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EXHIBIT 10.13
LOAN AGREEMENT
LOAN AGREEMENT dated to be effective the 18th day of July, 1997, between
Cotton Valley Energy Corporation ("Borrower") and those individuals who have
signed a Subscription Agreement which is attached hereto as Exhibit "A" (each
referred to as an "individual lender" and collectively referred to as
"Lender").
SECTION 1. DEFINITIONS AND GENERAL RULES. The following definitions and
general rules will apply hereto:
1.1. General Rules. For the purposes of this Agreement:
(a) The terms defined in this Section 1, unless the context
otherwise requires, will have the meanings applied to them in Section 1 and
will include the plural as well as the singular. Additional definitions may
be found throughout the Agreement.
(b) All terms defined by the Uniform Commercial Code as enacted
in the State of Texas shall have the meaning as defined therein unless
expressly defined otherwise in this Agreement.
(c) The words "herein", "hereof", "thereunder" and words of
similar import refer to this Agreement as a whole and not to a particular
section, paragraph or other subdivision.
1.2. Definitions. As used in this Agreement, the following terms
will have the following meanings unless the context requires otherwise:
Agreement means this loan agreement as originally executed or hereafter
amended.
Business Day means a day on which banks in Dallas, Texas are open for
business.
Collateral means the oil and gas leases described in the attached Exhibit
"B", together with, all and singular, all renewals thereof, and all rights and
appurtenances pertaining thereto, also sometimes referred to herein as the
Property.
Deed of Trust means a Deed of Trust creating a first lien on the
Collateral, as copy of which is attached hereto as Exhibit "D".
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Default means any event specified in Section 7.1 of this Agreement,
regardless of whether any requirement for the giving of notice or lapse of time
or any other condition has been satisfied.
Event of Default means any event specified in Section 7.1 of this
Agreement, provided that any requirement in connection with such event for the
giving of notice or lapse of time or any other condition has been satisfied.
Governmental Authority means the United States, the State, the County, the
City, or any other political subdivision in which the Property is located, and
any other political subdivision, agency, or instrumentality exercising
jurisdiction over Borrower or the Improvements, Property and/or Additional
Property.
Governmental Requirements means all laws, ordinances, rules, and
regulations of any Governmental Authority applicable to Borrower and/or the
Improvements, Property, or Additional Property.
Guaranty means a guaranty executed by Cotton Valley Resources Corporation
which unconditionally guaranties payment of the Notes in the form of Exhibit
"E" attached hereto.
Maturity Date means the maturity date set forth in each promissory note
executed by Borrower pursuant to Sections 3.1, 3.2 and 3.3.
Notes means the promissory notes described in Section 3.1, 3.2 and 3.3
hereof, as the same have been or may be renewed, extended or rearranged from
time to time and at any time, also sometimes referred to herein as the Notes.
Obligations means the outstanding principal amounts of the Notes.
Person means any corporation, partnership, trust, estate, individual,
unincorporated business entity or governmental department, administrative
agency or instrumentality.
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Security Instruments means this Agreement, the Deed of Trust, the Notes,
and such other instruments evidencing, securing, or pertaining to this Loan and
the Notes as shall, from time to time, be executed and delivered by Borrower or
any other party to Lender pursuant to this Agreement.
Warrants means warrants to purchase common stock of Cotton Valley
Resources Corporation at a strike price of $2.08 with an expiration date of
April 30, 2002.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Borrower represents, warrants and
covenants that:
2.1. Authority. Borrower is a Nevada corporation, in good
standing, and has the authority as such to cause a duly authorized
representative to execute this Agreement as well as all documents anticipated
by this Agreement.
2.2. Ownership. Borrower is a wholly owned subsidiary of Cotton
Valley Resources Corporation, an Ontario, Canada corporation in good standing
and fully authorized to execute the Guaranty.
2.3. Collateral. The Borrower has good and marketable title to the
Collateral.
2.4. Availability of Records. Borrower will permit any Lender
representative, accountant, agent, employee, or attorney of Lender to visit and
inspect the Collateral, the books and financial records of the Borrower
relating to the Collateral, at such reasonable times during normal business
hours and as often as the Lender may desire, and all after reasonable prior
notice to the Borrower.
2.5. Liens. The Collateral is not subject to any liens,
attachments, or pledges which would prevent Lender from having a first and
valid lien against the Collateral upon the execution of the Security
Instruments.
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SECTION 3. THE LOAN.
3.1. Notes. Subject to and upon the terms, conditions, covenants
and agreements contained herein, Lender and Borrower agree as follows:
Borrower agrees to execute individual Promissory Notes in the form of
Exhibit "C" attached hereto, payable to the order of the individual lenders.
The Notes shall be in the amounts set forth in Exhibit "A". Borrower agrees to
pay interest on the unpaid principal amount of the Notes quarterly at the rate
of 15%. After maturity or the occurrence of an Event of Default, the Notes
will provide for interest at 18% per annum. Payments of interest only on the
Notes shall be due and payable quarterly beginning October 18, 1997, and
continuing on the 18th day of January, April, July and October thereafter until
maturity on July 17, 1999, when the entire balance of principal and accrued
interest will be payable.
3.2. Renewals. Lender does not undertake to renew the Notes
following their Maturity Date and shall be under no obligation to do so.
3.3. Payments.
(a) All payments of principal of and interest on the Notes and
all other amounts payable by Borrower to Lender under this Agreement shall be
made in lawful money of the United States of America and shall be made to
Lender at its office set forth in Section 8.7.
(b) Whenever any payment of principal of or interest on the Notes
shall be due on a day which is not a Business Day, the date for payment thereof
shall be extended to the next succeeding Business Day and interest shall be
payable for such extended time at the rate of interest with respect thereto in
effect at the due date.
3.4. Computations of Interest. Interest on the unpaid principal
amount of the Notes from time to time outstanding shall be computed on the
basis of a year of 365 days and paid for the actual number of days elapsed.
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3.5. Security. (a) Payment of the Notes and Obligations and
performance of the Borrower's obligations under this Agreement and the Security
Instruments will be secured by a Deed of Trust, subject to no prior or superior
lien, security interest or encumbrance on the Collateral. The Deed of Trust
will be executed by Borrower simultaneous with the execution of the Notes and
this Agreement.
(b) Lender agrees that Borrower may pledge the Collateral to
secure other debt of Borrower to additional lenders under the terms of this
Loan Agreement provided that the combined amount of such additional debt and
the debt owed to Lender does not exceed $1,000,000. Any such pledge shall have
equal lien priority to that held by Lender.
(c) Borrower agrees to execute, acknowledge and deliver to Lender
such Security Instruments, statements, financing statements and other
instruments and documents, in a form acceptable to Lender as may in the good
faith and discretion of counsel for Lender be deemed necessary to enforce, to
grant to Lender and to perfect the assignments, security interests and liens on
the Collateral.
(d) Lender agrees to execute and deliver to Borrower within 10
days of request for same from Borrower such documents as are reasonably
required to enable Borrower to develop the leases forming the Collateral.
Lender agrees to subordinate its lien to the lien of a third party lender
funding drilling and production expenses for a well on any lease which is
Collateral. Such subordination shall only cover the actual acreage involved in
the particular well being developed.
3.6. Prepayment of Notes. Lender is willing to allow prepayment of
the Notes in full without penalty at any time and from time to time at
Borrower's option.
3.7. Warrants. In consideration of Lender agreeing to enter into
this Agreement, Borrower agrees to cause to be issued to Lender the Warrants in
the amounts shown in Exhibit "A". The form of the warrants is shown in
Exhibit "F".
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SECTION 4. CONDITIONS TO LOAN. The commitment of Lender to make the
loans is subject the satisfaction of the following further conditions:
4.1. Accuracy of Representation. The fact that the representations
and warranties contained in this Agreement are true and correct in all material
respects on and as of the applicable date of borrowing.
