Document:

Amendment No. 2 to The SunTrust Banks, Inc. Deferred Compensation Plan

 Exhibit 10.1 
 AMENDMENT NUMBER TWO TO THE 
 SUNTRUST BANKS, INC. 
 DEFERRED COMPENSATION PLAN 
 The SunTrust Banks, Inc. Deferred Compensation Plan, effective
October 1, 1999 (the “Deferral Plan”), is amended as set forth below, effective as of July 1, 2007, unless otherwise provided: 
  

	1.	Paragraph 1 is amended by adding the following new definitions: 

 “Retirement Plan” means the SunTrust Banks, Inc. Retirement Plan, as amended from time to time. 
 “Retirement”
means a Participant’s separation from service after attaining age 55 and five (5) Years of Service. 
 “Years of Service”
means a year of service for vesting purposes, including all years of service prior to and after the effective date of the Deferral Plan, as determined under the Retirement Plan. 
  

	2.	Paragraph 5.2 is revised to read as follows: 

  

	 	5.2	Exception. If a Participant’s Account consists of an Award that is subject to a vesting period (as defined in the Eligible Plan), and the Participant terminates
employment with the Corporation and its Affiliates for any reason prior to meeting the vesting requirements for such Award, then that portion of his Account that is not vested, and the earnings on such nonvested portion shall be forfeited and
deducted from the Participant’s Account. Notwithstanding the foregoing: (1) an Eligible Plan may provide that the nonvested portion of a Participant’s Account shall not be forfeited if the Participant is terminated without Cause
within three years following a Change in Control, and, in such case, the provisions of Section 9 of this Deferral Plan shall control unless the Eligible Plan provides otherwise; and (2) upon a Participant’s death, Total Disability,
Retirement or involuntary termination of employment resulting in the Participant’s eligibility to receive benefits under the SunTrust Banks, Inc. Severance Pay Plan (disregarding for purposes of determining eligibility, the Participant’s
eligibility to receive severance benefits under another severance plan or individual agreement maintained by the Corporation or an Affiliate), the Participant’s nonvested Account balance shall fully vest as of the date that forfeiture would
otherwise occur. The second clause of the preceding sentence shall apply to each Eligible Plan having any nonvested mandatory deferrals after June 30, 2007, unless an Eligible Plan specifically provides one or all of the events described in the
second clause shall not result in full vesting. 

  

	3.	Section 6.9 is revised to read as follows: 

 Distribution of Mandatory Deferrals. If a Participant’s Account contains a mandatory deferral Award, the vested portion of each mandatory deferral Award shall be paid in a lump sum upon the earlier of: (a) the specified
date(s) set forth in the Eligible Plan; or (b) the Participant’s Separation from Service (as defined in Code section 409A). In the event the Participant’s Separation from Service occurs before a specified date set forth in the
Eligible Plan, the lump sum payment shall be made in the first quarter of the calendar year immediately following the year of the Participant’s Separation from Service. Notwithstanding the foregoing, distributions may not be made to a Specified
Employee, determined in accordance with Code section 409A, upon a Separation from Service before the date which is six months after the date of the Specified Employee’s Separation from Service (of, if earlier, the date of death of the Specified
Employee).Securities Purchase Agreement

Exhibit
10.1

LOAN AGREEMENT

       This Loan Agreement
(this “Agreement”) is dated as of August 16, 2007 between
Universal Property Development and Acquisition Corporation, a Nevada
corporation (“UPDA” or the “Company”)
whose principle place of business is located at 124 N. Church Street, Jacksboro,
TX 76458, Heartland Oil and Gas Corp., a Nevada corporation
(“HOGC”), whose principal place of business is located at
1610 Industrial Drive, Paola, KS 66071, Canyon Creek Oil and Gas, Inc., a
Nevada corporation (“Canyon”), whose principal place of
business is located at 124 N. Church Street, Jacksboro, TX 76458, Catlin Oil
and Gas, Inc., a Nevada corporation (“Catlin”), whose
principal place of business is located at 124 N. Church Street, Jacksboro, TX
76458, Heartland Gas Gathering, LLC, a Kansas limited liability company
(“HGG”), whose principal place of business is located at 1610
Industrial Drive, Paola, KS 66071, Heartland Oil and Gas Inc., a Nevada
corporation (“Heartland Oil”), whose principal place of
business is located at 1610 Industrial Drive, Paola, KS 66071, UPDA
Operators, Inc., a Nevada corporation, whose principal place of business is
located at 124 N. Church St., Jacksboro, TX 76458 (“UPDAO”),
Heartland International Oil Corp., a British Virgin Island Company
(“Heartland International”), whose principal place of
business is located at 1610 Industrial Drive, Paola, KS 66071, Aztec Well
Services, Inc., a Nevada corporation (“Aztec”), whose
principal place of business is 1610 Industrial Drive, Paola, KS 66071, (Aztec,
together with HOGC, Canyon, Catlin, HGG, Heartland Oil, UPDAO, and Heartland
International, the “Subsidiary Guarantors”), whose principal
place of business is located at 106 S. Main St., Spring Hill, KS 66083, Kamal
Abdallah (“Abdallah”), a US citizen and resident of the
state of Texas, whose primary residence is 8 Links Green, San Antonio, TX 78257,
Christopher J. McCauley (“McCauley”), a US citizen and
resident of the state of Ohio, whose primary residence is 5408 Valley Pkwy.,
Brecksville, OH 44141 (Messrs. Abdallah and McCauley collectively, the
“Guarantors”) and Sheridan Asset Management, LLC, a
Delaware limited liability company whose principal place of business is located
at 1025 Westchester Avenue, Suite 311, White Plains, NY  10604
(“Sheridan” or the “Lender”). 

       WHEREAS, subject to the
terms and conditions set forth in this Agreement, the Company desires to borrow,
and the Lender desires to lend to the Company, certain funds as more fully
described in this Agreement.

       NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other
good and valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Company and the Lender agree as
follows:

ARTICLE
I.
DEFINITIONS

       1.1     Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized
terms that are not otherwise defined herein have the meanings given to such
terms in the Note (as defined herein), and (b) the following terms have the
meanings indicated in this Section 1.1:

             “Abdallah”
shall have the meaning ascribed to such term in the Preamble.

             “Action”
shall have the meaning ascribed to such term in Section 3.1(h).

             “Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the
Securities Act.  With respect to a Lender, any investment fund or managed
account that is managed on a discretionary basis by the same investment manager
as the Lender will be deemed to be an Affiliate of the
Lender.

   

             “Aztec”
shall have the meaning ascribed to such term in the Preamble. 

             “Business
Day” means any day except Saturday, Sunday and any day which shall be
a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.

             “Canyon”
shall have the meaning ascribed to such term in the Preamble.

             “Catlin”
shall have the meaning ascribed to such term in the Preamble.

