SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _____)*
GLADSTONE RESOURCES, INC.
- -----------------------------------------------------------------
(Name of Issuer)
Common Stock, no par value
- -----------------------------------------------------------------
(Title of Class of Securities)
376684-10-6
- -----------------------------------------------------------------
(CUSIP Number)
Joseph A. Hoffman, Esq.
Arter & Hadden LLP
1717 Main Street, Suite 4100
Dallas, Texas 75201 (214) 761-2100
- -----------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 19, 1999
- -----------------------------------------------------------------
(Date of Event Which Requires Filing
of this Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject of
this Schedule 13D, and is filing this schedule because of Rule
13d-1(b)(3) or (4), check the following box. [ ]
* The remainder of this cover page shall be filled out for a
Reporting Person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP No. 376684-10-6
(1) Name of Reporting Persons. A Group comprised of:
H. Wayne Gifford,
Charles B. Humphrey,
Johnathan M. Hill,
Fred Oliver,
Sheila Irons, individually and as Trustee of the
Humphrey Children's Trust,
Katherine Murphy,
David Tyrrell, individually and as trustee
of the Katherine Desporte Tyrrell Trust, and
Clay Moore
I.R.S. Identification
Nos. of Above Persons (entities only)
Humphrey Children's Trust 75-6443648
Katherine Desporte Tyrrell Trust 75-2469842
(2) Check the Appropriate Box if a (a) [ X ]
Member of a Group* (b) [ ]
(3) SEC Use Only
(4) Source of Funds* PF
(5) Check if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization U.S.A.
Number of Shares (7) Sole Voting 3,285,692
Power
Beneficially
(8) Shared Voting 0
Owned by Each Power
Reporting Person (9) Sole Dispositive 3,285,692
Power
with:
(10) Shared Dispositive 0
Power
(11) Aggregate Amount Beneficially Owned 3,285,692
by Each Reporting Person
(12) Check if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares*
(13) Percent of Class Represented by 77.33%
Amount in Row (11)
(14) Type of Reporting Person* OO
<PAGE>
CUSIP No. 376684-10-6
(1) Name of Reporting Persons Charles B. Humphrey
I.R.S. Identification
Nos. of Above Persons (entities only)
(2) Check the Appropriate Box if a (a) [ X ]
Member of a Group* (b) [ ]
(3) SEC Use Only
(4) Source of Funds* PF
(5) Check if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization U.S.A.
Number of Shares (7) Sole Voting 1,080,819
Power
Beneficially
(8) Shared Voting 0
Owned by Each Power
Reporting Person (9) Sole Dispositive 1,080,819
Power
with:
(10) Shared Dispositive 0
Power
(11) Aggregate Amount Beneficially Owned 1,080,819
by Each Reporting Person
(12) Check if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares*
(13) Percent of Class Represented by 25.44%
Amount in Row (11)
(14) Type of Reporting Person* IN
<PAGE>
CUSIP No. 376684-10-6
(1) Name of Reporting Persons Johnathan M. Hill
I.R.S. Identification
Nos. of Above Persons (entities only)
(2) Check the Appropriate Box if a (a) [ x ]
Member of a Group* (b) [ ]
(3) SEC Use Only
(4) Source of Funds* BK
(5) Check if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization U.S.A.
Number of Shares (7) Sole Voting 1,080,819
Power
Beneficially
(8) Shared Voting 0
Owned by Each Power
Reporting Person (9) Sole Dispositive 1,080,819
Power
with:
(10) Shared Dispositive 0
Power
(11) Aggregate Amount Beneficially Owned 1,080,819
by Each Reporting Person
(12) Check if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares*
(13) Percent of Class Represented by 25.44%
Amount in Row (11)
(14) Type of Reporting Person* IN
<PAGE>
CUSIP No. 376684-10-6
(1) Name of Reporting Persons Fred Oliver
I.R.S. Identification
Nos. of Above Persons (entities only)
(2) Check the Appropriate Box if a (a) [ X ]
Member of a Group* (b) [ ]
(3) SEC Use Only
(4) Source of Funds* PF
(5) Check if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization U.S.A.
Number of Shares (7) Sole Voting 259,397
Power
Beneficially
(8) Shared Voting 0
Owned by Each Power
Reporting Person (9) Sole Dispositive 259,397
Power
with:
(10) Shared Dispositive 0
Power
(11) Aggregate Amount Beneficially Owned 259,397
by Each Reporting Person
(12) Check if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares*
(13) Percent of Class Represented by 6.11%
Amount in Row (11)
(14) Type of Reporting Person* IN
<PAGE>
CUSIP No. 376684-10-6
(1) Name of Reporting Persons Sheila Irons, individually and
IRS Identification as Trustee of the Humphrey
Nos. of the Above Persons Children's Trust
(entities only)
(2) Check the Appropriate Box if a (a) [ X ]
Member of a Group* (b) [ ]
(3) SEC Use Only
(4) Source of Funds* PF
(5) Check if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization U.S.A.
Number of Shares (7) Sole Voting 302,630(1)
Power
Beneficially
(8) Shared Voting 0
Owned by Each Power
Reporting Person (9) Sole Dispositive 302,630(1)
Power
with:
(10) Shared Dispositive 0
Power
(11) Aggregate Amount Beneficially Owned 302,630(1)
by Each Reporting Person
(12) Check if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares*
(13) Percent of Class Represented by 7.12%
Amount in Row (11)
(14) Type of Reporting Person* IN/OO
(1) Includes 216,164 shares held by Humphrey Children's Trust
for which the Reporting Person is Trustee, but disclaims
beneficial ownership.
<PAGE>
CUSIP No. 376684-10-6
(1) Names of Reporting Persons David Tyrrell, individually and
I.R.S. Identification as Trustee of the Katherine
Nos. of Above Persons Desporte Tyrrell Trust
(entities only)
(2) Check the Appropriate Box if a (a) [ X ]
Member of a Group* (b) [ ]
(3) SEC Use Only
(4) Source of Funds* PF
(5) Check if Disclosure of Legal [ ]
Proceedings is Required Pursuant
to Items 2(d) or 2(e)
(6) Citizenship or Place of Organization U.S.A.
Number of Shares (7) Sole Voting 216,164(1)
Power
Beneficially
(8) Shared Voting 0
Owned by Each Power
Reporting Person (9) Sole Dispositive 216,164(1)
Power
with:
(10) Shared Dispositive 0
Power
(11) Aggregate Amount Beneficially Owned 216,164(1)
by Each Reporting Person
(12) Check if the Aggregate Amount in [ ]
Row (11) Excludes Certain Shares*
(13) Percent of Class Represented by 5.09%
Amount in Row (11)
(14) Type of Reporting Person* IN/OO
(1) Includes 108,082 shares held by Katherine Desporte Tyrrell
Trust for which the Reporting Person is Trustee, but
disclaims beneficial ownership.
<PAGE>
SCHEDULE 13D
------------
Filed Pursuant to Rule 13d-1
ITEM 1. Security and Issuer.
-------------------
This Statement on Schedule 13D ("Statement") relates to
common stock, no par value (the "Common Stock"), of GLADSTONE
RESOURCES, INC., a Washington corporation ("Issuer"). The
principal executive offices of the Issuer are located at 3500 Oak
Lawn Avenue, Suite 590, Dallas, Texas 75219.
ITEM 2. Identity and Background.
-----------------------
Pursuant to Rule 13d-1(k) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), this Statement is hereby
filed jointly by (i) a group (the "Group") comprised of H. Wayne
Gifford, Charles B. Humphrey, Johnathan M. Hill, Fred Oliver,
Sheila Irons, individually and as trustee of the Humphrey
Children's Trust, Katherine Murphy, David Tyrrell, individually
and as trustee of the Katherine Desporte Tyrrell Trust, and Clay
Moore, and (ii) each of the following individuals: (1) Charles
B. Humphrey, (2) Johnathan M. Hill, (3) Fred Oliver, (4) Sheila
Irons, individually and as trustee of the Humphrey Children's
Trust and (5) David Tyrrell, individually and as Trustee of the
Katherine Desporte Tyrrell Trust (collectively, the "Reporting
Persons"):
(a) and (b) The names and residence or business address
of the Reporting Persons are:
(i) H. Wayne Gifford
Residence Address:
9110 Loma Vista
Dallas, Texas 75243
(ii) Charles B. Humphrey
Residence Address:
3500 Lexington
Dallas, Texas 75205
(iii)Johnathan M. Hill
Residence Address:
3506 Granada
Dallas, Texas 75238
(iv) Fred Oliver
Residence Address:
8922 Fenchurch
Dallas, Texas 75238
<PAGE>
(v) Sheila Irons, individually and as trustee of
the Humphrey Children's Trust
Residence Address:
2212 Salem
Carrollton, Texas 75006
(vi) Katherine Murphy
Residence Address:
2005 Faulkner Dr.
Rowlett, Texas 75088
(vii)David Tyrrell, individually and as
trustee of the Katherine Desporte
Tyrrell Trust
Residence Address:
12 Turtlecreek Bend
Dallas, TX 75204
(ix) Clay Moore
Residence Address:
11830 Dixfield
Dallas, TX 75218
(c) The present principal occupation or employment of,
and the name, principal business and address of
any corporation or other organization in which
such employment is conducted by, the Reporting
Persons are as follows:
(i) Mr. Gifford is the President and a
Director of Gifford Operating, Inc.,
4625 Greenville Avenue, Suite 202,
Dallas, TX 75206. Mr. Gifford is also
active as an independent geological
consultant.
