REFINANCING NOTE
$680,000 Longmeadow, Massachusetts
As of January 6, 1998
FOR VALUE RECEIVED, the undersigned, Foreland Corporation, a
corporation organized and existing under the laws of the State of Nevada, and
Eagle Springs Production Limited-Liability Company, a limited liability company
organized under the laws of the State of Nevada (collectively the "Borrowers"),
each promises to pay to the order of Energy Income Fund, L.P., a limited
partnership organized and existing under the laws of the State of Delaware (the
"Lender"), or its successors or assigns, the principal sum of Six Hundred Eighty
Thousand Dollars ($680,000), or such lesser amount as has been advanced by
Lender to Borrowers as part of the Refinancing Loan pursuant to the Financing
Agreement of even date herewith, between Borrowers and Lender (the "Financing
Agreement"), together with interest from the date of funding as set forth
herein. This Note is secured by and entitled to the benefits of the Security
Instruments. All capitalized terms not defined herein shall have the meanings
attributed to them in the Financing Agreement.
The principal amount advanced hereunder shall bear interest from the
date of funding at a rate equal to twelve percent (12%) per annum for the actual
number of days such amount is outstanding based on a 360-day year. Payments of
principal and interest shall be made in accordance with the Schedule of Payments
attached as Schedule A hereto.
All payments received by the Lender shall be applied first to late
charges and fees (if any), then to accrued but unpaid interest, and then to
principal.
No prepayment of this Note shall be permitted except as set forth in
the Financing Agreement.
Upon the occurrence and during the continuation of an Event of
Default, any unpaid principal amount and any overdue interest shall bear
interest at the rate of fifteen percent (15%) per annum, computed for the actual
number of days such amount is outstanding based on a 360-day year.
Nothing contained in this Note shall be deemed to require the payment
of interest at a rate in excess of the maximum rate permitted by applicable law.
In the event that the amounts required to be paid hereunder for any month exceed
the maximum rate permitted by law, such amount shall be automatically reduced
for such month to the maximum rate permitted by law.
All payments due hereunder shall be payable in lawful money of the
United States of America and paid at the place designated in the Financing
Agreement, or at such other place in the Commonwealth of Massachusetts as the
Lender or any subsequent holder of this Note may designate.
Each Borrower has executed this Note pursuant to the Financing
Agreement. All of the terms, covenants, provisions, conditions, stipulations,
and agreements contained in the Financing Agreement to be kept and performed by
Borrowers are hereby made a part of this Note to the same extent and with the
same force and effect as if they were fully set forth herein, and each Borrower
covenants and agrees to perform the same, or to cause the same to be kept and
performed, strictly in accordance with the terms and provisions thereof.
The occurrence of any Event of Default, as that term is defined in
Article 8 of the Financing Agreement, shall be an Event of Default under this
Note. If an Event of Default has occurred and if such Event of Default
continues uncorrected, the entire principal amount outstanding, together with
accrued interest thereon, and any fees due thereunder, shall at once become due
and payable at the option of the holder without further notice. If after a
default, counsel is employed to collect the indebtedness evidenced hereby or to
protect the security for such indebtedness, each Borrower agrees to pay
reasonable attorneys' fees and all other reasonable costs and expenses incurred
in connection with such collection.
Each Borrower hereby waives diligence, presentment, protest, demand
for payment, notice of dishonor, notice of intent to accelerate, notice of
acceleration, and any and all other notices or demands in connection with the
delivery, acceptance, performance, default, or enforcement of this Note and
hereby consents to any extensions of time, renewals, releases of any party
hereto, waivers or modifications that may be granted or consented to by the
holder of this Note without notice. No delay on the part of the holder hereof
in exercising any power or right hereunder shall operate as a waiver thereof nor
shall any single or partial exercise of any power or right hereunder preclude
other or further exercise thereof or the exercise of any other power or right.
This Note shall be binding on each Borrower and its successors and assigns. Any
term or provision of this Note that is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Note in such or any other
jurisdiction, so long as the purposes of this Note can still be accomplished in
the manner anticipated by Borrowers and Lender, or Borrowers and Lender can
agree to an acceptable modification of this Note. If any provision of this Note
is so broad as to be unenforceable, such provision shall be interpreted to be
only so broad as is enforceable.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
The obligations and liabilities of Borrowers under this Note and the
Loan Documents are joint and several and Lender may enforce its rights under
this Note and the Loan Documents, in its sole discretion, against either or both
Borrowers.
Notwithstanding anything to the contrary contained in this Note, the
Financing Agreement or any other Loan Document, neither Borrower shall have any
personal liability for payment of principal and interest on this Note, and
Lender shall look solely to the Collateral for the payment of such principal and
interest and shall not seek a deficiency or other personal judgment against
either Borrower in the event that any sale of the Collateral shall be
insufficient to satisfy this Note. Nothing herein contained shall, however,
impair any right, remedy or security of Lender with respect to the Collateral
under this Note, nor limit either Borrower's obligations to perform any of
Borrowers' other obligations under the Loan Documents, including without
limitation Borrowers' obligations to remain personally liable under Section 4.3
of the Financing Agreement and to indemnify Lender as set forth in Article 9 of
the Financing Agreement.
WITNESS the following signature.
FORELAND CORPORATION
By /s/ X. Xxxxxx Xxxxxx
X. Xxxxxx Xxxxxx
President
EAGLE SPRINGS PRODUCTION
LIMITED-LIABILITY COMPANY, a
Nevada limited liability company
By /s/ X. Xxxxxx Xxxxxx
X. Xxxxxx Xxxxxx
Manager
