EX-10.15






AMERICAN STATE BANK




TERM NOTE




$309,681.87 Midland, Texas September 1, 2009




1. For value received, ESCONDE RESOURCES LP, a Texas limited partnership, (the “Maker”), promises
to pay to the order of AMERICAN STATE BANK, a Texas banking association (the “Bank”), at its
offices at 620 N. Grant Avenue, Odessa, Texas 79761, in lawful money of the United States of
America, the sum of THREE HUNDRED NINE THOUSAND SIX HUNDRED EIGHTY-ONE AND EIGHTY-SEVEN/100 DOLLARS
($309,681.87), together with interest on the principal amount from time to time outstanding
hereunder, from the date of disbursement of such principal until maturity, at a variable rate of
interest per annum (the “Variable Rate") equal to the “American State Bank Base Rate”, as defined
below, plus two percentage points (2.0%), but shall never be less than six percentage points
(6.00%), and shall in no event to exceed the “Highest Lawful Rate,” as defined below, with
adjustments to the Variable Rate to be made on the same date as the effective date of any change in
the American State Bank Base Rate and adjustments due to changes in the Highest Lawful Rate to be
made on the effective date of any change in the Highest Lawful Rate.



2. This Note is executed pursuant to the terms of that certain Loan Agreement, dated as of
September 1, 2009, by and among Maker, as Borrower; Esconde Energy LLC, as Guarantor; and Bank, as
Lender (the “Loan Agreement”). This Note incorporates by reference the terms of the Loan
Agreement. In the event of a conflict between the terms of this Note and the terms of the Loan
Agreement, the terms of the Loan Agreement shall be deemed to be controlling.



3. Notwithstanding the foregoing, if at any time the Variable Rate exceeds the Highest Lawful Rate,
the rate of interest to accrue on this Note shall be limited to the Highest Lawful Rate, but any
subsequent reductions in such Variable Rate shall not reduce the rate of interest to accrue on this
Note below the Highest Lawful Rate until the total amount of interest accrued on this Note equals
the amount of interest which would have accrued if the Variable Rate had at all times been in
effect.



4. If at maturity or final payment of this Note the total amount of interest paid or accrued under
the foregoing provisions is less than the total amount of interest which would have accrued if the
Variable Rate had at all times been in effect, then Makers agree to pay to Bank, to the extent
permitted by law, an amount equal to the difference between (a) the lesser of (i) the amount of
interest which would have accrued on this Note if the Highest Lawful Rate had at all times been in
effect, or (ii) the amount of interest which would have accrued if the Variable Rate had at all
times been in effect, and (b) the amount of interest accrued in accordance with the other
provisions of this Note.



5. The term “American State Bank Base Rate” shall mean the rate announced by Bank as its base
lending rate as of the beginning of each Business Day, as hereinafter defined, (and for holidays or
weekends the Base Rate shall be the American State Bank Base Rate as of the close of business on
the most recent Business Day immediately preceding such weekend or holiday) before all sums payable
hereunder have been paid in full. Without notice to the Makers or any other person, the Base Rate
may change from time to time pursuant to the preceding sentence. The Base Rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to any customer. Bank
may make commercial loans or other loans at rates of interest at, above or below the Base Rate.
Business Day shall mean a day other than a Saturday, Sunday, or legal holiday for commercial banks
under the laws of the State of Texas.



6. The term “Highest Lawful Rate” shall mean the maximum nonusurious interest rate, if any, that at
any time or from time to time may be contracted for, taken, reserved, charged, collected or
received by the Bank in connection with this Note under laws applicable to the Bank which are
presently in effect or, to the extent allowed by law, under applicable laws which may hereafter be
in effect and which allow a higher maximum nonusurious interest rate than applicable laws now
allow.



7. The principal balance of this Note shall be due and payable on or before December 15, 2009.



8. Interest, computed on the unpaid principal balance of this Note shall be due and payable as it
accrues monthly, commencing on September 15, 2009, and thereafter on the fifteenth day of each and
every succeeding month during the term hereof, until maturity, December 15, 2009, when the entire
amount of this Note, principal and accrued, unpaid interest, shall be due and payable.



9. All past due principal and interest on this Note shall bear interest from the maturity thereof
until paid, at the Highest Lawful Rate. Interest on this Note shall be computed on a 365/360 simple
interest basis; that is, by applying the ratio of the annual interest over a year of 360 days,
times the outstanding principal balance, times the actual number of days the principal is
outstanding, unless such calculation would result in a usurious rate, in which case interest shall
be calculated on a per diem basis of 360 days.



