Document:

Exhibit 10.14

COMMON STOCK

 

SUBSCRIPTION AGREEMENT

 

 

PERSONAL AND CONFIDENTIAL

 

 

GeoPetro Resources
Company

One Maritime Plaza, Suite
400

San
Francisco, California 94111

 

 

Gentlemen:

 

                I hereby make application to purchase _______________
Common Shares (the “Shares”) of GeoPetro Resources Company, a California
corporation (the “Company”), at $________ per Share, as set forth on the
signature page hereof. I understand that the Shares to be offered by the
Company will not be registered under the Securities Act of 1933, as amended
(the “Act”), or the various state blue sky laws.  I also understand that in order to assure
that the sale of the Shares will be exempt from registration under the Act and
various state securities laws, each prospective offeree must have such
knowledge and experience in financial and business matters in order that he or
she is able to evaluate the risks and merits of an investment in the Company.

 

                I understand that the information supplied in this
letter agreement (the “Agreement”) will be disclosed to no one other than the
officers and directors of the Company and/or to counsel or accountants for the
Company without my consent, or unless it is necessary for the Company to use
such information to support the exemption from registration under the Act which
it claims for the Offering.  The Company
may, in its sole discretion, reject any subscription for Shares.

 

I.              Representations and Warranties.

 

                I represent and warrant to you, jointly and severally
(if subscription is made for more than one person), as follows:

 

                (1)           By reason of my knowledge and
experience in financial and business matters in general, and investments in
particular, I am able to evaluate the merits and risks of an investment in the
Shares.

 

                (2)           My income and net worth are such that
I am not now, and do not contemplate in the future, being required to dispose
of any portion of any investment in the Shares to satisfy any existing or
contemplated undertaking.

 

                (3)           I am able to bear the economic risks
of an investment in the Shares, including, without limiting the generality of
the foregoing, the risk of losing part or all of my investment in the Shares,
and the probable inability to sell or transfer the Shares for an indefinite
period of time.

 

                (4)           I
am an “accredited investor” as that term is defined in Regulation D under the
Securities Act of 1933 (the “Act”), and other applicable securities laws and
regulations.  Please indicate the
following category or categories that accurately describe your situation [mark all applicable blanks]:

 

 

______                                                      (a)           A natural person (not an entity)
whose individual net worth, or joint net worth with his or her spouse, at the
time of his or her purchase exceeds $1,000,000;

______                                                      (b)           A natural person (not an entity) who [mark appropriate blank(s)]: 
(i) ___ had an individual income in excess of $200,000 in each of
the two most recent years or (ii) ___ joint income with his or her spouse
in excess of $300,000 in each of those years, and (iii) in either case (i)
or (ii) has a reasonable expectation of reaching the same income level in the
current year;

______                                                      (c)           A trust, with total assets in excess
of $5,000,000, not formed for the specific purpose of acquiring the securities
offered, whose purchase is directed by a person who has such knowledge and
experience in financial and business matters that he or she is capable of
evaluating the merits and risks of the prospective investment in the securities
offered;

______                                                      (d)           An entity in which all of the equity
owners are accredited investors;

______                                                      (e)           A bank, as defined in section 3(a)(2)
of the Act, or any savings and loan association or other institution as defined
in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary
capacity;

______                                                      (f)            Any broker or dealer registered pursuant
to section 15 of the Securities Exchange Act of 1934;

______                                                      (g)           Any insurance company as defined in
section 2(13) of the Act;

______                                                      (h)           Any investment company registered
under the Investment Company Act of 1940 or a business development company as
defined in section 2(a)(48) therein;

______                                                      (i)            Any Small Business Investment
Company licensed by the U.S. Small Business Administration under section 301(c)
or (d) of the Small Business Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the benefit of
its employees, if such plan has total assets in excess of $5,000,000;

______                                                      (j)            Any employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of 1974 [mark appropriate blank]: 
(i) if the investment decision is made by a plan fiduciary, as
defined in section 3(21) of such act, which is (A) _____ a bank,
(B) _____ a savings and loan association, (C) _____ an insurance
company, or (D) _____ a registered investment adviser, or (ii) _____
if the employee benefit plan has total assets in excess of $5,000,000 or,
(iii) _____ if a self-directed plan, with investment decisions made solely
by persons that are accredited investors;

______                                                      (k)           A private business development
company as defined in section 202(a)(22) of the Investment Advisers Act of
1940;

______                                                      (l)            An organization described in section
501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar
business trust, or partnership, not formed for the specific purpose of
acquiring the securities offered, or a plan established or maintained by a
state or its 

 

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                                political subdivisions
or any agency or instrumentality of a state or its political subdivisions, for
the benefit of its employees, in any such case with total assets in excess of
$5,000,000 (in case of an organization described in section 501(c)(3) of the
Internal Revenue Code, such total assets include endowment, annuity and life
income funds and are to be determined according to the subscriber’s most recent
audited financial statements); or

______                                                      (m)          A director, executive officer, or
general partner of the issuer of the securities being offered or sold, or a
director, executive officer, or general partner of a general partner of that
issuer.

 

 

If the subscriber has indicated category (d) or
(j)(iii) above, please list below the names and categories of accreditation of the
accredited investors who are the equity owners (category (d)), or making the
investment decisions (category (j)(iii)) (attach additional pages if
necessary):

 

	
  Person Making Decision/Equity
  Owner

  	
   

  	
  Accredited

  Investor

  Category

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

Special Note for Trusts, Limited Liability
Companies, Partnerships and Certain Retirement Plans: 
The application of the “accredited investor” categories to trusts
(including Massachusetts or similar business trusts), limited liability
companies, partnerships and self-employed individual retirement plans is
subject to complex regulatory interpretations and may differ under state and
federal law.  Accordingly, such an entity
attempting to qualify may be required to deliver additional information,
including a satisfactory opinion of its counsel.

 

                (5)           My investment in Shares will be
solely for my own account, for investment, and not with a view to, or to offer
to sell for an issuer in connection with, the distribution of the Shares, or to
participate or have a direct or indirect participation in any such undertaking,
or to participate or have a participation in the direct or indirect
underwriting of any such undertaking.

