Closing Agreement Dated November 17, 2004



  
 Exhibit 10.3

  
 CLOSING AGREEMENT 
  
 CLOSING AGREEMENT (“Agreement”) dated as of December 7, 2004, by
and between ENERGYTEC, INC., a Nevada corporation (“Purchaser”), CRAIG CARPENTER (“Seller”), and LEONARD W. BURNINGHAM, ESQ. (“LWB”). 
  
 Recitals 
  
 WHEREAS, Purchaser and Seller have entered into that certain Stock Purchase Agreement dated as of November 17, 2004 pursuant to which Purchaser will
purchase, and Seller will sell, 75,000 shares of the common stock of Source Energy Corporation (the “Shares”) at a total purchase price of $300,000; and 
  
 WHEREAS, Purchaser desires to deposit with LWB cash in the amount of $300,000 to be used for payment of the purchase price
and Seller desires to deposit with LWB a certificate for the Shares duly endorsed for transfer with Medallion signature guarantee, all of which are to be delivered as provided herein. 
  
 Agreement 
  
 NOW, THEREFORE, for good and valuable considerations, the receipt and adequacy of which are hereby acknowledged by each of the parties hereto, the parties
hereby agree as follows: 
  
 1. Delivery of Funds. On the
date of Closing (as defined therein) of the Asset Purchase Agreement between Purchaser and Source Energy Corporation dated November 17, 2004 (“Purchase Agreement”) Purchaser will cause to be sent by wire transfer to the trust account of
LWB $300,000 in cash (the “Funds”) and Seller will deliver to LWB a certificate for the Shares duly endorsed for transfer with Medallion signature guarantee (the “Certificate”). The Funds will be held in a non-interest bearing
account. The wire instructions are 
  
 Leonard W. Burningham,
Trust Account 
 Account No.
                                        
     
 Wells Fargo Bank 
 299 South Main, 7th Floor 
 Salt Lake City, Utah 84111 
 ABA 121000248

  
 2. Release of Funds. The Funds and Certificate will be
released and paid over by LWB as follows: 
  
 (a) As contemplated
by Section 4.8(b) of the Purchase Agreement, purchaser is distributing to its stockholders all of the common stock of Source Energy Corporation received by Purchaser under the Purchase Agreement. On the date the distribution is effected by mailing
certificates for Source Energy Corporation common stock to the stockholders of Purchaser, 

  









 
Purchaser will immediately give written notice thereof to Seller and LWB. Within three business days following the receipt of said notice, LWB will deliver
to Seller (pursuant to his written instructions) the Funds, without interest, and deliver to Purchaser the Certificate. 
  
 (b) If distribution of the Funds and Certificate does not occur under the terms of paragraph 2(a) on or before June 30, 2005, then on the next business
day LWB will cause the Funds to be returned to Purchaser by wire transfer, without interest, and deliver to Seller the Certificate, all without any obligation on the part of LWB to provide notice thereof to Seller or Purchaser and without any
approval or consent required of Seller or Purchaser. 
  
 3.
Limitation of Responsibility and Liability of LWB. LWB: 
  
 (a) Is authorized to rely upon all written instructions and/or communications of Seller and Purchaser that appear to be valid on their face; 
  
 (b) Has no implied obligations or responsibilities hereunder, nor shall it have any obligation or responsibility to collect funds or seek the deposit of
money or property; 
  
 (c) Acts hereunder as a depository only,
and is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness, or validity of any instrument deposited with it, or with respect to the form or execution of the same, or the identity, authority, or rights of
any person executing or depositing the same; 
  
 (d) Is entitled
to comply with any final award in arbitration or final order, judgment or decree of a court of competent jurisdiction; 
  
 (e) Is under no obligation to institute or defend any action, suit or proceeding in connection with this Agreement unless first indemnified to its
satisfaction by Seller and Purchaser; 
  
 (f) Has no liability
under this Agreement to either Seller or Purchaser for negligence or failure to act, except for liability arising from the willful misconduct or malfeasance of LWB; and 
  
 (f) May, at its election, file an action in any of the Federal or state courts sitting in Salt Lake County, Utah, and
interplead the Funds and/or Certificate with the court in such action (each of Seller and Purchaser consent to the personal and subject matter jurisdiction of said courts over such action), and thereby discharge any duty or obligation LWB may have
to either or both of Seller and Purchaser under this Agreement. 
  
