Document:

Unassociated Document

    
      

    

    Exhibit
      10.3

    

    RATIFICATION
      AND ASSUMPTION

    

    

    This
      Ratification and Assumption Agreement ("Agreement") is by and between Gastar
      Exploration Ltd. and Gastar Exploration Texas LP (collectively the "Sellers")
      and Navasota Resources, LP (the "Buyer").

    

    Sellers
      have previously entered into a Letter of Intent dated April 27, 2007 (the "LOI")
      with Chesapeake Energy Corporation and Chesapeake Exploration Limited
      Partnership (collectively called "Chesapeake"), a copy of which is attached
      hereto as Exhibit "A", which outlines the terms and conditions for the sale
      of (i) 10,000,000 shares of Gastar Exploration Ltd. Common stock and (ii) all
      of
      the Sellers' interest in the oil and gas leases described in Exhibit "A"
      attached to the LOI (the "Leases").

    

    By
      letter
      dated April 27, 2007, Sellers notified the Buyer of the terms and conditions
      of
      the LOI, that Buyer held a preferential right to purchase the Leases on the
      terms and conditions of the LOI, and requested that Buyer notify the Sellers
      as
      to whether the Buyer is electing to exercise the preferential
      right.

    

    By
      letter
      dated May 7, 2007, from the Buyer to the Sellers, the Buyer notified the Sellers
      that it had elected to exercise the preferential right (“Buyer’s Election
      Notice”). By letter dated May 7, 2007, from the Sellers to the Buyer (the “Title
      Defect Letter”), the Sellers acknowledged receipt of Buyer’s Election Notice and
      disclosed to the Buyer certain title defects identified by Chesapeake (the
“May
      7 Title Defects”) described on Exhibit A thereto, proposes a subsequent closing
      within 60 days for the Leases affected by the May 7 Title Defects. 

     

                   
      Accordingly, the parties hereto agree as follows:

    

    1.              The
      LOI
      has not been amended or modified, shall remain in full force and effect as
      between the parties to this Agreement to the full extent as if those parties
      were the original parties to the LOI, and hereby ratify and accept the LOI
      as a
      binding agreement between the parties to this Agreement.

    

    2.              Sellers
      covenant and agree that the Buyer shall be entitled to all of the rights and
      benefits of Chesapeake under the LOI (save and except that Buyer will not be
      entitled to preemptive rights that were granted to Chesapeake pursuant to the
      Common Share Purchase Agreement dated as of November 4, 2005), and that the
      Sellers shall be obligated to perform all of its covenants and obligations
      under
      the LOI to the same extent as it would had Chesapeake closed the acquisition
      under the terms and conditions of the LOI.

    

    3.              Buyer
      assumes and agrees to be bound by all the terms and obligations of the LOI
      to
      the same extent as Chesapeake would be had Chesapeake closed the acquisition
      under the terms and conditions of the LOI.

    

    4.              The
      Sellers agree under the Title Defect Letter to attempt to cure the Title Defects
      on or before July 9, 2007. The Sellers shall keep the Buyer apprised of its
      efforts in such regard. Between the date hereof and July 9, 2007, the Sellers
      shall sell and the Buyer shall buy, from time to time, such Leases affected
      by
      the May 7 Title Defects which are cured to the Buyer's satisfaction, not to
      be
      unreasonably withheld or delayed, at a price equal to $7,500 per net mineral
      leasehold acre conveyed (each such event a "Subsequent Closing"). To schedule
      a
      Subsequent Closing, Sellers will deliver written notice to Buyer identifying
      the
      Leases as to which Sellers believe they have cured title and the net mineral
      leasehold acres covered by such Leases. Subject to Buyer's satisfaction that
      title has been cured (as provided above), and provided the aggregate price
      to be
      paid by Buyer for the Leases as to which title has been cured exceeds $500,000,
      Sellers and Buyer shall hold a Subsequent Closing five (5) business days
      following receipt of Seller's notice to Buyer; provided that Sellers may at
      any
      time deliver notice to Buyer that all remaining title defects that can be cured
      have been cured in which event a Subsequent Closing will be held notwithstanding
      the aggregate price to be paid by Buyer for the Leases to be conveyed.
      Notwithstanding the foregoing, on July 9, 2007 a final Subsequent Closing shall
      be held at which Sellers shall convey to Buyer all remaining Leases as to which
      title has been cured to Buyer's reasonable satisfaction, regardless of the
      aggregate price to be paid by Buyer for the Leases to be conveyed. At each
      Subsequent Closing, Sellers shall deliver to Buyer a conveyance of the Leases
      as
      to which title has been cured in the form attached as Exhibit "B" to the LOI
      together with releases of any liens or security interests created by, through
      or
      under Sellers to the extent not previously provided to Buyer, and Buyer shall
      deliver to Sellers the purchase price attributable thereto.