4.2. Delivery of Documents. Receipt by Lender of the documents
required or contemplated hereunder from the appropriate parties, including,
without limitation, the following:
(a) Copy of the Articles of Incorporation and Certificate of Good
Standing;
(b) Board Resolution authorizing this loan;
(c) The executed Security Instruments contemplated by this
Agreement;
(d) The executed Guaranty contemplated by this Agreement; and
(e) Evidence that the lien formerly held by East Texas Limestone
on the Collateral has been released.
SECTION 5. AFFIRMATIVE COVENANTS. During the term of this Agreement and
until the Notes and the obligations have been fully and finally paid, unless
compliance with the provisions of the following Sections shall have been waived
in writing by Lender, Borrower agrees that:
5.1. Payment of Liabilities. Borrower will pay and discharge, when
due, all liabilities, all Indebtedness and all Obligations, except those being
contested in good faith.
5.2. Notice; Litigation. Borrower will promptly give written
notice to Lender of (i) any legal, judicial or regulatory proceedings affecting
the Collateral which involved is material and is not covered (subject to normal
deductibles) by insurance and that is likely to have a material adverse effect
on the Collateral, (ii) any dispute between Borrower and any govern-
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mental regulatory body or other person that is likely to interfere materially
with the normal operations of the Collateral, and (iii) any other action, event
or condition of any nature of which it has knowledge which is reasonably likely
to result in any material adverse effect upon the Collateral.
5.3. Maintenance of Leases. Borrower will use best efforts to (a)
develop the oil and gas leases which are Collateral commensurate with the
Borrower's financial capabilities and prudent business practices, and (b)
maintain in effect all oil and gas leases which are Collateral, including
renewing such leases if they expire during the term of this Agreement.
5.4. Further Assurances. Etc. Borrower will at any time and from
time to time, execute and deliver, such further instruments and take such
further action as may reasonably be requested by Lender, in order to cure any
defects in the execution and delivery of, or to comply with or accomplish the
covenants and agreements contained in, this Agreement, the Security Instruments
or the Notes.
SECTION 6. NEGATIVE COVENANTS. Borrower agrees that during the term
hereof and as long as the Notes are outstanding, unless Lender otherwise shall
give its prior written consent:
6.1. Limitations on Liens. Borrower will not create, assume or
suffer to exist any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind upon the Collateral, except as allowed pursuant to
Section 3.5 herein.
SECTION 7. DEFAULT.
7.1. Events of Default.
(a) Failure to pay any principal of or interest on the
Notes when same is due or declared due.
(b) Failure to comply with the terms of the Deed of Trust or the
covenants of this Agreement.
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(c) Any representation or warranty made by Borrower in this Agreement
or in any financial report or other statement furnished by Borrower pursuant
hereto or in connection herewith is untrue in any material respect as of the
date made or furnished;
(d) If an Event of Default as defined herein or in a Security
Instrument occurs, Lender shall give written notice to Borrower of such
default. Borrower shall have 10 days from the receipt of such notice to cure
any monetary default and 30 days to cure any non-monetary default. If such
default has not then been cured, Lender may proceed with any enforcement rights
related to an Event of Default.
(e) Failure to comply with the terms of the Warrants.
7.2. Suits for Enforcement. In case any one or more Events of Default
shall occur and be continuing, Lender may, at its option, proceed individually
and collectively and enforce its rights or remedies either by suit in equity or
by action at law or by both, whether for specific performance of any covenant,
agreement or other provision contained herein or in any document or instrument
delivered in connection with or pursuant to this Agreement or to enforce
payment of the Notes or any legal or equitable right or remedy.
7.3. Rights and Remedies Cumulative. No right or remedy
herein conferred upon Lender is intended to be exclusive of any other right or
remedy contained herein, in the Security Instruments, in the Notes or in any
other instrument or document delivered in connection with this Agreement, or of
any right existing at law or in equity or by statute or otherwise or in any
other agreement.
7.4. Rights and Remedies Not Waived. No course of dealing between
Borrower and Lender or any failure or delay on the part of Lender in exercising
any rights or remedies hereunder shall operate as a waiver of any rights or
remedies of Lender and no single or partial exercise of any right or remedies
hereunder shall operate as a waiver or preclude the exercise of any other
rights or remedies hereunder.
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7.5. Pro Rata Rights and Remedies. All individual lenders hereunder
shall share such rights, interests, and benefits as are created hereunder on a
pro rata basis, based on the ratio that the amount of the note held by an
individual (or entity) lender bears to the total dollar amount of the Notes
held collectively by the Lender. Any foreclosure conducted pursuant to a Deed
of Trust or any voluntary or involuntary transfer of assets by Borrower to
Lender, shall be for the benefit of and shared by all of the Lenders on the
pro rata basis as set forth above.
SECTION 8. MISCELLANEOUS.
8.1. Survival of Agreements. All agreements, covenants,
representations and warranties made herein shall survive the execution and
delivery of this Loan Agreement, the Notes, and all other documents and
instruments to be executed and delivered in accordance herewith, and shall
continue in full force and effect until all obligations have been paid in full.
8.2. Successors. This Agreement shall be binding upon Borrower and its
successors and assigns, and shall inure to the benefit of Lender and its
successors and assigns.
8.3. Counterparts. This Agreement may be executed in any number of
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.4. Severability. In case any one or more of the provisions contained
in this Agreement or in the Notes or any other documents executed in connection
therewith or herewith should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected thereby.
8.5. Usury Savings Clause. It is the intention of the parties hereto
to comply with the laws of the State of Texas; accordingly, it is agreed that
notwithstanding any provisions to the contrary in this Agreement, the Notes or
in any of the documents or otherwise relating hereto, in no event shall the
holders of the Notes or obligations be entitled to contract for, receive,
collect or apply, as interest on said Notes and Obliga-
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tions, any amount in excess of the maximum amount permitted by such laws of the
State of Texas, nor shall this Agreement or such instruments or documents
require the payment or permit the collection of interest, as defined under the
laws of the State of Texas, in excess of the maximum amount permitted by such
law. If any such excess of interest is contracted for, charged or received,
under this Agreement, the Notes or otherwise or the indebtedness evidenced by
the Notes is accelerated in whole or in part, or in the event that all or part
of the principal or interest of the Notes shall be prepaid, so that under any
of such circumstances the amount of interest contracted for, charged or
received under this Agreement, the Notes, or under any of the instruments
otherwise relating hereto, on the amount of principal actually outstanding from
time to time under the Notes shall exceed the maximum amount of interest
permitted by the laws of the State of Texas, then in any such event (a) the
provisions of this Section shall govern and control, (b) neither Borrower nor
any other person or entity now or hereafter liable for the payment of the
Notes shall be obligated to pay the amount of such interest to the extent that
it is in excess of the maximum amount of interest permitted to be contracted
for by, charged to or received from the party obligated thereon under the laws
of the State of Texas, (c) any such excess which may have been collected shall
be either applied as a credit against the then unpaid principal amount on the
Notes or refunded to the person paying the same, at the holder's option, and
(d) the effective rate of interest shall be automatically reduced to the
maximum lawful rate of interest permitted to be contracted for by, charged to
or received from the party obligated thereon under the laws of the State of
Texas as now or hereafter construed by the courts having jurisdiction thereof.
It is further agreed that without limitation of the foregoing, all calculations
of the rate of interest contracted for, charged or received under this
Agreement, the Notes, or under such other documents which are made for the
purpose of determining whether such rate exceeds the maximum lawful rate of
interest, shall be made to the extent permitted by the laws of the State of
Texas, by amortizing, prorating, allocating and spreading in equal parts during
the period of the full stated term of the Notes, all interest at any time
contracted for, charged or received from the undersigned or otherwise by the
holder or holders thereof in connection with the Notes.
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8.6. Notices. All notices, requests and demands shall be given to
or made upon the respective parties hereto as follows:
If to Borrower: Cotton Valley Energy Corporation
0000 X. Xxxxxxx Xxxxxxxxxx
Xxxxx X0000
Xxxxxx, XX 00000
If to Lender: To address shown on the attached Exhibit "A".
