FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): July 13, 2017

 

PETROGRESS, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware 333-18459 27-2019626

(State or Other Jurisdiction of Incorporation)

 

(Commission File Number)

(IRS Employer

Identification No.)

 

 

757 Third Ave., Suite 2110

New York, New York 10017 

(Address of Principal Executive Office) (Zip Code)

 

Registrant's telephone number, including area code: 212-376-5228

 

 

(former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☑

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

     

 

Item 2.02 -- Results of Operations and Financial Condition.

 

On July 3, 2017, after closing 2Q 2017, the Company paid its obligations under the two convertible notes held by Mammoth Corporation, totaling $44,887. This payment also retired approximately $65,550 due as a derivative liability arising from the potential obligation to issue shares upon conversion.

 

Item 2.03 -- Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

 

On July 13, 2017, the Company entered into a Revolving Line of Credit Agreement with its President and CEO, Christos P. Traios. In accordance with the Agreement, the Company also issued a Line of Credit Convertible Promissory Note (LOC Note). Copies of the Agreement and LOC Note are attached as exhibits. The Agreement and Note restate the Company’s obligations under an existing Convertible Promissory Note issued to Mr. Traios on April 1, 2016, under which Mr. Traios had advanced $134,600 to the Company to pay its general operational expenses, including the legal and auditing expenses relating to its SEC reporting requirements. The Agreement and LOC Note now cover approximately $400,000 in funds advanced by Mr. Traios to or on behalf of the Company, including the amounts referenced for repayment of the Mammoth Notes.

 

The Agreement and LOC Note establish a revolving credit arrangement that permits the Company to call on Mr. Traios to fund up to $1,000,000 of its working capital requirements under a more flexible financing facility that allows advances and repayment without the issuance and re-issuance of a series of subsidiary notes. The arrangement provides for 8% simple interest, with a 360-day year, on outstanding amounts, due and payable every six (6) months; for evergreen renewal of the Note, at the parties’ mutual agreement, every twelve (12) months; for the assignment or sale by Mr. Traios of some portion or all of the outstanding balance on the Note, subject to certain restrictions; and for the payment of interest due on the Note by issuance of shares of the Company’s common stock at a conversion rate of $.001 per share. The conversion provisions of the original Convertible Promissory Note issued by the Company to Mr. Traios allowed conversion of principal and interest at the same conversion rate, and as an inducement for his concession the Company issued a Warrant covering the right to purchase 15,000,000 shares of common stock at $.05 per share, representing a premium to market price at the time of this filing of approximately 65%. These remaining terms are not materially different from the original Convertible Promissory Note issued by the Company to Mr. Traios, instead reflecting a closer integration of the Company’s agreement with the obligation documents, providing the Company with greater flexibility with respect to advances and repayments, and confirming the amount of credit available.

 

Item 3.03 – Material Changes to Rights of Securities Holders.

 

On July 13, 2017, the Company created its Series A Preferred Shares, a new class of preferred stock that provides the holder(s), as a class, with the right to two (2) votes for each share of common stock issued and outstanding, and furthermore requires class voting such that the holders of a majority of the Series A Preferred Shares must approve, as a class, any matter requiring shareholder approval. The creation of these shares is authorized by the Company’s Articles of Incorporation and relevant provisions of the Delaware General Corporation Law: The Company’s Articles of Incorporation provide the directors with “blank check” authority to establish classes of preferred shares; the Company’s directors approved the establishment and issuance; and, although not necessary, shareholders holding a majority of the Company’s shares approved the terms and provisions thereof. These shares were issued to Christos P. Traios in consideration of, and as provided for in, his original employment agreement. A copy of the Designation of Preferences for Series A Preferred Shares is provided herewith.

 

The Company’s establishment of the Series A Preferred Shares situates near total authority over its conduct of business in the holders in so far as they now will have the right and ability to approve any corporate action requiring shareholder approval by a margin of 66 2/3% to 33 ½ %. While these provisions do not alter or reduce the obligations of management to adhere to their duties of care, loyalty, obedience and candor, nor affect the minority rights of shareholders, they should be deemed as an anti-takeover provision.

 

Item 5.02 – Compensatory Arrangments of Certain Officers.

 

On July 13, 2016, the Company entered into an Employment Agreement with its chief executive, Christos P. Traios. The Agreement was effective as of April 1, 2017; a copy is provided herewith. The agreement provides for a $120,000 per year salary, with accrual right for unpaid amounts; issuance of preferred shares as referenced above; and specific provisions regarding termination.

 

Item 9.01 – Financial Statements and Exhibits.  

 

3.01 - Designation of Series A Preferred Stock

10.01 - Employment Contract with Christos Traios

99.01 - Letter of Credit Agreement

99.02 - Letter of Credit Note

 

     

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

July 19, 2017

 

PETROGRESS, INC.

 

/s/ Christos Traios        

Christos Traios, President and CEO

 

 

 

 

 

 

Exhibit 3.01

 

CERTIFICATE OF DESIGNATION

OF

SERIES A PREFERRED STOCK OF

PETROGRESS, INC.

 

  

In accordance with Section 151 of the Delaware General Corporation Law and the constituent documents of the Corporation, the director and shareholders owning a majority of the common shares of Petrogress, Inc. (the “Corporation”), have established that one hundred (100) shares of the Corporation’s authorized Preferred Stock shall be designated as Series A and have the following terms, powers, preferences and rights. The Board of Directors of the Corporation shall adopt a resolution consistent with the requirements hereof prior to the issuance of any shares of the Series A.

 

1. Name; Number of Shares; Designation . A total of one hundred (100) shares of preferred stock par value $100.00 per share, of the Corporation are hereby designated as Series A Preferred Stock (the “Series A”).

 

2. Voting Rights. The Holder(s) of the Series A share shall as a class have rights in all matters requiring shareholder approval to a number of votes equal to two (2) times the sum of:

 

  (i) the total number of shares of common stock which are issued and outstanding at the time of any election or vote by the shareholders; plus
  (ii) the number of shares of Preferred Stock issued and outstanding of any other class that has voting rights, if any.

 

These voting rights may, if required, extend to a number of votes in excess of the total number of shares authorized.

 

3. Conversion. The Holder(s) of the Series A share shall not be entitled to convert the Series A share to shares of Common Stock or any other class of the Corporation’s stock.

