Document:

Purchase and Sale Agreement

 Exhibit 10.129 
  
 PURCHASE AND SALE AGREEMENT 
  
 This document shall evidence the agreement (“Agreement”) between Rockwall Marketing Corporation
(“Rockwall”) and Producers Pipeline Corporation (“Producers”) (collectively “Sellers”) and Energytec, Inc. (“Purchaser”) concerning the purchase and sale of Sellers’ interests in the referenced
properties, more particularly described in Exhibit “A” attached hereto and made a part hereof. 
  
 In consideration of Ten Dollars ($10) and the mutual benefits and obligations set forth herein, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows: 
  
 I.

  
 AGREEMENT TO PURCHASE SELLERS’ INTERESTS

  
 Sellers agree to sell and Purchaser agrees to buy the
following (collectively, the “Properties”) subject to the reservations described in Paragraph II and Exhibit “A” below: 
  
 A. All of Sellers’ right, title and interest of whatsoever kind and nature’ whether legal or equitable, and whether vested or contingent, in and
to the oil, gas and other minerals in and under that may be produced from the wells together with the lands described on Exhibit “A” attached hereto, including but not limited to, interests in oil and gas and/or mineral leases
covering all or any part of such lands, overriding royalty interests, production payments and net profits interest in all or any part of such lands or leases, and fee royalty interests, fee mineral interests and any other interests in oil, gas and
other minerals in all or any part of such lands. 
  
 B. All right,
title and interest of Sellers in and to all presently existing and valid oil and gas and/or mineral unitization, pooling or communitization agreements declarations and/or orders covering any of the property and the units credited thereby (including,
without limitation, units formed under orders, rules, regulations or other official acts of any federal, state or other authority having jurisdiction, voluntary unitization agreements, designations and/or declarations and so-called “working
interest units” created under operating agreements or otherwise) which relate to any of the Properties described in Exhibit “A”; 
  
 C. All right, title and interest of Sellers in and to all presently existing and valid production sales (and sales related) contracts, operating
agreements and other agreements and contracts which relate to any of the Properties described in Exhibit “A” or which relate to the exploration, development, operation or maintenance thereof or the treatment, storage, transportation
or marketing of production therefrom (or allocated thereto), including but not limited to all easements, rights of way, surface leases and other surface rights, all permits and licenses and all other appurtenances 

  

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being used or held for use in connection with or otherwise related to the Properties described in Exhibit “A”; 
  
 D. All right, title and interest of Sellers in and to all materials,
supplies, machinery, equipment, improvements and other personal property and fixtures, such as wells, wellhead equipment, pumping units, flow lines, tanks, buildings, injection facilities salt water disposal facilities, compression facilities,
gathering systems and other equipment located on and pertaining to the Properties. 
  
 E. All lease files, land files, well files and other books, files and records, information and data (including engineering, geological and geophysical data) and all rights thereto of Sellers insofar as the same are
directly related to any portion of the Properties and to the extent the transfer thereof is not prohibited by existing contractual obligations with third parties; 
  
 F. All rights to operate the Properties to the extent Sellers can readily transfer said rights. 
  
 G. All right, title and interest of Sellers in and to the gas processing
plants related pipeline, rights of way, gathering systems, fee lands and other appurtenances, all of which are more fully described in Exhibit “A”. 
  
 II. 
  
 PURCHASE PRICE AND OTHER CONSIDERATION 
  
 As consideration for this transaction, Purchaser shall assume all of Sellers’ debt and liability to American Bank of Texas, Sherman, Texas
(“American Bank”), as evidenced by various deeds of trust and UCC’s filed of record against the Properties with an outstanding debt balance of $1,906,846.75 as of January 1, 2003, subject to approval of American Bank loan terms by
Purchaser. 
  
 As additional consideration for this transaction ,
Purchaser shall pay to Sellers, as an additional part of the purchase price, the equivalent amount of the net profits from the Properties through June 30, 2003, as described on Exhibit “C” attached hereto. 
  
 III. 
  
 EARNEST MONEY 
  
 N/A 
  

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 IV. 
  
 EFFECTIVE DATE 
  
 The effective date (“Effective Date ) for the purchase of the Properties shall be midnight Central Standard Time, December 31, 2002. The Sellers
shall be entitled to all oil, gas and other minerals produced, transportation and processing fees earned, and all other income accrued before the Effective Date. The Sellers shall be responsible for all expenses of labor performed, materials
provided or any other expenses, including overhead, incurred prior to the Effective Date relating to the interests being conveyed. Subject to the term net profits interest reserved by Sellers and described on Exhibit “C” attached hereto,
Purchaser shall be entitled to all oil, gas and other minerals produced, transportation and processing fees earned, and all other income accrued on or after the Effective Date and shall be responsible for all expenses, including overhead, incurred
on and after the Effective Date relating to the interests being conveyed. 
  
 V. 
  
 CLOSING DATE

  
 The closing shall take place on or before March 31,
2003 (“Closing Date”) at the offices of American Bank. 
  
 VI. 
  
 REPRESENTATION OF SELLER

  
 Sellers represent and warrant that: 
  
 A. The Sellers shall convey their entire interest in the Properties of
whatsoever kind and nature as of the Effective Date and shall not further encumber their interests with any additional burdens. Purchaser has previously been provided worksheets showing the Sellers’ respective interests in the Properties.

  
 B. The Properties are subject to various retained overrides,
transportation fees, preferential rights, approval of successor operator, approval of assignee of Producers’ interests and other restrictions from Sellers in favor of Newco Energy Inc. (“Newco”) and/or Mescalaro Oil & Gas Inc.
(“Mescalaro”) evidenced by that certain letter agreement between Mescalaro, Newco, Rockwall and Producers dated January 15, 1999 and those certain agreements described as follows: 
  
 1. Assignment and Bill of Sale from Mescalaro to Rockwall
effective November 1, 1998 recorded in Volume 3009, Page 233, Deed Records of Bowie County, Texas, conveying certain oil and gas leases; and 
  
 2. Assignment and Bill of Sale from Mescalaro to Producers effective November 1, 1998 recorded in Volume 3009, Page 226, Deed Records of
Bowie 

  

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County, Texas, conveying a gas processing plant, fee lands, easements and other rights described therein and which requires Newco’s consent to assign.

  
 3. The Security Agreement from Producers to
Newco effective November 1, 1998 recorded in Volume 3079, Page 346, Deed Records of Bowie County, Texas. 
  
 4. The Security Agreement from Rockwall to Newco effective November 1, 1998 recorded in Volume 3079, Page 340, Deed Records of Bowie
County, Texas. 
  
 5. Transportation Agreement
effective November 1 , 1998 between Producers and Newco mandating a transportation fee for use of certain pipelines. 
  
 (These documents shall hereafter be referred to as the “Newco Restrictions”.) Sellers are making full disclosure of the Newco Restrictions and
have given Purchaser copies of same and have made full disclosure of the Newco Restrictions to Purchaser. 
  
 C. The Properties are free and clear of all liens and mortgages or will be free and clear of all liens and mortgages on the Closing Date, save and except
(1) the debts and liens in favor of American Bank with a balance as of October 1 , 2001 of $1,906 846.75 and evidenced by liens of record against the Properties which debt and lien will be assumed by Purchaser and (2) the Security Agreements and
Transportation Agreement of record against the Properties in favor of Newco Energy Inc. (“Newco”) effective November 1, 1998 described above. 
  
 D. All rentals, royalties (except as described in the Chapman Lawsuit and Royalty Owners Lawsuit described in paragraph VI.N. below) and joint interest
billings due from, attributable to or the responsibilities of Sellers up to and including the Closing Date shall have been paid (subject to an appropriate credit for such sums paid for any period on or after the Effective Date) and all actions
necessary to maintain the leases in full force and effect shall have been taken. 
  
 E. All taxes on the Properties, including but not limited to ad valorem, production and personal property taxes have been paid up through the year 2001. The 2002 ad valorem taxes will be paid according to paragraph VI
P. below. 
  