             “Closing”
means the closing of the Loan pursuant to Section 2.1.

             “Closing
Date” means the Business Day when all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Lenders’ obligations to deliver the Loan
Amount and (ii) the Company’s obligations to deliver the Note, have been
satisfied or waived.

             “Common
Stock” means the common stock of the Company, par value $.001, and any
securities into which such common stock shall hereinafter have been reclassified
into.

             “Company”
shall have the meaning ascribed to such term in the Preamble.

             “Company’s
Counsel” means McGuireWoods LLP.

             “Controlled
Account” shall have the meaning ascribed to such term in Section
4.6.

             “Disclosure
Schedules” shall have the meaning ascribed to such term in Section
3.1 hereof.

             “Eligible
Transaction Costs” means the Lender’s counsel legal fees,
Lender’s due diligence fees not reimbursed as of the Closing Date and an
investment fee as set forth in Schedule 1.

             “Financial
Statements” shall have the meaning ascribed to such term in Section
3.1(f).

             “GAAP”
shall have the meaning ascribed to such term in Section 3.1(f)
hereof.

             “Guaranty”
means those certain Amended and Restated Guaranty Agreements delivered by the
Guarantors. 

             “Guarantors”
shall have the meaning ascribed to such term in the Preamble. 

             “HGG”
shall have the meaning ascribed to such term in the Preamble. 

             “Heartland
International” shall have the meaning ascribed to such term in the
Preamble. 

             “Heartland
Oil” shall have the meaning ascribed to such term in the Preamble.

2
   

             “HOGC”
shall have the meaning ascribed to such term in the Preamble. 

             “Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(x).

             “Intellectual
Property Rights” shall have the meaning ascribed to such term in
Section 3.1(m).

             “Interests”
shall have the meaning given such term in the Purchase Agreement.

             “Investment
Company Act” shall have the meaning ascribed to such term in
Section 3.1(s).

             “Lender”
shall have the meaning ascribed to such term in the Preamble. 

             “Lender
Monthly Payment” shall have the meaning ascribed to such term in
Section 4.6.

             “Lender
Party” shall have the meaning ascribed to such term in the Preamble.

             “Liens”
means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction. 

             “Loan”
shall have the meaning ascribed to such term in Section 2.1. 

             “Loan
Amount” means, as to the Lender, the aggregate principal amount of the
Note, in United States Dollars.

             “Loan
Party” means any of the Company, the Subsidiaries and the
Guarantor.

             “Material
Adverse Effect” shall have the meaning assigned to such term in
Section 3.1(a) hereof.

             “Material
Permits” shall have the meaning ascribed to such term in Section
3.1(k).

             “Mortgage”
shall mean the mortgages in favor of the Lender secured by each property listed
on Schedule A attached hereto.

             “McCauley”
shall have the meaning ascribed to such term in the Preamble. 

             “Note”
means the Senior Secured Promissory Note, dated August 16, 2007,  due, subject
to the terms therein, thirty-six (36) months from its date of issuance, issued
by the Company to the Lender hereunder, in the form of Exhibit
A.

             “Operating
Subsidiaries” shall have the meaning ascribed to such term in the
Preamble. 

             “Palo
Pinto Assets” means the Interests purchased by the Company pursuant to
the terms of the Purchase Agreement. 

             “Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

3
   

             “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

             “Purchase
Agreement” means the Purchase and Sale Agreement, dated July 10, 2007,
by and between the Catlin, as buyer and Jilpetco, Inc., Petro Pro, Ltd., PKC
Energy, LLC and Jed Miesner, as sellers. 

             “Registration
Rights Agreement” means that certain Amended and Restated Registration
Rights Agreement dated the date hereof, between HOGC and the Lender.

             “Rule
144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

             “Sales
Rate” shall have the meaning ascribed to such term in Section
4.8.

             “Securities
Act” means the Securities Act of 1933, as amended.

             “Security
Agreement” means the Amended and Restated Security Agreement, dated
the date hereof, among the Company, the Lender and any and all of the
Company’s Subsidiaries, in the form of Exhibit B attached
hereto.

             “Security
Documents” means the Security Agreement, the Guaranty, the Subsidiary
Guarantee(s), the Mortgages and any other documents and filings required
thereunder in order to grant the Lenders a perfected security interest in all of
the assets of the Company and the property pledged or encumbered by the Guaranty
or the Mortgage, including but not limited to all UCC-1 filing
receipts.

             “Settlement
Date” shall have the meaning ascribed to such term in Section
4.6.

             “Sheridan”
or the “Lender” shall have the meaning ascribed to such term
in the Preamble. 

             “Subordination
Agreement” means that certain Amended and Restated Subordination
Agreement dated the date hereof between Lender, the Company, the Guarantors and
the Subsidiary Guarantors.

             “Subordinated
Debt” shall have the meaning ascribed to such term in the
Subordination Agreement.

             “Subsidiary”
means any subsidiary of the Company.

             “Subsidiary
Guarantee(s)” means the Amended and Restated Guarantee Agreement
executed by each of the Lender and the Subsidiary Guarantors and in the form of
Exhibit C attached hereto.

             “Subsidiary
Guarantors” shall have the meaning ascribed to such term in the
Preamble. 

             “Sufficient
Notice” shall have the meaning ascribed to such term  Section
4.11.

             “Target
Date” shall have the meaning ascribed to such term in Section
4.8. 

4
   

             “Transaction
Documents” means this Agreement, the Note, the Security Documents, the
Registration Rights Agreement, the Warrant, the Subordination Agreement and any
other documents or agreements executed in connection with the transactions
contemplated hereunder or required to be executed pursuant to the terms of any
Transaction Document.

             “UPDA”
or the “Company” shall have the meaning ascribed to such term
in the Preamble.

             “UPDA
First Loan Agreement” means the Loan Agreement, dated April 6, 2007,
as amended and restated as of August 16, 2007 by and among the Guarantor, the
Lender, Canyon Creek Oil and Gas, Inc., Catlin Oil and Gas, Inc., Kamal Abdallah
and Christopher J. McCauley, as such agreement maybe amended from time to
time.

             “UPDA
First Note” means the Note Senior Secured Promissory dated April 6,
2007, as amended, due, subject to the terms therein, one year from its date of
issuance, issued by UPDA to the Lender, as amended from time to time.

             “UPDAO”
shall have the meaning ascribed to such term in the Preamble. 

             
Warrant” means that certain Warrant, dated the hereof, issued by
HOGC to the Lender, in the Form of Exhibit D. 

