exh10j0309.htm


    EXHIBIT
10(j)


      Master
Lease Agreement

      


      Silsbee
Trading and Transportation Corp., a Texas Corporation, hereinafter "STTC"), with
an address at P. O. Box 695, Silsbee, Texas 77656, agrees to lease to South
Hampton Resources, Inc., a Texas Corporation, (hereinafter "SHRCO"), with an
address at P. O. Box 1636, Silsbee, Texas 77656, which agrees to lease from STTC
the Vehicles and Equipment described in the Exhibits attached
hereto.  This Master
Lease Agreement shall be the defining document for terms and conditions
for the lease of each vehicle or equipment or other asset specifically
delineated on an addendum which shall be completed for each individual asset,
unless said addendum specifically changes a term or condition as it applies to
that asset. This Master Lease
Agreement shall be in effect for as long as an individual piece of
equipment or asset is being leased under the date and term established by the
addendum for that asset. Upon expiration or termination of the Vehicle lease,
SHRCO shall return the vehicles to STTC at its location at Highway 418 in Hardin
County, Texas, in the same condition and appearance as when received, ordinary
wear and tear excepted.  Any holding over after the expiration of the
Vehicle lease shall be on a month-to-month basis and subject to all the terms of
this Lease.

      
        	
                1.  

              	
                MAINTENANCE AND
      REPAIR.  STTC agrees, at its own cost and expense, to
      provide with respect to the Vehicles leased,:  (a) all
      preventive maintenance, replacement parts, and repairs to keep the
      Vehicles in good repair and operating condition; (b) oil and lubricants
      necessary for the efficient operation of the Vehicles; (c) all necessary
      tires and tubes; (d) road service due to mechanical and tire failures; (e)
      periodic exterior washing; (f)initial painting and lettering of each
      Vehicle according to SHRCO specifications at the time the Vehicle is
      placed into service, at a cost not exceeding 1% of the initial cost of the
      vehicle, excluding taxes.  In the event any Vehicle shall be
      disabled for any reason, SHRCO and/or its driver shall immediately notify
      STTC.  SHRCO agrees that it will not cause or permit any person
      other than STTC or persons authorized by STTC to make any repairs or
      adjustments to a Vehicle, and shall abide by its directions concerning
      emergency

              


      


      
        
           


        

        
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      repairs.  In
the event a Vehicle is disabled due to mechanical or tire failure, STTC shall,
within a reasonable period of time after receipt of notification, properly
repair, or cause the repair of, the Vehicle.  SHRCO will cause its
drivers to report any trouble concerning the Vehicle not later than the date of
occurrence and to check oil and coolant levels in each Vehicle on a daily basis
to prevent damage.

      
        	
                2.  

              	
                VEHICLE LEASE SERVICE
      AGREEMENT. STTC will provide for inspections, preventive
      maintenance, and routine repairs in such a manner and at such times as to
      minimize the disruption of the normal use of the Vehicle.  SHRCO
      will deliver the Vehicles to the repair facility and pick them up as
      needed after repairs or maintenance is completed.  Any tow
      charges resulting from routine maintenance or repairs will be paid by
      STTC.

              


      

      
        	
                3.  

              	
                FUEL.  Shrco
      shall provide all fuel for the Vehicles and shall be responsible for all
      reporting, taxes, and charges associated
  therewith.

              


      

      
        	
                4.  

              	
                LICENSES, TAXES AND
      PERMITS.  STTC shall, at its own expense, register and
      title each Vehicle, and pay for any Vehicle inspection fees, in the state
      of domicile of such Vehicle for the licensed weight. STTC shall also pay
      the Federal Highway Use Tax and all personal property tax applicable to
      such Vehicle in that domicile state.  If permitted by law, STTC
      shall obtain, at SHRCO's expense, other vehicle licenses, registrations,
      or pro-rate or state reciprocity plates, as SHRCO may
      request.  Any increase in these rates or fees or change in the
      method of assessment over the allowance shown in Schedule "A" will be
      paid for by SHRCO.  Other than as set forth above, SHRCO shall
      pay for all permits, plates, special licenses, fees, or taxes (including
      any penalties or interest) required by SHRCO's business or now or
      hereafter imposed upon the operation or use of the Vehicles, or on this
      lease or on the charges accruing under this lease, including, but not
      limited to, sales or use taxes, mileage or ton mileage taxes, highway and
      bridge tolls, and any new and/or additional taxes and
  fees.