    

    --Signature
      pages to follow--

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Executed
      this 9th
      day of
      May, 2007.

    

    
      	 	
              NAVASOTA
                RESOURCES, LP

            
	 	
              by
                its General Partner Alta Mesa GP, LLC

            
	 	 	 
	 	
              By:

            	
              /s/
                HARLAN H. CHAPPELLE

            
	 	 	
              Harlan
                H. Chappelle

            
	 	 	
              President

            
	 	 	 
	 	 	 
	 	
              GASTAR
                EXPLORATION LTD.

            
	 	 	 
	 	
              By:

            	
              /s/
                J. RUSSELL PORTER

            
	 	 	
              J.
                Russell Porter

            
	 	 	
              President
                and Chief Executive Officer

            
	 	 	 
	 	 	 
	 	
              GASTAR
                EXPLORATION TEXAS LP, 

            
	 	
              by
                its General Partner, Gastar Exploration Texas, LLC

            
	 	 	 
	 	
              By:

            	
              /s/
                J. RUSSELL PORTER

            
	 	 	
              J.
                Russell Porter

            
	 	 	
              President

            

    

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    
 

    GASTAR
      EXPLORATION LTD.

    1331
      Lamar “Street, Suite 1080

    Houston,
      Texas 77010

    Phone
      (713) 739-1800

    Fax
      (713) 739-0458

    

    

    April
      27,
      2007

    

    Mr.
      Aubrey K. McClendon

    Chairman
      and CEO

    Chesapeake
      Energy Corporation

    6100
      N.
      Western Avenue

    Oklahoma
      City, Oklahoma 73118

    

    RE:
      Letter of Intent

    

    Dear
      Mr.
      McClendon:

    

    When
      executed by the parties, this letter shall constitute a Letter of Intent (the
      “LOI”) by and between Gastar Exploration Ltd. and/or its affiliate Gastar
      Exploration Texas LP (collectively “Gastar”) and Chesapeake Energy Corporation
      and/or its affiliate Chesapeake Exploration Limited Partnership (collectively
      “Chesapeake”), relating to a single transaction involving the purchase of Gastar
      stock and interests in oil and gas leases located in Roberson and Leon Counties,
      Texas (the “Transaction”).

    

    The
      purpose of this LOI is to set forth the terms upon which Chesapeake shall
      purchase from Gastar and Gastar shall sell to Chesapeake all of Gastar's
      leasehold interests in the oil and gas leases described on Exhibit “A” attached
      hereto and made a part hereof (the “Leases”).

    

    
      	 	
              A.

            	
              Purchase
                of Leases and Stock

            

    

    

    
      	 	
              1)

            	
              Gastar
                represents that Gastar’s total net ownership in the Leases is 9,633.75 net
                leasehold acres.

