SC 13D/A

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Schedule 13D**

Under the Securities Exchange Act of 1934
 (Amendment No. 2)*

AER Energy Resources, Inc.
 (Name of Issuer)

Common Stock, No Par Value
 (Title of Class of Securities)

000944108
 (Cusip Number)

J. Taylor Crandall
201 Main Street
Fort Worth, Texas  76102
(817) 390-8400
 (Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

September 27, 2000
 (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(e), 13d-1(f) or 13d-1(g), 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 disclosures provided in a prior cover page.

The information required on 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).

**The total number of shares reported herein is 6,465,053 shares, which
constitutes approximately 22.6% of the 28,644,908 shares of Stock deemed
outstanding pursuant to Rule 13d-3(d)(1)(i) under the Act.  Unless otherwise
stated, all ownership percentages set forth herein assume that there are
24,850,263 shares outstanding.



1.	Name of Reporting Person:

Keystone, Inc.

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: WC

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):

/   /

6.	Citizenship or Place of Organization: Texas

7.	Sole Voting Power: 1,000,000 (1)
Number of
Units
Beneficially	8.	Shared Voting Power: -0-
Owned By
Each
Reporting		9.	Sole Dispositive Power: 1,000,000 (1)
Person
With
10.	Shared Dispositive Power: -0-

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

1,000,000

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:

/   /

13.	Percent of Class Represented by Amount in Row (11): 4.0%

14.	Type of Reporting Person: CO
- ------------
(1)	Power is exercised through its President and sole director, Robert M.
	Bass.



1.	Name of Reporting Person:

Robert M. Bass

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: Not Applicable

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):

/   /

6.	Citizenship or Place of Organization: USA

7.	Sole Voting Power: 1,000,000 (1)
Number of
Units
Beneficially	8.	Shared Voting Power: -0-
Owned By
Each
Reporting		9.	Sole Dispositive Power: 1,000,000 (1)
Person
With
10.	Shared Dispositive Power: -0-

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

1,000,000 (1)

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:

/   /

13.	Percent of Class Represented by Amount in Row (11): 4.0%

14.	Type of Reporting Person: IN
- ------------
(1)	Solely in his capacity as President and sole director of Keystone, Inc.



1.	Name of Reporting Person:

FW AER Partners, L.P.

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: 00 - Contributions from Partners

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/   /

6.	Citizenship or Place of Organization: Texas

7.	Sole Voting Power: 1,584,158 (1)
Number of
Units
Beneficially	8.	Shared Voting Power: -0-
Owned By
Each
Reporting		9.	Sole Dispositive Power: 1,584,158 (1)
Person
With
10.	Shared Dispositive Power: -0-

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

2,419,158 (2)

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:
/   /

13.	Percent of Class Represented by Amount in Row (11): 9.4% (3)

14.	Type of Reporting Person: PN
- ------------
(1)	Power is exercised by its sole general partner, Group 31, Inc.
(2)	Includes 835,000 shares of Common Stock that may be acquired upon the
	exercise of warrants.
(3)	Assumes, pursuant to Rule 13d-3(d)(1)(i) under the Act, that there are
	25,685,263 shares of the Stock outstanding.



1.	Name of Reporting Person:

Group 31, Inc.

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: Not Applicable

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/   /

6.	Citizenship or Place of Organization: Texas

7.	Sole Voting Power: 1,584,158 (1)(2)
Number of
Units
Beneficially	8.	Shared Voting Power: -0-
Owned By
Each
Reporting		9.	Sole Dispositive Power: 1,584,158 (1)(2)
Person
With
10.	Shared Dispositive Power: -0-

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

2,419,158 (2)(3)

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:

/   /

13.	Percent of Class Represented by Amount in Row (11): 9.4% (4)

14.	Type of Reporting Person: CO
- ------------
(1)	Power is exercised by its President, J. Taylor Crandall.
(2)	Solely in its capacity as the sole general partner of FW AER Partners,
	L.P.
(3)	Includes 835,000 shares of Common Stock that may be acquired upon the
	exercise of warrants.
(4)   Assumes, pursuant to Rule 13d-3(d)(1)(i) under the Act, that there are
	25,685,263 shares of the Stock outstanding.


1.	Name of Reporting Person:

J. Taylor Crandall

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: Not Applicable

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/   /

6.	Citizenship or Place of Organization: USA

7.	Sole Voting Power: 1,584,158 (1)
Number of
Units
Beneficially	8.	Shared Voting Power: -0-
Owned By
Each
Reporting		9.	Sole Dispositive Power: 1,584,158 (1)
Person
With
10.	Shared Dispositive Power: -0-

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

5,378,803 (2)(3)(4)(5)(6)

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:

/   /

13.	Percent of Class Represented by Amount in Row (11): 18.8% (7)

14.	Type of Reporting Person: IN
- ------------
(1)	Solely in his capacity as the President of Group 31, Inc., general
	partner of FW AER Partners, L.P.
(2)	Solely in his capacity as the President of Group 31, Inc., general
	partner of FW AER Partners, L.P., with respect to 2,419,158 shares of
	the Stock.
(3)	Includes 835,000 shares of Common Stock that may be acquired upon the
	exercise of warrants held by FW AER Partners, L.P.
(4)	Solely in his capacity as the President of Group III 31, L.L.C.,
	general partner of FW AER II, L.P., with respect to 2,959,645 shares of
	the Stock.
(5)	Includes 583,029 shares of Common Stock that may be acquired upon the
	exercise of warrants held by FW AER II, L.P.
(6)	Includes 2,376,616 shares of Common Stock that may be acquired upon the
	conversion of 202,250 shares of the Issuer's Series A Convertible
	Preferred Stock.
(7)	Assumes, pursuant to Rule 13d-3(d)(1)(i) under the Act, that there are
	28,644,908 shares of the Stock outstanding.







1.	Name of Reporting Person:

FW AER II, L.P.

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: 00 - Contributions from Partners

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/   /

6.	Citizenship or Place of Organization: Delaware

7.	Sole Voting Power: -0-
Number of
Units
Beneficially	8.	Shared Voting Power: -0-
Owned By
Each
Reporting		9.	Sole Dispositive Power: -0-
Person
With
10.	Shared Dispositive Power: -0-

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

2,959,645 (1)(2)

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:

/   /

13.	Percent of Class Represented by Amount in Row (11): 10.6% (3)

14.	Type of Reporting Person: PN
- ------------
(1)	Includes 583,029 shares of Common Stock that may be acquired upon the
exercise of warrants.
(2)	Includes 2,376,616 shares of Common Stock that may be acquired upon the
conversion of 202,250 shares of the Issuer's Series A Convertible
Preferred Stock.
(3)	Assumes, pursuant to Rule 13d-3(d)(1)(i) under the Act, that there are
27,809,908 shares of the Stock outstanding.


1.	Name of Reporting Person:

Group III 31, L.L.C.

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: Not Applicable

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/   /

6.	Citizenship or Place of Organization: Delaware

7.	Sole Voting Power: -0-
Number of
Units
Beneficially	8.	Shared Voting Power: -0-
Owned By
Each
Reporting		9.	Sole Dispositive Power: -0-
Person
With
10.	Shared Dispositive Power: -0-

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

2,959,645 (1)(2)(3)

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:
/   /

13.	Percent of Class Represented by Amount in Row (11): 10.6% (4)

14.	Type of Reporting Person: OO-Other

- ------------
(1)	Solely in its capacity as the sole general partner of FW AER II, L.P.
(2)	Includes 583,029 shares of Common Stock that may be acquired upon the
exercise of warrants.
(3)	Includes 2,376,616 shares of Common Stock that may be acquired upon the
conversion of 202,250 shares of the Issuer's Series A Convertible
Preferred Stock.
(4)	Assumes, pursuant to Rule 13d-3(d)(1)(i) under the Act, that there are
27,809,908 shares of the Stock outstanding.



1.	Name of Reporting Person:

David G. Brown

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: PF

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):

/   /

6.	Citizenship or Place of Organization: USA

7.	Sole Voting Power: -0-
Number of
Units
Beneficially	8.	Shared Voting Power: 86,250 (1)
Owned By
Each
Reporting		9.	Sole Dispositive Power: -0-
Person
With
10.	Shared Dispositive Power: 86,250 (1)

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

86,250 (1)

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:

/   /

13.	Percent of Class Represented by Amount in Row (11): 0.3%

14.	Type of Reporting Person: IN
- ------------
(1)	Owned in joint tenancy with his wife, Maureen Brown, who shares voting
and dispositive power over such shares.




1.	Name of Reporting Person:

Maureen Brown

2.	Check the Appropriate Box if a Member of a Group:

(a) /   /

(b) / X /

3.	SEC Use Only

4.	Source of Funds: PF

5.	Check box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e):
/   /

6.	Citizenship or Place of Organization: USA

7.	Sole Voting Power: -0-
Number of
Units
Beneficially	8.	Shared Voting Power: 86,250 (1)
Owned By
Each
Reporting		9.	Sole Dispositive Power: -0-
Person
With
10.	Shared Dispositive Power: 86,250 (1)

11.	Aggregate Amount Beneficially Owned by Each Reporting Person:

86,250 (1)

12.	Check Box if the Aggregate Amount in Row (11) Excludes Certain Units:

/   /

13.	Percent of Class Represented by Amount in Row (11): 0.3%

14.	Type of Reporting Person: IN
- ------------
(1)	Owned in joint tenancy with her husband, David G. Brown, who shares
voting and dispositive power over such shares.



Pursuant to Regulation 13D-G of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Act"), the undersigned
hereby amend their Schedule 13D Statement dated May 30, 1996, as amended by
Amendment No. 1 dated April 11, 2000 (the "Schedule 13D"), relating to the
Common Stock (the "Stock"), of AER Energy Resources, Inc. (the "Issuer").
Unless otherwise indicated, all defined terms used herein shall have the
same meanings respectively ascribed to them in the Schedule 13D.

Item 1.	Security and Issuer.

No material change.

Item 2.	Identity and Background.

	No material change.

Item 3.	Source and Amount of Funds or Other Consideration.

	Item 3 is hereby amended and restated in its entirety as follows:

The source and amount of the funds used or to be used by the Reporting
Persons to purchase shares of the Stock are as follows:

REPORTING PERSON	SOURCE OF FUNDS		AMOUNT OF FUNDS

Keystone		Working Capital(1)	$2,361,924.65

R. Bass		Not Applicable		Not Applicable

FW Partners		Other - Contributions	$10,000,000.00 (2)
			from Partners

Group			Not Applicable		Not Applicable

J. Crandall		Not Applicable		Not Applicable

FW II			Other - Contributions	$2,000,000.00 (3)
			from Partners
D. Brown/
M. Brown		Personal Funds (4)	$146,950.00

(1)  As used herein, the term "Working Capital" includes income from
the business operations of the entity plus sums borrowed from banks and
brokerage firm margin accounts to operate such business in general.  None of
the funds reported herein as "Working Capital" were borrowed or otherwise
obtained for the specific purpose of acquiring, handling, trading or voting
the Stock.

(2)  This figure represents the total amount expended in purchasing
the Stock and the Warrant.