 

4. Dividends . The Holder(s) of the Series A shares shall not be entitled to dividends.

 

5. Liquidation Preference. In the event of liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the Holder(s) of the Series A share will be entitled to receive out of the assets of the Corporation, prior and in preference to any distribution of the assets or surplus funds of the Corporation to the holders of any other class of preferred stock or the Common Stock, the amount of One Hundred Dollars ($100.00) per share, and will not be entitled to receive any portion of the remaining assets of the Corporation except by reason of ownership of shares of any other class of the Corporation’s stock.

 

6. Redemption. The Series A shares shall not be subject to redemption by the Corporation.

 

7. Restrictions and Limitation. In addition to any other rights provided by law, so long as the Series A share remains issued and outstanding, the Corporation shall not, without first obtaining the affirmative vote or written consent of the Holder(s):

 

(i) alter, modify, amend or repeal (whether by merger or otherwise) any of the terms of this Certificate of Designation in any way;

(ii) amend or repeal any provision of, or add any provision to, the Corporation’s Articles of Incorporation or By-laws;

(iii) create (whether by merger or otherwise) any new series or class of Capital Stock;

(iv) increase or decrease (whether by merger or otherwise) the authorized number of shares of any series or class of Capital Stock;

(v) authorize or issue shares of stock of any class or any bonds, debentures, notes or other obligations convertible into or exchangeable for, or having option rights to purchase, any shares of stock of the Corporation having any preference or priority as to dividends, assets, or other rights;

(vi) alter or change the preferences, rights, privileges or power of, or the restrictions provided for the benefit of any Preferred Stock to include any preference or priority as to dividends, assets, or other right superior to or on a parity with any such preference or priority of the Preferred Stock;

(vii) re-classify any class or series of any Capital Stock hereafter created junior to the Preferred Stock into shares having any preference or priority as to dividends, assets or other right superior to or on a parity with any such preference or priority of the Preferred Stock;

(viii) increase the number of directors.

 

8. Voting Rights as a Class; Shareholder Consent; Limitations. The voting rights set out in Section 2 and the consents required in Section 7 of this Certificate of Designation shall be exercised by the class collectively. If there is more than one Holder of Series A, then each of them shall have a single vote per share of Series A with respect to any matter requiring shareholder approval, and a majority of votes shall determine whether the Series A, as a class, will approve or reject any shareholder resolution or provide consent, including with respect to any matter requiring shareholder approval, at the request of the directors, such that a shareholder meeting will not be required to effect corporate action. The Series A will not be permitted to offer shareholder proposals or resolutions by proxy or otherwise, but will be permitted to nominate no more than five (5) directors to serve the Corporation.

 

     

 

IN WITNESS WHEREOF , the Incorporator has executed this Certificate for attachment to its Articles of Incorporation as of this date.

 

Date: July 13, 2017.

 

Petrogress, Inc.

 

By: /s/ Christos P Traios                   

Christos P. Traios, Sole Director

 

Exhibit 10.01

 

__________________________________

EMPLOYMENT AGREEMENT

__________________________________

 

EMPLOYMENT AGREEMENT made effective as of the April 1, 2017, between Christos P. Traios, an individual residing at Piraeus - Greece (hereinafter referred to as the "Executive") and, Petrogress, Inc. a corporation with offices at 757 3 rd Ave., Ste. 2110, NY, NY 10017 (hereinafter referred to as the "Employer" or the “Company”).

 

WITNESSETH

 

WHEREAS , the Employer desires to employ the Executive under the terms and conditions of the Agreement; and

 

WHEREAS , the Executive is willing to provide his services to the Employer on the terms and conditions hereinafter set forth.

 

NOW THEREFORE , in consideration of the mutual covenants and promises of the parties hereto, the Employer and the Executive agree as follows:

 

  1. Employment : The Employer hereby agrees to employ the Executive to perform managerial and executive functions for the Employer, and the Executive hereby agrees to perform such services for the Employer on the terms and conditions hereinafter stated, subject to the directives of the Board of Directors of the Employer.

 

  2. Term of Employment : The period during which the Executive serves as an employee of the Company in accordance with and subject to the provisions of the Agreement is referred to in the Agreement as the Term of Employment. The Term of Employment pursuant to the Agreement shall be deemed to have commenced as of the April 1, 2016, and shall continue in full force and effect until the March 31 st , 2021, provided, however, that the Agreement shall be automatically renewed on a year-to-year basis thereafter unless terminated by either party on at least four (4) months prior written notice during any given year, unless sooner terminated as provided herein.

 

  3. Position and Duties

 

  (a) The Executive shall serve as Chief Executive Officer for the Company. The Executive shall be responsible for compliance with and periodic review of the Company’s corporate governance policies and practices, ensuring that the Company follows and complies with state and federal regulations as well as internal corporate rules and polices as set forth in the Company’s Certificate of Incorporation and By-Laws and as may be determined by the Board of Directors of the Company; the preparation and conducting of the meetings of the shareholders; establishment and maintenance of clear and effective channels of communications between the various governing bodies of the Company; the keeping of corporate records; and the review of and response to shareholders correspondence. The Employee shall also have such other duties as from time to time may be prescribed by the Board. Notwithstanding the foregoing, the Agreement shall not apply to the Executive’s position on the Board of Directors and shall only apply to his Corporate Secretary position with the Company.

 

  (b) During the Term, the Executive shall perform and discharge the duties that may be assigned to his by the Board from time to time in accordance with the Agreement, and the Executive shall devote his best talents, efforts and abilities to the performance of his duties hereunder.

 

  (c) During the Term, the Executive shall perform his duties hereunder on a full-time basis and shall be employed exclusively by the Company. The Executive shall not engage in any other business or accept other employment unless approved in advance by the Board. In addition to the foregoing, the Executive shall, at all times during the Term and any extension thereof, discharge his duties in consultation with, and under the supervision of the Board.

 

  4. Compensation and Bonuses :

 

  (a) During the Term of Employment, the Employer shall pay the Executive a salary at an annual rate of U.S. $120,000.00 (One Hundred Twenty Thousand U.S. dollars (the Base Salary). The Base Salary will be payable in monthly installments of ($10,000) Ten Thousand U.S. Dollars on the 1 st day of each month commencing on the starting date of the Agreement.

 

  (b) In addition to his Base Salary, the Company shall issue to the Executive shares of Preferred stock with super-voting rights, which he shall hold until the parties, or either of them, terminate this Agreement;
  (c) The Executive will also be given an expense allowance of U.S. Five Thousand ($5,000) Dollars per month subject to the Company receiving receipts for any such expenses. Any expenses more than that amount will require the prior approval of the Board.

