exv10w1



 







	 	 	 	 	 	 	 	 	 	 	 
	PRIOR
	 	LOAN NUMBER
	 	ACCT. NUMBER
	 	AGREEMENT DATE
	 	CREDIT LIMIT
	 	MATURITY DATE
	 	 	 	 	 	 	 	 	 	 	 
	OBLIGATION	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	INFORMATION
	 	7200001800
	 	103476
	 	01/03/00
	 	$9,000,000.00
	 	09/30/07
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	LOAN NUMBER
	 	ACCT. NUMBER
	 	MODIFICATION DATE
	 	CREDIT LIMIT
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	7200001800
	 	103476
	 	08/01/06
	 	$50,000,000.00
	 	 	 	 	 	 	 	 	 	 	 
	AMENDED
	 	MATURITY DATE
	 	INDEX (w/margin)
	 	INTEREST RATE
	 	INITIALS
	 	 	 	 	 	 	 	 	 	 	 
	OBLIGATION	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	INFORMATION	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	07/31/10
	 	Wall Street Journal

Prime minus 1.125%
	 	7.125%
	 	DJ
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Creditor Use Only	 	 	 	 






DEBT MODIFICATION AGREEMENT



DATE AND PARTIES: The date of this Debt Modification Agreement (Modification) is August 1, 2006.
The parties and their addresses are:



LENDER:



AMERICAN NATIONAL BANK

400 EAST 1ST STREET, SUITE 110

CASPER, WYOMING 82601

Telephone: (307) 234-5300



BORROWER:



DOUBLE EAGLE PETROLEUM CO.

A MARYLAND Corporation

777 OVERLAND TRAIL

CASPER, Wyoming 82602





	1.	 	DEFINITIONS. In this Modification, these terms have the following meanings:






A. Pronouns. The pronouns “I,” “me,” and “my” refer to each Borrower signing this
Modification, individually or together with their heirs, executors, administrators,
successors, and assigns. “You” and “Your” refer to the Lender, with its participants or
syndicators, successors and assigns, or any person or entity that acquires an interest in the
Modification or Prior obligation.




B. Amended Obligation. Amended Obligation is the resulting agreement that is created when
the Modification amends the Prior Obligation. It is described above in the AMENDED
OBLIGATION INFORMATION section.




C. Loan. Loan refers to this transaction generally. It includes the obligations and duties
arising from the terms of all documents prepared or submitted in association with the Prior
Obligation and this modification, such as applications, security agreements, disclosures,
notes, agreements, and this Modification.




D. Modification. Modification refers to this Debt Modification Agreement.




E. Prior Obligation. Prior Obligation refers to my existing agreement described above in the
PRIOR OBLIGATION INFORMATION section, and any previous extensions, renewals, modifications or
substitutions of it.



 









 






	2.	 	BACKGROUND. You and I have previously entered into a Prior Obligation. As of the date of
this Modification, the outstanding, unpaid balance of the Prior Obligation is $3,114,171.72.
Conditions have changed
since the execution of the Prior Obligation instruments. In response, and for value
received, you and I agree to modify the terms of the Prior Obligation, as provided for in
this Modification.
	 
	3.	 	TERMS. The Prior Obligation is modified as follows:






A. Promise to Pay. My promise to pay is modified to read:




	 	(1)	 	PROMISE TO PAY. For value received, I promise to pay you or your
order, at your address, or at such other location as you may designate, amounts
advanced from time to time under the terms of this Loan up to the maximum
outstanding principal balance of $50,000,000.00 (Principal), plus interest from
the date of disbursement, on the unpaid outstanding Principal balance until this
Loan is paid in full and Lender has no further obligations to make advances to
you under this Loan.





          My Credit Limit has been increased by $41,000,000.00 with an initial Borrowing Base
established at $25,000,000.





B. Interest. Our agreement for the payment of interest is modified to read:




	 	(1)	 	INTEREST. Interest will accrue on the unpaid Principal balance of
this Loan at the rate of 7.125 percent (Interest Rate) until August 2, 2006,
after which time it may change as described in the Variable Rate subsection.






	 	(a)	 	Maximum Interest Amount. Any amount assessed or
collected as interest under the terms of this Loan will be limited to the
maximum lawful amount of interest allowed by state or federal law,
whichever is greater. Amounts collected in excess of the maximum lawful
amount will be applied first to the unpaid principal balance. Any
remainder will be refunded to me.
	 
	 	(b)	 	Statutory Authority. The amount assessed or
collected on this Loan is authorized by the Wyoming usury laws under Wyo.
Stat. § 40-14-358.
	 
	 	(c)	 	Accrual. Interest accrues using an Actual/360 days
counting method.
	 
	 	(d)	 	Variable Rate. The Interest Rate may change during
the term of this transaction.






	 	(1)	 	Index. Beginning with the first Change
Date, the Interest Rate will be based on the following index: the
base rate on corporate loans posted by at least 75% of the nation’s
30 largest banks known as the Wall Street Journal Prime Rate.






	 	 	 	The Current Index is the most recent index figure available on each
Change Date. You do not guaranty by selecting this Index, or the margin,
that the Interest Rate on the loan will be the same rate you charge on
any other loans or class of loans you make to me or other borrowers. If
this Index is no longer available, you will substitute a similar index.
You will give me notice of your choice.






	 	(2)	 	Change Date. Each date on which the
Interest Rate may change is called a Change Date. The Interest Rate
may change August 2, 2006 and daily thereafter.
	 
	 	(3)	 	Calculation of Change. On each Change
Date you will calculate the Interest Rate, which will be the Current
Index minus 1.125 percent. The result of this calculation will be
rounded to the nearest .001 percent. Subject to any limitations,
this will be the Interest Rate until the next Change Date. The new
Interest Rate will become effective on each Change Date. The
Interest Rate and other charges on the Loan will never exceed the
highest rate or charge allowed by law for the Loan.




 









 






	 	(4)	 	Effect of Variable Rate. A change in the
Interest Rate will have the following effect on the payments: The
amount of scheduled payments will change.






C. Maturity and Payments. The maturity and payment provisions are modified to read:




	 	(1)	 	PAYMENT. I agree to pay all accrued interest on the balance
outstanding from time to time in regular payments beginning August 31, 2006, then
on the same day of each month thereafter. A final payment of the entire unpaid
outstanding balance of Principal and Interest will be due July 31, 2010.






	 	 	 	Payments will be rounded to the nearest $.01. With the final payment I also agree to
pay any additional fees or charges owing and the amount of any advances you have made
to others on my behalf. Payments scheduled to be paid on the 29th,
30th or 31st day of a month that contains no such day will,
instead, be made on the last day of such month.






