Document:

First Amendment

 Exhibit 10.1 
  
 FIRST AMENDMENT 
  
 FIRST AMENDMENT, dated as of November 9, 2004 (“First Amendment”), to the Amended and Restated Credit Agreement dated as of May 10, 2004
(the “Credit Agreement”), among MUZAK HOLDINGS LLC (“Holdings”), MUZAK LLC as Borrower (the “Borrower”), the lenders from time to time parties thereto (the “Lenders”), BEAR, STEARNS
& CO. INC. and LEHMAN BROTHERS INC., as Joint Lead Arrangers and Joint Bookrunners, LEHMAN COMMERCIAL PAPER INC., FLEET NATIONAL BANK and GECC CAPITAL MARKETS GROUP, INC., as Co-Syndication Agents, GENERAL ELECTRIC CAPITAL CORPORATION
(“GECC”), as Documentation Agent and Collateral Agent and BEAR STEARNS CORPORATE LENDING INC., as Administrative Agent (“Administrative Agent”). Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement. 
  
 WHEREAS,
the Borrower has requested certain amendments to the Credit Agreement; 
  
 WHEREAS, the Borrower has requested that the Lenders waive certain provisions of the Credit Agreement; 
  
 WHEREAS, pursuant to Section 11.1 of the Credit Agreement the consent of the Required Lenders is necessary to effect this First Amendment; 
  
 NOW, THEREFORE, in consideration of the premises and covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: 
  
 SECTION 1. AMENDMENTS TO CREDIT AGREEMENT 
  
 (a) Section 1.1. The definition of
“Applicable Margin” in Section 1.1 of the Credit Agreement is hereby amended by deleting such definition in its entirety and replacing it with the following: 
  
 “Applicable Margin”: for each Type of Loan, the rate per annum set forth under the relevant column heading
below: 
  

							
	 	  	Eurodollar Loans

	 	 	Base Rate Loans

	 
	 Revolving Loans
	  	4.00	%	 	2.75	%
	 Term Loans
	  	4.25	%	 	3.25	%

 ; provided that, on and after the first Adjustment Date (as defined in the Pricing Grid) occurring upon receipt of
the Borrower’s financial statements for the two full fiscal quarters of the Borrower completed after the Original Closing Date, the Applicable Margin with respect to Revolving Loans will be determined pursuant to the Pricing Grid. 

 
 (b) Section 1.1. The definition of
“Consolidated EBITDA” in Section 1.1 is hereby amended by deleting such definition in its entirety and replacing it with the following: 
  
 “Consolidated EBITDA”: for any period, Consolidated Net Income for such period plus, without duplication and to the extent
reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) income tax expense, (b) interest expense, amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other
fees and charges associated with Indebtedness (including the Loans), (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary charges or losses
determined in accordance with GAAP, (f) non-cash compensation expenses arising from the issuance or appreciation of capital stock, options to purchase capital stock and capital stock appreciation rights to the management of such Person and its
Included Subsidiaries, (g) any other non-ordinary course non-cash charges, non-cash expenses or non-cash losses of such Person or any of its Included Subsidiaries for such period; provided, however, that cash payments in respect of
such non-ordinary course non-cash charges, expenses or losses made in such period or in any future period in respect of such non-cash charges, expenses or losses shall be subtracted from Consolidated Net Income in calculating Consolidated EBITDA in
the period when such payments are made (other than an aggregate amount of up to $1,900,000 representing the cash impact of charges with respect to the reorganization described in the press release dated August 6, 2004, issued by Holdings and filed
as Exhibit 99.1 to the Form 8-K dated August 6, 2004 (the “Reorganization”) paid during the period beginning with the fiscal quarter ending September 30, 2004 through and including the fiscal quarter ending June 30, 2005), (h)
Deferred Management Fees; provided, however, that cash payments made in such period or in any future period in respect of such Deferred Management Fees shall be subtracted from Consolidated Net Income in calculating Consolidated EBITDA
in the period when such Deferred Management Fees are paid; provided, further, that cash payments made from and after the Original Closing Date in respect of any Pre-Closing Deferred Management Fees shall not be subtracted from
Consolidated Net Income in calculating Consolidated EBITDA in any period, (i) amounts paid by the Borrower in respect of license fees, interest thereon and any related penalties paid or (to the extent that such amounts were expensed by the Borrower
in such period) to be paid by the 
  