 F. The Properties are subject to the following gas
purchase contracts: 
  
 1. Dated November 1, 2002
between Enbridge Pipelines (NE Texas), L. L.C. as Processor and Rockwell Marketing Corporation as Producer; 
  
 The properties are also subject to a condensate sales contract cancelable on 30 day’s notice. 
  
 G. To the best of Sellers’ knowledge, the Properties and the operations
thereof and thereon are in full compliance with all laws, rules, regulations and orders 

  

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applicable thereto, including those relating to protection of the environment; and Sellers and any other operator on Sellers’ behalf have complied with
all state regulatory laws rules, regulations and orders applicable to operations on and of the Properties including those which require the plugging of abandoned wells. 
  
 H. Except for the Chapman Lawsuit and Royalty Owners Lawsuit, Sellers have no knowledge of any breach, impending breach or
threatened breach of any contract or agreement applicable to the Properties. 
  
 I. Purchaser will not be liable for the employment of any of Sellers’ or a third party’s personnel who may be associated with the maintenance and operation of the Properties. 
  
 J. Sellers are duly qualified and have the full right and authority to own
the Properties in the capacity in which the Properties are owned and to convey the Properties to Purchaser or its designee. 
  
 K. This agreement and any other document executed by Sellers in conjunction with Purchaser’s acquisition of the Properties will constitute valid and
binding agreements of Sellers enforceable in accordance with their terms. 
  
 L. Sellers have not incurred any obligations, contingent or otherwise, for any brokers, finders or consultant’s fees for which Purchaser will be liable, other than: 
  
 1. Possible $50,000 to Scott Shaver; and 
  
 2. Possible $60,000 to Tim Cane 
  
 which shall be paid according to paragraph VI. P. below. 
  
 M. The interests to be conveyed are undivided interests in the Properties and
are not interests in limited partnerships or drilling or income funds and Purchaser will not have any liability for any of Seller’s limited partnerships or drilling or income funds or the management thereof. 
  
 N. Sellers have no knowledge of any lawsuits or threatened lawsuits affecting
the Properties with the exception of (1) Cause No. 2002-20643; Newco Energy, Inc. v. Rockwall Marketing Corporation and Producers Pipeline Corporation, in the 333rd Judicial District Court of Harris County, Texas (the “Chapman Lawsuit”) in which the Sellers are Defendants. The Chapman Lawsuit is a dispute with
Pat Chapman concerning the transportation fee and reserved overriding royalties described in the Newco Restrictions; and (2) Cause No. 97 C 099 6A-202; Jerry M. Smith and Lilly Jo Smith v. Rockwall Marketing Corporation, in the District Court
of Bowie County, Texas (the “Royalty Owners Lawsuit”) in which Sellers are Defendants. The Royalty Owners’ Lawsuit is a dispute with certain royalty owners of the Properties for the failure to timely and properly pay royalties. With
respect to the Royalty Owners lawsuit, the $125,000 in suspense with Enbridge Pipelines will be applied to Purchaser’s portion of any pre-effective date liability. 
  

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 O. Sellers have knowledge of a potential claim by Jim Webb that he is owed to date approximately
$4,000.00 in past due overriding royalty interest payments. 
  
 P.
Sellers and Purchaser acknowledge that there are various debts, obligations, and claims currently pending against Sellers. These claims and obligations include, but are not limited to, the following: 
  
 The Chapman Lawsuit 
 The Royalty Owners’ Lawsuit 
 The Jim
Webb $4,000 overriding royalty interest claim 
 The Scott Shaver broker’s fee 
 The Tim Cane broker’s fee 
 2002 Ad
valorem taxes 
  
 (“Claims and Obligations”)

  
 Sellers and Purchaser agree that Sellers will use its best
efforts prior to June 30, 2003 to pay or settle all of the Claims and Obligations out of monies provided in the net profits interest it is retaining. However, subsequent to June 30, 2003, any Claims and Obligations which remain outstanding at that
date will be assumed by Purchaser and Purchaser hereby agrees to release and indemnify Sellers from any liability including damages, attorneys’ fees and court costs Sellers or Purchaser may incur as a result of the Claims and Obligations
remaining unpaid. 
  
 VII. 
  
 OBLIGATIONS OF SELLERS 
  
 Sellers shall: 
  
 A. Make available to Purchaser all lease files, land files, well files and other books, files and records, information and
data (including engineering, geological and geophysical data) in Sellers’ possession or control. 
  
 B. Execute and deliver to Purchaser at closing, all documents, including the applicable P-4 forms, necessary to transfer operations of the Properties to
Purchaser to extent Sellers are able to do so. 
  
 C. Not market
the Properties or otherwise advertise the Properties for sale to any third parties for as long as this is a valid agreement between the parties. 
  

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 VIII. 
  
 REPRESENTATIONS OF PURCHASER 
  
 Purchaser represents and warrants: 
  
 A. That it has the full right and lawful authority to make this offer and to acquire the Properties in accordance herewith and has the financial ability
to consummate the transaction contemplated herein. 
  
 B. This
Agreement and any other document executed by Purchaser in conjunction with its acquisition of the Properties will constitute valid and binding agreements of Purchaser enforceable in accordance with their terms. 
  
 C. Purchaser has incurred no obligation contingent or otherwise for any
broker’s, finder’s or consultant’s fees for which Sellers will be liable. 
  
 D. Purchaser is an operator in good standing in the State of Texas and is capable of operating the Properties. 
  
 E. Purchaser enters this agreement with full knowledge of the Newco Restrictions and agrees to comply with all restrictions including the preferential
right obligations described in the Newco Restrictions prior to closing or, should Purchaser elect to complete the purchase of the Properties without Purchaser and Sellers complying with the Newco Restrictions, then Purchaser agrees to release and
indemnify Sellers from any liability including damages, attorneys’ fees and Court costs Sellers or Purchaser may incur as a result of Purchaser and Sellers not complying with the Newco Restrictions. 
  
 IX. 
  
 CONDITIONS TO CLOSING 
  

Purchaser’s obligation to close the transaction contemplated herein is subject to the following conditions: 
  
 A. Purchaser is satisfied from its due diligence that Sellers have good and
marketable title to the Properties and that there are no material title defects or liens encumbering the Sellers’ interests that will not be released at closing. Purchaser shall examine title at its own expense. Purchaser shall deliver to
Sellers on or before March 21, 2003 at 5:00 p. m. written notice of any matter in which in Purchaser’s opinion constitutes either a title defect or a breach of any of Sellers’ representations or warranties set out in this Agreement.
Sellers, at their sole cost and expense, may attempt to cure such matters prior to the Closing Date. In the event Sellers are unable to cure such matters to the reasonable satisfaction of Purchaser, the affected portion of the Properties shall be
included at an adjusted value as mutually agreed and the Purchase Price shall be adjusted accordingly, or at Purchaser’s option, the affected 

  

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portion of the Property shall be excluded from this Agreement and the Purchase Price reduced accordingly. 
  
 B. Purchaser is satisfied from its due diligence that Sellers have complied
with all environmental laws, ordinances and requirements and have all requisite permits for the continued operations of the Properties. Purchaser may conduct a Phase One environmental audit at Purchaser’s expense and shall notify Sellers in
writing prior to March 21, 2003 at 5:00 p. m. of any environmental defects. Sellers at their sole cost and expense may attempt to cure such environmental defects prior to the Closing Date. In the event Sellers are unable to cure such environmental
defects to the reasonable satisfaction of Purchaser, the affected portion of the Properties shall be included at an adjusted value as mutually agreed and the Purchase Price shall be adjusted accordingly, or at Purchaser’s option, the affected
portion of the Properties shall be excluded from this Agreement and the Purchase Price reduced accordingly. 
  
 C. The parties will negotiate in good faith any adjusted values and Purchase Price adjustments required in this Agreement. 
  
 D. The written agreement of American Bank to this Agreement. 
  
 E. The transaction contemplated by this Agreement is an “all or
nothing” sale. If for any reason Purchaser shall be unable or unwilling to purchase all the Properties described in Exhibit “A”, then Sellers will have no obligation to sell to Purchaser. The Purchase Price and other
consideration shall not be offset in any manner by amounts owed by Sellers to Purchaser. 
  
 X. 
  