 

  (d) The Executive shall also be eligible to participate in any future bonus, profit sharing and/or ESOP plans approved and enacted by the Board on the same basis with all other senior executives of the Company, subject to the terms thereof. The Executive understands, however, that no such plans are currently in effect.

 

  5. Benefits:

 

  (a) General. Executive shall be entitled to receive such benefits and fringe benefits, subject to the Company’s policies and guidelines for the same, if any, as are approved from time to time by the Company for all the Company’s senior executives.

 

  (b) Health and Dental . The Employer currently does not have a health and dental plan, however, when the Employer is able to have such a plan, the Executive will be offered the opportunity to participate in the plan.

 

  (c) Vacation : During each year of the term of the Agreement, the Executive shall be entitled to three (3) weeks of vacation annually, which, if unused, will accrue daily and shall be paid to Executive (based upon the per-day amount of the Base Salary for the calendar year in which such vacation is accrued and pro-rated through the date of such termination) upon Executives termination or the expiration of the Term of Employment.

 

  (d) Moving Expenses. Executive shall be entitled to receive reimbursement for all reasonable expenses incurred by the Executive to move his immediate family and belongings if required by the Company. At the Executives sole option, however, the Agreement may be terminated if the Company requires such a move as a condition of continued employment. In such a case, the provisions of Termination of Employment will apply as if the Company had terminated the Agreement without cause.

 

  (e) No Obligation to Establish or Maintain Benefits . Except as contemplated by the Section 5 and the other express terms of the Agreement, compliance with the provisions of the Section 5 shall in no way create or be deemed to create any obligation, express or implied, on the part of the Company or any Parent, Subsidiary, or Affiliate of the Company with respect to the continuation of any benefit or other plan or arrangement maintained as of or prior to the date hereof or the creation and maintenance of any particular benefit or other plan or arrangement at any time after the date hereof.

 

  6. Termination of Employment : Unless renewed as provided in Section 2 hereof, the Agreement may be terminated as follows:

 

  (a) At any time by the mutual written consent of the Executive and the Company. Upon termination pursuant to the Section 6(a), all obligations of the Company for the payment of earned but unpaid Base Salary and any unpaid bonus and benefits through the date of termination shall continue until fully discharged.

 

  (b) At any time for cause by the Company upon written notice to the Executive. For the purposes of the Agreement, a termination shall be for cause if a majority of the Board of Directors of the Company reasonably determines that:

 

  (i) the Executive has been convicted by a court of competent jurisdiction or has pleaded guilty or nolo contendere to any felony or any lesser crime having as its predicate element fraud, embezzlement, misappropriation or breach of fiduciary duty against the Company; or
  (ii) the Executive has committed an act which submits the Company to criminal liability; or
  (iii) the Executive has committed a breach of any of the covenants, terms, or provisions in the Agreement concerning Non-competition or Intellectual Property; or
  (iv) the Executive has committed a breach of any of the covenants, terms, or provisions of the Agreement other than those related to Non-competition or Intellectual Property, and which breach has not been remedied within thirty (30) days after delivery to the Executive by the Company written notice thereof; or
  (v) the Executive has disobeyed for a period of thirty (30) days reasonable and lawful written instructions from the Company’s Board of Directors regarding the performance of the Executives duties as required by Section 3 hereof or has been grossly negligent in the performance of the Executives duties hereunder, after written notice from said Board.

 

Upon termination for cause as provided in the Section 6(b),

 

  (A) all obligations of the Company under the Agreement thereupon shall terminate other than any obligations with respect to earned but unpaid salary and any unpaid bonus and benefits through the date of termination;

 

  (B) the Company shall have any and all rights and remedies under the Agreement and applicable law, and

 

  (C) the Executive shall continue to be subject to any provisions under the Agreement regarding Non-competition and Intellectual Property.

 

  (c) Upon the Executives death or upon the Executives permanent disability (as defined below) continuing for a period of ninety (90) days. Upon termination or the event of death or permanent disability as provided in the Section 6(c), all obligations of the Company under the Agreement thereupon shall immediately terminate other than any obligations with respect to earned but unpaid salary and any unpaid bonus and benefits through date of termination, and to the extent applicable, the Executive shall continue to be subject to the covenants, terms, and provisions under the Agreement with regard to Non-competition and Intellectual Property. As used herein, the term permanent disability or permanently disabled is hereby defined as the inability of the Executive, due to illness, injury, or other cause, to perform a major part of the duties and responsibilities which the Executive had been performing prior to the date of disability in connection with the conduct of the business and affairs of the Company.

 

  (d) At any time by the Executive upon sixty (60) days written notice of intent to terminate to the Company. Upon termination by the Executive as provided in the Section 6(d), all obligations of the Company under the Agreement thereupon immediately shall terminate other than any obligations with respect to earned but unpaid salary and any unpaid bonus and benefits through the date of termination, and the Executive shall continue to be subject to covenants, terms, and provisions under the Agreement with regard to Non-competition and Intellectual Property of the Agreement in accordance with the terms thereof.

 

  (e) At any time without cause (as defined in Section 6(b) above) by the Company upon written notice to the Executive of not less than thirty (30) days. In the event of termination of the Executive by the Company pursuant to the Section 6(e), the Company shall pay the Executive the Executives Base Salary for a period of six (6) months as severance pay and shall pay any unpaid bonus and benefits in each case through the effective date of termination. If terminated without cause, the provisions of the Non-competition and Intellectual Property shall not apply, although the Executive shall nevertheless continue to be bound by the terms of that Non-Disclosure Agreement between the Executive and the Company, a copy of which is attached hereto as Exhibit A (Non-disclosure Agreement). Any payments of Base Salary of other amounts under the Section 6(e) shall be in the same intervals (i.e., weekly, monthly, yearly, etc.) as such payments were made to the executive immediately prior to termination. Payment of the amounts contemplated by the Section 6(e) is agreed by the parties hereto to be in full satisfaction and compromised of any claims arising out of any termination of the Executives employment pursuant to the Section 6(e).

 

  (f) In any event, all obligations of the Company and its affiliates hereunder shall terminate as of the last day of the Termination of Employment other than the obligation to pay Base Salary earned a bonus and benefits accrued but unpaid with respect to periods ending prior thereof.

