--------------------------------------------------------------------------------

Exhibit 10.2

 
SECURITY AGREEMENT
 
THIS SECURITY AGREEMENT (the “Security Agreement”) is dated as of the 19th day
of October, 2006 by and among Texhoma Energy, Inc., a Nevada Corporation (the
“Debtor”) and Frank Jacobs and Jacobs Oil & Gas, Ltd. (the “Secured Party”).
 
W I T N E S S E T H
 
WHEREAS, the Debtor owes certain monies to the Secured Party in connection with
loans made and monies advanced to the Debtor, which are evidenced by the
Promissory Note, which this Security Agreement is attached to as Exhibit B (the
“Note”), which Note may be supplemented and increased from time to time as
provided in the Note; and
 
WHEREAS, Debtor has agreed, pursuant to the terms and conditions of the Note, to
secure the repayment of the Note by granting the Secured Party a security
interest in certain property of the Debtor as more specifically provided herein;
 
NOW, THEREFORE, in consideration of the foregoing, Debtor and the Secured Party
agree as follows:
 
SECTION 1.  Grant of Security Interest.
 
In order to secure the payment and performance of the Note in accordance with
the terms thereof, except as otherwise specifically provided in this Security
Agreement, the Debtor hereby grants to the Secured Party, a continuing first
priority security interest and lien in and to all right, title and interest of
Debtor to 276,000 shares of Morgan Creek Energy Corp., which shares are held or
will be held by the Debtor subsequent to the parties entry into this Security
Agreement (the “Shares”), which Shares the Debtor agrees will be assigned to the
Secured Party promptly after the later of (a) the receipt of the shares by the
Secured Party; and (b) the parties entry into this agreement.
 
So long as no Event of Default has occurred and is continuing under the Note,
the Secured Party shall hold the Shares for the benefit of the Debtor, however
such shares shall for all purposes be treated as being owned by the Debtor,
which Debtor shall have the right to vote such shares, but not to transfer,
sell, pledge or otherwise encumber the Shares, until such time as (a) the Note
has been repaid in full, or (b) an Event of Default has occurred under the Note.
 
In the event the Note has been repaid in full, the Shares shall be reassigned by
the Secured Party to the Debtor and all right, title and benefit of the shares
shall revert back to the Debtor and the Secured Party shall retain no interest
in the Shares. In the event an Event of Default has occurred under the Note, the
Shares shall become the property of the Secured Party without any further action
on the part of the Secured Party, provided however that the Secured Party shall
obtain all its rights and remedies against the Secured Party in relation to any
outstanding amount of the Note, which is not sufficiently discharged by the
receipt and ownership of the Shares, in the reasonable opinion of the Debtor.
 
 

--------------------------------------------------------------------------------

 
 
SECTION 2. Miscellaneous.

 
(a)
Assignment. All of the terms, provisions and conditions of this Agreement shall
be binding upon and shall inure to the benefit of and be enforceable by the
Parties hereto and their respective successors and permitted assigns.

(b) Applicable Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of Texas, excluding any provision of this
Agreement which would require the use of the laws of any other jurisdiction.

 
(c)
Entire Agreement, Amendments and Waivers. This Agreement constitutes the entire
agreement of the Parties hereto and expressly supersedes all prior and
contemporaneous understandings and commitments, whether written or oral, with
respect to the subject matter hereof. No variations, modifications, changes or
extensions of this Agreement or any other terms hereof shall be binding upon any
Party hereto unless set forth in a document duly executed by such Party or an
authorized agent or such Party.

 
(d)
Waiver. No failure on the part of any Party to enforce any provisions of this
Agreement will act as a waiver of the right to enforce that provision.

 
(e)
Section Headings. Section headings are for convenience only and shall not define
or limit the provisions of this Agreement.

 
(f)
Effect of Facsimile and Photocopied Signatures. This Agreement may be executed
in several counterparts, each of which is an original. It shall not be necessary
in making proof of this Agreement or any counterpart hereof to produce or
account for any of the other counterparts. A copy of this Agreement signed by
one Party and faxed to another Party shall be deemed to have been executed and
delivered by the signing Party as though an original. A photocopy of this
Agreement shall be effective as an original for all purposes.

[Remainder of page left intentionally blank. Signature page follows.]
 

--------------------------------------------------------------------------------

 

 
  This Agreement has been executed by the Parties on the date first written
above, with an Effective Date as provided above.

 

 
/s/ Max Maxwell                                                                 
 /s/ Meredith Maxwell                                  
Max
Maxwell                                                                                                   Meredith
Maxwell
President &
CEO                                                                                            Legal
Administrator
 

Frank Jacobs & Jacobs Oil & Gas, Ltd.

/s/ Frank Jacobs        /s/ Meredith Maxwell
Frank
Jacobs                                                                                                    Meredith
Maxwell
President                                                                                                           Witness
 
 
 

--------------------------------------------------------------------------------