 

                (6)           My name and address are:

 

	
   

  
	
   

  
	
   

  

 

                (7)           My occupation is:

 

	
   

  
	
   

  
	
   

  

 

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                (8)           Other than my present occupation, I
have also been employed in the following capacities during the last five years
(specify type of position and dates):

 

	
   

  
	
   

  
	
   

  

 

                (9)           My educational background is as
follows (specify institutions, degrees, and dates):

 

	
   

  
	
   

  
	
   

  
	
   

  

 

                (10)         During the past ten years, I have made
investments in (check appropriate responses and describe representative
examples in the space below):

 

 

                                                ____       Marketable
securities:

 

	
   

  
	
   

  
	
   

  
	
   

  

 

                                                ____       Securities
purchased in Non-Registered securities Offerings:

 

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

                (11)         That the information contained in this
letter is accurate, true, and complete, and I understand that the Company will
not accept this subscription until it has reviewed this letter, and concluded that
I have such knowledge and experience in financial and business matters that I
am able to

 

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evaluate the merits and
risks of an investment in the Shares and that I am able to bear the economic
risks of such investment.

 

                (12)         That I have received satisfactory and
complete information concerning the business and financial condition of the
Company in response to all inquiries in respect thereof.

 

                (13)         The offer to sell Shares was directly
communicated to me by the Company in such a manner that I was able to ask
questions of and receive answers from the Company or a person acting on its
behalf concerning the terms of this transaction and that at no time was I
presented with or solicited by any leaflet, public or promotional meeting,
newspaper or magazine article, radio or television advertisement or any other
form of general advertising otherwise than in connection and concurrently with
such communicated offer.

 

                (14)         The Company has disclosed to me that:

 

                                (a)           The Shares that I am purchasing have
not been registered under the Act and the Shares must be held indefinitely
unless a transfer of the Shares is subsequently registered under the Act or the
Company receives an opinion of counsel reasonably satisfactory to the Company
that an exemption from such registration is available;

 

                                (b)           There is currently no public trading
market for the Shares; consequently, a purchaser of the Shares may not be able
to liquidate or transfer the Shares;

 

                                (c)           The Common Stock of the Company is
not listed for trading in the stock market. 
There can be no assurance as to when, if ever, such a listing may be
obtained;

 

                                (d)           The shares that I am acquiring are “restricted
securities” as that term is defined in Rule 144 promulgated under the Act; that
the exemption from registration under Rule 144 will not be available in any
event for at least one (1) year from the date of issuance, and even then will
not be available unless (i) a public trading market then exists for the Shares,
(ii) adequate information concerning the Company is then available to the
public, and (iii) other terms and conditions of Rule 144 are complied with; and
that any sale of the Shares may be made by me only in accordance with such
terms and conditions; and

 

                                (e)           Each
certificate representing the securities offered will bear a legend
substantially similar to the following:

 

                                                                   “THE
SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.  SUCH
SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNDER SAID ACT, WITHOUT
REGISTRATION, UNLESS UPON RECEIPT BY THE COMPANY OF AN OPINION OF LEGAL COUNSEL
OR A COPY OF A LETTER FROM THE STAFF OF THE SECURITIES AND EXCHANGE COMMISSION,
IN EITHER CASE SATISFACTORY TO THE COMPANY THAT SUCH SHARES MAY LEGALLY BE SOLD
OR TRANSFERRED WITHOUT SUCH REGISTRATION.”

 

                (15)         I understand the following:

 

                                (a)           There are a number of risk factors
associated with an investment in the Shares.

 

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                                (b)           I may lose the entire investment in
the Company.

 

                (16)         I have been advised to seek independent
counsel and further understands that the Company’s counsel does not represent
me.

 

                (17)         The Company is authorized to rely on
all of the representations and warranties made by me in this Subscription
Agreement.

 

II.            Subscription and Payment.

 

                1.             Subscription.  I hereby subscribe to purchase Shares in the
amount set forth on the signature page of this Agreement.  My check, payable in the amount of the full
purchase price, made payable to the Company, is tendered with this Subscription
Agreement.  As of the date this
Subscription Agreement is accepted and approved by the Company, I shall be
deemed to be an owner of the Shares for all purposes.

 

                2.             Duty
to Update Information.  All
information which I have provided to you concerning my financial position as
indicated herein, and knowledge of financial and business matters, is correct
and complete as of the date of my execution of this Subscription
Agreement.  If there should be any
material change in such information prior to acceptance of this Subscription
Agreement, I will immediately provide such information.

 

                3.             Indemnification
Regarding Subscription Information. 
I hereby agree to indemnify and hold harmless the Company and all of the
controlling persons thereof from any and all damages, losses, costs and
expenses which they may incur:  (i) by
reason of my failure to fulfill any of the terms and conditions of this Subscription
Agreement; (ii) by reason of my breach of any of my representations, warranties
or agreement; and (iii) with respect to any and all claims made by or involving
any person, other than me personally, claiming any interest, right, title,
power or authority in respect to my investment. 
I further agree and acknowledge that these indemnifications shall
survive any sale or transfer, or attempted sale or transfer, of any portion of
my Shares, my death or my default under this Agreement.