ARTICLE II.
PURCHASE AND
SALE       

       2.2     Deliveries

	

a)

	

On the Closing Date, the Company shall deliver or cause to
delivered to the Lender with respect to the Loan the following:

	
 
	
 	

(i)

	

this Agreement duly executed by the Company;

	
 	
 	
 
	
 	

(ii)

	

a Note with a principal amount equal to the Lender’s Loan
Amount, in the name of such Lender;

	
 	
 	
 
	
 	

(iii)

	

the Security Agreement, duly executed by the Company, along with
all of the Security Documents;

	
 	
 	
 
	
 	

(iv)

	

the Warrant, duly executed by the Company;

	
 	
 	
 
	
 	

(v)

	

the Registration Rights Agreement, duly executed by the
Company;

5
   

	
 	

(vi)

	

the Subordination Agreement, duly executed by the Company,
Guarantors and Subsidiary Guarantors;

	
 	
 	
 
	
 	

(vii)

	

a legal opinion of Company’s Counsel in form and substance
satisfactory to the Lender;

	
 	
 	
 
	
 	

(viii)

	

evidence satisfactory to the Lender, in its discretion, as to the
Company’s entry into the Purchase Agreement and other definitive
agreements to acquire the Interest;

	
 	
 	
 
	
 	

(ix)

	

the Guaranty, duly executed by Abdallah and McCauley; Subsidiary
Guarantors;

	
 	
 	
 
	
 	

(x)

	

unaudited financial statements for quarter ended June 30,
2007.

	
 	
 	
 
	
 	

(xi)

	

Amendment to the UPDA First Loan Agreement, duly executed by
UPDA, the Operating Subsidiaries, Abdallah and McCauley ; and

	
 	
 	
 
	
 	

(xii)

	

Amendment to the UPDA First Note, duly executed by
UPDA;

	
 	
 	
 
	

b)

	

On the Closing Date, the Lender shall deliver or cause to be
delivered to Company the following: 

	
 
	
 	

(i)

	

this Agreement, duly executed by such Lender;

	
 
	
 	

(ii)

	

the Security Agreement, duly executed by such Lender; 

	
 
	
 	

(iii)

	

the Registration Rights Agreement, duly executed by the Lender;

	
 
	
 	

(iv)

	

the Subordination Agreement, duly executed by the
Lender;

	
 
	
 	

(v)

	

the Loan Amount, in accordance with the Use of Proceeds attached
hereto as Schedule 2.2(b); 

	
 
	
 	

(vi)

	

the Amendment to the UPDA First Loan Agreement, duly executed by
the Lender; and

	
 
	
 	

(vii)

	

the UPDA First Note.

	
 

       2.3     Closing
Conditions. 

	

a)

	

The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:

	
 
	
 	

(i)

	

the accuracy in all material respects when made and on the
Closing Date of the representations and warranties of the Lender contained
herein;

	
 
	
 	

(ii)

	

all obligations, covenants and agreements of the Lender required
to be performed at or prior to the Closing Date shall have been performed;

6
   

	
 
	
 	

(iii)

	

the delivery by the Lender of the items set forth in Section
2.2(b) of this Agreement; and

	
 
	
 	

(iv)

	

the Company  shall have taken out a key man insurance policy on
Kamal Abdallah in an amount equal to no less than $10,000,000, which policy
designates the Lender as the additional insured thereof and delivered a
certificate of insurance evidencing the issuance of such policy.  

	
 
	

b)

	

The obligations of the Lender hereunder in connection with the
Closing are subject to the following conditions being met:

	
 	
 
	
 	

(i)

	

the accuracy in all material respects on the Closing Date of the
representations and warranties of the Company contained herein;

	
 
	
 	

(ii)

	

all obligations, covenants and agreements of the Company required
to be performed at or prior to the Closing Date shall have been
performed;

	
 
	
 	

(iii)

	

no Event of Default under the Note shall have occurred and be
continuing or would result after giving effect to the transaction contemplated
on the Closing Date;

	
 
	
 	

(iv)

	

the Lender shall be satisfied with the results of its due
diligence investigation of the Company and the Palo Pinto Assets;

	
 
	
 	

(v)

	

the Lender shall be satisfied with the Company’s current
and projected uses of cash; 

	
 
	
 	

(vi)

	

the delivery by the Company of the items set forth in Section
2.2(a) of this Agreement;

	
 
	
 	

(vii)

	

the Company shall have no outstanding indebtedness (other than
trade payables and liabilities incurred in the ordinary course of business) or
Liens, other than those in favor of certain the Subordinated Debt; 

	
 	

(viii)

	

there shall have been no Material Adverse Effect with respect to
the Company since the date hereof; 

	
 
	
 	

(ix)

	

compliance with Section 4.7 of the UPDA First Loan
Agreement; and

	
 
	
 	

(x)

	

no banking moratorium have been declared either by the United
States, Nevada or New York State authorities nor shall there have occurred any
material outbreak or escalation of hostilities or other national or
international calamity of such magnitude in its effect on, or any material
adverse change in, any financial markets which, in each case, in the reasonable
judgment of such Lender, makes it impracticable or inadvisable to purchase the
Note at the Closing.

       The acceptance of the
benefits of the Loan shall constitute a representation and warranty by the
Company to the Lender that the conditions specified in this Section
2.3(b) have been satisfied as of the time of the Closing.

7
   

ARTICLE III.
REPRESENTATIONS
AND WARRANTIES

       3.1     Representations
and Warranties of the Company.  Except as set forth in the Disclosure
Schedule which Disclosure Schedule shall be deemed a part hereof and except
for the UPDA First Loan Agreement, the UPDA First Note, the related transaction
documents and the amendments thereto contemplated hereby, the Company hereby
makes the representations and warranties set forth below to the
Lender:

             
(a)     Organization and Qualification.  The
Company and each Subsidiary is an entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted.  The Company and each Subsidiary
is not in violation or default of any of the provisions of its articles of
incorporation, bylaws or other organizational or charter documents.  The Company
and each Subsidiary is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability of
any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business, prospects or financial condition of the Company or
any Subsidiary, taken as a whole, or (iii) a material adverse effect on any Loan
Party’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.

             
(b)     Authorization; Enforcement.  Each Loan
Party, other than Abdallah and McCauley has the requisite power and authority to
enter into and to consummate the transactions contemplated by each of the
Transaction Documents to which it is a party and otherwise to carry out its
respective obligations thereunder.  The execution and delivery of each of the
Transaction Documents by each Loan Party and the consummation by each Loan Party
of the transactions contemplated thereby have been duly authorized by all
necessary action on its part and no further action is required thereby in
connection therewith.  Each Transaction Document has been (or upon delivery will
have been) duly executed by the Loan Parties signatory thereto, and, when
delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of each such Loan Party enforceable against such Loan Party
in accordance with its terms. 