All notices and other communications given to any party hereto
in accordance with the provisions of this Agreement shall be deemed to have
been given to any party when received after being sent by registered or
certified mail, if by mail, or when delivered to the addressee party, if by
telegram, in each case addressed to such party as provided herein or in
accordance with the latest unrevoked written notice from such party in
accordance with this Section.
8.8. Controlling Document. All documents executed contemporaneously
with or pursuant to this Agreement shall be interpreted in such a manner as to
be consistent with this Agreement, except in the event of actual conflict. In
the event of actual conflict in the terms and provisions of this Agreement and
any other documents referred to in this Agreement, the terms and provisions of
this Agreement will control. Any renewals, extensions, modifications and
rearrangements of the Notes referred to herein shall be deemed to be made
pursuant to this Agreement and, to the extent that they vary the rate of
interest or other terms and conditions of the Notes, shall be deemed to be an
amendment to this Agreement (even though the Notes are not executed by both
parties to this Agreement), and accordingly, shall be subject to the terms and
provisions hereof (except to the extent that the interest rate and other terms
and conditions of the Notes are amended).
8.9. Amendment. This Agreement may not be amended except in writing
signed by Borrower and Lender.
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8.10. Descriptive Headings. Descriptive headings of the several
sections and subsections of this Agreement are inserted for convenience only
and do not constitute a part of this Agreement.
8.11. Venue. All obligations and duties in any way arising out of
the terms and conditions of all documents related to this loan transaction
shall and are hereby declared to be fully performable in Waco, McLennan County,
Texas.
8.12. Borrower In Control. In no event shall Lender's rights and
interests under the Security Instruments be construed to give Lender the right
to, or be deemed to indicate that Lender is in control of the business,
management or properties of Borrower or has power over the daily management
functions and operating decisions made by Borrower.
IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to
be duly executed as of the date first above mentioned.
COTTON VALLEY ENERGY CORPORATION
BY: /s/ X. X. XXXXXXX
----------------------------------
NAME: X. X. Xxxxxxx
--------------------------------
TITLE: CEO
-------------------------------
LENDER:
/s/ XXXXXXX X. XXXXXX
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/s/ XXX XXXXXXXX
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EXHIBIT "A"
SUBSCRIPTION AGREEMENT
Cotton Valley Resources Corporation, and its wholly owned subsidiary,
Cotton Valley Energy Corporation, (collectively the "Company"), propose to
issue and sell promissory notes and warrants (the "Securities") to certain
investors in a transaction exempt from the registration requirements of the
Securities Act of 1933. The availability of this exemption depends in part upon
the nature of the purchasers in the offering. In order to satisfy its due
diligence obligations with respect to the qualifications of such investors to
participate in the offering, the Company requests that the undersigned investor
certify as to the following items:
1. The undersigned has had an opportunity to ask questions and
receive answers from the Company or a person or persons acting on its behalf,
concerning the terms and conditions of this investment and has had an
opportunity to examine all applicable documents and information, to the extent
such documents and information are relevant to this transaction and are
possessed by the Company or are obtainable by the Company without unreasonable
effort or expense, and all such questions have been answered and documents and
information have been supplied to the full satisfaction of the undersigned.
2. The undersigned understands that an investment in the Company
may be an illiquid investment and further recognizes and agrees that the
undersigned's investment in the Company will, most likely, be held for a
lengthy period of time.
3. The undersigned acknowledges that there are substantial
restrictions on the transferability of the Securities. The Securities may not
be, and the undersigned agrees that they shall not be, sold unless such sale is
exempt from such registration under the Securities Act and any other applicable
state blue sky laws or regulations. The undersigned also acknowledges
responsibility for compliance with all conditions on transfer imposed by any
securities administrator of any state.
4. The undersigned is an "Accredited Investor", as such term is
defined in Rule 501 promulgated under the Securities Act. Accredited Investors
include (a) any natural person whose net worth, or joint net worth with that
person's spouse, at the time of his purchase exceeds $1,000,000,and (b) any
natural person who had an individual income in excess of $200,000 in each of
the two most recent years or joint income with that person's spouse in excess
of $200,000 in each of those years and has a reasonable
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expectation of reaching the same income level in the current year.
5. The undersigned is acquiring the Securities for which he
hereby subscribes for his own account, as principal, for investment purposes
only and not with a view to the distribution thereof.
6. The undersigned has adequate means of providing for his
current needs and personal contingencies and has no need for liquidity in his
investment.
7. The undersigned has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and risks of the
proposed investment. The undersigned can bear the economic risks in and can
afford a complete loss of any investment he may make by virtue of his
purchasing Securities and can afford to hold any such investment for an
indefinite period.
8. The undersigned has previously purchased securities which were
sold in reliance on a private offering exemption for registration under the
Securities Act.
9. The undersigned desires to purchase a promissory note in the
amount set forth below and to purchase. 40 warrants for each dollar the subject
of such note below from the Company. Such purchase is subject to the terms of a
Loan Agreement dated July 18, 1997, executed by the Company.
10. By executing this Subscription Agreement, the undersigned
authorizes the Company to attach it as Exhibit "A" to a Loan Agreement dated
July 18, 1997 (the "Loan Agreement"). The undersigned agrees to the terms and
conditions of the Loan Agreement.
Executed as of _____________, 1997.
INVESTOR:
----------------------------------------
Printed Name:
---------------------------
Social Security No:
---------------------
Address:
--------------------------------
--------------------------------
Promissory Note Amount: $
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EXHIBIT "B"
(1)
Lessor: Xxxxxx Xxxxxx, Individually and as Independent
Executrix U/W/0 X. X. Xxxxxx, Deceased
Lessee: East Texas Limestone Limited Partnership
Date of Lease: June 27, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(2)
Lessor: X. X. Xxxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: June 27, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(3)
Lessor: Xxxxx Xxxxx Xxxxxxxx and wife, Xxxxx Xxx Xxxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: September 5, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(4)
Lessor: Xxxx Xxx Xxxxxxx a/k/a Xxx Xxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 11, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(5)
Lessor: Xxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 11, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(6)
Lessor: Jo Xxxxxxx Xxxxx a/k/a Xx Xxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 11, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
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(7)
Lessor: Xxxxxxxx X. Xxxxxx and Xxx Xxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 31, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(8)
Lessor: Xxxxx X. Xxxxxx, III and Xxxx X. Xxxxxx, a widow
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 31, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(9)
Lessor: Xxxxxx X. Xxxxxxx, Trustee for the Estate of Xxxx Xxxxxxxx Xxxxxxx, Deceased
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 8, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(10)
Lessor: Xxxx Xxxxxxxx, a widow
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 8, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(11)
Lessor: Xxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 31, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(12)
Lessor: Xxxxxxx Xxxxxxx and Xxxx Xxxxxx Xxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 31, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxx
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(13)
Lessor: Xxxx Xxx Xxxxxxxx, acting herein by and through her agent
and attorney-in-fact, X. X. Xxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 2, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(14)
Lessor: Xxxx Xxxxxxx Xxxxxxxxxx Xxxxxxxx, Individually and as Agent
and Attorney-in-fact for Xxxxx Xxxxxx Xxxxxxxxxx and Xxxxx
Xxxxxx Xxxxxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 15, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(15)
Lessor: Xxxxx Xxx Xxxx and wife, Xxx Xxxx Xxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 3, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(16)
Lessor: Xxxx X. May and wife, Xxx May
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 23, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(17)
Lessor: Xxxxxx X. Xxxxxxxxx, Xx., Xxxxx X. Xxxxxxx, Xxxxxxx Xxxxxxx
and Xxxx Xxxx Xxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 2, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(18)
Lessor: Xxxxxxx Xxxxxxxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 15, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxx
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(19)
Lessor: Xxxxxxxx Xxxxxxxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 15, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(20)
Lessor: Xxxxxxx X. XxXxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 7, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(21)
Lessor: Xxx Xxxxxxxx and wife, Xxxxxx Xxxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: January 19, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(22)
Lessor: Xxxxxxx X. XxXxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 7, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(23)
Lessor: S. R. Harvard and wife, Xxxx X. Harvard
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 5, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(24)
Lessor: Farm Credit Bank of Texas (formerly the Federal Land Bank of
Texas)
Lessee: East Texas Limestone Limited Partnership
Date of Lease: January 24, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
19
(25)
Lessor: Xxxx Xxxxxxxx Xxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 7, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(26)
Lessor: Xxxxx Xxxxxx and wife, Xxxx Xxxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 14, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(27)
Lessor: Xxxxxx Xxxxx, a widow; Xxxxxxx Xxxxxxxxx Xxxxx, a widow; Xxxx
X. Xxxxx; Xxx X. Xxxxx and Xxxxxx Xxxxx Xxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 19, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx
(28)
Lessor: Xxxx X. Xxxxxx and wife, Xxxxxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 15, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx
Xxxxxx, Xxxxx
20
EXHIBIT "C"
NOTE
Date: July 18, 1997
Maker: Cotton Valley Energy Corporation
Maker's Mailing Address: 0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx X0000, Xxxxxx, Xxxxx
00000
Payee: ?