 

  7. Non-Competition and Intellectual Property

 

  (a) Except as otherwise provided in the Agreement, during any period in which the Executive serves as an employee of the Company and for a period of two (2) years after the date of termination of the Executives employment at any time (the Non-compete Period), the Executive shall not, without the express written consent of the Board of Directors, directly or indirectly, engage, participate, invest in, be employed by or assist, whether as owner, part-owner, shareholder, partner, director, officer, trustee, employee, agent, or consultant, or in any other capacity, any business entity other than the Company and its affiliates, which develops, manufactures, sells or markets products or performs services which are directly competitive with the products or services of the Company, or products or services which the Company has under development or which are the subject of active study on the date of the termination of the Executives employment (hereinafter a Competitor). Without limiting the foregoing, the foregoing covenant shall prohibit the Executive during the period set forth above from (i) soliciting for or on behalf of any such Competitor any customer of the Company and (ii) diverting to any such Competitor any customer of the Company. In addition, during the period covered by the Section 7(a), the Executive shall not hire or attempt to hire for or on behalf of any Person (including any Competitor) any officer of employee of the Company or encourage for on or behalf of any such Person (including the Competitor) any officer of employee to terminate his or his relationship or employment with the Company. Notwithstanding the foregoing, however, the Executive may make passive investments in a Competitor, whether the securities of such Competitor are publicly traded, if such investment constitutes less than one percent (1%) of the outstanding shares of capital stock or comparable equity interests of the Competitor. As of the date of the Agreement, the Executive represents he is not performing any other duties for, and is not a party to any similar agreement with any Competitor. The Executive understands that the restrictions set forth in the Section 7(a) are intended to protect the Company’s interest in its proprietary information and established customer relationships and goodwill, and agrees that such restrictions are reasonable and appropriate for the purpose. For purposes of the Agreement, the term Person shall mean an individual, a corporation, an association, a partnership, a limited liability company or partnership, an estate, a trust, and any other entity or organization.

 

  (b) For purposes of the Agreement, "proprietary information" shall mean any proprietary information relating to the business of the Employer or its Parent or any entity in which the Employer or its Parent has a controlling interest that has not previously been publicly released by duly authorized representatives of the Employer and shall include (but shall not be limited to) information encompassed in all proposals, marketing and sales plans, financial information, costs, pricing information, computer programs (including without limitation source code, object code, algorithms and models), customer information, customer lists, and all methods, concepts, know-how or ideas in or reasonably related to the business of Employer or any entity in which the Employer has a controlling interest.

 

  (c) In connection with the execution of the Agreement, the Executive has executed and delivered the Non-disclosure and Confidentiality Agreement and for so long as the Executive is subject to the terms of Section 7(a) hereof, the Executive agrees to be bound by the terms thereof as if the same were set forth in full herein, it being understood that nay breach of the Nondisclosure and Confidentiality Agreement shall constitute a breach of the Agreement.

 

  8. Business Opportunities . The Executive agrees, while he is employed by the Company, to offer or otherwise make known or available to the Company and without additional compensation or consideration, any business prospects, contracts or other business opportunities that he may discover, find, develop or otherwise have available to his in any field in which the Company is engaged, and further agrees that any such prospects, contracts or other business opportunities shall be the property of the Company.

 

  9. Specific Performance; Severability . It is specifically understood and agreed that nay breach of the provisions of the Agreement (including, without limitation, Section 7 hereof and the obligations referred to and incorporated therein) by the Executive is likely to result in irreparable injuring to the Company, that the remedy a law alone will be an inadequate remedy for such breach and that, in addition to any other remedy it may have, the Company shall be entitled to enforce the specific performance of the Agreement by the Executive through both temporary and permanent injunctive relief, and through any other appropriate equitable relief, without the necessity of showing or proving actual damages. In case any of the provisions contained in the Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, including without limitation geographic scope, duration of functional coverage, any such invalidity, illegality or enforceability shall not affect any other provision of the Agreement, but the Agreement shall be construed as if such invalid, illegal or unenforceable provision had been limited or modified (consistent with its general intent) to the extent necessary to make it valid, legal and enforceable provision or part of a provision, the Agreement shall be construed as if such invalid, illegal or unenforceable provision or part of a provision had never been contained in the Agreement.

 

  10. Injunctive Relief : The Executive acknowledges that the injury to the Employer resulting from any violation by his of any of the covenants contained in the Agreement will be of such a character that it cannot be adequately compensated by money damages, and, accordingly, the Employer may, in addition to pursuing its other remedies, obtain an injunction from any court having jurisdiction of the matter restraining any such violation.

 

  11. Representation of Executive : The Executive represents and warrants that neither the execution and delivery of the Agreement nor the performance of his duties hereunder violates the provisions of any other agreement to which he is a party or by which he is bound.

 

  12. Parties; Non-Assignabilit y: As used herein, the term the "Employer" shall mean and include the Employer, its Parent and any subsidiary thereof and any successor thereto unless the context indicates otherwise. Any assignment of the Agreement shall be subject to the provisions of Section 8(g). The Agreement and all rights hereunder are personal to the Executive and shall not be assignable by his and any purported assignment shall be null and void and shall not be binding on the Employer.

 

  13. Entire Agreement : The Agreement and its attachments contains the entire agreement between the parties hereto with respect to the transactions contemplated herein and supersedes all previous representations, negotiations, commitments, and writing with respect thereto.
  14. Amendment or Alteration : No amendment or alteration of the terms of the Agreement shall be valid unless made in writing and signed by all the parties hereto.

 

  15. Choice of Law : The Agreement shall be governed by the laws of Delaware.

 

  16. Arbitration : Any controversy, claim, or breach arising out of or relating to the Agreement or the breach thereof shall be settled by arbitration in New York in accordance with the rules of the American Arbitration Association and the judgment upon the award rendered shall be entered by consent in any court having jurisdiction thereof.

 

  17. Notices : Any notices required or permitted to be given under the Agreement shall be sufficient if in writing, and if sent by registered mail to the residence of the Executive, or to the principal office of the Employer, respectively.

 

  18. Waiver of Breach : The waiver by any party hereto of a breach of any provision of the Agreement shall not operate or be construed as a waiver of any subsequent breach by any of the parties hereto.

 

  19. Binding Effect : The terms of the Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective personal representatives, heirs, administrators, successors, and permitted assigns.

 

  20. Gender : Pronouns in any gender shall be construed as masculine, feminine, or neuter as the context requires in the Agreement.

