Document:

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                                                                    Exhibit 10.7

NEITHER THIS PROMISSORY NOTE NOR THE UNDERLYING SHARES OF COMMON STOCK INTO
WHICH THIS PROMISSORY NOTE MAY BE CONVERTED HAS BEEN REGISTERED UNDER THE
FEDERAL SECURITIES ACT OF 1933, AS AMENDED, AND RULES AND REGULATIONS THEREUNDER
(THE "SECURITIES ACT") OR ANY APPLICABLE STATE SECURITIES LAW, AND MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF EITHER: (i)
REGISTRATION UNDER THE SECURITIES ACT, (ii) OR THE AVAILABILITY OF AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

                           CONVERTIBLE PROMISSORY NOTE
                             DUE ____________, 2006

US$______________                                               Houston, Texas
                                                      __________________, 2001

FOR VALUE RECEIVED, American Energy Services, Inc., a Texas corporation (the
"Company"), having offices at 7224 Lawndale, Houston, Texas 77012 hereby
promises to pay to the order of with an address at ___________________________
or registered assigns (the "Holder"), the principal amount of ($______) with
interest on the unpaid principal balance hereof at the rate of 6% per annum
(calculated on the basis of a 360-day year consisting of twelve 30-day months)
on or before _____________, 2006 (the "Maturity Date").

In the event that (i) a registration statement has not been filed by the Company
under the Securities Act with respect to the Conversion Shares (as defined
below) within 30 calendar days after the first issuance of Notes or such
registration statement has not been declared effective by the Securities and
Exchange Commission (the "SEC") within 120 calendar days after the first
issuance of Notes or any action is taken or threatened by any regulatory
authority to terminate or suspend such effectiveness, or (ii) in the event that
a final prospectus available for use in connection with the sale of the
Conversion Shares to the public is not furnished to the Escrow Agent (as defined
below) and the Holder within 120 calendar days after the first issuance of Notes
or such prospectus ceases to comply with all applicable securities rules and
regulations, then the principal amount of indebtedness represented by this Note
shall be increased by 2% for each 30-day period or part thereof during which the
registration statement is not filed and declared effective or a prospectus is
not available for use or any regulatory action is pending or threatened.

1.    Payments.

(a)   The unpaid principal of, and any accrued and unpaid interest on, this Note
shall be due and payable in full on the Maturity Date.

(b)   Interest on this Note shall be payable in arrears on the first day of each
January and July of each year commencing July 1, 2001 and on the Maturity Date
(each, a "Payment Date") in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts or, at the option of the Company, in shares of the Company's
common stock, par value $0.001 per share (the "Common Stock") based on the
Conversion Price (as defined below) then in effect. In either case, payment of
interest shall be made by first class mail paid to the Holder in whose name this
Note is registered at the close of business on the Payment Date at such address
as shall appear on the Note records maintained by the Company. Interest shall
accrue from the most recent Payment Date on which interest has been paid or, if
no interest has been paid on this Note, from the original date of issue of this
Note to but excluding the next Payment Date.

(c)   If any Payment Date or the Maturity Date would fall on a day that is not a
Business Day (as defined below), the payment due on such Payment Date or
Maturity Date will be made on the next succeeding

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Business Day with the same force and effect as if made on the Payment Date or
the Maturity Date, as the case may be. "Business Day" means any day which is not
a Saturday or Sunday and is not a day on which banking institutions are
generally authorized or obligated to close in the City of Houston, Texas.

(d)   This Note may not be prepaid, in whole or in part, without the consent of
the Holder, until the date which is 540 days after the first issuance of Notes.
Subject to the foregoing restriction, the Company shall be entitled to prepay
this Note, in whole or in part, without penalty or premium, upon not less than
10 business days prior written notice (a "Prepayment Notice") to the Holder. The
Prepayment Notice shall specify the time and place of prepayment and the amount
of indebtedness and accrued interest thereon to be prepaid. If after a
Prepayment Notice has been given pursuant to this paragraph, the Holder shall,
prior to the close of business on the last business day preceding the date fixed
for prepayment, deliver a Conversion Notice in accordance with Section 2(b) of
this Note with respect to the conversion of any or all of the principal and
accrued interest of this Note, then the Prepayment Notice shall be deemed
ineffective as to the Conversion Amount specified in the Conversion Notice and
such Conversion Amount shall be converted as provided in Section 2 hereof. In
every case of partial prepayment of Notes of like tenor to this Note, the amount
to be prepaid shall be allocated to all such Notes in the same proportion as
each Notes bears to the aggregate amount of indebtedness represented all
outstanding Notes.

(e)   The obligation to make the payments provided for in this Note are absolute
and unconditional and not subject to any defense, set-off, counterclaim,
rescission, recoupment or adjustment whatsoever. The Company hereby expressly
waives demand and presentment for payment, notice of nonpayment, notice of
dishonor, protest, notice of protest, and diligence in taking any action to
collect any amount called for hereunder, and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereon, regardless of
and without any notice, diligence, act or omission with respect to the
collection of any amount called for hereunder.