 4. Indemnification of LWB. Seller and Purchaser, jointly and severally, hereby indemnify and hold harmless LWB from and against, any and all loss, liability, cost, damage and expense, including, without limitation, reasonable
counsel fees, which LWB may suffer or incur by reason of any action, claim or proceeding brought against LWB arising out of or relating in 

  

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any way to this Agreement or any transaction to which this Agreement relates unless such action, claim or proceeding is the result of the willful misconduct
or malfeasance of LWB. LWB may consult counsel with respect of any question arising under this Agreement and LWB shall not be liable for any action taken or omitted in good faith upon advice of such counsel. 
  
 5. Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of service if served personally on the party to whom notice is to be given, (b) on the day of transmission if sent by facsimile/email transmission
to the facsimile number/email address given below, and telephonic confirmation of receipt is obtained promptly after completion of transmission, (c) on the day after delivery to Federal Express or similar overnight courier or the Express Mail
service maintained by the United States Postal Service, or (d) on the fifth day after mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed, return
receipt requested, to the party as follows: 
  
 If to Seller: 
  
 Craig Carpenter

 3040 Granite Meadow Lane 
 Sandy, UT 84092 
 Fax: (801) 942-2902 
  
 If to Purchaser: 
  
 Energytec, Inc. 
 Attn: Frank W Cole, President 
 14785 Preston Road, Suite 550 
 Dallas, TX 75254 
 Fax: (972) 789-5138 
  
 If to LWB: 
  
 Leonard W. Burningham, Esq. 
 455 East 500 South, Suite 205 
 Salt Lake City, UT 84111 
 Fax: 801-355-7126 
  
 Any party may change its address for purposes of this paragraph by giving the other parties written notice of the new address in the manner set forth above. 

 
 6. Costs and Expenses. In the event that LWB renders any material
service not contemplated by this Agreement or otherwise incurs any cost or expense for which it is not 

  

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indemnified pursuant to Section 4 of this Agreement, Seller agrees to compensate or reimburse LWB for such service or expense. 
  
 7. Successors and Assigns. Except as otherwise provided in this
Agreement, no party hereto shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other parties hereto, and any such attempted assignment without such prior written consent shall be void and of no
force and effect. This Agreement shall inure to the benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. 
  
 8. Governing Law; Jurisdiction. This Agreement shall be construed, performed, and enforced in accordance with, and governed by, the internal laws
of the State of Utah, without giving effect to the principles of conflicts of laws thereof. 
  
 9. Severability. In the event that any part of this Agreement is declared by any court or other judicial or administrative body to be null, void, or unenforceable, said provision shall survive to the extent it
is not so declared, and all of the other provisions of this Agreement shall remain in full force and effect. 
  
 10. Amendments; Waivers. This Agreement may be amended or modified, and any of the terms, covenants, or conditions hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any provision, term, or covenant contained in this Agreement, in any one or
more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition, or of the breach of any other provision, term, or covenant of this Agreement. 
  
 11. Entire Agreement. This Agreement contains the entire understanding
among the parties hereto with respect to the deposit and distribution contemplated hereby and supersedes and replaces all prior and contemporaneous agreements and understandings, oral or written, with regard thereto. 
  
 12. Section Headings. The section headings in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of this Agreement. 
  
 13. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. 
  
 14. Resignations and Termination. LWB may resign upon 10 days advance
written notice to the parties hereto. If a successor to LWB is not appointed within the 10-day period following such notice, LWB may petition any Federal or state court sitting in Salt Lake County, Utah to name a successor or interplead the Funds
and/or Certificates with such court, whereupon LWB’s duties hereunder shall terminate upon the naming of a successor or interpleader of the Funds and/or Certificates. This Agreement shall terminate upon completion of the final disbursement by
LWB pursuant to Section 2 above. 
  

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 15. Conflict Waiver. Seller has been advised that LWB provides legal representation to Purchaser
and that LWB has not accepted, by implication or otherwise, any engagement or other duty to provide any legal representation or service to Seller. The only obligations LWB has to Seller are those specifically set forth in this Agreement. Purchaser
agrees and acknowledges that LWB is bound to discharge its obligations to Seller under this Agreement notwithstanding any request, instruction, or demand of Purchaser to the contrary, and waives any conflict that LWB might have as counsel to
Purchaser that arises from LWB discharging its obligations to Seller under this Agreement. Purchaser is further advised that should any dispute arise between Seller and Purchaser with respect to the sale and purchase of the Shares, LWB will not be
able to represent Purchaser in asserting any claim or defending any claim brought against it. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective in all respects as of the date and year first hereinabove written. 
  

			
	ENERGYTEC, INC.
		
	By:	 	 /s/ Frank W Cole

	 	 	 Frank W Cole, President


  

	
	SELLER
	
	 /s/ Craig Carpenter

	 Craig Carpenter


  

	
	LWB
	
	 /s/ Leonard W. Burningham

	 Leonard W. Burningham


  

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