 

III.           Investor Rights.

 

                1.             Registration
Rights.  The undersigned and the
Company agree that the undersigned shall have the following rights with respect
to the registration by the Company of the Common Stock issued pursuant to this
Agreement (the “Registrable Securities”):

 

                                (a)           Piggyback Registration.  For a period of five (5) years following the
date of this Agreement (the “Piggyback Rights Period”), (i) if the Company
proposes to file with the SEC its initial registration statement for
registration under the Act (the “Registration Statement”), the Company will
give written notice of such intention to the undersigned at least thirty (30)
days prior to the proposed filing date offering to include in any such filing
twenty percent (20%) of the undersigned’s Registrable Securities, or (ii) if
following said initial Registration Statement, the Company proposes to file any
other Registration Statement, the Company will give written notice to the
undersigned at least thirty (30) days prior to said filing date offering to
include all of the undersigned’s Registrable Securities, subject in each case
to the limitations set forth herein.  The
Company may, in its sole discretion, waive the percentage limitation with
respect to the Company’s initial registration statement.  Further, provided that if a representative of
the underwriter advises the Company that marketing factors require a limitation
on the number of shares underwritten, the number of shares to be included by
the holders of registration rights shall be allocated among such persons pro
rata in accordance with the number of shares of Common Stock requested to be

 

6

 

included in such
registration.  Subject to the foregoing
limitation, upon receipt by the Company of a request to include in such filing
a registration of the undersigned’s Registrable Securities (which request shall
include the facts with respect to the proposed distribution), the Company shall
include such Registrable Securities in such filing at no expense to the
undersigned, except for the underwriting discounts, commissions and spreads
with respect to such Registrable Securities, transfer taxes incurred by the
undersigned and fees and expenses of counsel for the undersigned, if any, all
of which shall be paid by the undersigned, unless otherwise required by the
blue-sky laws of any state.  However, if
the Company files a Registration Statement during the Piggyback Rights Period,
the Company shall prepare and file with the SEC such amendments and supplements
to such Registration Statement as may be necessary to keep it effective for a
period of the lesser of (a) 6 months following the effective date of any
Registration Statement filed on a Form S-1 or S-2, (b) 12 months following the
date of any registration statement filed on Form S-3, and (c) the time when the
Registrable Securities can be sold pursuant to Rule 144 of the Act or any other
rule of similar effect.

 

                                (b)           Cooperation and Indemnification.  The Company agrees to indemnify and hold
harmless the undersigned against any losses, damages or liabilities to which
the undersigned may become subject under the Act or otherwise insofar as said
losses damages or liabilities (or actions in respect thereof) relate to the
sale of stock by them in connection with such registration statement, arising
from any untrue statement or alleged untrue statement of material fact or from
the omission or the alleged omission therein of a material fact required to be
stated therein or necessary to make the statements therein not misleading; but
such indemnity shall apply only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was not made in
reliance upon and in conformity with information furnished by the undersigned
for use in the preparation thereof.  The
Company agrees to reimburse the undersigned for any legal or other expenses
reasonably incurred in connection with any such loss, damage or liability.  The undersigned agrees to cooperate fully
with the Company in the preparation and filing of any registration statement which
includes any Registrable Securities owned by the undersigned.  The undersigned will provide at its own
expense and in writing to the Company all information and data with respect to
itself and to its plan of distribution as shall be required by the rules and
regulations of the SEC to be included in any such registration statement.  The undersigned further agrees to indemnify
and hold harmless the Company, each of its directors, and each of its officers
who has signed such registration statement (or any amendments thereof) and each
person, if any, who controls the Company, within the meaning of the Act,
against any losses, damages or liabilities to which the Company, or any such
director, officer or controlling person of the Company may become subject under
such Act or otherwise, insofar as said losses, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the registration
statement (or any amendment thereof) 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;
such indemnity shall apply only to the extent that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with information furnished by the undersigned for use in
the preparation thereof.  The undersigned
agrees to reimburse the Company and any such director, officer or controlling
person for any legal or other expenses reasonably incurred in connection with
any such loss, damage or liability.

 

                2.             Information
Rights.  The Company shall provide
the undersigned with written updates on the Company’s business every quarter
until the Company’s Common Stock becomes listed on a recognized exchange or
NASDAQ.

 

                3.             Lock-Up.  The undersigned agrees that if so requested
by an underwriter in connection with any public offering of securities by the
Company, the undersigned shall not sell, or make any short

 

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sale of, the Company’s
securities without the prior written consent of the underwriter for a period of
180 days following the effective date of such registration statement.

 

IV.           Miscellaneous.

 

                1.             Arbitration.  Any controversy or claim arising out of or
relating to this Subscription Agreement, or breach thereof, including without
limitation claims against either party, its affiliates, employees,
professionals, officers or directors shall be settled by binding arbitration in
San Francisco, California, in accordance with the Commercial Rules of the
American Arbitration Association.  The
arbitrator(s) shall be an active member of the California Bar.  In the proceeding, the arbitrator(s) shall
apply California substantive law and the California Evidence Code, except that
the arbitrator’s authority in awarding damages shall be interpreted under New
York law.  The undersigned agrees that
the arbitrator(s) shall have no authority to award punitive damages, and the
undersigned has been advised to seek counsel concerning the possible waiver by
the undersigned of certain rights otherwise available to the undersigned as a
consequence of such agreement.  The
arbitrator(s) shall prepare an award in writing, which shall include factual
findings and any legal conclusions on which the decision is based.  Judgment upon any award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.  In any such proceeding, the prevailing party
shall be entitled, in addition to any other relief awarded or adjudged, such
sum as the arbitrator(s) may fix as and for reasonable attorneys’ fees and
costs, and the same shall be included in the award and any judgment.

 

                2.             Binding
Effect.  I understand that this
Subscription Agreement shall be binding upon my heirs, successors, estate,
legal representatives and assigns, and shall be construed in accordance with
the laws of the State of California.

 

                3.             Execution.  If this Subscription Agreement is executed on
behalf of a corporation, partnership, trust or other entity, the undersigned
has been duly authorized and empowered to legally represent such entity and to
execute this Subscription Agreement and all other instruments in connection
with the purchase of the Securities and the signature of the undersigned is
binding upon such entity.

 

                6.             Pronouns.  All pronouns and any variations thereof used
herein shall be deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the person, persons or entities herein may be
appropriate.

 

                7.             Execution
of Further Documents.  The
undersigned hereby agrees to execute such other documents as may be reasonably
necessary to consummate the transaction proposed herein, including, but not
limited to, regulatory filings which may be required to be filed in my state of
residence.

 

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SUBSCRIPTION AGREEMENT SIGNATURE PAGE

 

 

                Executed this __________ day of ________________,             , at _________________________
(City), ______________________ (State).

 

                The undersigned hereby subscribes for
__________________ Common Shares at $________ per Share.

 

                The undersigned encloses cash payment in the full
amount of the Subscription.

 

                All checks should be made payable to:  GeoPetro Resources Company.

