Document:

ex10-3

 

EXHIBIT 10.3

CERTAIN INFORMATION (INDICATED BY ASTERISKS) IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY

WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTION.

SUPPLY AGREEMENT

     This Agreement, is
made as of the 7th day of December, 2001 (“Execution
Date”), among Siemens Hearing Instruments, Inc., a Delaware corporation, with
an address at 10 Constitution Avenue, Piscataway, New Jersey 08855 (“SHI” or
“Seller”), certain subsidiaries and affiliates of Siemens Aktiengesellschaft
(collectively, the “Siemens Affiliates”) and HEARx, Ltd., a Delaware
corporation, with an address at 1250 Northpoint Parkway, West Palm Beach, FL
33407 (“HEARx” or “Buyer”).

     WHEREAS, Buyer is a retail seller of hearing aids in the United States and
also services hearing healthcare programs sponsored by HMOs and insurance
companies; and

     WHEREAS, Seller is a manufacturer of hearing aids and sells such hearing
aids to retail resellers, including Buyer, for resale to consumers; and

     WHEREAS, Buyer and Seller have determined that it would be in their
respective best interests to assure a steady supply of hearing aids of various
styles and capacities (the “Products”) from Seller in order that Buyer may
efficiently and economically distribute such Products through its current and
future retail outlets (“Facilities”); and

     WHEREAS, Seller has offered to sell and Buyer has agreed to purchase the
Products, all in accordance with the terms and conditions contained herein.

     NOW, THEREFORE, the parties hereto agree as follows:

     1.     Purchase and Sale. Subject to the provisions contained in this
Agreement, Seller has agreed to sell and Buyer has agreed to buy those Products
listed on Exhibit A to this Agreement during the term of this Agreement. The
Siemens Affiliates manufacture or may manufacture certain of the Products
offered hereunder, and those Products manufactured and supplied by the Siemens
Affiliates and purchased by Buyer will be included within the definition of
Products under this Agreement and included in the calculations set forth in
Section 4 hereof. If any Siemens Affiliate shall sell any of the Products to
the Buyer, such Siemens Affiliate shall execute and deliver a counterpart,
substantially in the form of Exhibit B, to SHI and the Buyer. Upon the
execution of such counterpart, such Siemens Affiliate shall become a party
hereto and be bound by all the terms and conditions hereof as a “Seller” to the
same extent as though such Siemens Affiliate had originally executed this
Agreement. The parties understand and agree that Exhibit A may be amended from
time to time, upon mutual agreement of the Seller and Buyer, to add or delete
Products. In addition, it is specifically understood that Buyer is purchasing
the Products for the purpose of resale in all of Buyer’s Facilities, including,
without limitation, any new Facilities which may be or are owned, operated,
affiliated with or managed by Buyer.

 

 

     2.     Term. The initial term of this Agreement is five (5) years, commencing
on the Execution Date (the “Initial Term”). The Initial Term will be extended
for one additional five (5) year term (the “Renewal Term”) on the same terms
and conditions as those set forth as of the Execution Date of this Agreement;
provided, however, that during the Renewal Term the “minimum purchasing levels”
set forth in Section 4 hereof shall be at least the lesser of (a) **** of
Buyer’s quarterly purchases of hearing aid products and (b) **** hearing aids
per quarter.

     3.     Terms and Conditions of Sale. The Buyer will submit its orders for
Products either on the forms provided therefor or via a website provided by
Seller and payment shall be made by Buyer for products delivered and accepted
within sixty (60) days from the date of statement by Seller.

     4.     Ordering Process and Pricing. Buyer understands that Seller has
offered special terms and pricing to Buyer as consideration for the purchase
compliance levels committed to by Buyer, and that Seller is willing to continue
to provide Products to Buyer in a manner consistent with the relationship
enjoyed to date by Seller and Buyer. Subject to Section 3 hereof, Buyer agrees
to purchase, in each Fiscal Quarter during the term of this Agreement (which,
for the purposes of this calculation, shall be each of the three month periods
ending on the last Saturday of the months of March, June, September and
December, at least the lesser of (a) **** of Buyer’s quarterly purchases of
hearing aid products and (b) **** hearing aids per quarter (“minimum purchasing
levels”) from Seller; provided however, that:

                    (i)       for purposes of this Section 4, (A) the Fiscal Quarter in which the
Execution Date or the first day of the Renewal Term occurs (unless the
Execution Date or such first day of the Renewal Term is the first day of a
Fiscal Quarter), shall mean the period commencing on the Execution Date or such
first day of the Renewal Term and ending on the last day of the applicable
Fiscal Quarter (such period, the “Initial Contract Fiscal Quarter”), (B) the
“quarterly purchases” described in clause (a) above shall refer to such
purchases made during the applicable Initial Contract Fiscal Quarter, and (C)
for purposes of clause (b) above and Section 2(b), the numbers **** and ****
shall be reduced to a number equal to the product of **** or ****, as the case
may be, multiplied by a fraction, the numerator of which is the number of days
in the applicable Initial Contract Fiscal Quarter and the denominator of which
is the actual number of days in the Fiscal Quarter in which the Execution Date
occurs or the Renewal Term commences; and

                    (ii)       for purposes of this Section 4, (A) the Fiscal Quarter in which the
last day of the Initial Term or the Renewal Term occurs (unless such day is the
last day of a Fiscal Quarter), shall mean the period commencing on the first
day of such Fiscal Quarter and ending on the last day of the Initial Term or
the Renewal Term, as the case may be (such period, the “Final Contract Fiscal
Quarter”), (B) the “quarterly purchases” described in clause (a) above shall
refer to such purchases made during the applicable Final Contract Fiscal
Quarter, and (C) for purposes of clause (b) above and Section 2(b), the numbers
**** and **** shall be reduced to a number equal to the product of **** or
****, as the case may be, multiplied by a fraction, the numerator of which is
the number

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of days in the applicable Final Contract Fiscal Quarter and the
denominator of which is the actual number of days in the Fiscal Quarter in
which the last day of the Initial Term or the Renewal Term occurs.

     In exchange for this purchase commitment, Seller has offered to sell the
Products to Buyer at the prices set forth on Exhibit A. During the term of
this Agreement, upon written notice to Buyer not later than sixty (60) days
prior to the effective date thereof, Seller may adjust the list prices for the
Products, such adjustment to take effect on the date set forth on such notice.
Seller may not change the list prices for the Products more often than ***** in
any contract year and the prices shall not be increased more than ******* above
the then-current prices at the time of such change, unless Buyer fails to meet
its purchase requirements set forth in Section 4, at which time the parties
shall meet to discuss the adjustments which need to be made should Buyer
continue not to meet such purchase requirements. In the event Buyer defaults in
its obligation to meet the agreed purchase requirements, Seller, in its sole
discretion, shall have the right to take any or all of the following actions
hereunder: (i) adjust prices or terms and conditions of sale with respect to
the provision of Products for the remaining contract years of the Agreement,
(ii) seek reimbursement from Buyer for the difference between the special
pricing offered in connection with this Agreement and the then-current list
prices for the Products, (iii) obtain injunctive relief compelling Buyer to
refrain from purchasing hearing aids from any vendor other than Seller until
the end of the term of this Agreement, (iv) obtain injunctive relief compelling
Buyer to purchase all its requirements for hearing aids from Seller until the
end of the term of this Agreement, or (v) terminate this Agreement in
accordance with Section 11 hereof.

     5.     Product Representations. Seller makes the following representations
and warranties with respect to the Products sold hereunder:

     (a)  Each Product shall be manufactured (i) in conformity with all
applicable requirements of the Food and Drug Administration (“FDA”) and (ii) in
accordance with all applicable United States federal, state and local statutes,
ordinances and regulations, including but not limited to the Food, Drug and
Cosmetic Act (21 USC 301 et seq.) (the “Act”), as amended from time to time,
and the regulations thereunder, including Good Manufacturing Practice
Regulations, which are currently in force or which are hereafter adopted. At
the time of shipment of any Product, it will not be adulterated or misbranded
within the meaning of the Act and will not be a product which would violate any
section of the Act if introduced into interstate commerce in the United States.

     (b)  Seller has good and marketable title to, and the right to sell, the
Products.

     (c)  The manufacture and sale of the Product, and its use in accordance
with all applicable approvals theretofore obtained and Seller’s directions for
use, shall not, to the knowledge of Seller, infringe any intellectual property
rights of any third parties.

     6.     Covenants of Seller. Seller covenants and agrees as follows with
respect to the Products:

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      (a)  Seller shall conduct its manufacturing operations in a safe and
prudent manner, in compliance with all applicable laws and regulations,
including, but not limited to, those dealing with occupational safety and
health, those dealing with public safety and health, those dealing with
protection of the environment, and those dealing with disposal of wastes and in
compliance with the applicable provisions of this Agreement.

     (b)  Seller shall use commercially reasonable efforts to have the Products
listed on the “pick lists” maintained by each of the Canadian provinces.

     (c)  Seller shall use commercially reasonable efforts to (i) fill Buyer’s
orders for Products on time and (ii) deliver Products that function as per
specifications and that meet the requirements of the orders submitted by Buyer,
in each case consistent with past practices of Buyer and Seller.

     (d)  Seller shall use commercially reasonable efforts to remain one of the
technology leaders in the field of hearing healthcare; provided that nothing
contained herein shall limit or prohibit Seller from conducting its business in
accordance with the policies and procedures established from time to time by
Seller’s Board of Directors or with the overall policies and procedures of
Siemens Aktiengesellschaft.

     7.     Indemnification by Seller.

     (a)  Subject to the provisions of subsection 7(b) below, Seller agrees to
indemnify, defend and hold harmless Buyer, its affiliates and their respective
employees, agents and representatives, against any and all claims, losses,
damages and liabilities, including reasonable attorneys’ fees, incurred by any
of them arising out of any breach of any representation by Seller, resulting
from the actual adulteration or misbranding of Product, or any defect in
materials or workmanship.

     (b)  The foregoing indemnify shall not be effective to the extent any such
claim, loss, damage or liability is based upon (i) any act of Buyer or any of
its affiliates, agents or representatives, (ii) any act of Buyer or any of its
affiliates, agents or representatives done jointly with any party other than
Seller, or (iii) any claim arising as a result of any unauthorized alteration,
modification or change to the Product by any party other than Seller.

     8.     Indemnification by Buyer.

     (a)  Subject to the provisions of subsection 8(b) below, Buyer agrees to
indemnify, defend and hold harmless Seller, its affiliates and their respective
employees, agents and representatives, against any and all claims, losses,
damages and liabilities, including reasonable attorneys’ fees, incurred by any
of them arising out of any act of Buyer relative to the marketing, distribution
and sale of Products.

     (b)  The foregoing indemnity shall not be effective nor shall it be
enforceable in the event any such claim, loss, damage or liability is based
upon (i) any act of Seller or any of its affiliates, agents or representatives,
(ii) any act of Seller or any of its affiliates, agents

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 or representatives done jointly with any party other than Buyer, or
(iii) any claim arising as a result of any unauthorized alteration,
modification or change to the Product by any party other than Buyer, or any
defect in materials or workmanship.

     9.     Procedures Related to Indemnification.

     (a)  A party seeking indemnification under the terms of this Agreement
shall be referred to as the “indemnified party” and the person who is to
provide such indemnification shall be referred to as the “indemnifying party.”
The indemnified party shall notify in writing the indemnifying party with
reasonable promptness of its discovery of any matter giving rise to a claim of
indemnity. The failure or delay in so notifying the indemnifying party shall
not relieve indemnifying party of its obligations to indemnify unless, and only
to the extent that, the indemnifying party’s defense of such claim is
materially prejudiced as a result of such delay. The indemnified party shall
provide the indemnifying party as soon as practicable all information and
documentation related to the matter for which the indemnified party seeks
indemnification. The indemnifying party shall be given access to all books and
records in the possession or under the control of the indemnified party that
the indemnifying party reasonably determines to be related to such claim.

     (b)  Promptly upon receipt of notice from the indemnified party, the
indemnifying party shall take over control of the defense of any action, claim
or litigation arising out of the indemnification provisions of this Agreement.
The indemnified party shall support and assist the indemnifying party in the
defense, but all costs, expenses and related charges, including but not limited
to attorneys’ fees, shall be for the account of the indemnifying party, except
to the extent such independent counsel is representing the indemnified party
for defenses available to it but not available to the indemnifying party. If
the indemnified party wishes to retain its own counsel to advise and assist in
the defense of such claim, it may do so, but the expense of retaining such
independent counsel shall be for the account of the indemnified party and the
indemnifying party shall retain complete control over the defense. If, after
receipt of notice, the indemnifying party does not defend the interests of the
indemnified party or does not take appropriate action to defend and hold
harmless the indemnified party, then, and in that case only, the indemnified
party shall be entitled to retain counsel, defend the action, claim or
litigation, and seek compensation for all of its costs of defense from the
indemnifying party. The indemnified party shall not, without the prior consent
of the indemnifying party, enter into any settlement the result of which would
materially limit or modify the rights of the indemnifying party under this
Agreement.

     10.     Recall. In the event of any recall of any Product, whether voluntary
or involuntary, Seller shall replace the recalled Product without charge to
Buyer. In addition, Seller shall pay all of Buyer’s reasonable out of pocket
expenses incurred in connection with such recall. In no event shall Seller be
liable for any loss of use, revenue or anticipated profits, loss of stored,
transmitted or recorded data, or for any incidental, unforeseen, special,
punitive or consequential damages arising out of or in connection with this
Agreement, or the sale or use of the Products, or arising out of the actions
taken by

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 Seller in response to a recall or other action required by law,
regulation or agency with oversight over the operations and business of Seller;
provided, however, that nothing in this Section 10 shall limit Seller’s
indemnification obligations under Section 7 for losses incurred by Buyer for
which Buyer is entitled to indemnification arising out of a claim by any third
party.

     11.     Termination.

     (a)  Either party may terminate this Agreement in the event of a material
breach by the other which remains uncured (or where significant steps toward
effecting the cure shall not have been taken) within sixty (60) days after
written notice is given to the breaching party specifying the nature of the
breach. The parties agree that Buyer’s failure to meet the purchase
requirements set forth in Section 4 or to make payments as required under this
Agreement shall be material breaches, giving Seller the right subject to the
cure period, but not the obligation, to terminate this Agreement. The remedy
of termination shall be without prejudice to any other rights or remedies
available to the non-breaching party under this Agreement or at law.

     (b)  Notwithstanding subsection (a) hereinabove, Seller may terminate this
Agreement effective immediately if any proceeding shall be instituted by or
against the Buyer seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a custodian, receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceedings instituted against Buyer (but not instituted by
it) either such proceedings shall remain undismissed or unstayed for a period
of sixty (60) days or any of the actions sought in such proceedings shall
occur; or the Buyer shall take any corporate action to authorize any of the
actions set forth above in this subsection (b). Buyer may terminate this
Agreement if Seller voluntarily or involuntarily becomes bankrupt or is unable
to fulfill its obligations hereunder.

     (c)  Buyer may terminate this Agreement if (i) the US Food and Drug
Administration takes any final action the result of which is to ban the
manufacture, sale or introduction into interstate commerce of any Product or to
impose significant restrictions on its use in the hearing field or generally or
(ii) Seller purchases or operates any entity which sells hearing aids through
retail outlets.

     (d)  Termination or expiration of this Agreement for any reason shall not
(i) release either party from any liability or obligation which has already
accrued as of the effective date of such termination or (ii) constitute a
waiver or release of, or otherwise be deemed to prejudice or adversely affect,
any rights, remedies or claims, whether for damages or otherwise, which a Party
may have hereunder, at law, equity or otherwise.

     12.     Change of Control. If, during the two-year period following the
Execution Date, there is a Change of Control (as defined in the Credit
Agreement, dated as of

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 December 7, 2001, by and between the Seller and the Buyer), and the
surviving entity of such Change of Control does not assume the obligations
hereunder, Buyer will remit to Seller a break-up fee in the amount of fifty
million ($50,000,000.00) dollars not later than five (5) days from the date of
the Change in Control. After this two year period, if there is a Change of
Control and the surviving entity of such Change of Control is a manufacturer of
hearing aids or related products or owns, directly or indirectly, a
manufacturer of hearing aids or related products, Buyer will remit to Seller a
break-up fee in the amount of fifty million ($50,000,000.00) dollars not later
than five (5) days from the date of the Change in Control.

     13.     Representations and Warranties.

     (a)  Seller represents and warrants that:

		
	 	          (i) Seller is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation and has
requisite power and authority to own, lease and operate its properties
and to carry on its business as currently conducted, and is qualified to
do business in all jurisdictions where it currently conducts business.

		
	 	          (ii) Seller has the power and authority to enter into this Agreement
and to perform its obligations hereunder, and the execution of this
Agreement has been duly authorized by all necessary corporate or other
action.

		
	 	          (iii) This Agreement constitutes a legal, valid and binding
obligation of Seller, and is enforceable against it in accordance with
its terms, except to the extent such enforceability may be subject to (a)
the laws of bankruptcy, insolvency, fraudulent conveyance or other laws
relating to creditors’ rights or (b) general equitable principles.

		
	 	          (iv) The execution and delivery of this Agreement and the
performance by Seller of its obligations hereunder will not violate any
laws or regulations applicable to Seller, conflict with or cause a breach
of any obligations to a third party, or violate, breach or conflict with
any of the terms of Seller’s Certificate of Incorporation or By-Laws.

     (b)  Buyer represents and warrants that:

		
	 	          (i) Buyer is a corporation duly organized, validly existing and in
good standing under the laws of its state of organization and has
requisite power and authority to own, lease and operate its properties
and to carry on its business as currently conducted, and is qualified or
will be qualified to do business in all jurisdictions where it does or
will conduct business.

		
	 	          (ii) Buyer has the power and authority to enter into this Agreement,
including the power and authority to make payments in respect of
purchases and other transactions arising herefrom, and to perform its
obligations hereunder. The

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	 	execution of this Agreement has been duly authorized by all
necessary corporate, governmental or other action.

		
	 	          (iii) This Agreement constitutes a legal, valid and binding
obligation of Buyer, and is enforceable against it in accordance with its
terms, except to the extent such enforceability may be subject to (a) the
laws of bankruptcy, insolvency, fraudulent conveyance or other laws
relating to creditors’ rights or (b) general equitable principles.

		
	 	          (iv) To the best of Buyer’s knowledge, Buyer does not have any
liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise, that would be material to its or their financial
condition or business operations that have not been disclosed to Seller.

		
	 	          (v) The execution and delivery of this Agreement and the performance
by Buyer of its obligations hereunder will not violate any laws or
regulations applicable to Buyer, conflict with or cause a breach of any
obligations of Buyer to a third party, or violate, conflict with or cause
a breach of any of the terms of Buyer’s Certificate of Incorporation or
By-Laws.

     (c)  Product Complaint Procedures. Buyer agrees to provide all complaints
with respect to the Products to Seller, in writing and in the English language,
in a timely manner. Submitted complaints shall contain sufficient detail to
enable Seller to adequately investigate the reported problem. Complaints
pertaining to injury or death shall be reported to Seller in five (5) working
days or less from the date of Buyer’s receipt of such complaint in order that
Seller may comply with the requisite FDA Medical Device Reporting requirements.
Seller will take appropriate steps to make all necessary filings and reports
to regulatory agencies in accordance with its obligations. When requested so
to do, Buyer will use its best commercial efforts to provide evaluation and
investigation support to Seller. Seller, as service provider for the Products,
is responsible for analysis of service reports, service repair data, service
trends and telephone support for potential complaints or corrective action
requirements, all as set forth in the Quality Systems Regulation and other FDA
instructions. Buyer agrees to return parts involved in a complaint to Seller
promptly, and in any event within thirty (30) days after notification by Buyer
to Seller of the complaint.

     14.     Dispute Resolution.

     (a)  In an effort to effectively and economically manage the resolution of
any disagreement which might arise during the term of this Agreement with
respect to the obligations of the parties, or with respect to actions to be
taken or not taken under the terms of the Agreement, the parties agree to
appoint a representative (at the line manager level or its equivalent) to meet
and discuss the disagreement. If such representatives, after a good faith
effort, are not able to resolve the disagreement to the mutual satisfaction of
the parties, the disagreement then shall be submitted to the respective Vice
Presidents of the parties for their attention. If the Vice Presidents are not
able to negotiate a

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 mutually acceptable resolution of the dispute, then the parties agree to
submit the disagreement to arbitration and the provisions of clause (b) of this
Section shall apply.

     (b)  Subject to the provisions of subsection (a) hereinabove, any
disagreement, dispute, controversy or claim arising out of this Agreement,
including without limitation, interpretation thereof, or any alleged breach or
invalidity, which cannot be resolved through the good faith negotiations of the
parties shall be resolved through arbitration. The arbitration shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association (except to the extent such rules conflict with the
provisions of this Agreement, in which event, this Agreement shall control).
The tribunal shall be composed of three arbitrators (one selected by each party
and the third selected by the arbitrators selected by the parties) and shall be
conducted in New York, New York (“Site”). Any arbitration proceedings shall be
conducted in confidence and the award or decision of the tribunal shall be
final and binding upon the parties. The award of the arbitrators shall be
enforceable by any court having jurisdiction thereof.

     (c)  Nothing contained herein shall prohibit or limit in any way any party
from seeking or obtaining preliminary or interim injunctive or other equitable
relief from a court for a breach or alleged breach of any of the covenants and
agreements of the other party to this Agreement.