Place for Payment: ?
Principal Amount: ? ($?)
Annual Interest Rate on
Unpaid Principal from Date: Fifteen percent (15%)
Annual Interest Rate on
Matured, Unpaid Amounts: Eighteen percent (18%)
Terms of Payment (principal and interest): Payments of interest only shall be
due and payable quarterly beginning October 18, 1997, and continuing on the
18th day of January, April, July and October thereafter until maturity on July
18, 1999, when the entire unpaid principal balance and accrued interest shall
be due and payable in full.
Security for Payment
A Security Interest Created and Granted in the Following Deed of
Trust:
Date: July 18, 1997
Grantor: Cotton Valley Energy Corporation
Trustee: Xxxxx X. Xxxxxx
Beneficiary: Those individuals named in the Exhibit "A" attached to
the Deed of Trust.
Property: All of Grantor's interest in those certain oil & gas leases
situated in Xxxxxxx County, Texas, described in the Exhibit "B"
attached to the Deed of Trust.
21
Other Security for Payment: Guaranty dated July 18, 1997, executed by Cotton
Valley Resources Corporation.
Maker promises to pay to the order of Payee at the place for payment
and according to the terms of payment the principal amount plus interest at the
rates stated above. All unpaid amounts shall be due by the final scheduled
payment date.
If Maker defaults in the payment of this note or in the performance of
any obligation in any instrument securing or collateral to it, and the default
continues after Payee gives Maker notice of the default and the time within
which it must be cured, written as may be required by law or by that certain
Loan Agreement dated July 18, 1997, (the "Loan Agreement"), then Payee may
declare the unpaid principal balance and earned interest on this note
immediately due. Except as otherwise set forth above, Maker and each surety,
endorser, and guarantor waive all demands for payment, presentations for
payment, notices of intention to accelerate maturity, notices of acceleration
of maturity, protests, and notices of protest, to the extent permitted by law.
If this note or any instrument securing or collateral to it is given
to an attorney for collection or enforcement, or if suit is brought for
collection or enforcement, or if it is collected or enforced through probate,
bankruptcy, or other judicial proceeding, then Maker shall pay Payee all costs
of collection and enforcement, including reasonable attorney's fees and court
costs, in addition to other amounts due.
Interest on the debt evidenced by this note shall not exceed the
maximum amount of nonusurious interest that may be contracted for, taken,
reserved, charged, or received under law; any interest in excess of that
maximum amount shall be credited on the principal of the debt or, if that has
been paid, refunded. On any acceleration or required or permitted prepayment,
any such excess shall be canceled automatically as of the acceleration or
prepayment or, if already paid, credited on the principal of the debt or, if
the principal of the debt has been paid, refunded. This provision overrides
other provisions in this and all other instruments concerning the debt.
Payee and Maker warrant and represent that the entire agreement
relating to this loan transaction made between the parties is contained within
the Loan Agreement and other documents contemplated therein, and that there
exists no oral nor other unwritten agreements of promises between the parties
that are not reflected in the language of the various documents
22
executed in conjunction with this transaction. This notice is given by Payee
with respect to this Agreement and all documents contemplated by this
Agreement, pursuant to Section 26.02 of the Texas Business and Commerce Code.
Maker acknowledges, represents and warrants to Payee that Payee has given and
such party has received this notice and that the following language and this
notice is fully incorporated into all Security Instruments, Guaranties and all
other documents contemplated by this Agreement.
THIS DOCUMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Each Maker is responsible for all obligations represented by this
note.
When the context requires, singular nouns and pronouns include the
plural.
COTTON VALLEY ENERGY
CORPORATION
BY:
----------------------------
NAME:
---------------------------
TITLE:
--------------------------
23
EXHIBIT "D"
DEED OF TRUST
SECURITY AGREEMENT-FINANCING STATEMENT
Date: July 18, 1997
Grantor: Cotton Valley Energy Corporation
Grantor's Mailing Address: 0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx X0000, Xxxxxx,
Xxxxx 00000
Trustee: Xxxxx X. Xxxxxx, Xx.
Trustee's Mailing Address: 000 X. 00xx Xx., Xxxxxxxxx, Xxxxx 00000
Beneficiary: Those individuals named in Exhibit "1".
Note(s): Various notes executed by Grantor to Beneficiary, dated
July 18, 1997 pursuant to a Loan Agreement between Grantor and
Beneficiary, dated July 18, 1997 (the "Loan Agreement").
Property (including any improvements): All of Grantor's interest in those
certain oil & gas leases situated in Xxxxxxx County, Texas, described in the
attached Exhibit "2".
Prior Liens (including recording information): None
For value received and to secure the payment of the Notes, Grantor
conveys the property to Trustee in trust. Grantor warrants and agrees to defend
the title to the property. If Grantor performs all the covenants and pays the
Notes according to its terms, this deed of trust shall have no further effect,
and Beneficiary shall release it at Grantor's expense.
GRANTOR'S OBLIGATIONS.
Grantor agrees to:
1. pay all taxes and assessments on the property when due;
2. preserve the lien's priority as it is established in this Deed
of Trust;
24
BENEFICIARY'S RIGHTS.
1. Beneficiary may appoint in writing a substitute or successor
trustee, succeeding to all rights and responsibilities of the
original trustee.
2. If the proceeds of the Notes are used to pay any debt secured
by prior liens, Beneficiary is subrogated to all of the rights
and liens of the holders of any debt so paid.
3. If Grantor fails to perform any of Grantor's obligations,
Beneficiary may perform those obligations and be reimbursed by
Grantor, on demand, at the place where the Notes is payable
for any sums so paid, including attorney's fees, plus interest
on those sums from the dates of payment at the rate stated in
the Notes for mature, unpaid amounts. The sum to be reimbursed
shall be secured by this deed of trust.
4. If Grantor defaults on any one of the Notes or fails to
perform any of Grantor's obligations or if default occurs on a
prior lien Notes or other instrument, and the default
continues after Beneficiary gives Grantor notice of the
default and the time within which it must be cured, as may be
required by law or by the Loan Agreement, then Beneficiary
may:
a. declare the unpaid principal balance and earned interest
on the Notes immediately due;
b. Request Trustee to foreclose this lien, in which case
Beneficiary or Beneficiary's agent shall give notice of the
foreclosure sale as provided by The Texas Property Code as
then amended; and
c. purchase the property at any foreclosure sale by offering
the highest bid and have the bid credited on the Notes.