              


      

      
        	
                5.  

              	
                LEASE
      CHARGES.  SHRCO agrees to pay STTC the charges provided
      for under this lease upon receipt of
an

              


      


      
        
           


        

        
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      invoice,
without deduction or offset.  STTC will invoice SHRCO on a monthly
basis, including the billing of fixed charges in advance, and payment shall be
made to the location designated by STTC.  Unless SHRCO shall protest
the correctness of any invoice within seven (7) days of its receipt, SHRCO
agrees that such invoice shall be presumed to be correct.  Should
SHRCO fail to pay any charges when due, SHRCO shall pay interest on such
delinquent amounts at one and one-half percent (1-1/2%) per month or the maximum
permissible rate allowed in the jurisdiction in which SHRCO's principal place of
business is located, whichever is lower, from the date on which payment was due
until paid, together with all expenses of collection and reasonable attorneys'
fees.  This interest charge shall not be construed as an agreement to
accept late payments.

      
        	
                6.  

              	
                VEHICLE USE AND
      DRIVERS.  SHRCO shall use the Vehicle only in the normal
      and ordinary course of its business and operations and in a careful,
      non-abusive manner, and not beyond its capacity and SHRCO shall not make
      any alterations to the Vehicle without STTC's prior written
      consent.  Subject to the terms of this lease, from the time of
      delivery to SHRCO of any Vehicle covered by this lease, SHRCO shall have
      exclusive possession, control, supervision and use of the Vehicle until
      its return to STTC.  SHRCO agrees that all Vehicles shall be
      operated by safe, qualified, properly licensed drivers, who shall
      conclusively be presumed to be SHRCO's agent, servant or employee only,
      and subject to its exclusive direction and control.  The
      Vehicles shall not be operated:  (a) by a driver in possession
      of or under the influence of alcohol or any controlled drug, substance, or
      narcotic; (b) in a reckless or abusive manner; (c) off an improved road;
      (d) on an under inflated tire; (e) improperly loaded or loaded beyond
      maximum weight; or (f) in violation of any applicable laws, ordinances, or
      rules; and SHRCO shall protect, defend, indemnify and hold STTC harmless
      from and against all fines, claims, forfeitures, judgments, seizures,
      confiscations or penalties arising out of any such
      occurrence.  SHRCO will be responsible for all expenses for
      removing or towing any mired or snowbound Vehicle.  SHRCO agrees
      not to use or cause

              


      


      
        
           


        

        
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      any
Vehicle to be used for the transportation of hazardous materials as defined by
regulations promulgated by the Unite States Department of Transportation, unless
otherwise agreed to in writing by STTC, nor for any illegal
purpose.  SHRCO will cause each Vehicle to be stored in a safe
location.  Upon receipt of a written complaint from STTC specifying
any reckless, careless or abusive handling by any driver of the Vehicle(s),
SHRCO shall prohibit the driver so identified from operating the
Vehicle(s).  In the event that SHRCO shall fail to do so or shall be
prevented from so doing by any agreement with anyone on the driver's behalf,
SHRCO shall reimburse STTC in full for any loss and expense incurred by STTC as
a result of operation or use of the Vehicle(s) by such driver; and SHRCO shall
protect, defend, indemnify and hold STTC and its shareholders harmless from and
against any costs, expenses or damages arising out of the operation of any
Vehicle(s) by such driver, notwithstanding that STTC may be designated in this
lease as responsible for extending liability coverage or assuming the risk of
loss of, or damage to, the Vehicle.  SHRCO authorizes STTC to
investigate the driving record of each driver and test such driver with respect
to his ability to operate the Vehicle to which he will be assigned, without
prejudice to any right or remedy of STTC under this lease. The drivers shall be
selected and employed by SHRCO. STTC will have no responsibility for
compensation, supervision or control of such drivers.

      
        	
                7.  