(ii) Mr. Humphrey is the President,
Treasurer, and Sole Director of Humphrey
Oil Corporation, 3500 Oak Lawn Avenue,
Suite 590, Dallas, Texas 75219, an oil
and gas exploration company, and the
President and a Director of Lindenshire,
Inc., 3500 Oak Lawn Avenue, Suite 590,
Dallas, Texas 75219, a real estate
development company. Mr. Humphrey also
is engaged in real estate development
and investment individually and through
numerous other partnerships, joint
ventures and corporations.
(iii) Mr. Hill is the President of Hill &
Hill Production Company, P.O. Box
794127, Dallas, Texas 75379-4127, an oil
and gas production company, the
Secretary and Treasurer of Hill Energy
Company, P.O. Box 794127, Dallas, Texas
75379-4127, an oil and gas investment
company and the Vice President of HPC
Operating Company, P.O. Box 794127,
Dallas, Texas 75379-4127, an oil and gas
operating company.
<PAGE>
(iv) Mr. Oliver is the President of
Petroleum Ventures of Texas, Inc., 4625
Greenville Avenue, Suite 205, Dallas,
Texas, 75206, an oil and gas investment
company. Mr. Oliver also is engaged in
geological and engineering consulting.
(v) Sheila Irons is Vice President and
Secretary of Humphrey Oil Corporation,
3500 Oak Lawn Avenue, Suite 590, Dallas,
Texas 75219, an oil and gas exploration
company.
(vi) Ms. Murphy is Vice President and
Assistant Secretary of Humphrey Oil
Corporation, 3500 Oak Lawn Avenue, Suite
590, Dallas, Texas 75219,, an oil and
gas exploration company.
(vii) Mr. Moore is a petroleum geologist
and an oil operator in Dallas, Texas.
(viii) Mr. Tyrrell is independent investor in
Dallas, Texas.
The Reporting Persons have included as
Exhibit 1 to this Statement an agreement in
writing that this Statement is filed on behalf of
each of them.
(d) and (e) During the last five (5)
years, no Reporting Person has been convicted
in any criminal proceeding (excluding traffic
violations or similar misdemeanors) and none
of the Reporting Person was a party to a
civil proceeding of a judicial or
administrative body of competent jurisdiction
such that, as a result of such proceeding,
any Reporting Person was or is subject to a
judgment, decree of final order enjoining
future violations of, or prohibiting or
mandating activities subject to, federal or
state securities laws or finding any
violation with respect to such laws.
(f) The Reporting Persons are
citizens of the United States.
ITEM 3. Source and Amount of Funds or Other Consideration.
------------------------------------------------
On January 19, 1999, Mr. Gifford, Mr. Humphrey,
Mr. Hill, Mr. Tatum, Mr. Oliver, Mr. Tyrrell, Ms. Irons
(individually and as trustee of the Humphrey Children's
Trust), Ms. Murphy and Mr. Moore purchased an aggregate
of 2,973,000 shares of the Common Stock of the Issuer
or approximately 69.97% of the Common Stock of the
Issuer from Edward B. Brooks, Jr., Charles V. W.
Brooks, Carol Brady, Rebecca Feldt and Debra Brooks
Garrett (collectively, the "Sellers") in a privately
negotiated transaction at a cash purchase price of
approximately $.1060 per share for an aggregate
consideration of $315,229.83 in cash pursuant to a
Stock Purchase Agreement (the "Agreement") which is
attached as Exhibit 2.
Each Reporting Person, except Mr. Hill, used
personal funds (or trust funds in the case of the
trusts) to purchase the shares of Common Stock of the
Issuer. Mr. Hill, a member of the Group, borrowed the
funds he used to purchase the shares of Common Stock of
the Issuer that he acquired in the transaction
described in the preceding paragraph from Charles B.
Humphrey on January 19, 1999, under a
<PAGE>
Promissory Note and Stock Pledge Agreement, copies
of which are attached as Exhibit 4, which Promissory
Note provides for interest upon any outstanding balance
at 10% and is payable on February 28, 1999. The loan is
secured under the Stock Pledge Agreement with Mr.
Hill's 1,080,819 shares of Common Stock.
ITEM 4. Purpose of Transaction.
----------------------
The purpose of the acquisition is to acquire
controlling interest in the voting securities of the
Issuer. The Reporting Persons may, at some other
future time, purchase additional shares of Common
Stock, by open market purchase, private purchase or
otherwise. Whether the Reporting Persons purchase or
otherwise acquire any additional shares of Common
Stock, and the amount, method and timing of any such
purchases or acquisitions, will depend upon the
Reporting Persons' continuing assessment of pertinent
factors including, among other things, the following:
the availability of shares of Common stock for purchase
or acquisition at particular price levels or upon
particular terms; the business and prospects of the
Reporting Persons and the Issuer; other business and
investment opportunities available to the Reporting
Persons; economic conditions; stock market conditions;
the actions of other shareholders of the Issuer; the
availability and nature of opportunities to dispose of
Common Stock; and other plans and requirements of the
Reporting Persons. Depending on the assessment of the
factors noted above, the Reporting Persons may also, at
some future time, dispose of shares of the Common Stock
that they own or take other action with respect to such
Common Stock that could result in a change in the
corporate structure of the Issuer, although they have
no plans at this time with respect to the nature or
timing of any such disposition or change. Pursuant to
an Agreement dated January 19, 1999, attached as
Exhibit 3, the Sellers have agreed to take or cause to
be taken all such action as is necessary to cause
Johnathan M. Hill, Charles B. Humphrey, H. Wayne
Gifford, Fred Oliver and Katherine Murphy to be
appointed to and to constitute all the members of the
Board of Directors of the Issuer. The appointment of
such persons will require that the size of the board of
directors of the Issuer increase from three to five.
None of the Reporting Persons is currently a member of
the Board of Directors. The Reporting Persons plan to
elect Johnathan Hill as President of the Issuer, Sheila
Irons as Vice President and Secretary and Katherine Murphy as
Treasurer.
Other than as described above, the Reporting
Persons have no present plans or proposals that relate
to or would result in any of the transactions listed in
Item 4 of Schedule 13D.
ITEM 5. Interest in Securities of the Issuer.
-------------------------------------
(a) and (b) Pursuant to Rule 13d-5(b)(1) of the
Exchange Act, the Group is deemed to be the
beneficial owner of an aggregate of 3,285,692
shares of Common Stock constituting approximately
77.33% of the outstanding Common Stock of the
Issuer (based on 4,249,060 shares of Common Stock
outstanding on January 19, 1999).
The table below provides the aggregate
number and percentage of Common Stock beneficially
owned by each member of the Group on January 19,
1999:
<PAGE>
Aggregate Number Percentage of
Name of Common
Common Stock stock(1)
------------------- ---------------- -------------
Charles B. Humphrey 1,080,819 25.44%
Johnathan M. Hill 1,080,819 25.44
Sheila Irons,
individually and as 302,630(2) 7.12
Trustee of Humphrey
Children's Trust
Fred Oliver 259,397 6.10
David Tyrrell,
individually and as 216,164(3) 5.09
Trustee of the
Katherine Desporte
Tyrrell Trust
Wayne Gifford 172,931 4.07
Katherine Murphy 86,466 2.03
Clay Moore 86,466 2.03
--------------- -------------
TOTAL 3,285,692 77.33%
=============== =============
______________
(1) Based on 4,249,060 shares of Common Stock
issued and outstanding as of January 19, 1999.