 CLOSING

  
 At closing: 
  
 A. Sellers will convey the Properties to Purchaser or its designee with
special warranty of title in the form of Assignment and Bill of Sale attached hereto as Exhibit “B”. All personal property is to be conveyed “AS IS, WHERE IS” with no warranty, express or implied. 
  
 B. Purchaser shall pay to Sellers the Purchase Price as adjusted in
accordance with this Agreement in proportion to Sellers’ respective interests shown above. 
  
 C. All of Sellers’ original files covering lease records, well and production data, contracts and other information related to the Properties will be
delivered to Purchaser or its designee. Purchaser shall keep the files intact and not dispose of such files without first notifying Sellers. Sellers shall have reasonable access to the files after the Closing Date. 
  

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 D. Sellers shall deliver possession of the Properties to Purchaser. 
  
 XI. 
  
 INDEMNIFICATION 
  
 When the transaction contemplated herein is consummated, Sellers agree (as limited by paragraph VI. P. ) to indemnify and defend Purchaser against any
claims, suits or other liabilities including environmental liability relating to or arising from the Properties which accrued prior to the Effective Date and Purchaser agrees to indemnify and defend Sellers against any claims, suits, or other
liabilities, including environmental liabilities, relating to or arising from the Properties accruing after the Effective Date. 
  
 XII. 
  
 AD VALOREM TAXES 
  
 All ad valorem taxes shall be prorated as of the Effective Date (except as limited by VI. P.). 
  
 XIII. 
  
 POST CLOSING ADJUSTMENTS 
  
 N/A 
  
 XIV.

  
 OPERATIONS AFTER ACCEPTANCE OF OFFER

  
 A. After Sellers’ acceptance of this Agreement
and until the Closing Date, Rockwall shall continue to operate the Properties as a reasonably prudent operator and in a good and workmanlike manner. Sellers shall not abandon any part of the Properties. During this period, Sellers shall not remove
any facilities except to replace defective components or to repair and return them. 
  
 B. Sellers shall not make any major capital expenditures in excess of $20,000 after the Effective Date but prior to the Closing Date without first receiving Purchaser's prior written consent. 
  
 C. Once this transaction closes, the effective date for Purchaser assuming
operations shall be April 1, 2003. 
  

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 XV. 
  
 RISK OF LOSS 
  
 A. If prior to the Closing Date, all or any substantial portion of the Properties shall be destroyed by fire or other casualty including damage to the
underlying formation, or if any substantial portion of the Properties shall be taken in condemnation or under the right of eminent domain or if proceedings for such purposes shall be pending or threatened, either Sellers or Purchaser may elect to
terminate this Agreement. If such election is made, neither party shall have any further obligations to the other hereunder except for the return of the Earnest Money to Purchaser. 
  
 B. If not so terminated, this Agreement shall remain in full force and effect notwithstanding any such destruction or
taking, and Sellers shall at the Closing pay to Purchaser all sums paid to Sellers by reason of such destruction or taking. In addition, Sellers shall assign, transfer and set over unto Purchaser all of the right, title and interest of Sellers in
and to any unpaid awards or other payments arising out of such destruction or taking. Sellers shall not voluntarily compromise, settle or adjust any amounts payable by reason of such destruction or taking without first obtaining the written consent
of Purchaser. 
  
 XVI. 
  
 MISCELLANEOUS 
  
 A. Notices. All notices and communications required or
permitted under this Agreement shall be in writing, delivered to or sent by United States Mail or express delivery, postage prepaid, addressed as follows: 
  
 SELLERS: 
  
 Roy T. Rimmer, Jr. 
 14531 Hwy 377 South

 Fort Worth, TX 76126 
  
 with copy to: 
  
 Steven G. Eargle 
 Beckham, Rector &
Eargle, L.L.P. 
 1315 West 10th Street 
 Fort Worth, Texas 76102-3437 
  
 PURCHASER: 
  
 Energytec, Inc. 
 Attn: Frank W. Cole,
President 
 14785 Preston Road, Suite 550 
 Dallas, TX 75254 
  
 B.
Further Assurances. The parties hereto agree to execute and deliver such further instruments, conveyances and documents as may be required or 

  

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reasonably requested by the other party to establish, maintain or protect the respective rights and remedies of the parties of this Agreement and to carry
out and effectuate the intentions and purposes of this Agreement. 
  
 C. Continuing Obligations. If the transaction contemplated herein is consummated, the terms and conditions contained in this Agreement shall survive closing and shall apply to and bind the successors and assigns of Sellers and
Purchasers. 
  
 D. Entire Agreement. This Agreement
incorporates and merges all negotiations, communications and prior agreements, written or oral, between the parties. This Agreement constitutes the entire final agreement of the parties. This Agreement may not be amended, altered or modified except
by written instrument executed by all parties. 
  
 E.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. 
  
 F. Execution. This Agreement is executed and accepted on the date shown below but is to be effective as of the Effective Date. 

 
 G. Counterpart. This Agreement may be signed in any number
of counterparts, each of which shall be binding on the party or parties so signing, regardless of whether all parties execute this instrument or a counterpart hereof. 
  
 H. No Assignments. None of the parties to this Agreement may assign their rights under this Agreement without
the prior written consent of the other parties to this Agreement. 
  

			
	Sellers:
	
	 ROCKWALL MARKETING CORPORATION

		
	BY:	 	 /s/ Roy T. Rimmer, Jr.

	 	 	 Printed Name: Roy T. Rimmer, Jr.

	 	 	 Its: President

  
 Accepted and
agreed this 13th day of March, 2003. 
  

			
	PRODUCERS PIPELINE CORPORATION
		
	BY:	 	 /s/ Roy T. Rimmer, Jr.

	 	 	 Printed Name: Roy T. Rimmer, Jr.

	 	 	 Its: President

  

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 Accepted and agreed this 13th day of March, 2003. 
  

			
	PURCHASER:
	
	 ENERGYTEC, INC.

		
	BY:	 	 /s/ Frank W. Cole

	 	 	 Printed Name: Frank W. Cole

	 	 	 Its: President

  
 Accepted and
agreed this 13th day of March, 2003. 

  

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 reasonably requested by the other party to establish, maintain or protect the respective rights and remedies of the
parties of this Agreement and to carry out and effectuate the intentions and purposes of this Agreement. 
  
 C. Continuing Obligations. If the transaction contemplated herein is consummated, the terms and conditions contained in this Agreement shall
survive closing and shall apply to and bind the successors and assigns of Sellers and Purchasers. 
  
 D. Entire Agreement. This Agreement incorporates and merges all negotiations, communications and prior agreements, written or oral, between
the parties. This Agreement constitutes the entire final agreement of the parties. This Agreement may not be amended, altered or modified except by written instrument executed by all parties. 
  
 E. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas. 
  
 F. Execution. This Agreement is executed and accepted on the date shown below but is to be effective as of the Effective Date. 
  
 G. Counterpart. This Agreement may be signed in any number of counterparts, each of which shall be binding on the party or parties so
signing, regardless of whether all parties execute this instrument or a counterpart hereof. 
  
 H. No Assignments. None of the parties to this Agreement may assign their rights under this Agreement without the prior written consent of the other parties to this Agreement. 
  

			
	Sellers:
	
	ROCKWALL MARKETING CORPORATION
		
	BY:	 	 /s/ Roy T. Rimmer

	 	 	 Printed Name: Roy T. Rimmer

	 	 	 Its: President

  
 Accepted and
agreed this 13th day of March, 2003. 
  

			
	 PRODUCERS PIPELINE CORPORATION

		
	BY:	 	 /s/ Roy T. Rimmer

	 	 	 Printed Name: Roy T. Rimmer

	 	 	 Its: President

  

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 Accepted and agreed this 13th day of March, 2003. 
  

			
	PURCHASER:
	
	 ENERGYTEC, INC.

		
	BY:	 	 /s/ Frank W Cole

	 	 	 Printed Name: Frank W Cole

	 	 	 Its: President

  
 Accepted and
agreed this 13th day of March, 2003. 
  