(3)  This figure represents the total amount expended by FW II in
purchasing the convertible promissory note and the warrant described in
Amendment No. 1 to the Schedule 13D and in purchasing the warrant and Series
A convertible preferred stock described in Item 6 herein.

(4)  As used herein, the term "Personal Funds" may include sums
borrowed from banks and brokerage firm margin accounts, none of which were
borrowed or otherwise obtained for the specific purpose of acquiring,
handling, trading or voting the Stock.

Item 4.  Purpose of Transaction.

	No material change.

Item 5.  Interest in Securities of the Issuer.

	Item 5 is hereby amended and restated in its entirety as follows:

(a)

Keystone

The aggregate number of shares of the Stock that Keystone owns
beneficially, pursuant to Rule 13d-3 of the Act, is  1,000,000, which
constitutes approximately  4.0% of the outstanding shares of the Stock.

R. Bass

Because of his position as the President and sole director of
Keystone, R. Bass may, pursuant to Rule 13d-3 of the Act, be deemed to be
the beneficial owner of 1,000,000 shares of the Stock, which constitutes
approximately 4.0% of the outstanding shares of the Stock.

FW Partners

The aggregate number of shares of the Stock that FW Partners owns
beneficially, pursuant to Rule 13d-3 of the Act, is 2,419,158, which
constitutes approximately  9.4% of the 25,685,263 shares of the Stock deemed
outstanding pursuant to Rule 13d-3(d)(1)(i).

Group

Because of its position as the sole general partner of FW Partners,
Group may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial
owner of 2,419,158 shares of the Stock, which constitutes approximately
9.4% of the 25,685,263 shares of the Stock deemed outstanding pursuant to
Rule 13d-3(d)(1)(i).

J. Crandall

Because of his position as the President of Group, which is the sole
general partner of FW Partners, and because of his position as President of
Group III, which is the sole general partner of FW II, J. Crandall may,
pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial owner of
5,378,803 shares of the Stock, which constitutes approximately 18.8% of the
28,644,908 shares of the Stock deemed outstanding pursuant to Rule 13d-
3(d)(1)(i).

FW II

The aggregate number of shares of the Stock that FW II owns
beneficially, pursuant to Rule 13d-3 of the Act, is 2,959,645, which
constitutes approximately  10.6% of the 27,809,908 shares of the Stock
deemed outstanding pursuant to Rule 13d-3(d)(1)(i).

Group III

Because of its position as the sole general partner of FW II, Group
III may, pursuant to Rule 13d-3 of the Act, be deemed to be the beneficial
owner of 2,959,645 shares of the Stock, which constitutes approximately
10.6% of the 27,809,908 shares of the Stock deemed outstanding pursuant to
Rule 13d-3(d)(1)(i).

D. Brown

The aggregate number of shares of the Stock that D. Brown owns
beneficially as a joint tenant with M. Brown, pursuant to Rule 13d-3 of the
Act, is 86,250, which constitutes approximately 0.3% of the outstanding
shares of the Stock.

M. Brown

The aggregate number of shares of the Stock that M. Brown owns
beneficially as a joint tenant with D. Brown, pursuant to Rule 13d-3 of the
Act, is 86,250, which constitutes approximately 0.3% of the outstanding
shares of the Stock.

 (b)

Keystone

Acting through its President and sole director, Keystone has the
sole power to vote or to direct the vote and to dispose or to direct the
disposition of 1,000,000 shares of the Stock.

R. Bass

As the President and sole director of Keystone, R. Bass has the sole
power to vote or to direct the vote and to dispose or direct the disposition
of 1,000,000 shares of the Stock.

FW Partners

Acting through its sole general partner, FW Partners has the sole
power to vote or to direct the vote and to dispose or to direct the
disposition of 1,584,158 shares of the Stock.

Group

Acting through its President, and in its capacity as the sole
general partner of FW Partners, Group has the sole power to vote or to
direct the vote and to dispose or to direct the disposition of 1,584,158
shares of the Stock.

J. Crandall

In his capacity as the President of Group, which is the sole general
partner of FW Partners, J. Crandall has the sole power to vote or to direct
the vote and to dispose or to direct the disposition of 1,584,158 shares of
the Stock.

FW II

FW II has no power to vote or to direct the vote or to dispose or to
direct the disposition of any shares of the Stock.

Group III

In its capacity as the sole general partner of FW II, Group III has
no power to vote or to direct the vote or to dispose or to direct the
disposition of any shares of the Stock.

D. Brown

As joint tenant with M. Brown, D. Brown has the shared power to vote
or to direct the vote and to dispose or to direct the disposition of 86,250
shares of the Stock.

M. Brown

As joint tenant with D. Brown, M. Brown has the shared power to vote
or to direct the vote and to dispose or to direct the disposition of 86,250
shares of the Stock.

(c)  On September 27, 2000, FW II purchased from the Issuer (i)
202,250 shares of Series A Convertible Preferred Stock (the "Preferred
Stock")which may, subject to adjustment, be converted into 2,376,616 shares
of the Stock and (ii) a warrant to purchase 470,035 shares of the Stock (the
"FW AER II Warrant"). The aggregate purchase price of the Preferred Stock
and the FW AER II Warrant was $2,000,000, of which $1,000,000 was paid by
conversion, at a conversion price of $10.00 per share, of the $1,000,000
convertible promissory note acquired by FW II from the Issuer dated March
31, 2000.

Other than as set forth above, none of the Reporting Persons have
purchased or sold any shares of the Stock in the previous 60 days.

(d)  Each of the Reporting Persons affirms that no person other than
such Reporting Person has the right to receive or the power to direct the
receipt of dividends from, or the proceeds from the sale of, the shares of
the Stock owned by such Reporting Person.

(e)  Not Applicable.

Item 6.  Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.

	Item 6 is amended by adding at the end thereof the following:

	As described under Item 5(c) above, FW II entered into a Securities
Purchase Agreement with the Issuer dated as of September 27, 2000 (the
"Securities Purchase Agreement") under which FW II acquired from the Issuer
the Preferred Stock and the FW AER II Warrant. The description of the
Preferred Stock, the FW AER II Warrant and the Securities Purchase Agreement
that follows is not, and does not purport to be, complete and is qualified
in its entirety by reference to the Securities Purchase Agreement and the
Warrant dated September 27, 2000, as applicable, the forms of which are
attached hereto as Exhibits 99.7 and 99.8, respectively, and by reference to
the Articles of Amendment to the Issuer's Articles of Incorporation
containing a statement of the rights and preferences of the Preferred Stock
(the "Articles of Amendment"), a copy of which is attached hereto as Exhibit
99.9.  All of the foregoing Exhibits are hereby fully incorporated into this
Item 6 by this reference.

	Preferred Stock

	The Preferred Stock, which has a stated value of $10.00 per share, is
convertible into shares of the Issuer's common stock at a conversion price
of $0.851 per share, subject to adjustment as set forth in the Articles of
Amendment. The Preferred Stock is entitled to receive cumulative dividends
at the rate of 6.75% per annum.  The Preferred Stock has no voting rights
except as expressly provided in the Articles of Amendment or as provided by
applicable law.

	FW AER II Warrant

	The FW AER II Warrant is exercisable at any time, in whole or in part,
prior to September 30, 2005, into 470,035 shares of the Stock at a price of
$0.886 per share, subject to adjustment as described in Section 3 therein.

	Registration Rights

	Pursuant to Section 4 of the Securities Purchase Agreement, FW II and
certain associated persons and entities as set forth therein acquired demand
and piggyback registration rights with respect to shares of the Issuer's
common stock underlying the Preferred Stock and the FW AER II Warrant.  Such
registration rights will be in effect for a period of eight (8) years from
the date of the securities purchase agreement (September 22, 2000).

Except as set forth herein or in the Exhibits filed herewith and
previously, there are no contracts, arrangements, understandings or
relationships with respect to shares of the Stock owned by the Reporting
Persons.

Item 7.	Material to be Filed as Exhibits.

	Item 7 is hereby amended and restated in its entirety as follows:

Exhibit 99.1 -- Agreement pursuant to Rule 13d-1(k)(1)(iii), filed
herewith.

Exhibit 99.2 -- AER Energy Resources, Inc. Securities Purchase
Agreement dated as of May 13, 1996 between the Issuer and FW
Partners, L.P. previously filed.

Exhibit 99.3 -- Warrant to purchase 835,000 shares of Common Stock
dated as of May 20, 1996 and issued in the name of FW AER Partners,
L.P., previously filed.

Exhibit 99.4 -- Convertible Promissory Note in the amount of
$1,000,000, dated April 3, 2000 between the Issuer and FW AER II,
L.P., previously filed.

Exhibit 99.5 -- Warrant to purchase 112,994 shares of Common Stock
dated as of April 3, 2000 between the Issuer and FW AER II, L.P.,
previously filed.

Exhibit 99.6 -- Letter Agreement Amending Stock Purchase Agreement
between the Issuer and FW Partners, L.P. previously filed.

Exhibit 99.7 -- Securities Purchase Agreement dated as of September
27, 2000, between the Issuer and FW AER II, L.P., filed herewith.

Exhibit 99.8 -- Warrant to purchase 470,035 shares of Common Stock
dated as of September 27, 2000, between the Issuer and FW AER II,
L.P., filed herewith.

Exhibit 99.9 --Articles of Amendment to the Issuer's Articles of
Incorporation dated September 27, 2000, filed herewith.




     After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.

DATED:  October 13, 2000


KEYSTONE, INC.


By: /s/ W. R. Cotham
W. R. Cotham,
Vice President



/s/ W. R. Cotham
W. R. COTHAM
Attorney-in-Fact for:

ROBERT M. BASS (1)


FW AER PARTNERS, L.P.

By: Group 31, Inc.,
 General Partner



By: /s/ J. Taylor Crandall
    J. Taylor Crandall,
    President


GROUP 31, INC.


By: /s/ J. Taylor Crandall
    J. Taylor Crandall,
 President



/s/ J. Taylor Crandall
J. TAYLOR CRANDALL


FW AER II, L.P.

By: Group III 31, L.L.C.,
 General Partner


By: /s/ J. Taylor Crandall
    J. Taylor Crandall,
    President


GROUP III 31, L.L.C.


By: /s/ J. Taylor Crandall
    J. Taylor Crandall,
 President



/s/ David G. Brown
DAVID G. BROWN



/s/ Maureen Brown
MAUREEN BROWN


(1)	A Power of Attorney authorizing W. R. Cotham, et al., to act on
behalf of Robert M. Bass previously has been filed with the
Securities and Exchange Commission.

EX-99.1

Exhibit 99.1

Pursuant to Rule 13d-1(k)(1)(iii) of Regulation 13D-G of the General
Rules and Regulations of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, the undersigned agrees that the
statement to which this Exhibit is attached is filed on behalf of each of
them in the capacities set forth below.

KEYSTONE, INC.

By: /s/ W. R. Cotham
W. R. Cotham,
Vice President


/s/ W. R. Cotham
W. R. COTHAM
Attorney-in-Fact for:

ROBERT M. BASS (1)

FW AER PARTNERS, L.P.