(2) Includes 216,164 shares held by Humphrey
Children's Trust for which the Reporting
Person is Trustee, but disclaims beneficial
ownership.
(3) Includes 108,082 shares held by Katherine
Desporte Tyrrell Trust for which the
Reporting Person is Trustee, but disclaims
beneficial ownership.
Mr. Humphrey, Mr. Hill, Mr. Oliver, Ms. Irons,
individually and as trustee of the Humphrey
Children's Trust and Mr. Tyrrell, individually and
as trustee of the Katherine Desporte Tyrrell
Trust, each are also individually a Reporting
Person, and beneficially own the number of shares
of Common Stock of the Issuer and constituting the
percentage of the Common Stock of the Issuer
outstanding on January 19, 1999 as set forth in
the table below. Each member of the Group hereby
expressly disclaims beneficial ownership of the
shares of Common Stock of the Issuer held by the
Group or any other member thereof pursuant to Rule
13d-4 of the Exchange Act.
(b) The table below summarizes the number of
shares of Common Stock of the Issuer over which
each member of the Group, including such persons
who are also individually a Reporting Person, has
sole voting and dispositive power and shared
voting and dispositive power.
Percentage of
Voting and Voting and
Dispositive Dispositive(1)
--------------------- ---------------
Sole Shared Sole Shared
----------- -------- ------- -------
Charles B. Humphrey 1,080,819 0 25.44% 0
Johnathan M. Hill 1,080,819 0 25.44 0
Sheila Irons, Individually
and as Trustee of
Humphrey Childrens Trust 302,630(2) 0 7.12 0
Fred Oliver 259,397 0 6.11 0
David Tyrrell, individually
and as Trustee of the
Katherine Desporte Tyrrell
Trust 216,164(3) 0 7.12 0
Wayne Gifford 172,931 0 4.07 0
Katherine Murphy 86,466 0 2.03 0
Clay Moore 86,466 0 2.03 0
--------- ------
TOTAL 3,285,692 77.33%
========== ======
______________
(1) Based on 4,249,060 shares of Common Stock issued
and outstanding as of January 19, 1999.
(2) Includes 216,164 shares held by Humphrey Children's
Trust for which the Reporting Person is Trustee,
but disclaims beneficial ownership.
(3) Includes 108,082 shares held by Katherine
Desporte Tyrrell Trust for which the
Reporting Person is Trustee, but disclaims
beneficial ownership.
(c) On January 19, 1999, simultaneously with
the closing with the Sellers, the Group purchased
an aggregate of 161,325 shares of the Common Stock
of the Issuer constituting approximately 3.8% of
the outstanding Common
<PAGE>
Stock of the Issuer (based on 4,249,060
shares of Common Stock of the Issuer outstanding
at January 19, 1999) from C. J. Cloarec, M.D. and
Camrose Optical Co. in a privately negotiated
transaction at a cash purchase price of $.10 per
share, for an aggregate cash purchase price of
$16,182.50.
On December 31, 1998, the Group
purchased 96,992 shares of the Common Stock of the
Issuer constituting approximately 2.3% of the
outstanding Common Stock of the Issuer (based on
4,249,060 shares of Common Stock of the Issuer
outstanding at January 19, 1999) from William L.
Furneaux and Lane D. Furneaux, tenants in common,
in a privately negotiated transaction at a cash
purchase price of $.10 per share, for an aggregate
cash purchase price of $9,699.20.
On January 4, 1999, the Group purchased
54,375 shares of the Common Stock of the Issuer
constituting approximately 1.3% of the outstanding
Common Stock of the Issuer (based on 4,249,060
shares of Common Stock of the Issuer outstanding
at January 19, 1999) from G. F. Ray, Jr. in a
privately negotiated transaction at a cash
purchase price of $.10 per shares, for an
aggregate cash purchase price of $5,763.75.
(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, or Understandings or
---------------------------------------------
Relationships with Respect to Securities of the Issuer.
------------------------------------------------------
Mr. Hill, a member of the Group, borrowed the funds he used
to purchase the shares of Common Stock of the Issuer he
acquired in the transaction described in the preceding Item
from Charles B. Humphrey on January 19, 1999 under a
Promissory Note and Stock Pledge Agreement, copies of which
are attached as Exhibit 4, which Promissory Note provides
for interest upon any outstanding balance at 10% and is
payable February 28, 1999. The loan is secured under the
Stock Pledge Agreement with Mr. Hill's 1,080,819 shares of
Common Stock.
On January 19, 1999, Mr. Hill and Mr. Humphrey entered into
a letter agreement that provides Mr. Humphrey will purchase
the 1,080,819 shares of Common Stock of the Issuer owned of
record by Mr. Hill for $.1056 per share within five business
days after receipt of notice from Mr. Hill and from the Bank
of Oklahoma. The letter agreement states that Mr.
Humphrey's agreement to purchase such shares expires on
March 15, 1999.
ITEM 7. Material to be Filed as Exhibits.
---------------------------------
EXHIBIT
-------
1. Joint Filing Agreement, dated
January 29, 1999, by and among H. Wayne
Gifford, Charles B. Humphrey, Johnathan M.
Hill, Fred
<PAGE>
Oliver, David Tyrrell, individually and
as trustee of the Katherine Desporte
Tyrrell Trust, Clay Moore, Sheila Irons,
individually and as trustee of the
Humphrey Children's Trust, and Katherine
Murphy.
2. Stock Purchase Agreement dated
January 19, 1999, by and among Edward B.
Brooks, Jr., Charles V.W. Brooks, Carol
Brady, Rebecca Feldt and Debra Brooks
Garrett, as Sellers, and H. Wayne Gifford,
Charles B. Humphrey, Johnathan M. Hill, John
P. Tatum II, Fred Oliver, David Tyrrell,
individually and as trustee of the Katherine
Desporte Tyrrell Trust, Clay Moore, Sheila
Irons, individually and as trustee of the
Humphrey Children's Trust, and Katherine
Murphy, as Purchasers.
3. Agreement dated January 19,
1999 among Edward B. Brooks, Jr., Charles
V.W. Brooks, Carol Brady, Rebecca Feldt and
Debra Brooks Garrett, as Sellers, and H.
Wayne Gifford, Charles B. Humphrey, Johnathan
M. Hill, Fred Oliver, David Tyrrell,
individually and as trustee of the Katherine
Desporte Tyrrell Trust, Clay Moore, Sheila
Irons, individually and as trustee of the
Humphrey Children's Trust and Katherine
Murphy, as Purchasers.
4. Promissory Note dated January
19, 1999 of Johnathan M. Hill and Stock
Pledge Agreement dated January 19, 1999
between Johnathan M. Hill and Charles B.
Humphrey.
5. Letter Agreement dated January
19, 1999 by and between Johnathan M. Hill and
Charles B. Humphrey.
<PAGE>
After reasonable inquiry, and to the best of their knowledge
and belief, the undersigned certify that the information set
forth in this Statement is true, complete and correct.
Date: January 29, 1999
/s/ H. WAYNE GIFFORD
------------------------------
H. WAYNE GIFFORD
/s/ CHARLES B. HUMPHREY
------------------------------
CHARLES B. HUMPHREY
/s/ JOHNATHAN M. HILL
------------------------------
JOHNATHAN M. HILL
/s/ FRED OLIVER
------------------------------
FRED OLIVER
/s/ SHEILA IRONS, AS TRUSTEE
------------------------------
SHEILA IRONS, TRUSTEE OF THE
HUMPHREY CHILDREN'S TRUST
/s/ SHEILA IRONS
------------------------------
SHEILA IRONS
/s/ KATHERINE MURPHY
------------------------------
KATHERINE MURPHY
/s/ DAVID TYRRELL, AS TRUSTEE
------------------------------
DAVID TYRRELL, TRUSTEE OF THE
KATHERINE DESPORTE TYRRELL
TRUST
/s/ DAVID TYRRELL
------------------------------
DAVID TYRRELL
/s/ CLAY MOORE
------------------------------
CLAY MOORE
Attention: Intentional misstatements or
omissions of fact constitute federal
criminal violations (see 18 U.S. C. 1001).
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
----------- -----------
EXHIBIT 1 Joint Filing Agreement, dated
January 29, 1999 among H. Wayne Gifford,
Charles B. Humphrey, Johnathan M. Hill, Fred
Oliver, David Tyrrell, Clay Moore, Sheila
Irons, individually and as trustee of the
Humphrey Children's Trust, and Katherine
Murphy.