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 EXHIBITS OMITTEDCommercial Promissory Note

  
 Exhibit 10.130

  
 Loan No. ___ 
  
 COMMERCIAL PROMISSORY NOTE 
  

			
	 ENERGYTEC, INC., a Nevada Corporation
	 	AMERICAN BANK OF TEXAS
		
	 14785 Preston Road, Ste. 500
	 	P. O. Box 1234
		
	 Dallas , Texas 75254
	 	Sherman, Texas 75091-1234
	(hereafter called “Borrower”)	 	(hereafter called “Lender”)

  

					
	 $ 400,000.00
	 	April 11, 2003	 	October 11, 2004
	 Note Amount
	 	Execution Date	 	Maturity Date

  
 FOR VALUE
RECEIVED, Borrower, jointly and severally if more than one, promises to pay to the order of Lender (which term shall include all subsequent holders of this Note) at its offices set forth above or at such other address as Lender may from time to
time designate, in lawful money of the United States of America, the principal sum of Four Hundred Thousand and 00/100 Dollars ($400,000.00), or so much thereof as may be advanced and outstanding from time to time, with interest
at the rate provided below on the principal balance from time to time remaining unpaid, in the amounts, at the times and upon the terms provided in this Note. This Note is performable in GRAYSON County, Texas. 
  
 INTEREST RATE. Interest shall accrue on the unpaid balance of this
Note from time to time outstanding which is not past due, calculated on a 360 day annual basis (the “Rate”), except as otherwise provided herein, as follows: 
  
 Eight percent (8.00%) per annum. 
  
 PREPAYMENT. Borrower may prepay this Note in whole or in part at any time without being required to pay any penalty
or premium for such privilege. In the event a prepayment is made, such payment shall be applied first against accrued but unpaid interest, then to the discharge of any expenses for which the holder of this Note may be entitled to receive
reimbursement under the terms of this Note or under the terms of any other documents related thereto and lastly against the principal hereof. Any partial prepayment shall not postpone the due date or change the amount of any subsequent installment
due hereunder. 
  
 PAST DUE PAYMENTS. The annual interest
rate on matured unpaid amounts shall be eighteen percent (18%). 
  
 DISHONORED CHECK CHARGE. Lender may charge and collect a processing fee of $22.00 for each check given by Borrower to Lender as a payment on this loan which is dishonored. 
  
 PAYMENT TERMS. This Note shall be due and payable as follows:

  
 Interest only, shall be due and payable monthly as it
accrues, on the 11th day of each and every calendar month, beginning May 11, 2003, and continuing regularly and monthly thereafter until October 11, 2004, when the entire amount of principal and interest remaining unpaid, shall be then due and
payable. 
  
 THIS LOAN IS PAYABLE IN FULL AT MATURITY. BORROWER
MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. THE LENDER IS UNDER NO OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. BORROWER WILL, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS THAT BORROWER MAY OWN,
OR BORROWER WILL HAVE TO FIND A LENDER WHICH MAY BE THE LENDER BORROWER HAS THIS LOAN WITH , WILLING TO LEND BORROWER THE MONEY. IF BORROWER REFINANCES THIS LOAN AT MATURITY , BORROWER WILL HAVE TO PAY ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED
WITH A NEW LOAN EVEN IF BORROWER OBTAINS REFINANCING FROM THE SAME LENDER. THIS LENDER WILL CONSIDER AN APPLICATION TO REFINANCE THE BALLOON PAYMENT AT THE TIME PAYMENT IS DUE, ON THE SAME BASIS AS ALL OTHER NEW MORTGAGE LOAN APPLICATIONS.

  
 WAIVER. Except as otherwise expressly stated in any of
the Loan Documents, Borrower and any and all co-borrowers, endorsers, guarantors, and sureties severally waive notice, notice of intent to accelerate, notice of acceleration, demand, grace, presentment for payment, and protest and agree that this
Note and all liens securing its payment may be extended and re-extended and the time for payment extended and re-extended from time to time without notice to them or any of them, and they severally agree that their liability on or with respect to
this Note shall not be affected by any release or change in any security at any time existing or by any failure to perfect or maintain perfection of any security interest in such security. 
  
 TIME OF THE ESSENCE. It is agreed that time is of the essence in the
performance of this Note.  
  

					
	 	 	Page 1	 	INITIALS                  

 Loan No.             

  

 EVENTS OF DEFAULT. Each of the following events shall constitute a Default: 
  
 1. Default in the timely payment of any installment of principal and interest or in the
performance of any covenant or provision of any Loan Document as hereafter defined. 
  
 2. Borrower, or any Guarantor, shall: (a) execute an assignment for the benefit of creditors or take any action in furtherance thereof; or (b) admit in writing his inability to pay his debts generally as they become due; or (c) as a debtor,
file a petition, case, proceeding, or other action pursuant to, or voluntarily seek the benefit or benefits of any debtor relief law or take any action in furtherance thereof; or (d) seek, acquiesce in, or suffer the appointment of a receiver,
trustee, or custodian of Borrower, any Guarantor, the Property as herein defined, in whole or in part, or any significant portion of other property belonging to Borrower or any Guarantor that affects performance under this Note; or (e) voluntarily
become a party to any proceeding seeking to effect a suspension or having the effect of suspending any of the rights of Lender or the Trustee granted or referred to in the Loan Documents or take any action in furtherance thereof. 
  
 3. The filing of a petition, case, proceeding, or other action against Borrower, or any
Guarantor, as a debtor under any debtor relief law; or seeking appointment of a receiver, trustee, or custodian of Borrower, or any Guarantor, or of any property described in the Loan Documents or any part thereof, or of any significant portion of
other property belonging to Borrower or any Guarantor, that affects its ability to perform under this Note, or seeking to effect a suspension or having the effect of suspending any of the rights of Lender or the Trustee granted or referred to in the
Loan Documents, and: (a) Borrower or any Guarantor admits, acquiesces in, or fails to contest the material allegations thereof; or (b) the petition, case, proceeding, or other action results in entry of an order for relief or order granting the
relief sought against Borrower or any Guarantor; or (c) the petition, case, proceeding, or other action is not permanently dismissed on or before the earlier of trial thereon or sixty (60) days next following the date of its filing. 
  
 4. The discovery by Lender that any warranty, covenant, or representation made to Lender by
or on behalf of Borrower or any Guarantor is false, misleading, erroneous, or breached in any material respect. 
  
 A Default shall not be an Event of Default if the Default is cured within ten (10) days following the delivery of or the mailing of written notice from
Lender to Borrower’s most current address as reflected in Lender’s business records specifying the existence of any such Default. If such Default is not cured within the ten (10) day period, the Default shall be an Event of Default without
need of any further notice or action by Lender. 
  
 ACCELERATION AND WAIVER OF NOTICE. Upon the occurrence of an Event of Default, the entire unpaid principal balance plus all accrued and unpaid interest due and owing on this Note and any and all other indebtedness of Borrower to
Lender shall, at the option of Lender, become and be due and payable forthwith without demand , notice of default, notice of intent to accelerate, or the acceleration of the maturity hereof, notice of nonpayment, presentment, protest, or notice of
dishonor, all of which are hereby expressly waived to the full extent not prohibited by law by Borrower and each other liable party. Failure to exercise this option upon the occurrence of any such Event of Default shall not constitute a waiver of
the right to exercise such option in the event of any subsequent Event of Default. 
  
 COLLECTION COSTS AND JOINT AND SEVERAL LIABILITY. If the unpaid principal balance plus all accrued and unpaid interest due and owing on this Note is not paid at maturity, whether by acceleration or otherwise,
and this Note is placed in the hands of an attorney for collection, or suit is filed hereon, or proceedings are had in probate, bankruptcy, receivership, reorganization, arrangement, or other legal proceedings for collection hereof, Borrower and
each other liable party agree to pay Lender its reasonable collection costs, including a reasonable amount for attorneys’ fees. Borrower and each other liable party is and shall be directly and primarily, jointly and severally, liable for the
payment of all sums due hereunder, under the Loan Documents and under any instrument securing the payment hereof, and Borrower and each other liable party hereby expressly waives bringing of suit and diligence in taking any action to collect any
sums owing hereon and in the handling of any security, and Borrower and each other liable party hereby consents to and agrees to remain liable hereon regardless of any renewals, extensions for any period or rearrangements hereof, or any release or
substitution of security hereof in whole or in part, with or without notice, from time to time, before or after maturity. 
  