 -2- 

 Borrower in settlement of claims for past license fee calculations for prior periods to copyright
holders, performing rights organizations and/or licensing collectives and associations, and accruals therefor, provided that the aggregate amounts so included pursuant to this clause (i) shall not exceed $5,000,000 from the Original Closing
Date, and (j) to the extent applicable to the period for which Consolidated EBITDA is being calculated, $900,000, which represents the impact of lost revenue and expenses incurred by the Borrower and its Subsidiaries during the fiscal quarter ended
December 31, 2003 as a direct result of the outage of the Telstar 4 satellite in September 2003; minus, to the extent included in the statement of such Consolidated Net Income for such period, the sum of (a) interest income, (b) any
extraordinary income or gains determined in accordance with GAAP and (c) any other non-cash income (excluding any items that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period that are
described in the parenthetical to clause (g) above), all as determined on a consolidated basis. 
  
 (c) Section 1.1. The definition of “Consolidated Fixed Charge Coverage Ratio” in Section 1.1 of the Credit
Agreement is hereby amended by deleting such definition in its entirety and replacing it with the following: 
  
 “Consolidated Fixed Charge Coverage Ratio”: for any period, the ratio of (a) Consolidated EBITDA for such period to (b)
Consolidated Fixed Charges for such period. For purposes of calculating the Consolidated Fixed Charge Ratio, (x) Consolidated Fixed Charges shall be calculated on a Pro Forma Basis and (y) Consolidated EBITDA for any four consecutive fiscal quarter
period shall mean actual Consolidated EBITDA for the fiscal quarter then most recently ended multiplied by 4. 
  
 (d) Section 1.1. The last sentence of the definition of “Revolving Commitment” in Section 1.1 of the Credit
Agreement is hereby amended by deleting such sentence in its entirety and replacing it with the following sentence: 
  
 “The amount of the Total Revolving Commitments is $55,000,000.” 
  
 (e) Section 1.1. Section 1.1 of the Credit Agreement is hereby amended by deleting the
definition of “Revolving Termination Date” in its entirety and replacing it with the following: 
  
 “Revolving Termination Date”: May 20, 2007. 
  
 (f) Section 1.1. Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Term Loan
Termination Date” in its entirety and replacing it with the following: 
  
 “Term Loan Termination Date”: November 21, 2007. 
  

 -3- 

 (g) Section 2.3. Section 2.3 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following: 
  
 “2.3 Repayment of Term Loans. The Term Loans shall mature in six (6) consecutive quarterly installments, commencing on June 30, 2006 and payable on the respective dates set forth below, each of which shall
be in an amount equal to such Lender’s Term Percentage multiplied by the percentage of the principal amount of the Term Loans outstanding on the thirtieth day after the Closing Date (after giving effect to any prepayment of Term Loans required
under Section 4.2(d)), as set forth below opposite such installment payment date, and all remaining principal amounts outstanding under the Term Loans shall be payable on the Term Loan Termination Date: 
  

				
	 Installment Payment Date

	  	Percentage of Outstanding
Term Loans

	 
	 June 30, 2006
	  	0.25	%
	 September 30, 2006
	  	0.25	%
	 December 31, 2006
	  	0.25	%
	 March 31, 2007
	  	0.25	%
	 June 30, 2007
	  	0.25	%
	 September 30, 2007
	  	0.25	%
	 Term Loan Termination Date
	  	All remaining principal	 

  
 Notwithstanding the foregoing, if the
Revolving Commitments are terminated prior to the Revolving Termination Date, the Term Loans shall be immediately due and payable on the date of such termination of the Revolving Commitments.” 
  
 (h) Section 8.1. Section 8.1 of the Credit
Agreement is hereby amended by deleting such section in its entirety and replacing it with the provisions set forth in Exhibit A attached hereto. 
  
 (i) Section 8.7. Section 8.7 of the Credit Agreement is hereby amended by deleting the “.” at the end of the first
paragraph thereof and inserting the following provision: 
  
 “and (b) Capital Expenditures of the Borrower and its Subsidiaries in an aggregate amount of up to $700,000 in connection with the Reorganization during the period beginning with the fiscal quarter ending
September 30, 2004 through and including the fiscal quarter ending December 31, 2005.” 
  