5. All individuals (or entities) who are Beneficiary shall share
such rights, interests, and benefits as are created hereunder
on a pro rata basis, based on the ratio that the amount of the
note held by an individual (or entity) bears to the total
dollar amount of the Notes held collectively by the
Beneficiary. Any foreclosure conducted pursuant to this Deed
of Trust or any voluntary or involuntary transfer of assets by
Grantor to Beneficiary, shall be for the benefit of and shares
by all of the Beneficiary on the pro rata basis as set forth
above.
25
TRUSTEE'S DUTIES.
If requested by Beneficiary to foreclose this lien, Trustee shall:
1. either personally or by agent give notice of the foreclosure
sale as required by The Texas Property Code as then amended;
2. sell and convey all or part of the property to the highest
bidder for cash with a general warranty binding Grantor
subject to prior liens and to other exceptions to conveyance
and warranty; and
3. from the proceeds of the sale, pay, in this order:
a. actual expenses of foreclosure;
b. to Beneficiary, the full amount of principal,
interest, attorney's fees, and other charges due and
unpaid as set forth under Section 5, Beneficiary's
Rights;
c. any amounts required by law to be paid before
payment to Grantor; and
d. to Grantor, any balance.
GENERAL PROVISIONS.
1. If any of the property is sold under this deed of trust,
Grantor shall immediately surrender possession to the
purchaser. If Grantor fails to do so, Grantor shall become a
tenant at sufferance of the purchaser, subject to an action
for forcible detainer.
2. Recitals in any trustee's deed conveying the property will be
presumed to be true.
3. Proceeding under this deed of trust, filing suit for
foreclosure, or pursuing any other remedy will not constitute
an election of remedies.
4. If any portion of the Notes cannot be lawfully secured by this
deed of trust, payments shall be applied first to discharge
that portion.
5. Grantor assigns to Beneficiary all sums payable to or received
by Grantor from condemnation of all or part of the property,
from private sale in lieu of condemnation, and from damages
caused by public works or construction on or near the
property. After deducting any expenses incurred, including
attorney's fees, Beneficiary may release any remaining sums to
Grantor or apply such sums to reduce the Notes.
26
Beneficiary shall not be liable for failure to collect or to
exercise diligence in collecting any such sums.
6. Grantor collaterally assigns to Beneficiary, all present and
future income and production from the Property. Grantor
warrants the validity and enforceability of the assignment.
Beneficiary neither has nor assumes any obligations as lessee
with respect to the Property. Beneficiary is not required to
act under this paragraph, and acting under this paragraph does
not waive any of Beneficiary's other rights or remedies. If
Grantor becomes a voluntary or involuntary bankrupt,
Beneficiary's filing a proof of claim in bankruptcy will be
tantamount to the appointment of a receiver under Texas law.
7. Interest on the debt secured by this deed of trust shall not
exceed the maximum amount of nonusurious interest that may be
contracted for, taken, reserved, charged, or received under
law; any interest in excess of that maximum amount shall be
credited on the principal of the debt or, if that has been
paid, refunded. On any acceleration or required or permitted
prepayment, any such excess shall be canceled automatically as
of the acceleration or prepayment or, if already paid,
credited on the principal of the debt or, if the principal of
the debt has been paid, refunded. This provision overrides
other provisions in this and all other instruments concerning
the debt.
8. When the context requires, singular nouns and pronouns include
the plural.
9. The term "Notes" includes all sums secured by this deed of
trust.
10. This deed of trust shall bind, inure to the benefit of, and be
exercised by successors in interest of all parties.
11. If Grantor and Maker are not the same person, the term Grantor
shall include Maker.
12. Grantor represents that this deed of trust and the Notes are
given for the following purposes: The indebtedness, the
payment of which is hereby secured, represents cash that
Beneficiary advanced to Grantor on this day at Grantor's
request and that Grantor acknowledges receiving.
13. In addition to creating a deed of trust lien on all the real
and other property described above, Grantor also grants to
Beneficiary a security interest in all
27
Property other than the realty pursuant to the Texas Uniform
Commercial Code. In the event of a foreclosure sale under this
Deed of Trust, Grantor agrees that all the Property may be
sold as a whole at Beneficiary's option and that the Property
need not be present at the place of sale.
COTTON VALLEY ENERGY CORPORATION
BY:
---------------------------
NAME:
-------------------------
TITLE:
-------------------------
THE STATE OF TEXAS )
COUNTY OF _______________ )
This instrument was acknowledged before me on the day
-----
of 1997 by
-------------, --------------, -----------------------,
of Cotton Valley Energy Corporation, on behalf of said corporation.
----------------------------------
Notary Public
28
EXHIBIT "1"
LENDERS
XXXX XXXXXXX ($25,000)
Xx. 0, Xxx 000XX
Xxxxxxxxxx, Xxxxx 00000
XXXX X. XXXXXX ($50,000)
X.X. Xxx 0000
Xxxx, Xxxxx 00000
XXXX X. XXXX ($25,000)
000 X. 0xx Xx.
Xxxx, Xxxxx 00000
XXXX X. & XXXXXXX X. XXXXXX ($25,000)
0000 Xxxxx Xxxx Xx.
Xxxxxxx, Xxxxx 00000
XXX XXXXXX ($50,000)
000 X. Xxxx, Xxxxx 0000
Xx Xxxx, Xxxxx 00000
XXX XXXXXXXX ($150,000)
0000 Xxxxxxxxx
Xxxx, Xxxxx 00000
29
EXHIBIT "2"
(1)
Lessor: Xxxxxx Xxxxxx, Individually and as Independent
Executrix U/W/0 X. X. Xxxxxx, Deceased
Lessee: East Texas Limestone Limited Partnership
Date of Lease: June 27, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(2)
Lessor: X. X. Xxxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: June 27, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(3)
Lessor: Xxxxx Xxxxx Xxxxxxxx and wife, Xxxxx Xxx Xxxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: September 5, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(4)
Lessor: Xxxx Xxx Xxxxxxx a/k/a Xxx Xxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 11, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(5)
Lessor: Xxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 11, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(6)
Lessor: Jo Xxxxxxx Xxxxx a/k/a Xx Xxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 11, 1995
Recorded: Volume 1318, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
30
(7)
Lessor: Xxxxxxxx X. Xxxxxx and Xxx Xxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 31, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(8)
Lessor: Xxxxx X. Xxxxxx, III and Xxxx X. Xxxxxx, a widow
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 31, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(9)
Lessor: Xxxxxx X. Xxxxxxx, Trustee for the Estate of Xxxx
Xxxxxxxx Xxxxxxx, Deceased
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 8, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(10)
Lessor: Xxxx Xxxxxxxx, a widow
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 8, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(11)
Lessor: Xxxxx Xxxxxx
Lessee: East Texas Limestone Limited partnership
Date of Lease: July 31, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(12)
Lessor: Xxxxxxx Xxxxxxx and Xxxx Xxxxxx Xxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: July 31, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
31
(13)
Lessor: Xxxx Xxx Xxxxxxxx, acting herein by and through her
agent and attorney-in-fact, X. X. Xxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 2, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(14)
Lessor: Xxxx Xxxxxxx Xxxxxxxxxx Xxxxxxxx, Individually and as
Agent and Attorney-in-fact for Xxxxx Xxxxxx
Xxxxxxxxxx and Xxxxx Xxxxxx Xxxxxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 15, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(15)
Lessor: Xxxxx Xxx Xxxx and wife, Xxx Xxxx Xxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 3, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(16)
Lessor: Xxxx X. May and wife, Xxx May
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 23, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(17)
Lessor: Xxxxxx X. Xxxxxxxxx, Xx., Xxxxx X. Xxxxxxx, Xxxxxxx
Xxxxxxx and Xxxx Xxxx Xxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 2, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(18)
Lessor: Xxxxxxx Xxxxxxxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 15, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
32
(19)
Lessor: Xxxxxxxx Xxxxxxxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 15, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(20)
Lessor: Xxxxxxx X. XxXxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 7, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(21)
Lessor: Xxx Xxxxxxxx and wife, Xxxxxx Xxxxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: January 19, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(22)
Lessor: Xxxxxxx X. XxXxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 7, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(23)
Lessor: S. R. Harvard and wife, Xxxx X. Harvard
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 5, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(24)
Lessor: Farm Credit Bank of Texas (formerly the Federal Land
Bank of Texas)
Lessee: East Texas Limestone Limited Partnership
Date of Lease: January 24, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
33
(25)
Lessor: Xxxx Xxxxxxxx Xxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 7, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(26)
Lessor: Xxxxx Xxxxxx and wife, Xxxx Xxxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 14, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(27)
Lessor: Xxxxxx Xxxxx, a widow; Xxxxxxx Xxxxxxxxx Xxxxx, a
widow; Xxxx X. Xxxxx; Xxx X. Xxxxx and Xxxxxx Xxxxx
Xxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: February 19, 1996
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
(28)
Lessor: Xxxx X. Xxxxxx and wife, Xxxxxxxx Xxxxxx
Lessee: East Texas Limestone Limited Partnership
Date of Lease: August 15, 1995
Recorded: Volume 1332, page 000, Xxxx Xxxxxxx, Xxxxxxx Xxxxxx,
Xxxxx
34
EXHIBIT "E"
GUARANTY
For value received, Cotton Valley Resources Corporation (the
"Company") absolutely and unconditionally guarantees payment of a promissory
note dated July 18, 1997, executed by Cotton Valley Energy Corporation, and
payable to the order of____________, in the sum of $ __________ (the "Note"),
according to its terms to the same extent as if the Company were maker of the
Note. Except as set forth in that certain Loan Agreement dated July 18, 1997
between Cotton Valley Energy Corporation and the Payee of the Note, the Company
waives all demands for payment, presentations for payment, notices of intention
to accelerate maturity, notices of acceleration of maturity, protests, and
notices of protest, to the extent permitted by law, pertaining to the Note.