	 	(2)	 	Maturity. The maturity provision is modified to read:






	 	(a)	 	Maturity Date. Consistent with our existing periodic
payment arrangement, except any scheduled, final payment, I agree that the
entire outstanding balance of Principal and accrued interest is due on, or
before, July 31, 2010.






D. Fees and Charges. As additional consideration for your consent to enter into this
Modification Agreement, I agree to pay, or have paid these additional fees and charges:




	 	(1)	 	Nonrefundable Fees and Charges. The following fees are earned when
collected and will not be refunded if I prepay this Loan before the scheduled
maturity date.
	 
	 		 	• Loan. A(n) Loan fee of $58,000.00 payable from separate funds on or
before today’s date. (.25% of commitment less a credit of $4,500.00 paid on
the current facility.)






	4.	 	CONTINUATION OF TERMS. Except as specifically amended by this Modification, all of the terms
of the Prior Obligation shall remain in full force and effect.
	 
	5.	 	WAIVER. I waive all claims, defenses, setoffs, or counterclaims relating to the Prior
Obligation, or any document securing the Prior Obligation, that I may have. Any party to the
Prior Obligation that does not sign this Modification, shall remain liable under the terms of
the Prior Obligation unless released in writing by you.
	 
	6.	 	REASONS FOR MODIFICATION. THIS DEBT MODIFICATION IS TO:
(1) CHANGE THE INTEREST RATE TO WALL STREET JOURNAL PRIME MINUS 1.125%, ADJUSTING DAILY.
(2) EXTEND THE MATURITY DATE TO JULY 31, 2010.
(3) INCREASE THE CREDIT LIMIT OF THIS REVOLVING LINE OF CREDIT TO $50,000,000.00, WITH AN INITIAL
BORROWING BASE OF $25,000,000.00.
(4) TO ADD COVENANTS LISTED ON THE COMMERCIAL LOAN AGREEMENT AMENDMENT. EXHIBIT “B” NEW
COVENANTS.
	 
	7.	 	ADDITIONAL TERMS. A MORTGAGE ADDENDUM TO INCLUDE ADDITIONAL PROPERTIES TAKEN AS SECURITY IS
A PART OF THIS AGREEMENT AND ATTACHED. ANY THIRD PARTY LEGAL FEES IN EXCESS OF $5,000,00 WILL
BE PAID BY DOUBLE EAGLE PETROLEUM CO. THIS DEBT MODIFICATION AGREEMENT IS A CONTINUATION AND
SUBSTITUTION OF THAT PROMISSORY NOTE DATED JANUARY 3, 2000 AND ANY AMENDMENTS AND
MODIFICATIONS THERETO AND REPRESENTS A CONTINUATION OF THE INDEBTEDNESS EVIDENCED THEREBY.




 









 






	 	 	LOAN BALANCES REFERRED TO IN THIS AGREEMENT MAY BE THE BALANCES IN EFFECT AS OF THE DATE THIS
AGREEMENT WAS PREPARED. ALL TERMS AND CONDITIONS, EXCEPT AS SPECIFICALLY MODIFIED HEREIN, OF
THE PRIOR OBLIGATIONS ARE HEREBY RATIFIED AND CONFIRMED. CONSENT BY LENDER TO THIS
MODIFICATION DOES NOT WAIVE LENDER’S RIGHT TO REQUIRE STRICT PERFORMANCE OF THE PRIOR
OBLIGATIONS, AS MODIFIED, NOR
OBLIGATE LENDER TO MAKE ANY FUTURE MODIFICATIONS. BORROWER AFFIRMS THAT THE LENDER HAS FULLY
PERFORMED ITS OBLIGATIONS IN REGARD TO THE INDEBTEDNESS HEREBY BEING MODIFIED, AND THAT
BORROWER HAS NO DEFENSES TO PAYMENT OR RIGHT OF OFFSET AGAINST PAYMENTS OTHERWISE DUE.






	8.	 	SIGNATURES. By signing, I agree to the terms contained in this Modification. I also
acknowledge receipt of a copy of this Modification.
	 
	 	 	BORROWER:





	 	 	 	 	 	 	 	 	 
	 	 	DOUBLE EAGLE PETROLEUM CO.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
	 	 
	 	 	 	 	STEPHEN H. HOLLIS, PRESIDENT	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 
	 	 
	 	 	 	 	LONNIE BROCK, CHIEF FINANCIAL OFFICER	 	 







	 	 	LENDER:





	 	 	 	 	 	 	 	 	 
	 	 	AMERICAN NATIONAL BANK	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
	 	 
	 	 	 	 	DALLEN JUELFS, PRESIDENT	 	 






 









 








AUTHORIZATION

By Corporation





	1.	 	ENTITY CERTIFICATIONS. I, STEPHEN H. HOLLIS, PRESIDENT and LONNIE BROCK, CHIEF FINANCIAL
OFFICER certify that:






A. I am designated to act on behalf of DOUBLE EAGLE PETROLEUM CO., Federal Tax Identifying
Number 83-0214692 (Corporation).




B. I am authorized and directed to execute an original or a copy of this Authorization to
Financial Institution, and anyone else requiring a copy.




C. Corporation is properly formed and validly existing under the laws of Maryland and that
Corporation has the power and authority to conduct business and other activities as now being
conducted.




D. Corporation has the power and authority to adopt and provide this Authorization and to
confer the powers granted in this Authorization; the designated Agents have the power and
authority to exercise the actions specified in this Authorization; and Corporation properly
adopted these authorizations and appointed the Agents and me to act on its behalf.




E. Corporation will not use any trade or fictitious name without Financial Institution’s
prior written consent and will preserve Corporation’s existing name, trade names, fictitious
names and franchises.




F. Corporation will notify Financial Institution before reorganizing, merging, consolidating,
recapitalizing, dissolving or otherwise materially changing ownership, management or
organizational form. Corporation will be fully liable for failing to notify Financial
Institution of these material changes.






	2.	 	GENERAL AUTHORIZATIONS. I certify Corporation authorizes and agrees that:







A. American National Bank (Financial Institution) is designated to provide Corporation the
financial accommodations indicated in this Authorization.




B. All prior transactions obligating Corporation to Financial Institution by or on behalf of
Corporation are ratified by execution of this Authorization.




C. Any agent, while acting on behalf of Corporation, is authorized, subject to any expressed
restrictions, to make all other arrangements with Financial Institution which are necessary
for the effective exercise of the powers indicated within this Authorization.




D. The signatures of the Agents are conclusive evidence of this authority to act on behalf of
Corporation.




E. Unless otherwise agreed to in writing, this Authorization replaces any earlier related
Authorization and will remain effective until Financial Institution receives and records an
express written notice of its revocation, modification or replacement. Any revocation,
modification or replacement of this Authorization must be accompanied by documentation,
satisfactory to Financial Institution, establishing the authority for the change.




F. Corporation agrees not to combine proceeds from collateral securing any debts owed to
Financial Institution with unrelated funds.