2.    Conversion.

(a)   After the original date of issue of this Note, the Holder shall have the
right (the "Conversion Right"), on the terms set forth in this Section 2, to
convert the principal amount of this Note and the accrued but unpaid interest
thereon, into a number of shares of Common Stock, determined by dividing the
principal and accrued interest of this Note or the portion to be converted (the
"Conversion Amount") by the then effective Conversion Price. As used herein, the
term Conversion Price shall mean 70% of the average Market Price of the Common
Stock for the five trading days concluded most recently prior to the date of
execution of the Conversion Notice (the "Conversion Date"), but in any event,
not more than $1.00 (the "Maximum Conversion Price"). The Maximum Conversion
Price is subject to adjustment from time to time pursuant to Section 3 of this
Note.

(b)   To exercise the Conversion Right, the Holder, on or before the Maturity
Date, shall deliver to ___________________, as escrow agent (the "Escrow Agent")
pursuant to a certain Escrow Agreement dated of even dated herewith, at his
office at 10 South Brentwood Blvd, Suite 416, St. Louis, Missouri 63105 or at
such other place as is designated in writing by the Escrow Agent, a notice (the
"Conversion Notice") in the form attached hereto as EXHIBIT A. The Conversion
Amount, unless equal to the maximum amount eligible for conversion, shall be an
integral multiple of $1,000 and, if the Conversion Notice (i) specifies a
Conversion Amount other than an amount permitted by the foregoing, the
Conversion Amount shall be equal to the greatest amount so permitted which does
not exceed the amount stated in the Conversion Notice, or (ii) does not specify
a Conversion Amount, the Conversion Amount shall be equal to the maximum
permitted Conversion Amount.

(c)   Upon exercise of the Conversion Right, the Holder shall be deemed to be
the holder of record of the shares of Common Stock issuable upon such exercise
(the "Conversion Shares"), notwithstanding that the

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transfer books of the Company shall then be closed or certificates representing
such Conversion Shares shall not then have been actually delivered to the
Holder.

(d)   As soon as practicable after the Conversion Date, the Escrow Agent shall
provide the Company with written notice of the exercise of the Conversion Right
and the Escrow Agent shall transfer to the exercising Holder, in certificated or
uncertificated form, that number of Conversion Shares to which such Holder is
entitled in accordance with the instructions set forth in the Notice of
Conversion. All Conversion Shares issued on exercise of any Conversion Right
shall be validly authorized and issued, full paid and nonassessable, and free
from all taxes, liens and charges created by the Company in respect of the issue
thereof, and shall be previously unissued shares. Promptly after a registration
statement filed by the Company under the Securities Act with respect to the
Conversion Shares has been declared effective by the SEC the Company shall cause
notice thereof or a copy of the prospectus included as part of such registration
statement to be mailed to the Escrow Agent and the Holder of this Note.

(e)   In the event that the Conversion Amount is less than the maximum permitted
Conversion Amount, the Company shall immediately (but in any event not more than
three business days after receiving notice of the exercise of the Conversion
Right) cause to be mailed, by first class mail, to the Holder, or such other
person as shall be designated in the Conversion Notice, a new Note representing
the indebtedness and accrued interest not included in the Conversion Amount.

(f)   The issuance of any Conversion Shares or other securities upon the
exercise of the Conversion Right, and the delivery of certificates or other
instruments representing such shares or other securities, shall be made without
charge to the Holder for any tax or other charge in respect of such issuance.
The Company shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of any certificate
in a name other than that of the Holder, and the Company shall not be required
to issue or deliver any such certificate unless and until the person or persons
requesting the issue thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid.

(g)   The Holder shall not have, solely on account of its status as a holder of
this Note, any rights of a stockholder of the Company, either at law or in
equity, or any notice of meetings of stockholders or of any other proceedings of
the Company, except as provided in this Note.

(h)   The Company shall at all times maintain in escrow with the Escrow Agent a
number of shares of Common Stock equal to 125% of the number of shares of Common
Stock issuable upon exercise in full of the Conversion Rights of all outstanding
Notes.

(i)   The Company shall not be required upon the exercise of the Conversion
Right to issue fractional shares of Common Stock. The number of full Conversion
Shares that shall be deliverable shall be computed based on the then effective
Conversion Price. With respect to any final fraction of a share called for upon
the exercise of any Conversion Right, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to the same fraction of the
Market Price of a share of Common Stock.

3.    Adjustment of Conversion Price.

(a)   In case the Company shall at any time after the original date of issuance
of this Note (1) declare a dividend on its outstanding Common Stock payable in
shares of its capital stock, (2) subdivide its outstanding Common Stock, (3)
combine its outstanding Common Stock into a smaller number of shares, or (4)
issue any shares of its capital stock by reclassification of its Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the surviving

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entity), then, in each case, the Maximum Conversion Price issuable upon exercise
of the Conversion Right, in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, shall be proportionately adjusted so that the Holder after
such time shall be entitled to receive the aggregate number and kind of shares
which, if the Conversion Right had been exercised immediately prior to such
time, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.