This is a guaranty of payment and performance, not of collection, and it is an
agreement of guaranty, not of suretyship.
Dated this 18th day of July, 1997.
COTTON VALLEY RESOURCES CORPORATION
BY:
------------------------------------
XXXXXX XXXXXXX, CEO
35
EXHIBIT "F"
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE COMMON STOCK ISSUABLE UPON
EXERCISE OF THE WARRANTS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES OR BLUE SKY LAWS OF ANY STATE AND MAY
BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO RELEVANT
PROVISIONS OF FEDERAL AND STATE SECURITIES OR BLUE SKY LAWS OR IF AN EXEMPTION
FROM SUCH REGISTRATION OR QUALIFICATION IS APPLICABLE.
COTTON VALLEY RESOURCES CORPORATION
Incorporated Under the Laws of the Province of Ontario
No. Common Stock
Purchase Warrants
CERTIFICATE FOR COMMON STOCK
PURCHASE WARRANTS
1. Warrant. This Warrant Certificate certifies that , or registered
assigns (the "Registered Holder"), is the registered owner of the above
indicated number of Warrants expiring on the Expiration Date, as hereinafter
defined. One (1) Warrant entitles the Registered Holder to purchase one (1)
share of the common stock (a "Share") of Cotton Valley Resources Corporation,
an Ontario corporation (the "Company"), from the Company at a purchase price of
Two Dollars and Eight Cents (US$2.08) (the "Exercise Price") at any time during
the Exercise Period, as hereinafter defined, upon surrender at the principal
office of the Company of this Warrant Certificate with the exercise form
appended hereto duly completed and executed and accompanied by payment of the
Exercise Price.
Upon due presentment for transfer or exchange of this Warrant
Certificate at the principal office of the Company, a new Warrant Certificate
or Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued in exchange for this Warrant Certificate,
subject to the limitations provided herein, upon payment of any tax or
governmental charge imposed in connection with such transfer. Subject to the
terms hereof, the Company shall deliver Warrant Certificates in required whole
number denominations to Registered Holders in connection with any transfer or
exchange permitted hereunder.
2. Restrictive Legend. Each Warrant Certificate and each certificate
representing Shares issued upon exercise of a Warrant, unless such Shares are
then
-1-
36
registered under the Securities Act of 1933, as amended (the "Act"), shall bear
a legend in substantially the following form:
"THE [SECURITIES] REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
OR QUALIFIED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES OR BLUE SKY
LAWS OF ANY STATE AND MAY BE OFFERED AND SOLD ONLY IF REGISTERED AND
QUALIFIED PURSUANT TO RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES
OR BLUE SKY LAWS OR IF AN EXEMPTION FROM SUCH REGISTRATION OR QUALIFICATION
IS APPLICABLE."
3. Exercise. Subject to the terms hereof, the Warrants evidenced by this
Warrant Certificate may be exercised at the Exercise Price in whole or in part
at any time during the period (the "Exercise Period") commencing on June 18,
1997 and terminating at 5:00 p.m., Central standard time, on April 30, 2002
(the "Expiration Date"). The Exercise Period may be extended by the Company's
Board of Directors.
A Warrant shall be deemed to have been exercised immediately prior to
the close of business on the date (the "Exercise Date") of the surrender to the
Company at its principal offices of this Warrant Certificate with the exercise
form attached hereto completed and executed by the Registered Holder and
accompanied by payment to the Company, in cash or by check (which shall be
accepted subject to collection), of an amount equal to the aggregate Exercise
Price for the Warrants being exercised, in lawful money of Canada.
The person entitled to receive the Shares issuable upon exercise of a
Warrant or Warrants ("Warrant Shares") shall be treated for all purposes as the
holder of such Warrant Shares as of the close of business on the Exercise Date.
The Company shall not be obligated to issue any fractional share interests in
Warrant Shares issuable or deliverable on the exercise of any Warrant or scrip
or cash with respect thereto, and such right to a fractional share shall be of
no value whatsoever. If more than one Warrant shall be exercised at one time by
the same Registered Holder, the number of full Shares which shall be issuable on
exercise thereof shall be computed on the basis of the aggregate number of full
shares issuable on such exercise.
Promptly, and in any event within ten business days after the
Exercise Date, the Company shall cause to be issued and delivered to the person
or persons entitled to receive the same, a certificate or certificates for the
number of Warrant Shares deliverable on such exercise.
The Company may deem and treat the Registered Holder of the Warrants
at any time as the absolute owner thereof for all purposes, and the Company
shall not be affected by any notice to the contrary. The Warrants shall not
entitle the Registered
-2-
37
Holder thereof to any of the rights of shareholders or to any dividend declared
on the Shares unless the Registered Holder shall have exercised the Warrants
and thereby purchased the Warrant Shares prior to the record date for the
determination of holders of Shares entitled to such dividend or other right.
4. Reservation of Shares and Payment of Taxes. The Company covenants
that it will at all times reserve and have available from its authorized Common
Stock such number of Shares as shall then be issuable on the exercise of
outstanding Warrants. The Company covenants that all Warrant Shares which shall
be so issuable shall be duly and validly issued, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the issue thereof.
The Registered Holder shall pay all documentary, stamp or similar
taxes and other government charges that may be imposed with respect to the
issuance, transfer or delivery of any Warrant Shares on exercise of the
Warrants. In the event the Warrant Shares are to be delivered in a name other
than the name of the Registered Holder of the Warrant Certificate, no such
delivery shall be made unless the person requesting the same has paid the
amount of any such taxes or charges incident thereto.
5. Registration of Transfer. The Warrant Certificates may be transferred
in whole or in part, provided any such transfer complies with all applicable
securities laws. Warrant Certificates to be transferred shall be surrendered to
the Company at its principal office. The Company shall execute, issue and
deliver in exchange thereof the Warrant Certificate or Certificates which the
Registered Holder making the transfer shall be entitled to receive.