     15.     Notices. When any notice is required or permitted to be given under
any provision of this Agreement, such notice shall be made in writing and
signed by or on behalf of the party giving such notice, mailed certified mail,
postage prepaid, return receipt requested, or sent by nationally recognized
overnight courier, and addressed to the party to whom such notice is to be
given at the addresses set forth below. Notices are considered delivered on
the postmarked date or the date delivered to a courier for next workday
delivery. Either party may change its address for the receipt of any notice in
the manner set forth above.

	 	 	 	 	 
	To Seller:
	 	To Buyer:
	 
	Siemens Hearing Instruments, Inc.
	 	HEARx Ltd.
	10 Constitution Avenue
	 	1250 Northpoint Parkway
	Piscataway, New Jersey 08855
	 	West Palm Beach, FL 33407
	Attention: Chief Financial Officer
	 	Attention: President
	Telecopy No. (732) 562-6688
	 	Telecopy No.  (561) 688-8893
	 
	Copy to:
	 	Copy to:
	 
	Associate General Counsel
	 	The Buyer's General Counsel (at the
	Siemens Corporation
	 	address specified above).
	186 Wood Avenue South
Iselin, NJ 08830
	 	 	 	 

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     16.     New Products. The parties understand and agree that the development
of new hearing aids is both anticipated and encouraged. Buyer wishes to be
able to sell new and improved Products. As new Products become commercially
available from Seller, Seller will provide notice to Buyer of such
availability, and such Products will be added to this Agreement as soon as they
are commercially available upon the mutual agreement of the parties. Seller
shall determine the prices for such new Products, such prices to be
commercially reasonable and consistent with the quantity discounts provided
under this Agreement. Such Products shall be subject to the same adjustments
in price as described above for the current Products. As a result of the
development of new technology, certain of the current Products may become less
valuable in the marketplace. To the extent practicable, Seller will continue
to offer the older Products, but Buyer agrees to channel its marketing efforts
and those of the Facilities towards the introduction and sale of the new
Products added to this Agreement. As the scope of the Products changes,
certain older Products may be deleted from the Products offered under this
Agreement, upon the mutual agreement of the parties.

     17.     Miscellaneous Provisions.

     (a)  No Assignment. Neither this Agreement, nor the rights or duties of
any party thereunder, may be assigned without the written consent of the other
party, which consent shall not be unreasonably withheld or delayed, provided,
however, that Seller shall be permitted to assign this Agreement to a
subsidiary, parent or affiliated entity of Seller. In the event of a Change of
Control (as defined in Section 12 hereof) during the term of this Agreement,
Seller shall have the right to determine whether or not, in its discretion,
this Agreement should be assigned to the third party or the entity which
results from the Change of Control, and, should Seller so request, Buyer will
provide or arrange to have provided to Seller, additional assurance of the
abilities and willingness of the third party or new entity to assume the
obligations and provide the services of Buyer hereunder. If Seller does not
consent to an assignment of this Agreement, Buyer shall have the right to
terminate the Agreement on sixty (60) days prior written notice without any
further obligation or liability hereunder. Seller shall retain all rights
which it has or may have up to the effective date of such termination. This
Agreement shall be binding on Seller and Buyer and their respective successor
and permitted assigns.

     (b)  No Waiver. No waiver of a breach of any provision of this Agreement
shall constitute a waiver of any other breach of such provision, nor shall any
such waiver be construed as a continuing waiver.

     (c)  Governing Law. This Agreement is governed by and construed in
accordance with the laws of the State of New York, without giving effect to
such State’s conflict of laws provisions (other than Sections 5-1401 and 5-1402
of the New York General Obligations Law).

     (d)  Force Majeure. No party shall be liable for failure to perform or
delay in performing its obligations under this Agreement, and shall not be
deemed to be in breach of its obligations hereunder, if and to the extent and
for so long as such failure or delay in

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 performance or breach is due to natural disaster, war, strikes or other
labor disputes, any loss or disruption of facilities, or any other cause beyond
the reasonable control of such party. The affected party shall promptly
provide the other party with notice of such occurrence, shall diligently
attempt to restore or continue its performance, and shall advise when such
event of force majeure shall have ended.

     (e)  Housemark Usage. In connection with the transactions contemplated
under this Agreement, Seller has authorized Buyer to use Seller’s housemark
‘SIEMENS’ in accordance with Seller’s regulations and guidelines for the use of
such housemark. In order to assure proper usage of its housemark, Seller
reserves the right to review all proposed usages of the housemark by Buyer.

     (f)  Complete Agreement. This Agreement, and the Exhibits hereto,
represents the complete and exclusive statement of the arrangement between the
parties with respect to the matters contained herein and supersedes all prior
agreements and representations, oral or written, on the same subject matter.
Amendments to this Agreement shall not be effective unless made in writing and
signed by the parties hereto. In the event of a conflict between the terms
contained in any of the Exhibits relating to this Agreement and the terms of
this Agreement, the text of this Agreement shall govern. If there are terms in
the Exhibits which govern activities related thereto and which are not
addressed in this Agreement, the terms of the Exhibit shall govern. If the
nature of the activities to be conducted pursuant to this Agreement anticipate
the preparation, execution and use of other agreements (“ancillary documents”)
in respect of specific activities, such ancillary documents will be subject to
the terms of this Agreement to the extent the terms therein are not in conflict
with this Agreement, and in an event of conflict, the terms of the ancillary
documents shall control the activities described therein.

     (g)  No Agency. The relationship established hereby is in all respects a
commercial relationship. Nothing herein shall be construed as imposing any
fiduciary obligations on either party, or as establishing any partnership or
joint venture between the parties, or as rendering one part an agent of the
other. No agent or employee of one party shall be deemed to be an employee or
agent of the other. The parties acknowledge that their relationship is one of
independent buyer and seller and that, as separate entities, they have entered
into this Agreement for their respective business interests.

     (h)  Confidentiality. Buyer and Seller agree that this Agreement,
including any Exhibits, appendices or ancillary agreements, as well as the
nature of the services to be provided one to the other hereunder, are
confidential. The parties agree to keep this Agreement and the information
disclosed in, in connection with and with respect to this Agreement as
confidential and not reveal such information to any other entity now, during or
after the termination or expiration of this Agreement. The parties may,
however, admit to the existence of a supply agreement between them. This
restriction does not apply to any information that (i) is or becomes public
through the process of law, or through no fault of either party, or (ii) that
was revealed to either party by a third party not owing an obligation of
confidentiality to the party who owns the information disclosed, (iii)
information that is rightfully in the recipient’s possession or part of recipient’s general

-11-

 

 knowledge prior to the receipt of such confidential
information, or (iv) information that is required to be disclosed by law, the
order of a court or regulation of a governmental agency having jurisdiction
over the parties; provided, however, in the event this Agreement is a “Material
Agreement” or Buyer is otherwise required by the SEC to file this Agreement,
Buyer shall provide to Seller for Seller’s prior review: (i) a copy of Buyer’s
proposed redacted version of the Agreement, and (ii) Buyer’s explanatory cover
letter to the SEC. Buyer shall incorporate all redactions reasonably requested
by Seller, provided all redactions are requested upon the advice of Seller’s
counsel.

     (i)  Taxes. Each party shall remain responsible for any taxes assessed
against such party which are to be paid by such party as a result of the
transactions hereunder.

     (j)  Headings; Counterparts. The headings contained in this Agreement are
for convenience of reference only and shall not constitute a part hereof, or
define, limit or in any was affect the meaning of any of the terms or
provisions hereof. This Agreement may be executed in two or more counterparts
and any party hereto may execute any such counterpart. Each counterpart, when
executed and delivered, shall be deemed to be an original and all of such
counterparts taken together shall be deemed to be one and the same instrument.

     (k)  Public Announcements. Except as the other party shall authorize in
writing, or as required by law, the parties shall not disclose, and shall cause
their respective officers, directors, employees, affiliates and advisors not to
disclose, any matter or matters relating to this transaction to any person not
an officer, director, employee, affiliate or advisor of such party. In the
event a party is required by law to make a public announcement or disclosure,
such party shall, if practicable, consult with the other as to the timing and
content of such announcement before such announcement is made. The parties
shall agree about the content of any statement or communication to the public
or the media prior to the release thereof.

     (l)  Survival of Certain Provisions. Notwithstanding the termination or
expiration of this Agreement, the following provisions shall survive, along
with either party’s obligations to pay any payments or fees accrued prior to
termination or expiration: Sections 7, 8, 9, 10, 11(d), 12, 13, 14 and 17.

[SIGNATURE PAGE FOLLOWS.]

-12-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the Execution Date.

	 	 
		HEARX LTD
	 
		/s/ Stephen J. Hansbrough                    

Name: Stephen J. Hansbrough

Title: President and Chief Operating
Officer
	 
		SIEMENS HEARING INSTRUMENTS, INC
	 
		By: /s/ John R. Krauter                    

Name:  John R. Krauter

Title:  President and Chief Financial
Officer

-13-

 

EXHIBIT A

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	Type	 	Description 1	 	Description 2	 	List Price	 	Buyer's Price
	

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	

	Custom	 	AGC/RPC	 	1 ITE	 	$	352	 	 	$	              ***	 
	

	Custom	 	AGC/RPC	 	3 Canal	 	$	524	 	 	$	              ***	 
	

	Custom	 	AGC/RPC	 	4 Mini Canal	 	$	560	 	 	$	              ***	 
	

	Custom	 	AGC-I	 	1 ITE	 	$	325	 	 	$	              ***	 
	

	Custom	 	AGC-I	 	3 Canal	 	$	497	 	 	$	              ***	 
	

	Custom	 	CL D AGC-O	 	1 ITE	 	$	325	 	 	$	              ***	 
	

	Custom	 	CL D AGC-O	 	2 Half Shell	 	$	426	 	 	$	              ***	 
	

	Custom	 	Class D	 	1 ITE	 	$	319	 	 	$	              ***	 
	

	Custom	 	Class D	 	2 Half Shell	 	$	420	 	 	$	              ***	 
	

	Custom	 	Class D	 	3 Canal	 	$	491	 	 	$	              ***	 
	

	Custom	 	Class D	 	4 Mini Canal	 	$	527	 	 	$	              ***	 
	

	Custom	 	Class D	 	6 Low Profile	 	$	373	 	 	$	              ***	 
	

	Custom	 	Class D w/AGC	 	1 ITE	 	$	363	 	 	$	              ***	 
	

	Custom	 	Class D w/AGC	 	2 Half Shell	 	$	464	 	 	$	              ***	 
	

	Custom	 	Class D w/AGC	 	3 Canal	 	$	535	 	 	$	              ***	 
	

	Custom	 	Class D w/AGC	 	4 Mini Canal	 	$	571	 	 	$	              ***	 
	

	Custom	 	Class D w/AGC	 	6 Low Profile	 	$	417	 	 	$	              ***	 
	

	Custom	 	Frontier	 	1 ITE	 	$	491	 	 	$	              ***	 
	

	Custom	 	Illusion Linear-D	 	5 CIC	 	$	780	 	 	$	              ***	 
	

	Custom	 	Infiniti 3	 	1 ITE	 	$	361	 	 	$	              ***	 
	

	Custom	 	Infiniti 3	 	2 Half Shell	 	$	462	 	 	$	              ***	 
	

	Custom	 	Infiniti 3	 	3 Canal	 	$	533	 	 	$	              ***	 
	

	Custom	 	Infiniti 3	 	4 Mini Canal	 	$	569	 	 	$	              ***	 
	

	Custom	 	Infiniti 3	 	5 CIC	 	$	797	 	 	$	              ***	 
	

	Custom	 	Infiniti 3	 	6 Low Profile	 	$	415	 	 	$	              ***	 
	

	Custom	 	InteliVenience	 	1 ITE	 	$	476	 	 	$	              ***	 
	

	Custom	 	InteliVenience	 	2 Half Shell	 	$	577	 	 	$	              ***	 
	

	Custom	 	InteliVenience	 	3 Canal	 	$	648	 	 	$	              ***	 
	

	Custom	 	InteliVenience	 	5 CIC	 	$	912	 	 	$	              ***	 
	

	Custom	 	K-AMP (28D)	 	5 CIC	 	$	825	 	 	$	              ***	 
	

	Custom	 	K-AMP Plus	 	2 Half Shell	 	$	490	 	 	$	              ***	 
	

	Custom	 	K-AMP Plus	 	3 Canal	 	$	561	 	 	$	              ***	 
	

	Custom	 	Music	 	1 ITE	 	$	683	 	 	$	              ***	 
	

	Custom	 	Music	 	2 Half Shell	 	$	784	 	 	$	              ***	 
	

	Custom	 	Music	 	3 Canal	 	$	855	 	 	$	              ***	 
	

	Custom	 	Music	 	4 Mini Canal	 	$	891	 	 	$	              ***	 
	

	Custom	 	Music	 	5 CIC	 	$	1,119	 	 	$	              ***	 
	

	Custom	 	Music	 	6 Low Profile	 	$	737	 	 	$	              ***	 
	

	Custom	 	Music Digital	 	1 ITE	 	$	841	 	 	$	              ***	 
	

	Custom	 	Music Digital	 	2 Half Shell	 	$	942	 	 	$	              ***	 
	

	Custom	 	Music Digital	 	3 Canal	 	$	1,013	 	 	$	              ***	 
	

	Custom	 	Music Digital	 	4 Mini Canal	 	$	1,049	 	 	$	              ***	 
	

	Custom	 	Music Digital	 	5 CIC	 	$	1,277	 	 	$	              ***	 
	

	Custom	 	Music Digital	 	6 Low Profile	 	$	895	 	 	$	              ***	 

A-1

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Type	 	Description 1	 	Description 2	 	List Price	 	Buyer's Price
	

	Custom	 	Music Digital	 	7 Helix	 	$	943	 	 	$	              ***	 
	

	Custom	 	POWER D	 	1 ITE	 	$	346	 	 	$	              ***	 
	

	Custom	 	POWER D/AGC-I	 	1 ITE	 	$	384	 	 	$	              ***	 
	

	Custom	 	Prisma	 	1 ITE	 	$	961	 	 	$	              ***	 
	

	Custom	 	Prisma	 	2 Half Shell	 	$	1,062	 	 	$	              ***	 
	

	Custom	 	Prisma	 	3 Canal	 	$	1,133	 	 	$	              ***	 
	

	Custom	 	Prisma	 	4 Mini Canal	 	$	1,169	 	 	$	              ***	 
	

	Custom	 	Prisma	 	5 CIC	 	$	1,397	 	 	$	              ***	 
	

	Custom	 	PushPull	 	1 ITE	 	$	344	 	 	$	              ***	 
	

	Custom	 	PushPull	 	2 Half Shell	 	$	445	 	 	$	              ***	 
	

	Custom	 	PushPull AGC-I	 	1 ITE	 	$	381	 	 	$	              ***	 
	

	Custom	 	PushPull AGC-I	 	2 Half Shell	 	$	482	 	 	$	              ***	 
	

	Custom	 	RPC	 	1 ITE	 	$	313	 	 	$	              ***	 
	

	Custom	 	RPC	 	2 Half Shell	 	$	414	 	 	$	              ***	 
	

	Custom	 	RPC	 	3 Canal	 	$	485	 	 	$	              ***	 
	

	Custom	 	RPC	 	6 Low Profile	 	$	367	 	 	$	              ***	 
	

	Custom	 	Signia	 	1 ITE	 	$	1,251	 	 	$	              ***	 
	

	Custom	 	Signia	 	2 Half Shell	 	$	1,352	 	 	$	              ***	 
	

	Custom	 	Signia	 	3 Canal	 	$	1,423	 	 	$	              ***	 
	

	Custom	 	Signia	 	4 Mini Canal	 	$	1,459	 	 	$	              ***	 
	

	Custom	 	Signia	 	5 CIC	 	$	1,687	 	 	$	              ***	 
	

	Custom	 	Signia	 	6 Low Profile	 	$	1,305	 	 	$	              ***	 
	

	Custom	 	Standard	 	1 ITE	 	$	262	 	 	$	              ***	 
	

	Custom	 	Standard	 	2 Half Shell	 	$	363	 	 	$	              ***	 
	

	Custom	 	Standard	 	3 Canal	 	$	434	 	 	$	              ***	 
	

	Custom	 	Standard	 	4 Mini Canal	 	$	470	 	 	$	              ***	 
	

	Custom	 	Standard	 	6 Low Profile	 	$	316	 	 	$	              ***	 
	

	BTE	 	BTE AID,BN,284 PP	 	2738474	 	 	 	$	353	 	 	$	              ***	 
	

	BTE	 	BTE, INF3 S2P+, BLUE	 	7082360	 	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	BTE, INFINITI 3-
S2+P,TB,13 BAT	 	7204238	 	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	BTE, INFINITI3-
S2+D,BG,13 BAT	 	 	7208635	 	 	 	$	409	 	 	$	              ***	 
	

	BTE	 	BTE, INFINITI3-
S2+D,GRY,13 BAT	 	 	7208650	 	 	 	$	409	 	 	$	              ***	 
	

	BTE,	 	BTE, INFINITI3-
S2+D,TB,13 BAT	 	 	7208643	 	 	 	$	409	 	 	$	              ***	 
	

	BTE	 	BTE, PHOENIX 104 BEIGE	 	 	5635490	 	 	 	$	522	 	 	$	              ***	 
	

	BTE	 	BTE, PHOENIX 204 BEIGE	 	 	5628008	 	 	 	$	542	 	 	$	              ***	 
	

	BTE	 	BTE, SIGNIA S MINI, BG	 	 	7210466	 	 	 	$	1,434	 	 	$	              ***	 
	

	BTE	 	BTE,284PP,BG,M.A.E	 	 	2746022	 	 	 	$	353	 	 	$	              ***	 
	

	BTE	 	BTE,284PPAGCI,BG,AE	 	 	2746048	 	 	 	$	368	 	 	$	              ***	 
	

	BTE	 	BTE,INF3 S3+, BLUE,675 BAT	 	 	7082410	 	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	BTE,INFINITI 3
S1+,BG,13 BAT	 	 	2942667	 	 	 	$	384	 	 	$	              ***	 
	

A-2

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Type	 	 	 	  Description 1	 	Description 2	 	List Price	 	Buyer's Price
	

	BTE	 	 	BTE,INFINITI 3
S1+,GY,13 BAT	 	 	2942675	 	 	$	384	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3
S1+,TB,13 BAT	 	 	2942683	 	 	$	384	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3 S1,
BLUE,13 BAT	 	 	7086460	 	 	$	363	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3
S1,BG,13 BAT	 	 	2942634	 	 	$	363	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3
S1,GY,13 BAT	 	 	2942642	 	 	$	363	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3
 S1,TB,13 BAT
	 	 	2942659	 	 	$	363	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3 S2+,BG	 	 	2944218	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3 S2+,GY	 	 	2943095	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3 S2+,TB	 	 	2943152	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3
S3+,BG,675 BAT	 	 	2942725	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3 S3+,TB	 	 	2942741	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3-
S2+P,BG,13 BAT	 	 	7204212	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	 	BTE,INFINITI 3-
S2+P,GRY,13 BAT	 	 	7204220	 	 	$	421	 	 	$	              ***	 
	

	BTE	 	 	BTE,MUSIC
DIGITAL,BEIGE	 	 	5619197	 	 	$	769	 	 	$	              ***	 
	

	BTE	 	 	BTE,MUSIC 
DIGITAL,GRAY	 	 	7059087	 	 	$	769	 	 	$	              ***	 
	

	BTE	 	 	BTE,MUSIC
DIGITAL,TOBACCO	 	 	5619213	 	 	$	769	 	 	$	              ***	 
	

	BTE	 	 	BTE,MUSIC
POWER,BEIGE,13 BAT	 	 	5620351	 	 	$	729	 	 	$	              ***	 
	

	BTE	 	 	BTE,MUSIC
POWER,TOBACCO,13 BAT	 	 	5620880	 	 	$	729	 	 	$	              ***	 
	

	BTE	 	 	BTE,MUSIC,BG,13 BAT	 	 	2933575	 	 	$	689	 	 	$	              ***	 
	

	BTE	 	 	BTE,MUSIC,GRY,13 BAT	 	 	2933591	 	 	$	689	 	 	$	              ***	 
	

	BTE	 	 	BTE,PRISMA 2-SP+ 
BEIGE	 	 	7202877	 	 	$	1,202	 	 	$	              ***	 
	

	BTE	 	 	BTE,PRISMA 2-SP+
TOBACCO	 	 	7153377	 	 	$	1,202	 	 	$	              ***	 
	

	BTE	 	 	BTE,PRISMA 2-SP+, 
BLUE	 	 	7080612	 	 	$	1,202	 	 	$	              ***	 
	

	BTE	 	 	BTE,PRISMA BEIGE	 	 	2922172	 	 	$	1,087	 	 	$	              ***	 
	

	BTE
	 	 	BTE,PRISMA GRANITE	 	 	2922271	 	 	$	1,087	 	 	$	              ***	 
	

	BTE	 	 	BTE,PRISMA 
POWER,BEIGE	 	 	5620955	 	 	$	1,171	 	 	$	              ***	 
	

	BTE	 	 	BTE,PRISMA
POWER,TOBACCO	 	 	5620963	 	 	$	1,171	 	 	$	              ***	 
	

	BTE	 	 	BTE,SIGNIA BEIGE	 	 	5627000	 	 	$	1,403	 	 	$	              ***	 
	

	BTE	 	 	BTE,SIGNIA GRANITE	 	 	5627422	 	 	$	1,403	 	 	$	              ***	 
	

	BTE	 	 	BTE,SIGNIA GREY	 	 	5627430	 	 	$	1,403	 	 	$	              ***	 

A-3

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Type	 	Description 1	 	Description 2	 	List Price	 	Buyer's Price
	

	BTE	 	BTE,SIGNIA S MINI GR	 	7210490	 	 	 	$	1,434	 	 	$	              ***	 
	

	BTE	 	BTE,SIGNIA, TB	 	5627414	 	 	 	$	1,403	 	 	$	              ***	 
	

	Options	 	Clear Coat	 	0113LC	 	$	28	 	 	$	              ***	 
	

	Options	 	Filament VC	 	0506FT	 	$	59	 	 	$	              ***	 
	

	Options	 	Gain Control	 	0512GC	 	$	24	 	 	$	              ***	 
	

	Options	 	Gain Control	 	0513GC	 	$	24	 	 	$	              ***	 
	

	Options	 	Gain Control	 	0514GC	 	$	24	 	 	$	              ***	 
	

	Options	 	MPO Control	 	0512PC	 	$	24	 	 	$	              ***	 
	

	Options	 	MPO Control	 	0513PC	 	$	24	 	 	$	              ***	 
	

	Options	 	MPO Control	 	0514PC	 	$	24	 	 	$	              ***	 
	

	Options	 	Screw Set VC	 	0506SS	 	$	24	 	 	$	              ***	 
	

	Options	 	Soft Canal	 	0105SC	 	$	26	 	 	$	              ***	 
	

	Options	 	T-Coil	 	0503TC	 	$	53	 	 	$	              ***	 
	

	Options	 	Tone (N-H) Control	 	0512NH	 	$	24	 	 	$	              ***	 
	

	Options	 	Tone (N-H) Control	 	0513NH	 	$	24	 	 	$	              ***	 
	

	Options	 	Tone (N-H) Switch	 	0512HT	 	$	24	 	 	$	              ***	 
	

	Options	 	Tone (N-H) Switch	 	0513HT	 	$	24	 	 	$	              ***	 
	

	Options	 	Tone (N-L) Control	 	0514NL	 	$	24	 	 	$	              ***	 
	

	Options	 	Tone (N-L) Control	 	0512NL	 	$	24	 	 	$	              ***	 
	

	Options	 	Tone (N-L) Control	 	0513NL	 	$	24	 	 	$	              ***	 
	

	Options	 	TwinMic System		0211D	 	 	 	$	120	 	 	$	              ***	 
	

	Options	 	VoiceMic	 	0211E	 	 	 	$	120	 	 	$	              ***	 
	

	•	 	The parties agree that the “ship to” addresses determine the level of
pricing charged to the purchasers under the terms of this Agreement.