 

  21. Miscellaneous. The failure of any of the parties to require the performance of a term of obligation or to exercise of such right or the enforcement at any time of any other right hereunder or be deemed a waiver of any subsequent breach of the provision so breached, or of any other breach hereunder. The Agreement shall inure to the benefit of successors of the Company by way of merger, consolidation or transfer of all or substantially all the assets of the Company, shall be binding upon the heirs, executors, administrators and legal representatives of the Executive and may not be assigned by the Executive. The Agreement supersedes all prior understandings and agreements among the parties relating to the subject matter hereof.

 

IN WITNESS WHEREOF, the parties have executed the Agreement as of the day and year first above written.

 

 

Exhibit 99.01

 

REVOLVING LINE OF CREDIT AGREEMENT

 

This Revolving Line of Credit Agreement (the “Agreement”) is made and entered into this 13th day of July, 2017 (the “Effective Date”), by and between Petrogress, Inc., a Delaware Corporation (the “Borrower”), and Christos P. Traios, a resident of Piraeus, Greece (the “Lender”).

 

In consideration of the mutual covenants and agreements contained herein, the parties agree as follows:

 

1.   Line of Credit .   Lenders hereby establishes for a period of twelve (12) months from the Effective Date (the “Maturity Date”) a revolving line of credit (the “Credit Line”) for Borrower in the principal amount of up to One Million Dollars ($1,000,000) (the “Credit Limit”) which indebtedness shall be evidenced by and repaid in accordance with the terms of a promissory note for the amount of the Credit Limit in substantially the form attached hereto as  Exhibit A  (the “Line of Credit Note Note”).  All sums advanced on the Credit Line or pursuant to the terms of this Agreement (each an “Advance”) shall become part of the principal of the Line of Credit Note.

 

2. Renewal and Extension of Line of Credit .   Provided that Borrower is not in default under this Agreement or the Promissory Note, at the Maturity Date, the Borrower, at the Borrower’s option may extend and renew this Credit Line for additional terms of twelve (12) months, with a new Effective Date and Maturity Date assigned for each successive extension and renewal.

 

3.   Advances .

 

(a) Lender has made advances to the Borrower to-date totaling US $339,906.00, with accrued interest of US $0.00.

 

(b)  Borrower may request an Advance from time-to-time and in such amounts as Borrower may choose,  provided however , any requested Advance will not, when added to the outstanding principal balance of all previous Advances, exceed the Credit Limit.  Requests for Advances must be made in writing, delivered to the Lender, by such officer of Borrower authorized by it to request such advances.  Until such time as Lender may be notified otherwise, Borrower hereby authorizes its Chief Executive Officer or its Chief Financial Officer to request Advances.  For each Advance, properly requested, the Lender shall advance an amount equal to the Advance amount.  The Lender may refuse to make any requested Advance if an event of default has occurred and is continuing hereunder either at the time the request is given or the date the Advance is to be made, or if an event has occurred or condition exists which, with the giving of notice or passing of time or both, would constitute an event of default hereunder as of such dates.

  

4. Interest .   All sums advanced pursuant to this Agreement shall bear interest from the date each Advance is made until paid in full at an interest rate of eight percent (8%) simple interest per annum (the “Interest Rate”).  Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed. Interest shall be due and payable every six (6) months, with payments due on the first business day six (6) months following the Effective Date (the “Interest Due Date”) and on the Maturity Date, and each successive iteration of such dates upon extension and renewal thereafter for so long as this Agreement shall remain in effect.

 

5. Default Interest .  Notwithstanding the foregoing, upon the occurrence of an Event of Default hereunder, the Interest Rate shall immediately increase to the lesser of eighteen percent (18%) or the highest rate allowable under applicable law, and shall continue at such rate, both before and after judgment, until the Credit Line has been repaid in full and all of Borrower’s other obligations to Lender hereunder have been fully paid and discharged.

 

6. Interest Payments; Repayment; No Pre-Payment Penalty .   Subject to the extension and renewal provisions set out herein, Interest on the then outstanding principal balance shall be payable on the Interest Due Date(s), and the entire unpaid principal balance, together with any unpaid accrued interest and other unpaid charges or fees hereunder, shall be due and payable on the Maturity Date(s).  Subject to the provisions of Paragraph 8 hereof, payment shall be made to the Lender at such place as the Lender may, from time to time, designate in lawful money of the United States of America.  All payments received hereunder shall be applied as follows: first, to any late charge; second, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder; third, to accrued interest; fourth, to principal; and fifth, the balance, if any, to such person entitled thereto; provided, however, upon occurrence of an Event of Default, a Lender may, in its discretion, change the priority of the application of payments as it deems appropriate.  Borrower may prepay principal and/or interest at any time without penalty.

 

7.    Conditions Precedent  No Lender shall be required to make any advance hereunder unless and until:

 

(a)  All of the documents required by such Lender, including the Line of Credit Note, have been duly executed and delivered to such Lender and shall be in full force and effect.

 

(b) The representations and warranties contained in this Agreement are then true with the same effect as though the representations and warranties had been made at such time.  The request for an Advance by Borrower shall constitute a reaffirmation to Lender that all representations and warranties made herein, including specifically those made in Paragraphs 10, remain true and correct in all material respects to the same extent as though given the time such request is made; that all conditions precedent listed in this Paragraph 7 have been, and continue to be, satisfied in all respects as of the date such request is made; and that Borrower is in compliance with all covenants made herein, including specifically those made in Paragraphs 11 and 12.

 

(c) No event of default hereunder has occurred and is continuing, and no condition exists or event has occurred which, with the passing of time or the giving of notice or both, would constitute an event of default hereunder.

 

8. Conversion and Maintenance of Reserve . Upon the Interest Due Date or Maturity Date, or any of them, regardless of any Event of Default, as set out herein, the Lender may demand payment of any or all of the interest due on the principal amount by delivery of a number of common shares, effecting a conversion of a portion of the outstanding debt represented by the Line of Credit Note to equity represented by common stock in the Company. In the Event of Default, and if the Borrower is unable or for any reason determines to not repay any amounts due in U.S. Currency or such other currency or, with the Lender’s consent, by delivery of any assets of the Company, the Lender may demand payment of any outstanding debt by such conversion. The conversion rate shall be at Par Value, $.001 per share. Except in the Event of a Default, in no instance shall the Lender convert amounts due such that it shall cause the Borrower to issue a number of shares constituting ten percent (10%) or more of the Company’s common shares. The Borrower shall maintain a reserve of shares sufficient to satisfy its obligation to issue shares upon a conversion demand by the Lender. The reserved shares shall not be issued except to the Lender under the provisions of this Agreement and the Line of Credit Note.