              	
                PHYSICAL DAMAGE TO
      VEHICLES.  SHRCO assumes the risk of loss of, or damage
      to, the Vehicle(s) covered by this lease from any and every cause
      whatsoever, including, but not limited to, casualty, collision, upset,
      fire, theft, malicious mischief, vandalism, graffiti, glass breakage, and
      mysterious disappearance, except as otherwise provided in this
      lease.  SHRCO shall, at its sole cost, procure and maintain an
      automobile collision and comprehensive insurance policy protecting STTC
      against any and all loss or damage to the Vehicles covered by this lease,
      in form satisfactory to STTC, which policy shall provide that losses, if
      any, shall be payable to STTC and/or its assignee.  The amount
      of coverage for each vehicle

              


      


      
        
           


        

        
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      shall be
the fair market value of each item as of this date.  SHRCO shall
deliver to STTC all policies of insurance, or evidence satisfactory to STTC of
such coverage, prior to delivery to SHRCO of any Vehicle covered by this
lease.  Each insurer shall agree, by endorsement upon the policy
issued by it, or by an independent document provided to STTC, that it shall give
STTC thirty (30) days' prior written notice of the effective date of any
alteration or cancellation of such policy, and that such notice shall be sent by
registered or certified mail postage prepaid, return receipt requested, to STTC,
P.  O. Box 695, Silsbee, Texas 77656.

      
        	
                8.  

              	
                LIABILITY
      COVERAGE.  SHRCO shall, at its sole cost, provide
      liability coverage for SHRCO and STTC and their respective agents,
      servants and employees, in accordance with the standard provisions of a
      basic automobile liability insurance policy as required in the
      jurisdiction in which the Vehicle is operated, against liability for
      bodily injury, including death, and property damage arising out of the
      ownership, maintenance, use and operation of the Vehicle(s) with limits of
      at least a combined single limit of $5,000,000 per occurrence (except that
      STTC shall not be liable for damage to property left, stored, loaded, or
      transported in, upon, or by the Vehicle).  Such coverage shall
      be primary and not excess or contributory and shall be in conformity with
      the basic requirements of any applicable No-Fault or uninsured motorist
      laws, but does not include "Uninsured Motorist" or supplementary
      "No-Fault", or optional coverage.  Such coverage, if the
      obligation of SHRCO, shall be in a form acceptable to STTC and SHRCO shall
      deliver all policies of insurance, or evidence satisfactory to STTC of
      such coverage, prior to delivery to SHRCO of any Vehicle covered by this
      lease.  Each insurer shall agree, by endorsement upon the policy
      issued by it, or by an independent document provided to STTC, that it
      shall give STTC thirty (30) days' prior written notice of the effective
      date of any alteration or cancellation of such policy and that such notice
      shall be sent in the manner contemplated by Article 6.  SHRCO
      shall notify STTC as well as SHRCO's insurance company, of any loss of, or
      damage to, or accident involving
any

              


      


      
        
           


        

        
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      Vehicle,
immediately by telephone, and in writing as soon as practicable thereafter, and
to cooperate fully in the investigation, prosecution and/or defense of any claim
or suit and to do nothing to impair or invalidate any applicable liability,
physical damage or cargo coverage.  SHRCO shall provide in each
vehicle proof of financial responsibility.

      
        	
                9.  

              	
                INDEMNIFICATION.  SHRCO
      shall protect, defend, indemnify and hold harmless STTC and its partners
      and its agents, servants and employees from any and all claims, suits,
      costs, damages, expenses and liabilities arising from: (a) SHRCO's failure
      to comply with its obligations to governmental bodies having jurisdiction
      over SHRCO and the Vehicles or its failure to comply with the terms of
      this lease, or the use, selection, possession, maintenance, and/or
      operation of the Vehicle; (b) any liability imposed upon or assumed by
      SHRCO under any Workers' Compensation Act, plan or contract and any and
      all injuries (including death) or property damage sustained by SHRCO or
      any driver, agent, servant or employee of SHRCO; or (c) SHRCO's failure to
      properly operate or maintain a trailer or other equipment not leased by
      STTC under this lease, or properly connect any trailer or other equipment.
      Where the Vehicle is operated with a trailer or other equipment not leased
      by STTC under this lease, then SHRCO warrants that such trailer or other
      equipment shall be in good operating condition compatible in all respects
      with the Vehicle with which it is to be used and in compliance with all
      laws and regulations covering the trailer or other
    equipment.