 

TYPE OF OWNERSHIP

(Check one)

 

                                                a. _____                Separate
or individual property.  (If the
purchaser is married, his/her spouse should sign a spouse’s consent if
community funds will be used to purchase the Common Shares.)

 

                                                b. _____                Husband
and wife as community property.  (Husband
and wife must both sign required documents unless investor’s attorney
advises that one signature is sufficient.)

 

                                                c. _____                Joint
tenants with right of survivorship.  (Both
parties must sign all required documents unless investor’s attorney advises
that one signature is sufficient.)

 

                                                d. _____                Tenants
in common.  (Both parties must
sign all required documents.)

 

                                                e. _____                Trust.  (Include name of trust, name of trustee and
date trust was formed.)

 

                                                f. _____ Partnership.  (Include copy of Partnership Agreement
authorizing signature.)

 

                                                g. _____                Corporation.  (Include certified corporate resolution
authorizing signature.)

 

                                                h. _____                Other
(Indicate):                                                                                                   

 

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Please print here the
exact name(s) desired on Company records. 
If there are more than two investors, please attach an additional sheet.

 

	
   

  	
   

  	
   

  
	
  Investor #1 Signature

  	
   

  	
  Investor #2 Signature

  
	
   

  	
   

  	
   

  
	
  Investor #1 (Print or
  Type Name)

  	
   

  	
  Investor #2 (Print or
  Type Name)

  
	
   

  	
   

  	
   

  
	
  Social Security or Tax
  I.D. Number

  	
   

  	
  Social Security or Tax
  I.D. Number

  
	
   

  	
   

  	
   

  
	
  Residence Address

  	
   

  	
  Residence Address

  
	
   

  	
   

  	
   

  
	
  City          State          Zip

  	
   

  	
  City          State          Zip

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ACCEPTED BY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GEOPETRO RESOURCES
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  

 

10Exhibit 10.15

 

FULL-RECOURSE SECURED
PROMISSORY NOTE

 

 

	
  $1,000,000

  	
   

  	
  June 7, 2006

  

 

 

1.               For value received, the undersigned (“Debtor”)
promises to pay to GeoPetro Resources Company, a California corporation (“Lender”),
or order, at One Maritime Plaza, Suite 700, San Francisco, California  94111, or at such other location as Lender
may from time to time designate, the principal sum of One Million Dollars
($1,000,000), with interest thereon at the rate of eight percent (8 %) per
annum, (the “Interest Rate”). Principal and interest shall be due and payable
March 31, 2007 (the “Payment Date”).  All
payments made shall first be applied to accrued but unpaid interest and second
to outstanding principal.  If the Payment
Date falls on a day which is not a banking day in California, the payment shall
be due on the next succeeding banking day.

 

2.               This Note is the Full-Recourse Secured
Promissory Note referred to in that certain Pledge Agreement (the “Pledge
Agreement”), dated as of even date herewith, between Debtor and Lender, and the
holder hereof is entitled to the benefits thereof. Reference is herein made to
said Pledge Agreement for a description of the provisions upon which this Note
is issued and secured, and the nature and extent of the security and the rights
of the holder hereof.

3.               Debtor is and shall remain absolutely and
unconditionally liable for the performance of its obligations under this Note,
including, without limitation, any deficiency by reason of the failure of the
collateral described in the Pledge Agreement to satisfy all amounts due Lender
hereunder.  Debtor acknowledges and
agrees that Lender is not required to utilize or exhaust the collateral
described in the Pledge Agreement to satisfy any amounts due hereunder which
are not timely paid, and that Lender may exercise any or all rights at law,
equity or otherwise to receive payment in the event Debtor fails to pay any
amount due hereunder.

4.               Principal and interest shall be payable
in lawful money of the United States of America.

5.               This Note may be prepaid, in whole or in
part, at any time without penalty.

6.               The following events shall constitute an “Event
of Default” under the Note:  (a) the
failure of Debtor to make any payment required under this Note when due; (b)
any breach, misrepresentation or other default by Debtor under this Note or the
Pledge Agreement; (c) the insolvency of Debtor or the failure of Debtor
generally to pay his debts as such debts become due; (d) the commencement as to
Debtor of any voluntary or involuntary proceeding under any laws relating to
bankruptcy, insolvency, reorganization, arrangement, debt adjustment or debtor
relief; (e) the assignment by Debtor for the benefit of Debtor’s creditors; (f)
the appointment, or commencement of any proceedings for the appointment, of a
receiver, trustee, custodian or similar official for any of Debtor’s property;
(g) the death of Debtor; (h) the failure of Debtor to comply with any order,
judgment, injunction, decree, writ or demand of any court or other public
authority; (i) the filing or recording against Debtor, or the property of
Debtor, of any notice of levy, notice to withhold, or other legal process for
taxes other than property taxes; (j) the default by Debtor on any obligation
concerning the

 

1

 

borrowing of money; (k) the issuance against Debtor, or the property of
Debtor, of any writ of attachment, execution, or other judicial lien; or (l)
the deterioration of the financial condition of Debtor which results in Lender
deeming itself, in good faith, insecure. 
Upon the occurrence of any such Event of Default, Lender may declare, in
its discretion, all obligations under this Note immediately due and payable;
however, upon the occurrence of an event of default under (d), (e) or (f), all
principal and interest shall automatically become immediately due and payable.

7.               In case any one
or more Events of Default shall occur and be continuing and acceleration of
this Note shall have occurred, Lender may, among other things, proceed to protect
and enforce its rights by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement contained
herein or in the Pledge Agreement, or for an injunction against a violation of
any of the terms hereof or thereof or in and of the exercise of any power
granted hereby or thereby or by law.  No
right conferred upon Lender hereby or by the Pledge Agreement shall be
exclusive of any other right referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise.  Any principal or interest not paid by Debtor
when due under this Note will bear interest at the rate of ten percent (10%).

8.               Debtor agrees to pay all costs, expenses
and fees (including, without limitation, all attorneys’ fees) incurred by
Lender in any proceeding for collection of the debt evidenced hereby, or in any
litigation or controversy arising from or connected with this Note.

