DEBT CONVERSION AGREEMENT
Exhibit
10.5
This
Debt Conversion Agreement (the “Agreement”) is entered
into this 31stday of January, 2019 among Petro Exploration Funding,
LLC, a Delaware limited liability company (“Petro Funding I”) and
Petro River Oil Corp., a Delaware corporation (“Petro”). Each of Petro
Funding I and Petro may be referred to herein, individually, as a
“Party”
and, collectively, as the “Parties”.
WHEREAS, Petro and Petro Funding I wish to restructure the
$2,000,000 of senior debt issued to Petro Funding I (the
“Senior Debt”) into a new class of Series A Convertible
Preferred Stock of the Petro (the “Series A
Preferred”); and
NOW, THEREFORE, for good and valuable consideration, the
sufficiency of which is hereby acknowledged, the Parties hereby
agree as follows:
1.
Conversion. Petro
and Petro Funding I hereby agree to convert the $2,000,000
principal amount of the Senior Debt plus accrued and unpaid
interest of $327,473 into
116,374 shares of Series A Preferred Stock.
2. Representations and Warranties.
Each Party represents and warrants to each other Party, as of the
date hereof, that with respect to itself, (a) it is duly formed and
existing and in good standing under its jurisdiction of formation,
and is duly qualified to do business under the laws of such
jurisdiction and each other jurisdiction in which such
qualification is required to perform its obligations under this
Agreement, (b) it has the limited liability company and corporate
power, as applicable, to execute and deliver this Agreement and
perform its obligations under this Agreement, (c) this Agreement
has been duly executed and delivered by it and is legally binding
upon it (assuming that each other Party has duly executed and
delivered this Agreement), enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors’ rights and
to general principles of equity and (d) the execution, delivery and
performance of this Agreement by the Parties, and the consummation
of the transactions contemplated by this Agreement, will not (i)
violate any provision of any governing instruments of the Parties,
(ii) result in a material default (with due notice or lapse of time
or both) or the creation of any lien or encumbrance or give rise to
any right of termination, cancellation or acceleration under any
material note, bond, mortgage, indenture, or other financing
instrument to which the Parties are parties or by which they are
bound, (iii) violate any judgment, order, ruling or regulation
applicable to the Parties as parties in interest or (iv) violate
any law applicable to the Parties, except any matters described in
Clauses (ii) or (iii) above which would not have a material adverse
effect on the Parties or their properties.
3.
Notices.
(a) Subject to clause
(b) below, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by
facsimile or e-mail to the address of such Party set forth on the
signature page hereto.
(b) Any Party
hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other in the manner
set forth above.
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4.
GOVERNING
LAW; JURISDICTION.
(a) THIS
AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION
(WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION.
(b) THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPROPRIATE APPELLATE COURTS THEREFROM, AND EACH PARTY
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF, OR IN CONNECTION
WITH, THIS AGREEMENT MAY BE HEARD AND DETERMINED IN SUCH COURTS.
THE PARTIES HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAWS, ANY OBJECTION WHICH THEY MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH DISPUTE,
CONTROVERSY OR CLAIM BROUGHT IN ANY SUCH COURT OR ANY DEFENSE OF
INCONVENIENT FORUM FOR THE MAINTENANCE OF SUCH DISPUTE, CONTROVERSY
OR CLAIM IN ANY SUCH COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY APPLICABLE LAW.
5. WAIVER OF JURY
TRIAL. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY DISPUTE, CONTROVERSY
OR CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.
6.
Waivers;
Amendments.
(a) No failure or delay
by the Parties in exercising any right or power hereunder shall
operate as a waiver hereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude
any other or further exercise hereof or the exercise of any other
right or power. The rights and remedies of the Parties hereunder
are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this
Agreement or consent to any departure by any Party therefrom shall
in any event be effective unless the same shall be permitted by
clause (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the
purpose for which given.
(b) Neither this
Agreement nor any other provision hereof may be waived, amended or
modified except pursuant to an agreement in writing entered into by
the Parties and expressly identified as a waiver, amendment or
modification.
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7.
Assignment. The
provisions of this Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and
assigns.
8.
No Third-Party
Beneficiaries. Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any person (other than
the Parties hereto, their respective successors and assigns
permitted hereby) any legal or equitable right, cause of action,
remedy or claim under or by reason of this Agreement.
9.
Severability. Any
provision of the Agreement held to be invalid, illegal or
unenforceable in any respect in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions thereof;
and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other
jurisdiction.
10.
Counterparts. This
Agreement may be executed in counterparts, each of which shall be
deemed an original instrument, but all such counterparts together
shall constitute but one agreement.
11.
Headings. Article
and Section headings 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.
12.
Interpretation. The
Parties acknowledge and agree that (i) each Party has had the
opportunity to exercise business discretion in relation to the
negotiation of the details of the transaction contemplated hereby,
(ii) this Agreement is the result of arms-length negotiations from
equal bargaining positions and (iii) each Party and its counsel
participated in the preparation and negotiation of this Agreement.
Any rule of construction that a contract be construed against the
drafter shall not apply to the interpretation or construction of
this Agreement.
13.
Entire Agreement.
This Agreement constitute the entire agreement among the Parties
pertaining to the subject matter hereof, and supersede all prior
agreements, understandings, negotiations and discussions, whether
oral or written, of the Parties pertaining to the subject matter
hereof.
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IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the
day and year first above written.
PETRO
FUNDING I, LLC
By:
/s/ Xxxx
Xxxxx
Name:
Xxxx
Xxxxx
Title:
Manager
By:
/s/ Xxxxxxx
Xxxxxxx
Name:
Xxxxxxx
Xxxxxxx
Title:
President
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