By: Group 31, Inc.,
 General Partner


By: /s/ J. Taylor Crandall
    J. Taylor Crandall,
    President

GROUP 31, INC.

By: /s/ J. Taylor Crandall
    J. Taylor Crandall,
 	President


/s/ J. Taylor Crandall
J. TAYLOR CRANDALL

FW AER II, L.P.

By: Group III 31, L.L.C.,
 General Partner

By: /s/ J. Taylor Crandall
    J. Taylor Crandall,
    President



GROUP III 31, L.L.C.

By: /s/ J. Taylor Crandall
    J. Taylor Crandall,
 President


/s/ David G. Brown
DAVID G. BROWN


/s/ Maureen Brown
MAUREEN BROWN


(1)	A Power of Attorney authorizing W. R. Cotham, et al., to act on
behalf of Robert M. Bass previously has been filed with the
Securities and Exchange Commission.

EX-99.7

Exhibit 99.7

SECURITIES PURCHASE AGREEMENT

THIS IS A SECURITIES PURCHASE AGREEMENT (this "Agreement") by and
between the undersigned ("Purchasers"), and AER Energy Resources, Inc., a
Georgia corporation ("AER"), dated as of September 27, 2000, and by which
Purchasers and AER, in consideration of the agreements set forth below (the
mutuality, adequacy and sufficiency of which are hereby acknowledged),
hereby agree as follows:

1. Agreement to Purchase and Sell.  Upon the terms set forth in this
Agreement, each Purchaser hereby agrees to purchase from AER and AER agrees
to sell to each Purchaser (i) (A) 200,000 shares of AER's no par value
Series A Convertible Preferred Stock (the "Preferred Stock") and (B) 2,250
shares of Preferred Stock (representing 50% of a transaction fee to be paid
by AER to each Purchaser) (collectively, the shares to be issued by AER
pursuant to clauses (A) and (B) above shall be referred to as the "Shares")
and (ii) a warrant to purchase 470,035 shares of AER's no par value Common
Stock (collectively, the "Warrants") in the form attached hereto as Exhibit
A.  The aggregate purchase price for each Purchaser for its Shares and
Warrants shall be $2,000,000.

2. The Closing.  The closing shall occur at 10:00 a.m. on September
27, 2000 (the "Closing") at the offices of Sutherland Asbill & Brennan LLP,
999 Peachtree Street, N.E., Atlanta, Georgia 30309-3996, or as the parties
shall otherwise agree.  At the Closing, the following shall occur:

(a) AER shall deliver to each Purchaser (i) a duly completed and
executed share certificate in the name of each Purchaser representing its
Shares, (ii) a duly completed and executed Warrant, and (iii) if such
Purchaser converts in part its $1,000,000 AER convertible promissory note
dated March 31, 2000 (a "Note") to Preferred Stock, a new AER promissory
note for the remaining principal balance, with otherwise identical terms.

(b) Each Purchaser shall deliver to AER by wire transfer in
immediately available federal funds the aggregate purchase price of its
Shares and its Warrant (less $22,500, representing 50% of the transaction
fee to be paid by AER in cash to each Purchaser), or at its option, it may
pay a portion of the purchase price by converting its Note at a conversion
price of $10.00 of principal per Share, in which case the Note will be
surrendered for cancellation in whole or in part, as appropriate.

3. Representations and Warranties.
(a) By AER.  AER hereby represents and warrants to each Purchaser
that:
(i) AER is a duly incorporated and organized Georgia
corporation validly existing and in good standing under Georgia law;

(ii) AER has the power and authority to issue the Shares and
the Warrant to Purchaser pursuant to this Agreement and to execute, deliver
and otherwise perform this Agreement, and without limiting the foregoing,
the Board of Directors of AER has authorized and approved the execution,
delivery and performance of this Agreement;

(iii) the Shares, the AER Common Stock ("Common Stock")
issuable upon exercise of the Warrants (the "Warrant Shares") and the Common
Stock issuable upon conversion of the Shares (the "Conversion Shares") when
issued will be validly issued, fully paid and non-assessable shares of
capital stock of AER free and clear of any liens, encumbrances, adverse
rights or claims of any kind whatsoever, and AER will at all times maintain
a number of authorized but unissued shares of Common Stock for issuance of
the Warrant Shares and the Conversion Shares;

(iv) this Agreement and the Warrants each has been duly
executed and delivered by AER, and constitutes the legal, valid and binding
obligation of AER, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency and other
laws and equitable principles affecting creditors' rights generally and the
discretion of the courts in granting equitable remedies;

(v) the execution, delivery and performance of this Agreement
and the Warrants each is in compliance with, and is not and will not be,
after the giving of notice or the passage of time or both, in violation of
(A) the articles of incorporation or bylaws of AER as amended or restated,
(B) any applicable law, regulation or order to which AER or its assets is
subject or bound, or (C) any agreement to which AER or its assets is subject
or bound (and without limiting the foregoing, will not result in any
preemptive rights or otherwise require the issuance of stock or other
securities to satisfy antidilution or other similar requirements);

(vi) all of the documents (the "SEC Documents") filed by AER
within the last thirty-six months prior to the date of this Agreement with
the Securities and Exchange Commission (the "Commission") in accordance with
the requirements of the Securities Act of 1933, as amended (the "Securities
Act"), and the Securities Exchange Act of 1934, as amended (collectively the
"Securities Acts"), conformed in all material respects to the requirements
of the Securities Acts and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;

(vii) the authorized capital stock of AER consists of
100,000,000 shares of common stock, no par value ("Common Stock") and
10,000,000 shares of preferred stock, no par value.  As of September 21,
2000, AER had 24,850,263 shares of Common Stock outstanding, and no shares
of preferred stock outstanding.  Other than warrants previously issued to
each Purchaser, the Warrant issued to Swartz Investments, Inc. ("Swartz") in
1995, and stock options granted to employees and restricted stock issued to
directors, both as described in the SEC Documents, AER has no outstanding
securities convertible into (or exercisable or exchangeable for) or
evidencing the right to purchase or subscribe for, shares of its capital
stock or authorized subscriptions, options, warrants, calls, rights,
commitments or any other agreements or arrangements, obligating it to issue
any shares of its capital stock or securities convertible into capital
stock;

(viii) the financial statements (including any related notes)
included in the SEC Documents (the "Financial Statements"), have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as may be noted
therein) and fairly present the financial condition, results of operations
and cash flows of AER as of the dates thereof and for the periods ended on
such dates (in each case subject, as to interim statements, to changes
resulting from year-end adjustments (none of which were or could be expected
to be material in amount or effect)); and

(ix) except as set forth in the Financial Statements, since
December 31, 1999, AER has conducted its business only in the ordinary
course in substantially the same manner as theretofore conducted, and AER
has not undergone or suffered any material adverse change in its condition,
financial or otherwise, business, operations, affairs, properties, assets or
prospects.

(b) By Purchasers.  Each Purchaser hereby represents and warrants
to AER:

(i)  this Agreement has been duly executed and delivered by
Purchaser, and constitutes the legal, valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency and other
laws and equitable principles affecting creditors' rights generally and the
discretion of the courts in granting equitable remedies;

(ii) Purchaser will acquire the Shares, the Conversion
Shares, the Warrant and the Warrant Shares (collectively the "Securities")
for its own account, to hold for investment, and with no present intention
of dividing its participation with others or reselling or otherwise
participating, directly or indirectly, in a distribution of the Securities,
and it will not make any sale, transfer, or other disposition of the
Securities in violation of the Securities Act or any applicable state
securities laws (the "State Acts").  There will be placed on the Warrant and
any certificates for the Shares, the Conversion Shares and the Warrant
Shares, a legend stating in substance:

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS IN RELIANCE ON ONE OR MORE
EXEMPTIONS THEREUNDER AND MAY NOT BE SOLD OR
TRANSFERRED EXCEPT IN TRANSACTIONS EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT THEREUNDER.  THE
SECURITIES EVIDENCED HEREBY ARE SUBJECT TO
RESTRICTIONS ON TRANSFER CONTAINED IN A SECURITIES
PURCHASE AGREEMENT TO WHICH THE CORPORATION IS A
PARTY.  ANY TRANSFER OF THE SECURITIES REPRESENTED
HEREBY IN VIOLATION OF SAID AGREEMENT SHALL BE
VOID.  THE CORPORATION WILL MAIL TO THE HOLDER OF
THESE SECURITIES A COPY OF SUCH RESTRICTIONS
WITHOUT CHARGE WITHIN FIVE (5) DAYS AFTER RECEIPT
OF WRITTEN REQUEST THEREFOR ADDRESSED TO THE
CORPORATION.

(iii) Purchaser, in offering to subscribe for the Securities
hereunder, has been given access to all material and relevant information
concerning AER, thereby enabling Purchaser to make an informed investment
decision concerning the Securities.  Purchaser has relied solely upon an
independent investigation made by it and its representatives, if any, and
has, prior to the date hereof, been given access to and the opportunity to
examine data and information relating to AER.  In making its investment
decision to purchase the Securities, Purchaser is not relying on any oral or
written representations or assurances from AER or any other person or any
representation of AER or any other person other than as set forth in this
Agreement.  Without limiting the foregoing, Purchaser has reviewed AER's
Annual Report on Form 10-K for the year ended December 31, 1999 and AER's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
Purchaser is an "accredited investor" as defined in Rule 501 of Regulation D
under the Securities Act.

(iv) Purchaser understands and acknowledges that an
investment in the Securities involves a high degree of risk.  Purchaser
represents that Purchaser is able to bear the economic risk of an investment
in the Securities, which Purchaser acknowledges are currently illiquid and
may remain illiquid indefinitely, including a possible total loss of its
investment.  In making this statement Purchaser hereby represents and
warrants to AER that Purchaser has adequate means of providing for
Purchaser's current needs and contingencies; Purchaser is able to afford to
hold the Securities for an indefinite period and Purchaser further
represents that Purchaser has such knowledge and experience in financial and
business matters that Purchaser is capable of evaluating the merits and
risks of the investment in the Securities.  Further, Purchaser represents
that Purchaser has no present need for liquidity in the Securities and
Purchaser is willing to accept such investment risks.

(v) Purchaser understands that no United States federal or
state agency, or similar agency of any other country, has reviewed,
approved, passed upon or made any recommendation or endorsement of AER or
the Securities.

(vi) This Agreement is made by AER with Purchaser in reliance
upon Purchaser's representations and covenants made in this Section 3(b),
which reliance by its execution of this Agreement Purchaser hereby confirms.

(vii) Purchaser understands that the Securities have not been
registered under the Securities Act or any State Acts and are being offered
and sold pursuant to exemptions therefrom based in part upon the
representations of Purchaser contained herein.

(viii) Purchaser knows of no public solicitation or
advertisement of an offer in connection with the proposed issuance and sale
of the Securities.

(ix) Purchaser has reviewed with its tax advisors the U.S.
federal, state, local and foreign tax consequences of an investment in the
Securities and the transactions contemplated by this Agreement.  Purchaser
is relying solely on such advisors and not on any statements or
representations of AER or any of its agents and understands that Purchaser
(and not AER) shall be responsible for Purchaser's own tax liability that
may arise as a result of this investment or the transactions contemplated by
this Agreement.