(b)   In case the Company shall issue or fix a record date for the issuance to
all holders of its Common Stock of rights, options, or warrant to subscribe for
or purchase the Common Stock (or securities convertible into or exchangeable for
the Common Stock) at a price per share (or having a conversion or exchange price
per share, if a security convertible into or exchangeable for the Common Stock)
less than the Market Price of the Common Stock on such record date, then, in
each case, the Maximum Conversion Price shall be adjusted by multiplying the
Maximum Conversion Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of Common Stock which
the aggregate offering price of the total number of shares of Common Stock so to
be offered (or the aggregate initial conversion or exchange price of the
convertible or exchangeable securities so to be offered) would purchase at such
Market Price and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock to be offered for subscription or purchase (or into which
the convertible or exchangeable securities so to be offered are initially
convertible or exchangeable); provided, however, that no such adjustment shall
be made which results in an increase in the Maximum Conversion Price. Such
adjustment shall become effective at the close of business on such record date;
provided, however, that, to the extent the shares of Common Stock (or securities
convertible into or exchangeable for shares of Common Stock) are not delivered,
the Maximum Conversion Price shall be readjusted after the expiration of such
rights, options, or warrants (but only with respect to Conversion Rights
exercised after such expiration), to the Maximum Conversion Price which would
then be in effect had the adjustments made upon the issuance of such rights,
options, or warrants been made upon the basis of delivery of only the number of
shares of Common Stock (or securities convertible into or exchangeable for
shares of Common Stock) actually issued. In case any subscription price may be
paid in a consideration, part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the board of directors of the Company, whose determination shall be conclusive
absent manifest error. Shares of Common Stock owned by or held for the account
of the Company or any majority-owned subsidiary shall not be deemed outstanding
for the purpose of any such computation.

(c)   In case the Company shall distribute to all holders of its Common Stock
(including any such distribution made to the stockholders of the Company in
connection with a consolidation or merger in which the Company is the surviving
corporation) evidences of its indebtedness, cash or assets (other than
distributions and dividends payable in shares of Common Stock), or rights,
options, or warrants to subscribe for or purchase Common Stock, or securities
convertible into or changeable for shares of Common Stock (excluding those with
respect to the issuance of which an adjustment of the Maximum Conversion Price
is provided pursuant to Section 3(b) hereof), then, in each case, the Maximum
Conversion Price shall be adjusted by multiplying the Maximum Conversion Price,
in effect immediately prior to the record date for the determination of
stockholders entitled to receive such distribution by a fraction, the numerator
of which shall be the Market Price of the Common Stock on such record date, less
the fair market value (as determined in good faith by the board of directors of
the Company, whose determination shall be conclusive absent manifest error) of
the portion of the evidences of indebtedness or assets so to be distributed, or
of such rights, options, or warrants or convertible or exchangeable securities,
or the amount of such cash, applicable to one share, and the denominator of
which shall be such Market Price of the Common Stock. Such adjustment shall
become effective at the close of

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business on such record date.

(d)   In any case in which this Section 3 shall require that an adjustment in
the Maximum Conversion Price be made effective as of a record date for a
specified event, the Company may elect to defer, until the occurrence of such
event, issuing to the Holders, if such Holder has exercised his Conversion
Rights after such record date, the Conversion Shares, if any, issuable upon such
exercise over and above the Conversion Shares issuable upon such exercise on the
basis of the Conversion Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such Holder a due bill or other
appropriate instrument evidencing the Holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.

(e)   As used in this Agreement, the term "Market Price" shall mean:

(i)   if the Common Stock is listed, or admitted to unlisted trading privileges
on a national securities exchange, or is traded on the Nasdaq National Market or
the Nasdaq Small-Cap Market, the last reported high bid price on the each
trading day of any measurement period to which such Market Price relates, in
each case as officially reported by the principal securities exchange on which
the Common Stock is listed or admitted to unlisted trading privileges or by the
Nasdaq National Market or Nasdaq Small-Cap Market, or

(ii)   if the Common Stock is not listed or admitted to unlisted trading
privileges, on any national securities exchange, or traded on the Nasdaq
National Market or Nasdaq Small-Cap Market, but is traded on the OTC Bulletin
Board of the Nasdaq Stock Market, Inc. (the "OTCBB"), then the Market Price is
the last reported high bid price of the Common Stock reported by the OTCBB; or

(iii)   if the Common Stock is not listed or admitted to unlisted trading
privileges, on any national securities exchange, or traded on the Nasdaq
National Market, Nasdaq Small-Cap Market, or the OTCBB but is traded in the
over-the-counter market, then the Market Price is the last reported high bid
price of the Common Stock reported by the National Quotation Bureau, Inc. or
similar bureau if the National Quotation Bureau, Inc. is no longer reporting
such information on the date of the event to which such Market Price relates,
and if no such prices are reported on such date, then the average of the last so
reported high bid prices on the last five trading days on which such prices are
reported immediately preceding such date; or

(iv)   if the Common Stock is neither listed, nor admitted to unlisted trading
privileges on a national securities exchange, nor traded on the Nasdaq National
Market or Nasdaq Small-Cap Market, nor on the OTCBB, nor traded in the
over-the-counter market, then the fair market value of the Common Stock, not
less that the book value thereof, as of the date of the event to which such
Market Price relates, as determined in good faith (using customary valuation
methods) by the Board of Directors of the Company, which determination shall be
evidenced by a resolution of the Board of Directors and based on the best
information available to it.

(f)   In case of any consolidation with or merger of the Company with or into
another corporation (other than a merger or consolidation in which the Company
is the surviving or continuing corporation), or in case of any sale, lease, or
conveyance to another corporation of the property and assets of any nature of
the Company as an entirety or substantially as an entirety, such successor,
leasing, or purchasing corporation, as the case may be, the Company shall (a)
execute with the Holder an agreement providing that the Holder shall have the
right thereafter to receive upon exercise of the Conversion Right solely the
kind and amount of shares of stock and other securities, property, cash, or any
combination thereof receivable upon such consolidation, merger, sale, lease, or
conveyance by a holder of the number of shares of the Common Stock for which the
Conversion Right might have been exercised immediately

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prior to such consolidation, merger, sale, lease, or conveyance, and (b) make
effective provision in its certificate of incorporation or otherwise, if
necessary, to effect such agreement. Such agreement shall provide for
adjustments that shall be as nearly equivalent as practicable to the adjustments
in this Section 3.