 

9. Warrants .   In consideration of Lender's extending the Credit Line to Borrower, Borrower agrees to issue to Lender a Warrant (the "Warrant") to purchase 15,000,000 shares of the Borrower’s common stock at an exercise price of $.05 for a period of five years. The Warrant will provide for cashless exercise privileges, and be transferrable or assignable at the Holder’s option, with the Borrower’s approval.

 

10.    Representations and Warranties .   In order to induce Lender to enter into this Agreement and to make the advances provided for herein, Borrower represents and warrants to Lenders as follows:

 

(a)  Borrower is a duly organized , validly existing, and in good standing under the laws of the State of Delaware with the power to own its assets and to transact business within the United States or any of them, or in any foreign jurisdiction where it conducts business. 

 

(b) Borrower has the authority and power to execute and deliver any document required hereunder and to perform any condition or obligation imposed under the terms of such documents.

 

(c) No information or report furnished by Borrower to Lender in connection with the negotiation of this Agreement contained any material misstatement of fact or omitted to state a material fact or any fact necessary to make the statements contained therein not misleading.

 

11.   Affirmative Covenants .   So long as any sum remains unpaid hereunder, in whole or in part, Borrower covenants and agrees that except with the prior written consent of the  Lender, which consent will not be unreasonably withheld, it shall do the following:

 

(a) Borrower shall duly observe and conform to all valid requirements of any governmental authority relative to the conduct of its business, its properties, or its assets and will maintain and keep in full force and effect its corporate existence and all licenses and permits necessary to the proper conduct of its business.

 

(b) Borrower shall keep proper books of records and accounts in which full, true, and correct entries will be made of all dealings or transactions relating to its business and activities.

 

(c) Borrower shall (1) file all applicable reports which it is required to file with the Securities and Exchange Commission in a timely manner; (2) file all applicable federal, state, and local tax returns or other statements required to be filed in connection with its business, including those for income taxes, sales taxes, property taxes, payroll taxes, payroll withholding amounts, FICA contributions, and similar items; (3) maintain appropriate reserves for the accrual of the same; and (4) pay when due all such taxes, or sums or assessments made in connection therewith.  Provided, however, that (until distraint, foreclosure, sale, or similar proceedings have been commenced) nothing herein will require Borrower to pay any sum or assessment, the validity of which is being contested in good faith by proceedings diligently pursued and as to which adequate reserves have been made.

 

12.  Negative Covenants  So long as any amounts due hereunder remain unpaid in whole or in part, Borrower covenants that except with the prior written consent of the Lender, which consent will not be unreasonably withheld, it will not do any of the following:

 

(a) Borrower shall not make any loans or advances to any person or other entity other than in the normal and ordinary course of business now conducted; make any investment in securities of any person or other entity; or guarantee or otherwise become liable upon the obligations of any person or other entity, except by endorsement of negotiable instruments for deposit or collection in the normal and ordinary course of business.  This restriction will apply, without limitation, to loans to any subsidiaries of Borrower.

 

(b) Borrower shall not create or permit to exist any lien, claim, or encumbrance on the assets of Borrower or any part thereof, except as may be granted to Lender.

 

13. Events of Default .    An event of default (each, an “ Event of Default ”) will occur if any of the following events occurs:

 

(a) Failure to pay interest when due, including by issuance of shares upon conversion demand, unless warranted by the 10% equity block provisions set out in the Line of Credit Note;

 

(b) Failure to pay any principal within five (5) days after the same becomes due.

 

(c) Any representation or warranty made by Borrower in this Agreement or in connection with any borrowing or request for an advance hereunder, or in any certificate, financial statement, or other statement furnished by Borrower to Lender is untrue in any material respect at the time when made.

 

(d) Default by Borrower in the observance or performance of any other covenant or agreement contained in this Agreement, other than a default constituting a separate and distinct event of default under this Paragraph 13.

 

(e)  Default by Borrower in the observance or performance of any other covenant or agreement contained in any other document or agreement made and given in connection with this Agreement, other than a default constituting a separate and distinct event of default under this Paragraph 13, and the continuance of the same unremedied for a period of fourteen (14) days after notice thereof is given to Borrower.

 

(f) Any of the documents executed and delivered in connection herewith for any reason ceases to be valid or in full force and effect or the validity or enforceability of which is challenged or disputed by any signer thereof, other than Lender.

 

(g) Borrower shall default in the payment of principal or interest on any other obligation for borrowed money other than hereunder, or defaults in the payment of the deferred purchase price of property beyond the period of grace, if any, provided with respect thereto, or defaults in the performance or observance of any obligation or in any agreement relating thereto, if the effect of such default is to cause or permit the holder or holders of such obligation (or trustee on behalf of such holder or holders) to cause such obligation to become due prior to the stated maturity.

 

(h) Filing by Borrower of a voluntary petition in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended or under any other insolvency act or law, state or federal, now or hereafter existing.

 

(i) Filing of an involuntary petition against Borrower in bankruptcy seeking reorganization, arrangement or readjustment of debts, or any other relief under the Bankruptcy Code as amended, or under any other insolvency act or law, state or federal, now or hereafter existing, and the continuance thereof for sixty (60) days undismissed, unbonded, or undischarged.

 

(j) All or any substantial part of the property of Borrower shall be condemned, seized, or otherwise appropriated, or custody or control of such property is assumed by any governmental agency or any court of competent jurisdiction, and is retained for a period of thirty (30) days.

 

14. Remedies .   Upon the occurrence of an Event of Default as defined above, the Lender may declare the entire unpaid principal balance, together with accrued interest thereon, to be immediately due and payable without presentment, demand, protest, or other notice of any kind.  Lender may suspend or terminate any obligation it may have hereunder to make additional Advances.  To the extent permitted by law, Borrower waives any rights to presentment, demand, protest, or notice of any kind in connection with this Agreement.  No failure or delay on the part of the Lender in exercising any right, power, or privilege hereunder will preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.  The rights and remedies provided herein are cumulative and not exclusive of any other rights or remedies provided at law or in equity.  Borrower agrees to pay all costs of collection incurred by reason of the default, including court costs and reasonable attorney’s fees, whether or not the attorney is a salaried employee of Lender, including such expenses incurred before or after any legal action or Bankruptcy proceeding involving Borrower has commenced, during the pendency of such proceedings, and continuing to all such expenses in connection with any appeal to higher courts arising out of matters associated herewith.