(x) Purchaser's acquisition of the Securities is not a
transaction (or any element of a series of transactions) that is a part of a
plan or scheme to evade the registration provisions of the Securities Act.

4. Registration of Shares.

(a) Demand Registration.  If at any time prior to eight (8) years
from the date of the Closing, AER shall receive a written request from a
Purchaser or Purchasers holding Shares, Conversion Shares, Warrants and
Warrant Shares representing at least 25% of the Common Stock issuable upon
conversion of the Shares and exercise of the Warrants that AER file a
registration statement under the Securities Act, covering the registration
of at least $2,000,000 of the Warrant Shares, the Conversion Shares, other
shares of Common Stock owned by each Purchaser, and shares of Common Stock
owned by Keystone, Inc., David G. Brown, Mark A. Wolfson or "affiliates" or
"associates" thereof, as such terms are defined in the Securities Act
(collectively the "Third Party Shareholders") to the extent such shares of
Common Stock are not then freely tradable under the Securities Act, AER
shall first notify in writing any Purchaser who has not joined in such
request of such request.  Each such Purchaser and any Third Party
Shareholder shall have ten (10) days in which to notify AER of its intention
to join in the request to register its shares.  Not later than ninety (90)
days after receipt by AER of a written request for a demand registration
pursuant to this Section 4(a), AER shall file a registration statement with
the Commission relating to the shares as to which such request for a demand
registration relates (the "Requested Shares") and AER shall use its best
efforts to cause the registration statement (which may cover, without
limitation, an offering on a delayed or continuous basis open for up to one
hundred eighty (180) days pursuant to Commission Rule 415) for the Requested
Shares to become effective under the Securities Act.  AER shall be obligated
to effect only three (3) registrations pursuant to this Section 4(a) for all
Purchasers and Third Party Shareholders together, and only if the proposed
aggregate selling price in any such offering is at least $2,000,000.  Any
such request shall be subject to the rights of the purchasers of AER
Debentures (the "Debenture Subscribers") and Swartz pursuant to the
Registration Rights Agreement dated as of November 22, 1995 among AER, the
Debenture Subscribers and Swartz.

(b) Delay of Registration.  Notwithstanding anything to the
contrary in Section 4(a), AER shall have the right (i) to defer the initial
filing or request for acceleration of effectiveness of any registration
pursuant to Section 4(a) or (ii) after effectiveness, to suspend
effectiveness of any such registration statement or to require holders to
suspend further sales pending amendment (collectively a "Delay"), if, in the
good faith judgment of the Board of Directors of AER and upon the advice of
counsel to AER, such delay in filing or requesting acceleration of
effectiveness or such suspension of effectiveness or suspension of sales is
necessary in light of the existence of material non-public information
(financial or otherwise) concerning AER disclosure of which at the time is
not, in the opinion of the Board of Directors of AER and upon the advice of
counsel, (A) otherwise required and (B) in the best interests of AER;
provided, however that AER will not invoke a Delay for more than three (3)
months, unless the reason for the Delay is that AER is then engaged in an
acquisition, in which case it will use its best efforts to end the Delay as
soon as possible and provided, further that AER will not invoke Delays for
more than an aggregate of six (6) months in any calendar year.  The one
hundred eighty (180) day period referred to herein during which the
registration statement may be kept current after its effective date shall be
extended for an additional number of business days equal to the number of
business days during which the right to sell shares was suspended pursuant
to the preceding sentence, and, if and to the extent necessary to effect
such extension, the eight (8)-year period referred to above shall also be
extended.  In addition, the eight (8)-year period will also be extended if
any registration has been delayed pursuant to the foregoing and cannot be
completed within such period.

(c) "Piggyback" Registration.  If at any time prior to eight (8)
years from the date of the Closing, AER shall determine to proceed with the
preparation and filing of a registration statement under the Securities Act
in connection with the proposed offer and sale for money of any of its
equity securities by it or any of its security holders (other than on Form
S-4 or Form S-8 promulgated under the Securities Act or any successor or
similar form), AER will give written notice of its determination to each
Purchaser.  Upon the written request of a Purchaser or any Third Party
Shareholder given to AER within ten (10) days after Purchaser's receipt of
any such notice by AER, AER will cause all the Conversion Shares and Warrant
Shares and other shares of Common Stock which Purchasers and any of the
Third Party Shareholders have requested to have registered (the "Piggyback
Shares") to be included in such registration statement; provided, however,
that such request shall be subject to the rights of the Debenture
Subscribers and Swartz pursuant to the Registration Rights Agreement dated
as of November 22, 1995 among AER, the Debenture Subscribers and Swartz, and
provided, further that, if the managing underwriter, in the case of an
underwritten public offering, determines and advises in writing that the
inclusion in the registration statement of all the Piggyback Shares proposed
to be included by Purchasers or the Third Party Shareholders would interfere
with the successful marketing of the securities proposed to be registered by
AER, then the number of such Piggyback Shares to be included in the
registration statement shall be reduced in accordance with the
recommendations of the managing underwriter, except that if the managing
underwriter determines and advises that the inclusion in such registration
statement of any Piggyback Shares would so interfere, then no Piggyback
Shares shall be included in such registration statement; provided that any
such reduction shall be made pro rata with respect to all Purchasers and
Third Party Shareholders requesting such registration.

(d) Expenses.  With respect to each inclusion of shares in a
registration statement pursuant to Section 4(a) or 4(b), AER shall bear the
following fees, costs and expenses:  all registration, filing and NASD fees,
printing expenses, fees and disbursements of counsel and accountants for AER
and all legal fees and disbursements and other expenses of complying with
state securities or blue sky laws of any jurisdictions in which the
securities to be offered are to be registered or qualified.  Fees and
disbursements not expressly included above shall be borne pro rata by the
Purchasers and the Third Party Shareholders whose shares are included in
such registration statement.

(e) Indemnification, Etc.  In the event that shares are
registered pursuant to Section 4(a) or 4(b), AER, Purchasers and the Third
Party Shareholders shall execute reasonable and customary underwriting,
indemnification and lock-up agreements relating to such registration and
shall undertake reasonable and customary registration procedures.

(f) Termination of Rights.  Notwithstanding anything to the
contrary in this Section 4, all registration rights set forth in this
Section 4 shall terminate with respect to each Purchaser and Third Party
Shareholder at such time as it or he is able to sell all of its or his
Common Stock subject to such registration rights pursuant to Rule 144 under
the Securities Act within a single three (3)-month period.

5. Survival; Indemnification.  The representations, warranties and
agreements made in this Agreement shall survive the Closing.  Each party,
acknowledging that each of the others is entitled to rely on its
representations, warranties and agreements in this Agreement in order to
preserve the benefit of the bargain otherwise represented by this Agreement,
agrees that neither the survival of such representations, warranties and
agreements, nor their enforceability nor any remedies for breaches of them
shall be affected by any knowledge of a party regardless of when or how such
party acquired such knowledge.

6. Miscellaneous.

(a) Good Faith Efforts; Further Assurances; Cooperation.  The
parties shall in good faith undertake to perform their obligations in this
Agreement, to satisfy all conditions and to cause the transactions contem-
plated in this Agreement to be carried out promptly in accordance with the
terms of this Agreement.  Upon the execution of this Agreement and
thereafter, each party shall do such things as may be reasonably requested
by the others in order more effectively to consummate or document the
transactions contemplated by this Agreement.  The parties shall cooperate
with each other and their respective counsel, accountants or representatives
in connection with any actions required to be taken as part of their
respective rights and obligations under this Agreement.

(b) Notices.  Each notice, communication and delivery under this
Agreement (i) shall be made in writing signed by the party making the same,
(ii) shall specify the section of this Agreement pursuant to which it is
given, (iii) shall be given either in person or by a nationally recognized
next business day delivery service or by telecopier, and (iv) if not given
in person, shall be given to a party at the address set forth below such
party's signature (or at such other address as a party may furnish to the
other parties to this Agreement pursuant to this Section 6(b)).  If notice
is given pursuant to this Section 6(b) of a permitted successor or assign of
a party, then notice shall also thereafter be given as set forth above to
such successor or assign of such party.

(c) Assignment.  No assignment or transfer by a Purchaser or any
Third Party Shareholder of their respective rights and obligations under
this Agreement shall be made by merger or other operation of law or
otherwise except with the prior written consent of AER.  This Agreement is
binding upon the parties and their successors and assigns and inures to the
benefit of the parties and their permitted successors and assigns and, when
appropriate to effect the binding nature of this Agreement for the benefit
of the other parties, of any other successor or assign.

(d) Severability.  Any determination by any court of competent
jurisdiction of the invalidity of any provision of this Agreement that is
not essential for accomplishing its purposes shall not affect the validity
of any other provision of this Agreement, which shall remain in full force
and effect and which shall be construed as to be valid under applicable law.

(e) Controlling Law; Integration; Amendment; Waiver. This
Agreement is governed by, and shall be construed and enforced in accordance
with, the laws of the State of Georgia (except the laws of that state that
would render such choice of laws ineffective).  This Agreement supersedes
all prior negotiations, agreements and understandings between the parties as
to its subject matter, constitutes the entire agreement between the parties
as to its subject matter and may not be altered or amended except in writing
signed by the parties.  The failure of any party at any time or times to
require performance of any provision of this Agreement shall in no manner
affect the right to enforce the same; and no waiver by any party of any
provision or of a breach of any provision of this Agreement, whether by
conduct or otherwise, in any one of more instances shall be deemed or
construed either as a further or continuing waiver of any such provision or
breach or as a waiver of any other provision or of a breach of any other
provision of this Agreement.

(f) Copies.  This Agreement may be executed in two or more
copies, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement or its terms to produce or
account for more than one of such copies.


DULY EXECUTED and delivered by Purchasers and AER, on September 27,
2000.


PURCHASERS:				FW AER II, L.P.

					By:
   					Name
   					Title:

					Address:
					201 Main Street, Suite 3100
					Fort Worth, Texas  76102
					Phone:		(817) 390-8500
					Fax Number:  	(817) 338-2064


					ELMWOOD PARTNERS II

					By:
   					Name:
   					Title:

					Address:
					12651 Elmwood Avenue
					Cleveland, Ohio  44111
					Phone:  	(216) 252-4122
					Fax Number:  	(216) 252-5639



AER:					AER ENERGY RESOURCES, INC.


					By:
					J.T. Moore
					Vice President and Chief Financial Officer

					Address:
					4600 Highlands Parkway, Suite G
					Smyrna, Georgia  30082
					Phone:		(770) 433-2127
					Fax Number:	(770) 433-2286


*    *    *    *    *
2

EX-99.8

Exhibit 99.8

THIS WARRANT AND THE SECURITIES PURCHASED ON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE
SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
UNTIL EITHER (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE
WITH REGARD THERETO, OR (ii) THE CORPORATION SHALL HAVE RECEIVED AN
OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION AND ITS COUNSEL
THAT AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR
APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN CONNECTION
THEREWITH.