(g)   In case of any reclassification or change of the Common Stock issuable
upon exercise of the Conversion Right (other than a change in par value or from
no par value to a specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or more classes or
series or shares), or in case of any consolidation or merger of another
corporation into the Company in which the Company is the continuing corporation
and in which there is a reclassification or change (including a change to the
right to receive cash or other property) of the Common Stock (other than a
change in par value, or from no par value to a specified par value, or as a
result of a subdivision or combination, but including any change in the shares
into two or more classes or series of shares), the Holder shall have the right
thereafter to receive upon exercise of the Conversion Right solely the kind and
amount of shares of stock and other securities, property, cash, or any
combination thereof receivable upon such reclassification, change,
consolidation, or merger by a holder of the number of shares of the Common Stock
for which the Conversion Right might have been exercised immediately prior to
such reclassification, change, consolidation, or merger. Thereafter, appropriate
provision shall be made for adjustments that shall be as nearly equivalent as
practicable to the adjustments in this Section 3.

(h)   Whenever the Maximum Conversion Price is adjusted as provide in this
Section 3, the Company shall promptly obtain a certificate of a firm of
independent public accountants of recognized standing selected by the board of
directors (who may be the regular auditors of the Company) setting forth the
Maximum Conversion Price, so adjusted, and a brief statement of the facts
accounting for such adjustment, an shall make available a brief summary thereof
to the Holder, at his address listed on the register maintained for the purpose
by the Company.

(i)   In the event that the Company shall propose to take any action that could
cause an adjustment in the Maximum Conversion Price, the Company shall cause
notice of such proposal to be mailed to the Holder at least 20 calendar days
prior to the date of expected action. Such notice shall specify the date on
which the action is expected to take place.

4.    Events of Default. Each of the following events shall constitute an event
of default hereunder (an "Event of Default"). Upon the occurrence of any Event
of Default, the Company shall immediately notify the Holder in writing of the
occurrence thereof.

(a)   Default in the payment of any interest upon this Note when it becomes due
and payable, which default continues for more than five (5) days after the due
date thereof.

(b)   Default in the payment of any installment of the principal of this Note
when due.

(c)   The filing of a petition against the Company or any of its subsidiaries
seeking reorganization, arrangement, adjustment or composition of the Company or
any of its subsidiaries, or under the Federal Bankruptcy Act, any insolvency act
or any other applicable federal or state law dealing with creditors rights
generally, or the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or any of its
subsidiaries or of any substantial part of their property or an order for the
winding up or liquidation of any of their affairs, and the failure to obtain the
dismissal or a stay of such petition for a period of 45 days.

(d)   The institution by the Company or any of its subsidiaries of proceedings,
or the consent by any of them to the institution of bankruptcy or insolvency
proceedings against any such person or the filing by any

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of them of a petition or answer or consent seeking reorganization or release
under the Federal Bankruptcy Act, any insolvency act or any other applicable
federal or state law dealing with creditors rights generally, or the consent by
any of them to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or any of its subsidiaries or of any substantial part
of any of their property, or the making by any of them of an assignment for the
benefit of creditors, or the admission by any of them in writing of their
inability to pay their debts generally as they become due or the taking of
corporate action by the Company or any of its subsidiaries in furtherance of any
such action.

(e)   Any failure by the Company to comply with any of its obligations contained
in the provisions of this Note or any other written agreement between the
Company and the Holder, and the continuation thereof for more than thirty (30)
days after written notice thereof is given to the Company by the Holder of the
Note.

(f)   One or more judgments, orders or decrees for the payment of money which
either individually or in the aggregate at any one time exceeds $100,000 shall
be rendered against the Company or any of its subsidiaries by a court of
competent jurisdiction and shall remain undischarged and unbonded for a period
(during which execution shall not be effectively stayed) of 45 days after such
judgment becomes final and nonappealable.

5.    Acceleration of Maturity.

(a)   If an Event of Default occurs and is continuing, the Holders of not less
than 50% in principal amount of the Notes then outstanding, may declare the
entire unpaid principal of the Notes to be due and payable immediately, by
notice in writing to the Company, and upon any such declaration such principal
shall become immediately due and payable. Any Note owned beneficially or of
record by the Company or any of its subsidiaries shall be deemed to be not
outstanding for purposes of this paragraph (a).

(b)   After the occurrence of an Event of Default, whether or not collection
procedures are instituted by a Holder, the Company shall be obligated to pay
reasonable costs incurred by a Holder of a Note in seeking collection and
performance of a Note by the Company.

6.    Rights and Remedies Cumulative. No right or remedy herein conferred upon
or reserved to the Holder is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise, but subject in all
instances to the provisions of this Note. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

7.    Other Provisions Relating to Rights of the Holder.

(a)   This Note shall not entitle the Holder to any rights of a shareholder of
the Company, including without limitation, the right to vote, to receive
dividends and other distributions, to receive any notice of, or to attend,
meetings of shareholders or any other proceedings of the Company.