 LOAN CHARGES. It is expressly stipulated and agreed to be the intent of Borrower and Lender at all times to comply with the applicable Texas law
governing the maximum rate or amount of interest payable on this Note or the indebtedness evidenced hereby and by the other Loan Documents (or applicable United States federal law to the extent that it permits the Borrower to contract for, charge,
take, reserve or receive a greater amount of interest than under Texas law). If the applicable law is ever judicially interpreted so as to render usurious any amount called for under this Note or under any of the Loan Documents, or contracted for,
charged, taken, reserved or received with respect to such indebtedness, or if Borrowers exercise of the option herein contained to accelerate the maturity of this Note or if any prepayment by Borrower results in Borrower having paid any interest in
excess of that permitted by applicable law, then it is Borrower’s and Lender’s express intent that all excess amounts theretofore collected by Lender be credited on the principal balance of this Note (or, if this Note has been or would
thereby be paid in full, refunded to Borrower), and the provisions of this Note and the other Loan Documents immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the
execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. Notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents, it is not the intention of Lender to accelerate the maturity of any interest that has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration. All sums paid or agreed to be
paid by Lender for the use, forbearance or detention of the indebtedness evidenced hereby and by the other Loan Documents shall, to the extent permitted by applicable law, be amortized , prorated, allocated and spread throughout the full term of
such indebtedness until payment in full so that the rate or amount of interest on account of such indebtedness does not exceed the usury ceiling from time to time in effect an applicable to such indebtedness evidenced hereby for so long as debt is
outstanding. To the extent that Lender is relying on the Texas Finance Code, as amended, to determine the Highest Lawful 

  

					
	 	 	Page 2	 	INITIALS                  

 Loan No.             

  

 
Rate payable on such indebtedness, Lender will utilize the indicated (weekly) rate ceiling from time to time in effect. To the extent United States federal
law permits Lender to contract for, charge or receive a greater amount of interest, Lender will rely on United States federal law instead of the Texas Finance Code, as amended, for the purpose of determining the Highest Lawful Rate. Additionally, to
the extent permitted by applicable law now or hereafter in effect, Lender may, at its option and from time to time, implement any other method of computing the Highest Lawful Rate under any other applicable law by giving notice, if required, to
Borrower as provided by applicable law now or hereafter in effect. 
  
 RIGHT OF SET OFF. Borrower grants to Lender a contractual possessory security interest in and hereby assigns, conveys, delivers, pledges, and transfers to Lender, all Borrower’s right, title and interest in and to
Borrower’s accounts with Lender (whether checking, savings or some other account), including without limitation all accounts held jointly with someone else and all accounts Borrower may open in the future, excluding however all IRA, Keogh and
trust accounts. Borrower authorizes Lender, to the extent permitted by applicable law, to charge or set off all sums owing on this Note against any and all such amounts. 
  
 ADDITIONAL SECURITY. This Note is secured by all security agreements, collateral assignments, assignments,
guaranties, deeds of trust, and lien instruments executed by Borrower (or by any Guarantor) in favor of Lender or any other holder of this Note, including those executed simultaneously herewith, those executed heretofore and those hereafter
executed, and by all such agreements, assignments, guaranties, and security instruments securing the payment of all other indebtedness of Borrower to Lender. 
  
 REMEDIES OF LENDER. Lender shall have all rights, remedies, and recourses granted in this Note, the Loan Documents and all other instruments
securing the payment hereof and the payment of all indebtedness of Borrower to Lender, howsoever evidenced, and those which are available at law or equity, and same: (a) shall be cumulative and concurrent; (b) may be pursued separately,
successively, or concurrently against Borrower or any other liable party or against any one or more of them at the sole discretion of Lender and in such order as Lender, in its sole discretion, shall determine; (c) may be exercised as often as
occasion therefore shall arise, it being agreed by Borrower that the exercise or failure to exercise any of the same shall in no event be construed as a waiver or release thereof or of any other right, remedy, or recourse; and (d) are intended to
be, and shall be, nonexclusive. If any part of this Note cannot be enforced, this fact will not affect the rest of this Note. This loan shall be governed by and construed in accordance with the laws of the State of Texas and applicable United States
federal law. 
  
 NOTICES TO BORROWER AND OTHER PARTIES. Any
notice under this Note shall be in writing and shall be effective when actually delivered or, if mailed, shall be deemed effective when deposited in the United States mail first Class, certified mail, postage prepaid, directed to the addresses shown
near the beginning of this Note. Any party may change its address for notices under this Note by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party’s address. For notice purposes,
Borrower agrees to keep Lender informed at all times of Borrower’s current address. 
  
 LOAN DOCUMENTS. This Note and all other instruments executed in connection herewith and/or securing repayment hereof (the “Loan Documents”), including but not limited to: 
  
 (a) The Additional Security as described above. 
  
 (b) Oil and Gas Deed of Trust, Security Agreement, Assignment of Production
and Financing Statement executed by Borrower to JERRY GRIFFIN, Trustee for the benefit of Lender and any subsequent holder of this Note, of even date herewith, and UCC-1 Financing Statement filed with the Secretary of State of the State of Texas,
covering Oil and Gas Properties situated in Bowie County, Texas. 
  
 (c) Commercial Deed of Trust, Security Agreement and Assignment of Rents executed by Borrower to JERRY GRIFFIN, Trustee for the benefit of Lender and any subsequent holder of this Note, of even date herewith, and UCC-1 Financing Statement
filed with the Secretary of State of the State of Texas, covering real and personal property situated in Bowie County, Texas. 
  
 (d) Oil and Gas Deed of Trust, Security Agreement, Assignment of Production and Financing Statement executed by Borrower to JERRY GRIFFIN, Trustee for the
benefit of Lender and any subsequent holder of this Note, of even date herewith, and UCC-1 Financing Statement filed with the Secretary of State of the State of Texas, covering Oil and Gas Properties situated in Cass County, Texas. 
  
 (e) Commercial Deed of Trust, Security Agreement and Assignment of Rents
executed by Borrower to JERRY GRIFFIN, Trustee for the benefit of Lender and any subsequent holder of this Note, of even date herewith, and UCC-1 Financing Statement filed with the Secretary of State of the State of Texas, covering real and personal
property situated in Cass County, Texas. 
  
 (f) Oil and Gas Deed
of Trust, Security Agreement, an Assignment of Production executed by Borrower to JERRY GRIFFIN Trustee for the benefit of Lender and any subsequent holder of this Note, of even date herewith, and UCC-1 Financing Statement filed with the Secretary
of State of the State of Texas, covering Oil and Gas Properties situated in Rains County, Texas. 
  
 (g) Security Agreements and UCC-1 Financing Statements, of even date herewith, executed by Borrower, covering all inventory, equipment and accounts
receivable, filed under Secretary of State for the benefit of Lender and any subsequent holder of this Note. 
  
 (h) Loan Agreement executed by Borrower for the benefit of Lender and any subsequent holder of this Note, of even date herewith. 
  

					
	 	 	Page 3	 	INITIALS                  

 Loan No.             

  

 (i) Security Agreement (Pledge) executed by Borrower, for the benefit of Lender and any subsequent
holder of this Note, of even date therewith, pledging Depository Account No.                     . 
  
 (j) Commercial Guaranty Agreements executed by COMANCHE WELL SERVICE
CORPORATION and LACY J. HARBER for the benefit of Lender and any subsequent holder of this note, of even date herewith. 
  
 PROPERTY. The property described in the Loan Documents (the “Property”) is: 
  
 Real and Personal property being more fully described in Exhibit
“A” attached hereto and made a part hereof for all purposes. 
  