G. Financial Institution may verify credit history of Corporation by obtaining a credit
report from a credit reporting agency or any other necessary means.



 









 






	3.	 	SPECIFIC AUTHORIZATIONS. The following persons (Agents) are authorized to act on behalf of
Corporation in fulfilling the purposes of this Authorization:





	 	 	 	 	 	 	 	 	 
	Name and Title	 	Signature	 	 	 	Facsimile Signature	 	 
	 
	 	 	 	 	 	 	 	 
	STEPHEN H. HOLLIS, PRESIDENT

	 	 

	 	 
	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	LONNIE BROCK, CHIEF FINANCIAL OFFICER

	 	 

	 	 
	 	 

	 	 





Corporation authorizes and directs the designated Agents to act, as indicated, on Corporation’s
behalf to:





A. Borrow money or obtain other credit or financial accommodation from Financial Institution
on behalf of and in the name of Corporation on the terms agreed to with Financial
Institution. The designated agents may execute and endorse promissory notes, acceptances or
other evidences of indebtedness.




B. Grant a security interest, lien or other encumbrance to Financial Institution in any or
all real or personal property that Corporation now owns or may acquire in the future for the
payment or performance of all debts, liabilities and obligations of every type and
description owed now or in the future by Corporation to Financial Institution.




This power may only be exercised by STEPHEN H. HOLLIS and LONNIE BROCK and requires 2
authorized signatures.




C. Receive and acknowledge receipt for funds, whether payable to the order of Corporation or
an Agent, without additional certification as to the use of the proceeds.




This power may only be exercised by STEPHEN H. HOLLIS and LONNIE BROCK and requires 2
authorized signatures.




D. Periodically amend, restructure, renew, extend, modify, substitute or terminate any
agreements or arrangements with Financial Institution that relate to this Authorization.




This power may only be exercised by STEPHEN H. HOLLIS and LONNIE BROCK and requires 2
authorized signatures.




E. Execute other agreements that Financial Institution may require, and perform or cause to
be performed any further action necessary to carry out the purposes of this Authorization.




This power may only be exercised by STEPHEN H. HOLLIS and LONNIE BROCK and requires 2
authorized signatures.



 









 






	4.	 	INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the
singular. The section headings are for convenience only and are not to be used to interpret
or define the terms of this Authorization.




SIGNATURES. By signing under seal, I certify and agree to the terms contained in this
Authorization on behalf of Corporation on August 1, 2006. I also acknowledge receipt of a copy of
this Authorization.





	 	 	AUTHORIZATION’S SIGNER:





	 	 	 	 	 	 	 	 	 	 
	 	 	DOUBLE EAGLE PETROLEUM CO.	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
	 	(Seal)
	 	 	 	 	STEPHEN H. HOLLIS, PRESIDENT	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	By
	 	 
	 	(Seal)
	 	 	 	 	LONNIE BROCK, CHIEF FINANCIAL OFFICER	 	 	 






Notary or Acknowledgment Here (Optional)





 









 








Double Eagle Petroleum Co. #7200001800

Part of Modification Agreement dated 08/01/06




Exhibit “A”

CURRENT COVENANTS





	1.	 	Annual audited financial statements will be received by March 31st of each year. Quarterly
(10Q’s) will be provided within 45 days of each quarter end.
	 
	2.	 	A Current Ratio of 1:1 will be maintained and calculated as follows: (cash + accounts
receivable + availability on the line of credit shall be equal to or greater than current
liabilities). Should the borrower fall out of compliance on this covenant, a period of six
months will be allowed to remedy the situation before the loan is considered to be in default.
This ratio will be reviewed on a quarterly basis. The remedy period begins as of the quarter
end being reviewed.
	 
	3.	 	No unencumbered oil and gas properties are to be pledged as security without American
National Bank’s written consent.
	 
	4.	 	The existing line of credit, loan #7200001800 may be utilized by American National Bank to
advance on any demands from third party beneficiaries up to an aggregate amount of $250,000.
This requirement includes, but is not limited to, Letter of Credit #338 in the amount of
$32,000, Letter of Credit #356 in the amount of $12,379.25, and Letter of Credit #358 in the
amount of $21,389. Demand can be made by American National Bank at any time. Availability
against this line of credit will be reduced by the sum of all outstanding Letters of Credit.
	 
	5.	 	The engineering reports will govern the proposed lendable amount under a 65% margined loan to
value. (65% of the NPV 10% using pricing allowed by bank policy). Annual independent
engineering will be required on or before March 31st of each year.
	 
	6.	 	Standard loan agreements as set forth in the original loan agreement dated 01-03-2000 will be
ongoing (see attached Exhibit “AI”).





Double Eagle Petroleum Co.




	 	 	 	 	 	 	 
	 

Stephen H. Hollis, President

	 	 
	 	 

Lonnie Brock, CFO
	 	 







 









 









Page 1 of 2




Double Eagle Petroleum Co. #7200001800

Part of Modification Agreement dated 08/01/06




Exhibit “B”

NEW COVENANTS





	1.	 	The next Borrowing Base Review will be conducted 12/06 and June and December of every year
thereafter.
	 
	2.	 	The annual review will be conducted each June in conjunction with the Borrowing Base review.
	 
	3.	 	There will be an annual fee invoiced of .125% on the committed amount as of August 1st
 of each year.
	 
	4.	 	An unused commitment fee equal to .375% per annum of the difference between the average
Borrowing Base and the average outstanding balance will be invoiced quarterly. Example:
$10,000;000 average unused for three months x .375%/4 = an additional fee of $9,375 for the
quarter.
	 
	5.	 	A monthly summary of gas and oil production, operating expenses and budget variances as
prepared in-house will be provided to American National Bank within 45 days of each month end.
	 
	6.	 	The negative pledge agreement (#3 of Exhibit “A”) will include the assets of Eastern Washakie
Midstream, LLC.
	 
	7.	 	Hedging or forward sales in excess of 85% of the proved developed and producing oil and gas
production will not be allowed without American National Bank’s written consent.
	 
	8.	 	Stockholder’s equity will not drop below $22,500,000 as determined from quarterly financials.
A six month period from the end of the quarter will be provided to remedy this before it is
considered a breach of the covenant.
	 
	9.	 	At least 80% of the proved producing properties will continue to be held as security at
American National Bank as determined by annual reviews each June.
	 
	10.	 	The bank account officer will conduct a field inspection of the Cow Creek, Doty Mountain and
the Pipeline owned by Eastern Washakie Midstream, LLC (Rawlins and Baggs) areas prior to
funding this credit facility in excess of $9,000,000 and annually thereafter.
	 
	11.	 	Double Eagle Petroleum Co. will continue using American National Bank for their primary
operating accounts during the term of this commitment.