(b)   If this Note shall be lost, mutilated, stolen or destroyed, the Company in
its discretion may cause to be executed and delivered, in exchange and
substitution for and upon cancellation of a mutilated Note, or in lieu of or in
substitution for a lost, stolen or destroyed Note, a new Note of like tenor and
principal amount to the lost, mutilate, stolen or destroyed Note but only upon
receipt of evidence of such loss, theft or destruction of such Note, and of the
ownership thereof, and indemnity, if requested, all satisfactory to the Company.
Applicants for such a substitute Note shall also comply with such other
reasonable

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regulations and pay such other reasonable charges incidental thereto as the
Company may prescribe. Any such new Note shall constitute an original
contractual obligation of the Company, whether or not the allegedly lost,
stolen, mutilated or destroyed Note shall be at anytime enforceable by anyone.

(c)   Prior to the Maturity Date, this Note, subject to compliance with
applicable law, may be split up, combined or exchanged for other Notes of like
tenor and aggregate principal amount or may be transferred in whole or in part.
If the Holder desires to split up, combine or exchange a Note, he shall make
such request in a writing delivered to the Company and shall surrender the Note
so to be split up, combined or exchanged. Subject to any applicable laws, rules
or regulations restricting transferability, any restriction that may appear on a
Note, transfer of an outstanding Note may be effected by the Company from time
to time upon the books of the Company to be maintained for that purpose, upon
surrender of the Note to the Company, duly endorsed. Upon any such surrender for
split up, combination, exchange or transfer, the Company shall execute and
deliver to the person entitled thereto a Note, as the case may be, as so
requested. The Company may require the holder to pay a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any split
up, combination, exchange or transfer of a Note prior to the issuance of any new
Note.

(d)   The Holder by accepting the same consents and agrees with the Company
that: (a) transfer of Notes shall be registered on the books of the Company
maintained for that purpose only if surrendered at the executive offices of the
Company, duly endorsed or accompanied by a proper instrument of transfer, with
signatures guaranteed; and, (b) prior to due presentment for registration of
transfer, the Company may deem and treat the person in whose name the Note is
registered as the absolute owner thereof (notwithstanding any notations of
ownership or writing on the Note made by anyone other than the Company) for all
purposes whatsoever, and the Company shall not be affected by any notice to the
contrary.

(e)   The Company shall maintain books and records for registration and
registration of transfer of the Notes. Such books shall show the names and
addresses of the respective holders of the Notes, the principal amount of such
Notes and the date of each Note.

(f)   Any request, demand, authorization, direction, notice, consent, waiver or
other action to be given or taken by the Holder may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Holder(s) in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holder(s) signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Note and
conclusive in favor of the Company. The fact and date of the execution by any
Holder of any such instrument or writing may be proved by the certificate of any
notary public or other officer authorized by law to take acknowledgments of
deeds, certifying that the person signing such instrument or writing
acknowledged the due execution thereof. Where such execution is by an officer of
a corporation or association or a member of a partnership or an official of a
public or governmental body, on behalf of such corporation, association,
partnership, or public or governmental body or by a fiduciary, such certificate
shall also constitute sufficient proof of such person's authority. The fact and
date of the execution by any Holder of any such instrument or writing, or the
authority of the person executing the same, may also be proved in any other
manner that the Company deems sufficient and in accordance with such reasonable
rules as the Company may determine.

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(g)   No delay or omission of the Holder of the Note to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.

(h)   The Holders of not less than a majority in principal amount of the Notes
outstanding at any time may on behalf of the Holders of all the Notes, waive any
past default hereunder and its consequences. Upon any such waiver, such default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Note; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.

(i)   This Note is made under and will be governed by the laws of the State of
Texas

(j)   The descriptive headings of the articles and sections of this Note are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

IN WITNESS WHEREOF, the Company has caused this Note to be signed on the date
first above written.

                                    AMERICAN ENERGY SERVICES, INC.

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

                                       9<PAGE>

                      THIS WARRANT HAS NOT BEEN REGISTERED
                        UNDER THE SECURITIES ACT OF 1933
                             AND IS NOT TRANSFERABLE
                            EXCEPT AS PROVIDED HEREIN

                               GMX RESOURCES, INC.

                                PURCHASE WARRANT

                                   Issued to:

                        PAULSON INVESTMENT COMPANY, INC.

                             Exercisable to Purchase

              40,000 Shares of Series A Convertible Preferred Stock

                                       of

                               GMX RESOURCES, INC.

                           Void after _________, 2006

<PAGE>

         This is to certify that, for value received and subject to the terms
and conditions set forth below, the Warrantholder (hereinafter defined) is
entitled to purchase, and the Company promises and agrees to sell and issue to
the Warrantholder, at any time on or after _____________, 2002 and on or before
____________, 2006, up to 40,000 Shares (hereinafter defined) at the Exercise
Price (hereinafter defined).

         This Warrant Certificate is issued subject to the following terms and
conditions:

         1. DEFINITIONS OF CERTAIN TERMS. Except as may be otherwise clearly
required by the context, the following terms have the following meanings:

         (a) "Act" means the Securities Act of 1933, as amended.