             
(c)     No Conflicts.  The execution, delivery
and performance of the Transaction Documents by each Loan Party and the
consummation by such Loan Party of the other transactions contemplated thereby
do not and will not: (i) as to each of the Company and the Subsidiaries,
conflict with or violate any provision of such Loan Party’s certificate of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of such Loan Party, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Loan Party debt or otherwise) or other understanding to
which such Loan Party is a party or by which any property or asset of such Loan
Party is bound or affected, or (iii) conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which such Loan Party is
subject (including federal and state securities laws and regulations), or by
which any property or asset of such Loan Party is bound or affected; except in
the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect.

8
   

             
(d)     Filings, Consents and Approvals.  Other
than the amendment to the UPDA First Loan Agreement and the UPDA First Note, no
Loan Party is required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other
federal, state, local or other governmental authority or other Person in
connection with its execution, delivery and performance of the Transaction
Documents.

             
(e)     Capitalization.  The capitalization of
the Company and each Subsidiary is as set forth in the Capitalization section of
the Disclosure Schedule.  Other than as set forth on the Disclosure Schedule,
the Company has no indebtedness.  The Company has not issued any capital stock
not reflected on the Disclosure Schedule.  No Person has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.
Except as set forth in the Disclosure Schedule, there are no outstanding
options, warrants, script rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to
issue additional shares of Common Stock, or securities or rights convertible or
exchangeable into shares of Common Stock.  The issuance and sale of the Note
will not obligate the Company to issue shares of Common Stock or other
securities to any Person and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price under
such securities.  All of the outstanding shares of capital stock of the Company
are validly issued, fully paid and nonassessable, have been issued in compliance
with all federal and state securities laws, and none of such outstanding shares
was issued in violation of any preemptive rights or similar rights to subscribe
for or purchase securities.  No further approval or authorization of any
stockholder, the Board of Directors of the Company or others is required for the
issuance and sale of the Note.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge of the
Company, between or among any of the Company’s stockholders.

             
(f)     Financial Condition.  The Company has
heretofore furnished to the Lender the draft consolidated audited balance sheet
of the Company as at December 31, 2006 and the related draft consolidated
audited statement of income for the fiscal year ended on said date, the
consolidated unaudited balance sheet of the Company as at June 30, 2007 and the
related consolidated unaudited statement of income for the six month period
ended on said date (the “Financial Statements”).  The
Financial Statements of the Company  have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited Financial Statements may not contain all footnotes required by
GAAP, and fairly present in all material respects the financial position of the
Company as the case may be, as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

9
   

             (g)     Material
Changes.  Since the date of its latest audited financial statements, (i)
there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP, (iii) the Company
has not altered its method of accounting, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock and (v) the Company has not issued any equity securities to
any officer, director or Affiliate, except pursuant to existing Company stock
option plans. 

             (h)     Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of any Loan Party, threatened against
or affecting any Loan Party, or any of its properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the
Note or (ii) could, if there were an unfavorable decision, have or reasonably be
expected to result in a Material Adverse Effect.  Neither the Company nor any
director or officer thereof is or has been the subject of any Action involving a
claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.

             (i)     Labor
Relations.  No material labor dispute exists or, to the knowledge of any
Loan Party, is imminent with respect to any of the employees of the Company or
any Subsidiary which could reasonably be expected to result in a Material
Adverse Effect.

             (j)     Compliance.
Assuming execution and delivery of the amendments to the UPDA First Loan
Agreement and UPDA First Note, each Loan Party (i) is not in default under or in
violation of (and no event has occurred that has not been waived that, with
notice or lapse of time or both, would result in a default by such Loan Party
under), nor has such Loan Party received notice of a claim that it is in default
under or that it is in violation of, any indenture, loan or credit agreement or
any other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has been
waived), (ii) is not in violation of any order of any court, arbitrator or
governmental body, and (iii) is not or has not been in violation of any statute,
rule or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws applicable to its business except in
each case as could not have a Material Adverse Effect.

             
(k)     Regulatory Permits.  Each Loan Party
possesses all certificates, authorizations and permits issued by the appropriate
federal, state, local or foreign regulatory authorities necessary to conduct its
businesses, except where the failure to possess such permits could not have or
reasonably be expected to result in a Material Adverse Effect
(“Material Permits”), and the Company has not received any
notice of proceedings relating to the revocation or modification of any Material
Permit.

             (l)     Title
to Assets.  Each Loan Party has good and marketable title in fee simple to
all real property it owns that is material to its business and good and
marketable title in all personal property and other tangible or intangible
assets it owns that is material to its business, including but not limited to
oil and gas exploration and drilling rights, in each case free and clear of all
Liens, except for liens arising under the UPDA First Loan Agreement and related
transaction documents, and Subordinated Debt.  Any real property and facilities
held under lease by each Loan Party are held under valid, subsisting and
enforceable leases of which such Loan Party is in
compliance.

10
   

             
(m)     Patents and Trademarks.  Each Loan Party
has, or has rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, copyrights, licenses and
other similar rights necessary or material for use in connection with its
respective businesses and which the failure to so have could have a Material
Adverse Effect (collectively, the “Intellectual Property
Rights”).  No Loan Party has received a written notice that the
Intellectual Property Rights used by each Loan Party violates or infringes upon
the rights of any Person.  To the knowledge of each Loan Party, all such
Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights of
others.

             
(n)     Insurance.  Each Loan Party is insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which such
Loan Party is engaged, at least equal to the aggregate Loan Amount.  To the best
such Loan Party’s knowledge, such insurance contracts and policies are
accurate and complete.  Each Loan Party has no reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.

             
(o)     Transactions With Affiliates and
Employees.  None of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company or any Subsidiary
is presently a party to any transaction with the Company or any Subsidiary
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, any entity in which any officer, director, or any such employee has
a substantial interest or is an officer, director, trustee or partner, in each
case in excess of $10,000.

             
(p)     Internal Accounting Controls.  The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. 

             
(q)     Certain Fees.  Except as set forth on
Schedule 3.1(q), no brokerage or finder’s fees or commissions are
or will be payable by any Loan Party to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement.  The Lender
shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by this
Agreement.

11
   

             (r)     Private
Placement.  Assuming the accuracy of the Lender’s representations and
warranties set forth in Section 3.2, no registration under the Securities
Act is required for the offer and sale of the Note by the Company to the Lender
as contemplated hereby.

             (s)     Investment
Company.  The Company is not, and is not an Affiliate of, and immediately
after receipt of payment for the Note, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company
Act of 1940, as amended (“Investment Company Act”).  The
Company shall conduct its business in a manner so that it will not become
subject to the Investment Company Act.

             (t)     Sophisticated
Borrower.  The Company has assets of at least $2,000,000 in value as
reflected in its financial statements dated not more than ninety (90) days prior
to the date of this Agreement which financial statements have been prepared in
accordance with generally accepted accounting principles, and the Company and
the Guarantor by reason of their business and financial experience, or that of
their professional advisors, have the capacity to protect their own interests
and the interests of the Company in connection with the Loan. 