EXHIBIT 2 Stock Purchase Agreement dated
January 19, 1999 among Edward B. Brooks, Jr.,
Charles V.W. Brooks, Carol Brady, Rebecca
Feldt and Debra Brooks Garrett, as Sellers,
and H. Wayne Gifford, Charles B. Humphrey,
Johnathan M. Hill, Fred Oliver, David
Tyrrell, Clay Moore, Sheila Irons,
individually and as trustee of the Humphrey
Children's Trust, and Katherine Murphy, as
Purchasers.
EXHIBIT 3 Agreement dated January 19,
1999 among Edward B. Brooks, Jr., Charles
V.W. Brooks, Carol Brady, Rebecca Feldt and
Debra Brooks Garrett, as Sellers, and H.
Wayne Gifford, Charles B. Humphrey, Johnathan
M. Hill, Fred Oliver, David Tyrrell, Clay
Moore, Sheila Irons, individually and as
trustee of the Humphrey Children's Trust and
Katherine Murphy, as Purchasers.
EXHIBIT 4 Promissory Note dated January
19, 1999 of Johnathan M. Hill and Stock
Pledge Agreement dated January 19, 1999
between Johnathan M. Hill and Charles B.
Humphrey.
EXHIBIT 5 Letter Agreegment dated
January 19, 1999 by and between Johnathan M.
Hill and Charles B. Humphrey.
<PAGE>
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k)(1) under the Securities
Exchange Act of 1934, as amended, the persons named below agree
to the joint filing on behalf of each of them of a Statement on
Schedule 13D (including any amendments thereto) with respect to
the Common Stock of GLADSTONE RESOURCES, INC.
Date: January 29, 1999
/s/ H. WAYNE GIFFORD
------------------------------
H. WAYNE GIFFORD
/s/ CHARLES B. HUMPHREY
------------------------------
CHARLES B. HUMPHREY
/s/ JOHNATHAN M. HILL
------------------------------
JOHNATHAN M. HILL
/s/ FRED OLIVER
------------------------------
FRED OLIVER
/s/ SHEILA IRONS, AS TRUSTEE
------------------------------
SHEILA IRONS, TRUSTEE OF THE
HUMPHREY CHILDREN'S TRUST
/s/ SHEILA IRONS
------------------------------
SHEILA IRONS
/s/ KATHERINE MURPHY
------------------------------
KATHERINE MURPHY
/s/ DAVID TYRRELL, AS TRUSTEE
------------------------------
DAVID TYRRELL, TRUSTEE OF THE
KATHERINE DESPORTE TYRRELL
TRUST
/s/ DAVID TYRRELL
------------------------------
DAVID TYRRELL
/s/ CLAY MOORE
------------------------------
CLAY MOORE
<PAGE>
EXHIBIT 2
---------
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), made and
entered into as of this 19th day of January, 1999, by and between
Edward B. Brooks, Jr. (a.k.a. E. B. Brooks, Jr.), a resident of
Dallas, Texas; Charles V. W. Brooks, a resident of The Woodlands,
Texas; Carol Brady, a resident of Dallas, Texas; Rebecca B.
Feldt, a resident of Dallas, Texas; and Debra Brooks Garrett, a
resident of Dallas, Texas; (collectively, the "Sellers") and H.
Wayne Gifford, a resident of Dallas, Texas; Charles B. Humphrey,
a resident of Dallas, Texas; Johnathan M. Hill, a resident of
Dallas, Texas; Fred Oliver, a resident of Dallas, Texas; David
Tyrrell, a resident of Dallas, Texas; Clay Moore, a resident of
Dallas, Texas; Sheila Irons, individually and as Trustee of the
Humphrey Children's Trust, a resident of Carrollton, Texas; and
Katherine R. Murphy, a resident of Rowlett, Texas (collectively,
the "Purchasers").
W I T N E S S T H:
WHEREAS, the Sellers are the record and beneficial owner of
2,973,000 shares, or 70.050847%, of the issued and outstanding
shares of common stock of Gladstone Resources, Inc., a Washington
corporation (the "Company").
WHEREAS, Sellers have agreed to sell to Purchasers, and
Purchasers have agreed to purchase from Sellers, all of the
shares of the common stock of the Company owned by the Sellers;
NOW, THEREFORE, for and in consideration of the premises and
mutual undertakings and agreements contained in this Agreement,
the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. SALE OF STOCK. Upon and subject to the terms and conditions
set forth in this Agreement, Sellers hereby sell, assign,
transfer and deliver to Purchasers good and valid title to Two
Million Nine Hundred Seventy-three Thousand (2,973,000) shares,
or 70.050847%, of the issued and outstanding common stock of the
Company (the "Shares") at the agreed aggregate purchase price of
Three Hundred Fifteen Thousand Two Hundred Twenty-nine Dollars
and Eighty-three Cents ($315,229.83), or $ .1060 per Share. The
respective numbers of the Shares to be sold and delivered by each
Seller and the respective portion of the aggregate purchase price
to be received by each Seller are set forth on the signature
pages hereto. Sellers hereby deliver to Purchasers stock
certificates representing the Shares, endorsed in blank or
accompanied by duly executed assignment documents. Purchasers
hereby acknowledge receipt of the stock certificates evidencing
the Shares, duly endorsed in blank and in proper form for
transfer.
2. PURCHASE PRICE AND CONSIDERATION. In consideration of
Sellers' conveyance to the Purchasers of the Shares, Purchasers
have concurrently, with the execution of this Agreement paid to
Sellers the aggregate sum of Three Hundred Fifteen Thousand Two
Hundred Twenty-nine Dollars and Eighty-three Cents ($315,229.83)
in the form of separate checks. The respective number of Shares
to be purchased and delivered to each Purchaser and the
respective portion
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<PAGE>
of the aggregate purchase price to be paid by each Purchaser
are set forth on the signature pages hereto.
3. REPRESENTATION AND WARRANTIES OF SELLERS. Sellers hereby,
jointly and severally, represent and warrant unto each of the
Purchasers as follows:
a. AUTHORIZATION OF TRANSACTION. Each of the Sellers has full
power and authority to execute and deliver this Agreement and to
perform his respective obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of each of
the Sellers, enforceable in accordance with its terms and
conditions. None of the Sellers is required to give any notice
to, make any filing with, or obtain any authorization, consent,
or approval of any government or governmental agency or any other
person or entity in order to consummate the transactions
contemplated by this Agreement.
b. NONCONTRAVENTION. Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge or other restriction of any government, governmental
agency or court to which any of the Sellers are subject or (B)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify or cancel, or require any notice
under any agreement, contract, lease, license, instrument or
other arrangement to which any of the Sellers are a party, or by
which any of the Sellers are bound, or to which any of the
Sellers' assets are subject.
c. NO BROKERS' FEE. None of the Sellers have any liability or
obligation to pay any fees or commissions to any broker, finder
or agent with respect to the transactions contemplated by this
Agreement.
d. SHARES. Each of the Sellers holds of record and own
beneficially all of the issued and outstanding Shares set forth
opposite his name on the signature pages hereto, free and clear
of any restrictions on transfer (other than any restrictions
under federal and state securities laws), taxes, security
interests, encumbrances, liens, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands of
any kind or character. None of the Sellers is a party to any
option, warrant, purchase right or other contract or commitment
that could require any of the Sellers to sell, transfer or
otherwise dispose of any capital stock of the Company (other than
this Agreement). None of the Sellers are a party to any
shareholders agreement, voting trust, proxy, or other agreement
or understanding with respect to the voting of any capital stock
of the Company.
e. CAPITALIZATION. As of the date hereof, the authorized
capital stock of the Company consists of 6,000,000 shares of
common stock, with no par value, of which 4,244,060 shares of
common stock are issued and outstanding. The stated value for
all outstanding shares is $150,000. The Company does not have any
form of shareholder rights or "poison pill" plan in effect.