A-4<PAGE>
                                                                    EXHIBIT 10.1

                    ASSIGNMENT, BILL OF SALE AND CONVEYANCE

STATE OF OKLAHOMA                        )
                                         ) KNOW ALL MEN BY THESE PRESENTS THAT:
COUNTY OF ELLIS                          )

     THE PROSPECTIVE INVESTMENT AND TRADING COMPANY, LTD., an Oklahoma
Corporation, whose address is P.O. Box 702320, Tulsa, Oklahoma, 74170-2320,
hereinafter referred to as "Assignor", for and in consideration of ONE HUNDRED
DOLLARS ($100.00) and other good and valuable consideration, the receipt of
which is hereby acknowledged, does hereby assign, transfer, grant and convey
unto PAX Energy, LLC, 6420-B N. Santa Fe Ave, Oklahoma City OK 73116,
hereinafter referred to as "Assignee", all of Assignor's right, title and
interest in and to the following:

     (i)    The oil and gas leases, leasehold interests, rights and interests
            attributable or allocable to the oil and gas leases or leasehold
            interests by virtue of pooling, utilization, communization, and
            operating agreement, licenses, permits, and other agreements
            (collectively the "Leases"), all more particularly described on
            Exhibit "A" hereof, together with identical undivided interests in
            and to all the property and rights incident thereto, including, but
            not limited to, all rights in, to and under all agreements, product
            purchase and sale contracts, leases, permits, rights-of-way,
            easements, licenses, farmouts, options, orders, and other contracts
            or agreements of a similar nature to the extent same relate to the
            Leases, insofar and only insofar as they cover the drilling and
            spacing unit for each of the wells described on Exhibit "B" hereof
            as established by the Oklahoma Corporation Commission.

     (ii)   The wells, equipment, materials and other personal property,
            fixtures and improvements on the Leases as of the Effective Date
            (as hereinafter defined), appurtenant thereto or used or obtained in
            connection with the Leases or with the production, treatment, sale
            or disposal of hydrocarbons or waste produced therefrom or
            attributable thereto, and all other appurtenances thereunto
            belonging (the "Equipment"); provided, however, Equipment shall not
            include vehicles, communications equipment, tools, or leased
            equipment located on the Leases;

     (iii)  All unitization, communication, pooling, and operating agreements,
            and the units created thereby which relate to the Leases or
            interests therein described on Exhibit "A" or which relate to any
            units or wells located on the Leases, including any and all units
            formed under orders, regulations, rules, and other official acts of
            the governmental authority having jurisdiction, together with any
            right, title and interest created thereby in the Leases, insofar,
            and only insofar as they relate to the drilling and spacing units
            established by the Oklahoma Corporation Commission for the wells
            described on Exhibit "B".

Assignor's interest in the above mentioned assets being herein conveyed is
hereinafter collectively referred to as the "Interests".

Assignor specifically reserves unto itself, its heirs, successors and assigns,
and excepts from this assignment all of its leasehold rights outside the
wellbore of the Safari 1-33 located in Section 33-19N-21W, Ellis County,
Oklahoma and a like interest in and to all rights lying and being below the
Morrow Formation, together with full rights of ingress and egress. Assignor
reserves unto itself, its heirs, successors and assigns and excepts from this
assignment all proceeds or revenue attributable to the interests assigned herein
that occurred prior to the effective date, as well as the same proportionate
share of oil in the tanks on the effective date. Assignor shall be entitled to
receive any and all proceeds or revenues received for the sale of its
proportionate share of the oil remaining in the tanks on the effective date and
subsequently sold.

TO HAVE AND TO HOLD the interests unto Assignee, its successors and assigns,
forever, subject to the following terms and conditions:

<PAGE>
 1.  This Assignment is accepted subject to, and Assignee agrees to assume and
     perform, any and all of the liabilities and obligations, or alleged or
     threatened liabilities and obligations, of Assignor under the Interests and
     existing oil and gas leases, assignments, operating agreements, product
     purchase and sale contracts, leases, permits, rights-of-way, licenses,
     easements, options, orders, and any other agreements or contracts
     attributable to and affecting the Interests, including but not limited to,
     any and all obligations (i) to pay and deliver royalties, overriding
     royalties, non-participating royalties, and other burdens on production,
     (ii) in connection with or arising out of balancing of overproduction or
     underproduction from the Interests, and (iii) in compliance with all laws
     and governmental regulations with respect to the Interests including, but
     not limited to, the lawful plugging and abandonment of oil and gas wells
     and the restoration of the surface of the land as nearly as possible to its
     prelease condition, whether or not such liabilities and obligations, or
     alleged or threatened liabilities and obligations, are caused by Assignor's
     negligence and whether or not such liabilities and obligations, or alleged
     or threatened liabilities and obligations, arise during the period of, or
     from, or in connection with Assignor's ownership or operation of the
     Interests. Without limitation of the foregoing, Assignee agrees to assume
     and perform any and all of the liabilities and obligations, or alleged or
     threatened liabilities and obligations, of Assignor for claims, losses,
     damages, costs, expenses, diminuitions in value, suits, and causes of
     action of any kind or character, with respect to the environmental
     condition of the Interests, regardless of when the events occurred that
     caused such condition to exist and whether or not caused by or attributable
     to Assignor's negligence. Assignee shall, to the fullest extent permitted
     by law, protect, defend, indemnify and hold Assignor and its directors,
     officers, employees, agents and representatives of each of them, harmless
     from and against any and all claims, losses, damages, costs, expenses,
     diminuitions in value, suits, causes of action or judgments of any kind or
     character with respect to any and all liabilities and obligations or
     alleged or threatened liabilities and obligations, including, but not
     limited to, any interest, penalty and any attorney's fees and other costs
     and expenses incurred in connection with investigation or defending any
     claims or actions, whether or not resulting in any liability, attributable
     to or arising out of (i) ownership or operation of the Interests subsequent
     to the Effective Date, and (ii) Assignee's assumption of any liability or
     obligation in accordance with this paragraph.

     THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS PROVIDED FOR IN
     THIS ASSIGNMENT SHALL BE APPLICABLE WHETHER OR NOT THE LOSSES, COSTS,
     EXPENSES AND DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM THE GROSS,
     ACTIVE, PASSIVE OR CONCURRENT NEGLIGENCE, OR OTHER FAULT OF ASSIGNOR.

2.   THIS ASSIGNMENT AND BILL OF SALE IS EXECUTED, DELIVERED, AND ACCEPTED
     WITHOUT ANY REPRESENTATION, WARRANTY OR COVENANT OF TITLE OF ANY KIND OR
     NATURE, EXCEPT AS EXPRESSLY PROVIDED HEREIN, EITHER EXPRESS, IMPLIED OR
     STATUTORY. THE INTERESTS ARE BEING CONVEYED AND ASSIGNED TO AND ACCEPTED BY
     THE ASSIGNEE IN THIS "AS IS, WHERE IS" CONDITION AND STATE OF REPAIR, AND
     WITH ALL FAULTS AND DEFECTS, WITHOUT ANY REPRESENTATION, WARRANTY OR
     COVENANT OF ANY KIND OR NATURE, EXPRESS, IMPLIED OR STATUTORY, INCLUDING,
     BUT NOT LIMITED TO, WARRANTIES OF MARKETABILITY, QUALITY, CONDITION,
     MERCHANTABILITY, AND/OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE
     EXPRESSLY DISCLAIMED. IT IS UNDERSTOOD AND AGREED THAT ASSIGNEE SHALL
     ACCEPT ALL OF THE SAME IN THEIR "AS IS, WHERE IS" CONDITION AND STATE OR
     REPAIR AND WITH ALL FAULTS AND DEFECTS, INCLUDING, BUT NOT LIMITED TO, THE
     PRESENCE OF NATURALLY OCCURRING RADIOACTIVE MATERIAL (NORM). IN ADDITION,
     ASSIGNOR MAKES NO REPRESENTATION, COVENANT OR WARRANTY, EXPRESS, IMPLIED OR
     STATUTORY, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA DELIVERED TO
     ASSIGNEE WITH RESPECT TO THE INTERESTS, OR CONCERNING THE QUALITY OR
     QUANTITY OF HYDROCARBON RESERVES, IF ANY, ATTRIBUTABLE TO THE INTERESTS, OR
     THE ABILITY OF THE INTERESTS TO PRODUCE HYDROCARBONS, OR THE PRICES WHICH
     ASSIGNEE IS OR WILL BE ENTITLED TO RECEIVE FOR ANY SUCH HYDROCARBONS.

3.   Assignor shall warrant and defend the title to the Interests against all
     claims and demands of all persons claiming by, through or under Assignor,
     but not otherwise.

<PAGE>
4.       This Assignment and Bill and Sale shall Inure to the benefit of and be
         binding upon the parties hereto, their heirs, successors and assigns.

5.       This assignment and Bill of Sale may be executed by Assignor and
         Assignee in any number of counterparts, each of which shall be deemed
         an original instrument, but all of which together shall constitute one
         and the same instrument.

IN WITNESS WHEREOF, this instrument is executed the ______ day of _____________,
2001, but shall be effective as of the ________________________, 2001 (the
"Effective Date").

                                        ASSIGNOR:

                                        THE PROSPECTIVE INVESTMENT AND
                                        TRADING COMPANY, LTD.

                                        By:
                                           ------------------------------------
                                           Adam C. Singer, President

                                        ASSIGNEE:

                                        PAX ENERGY, LLC

                                        By:
                                           ------------------------------------
                                           De Wayne Pitt

STATE OF OKLAHOMA         )
                          )
COUNTY OF TULSA           )

         BEFORE ME, the undersigned authority, on this day personally appeared
Adam C. Singer, President of The Prospective Investment and Trading Company,
Ltd., known to me to be the person and officer whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed and in the capacity therein stated
as the act and deed of said corporation.

         GIVEN UNDER MY HAND AND OFFICIAL SEAL OF OFFICE on this ______ day of
_________________, 1999.

                                 -----------------------------------------------
                                 Notary Public in and for said County and State.

MY COMMISSION EXPIRES:

----------------------

<PAGE>

STATE OF OKLAHOMA         )
                          )
COUNTY OF ____________    )

         BEFORE ME, the undersigned authority, on this day personally appeared
______________________, ______________________ of PAX ENERGY, LLC, known to be
the person and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and consideration
therein expressed and in the capacity therein stated as the act and deed of said
corporation.

         GIVEN UNDER MY HAND AND OFFICIAL SEAL OF OFFICE on this ______ day of
_________________, 1999.

                                 -----------------------------------------------
                                 Notary Public in and for said County and State.

MY COMMISSION EXPIRES:

----------------------
                                   EXHIBIT "A"

                                   EXHIBIT "B"

<PAGE>

<Table>
<Caption>
                                                            LEASE         BOOK
LEASE NAME                             LESSEE               DATED         PAGE
----------                             ------               -----         ----
<S>                             <C>                       <C>           <C>

W.R. Cree                       Harvest Land Leasing       01/22/82     384/340

Raymond E. Reid,                Harvest Land Leasing       01/22/82     384/337
  Atty in Fact

G.B. Cree, Jr.                  Harvest Land Leasing       04/19/82     388/305

Donald R. Harrel, et ux         Prospective Investment     02/15/82     407/355

Earl Ritterhouse, et ux         Harvest Land Leasing       01/22/82     387/694

Mary K. Earl                    Harvest Land Leasing       02/02/82     385/754

Clyde J. Hurst Trust            Harvest Land Leasing       02/23/82     385/756

Ernestine Farley                Harvest Land Leasing       02/02/82     387/579

Margaret Price                  Harvest Land Leasing       02/02/82     387/577

Mercedes B. Hawkins             Prospective Investment     06/24/81     370/444

Marilyn Hodges                  Prospective Investment     11/10/82     402/547

Sabine Corporation              Prospective Investment     02/02/83     408/350

Nimrod Petroleum Company        Prospective Investment     11/15/82     399/431

The Liberty Nat'l Bank &        Cities Service Company     05/05/80     346/617
  Trust Company

Villard Martin Jr, Trustee      Cities Service Company     04/22/80     346/615

K.L. Ferguson, et ux            Cities Service Company     12/03/81     384/866

Hazel Wyley                     Harvest Land Leasing       02/02/82     385/762

Katherine Smith, et vir         Harvest Land Leasing       02/02/82     387/581

Jay B. Price                    Harvest Land Leasing       02/02/82     385/758

Mrs. Bertha Hollingsworth       Harvest Land Leasing       02/02/82     385/760

Lola Comstock                   Harvest Land Leasing       02/02/82     385/764

Colonial Royalties Company      Prospective Investment     04/13/82     389/514

The Ajax Investment Company     Prospective Investment     04/13/82     389/512

Triangle Oil Company            Prospective Investment     05/13/81     365/464

CCW Interests Inc.              Prospective Investment     05/13/81     365/756

Royal Oil and Gas Corporation   Prospective Investment     05/01/81     366/13

ST OK CS 17234                  Prospective Investment     12/07/82     402/630

Joe M. Sears, Trustee           Prospective Investment     02/25/83     406/800

L.O. Pulliam                    Cities Service Company     04/10/80     346/619

Mary V. Guerin                  Cities Service Company     04/01/80     344/230

D.W. Keffer, et ux              Cities Service Company     01/23/80     340/150

Harold M. Bradbury              Cities Service Company     04/01/80     344/115

Elizabeth Seibold               Cities Service Company     03/20/80     342/598

Jean R. Voss, et vir            Cities Service Company     03/20/80     342/596

George W. Seibold, Jr.          Cities Service Company     03/20/80     342/594

Tenneco Oil Company             Prospective Investment     04/21/83     414/218
</Table>

SPECIFICALLY EXCLUDING all right, title and interest in and to the well bore of
the Safari 1-33 currently operated by The Prospective Investment and Trading
Company, Ltd. and the rights necessary to produce oil, gas and minerals from
said well bore AND all right, title and interest below the base of the Morrow
Formation.

<PAGE>

                                                         Record and return to:
VICI                                                     PAX ENERGY, LLC
                                                         6420-B N. Santa Fe
                                                         Oklahoma City, OK 73116

                        ASSIGNMENT OF OIL AND GAS LEASES
                      SUBJECT TO A CARRIED WORKING INTEREST

KNOW ALL MEN BY THESE PRESENTS:

         THAT WHEREAS, the undersigned PAX ENERGY, LLC, whose address is 6420-B
N. Santa Fe, Oklahoma City, Oklahoma, 73116, (hereinafter called "Assignor") is
the owner of an interest in certain oil and gas leases covering certain lands,
which leases and the lands covered by said leases are more fully described in
Exhibit "A" attached hereto and made a part hereof.

         NOW THEREFORE, for and in consideration of Ten Dollars ($10.00) in hand
paid and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned Assignor does hereby grant,
bargain, sell, transfer and convey all of that portion of Assignor's right,
title and interest in and to the leases described in Exhibit "A", unto the
following named parties (hereinafter called "Assignees"), in the proportions set
opposite their names below, as follows:

<Table>
<Caption>
                                                PROPORTION OF WORKING
            NAME AND ADDRESS OF ASSIGNEE          INTEREST ASSIGNED
            ----------------------------        ---------------------
<S>                                             <C>

            TBX Resources, Inc.                         33.75%
            12300 Ford Road, Suite 265
            Dallas, TX 75234

            Sanguine Investments, LLC                  16.875%
            6420-B N. Santa Fe Avenue
            Oklahoma City, OK 73116
</Table>

RESERVATION

         FOR THE SAME CONSIDERATION, Assignor does hereby reserve and retain and
assignees do hereby grant, transfer, assign and convey unto the following named
parties in the proportions set opposite their names below, as follows:

<Table>
<Caption>
                                                PROPORTION OF CARRIED
            NAME                                   WORKING INTEREST
            ----                                ---------------------
<S>                                             <C>

            PAX Energy, L.L.C.                          4.500%
            6420-B N. Santa Fe
            Oklahoma City, OK 73116

            Creede Oil & Gas Company                    .5625%
            3217 Bart Conner Drive, Suite A
            Norman, OK 73072

            Prism Resources, L.L.C.                     .5625%
            6420-B N. Santa Fe
            Oklahoma City, OK 73116
</Table>

         AN UNDIVIDED TEN PERCENT (10.00%) CARRIED WORKING INTEREST in and to
all right, title and interest of Assignor in and to the oil and gas leases
described in Exhibit "A" attached hereto and made a part hereof, insofar and
only insofar as said leases cover the lands described in said Exhibit "A".

         In the event Assignee, their successors and assigns, acquires any
additional oil and gas leasehold or fee mineral interests in the lands described
in Exhibit "A" over and above the originally acquired prospect interest, on or
after the effective date hereof, Assignee agrees to assign in the same
proportions and subject to the same limitations, as hereinabove set forth, such
additional interest was acquired, an additional Ten Percent (10.00%) carried
working interest, on any and all such additional interests so acquired by
Assignee in the lands described in Exhibit "A". This agreement to assign such
additional carried working interest shall be and remain in full force and effect
from the effective date hereof and so long thereafter as oil and/or gas is
produced from the lands described in Exhibit "A", or upon any lands with which
the lands described on Exhibit "A" might be included in any drilling or spacing
unit.

         The term "Carried Working Interest", as used herein means that all
costs and expenses of drilling, equipping, recompleting and/or plugging back of
any well, and all costs and expenses of plugging and abandoning any well in case
of a dry hole, attributable to the carried working interest herein assigned, and
agreed to be assigned, shall be borne by Assignee, its successors and assigns
until such well has been

                                                                         [STAMP]

                                        1
<PAGE>
completed or recompleted as a producer into the tanks if an oil well or to the
point of first sales if a gas well, including any gas sales lines, metering
facilities and related production facilities, and thereafter, Assignors shall
own their proportionate shares of all personal property and surface and
subsurface fixtures, material, supplies and equipment appurtenant to such wells,
including any gas sales lines, metering facilities and related production
facilities.

         The carried working interest herein assigned, and agreed to be
assigned, shall be subject to Assignors' proportionate parts of all royalties,
excess royalties and other burdens, to which the interest of Assignor in the
subject leases was subject on the effective date hereof, or on the effective
date Assignor acquired its interest.

         GENERAL PROVISIONS

         All interests and rights of Assignors in and to the lands described in
Exhibit "A" and the production therefrom provided for in this instrument shall
extend not only to the oil and gas leases described in Exhibit "A", but also to
any and all extensions and renewals of said oil and gas leases, which may be
acquired by Assignee, its successors and assigns.

         All costs and expenses of present and future accounting,
administration, recordation and distribution, with respect to the interests
herein assigned shall be borne by Assignee. Assignor agrees to execute and
deliver to Assignees the documentation necessary to record such Assignments and
to carry out the intention of this instrument.

         This assignment may be executed in any number of counterparts, and
each executed counterpart hereof shall be deemed to be an original instrument,
but all such counterparts shall constitute but one assignment. To facilitate
recording, the counterpart to be recorded in a given county may contain only
that part of Exhibit "A" hereto that describes property located in that county.
Assignor and Assignees have retained counterparts of this assignment with a
complete Exhibit "A" hereto.