10. If an Event of Default should occur under the Loan Agreement, thereupon, following any
applicable notice and cure provisions, at the option of Bank, the principal balance and accrued
interest of the Note, and any and all other indebtedness of Makers to Bank shall become and be due
and payable forthwith without demand, notice of default, notice of acceleration, notice of intent
to accelerate the maturity hereof, notice of nonpayment, presentment, protest or notice of
dishonor, all of which are hereby expressly waived by Makers and each other liable party. Bank may
waive any default without waiving any prior or subsequent default.



11. If a payment is ten (10) days or more late, Makers will be charged five percent (5%) of the
regularly scheduled payment or $100.00, whichever is less.



12. To the extent not prohibited by applicable law, Makers will pay all reasonable costs and
expenses and reimburse Bank for any and all expenditures of every character incurred or expended
from time to time, regardless of whether an Event of Default shall have occurred, in connection
with (a) Bank’s evaluating, monitoring, administering and protecting the Mortgaged Property, as
hereinafter defined, and (b) Bank’s creating, perfecting or realizing upon Bank’s security interest
in and liens on the Mortgaged Property, and all reasonable costs and expenses relating to Bank’s
exercising any of its rights and remedies under this or any other instrument now or hereafter
securing the Indebtedness or at law, including, without limitation, all filing fees, taxes,
brokerage fees and commissions, title review and abstract fees, Uniform Commercial Code search
fees, other fees and expenses incident to title searches, reports and security interests, escrow
fees, attorneys’ fees, legal expenses, court costs, fees and expenses incurred in connection with
any complete or partial liquidation of the Mortgaged Property, and all fees and expenses for any
professional services relating to the Mortgaged Property or any operations conducted in connection
with it; provided, however, that no right or option granted by Makers or Bank or otherwise arising
pursuant to any provision of this or any other instrument shall be deemed to impose or admit a duty
on the Bank to supervise, monitor or control any aspect of the character or condition of the
Mortgaged Property or any operations conducted in connection with it for the benefit of Makers or
any other person or entity other than the Bank.



13. If this Note is not paid at maturity whether by acceleration or otherwise and is placed in the
hands of an attorney for collection, or suit is filed hereon, or proceedings are had in probate,
bankruptcy, receivership, reorganization, arrangement or other legal proceedings for collection
hereof, Makers and each other liable party agrees to pay Bank their collection costs, including a
reasonable amount for attorney’s fees, but in no event to exceed the maximum amount permitted by
law. Makers and each other liable party is and shall be directly and primarily, jointly and
severally, liable for the payment of all sums called for hereunder, and Makers and each other
liable party hereby expressly waives bringing of suit and diligence in taking any action to collect
any sums owing hereon and in the handling of any security, and Makers and each other liable party
hereby consents to and agrees to remain liable hereon regardless of any renewals, extensions for
any period or rearrangements hereof, or partial prepayments hereon, or any release or substitution
of security hereof, in whole or in part, with or without notice, from time to time, before or after
maturity.



14. It is the intent of the Makers and Bank in the execution and performance of this note to
contract in strict compliance with the usury laws of the State of Texas and the United States of
America from time to time in effect. For purposes hereof, “interest” shall include the aggregate
of all charges which constitute interest under such laws that are contracted for, reserved, taken,
charged or received under this note. In furtherance thereof, the Bank and the Makers stipulate and
agree that none of the terms and provisions contained in this note, shall ever be construed to
create a contract to pay for the use, forbearance or detention of money with interest at a rate in
excess of the Highest Lawful Rate. In the event the Bank or any other holder of the note ever
charges or contracts for any amount in excess of lawful interest, the documents or instruments
constituting such charge or contract shall be ipso facto modified without any further action by any
party so that no amount in excess of lawful interest shall be charged or contracted for. If the
Bank or any other holder of the note ever receives, collects or applies as interest any amount in
excess of lawful interest, such amount which would be excessive interest shall be applied to the
reduction of the unpaid principal balance of the note, and, if upon such application the principal
balance of the note is paid in full, any remaining excess shall be forthwith paid to the Makers.
In determining whether or not the interest paid or payable under any specific contingency exceeds
the Highest Lawful Rate, the Makers and the Bank shall, to the maximum extent permitted under
applicable law, (a) treat all advances as but a single extension of credit (and the Makers and the
Bank agree that such is the case and that provision herein for multiple advances is for convenience
only), (b) characterize any nonprincipal payment as an expense, fee or premium rather than as
interest, (c) exclude voluntary prepayments and the effects thereof, and (d) “spread” the total
amount of interest throughout the entire contemplated term of the note. The provisions of this
paragraph shall control over all other provisions of the note or other documents executed in
connection with this note which may be in apparent conflict herewith.