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<PAGE>
f. SEC DOCUMENTS. None of the filings made by the Company with
the Securities and Exchange Commission ("SEC") between December
31, 1997 and the date hereof (collectively, the "SEC Documents")
contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained
therein not misleading. The SEC Documents constitute all of the
documents that the Company was required by applicable securities
laws and regulations to file with the SEC since December 31,
1997. The financial statements of the Company included in the
SEC Documents were prepared in accordance with generally accepted
accounting principles ("GAAP") and fairly present, in all
material respects in accordance with GAAP, the financial
condition and results of operations and changes in financial
position as of the dates thereof.
g. NO MATERIAL CHANGES. Except as disclosed in any SEC
Document, since December 31, 1997 there has not been any material
adverse change in the condition (financial or otherwise),
earnings, assets, liabilities (contingent or otherwise),
properties, business or operations of the Company.
h. REPRESENTATIONS OF PURCHASERS. Each Purchaser hereby,
jointly and severally, represents that he is acquiring the Shares
for investment and not with a view to distribution or resale, and
none of the Shares received by Purchasers will be sold or
transferred unless (i) such sale is registered in accordance with
the Securities Act of 1933, as amended (the "Act"), and
applicable state securities laws or (ii) the Company receives an
opinion of or satisfactory to counsel for the Company that
registration under the Act and such securities laws is not
required.
4. MISCELLANEOUS.
a. ENTIRE AGREEMENT. This document sets forth the entire
agreement and understanding between the parties hereto relating
to the subject matter described herein and merges and supersedes
all prior and contemporaneous discussions and documents relating
thereto.
b. FURTHER DOCUMENTS. Following the execution hereof, to the
extent deemed reasonably necessary, the parties shall execute and
deliver all such additional documents or instruments as shall be
necessary or appropriate to carry out the intent of this
Agreement.
c. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective
heirs, executors, administrators, successors and assigns.
d. HEADINGS. Descriptive headings contained in this Agreement
are for convenience only and shall not control or affect the
meaning or construction of any provisions hereof.
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<PAGE>
e. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall constitute together but one
and the same instrument.
f. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Warranties and
representations contained herein shall survive the sale of the
Shares.
g. GOVERNING LAW; VENUE. The validity, construction and
enforcement of this Agreement shall be governed in all respect by
the laws of the State of Texas without reference to applicable
conflict of law provisions. Venue for any action brought with
respect to this Agreement shall be solely in Dallas County,
Texas.
h. GENDER. Pronouns in masculine gender shall be construed to
include any other gender, unless the context otherwise requires.
SELLERS:
Address:
5646 Milton EDWARD B. BROOKS, JR.
228 Meadows Bldg. (a.k.a. E. B. BROOKS, JR.)
Dallas, Texas 75206 (Shares Sold: 1,910,000;
Purchase Price Received:
$202,518.99)
Address:
2829 South Log Run Circle CHARLES V. W. BROOKS
The Woodlands, Texas 77380 (Shares Sold: 10,000;
Purchase Price Received: $1,060.31)
Address:
c/o Ted Brooks, Jr. CAROL BRADY
5646 Milton (Shares Sold: 351,000;
228 Meadows Bldg. Purchase Price Received: $37,216.84)
Dallas, Texas 75206
Address:
c/o Ted Brooks, Jr. REBECCA B. FELDT
5646 Milton (Shares Sold: 351,000;
228 Meadows Bldg. Purchase Price Received: $37,216.84)
Dallas, Texas 75206
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<PAGE>
Address:
c/o Ted Brooks, Jr. DEBRA BROOKS GARRETT
5646 Milton (Shares Sold: 351,000;
228 Meadows Bldg. Purchase Price Received: $37,216.84)
Dallas, Texas 75206
PURCHASERS:
Address:
4625 Greenville Ave. H. WAYNE GIFFORD
Suite 202 (Shares Purchased: 156,474;
Dallas, TX 75206 Purchase Price Paid: $16,591.04)
Address:
3500 Oak Lawn Ave. CHARLES B. HUMPHREY
Suite 590, LB 49 (Shares Purchased: 977,961;
Dallas, TX 75219 Purchase Price Paid: $103,694.03)
Address:
3506 Grenada JOHNATHAN M. HILL
Dallas, TX 75205 (Shares Purchased: 977,961;
Purchase Price Paid: $103,694.03)
Address:
4625 Greenville Ave. FRED OLIVER
Suite 205 (Shares Purchased: 234,711;
Dallas, TX 75206 Purchase Price Paid: $24,886.57)
Address:
4625 Greenville Ave. DAVID TYRRELL
Suite 203 (Shares Purchased: 195,592;
Dallas, TX 75206 Purchase Price Paid: $20,738.80)
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<PAGE>
Address:
6440 N. Central Exp. CLAY MOORE
Suite 620 (Shares Purchased: 78,237;
Dallas, TX 75206 Purchase Price Paid: $8,295.52)
Address:
3500 Oak Lawn Ave. HUMPHREY CHILDREN'S TRUST
Suite 590, LB 49 Sheila Irons, Trustee
Dallas, TX 75219 (Shares Purchased: 195,592;
Purchase Price Paid: $20,738.80)
Address:
2212 Salem SHEILA IRONS
Carrollton, Texas 75006 (Shares Purchased: 78,237;
Purchase Price Paid: $8,295.52)
Address:
2005 Faulkner Drive KATHERINE R. MURPHY
Rowlett, Texas 75088 (Shares Purchased: 78,237;
Purchase Price Paid: $8,295.52)
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<PAGE>
EXHIBIT 3
---------
AGREEMENT
This Agreement is entered into this 19th day of January,
1999 among Edward B. Brooks, Jr., a resident of Dallas, Texas;
Charles V. W. Brooks, a resident of The Woodlands, Texas; Carol
Brady, a resident of Dallas, Texas; Rebecca Feldt, a resident of
Dallas, Texas; Deborah Brooks Garrett a resident of Dallas,
Texas; (collectively, the "Sellers") and H. Wayne Gifford, a
resident of Dallas, Texas; Charles B. Humphrey, a resident of
Dallas, Texas; Johnathan M. Hill, a resident of Dallas, Texas;
Clay Moore, a resident of Dallas, Texas; Fred Oliver, a resident
of Dallas, Texas; David Tyrrell, a resident of Dallas, Texas;
Sheila Irons, individually and as Trustee of the Humphrey
Children's Trust, a resident of Carrollton, Texas; and Katherine
R. Murphy, a resident of Rowlett, Texas (collectively, the
"Purchasers").
RECITALS
WHEREAS, Purchasers are today purchasing from Sellers the
outstanding capital stock of Gladstone Resources, Inc. (the
"Company") owned by Sellers pursuant to that certain Stock
Purchase Agreement (the "Stock Purchase Agreement") among Sellers
and Purchasers;
WHEREAS, it is a condition precedent to Purchasers entering
into and consummating the stock purchase under the Stock Purchase
Agreement that Sellers enter into this Agreement;
NOW, THEREFORE, for and in consideration of the premises and
the mutual undertakings and agreements contained in this
Agreement, the sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. CONSENT. The Company has entered into that certain Purchase
and Sale Agreement (the "Sale Agreement") with EXCO Resources,
Inc. ("EXCO") pursuant to which the Company will sell (the
"Sale") to EXCO certain of its oil and gas properties that
generate approximately 80-85% of the Company's revenue. Each
Seller is familiar with the Sale Agreement and its impact on the
Company and hereby approves and consents to the Sale under the
Sale Agreement. Each Seller acknowledges that Purchasers are
entering into the Stock Purchase Agreement in part in reliance
upon this consent of the Sellers and the other agreements of
Sellers contained herein.
2. INDEMNIFICATION. Each Seller hereby agrees, jointly and
severally, to indemnify and hold harmless each Purchaser and his,
her or its respective heirs, executors, administrators,
successors and assigns, from and against any and all claims,
demands, actions, causes of action, losses, costs, damages,
liabilities and expenses, including, without limitation,
reasonable legal fees, in any manner arising out of or as a
result of the Sale.
3. BOARD OF DIRECTORS. Each Seller agrees to take or cause to
be taken, all such action as shall be necessary to cause
Johnathan M. Hill, Charles B. Humphrey, H. Wayne Gifford, Fred
Oliver and Katherine R. Murphy to be appointed to and constitute
all the members of the Board of Directors of the Company.
4. ENTIRE AGREEMENT. This document sets forth the entire
Agreement and understanding between the parties hereto related to
the subject matter described herein and together with the Stock
Purchase Agreement and other agreements referenced therein and
executed in connection therewith merges and supersedes all prior
and contemporaneous discussions and documents relating to such
subject matter.
<PAGE>
5. FURTHER DOCUMENTS. Following the execution hereof, to the
extent deemed reasonably necessary, the parties shall execute and
deliver all additional documents or instruments as shall be
necessary or appropriate to carry out the intent of this
Agreement.
6. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs,
executors, administrators, successors and assigns.