         Assignor warrants the title to the interests herein assigned be free,
clear and discharged from all former grants, charges, taxes, judgments, and
other encumbrances of whatsoever nature made or suffered to be made by, through
or under Assignor, but not otherwise.

         This instrument shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns, and shall run with and burden the leaseholds and lands which are the
subject hereof. This Assignment is effective October 1, 2000.

ASSIGNEES:                            ASSIGNOR:

TBX RESOURCES, INC.                   PAX ENERGY, LLC

/s/ TIM BURROUGHS                     /s/ DE WAYNE PITT
--------------------                  --------------------
Tim Burroughs                         By: De Wayne Pitt

/s/ STEVE OWEN
--------------------
Steve Owen

STATE OF OKLAHOMA   )
                    )ss.
COUNTY OF OKLAHOMA  )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 10th day of October, 2000 personally appeared De Wayne Pitt,
Managing Member of PAX Energy, LLC, and acknowledged to me that he executed the
same as his free and voluntary act and deed, for the uses and purposes therein
set forth.

     Given under my hand and seal of office the day and year last above written.

My commission expires:       /s/ TERRI M. RICHARDSON  [STATE OF CALIFORNIA SEAL]
August 22, 2004              ------------------------
                                   Notary Public

                                            STATE OF OKLAHOMA )
                                               ELLIS COUNTY   )F8
                                            This instrument was filed for record
                                            on the 18th day of October 2000
[NOTARY SEAL]                               at 10 o'clock A.M. and duly
                                            recorded misc. book 646
                                            on page 134-41. Fee $22.00
                                            PEGGY SCHOENHALS,
                                            County Clerk
                                            By JANET BLAYLOCK, Deputy

                                                   [STAMP]

                                       2
<PAGE>
STATE OF TEXAS   )
                 )ss.
COUNTY OF DALLAS )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 13th day of October, 2000 personally appeared Tim Burroughs,
President of TBX Resources, Inc., and acknowledged to me that he executed the
same as his free and voluntary act and deed, for the uses and purposes therein
set forth.

     Given under my hand and seal of office the day and year last above written.

My commission expires:              /s/ CHRISTINE COLEY
12-29-01                            -------------------------
                                        Notary Public

                                        [NOTARY SEAL]

STATE OF OKLAHOMA   )
                    )ss.
COUNTY OF OKLAHOMA  )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 10th day of October, 2000 personally appeared Steve Owen, and
acknowledged to me that he executed the same as his free and voluntary act and
deed, for the uses and purposes therein set forth.

     Given under my hand and seal of office the day and year last above written.

                                        /s/ TERRI M. RICHARDSON
                                        ------------------------
                                               Notary Public

[NOTARY SEAL]

                                                                         [STAMP]

                                       3
<PAGE>
                                  EXHIBIT "A"

                                S. VICI PROSPECT

                               Section 23-19N-21W
                                Ellis County, OK

Lessor:        Clayton Beall, a single person
Lessee:        Verlan W. Harrell
Dated:         3-5-99
Recorded:      Book 8531, Page 421
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Leon Beall, a single person
Lessee:        Verlan W. Harrell
Dated:         3-5-99
Recorded:      Book 8529, Page 417
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Ronald G. Care
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8527, Page 413
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Maxine Castor
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9153, Page 366
Description:   SE/4 NE/4

Lessor:        Jacqueline Marrs Cundieff
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8532, Page 423
Description:   N/2 N/2

Lessor:        Carol Ward de Sreyes
Lessee:        Verlan W. Harrell
Dated:         8-13-99
Recorded:      Book 9933, Page 1
Description:

Lessor:        George Doll
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9150, Page 360
Description:   SE/4 NE/4

Lessor:        Paul Edgar Doll
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9152, Page 364
Description:   SE/4 NE/4

Lessor:        Ruby Ketron
Lessee:        Verlan W. Harrell
Dated:         5-20-99
Recorded:      Book 9157, Page 372
Description:   SW/4 NW/4 & W/2 SW/4

Lessor:        Sharon Murray
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9454, Page 394
Description:   SE/4 NE/4

Lessor:        Judy Schultz
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9154, Page 368
Description:   SE/4 NE/4

                                                                         [STAMP]

                                       1
<PAGE>
                                  EXHIBIT "A"

                                S. VICI PROSPECT

                           Section 23-19N-21W (cont.)
                                Ellis County, OK

Lessor:        John A. Taylor
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9932, Page 949
Description:   SE/4 NE/4

Lessor:        John T. Young & Erma Lee Young, his wife
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8533, Page 425
Description:   SE/4 NW/4 & NE/4 SW/4

Lessor:        Pauline Young, a single person
Lessee:        Verlan W. Harrell
Dated:         3-9-99
Recorded:      Book 8530, Page 419
Description:   SE/4 NW/4 & NE/4 SW/4

Lessor:        Dorotha M. Ward
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9160, Page 380
Description:   SE/4 NE/4

Lessor:        Dorothy S. Ward a/k/a Dorothy Steele Ward
Lessee:        Verlan W. Harrell
Dated:         5/18/99
Recorded:      Book 9465, Page 416
Description:   SE/4 NE/4

Lessor:        Wanda Allen White
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8528, Page 415
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Edith L. Wild & Everett U. Wild
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9151, Page 362
Description:   SE/4 NE/4

                               Section 26-19N-21W
                             Ellis County, Oklahoma

Lessor:        Barbara Rose Austin
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9459, Page 404
Description:   NW/4

Lessor:        Cleo Fay Crum a/k/a Cleo F. Crum
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9470, Page 426
Description:   NW/4

Lessor:        Beverly Ruth Culver
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9477, Page 440
Description:   NW/4

                                                                         [STAMP]

                                       2

<PAGE>
                                  EXHIBIT "A"

                                S. VICI PROSPECT

                           Section 26-19N-21W (cont.)
                                Ellis County, OK

Lessor:        Travis David Dennett & Lorri P. Dennett, his wife
Lessee:        Verlan W. Harrell
Dated:         7-15-99
Recorded:      Book 9473, Page 432
Description:   NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4, E/2 SE/4

Lessor:        Darline Kemnitz
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9460, Page 406
Description:   NW/4

Lessor:        Loren John (Johnny) Meeks
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9453, Page 392
Description:   NW/4

Lessor:        Merline Newell
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9458, Page 402
Description:   NW/4

Lessor:        Lou Ann O'Neill
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9466, Page 418
Description:   NW/4

Lessor:        Judith Ann Perry & Marvin Perry, her husband
Lessee:        Verlan W. Harrell
Dated:         7-15-99
Recorded:      Book 9475, Page 436
Description:   N/2 SW/4

Lessor:        Joyce Prilliman
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9457, Page 400
Description:   NW/4

Lessor:        Matilda J. Turner Tobin
Lessee:        Verlan W. Harrell
Dated:
Recorded:      Book 9462, Page 410
Description:   NW/4

Lessor:        Jeanne E. Temple Truan
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9464, Page 414
Description:   NW/4

Lessor:        Robert F. Turner
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9472, Page 430
Description:   NW/4

Lessor:        Fred C. Turner
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9469, Page 424
Description:   NW/4

                                                                         [STAMP]

                                       3
<PAGE>

                                  EXHIBIT "A"

                                S. VICI PROSPECT

                          Section 26-19N-21 W (cont.)
                                Ellis County, OK

Lessor:           Sam Lawson Turner
Lessee:           Verlan W. Harrell
Dated:            7-7-99
Recorded:         Book 9468, Page 422
Description:      NW/4

                               Section 27-19N-21W
                             Ellis County, Oklahoma

Lessor:           Harold M. Bradbury Trust dtd. 2/20/96, Maudie L. Bradbury &
                  Jennifer L. Hale, Trustees
Lessee:           Verlan W. Harrell
Dated:            2-25-99
Recorded:         Book 8539, Page 438
Description:      SW/4 SW/4

Lessor:           Mary Opal Cree Royalty Partnership, a Texas General
                  Partnership
Lessee:           Verlan W. Harrell
Dated:            2-25-99
Recorded:         Book 8536, Page 431
Description:      SW/4 SW/4

Lessor:           Travis David Dennett & Lorri P. Dennett, his wife
Lessee:           Verlan W. Harrell
Dated:            5-19-99
Recorded:         Book 9159, Page 378
Description:      E/2 SE/4

Lessor:           Jay E. Dixon & Ruth R. Dixon
Lessee:           Verlan W. Harrell
Dated:            2-25-99
Recorded:         Book 8538, Page 435
Description:      SW/4 SE/4

Lessor:           Mary V. Geurin Trust dtd. 10-19-93, Carol Jean Bashlor,
                  Surviving Trustee
Lessee:           Verlan W. Harrell
Dated:            5-2-99
Recorded:         Book 9158, Page 374
Description:      SW/4 SW/4

Lessor:           Burtram Collver Hopkins II, Trustee of the Julie Ann Hopkins
                  Trust
Lessee:           Verlan W. Harrell
Dated:            3-5-99
Recorded:         Book 8534, Page 427
Description:      W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4, NW/4
                  SE/4

Lessor:           Hugh B. Key
Lessee:           Verlan W. Harrell
Dated:            2-25-99
Recorded:         Book 8537, Page 433
Description:      W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4, NW/4
                  SE/4

Lessor:           Judith Ann Perry & Marvin Perry, her husband
Lessee:           Verlan W. Harrell
Dated:            5-19-99
Recorded:         Book 9156, Page 376
Description:      E/2 SE/4

Lessor:           Ann B. Winslow
Lessee:           Verlan W. Harrell
Dated:            5-19-99
Recorded:         Book 9155, Page 370
Description:      W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4, NW/4
                  SE/4

                                                                         [STAMP]

                                       4
<PAGE>
                                  EXHIBIT "A"

                                S. VICI PROSPECT

                               Section 34-19N-21W
                                Ellis County, OK

Lessor:           Benischek Properties, L.L.C., A New Mexico Limited Liability
                  Company, H. W. Benischek
Lessee:           Verlan W. Harrell
Dated:            7-7-99
Recorded:         Book 9471, Page 428
Description:      S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:           Bevery Honaker, Trustee of the Ward Irrevocable Trust dtd
                  3-31-92
Lessee:           Verlan W. Harrell
Dated:            8-4-99
Recorded:         Book 9456, Page 398
Description:      S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:           Bevery Sargent Honaker Family Trust dated 3-24-92
Lessee:           Verlan W. Harrell
Dated:            7-9-99
Recorded:         Book 9455, Page 396
Description:      S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:           Nathan Janco, Trustee of the Nathan Janco Trust
Lessee:           Verlan W. Harrell
Dated:            8-12-99
Recorded:         Book 9931, Page 947
Description:      South 13.34 acres of the NW/4 SW/4; S/2 SW/4; SW/4 SE/4

Lessor:           Michael P. McClure
Lessee:           Verlan W. Harrell
Dated:            7-19-99
Recorded:         Book 9930, Page 945
Description:      The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and
                  the SW/4 SE/4

Lessor:           Sherry A. McClure Revocable Trust U/T/A dtd 8-5-97
Lessee:           Verlan W. Harrell
Dated:            7-19-99
Recorded:         Book 9463, Page 412
Description:      The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and
                  the SW/4 SE/4

Lessor:           James R. Via & Betty June Via, his wife
Lessee:           Verlan W. Harrell
Dated:            7-8-99
Recorded:         Book 9467, Page 420
Description:      The North 26.66 acres of the NW/4 SW/4

Lessor:           Gwenliana McClure Wilson
Lessee:           Verlan W. Harrell
Dated:            7-19-99
Recorded:         Book 9461, Page 408
Description:      The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and
                  the SW/4 SE/4

                                                                      [STAMP]

                                       5

<PAGE>
                        ASSIGNMENT OF OIL AND GAS LEASES

         KNOW ALL MEN BY THESE PRESENTS:

         That the undersigned, VERLAN W. HARRELL, 101 Park Avenue, Suite 310,
Oklahoma City, Oklahoma, 73116, hereinafter referred to as "ASSIGNOR", for and
in consideration of the sum of ten dollars ($10.00), the receipt of which is
hereby acknowledged, does hereby sell, assign, transfer, and set over to PAX
ENERGY, LLC, 6420 N. Santa Fe, Oklahoma City, Oklahoma, 73116, 75%, and to
HARRELL PETROLEUM, INC., 101 Park Avenue, Suite 310, Oklahoma City, Oklahoma,
73116, hereinafter referred to as "ASSIGNEES", 25% of Assignor's right, title
and interest in and to those certain Oil and Gas Leases, more specifically
described and set out in Exhibit "A", attached hereto and made a part hereof.

         THIS ASSIGNMENT shall be subject to the terms and conditions of the
Oil and Gas Leases herein assigned and to the depths and limitations, if any,
thereof, and subject further to all overriding royalties, excessive royalties,
or other burdens presently existing.

         ASSIGNOR shall retain and reserve an overriding royalty interest being
the difference between an 80% net revenue and existing burdens or royalties,
proportionately reduced to the interest assigned in the leases described on
Exhibit "A".

         THIS ASSIGNMENT is made without warranty of title, express or implied,
and shall extend to and be binding upon the heirs, executors, administrators,
trustees, successors and assigns of the respective parties.

         EXECUTED AND DELIVERED THIS 1 day of Aug., 2000.

                                                   ASSIGNOR:
STATE OF OKLAHOMA )
                  )F8                             /s/ VERLAN W. HARRELL
   ELLIS COUNTY   )                               -----------------------
This Instrument was filed for record on           VERLAN W. HARRELL
the 2 day of Aug. 2000 at 9 o'clock A.M.
and duly recorded misc. book 644 on page
200-06 Fee $20.00
PEGGY SCHOENHALS, County Clerk
By JANET BLAYLOCK Deputy

[STATE OF OKLAHOMA SEAL]

STATE OF OKLAHOMA   )
                    )ss.
COUNTY OF OKLAHOMA  )

         Before me, the undersigned, a Notary Public, in and for said County
and State on this 1st day of August, 2000 personally appeared Verlan W. Harrell
and acknowledged to me that he executed the same as his free and voluntary act
and deed, for the uses and purposes therein set forth.

         Given under my hand and seal of office the day and year last above
written.

My commission expires:                            /s/ TERRI M. RICHARDSON
8-22-00                                           --------------------------
                                                      Notary Public

[NOTARY SEAL]                                         [STAMP]

                                       1
<PAGE>
                                  EXHIBIT "A"
                                S. VICI PROSPECT

                               Section 23-19N-21W
                                Ellis County, OK

Lessor:        Clayton Beall, a single person
Lessee:        Verlan W. Harrell
Dated:         3-5-99
Recorded:      Book 628, Page 421
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Leon Beall, a single person
Lessee:        Verlan W. Harrell
Dated:         3-5-99
Recorded:      Book 628, Page 417
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Ronald G. Care
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 628, Page 413
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Maxine Castor
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 630, Page 366
Description:   SE/4 NE/4

Lessor:        Jacqueline Marrs Cundieff
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 628, Page 423
Description:   N/2 N/2

Lessor:        Carol Ward de Sreyes
Lessee:        Verlan W. Harrell
Dated:         8-13-99
Recorded:      Book 633, Page 1
Description:   SE/4 NE/4

Lessor:        George Doll
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 630, Page 360
Description:   SE/4 NE/4

Lessor:        Paul Edgar Doll
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 630, Page 364
Description:   SE/4 NE/4

Lessor:        Ruby Ketron
Lessee:        Verlan W. Harrell
Dated:         5-20-99
Recorded:      Book 630, Page 374
Description:   SW/4 NW/4 & W/2 SW/4

Lessor:        Sharon Murray
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 631, Page 394
Description:   SE/4 NE/4

Lessor:        Judy Schultz
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 630, Page 368
Description:   SE/4 NE/4                                          [STAMP]

                                       2
<PAGE>
                                  EXHIBIT "A"
                                S. VICI PROSPECT

                           Section 23-19N-21W (cont.)
                                Ellis County, OK

Lessor:        John A. Taylor
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 632, Page 949
Description:   SE/4 NE/4

Lessor:        John T. Young & Erma Lee Young, his wife
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 628, Page 425
Description:   SE/4 NW/4 & NE/4 SW/4

Lessor:        Pauline Young, a single person
Lessee:        Verlan W. Harrell
Dated:         3-9-99
Recorded:      Book 628, Page 419
Description:   SE/4 NW/4 & NE/4 SW/4

Lessor:        Dorotha M. Ward
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 630, Page 380
Description:   SE/4 NE/4

Lessor:        Dorothy S. Ward a/k/a Dorothy Steele Ward
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 631, Page 416
Description:   SE/4 NE/4

Lessor:        Wanda Allen White
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 628, Page 415
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Edith L. Wild & Everett U. Wild
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 630, Page 362
Description:   SE/4 NE/4

                               Section 26-19N-21W
                             Ellis County, Oklahoma

Lessor:        Barbara Rose Austin
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 404
Description:   NW/4

Lessor:        Cleo Fay Crum a/k/a Cleo F. Crum
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 426
Description:   NW/4

Lessor:        Beverly Ruth Culver
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 440
Description:   NW/4                                               [STAMP]

                                       3
<PAGE>
                                  EXHIBIT "A"
                                S. VICI PROSPECT

                           Section 26-19N-21W (cont.)
                                Ellis County, OK

Lessor:        Travis David Dennett & Lorri P. Dennett, his wife
Lessee:        Verlan W. Harrell
Dated:         7-15-99
Recorded:      Book 631, Page 434
Description:   N/2 SW/4

Lessor:        Darline Kemnitz
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 406
Description:   NW/4

Lessor:        Loren John (Johnny) Meeks
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 392
Description:   NW/4

Lessor:        Merline Newell
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 402
Description:   NW/4

Lessor:        Lou Ann O'Neill
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 418
Description:   NW/4

Lessor:        Judith Ann Perry & Marvin Perry, her husband
Lessee:        Verlan W. Harrell
Dated:         7-15-99
Recorded:      Book 631, Page 436
Description:   N/2 SW/4

Lessor:        Joyce Prilliman
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 400
Description:   NW/4

Lessor:        Matilda J. Turner Tobin
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 410
Description:   NW/4

Lessor:        Jeanne E. Temple Truan
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 414
Description:   NW/4

Lessor:        Robert F. Turner
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 430
Description:   NW/4

Lessor:        Fred C. Turner
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 424
Description:   NW/4                                                   [STAMP]

                                       4

<PAGE>

                                  EXHIBIT "A"
                                S. VICI PROSPECT

                           Section 26-19N-21W (cont.)
                                Ellis County, OK

Lessor:           Sam Lawson Turner
Lessee:           Verlan W. Harrell
Dated:            7-7-99
Recorded:         Book 631, Page 422
Description:      NW/4

                               Section 27-19N-21W
                             Ellis County, Oklahoma

Lessor:           Harold M. Bradbury Trust dtd. 2/20/96, Maudie L. Bradbury &
                  Jennifer L. Hale, Trustees
Lessee:           Verlan W. Harrell
Dated:            2-25-99
Recorded:         Book 628, Page 438
Description:      SW/4 SW/4

Lessor:           Mary Opal Cree Royalty Partnership, a Texas General
                  Partnership
Lessee:           Verlan W. Harrell
Dated:            2-25-99
Recorded:         Book 628, Page 431
Description:      SW/4 SW/4

Lessor:           Travis David Dennett & Lorri P. Dennett, his wife
Lessee:           Verlan W. Harrell
Dated:            5-19-99
Recorded:         Book 630, Page 378
Description:      E/2 SE/4

Lessor:           Jay E. Dixon & Ruth R. Dixon
Lessee:           Verlan W. Harrell
Dated:            2-25-99
Recorded:         Book 628, Page 435
Description:      SW/4 SE/4

Lessor:           Mary V. Geurin Trust dtd. 10-19-93, Carol Jean Bashlor,
                  Surviving Trustee
Lessee:           Verlan W. Harrell
Dated:            5-4-99
Recorded:         Book 630, Page 376
Description:      SW/4 SW/4

Lessor:           Butram Collver Hopkins II, Trustee of the Julie Ann Hopkins
                  Trust
Lessee:           Verlan W. Harrell
Dated:            3-5-99
Recorded:         Book 628, Page 427
Description:      W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4, NW/4
                  SE/4

Lessor:           Butram Collver Hopkins II, Trustee of the Mark Collver
                  Hopkins Trust
Lessee:           Verlan W. Harrell
Dated:            3-5-99
Recorded:         Book 628, Page 429
Description:      W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4, NW/4
                  SE/4

Lessor:           Hugh B. Key
Lessee:           Verlan W. Harrell
Dated:            2-25-99
Recorded:         Book 628, Page 433
Description:      W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4, NW/4
                  SE/4

                                                                         [STAMP]

                                       5
<PAGE>
                                  EXHIBIT "A"
                                S. VICI PROSPECT

                           Section 27-19N-21W (cont.)
                             Ellis County, Oklahoma

Lessor:        Judith Ann Perry & Marvin Perry, her husband
Lessee:        Verlan W. Harrell
Dated:         5-19-99
Recorded:      Book 630, Page 372
Description:   E/2 SE/4

Lessor:        Ann B. Winslow
Lessee:        Verlan W. Harrell
Dated:         5-19-99
Recorded:      Book 630, Page 370
Description:   W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4,
               NW/4 SE/4

                               Section 34-19N-21W
                                Ellis County, OK

Lessor:        Benischek Properties, L.L.C., A New Mexico Limited Liability
               Company,
               H.W. Benischek
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 631, Page 428
Description:   S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:        Travis David Dennett & Lorri P. Dennett, his wife
Lessee:        Verlan W. Harrell
Dated:         7-15-99
Recorded:      Book 631, Page 432
Description:   NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4, E/2 SE/4

Lessor:        Bevery Honaker, Trustee of the Ward Irrevocable Trust dtd 3-31-92
Lessee:        Verlan W. Harrell
Dated:         8-4-99
Recorded:      Book 631, Page 398
Description:   S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:        Bevery Sargent Honaker Family Trust dated 3-24-92
Lessee:        Verlan W. Harrell
Dated:         7-9-99
Recorded:      Book 631, Page 396
Description:   S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:        Nathan Janco, Trustee of the Nathan Janco Trust
Lessee:        Verlan W. Harrell
Dated:         8-12-99
Recorded:      Book 632, Page 947
Description:   South 13.34 acres of the NW/4 SW/4; S/2 SW/4; SW/4 SE/4

Lessor:        Michael P. McClure
Lessee:        Verlan W. Harrell
Dated:         7-19-99
Recorded:      Book 632, Page 945
Description:   The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and the
               SW/4 SE/4

Lessor:        Sherry A. McClure Revocable Trust U/T/A dtd 8-5-97
Lessee:        Verlan W. Harrell
Dated:         7-19-99
Recorded:      Book 631, Page 412
Description:   The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and the
               SW/4 SE/4

                                                                         [STAMP]

                                       6
<PAGE>
                                  EXHIBIT "A"
                                S. VICI PROSPECT

                           SECTION 34-19N-21W (CONT.)
                                ELLIS COUNTY, OK

Lessor:        Judith Ann Perry & Marvin Perry, her husband
Lessee:        Verlan W. Harrell
Dated:         7-15-99
Recorded:      Book 631, Page 438
Description:   NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4, E/2 SE/4

Lessor:        James R. Via & Betty June Via, his wife
Lessee:        Verlan W. Harrell
Dated:         7-8-99
Recorded:      Book 631, Page 420
Description:   The North 26.66 acres of the NW/4 SW/4

Lessor:        Gwenliana McClure Wilson
Lessee:        Verlan W. Harrell
Dated:         7-19-99
Recorded:      Book 631, Page 408
Description:   The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and
               the SW/4 SE/4

                                                                         [STAMP]

                                       7
<PAGE>

                                  EXHIBIT "C"
                              (CORRECTED 6/13/01)

                    ASSIGNMENT, BILL OF SALE AND CONVEYANCE

STATE OF OKLAHOMA          )
                           ) KNOW ALL MEN BY THESE PRESENTS THAT:
COUNTY OF ELLIS            )

     PAX ENERGY, LLC, whose address is 6420-B N. Santa Fe, Oklahoma City,
Oklahoma, 73116, hereinafter referred to as "Assignor", for and in consideration
of ONE HUNDRED DOLLARS ($100.00) and other good and valuable consideration, the
receipt of which is hereby acknowledged, does hereby assign, transfer, grant and
convey unto GREAT WEST ENERGY AND EXPLORATION, INC., 8140 WALNUT HILL LANE, ONE
GLEN LAKES, DALLAS, TEXAS, 75231, hereinafter referred to as "Assignee", a
thirty percent (30%) interest in Section 33, T19N, Range 21W, Ellis County,
Oklahoma.