15. Except as otherwise provided in the Loan Documents, all payments and prepayments on this Note,
including proceeds from the exercise of any Rights of the Bank under the Loan Documents, shall be
applied to this Note in the following order: (i) first, to the accrued interest on this Note being
paid or prepaid; (ii) to the principal of this Note being paid or prepaid, with the amounts so
prepaid to be applied upon installments of most remote maturity; (iii) to any remaining obligation
of Borrower under the Loan Agreement, and (iv) last, to reasonable expenses for which the Bank
shall not have been reimbursed under the Loan Documents and then to all amounts to which the Bank
is entitled to indemnification under the Loan Documents.



16. Makers reserve the option of prepaying the principal of this Note, in whole or in part, at any
time after the date hereof without penalty. At the option of Bank, it may demand (at any time at
or after prepayment) all accrued and unpaid interest with respect to the principal amount prepaid
through the date of prepayment. All amounts of principal so prepaid and received by the owner and
holder of this Note shall be applied to the last maturing installments of this Note in their
inverse order of maturity.



17. Unless otherwise specified below, this Note shall be construed under and governed by the laws
of the State of Texas (including applicable federal law), but in any event TEX. FIN. CODE ANN.
SECTION 346.001 et. seq. (which regulates certain revolving loan accounts and revolving tripartite
accounts) shall not apply to the loan evidenced by this Note.



18. Unless changed in accordance with the law, the applicable rate ceiling under Texas law shall be
the indicated (weekly) rate ceiling from time to time in effect as provided in TEX. FIN. CODE ANN.
Section 303.001 et seq., as amended.



19. Makers warrant and represent to the Bank, and to all other holders of this note that all loans
evidenced by this Note are and will be for business, commercial, investment or other similar
purposes and not primarily for personal, family, household or agricultural use, as such terms are
used in TEX. REV. CIV. STAT. ANN. ART. 5069-1D. 201, as amended.



20. This Note is secured by the pledge of the following Collateral:




	 	a.	 	all present and future interests now owned or hereafter acquired by the Maker
in those oil, gas, and mineral properties identified in Deeds of Trust, by and between
Makers and the Lender, together with all proceeds of production therefrom;






	 	b.	 	all present and future increases, profits, combinations, reclassifications,
improvements and products of, accessions, attachments, and other additions to, and
substitutes and replacements for, any of the Collateral;






	 	c.	 	all cash and noncash proceeds and other Rights arising from or by virtue of, or
from the voluntary or involuntary sale, lease or other disposition of, or collections
with respect to, or insurance proceeds payable with respect to, or proceeds payable by
virtue of warranty or other claims against manufacturers of, or claims against any
other persons with respect to, any of the Collateral;






	 	d.	 	all present and future security for the payment to Borrower for any of the
Collateral;






	 	e.	 	all goods which gave or will give rise to any of the Collateral or are
evidenced, identified or represented therein or thereby; and






	 	f.	 	all certificates of title, manufacturer’s statements of origin, or other
documents, accounts and chattel paper arising from or related to any of the Collateral.





The Collateral is covered and governed by Deeds of Trust, Security Agreements, and Financing
Statements, or amendments thereto, of even date herewith, covering oil and gas properties located
in Borden, Garza, and Scurry Counties, in the State of Texas. The Maker’s performance under this
Note is further secured by that certain Guaranty Agreement, also of even date herewith, executed by
Esconde Energy LLC. Failure to describe all or part of the security shall not be considered as a
waiver of such security.



21. Bank reserves the right, exercisable in Bank’s sole discretion and without notice to Makers or
any other person, to sell participations, to assign its interest or both, in all or any part of the
Note or the debt evidenced by the Note.



22. By execution of this Note, Makers acknowledge the receipt of the following notices from Bank:



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THIS NOTE, AND ALL OTHER LOAN PAPERS EXECUTED SUBSTANTIALLY CONCURRENTLY
HEREWITH TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.



THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.



Address:



	 	 	 	 	 	 	 	 	 
	3327 West Wadley Avenue,	 	 	 	ESCONDE RESOURCES LP, a Texas	 	 
	Suite 3-267	 	Limited Partnership	 	 	 	 
	Midland, Texas 79701	 	 	 	 	 	 	 	 
	 	 	By:	 	Esconde Energy LLC, its general partner
	 	 	 	 	By:	 	Pierce-Hamilton Energy Partners LP,

	 	 	 	 	 	 	Managing Member

	 	

	 	 	 	 	 	 	By:

	 	Muscoda Hill Energy LLC, its general partner






By:      /s/ Lisa P. Hamilton—

Lisa P. Hamilton, President




      /s/ Paul W. Heard—



Paul W. Heard, Managing Member



      /s/ Ronnie L. Steinocher—



Ronnie L. Steinocher, Managing Member



MAKER



By its signature, Bank acknowledges the truth of the notice hereinabove.



AMERICAN STATE BANK



By:       /s/ Mike Marshall—

Mike Marshall

President




BANK





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