Warrant to Purchase					Warrant No. 2000-3
470,035 Shares

	Warrant to Purchase Common Stock
	of
	AER ENERGY RESOURCES, INC.


THIS CERTIFIES that FW AER II, L.P., a Delaware limited
partnership ("Holder") or any subsequent holder hereof, has the
right to purchase from AER Energy Resources, Inc., a Georgia
corporation (the "Company"), up to 470,035 fully paid and
nonassessable shares of the Company's Common Stock, no par value
("Common Stock"), at the Exercise Price (as defined herein),
subject to adjustment as provided below, at any time on or before
5:00 p.m., Atlanta, Georgia time, on September 30, 2005.

This Warrant is issued and all rights hereunder shall be held
subject to all of  the conditions, limitations and provisions set
forth herein.

1. Exercise.

This Warrant may be exercised as to all or any lesser
number of full shares of Common Stock covered hereby upon surrender
of this Warrant, with the Subscription Form attached hereto duly
executed, together with the full Exercise Price in cash, or by
certified or official bank check payable in New York Clearing House
Funds or wire transfer payable in immediately available federal
funds for each share of Common Stock as to which this Warrant is
exercised, at the office of the Company, AER Energy Resources,
Inc., 4600 Highlands Parkway, Suite G, Smyrna, GA 30082, or at such
other office or agency as the Company may designate in writing
(such surrender and payment hereinafter called the "Exercise of
this Warrant").  The "Date of Exercise" of the Warrant shall be
defined as the date that the original Warrant and Subscription Form
are received by the Company.  This Warrant shall be canceled upon
its Exercise, and, as soon as practicable thereafter, the Holder
hereof shall be entitled to receive a certificate or certificates
for the number of shares of Common Stock purchased upon such
Exercise and a new Warrant or Warrants (containing terms identical
to this Warrant) representing any unexercised portion of this
Warrant.  Each person in whose name any certificate for shares of
Common Stock is issued shall, for all purposes, be deemed to have
become the Holder of record of such shares on the Date of Exercise
of this Warrant, irrespective of the date of delivery of such
certificate.  Nothing in this Warrant shall be construed as
conferring upon the Holder hereof any rights as a shareholder of
the Company.

2. Payment of Warrant Exercise Price.

Payment of the Exercise Price may be made by any of the
following, or a combination thereof, at the election of Holder:

(i) cash, certified check or cashier's check or wire transfer
payable in immediately available federal funds; or

(ii) surrender of this Warrant at the principal office of the
Company together with notice of election, in which event the
Company shall issue Holder a number of shares of Common Stock
computed using the following formula:

X = Y (A-B)/A

where:  X = the number of shares of Common Stock to be issued to
Holder (not to exceed the number of shares set forth on the cover
page of this Warrant, as adjusted pursuant to the provisions of
Section 5 of this Warrant).

Y = the number of shares of Common Stock for which this
Warrant is being exercised.

A = the Market Price of one share of Common Stock (for
purposes of this Section 2(ii), the "Market Price" shall
be defined as the average closing bid price of the Common
Stock for the five trading days prior to the Date of
Exercise of this Warrant (the "Five-Day Average Closing
Bid Price"), as reported on the Nasdaq National Market,
or if the Common Stock is not traded on the Nasdaq
National Market, the Five-Day Average Closing Bid Price
in the over-the-counter market; provided, however, that
if the Common Stock is listed on a stock exchange, the
Market Price shall be the Five-Day Average Closing Bid
Price on such exchange).

B = the Exercise Price.

It is intended that the Common stock issuable upon exercise of this
Warrant in a cashless exercise transaction shall be deemed to have
been acquired at the time this Warrant was issued, for purposes of
Rule 144(d)(3)(ii).

3. Exercise Price.

The Exercise Price shall initially be $0.886 per share.
 However, if 120% of the average closing bid price of a share of
Common Stock (as reported on any tier of The Nasdaq Stock Market,
Inc., including the Over-the-Counter Bulletin Board automated
quotation system or on a national securities exchange) for 20
consecutive trading days ending on September 26, 2001 (the "20-Day
Average Closing Bid Price"), is less than the Exercise Price, then
the Exercise Price shall be adjusted to equal the greater of (i)
120% of the 20-Day Average Closing Bid Price or (ii) $0.554.
Notwithstanding the foregoing, in the event that the Exercise Price
is adjusted pursuant to this Section 3, no such adjustment shall be
made to the number of Shares of Common Stock that may be received
upon the Exercise of this Warrant.

4. Transfer and Registration.

Subject to the provisions of Section 8 of this Warrant,
this Warrant may be transferred on the books of the Company, wholly
or in part, in person or by attorney, upon surrender of this
Warrant properly endorsed, with signature guaranteed.  This Warrant
shall be canceled upon such surrender and, as soon as practicable
thereafter, the person to whom such transfer is made shall be
entitled to receive a new Warrant or Warrants as to the portion of
this Warrant transferred, and the Holder of this Warrant shall be
entitled to receive a new Warrant or Warrants as to the portion
hereof retained.

5. Anti-Dilution Adjustments.

(a) If the Company shall at any time declare a dividend
payable in shares of Common Stock, then the Holder hereof, upon
Exercise of this Warrant after the record date for the
determination of Holders of Common Stock entitled to receive such
dividend, shall be entitled to receive upon Exercise of this
Warrant, in addition to the number of shares of Common Stock as to
which this Warrant is Exercised, such additional shares of Common
stock as such Holder would have received had this Warrant been
Exercised immediately prior to such record date.

(b) If the Company shall at any time effect a
recapitalization or reclassification of such character that the
shares of Common stock shall be changed into or become exchangeable
for a larger or smaller number of shares, then upon the effective
date thereof, the number of shares of Common Stock which the Holder
hereof shall be entitled to purchase upon Exercise of this Warrant
shall be increased or decreased, as the case may be, in direct
proportion to the increase or decrease in the number of shares of
Common Stock by reason of such recapitalization or
reclassification, and the Exercise Price shall be, in the case of
an increase in the number of shares, proportionately decreased and,
in the case of a decrease in the number of shares, proportionally
increased.

(c) If the Company shall at any time distribute to Holders of
Common Stock cash, evidences of indebtedness or other securities or
assets (other than cash dividends or distributions payable out of
earned surplus or net profits for the current or preceding year)
then, in any such case, the Holder of this Warrant shall be
entitled to receive, upon Exercise of this Warrant, with respect to
each share of Common Stock issuable upon such Exercise, the amount
of cash or evidences of indebtedness or other securities or assets
which such Holder would have been entitled to receive with respect
to each such share of Common stock as a result of the happening of
such event had this Warrant been Exercised immediately prior to the
record date or other date fixing shareholders to be affected by
such event (the "Determination Date") or, in lieu thereof, if the
Board of Directors of the Company should so determine at the time
of such distribution, a reduced Exercise Price determined by
multiplying the Exercise Price on the Determination Date by a
fraction, the numerator of which is the result of such Exercise
Price reduced by the value of such distribution applicable to one
share of Common stock (such value to be determined by the Board in
its discretion) and the denominator of which is such Exercise
Price.

(d) If the Company shall at any time consolidate or merge
with any other corporation or transfer all or substantially all of
its assets or dissolve, then the Company shall deliver written
notice to the Holder of such merger, consolidation or sale of
assets or dissolution at least thirty (30) days prior to the
closing of such merger, consolidation or sale of assets or
dissolution, and this Warrant shall terminate and expire
immediately prior to the closing of such merger, consolidation or
sale of assets or dissolution.

(e) As used in this Warrant, the term "Exercise Price" shall
mean the purchase price per share specified in Section 3 of this
Warrant until the occurrence of an event stated in Section 5(b) or
5(c) and thereafter shall mean said price as adjusted from time to
time in accordance with the provisions of said sections.  No such
adjustment pursuant to Section 5(b) or 5(c) shall be made unless
such adjustment would change the Exercise Price at the time by $.01
or more; provided, however, that all adjustments not so made shall
be deferred and made when the aggregate thereof would change the
Exercise Price at the time by $.01 or more.  No adjustment made
pursuant to any provision of this Section 5 shall have the effect
of increasing the total consideration payable upon Exercise of this
Warrant in respect of all the Common Stock as to which this Warrant
may be exercised.

(f) In the event that at any time, as a result of an
adjustment made pursuant to this Section 5, the Holder of this
Warrant shall, upon Exercise of this Warrant, become entitled to
receive shares and/or other securities or assets (other than Common
Stock) then, wherever appropriate, all references herein to shares
of Common Stock shall be deemed to refer to and include such shares
and/or other securities or assets; and thereafter the number of
such shares and/or other securities or assets shall be subject to
adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 5.

6. Fractional Interests.

No fractional shares or scrip representing fractional
shares shall be issuable upon the Exercise of this Warrant, but on
Exercise of this Warrant, the Holder hereof may purchase only a
whole number of shares of Common Stock.  The Company shall make a
payment in cash in respect of any fractional shares which might
otherwise be issuable upon Exercise of this Warrant, calculated by
multiplying the fractional share amount by the market price of the
Company's Common Stock on the Date of Exercise as reported on the
Nasdaq National Market or such other exchange or system on which
the Company's Common Stock is traded.

7. Reservation of Shares.

The Company shall at all times reserve for issuance such
number of authorized and unissued shares of Common Stock (or other
securities substituted therefor as herein above provided) as shall
be sufficient for Exercise of this Warrant.  The Company covenants
and agrees that upon Exercise of this Warrant, all shares of Common
Stock issuable upon such Exercise shall be duly and validly issued,
fully paid, nonassessable and not subject to preemptive rights of
any shareholders.

8. Restrictions on Transfer.

This Warrant and the Common Stock issuable on Exercise
hereof have been or will be acquired by the Holder hereof for
investment for its own account and not with a view to the
distribution thereof, have not been registered under the Securities
Act of 1933, as amended (the "Act"), or under any state securities
laws (the "State Acts") and may not be sold, transferred, pledged,
hypothecated or otherwise disposed of in the absence of
registration or the availability of an exemption from registration
under the Act and any applicable State Acts and, in the event a
Holder believes an exemption from the registration requirements of
the Act and any applicable State Acts is available, the Holder must
deliver a legal opinion satisfactory in form and substance to the
Company and its counsel, stating that such exemption is available.
 All shares of Common Stock issued upon Exercise of this Warrant
shall bear an appropriate legend to such effect.  Holder has
represented to the Company that it and any transferee of all or any
portion of this Warrant is and will remain at all times while this
Warrant is outstanding an "accredited investor" as defined in
Regulation D promulgated under the Act.

9. Benefits of this Warrant.

Nothing in this Warrant shall be construed to confer upon
any person other than the Company and the Holder of this Warrant
any legal or equitable right, remedy or claim under this Warrant
and this Warrant shall be for the sole and exclusive benefit of the
Company and the Holder of this Warrant.

10. Applicable Law.

This Warrant is issued under and shall for all purposes
be governed by and construed in accordance with the laws of the
State of Georgia.  Jurisdiction for any dispute regarding this
Warrant lies in Georgia.

