Document:

LETTER
      IN LIEU OF TRANSFER ORDER

    

    

    

    Attention:
      Division Order Department

     

    Re: Letter
      in
      Lieu of Transfer Orders

     

    Ladies
      and Gentlemen:

     

    Your
      company (the “Payor”) has been disbursing to UNITED
      HERITAGE CORPORATION,
      LOTHIAN
      OIL INC., LOTHIAN OIL (USA) INC.,
      LOTHIAN
      OIL TEXAS I, INC. and/or
      UHC
      NEW MEXICO CORPORATION
      (collectively, “Assignor”), Assignor’s share of revenues derived from the sale
      of oil, gas and other minerals produced from the interest in those certain
      oil
      and gas properties described on Exhibit “A” attached hereto (collectively the
“Properties”). Assignor has made an assignment of such production to
STERLING
      BANK
      (“Sterling Bank”), effective as of 7:00 o’clock a.m. on the date set forth
      below.

     

    EFFECTIVE
      DATE OF TRANSFER:                     

     

    Payor
      is
      hereby authorized and directed to remit the revenues from the sale of oil,
      gas
      and other minerals produced from the Properties on and after such effective
      time
      and date that are attributable to Assignor’s interest in the Properties to
      Sterling Bank at the following address:

     

     

    
      	 	
              Sterling
                Bank 

              Attn:
                Energy Lending Group 

              2550
                North Loop West, Suite 800 

              Houston,
                Texas 77092 

              Attn:
                Lothian Oil Inc.

               

            	 

    

    
    

    Sterling
      Bank acknowledges and agrees that its receipt of the payment of such proceeds
      from Payor shall be subject to the terms of any currently effective division
      or
      transfer orders applicable to Assignor’s interest in the
      Properties.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Assignor
      hereby ratifies, adopts and confirms his assignment and transfer to Sterling
      Bank, and does hereby assign and transfer to Sterling Bank, as of the above
      effective time and date, the interest in oil, gas and other minerals produced
      from the Properties, together with all proceeds and accounts resulting from
      the
      sale thereof.

     

    
      
        	 	 	 
	 	
                Very
                  truly yours,

              
	 	 
	 	
                STERLING
                  BANK,

              
	 	 	 
	 	
                By:
                  

              	
                /s/
                  Daniel G. Steele

              
	 	 	
                
                  

                

                Daniel
                  G. Steele,

              
	 	 	
                Senior
                  Vice President

              

      

       

      
        	 	 	 
	 	
                
                  UNITED
                    HERITAGE CORPORATION

                

              
	 	 	 
	 	
                By:
                  

              	
                /s/
                  C. Scott Wilson 

              
	 	 	
                
                  

                

                C.
                  Scott Wilson,

              
	 	 	
                
                  Chief
                    Executive Officer and
                    President

                

              

      

       

    

    
      
        	
                 

              	
                 

              	
                 

              
	
                 

              	
                
                  LOTHIAN
                    OIL INC.

                

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                By:  

              	
                /s/
                  C.
                  Scott Wilson

              
	
                 

              	
                
                  
C.
                  Scott Wilson,

              
	
                 

              	
                
                  Chief
                    Financial Officer

                

              

      

    

     

    
      
        	 	 	 
	 	
                
                  LOTHIAN
                    OIL (USA) INC.

                

              
	 	 	 
	 	
                By:
                  

              	
                /s/
                  C. Scott Wilson

              
	 	 	
                
                  

                

                C.
                  Scott Wilson,

              
	 	 	
                Chief
                  Financial Officer

              

      

      

        
          	 	 	 
	 	
                  
                    LOTHIAN
                      OIL TEXAS I, INC.

                  

                
	 	 	 
	 	
                  By:
                    

                	
                  /s/
                    C. Scott Wilson

                
	 	 	
                  
                    

                  

                  C.
                    Scott Wilson,

                
	 	 	
                  Chief
                    Financial Officer

                

        

        

        
          	 	 	 
	 	
                  

                    UHC
                      NEW MEXICO CORPORATION

                  

                
	 	 	 
	 	
                  By:
                    

                	
                  /s/
                    C. Scott Wilson

                
	 	 	
                  
                    

                  

                  C.
                    Scott Wilson,

                
	 	 	
                  
                    Chief
                      Executive Officer and
                      President

                  

                

        

        
        

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            	
                    STATE
                      OF TEXAS 

                  	
                    §

                  	 
	 	
                    §

                  	 
	
                    COUNTY
                      OF HARRIS 

                  	
                    §

                  	 

          

        

         

      

    

     

    This
      instrument was acknowledged before me on the 16th day of June 2006, by
      Daniel G. Steele, Senior Vice President, of Sterling Bank, a Texas state
      chartered banking institution, on behalf of said banking
      institution.