            

    

    

    
      	 	
              2)

            	
              Gastar's
                obligation to sell the Leases at the price and on the terms set forth
                herein is subject to the condition precedent that Chesapeake will,
                simultaneously with the purchase of the Leases, also acquire ten
                million
                (10,000,000) newly issued shares of Gastar Exploration Ltd.'s common
                stock
                (the "Purchase Shares"). At Closing Chesapeake shall purchase, and
                Gastar
                shall issue, sell and assign to Chesapeake, the Purchase Shares and
                the
                Leases for total consideration of $92,253,125, (the "Purchase Price").
                The
                Purchase Price will be allocated to the Purchase Shares and the Leases
                based on a price of USD $2.00 per share for the Purchase Shares and
                $7,500
                per net leasehold acre for the Leases. While for accounting purposes
                certain values are being placed on the various components of the
                Transaction, the parties acknowledge and agree that the consideration
                attributable to the matters covered hereby were not derived separately
                but
                were negotiated as a whole and that the transactions will not be
                consummated without each of the matters covered hereby being completed.
                

            

    

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    
      	 	
              3)

            	
              The
                Leases assigned from Gastar to Chesapeake shall be subject to all
                existing
                burdens of record, contracts and obligations including existing
                contractual overriding royalty interests, after payout “back in” working
                interests and existing acreage dedications and processing volume
                commitments under natural gas sales agreements.

            

    

    

    
      	 	
              4)

            	
              Gastar
                represents to Chesapeake that the Leases contain contractual lease
                extension language that grants the Lessee the option to extend each
                Lease
                (with the exception of Leases covering approximately 35.42 net leasehold
                acres) for a two year period by tendering a defined payment to Lessor.
                Gastar shall be responsible for tendering the contractual lease extension
                payments for all Leases with an expiration date prior to August 1,
                2007,
                provided that after closing of the Transaction, such extension payment
                will be tendered to Chesapeake with a notice letter fully describing
                the
                Leases to be extended pursuant thereto and, upon receipt of such
                payment
                Chesapeake will cause the Lease or Leases covered thereby to be extended.
                For Leases with expiration dates after August 1, 2007 through May
                4, 2008,
                Chesapeake shall be responsible for tendering contractual lease extension
                payments and shall invoice Gastar for its proportionate share of
                the
                contractual lease extension payments. The amount invoiced to Gastar
                shall
                be calculated based on the existing contractual lease extension language
                in each Lease and Gastar’s undivided ownership interest in each such Lease
                immediately prior to closing of the Transaction. Within 30 days of
                receipt
                of the lease extension payment invoice from Chesapeake, along with
                payment
                documentation, Gastar shall tender its proportionate share of the
                lease
                extension payments to Chesapeake. Gastar will have no obligation
                for
                payment of lease extensions for leases expiring after May 4,
                2008.

            

    

    

    Gastar
      shall use commercially reasonable efforts to extend the existing 35.42 net
      leasehold acres of Leases that do not contain extension language or enter into
      new leases with respect to such acreage on substantially the same terms as
      the
      existing leases but in any event terms consistent with the market at the time
      of
      renewal. If Gastar fails to obtain an extension or a new lease on such terms
      for
      the 35.42 net acres within 90 days after the applicable termination of such
      lease, Gastar will refund to Chesapeake $7,500 per net acre for the portion
      of
      such Leases that are not extended by extensions or new leases. In addition,
      in
      the event that prior to closing the Transaction the parties determine there
      is a
      title failure with respect to any of the Leases, the purchase price will be
      reduced by an amount equal to $7,500 times the number of net acres affected
      by
      such title failure.

    

    
      	 	
              5)

            	
              Transfer
                of title to the Leases shall be made by special warranty under the
                terms
                of which Gastar shall, subject to customary permitted encumbrances,
                warrant and defend title to the leasehold/working interests assigned
                to
                Chesapeake against every person lawfully claiming the interests assigned
                or any part thereof by, through or under Gastar, but not otherwise.
                The
                assignment of Gastar’s interests in the Leases from Gastar to Chesapeake
                shall be made on the form attached hereto and made a part hereof
                as
                Exhibit “B”.

            

    

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

    
      	 	
              6)

            	
              Chesapeake
                shall have reasonable access to any Gastar records pertaining to
                the
                Leases prior to, and after Closing.