             (u)     Application
of Takeover Protections.  The Company and its Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the
Company’s Certificate of Incorporation (or similar charter documents) or
the laws of its state of incorporation that is or could become applicable to the
Lender as a result of the Lender and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Note and the
Lender’s ownership of the Note.

             (v)     Disclosure.
All disclosure provided to the Lender regarding the Company, its business and
the transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, furnished by or on behalf of the Company with respect to the
representations and warranties made herein are true and correct with respect to
such representations and warranties and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.  The Company acknowledges and agrees that the Lender does
not make and has not made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.

             (w)     Federal
Reserve Regulations.  No Loan Party is engaged in the business of extending
credit for the purpose of buying or carrying Margin Stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, and no
part of the proceeds of any advance will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for any purpose
that entails a violation of, or that is inconsistent with, the provisions of the
Regulations of the Board of Governors of the Federal Reserve System, including,
to the extent applicable, Regulation U and Regulation
X.

12
   

             (x)     Solvency.
Based on the financial condition of the Company as of the Closing Date after
giving effect to the receipt by the Company of the proceeds from the sale of the
Note hereunder and the application of the proceeds thereof, (i) the
Company’s fair saleable value of its assets exceeds the amount that will
be required to be paid on or in respect of the Company’s existing debts
and other liabilities (including known contingent liabilities) as they mature;
(ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business for the current fiscal year as now conducted and as
proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, and
projected capital requirements and capital availability thereof; and (iii) the
current cash flow of the Company, together with the proceeds the Company would
receive, were it to liquidate all of its assets, after taking into account all
anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its debt when such amounts are required to be paid.  The Company does
not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in
respect of its debt).  The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.  The Financial Statements of the Company
set forth as of the dates thereof all outstanding secured and unsecured
Indebtedness of the Company or for which the Company has commitments.  For the
purposes of this Agreement, “Indebtedness” shall mean (a) any
liabilities for borrowed money or amounts owed other than trade accounts payable
incurred in the ordinary course of business, (b) all guaranties, endorsements
and other contingent obligations in respect of Indebtedness of others, whether
or not the same are or should be reflected in the Company’s balance sheet
(or the notes thereto), except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business; and (c) the present value of any lease payments due under
leases required to be capitalized in accordance with GAAP.  The Company is not
in default with respect to any Indebtedness.

             (y)     Tax
Status.  Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and its subsidiaries have filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and neither Company nor any of its subsidiaries has any
knowledge of a tax deficiency which has been asserted or threatened against
it.

             (z)     Patriot
Act.  The Company certifies that, to the best of Company’s knowledge,
neither the Company nor any of its Subsidiaries has been designated, and is not
owned or controlled, by a “suspected terrorist” as defined in
Executive Order 13224.  The Company hereby acknowledges that the Lender
seeks to comply with all applicable laws concerning money laundering and related
activities.  In furtherance of those efforts, the Company hereby represents,
warrants and agrees that:  (i) none of the cash or property that the Company or
any of its Subsidiaries will pay or will contribute to the Lender has been
or shall be derived from, or related to, any activity that is deemed criminal
under United States law; and (ii) no contribution or payment by the Company or
any of its Subsidiaries to the Lender, to the extent that they are within
the Company’s and/or its Subsidiaries’ control shall cause
the Lender to be in violation of the United States Bank Secrecy Act, the
United States International Money Laundering Control Act of 1986 or the United
States International Money Laundering Abatement and Anti-Terrorist Financing Act
of 2001.  The Company shall promptly notify the Lender if any of these
representations ceases to be true and accurate regarding the Company or any of
its Subsidiaries.  The Company agrees to provide the Lender any additional
information regarding the Company or any of its Subsidiaries that the Lender
deem necessary or convenient to ensure compliance with all applicable laws
concerning money laundering and similar activities.  The Company understands and
agrees that if at any time it is discovered that any of the foregoing
representations are incorrect, or if otherwise required by applicable law or
regulation related to money laundering similar activities, the Lender may
undertake appropriate actions to ensure compliance with applicable law or
regulation, including but not limited to segregation and/or acceleration of the
obligations to the Lender under the Note and the other Transaction Documents.
The Company further understands that the Lender may release confidential
information about the Company and its Subsidiaries and, if applicable, any
underlying beneficial owners, to proper authorities if a Lender, in its
sole discretion, determines that it is in the best interests of such Lender
in light of relevant rules and regulations under the laws set forth in
subsection (ii) above.

13
   

             (aa)     Foreign
Corrupt Practices.  Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any corrupt funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is  in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended

             (bb)     Seniority.
As of the Closing Date, no indebtedness or other equity of the Company is senior
to, or pari passu with, the Note in right of payment, whether with respect to
interest or upon liquidation or dissolution, or otherwise, other than
indebtedness secured by purchase money security interests (which is senior only
as to underlying assets covered thereby) and capital lease obligations (which is
senior only as to the property covered thereby).

             (cc)     No
Disagreements with Accountants and Lawyers.  There are no disagreements of
any kind presently existing, or reasonably anticipated by the Company to arise,
between the accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to its
accountants and lawyers.  By making this representation, the Company does not,
in any manner, waive the attorney/client privilege or the confidentiality of the
communications between the Company and its lawyers.

             (dd)     Acknowledgment
Regarding Lender’s Making the Loan.  The Company acknowledges and
agrees that the Lender is acting solely in the capacity of an arm’s length
Lender with respect to the Transaction Documents and the transactions
contemplated hereby.  The Company further acknowledges that the Lender is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby and any advice given by the Lender or any of its representatives or
agents in connection with this Agreement and the transactions contemplated
hereby is merely incidental to the Lender’s making of the Loan.  The
Company further represents to the Lender that the Company’s decision to
enter into this Agreement has been based solely on the independent evaluation of
the transactions contemplated hereby by the Company and its representatives.

             (ee)     Press
Release.  The Company will issue a press release reasonably satisfactory to
the Lender and subject to the Lender’s prior approval publicly announcing
the material terms of this deal within one Business Day of the Closing
Date.

             (ff)     Key
Man Insurance.  The Company shall maintain a key man insurance policy on
Abdallah in an amount equal to no less than $10,000,000 in full force and effect
while the Company’s or the Guarantor’s obligations to the Lender are
outstanding.  