9.               This Note shall be governed by, and
construed in accordance with, the laws of the State of California without
reference to its conflict of laws principles. 
Debtor hereby expressly consents to jurisdiction and venue for any
litigation arising out of, under or related to this Note in the federal and
state courts of California.

10.         Reference in this Note to “Lender” shall
mean the original Lender hereunder so long as such Lender shall be a holder of
this Note, and thereafter shall mean any subsequent holder(s) of this Note.

11.         Time is of the essence of each obligation
of Debtor hereunder.

12.         No delay or omission on the part of
Lender in exercising any rights hereunder or under any other instrument given
to secure this Note, shall operate as a waiver of such right or of any other
right hereunder, or under said instruments.

13.         Debtor hereby waives presentment for
payment, demand, notice of dishonor, and protest of this Note, and further
agrees that none of the terms or provisions of this Note may be waived,
altered, modified or amended, except as Lender may consent thereto in writing.

14.         All agreements between Debtor and Lender
are hereby expressly limited so that in no contingency or event whatsoever
shall the amount paid or agreed to be paid to Lender for the use, forbearance,
or retention of money exceed the maximum permissible under applicable law.  If, from any circumstance whatsoever,
fulfillment of any provision hereof, at the time performance of such provisions
shall be due, shall be prohibited by law, the obligation to be fulfilled shall
be reduced to the maximum not so prohibited, and, if from any circumstances,

 

2

 

Lender should ever receive as interest an amount which would exceed the
highest lawful rate, such amount as would be excessive interest shall be
applied to the reduction of the principal balance outstanding under this Note
and not to the payment of interest. This provision shall control every other
provision of all agreements between Debtor and Lender.

	
   

  	
   

  	
  DEBTOR:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ G. Carter Sednaoui

  
	
   

  	
   

  	
  G. Carter Sednaoui

  

 

3

 

PLEDGE AGREEMENT

 

This Pledge Agreement
(the “Agreement”) is made effective as of June ____, 2006, by
G. Carter Sednaoui (“Pledgor”) in favor of GeoPetro Resources Company, a
California corporation (“Lender”).

RECITALS

A.            Pledgor has executed that certain Full-Recourse Secured
Promissory Note of even date herewith (hereinafter, as the same may be
subsequently amended, restated, supplemented or otherwise modified from time to
time, the “Note”) in favor of Lender, pursuant to which Lender has lent funds
to Pledgor (the “Loan”) subject to the terms and conditions thereof.

B.            Pledgor is the record and beneficial owner of certain
shares of capital stock of Lender.

NOW, THEREFORE, in
consideration of the above Recitals and to induce Lender to make the Loan, the
parties hereto hereby agree as follows:

1.             Definitions.           The following terms shall have
(unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the
singular and plural form of the terms defined):

“Bankruptcy Code” shall
mean the provisions of title 11 of the United States Code, 11 U.S.C. §§ 101 et
seq.

“Event of Default” shall
have the meaning assigned to it in Section 8.

“Indebtedness” shall have
the meaning assigned to it in Section 3.

“Pledged Collateral”
shall have the meaning assigned to it in Section 2.

“Pledged Shares” shall
have the meaning assigned to it in Section 2.

“Securities Act” shall
mean the provisions of the Securities Act of 1933, 15 U.S.C. Sections 77a et
seq.

“Termination Date” shall
mean the date on which the Indebtedness has been indefeasibly repaid in full.

2.             Grant
of Security Interest.                Pledgor
hereby grants to Lender a possessory security interest in 564,120 of Pledgor’s
shares of common stock of Lender (the “Pledged Shares”) and the certificates
representing the Pledged Shares, any and all replacements, accessions and
substitutions in respect of the Pledged Shares, and all dividends,
distributions, cash instruments and other property  or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Pledged Shares (the “Pledged Collateral”).

 

1

 

3.             Indebtedness.        Pledgor agrees that the Pledged
Collateral is and shall be security for the timely payment and performance of
all obligations under all Indebtedness to Lender.  “Indebtedness” means all debts, obligations
and liabilities of Pledgor in connection with the Note; all renewals,
extensions and modifications thereof; and all attorneys’ fees and costs
incurred by Lender in connection with the collection and enforcement thereof.

4.             Delivery
of Pledged Collateral.         All
certificates evidencing the Pledged Collateral have been or shall be delivered
to and held by Lender or to a bailee on behalf of Lender pursuant to the terms
of this Agreement.  All Pledged Shares
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to Lender.

5.             Representations
and Warranties.    Pledgor represents
and warrants to Lender that:

(a)           Pledgor is, and at the time of
delivery of the Pledged Shares to Lender, the sole holder of record and the
sole beneficial owner of such Pledged Collateral pledged by it free and clear
of any lien thereon or affecting the title thereto, except for any lien created
by this Agreement;

(b)           Pledgor has the right and requisite
authority to pledge, assign, transfer, deliver, deposit and set over the
Pledged Collateral pledged by Pledgor to Lender as provided herein;

(c)           No consent, approval, authorization
or other order or other action by, and no notice to or filing with, any
governmental authority or any other Person is required (i) for the pledge
by Pledgor of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor, or (ii) for
the exercise by Lender of the voting or other rights provided for in this Agreement
or the remedies in respect of the Pledged Collateral pursuant to this
Agreement, except as may be required in connection with such disposition by
laws affecting the offering and sale of securities generally;

(d)           The
pledge, assignment and delivery of the Pledged Collateral pursuant to this
Agreement will create a valid first priority lien in favor of Lender in the
Pledged Collateral and the proceeds thereof, securing the payment of Pledgor’s
obligations under the Note, subject to no other lien; and

(e)           This
Agreement has been duly authorized, executed and delivered by Pledgor and
constitutes a legal, valid and binding obligation of Pledgor enforceable
against Pledgor in accordance with its terms.

The representations and
warranties set forth in this Section 5 shall survive the execution and
delivery of this Agreement.