7. HEADINGS. Descriptive headings contained in this Agreement
are for convenience only and shall not control or effect the
meaning or construction of any provision hereof.
8. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall constitute together but one
in the same instrument.
9. GOVERNING LAW; VENUE. The validity, construction and
enforcement of this Agreement shall be governed in all respects
by the laws of the State of Texas without reference to applicable
conflict of law provisions. Venue to any action brought with
respect to this Agreement shall be solely in Dallas County,
Texas.
[Signature page follows]
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<PAGE>
SELLERS: PURCHASERS:
_______________________________ _______________________________
Edward B. Brooks, Jr. H. Wayne Gifford
_______________________________ _______________________________
Charles V. W. Brooks Charles B. Humphrey
_______________________________ _______________________________
Carol Brady Johnathan M. Hill
_______________________________ _______________________________
Rebecca Feldt Clay Moore
_______________________________ _______________________________
Deborah Brooks Garrett Fred Oliver
_______________________________
David Tyrell
_______________________________
Sheila Irons
_______________________________
Humphrey Children's Trust
_______________________________
Katherine Murphy
<PAGE>
EXHIBIT 4
---------
PROMISSORY NOTE
$125,000 January 19, 1999
FOR VALUE RECEIVED, the undersigned ("Maker") hereby
promises to pay to the order of Charles B. Humphrey ("Payee"), at
3500 Oak Lawn Avenue, Suite 590, Dallas, Texas 75219 or at such
other place as the holder may designate in writing from time to
time, the principal amount of ONE HUNDRED TWENTY FIVE THOUSAND
DOLLARS ($125,000) in lawful money of the United States of
America upon the following terms:
1. INTEREST. The unpaid principal amount of this note from
time to time outstanding shall bear interest from the date of
this Note at the rate of ten percent (10%) per annum calculated
on the basis of a 365-day calendar year. Notwithstanding the
foregoing, upon default as set forth in Section 7 of this Note,
the unpaid principal balance of principal and accrued interest
then declared due and payable shall bear interest at the rate of
fifteen percent (15%) per annum, calculated as set forth above.
2. PAYMENT. This Note shall be due and payable as follows:
(a) The principal amount of this Note shall be due and payable
in full in one (1) installment on February 28, 1999.
(b) Interest on the outstanding principal balance of this Note
shall be due and payable as it accrues contemporaneously with and
in addition to the principal installment paid on this Note, in
accordance with the provisions of Section 2(a) above.
(c) Payments shall be first applied to accrued and unpaid
interest due at the time of such payment and then to principal.
3. SECURITY. The payment of the indebtedness evidenced this
Note is secured by a security interest in 1,080,820 shares of
Maker's common stock in Gladstone Resources, Inc., a Washington
corporation, granted by Maker to Payee, dated of even date
herewith. In no event shall the reference to the Stock Pledge
Agreement herein impair the absolute obligation for the
performance of all the terms and conditions of this note.
4. PREPAYMENTS. Any installment of principal or interest
payable under the terms of this Note may be prepaid in whole or
in part at any time and from time to time before its maturity
date, without any penalty or premium; provided, however, that
prepayments shall be first applied to accrued and unpaid interest
due at the time of such prepayment and then to principal
installments in the inverse order of their maturity.
5. UNCONDITIONAL LIABILITY. The liability of any maker or
endorser under this Note shall be unconditional and shall not be
in any manner affected by any indulgence whatsoever granted or
consented to by the holder of this Note, including but without
being limited to any extension of time, renewal or release of
security.
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<PAGE>
6. NO WAIVER BY PAYEE. No delay on the part of Payee in the
exercise of any power or right under this Note or under any other
instrument executed pursuant to this Note shall operate as a
waiver thereof, nor shall a single or partial exercise of any
power or right preclude other or further exercise thereof or the
exercise of any power or right.
7. DEFAULT. If Maker fails or refuses to pay any part of the
principal or interest on this Note or any other indebtedness of
Maker to Payee when the same becomes due, then, upon prior
written notice by Payee to Maker and upon the failure of Maker to
cure the default specified in the notice within ten (10) days of
receipt of such notice, the holder of this Note may, at his
option, declare the entire unpaid balance of principal and
accrued interest on this Note to be immediately due and payable,
and the amount declared due and payable shall bear thereafter
interest as provided in Section 2 of this Note. The holder may
proceed to enforce payment of this Note and to exercise any and
all rights and remedies available to him under this Note and
applicable laws of the United States or the State of Texas.
8. USURY. All agreements between the Maker and Payee hereof,
whether now existing or hereafter arising and whether written or
oral, are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of the
maturity hereof, or otherwise, shall the amount paid, or agreed
to be paid to the Payee hereof for the use, forbearance or
detention of the funds advanced pursuant to this Note, or
otherwise, or for payment or performance of any covenant or
obligation contained herein or in any other document or
instrument evidencing, securing or pertaining to this Note exceed
the maximum amount permissible under applicable law. If from any
circumstances whatsoever fulfillment of any provisions hereof or
any other document or instrument described herein, at the time
performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by law, then ipso
facto, the obligation to be fulfilled shall be reduced to the
limit of such validity, and if from any such circumstances the
Payee hereof shall ever receive anything of value deemed interest
by applicable law, which would exceed interest at the highest
lawful rate, such amount which would be excessive interest will
be applied to the reduction of the unpaid principal balance of
this Note or on account of any other principal indebtedness of
the Maker to the Payee hereof, and not to the payment of
interest, or if such excessive interest exceeds the unpaid
principal balance of this Note and such other indebtedness, such
excess shall be refunded to the Maker All sums paid, or agreed
to be paid, by the Maker for the use, forbearance or detention of
the indebtedness of the Maker to the Payee of this Note shall to
the extent permitted by applicable law, be amortized, prorated,
allocated and spread through out the full term of such
indebtedness until payment in full so that the actual rate of
interest on account of such indebtedness is uniform throughout
the term hereof. The terms and provision of this paragraph shall
control and supersede every other provision of all agreements
between the Maker and Payee hereof.
9. COLLECTION EXPENSES. In the event this Note is placed in
the hands of an attorney for collection after this Note shall for
any reason become due, whether or not suit is brought, or if this
Note is collected by any legal proceedings, or under any
foreclosure proceedings, the undersigned Maker shall pay all
costs of collection of any amounts due under this Note,
including, without limitation, reasonable attorneys' fees and
expenses of the holder of this Note.
10. SEVERABILITY. In case any one or more of the provisions
contained in this Note shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such
invalidity,
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<PAGE>
illegality or unenforceability shall not affect any other
provisions of this Note, and in lieu of such unenforceable
provision there will be added automatically as part of this Note
a provision as similar in terms as may be valid, legal and
enforceable.
11. HEADINGS. The descriptive headings for the several sections
of this Note are inserted for convenience only and do not
constitute a part of this Note.
12. GOVERNING LAW. This Note shall be governed by and construed
and enforced in accordance with the substantive laws of the State
of Texas without regard to conflict of law provisions and, to the
extent applicable, federal law.
13. BINDING EFFECT. This Note and all of the provisions,
conditions, promises and covenants of this Note shall be binding
in accordance with the terms of this Note upon Maker and his
successors and assigns.
14. NO ASSIGNMENT. The holder of this Note shall not have right
to assign, sell, transfer ownership, discount, pledge as security
or otherwise use the value of this Note without written consent
of the Maker.
EXECUTED as of the date first above written.
MAKER:
Address: /S/ JOHNATHAN M. HILL
---------------------------
Johnathan M. Hill
3506 Granada
Dallas, Texas 75238
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<PAGE>
STOCK PLEDGE AGREEMENT
This Stock Pledge Agreement (the "Agreement") is made
and entered into this 19th day of January, 1999, by and between
Johnathan M. Hill (the "Pledgor") and Charles B. Humphrey
(referred to as the "Pledgee"), with reference to the following
facts.
RECITALS
1. Pledgee is the payee of a certain promissory note made
by Pledgor, dated as of the date hereof, with a principal amount
of one hundred twenty-five thousand ($125,000) (the "Note") and
with other terms and conditions as set forth therein.
2. Pursuant to the terms of a Stock Purchase Agreement
dated as of the date hereof, by and among the Pledgor and Pledgee
as Purchasers and others (the "Purchase Agreement"), the Pledgor
is acquiring 1,080,819 shares (the "Collateral") of the issued
and outstanding stock of Gladstone Resources, Inc. (the
"Company").