14
   

       3.2     Representations
and Warranties of the Lender.  The Lender hereby, for itself and for no
other Person, represents and warrants as of the date hereof and as of the
Closing Date to the Company as follows:

             (a)     Organization;
Authority.  The Lender is an entity duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization with full
right, corporate or partnership power and authority to enter into and to
consummate the transactions contemplated by the Transaction Documents and
otherwise to carry out its obligations thereunder. The execution, delivery and
performance by the Lender of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate or similar action on the
part of the Lender.  Each Transaction Document to which it is a party has been
duly executed by the Lender, and when delivered by the Lender in accordance with
the terms hereof, will constitute the valid and legally binding obligation of
the Lender, enforceable against it in accordance with its terms, except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

             (b)     Experience
of the Lender.  The Lender, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Note and the Warrant, and has so evaluated the
merits and risks of such investment.  The Lender is able to bear the economic
risk of an investment in the Note and the Warrant and, at the present time, is
able to afford a complete loss of such investment.

       The Company
acknowledges and agrees that the Lenders do not make or have not made any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in this Section
3.2.

ARTICLE IV.
OTHER AGREEMENTS
OF THE PARTIES

       4.1     Securities
Laws Disclosure; Publicity.  The Company and the Lender shall consult with
each other in issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor the Lender shall issue any such
press release or otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of the Lender, or
without the prior consent of the Lender, with respect to any press release of
the Company, which consent shall not unreasonably be withheld, except if such
disclosure is required by law, in which case the disclosing party shall promptly
provide the other party with prior notice of such public statement or
communication. 

       4.2     Shareholder
Rights Plan.  No claim will be made or enforced by the Company or, to the
knowledge of the Company, any other Person that the Lender is an
“Acquiring Person” under any shareholder rights plan or similar plan
or arrangement in effect or hereafter adopted by the Company, or that the Lender
could be deemed to trigger the provisions of any such plan or arrangement, by
virtue of receiving the Note and the Warrant, or the exercise thereof, under the
Transaction Documents or under any other agreement between the Company and the
Lender. The Company shall conduct its business in a manner so that it will not
become subject to the Investment Company Act.

15
   

       4.3     Use
of Proceeds.  The Company shall use all of the net proceeds from the Loan
Amount for the acquisition of Palo Pinto Assets, including Eligible Transaction
Costs. 

       4.4     Reimbursement.
If the Lender becomes involved in any capacity in any Proceeding by or against
any Person who is a stockholder of the Company (except as a result of sales,
pledges, margin sales and similar transactions by the Lender to or with any
current stockholder), solely as a result of the Lender’s acquiring the
Note under this Agreement, the Company will reimburse the Lender for its
reasonable legal and other expenses (including the cost of any investigation
preparation and travel in connection therewith) incurred in connection
therewith, as such expenses are incurred.  The reimbursement obligations of the
Company under this paragraph shall be in addition to any liability which the
Company may otherwise have, shall extend upon the same terms and conditions to
any Affiliates of the Lender who are actually named in such action, proceeding
or investigation, and partners, directors, agents, employees and controlling
persons (if any), as the case may be, of the Lender and any such Affiliate, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of the Company, the Lender and any such Affiliate
and any such Person.  The Company also agrees that neither the Lender nor any
such Affiliates, partners, directors, agents, employees or controlling persons
shall have any liability to the Company or any Person asserting claims on behalf
of or in right of the Company solely as a result of acquiring the Note under
this Agreement.

       4.5     Indemnification
of Lender.  Subject to the provisions of this Section 4.6, each Loan
Party will indemnify and hold the Lender and its directors, officers,
shareholders, partners, employees and agents (each, a “Lender
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees
and costs of investigation that any Lender Party may suffer or incur as a result
of or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against the Lender, or any of
them or their respective Affiliates, by any stockholder of the Company who is
not an Affiliate of the Lender, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is based upon a
breach of the Lender’s representation, warranties or covenants under the
Transaction Documents or any agreements or understandings the Lender may have
with any such stockholder or any violations by the Lender of state or federal
securities laws or any conduct by the Lender which constitutes fraud, gross
negligence, willful misconduct or malfeasance).  If any action shall be brought
against any Lender Party in respect of which indemnity may be sought pursuant to
this Agreement, the Lender Party shall promptly notify the Company in writing,
and the Company shall have the right to assume the defense thereof with counsel
of its own choosing.  Any Lender Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the Lender Party except
to the extent that (i) the employment thereof has been specifically authorized
by the Company in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of such separate counsel, a material
conflict on any material issue between the position of the Company and the
position of the Lender Party.  The Company will not be liable to any Lender
Party under this Agreement (i) for any settlement by a Lender Party effected
without the Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (ii) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Lender
Party’s breach of any of the representations, warranties, covenants or
agreements made by the Lender in this Agreement or in the other Transaction
Documents.

16
   

       4.6     Controlled
Account.  All amounts of cash generated from the Palo Pinto Assets shall be
deposited in a controlled bank account  in the name of the Company and
controlled by the Lender at account # 2000030407338 with Wachovia Bank, National
Association, Mail Code NC 0817, 301
South Tryon Street -Floor M7, Charlotte, North Carolina
28288 (“Controlled Account”).  The
Company shall irrevocably notify all purchasers of the products sold from the
Palo Pinto Assets of their requirement to make all payments to the Controlled
Account in the form attached hereto as Exhibit E.  In the event such
purchasers shall pay the Company directly instead of the Controlled Account, the
Company will retain such funds in trust for the benefit of the Lender and
promptly turn over such funds to the Controlled Account.  On the 15th
of every month (“Settlement Date”) so long as no Event of
Default has occurred and is continuing, all fund on deposit in the Controlled
Account shall be applied by the Lender in the following priority:  (i) to pay
the Royalty Amount (defined below) in the manner set forth below, (ii) all
expenses incurred by Lender in connection with the collection of amounts due
under the Note (“Lender Monthly Payments”), (iii) all Lender
approved requests by the Company to fund the Company’s royalty expenses
arising from the Company’s liabilities as an operator of the Palo Pinto
Assets (iv) all accrued and unpaid interest due as of such Settlement Date, (v)
all principal payments due under the Note as of such Settlement Date, (vi) all
other amounts above $500,000 remaining in the Controlled Account shall be paid
to the Company and (vii) on or after the Maturity Date upon payment of all
obligations under the Transaction Documents, all amounts remaining in the
Controlled Account may be released from the Controlled Account to the Company.
If the Controlled Account shall not have the sufficient funds to pay the Lender
Monthly Payments on the Settlement Date, then the Company shall be required to
deposit such funds in the Controlled Account by the Settlement Date to cover the
Lender Monthly Payments.  The Company shall deliver to the lender a certificate
certified by the Company’s Chief Executive Officer, 5 days prior to each
Settlement Date, setting forth the Royalty Amount and payee information ,
together with a list of each of the royalty participants of the Palo Pinto
Assets and the portion of the Royalty Amount such participant shall be entitled
to receive.  For purposes of this Section 4.6, “Royalty
Amount” shall mean the monthly amounts calculated by the Company that
are owed to the royalty participants of the Palo Pinto Assets set forth on
Schedule 4.6.