 (j) Lender Addenda: Schedule 1 to that certain Lender Addendum dated as of May 10, 2004 among GECC, Muzak LLC and the
Administrative Agent is hereby amended by reducing the Revolving Commitment amount stated therein from $20,000,000 to $15,000,000 (the “Non Pro Rata Commitment Reduction”). Each reference to “Revolving Percentages” of the
relevant Lenders in the Loan Documents shall hereafter be deemed to refer to such percentages after giving effect to the Non-Pro Rata Commitment Reduction, as set forth on Schedule 1 attached hereto. 
  

 -4- 

 SECTION 2. WAIVERS TO THE CREDIT AGREEMENT 
  
 Subject to the conditions set forth in Section 4 of this First Amendment, the Required Lenders hereby: 
  
 (a) waive the provisions of Section 4.8 of the Credit
Agreement in connection with the Non-Pro Rata Commitment Reduction and related transactions to the extent that any Default or Event of Default will arise therefrom; 
  
 (b) waive the provisions of Section 8.1(a), (b) and (c) for the period ending September 30, 2004 to the
extent that any Default or Event of Default has occurred or is continuing through and including the date hereof. 
  
 This is a limited waiver of the Borrower’s compliance with the foregoing provisions, and does not constitute and shall not be deemed to constitute a waiver of any
right, power, remedy or privilege inuring to the Administrative Agent or any Lender arising from any future noncompliance. 
  
 SECTION 3. REPRESENTATIONS AND WARRANTIES 
  
 In order to induce the Required Lenders to enter into this First Amendment, Borrower and Holdings jointly and severally represent and warrant to each of
the Lenders that: 
  
 (a) Holdings, Borrower and
their respective Subsidiaries have taken all necessary action to authorize the execution, delivery and performance of this First Amendment. 
  
 (b) The execution, delivery and performance of this First Amendment will not violate: (i) the Certificate of Incorporation and By-Laws or
other organizational or governing documents of Holdings, Borrower or any of their respective Subsidiaries; (ii) any law, treaty, rule or regulation or determination of an arbitrator or a court or other nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory or other organization (including the National Association of Insurance Commissioners), in each case applicable to or binding upon Holdings, Borrower or any of their respective Subsidiaries or any of
their property to which they or any of their property are subject; or (iii) any provision of any written agreement, written instrument or other written undertaking to which Holdings, Borrower or any of their respective Subsidiaries is a party or by
which any of their property is bound. 
  
 (c) All
of the representations and warranties in the Credit Agreement, after giving effect to this First Amendment, are true and correct in all material respects on and as of the date hereof as if made on the date hereof (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, as of such specific date). 
  

 -5- 

 (d) No Default or Event of Default has occurred and is continuing (except for those that
are waived). 
  
 SECTION 4. CONDITIONS TO EFFECTIVENESS 
  
 The effectiveness of this First Amendment is subject to the following
conditions precedent (unless specifically waived in writing by the Administrative Agent), each to be in form and substance satisfactory to the Administrative Agent: 
  
 (a) The Borrower shall have paid to the Agents and the Lenders, as the case may be, all costs, fees and
expenses (including, without limitation, the fees and disbursements of Cahill Gordon & Reindel LLP, counsel to the Administrative Agent and breakage costs, if any) payable to the Agents and the Lenders, including without
limitation an amendment fee payable to: 
  
 (x)
in the case of each Lender executing this First Amendment (other than GECC), an amount equal to 0.175% of such Lender’s Revolving Commitment, and 
  
 (y) in the case of GECC to the extent it executes this First Amendment, an amount equal to the sum of (A) its Term Commitments
($35,000,000) multiplied by 0.15% and (B) its Revolving Commitment (after giving effect to this First Amendment) ($15,000,000) multiplied by 0.15%. 
  
 (b) All corporate and other proceedings taken or to be taken in connection with this First Amendment and all documents incidental thereto,
whether or not referred to herein, shall be satisfactory in form and substance to the Administrative Agent and its legal counsel. 
  
 (c) The Administrative Agent shall have received duly executed counterparts of this First Amendment which, when taken together, bear the
authorized signatures of the Borrower, Holdings and the Required Lenders. 
  