6.             Covenants.            Pledgor covenants and agrees that
until the Termination Date:

(a)           Without
the prior written consent of Lender (which it can withhold, condition or delay
in its sole and absolute discretion), Pledgor will not sell, assign, transfer,

 

2

 

pledge, or
otherwise encumber any of its rights in or to any Pledged Collateral, or any
unpaid dividends or other distributions or payments with respect to any Pledged
Collateral, or grant a lien in the Pledged Collateral;

(b)           Pledgor
will, at its expense, promptly execute, acknowledge and deliver all instruments
and documents and take all such actions as Lender from time to time may
reasonably request in order to ensure to Lender the benefits of the liens in
and to the Pledged Collateral intended to be created by this Agreement,
including the filing of any UCC financing statements, which may be filed by
Lender with or (to the extent permitted by law) without the signature of
Pledgor, and will cooperate with Lender, at Pledgor’s expense, in obtaining all
necessary approvals and making all necessary filings under federal, state,
local or foreign law in connection with such liens or any private sale or
transfer of the Pledged Collateral, which sale or transfer would only occur
upon the occurrence and during the continuance of an Event of Default; and

(c)           Pledgor
has and will defend the title to the Pledged Collateral and the liens of Lender
in the Pledged Collateral against the claim of any Person and will maintain and
preserve such liens.

7.             Pledgor’s
Rights.                So long as no Event of
Default shall have occurred and be continuing and until written notice shall be
given to Pledgor in accordance with Section 9(a):

(a)           Pledgor
shall have the right, from time to time, to vote and give consents with respect
to the Pledged Collateral or any part thereof for all purposes not inconsistent
with the provisions of this Agreement or the Note; provided, that
without the prior written consent of Lender (which it can withhold, condition
or delay in its sole and absolute discretion), no vote shall be cast, and no
consent shall be given or action taken, that would have the effect of impairing
the position or interest of Lender in respect of the Pledged Collateral or that
would authorize, effect or consent to: (i) the dissolution or liquidation,
in whole or in part, of Lender; (ii) the consolidation or merger of Lender with
any other entity (other than a merger in which Lender is the surviving entity);
or (iii) the sale, disposition or encumbrance of all or substantially all
of the assets of Lender.

(b)           Pledgor
shall be entitled, from time to time, to collect and receive for its own use
all dividends and other distributions paid in respect of the Pledged Shares,
except for any and all dividends of stock in Lender; provided, that all such
distributions and, until actually paid, all rights thereto, shall be subject to
the lien in favor of Lender created by this Agreement.

(c)           All
stock dividends and all other stock distributions paid or payable in respect of
any of the Pledged Shares, whenever paid or made, shall, when actually paid, be
delivered to Lender to hold as Pledged Collateral in the same form as so
received (with any necessary endorsements).

8.             Events
of Default. The occurrence of any
of the following shall constitute an “Event of Default” under this Agreement:

(a)                                  Pledgor shall fail to perform any
obligation under this Agreement; or

 

3

 

(b)           Pledgor
shall fail to perform under the Note.

9.             Defaults and Remedies; Proxy.

(a)           Upon
the occurrence and during the continuation of any Event of Default, and
concurrently with written notice to Pledgor, Lender (personally or through an
agent) is hereby authorized and empowered to transfer and register in its name
or in the name of its nominee the whole or any part of the Pledged Collateral,
to exchange certificates representing or evidencing Pledged Collateral for
certificates of smaller or larger denominations, to exercise the voting and all
other rights as a holder with respect thereto, to collect and receive all cash
dividends and other distributions made thereon, to sell in one or more sales
after ten days’ notice of the time and place of any public sale or of the time
at which a private sale is to take place (which notice Pledgor agrees is
commercially reasonable) the whole or any part of the Pledged Collateral and to
otherwise act with respect to the Pledged Collateral as though Lender were the
outright owner thereof.  Any sale shall
be made at a public or private sale at Lender’s place of business, or at any
place to be named in the notice of sale, either for cash or upon credit or for
future delivery at such price as Lender may deem fair, and Lender may be the
purchaser of the whole or any part of the Pledged Collateral so sold and hold
the same thereafter in its own right free from any claim of Pledgor or any
right of redemption.  Each sale shall be
made to the highest bidder, but Lender reserves the right to reject any and all
bids at such sale that, in its discretion, it shall deem inadequate.  Except as otherwise specifically provided for
in this Agreement or the Note, demands of performance, notices of sale,
advertisements and the presence of property at sale are hereby waived and any
sale hereunder may be conducted by an auctioneer or any officer or agent of
Lender.  PLEDGOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS LENDER AS ITS PROXY AND ATTORNEY-IN-FACT WITH RESPECT
TO THE PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE THE PLEDGED SHARES, WITH
FULL POWER OF SUBSTITUTION TO DO SO.  THE
APPOINTMENT OF LENDER AS PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST
AND SHALL BE IRREVOCABLE UNTIL THE TERMINATION DATE.  IN ADDITION TO THE RIGHT TO VOTE THE PLEDGED
SHARES, THE APPOINTMENT OF LENDER AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE
THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO
WHICH A HOLDER OF PLEDGED SHARES WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING
WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND
VOTING AT SUCH MEETINGS).  SUCH PROXY
SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION
(INCLUDING ANY TRANSFER OF ANY PLEDGED SHARES ON THE RECORD BOOKS OF THE ISSUER
THEREOF) BY ANY PERSON (INCLUDING ANY ISSUER OF ANY PLEDGED SHARES OR ANY
OFFICER THEREOF), UPON THE OCCURRENCE OF AN EVENT OF DEFAULT.  NOTWITHSTANDING THE FOREGOING, LENDER SHALL
NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME AND SHALL
NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.

(b)           If,
at the original time or times appointed for the sale of the whole or any part
of the Pledged Collateral, (i) the highest bid, if there is but one sale, shall
be inadequate to discharge in full all the Indebtedness, or (ii) such Pledged
Collateral is offered for sale in lots, the

 

4

 

highest bid for
the lot offered for sale at any of such sales would indicate to Lender, in its
discretion, that the proceeds of the sales of the whole of the Pledged
Collateral would be unlikely to be sufficient to discharge all the
Indebtedness, then Lender may, on one or more occasions and in its discretion,
postpone any of said sales by public announcement at the time of sale or the
time of previous postponement of sale, and no other notice of such postponement
or postponements of sale need be given, any other notice being hereby waived; provided,
that any sale or sales made after such postponement shall be after ten days’
notice to Pledgor.