     

    
      	 	 	 
	 	 
	 	 	/s/ Rhonda
              Muschalik
	 	
              
NOTARY
              PUBLIC, STATE OF TEXAS
	 	 

    

    

    

      
        	
                THE
                  STATE OF TEXAS 

              	
                §

              	 
	 	
                §

              	 
	
                COUNTY
                  OF HARRIS 

              	
                §

              	 

      

      
 

    

    This
      instrument was acknowledged before me on this 15th day of June 2006, by C.
      Scott
      Wilson, Chief Executive Officer and President of United Heritage Corporation,
      a
      Utah corporation, on behalf of said corporation.

     

    
      
        	 	 	 
	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

              
	 	 	 

      

      
      

      
        	
                THE
                  STATE OF TEXAS

              	
                §

              	 
	 	
                §

              	 
	
                COUNTY
                  OF HARRIS 

              	
                §

              	 

      

       

    

    This
      instrument was acknowledged before me on this 15th day of June 2006, by C.
      Scott
      Wilson, Chief Financial Officer of Lothian Oil Inc., a Delaware corporation,
      on
      behalf of said corporation.

     

    
      
        	 	 	 
	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

              
	 	 	 

      

      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      
        	
                THE
                  STATE OF TEXAS 

              	
                §

              	 
	 	
                §

              	 
	
                COUNTY
                  OF HARRIS 

              	
                §

              	 

      

      
      

    

    This
      instrument was acknowledged before me on this 15th day of June 2006, by
      C. Scott Wilson, Chief Financial Officer of Lothian Oil (USA) Inc., a Texas
      corporation, on behalf of said corporation.

     

    
      
        	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

              
	 	 	 

      

       

    

    
      	
              
                THE
                  STATE OF TEXAS 

              

            	
              §

            	 
	 	
              §

            	 
	
              COUNTY
                OF HARRIS 

            	
              §

            	 

    

    
    

     

    This
      instrument was acknowledged before me on this 15th day of June 2006, by C.
      Scott
      Wilson, Chief Financial Officer of Lothian Oil Texas I, Inc., a Texas
      corporation, on behalf of said corporation.

    

      
        	 	 	 
	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

              
	 	 	 

      

      
      

    

    
      
        	
                THE
                  STATE OF TEXAS 

              	
                §

              	 
	 	
                §

              	 
	
                COUNTY
                  OF HARRIS 

              	
                §

              	 

      

      
      

    

    This
      instrument was acknowledged before me on this 15th day of June 2006, by C.
      Scott
      Wilson, President and Chief Executive Officer of UHC New Mexico Corporation,
      a
      New Mexico corporation, on behalf of said corporation.

     

    
      
        	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXASPROMISSORY
          NOTE 

         

        
          	
                  $20,000,000.00

                	
                  Houston,
                    Texas

                	
                  June
                    16, 2006, 

                  effective
                    as of March 31, 2006

                

        

         

        FOR
          VALUE
          RECEIVED and WITHOUT GRACE, the undersigned (“Makers”)
          jointly and severally promise to pay to the order of STERLING BANK
          (“Payee”),
          at
          its banking quarters in Houston, Harris County, Texas, the sum of TWENTY
          MILLION
          DOLLARS ($20,000,000.00), or so much thereof as may be advanced against
          this
          Note pursuant to the Amended and Restated Credit Agreement dated of even
          date
          herewith by and between Makers and Payee (as amended, restated or supplemented
          from time to time, the “Credit
          Agreement”),
          together with interest at the rates and calculated as provided in the Credit
          Agreement. 

         

        Reference
          is hereby made to the Credit Agreement for matters governed thereby, including,
          without limitation, the availability of Makers to receive advances under
          this
          Note and certain events which will entitle the holder hereof to accelerate
          the
          maturity of all amounts due hereunder. Capitalized terms used but not defined
          in
          this Note shall have the meanings assigned to such terms in the Credit
          Agreement. 

         

        This
          Note
          is issued pursuant to and is payable as provided in the Credit Agreement.
          Subject to compliance with applicable provisions of the Credit Agreement,
          Makers
          may at any time pay the full amount or any part of this Note without the
          payment
          of any premium or fee, but such payment shall not, until this Note is fully
          paid
          and satisfied, excuse the payment as it becomes due of any payment on this
          Note
          provided for in the Credit Agreement. 

         

        Without
          being limited thereto or thereby, this Note is secured by the Security
          Instruments. 

         

        THIS
          NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE STATE OF TEXAS
          WITHOUT
          GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW; PROVIDED,
          HOWEVER, THAT CHAPTER 345 OF THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN
          REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL NOT
          APPLY
          TO THIS NOTE.

         

        
          	 	 	 
	 	
                  MAKERS:

                
	 	

                  UNITED
                    HERITAGE CORPORATION

                
	 
 	 
 	 
 
	 	By:  	/s/
                  C.
                  Scott Wilson 
	 	
                  
C.
                  Scott Wilson 
	 	
                  Chief
                    Executive Officer and
                    President

                

        

      

       

      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

    

    
      
        	
                 

              	
                 

              	
                 

              
	
                 

              	
                
                  LOTHIAN
                    OIL INC.