3. The purchase price for the Collateral acquired from
Sellers under the Purchase Agreement is represented by the Note.
4. The Pledgee and Pledgor intend by the pledge of the
Collateral hereunder to secure the performance of the obligations
of the Pledgor under the Note and to Pledgee under the Purchase
Agreement.
NOW, THEREFORE, for and in consideration of the foregoing
and the mutual promises contained herein, the parties agree as
follows:
1. GRANT OF SECURITY INTEREST. Pledgor hereby grants to
the Pledgee a security interest in, and assigns and transfers to
and pledges with the Pledgee, the Collateral represented by
Certificate No. ____, duly endorsed in blank or accompanied by an
assignment separate form certificate duly endorsed in blank.
2. DEPOSIT WITH PLEDGEHOLDER. The endorsed certificate
representing the collateral shall be delivered to Charles B.
Humphrey ("Pledgeholder"), to retain in his possession for and on
behalf of Pledgee. Pledgeholder shall hereafter hold the
certificate in accordance with the terms of this Agreement.
Pledgeholder shall use reasonable care in the custody and
preservation of said certificate and shall not encumber or
dispose of the Collateral except in accordance with the provision
of this Agreement.
3. PAYMENT OF DIVIDENDS. During the term of this
Agreement, all cash dividends and other amounts payable with
respect to the Collateral, whether in the form of dividends or
otherwise, shall be payable to Pledgor.
4. VOTING RIGHTS. During the terms of this Agreement, and
so long as the Pledgor is not in default in the performance of
any of the terms of this Agreement or in the payment of the
principal of the Note, the Pledgor shall have the right to vote
the Collateral on all corporate matters.
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<PAGE>
5. RIGHTS IN THE COLLATERAL. Pledgee's rights under this
Agreement are limited to the rights granted to Pledgee hereunder;
the Pledgor shall otherwise be entitled to exercise all
shareholder rights in the Collateral, including the right to vote
as provided in Section 4 above.
6. ADDITIONAL COLLATERAL. In the event that, during the
term of this Agreement, any stock dividend, reclassification,
readjustment, merger, reorganization, liquidation or other change
is declared or made in the capital structure of the Company, all
new, substituted and additional shares or other securities,
distributed or issued by reason of any such change, together with
any stock dividends issued in respect of the Collateral, shall be
assigned to or distributed to the Pledgeholder in accordance with
Section 2 above and held by the Pledgeholder under the terms of
this Agreement in the same manner as the Collateral originally
pledged hereunder.
7. WARRANTS AND OPTIONS. In the event that, during the
term of this Agreement, warrants or any other rights or options
shall be issued in connection with the Collateral, such warrants,
rights and options shall be immediately assigned by the Pledgee
to the Pledgor, and if exercised by the Pledgor, all new shares
or other securities so acquired by the Pledgor shall be
immediately assigned to or distributed to the Pledgeholder in
accordance with Section 2 above, to be held under the terms of
this Agreement in the same manner as the Collateral originally
pledged hereunder.
8. RETURN OF COLLATERAL. Pledgeholder shall retain
possession of the Collateral until Pledgor's payment in full of
the sums due under the Note. Upon written notice and evidence
satisfactory to the Pledgeholder from Pledgor that such
obligations have been satisfied, Pledgeholder shall release the
Collateral in accordance with instructions of the Pledgor and
shall transfer to the Pledgor the Collateral, together with any
dividends, property, additional shares of other forms of
additional collateral held by the Pledgeholder hereunder and
otherwise payable to Pledgee in satisfaction of Pledgor's
obligations to Pledgee.
9. PROHIBITION OF TRANSFER. Notwithstanding anything
herein to the contrary, neither Pledgor nor Pledgee shall attempt
to assign, transfer or otherwise dispose of the Collateral while
it is in the possession of Pledgeholder.
10. WARRANTIES. Pledgor represents, warrants, covenants
and agrees to and with Pledgee that:
(a) Pledgor is the legal and beneficial owner of the
Collateral;
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(b) No dispute, right of setoff, or counterclaim
exists with respect to all or any part of the Collateral;
(c) Pledgor is the owner of the Collateral free and
clear of any pledge, mortgage, hypothecation, lien, charge,
encumbrance or security interest in the Collateral or the
proceeds thereof, except as herein created;
(d) Except for matters arising by reason of state or
federal securities laws, there are no restrictions upon the
transfer of any of the Collateral;
(e) Pledgor has the right to transfer the Collateral
free of any encumbrances and without obtaining the consent of any
other party which has not already been obtained;
(f) The execution and delivery of this Agreement and
the performance of its terms will not violate or constitute a
default under the terms of any agreement, or other instrument,
license, judgment, decree, order, law, statute, ordinance, or
other governmental rule or regulation applicable to Pledgor or
any of Pledgor's property; and
11. PLEDGEHOLDER. Pledgeholder shall act as a depositary
only and shall not be responsible or liable in any manner
whatever for the sufficiency, correctness, genuineness or
validity of any instrument deposited with it hereunder, or with
respect to form or execution of the same, or the identity,
authority or right of any person executing or depositing the
same. Pledgeholder shall be protected in acting upon any notice,
request, waiver, consent, receipt or other paper or document
believed by Pledgeholder to be signed by the proper party or
parties. Pledgeholder shall not be liable for any error or
judgment or for any act done or step taken or omitted by it in
good faith or for any mistake of act or law, or for anything
which it may refrain for doing in connection herewith, except his
own willful misconduct.
12. TAXES AND CLAIMS. Pledgor agrees to pay all taxes,
charges, liens and assessments against the Collateral arising
during the term of this Agreement.
13. EVENTS OF DEFAULT. At the option of the Pledgee, and
upon written notice to Pledgor, the happening of any of the
following events shall constitute and Event of Default hereunder.
(a) Failure by the Pledgor to keep or perform any of
the terms or provision of this Agreement binding on Pledgor.
(b) An Event of Default by Pledgor under and as
defined in the Note.
(c) Any breach by Pledgor of his obligations to
Pledgee under the Purchase Agreement.
14. POWER OF ATTORNEY. After the occurrence of an Event of
Default hereunder, Pledgor hereby irrevocably appoints Pledgee,
and his successors and assigns, as Pledgor's true and lawful
attorney to collect and receive all the Collateral granting
Pledgee full power and authority to do and perform every act and
thing whatsoever necessary as fully as if Pledgor might or could
do, with full power of substitution and revocation.
15. REMEDIES. Upon the expiration of thirty (30) days
after the occurrence of an Event of Default hereunder, Pledgee
may, unless such Event of Default has been cured within such 30-
day period, in addition to any and all other rights and remedies
which the Pledgee may then have hereunder, under the California
Uniform Commercial Code ("UCC") or otherwise, at Pledgee's option
and in Pledgee's discretion and without notice to Pledgor, take
any one or more of the following actions, without liability
except to account for property actually received by Pledgee:
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(a) Receive dividends, income, property and other
distributions with respect to the Collateral and hold them or
apply them to the obligations under the Note;
(b) Exercise or cause to be exercised all voting and
corporate powers with respect to any Collateral, including all
rights of conversion, exchange, subscription, or any other
rights, privileges or options pertaining to the Collateral;
(c) Exchange any of the Collateral for any other
property upon a reorganization, dissolution, or other
readjustment and, in connection therewith, deposit any of the
Collateral with a committee or depositary upon such terms as
Pledgee may determine;
(d) In Pledgee's name, or in the name of Pledgor,
demand, sue for, collect or receive any money or property at any
time payable or receivable on account of or in exchange for any
of the Collateral;
(e) Reduce Pledgee's claim to judgment or foreclosure
or otherwise enforce the security interest created herein, in
whole or in part, by any available judicial procedure;
(f) Without demand of performance or other demand,
advertisement or notice of any kind (except the notice required
under the UCC) to Pledgor forthwith realize upon the Collateral
or any part thereof, and agree to sell or otherwise dispose or
deliver the Collateral or any part thereof or interest therein,
in one or more portions at the public or private sale or sales,
at such prices and on such terms (including, without limitation,
a requirement that any purchaser of all or any part of the
Collateral purchase the interest constituting the Collateral for
investment without any intention to make any distribution
thereof) as Pledgee deems best, for cash or on credit, or for
future delivery without assumption of any risk or the right of
Pledgor or any purchaser to purchase upon any such sale the whole
or any part of the Collateral free from any right of equity of
redemption in Pledgor, which right or equity is hereby expressly
waived and released.