 (d) No Default or Event of Default has occurred and is continuing (except for those that are waived). 
  
 SECTION 5. MISCELLANEOUS 
  
 (a) This First Amendment may be executed by the parties hereto in one or more counterparts, each of which shall be an original and all of
which shall constitute one and the same agreement. 
  
 (b) THIS FIRST AMENDMENT SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS. 
  

 -6- 

 (c) Except as expressly provided herein, this First Amendment shall not constitute a
consent to or modification of any other provision, term or condition of the Credit Agreement or any other Loan Document. All terms, provisions, covenants, representations, warranties, agreements and conditions contained in the Credit Agreement, as
amended hereby, and the other Loan Documents are ratified and confirmed in all respects and shall remain in full force and effect. 
  
 [Signature Pages Follow] 
  

 -7- 

 IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the
date first above written. 
  

			
	 MUZAK LLC,
as Borrower

		
	 By:
	 	 /s/ Catherine Walsh

	 Name:
	 	 Catherine Walsh

	 Title:
	 	 Treasurer

	
	 MUZAK HOLDINGS LLC

		
	 By:
	 	 /s/ Catherine Walsh

	 Name:
	 	 Catherine Walsh

	 Title:
	 	 Treasurer

  

 First Amendment 
 S-    of S- 

			
	 BEAR STEARNS CORPORATE LENDING
INC., as Administrative Agent and a Lender

		
	 By:
	 	 /s/ Victor Bulzacchelli

	 Name:
	 	 Victor Bulzacchelli

	 Title:
	 	 Vice President

  

 First Amendment 
 S-    of S- 

			
	 LEHMAN COMMERCIAL PAPER INC.,
as Lender

		
	 By:
	 	 /s/ Frank P. Turner

	 Name:
	 	 Frank P. Turner

	 Title:
	 	 Vice President

  

 First Amendment 
 S-    of S- 

			
	 FLEET NATIONAL BANK,
as Lender

		
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  

 First Amendment 
 S-    of S- 

			
	 GENERAL ELECTRIC CAPITAL
CORPORATION, as Lender

		
	 By:
	 	 /s/ Scott T. Webster

	 Name:
	 	 Scott T. Webster

	 Title:
	 	 Senior Vice President

  

 First Amendment 
 S-    of S- 

			
	 CANYON CAPITAL CLO 2004-1 LTD.,
as Lender

		
	 By:
	 	 /s/ R. Christian B. Eversen

	 Name:
	 	 R. Christian B. Eversen

	 Title:
	 	 Managing Director

  

 First Amendment 
 S-    of S- 

			
	 CANPARTNERS INVESTMENTS IV, LLC
as Lender

		
	 By:
	 	 /s/ R. Christian B. Eversen

	 Name:
	 	 R. Christian B. Eversen

	 Title:
	 	 Managing Director

  

 First Amendment 
 S-    of S- 

 EXHIBIT A 
  
 (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as at the last day of any fiscal quarter of
the Borrower set forth below to exceed the ratio set forth below opposite such fiscal quarter: 
  

			
	 Fiscal Quarter Ended

	  	Consolidated Leverage Ratio

	June 30, 2003	  	5.00 to 1.0
	September 30, 2003	  	5.00 to 1.0
	December 31, 2003	  	4.75 to 1.0
	March 31, 2004	  	5.25 to 1.0
	June 30, 2004	  	5.75 to 1.0
	September 30, 2004	  	6.50 to 1.0
	December 31, 2004	  	6.50 to 1.0
	March 31, 2005	  	6.50 to 1.0
	June 30, 2005	  	6.50 to 1.0
	September 30, 2005	  	6.25 to 1.0
	December 31, 2005	  	6.00 to 1.0
	March 31, 2006	  	6.00 to 1.0
	June 30, 2006	  	6.00 to 1.0
	September 30, 2006	  	5.75 to 1.0
	December 31, 2006	  	5.50 to 1.0
	March 31, 2007	  	5.50 to 1.0
	June 30, 2007	  	5.50 to 1.0
	 September 30, 2007 and each fiscal quarter ended thereafter
	  	5.25 to 1.0

  
 (b) Consolidated
Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio for any period of four consecutive fiscal quarters of the Borrower ending with any fiscal quarter set forth below to be less than the ratio set forth below opposite such
fiscal quarter: 
  