Initials ______





 









 








Page 2 of 2

Exhibit “B”



Double Eagle Petroleum Co. #7200001800

Part of Modification Agreement dated 08/01/06





	12.	 	Any assets sold in excess of $500,000 will require notification to American National Bank.
Asset sales in excess of $1,000,000 will require written consent from American National Bank
	 
	13.	 	Hedging services as provided by the Bank of Oklahoma will be available to Double Eagle
Petroleum Co. however this is not a requirement of this credit facility. General terms and
conditions of this “‘Hedging Service” are set forth in Exhibit “B1”. In the event Double
Eagle elects to exercise an agreement for these services with Bank of Oklahoma, the following
requirements will be made:






	 	a.	 	(Cross Default) A breach by the Borrower of any terms of any ISDA
Master Agreement or any schedules or annexes thereto (collectively the “ISDA
Agreement”) shall constitute a breach of the terms the Credit Documents (as defined in
the ISDA Agreement).
	 
	 	b.	 	(Early Termination) For avoidance of doubt and notwithstanding any other
provisions contained herein or contained in the ISDA Agreement, in addition to any
other remedies to which the Bank may be entitled, upon Termination (as defined in the
ISDA Agreement) of the ISDA Agreement, the Bank shall have the right to (i) immediately
liquidate all Specified Transactions between the Borrower and the Bank and (ii) setoff
against obligations owed by the Borrower to the Rank any amounts owed the Borrower by
the Bank.
	 
	 	c.	 	(Perfecting Collateral) Any obligation owed by the Borrower to the Bank
arising under the ISDA Agreement shall (i) be deemed to be an advance against the line
of credit established by the Credit Documents for the purpose of determining the amount
of available credit remaining upon which the Borrower may draw, if any; and, (ii) upon
notice to the Borrower by the Bank, shall also be deemed funds borrowed under the
Credit Documents.





Double Eagle Petroleum Co.




	 	 	 	 	 	 	 
	 

Stephen H. Hollis, President

	 	 
	 	 

Lonnie Brock, CFO
	 	 







 









 








Double Eagle Petroleum Co. #7200001800

Part of Modification Agreement dated 08/01/06




Exhibit “Bl”




HEDGING




1.0 Definitions:




     “Borrower and/or Bank of Oklahoma National Association (“BOK”) Hedging Obligations”
means Hedging Obligations incurred by Borrower to BOK in connection with any one or more hedging
transactions of Borrower arranged through BOK and as to which BOK is acting as the counterparty.



     “Extended Hedging Repayment Date” means, with respect to any Borrower/BOK Hedging
Obligation payable on any particular Hedging Settlement Date, such later date (if any such later
date is agreed to by the parties in the relevant confirmation or other document delivered pursuant
to or in connection with the TSDA Agreement) to which Borrower’s obligation to make payment or
delivery is extended.



     “Hedging Loan” has the meaning given such term in Section 1.1 below.



     “Hedging Obligations” means, with respect to any Person, all liabilities of such
Person under commodity hedge, commodity swap, exchange, collar or cap agreements, fixed price
agreements and all other agreements and arrangements designed to protect such Person against
changes in interest rates and currency exchange rates and fluctuations in the price of oil, gas,
hydrocarbons or other commodities.



     “Hedging Settlement Date” means, with respect to any Borrower/BOK Hedging Obligation,
the first date upon which, under the ISDA Agreement (and without consideration of any extensions
granted thereunder or in connection therewith), payment or delivery is due from Borrower to BOK for
any amount payable in respect of such Borrower/BOK Hedging Obligation.



     “ISDA Agreement” means an ISDA Master Agreement hereafter entered into between
Borrower and BOK governing hedging transactions arranged by BOK on behalf of Borrower and as to
which BOK is named as the counterparty.



     “Maturity Date (Hedging)” means the earlier of: (a) August 1, 2006, or (b) such date
on which the Hedging Loan is due and payable in full by reason of the occurrence of an Event of
Default, provided that, upon the request of Borrower, BOK may, in its sale discretion, extend said
date to a date not later than December 31, 2012 by giving written notice of such extension to
Borrower, but nothing contained in this Agreement, the Note or any other Loan Document shall be
deemed to commit or require BOK to grant any such extension.



     “Maximum Hedging Amount” means $10,000,000, as such amount may be increased or
decreased from time to time in the sole discretion of BOK; provided that nothing contained in this
Agreement, the ISDA Agreement or any other Loan Document shall be deemed to commit or require BOK
to grant any increase in such amount or to retrain from decreasing such amount.



 









 





     Section 1.1. The Hedging Loan. (a) Subject to the other terms and conditions of this
Agreement, BOK agrees to make short-ten extensions of credit to Borrower, each such credit
extension to be in an amount equal to the amount of the applicable Borrower/BOK Hedging Obligation
and for the time period from the applicable Hedging Settlement Date for that Borrower/BOK Hedging
Obligation to the Extended Hedging Repayment Date for that Borrower/BOK Hedging Obligation.



     (b) BOK shall not have any obligation to make any credit extension to Borrower in connection
with any Borrower/BOK Hedging Obligation: (1) which arises on or after the Maturity Date (Hedging),
(2) which relates to a hedging transaction not arranged through BOK or as to which BOK is not
acting as the counterparty, or (3) if, immediately after such credit extension, the aggregate
amount of all credit extensions. from BOK to Borrower in connection with Borrower/BOK Hedging
Obligations would exceed the Maximum Hedging Amount



     (c) Each credit extension from BOK to Borrower in connection with Borrower/BOK Hedging
Obligations pursuant to the terms of this Section 1.1 shall be entitled to all benefits of the
Security Documents and shall be subject to all terms of this Agreement and any and all other
applicable Loan Documents.



     (d) Any and all credit extensions from BOK to Borrower in connection with Borrower/BOK Hedging
Obligations pursuant to the terms of this Section 1.1 shall be herein collectively referred to as
the “Hedging Loan”.



     Section 1.2. The Note; ISDA Agreement; Interest. (a) Borrower’s obligation to repay
the Revolving Loan, with interest thereon, shall be evidenced by the Note. Borrower’s obligation
to repay the Hedging Loan, with interest, if any, thereon, shall be evidenced by the ISDA
Agreement. In the event any provision contained in the Note or the ISDA Agreement conflicts with
a provision contained in this Agreement, the provisions of this Agreement shall control.




     (b)(l) Except as otherwise provided in (3) below, interest on the Revolving Loan shall
accrue at a fluctuating annual rate equal to the Prime Rate plus the Prime Rate Spread. (2)
Except as otherwise provided in (3) below, interest on the Hedging Loan shall accrue as
described in the ISDA Agreement; provided that, as to any Borrower/BOK Hedging Obligation,
Borrower shall not be required to pay interest for the time period from the Hedging
Settlement Date for that Borrower/BOK Hedging Obligation to the Extended Hedging Repayment
Date for that Borrower/BOK Hedging Obligation. (3) From and after the occurrence, and during
the continuance, of any Event of Default hereunder, interest on the Loans shall accrue, from
the date of occurrence of the Event of Default until the date the Event of Default is cured,
at a fluctuating annual rate equal to the Prime Rate plus three percentage points per annum.