(c)           If,
at any time when Lender shall determine to exercise its right to sell the whole
or any part of the Pledged Collateral hereunder, such Pledged Collateral or the
part thereof to be sold shall not, for any reason whatsoever, be effectively
registered under the Securities Act (or any similar statute), then Lender may,
in its discretion (subject only to applicable requirements of law), sell such
Pledged Collateral or part thereof by private sale in such manner and under
such circumstances as Lender may deem necessary or advisable, but subject to
the other requirements of this Section 9, and shall not be required to
effect such registration or to cause the same to be effected.  Without limiting the generality of the
foregoing, in any such event, Lender in its discretion may (i) in accordance
with applicable securities laws proceed to make such private sale
notwithstanding that a registration statement for the purpose of registering
such Pledged Collateral or part thereof could be or shall have been filed under
the Securities Act (or similar statute), (ii) approach and negotiate with a
single possible purchaser to effect such sale, and (iii) restrict such sale to
a purchaser who is an accredited investor under the Securities Act and who will
represent and agree that such purchaser is purchasing for its own account, for
investment and not with a view to the distribution or sale of such Pledged
Collateral or any part thereof.  In
addition to a private sale as provided above in this Section 9, if any
of the Pledged Collateral shall not be freely distributable to the public
without registration under the Securities Act (or similar statute) at the time
of any proposed sale pursuant to this Section 9, then Lender shall not
be required to effect such registration or cause the same to be effected but,
in its discretion (subject only to applicable requirements of law), may require
that any sale hereunder (including a sale at auction) be conducted subject to
restrictions:

(i)            as to the financial sophistication
and ability of any Person permitted to bid or purchase at any such sale;

(ii)           as to the content of legends to be
placed upon any certificates representing the Pledged Collateral sold in such
sale, including restrictions on future transfer thereof;

(iii)          as to the representations required to
be made by each Person bidding or purchasing at such sale relating to such
Person’s access to financial information about the issuer of the Pledged
Collateral and such Person’s intentions as to the holding of the Pledged
Collateral so sold for investment for its own account and not with a view to
the distribution thereof; and

(iv)          as to such other matters as Lender
may, in its discretion, deem necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in compliance with
the Bankruptcy Code and other laws affecting the enforcement of creditors’
rights and the Securities Act and all applicable state securities laws.

 

5

 

(d)           Pledgor
recognizes that Lender may be unable to effect a public sale of any or all the
Pledged Collateral and may be compelled to resort to one or more private sales
thereof in accordance with clause (c) above.  Pledgor also acknowledges that any such
private sale may result in prices and other terms less favorable to the seller
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall not be deemed to have been made in a
commercially unreasonable manner solely by virtue of such sale being
private.  Lender shall be under no
obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit registration of such securities for public sale under
the Securities Act, or under applicable state securities laws.

10.          Costs
and Expenses.            Pledgor promises, to
the extent permitted by applicable law, to reimburse Lender promptly for all
reasonable costs and expenses incurred by Lender in performing any agreement of
Pledgor which Pledgor shall fail to perform, or in taking any other action
which Lender deems necessary for the maintenance or preservation of any Pledged
Collateral or its interest therein, which costs and expenses shall constitute
Indebtedness under this Agreement.

11.          Power of Attorney.

(a)           Pledgor
hereby irrevocably appoints Lender, or any officer thereof, as Pledgor’s true
and lawful attorney-in-fact coupled with an interest, with full power of
substitution, to sign or endorse any instrument, document, or other writing
necessary or desirable to transfer title or other rights to or in any of the
Pledged Collateral; and to do all acts necessary or incidental to assert,
protect and enforce Lender’s rights in the Pledged Collateral and under this
Agreement.  Pledgor agrees that Pledgor
will reimburse Lender promptly upon demand for any reasonable expenses Lender
may incur while acting as Pledgor’s attorney-in-fact, which expenses shall
constitute Indebtedness under this Agreement.

(b)           At
any time, without notice, and at the expense of Pledgor, Lender in its name or
in the name of Pledgor may, but shall not be obligated to (i) collect by legal
proceedings or otherwise, endorse, receive and receipt for all distributions now
or hereafter payable upon or on account of the Pledged Collateral; (ii) insure,
process and preserve the Pledged Collateral; and (iii) participate in any
recapitalization, reclassification, reorganization, consolidation, redemption,
merger or liquidation of any issuer of securities which constitute Pledged
Collateral, and in connection therewith may deposit or surrender control of the
Pledged Collateral, accept money or other property in exchange for the Pledged
Collateral, and take such action as it deems proper in connection therewith,
and any other money or property received in exchange for the Pledged Collateral
shall be applied to the Indebtedness or held by Lender thereafter as Pledged
Collateral pursuant to the provisions hereof.

12.          Waivers
of Pledgor.            Pledgor waives any
right to require Lender to proceed against any Person, or to exhaust any
Pledged Collateral or to pursue any remedy in Lender’s power whatsoever.  Lender shall not be required to make
presentment, demand or protest, or give any notices thereof, or take any action
to preserve rights against prior parties with respect to any of the Pledged
Collateral.  Pledgor waives the right to
plead any statute of limitations or any defense to the personal liability of
Pledgor as a defense to Lender’s exercise of any right or remedy
hereunder.  No delay on Lender’s part in
exercising any power of sale, lien, option or

 

6

other right hereunder, and no
notice or demand that may be given to or made upon Pledgor by Lender with
respect to any power of sale, lien, option or other right hereunder, shall
constitute a waiver thereof, or limit or impair Lender’s right to take any
action or to exercise any power of sale, lien, option, or any other right
hereunder, without notice or demand, or prejudice Lender’s rights as against
Pledgor in any respect.