			
	 Fiscal Quarter Ended

	  	 Consolidated Interest
 Coverage Ratio

	 June 30, 2003 through and including the fiscal quarter ended June 30, 2004
	  	2.00 to 1.0
	 September 30, 2004
	  	1.75 to 1.0
	 December 31, 2004
	  	1.75 to 1.0
	 March 31, 2005
	  	1.50 to 1.0
	 June 30, 2005
	  	1.50 to 1.0
	 September 30, 2005
	  	1.50 to 1.0
	 December 31, 2005
	  	1.50 to 1.0
	 March 31, 2006
	  	1.50 to 1.0
	 June 30, 2006
	  	1.50 to 1.0
	 September 30, 2006 and each fiscal quarter ended thereafter
	  	1.75 to 1.0

  

 A-1 

 (c) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge Coverage Ratio for any
fiscal quarter of the Borrower ending with any fiscal quarter set forth below to be less than the ratio set forth below opposite such fiscal quarter: 
  

			
	 Fiscal Quarter Ended

	  	 Consolidated Fixed
 Charge Coverage Ratio

	 June 30, 2003 through fiscal quarter ended September 30, 2003
	  	1.00 to 1.0
	 December 31, 2003 through fiscal quarter ended June 30, 2004
	  	0.90 to 1.0
	 September 30, 2004
	  	0.75 to 1.0
	 December 31, 2004
	  	0.75 to 1.0
	 March 31, 2005
	  	0.75 to 1.0
	 June 30, 2005
	  	0.80 to 1.0
	 September 30, 2005
	  	0.80 to 1.0
	 December 31, 2005
	  	0.83 to 1.0
	 March 31, 2006
	  	0.85 to 1.0
	 June 30, 2006
	  	0.88 to 1.0
	 September 30, 2006
	  	0.92 to 1.0
	 December 31, 2006
	  	0.96 to 1.0
	 March 30, 2007
	  	0.97 to 1.0
	 June 30, 2007 and each fiscal quarter ended thereafter
	  	1.00 to 1.0

  

 A-2Promissory Note of November 8, 2004 to JMG Exploration, Inc.

 Exhibit 10.1 
  
 PROMISSORY NOTE 
  

			
	 $1,500,000.00
	 	November 8, 2004

  
 FOR VALUE RECEIVED,
FELLOWS ENERGY LTD., a Nevada corporation, (the “Maker”), promises to pay to the order of JMG EXPLORATION, INC. (the “Holder”), at Calgary, Alberta, or at such other place as the Holder of this
promissory note (the “Note”) may from time to time designate, the principal amount of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00), together with interest on the unpaid principal amount hereof from the date
hereof, until paid in full, at a rate per annum (computed on the basis of a 360 day year and applied to the actual number of days elapsed in the interest calculation period) equal to 18% (1 1/2% per month); said principal together with
all other amounts advanced by the Holder to the Maker after the date hereof and accrued interest thereon to be due and payable in two payments: the first of $750,000 of the principal of this note plus 50% of the principal amount of any and all
future advances plus all accrued interest thereon on January 31, 2005, and the second of the entire remaining principal balance and all accrued and unpaid interest thereon on April 30, 2005. All payments hereunder shall be made in lawful money of
the United States of America, without offset. 
  
 The
unpaid principal amount of the Note may be prepaid in whole or in part at any time or times without premium or penalty. Each prepayment shall be applied first to the payment of all interest and other amounts accrued hereunder on the date of any such
prepayment, and the balance of any such prepayment shall be applied to the principal amount hereof. 
  
 The Note evidences a loan advanced by Holder to or for the benefit of the Maker as a borrower. The Maker hereby agrees (i) to execute and deliver a
general security agreement (the “GSA”) of even date to the Holder as security for the Note, and (ii) that any indebtedness evidenced by this the Note is secured by the GSA and until released the GSA contains additional rights of the
Holder. Such rights may cause acceleration of the indebtedness evidenced by the Note. Reference is made to the GSA for such additional terms. 
  