     (c) If BOK determines that market conditions so warrant, upon notice from BOK to Borrower,
Borrower shall pay to BOK a margin use fee in an amount of up to four percent per annum of the
margin BOK is required to post in connection with hedging transactions arranged by BOK for the
benefit of Borrower.



 









 





	 	 	 	 	 	 	 	 	 	 	 
	LOAN NUMBER

	 	LOAN NAME
	 	ACCT. NUMBER
	 	AGREEMENT DATE
	 	INITIALS
	 
	 	 	 	 	 	 	 	 	 	 
	7200001800

	 	Double Eagle
Petroleum and
Mining Co.
	 	 	0109	 	 	01/03/00
	 	CB
	 
	 	 	 	 	 	 	 	 	 	 
	NOTE AMOUNT

	 	INDEX (w/Margin)
	 	RATE
	 	MATURITY DATE
	 	LOAN PURPOSE
	 
	 	 	 	 	 	 	 	 	 	 
	$3,000,000.00

	 	Wall Street Journal

Prime
	 	 	8.5	%	 	01/03/01
	 	Commercial






COMMERCIAL LOAN AGREEMENT




Revolving Draw Loan



DATE AND PARTIES. The date of this Commercial Loan Agreement (Agreement) is January 3, 2000. The
parties and their addresses are as follows:




     LENDER:


AMERICAN NATIONAL BANK

201 East 2nd, Suite 25

Casper, Wyoming 82601




     BORROWER:


DOUBLE EAGLE PETROLEUM AND MINING CO.

a Wyoming Corporation

777 Overland Trail

Casper, Wyoming 82601



1. DEFINITIONS. For the purposes of this Agreement, the following terms have the following
meanings.




     A. Accounting Terms. In this Agreement, any accounting terms that are not specifically defined
will have their customary meanings under generally accepted accounting principles.



     B. Insiders. Insiders include those defined as insiders by the United States Bankruptcy Code,
as amended; or to the extent left undefined, include without limitation any officer, employee,
stockholder or member, director, partner, or any immediate family member of any of the foregoing,
or any person or entity which, directly or indirectly, controls, is controlled by or is under
common control with me.



     C. Loan. The Loan refers to this transaction generally, including obligations and duties
arising from the terms of all documents prepared or submitted for this transaction.



     D. Pronouns. The pronouns “I”, “me” and “my” refer to every Borrower signing this Agreement,
individually or together, and their heirs, successors and assigns. “You” and “your” refers to the
Loan’s lender, any participants or syndicators, or any person or company that acquires an interest
in the Loan and their successors and assigns.



     E. Property. Property is any property, real, personal or intangible, that secures my
performance of the obligations of this Loan.



 









 




2. MULTIPLE ADVANCES. In accordance with the terms of this Agreement and other Loan documents, you
will provide me with a revolving draw note and the maximum outstanding principal balance will not
exceed $3,000,000.00 (Principal).



3. ADDITIONAL TERMS ON ADVANCES. Further advances under said Promissory Note will be made upon the
request of the borrower(s) and approval of a Loan Officer of the Lender.



4. OBLIGATORY ADVANCES. You will make all Loan advances subject to this Agreement’s terms and
conditions.



5. REQUESTS FOR ADVANCES. I authorize you to honor a request for an advance, made in writing or by
telephone, from me or any persons I authorize to make these requests on my behalf until you receive
my written revocation of this authority). My requests for on advance must specify the advance’s
requested amount and date and be accompanied with ail agreements, documents, end instruments that
you normally require for the particular type of Loan.



Requests for an advance received by you from me or my authorized agent before 5:00 pm will be made
on any day that you are open for business, on the day of which the advance is requested, in the
amount of at least $100,00. Advances will be made no more frequently than daily.



My requests are a warranty that I am in compliance with all the Loan documents. I will indemnify
you and hold you harmless for your reliance on any request for advances that you reasonably believe
to be genuine. I will indemnify you and hold you harmless when the person making any request
represents that I authorized this person to request an advance even when this person is
unauthorized or this person’s signature is not genuine.



On my fulfillment of this Agreement’s terms and conditions, you will disburse the advance in any
manner as you and I agree. Your records will be conclusive evidence as to the amount of advances,
the Loan’s unpaid principal balances and the accrued interest. A check or other charge presented
against this account in excess of the balance may be treated by you, at your option, as a request
for an advance under this Agreement. Any payment by you of any check, share draft or other charge
may, at your option, constitute an advance on the Loan to me.



6. MATURITY DATE. I agree to fully repay the Loan by January 3, 2001.



7. CONDITIONS. I will satisfy all of the following conditions before you either issue any
promissory notes or make any advances under this Agreement.




          A. No Default. There has not been a default under this Agreement or other Loan documents nor
would a default result from making the Loan or any advance.




          B. Information. You have received all documents, information, certifications and warranties as
you may require, all properly executed, if appropriate, on forms acceptable to you. This includes,
but is not limited to, the documents and other items listed in the Loan Checklist Report which is
hereby incorporated by reference into this Agreement.




          C. Inspections. You have made all inspections that you consider necessary and are satisfied
with this inspection.




          D. Conditions and Covenants. I will have performed and complied with all conditions required
for an advance and all covenants in this Agreement and any other Loan documents.




 









 








          E. Warranties and Representations. The warranties and representations contained in this
Agreement are true and correct at the time of making the requested advance.




          F. Financial Statements. My most recent financial statements and other financial reports,
delivered to you, are current, complete, true and accurate in all material respects and fairly
represent my financial condition.




          G. Bankruptcy Proceedings. No proceeding under the United States Bankruptcy Code has been
commenced by or against me or any of my affiliates.



8. WARRANTIES AND REPRESENTATIONS. I make to you the following warranties and representations which
will continue as long as this Loan is in effect, except when this Agreement provides otherwise.




          A. Power. I am duly organized, and validly existing and in good standing in all jurisdictions
in which I operate. I have the power and authority to enter into this transaction and to carry on
my business or activity as it is now being conducted and, as applicable, am qualified to do so in
each jurisdiction in which I operate.




          B. Authority. The execution, delivery and performance of this Loan and the obligation
evidenced by the Note are within my powers, have been duly authorized, have received all necessary
governmental approval, will not violate any provision of law, or order of court or governmental
agency, and will not violate any agreement to which I am a party or to which I am or any of my
property is subject.