 

15. Notices All notices, requests, demands and other communications under this Agreement, shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given or within five (5) business days if mailed to the party to whom notice is to be given, by first-class mail, registered, or certified, postage prepaid and properly addressed as follows:

 

 

If to the Borrower, addressed to :

Petrogress, Inc.

757 Third Ave., Suite 2110

New York, New York 10017

Tel: +1 212 376 5228 

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

If to Lender, addressed to :

Christos P. Traios

10, Sp. Trikoupi Str.,

18538 Piraeus - Greece Tel: +30 210 459 9741 Fax: +30 210 459 9744  This email address is being protected from spambots. You need JavaScript enabled to view it.

 

 

16.   General Provisions .   All representations and warranties made in this Agreement and the Line of Credit Note shall survive the execution and delivery of this Agreement and the making of any loans hereunder.  This Agreement will be binding upon and inure to the benefit of Borrower and Lender, and their respective successors and assigns, except that Borrower may not assign or transfer its rights or delegate its duties hereunder without the prior written consent of Lender.  This Agreement, the Line of Credit Note, and all documents and instruments associated herewith will be governed by and construed and interpreted in accordance with the laws of the State of Delaware.  Time is of the essence hereof.  Lender may set off against any debt or account it owns Borrower, now existing or hereafter arising, in accordance with its rules and regulations governing deposit accounts then in existence, and for such purposes is hereby granted a security interest in all such accounts.  This Agreement will be deemed to express, embody, and supersede any previous understanding, agreements, or commitments, whether written or oral, between the parties with respect to the general subject matter hereof.  This Agreement may not be amended or modified except in writing signed by the parties. If any portion of this Agreement is determined to be in violation of any law by a court of competent jurisdiction, then such offending provision shall be severed, and the balance of this Agreement will remain in effect and enforceable as between or among the parties.

 

17. Waiver of Jury Trial .   The Parties hereto hereby voluntarily and irrevocably waive trial by jury in any Proceeding brought in connection with this Agreement, any of the related agreements and documents, or any of the transactions contemplated hereby or thereby. For purposes of this Agreement, “Proceeding” includes any threatened, pending, or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing, or any other actual, threatened, or completed proceeding, whether brought by or in the right of any party or otherwise and whether civil, criminal, administrative, or investigative, in which a Party was, is, or will be involved as a party or otherwise.

 

18. Counterparts; Facsimile Signatures .  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement.  Facsimile signatures shall be sufficient for execution of this Agreement.

 

19. Independent Advice of Counsel.    The Parties hereto, and each of them, represent and declare that in executing this Agreement they relied solely upon their own judgment, belief, knowledge and the advice and recommendations of their own independently selected counsel, concerning the nature, extent, and duration of their rights and claims, and that they have not been influenced to any extent whatsoever in executing the Agreement by any representations or statements covering any matters made by any other party or that party’s representatives hereto.

 

20.  Entire Agreement .   This Agreement, together with the Line of Credit Note, constitutes the entire understanding and agreement of the parties with respect to the general subject matter hereof; supersede all prior negotiations and agreements with respect thereto; may not be contradicted by evidence of any alleged oral agreement; and may not be amended, modified, or rescinded in any manner except by a written agreement signed by Lender which clearly and unequivocally expresses an intent to amend, modify, or rescind the same.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.

BORROWER:

 

PETROGRESS, INC.

 

 

 /s/ Christos P. Traios

_____________________________________

By: Christos P. Traios, President and CEO

 

 

 

LENDER:

 

 

 /s/ Christos P. Traios

_____________________________________

Christos P. Traios

 

Exhibit 99.02

 

 

NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (1) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (C) UNLESS SOLD PURSUANT TO SECTION 4(a)(1) OR RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

REVOLVING LINE OF CREDIT NOTE

 

 

 

Principal Amount: Up to $1,000,000 of which $339,906.00 has been advanced to-date
Interest Rate: 8% Simple Interest
Borrower: Petrogress, Inc.
Lender: Christos P. Traios

 

 

FOR VALUE RECEIVED, Petrogress, Inc. a Delaware corporation (“Borrower”) promises to pay to Christos P. Traios (the “Lender”), or to order of Lender in the event of any selling on or assignment, the principal sum of One Million Dollars ($1,000,000) or the aggregate unpaid principal amount of all advances made by Lender to Borrower pursuant to the terms of a Revolving Line of Credit Agreement (the “Loan Agreement”) of even date herewith, whichever is less, together with interest thereon from the date each advance is made until paid in full, at an interest rate of eight percent (8%) simple interest per annum (the “Interest Rate”).  Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed.

 

1. Maturity.     Unless otherwise accelerated pursuant to the Loan Agreement, the principal, any unpaid accrued interest and other charges and fee (the “Credit Line”), shall be due and payable twelve (12) months from the Effective Date (the “Maturity Date”).  Notwithstanding the foregoing, the entire unpaid principal sum of this Promissory Note, together with accrued and unpaid interest thereon, shall become immediately due and payable upon the Event of Default as set forth in the Loan Agreement.

 

2. Renewal and Extension of Line of Credit .   Provided that Borrower is not in default under the Loan Agreement or this Line of Credit Note at the Maturity Date, and subject to the Lender’s right to demand conversion for interest payments set out in Section 7, the Borrower, at the Borrower’s option may extend and renew this Promissory Note for an additional term or terms of twelve (12) months.

 

3. Interest .   All sums advanced pursuant to this Agreement shall bear interest from the date each Advance is made until paid in full at an interest rate of eight percent (8%) simple interest per annum (the “Interest Rate”).  Interest will be calculated on a basis of a 360-day year and charged for the actual number of days elapsed with regard to each separate advance. Interest shall be due and payable every six (6) months, with payments due on the first business day six (6) months following the Effective Date (the “Interest Due Date”) and on the Maturity Date, and each successive iteration of such dates upon extension and renewal thereafter for so long as this Line of Credit Note is outstanding.

 

4. Default Interest .  Notwithstanding the foregoing, upon the occurrence of an Event of Default hereunder, the Interest Rate shall immediately increase to the lesser of eighteen percent (18%) or the highest rate allowable under applicable law, and shall continue at such rate, both before and after judgment, until the Credit Line has been repaid in full and all of Borrower’s other obligations to Lender hereunder have been fully paid and discharged.