 R-1 

 The occurrence of the following shall constitute an event of default (“Event of Default”)
hereunder; (i) failure to pay, when due, the principal, any interest, or any other sum payable hereunder and continuance of such failure for five (5) business days after the date on which such principal and accrued interest or other sum is due
(whether upon maturity hereof, upon any prepayment date, upon acceleration, or otherwise), or (ii) the occurrence of any event of default defined in the GSA. 
  
 Upon the occurrence of any such Event of Default hereunder, the entire principal amount hereof, and all accrued and unpaid interest thereon, shall be
accelerated, and shall be immediately due and payable, at the option of the Holder, without demand or notice, and in addition thereto, and not in substitution therefor, the Holder shall be entitled to exercise any one or more of the rights and
remedies provided by applicable law. Failure to exercise said option or to pursue such other remedies shall not constitute a waiver of such option or such other remedies or of the right to exercise any of the same in the event of any subsequent
Event of Default hereunder. 
  
 The Holder may, upon the
occurrence of any such Event of Default hereunder, exercise its rights under the GSA, in addition to any and all other rights it may have hereunder and at law. 
  

The Maker promise to pay all reasonable costs and expenses (including without limitation reasonable attorneys’ fees and disbursements) incurred in
connection with the collection hereof or in the protection or realization of any collateral now or hereafter given as security for the repayment hereof, and to perform each and every covenant or agreement to be performed by the Maker under the Note,
the GSA and any other instrument evidencing or securing the obligation represented by the Note. 
  
 Any payment on the Note coming due on a Saturday, a Sunday, or a day which is a legal holiday in the place at which a payment is to be made hereunder
shall be made on the next succeeding day which is a business day in such place, and any such extension of the time of payment shall be included in the computation of interest hereunder. 
  

 R-2 

 Each Obligor (which term shall include the Maker and all makers, sureties, guarantors, endorsers, and
other persons assuming obligations pursuant to the Note) under the Note hereby waives presentment, protest, demand, notice of dishonor, and all other notices. The pleading of any statute of limitations as a defense to any demand against any Obligor
is expressly waived. 
  
 No single or partial exercise by the
Holder of any right hereunder, under the Loan Agreement, or under any other agreement given as security for the Note or pertaining hereto, shall preclude any other or further exercise thereof or the exercise of any other rights. No delay or omission
on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right or of any other right under the Note. 
  
 Any amendment to the terms and conditions of the Note shall be in writing and executed by both the Maker and the Holder. 
  
 The Note and all agreements between the Maker and the Holder relating hereto
are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of acceleration or otherwise, shall the amount paid or agreed to be paid to the Holder for the use, forbearance or detention of money hereunder exceed the
maximum amount permissible under applicable law. If from any circumstance whatsoever fulfillment of any provision hereof, at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law,
then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity, and if from any such circumstance the Holder shall ever receive interest, or anything which might be deemed interest under applicable law, which
would exceed the highest lawful rate, such amount which would be excessive interest shall be applied to the reduction of the principal amount owing on account of the Note and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal of the Note, such excess shall be refunded to the Maker. All sums paid or agreed to be paid to the Holder for the use, forbearance or detention of the indebtedness of the Maker to the Holder shall, to the extent permitted
by applicable law, be deemed to be amortized, prorated, allocated and spread 

  

 R-3 

 
throughout the full term of such indebtedness until payment in full so that the actual rate of interest on account of such indebtedness is uniform throughout
the term thereof. The terms and provisions of this paragraph shall control and supersede every other provision of the Note and all other agreements between the Maker and the Holder. 
  
 The Maker hereby declares represents and warrants that the indebtedness evidenced hereby is made for the purpose of
acquiring or carrying on a business, professional, or commercial activity. 
  
 Whenever used herein, the words “Maker” and “Holder” and “Obligor” shall be deemed to include their respective successors and assigns. 
  
 IN WITNESS WHEREOF, the undersigned has duly executed the Note, or has caused
the Note to be duly executed on its behalf, as of the day and year first hereinabove set forth. 
  

									
	 [SEAL]
	 	 	 	 	 	FELLOWS ENERGY LTD.
			
	 ATTEST:
	 	 	 	 
				
	 /s/ Marsha Johnston
	 	 	 	 By:
	 	 /s/ George S. Young

	 	 	 	 	 	 	 George S. Young

	 	 	 	 	 	 	 	 	 President

  

 R-4

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