     (i)  The oil and gas leases, leasehold interests, rights and interests
          attributable or allocable to the oil and gas leases or "leasehold
          interests by virtue of pooling, unitization, communitization, and
          operating agreement, licenses, permits, and other agreements
          (collectively the "Leases"), all more particularly described on
          Exhibit "A" hereof.

Assignor's interest in the above mentioned assets being herein conveyed are
hereinafter collectively referred to as the "interests".

Assignor hereby reserves unto itself, its heirs, successors or assigns, and
excepts from this Assignment an overriding royalty interest equal to two and
one-half percent (2 1/2%) of all oil, gas, or other hydrocarbons produced, saved
and sold from the lands and well described in Exhibit "A" hereof under the terms
of the Oil and Gas Leases, if, as and when produced, saved and sold, but not
otherwise. Such overriding royalty interest shall be free of all development,
production, marketing and operating expenses and charges of any other nature;
however, said interest shall bear and pay currently its share of gross
production and/or pipeline taxes. It is agreed that the reservation and
exception herein made imposes upon Assignee herein, its heirs, successors and
assigns, no duty or obligation to develop or operate the leased premises for
oil, gas or other hydrocarbons not imposed by the provisions of the Leases. If
the interest herein assigned is less than the full and undivided leasehold
estate in and to the lands described in Exhibit "A" hereof then the overriding
royalty interest herein reserved and excepted shall be reduced proportionately
to correspond with the leasehold interests actually assigned hereby. This
Assignment is limited from the base of the deepest production to all depths.

Assignor hereby reserves unto itself, its heirs, successors or assigns, and
excepts from this Assignment a back-in working interest of 10% after 100%
payout. Payout is defined as being that point in time when Great West has
recovered all its costs (including acreage costs) of drilling and completing of
each well drilled under this Assignment.

Assignor specifically reserves unto itself, its heirs, successors and assigns,
and excepts from this assignment all of its leasehold rights inside the wellbore
of the Safari 1-33 located in Section 33-19N-21W, Ellis County, Oklahoma and a
like interest in and to all rights tying and being below the Morrow Formation,
together with full rights of ingress and egress. Assignor reserves unto itself,
its heirs, successors and assigns and excepts from this assignment all proceeds
or revenue attributable to the Interests assigned herein that occurred prior to
the effective date, as well as the same proportionate share of oil in the tanks
on the effective date. Assignor shall be entitled to receive any and all
Proceeds or revenues received for the sale of its proportionate share of the oil
remaining in the tanks on the effective date and subsequently sold.

     1.   This Assignment is accepted subject to, and Assignee agrees to assume
          and perform, any and all of the liabilities and obligations, or
          alleged or threatened liabilities and obligations, of Assignor under
          the Interests and existing oil and gas leases, assignments, operating
          agreements, product purchase and sale contracts, leases, permits,
          rights-of-way, licenses, easements, options, orders, and any other
          agreements or contracts attributable to and affecting the Interests,
          including but not limited to, any and all obligations (i) to pay

<PAGE>
     and deliver royalties, overriding royalties, non-participating royalties,
     and other burdens on production, (ii) in connection with or arising out of
     balancing of overproduction or underproduction from the Interests, and
     (iii) in compliance with all laws and governmental regulations with respect
     to the Interests including, but not limited to, the lawful plugging and
     abandonment of oil and gas wells and the restoration of the surface of the
     land as nearly as possible to its prelease condition, whether or not such
     liabilities and obligations, or alleged or threatened liabilities and
     obligations, are caused by Assignors negligence and whether or not such
     liabilities and obligations, or alleged or threatened liabilities and
     obligations, arise during the period of, or from, or in connection with
     Assignor's ownership or operation of the Interests. Without limitation of
     the foregoing, Assignee agrees to assume and perform any and all of the
     liabilities and obligations, or alleged or threatened liabilities and
     obligations, of Assignor for claims, losses, damages, costs, expenses,
     diminuitions in value, suits, and causes of action of any kind or
     character, with respect to the environmental condition of the Interests,
     regardless of when the events occurred that caused such condition to exist
     and whether or not caused by or attributable to Assignor's negligence.
     Assignee shall, to the fullest extent permitted by law, protect, defend,
     indemnify and hold Assignor and its directors, officers, employees, agents
     and representatives of each of them, harmless from and against any and all
     claims, losses, damages, costs, expenses, diminuitions in value, suits,
     causes of action or judgments of any kind or character with respect to any
     and all liabilities and obligations or alleged or threatened liabilities
     and obligations, including, but not limited to, any interest, penalty and
     any attorneys' fees and other costs and expenses incurred in connection
     with investigation or defending any claims or actions, whether or not
     resulting in any liability, attributable to or arising out of (i) ownership
     or operation of the Interests subsequent to the Effective Date, and (ii)
     Assignees assumption of any liability or obligation in accordance with this
     paragraph.

     THE INDEMNIFICATION, RELEASE AND ASSUMPTION PROVISIONS PROVIDED FOR IN THIS
     ASSIGNMENT SHALL BE APPLICABLE WHETHER OR NOT THE LOSSES, COSTS, EXPENSES
     AND DAMAGES IN QUESTION AROSE SOLELY OR IN PART FROM THE GROSS, ACTIVE,
     PASSIVE OR CONCURRENT NEGLIGENCE, OR OTHER FAULT OF ASSIGNOR.

 2.  THIS ASSIGNMENT AND BILL OF SALE IS EXECUTED, DELIVERED, AND ACCEPTED
     WITHOUT ANY REPRESENTATION, WARRANTY OR COVENANT OF TITLE OF ANY KIND OR
     NATURE, EXCEPT AS EXPRESSLY PROVIDED HEREIN, EITHER EXPRESS, IMPLIED OR
     STATUTORY. THE INTERESTS ARE BEING CONVEYED AND ASSIGNED TO AND ACCEPTED BY
     THE ASSIGNEE IN THIS "AS IS, WHERE IS" CONDITION AND STATE OF REPAIR, AND
     WITH ALL FAULTS AND DEFECTS, WITHOUT ANY REPRESENTATION, WARRANTY OR
     COVENANT OF ANY KIND OR NATURE, EXPRESS, IMPLIED OR STATUTORY, INCLUDING,
     BUT NOT LIMITED TO, WARRANTIES OF MARKETABILITY, QUALITY, CONDITION,
     MERCHANTABILITY, AND/OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE
     EXPRESSLY DISCLAIMED. IT IS UNDERSTOOD AND AGREED THAT ASSIGNEE SHALL
     ACCEPT ALL OF THE SAME IN THEIR "AS IS, WHERE IS" CONDITION AND STATE OR
     REPAIR AND WITH ALL FAULTS AND DEFECTS, INCLUDING, BUT NOT LIMITED TO, THE
     PRESENCE OF NATURALLY OCCURRING RADIOACTIVE MATERIAL (NORM). IN ADDITION,
     ASSIGNOR MAKES NO REPRESENTATION, COVENANT OR WARRANTY, EXPRESS, IMPLIED OR
     STATUTORY, AS TO THE ACCURACY OR COMPLETENESS OF ANY DATA DELIVERED TO
     ASSIGNEE WITH RESPECT TO THE INTERESTS, OR CONCERNING THE QUALITY OR
     QUANTITY OF HYDROCARBON RESERVES, IF ANY, ATTRIBUTABLE TO THE INTERESTS, OR
     THE ABILITY OF THE INTERESTS TO PRODUCE HYDROCARBONS, OR THE PRICES WHICH
     ASSIGNEE IS OR WILL BE ENTITLED TO RECEIVE FOR ANY SUCH HYDROCARBONS.

 3.  Assignor shall warrant and defend the title to the Interests against all
     claims and demands of all persons claiming by, through or under Assignor,
     but not otherwise.

 4.  This Assignment and Bill of Sale shall inure to the benefit of and be
     binding upon the parties hereto, their heirs, successors and assigns.

 5.  This Assignment and Bill of Sale may be executed by Assignor and Assignee
     in any number of counterparts, each of which shall be deemed an original
     instrument, but all of which together shall constitute one and the same
     instrument.

<PAGE>

     IN WITNESS WHEREOF, this instrument shall be effective as of the June 15,
2001, (the "Effective Date").

                                        ASSIGNOR:

                                        PAX ENERGY, LLC

                                        By:
                                           ------------------------------------
                                           De Wayne Pitt, Managing Member

                                        ASSIGNEE:

                                        GREAT WEST ENERGY AND EXPLORATION, INC.

                                        By:
                                           ------------------------------------

STATE OF OKLAHOMA   )
                    )
COUNTY OF OKLAHOMA  )

     BEFORE ME, the undersigned authority, on this day personally appeared De
Wayne Pitt, Managing Member of PAX ENERGY, LLC, known to be the person and
officer whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consideration therein
expressed and in the capacity therein stated as the act and deed of said
corporation.

     GIVEN UNDER MY HAND AND OFFICIAL SEAL OF OFFICE on this ____ day of
_____________________ 2001.

                                  ----------------------------------------------
                                  Notary Public in and for said County and State

MY COMMISSION EXPIRES:

----------------------

STATE OF OKLAHOMA       )
                        )
COUNTY OF _____________ )

     BEFORE ME, the undersigned authority, on this day personally appeared
___________________________, ___________________ of GREAT WEST to be the person
and officer whose name is subscribed to the foregoing instrument, and
acknowledged to me that he executed the same for the purposes and
consideration therein expressed and in the capacity therein stated as the act
and deed of said corporation.

     GIVEN UNDER MY HAND AND OFFICIAL SEAL OF OFFICE on this ____ day of
___________________ 2001.

                                  ----------------------------------------------
                                  Notary Public in and for said County and State

MY COMMISSION EXPIRES:

----------------------
<PAGE>

                                  EXHIBIT "A"

<Table>
<Caption>
                                                                  LEASE           BOOK
          LEASE NAME                       LESSEE                  DATE           PAGE
          ----------                       ------                 -----           ----
<S>                                <C>                           <C>            <C>
W. R. Cree                         Harvest Land Leasing          01/22/82       384/340
Raymond E. Reid,
Atty in Fact                       Harvest Land Leasing          01/22/82       384/337
G. B. Cree, Jr.                    Harvest Land Leasing          04/19/82       388/305
Donald R. Harrel, et ux.           Prospective Investment        02/15/82       407/355
Earl Ritterhouse, et ux.           Harvest Land Leasing          01/22/82       387/694
Mary K. Earl                       Harvest Land Leasing          02/02/82       385/754
Clyde J. Hurst Trust               Harvest Land Leasing          02/23/82       385/756
Ernestine Farley                   Harvest Land Leasing          02/02/82       387/579
Margaret Price                     Harvest Land Leasing          02/02/82       387/577
Mercedes B. Hawkins                Prospective Investment        06/24/81       370/444
Marilyn Hodges                     Prospective Investment        11/10/82       402/547
Sabine Corporation                 Prospective Investment        02/02/83       408/350
Ninrod Petroleum Company           Prospective Investment        11/15/82       399/431
The Liberty Nat'l Bank & Trust
Company                            Cities Service Company        05/05/80       346/617
Villard Martin Jr, Trustee         Cities Service Company        04/22/80       346/615
K. L. Ferguson, et ux.             Cities Service Company        12/03/81       384/866
Hazel Wyley                        Harvest Land Leasing          02/02/82       385/762
Katherine Smith, et vir.           Harvest Land Leasing          02/02/82       387/581
Jay B. Price                       Harvest Land Leasing          02/02/82       385/758
Mrs. Bertha Hollingsworth          Harvest Land Leasing          02/02/82       385/760
Lela Comstock                      Harvest Land Leasing          02/02/82       385/764
Colonial Royalties Company         Prospective Investment        04/13/82       389/514
The Ajax Investment Company        Prospective Investment        04/13/82       389/512
Triangle Oil Company               Prospective Investment        05/13/81       365/464
CCW Interests Inc.                 Prospective Investment        05/13/81       365/756
Royal Oil and Gas Corporation      Prospective Investment        05/01/81       366/13
ST OK CS 17234                     Prospective Investment        12/07/82       402/630
Joe M. Sears, Trustee              Prospective Investment        02/25/83       406/800
L. O. Pulliam                      Cities Service Company        04/10/80       346/619
Mary V. Guerin                     Cities Service Company        04/01/80       344/230
D. W. Keffer, et ux.               Cities Service Company        01/23/80       340/150
Harold M. Bradbury                 Cities Service Company        04/01/80       344/115
Elizabeth Seibold                  Cities Service Company        03/20/80       342/598
Jean R. Voss, et vir.              Cities Service Company        03/20/80       342/596
George W. Seibold, Jr.             Cities Service Company        03/20/80       342/594
Tenneco Oil Company                Prospective Investment        04/21/83       414/218
</Table>

SPECIFICALLY EXCLUDING all right, title and interest in and to the well bore of
the Safari 1-33, currently operated by The Prospective Investment and Trading
Company, Ltd., and the rights necessary to produce oil, gas and minerals from
said well bore AND all right, title and interest below the base of the Morrow
Formation.

<PAGE>

PAX ENERGY LLC
                                                              6420-B N. SANTA FE
                                                         OKLAHOMA CITY, OK 73116
                                            (405) 843-8065    FAX (405) 848-7058

October 10, 2000

Mr. Tim Burroughs                       Mr. Steve Owen
TBX Resources, Inc.                     (Hand delivered)
12300 Ford Road, Suite 194
Dallas, TX 75234

Re:  Vici Prospect Assignment
     Ellis County, OK

Dear Tim and Steve:

Enclosed for your execution and return is an Assignment of the Vici acreage
which has been executed by PAX Energy. Upon receipt of a fully executed
Assignment I will file it of record and furnish you a recorded copy. This
Assignment is exclusively subject to the Agreement and Mutual Area of Interest
between PAX Energy and Verlan W. Harrell dated August 3, 2000 (copy attached).
Further, the parties hereto establish a Mutual Area of Interest the same as the
Mutual Area of Interest provided for in the Verlan W. Harrell/PAX Energy
Agreement, in that the same terms shall apply to each of the parties.

Please indicate your acceptance of the Verlan W. Harrell letter and the Mutual
Area of Interest by signing in the space provided below, and returning a copy
for our files.

Sincerely,

/s/ DE WAYNE PITT

De Wayne Pitt

DWP:tr
Enclosures

AGREED AND ACCEPTED THIS 10TH DAY OF OCTOBER, 2000

TBX Resources, Inc.

/s/ TIM BURROUGHS                       /s/ STEVE OWEN
--------------------                    ----------------
Tim Burroughs                           Steve Owen
<PAGE>
                                PAX ENERGY, LLC
                           6420-B N. SANTA FE AVENUE
                          OKLAHOMA CITY, OK 73116-9111
                      (405) 843-8065   (405) 848-7058 FAX

                     AGREEMENT AND MUTUAL AREA OF INTEREST

     WHEREAS, Verlan W. Harrell owns 765.86 net acres in Sections 23, 26, 27 &
34-T19N-R21W, Ellis County, Oklahoma; PAX Energy desires to purchase 75% of said
acreage further described on Exhibit "A" to the Assignment attached hereto. The
parties agree as follows:

PURCHASE:

     PAX shall pay $25.00/acre for each net acre delivered upon receipt of the
executed Assignment (attached). Said Assignment delivers an 80% net revenue
interest.

CARRIED INTEREST:

     As to the first four wells drilled in Section 23, 26, 27, or 34-T19N-R21W
in which both PAX and Harrell participate, PAX will carry Harrell in the PAX
working interest for 2% working interest until the date of first production
proportionately reduced to the interest with which PAX participates.

PROSPECT FEE:

     As a fee for the geological and engineering work and presentation, PAX
agrees to pay Verlan W. Harrell a sum of $43,000.00 as a prospect fee, due upon
completion of all contractual arrangements.

MUTUAL AREA OF INTEREST (AMI):

     A Mutual Area of Interest (AMI) shall be established from the date of this
Agreement, covering Sections 23, 26, 27, 28, 34-T19N-R21W, Ellis County,
Oklahoma, and for a term as long as any of the leases remain in effect. Should
either party acquire acreage in the AMI by any means, that party shall offer to
the other party his proportionate share of the acreage at the acquiring parties
cost. In the event a party elects to go non-consent or otherwise not participate
in a proposed well, the unit attributable to the well shall be eliminated from
the AMI.

OPERATING AGREEMENT:

     A Joint Operating Agreement in the form of Exhibit "B" shall be executed by
the parties covering Sections 23, 26, 27, 28, & 34-T19N-R21W, Ellis County,
Oklahoma. It is recognized there currently exists an Operating Agreement
covering Section 33-19N-21W, with PITCO as Operator dated December 13, 1982.

<PAGE>
Agreement and Mutual Area of Interest
Page 2

PURCHASE OF SAFARI 1-33 WELL AND LEASES:

         Verlan W. Harrell further agrees to sell and assign the 2% working
interest and 1.5% revenue interest which he owns in Section 33, in the well,
production, equipment, and leases for his cost of $1,000.00, as of August 1,
2000. Said interest is currently producing and subject to the Operating
Agreement of PITCO.

         INITIAL WELL:

         PAX Energy will propose an increased density well in the spaced unit
covering Section 33 and use its best effort to cause said well to be drilled.
In the event, PAX increases its interest to 10% or above, PAX shall be
obligated to offer to Harrell 25%, and Harrell shall be obligated to accept 25%
working interest in the interest available proportionately reduced, for the
drilling of well in Section 33, and said well shall be drilled under the terms
of the existing Joint Operating Agreement.

         THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED according to the
Laws of the State of Oklahoma. This Agreement shall be binding upon and inure
to the respective successors and assigns of the parties hereto. All
negotiations between the parties are merged in this Agreement and there are no
understandings or Agreements other than those incorporated herein. This
Agreement may not be modified except in writing executed by the parties hereto.

         IN WITNESS WHEREOF, the parties hereto have hereinto set their hands
upon the 3rd day of Aug., 2000.

                                             PAX Energy, LLC

/s/ VERLAN W. HARRELL                        /s/ DE WAYNE PITT
----------------------                       ---------------------
Verlan W. Harrell                            De Wayne Pitt

                                       2
<PAGE>
VICI                                                     Record and return to:
                                                         PAX ENERGY, LLC
                                                         6420-B N. Santa Fe
                                                         Oklahoma City, OK 73116

                        ASSIGNMENT OF OIL AND GAS LEASES
                     SUBJECT TO A CARRIED WORKING INTEREST

KNOW ALL MEN BY THESE PRESENTS:

         THAT WHEREAS, the undersigned PAX ENERGY, LLC, whose address is 6420-B
N. Santa Fe, Oklahoma City, Oklahoma, 73116, (hereinafter called "Assignor") is
the owner of an interest in certain oil and gas leases covering certain lands,
which leases and the lands covered by said leases are more fully described in
Exhibit "A" attached hereto and made a part hereof.