         (b) "Cashless Exercise" means an exercise of Warrants in which, in lieu
of payment of the Exercise Price, the Holder elects to receive a lesser number
of Securities such that the value of the Securities that such Holder would
otherwise have been entitled to receive but has agreed not to receive, as
determined by the closing price of such Securities on the date of exercise or,
if such date is not a trading day, on the next prior trading day, is equal to
the Exercise Price with respect to such exercise. A Holder may only elect a
Cashless Exercise if the Securities issuable by the Company on such exercise are
publicly traded securities.

         (c) "Closing Date" means the date on which the Offering is closed.

         (d) "Commission" means the Securities and Exchange Commission.

         (e) "Common Stock" means the common stock, $0.001 par value, of the
Company.

         (f) "Company" means GMX Resources, Inc., an Oklahoma corporation.

         (g) "Company's Expenses" means any and all expenses payable by the
Company or the Warrantholder in connection with an offering described in Section
6 hereof, except Warrantholder's Expenses.

         (h) "Effective Date" means the date on which the Registration Statement
is declared effective by the Commission.

         (i) "Exercise Price" means the price at which the Warrantholder may
purchase one Share upon exercise of Warrants as determined from time to time
pursuant to the provisions hereof. The initial Exercise Price is $____ per
Share.

         (j) "Offering" means the public offering of Shares made pursuant to the
Registration Statement.

                                       2

<PAGE>

         (k) "Participating Underwriter" means any underwriter participating in
the sale of the Securities pursuant to a registration under Section 6 of this
Warrant Certificate.

         (l) "Registration Statement" means the Company's registration statement
(File No. 333 -________) as amended on the Closing Date.

         (m) "Rules and Regulations" means the rules and regulations of the
Commission adopted under the Act.

         (n) "Securities" means the securities obtained or obtainable upon
exercise of the Warrant or securities obtained or obtainable upon exercise,
exchange, or conversion of such securities.

         (o) "Share" means one share of Series A Cumulative Convertible
Preferred Stock, $0.001 par value, of the Company.

         (p) "Warrant Certificate" means a certificate evidencing the Warrant.

         (q) "Warrantholder" means a record holder of the Warrant or Securities.
The initial Warrantholder is Paulson Investment Company, Inc.

         (r) "Warrantholder's Expenses" means the sum of (i) the aggregate
amount of cash payments made to an underwriter, underwriting syndicate, or agent
in connection with an offering described in Section 6 hereof multiplied by a
fraction the numerator of which is the aggregate sales price of the Securities
sold by such underwriter, underwriting syndicate, or agent in such offering and
the denominator of which is the aggregate sales price of all of the securities
sold by such underwriter, underwriting syndicate, or agent in such offering and
(ii) all out-of-pocket expenses of the Warrantholder, except for the fees and
disbursements of one firm retained as legal counsel for the Warrantholder that
will be paid by the Company.

         (s) "Warrant" means the warrant evidenced by this certificate, any
similar certificate issued in connection with the Offering, or any certificate
obtained upon transfer or partial exercise of the Warrant evidenced by any such
certificate.

               2. EXERCISE OF WARRANTS. All or any part of the Warrant may be
exercised commencing on the first anniversary of the Effective Date and
ending at 5 p.m. Pacific Time on the fifth anniversary of the Effective Date by
surrendering this Warrant Certificate, together with appropriate instructions,
duly executed by the Warrantholder or by its duly authorized attorney, at the
office of the Company, One Benham Place, Suite 600, 9400 North Broadway,
Oklahoma City, Oklahoma 73114, or at such other office or agency as the Company
may designate. The date on which such instructions are received by the Company
shall be the date of exercise. If the Holder has elected a Cashless Exercise,
such instructions shall so state. Upon receipt of notice of exercise, the
Company shall immediately instruct its transfer agent to prepare certificates
for the Securities to be

                                       3

<PAGE>

received by the Warrantholder upon completion of the Warrant exercise. When
such certificates are prepared, the Company shall notify the Warrantholder
and deliver such certificates to the Warrantholder or as per the
Warrantholder's instructions immediately upon payment in full by the
Warrantholder, in lawful money of the United States, of the Exercise Price
payable with respect to the Securities being purchased, if any. If the
Warrantholder shall represent and warrant that all applicable registration
and prospectus delivery requirements for their sale have been complied with
upon sale of the Securities received upon exercise of the Warrant, such
certificates shall not bear a legend with respect to the Securities Act of
1933.

         If fewer than all the Securities purchasable under the Warrant are
purchased, the Company will, upon such partial exercise, execute and deliver to
the Warrantholder a new Warrant Certificate (dated the date hereof), in form and
tenor similar to this Warrant Certificate, evidencing that portion of the
Warrant not exercised. The Securities to be obtained on exercise of the Warrant
will be deemed to have been issued, and any person exercising the Warrants will
be deemed to have become a holder of record of those Securities, as of the date
of the payment of the Exercise Price.

         3. ADJUSTMENTS IN CERTAIN EVENTS. The number, class, and price of the
Shares are subject to adjustment from time to time upon the happening of certain
events as follows:

         (a) If the outstanding Shares are divided into a greater number of
Shares or a dividend in Shares is paid on the Shares , the number of Shares for
which the Warrant is then exercisable will be proportionately increased and the
Exercise Price will be proportionately reduced; and, conversely, if the
outstanding Shares are combined into a smaller number of Shares, the number of
Shares for which the Warrant is then exercisable will be proportionately reduced
and the Exercise Price will be proportionately increased. The increases and
reductions provided for in this subsection 3(a) will be made with the intent
and, as nearly as practicable, the effect that neither the percentage of the
total Series A Preferred equity of the Company obtainable on exercise of the
Warrants nor the price payable for such percentage upon such exercise will be
affected by any event described in this subsection 3(a).