			
	ENERGYTEC, INC., a Nevada Corporation
		
	By:	 	 
	 	 	 FRANK W. COLE, its President

  

			
	 	  	 Prepared in the Law Office of:
  
 Munson, Munson, Pierce & Cardwell, P.C.
 301 W. Woodard - P. O. Box 1099
 Denison, Texas 75020
 (903) 463-3750

  

 Page 4 

  
 EXHIBIT “A”

  
 PART ONE: 
  
 Tract I: 
  
 Situated in the County of Bowie, State of Texas, being Tract I, Segment I of that certain Surface Lease and Pipeline Right of Way Agreement
by and between Shell Oil Company and Delhi Gas Pipeline Corporation dated May 8, 1973, such surface leases being recorded in Volume 558, Page 496 of the Official Records of Cass County, Texas, and being partially assigned by Partial Assignment of
Right of Way from Koch Midstream Services Company and Producers Pipeline Corporation effective March 1, 1999, and recorded in Volume 3053, Page 1 of the Official Records of Bowie County, Texas. 
  
 Situated in the County of Bowie, State of Texas, and being a six inch pipeline and
appurtenances, Beginning at a point where it crosses the Sulphur River and enters Bowie County, Texas, continuing in a Northwesterly direction over, across and though the following surveys: Mrs. Willie R. Timmins Survey, A-1187; T. and P.R.R.
Survey, A-620; B.B.B. and C.R.R. Survey, A-81; Allen Brazzel Survey, A-68; Thos Y. Logwood Survey, A-343; T. and P.R.R. Survey, A-619; R. J. Creamer, A-922; Sterling M. Yancy Survey, S-693; T. and R.R., A-625; Hiram Edwards Survey, A-198; T. and
P.R.R. Survey, A-579; T. and P.R.R., A-606; F.E. Ames Survey, A-11; A. F. Hancock Survey, A-883; T. and P.R.R. Survey, A-587 and ending at a point located within the Jas Parham Survey, A-481. Said pipeline and appurtenances being more fully shown on
Alignment Drawings Numbered 1 through 6 of Delhi Gas Pipeline Corp., Dalby Springs Lateral, dated March 1973, and being more fully described in Assignment and Bill of Sale of Personal Property from Koch Midstream Services Company to Producers
Pipeline Corporation, effective March 1, 1999 and recorded in Volume 3052, Page 347, Official Records of Bowie County, Texas. 
  
 Situated in the County of Bowie, State of Texas, and being those rights of way, easements and permits assigned by Koch Midstream Services Company to Producers Pipeline
Corporation by Assignment of Right-of-Way, Easements and Permits effective March 1, 1999 and recorded in Volume 3053, Page of the Official Public Records of Bowie County, Texas, said Rights-of-Way, Easements and Permits being more fully described in
Schedule I-A attached hereto and made a par hereof. 
  
 Situated in the County of
Bowie, State of Texas, and being a natural gas processing plant, fee lands, pipeline and gathering system commonly known as Processing Plant No. 360, located in the Ann Hale Headright Survey assigned by Mescalaro Oil & Gas, Inc. to Producers
Pipeline Corporation, by Assignment and Bill of Said recorded in Volume 3009, Page 226, Official Records, Bowie County, Texas, said lands, pipeline and gathering system being more fully described in Schedule 2-A attached hereto and made a part
hereof for all purposes. 
  
 Tract II: 
  
 Situated in the County of Bowie, State of Texas, part of the Daniel Morris Survey, Abstract
No. 381, and being that certain 3 acre easement over, though and across 40 acres, more or less, conveyed for the purposes of constructing, maintaining, operating, altering and repairing a control station for the transportation of oil, gas, petroleum
products and other liquids, gases or substances more fully described in Schedule 1-B attached hereto, together with a 30 foot pipeline 

  

 
easement more fully described in Schedule 2-B attached hereto; and a 50 foot road right of way more fully described in Schedule 3-B attached hereto; all
granted by M. Mark Lesher and Emily Lesher to Mike Rogers Drilling Company, Inc., dated December 2, 1988, and recorded in Volume 1288, Page 332, Deed Records, Bowie County, Texas, and subsequently assigned by Act of Assignment from Mike Rogers
Drilling Co., Inc. to Rockwall Marketing Corporation effective January 1, 1996 and recorded in Volume 2657, Page 84 of the Real Property Records of Bowie County, Texas. 
  
 Tract III: 
  
 AN UNDIVIDED 68.75% WORKING INTEREST IN THE FOLLOWING DESCRIBED OIL AND GAS LEASE: 
  

			
	LESSOR:	  	JAMES J. NAPLES
		
	LESSEE:	  	BARROW-SHAVER RESOURCES COMPANY
		
	DATE:	  	January 9, 1992
		
	RECORDED:	  	Volume 1716, Page 36 of the Real Property Records of Bowie County, Texas.
		
	EXTENSIONS:	  	January 7, 1993, recorded in Volume 1885, at Page 162 and March 5, 1993 recorded in Volume 1913, at Page 169 of the Real Property Records of Bowie County, Texas.
		
	ASSIGNMENT:	  	March 18, 1996, from ULTRA PETROLEUM (USA), INC. as Assignor to ROCKWALL MARKETING CORPORATION as Assignee, of record in Volume 2495, Page 236 of the Real Property Records of Bowie County,
Texas, assigning 68.75% Working Interest.
		
	LANDS:	  	200 acres, more or less, out of the MEP & R Railway Survey, A-420; John McClure Headright Survey, A-392, and the Daniel Morris Headright Survey, A-381, Bowie County, Texas, as more fully
described in Schedule “I” attached hereto and made a part hereof for all purposes.

  

 J. D. OWEN GAS UNIT NO. 1 AND NO. 2 
  
 Situated in the County of Bowie, State of Texas, and being Oil and Gas Properties, Wells and
Equipment described in Assignment and Bill of Sale from Rialto Energy, Inc. to Rockwall Marketing Corporation, effective June 1, 1995, recorded in Volume 2394, Page 25, Official Records, Bowie County, Texas, said Oil and Gas Properties being more
fully described in Schedule II attached hereto and made a part hereof for all purposes. 
  
 Situated in the County of Bowie, State of Texas, and being a part of the J. S. Herring Survey, Abstract No. 263, and being Oil and Gas Properties, Wells and Equipment described in Assignment, Bill of Sale and Conveyance from Stelaron, Inc.
to Rockwall Marketing Corporation, effective September 1, 1996, recorded in Volume 2636, Page 31, Official Records, Bowie County, Texas, said Oil and Gas Properties being more fully described in Schedule II attached hereto and made a part hereof for
all purposes. 
  
 Situated in the County of Bowie, State of Texas, and being a
part of the J. S. Herring Survey, Abstract No. 263, and the E. T. Jackson Survey, Abstract No. 300, and being Oil and Gas Properties, Wells and Equipment described in Assignment and Bill of Sale from Stratco Operating Co., Inc. to Rockwall Marketing
Corporation, effective January 1, 1996, recorded in Volume 2495, Page 239, Official Records, Bowie County, Texas, said Oil and Gas Properties being more fully described in Schedule II attached hereto and made a part hereof for all purposes.

  
 Situated in the County of Bowie, State of Texas, and being a part of the J. S.
Herring Survey, Abstract No. 263, the E. T. Jackson Survey, Abstract No. 300, and the N. Hale Survey, Abstract No. 273, and being oil, gas and mineral leases, wells and equipment described in Assignment and Bill of Sale from Vintage Petroleum, Inc.
to Rockwall Marketing Corporation, effective September 1, 1998, recorded in Volume 2969, Page 129, Official Records, Bowie County, Texas, said Oil and Gas Properties being more fully described in Schedule II attached hereto and made a part hereof
for all purposes. 
  
 Situated in the County of Bowie, State of Texas, and being
487.829 acres out of the J. S. Herring Survey, Abstract No. 263, and the B. T. Jackson Survey, Abstract No. 300, and being Oil and Gas Properties, Wells and Equipment described in Assignment, Bill of Sale and Conveyance from DNA Petroleum, Inc. to
Rockwall Marketing Corporation, effective September 1, 1997, recorded in Volume 2761, Page 66, Official Records, Cass County, Texas, said Oil and Gas Properties being more fully described in Schedule II attached hereto and made a part hereof for all
purposes. 
  
 LOYD WILSON GAS UNIT NO. 1

  
 Situated in the County of Bowie, State of Texas, and being part of the
Daniel Morris Survey, Abstract No. 382 and being Well and Equipment described in Bill of Sale from Vintage Petroleum, Inc. to Rockwall Marketing Corporation recorded in Volume 2705, Page 301, Official Records, Bowie County, Texas. 
  