            

    

    

    
      	 	
              7)

            	
              Within
                30 days of completion Gastar shall receive, from Chesapeake, free
                of cost,
                all well information for each well drilled on the lands subject to
                the
                Leases or lands pooled therewith.

            

    

    

    
      	 	
              7)

            	
              The
                purchase of the Purchase Shares will be subject to the terms and
                conditions of a Common Share Purchase Agreement mutually agreeable
                to
                Gastar and Chesapeake, but in substantially the form attached hereto
                as
                Exhibit “C”.

            

    

    

    
      	 	
              B.

            	
              Interdependent
                Obligations
                The purchase and issuance of the Purchase Shares and the purchase
                and sale
                of the Leases are each part of a single Transaction with each part
                contingent on the successful closing of the other. Neither party
                will be
                required to close on less than the entire Transaction contemplated
                hereby.
                Chesapeake and Gastar each acknowledge and agree that: (i) it is
                a
                condition precedent to Gastar’s obligation to consummate the Transaction
                that Chesapeake acquires both the Purchase Shares and the Leases;
                and (ii)
                it is a condition precedent to Chesapeake’s obligation to consummate the
                Transaction that Gastar sell to Chesapeake both the Purchase Shares
                and
                the Leases. 

            

    

    

    The
      Closing shall occur at a mutually agreeable location on the date that is two
      (2)
      local business days after the expiration of the ten (10) day right of first
      refusal and/or preferential right held by third parties under that certain
      Operating Agreement dated July 7, 2000 applicable to the Leases. In the event
      a
      right of first refusal and/or preferential right is exercised with respect
      to
      the entire Transaction, this LOI will not be deemed terminated unless the party
      exercising such right consummates the entire Transaction within two (2) local
      business days after the end of the ten (10) day preferential right period.
      

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    The
      undersigned are bound by the terms of this LOI immediately upon their execution
      of this document.

    

    Sincerely,

    

    GASTAR
      EXPLORATION LTD.

    

    /s/
      J.
      RUSSELL PORTER

    

    J.
      Russell Porter

    President
      and Chief Executive Officer

    

    

    GASTAR
      EXPLORATION TEXAS LP,

    By
      its
      General Partner, Gastar Exploration 

    Texas
      LLC

    

    /s/
      J.
      RUSSELL PORTER

    

    J.
      Russell Porter

    President

    

    

    Agreed
      to
      and accepted this 27th day of April, 2007.

    

    
      	
              CHESAPEAKE
                ENERGY CORPORATION

            	 
	 	 	 
	 	 	 
	
              By:

            	
              /s/
                DOUGLAS J. JACOBSON

            	 
	 	
              Douglas
                J. Jacobson, Executive Vice President

            	 
	 	 	 
	 	 	 
	 	 	 
	
              CHESAPEAKE
                EXPLORATION LIMITED PARTNERSHIP

            	 
	 	 	 
	
              By:

            	
              Chesapeake
                Operating, Inc., General Partner

            	 
	 	 	 
	 	 	 
	
              By:

            	
              /s/
                DOUGLAS J. JACOBSON

            	 
	 	
              Douglas
                J. Jacobson, Executive Vice President

            	 

    

     

     

    A-4EXHIBIT 10.93

     THIS NOTE AND ANY SECURITIES ISSUABLE UPON THE CONVERSION OF THIS NOTE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
THE SECURITIES LAWS OF ANY STATE. THIS NOTE AND ANY SECURITIES ISSUABLE UPON THE
CONVERSION  HEREOF  MAY  NOT  BE  TRANSFERRED  OR  OTHERWISE  DISPOSED OF EXCEPT
PURSUANT  TO  AN  EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE
STATE  SECURITIES  LAWS  OR  PURSUANT  TO  AN  APPLICABLE  EXEMPTION  FROM  THE
REGISTRATION  REQUIREMENTS  OF SUCH ACT AND SUCH LAWS. CERTIFICATES REPRESENTING
ANY  SECURITIES  ISSUABLE  UPON  CONVERSION  OF THIS NOTE SHALL BEAR A LEGEND TO
SIMILAR  EFFECT  AS  THE  FOREGOING.