11. Loss of Warrant.

Upon receipt by the Company of evidence of the loss,
theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of indemnity or security reasonably
satisfactory to the Company, and upon surrender and cancellation of
this Warrant, if mutilated, the Company shall execute and deliver
a new Warrant of like tenor and date.

12. Purchase Agreement.

This Warrant is issued and sold pursuant to that certain
Securities Purchase Agreement dated as of September 27, 2000 (the
"Purchase Agreement").  The Holder shall be entitled to all of the
rights and benefits and subject to all of the obligations of a
Purchaser under the Purchase Agreement, including without
limitation, rights with respect to registration under the Act.  The
terms of the Purchase Agreement are hereby incorporated herein for
all purposes and shall be considered a part of this Warrant as if
they had been fully set forth herein.

13. Notice to Company and Holder.

Notices or demands pursuant to this Warrant to be given
or made by the Holder of this Warrant to or on the Company shall be
sufficiently given or made if sent by certified or registered mail,
return receipt requested, postage prepaid, and addressed, until
another address is designated in writing by the Company, AER Energy
Resources, Inc., 4600 Highlands Parkway, Suite G, Smyrna, GA 30082,
Attention: Chief Executive Officer.  Notices or demands pursuant to
this Warrant to be given or made by the Company to or on the Holder
of this Warrant shall be sufficiently given or made if sent by
certified or registered mail, return receipt requested, postage
prepaid, and addressed to the Holder as follows: FW AER II, L.P.,
201 Main Street, Suite 3100, Ft. Worth, Texas 76102, Attn:. Vice
President and Controller, with a copy to David G. Brown, c/o Arbor
Investors, 2775 Sand Hill Road, Suite 220, Menlo Park, California
94025 or another person or address designated in writing by Holder.


(signature follows on next page)


IN WITNESS WHEREOF, this Warrant is hereby executed effective
as of the date set forth below.


Dated as of September 27, 2000.


AER ENERGY RESOURCES, INC.


By:
 J.T. Moore
Vice President and Chief Financial
Officer




	SUBSCRIPTION FORM

	TO: AER ENERGY RESOURCES, INC.


The undersigned hereby irrevocably exercises the right to
purchase _______________ shares of Common Stock of AER Energy
Resources, Inc., a Georgia corporation, evidenced by the attached
Warrant, and herewith makes payment of the Exercise Price with
respect to such shares in full, all in accordance with the
conditions and provisions of said Warrant.

The undersigned represents that it is an "accredited investor"
as defined in Regulation D under the Securities Act of 1933, as
amended, agrees not to offer, sell, transfer or otherwise dispose
of any of such Common Stock, except in accordance with the
provisions of Section 8 of the Warrant, and consents that the
following legend may be affixed to the certificates for the Common
Stock hereby subscribed for, if such legend is applicable:

"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities law, and may not be
sold, transferred, pledged, hypothecated or otherwise disposed
of until either (i) a registration statement under the
Securities Act and applicable state securities laws shall have
become effective with regard thereto, or (ii) the corporation
shall have received an opinion of counsel acceptable to the
corporation and its counsel that an exemption from
registration under the Securities Act or applicable state
securities laws is available in connection therewith."

The undersigned requests that certificates for such shares be
issued, and a warrant representing any unexercised portion thereof
be issued, pursuant to the Warrant in the name of the Registered
Holder and delivered to the undersigned at the address set forth
below:



(Check
Box if
applicable)
The undersigned hereby elects to make payment of the
Exercise Price through a cashless exercise pursuant to
Section 2(ii) of the Warrant.




Dated:


	Signature of Registered Holder


	Name of Registered Holder (Print)



	Address

The attached Warrant and the securities issuable on exercise
thereof have not been registered under the Securities Act of 1933,
as amended, or any state securities law and may not be sold,
transferred, pledged, hypothecated or otherwise disposed of in the
absence of registration or the availability of an exemption from
registration under said Act or any state securities law.




	ASSIGNMENT

	(To be executed by the registered Holder
	desiring to transfer the Warrant)


FOR VALUE RECEIVED, the undersigned Holder of the attached Warrant
hereby sells, assigns and transfers unto the person or persons
below named the right to purchase ____________ shares of the Common
Stock of AER ENERGY RESOURCES, INC. evidenced by the attached
Warrant and does hereby irrevocably constitute and appoint
_____________________________ attorney to transfer the said Warrant
on the books of the Company, with full power of substitution in the
premises.


Dated:						Signature

Fill in for new Registration of Warrant:		Signature
Guarantee:


Name					Name of Guarantor

					By:
					Name:
Address				Title:



Please print name and address of assignee
(including zip code)



NOTICE

The signature to the foregoing Subscription Form or Assignment must
correspond to the name as written upon the face of the attached
Warrant in every particular, without alteration or enlargement or
any change whatsoever.

EX-99.9

Exhibit 99.9

ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION OF
AER ENERGY RESOURCES, INC.

In accordance with Sections 14-2-602 and 14-2-1006 of
the Georgia Business Corporation Code (the "Code"), AER
Energy Resources, Inc. (the "Corporation"), a corporation
organized and existing under and by virtue of the Code,
DOES HEREBY CERTIFY:

1.	The name of the Corporation is AER Energy
Resources, Inc.

2.	The following resolution setting forth an
amendment to the Corporation's Articles of
Incorporation has been duly adopted by the
Corporation's Board of Directors:

RESOLVED, that Article II of the
Corporation's Articles of Incorporation is hereby
amended by adding the following provisions to the
end of Section 2.4:  "The Corporation is
authorized to issue 425,000 shares of Series A
Convertible Preferred Stock, no par value (the
"Series A Preferred Stock").  The Series A
Preferred Stock shall have the terms,
preferences, limitations and relative rights set
forth on Exhibit A hereto."

3.	The "Exhibit A" referenced in the foregoing
resolution is included in these Articles of
Amendment and is the same "Exhibit A" as is
attached hereto.

4.	The foregoing resolution containing the amendment
was duly adopted on September 21, 2000, by the
Corporation's Board of Directors in accordance
with the provisions of Sections 14-2-602 and 14-
2-1002 of the Code.  This amendment was adopted
by the Corporation's Board of Directors without
shareholder action and such shareholder action was
not required.

IN WITNESS WHEREOF, the Corporation has caused these
Articles of Amendment to be signed by the undersigned duly
authorized officer, this 27th day of September, 2000.


AER ENERGY RESOURCES, INC.


By: 	/s/ J.T. Moore
	J.T. Moore
	Vice President and Chief
	Financial Officer



Exhibit A

TERMS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF
SERIES A CONVERTIBLE PREFERRED STOCK OF
AER ENERGY RESOURCES, INC.


The following terms shall have the meanings specified:

"Articles of Incorporation" shall mean the Articles of
Incorporation of the Corporation, as amended.

"Base Price" shall mean $0.738.

"Board of Directors" shall mean the board of directors
of the Corporation.

"Bylaws" shall mean the bylaws of the Corporation, as
amended.

"Common Stock" shall mean the common stock, no par
value per share, of the Corporation.

"Conversion Notice" shall have the meaning provided in
Section (d)(5) hereof.

"Conversion Price" shall equal $0.851; provided,
however, that if 115% of the average closing bid price of
the Common Stock as reported on the OTC-BB for the 20
consecutive trading days ending on the first anniversary of
the Original Issue Date (such 20-day average price being
referred to in this definition as the "Adjusted Price") is
less than the Conversion Price, then the Conversion Price
shall equal the greater of (1) 115% of the Adjusted Price
and (2) $0.554; provided, further, that the Conversion
Price shall also be subject to the adjustments provided in
Section (d)(6) hereof.

"Conversion Rate" shall equal such number of shares of
Common Stock equal to (1) the then applicable Liquidation
Value, divided by (2) the then applicable Conversion Price.

"Conversion Rights" shall have the meaning provided in
Section (d) hereof.

"Conversion Shares" shall mean the shares of Common
Stock into which each share of Series A Preferred Stock is
convertible pursuant to Section (d) hereof.

"Corporation" shall mean AER Energy Resources, Inc., a
Georgia corporation.

 "Extraordinary Transaction" shall mean any of the
following events:

(1)	the consummation of a merger, share exchange,
acquisition of stock or other similar transaction, as a
result of which the Corporation shall not continue to exist
or shall continue to exist only as a subsidiary of another
entity (other than a parent or subsidiary of the
Corporation);

(2)	the consummation of a sale of all or
substantially all the assets of the Corporation to a person
or entity (other than a parent or subsidiary of the
Corporation); or

(3)	the public announcement of a tender offer (other
than by a parent or subsidiary of the Corporation) for all
of the outstanding shares of Common Stock.

"Georgia Code" shall mean the Georgia Business
Corporation Code, O.C.G.A.  14-2-101 et seq., as amended.

"Liquidation" shall have the meaning provided in
Section (b) hereof.

"Liquidation Value," with respect to a share of Series
A Preferred Stock, shall equal the Stated Value of such
share plus all accrued but unpaid dividends with respect to
such share.

"Original Issue Date" shall mean September 27, 2000.

"OTC-BB" shall mean the Over-the-Counter Bulletin
Board automated quotation system operated by The Nasdaq
Stock Market, Inc., or any successor quotation system.

"Redemption Notice" shall have the meaning provided in
Section (e)(1) hereof.

"Redemption Price" shall have the meaning provided in
Section (e)(1) hereof.

"Securities Act" shall mean the Securities Act of
1933, as amended.

"Series A Preferred Stock" shall mean the 425,000
shares of Series A Convertible Preferred Stock, no par
value, hereby established.

"Stated Value" per share of the Series A Preferred
Stock shall mean the per share issue price for any share of
Series A Preferred Stock, as adjusted pursuant to Section
(d)(6) hereof after the Original Issue Date.  The initial
Stated Value per share of Series A Preferred Stock is
$10.00.

The terms, preferences, limitations and relative
rights of the Series A Preferred Stock are as follows:

(a) Dividend Rights.  The following dividend rights
shall apply to the Series A Preferred Stock:

(1) The holders of outstanding shares of Series
A Preferred Stock shall be entitled to receive cash
dividends when, as and if declared by the Board of
Directors out of any funds legally available therefor
at the rate of 6.75% of the Liquidation Value per
annum, or $0.675 per share of Series A Preferred Stock
based upon the initial Stated Value per share.

(2) Dividends shall accrue on each share of
Series A Preferred Stock from the Original Issue Date,
and shall accrue from day to day, whether or not
earned or declared and whether or not there shall be
funds legally available for the payment of such
dividends.  Such dividends shall be cumulative so
that, if such dividends in respect of any previous or
current quarterly dividend period, at the rate
specified above, shall not have been paid or declared
and a sum sufficient for the payment thereof set
apart, the deficiency shall first be fully paid before
any dividend or other distribution shall be paid on or
declared and set apart for the Common Stock or any
other stock ranking junior to the Series A Preferred
Stock.  Any accumulation of dividends on the Series A
Preferred Stock shall not bear interest.