 Situated in the County of Bowie, State of Texas and being 109 acres and 137 acres, all in the
Daniel Morris Survey, Abstract No. 382 and being an Oil, Gas and Mineral Lease from Johnson 

  

 
Timber & Land Co. Ltd., et al to Rockwall Marketing Corporation, effective January 1, 1997, recorded in Volume 2636, Page 18, Official Records, Bowie
County, Texas. 
  
 FEAZELL NO. 1-A

  
 Situated in the County of Bowie, State of Texas, and being 160 acres,
more or less, T & P.R.R. Survey, Abstract No. 587, and being Oil and Gas Properties, Wells and Equipment described in Assignment and Bill of Sale from Mescalaro Oil & Gas, Inc. to Rockwall Marketing Corporation effective November 1, 1998,
and recorded in Volume 3009, Page 233, Official Records, Bowie County, Texas, said Oil and Gas Properties being more fully described as Oil and Gas Lease from William S. Feazell, et ux to Bishop Petroleum, Inc. dated January 1, 1983, recorded in
Volume 18, Page 695, Real Property Records, Bowie County, Texas. 
  
 B. E. LEWIS GAS UNIT NO. 1 
  
 Situated in
the County of Bowie, State of Texas, and being 621.715 acres, more or less, out of the John J. Carson Survey, Abstract No. 112, the Jacob Barkman Survey, Abstract No. 51 and the R. F. Peters Survey, Abstract No. 480 and being Oil and Gas Properties,
Wells and Equipment described in Assignment and Bill of Sale from Mescalaro Oil & Gas, Inc. to Rockwall Marketing Corporation, effective November 1, 1998, recorded in Volume 3009, Page 233, Official Records, Bowie County, Texas, said Oil and Gas
Properties being more fully described in Schedule III attached hereto and made a part hereof for all purposes. 
  
 COUCH UNIT PROSPECT 
  
 Situated in the County of Bowie, State of Texas, and being 1090.602 acres, more or less, and being Oil and Gas Properties described in Assignment from Field Information
Services, Inc. to Rockwall Marketing Corporation, effective July 1, 1996, recorded in Volume 2636, Page 26 Official Records, Bowie County, Texas, said Oil and Gas Properties being more fully described in Schedule IV attached hereto and made a part
hereof for all purposes. 
  
 RUTH MARABLE NO.
1 160.0 ACRE UNIT 
  
 Situated in the County of Bowie, State of Texas, being
160.0 acres of land, more or less, out of the Daniel Morris Headright Survey, Abstract No. 381, as more fully described in Assignment, Bill of Sale and Conveyance: (i) from Roy T. Rimmer, Jr., to Rockwall Marketing Corporation, effective July 1,
1994, and recorded under Clerk’s File No. 11082 on September 2, 1994 in the Real Property Records of Bowie County, Texas; (ii) from Carden Oil & Gas, Inc. to Rockwall Marketing Corporation effective September 1, 1996 and recorded in Volume
2627, Page 279 of the Real Property Records of Bowie County, Texas; and (iii) from Coronado Company to Rockwall Marketing Corporation effective January 1, 1997 and recorded in Volume 2698, Page 106 of the Real Property Records of Bowie County,
Texas, and being more fully described in Schedule V attached hereto and made a part hereof for all purposes. 
  
 W. E. SPENCER NO. 1 
  
 Situated in the County of Bowie, State of Texas, being 160.0 acres of land, more or less, out of the Daniel Morris Headright Survey, Abstract No. 381, as more fully
described in Assignment, Bill of Sale and Conveyance: (i) from Roy T. Rimmer, Jr., to Rockwall Marketing 

  

 
Corporation, effective July 1, 1994, and recorded under Clerk’s File No. 11082 on September 2, 1994 in the Real Property Records of Bowie County, Texas;
(ii) from Carden Oil & Gas, Inc. to Rockwall Marketing Corporation effective September 1, 1996 and recorded in Volume 2627, Page 279 of the Real Property Records of Bowie County, Texas; and (iii) from Coronado Company to Rockwall Marketing
Corporation effective January 1, 1997 and recorded in Volume 2698, Page 106 of the Real Property Records of Bowie County, Texas, and being more fully described in Schedule VI attached hereto and made a part hereof for all purposes. 
  
 IVA L. SMITH NO. 1 
  
 Situated in the County of Bowie, State of Texas, being 160.0 acres of land, more or less,
out of the Daniel Morris Headright Survey, Abstract No. 381, as more fully described in Assignment, Bill of Sale and Conveyance: (i) from Roy T. Rimmer, Jr., to Rockwall Marketing Corporation, effective July 1, 1994, and recorded under Clerk’s
File No. 11082 on September 2, 1994 in the Real Property Records of Bowie County, Texas; (ii) from Carden Oil & Gas, Inc. to Rockwall Marketing Corporation effective September 1, 1996 and recorded in Volume 2627, Page 279 of the Real Property
Records of Bowie County, Texas; and (iii) from Coronado Company to Rockwall Marketing Corporation effective January 1, 1997 and recorded in Volume 2698, Page 106 of the Real Property Records of Bowie County, Texas, and being more fully described in
Schedule VII attached hereto and made a part hereof for all purposes. 
  
 Tract
IV: 
  
 Situated in the County of Cass, State of Texas, part of the Samuel
Burnham Survey, Abstract No. 67, and being that certain Easement and Right of Way over and across 69.00 acres, more or less, conveyed by Robert L. Warren to Producers Pipeline Corporation, recorded in Volume 1078, Page 403 of the Official Records of
Cass County, Texas. 
  
 Situated in the County of Cass, State of Texas, part of
the Samuel Burnham Survey, Abstract No. 67, and being that certain Easement and Right of Way over and across 100.00 acres, more or less, conveyed by Arthur Andrew Arnold, et al to Producers Pipeline Corporation, recorded in Volume 1078, Page 405 of
the Official Records of Cass County, Texas. 
  
 Situated in the County of Cass,
State of Texas, part of the John C. Gahagan Survey, Abstract No. 390, and being that certain Easement and Right of Way over and across 70.34 acres, more or less, conveyed by Donald E. Coats, Sr., et ux, to Producers Pipeline Corporation, recorded in
Volume 1078, Page 407 of the Official Records of Cass County, Texas. 
  
 Situated
in the County of Cass, State of Texas, part of the John C. Gahagan Survey, Abstract No. 390 and being that certain Easement and Right of Way over and across 35.16 acres, more or less, conveyed by Donald E. Coats, Jr., et ux, to Producers Pipeline
Corporation, recorded in Volume 1078, Page 409 of the Official Records of Cass County, Texas. 
  
 Situated in the County of Cass, State of Texas, part of the Samuel Burnham Survey, Abstract No. 67, and being that certain Easement and Right of Way over and across 50.00 acres, more or less, conveyed by E. H.
Florence, et ux to Producers Pipeline Corporation recorded in Volume 1078, Page 411 of the Official Records of Cass County, Texas. 
  
 Situated in the County of Cass, State of Texas, being Tract I, Segment I of that certain Surface 

  

 
Lease and Pipeline Right-of-Way Agreement by and between Shell Oil Company and Delhi Gas Pipeline Corporation dated May 8, 1973, such surface leases being
recorded in Volume 558, Page 496 of the Official Records of Cass County, Texas and being partially assigned by Partial Assignment of Right of Way from Koch Midstream Services Company to Producers Pipeline Corporation effective March 1, 1999, and
recorded in Volume 1078, Page 391, Official Records of Cass County, Texas. 
  