The Company shall keep transfer books at its principal office which
shall register Warrant Certificates and the transfer thereof. On due
presentment of any Warrant Certificate for registration of transfer at such
office, the Company shall execute, issue and deliver to the transferee or
transferees a new Warrant Certificate or Certificates representing an equal
aggregate number of Warrants. All Warrant Certificates presented for
registration of transfer or exercise shall be duly endorsed or be accompanied
by a written instrument or instruments of transfer in form satisfactory to the
Company. The Company may require payment of a sum sufficient to cover any tax
or other government charge that may be imposed in connection therewith.
All Warrant Certificates so surrendered, or surrendered for exercise,
or for exchange in case of mutilated Warrant Certificates, shall be promptly
canceled by the Company and thereafter retained by the Company until the
Expiration Date. Prior to due presentment for registration of transfer thereof,
the Company may treat the Registered Holder of any Warrant Certificate as the
absolute owner thereof (notwithstanding any notations of ownership or writing
thereon made by anyone other
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than the Company), and the Company shall not be affected by any notice to the
contrary.
6. Loss or Mutilation. On receipt by the Company of evidence
satisfactory as to the ownership of and the loss, theft, destruction or
mutilation of this Warrant Certificate, the Company shall execute and deliver,
in lieu thereof, a new Warrant Certificate representing an equal aggregate
number of Warrants. In the case of loss, theft or destruction of any Warrant
Certificate, the individual requesting issuance of a new Warrant Certificate
shall be required to indemnify the Company in a form and amount satisfactory to
the Company. In the event a Warrant Certificate is mutilated, such Certificate
shall be surrendered and canceled by the Company prior to delivery of a new
Warrant Certificate. Applicants for a new Warrant Certificate shall also comply
with such other regulations and pay such other reasonable charges as the
Company may prescribe.
7. Adjustment of Shares. The number and kind of securities issuable
upon exercise of a Warrant shall be subject to adjustment from time to time
upon the happening of certain events, as follows:
(a) Stock Splits, Stock Combinations and Certain Stock
Dividends. If the Company shall at any time subdivide or combine its
outstanding Shares, or declare a dividend in Shares or other
securities of the Company convertible into or exchangeable for Shares,
a Warrant for the same Exercise Price shall, after such subdivision or
combination or after the record date for such dividend, be exercisable
for that number of Shares and other securities of the Company that the
Registered Holder would have owned immediately after such event with
respect to the Shares and other securities for which a Warrant may
have been exercised immediately before such event had the Warrant been
exercised immediately before such event. Any adjustment under this
Section 7(a) shall become effective at the close of business on the
date the subdivision, combination or dividend becomes effective.
(b) Adjustment for Reorganization, Consolidation, Merger. In
case of any reorganization of the Company (or any other corporation
the stock or other securities of which are at the time receivable upon
exercise of a Warrant) or in case the Company (or any such other
corporation) shall merge into or with or consolidate with another
corporation or convey all or substantially all of its assets to
another corporation or enter into a business combination of any form
as a result of which the Shares or other securities receivable upon
exercise of a Warrant are converted into other stock or securities of
the same or another corporation, then and in each such case, the
Registered Holder of a Warrant, upon exercise of the purchase right at
any time after the consummation of such reorganization, consolidation,
merger, conveyance or combination, shall for the
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same Exercise Price be entitled to receive, in lieu of the Shares or other
securities to which such Registered Holder would have been entitled had he
exercised the purchase right immediately prior thereto, such stock and
securities which such Registered Holder would have owned immediately after
such event with respect to the Shares and other securities for which a
Warrant may have been exercised immediately before such event had the
Warrant been exercised immediately prior to such event.
In each case of an adjustment in the Shares or other securities
receivable upon the exercise of a Warrant, the Company shall promptly notify the
Registered Holder of such adjustment. Such notice shall set forth in reasonable
detail the facts upon which such adjustment is based.
8. Reduction in Exercise Price at Company's Option. The Company's Board
of Directors may, at its sole discretion, reduce the Exercise Price of the
Warrants in effect at any time either for the remaining life of the Warrants or
any shorter period of time determined by the Company's Board of Directors. The
Company shall promptly notify the Registered Holders of any such reduction in
the Exercise Price.
9. Registration Rights.
(a) If, at any time during the Exercise Period and the
three (3) years following any exercise hereunder, the Company proposes to file
a registration statement with respect to any class of securities (other than
pursuant to a registration statement on Forms S-4 or S-8 or any successor form)
under the Securities Act, the Company shall notify the Registered Holder at
least twenty (20) days prior to the filing of such registration statement and
will offer to include in such registration statement all or any portion of the
Warrant Shares. In a written notice to be delivered to the Company within twenty
(20) days after receipt of any such notice from the Company, the Registered
Holder shall state the number of Warrant Shares that it wishes to register for
resale and distribution publicly under the proposed registration statement. The
Company will use its best efforts, through its officers, directors, auditors and
counsel in all matters necessary or advisable, to file at least one (1) such
registration statement by November 30, 1997. The Company will also use its best
efforts, through its officers, directors, auditors and counsel in all matters
necessary or advisable, to include within the coverage of each such registration
statement (except as hereinafter provided) the Warrant Shares that Registered
Holder has advised the Company that Registered Holder wishes to register
pursuant to such registration statement for resale and distribution, to
prosecute each such registration statement diligently to effectiveness, to cause
such registration statement to become effective as promptly as practicable, and
to register or qualify the securities so being registered under such state and
provincial securities or "blue sky" laws as the Registered Holder may
reasonably request. In that regard, the
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Company makes no representations or warranties as to its ability to have any
registration statement declared effective.
All registrations requested pursuant to this Section 9(a) are referred to
herein as "Piggyback Registrations." In the event the Company is advised by the
staff of the Securities and Exchange Commission, Nasdaq Stock Market or any
self-regulatory or state securities agency that the inclusion of the Warrant
Shares will prevent, preclude or materially delay the effectiveness of a
registration statement filed, the Company, in good faith, may amend such
registration statement to exclude the Warrant Shares without otherwise
affecting the Registered Holder's rights to any other registration statement
herein.
(i) Primary Registrations. If a Piggyback Registration is an
underwritten primary registration on behalf of the Company, and if the
underwriter thereof advises the Company in writing that in its opinion the
number of Warrant Shares requested to be included in such registration
statement exceeds the number that can be sold in such offering without
materially adversely affecting the distribution of such securities by the
Company, then the Company will include in such registration statement first,
the securities that the Company proposes to sell and second, the securities
requested to be included in such registration statement by selling
securityholders, such rights to inclusion being apportioned pro rata among
the Registered Holder and the other holders of any other securities
requesting registration according to the market value of Warrant Shares and
other securities requested to be registered.
Notwithstanding the above, if any such underwriter shall advise the
Company in writing that the distribution of the Warrant Shares being included
in the registration statement concurrently with the securities being registered
by the Company would materially adversely affect the distribution of such
securities by the Company, then the Registered Holder shall delay its offering
and sale for such period ending on the earliest of (a) one hundred eighty (180)
days following the effective date of the Company's registration statement, (b)
the earliest date that, in the opinion of such underwriter, such adverse effect
would no longer be caused, or (c) such date as the Company, managing
underwriter and Registered Holder shall otherwise agree. In the event of such
delay, the Company shall file such supplements and post-effective amendments
and take any such other actions as may be necessary or appropriate to permit
such Registered Holder to make its proposed offering and sale for a period of
at least ninety (90) days commencing immediately following the end of such
period of delay. If any party
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41
disapproves of the terms of any such underwriting, it may elect
to withdraw therefrom by written notice to the Company, the
underwriter and the Registered Holder. Notwithstanding the foregoing,
the Company shall not be required to include Warrant Shares within the
coverage of a registration statement being filed pursuant to this
Section 9(a)(i) if, in the opinion of counsel for both the Company and
Registered Holder, all of the Warrant Shares proposed to be registered
may be immediately transferred pursuant to the provisions of Rule 144
under the Securities Act.