                

              
	
                 

              	
                 

              	
                 

              
	
                 

              	
                By:  

              	
                /s/
                  C.
                  Scott Wilson

              
	
                 

              	
                
                  
C.
                  Scott Wilson

              
	
                 

              	
                
                  Chief
                    Financial Officer

                

              

      

    

     

    
      
        	 	 	 
	 	
                
                  LOTHIAN
                    OIL (USA) INC.

                

              
	 	 	 
	 	
                By:
                  

              	
                /s/
                  C. Scott Wilson

              
	 	 	
                
                  

                

                C.
                  Scott Wilson

              
	 	 	
                Chief
                  Financial Officer

              

      

      

        
          	 	 	 
	 	
                  
                    LOTHIAN
                      OIL TEXAS I, INC.

                  

                
	 	 	 
	 	
                  By:
                    

                	
                  /s/
                    C. Scott Wilson

                
	 	 	
                  
                    

                  

                  C.
                    Scott Wilson

                
	 	 	
                  Chief
                    Financial Officer

                

        

        

        
          	 	 	 
	 	
                  
                    UHC
                      NEW MEXICO CORPORATION

                  

                
	 	 	 
	 	
                  By:
                    

                	
                  /s/
                    C. Scott Wilson

                
	 	 	
                  
                    

                  

                  C.
                    Scott Wilson,

                
	 	 	
                  
                    Chief
                      Executive Officer and
                      President

                  

                

        

        
        

        
 

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          
            	
                    STATE
                      OF TEXAS 

                  	
                    §

                  	 
	 	
                    §

                  	 
	
                    COUNTY
                      OF HARRIS 

                  	
                    §

                  	 

          

        

         

      

    

     

    This
      instrument was acknowledged before me on the 16th day of June 2006, by
      Daniel G. Steele, Senior Vice President, of Sterling Bank, a Texas state
      chartered banking institution, on behalf of said banking
      institution.

     

    
      	 	 	 
	 	 
	 	 	/s/ Rhonda
              Muschalik
	 	
              
NOTARY
              PUBLIC, STATE OF TEXAS
	 	 

    

    

    

      
        	
                THE
                  STATE OF TEXAS 

              	
                §

              	 
	 	
                §

              	 
	
                COUNTY
                  OF HARRIS 

              	
                §

              	 

      

      
 

    

    This
      instrument was acknowledged before me on this 15th day of June 2006, by C.
      Scott
      Wilson, Chief Executive Officer and President of United Heritage Corporation,
      a
      Utah corporation, on behalf of said corporation.

     

    
      
        	 	 	 
	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

              
	 	 	 

      

      
      

      
        	
                THE
                  STATE OF TEXAS

              	
                §

              	 
	 	
                §

              	 
	
                COUNTY
                  OF HARRIS 

              	
                §

              	 

      

       

    

    This
      instrument was acknowledged before me on this 15th day of June 2006, by C.
      Scott
      Wilson, Chief Financial Officer of Lothian Oil Inc., a Delaware corporation,
      on
      behalf of said corporation.

     

    
      
        	 	 	 
	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

              
	 	 	 

      

      
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      
        	
                THE
                  STATE OF TEXAS 

              	
                §

              	 
	 	
                §

              	 
	
                COUNTY
                  OF HARRIS 

              	
                §

              	 

      

      
      

    

    This
      instrument was acknowledged before me on this 15th day of June 2006, by
      C. Scott Wilson, Chief Financial Officer of Lothian Oil (USA) Inc., a Texas
      corporation, on behalf of said corporation.

     

    
      
        	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

              
	 	 	 

      

       

    

    
      	
              
                THE
                  STATE OF TEXAS 

              

            	
              §

            	 
	 	
              §

            	 
	
              COUNTY
                OF HARRIS 

            	
              §

            	 

    

    
    

     

    This
      instrument was acknowledged before me on this 15th day of June 2006, by C.
      Scott
      Wilson, Chief Financial Officer of Lothian Oil Texas I, Inc., a Texas
      corporation, on behalf of said corporation.

    

      
        	 	 	 
	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

              
	 	 	 

      

      
      

    

    
      
        	
                THE
                  STATE OF TEXAS 

              	
                §

              	 
	 	
                §

              	 
	
                COUNTY
                  OF HARRIS 

              	
                §

              	 

      

      
      

    

    This
      instrument was acknowledged before me on this 15th day of June 2006, by C.
      Scott
      Wilson, President and Chief Executive Officer of UHC New Mexico Corporation,
      a
      New Mexico corporation, on behalf of said corporation.

     

    
      
        	 	 	 
	 	 	
                /s/
                  Rhonda Muschalik

              
	 	 	
                
                  

                

                NOTARY
                  PUBLIC, STATE OF TEXAS

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