxxxx Xxxxx Xxxxxxxx FBO OVE, Inc., Profit Sharing Plan FBO Xxxxxx Xxxxxxxx or his, her or its registered assigns (“Holder”) the amount set out above as the Principal Amount (as reduced pursuant to the terms hereof pursuant to conversion or otherwise, the “Principal”) one year from the above stated issue date (the “Maturity Date”), or upon acceleration, conversion or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal Amount (the “Principal”), if it is due, upon the Maturity Date (in each case in accordance with the terms hereof). This Amended and Restated Convertible Note (the “Note”) amends and restates, and is a complete substitute for, the Convertible Note in the amount of $1,280,000.00, from Borrower to Holder originally issued on August 2, 2016 (the “Issuance Date”).
Unless otherwise separately defined herein, all capitalized terms used in this Note shall have the same meaning as is set forth in the Subscription Agreement. This Note is accompanied by a Warrant to purchase up to one share of the Borrower’s Common Stock for every three shares of Common Stock of the Borrower issuable on conversion of this Note, at an initial warrant exercise price of $0.80 per share, subject to adjustment as provided therein, as set forth in the Subscription Agreement, and expiring two years from the Issue Date. The shares of the Borrower’s no par value common stock (the “Common Stock issuable upon exercise of the warrant shall have piggy-back registration rights as set forth in Section 2.6 and no demand registration rights. The following terms shall apply to this Note:
ARTICLE 1
INTEREST
INTEREST
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before the Maturity Date, the Interest Rate shall be reduced automatically and retroactively from 25% to 10% as of the Issuance Date on the outstanding Principal, and shall be payable, if at all, on the Maturity Date in accordance with the terms of this Note.
ARTICLE 2
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or if a dividend is paid on the Common Stock in shares of Common Stock, the Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event..
ARTICLE 3
DEFAULT
DEFAULT
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such breach, if subject to cure, continues for a period of ten (10) business days after written notice to the Borrower from the Holder.
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If to the Borrower:
Royale Energy, Inc.
0000 Xxxxxx Xxxx Xxxxx
El Cajon, California 92019
Attention: Xxxxxxx X. Xxxxxx, CFO
Email: xxxxxx@xxxx.xxx
If to the Holder:
Xxxxxx X. Xxxxxxxx
000 Xxxxxxxxx Xxxxx
Oak View, CA 93022
Email: xxxxxxxxx@xxxxxxxxx.xxx
4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of California or in the federal courts located in the State of California. Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit to the
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jurisdiction of such courts. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs.
IN WITNESS WHEREOF, Xxxxxxxx has caused this Amended and Restated Convertible Note to be signed in its name by an authorized officer as of the 23rd day of November, 2017.
ROYALE ENERGY, INC.
By: /s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Chief Executive Officer
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