(ii) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of
holders of securities of the Company, and the underwriter thereof
advises the Company in writing that in its opinion the number of
Warrant Shares requested to be included in such registration statement
exceeds the number of which can be sold in such offering without
materially adversely affecting the distribution of such securities,
then the Company will include in such registration statement the
securities requested to be included in such registration statement by
selling securityholders on a pro rata basis, with such rights to
inclusion being apportioned among the Registered Holder and the other
holders of any other securities requesting registration according to
the market value of Warrant Shares and other securities requested by
them, respectively, to be registered. Notwithstanding the foregoing,
the Company shall not be required to include Warrant Shares within the
coverage of a registration statement being filed pursuant to this
Section 9(a)(ii) if, in the opinion of counsel for both the Company
and Registered Holder, all of the Warrant Shares proposed to be
registered may be immediately transferred pursuant to the provisions
of Rule 144 under the Securities Act.
(b) If at any time after June 18, 1997 and prior to the third (3rd)
anniversary of the earlier of the Expiration Date and the exercise of the
final Warrant represented hereby and the Warrant Shares issued or issuable
upon exercise of the Warrants represented hereby are not then registered
under one or more Piggyback Registrations and then covered by a prospectus
complying with the requirements of the Securities Act, the Registered
Holder may by written notice to the Company required the Company to file a
registration statement under the Securities Act covering such Warrant
Shares as the Registered Holder may specify in such notice. A Registered
Holder shall be entitled so to require the Company to file a registration
statement pursuant to this Section 9(b) on only one (1) occasion. The
Company will file such a registration statement within ninety (90) days of
receipt of such notice; and thereafter will prosecute such registration
statement diligently to effectiveness; will cause such registration
statement to become effective as promptly as practicable; will promptly
file all such
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supplements and post-effective amendments to such registration statement and
take any such other actions as may be necessary or appropriate to make
available to Registered Holder on as continuous a basis as is practicable a
prospectus meeting the requirements of the Securities Act through the earliest
of (a) the date on which the final Warrant Shares have been sold and
distributed by Registered Holder, (b) the date on which, in the opinion of
counsel for both the Company and Registered Holder, all of the Warrant Shares
which Registered Holder then holds may be immediately transferred pursuant to
the provisions of Rule 144 under the Securities Act, and (c) April 30, 2002;
and will register or qualify the securities so being registered under such
state and provincial securities or "blue sky" laws as the Registered Holder may
reasonably request. In that regard, the Company makes no representative or
warranties as to its ability to have any registration statement or
post-effective amendment thereto declared effective.
(c) In the event of any registration of a security pursuant to this
Section 9, the Company shall indemnify the Registration Holder and its officers,
directors and other controlling persons against all losses, claims, damages and
liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus (and as
amended or supplemented) relating to such registration, or caused by any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances under which they are made unless such statement or omission
was made in reliance upon and in conformity with information furnished to the
Company by the Registered Holder expressly for use therein. The Registered
Holder shall also indemnify the Company, its officers and directors and each
underwriter of the Warrant Shares so registered with respect to losses, claims
damages and liabilities caused by any untrue statement or omission made in
reliance upon and in conformity with information furnished by the Registered
Holder to the Company in writing expressly for use in such registration
statement or prospectus.
(d) All expenses of any registration referred to in this Section 9,
except the fees and disbursements of counsel to the Registered Holder,
underwriting commissions or discounts and any transfer or other taxes
applicable to the transfer of Warrant Shares by the Registered Holder, shall be
borne by the Company.
(e) Following the exercise of Warrants hereunder and the disposition of
Warrant Shares, the Registered Holder shall promptly advise the Company when
Registered Holder no longer holds any Warrant Shares acquired through the
exercise of Warrants hereunder, and upon the request of the Company, the
Registered Holder shall advise the Company from time to time of the number of
Warrant Shares then held by Registered Holder.
(f) The registration rights granted hereunder to the Registered Holder
with respect to Warrant Shares shall also apply to any other shares of the
Company's
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Common Stock or other securities issued by the Company other than Warrants
which are then held by the Registered Holder and constitute "restricted
securities" as that term is defined in Rule 144 promulgated under the
Securities Act, on the same basis as if such securities were Warrant Shares.
10. Notices. All notices, demands, elections, or requests (however
characterized or described) required or authorized hereunder
shall be deemed given sufficiently if in writing and sent by
registered or certified mail, return receipt requested and
postage prepaid, or by facsimile or telegram to the Company,
at its principal executive office, and to the Registered
Holder, at the address of such holder as set forth on the
books maintained by the Company.
11. General Provisions. This Warrant Certificate shall be
construed and enforced in accordance with, and governed by, the laws of the
Province of Ontario. Except as otherwise expressly stated herein, time is of
the essence in performing hereunder. The headings of this Warrant Certificate
are for convenience in reference only and shall not limit or otherwise affect
the meaning hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed as of the 24th day of June, 1997.
COTTON VALLEY RESOURCES
CORPORATION, an Ontario, Canada corporation
By: /s/ E. A. SOLTORO
-------------------------------
Name: E. A. Soltoro
Title: CEO
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44
COTTON VALLEY RESOURCES CORPORATION
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the entireties Custodian
JR TEN - as joint tenants with right (Cust) (Minor)
of survivorship and not as under Uniform Gifts
tenants in common to Minors Act ___
(State)
Additional abbreviations may also be used though not in the above list.
FORM OF ASSIGNMENT
(To be Executed by the Registered Holder if He
Desires to Assign Warrants Evidenced by the
Within Warrant Certificate)
FOR VALUE RECEIVED __________________________________________________
hereby sells, assigns and transfers unto ___________________________ (_________)
Warrants, evidenced by the within Warrant Certificate, and does hereby
irrevocably constitute and appoint _______________________ Attorney to transfer
the said Warrants evidenced by the within Warrant Certificates on the books of
the Company, with full power of substitution.
Dated:_________________________ _______________________________________
Signature
Notice: The above signature must correspond with the name as written upon the
face of the Warrant Certificate in every particular, without
alteration or enlargement or any change whatsoever.
Signature Guaranteed: ________________________________________
SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER FIRM OF ONE OF THE
FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC COAST STOCK
EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.
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45
FORM OF ELECTION TO PURCHASE
(To be Executed by the Holder if he Desires to Exercise
Warrants Evidenced by the Warrant Certificate)
To Cotton Valley Resources Corporation:
The undersigned hereby irrevocably elects to exercise ____________________
__________________ (_____) Warrants, evidenced by the within Warrant
Certificate for, and to purchase thereunder, _______________________ __________
(____) full shares of Common Stock issuable upon exercise of said Warrants and
delivery of CS ________________ and any applicable taxes.
The undersigned requests that certificates for such shares be issued in
the name of:
PLEASE INSERT SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
If said number of Warrants shall not be all the Warrants evidenced by the
within Warrant Certificate, the undersigned requests that a new Warrant
Certificate evidencing the Warrants not so exercised by issued in the name of
and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(SIGNATURES CONTINUED ON FOLLOWING PAGE)
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46
Dated: ______________________ Signature: ____________________
NOTICE: The above signature must correspond with the name as written upon
the face of the within Warrant Certificate in every particular,
without alteration or enlargement or any change whatsoever. If
signed by any other person, the Form of Assignment hereon must be
duly executed by the registered holder in favor of the person so
signing, and if the certificate representing the shares or any
warrant Certificate representing Warrants not exercised is to be
registered in a name other than that in which the within Warrant
Certificate is registered, the signature of the holder hereof must
be guaranteed.
Signature Guaranteed: _______________________________________
ANY SIGNATURE GUARANTY REQUIRED MUST BE PROVIDED BY A COMMERCIAL BANK OR MEMBER
FIRM OF ONE OF THE FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE, PACIFIC
COAST STOCK EXCHANGE, AMERICAN STOCK EXCHANGE, OR MIDWEST STOCK EXCHANGE.
_________________________
