PROMISSORY NOTE
FOR VALUE
RECEIVED, on the dates and in the amounts so herein stipulated,
VELOCITY ENERGY PARTNERS LP, a limited partnership organized under
the laws of the State of Delaware (“
Maker” ), promises to pay to the order of
CLASSIC OIL & GAS RESOURCES, INC., a corporation organized
under the Laws of the Commonwealth of Kentucky (“
Payee” ), in U.S. Dollars, the principal sum of
FIVE HUNDRED EIGHTY-FOUR THOUSAND EIGHT HUNDRED TWENTY-THREE AND
50/100 DOLLARS ($584,823.50), MORE OR LESS, being 50% of the
Adjusted Cash Purchase Price of $1,169,647.00 for the Classic
Assets, subject to proportionate reduction for any interests as to
which preferential rights of purchase have been exercised as well
as to certain Closing Adjustments and Post-Closing Adjustments,
which sum shall be payable on or before the one (1) year
anniversary of Closing and shall be secured by a first and prior
perfected security interest in and to the Classic
Assets.
This Note shall
not bear any interest on the principal amount hereof remaining
unpaid as more fully set forth in the definitive and legally
binding Letter of Intent executed by the Maker and Payee
contemporaneously herewith if full payment of the sum secured by
this Promissory Note is timely made in accordance with the
provisions hereof. It is agreed, however, that if Default in the
payment of this Note shall occur, then the Payee shall have the
rights afforded by said Letter of Intent in addition to other
rights afforded by applicable law, without notice of intent to
accelerate, notice of acceleration or any other demand or notice.
Any sum payable under this Note which is not paid when due shall
bear interest from the date such payment is due until paid at the
lesser of 18% or the Highest Lawful Rate under the statutes of the
laws of West Virginia then in force and effect (with whichever rate
is applicable being referred to herein as the “Default
Rate”). Maker further agrees and promises to pay
to Payee all reasonable attorneys’ fees and other expenses
incurred by Payee in the enforcement or collection hereof. For
the
Maker and any
and all endorsers, guarantors and sureties severally waive all
notices, demands for payment, presentment for payment, protest and
notice of protest, notice of intent to accelerate, notice of
acceleration, any other notices of any kind, the filing of suit
hereon for the purpose of fixing liability and diligence in taking
any action to collect amounts called for hereunder and in the
handling of securities at any time existing in connection herewith,
and consent that the time of payment hereof may be extended and
re-extended from time to time without notice to them or any of
them.
It is agreed
that payment of this Note is secured by that certain Mortgage, Deed
Of Trust, Assignment Of Production, Secur
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