                          CONVERTIBLE PROMISSORY NOTE

US  $25,000.00                                               February  15,  2007

     FOR  VALUE  RECEIVED,  DERMISONICS,  INC.,  a  Nevada corporation having an
office  at  2  Park  Plaza,  Suite  450,  Irvine,  California 92614, U.S.A. (the
"Company"), hereby promises to pay to Victor Fein at3000 Bronx Park East, Bronx,
New  York  10467,  or its duly registered assigns (each a "Holder"), on February
14,  2008  ("Maturity"),  or  earlier  upon  prepayment of this Note as provided
herein,  the principal sum of US $25,000.00, together with interest (computed on
the  basis of a 365-day year) on the unpaid principal balance at the rate of 10%
per  annum,  payable  on  the  first  anniversary  of  the Note and at Maturity.

     The  principal  amount of this Note and all accrued interest thereon may be
prepaid  by  the  Company  written notice to the Holder and without a prepayment
penalty.  Upon  any  prepayment of this Note, all accrued but unpaid interest on
the principal amount shall be paid to the Holder on the date of prepayment.  All
payments  hereunder  shall  be  applied  first  to  interest  then to principal.

     All  payments of principal and interest shall be made in lawful currency of
the  United  States  of America in immediately available funds before 11:00 a.m.
California  time  on  the  due date thereof at the coordinates for the Holder on
file  with  the  Company,  or in such other manner or at such other place as the
Holder  of  this  Note  designates  in  writing.

     Subject to and in compliance with the provisions hereof, the Holder may, on
an  event  of  default,  as  described  below, convert all or any portion of the
outstanding  principal  balance  of  this  Note as of such payment or prepayment
date,  and  all or any portion of the interest accrued hereon to such date, into
shares  ("Conversion  Shares")  of

                                        1
<PAGE>
the  common  stock,  $.001  par value, of the Company (the "Common Stock"), at a
conversion  price  equal  to the lesser of US $0.10 or 70% of the average of the
three  lowest closing bid prices per share of Common Stock during the 30 trading
days  immediately  prior  to  any  such  conversion.  The  Holder  hereof  shall
communicate  its intention to convert all or any portion of the principal amount
of  this Note and all or any portion of interest accrued through such conversion
date  by  surrendering this Note, with the Form of Notice of Election to Convert
attached  hereto  duly  completed  and signed, to the Company at its address for
notice  set  forth  elsewhere  herein.

     In  the  event  of  a conversion by the Holder of all or any portion of the
outstanding  principal  balance  of  this Note and all or any portion of accrued
interest  thereon  into  shares  of the Common Stock, the Company will issue and
deliver  to  the Holder, as soon as practical after the Company's receipt of the
Notice  of Election a certificate evidencing the shares of Common Stock issuable
upon  any  such  conversion.

     If  the  Holder  elects to convert less than the entire principal amount of
this Note and interest accrued to the date of such conversion, the Company shall
issue  or  cause to be issued and delivered to the Holder, at its expense, a new
promissory  note  evidencing  the  outstanding amount of principal due hereunder
after  giving  effect  to  the  amount  applied  to  the  conversion, which such
promissory  note  shall, except as to the principal amount thereof, be identical
to  this  Note  in  all  respects.

     The  Company covenants that it will at all times reserve and keep available
out  of  the  aggregate  of its authorized but unissued and otherwise unreserved
Common  Stock,  solely for the purpose of enabling it to issue Conversion Shares
upon conversion of this Note as herein provided, the number of Conversion Shares
which are then issuable and deliverable upon the conversion of the entire amount
due  under  this  Note,  free  from  preemptive  rights  or any other contingent
purchase rights of persons other than the Holder. The Company covenants that all
Conversion Shares so issuable and deliverable shall, upon issuance in accordance
with the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.