(3) No cash dividend shall be paid or declared
on Common Stock or any or any other stock ranking
junior to the Series A Preferred Stock as to dividend
preference unless (A) full accrued and unpaid
dividends on the Series A Preferred Stock for all past
dividend periods and the then current dividend period
shall have been paid or declared and a sum sufficient
for the payment above set apart and (B) the
Corporation shall also pay each holder of the Series A
Preferred Stock the amount of such cash dividend per
share of Common Stock, multiplied by the number of
shares of Common Stock that such holder would have
received if, immediately prior to the declaration date
of such dividend, all shares of Series A Preferred
Stock owned by such holder were converted into Common
Stock pursuant to Section (d) hereof.

(4) Each dividend shall be paid to the holders
of record of the Series A Preferred Stock as they
shall appear on the stock register of the Corporation
on such record date, not exceeding 45 days nor less
than 10 days preceding a dividend payment date, as
shall be fixed by the Board of Directors or a duly
authorized committee thereof.

(b) Liquidation Rights.  Subject to the rights of any
class of stock of the Corporation with liquidation
preferences senior to the Series A Preferred Stock, in the
event of the liquidation, dissolution or winding up for any
reason, including, without limitation, bankruptcy, of the
Corporation or any of the Corporation's subsidiaries, the
assets of which constitute all or substantially all the
assets of the business of the Corporation and its
subsidiaries taken as a whole (each such event being
referred to as a "Liquidation"), the holders of the
outstanding shares of Series A Preferred Stock shall be
entitled to receive in exchange for and in redemption of
each share of their Series A Preferred Stock, and on a
parity with the holders of any capital stock ranking pari
passu to the Series A Preferred Stock, from any funds,
proceeds or assets legally available for distribution to
shareholders, an amount equal to the greater of (1) the
Liquidation Value as of the date that the Liquidation is
approved by the shareholders of the Corporation, or, if no
such approval is required, the Board of Directors, or (2)
the aggregate amount of such funds, proceeds or assets,
multiplied by a fraction:

(x)	the numerator of which is the number of
Conversion Shares to which the holder of such share of
Series A Preferred Stock would be entitled to receive
by virtue of converting such share; and

(y)	the denominator of which is the aggregate of
the number of Conversion Shares, shares of Common
Stock outstanding, and all other shares of outstanding
capital stock of any series the holders of which are
entitled to participate in the proceeds of a
Liquidation.

All the preferential amounts to be paid to the holders
of Series A Preferred Stock under this Section (b) shall be
paid or set apart for payment before the payment or setting
apart for payment of any amount for, or the distribution of
any funds, proceeds or assets of the Corporation to, the
holders of shares of Common Stock or any class or series of
stock of the Corporation ranking junior to the Series A
Preferred Stock in connection with a Liquidation as to
which this Section (b) applies.  If the funds, proceeds and
assets to be distributed to the holders of Series A
Preferred Stock are insufficient to permit the payment to
such holders of the full amounts payable to such holders,
the funds, proceeds and assets legally available for
distribution shall be distributed ratably among the holders
of Series A Preferred Stock in proportion to the full
amount each such holder is otherwise entitled to receive.

(c) Voting Rights.  Except as provided herein or by
the Code, the Series A Preferred Stock shall not have any
voting rights.

(d) Conversion.  The holders of Series A Preferred
Stock shall have conversion rights as follows (the
"Conversion Rights"):

(1) Conversion Rate.

(A) For purposes of this Section (d), each
share of Series A Preferred Stock shall be
convertible, at the times and under the
conditions described in this Section (d), at the
rate of one share of Series A Preferred Stock to
the number of shares of Common Stock that equals
the Conversion Rate.  Such conversion shall be
deemed to have been made immediately prior to the
close of business on the date of the
surrender of the shares of Series A Preferred
Stock to be converted in accordance with the
procedures described in Section (d)(5) hereof.

(B) No fractional shares of Common Stock
shall be issued upon conversion of Series A
Preferred Stock, and any shares of Series A
Preferred Stock surrendered for conversion that
would otherwise result in a fractional share of
Common Stock shall be redeemed in cash at the
then effective Conversion Price per share,
payable as promptly as possible when funds are
legally available therefor.

(2) Conversion at Option of Holders.  Subject to
Section (d)(5) hereof, each share of Series A
Preferred Stock shall be convertible, at the option of
the holder thereof, at any time after issuance, in
whole or in part, at the office of the Corporation or
any transfer agent for the Series A Preferred Stock,
into Common Stock at the then effective Conversion
Rate

(3) Conversion at Option of Company.

(A) Beginning on the date that is three
years after the Original Issue Date, and if all
the conditions of Section (d)(3)(B) are
satisfied, the Corporation may require that each
holder of Series A Preferred Stock convert such
holder's shares of Series A Preferred Stock into
Common Stock in accordance with Section (d)
hereof.

(B) All of the following conditions must be
met in order for the Corporation to exercise the
conversion rights set forth in Section (d)(3)(A)
hereof:

(i) the average closing bid price of a
share of the Common Stock (as reported on
the OTC-BB) for any 20 trading days out of
the 30 trading days immediately preceding
such exercise shall be greater than or equal
to 250% of the Conversion Price as of the
date of such exercise;

(ii)   a registration statement filed
under the Securities Act covering the resale
of shares of Common Stock that may be
received upon the conversion of all shares
of the Series A Preferred Stock (the "Resale
Registration Statement") is effective and
has been continuously effective for at least
three months;

(iii) from the effective date of the
Resale Registration Statement until the date
of such exercise, the Common Stock has been
continuously listed or quoted on a national
securities exchange, on any tier of The
Nasdaq Stock Market, Inc. or on an automated
inter-dealer quotation system (including the
OTC-BB), and the Corporation has not
received any written notice stating that
such exchange, market or system has delisted
or is seeking to delist the Common Stock
from such exchange, market or system; and

(iv) for a three-month period ending on
the Conversion Date with respect to such
exercise, there has not been a public
announcement of an Extraordinary Transaction
that is pending on or has been consummated
before the Conversion Date.

(4) Conversion Upon Extraordinary Transaction.
At any time after the date that an Extraordinary
Transaction has been announced and is then pending,
any holder of Series A Preferred Stock may convert all
of its shares of Series A Preferred Stock into a
number of shares of Common Stock calculated by
dividing (A) the greater of (i) the then applicable
Liquidation Value and (ii) the Stated Value, plus the
dividends that would have accrued on the Series A
Preferred Stock in the event that no dividends were
declared and paid by the Corporation for a period of
three years from the Original Issue Date, by (B) the
then applicable Conversion Price.

(5) Mechanics of Conversion.  Before any holder
of Series A Preferred Stock shall be entitled to
receive certificates representing the shares of Common
Stock into which shares of Series A Preferred Stock
are converted in accordance with Sections (d)(2),
(d)(3), (d)(4) or (e)(2) hereof, such holder shall
surrender the certificate or certificates for such
shares of Series A Preferred Stock, duly endorsed,
with signatures guaranteed, at the office of the
Corporation or of any transfer agent for the Series A
Preferred Stock, and shall give written notice to the
Corporation at such office of the name or names in
which such holder wishes the certificate or
certificates for shares of Common Stock to be issued,
if different from the name shown on the books and
records of the Corporation (the "Conversion Notice").
The Conversion Notice shall also contain such
representations as may reasonably be required by the
Corporation to the effect that the shares to be
received upon conversion are not being acquired and
will not be transferred in any way that might violate
the then applicable securities laws.  The Corporation
shall, as soon as practicable thereafter and in no
event later than 10 days after the delivery of said
certificates and Conversion Notice, issue and deliver
at such office to such holder of Series A Preferred
Stock, or to the nominee or nominees of such holder as
provided in the Conversion Notice, a certificate or
certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid.
The conversion shall be effective at the time the
Corporation accepts the Conversion Notice as being
proper in form and substance.  The person or persons
entitled to receive the shares of Common Stock
issuable upon a conversion pursuant to Sections
(d)(2), (d)(3), (d)(4) or (e)(2) hereof shall be
treated for all purposes as the record holder or
holders of such shares of Common Stock as of the
effective date of conversion pursuant to this Section
(d).  All certificates issued upon the exercise or
occurrence of the conversion shall contain a legend
governing restrictions upon such shares imposed by law
(if any) or agreement of the holder or his or its
predecessors, successors or permitted assigns.

(6) Conversion Price Adjustments.  The Stated
Value (and therefore, the Liquidation Value, the
Conversion Price, the corresponding Conversion Rate
and the $0.851 and $0.554 figures set forth in the
definition of Conversion Price) shall be subject to
adjustment from time to time as follows:

(A) Common Stock Issued at Less Than the
Current Conversion Price.  If the Corporation
shall issue any Common Stock other than Excluded
Securities (as hereinafter defined) without
consideration or for a consideration per share
less than the then current Conversion Price, the
Conversion Price in effect immediately prior to
each such issuance shall immediately (except as
provided below) be reduced by multiplying the
Conversion Price by a fraction of which the
numerator shall be an amount equal to the sum of
(x) the number of shares of Common Stock
outstanding immediately prior to such issuance
multiplied by the current Conversion Price plus
(y) the consideration, if any, received by the
Corporation upon such issuance and the
denominator shall be the total number of shares
of Common Stock outstanding immediately after
such issuance multiplied by the current
Conversion Price.

For the purposes of any adjustment of the
Conversion Price pursuant to Section (d)(6)(A)
hereof, the following provisions shall be
applicable:

(i) Cash.  In the case of the issuance
of Common Stock for cash, the amount of the
consideration received by the Corporation
shall be deemed to be the amount of the cash
proceeds received by the Corporation for
such Common Stock before deducting therefrom
any discounts, commissions, taxes or other
expenses allowed, paid or incurred by the
Corporation for any underwriting or
otherwise in connection with the issuance
and sale thereof.

(ii) Consideration Other Than Cash.  In
the case of the issuance of Common Stock
(otherwise than upon the conversion of
shares of capital stock or other securities
of the Corporation) for a consideration in
whole or in part other than cash, including
securities acquired in exchange therefor
(other than securities by their terms so
exchangeable), the consideration other than
cash shall be deemed to be the fair
value thereof as determined by the Board of
Directors, irrespective of any accounting
treatment, whose determination shall be
conclusive.