          C. Name and Place of Business. Other than previously disclosed in writing to you I have not
changed my name or principal place of business within the last 10 years and have not used any other
trade or fictitious name. Without your prior written consent, I do not and will not use any other
name and will preserve my existing name, trade names and franchises.




          D. Loan Purpose. This Loan is for Commercial purposes.




          E. No Other Liens. I own or lease all property that I need to conduct my business and
activities. I have good and marketable title to all property that I won or lease. All of my
Property is free and clear of all liens, security interests, encumbrances and other adverse claims
and interests, except those to you or those you consent to in writing.




          F. Compliance With Laws. I am not violating any laws, regulations rules, orders, judgments or
decrees applicable to me or my property, except for those which I am challenging in good faith
through proper proceedings after providing adequate reserves to fully pay the claim and its
challenge should I lose.




          G. Legal Dispute. There are no pending or threatened lawsuits, arbitrations or other
proceedings against me or my property that singly or together may materially and adversely affect
my property, operations, financial condition, or business.




          H. Adverse Agreements. I am not a party to, nor am I bound by, any agreement that is now or
is likely to become materially adverse to my business, property or operations.




          I. Other Claims. There are no outstanding claims or rights that would conflict with the
execution, delivery or performance by me of the terms and conditions of this Agreement or the other
Loan documents. No outstanding claims or rights exist that may result in a lien on the Property,
the Property’s proceeds and the proceeds of proceeds, except liens that were disclosed to and
agreed to by you in writing.




 









 








          J. Solvency. I am able to pay my debts as they mature, my assets exceed my liabilities and I
have sufficient capital for my current and planned business and other activities. I will not become
insolvent by the execution or performance of this Loan.



9. FINANCIAL STATEMENTS. I will prepare and maintain my financial records using consistently
applied generally accepted accounting principles then in effect. I will provide you with financial
information in a form that you accept and under the following terms.




          A. Certification. I represent and warrant that any financial statements that I provide you
fairly represents my financial condition for the stated periods, is current, complete, true and
accurate in and in all material respects, includes all of my direct or contingent liabilities and
there has been no material adverse change in my financial condition, operations or business since
the date the financial information was prepared.




          B. Frequency. Annually, I will provide to you my financial statements, tax returns, annual
internal audit reports or those prepared by independent accountants as soon as available or at
least within 75 days after the close of each of my fiscal years. Any annual financial statements
that I provide you will be compiled statements.





               (1) Interim Financial Reports. Each fiscal quarter, I will provide to you my financial
statements, internal audit reports or those prepared by independent accountants, tax
reports, statements of cash flow, budgets and forecasts, certificates and schedules of
Property as soon as available or at least within 60 days after the close of this business
period. Any interim financial statements that I provide you will be compiled statements.



          C. SEC Reports. I will provide you with true and correct copies of all reports, notices or
statements that I provide to the Securities and Exchange Commission, any securities exchange or my
stockholders, owners, or the holders of any material indebtedness as soon as available or at least
within 60 clays after issuance.




          D. Requested Information. I will provide you with any other information about my operations,
financial affairs and condition within 60 days after your request.




          E. Additional Financial Statements Term. During the term of the loan I will provide the
following information within the timeframes outlined: (1) Quarterly 10-Q statements shall be due to
the Lender within 60 days following each quarter end. (2) Annual 10-K statements shall be due to
the Lender within 75 days following fiscal year end.



10. COVENANTS. Until the Loan and all related debts, liabilities and obligations are paid and
discharged, I will comply with the following terms, unless you waive compliance in writing.




          A. Participation. I consent to you participating or syndicating the Loan and sharing any
information that you decide is necessary about me and the Loan with the other participants or
syndicators.




          B. Inspection. Upon reasonable notice I will permit you or your agents to enter any of my
premises and any location where my Property is located during regular business hours to do the
following.





               (1 ) You may inspect, audit, check, review and obtain copies from my books, records,
journals, orders, receipts, and any correspondence and other business related data,




               (2) You may discuss my affairs, finances and business with anyone who claims to be my
creditor.



 









 






               (3) You may inspect my Property, audit for the use and disposition of the Property’s
proceeds and proceeds of proceeds; or do whatever you decide is necessary to preserve and
protect the Property and your interest in the Property.


After prior notice to me, you may discuss my financial condition and business operations with my
independent accountants, if any, or my chief financial officer and I may be present during these
discussions. As long as the Loan is outstanding, I will direct all of my accountants and auditors
to permit you to examine my records in their possession and to make copies of these records. You
will use your best efforts to maintain the confidentiality of the information you or your agents
obtain, except you may provide your regulator, if any, with required Information about my financial
condition, operation and business or that of my parent, subsidiaries or affiliates.




          C. Business Requirements. I will preserve and maintain my present existence and good standing
in the jurisdiction where I am organized and all of my rights, privileges and franchises. I will do
all that is needed or required to continue my business or activities as presently conducted, by
obtaining licenses, permits and bonds everywhere I engage in business or activities or own, lease
or locate my property. I will obtain your prior written consent before I cease my business or
before I engage in any new line of business that is materially different from my present business.




          D. Compliance with Laws. I will not violate any laws. regulations, rules, orders, judgments or
decrees applicable to me or my Property, except for those which I challenge in good faith through
proper proceedings after providing adequate reserves to fully pay the claim and its appeal should I
lose. Laws include without limitation the Federal Fair Labor Standards Act requirements for
producing goods, the federal Employee Retirement income Security Act of 1974’s requirements for the
establishment, funding and management of qualified deferred compensation plans for employees,
health and safety laws, environmental laws, tax laws, licensing and permit laws. On your request, I
will provide you with written evidence that I have fully and timely paid my taxes, assessments and
other governmental charges levied or imposed on me, my income or profits and my property. Taxes
include without limitation sales taxes, use taxes, personal property taxes, documentary stamp
taxes, recordation taxes, franchise taxes, income taxes. withholding taxes, FICA taxes and
unemployment taxes. I will adequately provide for the payment of these taxes, assessments and other
charges that have accrued but are not yet due and payable.




          E. New Organizations. I will obtain your written consent and any necessary changes to the Loan
documents before I organize or participate in the organization of any entity, merge into or
consolidate with anyone, permit anyone else to merge into me, acquire all or substantially all of
the assets of anyone else or otherwise materially change my legal structure, management, ownership
or financial condition.




          F. Dealings with Insiders. I will not purchase, acquire or lease any property or services
from, or sell, provide or lease any property or services to, or permit any outstanding loans or
credit extensions to, or otherwise deal with, any Insiders except as required under contracts
existing at the time I applied for the Loan and approved by you or as this Agreement otherwise
permits. I will not change or breach these contracts existing at Loan application so as to cause an
acceleration of or an increase in any payments due.