         (b) In case of any change in the Shares through merger, consolidation,
reclassification, reorganization, partial or complete liquidation, purchase of
substantially all the assets of the Company, or other change in the capital
structure of the Company, then, as a condition of such change, lawful and
adequate provision will be made so that the holder of this Warrant Certificate
will have the right thereafter to receive upon the exercise of the Warrant the
kind and amount of shares of stock or other securities or property to which he
would have been entitled if, immediately prior to such event, he had held the
number of Shares obtainable upon the exercise of the Warrant. In any such case,
appropriate adjustment will be made in the application of the provisions set
forth herein with respect to the rights and interest thereafter of the
Warrantholder, to the end that the provisions set forth herein will thereafter
be applicable, as nearly as reasonably may be, in relation to any shares of
stock or other property thereafter deliverable upon the exercise

                                       4

<PAGE>

of the Warrant. The Company will not permit any change in its capital
structure to occur unless the issuer of the shares of stock or other
securities to be received by the holder of this Warrant Certificate, if not
the Company, agrees to be bound by and comply with the provisions of this
Warrant Certificate.

         (c) When any adjustment is required to be made in the number of Shares,
other securities, or property purchasable upon exercise of the Warrant, the
Company will promptly determine the new number of such Shares or other
securities or property purchasable upon exercise of the Warrant and (i) prepare
and retain on file a statement describing in reasonable detail the method used
in arriving at the new number of such Shares or other securities or property
purchasable upon exercise of the Warrant and (ii) cause a copy of such statement
to be mailed to the Warrantholder within thirty (30) days after the date of the
event giving rise to the adjustment.

         (d) No fractional Shares or other securities will be issued in
connection with the exercise of the Warrant, but the Company will pay, in lieu
of fractional shares, a cash payment therefor on the basis of the mean between
the bid and asked prices of the Shares in the over-the-counter market or the
closing price on a national securities exchange on the day immediately prior to
exercise.

         (e) If securities of the Company or securities of any subsidiary of the
Company are distributed pro rata to holders of Shares, such number of securities
will be distributed to the Warrantholder or his assignee upon exercise of his
rights hereunder as such Warrantholder or assignee would have been entitled to
if this Warrant Certificate had been exercised prior to the record date for such
distribution. The provisions with respect to adjustment of the Shares provided
in this Section 3 will also apply to the securities to which the Warrantholder
or his assignee is entitled under this subsection 3(e).

         (f) Notwithstanding anything herein to the contrary, there will be no
adjustment made hereunder on account of the sale of the Shares or other
Securities purchasable upon exercise of the Warrant.

         4. RESERVATION OF SECURITIES. The Company agrees that the number of
Shares or other Securities sufficient to provide for the exercise of the Warrant
upon the basis set forth above will at all times during the term of the Warrant
be reserved for exercise.

         5. VALIDITY OF SECURITIES. All Securities delivered upon the exercise
of the Warrant will be duly and validly issued in accordance with their terms,
and the Company will pay all documentary and transfer taxes, if any, in respect
of the original issuance thereof upon exercise of the Warrant.

         6. REGISTRATION OF SECURITIES ISSUABLE ON EXERCISE OF WARRANT
CERTIFICATE.

         (a) The Company will register the Securities with the Commission
pursuant to the Act so as to allow the unrestricted sale of the Securities to
the public from time to

                                       5

<PAGE>

time commencing on the first anniversary of the Effective Date and ending at
5:00 p.m. Pacific Time on the fifth anniversary of the Effective Date (the
"Registration Period"). The Company will also file such applications and
other documents necessary to permit the sale of the Securities to the public
during the Registration Period in those states in which the Units were
qualified for sale in the Offering or such other states as the Company and
the Warrantholder agree to. In order to comply with the provisions of this
Section 6(a), the Company is not required to file more than one registration
statement. No registration right of any kind, "piggyback" or otherwise, will
last longer than five years from the Effective Date.

         (b) The Company will pay all of the Company's Expenses and each
Warrantholder will pay its pro rata share of the Warrantholder's Expenses
relating to the registration, offer, and sale of the Securities.

         (c) Except as specifically provided herein, the manner and conduct of
the registration, including the contents of the registration, will be entirely
in the control and at the discretion of the Company. The Company will file such
post-effective amendments and supplements as may be necessary to maintain the
currency of the registration statement during the period of its use. In
addition, if the Warrantholder participating in the registration is advised by
counsel that the registration statement, in their opinion, is deficient in any
material respect, the Company will use its best efforts to cause the
registration statement to be amended to eliminate the concerns raised.

         (d) The Company will furnish to the Warrantholder the number of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as it may reasonably request
in order to facilitate the disposition of Securities owned by it.

         (e) The Company will, at the request of Warrantholders holding at least
50 percent of the then outstanding Warrants, (i) furnish an opinion of the
counsel representing the Company for the purposes of the registration pursuant
to this Section 6, addressed to the Warrantholders and any Participating
Underwriter, (ii) furnish an appropriate letter from the independent public
accountants of the Company, addressed to the Warrantholders and any
Participating Underwriter, and (iii) make representations and warranties to the
Warrantholders and any Participating Underwriter. A request pursuant to this
subsection (e) may be made on three occasions. The documents required to be
delivered pursuant to this subsection (e) will be dated within ten days of the
request and will be, in form and substance, equivalent to similar documents
furnished to the underwriters in connection with the Offering, with such changes
as may be appropriate in light of changed circumstances.