       4.7     Liens.
The Company shall not create, incur or permit to exist any mortgage, pledge,
encumbrance, lien, security interest or charge any kind on its property or
assets, whether now owned or hereafter acquired, or upon income, profits or
proceeds therefrom, without the prior written consent of the Lender, other than
those arising under the Transaction Documents and the UPDA First Loan
Agreement.

       4.8     Maintenance
of Palo Pinto Assets.  On or before the six-month anniversary of the
Closing, the Palo Pinto Assets shall have achieved average daily gas sales from
production (“Sales Rate”) at a rate of not less than 2,000
mcf/de, as measured for any 30 day period ending on or before such six-month
anniversary (the last day of such period herein after referred to as the
“Target Date”).  For each period commencing on and including
the day after the Target Date and ending on and excluding the first anniversary
thereof, the Company shall maintain a Sales Rate for the Palo Pinto Assets that
is not less than 75% of the Sales Rate achieved for the immediately preceding 12
month period.

       4.9     Dividends.
The Company shall not pay any dividends or any other capital distributions to
its shareholders while the Note remains issued and outstanding.

       4.10     Reports.
The Company shall maintain books of records and account in which full, correct
and current entries in accordance with GAAP will be made of all its dealings,
business and affairs and the Company will deliver to Lender the
following:

             (a)     monthly
sales reports for the Palo Pinto Assets on the 15th day of each month
following the month of such report;

             (b)     quarterly
audited financial statements as required by the Securities and Exchange
Commission (“SEC”) on the date filed with the SEC;
and

17
   

             (c)     monthly
statements of gas and liquids, measured at the well heads, production on the
15th day of each month following the month of such report.

       4.11     Right
of First Refusal.  In the event that the Company shall seek new capital
financing, the Company shall notify the Lender and provide the Lender with
sufficient information regarding the financing that would allow Lender to make a
determination  (the “Sufficient Notice”), and Lender shall
have the first right to provide such financing.  Within 5 days of the receipt of
the Sufficient Notice, the Lender shall inform the Company whether it will
provide such financing.

ARTICLE
V.
MISCELLANEOUS

       5.1     Fees.
At the Closing, the Company has agreed to (i) pay the Lender a closing fee of
$97,500 and (ii) reimburse the Lender’s reasonable out-of-pocket expenses,
including but not limited to due diligence and legal expenses.  The Company has
previously delivered to the Lender a non-refundable deposit of $60,000 for legal
fees and due diligence.  Except as expressly set forth in the Transaction
Documents to the contrary, the Loan Parties shall pay the fees and expenses of
its advisers, counsel, accountants and other experts for both parties, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.  The Company
shall pay Lender a $100,000.00 “break-up fee” plus or minus any due
diligence expense adjustments should Lender stand ready to close a financing
substantially in conformance with the terms provided hereunder and Company
chooses not to close

       5.2     Entire
Agreement.  The Transaction Documents, together with the exhibits and
schedules thereto, contain the entire understanding of the parties with respect
to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

       5.3     Notices.
Any and all notices or other communications or deliveries required or permitted
to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at (561) 277-2430 for the Company and
(914) 285-0071 for the Lender prior to 5:30 p.m. (New York City time) on a
Business Day, (b) the next Business Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
stated above on a day that is not a Business Day or later than 5:30 p.m. (New
York City time) on any Business Day, (c) the second Business Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given.  The address for such notices and communications shall be as set
forth in the introductory paragraph of the Agreement.

       5.4     Amendments;
Waivers.  No provision of this Agreement may be waived or amended except in
a written instrument signed, in the case of amendments, by the Company and
Lender, or, in the case of a waiver, by the party against whom enforcement of
any such waiver is sought.  No waiver of any default with respect to any
provision, condition or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

       5.5     Construction.
The headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.  The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

18
   

       5.6     Successors
and Assigns.  This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and permitted assigns.  The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Lender.  The Lender may assign any or all of its rights
under this Agreement and the other Transaction Documents to any
Person.

       5.7     No
Third-Party Beneficiaries.  This Agreement is not for the benefit of, nor
may any provision hereof be enforced by, any Person other than the parties
hereto and their successors and permitted assigns.

       5.8     Governing
Law.  All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York,
without regard to the principles of conflicts of law thereof.  Each party agrees
that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New
York.  Each party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the City of New York, Borough of
Manhattan for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper or inconvenient
venue for such proceeding.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  The parties hereby waive all rights to a trial
by jury.  If either party shall commence an action or proceeding to enforce any
provisions of the Transaction Documents, then the prevailing party in such
action or proceeding shall be reimbursed by the other party for its
attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.

       5.9     Survival.
The representations and warranties contained herein shall survive the Closing
for the applicable statue of limitations.

       5.10     Execution.
This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile signature page were an original
thereof.

       5.11     Severability.
If any provision of this Agreement is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

19
   

       5.12     Rescission
and Withdrawal Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) the Transaction Documents,
whenever the Lender exercises a right, election, demand or option under a
Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then the Lender may rescind or
withdraw, in its sole discretion from time to time upon written notice to the
Company, any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights.

       5.13     Replacement
of Note.  If any certificate or instrument evidencing the Note is mutilated,
lost, stolen or destroyed, the Company shall issue or cause to be issued in
exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.  The
applicants for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs associated with the issuance of such
replacement Note.

       5.14     Remedies.
In addition to being entitled to exercise all rights provided herein or granted
by law, including recovery of damages, each of the Lender and the Company will
be entitled to specific performance under the Transaction Documents.  The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of obligations described in the foregoing
sentence and hereby agrees to waive in any action for specific performance of
any such obligation the defense that a remedy at law would be adequate.

       5.15     Payment
Set Aside.  To the extent that the Company makes a payment or payments to
the Lender pursuant to any Transaction Document or a Lender enforces or
exercises its rights thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

       5.16     Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist
upon or plead or in any manner whatsoever claim, and will resist any and all
efforts to be compelled to take the benefit or advantage of, usury laws wherever
enacted, now or at any time hereafter in force, in connection with any claim,
action or proceeding that may be brought by the Lender in order to enforce any
right or remedy under any Transaction Document.  Notwithstanding any provision
to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction
Documents for payments in the nature of interest shall not exceed the maximum
lawful rate authorized under applicable law (the “Maximum
Rate”), and, without limiting the foregoing, in no event shall any
rate of interest or default interest, or both of them, when aggregated with any
other sums in the nature of interest that the Company may be obligated to pay
under the Transaction Documents exceed such Maximum Rate.  It is agreed that if
the maximum contract rate of interest allowed by law and applicable to the
Transaction Documents is increased or decreased by statute or any official
governmental action subsequent to the date hereof, the new maximum contract rate
of interest allowed by law will be the Maximum Rate applicable to the
Transaction Documents from the effective date forward, unless such application
is precluded by applicable law.  If under any circumstances whatsoever, interest
in excess of the Maximum Rate is paid by the Company to the Lender with respect
to indebtedness evidenced by the Transaction Documents, such excess shall be
applied by the Lender to the unpaid principal balance of any such indebtedness
or be refunded to the Company, the manner of handling such excess to be at the
Lender’s election.