     Except  as  provided  elsewhere herein, if the Company shall fail to make a
payment of principal or interest when due and such failure shall continue for 10
days  after  notice of such failure; or shall make an assignment for the benefit
of  creditors,  file  a  petition  in  bankruptcy,  be  adjudicated insolvent or
bankrupt,  suffer an order for relief under any federal bankruptcy law, petition
or  apply  to  any  tribunal for the appointment of a custodian, receiver or any
trustee for the Company or any substantial part of its assets, or shall commence
any  proceeding  under any bankruptcy, reorganization, arrangement, readjustment
of  debt,  dissolution or liquidation law or statue of any jurisdiction, whether
now  or  hereafter  in  effect;  or  if  there  shall  have  been

                                        2
<PAGE>
filed  any  such petition or application, or any such proceeding shall have been
commenced  against  the Company, which remains undismissed, unstayed or unbonded
for a period of 30 days or more; or if the Company, by any act or omission shall
indicate  consent  to, approve or acquiescence in any such petition, application
or proceeding or the appointment of a custodian, receiver or any trustee for all
or  any  substantial  part of its properties, or if the Company shall allow such
custodianship,  receivership,  or trusteeship to continue undischarged, unstayed
or unbonded for a period of 30 days or more, or the Company violates any term or
provision  of  this  Note and same remains uncured for a period of 30 days after
notice  thereof  by  the  Holder  of  this Note, then and in any such event, the
outstanding  principal amount of this Note, together with all accrued and unpaid
interest  thereon,  shall  be  and  become  immediately  due  and  payable.

     Anything  contained  in  this  Note to the contrary notwithstanding, in the
event  this  Note is placed in default as a result of the Company's inability to
pay the amounts due hereunder when due, the Company shall have the right to cure
such  default  during  the  30-day  period  from  its  receipt of declaration of
default.

     All  notices  and other communications provided for herein shall be sent by
registered  or certified mail, return receipt requested, or by personal delivery
or  via  a nationally recognized overnight courier to the Holder or the Company,
at  their  respective addresses as set forth herein, or to such other address as
to  which  either  party may advise the other by notice given in accordance with
this  provision.  All  such  notices  shall  be deemed given upon the earlier of
receipt  or  within  five  business  days  of  mailing  if  receipt  is refused.

     Upon  notice  to  the Company as provided for hereinabove, the Holder shall
have  the  right  to  assign  this  Note.

     Notwithstanding  any other provision of this Note, interest under this Note
shall  not  exceed  the maximum rate permitted by law; and if any amount is paid
under  this  Note as interest in excess of such maximum rate, then the amount so
paid will not constitute interest but will constitute a prepayment on account of
the  principal  amount  of  this  Note.

     All  payments  under  this  Note  shall be made without defense, set-off or
counterclaim,  free  and  clear  of  and  without deduction for any taxes of any
nature  now  or  hereafter  imposed.

     The  undersigned  agrees  to  pay  on demand all expenses of collecting and
enforcing this Note, including, without limitation, reasonable expenses and fees
of  legal

                                        3
<PAGE>
counsel,  court  costs  and  the  cost  of  appellate  proceedings.

     The  provisions  of  this Note shall in all respects be construed according
to,  and  the  rights  and  liabilities  of  the parties hereto and shall in all
respects  be  governed  by, the laws of the State of Nevada.  This Note shall be
deemed  a  contract  made  under  the  laws  of  the State of Nevada to be fully
performed  therein,  and the validity of this Note and all rights an liabilities
hereunder  shall be determined under the laws of said State without reference to
the  conflicts  of  laws  provisions  thereof.   For  purposes of any proceeding
involving  this  Note  or  any  of  the  obligations  of  the  undersigned,  the
undersigned  hereby  submits  to the non-exclusive jurisdiction of the courts of
the  State  of  Nevada  and  of  the  United States having jurisdiction in Clark
County,  State of Nevada, and agrees not to raise and waives any objection to or
defense  based  upon  the  venue  of  any  such  court  or  based upon forum non
conveniens.  The  undersigned agrees not to bring any action or other proceeding
with respect to this Note or with respect to any of its obligations in any other
court  unless  such  courts  of  the  State  of  Nevada and of the United States
determine  that  they  do  not  have  jurisdiction  in  the  matter.