              


      

      
        	
                10.  

              	
                ACCEPTANCE OF
      VEHICLES.  If subsequent to the date of preparation of
      the Schedule "A",
      any law, rule, or regulation shall require the installation of any
      additional equipment or accessories, including, but not limited to,
      anti-pollution and/or safety devices, or in the event that any
      modification of the Vehicle shall be required by virtue of such law, rule
      or regulation, STTC and SHRCO agree to cooperate in arranging for the
      installation of such equipment or the performance of such modifications
      and SHRCO agrees to promptly pay the full cost thereof, including any
      additional maintenance expenses
upon

              


      


      
        
           


        

        
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      receipt
of an invoice for same.  STTC may, in order to keep the fleet of
equipment in up to date and modern condition, substitute trucks or trailers of
equal or higher value.  Equipment changes resulting in additional or
enhanced equipment being available to SHRCO will result in additional lease
charges as determined by mutual agreement.

      
        	
                11.  

              	
                FORCE
      MAJEURE.  STTC shall incur no liability to SHRCO for
      failure to perform any obligation under this lease caused or contributed
      to by events beyond STTC's reasonable control, such as, but not limited
      to, war, fire, governmental regulations, labor disputes, manufacturer,
      supplier or transportation shortages or delays, or fuel allocation
      programs.

              


      

      
        	
                12.  

              	
                VEHICLE
      TITLE.  Title to the Vehicles and all equipment delivered
      to SHRCO under this lease shall remain in STTC or its
      designee.  SHRCO shall, at all times, at its sole cost, keep the
      Vehicles and related equipment free and clear from all liens,
      encumbrances, levies, attachments or other judicial process from every
      cause whatsoever, (other than a claimant through an act of STTC), and
      shall give STTC immediate written notice thereof and shall indemnify and
      hold STTC harmless from any loss or damage, including attorneys' fees,
      caused thereby.

              


      

      
        	
                13.  

              	
                DEFAULT BY SHRCO AND
      REMEDIES.  In the event SHRCO shall fail or refuse to pay
      any charges under this lease when due, or perform or observe any other
      term of this lease for five (5) days after written notice is sent to SHRCO
      by STTC, or if SHRCO or any guarantor of SHRCO's obligations shall become
      insolvent or make a bulk transfer of its assets or make an assignment for
      the benefit of creditors, or if SHRCO or any guarantor of SHRCO's
      obligations shall file or suffer the filing against it of a petition under
      the Bankruptcy Act or under any other insolvency law or law providing for
      the relief of debtors, or if any representation or warranty made by SHRCO
      herein or any document furnished by SHRCO or a guarantor of SHRCO's
      obligations shall prove to be incorrect in any material respect, STTC
      shall be entitled to pursue the remedies specified in the following
      paragraph.  Upon the happening of one of the preceding Events of
      Default, STTC may, with or without terminating this lease, with or
      without

              


      


      
        
           


        

        
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      demand or
notice to SHRCO, and with or without any court order or process of law, take
immediate possession of, and remove, any and all Vehicles covered by this lease
wherever located, and/or retain and refuse to deliver, and/or re-deliver to
SHRCO, the Vehicle(s), without STTC being liable to SHRCO for damages caused by
such taking of possession.  In addition, STTC may proceed by
appropriate court action to enforce the terms of this lease or to recover
damages for the breach of any of its terms.  In the event STTC takes
possession of or retains any Vehicle and there shall, at the time of taking or
retention, be in, upon or attached to the Vehicle any property or things of a
value belonging to SHRCO or in SHRCO's custody or control, STTC is authorized to
take possession of such items and either hold the items for SHRCO or place them
in public storage for SHRCO, at SHRCO's sole cost and risk of loss or
damage.

      
        	
                14.  

              	
                ADJUSTED
      COST.  The parties hereto recognize that the lease rate
      provided for in this lease is based upon STTC's current costs and that
      such costs may fluctuate.  Accordingly, STTC and SHRCO agree
      that for each rise or fall in the Consumer Price Index for All Urban
      Consumers for the United States, published by the United States Department
      of Labor, Bureau of Labor Statistics, or any successor index designated by
      STTC, above or below the Consumer Price Index figure applicable for each
      leased Vehicle per the individual Addendum for that vehicle, the fixed
      lease charges shall be adjusted upward or downward. All increases under
      this Article shall be cumulative and shall be calculated only on the
      charges initially shown on the Vehicle's individual addendum. Upon adjustment, the
      fixed lease charge shall be rounded off to the nearest whole
      cent.  This adjustment in cost to Shrco may be waived by STTC
      for a  given period or in any given year and such waiver does
      not affect the ability to apply such change in the succeeding years to
      future lease costs.

