$950,954 REFORMED AS OF JUNE 19, 1998
LIMITED RECOURSE PROMISSORY NOTE
FOR VALUE RECEIVED, DAVID N. PIERCE, an individual ("Maker"), promises to
pay to FX ENERGY, INC., a Nevada corporation with its mailing address at 3006
Highland Drive, Suite 206, Salt Lake City, Utah 84106, facsimile number (801)
486-5575 ("Payee"), the principal amount of up to Nine Hundred Fifty Thousand,
Nine Hundred Fifty-Four Dollars ($950,954.00), consisting of Three Hundred Forty
Two Thousand Seven Hundred and Fifty Five Dollars ($342,755) advanced to date
plus additional amounts of up to Six Hundred Eight Thousand One Hundred and
Ninety Nine Dollars ($608,199) in as the same shall from time to time be
advanced by Payee to Maker in accordance with the terms of the Memorandum of
Understanding between Maker and Payee, as reformed June 19, 1998 (the
"Accommodation Loan") and set forth in the following schedule:
DATE AMOUNT
------- ----------
4/15/98 $ 213,926
6/15/98 49,160
9/15/98 49,160
1/15/99 49,160
4/15/99 246,793
----------
$ 608,199
together with interest on the unpaid principal balance at 7.7% per annum, due
and payable at the times and in the manner hereinafter provided, but in any
event on or before December 31, 1999.
Payee may, at any time after results are released respecting the two Apache
Corp. wells to be spudded by June 30, 1998, in Poland or the first commercially
successful well in which Payee participates in Poland, whichever occurs first,
which shall in no event extend beyond Dec. 31, 1998 (the "Lockup Period"),
demand payment in full of the principal and interest on the Accommodation Loan.
Within 45 days after such demand, Maker shall either (i) repay in cash the
principal and interest due hereunder, (ii) tender that number of shares of Payee
Common Stock which, at the average bid price for the five trading days preceding
such tender, would satisfy the principal and interest due hereunder in full,
(iii) or tender 128,943 shares of Payee common stock in full satisfaction of the
full amount of principal and interest due hereunder.
Maker reserves the right to prepay this Note in whole or in part at any
time, or from time to time, without notice, premium, charge, or penalty, by
paying cash or by tendering shares of Common Stock which, at the average bid
price for the five trading days preceding such tender, would satisfy the
principal and interest due hereunder in full.
Payments of principal and interest shall be made to the above-named Payee
at its mailing address or at such other address as the Payee or other holder
hereof may from time to time designate in writing.
Every Maker, endorser, and guarantor of this Note, or the obligation
represented hereby, waives presentment, demand, notice, protest, notice of
protest, or enforcement of this Note, assents to any extensions or postponements
of the time of payment or any other indulgence and to the addition to release of
any other party or person primarily or secondarily liable. None of the rights
and remedies of the Payee hereunder are to be waived or affected by failure or
delay to exercise them. All remedies of the Payee hereunder are to be waived or
affected by failure or delay to exercise them. All remedies conferred on the
Payee of this Note shall be cumulative and none is exclusive. Such remedies may
be exercised concurrently or consecutively at the Payee's option.
If this Note is placed with an attorney for collection, or if suit be
instituted for collection, or if any other remedy permitted by law is pursued by
the Payee hereof, because of any default in the terms and conditions herein,
then in such event, the undersigned agrees to pay reasonable attorneys' fees,
costs, and other expenses incurred by the Payee hereof in so doing.
This Note shall be governed by and construed in accordance with the laws of
the state of Utah.
This Note is secured by the limited recourse pledge of up to 128,943 shares
of Common Stock of Payee (the "Collateral"). To the extent of all amounts in
excess of $125,000 in principal and interest due thereon, this Note and the
obligation evidenced hereby shall be without recourse to Maker, and Payee will
look solely to the Collateral for payment of the principal and interest due
thereon and shall not seek a deficiency or other personal judgment against Maker
in the event that any proceeds from the Collateral shall be insufficient to
satisfy any amount in excess of $125,000 in principal and interest due thereon
pursuant to this Note. Any payments of principal and interest under this Note
shall first be applied to reduce the full recourse obligations of $125,000 under
this Note.
/s/ David N. Pierce