(iii) Options and Convertible
Securities.  Except with respect to any
securities that are Excluded Securities, in
the case of the issuance of (1) options,
warrants or other rights to purchase or
acquire Common Stock (whether or not at the
time exercisable), (2) securities by their
terms convertible into or exchangeable for
Common Stock (whether or not at the time so
convertible or exchangeable) or (3) options,
warrants or rights to purchase such
convertible or exchangeable securities
(whether or not at the time exercisable):
(a) the aggregate maximum number
of shares of Common Stock deliverable
upon exercise of such options, warrants
or other rights to purchase or acquire
Common Stock shall be deemed to have
been issued at the time such options,
warrants or rights were issued and for
a consideration equal to the
consideration (determined in the manner
provided in Sections (d)(6)(A)(i) and
(ii) hereof, if any, received by the
Corporation upon the issuance of such
options, warrants or rights plus the
minimum purchase price provided in such
options, warrants or rights for the
Common Stock covered thereby;

(b) the aggregate maximum number
of shares of Common Stock deliverable
upon conversion of or in exchange for
any such convertible or exchangeable
securities, or upon the exercise of
options, warrants or other rights to
purchase or acquire such convertible or
exchangeable securities and the
subsequent conversion or exchange
thereof, shall be deemed to have been
issued at the time such securities
were issued or such options, warrants
or rights were issued and for a
consideration equal to the
consideration, if any, received by the
Corporation for any such securities and
related options, warrants or rights
(excluding any cash received on account
of accrued interest or accrued
dividends), plus the additional
consideration (determined in the manner
provided in Sections (d)(6)(A)(i) and
(ii) hereof), if any, to be received by
the Corporation upon the conversion or
exchange of such securities, or upon
the exercise of any related options,
warrants or rights to purchase or
acquire such convertible or
exchangeable securities and the
subsequent conversion or exchange
thereof;

(c) on any change in the number
of shares of Common Stock deliverable
upon exercise of any such options,
warrants or rights or conversion or
exchange of such convertible or
exchangeable securities or any change
in the consideration to be received by
the Corporation upon such exercise,
conversion or exchange, including, but
not limited to, a change resulting from
the anti-dilution provisions thereof,
the Conversion Price as then in effect
shall forthwith be readjusted to such
Conversion Price as would have been
obtained had an adjustment been made
upon the issuance of such options,
warrants or rights not exercised prior
to such change, or of such convertible
or exchangeable securities not
converted or exchanged prior to such
change, upon the basis of such change;

(d) on the expiration or
cancellation of any such options,
warrants or rights, or the termination
of the right to convert or
exchange such convertible or
exchangeable securities, if the
Conversion Price shall have been
adjusted upon the issuance thereof, the
Conversion Price shall forthwith be
readjusted to such Conversion Price as
would have been obtained had an
adjustment been made upon the issuance
of such options, warrants, rights or
such convertible or exchangeable
securities on the basis of the issuance
of only the number of shares of Common
Stock actually issued upon the exercise
of such options, warrants or rights, or
upon the conversion or exchange of such
convertible or exchangeable securities;
and

(e) if the Conversion Price shall
have been adjusted upon the issuance of
any such options, warrants, rights or
convertible or exchangeable securities,
no further adjustment of the Conversion
Price shall be made for the actual
issuance of Common Stock upon the
exercise, conversion or exchange
thereof.

(B) Excluded Securities.  Notwithstanding
the foregoing, no adjustment shall be made
pursuant to this Section (d) as a result of the
issuance or deemed issuance of any of the
foregoing (collectively, the "Excluded
Securities"):

(i) any shares of Common Stock upon
the conversion of shares of Series A
Preferred Stock;

(ii) securities of the Corporation
offered to the public pursuant to an
effective registration statement under the
Securities Act;

(iii) any securities of the Corporation
(including any shares of Common Stock that
may be issuable pursuant to the
conversion or exercise of any options,
warrants or rights of the Corporation)
pursuant to any commercial agreement if the
issuance of such securities is approved by
the Board of Directors;

(iv) any shares of Common Stock as a
result of the adjustments to the Conversion
Price and the Conversion Rate under this
Section (d);

(v) any options, warrants or rights of
the Corporation, and any shares of Common
Stock issued at any time following the
Original Issue Date (including any shares of
Common Stock that may be issuable pursuant
to the conversion or exercise of any
options, warrants or rights of the
Corporation), in each case granted under any
employee stock option or incentive plan in
which employees or directors of the
Corporation may participate;

(vi) any shares of Common Stock issued
in a transaction to which Section (d)(6)(C)
or (D) applies; or

(vii) any shares of Common Stock issued
pursuant to the exchange, conversion or
exercise of options, warrants or other
rights of the Corporation that have
previously been incorporated into
computations hereunder on the date when such
options, warrants or other rights of the
Corporation were issued.

(C) Stock Dividends, Subdivisions,
Reclassifications or Combinations.  If the
Corporation shall (i) declare a dividend or make
a distribution on its Common Stock in shares of
its Common Stock, (ii) subdivide or reclassify
the outstanding shares of Common Stock into a
greater number of shares, or (iii) combine or
reclassify the outstanding Common Stock into a
smaller number of shares, the Conversion Price in
effect at the time of the record date for such
dividend or distribution or the effective
date of such subdivision, combination or
reclassification shall be proportionately
adjusted so that the holder of any shares of
Series A Preferred Stock surrendered for
conversion after such date shall be entitled to
receive the number of shares of Common Stock
which he would have owned or been entitled to
receive had such Series A Preferred Stock been
converted immediately prior to such date.
Successive adjustments in the Conversion Price
shall be made whenever any event specified above
shall occur.

(D) Other Distributions.  In case the
Corporation shall fix a record date for making of
a distribution to all holders of shares of its
Common Stock of (i) shares of any class other
than its Common Stock, (ii) evidences of
indebtedness of the Corporation, (iii) assets
(excluding cash dividends or distributions, or
dividends or distributions referred to in Section
(d)(6)(C) hereof), or (iv) rights or warrants
(excluding those referred to in Section (d)(6)(A)
hereof), in each such case the Conversion Price
in effect immediately prior thereto shall be
reduced immediately thereafter to the price
determined by dividing (1) an amount equal to the
difference resulting from (x) the number of
shares of Common Stock outstanding on such record
date multiplied by the Conversion Price per share
on such record date, less (y) the fair market
value (as determined by the Board of Directors,
whose determination shall be conclusive) of said
shares or evidences of indebtedness or assets or
rights or warrants to be so distributed, by (2)
the number of shares of Common Stock outstanding
on such record date.  Such adjustment shall be
made successively whenever such a record date is
fixed.  In the event that such distribution is
not so made, the Conversion Price then in effect
shall be readjusted, effective as of the date
when the Board of Directors determines not to
distribute such shares, evidences of
indebtedness, assets, rights or warrants, as the
case may be, to the Conversion Price which would
then be in effect if such record date had not
been fixed.

(7) De Minimis Adjustments.  No adjustment to
the Conversion Price (and, therefore, the Conversion
Rate) shall be made if such adjustment would result in
a change in the Conversion Price of less than $0.01,
but any lesser adjustment shall be carried forward and
shall be made at the time of and together with the
next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to $0.01
or more.

(8) Reservation of Stock Issuable Upon
Conversion.  The Corporation shall at all times
reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose
of effecting the conversion of the shares of the
Series A Preferred Stock such number of shares of
Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of
the Series A Preferred Stock; and if at any time the
number of authorized but unissued shares of Common
Stock shall be insufficient to effect the conversion
of all then outstanding shares of the Series A
Preferred Stock, the Corporation shall take such
corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.

(9) Notices of Record Date.  In the event of any
taking by the Corporation of a record of the holders
of any series or class of securities other than Series
A Preferred Stock (A) for the purpose of determining
the holders thereof who are entitled to receive any
dividend or other distribution or (B) with respect to
an Extraordinary Transaction (other than a tender
offer) or any other action described in Section
(d)(6)(C) or (D) hereof, the Corporation shall mail to
each holder of Series A Preferred Stock, at least 10
days prior to the date specified therein, a notice
specifying the date on which any such record is to be
taken for the purpose of such dividend, distribution
or action, and the amount and character of such
dividend, distribution or action; provided, however,
that the failure to give such notice shall not impair
the validity of such dividend, distribution,
Extraordinary Transaction or other action.

(e) Redemption.

(1) Optional Redemption.  The Series A Preferred
Stock is redeemable by the Corporation, in whole or in
part, at any time or from time to time after issuance
of the Series A Preferred Stock at the option of the
Corporation, on at least 20 but not more than 90 days'
written notice (the "Redemption Notice").  With
respect to any such redemption, each share of Series A
Preferred Stock will be redeemable at a price equal to
the greater of (A) the then applicable Liquidation
Value and (B) the Stated Value, plus the dividends
that would have accrued on the Series A Preferred
Stock in the event that no dividends were declared and
paid by the Corporation for a period of three years
from the Original Issue Date (the "Redemption Price").
The Redemption Price is payable in cash.  Any holder
of Series A Preferred Stock may, in lieu of receiving
cash pursuant to this Section (e), exercise such
holder's conversion rights pursuant to Section (d)(2)
hereof by giving the Corporation a Conversion Notice
no later than 10 days after the Corporation delivers
the Redemption Notice.

(2) Mandatory Redemption.  On the fifth
anniversary of the Original Issue Date, the Company
must, at its option (A) redeem each share of Preferred
Stock for a cash payment equal to the then applicable
Liquidation Value or (B) convert each share of Series
A Preferred Stock into a number of shares of Common
Stock equal to the then Conversion Rate in accordance
with the applicable provisions of Section (d).

(f) Protective Provisions.  In addition to any other
rights provided by law, so long as any shares of Series A
Preferred Stock are then outstanding, except where the vote
or written consent of the holders of a greater number of
shares is required by law or by another provision of the
Articles of Incorporation, without first obtaining the
affirmative vote or written consent of the holders of 66?%
of the total number of shares of Series A Preferred Stock
outstanding, voting together as a single class, the
Corporation shall not:

(1) amend or repeal any provision of, or add any
provision to, the Articles of Incorporation or the
Bylaws, if such action would materially and adversely
alter the preferences, rights, privileges or powers
of, or restrictions provided for the benefit of,
holders of Series A Preferred Stock; or

(2) issue any shares of capital stock with
preferences, limitations and relative rights that
would be superior to or pari passu with the Series A
Preferred Stock.

(g) Notices.  Any notice required by the provisions
hereof to be given to the holders of shares of Series A
Preferred Stock shall be deemed given (i) on the date of
delivery, if such notice is hand-delivered to such holder
or (ii) on the third business day following (and not
including) the date on which such notice is either sent via
express courier or deposited in the United States Mail,
first-class, postage prepaid, and addressed to each holder
of record at his address appearing on the books of the
Corporation.  Notice by any other means shall not be deemed
effective until actually received.

(h) Determination of Market Price.  In each case
where these Articles of Amendment refer to the OTC-BB to
calculate the market price of the Common Stock and at such
time the Common Stock is not quoted on the OTC-BB, the
following provisions shall apply:

(1) If the Common Stock is listed on a national
securities exchange, the average closing bid price
shall be calculated according to the closing price of
the Common Stock as reported by such exchange.

(2) If the Common Stock is not listed on a
national securities exchange but is quoted on any tier
of The Nasdaq Stock Market, Inc. ("Nasdaq"), or any
successor thereto, the average closing bid price shall
be calculated according to the closing bid price of
the Common Stock as reported by such tier of Nasdaq.

(3) If the Common Stock is not listed on a
national securities exchange or quoted on a tier of
Nasdaq, the average closing bid price shall be
calculated according to the closing price of the
Common Stock as reported by the "Pink Sheets"
published by The National Quotation Bureau, Inc., or
any successor thereto, or as reported by any other
electronic or non-electronic quotation system that
publishes or reports daily quotations of the Common
Stock.

(4) If none of the foregoing apply, the average
closing bid price shall be as determined in good faith
by a resolution of the Board of Directors.

*		*		*