         NOW THEREFORE, for and in consideration of Ten Dollars ($10.00) in hand
paid and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned Assignor does hereby grant,
bargain, sell, transfer and convey all of that portion of Assignor's right,
title and interest in and to the leases described in Exhibit "A", unto the
following named parties (hereinafter called "Assignees"), in the proportions set
opposite their names below, as follows:

<Table>
<Caption>
                                                      PROPORTION OF WORKING
         NAME AND ADDRESS OF ASSIGNEE                   INTEREST ASSIGNED
         ----------------------------                 ---------------------
<S>                                                   <C>
         TBX Resources, Inc.                                  33.75%
         12300 Ford Road, Suite 265
         Dallas, TX 75234

         Sanguine Investments, LLC                           16.875%
         6420-B N. Sante Fe Avenue
         Oklahoma City, OK 73116
</Table>

RESERVATION

         FOR THE SAME CONSIDERATION, Assignor does hereby reserve and retain and
assignees do hereby grant, transfer, assign and convey unto the following named
parties in the proportions set opposite their names below, as follows:

<Table>
<Caption>
                                                      PROPORTIONS OF CARRIED
         NAME                                            WORKING INTEREST
         ----                                         ----------------------
<S>                                                   <C>
         PAX Energy, L.L.C.                                    4.500%
         6420-B N. Sante Fe
         Oklahoma City, OK 73116

         Creede Oil & Gas Company                              .5625%
         3217 Bart Conner Drive, Suite A
         Norman, OK 73072

         Prism Resources, L.L.C.                               .5625%
         6420-B N. Santa Fe
         Oklahoma City, OK 73116
</Table>

         AN UNDIVIDED TEN PERCENT (10.00%) CARRIED WORKING INTEREST in and to
all right, title and interest of Assignor in and to the oil and gas leases
described in Exhibit "A" attached hereto and made a part hereof, insofar and
only insofar as said leases cover the lands described in said Exhibit "A".

         In the event Assignee, their successors and assigns, acquires any
additional oil and gas leasehold or fee mineral interests in the lands described
in Exhibit "A" over and above the originally acquired prospect interest, on or
after the effective date hereof, Assignee agrees to assign in the same
proportions and subject to the same limitations, as hereinabove set forth, such
additional interest was acquired, an additional Ten Percent (10.00%) carried
working interest, on any and all such additional interests so acquired by
Assignee in the lands described in Exhibit "A". This agreement to assign such
additional carried working interest shall be and remain in full force and effect
from the effective date hereof and so long thereafter as oil and/or gas is
produced from the lands described in Exhibit "A", or upon any lands with which
the lands described on Exhibit "A" might be included in any drilling or spacing
unit.

         The term "Carried Working Interest", as used herein means that all
costs and expenses of drilling, equipping, recompleting and/or plugging back of
any well, and all costs and expenses of plugging and abandoning any well in case
of a dry hole, attributable to the carried working interest herein assigned, and
agreed to be assigned, shall be borne by Assignee, its successors and assigns
until such well has been

                                       1
<PAGE>

completed or recompleted as a producer into the tanks if an oil well or to the
point of first sales if a gas well, including any gas sales lines, metering
facilities and related production facilities, and thereafter, Assignors shall
own their proportionate shares of all personal property and surface and
subsurface fixtures, material, supplies and equipment appurtenant to such wells,
including any gas sales lines, metering facilities and related production
facilities.

         The carried working interest herein assigned, and agreed to be
assigned, shall be subject to Assignors' proportionate parts of all royalties,
excess royalties and other burdens, to which the interest of Assignor in the
subject leases was subject on the effective date hereof, or on the effective
date Assignor acquired its interest.

         GENERAL PROVISIONS

         All interests and rights of Assignors in and to the lands described in
Exhibit "A" and the production therefrom provided for in this instrument shall
extend not only to the oil and gas leases described in Exhibit "A", but also to
any and all extensions and renewals of said oil and gas leases, which may be
acquired by Assignee, its successors and assigns.

         All costs and expenses of present and future accounting,
administration, recordation and distribution, with respect to the interests
herein assigned shall be borne by Assignee. Assignor agrees to execute and
deliver to Assignees the documentation necessary to record such Assignments and
to carry out the intention of this instrument.

         This assignment may be executed in any number of counterparts, and
each executed counterpart hereof shall be deemed to be an original instrument,
but all such counterparts shall constitute but one assignment. To facilitate
recording, the counterpart to be recorded in a given county may contain only
that part of Exhibit "A" hereto that describes property located in that county.
Assignor and Assignees have retained counterparts of this assignment with a
complete Exhibit "A" hereto.

         Assignor warrants the title to the interests herein assigned be free,
clear and discharged from all former grants, charges, taxes, judgments, and
other encumbrances of whatsoever nature made or suffered to be made by, through
or under Assignor, but not otherwise.

         This instrument shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns, and shall run with and burden the leaseholds and lands which are
subject hereof. This Assignment is effective October 1, 2000.

ASSIGNEES:                                   ASSIGNOR:

TBX RESOURCES, INC.                          PAX ENERGY LLC

/s/ TIM BURROUGHS                            /s/ DE WAYNE PITT
------------------------                     ------------------------
Tim Burroughs                                By: De Wayne Pitt

/s/ STEVE OWEN
------------------------
Steve Owen

STATE OF OKLAHOMA          )
                           )ss.
COUNTY OF OKLAHOMA         )

         Before me, the undersigned, a Notary Public, in and for said County
and State on this 10th day of October, 2000 personally appeared De Wayne Pitt,
Managing Member of PAX Energy, LLC, and acknowledged to me that he executed the
same as his free and voluntary act and deed, for the uses and purposes therein
set forth.

         Given under my hand and seal of office the day and year last above
written.

                                             /s/ TERRI M. RICHARDSON
                                             -------------------------------
                                                      Notary Public

My commission expires:

August 22, 2004

[NOTARY SEAL]

                                       2
<PAGE>

STATE OF TEXAS      )
                    )ss.
COUNTY OF DALLAS    )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 13th day of October, 2000 personally appeared Tim Burroughs,
President of TBX Resources, Inc., and acknowledged to me that he executed the
same as his free and voluntary act and deed, for the uses and purposes therein
set forth.

     Given under my hand and seal of office the day and year last above written.

                                        /s/ CHRISTINE COLEY
                                        -------------------
[NOTARY SEAL]                              Notary Public

My commission expires:
12-29-01

STATE OF OKLAHOMA      )
                       )ss.
COUNTY OF OKLAHOMA     )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 10th day of October, 2000 personally appeared Steve Owen, and
acknowledged to me that he executed the same as his free and voluntary act and
deed, for the uses and purposes therein set forth.

     Given under my hand and seal of office the day and year last above written.

                                        /s/ TERRI M. RICHARDSON
                                        -----------------------
[NOTARY SEAL]                                 Notary Public

My commission expires:
August 22, 2004

                                       3
<PAGE>
                                  EXHIBIT "A"

                                S. VICI PROSPECT

                               Section 23-19N-21W
                                Ellis County, OK

Lessor:        Clayton Beall, a single person
Lessee:        Verlan W. Harrell
Dated:         3-5-99
Recorded:      Book 8531, Page 421
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Leon Beall, a single person
Lessee:        Verlan W. Harrell
Dated:         3-5-99
Recorded:      Book 8529, Page 417
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Ronal G. Care
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8527, Page 413
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Maxine Castor
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9153, Page 366
Description:   SE/4 NE/4

Lessor:        Jacqueline Marrs Cundieff
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8532, Page 423
Description:   N/2 N/2

Lessor:        Carol Ward de Sreyes
Lessee:        Verlan W. Harrell
Dated:         8-13-99
Recorded:      Book 9933, Page 1
Description:

Lessor:        George Doll
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9150, Page 360
Description:   SE/4 NE/4

Lessor:        Paul Edgar Doll
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9152, Page 364
Description:   SE/4 NE/4

Lessor:        Ruby Ketron
Lessee:        Verlan W. Harrell
Dated:         5-20-99
Recorded:      Book 9157, Page 372
Description:   SW/4 NW/4 & W/2 SW/4

Lessor:        Sharon Murray
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9454, Page 394
Description:   SE/4 NE/4

Lessor:        Judy Schultz
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9154, Page 368
Description:   SE/4 NE/4

                                       1

<PAGE>
                                  EXHIBIT "A"

                                S. VICI PROSPECT

                           Section 23-19N-21W (cont.)
                                Ellis County, OK

Lessor:        John A. Taylor
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9932, Page 949
Description:   SE/4 NE/4

Lessor:        John T. Young & Erma Lee Young, his wife
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8533, Page 425
Description:   SE/4 NW/4 & NE/4 SW/4

Lessor:        Pauline Young, a single person
Lessee:        Verlan W. Harrell
Dated:         3-9-99
Recorded:      Book 8530, Page 419
Description:   SE/4 NW/4 & NE/4 SW/4

Lessor:        Dorotha M. Ward
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9160, Page 380
Description:   SE/4 NE/4

Lessor:        Dorothy S. Ward a/k/a Dorothy Steele Ward
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9465, Page 416
Description:   SE/4 NE/4

Lessor:        Wanda Allen White
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8528, Page 415
Description:   SW/4 NE/4, N/2 SE/4, SE/4 SE/4

Lessor:        Edith L. Wild & Everett U. Wild
Lessee:        Verlan W. Harrell
Dated:         5-18-99
Recorded:      Book 9151, Page 362
Description:   SE/4 NE/4

                               Section 26-19N-21W
                             Ellis County, Oklahoma

Lessor:        Barbara Rose Austin
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9459, Page 404
Description:   NW/4

Lessor:        Cleo Fay Crum a/k/a Cleo F. Crum
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9470, Page 426
Description:   NW/4

Lessor:        Beverly Ruth Culver
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9477, Page 440
Description:   NW/4

                                       2

<PAGE>
                                  EXHIBIT "A"

                                S. VICI PROSPECT

                           Section 26-19N-21W (cont.)
                                Ellis County, OK

Lessor:        Travis David Dennett & Lorri P. Dennett, his wife
Lessee:        Verlan W. Harrell
Dated:         7-15-99
Recorded:      Book 9473, Page 432
Description:   NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4, E/2 SE/4

Lessor:        Darline Kemnitz
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9460, Page 406
Description:   NW/4

Lessor:        Loren John (Johnny) Meeks
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9453, Page 392
Description:   NW/4

Lessor:        Merline Newell
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9458, Page 402
Description:   NW/4

Lessor:        Lou Ann O'Neill
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9466, Page 418
Description:   NW/4

Lessor:        Judith Ann Perry & Marvin Perry, her husband
Lessee:        Verlan W. Harrell
Dated:         7-15-99
Recorded:      Book 9475, Page 436
Description:   N/2 SW/4

Lessor:        Joyce Prilliman
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9457, Page 400
Description:   NW/4

Lessor:        Matilda J. Turner Tobin
Lessee:        Verlan W. Harrell
Dated:
Recorded:      Book 9462, Page 410
Description:   NW/4

Lessor:        Jeannie E. Temple Truan
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9464, Page 414
Description:   NW/4

Lessor:        Robert F. Turner
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9472, Page 430
Description:   NW/4

Lessor:        Fred C. Turner
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9469, Page 424
Description:   NW/4

                                       3
<PAGE>

                                  EXHIBIT "A"

                                S. VICI PROSPECT

                           Section 26-19N-21W (cont.)
                                Ellis County, OK

Lessor:        Sam Lawson Turner
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9468, Page 422
Description:   NW/4

                               Section 27-19N-21W
                             Ellis County, Oklahoma

Lessor:        Harold M. Bradbury Trust dtd. 2/20/96, Maudie L. Bradbury &
               Jennifer L. Hale, Trustees
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8539, Page 438
Description:   Sw/4 SW/4

Lessor:        Mary Opal Cree Royalty Partnership, a Texas General Partnership
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8536, Page 431
Description:   SW/4 SW/4

Lessor:        Travis David Dennett & Lorri P. Dennett, his wife
Lessee:        Verlan W. Harrell
Dated:         5-19-99
Recorded:      Book 9159, Page 378
Description:   E/2 SE/4

Lessor:        Jay E. Dixon & Ruth R. Dixon
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8538, Page 435
Description:   SW/4 SE/4

Lessor:        Mary V. Geurin Trust dtd 10-19-93, Carol Jean Bashlor,
               Surviving Trustee
Lessee:        Verlan W. Harrell
Dated:         5-2-99
Recorded:      Book 9158, Page 374
Description:   SW/4 SW/4

Lessor:        Burtram Collver Hopkins II, Trustee of the Julie Ann
               Hopkins Trust
Lessee:        Verlan W. Harrell
Dated:         3-5-99
Recorded:      Book 8534, Page 427
Description:   W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4,
               NW/4 SE/4

Lessor:        Hugh B. Key
Lessee:        Verlan W. Harrell
Dated:         2-25-99
Recorded:      Book 8537, Page 433
Description:   W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4,
               NW/4 SE/4

Lessor:        Judith Ann Perry & Marvin Perry, her husband
Lessee:        Verlan W. Harrell
Dated:         5-19-99
Recorded:      Book 9156, Page 376
Description:   E/2 SE/4

Lessor:        Ann B. Winslow
Lessee:        Verlan W. Harrell
Dated:         5-19-99
Recorded:      Book 9155, Page 370
Description:   W/2 NW/4, NE/4 NW/4, W/2 SE/4 NW/4, N/2 SW/4, SE/4 SW/4,
               NW/4 SE/4

                                       4

<PAGE>
                                  EXHIBIT "A"

                                S. VICI PROSPECT

                               Section 34-19N-21W
                                Ellis County, OK

Lessor:        Benischek Properties, L.L.C., A New Mexico Limited Liability
               Company, H. W. Benischek
Lessee:        Verlan W. Harrell
Dated:         7-7-99
Recorded:      Book 9471, Page 428
Description:   S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:        Bevery Honaker, Trustee of the Ward Irrevocable Trust dtd
               3-31-92
Lessee:        Verlan W. Harrell
Dated:         8-4-99
Recorded:      Book 9456, Page 398
Description:   S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:        Bevery Sargent Honaker Family Trust dated 3-24-92
Lessee:        Verlan W. Harrell
Dated:         7-9-99
Recorded:      Book 9455, Page 396
Description:   S/2 NE/4, SE/4 NW/4, NE/4 SW/4, NW/4 SE/4

Lessor:        Nathan Janco, Trustee of the Nathan Janco Trust
Lessee:        Verlan W. Harrell
Dated:         8-12-99
Recorded:      Book 9931, Page 947
Description:   South 13.34 acres of the NW/4 SW/4; S/2 SW/4; SW/4 SE/4

Lessor:        Michael P. McClure
Lessee:        Verlan W. Harrell
Dated:         7-19-99
Recorded:      Book 9930, Page 945
Description:   The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and the
               SW/4 SE/4

Lessor:        Sherry A. McClure Revocable Trust U/T/A dtd 8-5-97
Lessee:        Verlan W. Harrell
Dated:         7-19-99
Recorded:      Book 9463, Page 412
Description:   The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and the
               SW/4 SE/4

Lessor:        James R. Via & Betty June Via, his wife
Lessee:        Verlan W. Harrell
Dated:         7-8-99
Recorded:      Book 9467, Page 420
Description:   The North 26.66 acres of the NW/4 SW/4

Lessor:        Gwenliana McClure Wilson
Lessee:        Verlan W. Harrell
Dated:         7-19-99
Recorded:      Book 9461, Page 408
Description:   The South 13.34 acres of the NW/4 SW/4 and the S/2 SW/4 and the
               SW/4 SE/4

                                       5
<PAGE>
PAX ENERGY LLC

                                                              6420-B N. SANTA FE
                                                         OKLAHOMA CITY, OK 73116
                                             (405) 843-8065   FAX (405) 848-7058

                                                                         [STAMP]

February 6, 2002

Mr. Tim Burroughs
TBX Resources, Inc.
12300 Ford Road, Suite 194
Dallas, TX 75234

Re:   Union City
      Section 16-11N-8W
      Canadian County, OK

Dear Tim:

Enclosed is an Assignment reflecting the previous agreement between PAX Energy,
LLC and TBX Resources, Inc. of a 10% carried interest or TBX's 20% interest in
this well.

Please execute the Assignment, have it notarized and return the original to me.
I will have the Assignment recorded and provide you with a recorded copy when
available.

If you have any questions, please call.

Sincerely,

/s/  DE WAYNE PITT
----------------------------
     De Wayne Pitt

D WP:tr
Enclosure
<PAGE>
                                                  Record and return to:
                                                  PAX ENERGY, LLC
                                                  6420-B N. Santa Fe
                                                  Oklahoma City, OK 73116

                        ASSIGNMENT OF OIL AND GAS LEASES

KNOW ALL MEN BY THESE PRESENTS:

     THAT WHEREAS, the undersigned TBX RESOURCES, INC., whose address is 12300
Ford Road, Suite 194, Dallas, TX, 75234, (hereinafter called "Assignor") is the
owner of an interest in certain oil and gas leases covering certain lands,
which leases and the lands covered by said leases are more fully described in
Exhibit "A" attached hereto and made a part hereof.

     NOW THEREFORE, for and in consideration of Ten Dollars ($10.00) in hand
paid and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned Assignor does hereby grant,
bargain, sell, transfer and convey a 2% carried working interest in and to the
leases described in Exhibit "A", unto Assignees in the proportion hereinafter
set forth:

<Table>
<Caption>
                                   PROPORTION OF CARRIED
NAME                                  WORKING INTEREST
----                               ---------------------
<S>                                <C>
PAX Energy, L.L.C.                          0.9%
6420-B N. Santa Fe
Oklahoma City, OK 73116

Creede Oil & Gas Company                    0.9%
3217 Bart Conner Drive, Suite A
Norman, OK 73072

Prism Resources, L.L.C.                     0.2%
6420-B N. Santa Fe
Oklahoma City, OK 73116                    ----

TOTAL                                      2.00%
</Table>

     In the event Assignor, its successors and assigns, acquire any additional
oil and gas leasehold or fee mineral interests in Section 16-11N-8W, Canadian
County, Oklahoma, over and above the originally acquired prospect interest, on
or after the effective date hereof, Assignor agrees to assign in the same
proportions and subject to the same limitations, as hereinabove set forth, such
additional interest acquired, an additional Ten Percent (10.00%) carried working
interest, on any and all such additional interests so acquired by Assignor in
the lands in Section 16-11N-8W, Canadian County, Oklahoma. This agreement to
assign such additional carried working interest shall be and remain in full
force and effect from the effective date hereof and so long thereafter as oil
and/or gas is produced from the lands in Section 16-11N-8W, Canadian County,
Oklahoma, or upon any lands with which the lands described in Section 16-11N-8W,
Canadian County, Oklahoma, might be included in any drilling or spacing unit.

     The term "Carried Working Interest", as used herein means that all costs
and expenses of drilling, equipping, recompleting and/or plugging back of any
well, and all costs and expenses of plugging and abandoning any well in case of
a dry hole, attributable to the carried working interest herein assigned, and
agreed to be assigned, shall be borne by Assignor, its successors and assigns
until such well has been completed or recompleted as a producer into the tanks
if an oil well or to the point of first sales if a gas well, including any gas
sales lines, metering facilities and related production facilities, and
thereafter, Assignees shall own their proportionate shares of all personal
property and surface and subsurface fixtures, material, supplies and equipment
appurtenant to such wells, including any gas sales lines, metering facilities
and related production facilities.

     The carried working interest herein assigned, and agreed to be assigned,
shall be subject to Assignor's proportionate parts of all royalties, excess
royalties and other burdens, to which the interest of Assignor in the subject
leases was subject on the effective date hereof, or on the effective date
Assignor acquired its interest.

     GENERAL PROVISIONS

     All interests and rights of Assignees in and to the lands described in
Exhibit "A" and the production therefrom provided for in this instrument shall
extend not only to the oil and gas leases described in Exhibit "A", but also to
any and all extensions and renewals of said oil and gas leases, which may be
acquired by Assignor, its successors and assigns.
<PAGE>

         All costs and expenses of present and future accounting,
administration, recordation and distribution, with respect to the interests
herein assigned shall be borne by Assignee. Assignor agrees to execute and
deliver to Assignees the documentation necessary to record such Assignments and
to carry out the intention of this instrument.

         This assignment may be executed in any number of counterparts, and each
executed counterpart hereof shall be deemed to be an original instrument, but
all such counterparts shall constitute but one assignment. To facilitate
recording, the counterpart to be recorded in a given county may contain only
that part of Exhibit "A" hereto that describes property located in that county.
Assignor and Assignees have retained counterparts of this assignment with a
complete Exhibit "A" hereto.

         Assignor warrants the title to the interests herein assigned to be
free, clear and discharged from all former grants, charges, taxes, judgments,
and other encumbrances of whatsoever nature made or suffered to be made by,
through or under Assignor, but not otherwise.

         This instrument shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns, and shall run with and burden the leaseholds and lands which are the
subject hereof. This Assignment is effective February 1, 2002.

ASSIGNOR:                                    ASSIGNEES:

TBX RESOURCES, INC.                          PAX ENERGY, LLC.