13.          Non-Waiver.         Lender may, in the exercise of its
sole discretion, waive an Event of Default, or cure an Event of Default at
Pledgor’s expense.  Any such waiver shall
be subject to Section 15 (c) below.

14.          Lender’s Duties.

(a)           Lender’s
sole duty with respect to the Pledged Collateral in its possession shall be to
use reasonable care in the custody and preservation thereof.  Lender shall be deemed to have exercised reasonable
care in the custody and preservation of such Pledged Collateral if such Pledged
Collateral is accorded treatment substantially equal to that which Lender
accords its own property, it being understood that Lender shall not have any
responsibility for ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, declining value, tenders or other matters
relative to any Pledged Collateral, regardless of whether Lender has or is
deemed to have knowledge of such matters; or taking any necessary steps to
preserve any rights against any person with respect to any Pledged
Collateral.  Under no circumstances shall
Lender be responsible for any injury or loss to the Pledged Collateral, or any
part thereof, arising from any cause beyond the reasonable control of Lender.

(b)           Lender
may at any time deliver the Pledgor Collateral or any part thereof to Pledgor
and the receipt of Pledgor shall be a complete and full acquittance for the
Pledged Collateral so delivered, and Lender shall thereafter be discharged from
any liability or responsibility therefor.

15.          General Provisions.

(a)           Notices. Any notices given
by any party under this Agreement or the Note shall be in writing and shall
either be served personally or by registered or certified mail, return receipt
requested. Each party may change the address to which notices, requests and
other communications are to be sent by giving written notice of such change to
each other party.

(b)           Binding
Effect.     This
Agreement shall be binding upon Pledgor, its permitted successors,
representatives and assigns, and shall inure to the benefit of Lender and its
successors, representatives and assigns; provided however that Pledgor may not
assign or transfer’s Pledgor’s obligations under this Agreement without Lender’s
prior written consent (which it can withhold, condition or delay in its sole
and absolute discretion).

(c)           No
Waiver.            Any
waiver, consent or approval by Lender of any Event of Default or breach of any
provision, condition or covenant of this Agreement or the Note must be in
writing and shall be effective only to the extent set forth in writing.  No waiver of any breach or default shall be
deemed a waiver of any later breach or default of the same or any other
provision of this Agreement or the Note. 
No failure or delay on the part of Lender in exercising any power, right
or privilege under this Agreement or the Note shall operate as a waiver
thereof,

 

7

 

and no single or
partial exercise of any such power, right or privilege shall preclude any
further exercise thereof, or the exercise of any further power, right or
privilege.

(d)           Rights
Cumulative.             All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any other rights or remedies available under contract or
applicable law.

(e)           Unenforceable
Provisions. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall be so only as to such jurisdiction and only to the extent of
such prohibition or unenforceability, but all the remaining provisions of this
Agreement shall remain valid and enforceable.

(f)            Choice
of Law; Amendments.            This
Agreement shall be binding upon and inure to the benefit of Pledgor and Lender
and their respective successors and assigns (to the extent permitted
hereunder), and shall be governed by, and construed and enforced in accordance
with, the internal laws of state of California, excluding conflict of laws
principles that would cause the application of laws of any other jurisdiction,
and none of the terms or provisions of this Agreement may be waived, altered,
modified or amended except in writing duly signed for and on behalf of Lender,
and Pledgor.

(g)           Indemnification.   Pledgor shall pay
and protect, defend and indemnify Lender and Lender’s employees, officers,
directors, shareholders, affiliates, correspondents, agents and representatives
(other than Lender, collectively “Agents”) against, and hold Lender and each
such Agent harmless from, all claims, actions, proceedings, liabilities,
damages, losses, expenses (including, without limitation, attorneys’ fees and
costs) and other amounts incurred by Lender and each such Agent, arising from
the matters contemplated by this Agreement; provided, however, that this
indemnification shall not apply to any of the foregoing incurred solely as the
result of Lender’s or any Agent’s gross negligence or willful misconduct.  This indemnification shall survive the
payment and satisfaction of all of Pledgor’s obligations and liabilities to
Lender.

(h)           Reimbursement.  Pledgor shall
reimburse Lender for all costs and expenses, including without limitation
reasonable attorneys’ fees and disbursements (and fees and disbursements of
Lender’s in-house counsel) expended or incurred by Lender in any arbitration,
mediation, judicial reference, legal action or otherwise in connection with (a)
the enforcement of this Agreement, (b) any proceeding for declaratory relief,
any counterclaim to any proceeding, or any appeal, or (c) the protection,
preservation or enforcement of any rights of Lender.  For the purposes of this section, attorneys’
fees shall include, without limitation, fees incurred in connection with the
following:  (1) contempt proceedings; (2)
discovery; (3) any motion, proceeding or other activity of any kind in
connection with a bankruptcy proceeding or case arising out of or relating to
any petition under the Bankruptcy Code, as the same shall be in effect from
time to time, or any similar law; (4) garnishment, levy, and Pledgor and/or
third party examinations; and (5) postjudgment motions and proceedings of any
kind, including without limitation any activity taken to collect or enforce any
judgment.

 

8

 

(i)            Entire
Agreement.              This
Agreement is intended by Pledgor and Lender as the final expression of Pledgor’s
obligations to Lender in connection with the Pledged Collateral and supersedes
all prior understandings or agreements concerning the subject matter hereof.

(j)            Counterparts.       This Agreement
may be executed in any number of counterparts, which shall, collectively and
separately, constitute one agreement. 
Delivery of an executed counterpart of a signature page to this
Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart thereof.

(k)           Jurisdiction.         Debtor hereby
expressly consents to jurisdiction and venue for any litigation arising out of,
under or related to this Agreement in the federal and state courts of
California.

16.          Termination
and Release of Pledged Shares.                When all of the
Indebtedness has been fully and completely discharged and this Agreement is
terminated, Lender shall return to Pledgor the Pledged Shares and other Pledged
Collateral then held by Lender under this Agreement.

IN
WITNESS WHEREOF, Pledgor has executed this Agreement as of the date of the
preamble.

	
   

  	
   

  	
   

  	
  PLEDGOR:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  G. CARTER SEDNAOUI

  

 

9

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