16. SECURITIES LAW. Pledgor agrees that, because of the
Securities Act of 1933, as amended, or any other laws or
regulations, and for other reasons, there may be legal and/or
practical consideration or limitations affecting Pledgee in any
attempts to dispose of certain portions of the Collateral and for
the enforcement of Pledgee's rights. For these reasons, Pledgee
is hereby authorized by Pledgor, but not obligated, upon the
occurrence of any Event of Default, to sell all or any part of
the Collateral at a private sale, subject to investment letter or
in any other manner which will not require the Collateral, or any
part thereof, to be registered in accordance with the Securities
Act of 1933, as amended, or the rules and regulations promulgated
thereunder or any other laws or regulations, at the best price
reasonably attainable by Pledgee at such private sale or other
distribution in the manner mentioned above. Pledgor understands
that Pledgee may, in Pledgee's discretion, approach a limited
number of potential purchasers and that a sale under such
circumstances may yield a lower price for the Collateral, or any
part or parts thereof, than would otherwise be obtainable if same
were either afforded to a larger number of potential purchasers,
or registered or sold in the open market. Pledgor agrees that
such private sale shall be deemed to have been made in a
commercially reasonable manner, and that Pledgee has no
obligation to delay the sale of any Collateral to permit the
issuer thereof to register it for public sale under any
applicable federal or state securities laws.
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17. APPLICATION OF PROCEED OF SALE. In the event of sale
pursuant to Section 15 above, the proceeds of such sale shall be
applied in the following order: (a) to the reasonable expenses
of retaking, holding, preparing for sale, selling, and the like
and, to the extent provided in this Agreement and not prohibited
by law, the reasonable attorney's fees and legal expenses
incurred by the Pledgee; (b) to the satisfaction of indebtedness
or obligations secured by this Agreement under which the
disposition is made; (c) to the satisfaction of indebtedness
secured by any subordinate security interest in the Collateral if
written notice and demand thereof is received prior to
distribution of the proceeds, and providing reasonable proof of
such interest of interests is timely furnished to the Pledgee;
and (d) to the Pledgor. The Pledgee may buy the Collateral at a
public sale or at a private sale under the conditions specified
in the UCC. Any sale hereunder may be conducted by any
auctioneer or any officer, attorney or agent of the Pledgee.
18. ORDER OR ENFORCEMENT WAIVER. Pledgor waives any rights
to require the Pledgee to proceeds against any other person or to
pursue any other remedy in the Pledgee's power, including by way
of illustration only foreclosing against any other collateral
given by Pledgor to Pledgee to secure the obligations secured by
this Agreement.
19. CUMULATIVE REMEDIES; WAIVER. The rights, powers and
remedies given to the Pledgee by virtue of this Agreement shall
be in addition to all rights, powers and remedies given to the
Pledgee by virtue of the UCC or any other statute or rule of law.
Any forbearance, failure or delay by the Pledgee in exercising
any right, power or remedy hereunder shall not be deemed to waive
such right, power or remedy, and any single or partial exercise
of any right, power or remedy hereunder shall not preclude the
further exercise thereof.
20. EXPENSES AND ATTORNEY'S FEES. Pledgor hereby agrees to
pay all costs and expenses, including without limitation all
reasonable costs and expenses of preparing for sale and selling
the Collateral, all collection agency fees and expenses,
reasonable attorney's fees and costs of suit which the Pledgee
may incur in the exercise, preservation or enforcement of the
Pledgee's rights, powers and remedies hereunder or otherwise
under law.
21. SUCCESSORS AND ASSIGNS. Each and all of the covenants,
conditions and restrictions contained in this Agreement shall
inure to the benefit of and shall binding upon the heirs, assigns
and other successors in interest of Pledgor and Pledgee. Nothing
in this Agreement shall be construed to permit Pledgor to assign
or transfer this Agreement or the Note without the prior written
consent of Pledgee.
22. SEVERABILITY. If any term, covenant, condition or
provision of this Agreement or portion thereof is determined to
be invalid, void or unenforceable for any reason, the remainder
of the provisions contained herein or portions thereof shall
remain in full force and effect.
23. TERM. This Agreement shall remain in full force and
effect unless and until the Pledgor's obligations under the Note
are discharged in full, whereupon Pledgee shall take all actions
and execute all documents as may be necessary or appropriate in
order to terminate Pledgee's security interest in the Collateral.
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24. NOTICE. Any notice, demand or requires required or
permitted to be given hereunder shall be in writing and shall be
deemed effective when given if served personally, twenty-four
(24) hours after having been delivered to an overnight mail or
air express service for the next-day delivery, or three (3) days
after having been deposited in the United States mail, postage
prepaid, registered or certified, and addressed to the other
party at his principal office set forth below (and any party may
change his address for purposes of this Agreement by written
notice given to the other party):
Pledgee: Charles B. Humphrey
Gladstone Resources, Inc.
3500 Oak Lawn Avenue, Suite 590
Dallas, Texas 75219
Pledgor: Johnathan M. Hill
3506 Granada
Dallas, Texas 75238
25. CAPTIONS. Any titles or captions of sections contained
in this Agreement are for convenience only and shall not be
deemed part of the substantive content of this Agreement.
26. INTERPRETATION. Each party and counsel for each party
have reviewed and revised this Agreement and the normal rule of
construction to the effect that any ambiguities are to be
resolved against the drafting party and shall not be employed in
the construction or interpretation of this Agreement or any
amendments or exhibits hereto.
27. AMENDMENT. This Agreement may be amended or modified
from time to time only in a writing executed by all parties to
this Agreement.
28. GOVERNING LAW. This Agreement shall be governed by and
be construed in accordance with the laws of the State of Texas,
excluding that body of law denominated as the choice of law
rules.
29. PLEDGEHOLDER COSTS. Pledgor agrees to pay to
Pledgeholder a reasonable fee, based upon the hourly charges of
his attorneys, paralegals, or other employees or agents, each
time Pledgeholder is required to perform any act or service under
this Agreement solely in his capacity as the Pledgeholder
hereunder, and further agrees to pay any charges incurred by
Pledgeholder in performance of his obligations under this
Agreement.
30. INTERPLEADER. The Pledgeholder will not be required to
make delivery of the Collateral or any portion thereof to either
Pledgee or Pledgor unless, in the Pledgeholder's exclusive
judgment, such payment or delivery may be made without the
Pledgeholder incurring any liability. If conflicting demands are
made or notice is served upon the Pledgeholder with respect to
this Agreement, Pledgee and Pledgor agree that the Pledgeholder
will have the absolute right to elect to do either or both of the
following: (a) withhold and stop all further proceedings under,
and performance of, this Agreement, or (b) file a suit in
interpleader and obtain an order from the court requiring the
parties to interplead and litigate in such court their several
claims and rights amongst themselves. In the event such
interpleader suit is brought, the
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Pledgeholder will be fully released and discharged from all
obligations to further perform any and all duties or obligations
imposed upon the Pledgeholder hereunder, and the parties jointly
and severally agree to pay the Pledgeholder all costs, expenses
and reasonable attorney's fees expended or incurred by the
Pledgeholder as may be fixed by the court in such suit.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement the day and year first above written.
PLEDGOR:
/s/ JOHNATHAN M. HILL
-----------------------------------
Johnathan M. Hill
PLEDGEE:
/s/ CHARLES B. HUMPHREY
-----------------------------------
Charles B. Humphrey
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EXHIBIT 5
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January 19, 1999
Mr. Johnathan M. Hill
3500 Oak Lane, Suite 590
Dallas, TX 75219
Re: Gladstone Stock Purchase
Dear John:
It is my understanding that your lender, Bank of Oklahoma (BOK)
will be advancing you from your Line of Credit the funds
necessary to acquire a certain stock position in Gladstone
Resources, Inc.
It is contemplated that you and I will each be purchasing
1,080,984 shares at an average cost of $.1056 cents per share for
a total consideration of $144,103.71 each, along with some other
parties for varying interests.
Pursuant to our agreement, I will agree to purchase the above
referenced shares, free and clear of any encumbrances, as
outlined above for $.1056 cents per share, within five (5)
business days after receipt of written notice by yourself and
BOK. This offer to "put" the stock back to me will expire on
March 15, 1999, at which time, if no notice is given, my
obligation to purchase said interests will be null and void.
For any banking or financial references, please feel free to
contact Dan Strodel at Compass Bank, Dallas, (214) 706-8042.
Sincerely,
Charles B. Humphrey