 

5. Interest Payments; Repayment .   Subject to the extension and renewal provisions set out herein, interest on the then outstanding principal balance shall be payable on the Interest Due Date(s). Subject to the extension and renewal provisions of Paragraph 2, the entire unpaid principal balance, together with any unpaid accrued interest and other unpaid charges or fees hereunder, shall be due and payable on the Maturity Date(s).  Subject to the provisions of Paragraph 7 hereof, payment shall be made to the Lender at such place as the Lender may, from time to time, designate in lawful money of the United States of America.  All payments received hereunder shall be applied as follows: first, to any late charge; second, to any costs or expenses incurred by Lender in collecting such payment or to any other unpaid charges or expenses due hereunder; third, to accrued interest; fourth, to principal; and fifth, the balance, if any, to such person entitled thereto; provided, however, upon occurrence of an Event of Default, a Lender may, in its discretion, change the priority of the application of payments as it deems appropriate.  Borrower may prepay principal and/or interest at any time without penalty.

 

6. Prepayment .   Borrower may pre-pay the sums due under this Line of Credit Note, in whole or in part, at any time and from time-to-time, without penalty or premium, subject to the requirements provided in the Loan Agreement.

 

7. Conversion and Maintenance of Reserve . Upon the Interest Due Date or Maturity Date, or any of them, regardless of any Event of Default, as set out in the Loan Agreement, the Lender may demand payment of any or all of the interest due on the principal amount by delivery of a number of common shares, effecting a conversion of outstanding debt represented by this Line of Credit Note to equity represented by common stock in the Company. In the Event of Default, and if the Borrower is unable or for any reason determines to not repay any amounts due in U.S. Currency or such other currency or, with the Lender’s consent, by delivery of any assets of the Company, the Lender may demand payment of any outstanding debt by such conversion. The conversion rate shall be at Par Value, $.001 per share. Except in the Event of a Default, in no instance shall the Lender convert amounts due such that it shall cause the Borrower to issue a number of shares constituting ten percent (10%) or more of the Company’s common shares. The Borrower shall maintain a reserve of shares sufficient to satisfy its obligation to issue shares upon a conversion demand by the Lender. The reserved shares shall not be issued except to the Lender under the provisions of this Line of Credit Note and the Loan Agreement

 

8. Default .   Upon and after the occurrence of an Event of Default (as set forth in the Loan Agreement) unless such Event of Default is waived as provided in the Loan Agreement, this Line of Credit Note may, at the option of Lender and without further demand, notice or legal process of any kind, be declared in default by Lender and shall immediately become, due and payable.

 

9. Waiver .   Demand, presentment, protest and notice of non-payment and protest, notice of intention to accelerate maturity, notice of acceleration of maturity and notice of dishonor are hereby waived by Borrower.  Subject to the terms of the Loan Agreement, Lender may extend the time of payment of this Line of Credit Note, postpone the enforcement hereof, grant any indulgences, release any party primarily or secondarily liable hereon, or agree to any subordination of Borrower’s obligations hereunder without affecting or diminishing Lender’s right of recourse against Borrower, which right is hereby expressly reserved.

 

10. Transfer; Successors and Assigns.   At any time, and from time-to-time, the Lender may sell on, assign, pledge or otherwise transfer this Line of Credit Note, or any segregable portion including the accrued interest, to one or more accredited investors, as that term is defined in Rule 501 of Regulation D, in transactions exempt from the registration provisions of the Federal Securities Laws and any applicable state securities laws. Notwithstanding the foregoing, the Lender may not assign, pledge, or otherwise transfer this Line of Credit Note or rights to accrued interest without the prior written consent of the Borrower, which shall not be unreasonably withheld. With regards to the conversion rights set out in Paragraph 7, in no instances shall the Borrower be required to issue shares in payment of interest to a transferee such that the transferee would own 10% or more of the Borrower’s common shares. In the event of a transfer, the Lender shall surrender the original Line of Credit Note for registration of transfer, duly endorsed, or accompanied by a duly executed written instrument of transfer in form satisfactory to the Borrower. Thereupon, a new note for the appropriate principal amount will be issued to, and registered in the name of, the transferee, and the Borrower will adjust its books to reflect the amount remaining due to the Lender. The terms and conditions of this Line of Credit Note shall inure to the benefit of and be binding upon the respective successors and assigns of the Lender.

 

11. Governing Law.   This Line of Credit Note shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law.

 

12. Notices All notices, requests, demands and other communications under this Line of Credit Note, shall be in writing and shall be deemed to have been duly given on the date of service if served personally on the party to whom notice is to be given or within five (5) business days if mailed to the party to whom notice is to be given, by first-class mail, postage prepaid and properly addressed as follows:

 

If to the Borrower, addressed to :

Petrogress, Inc.

757 Third Ave., Suite 2110

New York, New York 10017

Tel: +1 212 376 5228 

This email address is being protected from spambots. You need JavaScript enabled to view it.

 

If to Lender, addressed to :

Christos P. Traios

10, Sp. Trikoupi Str.,

18538 Piraeus - Greece Tel: +30 210 459 9741 Fax: +30 210 459 9744  This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Any notice mailed to any party hereunder will be deemed effective within five (5) business days of deposit in the United States mail.

 

13. Amendments and Waivers.    The terms of this Line of Credit Note may be amended only in writing signed by Borrower and Lender. This Line of Credit Note, together with the Loan Agreement, constitutes and contains the entire agreement between and among the parties regarding the subject matter hereof, and supersedes and replaces all prior agreements, promises and understandings, whether written or oral, proposed or otherwise, regarding the subject matter hereof.

 

14. Counterparts; Facsimile Signatures .  This Line of Credit Note may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement.  Facsimile signatures shall be sufficient for execution of this Line of Credit Note.

 

15. Action to Collect on Note.   If action is instituted to collect on this Line of Credit Note, the Borrower promises to pay all costs and expenses, including reasonable attorney’s fees, incurred in connection with such action.

 

16. Loss of Note.   Upon receipt by the Borrower of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Line of Credit Note, or any note issued to a transferree exchanged for it, and indemnity satisfactory to the Borrower (in case of loss, theft or destruction) or surrender and cancellation of such Line of Credit Note (in the case of mutilation), the Borrower will make and deliver in lieu of such Line of Credit Note a new Note of like tenor.

 

 

 

 

IN WITNESS WHEREOF, this Promissory Note is executed as of July 13, 2017.

 

BORROWER

 

PETROGRESS, INC.

 

  /s/ Christos P. Traios

_______________________________________

By: Christos P. Traios, President and CEO