Exhibit 10.1





T HIRD AMENDMENT TO RENEWAL PROMISSORY NOTE





RECITALS





WHEREAS, the undersigned five corporate entities (each, a "Maker;” or collectively, “Makers”) are each co-makers of a certain Renewal Promissory
Note (the “Note”) dated May 21, 2007, in the original stated amount of $5,579,847.00, in favor of Teton, Ltd., a Texas limited partnership (“Payee”);





WHEREAS, the Note was previously amended by Amendment to Renewal Promissory Note dated May 21, 2008 (the “First Amendment”), and by Second Amendment
to Renewal Promissory Note and Loan Modification Agreement (the “Second Amendment”) dated March 3, 2009;





WHEREAS, the Note called for an interest payment to be made on May 21, 2009;





WHEREAS, Makers and Payee desire to amend the Note to eliminate the May 21, 2009, interest payment;





NOW, THEREFORE, in consideration of the premises and the mutual promises contained in this Amendment, Makers and Payee hereby agree as follows:





AGREEMENT





1.           Amendment to Note.  The Note is hereby amended to eliminate the requirement for an interest payment to be made on May 21, 2009.  As a result
of this amendment, all accrued interest payable under the terms of the Note shall be payable on May 21, 2010; and no payment on the Note shall be required to be made on May 21, 2009.  The final maturity date of the Note is unchanged and remains May 21, 2010.





2.           This Amendment is not an agreement to any further or other amendment of the Note.





3.           Makers expressly acknowledge and agree that except as expressly amended in this Amendment, the Note remains in full force and effect and is ratified and confirmed.  This Amendment shall neither extinguish nor constitute
a novation of the Note or indebtedness evidenced thereby.





4.           The parties covenant and agree as follows:





(1)       The rights and obligations of the parties shall be determined solely from the written “Loan Agreement” (as such term is defined in Section 26.02(a)(2) of the Texas Business and Commerce Code) executed and delivered in connection with
the Loan, and any oral agreements between or among the parties are superseded by and merged into the Loan Agreement.









(2)       The Loan Agreement has not been and may not be varied by any oral agreements or discussions that have or may occur before, contemporaneously with, or subsequent thereto.





(3)       THE WRITTEN LOAN AGREEMENT 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 AMONG
THE PARTIES.





Executed to be effective as of May 21, 2009.






Makers:


Payee:Pegasi Energy Resources Corporation,


Teton, Ltd., a Texas limited partnershipa Nevada corporation f/n/a


By:Notet Corp., a Texas corporation,Maple Mountain Explorations Inc.


its general partner/s/ Richard Lindermanis


/s/ W.L. SudderthRichard Lindermanis, Senior Vice President


W.L. Sudderth, Secretaryand CFO














Pegasi Energy Resources Corporation,


a Texas corporation (and wholly-owned


subsidiary of Pegasi Energy Resources Corporation,


a Nevada corporation f/n/a Maple Mountain Explorations Inc.)







By:/s/ RICHARD LINDERMANIS


Richard Lindermanis, Vice President








Pegasi Operating Inc., a Texas corporation (and wholly-owned


subsidiary of Pegasi Energy Resources Corporation,


a Texas corporation)







By:/s/ RICHARD LINDERMANIS


Richard Lindermanis, Vice President








(signatures continued on next page)












TR Rodessa, Inc., a Texas corporation (and wholly-owned


subsidiary of Pegasi Energy Resources Corporation,


a Texas corporation)








By:/s/ RICHARD LINDERMANIS





Richard Lindermanis, Vice President








59 Disposal, Inc., a Texas corporation (and wholly-owned


subsidiary of Pegasi Energy Resources Corporation,


a Texas corporation)








By:/s/ RICHARD LINDERMANIS





Richard Lindermanis, Vice President