/s/ TIM BURROUGHS                            /s/ DE WAYNE PITT
-----------------------                      ------------------------------
Tim Burroughs, President                     De Wayne Pitt, Managing Member

                                             PRISM RESOURCES, LLC

                                             /s/ J.P. DICK
                                             -------------------------------
                                             J. P. Dick, Managing Member

                                             CREEDE OIL & GAS COMPANY

                                             /s/ ELLIS RANDOLPH
                                             -------------------------------
                                             Ellis Randolph, President

STATE OF OKLAHOMA          )
                           )ss.
COUNTY OF OKLAHOMA         )

         Before me, the undersigned, a Notary Public, in and for said County
and State on this 7th day of February, 2002 personally appeared De Wayne Pitt,
Managing Member of PAX Energy, LLC, and acknowledged to me that he executed the
same as his free and voluntary act and deed, for the uses and purposes therein
set forth.

         Given under my hand and seal of office the day and year last above
written.

My commission expires:              /s/ TERRI M. RICHARDSON
                                    -----------------------
August 22, 2004                          Notary Public

                                 [NOTARY SEAL]

STATE OF TEXAS             )
                           )ss.
COUNTY OF ______________   )

         Before me, the undersigned, a Notary Public, in and for said County and
State on this ___ day of ________, 2002 personally appeared Tim Burroughs,
President of TBX Resources, Inc., and acknowledged to me that he executed the
same as his free and voluntary act and deed, for the uses and purposes therein
set forth.

         Given under my hand and seal of office the day and year last above
written.

My commission expires:
                                    -----------------------
                                         Notary Public
----------------------
<PAGE>
STATE OF OKLAHOMA        )
                         ) ss.
COUNTY OF OKLAHOMA       )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 7th day of February, 2002 personally appeared J.P. Dick, Managing
Member of Prism Resources, LLC, and acknowledged to me that he executed the
same as his free and voluntary act and deed, for the uses and purposes therein
set forth.

     Given under my hand and seal of office the day and year last above written.

My commission expires      [NOTARY SEAL]          /s/ TERRY M. RICHARDSON
                                                  --------------------------
 August 22, 2004                                        Notary Public

STATE OF OKLAHOMA        )
                         ) ss.
COUNTY OF OKLAHOMA       )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 7th day of February, 2002 personally appeared Ellis Randolph,
President of Creede Oil & Gas Company, and acknowledged to me that he executed
the same as his free and voluntary act and deed, for the uses and purposes
therein set forth.

     Given under my hand and seal of office the day and year last above written.

My commission expires      [NOTARY SEAL]          /s/ TERRY M. RICHARDSON
                                                  --------------------------
 August 22, 2004                                        Notary Public
<PAGE>
               Canadian County, OK

Lessor:        Barbara Ann Reuter, Managing Trustee of the Equivalent Exemption
               Trust, Last Will of Gaylord Reuter, decd.
Lessee:        PAX Energy, LLC
Dated:         4-9-01
Recorded:      Book 2430, Page 840
Description:   NW/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        Jack J. and Alice M. Robinson
Lessee:        PAX Energy, LLC
Dated:         4-9-01
Recorded:      Book 2430, Page 842
Description:   E/2 NE/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        Triple B Farms, LLC
Lessee:        PAX Energy, LLC
Dated:         4-9-01
Recorded:      Book 2427, Page 578
Description:   W/2 NE/4 and SE/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        Oklahoma United Methodist Foundation, Inc., Bank One Trust
               Company, N.A.
Lessee:        PAX Energy, LLC
Dated:         4-11-01
Recorded:      Book 2427, Page 576
Description:   SW/4 Section 16-11N-8W
               Canadian County, OK

And the interest of Robert Baxter Case, being the same person as Roger Baxter
Case, which interest was pooled by the Oklahoma Corporation Commission under
Pooling Order No. 452155 dated May 17, 2001 covering interest in the NW/4
Section 16-11N-8W, Canadian County, Oklahoma.
<PAGE>

                                                         Record and return to:
                                                         PAX ENERGY, LLC
                                                         6420-B N. Santa Fe
                                                         Oklahoma City, OK 73116

                        ASSIGNMENT OF OIL AND GAS LEASES
                     SUBJECT TO A CARRIED WORKING INTEREST

KNOW ALL MEN BY THESE PRESENTS:

     THAT WHEREAS, the undersigned PAX ENERGY, LLC, whose address is 6420-B N.
Santa Fe, Oklahoma City, Oklahoma, 73116, (hereinafter called "Assignor") is the
owner of an interest in certain oil and gas leases covering certain lands,
which leases and the lands covered by said leases are more fully described in
Exhibit "A" attached hereto and made a part hereof.

     NOW THEREFORE, for and in consideration of Ten Dollars ($10.00) in hand
paid and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned Assignor does hereby grant,
bargain, sell, transfer and convey all of that portion of Assignor's right,
title and interest in and to the leases described in Exhibit "A", unto the
following named parties (hereinafter called "Assignees"), in the proportions set
opposite their names below, as follows:

<Table>
<Caption>
                                              PROPORTION OF WORKING
     NAME AND ADDRESS OF ASSIGNEE               INTEREST ASSIGNED
     ----------------------------             ---------------------

<S>                                      <C>
     TBX Resources, Inc.                              45.00%
     12300 Ford Road, Suite 265
     Dallas, TX 75234

     Getty Natural Gas Corporation                    45.00%
     6422-A N. Santa Fe
     Oklahoma City, OK 73116

                                                      -----
     TOTAL                                            90.00%
</Table>

RESERVATION

     FOR THE SAME CONSIDERATION, Assignor does hereby reserve and retain and
assignees do hereby grant, transfer, assign and convey unto the following named
parties in the proportions set opposite their names below, as follows:

<Table>
<Caption>
                                              PROPORTION OF CARRIED
     NAME                                       WORKING INTEREST
     ----                                     ---------------------

<S>                                           <C>
     PAX Energy, L.L.C.                                8.00%
     6420-B N. Santa Fe
     Oklahoma City, OK 73116

     Creede Oil & Gas Company                          1.00%
     3217 Bart Conner Drive, Suite A
     Norman, OK 73072

     Prism Resources, L.L.C.                           1.00%
     6420-B N. Santa Fe
     Oklahoma City, OK 73116
                                                      -----
     TOTAL                                            10.00%
</Table>

     AN UNDIVIDED TEN PERCENT (10.00%) CARRIED WORKING INTEREST in and to all
right, title and interest of Assignor in and to the oil and gas leases
described in Exhibit "A" attached hereto and made a part hereof, insofar and
only insofar as said leases cover the lands described in said Exhibit "A".

     In the event Assignee, their successors and assigns, acquires any
additional oil and gas leasehold or fee mineral interests in the lands
described in Exhibit "A" over and above the originally acquired prospect
interest, on or after the effective date hereof, Assignee agrees to assign in
the same proportions and subject to the same limitations, as hereinabove set
forth, such additional interest was acquired, an additional Ten Percent
(10.00%) carried working interest, on any and all such additional interests so
acquired by Assignee in the lands described in Exhibit "A". This agreement to
assign such additional carried working interest shall be and remain in full
force and effect from the effective date hereof and so long thereafter as oil
and/or gas is produced from the lands described in Exhibit "A", or upon any
lands with which the lands described on Exhibit "A" might be included in any
drilling or spacing unit.

                                       1
<PAGE>

         The term "Carried Working Interest", as used herein means that all
costs and expenses of drilling, equipping, recompleting and/or plugging back of
any well, and all costs and expenses of plugging and abandoning any well in case
of a dry hole, attributable to the carried working interest herein assigned, and
agreed to be assigned, shall be borne by Assignee, its successors and assigns
until such well has been completed or recompleted as a producer into the tanks
if an oil well or to the point of first sales if a gas well, including any gas
sales lines, metering facilities and related production facilities, and
thereafter, Assignors shall own their proportionate shares of all personal
property and surface and subsurface fixtures, material, supplies and equipment
appurtenant to such wells, including any gas sales lines, metering facilities
and related production facilities.

         The carried working interest herein assigned, and agreed to be
assigned, shall be subject to Assignors' proportionate parts of all royalties,
excess royalties and other burdens, to which the interest of Assignor in the
subject leases was subject on the effective date hereof, or on the effective
date Assignor acquired its interest.

         GENERAL PROVISIONS

         All interests and rights of Assignors in and to the lands described in
Exhibit "A" and the production therefrom provided for in this instrument shall
extend not only to the oil and gas leases described in Exhibit "A", but also to
any and all extensions and renewals of said oil and gas leases, which may be
acquired by Assignee, its successors and assigns.

         All costs and expenses of present and future accounting,
administration, recordation and distribution, with respect to the interests
herein assigned shall be borne by Assignee. Assignor agrees to execute and
deliver to Assignees the documentation necessary to record such Assignments and
to carry out the intention of this instrument.

         This assignment may be executed in any number of counterparts, and each
executed counterpart hereof shall be deemed to be an original instrument, but
all such counterparts shall constitute but one assignment. To facilitate
recording, the counterpart to be recorded in a given county may contain only
that part of Exhibit "A" hereto that describes property located in that county.
Assignor and Assignees have retained counterparts of this assignment with a
complete Exhibit "A" hereto.

         Assignor warrants the title to the interests herein assigned be free,
clear and discharged from all former grants, charges, taxes, judgments, and
other encumbrances of whatsoever nature made or suffered to be made by, through
or under Assignor, but not otherwise.

         This instrument shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns, and shall run with and burden the leaseholds and lands which are the
subject hereof. This Assignment is effective July 1, 2000.

TBX RESOURCES, INC.                             PAX ENERGY, LLC

/s/ TIM BURROUGHS                               /s/ DE WAYNE PITT
-------------------------                       ------------------------
Tim Burroughs                                   By: De Wayne Pitt

GETTY NATURAL GAS CORPORATION

/s/ STEVE OWEN                                  /s/ [ILLEGIBLE]
--------------------------                      --------------------------
Steve Owen, Vice President                      President

STATE OF OKLAHOMA       )
                        ) ss.
COUNTY OF OKLAHOMA      )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 19th day of September 2000 personally appeared De Wayne Pitt and
acknowledged to me that he executed the same as his free and voluntary act and
deed, for the uses and purposes therein set forth.

     Given under my hand and seal of office the day and year last above written.

My commission expires:                          /s/ TERRI M. RICHARDSON
                                                -----------------------
8-22-04                                              Notary Public
----------------------

[NOTARY SEAL]
                                       2

<PAGE>

STATE OF TEXAS          )
                        )ss.
COUNTY OF DALLAS        )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this 25th day of September, 2000 personally appeared Tim Burroughs and
acknowledged to me that he executed the same as his free and voluntary act and
deed, for the uses and purposes therein set forth.

     Given under my hand and seal of office the day and year last above written.

                                                     /s/ CHRISTINE COLEY
My commission expires:                               -------------------
                                                        Notary Public
12-29-01
----------------------                                  [NOTARY SEAL]

STATE OF OKLAHOMA       )
                        )ss.
COUNTY OF OKLAHOMA      )

     Before me, the undersigned, a Notary Public, in and for said County and
State on this ____ day of ______________, 2000 personally appeared Steve Owen
and acknowledged to me that he executed the same as his free and voluntary act
and deed, for the uses and purposes therein set forth.

     Given under my hand and seal of office the day and year last above written.

My commission expires:                               -------------------
                                                        Notary Public

----------------------

                                        3

<PAGE>

                                   EXHIBIT "A"

                Attached to and made a part of that Assignment of
                    Oil and Gas Leases effective July 1, 2000

Oil and Gas Lease covering the NW/4 Section 22-21N-6W containing 158.99 acres,
subject to the Operating Agreement dated March 1, 1977, covering the S/2 of
Section 22-21N-6W, Garfield County, Oklahoma, insofar and only insofar as they
cover the E/2 NW/4 of Section 22-21N-6W Garfield County, Oklahoma, which is the
Viola spacing unit attributable to the Viola production from the Albert 1-22
Well, excluding production from the Elmer Stutz 2-22 Well located in the NW/4
NW/4 of Section 22-21N-6W, Garfield County, Oklahoma.

                                       4
<PAGE>
                        ASSIGNMENT OF OIL AND GAS LEASE

STATE OF OKLAHOMA  )
                   )ss
COUNTY OF CANADIAN )

KNOW ALL MEN BY THESE PRESENTS:

That TBX RESOURCES, INC., 12300 Ford Road, Suite 194, Dallas, Texas, 75234, and
PAX ENERGY LLC, 6420-B N. Santa Fe, Oklahoma City, Oklahoma, hereinafter called
"Assignors", for and in consideration of the sum of Ten Dollars ($10.00) cash
and other good and valuable consideration paid by CRAWLEY PETROLEUM
CORPORATION, 105 N. Hudson, Suite 800, Oklahoma City, Oklahoma, 73102,
hereinafter called "Assignee", the receipt and sufficiency of which is hereby
acknowledged, does, subject to the terms and provisions hereof, sell, assign,
transfer and convey unto Assignee, its successors or assigns, 60% of Assignors'
right, title and interest in and to the oil and gas lease, lands and interest
therein, in Canadian County, Oklahoma, hereinafter referred to as "said lease",
to wit:

         LESSOR:           Margaret E. Petree
         LESSEE:           Sarkey's Inc.
         DATED:            November 5, 1976
         RECORDED:         Book 652, Page 135
         DESCRIPTION:      Section 17-11N-8W

Less and except the borehole of the Petree 1-17 well located in the NE/4 of
Section 17-11N-8W, Canadian County, Oklahoma. This Assignment is from the
surface of the earth to the base of the Hunton formation outside the wellbore
of the Petree 1-17 well, less and except the Cottage Grove or equivalent Layton
formation as identified in the Petree 1-17 well, Section 17-11N-8W, between a
depth of 8740' to 8796'.

Assignor hereby specifically reserves an overriding royalty interest based upon
the difference between 22.75% and existing lease burdens, it being the intent
to deliver to Assignee a 77.25% net revenue interest. Said reserved overriding
royalty shall be proportionately reduced to the extent that said lease covers
less than the full oil and gas leasehold estate under the assigned tract.

This Assignment is subject to the terms of the Assignment dated February 6,
2001 from Sweetwater Exploration LLC to TBX Resources, Inc. and this Assignment
is subject to the terms and conditions of that certain unrecorded Letter
Agreement between Sweetwater Exploration LLC and TBX Resources, Inc. dated
January 30, 2001, and subject to the terms of Letter Agreement between TBX, PAX
and Crawley dated June 28, 2001.

Assignor hereby agrees to indemnify, defend, and hold Assignee harmless from
and against any and all claims, demands, actions, orders, judgments, or
liabilities relating to acts, events, or failure to act or any other matter
whatsoever associated with the conveyed properties occurring prior to the
effective date hereof.

The terms, covenants and conditions hereof shall be binding upon and shall
inure to the benefit of Assignor and Assignee and their respective successors
and assigns.

THIS ASSIGNMENT is made without warranty of title, express or implied, except
as to claims by, through and under Assignors, and shall extend to and be
binding upon the heirs, executors, administrators, trustees, successors and
assigns of the respective parties.

IN WITNESS WHEREOF, Assignor has executed this instrument on this 3rd day of
July, 2001, however effective February 1, 2001.

ASSIGNORS:

PAX ENERGY, LLC                               TBX RESOURCES, INC.

/s/ DE WAYNE PITT                             /s/ TIM BURROUGHS
----------------------------------            ------------------------------
By: De Wayne Pitt, Managing Member            By: Tim Burroughs, President

ASSIGNEE:

CRAWLEY PETROLEUM CORPORATION

/s/ S.K. HATFIELD
----------------------------------
By: S.K. Hatfield, President
<PAGE>

STATE OF TEXAS      )
                    )ss.
COUNTY OF DALLAS    )

Before me, the undersigned, a Notary Public, in and for said County and State on
this 29th day of June, 2001, personally appeared Tim Burroughs and
acknowledged to me that he executed the same as his free and voluntary act and
deed as President of TBX Resources, Inc., for the uses and purposes therein set
forth.

Given under my hand and seal of office the day and year last above written.

My commission expires:                           /s/ CHRISTINE COLEY
                                                 -------------------
12-29-01                                             Notary Public

                                                    [NOTARY SEAL]

STATE OF OKLAHOMA   )
                    )ss.
COUNTY OF OKLAHOMA  )

Before me, the undersigned, a Notary Public, in and for said County and State on
this 29th day of June, 2001, personally appeared De Wayne Pitt and acknowledged
to me that he executed the same as his free and voluntary act and deed as
Managing Member of PAX Energy, LLC, for the uses and purposes therein set forth.

Given under my hand and seal of office the day and year last above written.

My commission expires:                           /s/ TERRI M. RICHARDSON
                                                 -----------------------
8-22-04                                                Notary Public

                                                       [NOTARY SEAL]

STATE OF OKLAHOMA   )
                    )ss.
COUNTY OF OKLAHOMA  )

Before me, the undersigned, a Notary Public, in and for said County and State on
this 3rd day of July, 2001, personally appeared S.K. Hatfield and acknowledged
to me that he executed the same as his free and voluntary act and deed as
President of Crawley Petroleum Corporation, for the uses and purposes therein
set forth.

Given under my hand and seal of office the day and year last above written.

My commission expires:                           /s/ DONNA B. COVINGTON
                                                 ----------------------
Jan. 31, 2003                                        Notary Public

[NOTARY SEAL]
<PAGE>
                        ASSIGNMENT OF OIL AND GAS LEASES
                       AND FORCE POOLED MINERAL INTERESTS

KNOW ALL MEN BY THESE PRESENTS:

         That the undersigned, TBX RESOURCES, INC., 12300 Ford Road, Suite 194,
Dallas, Texas, 75234, and PAX ENERGY, LLC, 6420 N. Santa Fe, Oklahoma City,
Oklahoma, 73116, hereinafter referred to as "ASSIGNORS", for and in
consideration of the sum of ten dollars ($10.00), the receipt of which is hereby
acknowledged, does hereby sell, assign, transfer, and set over to CRAWLEY
PETROLEUM CORPORATION, 105 N. Hudson, Suite 800, Oklahoma City, Oklahoma, 73102
hereinafter referred to as "ASSIGNEE", 60% of Assignor's right, title and
interest in and to those certain Oil and Gas Leases and force pooled mineral
interests ("Leases"), more specifically described and set out in Exhibit "A",
attached hereto and made a part hereof.

         DELIVERING an 80% net revenue interest in the Leases, reserving a
proportionately reduced overriding royalty interest equal to the difference
between existing burdens and 80% to the Assignors.

         ASSIGNORS reserve and shall be granted a proportionately reduced
back-in to a working interest ownership of the well, equipment and Leases of 15%
after payout of all costs of drilling, completing, operating, and acreage costs
attributable to the well and Leases conveyed by this Assignment.

         THIS ASSIGNMENT shall be subject to the terms and conditions of the
Leases herein assigned and to the depths and limitations, if any, thereof, and
subject further to all overriding royalties, excessive royalties, or other
burdens presently existing and subject to terms of the Letter Agreement between
TBX Resources, Inc., PAX Energy, LLC, and Crawley Petroleum Corporation, dated
June 28, 2001.

         THIS ASSIGNMENT is made without warranty of title, express or implied,
except as to claims by, through and under Assignors, and shall extend to and be
binding upon the heirs, executors, administrators, trustees, successors and
assigns of the respective parties.

         EXECUTED AND DELIVERED THIS 3rd day of July, 2001

ASSIGNOR:                               ASSIGNEE:
PAX ENERGY, LLC                          Crawley Petroleum Corporation

    /s/ DE WAYNE PITT                       /s/ S.K. HATFIELD
----------------------------------      -------------------------------
By: De Wayne Pitt, Managing Member      By: S.K. Hatfield, President

ASSIGNOR:
TBX Resources, Inc.

    /s/ TIM BURROUGHS
--------------------------------
By: Tim Burroughs, President

                                       1
<PAGE>

STATE OF OKLAHOMA    )
                     )ss.
COUNTY OF OKLAHOMA   )

Before me, the undersigned, a Notary Public, in and for said County and State
on this 29th day of June 2001 personally appeared De Wayne Pitt and
acknowledged to me that he executed the same as his free and voluntary act and
deed, for the uses and purposes therein set forth.

Given under my hand and seal of office the day and year last above written.

                                             /s/ TERRI M. RICHARDSON
                                             ---------------------------------
                                                      Notary Public

My commission expires:
                                                      [NOTARY SEAL]
8-22-04

STATE OF TEXAS       )
                     )ss.
COUNTY OF DALLAS     )

Before me, the undersigned, a Notary Public, in and for said County and State
on this 29th day of June 2001 personally appeared Tim Burroughs and
acknowledged to me that he executed the same as his free and voluntary act and
deed, for the uses and purposes therein set forth.

Given under my hand and seal of office the day and year last above written.

                                             /s/ CHRISTINE COLEY
                                             ---------------------------------
                                                      Notary Public

My commission expires:
                                                      [NOTARY SEAL]
12-29-01

STATE OF OKLAHOMA    )
                     )ss.
COUNTY OF OKLAHOMA   )

Before me, the undersigned, a Notary Public, in and for said County and State
on this 3rd day of July 2001 personally appeared S.K. Hatfield and
acknowledged to me that he executed the same as his free and voluntary act and
deed, for the uses and purposes therein set forth.

Given under my hand and seal of office the day and year last above written.