         7. INDEMNIFICATION IN CONNECTION WITH REGISTRATION.

         (a) If any of the Securities are registered, the Company will indemnify
and hold harmless each selling Warrantholder, any person who controls any
selling Warrantholder

                                       6

<PAGE>

within the meaning of the Act, and any Participating Underwriter against any
losses, claims, damages, or liabilities, joint or several, to which any
Warrantholder, controlling person, or Participating Underwriter may be
subject under the Act or otherwise; and it will reimburse each Warrantholder,
each controlling person, and each Participating Underwriter for any legal or
other expenses reasonably incurred by the Warrantholder, controlling person,
or Participating Underwriter in connection with investigating or defending
any such loss, claim, damage, liability, or action, insofar as such losses,
claims, damages, or liabilities, joint or several (or actions in respect
thereof), arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained, on the effective date
thereof, in any such registration statement or any preliminary prospectus or
final prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that the Company will not be
liable in any case to the extent that any loss, claim, damage, or liability
arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in any registration statement,
preliminary prospectus, final prospectus, or any amendment or supplement
thereto, in reliance upon and in conformity with written information
furnished by a Warrantholder for use in the preparation thereof. The
indemnity agreement contained in this subparagraph (a) will not apply to
amounts paid to any claimant in settlement of any suit or claim unless such
payment is first approved by the Company, such approval not to be
unreasonably withheld.

         (b) Each selling Warrantholder, as a condition of the Company's
registration obligation, will indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed any registration statement
or other filing or any amendment or supplement thereto, and any person who
controls the Company within the meaning of the Act, against any losses, claims,
damages, or liabilities to which the Company or any such director, officer, or
controlling person may become subject under the Act or otherwise, and will
reimburse any legal or other expenses reasonably incurred by the Company or any
such director, officer, or controlling person in connection with investigating
or defending any such loss, claim, damage, liability, or action, insofar as such
losses, claims, damages, or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue or alleged untrue statement of any material
fact contained in said registration statement, any preliminary or final
prospectus, or other filing, or any amendment or supplement thereto, or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in said
registration statement, preliminary or final prospectus, or other filing, or
amendment or supplement, in reliance upon and in conformity with written
information furnished by such Warrantholder for use in the preparation thereof;
PROVIDED, HOWEVER, that the indemnity agreement contained in this subparagraph
(b) will not apply to amounts paid to any claimant in settlement of any suit or
claim unless such payment is first approved by the Warrantholder, such approval
not to be unreasonably withheld.

                                       7

<PAGE>

         (c) Promptly after receipt by an indemnified party under subparagraphs
(a) or (b) above of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, notify the indemnifying party of the commencement thereof; but the
omission to notify the indemnifying party will not relieve it from any liability
that it may have to any indemnified party otherwise than under subparagraphs (a)
and (b).

         (d) If any such action is brought against any indemnified party and it
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in, and, to the extent that it may wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel satisfactory to such indemnified party; and after
notice from the indemnifying party to such indemnified party of its election to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.

         8. RESTRICTIONS ON TRANSFER. This Warrant Certificate and the Warrant
may not be sold, transferred, assigned or hypothecated for a one-year period
after the Effective Date except to underwriters of the Offering or to
individuals who are either a partner or an officer of such an underwriter or by
will or by operation of law. The Warrant may be divided or combined, upon
request to the Company by the Warrantholder, into a certificate or certificates
evidencing the same aggregate number of Warrants.

         9. NO RIGHTS AS A SHAREHOLDER. Except as otherwise provided herein, the
Warrantholder will not, by virtue of ownership of the Warrant, be entitled to
any rights of a shareholder of the Company but will, upon written request to the
Company, be entitled to receive such quarterly or annual reports as the Company
distributes to its shareholders.

         10. NOTICE. Any notices required or permitted to be given hereunder
will be in writing and may be served personally or by mail; and if served will
be addressed as follows:

                  If to the Company:

                  GMX Resources Inc.
                  One Benham Place, Suite 600
                  9400 North Broadway
                  Oklahoma City, Oklahoma 73114
                  Attn: Treasurer

                  If to the Warrantholder:

                  at the address furnished

                                       8

<PAGE>

                  by the Warrantholder to the
                  Company for the purpose of
                  notice.

         Any notice so given by mail will be deemed effectively given 48 hours
after mailing when deposited in the United States mail, registered or certified
mail, return receipt requested, postage prepaid and addressed as specified
above. Any party may by written notice to the other specify a different address
for notice purposes.

         11. APPLICABLE LAW. This Warrant Certificate will be governed by and
construed in accordance with the laws of the State of Oregon, without reference
to conflict of laws principles thereunder. All disputes relating to this Warrant
Certificate shall be tried before the courts of Oregon located in Multnomah
County, Oregon to the exclusion of all other courts that might have
jurisdiction.

         Dated as of _______, 2001

         GMX RESOURCES, INC.

         By:  __________________________________
              Title:

         Agreed and Accepted as of __________, 2001

         PAULSON INVESTMENT COMPANY, INC.

         By:___________________________________
              Title:

                                       9

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