     This  Note  may  be  amended  only  by a written instrument executed by the
Company  and  the  Holder.

     IN WITNESS WHEREOF, DERMISONICS, INC. has caused this Promissory Note to be
executed  in  its  corporate  name  by its President, thereunto duly authorized.

Dated:  February 15, 2007

                                        DERMISONICS,  INC.

                                        By: /s/ Bruce H. Haglund
                                            --------------------
                                            Bruce  H.  Haglund,
                                            Chairman

                                        4
<PAGE>
                      Form of Notice of Election to Convert

     The undersigned Holder hereby elects to convert $________ of the amount due
under  that  certain  promissory note made by Dermisonics, Inc. in the principal
amount  of US $25,000.00 dated February 15, 2007 (the "Note") into _____________
shares  of  Common  Stock at a conversion price of the the lesser of US $0.10 or
70%  of  the  average of the three lowest closing bid prices per share of Common
Stock  during  the  30  trading  days  immediately  prior  to  the  conversion.
Capitalized  terms  used  herein  and  not otherwise defined have the respective
meanings  set  forth  in  the  Note.

     In  connection  with  the  conversion  of  the Note, the undersigned hereby
represents,  warrants and covenants to, and agrees with, the Company as follows:

     (a)  The  undersigned understands and acknowledges that the Conversion
     Shares  have  not been and will not be registered under the Securities
     Act  and  may  not be offered or sold unless the Conversion Shares are
     registered  under  the  Securities  Act  or such offer or sale is made
     pursuant  to  an  exemption  from the registration requirements of the
     Act.

     (b)  The  Conversion  Shares are being offered and sold by the Company
     pursuant  to  the  terms  of  the  Note  and  an  exemption  from  the
     registration  requirements  of  the Securities Act of 1933 (the "Act")
     afforded  by  Section  4(2)  of  the  Act.

     (c) Unless registered under the Act, the Holder agrees that any offer,
     sale  or  transfer  of  the  Conversion Shares or any interest therein
     shall  be  made in accordance with exemptions available under the Act.

     (d)  The  Conversion Share are "restricted securities" as that term is
     defined  in  Rule 144 promulgated under the Act and are subject to the
     restrictions on transfer imposed therein and pursuant to Rule 144. The
     Holder  agrees and acknowledges that the Conversion Shares will bear a
     restrictive  legend  in  substantially  the  following  form:

     THE  SECURITIES  REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES  ACT  OF  1933, AS AMENDED ("ACT"), OR ANY APPLICABLE STATE
     SECURITIES  LAWS  ("BLUE  SKY  LAWS"). ANY TRANSFER OF SUCH SECURITIES
     WILL  BE  INVALID  UNLESS A REGISTRATION STATEMENT UNDER THE ACT OR AS
     REQUIRED  BY  BLUE SKY LAWS IS IN EFFECT AS TO SUCH TRANSFER OR IN THE
     OPINION  OF  COUNSEL  SATISFACTORY  TO

                                        5
<PAGE>
     THE  COMPANY  SUCH  REGISTRATION  IS  UNNECESSARY  IN  ORDER  FOR SUCH
     TRANSFER  TO  COMPLY  WITH  THE  ACT  OR  BLUE  SKY  LAWS.

Dated:           ,                      Name  of  Holder:
       ---------  ----

                                        (Print)
                                                ---------------------------

                                        By:
                                            -------------------------------
                                        Name:
                                              -----------------------------
                                        Title:
                                               ----------------------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00123-of-00352.parquet"}]]