              


      

      
        	
                15.  

              	
                NON-LIABILITY FOR
      CONTENTS.  STTC shall not be liable for loss of, or
      damage to, any cargo or other property left, stored, loaded or transported
      in, upon, or by any vehicle furnished to SHRCO pursuant to this lease at
      any time or place, and SHRCO agrees to
protect,

              


      


      
        
           


        

        
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      indemnify,
defend and hold STTC and its partners harmless from and against any claims for
such loss or damage.

      
        	
                16.  

              	
                ASSIGNMENT AND
      SUBLETTING.  Without prior written consent of STTC, which
      consent will not be unreasonably withheld, SHRCO shall not voluntarily or
      involuntarily assign or pledge this lease or the Vehicles, or sublet, rent
      or license the use of the Vehicles, or cause or permit the Vehicles to be
      used by anyone other than SHRCO or its agents, servants or
      employees.  This lease and any Vehicles, rent or other sums due
      or to become due hereunder may be assigned or otherwise transferred,
      either in whole or in part, by STTC, without affecting any obligations of
      SHRCO and, in such event, the right of SHRCO shall be subject to any lien,
      security interest or assignment given by STTC in connection with the
      ownership of the Vehicle(s), and the transferee or assignee shall have all
      of the rights, powers, privileges and remedies of
  STTC.

              


      

      
        	
                17.  

              	
                DISCLAIMER.  STTC
      MAKES NO WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, AS TO THE
      MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY VEHICLE
      COVERED BY THIS LEASE.  STTC SHALL NOT BE LIABLE FOR LOSS OF
      SHRCO'S PROFITS OR BUSINESS, LOSS OR DAMAGE TO CARGO, DRIVER'S TIME, OR
      ANY INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES.

              


      

      
        	
                18.  

              	
                MISCELLANEOUS.  This
      lease and the schedules and/or riders attached hereto shall constitute the
      entire agreement between the parties and to be binding on STTC must be
      signed by an officer of STTC.  This document shall constitute an
      agreement of lease and nothing shall be construed as giving to SHRCO any
      right, title or interest in any of the Vehicles or related equipment,
      except as lessee only.  Upon execution of this lease by STTC and
      SHRCO, the lease shall be binding on the respective parties and their
      legal representative, successors and assigns.  Its terms shall
      not be amended or altered by failure of either party to insist on
      performance, or failure to exercise any right or privilege, or in any
      manner unless such amendment or alteration is in writing and signed on
      behalf of the parties hereto.  This lease shall supersede any
      and all proposals or agreement, written or verbal, between the parties,
      relating to

              


      


      
        
           


        

        
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      the
subject matter of this lease and may not be modified, terminated or discharged,
except in writing and signed by the party against whom the enforcement of the
discharge, modification or termination is sought.  Any notice given
under this lease shall be in writing and sent by registered or certified mail to
STTC or to SHRCO, as the case may be, to the addresses set forth in this lease,
or to such other addresses as are designated in writing by either
party.  This lease is to be interpreted, construed and enforced in
accordance with the laws of the State of Texas.  In the event any of
the terms and provisions of this lease are in violation of or prohibited by any
law, statute, regulation or ordinance of the United States and/or state or city
where the lease is applicable, such terms and provisions shall be deemed amended
to conform to such law, statute, regulation or ordinance without invalidating
any of the other terms and provisions of this lease.

      


      


      IN
WITNESS WHEREOF, the parties shall cause this lease to be executed by their duly
authorized representative this 3rd day of February,
2009.

      


      Silsbee
Trading and Transportation Corp.

      


      by 
/s/ Nick
Carter

      


      Its President

      


      South
Hampton Resources, Inc.

      


      by /s/ Connie
Cook

      


      Its
Controller


      
        
           


        

        
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