EX-10.19






FIRST MODIFICATION AND AMENDMENT

OF

TERM NOTE




THIS FIRST MODIFICATION AND AMENDMENT OF TERM NOTE (this “Modification”) is entered into as of
the 28th day of December 2009, effective as of December 15, 2009, by and between, by and
between ESCONDE RESOURCES LP, a Texas limited partnership, whose address is 3327 West Wadley Ave.,
Suite 3-267, Midland, TX 79707 (the “Maker”), and AMERICAN STATE BANK, a Texas banking
association, whose address is 620 N. Grant, Odessa, Texas 79761-4797 (the “Bank”).



NOTICE IS TAKEN OF THE FOLLOWING:




	A.	 	Reference is made to that certain Loan Agreement, dated as of September 1, 2009, by and among
Maker, as Borrower; Esconde Energy, LLC, as Guarantor (the “Guarantor”); and the Bank, as
Lender (the “Loan Agreement”).






	B.	 	Pursuant to the terms of the Loan Agreement, the Maker has previously executed and delivered
to the Bank a Term Note, dated as of September 1, 2009 (the “Note”).






	B.	 	The Maker, the Guarantor, and the Bank have now entered into that certain First Amendment to
Loan Agreement, dated of even date herewith (the “First Amendment”). Under the First
Amendment, the Maker, the Guarantor, and the Bank agree to extend the maturity date of the
Note to March 1, 2010. In order to evidence this agreement and the terms of the First
Amendment, the parties have agreed to enter into this Modification in order to evidence that
agreement.





NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend the
terms of the Note as follows:




	 	1.	 	Amendments.






	 	A.	 	Paragraph 1 of the Existing Note is hereby amended by deleting it
in its entirety and substituting the following:






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 and one-half percentage points (2.5%), but shall
never be less than six and one-half percentage points (6.50%), and shall in
no event to exceed the “Highest Lawful Rate,” as defined below, with
adjustments to the VariableRate 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.




	 	B.	 	Paragraph 7 of the Note is hereby amended by deleting it in its
entirety and substituting the following:






	 	7.	 	The principal balance of this Note shall be due
and payable on or before March 1, 2010.






	 	C.	 	Paragraph 8 of the Note is hereby amended by deleting it in its
entirety and substituting the following:






	 	8.	 	Interest, computed on the unpaid principal
balance of this Note shall be due and payable as it accrues monthly,
commencing on January 15, 2010, and thereafter on the fifteenth day of
each and every succeeding month during the term hereof, until maturity,
March 1, 2010, when the entire amount of this Note, principal and
accrued, unpaid interest, shall be due and payable.





2. Effectiveness:




	 	A.	 	Except to the extent specifically amended and supplemented
hereby, all of the terms, conditions and provisions of the Note will remain
unmodified, and the Note, as amended and supplemented by this Modification, is
confirmed as being in full force and effect.






	 	B.	 	All references to the Note herein or in any other document or
instrument between the Maker and Bank will hereinafter be construed to be
references to the Note as modified by this Modification.





3. Counterparts:




This Modification may be executed in any number of counterparts, each of which when
executed and delivered will be deemed an original, but all of which constitute one
instrument. In making proof of this Modification, it will not be necessary to
produce or account for more than one counterpart thereof signed by each of the
parties hereto.



4. Notice of Final Agreement:




THIS FIRST MODIFICATION AND AMENDMENT OF TERM NOTE AND THOSE INSTRUMENTS EXECUTED
CONTEMPORANEOUSLY HEREWITH REPRESENT 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.



{The remainder of this page is intentionally left blank. Signature page follows.}





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IN WITNESS WHEREOF, the parties hereto have executed this Modification as of the date and year
first above written.



	 	 	 	 	 	 	 
	Address:	 	ESCONDE RESOURCES LP, a Texas Limited Partnership	 	 
	3327 West Wadley Avenue, Suite 3-267

Midland, Texas 79707

	 	

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	 	 
	By:
	 	/s/ Paul Heard

	 	

	 	 	 

	 	 
	 	 	Paul Heard

Managing Member

	 	



	By:
	 	/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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