          G. Other Debts. I will pay when due any and all other debts owed or guaranteed by me and will
faithfully perform, or comply with all the conditions and obligations imposed on me concerning the
debt or guaranty.




          H. Other liabilities. I will not incur, assume or permit any debt evidenced by notes, bonds or
similar obligations, except: debt in existence on the date of this Agreement and fully disclosed to
you; debt subordinated in payment to you on conditions and terms acceptable to you; accounts
payable incurred in the ordinary course of my business and paid under customary trade terms or
contested in good faith with reserves satisfactory to you.




 









 








          I. Notice to You. I will promptly notify you of any material change in my financial condition,
of the occurrence of a default under the terms of this Agreement, or a default by me under any
agreement between me and any third party which materially and adversely effects my property,
operations, financial condition or business.




          J. Certification of No Default. On your request, my chief financial officer or my independent
accountant will provide you with a written certification that to the best of their knowledge no
event of default exists under the terms of this Agreement or the other Loan documents, and that
there exists no other action, condition or event which with the giving of notice or lapse of time
or both would constitute a default. As requested, my chief financial officer or my independent
accountant will also provide you with computations demonstrating compliance with any financial
covenants and ratios contained in this Agreement. If an action, condition or event of default does
exist, the certificate must accurately and fully disclose the extent and nature of this action,
condition or event and state what must be done to correct it.




          K. Use of Loan Proceeds. I will not permit the loan proceeds to be used to purchase, carry,
reduce, or retire any loan incurred to purchase or carry any margin stock.




          L. Dispose of No Assets. Without your prior written consent or as the Loan documents permit, I
will not sell, lease, assign, transfer, dispose of or otherwise distribute all or substantially all
of my assets to any person other than in the ordinary course of business for the assets’
depreciated book value or more.




          M. No Other Liens. I will not create, permit or suffer any lien or encumbrance upon any of my
properties for or by anyone, other than you, except for nonconsensual liens imposed by law arising
out of the ordinary
course of business on obligations that are not overdue or which I am contesting in good faith
after making appropriate reserves; valid purchase money security interests on personal property; or
any other liens specifically agreed to by you in writing.




          N. Guaranties. I will not guaranty or become liable in any way as surety, endorser other than
as endorser of negotiable instruments in the ordinary course of business) or accommodation endorser
or otherwise for the debt or obligations of any other person or entity, except to you or as you
otherwise specifically agree in writing.




          O. No Default under Other Agreements. I will not allow to occur, or to continue unremedied,
any act, event or condition which constitutes a default, or which, with the passage of time or
giving of notice, or both, would constitute a default under any agreement, document, instrument or
undertaking to which I am a party or by which I may be bound.




          P. Legal Disputes. I will promptly notify you in writing of any threatened or pending
lawsuit, arbitration or other proceeding against me or any of my property, not identified in my
financial statements, or that singly or together without proceedings may materially and adversely
affect my property, operations, financial condition or business. I will use my best efforts to
bring about a favorable and speedy result of any of these lawsuits, arbitrations or other
proceedings.




          Q. Other Notices. I will immediately provide you with any information that may materially and
adversely affect my ability to perform this Agreement and of its anticipated effect.




          R. No Change in Capital. I will not release, redeem, retire, purchase or otherwise acquire,
directly or indirectly, any of my capital stock or other equity security or partnership interest,
or make any change in my capital structure, except to the extent required by any agreements signed
prior to this Agreement and disclosed to you or with your prior written consent.




 









 








          S. Loan Obligations. I will make full and timely payment of all principal and interest
obligations, and comply with the other terms and agreements contained in this Agreement and in the
other Loan documents.




          T. Insurance. I will obtain and maintain insurance with insurers, in amounts and coverages
that are acceptable to you and customary with industry practice. This may include without
limitation insurance policies for public liability, fire, hazard and extended risk, workers
compensation, and, at your request, business interruption and/or rent loss insurance. At your
request, I will deliver to you certified copies of all of these insurance policies, binders or
certificates. I will obtain and maintain a mortgagee or loss payee endorsement for you when these
endorsements are available, I will immediately notify you of cancellation or termination of
insurance, I will require all insurance policies to provide you with at least 10 days prior written
notice to you of cancellation or modification. I consent to you using or disclosing information
relative to any contract of insurance required by the Loan for the purpose of replacing this
insurance. I also authorize my insurer and you to exchange all relevant information related to any
contract of insurance required by any document executed as part of this Loan.




          U. Property Maintenance. I will keep all tangible and intangible property that I consider
necessary or useful in my business in good working condition by making all needed repairs,
replacements and improvements and by making all rental, lease or other payments due on this
property,




          V. Property Loss. I will immediately notify you, and the insurance company when appropriate,
of any material casualty, loss or depreciation to the Property or to my other property that affects
my business.




          W. Additional Covenants. (1) Borrower will provide to lender semi-annual production reports
(as of July 1st and January 1st; due to Lender thirty (30) days following) on the monthly
production of the oil fields. Included with the production reports shall be a listing of the
monthly lease operating expenses associated with production. The production reports will be
completed by a petroleum engineer that meets the lender’s requirements, as determined by Lender,
for a qualified evaluation engineer. (2) During the term of this Promissory Note Borrower will
maintain a minimum Debt to Worth ratio of 1:1X. (3) During the term of this
Promissory Note the maximum loan amount will not exceed the lesser of Three Million Dollars
($3,000,000), or the Borrowing Base. The initial commitment and Borrowing Base amount is One
Million Four Hundred Thousand Dollars ($1,400,000,00). Committment is defined as the lesser of the
face amount of the Promissory Note or the Borrowing Base as determined by the Lender from time to
time. The Lender, in accordance with its normal credit approval process, must approve increases in
the Borrowing Base Amount before the Borrower may use any increase In the Commitment Amount. (4)
At the time Lender and Borrower agree to the release of certain wells, Borrower will provide Lender
with full legal descriptions specific to the 1/4 section for release purposes.



11. DEFAULT. I will be in default if anyone or more of the following occur.




          A. Payments. I fail to make a payment in full when due.




          B. Insolvency or Bankruptcy. I make an assignment for the benefit of creditors or become
insolvent, either because my liabilities exceed my assets or I am unable to pay my debts as they
become due; or I petition for protection under federal, state or local bankruptcy, insolvency or
debtor relief laws, or am the subject of a petition or action under such laws and fail to have the
petition or action dismissed within a reasonable period of time not to exceed 60 days.




          C. Business Termination, I merge, dissolve, reorganize, end my business or existence, or a
partner or majority stockholder dies or is declared incompetent.




 









 








          D. Failure of Condition or Term. I fail to pay, or perform any condition or to keep any
promise or covenant on this or any debt or agreement I have with you.




          E. Misrepresentation. I make any verbal or written statement or provide any financial
information that is untrue, inaccurate, or conceals a material fact at the time it is made or
provided.