20
   

       5.17     Remedies.
In the event the Lender assigns any portion of its interest under the Note, no
action shall be taken under this Agreement, except upon the written consent of
the Note holders holding the Note representing a majority of the principal
amount under the Note, which shall include the Lender.

(Signature Pages Follow)

21
   

IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above. 

	

UNIVERSAL PROPERTY DEVELOPMENT
AND
ACQUISITION CORPORATION

	
 
	

By:
__________________________________________

  Name:
      Title:

	
 
	

CANYON CREEK OIL AND GAS CORP.

	
 
	

By:
__________________________________________

  Name:
      Title:

	
 
	

CATLIN OIL & GAS, INC. 

	
 
	

By:
__________________________________________

  Name:
      Title:

	

HEARTLAND OIL & GAS, CORP.

	
 
	

By:
__________________________________________

  Name:
      Title:

	
 
	

HEARTLAND GAS GATHERING, LLC

	
 
	

By:
__________________________________________

  Name:
      Title:

	
 
	

HEARTLAND OIL & GAS, INC.

	
 
	

By:
__________________________________________

  Name:
      Title:

	
 
	

HEARTLAND INTERNATIONAL OIL CORP.

	
 
	

By:
__________________________________________

  Name:
      Title:

	
 
	

AZTEC WELL SERVICES, INC.

	
 
	

By:
__________________________________________

  Name:
      Title:

22
   

	
 
	

UPDA OPERATORS, INC.

	
 
	

By:
__________________________________________

  Name:
      Title:

	
 
	
 
	
 
	

       

	

KAMAL ABDALLAH

	
 
	
 
	
 
	

       

	

CHRISTOPHER J. MCCAULEY

	
 
	
 
	
 
	
 
	

SHERIDAN ASSET MANAGEMENT, LLC

	
 
	

By:
__________________________________________

  Name:
      Title:

	
 
	
 

23
   

Schedule A

24
   

Schedule I 

25
   

Disclosure Schedule

3.1(a):

	Subsidiaries of the
Company

	

Name

	

Jurisdiction of Incorporation

	

Percentage Owned

	

Owner

	

Canyon Creek Oil and Gas, Inc.

	

Nevada

	

60%

	

Universal Property Development and Acquisition
Corporation

	

Catlin Oil and Gas, Inc.

	

Nevada

	

90%

	

Universal Property Development and Acquisition
Corporation

	

Heartland Oil and Gas Corp.

	

Nevada

	

100%

	

Universal Property Development and Acquisition
Corporation

	

Heartland Gas Gathering, LLC

	

Nevada

	

100%

	

Heartland Oil and Gas Corp.

	

Heartland Oil and Gas Inc.

	

Nevada

	

100%

	

Heartland Oil and Gas Corp.

	

UPDA Operators, Inc.

	

Nevada

	

100%

	

Universal Property Development and Acquisition
Corporation

	

Aztec Well Services, Inc.

	

Nevada

	

100%

	

Universal Property Development and Acquisition
Corporation

	

Heartland International Oil Corp.

	

British Virgin Islands

	

100%

	

Heartland Oil and Gas Corp.

	

Continental Fuels, Inc.

	

Nevada

	

100%

	

Universal Property Development and Acquisition
Corporation

In addition, West Oil and Gas, Inc., Texas Energy, Inc. and
Ambient Well Services, Inc. have filed for dissolution on or prior to the date
hereof. 

26
   

3.1(e):

	Capitalization
―

	

Name

	

Number of Shares and Type

	

Percentage Owned

	

Owner

	

Universal Property Development and Acquisition
Corporation

	

2,060,000  shares of Common Stock, par value $0.001 per share;
100,000  shares of Class A Convertible Preferred Stock, par value $10.00 per
share

	

20%

	

Kamal Abdallah and Chris McCauley; see Capitalization Report re
other holders.

	

Canyon Creek Oil and Gas, Inc.

	

60,000 shares of Common Stock, par value $0.001 per
share

	

60%

	

Universal Property Development and Acquisition
Corporation

	

Catlin Oil and Gas, Inc.

	

90,000 shares of Common Stock, par value $0.001 per
share

	

90%

	

Universal Property Development and Acquisition
Corporation

	

Heartland Oil and Gas Corp.

	

5,063,177 shares of Common Stock, par value $0.001 per
share

	

52%

	

Universal Property Development and Acquisition Corporation;  see
Capitalization Report re other holders.

	

Heartland Gas Gathering, LLC

	

Sole managing member

	

100%

	

Heartland Oil and Gas Corp.

	

Heartland Oil and Gas Inc.

	

100,000 shares of Common Stock, par value $0.001 per
share

	

100%

	

Heartland Oil and Gas Corp.

	

UPDA Operators, Inc.

	

100,000 shares of Common Stock, par value $0.001 per
share

	

100%

	

Universal Property Development and Acquisition
Corporation

	

Aztec Well Services, Inc.

	

100,000 shares of Common Stock, par value $0.001 per
share

	

100%

	

Universal Property Development and Acquisition
Corporation

	

Heartland International Oil Corp.

	

100 shares of Common Stock, par value $1.00 per share

	

100%

	

Heartland Oil and Gas Corp.

	

Continental Fuels, Inc.

	

48,000 shares of Preferred Stock, par value $0.001 per
share

	

100%

	

Universal Property Development and Acquisition
Corporation

27
   

In addition, West Oil and Gas, Inc., Texas Energy, Inc. and
Ambient Well Services, Inc. have filed for dissolution on or prior to the date
hereof.

	Indebtedness
― Various intercompany indebtedness subject to the Subordination
Agreement.

	Warrants,
etc. ― None.

3.1(q):  

	$165,000 payable to Copper Beech Equity on the date hereof in
connection with the acquisition of the Interests.

28
   

Exhibit A

Note

   

Exhibit B

Security Agreement

   

Exhibit C

Subsidiary Guarantee

   

Exhibit D

Warrant

   

Exhibit E
 [DATE]	

[Address]

Attention: 

       

       Re:     Payment
Direction

Gentlemen:

       You are each hereby
irrevocably and unconditionally authorized and directed to pay all sums
otherwise due the undersigned by wire transfer to:   Account # 2000030407338 at
Wachovia Bank, National Association, Mail Code NC 0817, 301 South Tryon Street
-Floor M7, Charlotte, North Carolina 28288.

	
 	

Very truly yours,

	
 
	
 	

[Name of Entity]

	
 
	
 	

By:________________________________

	
 	

Name:

	
 	

Title:

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