                                             /s/ DONNA B. COVINGTON
                                             ---------------------------------
                                                      Notary Public

My commission expires:
                                                      [NOTARY SEAL]
Jan. 31, 2003
<PAGE>
                                  EXHIBIT "A"

Attached to and made a part of that Assignment of Oil and Gas Leases between PAX
Energy, LLC, TBX Resources, Inc., Assignors, and Crawley Petroleum Corporation,
Assignee, dated July 3rd, 2001

Lessor:        Connie Gay Athens
Lessee:        PAX Energy, LLC
Dated:         09-12-00
Recorded:      Book 2396, Page 91
Description:   NW/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        Connie Gay Athens, Trustee of the Mary Virginia Corn Trust
Lessee:        PAX Energy, LLC
Dated:         09-12-00
Recorded:      Book 2396, Page 91
Description:   NW/4 Section 16-11N
               Canadian County, OK

Lessor:        Carolyn Kay Magni
Lessee:        PAX Energy, LLC
Dated:         09-12-00
Recorded:      Book 2396, Page 94
Description:   NW/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        Michael D. Smith, Sole Heir of Donald E. Smith, dec'd.
Lessee:        PAX Energy, LLC
Dated:         10-19-00
Recorded:      Book 2396, Page 99
Description:   NW/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        Terry G. Smith, as Trustee of the Smith Family Living Trust dated
               March 6, 1991
Lessee:        Pax Energy, LLC
Dated:         10-19-00
Recorded:      Book 2396, Page 97
Description:   NW/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        Patricia Neal
Lessee:        Pax Energy, LLC
Dated:         11-21-00
Recorded:      Book 2398, Page 603
Description:   NW/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        James Edward Smith
Lessee:        Pax Energy, LLC
Dated:         11-21-00
Recorded:      Book 2402, Page 329
Description:   NW/4 Section 16-11N-8W
               Canadian County, OK

Lessor:        Kenny W. Smith
Lessee:        PAX Energy, LLC
Dated:         11-21-00
Recorded:      Book 2402, Page 330
Description:   NW/4 Section 16-11N-8W
               Canadian County, OK

                                       3

<PAGE>
                                  EXHIBIT "A"
                                     Page 2

Lessor:           Robert H. Smith
Lessee:           PAX Energy, LLC
Dated:            11-21-00
Recorded:         Book 2396, Page 95
Description:      NW/4 Section 16-11N-8W
                  Canadian County, OK

Lessor:           Frederick J. Norman
Lessee:           PAX Energy, LLC
Dated:            11-30-00
Recorded:         Book 2396, Page 87
Description:      NW/4 Section 16-11N-8W
                  Canadian County, OK

Lessor:           Lloyd V. (now deceased) and Ruth Chappell, h/w, JT,
                  Betty Ann Sherwin, POA, Betty Ann Sherwin and
                  Carroll E. Sherwin, h/w
                  And Mary Ellen Hembree and Jess E. Hembree, h/w
Lessee:           PAX Energy, LLC
Dated:            4-9-01
Recorded:         Book 2430, Page 837
Description:      E/2 NE/4 Section 16-11N-8W
                  Canadian County, OK

Lessor:           Barbara Ann Reuter, Managing Trustee of the Equivalent
                  Exemption Trust, Last Will of Gaylord Reuter, decd.
Lessee:           PAX Energy, LLC
Dated:            4-9-01
Recorded:         Book 2430, Page 840
Description:      NW/4 Section 16-11N-8W
                  Canadian County, OK

Lessor:           Jack J. and Alice M. Robinson
Lessee:           PAX Energy, LLC
Dated:            4-9-01
Recorded:         Book 2430, Page 842
Description:      E/2 NE/4 Section 16-11N-8W
                  Canadian County, OK

Lessor:           Triple B Farms, LLC
Lessee:           PAX Energy, LLC
Dated:            4-9-01
Recorded:         Book 2427, Page 578
Description:      W/2 NE/4 and SE/4 Section 16-11N-8W
                  Canadian County, OK

Lessor:           Oklahoma United Methodist Foundation, Inc.,
                  Bank One Trust Company, N.A.
Lessee:           PAX Energy, LLC
Dated:            4-11-01
Recorded:         Book 2427, Page 578
Description:      W/2 NE/4 and SE/4 Section 16-11N-8W
                  Canadian County, OK

And the interest of Robert Baxter Case, being the same person as Roger Baxter
Case, which interest was pooled by the Oklahoma Corporation Commission under
Pooling Order CD No. 200101023 and Order No. 452155 dated May 17, 2001 covering
and interest in the NW/4 Section 16-11N-8W, Canadian County, Oklahoma.

                                       4
<PAGE>
                                                         Record and return to:
                                                         PAX ENERGY, LLC
                                                         6420-B N. Santa Fe
                                                         Oklahoma City, OK 73116

                        ASSIGNMENT OF OIL AND GAS LEASES
                     SUBJECT TO A CARRIED WORKING INTEREST

KNOW ALL MEN BY THESE PRESENTS:

         THAT WHEREAS, the undersigned PAX ENERGY, LLC, whose address is 6420-B
N. Santa Fe, Oklahoma City, Oklahoma, 73116, (hereinafter called "Assignor") is
the owner of an interest in certain oil and gas leases covering certain lands,
which leases and the lands covered by said leases are more fully described in
Exhibit "A" attached hereto and made a part hereof.

         NOW THEREFORE, for and in consideration of Ten Dollars ($10.00) in land
paid and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned Assignor does hereby grant,
bargain, sell, transfer and convey all of that portion of Assignor's right,
title and interest in and to the leases described in Exhibit "A", which interest
was assigned into PAX Energy, LLC by Jerry Gordon (.00754700), Assignment
effective May 29, 2001, and Joe Sears, (.00677080), Assignment effective July 1,
2001 and Verlan Harrell (.02000), Assignment effective August 1, 2000, being a
total of .0343178 unto the following named parties (hereinafter called
"Assignees"), in the proportions set opposite their names below, as follows:

<Table>
<Caption>
                                                      Portion of Working
Name and Address of Assignee                           Interest Assigned
----------------------------                          ------------------
<S>                                                   <C>
TBX Resources, Inc.                                          45%
12300 Ford Road, Suite 265
Dallas, TX 75234

Garrett Petroleum, Inc.                                      22.5%
8801 S. Yale, Suite 240
P.O. Box 853
Tulsa, OK 74137

Merlin Corporation                                           22.5%
6420-B N. Santa Fe
Oklahoma City, OK 73116

TOTAL                                                        90%
</Table>

RESERVATION

FOR THE SAME CONSIDERATION, Assignor does hereby reserve and retain and
assignees do hereby grant, transfer, assign and convey unto the following named
parties in the proportions set opposite their names below, as follows:

<Table>
<Caption>
                                                      Portion of Carried
Name                                                   Working Interest
----                                                  ------------------
<S>                                                   <C>
PAX Energy, L.L.C.                                          8.00%
6420-B N. Santa Fe
Oklahoma City, OK 73116

Creede Oil & Gas Company                                    1.00%
3217 Bart Conner Drive, Suite A
Norman, OK 73072

Prism Resources, L.L.C.                                     1.00%
6420-B N. Santa Fe
Oklahoma City, OK 73116                                  ---------

TOTAL                                                      10.00%
</Table>

         AN UNDIVIDED TEN PERCENT (10.00%) CARRIED WORKING INTEREST in and to
all right, title and interest of Assignor in and to the oil and gas leases
described in Exhibit "A" attached hereto and made a part hereof, insofar and
only insofar as said leases cover the lands described in said Exhibit "A".

<PAGE>
     In the event Assignee, their successors and assigns, acquires any
additional oil and gas leasehold or fee mineral interests in the lands
described in Exhibit "A" over and above the originally acquired prospect
interest, on or after the effective date hereof, Assignee agrees to assign in
the same proportions and subject to the same limitations, as hereinabove set
forth, such additional interest was acquired, an additional Ten Percent (10.00%)
carried working interest, on any and all such additional interests so acquired
by Assignee in the lands described in Exhibit "A". This agreement to assign
such additional carried working interest shall be and remain in full force and
effect from the effective date hereof and so long thereafter as oil and/or gas
is produced from the lands described in Exhibit "A", or upon any lands with
which the lands described on Exhibit "A" might be included in any drilling or
spacing unit.

     The term "Carried Working Interest", as used herein means that all costs
and expenses of drilling, equipping, recompleting and/or plugging back of any
well, and all costs and expenses of plugging and abandoning any well in case of
a dry hole, attributable to the carried working interest herein assigned, and
agreed to be assigned, shall be borne by Assignee, its successors and assigns
until such well has been completed or recompleted as a producer into the tanks
if an oil well or to the point of first sales if a gas well, including any gas
sales lines, metering facilities and related production facilities, and
thereafter, Assignors shall own their proportionate shares of all personal
property and surface and subsurface fixtures, material, supplies and equipment
appurtenant to such wells, including any gas sales lines, metering facilities
and related production facilities.

     The carried working interest herein assigned, and agreed to be assigned,
shall be subject to Assignors' proportionate parts of all royalties, excess
royalties and other burdens, to which the interest of Assignor in the subject
leases was subject on the effective date hereof, or on the effective date
Assignor acquired its interest.

     GENERAL PROVISIONS

     All interests and rights of Assignors in and to the lands described in
Exhibit "A" and the production therefrom provided for in this instrument shall
extend not only to the oil and gas leases described in Exhibit "A", but also to
any and all extensions and renewals of said oil and gas leases, which may be
acquired by Assignee, its successors and assigns.

     All costs and expenses of present and future accounting, administration,
recordation and distribution, with respect to the interests herein assigned
shall be borne by Assignee. Assignor agrees to execute and deliver to Assignees
the documentation necessary to record such Assignments and to carry out the
intention of this instrument.

     This assignment may be executed in any number of counterparts, and each
executed counterpart hereof shall be deemed to be an original instrument, but
all such counterparts shall constitute but one assignment. To facilitate
recording, the counterpart to be recorded in a given county may contain only
that part of Exhibit "A" hereto that describes property located in that county.
Assignor and Assignees have retained counterparts of this assignment with a
complete Exhibit "A" hereto.

     Assignor warrants the title to the interests herein assigned be free,
clear and discharged from all former grants, charges, taxes, judgments, and
other encumbrances of whatsoever nature made or suffered to be made by, through
or under Assignor, but not otherwise.

     This instrument shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors and
assigns, and shall run with and burden the leaseholds and lands which are the
subject hereof. This Assignment is effective September 1, 2001.

ASSIGNEES:                                       ASSIGNOR:

TBX RESOURCES, INC.                              PAX ENERGY, LLC

/s/ TIM BURROUGHS                                /s/ DE WAYNE PITT
------------------------                         ------------------------
    Tim Burroughs                                By: De Wayne Pitt

GARRETT PETROLEUM, INC.

------------------------
J.P. Garrett

MERLIN CORPORATION

/s/ DE WAYNE PITT
------------------------
De Wayne Pitt, President

                                       2
<PAGE>
STATE OF OKLAHOMA          )
                           )ss.
COUNTY OF OKLAHOMA         )

         Before me, the undersigned, a Notary Public, in and for said County and
State on this 30th day of August, 2001 personally appeared De Wayne Pitt,
Managing Member of PAX Energy, LLC, and President of Merlin Corporation, and
acknowledged to me that he executed the same as his free and voluntary act and
deed, for the uses and purposes therein set forth.

         Given under my hand and seal of office the day and year last above
written.

My commission expires:              /s/ TERRI M. RICHARDSON
                                    -----------------------
                                         Notary Public

August 22, 2004                     [NOTARY SEAL]

STATE OF TEXAS             )
                           )ss.
COUNTY OF DALLAS           )

         Before me, the undersigned, a Notary Public, in and for said County and
State on this 31st day of August, 2001 personally appeared Tim Burroughs,
President of TBX Resources, Inc., and acknowledged to me that he executed the
same as his free and voluntary act and deed, for the uses and purposes therein
set forth.

         Given under my hand and seal of office the day and year last above
written.

My commission expires:              /s/ CHRISTINE COLEY
                                    -------------------
                                       Notary Public

12-29-01
----------------------              [NOTARY SEAL]

STATE OF OKLAHOMA          )
                           )ss.
COUNTY OF OKLAHOMA         )

         Before me, the undersigned, a Notary Public, in and for said County and
State on this ____ day of _________, 2001 personally appeared _______________,
______________ of Garrett Petroleum, Inc., and acknowledged to me that he
executed the same as his free and voluntary act and deed, for the uses and
purposes therein set forth.

         Given under my hand and seal of office the day and year last above
written.

My commission expires:
                                    ----------------------
                                        Notary Public

----------------------

                                       3
<PAGE>
                                                                         [STAMP]

                      PARTIAL ASSIGNMENT AND BILL OF SALE
                                (WELLBORE ONLY)

STATE OF OKLAHOMA        )
                         )    KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF CADDO          )

     THAT, for valuable consideration in hand paid, the receipt and sufficiency
of which are hereby acknowledged RYAN PETROLEUM OPERATING, INC., whose address
is 100 West Main Street, Suite 227, Oklahoma City, Oklahoma 73102, (hereinafter
referred to as "Assignor"), hereby assigns, grants and conveys to TBX RESOURCES,
INC., whose address is 12300 Ford Road, Suite 194, Dallas, Texas 75234,
(hereinafter referred to as "Assignee"), an undivided TWENTY-FIVE PERCENT (25%)
interest in and to the oil and gas leases located in Section 2-12N-12W,
("Conveyed Premises"), INSOFAR AND ONLY INSOFAR as oil and gas and/or other
minerals attributable to the Conveyed Premises are produced from the WELLBORE of
the Soddie #1-2 Well, located in Section 2, Township 12 North, Range 12 West,
Caddo County, and further limited to production from the Red Fork formation only
as found in the Soddie #1-2 well from 11, 235' to 11, 620' subsurface. It is
expressly understood and agreed that this Partial Assignment of Oil and Gas
Leases pertains to and covers only production from the WELLBORE of the Soddie
#1-2 well.

     Assignee shall bear it proportionate share of all royalties, overriding
royalties, and other matters presently of record, which burden the Conveyed
Premises. This assignment is specifically made subject to the terms and
conditions of that certain Letter Agreement by and between Assignor and Assignee
herein.

     This Assignment is made without warranty of title, either express or
implied, except by, through and under Assignor herein. Furthermore, the Assignor
EXPRESSLY DISCLAIMS AND NEGATES ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, AND IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE, AND ANY IMPLIED OR EXPRESS WARRANTY OF CONFORMITY TO MODELS OR SAMPLES
OF MATERIALS AS TO ALL EQUIPMENT, FIXTURES, FACILITIES, MATERIALS AND
IMPROVEMENTS HEREBY CONVEYED TO ASSIGNEE. All such equipment, fixtures,
facilities, materials and improvements are conveyed to Assignee AS IS, WHERE IS,
AND WITH ALL FAULTS.

     The terms and provisions of this Assignment shall be binding upon and shall
inure to the benefit of Assignor and Assignee, their respective heirs or
successors and assigns, and shall be covenants running with the lands and leased
acreage herein assigned and with each transfer or assignment of said lease
acreage.

     IN WITNESS WHEREOF, this Assignment is executed this 16th day of July, 2001
and shall be effective as of July 1, 2001.

                                             RYAN PETROLEUM OPERATING, INC.

                                             /s/ C. CRAIG FUNK
                                             -----------------------------------
                                             C. Craig Funk, President

STATE OF OKLAHOMA       )
                        )ss.
COUNTY OF CLEVELAND     )

     The foregoing instrument was acknowledged before me this 16th day of July,
2001 by C. Craig Funk, President of Ryan Petroleum Operating, Inc., an Oklahoma
Corporation, on behalf of the corporation.

                                                        /s/ SUSAN J. FUNK
My commission expires:                          --------------------------------
                                                        Notary Public
12/30/2001
-------------------------
                                Return to:
[NOTARY SEAL]                       Creede Oil & Gas Company
                                    3217 Bart Conner Drive, Suite A
                                    Norman, OK 73072
<PAGE>
                                  EXHIBIT "A"

Attached to and made a part of that certain Partial Assignment and Bill of Sale
(Wellbore Only) dated effective July 1, 2001, by and between Ryan Petroleum,
Operating, Inc., Assignor and TBX Resources, Inc., Assignee.

<Table>
<S>                                 <C>
                  TBI Lease No.:    800975B
                         Lessor:    Carl J. Bode and Frances E. Bode, his wife
                         Lessee:    Union Oil Company of California
                           Date:    January 9, 1973
                      Recording:    Volume 206, Page 134
                    Description:    Lands accreting into Section 2-12N-12W
                                    Caddo County, Oklahoma, from
                                    Section 35-13N-12W. Blaine County,
                                    Oklahoma

                  TBI Lease No.:    800976
                         Lessor:    Doris W. Neustadt Marital Trust, Walter
                                    Neustadt, Jr. Trust, Jean Neustadt Levy Trust,
                                    Allan Neustadt Trust, Joan Neustadt Levy Trust,
                                    u/w/o Walter Neustadt, Deceased
                         Lessee:    D.J. Murphy
                           Date:    January 23, 1973
                      Recording:    Volume 208, Page 400
                    Description:    Lands accreting into Section 2-12N-12W
                                    Caddo County, Oklahoma, from
                                    Section 36-13N-12W. Blaine County,
                                    Oklahoma

                  TBI Lease No.:    800978
                         Lessor:    William N. London and W. Joe London
                         Lessee:    Mobil Oil Corporation
                           Date:    October 7, 1970
                      Recording:    Volume 541, Page 525
                    Description:    Lands accreting into Section 2-12N-12W
                                    Caddo County, Oklahoma, from
                                    Section 3-12N-12W. Caddo County,
                                    Oklahoma

                  TBI Lease No.:    800993A
                         Lessor:    Ray H. Karlin and Almeda Karlin, husband & wife
                         Lessee:    American Hydrocarbon Company
                           Date:    May 15, 1973
                      Recording:    Volume 610, Page 451
                    Description:    Lots 1, 2, 3, 4, and S/2 N/2 Section 2-12N-12W
                                    Caddo County, Oklahoma, together with all
                                    riparian rights and accretions thereto

                  TBI Lease No.:    800993B
                         Lessor:    Viola B. Jelks and J.T. Jelks wife and husband
                         Lessee:    American Hydrocarbon Company
                           Date:    August 6, 1973
                      Recording:    Volume 616, Page 407
                    Description:    Lots 1, 2, 3, 4, and S/2 N/2 Section 2-12N-12W
                                    Caddo County, Oklahoma, together with all
                                    riparian rights and accretions thereto

                  TBI Lease No.:    800993C
                         Lessor:    Hattie E. Spurrier and R.W. Spurrier
                                    wife and husband
                         Lessee:    American Hydrocarbon Company
                           Date:    August 3, 1973
                      Recording:    Volume 616, Page 405
                    Description:    Lots 1, 2, 3, 4, and S/2 N/2 Section 2-12N-12W
                                    Caddo County, Oklahoma, together with all
                                    riparian rights and accretions thereto
</Table>

                                    [STAMP]

<PAGE>
<Table>
<S>                                 <C>
                  TBI Lease No.:    800993D
                         Lessor:    Ethel M. Thompson and W.H. Thompson
                                    wife and husband
                         Lessee:    American Hydrocarbon Company
                           Date:    August 3, 1973
                      Recording:    Volume 621, Page 79
                    Description:    Lots 1, 2, 3, 4, and S/2 N/2 Section 2-12N-12W
                                    Caddo County, Oklahoma, together with all
                                    riparian rights and accretions thereto

                  TBI Lease No.:    800996
                         Lessor:    S.V. Schroder a widow
                         Lessee:    Mobil Oil Corporation
                           Date:    September 21, 1970
                      Recording:    Volume 540, Page 99
                    Description:    S/2 Section 2-12N-12W. Caddo County, Oklahoma

                  TBI Lease No.:    801033
                         Lessor:    Chicago, Rock Island and Pacific Railroad Company
                         Lessee:    W.M. Bryan, Inc.
                           Date:    March 15, 1977
                      Recording:    Volume 593, Page 598
                    Description:    Part of NW/4 Section 2-12N-12W.
                                    Caddo County, Oklahoma more particularly described
                                    as follows:

                                    Beginning at a point on the Northerly right
                                    of way line of the Chicago, Rock Island and
                                    Pacific Railroad Company, which point is 50
                                    feet Northerly from the center line of main
                                    track, and measured at right angles thereto
                                    at Engineer's Station 1540 plus 00, thence
                                    Northerly at right angles to said main track
                                    25 feet, thence Easterly at right angles
                                    parallel to the Northerly right of way line
                                    and 25 feet Northerly therefrom 200 feet
                                    thence Southerly at right angles 25 feet to
                                    the Northerly right of way line thence
                                    Westerly along said right of way line 200
                                    feet to place of beginning and containing 11
                                    acres.

                                    Also beginning on the Southerly right of way
                                    line of the Chicago, Rock Island and Pacific
                                    Railroad Company and which point is 50 feet
                                    Southerly from the center line of main track
                                    and measured at right angles thereto at
                                    Engineer's Station 1540 plug 00, thence
                                    Southerly at right angles to said main track
                                    25 feet thence Easterly at right angles
                                    parallel to the Southerly right of the way
                                    line and 25 feet Southerly therefrom 200
                                    feet thence Northerly at right angles 25
                                    feet to the Southerly right of way line
                                    thence Westerly along said right of way line
                                    200 feet to point of beginning and
                                    containing 11 acres

                                    A total of 22 acres more and less
</Table>

STATE OF OKLAHOMA, CADDO COUNTY
Filed for record on the 2nd day
of August, 2001, at 10:26 AM                  [CADDO COUNTY SEAL]
Book 2354, at Page 154
Documentary Stamps, $ 156
PATRICE DOLCH, County Clerk
WILMA MCCARTY Deputy

                                    [STAMP]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00034-of-00352.parquet"}]]