          F. Judgment. I fail to pay or discharge any judgment against me for the payment of money,
unless, within 10 days of its entry, the judgment is satisfied or a stay of enforcement is granted
pending an appeal.




          G. Forfeiture. The Property is used in a manner or for a purpose which threatens confiscation
by a legal authority.




          H. Name Change. I change my name or assume an additional name without notifying you before
making such a change.




          I. Property Transfer. I transfer all or a substantial part of my money or property.




          J. Material Change. Without first notifying you, there is a material change in my business,
including ownership, management and financial conditions.




          K. Property Loss. The Property is damaged, destroyed or stolen.




          L. Additional Security or Guaranty. I fail to provide any additional security or guaranty that
you may require.




          M. Insurance. I fail to keep the Property insured, if required.




          N. Other Instruments. A default occurs under the terms of any instrument evidencing or
pertaining to the Loan,




          0. Insecurity. Anything else happens that causes you to reasonably believe that you will have
difficulty collecting the amount I owe you or significantly impairs the value of the Property.



12. REMEDIES. After I default, and after you give any legally required notice and opportunity to
cure the default, you may at your option do anyone or more of the following.




          A. Acceleration. You may make all or any part of the amount owing by the terms of the Loan
immediately due.




          B. Additional Security. You may demand security, additional security, or additional parties to
be obligated to pay the Loan.




          C. Sources. You may use any and all remedies you have under state or federal law or in any
instrument securing the Loan.




          D. Insurance Benefits. You may make a claim for any and all insurance benefits or refunds that
may be available on my default.




          E. Payments Made On My Behalf. Amounts advanced on my behalf will be immediately due and may
be added to the balance owing under the terms of the Loan, and accrue interest at the highest
post-maturity interest rate.




 









 








          F. Termination. You may terminate my right to obtain advances and may refuse to make any
further extensions of credit.




          G. Attachment. You may attach or garnish my wages or earnings.




          H. Set-Off. You may use the right of set-off. This means you may set-off any amount due and
payable under the terms of the Loan against any right I have to
receive money from you. My right to
receive money from you includes any deposit or share account balance I have with you; any money
owed to me on an item presented to you or in your possession for collection or exchange; and any
repurchase agreement or other non-deposit obligation. “Any amount due and payable under the terms
of the Loan” means the total amount to which you are entitled to demand payment under the terms of
the Loan at the time you set-off.




          Subject to any other written contract, if my right to receive money from you is also owned by
someone who has not agreed to pay the Loan, your right of set-off will be limited to my
proportionate interest in the obligation. In the absence of reasonable proof of net contributions,
my proportionate interest equals the amount of such obligation divided equally by all parties
having present rights to receive such money.




          Your right of set-off does not apply to an account or other obligation where my rights arise
only in a representative capacity. It also does not apply to any Individual Retirement Account or
other tax-deferred retirement account.




          You will not be liable for the dishonor of any check or share draft when the dishonor occurs
because you set-off against any of my accounts. I agree to hold you harmless from any such claims
arising as a result of your exercise of your right of set-off.




          I. Waiver. Except as otherwise required by law, by choosing anyone or more of these remedies
you do not give up your right to use any other remedy. You do not waive a default if you choose
not to use a remedy. By electing not to use any remedy, you do not waive your right to later
consider the event a default and to use any remedies if the default continues or occurs again.



13. COLLECTION EXPENSES AND ATTORNEYS’ FEES. On or after Default, to the extent permitted by law, I
agree to pay all expenses of collection, enforcement or protection of your rights and remedies
under this Agreement. Expenses include, but are not limited to, attorneys’ fees, court costs and
other legal expenses. These expenses are due and payable immediately. If not paid immediately,
these expenses will bear interest from the date of payment until paid in full at the highest
interest rate in effect as provided for in the terms of this Loan. All fees and expenses will be
secured by the Property I have granted to you, if any. To the extent permitted by the
United States Bankruptcy Code, I agree to pay the reasonable attorneys’ fees you incur to collect
this debt as awarded by any court exercising jurisdiction under the Bankruptcy Code.



14. APPLICABLE LAW. This Agreement is governed by the laws of Wyoming, the United States of
America and to the extent required, by the laws of the jurisdiction where the Property is located.
In the event of a dispute, the exclusive forum, venue and place of jurisdiction will be in Wyoming,
unless otherwise required by law.



15. JOINT AND INDIVIDUAL LIABILITY AND SUCCESSORS. My obligation to pay this Loan is independent of
the obligation of any other person who has also agreed to pay it. You may sue me alone, or anyone
else who is obligated on this Loan, or any number of us together, to collect this Loan. Extending
this Loan or new obligations under this Loan, will not affect my duty under this Loan and I will
still be
obligated to pay this Loan. The duties and benefits of this Loan will bind and benefit
the successors and assigns of you and me.




 









 







16. AMENDMENT, INTEGRATION AND SEVERABILITY. This Agreement may not be amended or modified by oral
agreement. No amendment or modification of this Agreement is effective unless made in writing and
executed by you and me. This Agreement is the complete and final expression of the understanding
between you and me. If any provision of this Agreement is unenforceable, then the unenforceable
provision will be severed and the remaining provisions will still be enforceable.



17.
INTERPRETATION. Whenever used, the singular includes the plural and the plural includes the
singular. The section headings are for convenience only and are not be used to interpret or define
the terms of this Agreement.



18. NOTICE, FINANCIAL REPORTS AND ADDITIONAL DOCUMENTS. Unless otherwise required by law, any
notice will be given by delivering it or mailing it by first class mail to the appropriate party’s
address listed in the DATE AND PARTIES section, or to any other address designated in writing.
Notice to one party will be deemed to be notice to all parties. I will inform you in writing of
any change in my name, address or other application information. I will provide you any financial
statement or information you request. All financial statements and information I give you will be
correct and complete. I agree to sign, deliver, and file any additional documents or
certifications that you may consider necessary to perfect, continue, and preserve my obligations
under this Loan and to confirm you lien status on any property. Time is of the essence.



19. SIGNATURES. By signing, I agree to the terms contained in this Agreement. I also acknowledge
receipt of a copy of this Agreement.




 









 





	 	 	 	 	 
	BORROWER:	 	 
	 
	 	 	 	 
	 

	 	Double Eagle Petroleum and Mining Co.	 	 
	 
	 	 	 	 
	 

	 	 

Stephen H. Hollis, President
	 	 
	 
	 	 	 	 
	 

	 	 

D. Steven Degenfelder, Vice President
	 	 
	 
	 	 	 	 
	LENDER:	 	 
	 
	 	 	 	 
	 

	 	American National Bank	 	 
	 
	 	 	 	 
	 

	 	 

Cary Brus, Vice President