 Situated in the County of Cass, State of Texas, and being a six inch pipeline and appurtenances, Beginning at a point with the Sulphur River Bryans Mill Plant located in the Benjamin F. Lynn Survey, Abstract No. 651, Cass County, Texas, and
continuing in a Northwesterly direction over, across, and though the following surveys: John Myers Survey, Abstract No. 695; Elizabeth Barcroft Survey, Abstract No. 113; W.M.S. Armstrong Survey, Abstract No. 29; J. S. Petty Survey, Abstract No. 864;
H. C. Adams Survey, Abstract No. 16; Geo W. Sternes Survey, Abstract No. 97; Cass County School Land, Abstract No. 173; Lewis Holcomb Survey, Abstract No. 479; J. P. Mathews Survey, Abstract No. 1265, at which point the six inch pipeline leaves Cass
County, Texas and crosses the Sulphur River and enters Bowie County, Texas. Said pipeline and appurtenances being more fully shown on Alignment Drawings Numbered 1 through 6 of Delhi Gas Pipeline Corp., Dalby Springs Lateral, dated March 1973, and
being more fully described in Assignment and Bill of Sale of Personal Property from Koch Midstream Services Company to Producers Pipeline Corporation, effective March 1, 1999 and recorded in Volume 1078, Page 386, Official Records, Cass County,
Texas. 
  
 Situated in the County of Cass, State of Texas, and being those rights
of way, easements and permits assigned by Koch Midstream Services Company to Producers Pipeline Corporation by Assignment of Rights-of-Way, Easements and Permits effective March 1, 1999, and recorded in Volume 1078, Page 395, Official Records, Cass
County, Texas, said rights of way, easements and permits being more fully described in Schedule I attached hereto and made a part hereof for all purposes. 
  
 Tract V: 
  
 Nine (9) acres of land off the south end of the following described tract lying and situated on the east side of State Highway No. 77: 
  
 Being a part of the John C. Gahagan Survey, A-390, in Cass County,
Texas and being more fully described by metes and bounds as follows: 
  
 Beginning at the Southeast Corner of said Survey at a stake from which a pine brs. South 5 deg. East 10 vrs., a P. O. brs. South 62 deg. West 14.4 vrs. both marked “CNS”: 
  
 THENCE West 651 vrs. to a stake from which a pine brs. North 47 deg. East 7 vrs. a pine brs. North 78 deg. East 4 vrs. both marked “M”: 
  
 THENCE North 217 vrs. to a stake from which a pine brs. North 32 deg. East 5 vrs. marked “B”; a pine brs. South 65 deg. East 12 12 vrs., marked
“M”: 
  
 THENCE East 651 vrs. to a stake from which a pine brs. North 17 deg. West 15 vrs. marked “B” a pine brs. South 44 deg. West 5 vrs, marked
“M”: 
  

 THENCE South 217 vrs. to the Point of Beginning, containing 25 acres, more or less, and being the same land as that
described in deed from L. L. Maroney to John Bricker, said deed dated 3/5/1877, and recorded in Vol. Y, page 546, Deed Records, Cass County, Texas; 
  
 Also being a portion of the SECOND TRACT described in that certain Deed of Trust dated the 18th day of August, 1978, from Michael Clyde Taylor et ux Loye Jan Taylor to
The First National Bank of Atlanta, Texas, recorded Vol. 163, page 714, Deed of Trust records, Cass County, Texas. 
  
 Said 9.0 acres, more or less, being the same land described in a deed dated 12/15/78, recorded in Vol. 618, page 118, Deed Records of Cass County, Texas, from Michael
Clyde Taylor, et ux, to Clyde E. Glass, Jr. 
  
 Tract VI: 
  
 C. E. GLASS NO. 1 GAS UNIT 
  
 Gas Unit Designation, Kaiser Oil (U.S.), Ltd. et al - V. E. Glass Unit No. 1, dated January
25, 1982, recorded in Volume 672, Page 542 of the Official Records of Cass County, Texas, as well as any amendments thereto of record in Cass County, Texas, as more fully described in Assignment and Bill of Sale from Salt Creek Production, Inc. and
K.M.A. Operating, Inc. to Rockwall Marketing Corporation effective January 1, 1996, recorded in Volume 1006, Page 876, Official Records of Cass County, Texas, said leases being more fully described in Schedule I-D attached hereto and made a part
hereof for all purposes. 
  
 R. BROWN NO. 1
GAS UNIT 
  
 Oil, gas and mineral property known as the Long Operating,
L.L.C. - R. Brown No. 1 Gas Unit located in the Atlanta South Field, Samuel Burnham Survey, Abstract No. 67, more fully described in Assignment and Conveyance from Long Petroleum, Inc. to Rockwall Marketing Corporation, effective January 1, 1999,
recorded in Volume 1075, Page 513, Official Records, Cass County, Texas, and al of the Oil, Gas and Mineral Leases covering lands included therein, being described in Schedule II-D attached hereto and made a part hereof for all purposes. 

 
 BEAVER GAS UNIT NO. 1 
  
 Oil and Gas Properties, Wells and Equipment described in Assignment and Bill of Sale from
SOGO, Inc. to Rockwall Marketing Corporation, effective September 1, 1996, recorded in Volume 1019, Page 381, Official Records of Cass County, Texas, said oil and gas properties being more fully described in Schedule III-D attached hereto and made a
part hereof for all purposes. 
  

 Tract VII: 
  
 WADE BROTHERS GAS UNIT NO. 1 
  
 Oil and gas property known as Wade Brothers Gas Unit No. 1 as described in Unit Declaration recorded in Volume 286, Page 667 of the Deed Records of Rains County, Texas,
as more fully described in Assignment and Bill of Sale from Scotchwood Group, Ltd., et al to Rockwall Marketing Corporation effective March 1, 1998 and recorded in Volume 359, Page 362, of the Deed Records of Rains County, Texas. 
  
 PART TWO: 
  
 TO THE EXTENT LOCATED AT, INSTALLED ON, DEPOSITED IN, AFFIXED OR ATTACHED TO, USED IN CONNECTION WITH OR RESULTING FROM OPERATIONS CONDUCTED
ON THE REAL PROPERTY DESCRIBED IN EXHIBIT “B” ATTACHED HERETO. 
  
 All
of Debtor’s presently existing and hereafter arising or acquired “Accounts” which shall mean and include all of Debtor’s present and future rights to payment for real property, goods, merchandise or Inventory (as hereinafter
defined) sold, rented or leased or for services rendered, including, without limitation, those which are not evidenced by instruments or chattel paper, and whether or not they have been earned by performance; account(s), accounts receivable,
proceeds of any letters of credit on which Debtor is named as beneficiary; contract rights; acceptances; notes; chattel paper; instruments (other than margin stock); drafts; documents; insurance proceeds; deposits or other sums credited by or due
from the Secured Party to Debtor; and all such obligations whatsoever owing to Debtor, together with all instruments and all documents of title representing any of the foregoing, all rights in any goods, merchandise or Inventory which any of the
same may represent, all rights in any returned or repossessed goods, merchandise and Inventory, and all right, title, security and guaranties with respect to each of the foregoing, including, without limitation, any right of stoppage in transit. In
addition, this definition shall include the definition of “accounts” as that term is used in the Uniform Commercial Code of each state in which the Debtor’s Accounts are located. 
  
 All of Debtor’s presently existing and hereafter arising or acquired
“Inventory” which shall mean any and all goods, merchandise and other personal property, wheresoever located and whether or not in transit, now owned or hereafter acquired by Debtor which is or may at any time be held for sale or lease,
furnished under any contract of service or held as raw materials, work in process, finished goods, supplies or material used or consumed in Debtor’s business and all such property the sale or other disposition of which has given rise to
Accounts and which has been returned to or repossessed or stopped in transit by Debtor or which is or might be used in connection with the manufacture, packing, shipping, advertising, selling or finishing of such goods, merchandise and other
personal property, all returned or repossessed goods now, or at any time or times hereafter, in the possession or under the control of Debtor or Secured Party, and all documents of title or documents representing the same. In addition, this
definition shall include the definition of “inventory” as that term is used in the Uniform Commercial Code of each state in which the Debtor’s Inventory is located. 
  

 All of Grantor’s presently existing and hereafter arising or acquired “Equipment” which shall mean all of
Grantor’s now owned or hereafter acquired fixtures, machinery and equipment, including, without limitation, furniture, rolling stock, vehicles, trade fixtures and machinery, and the equipment more fully described in Exhibit “B”
attached hereto and made a part hereof for all purposes, together with any and all improvements, accessions, parts and appurtenances thereto, substitutions therefor and replacements thereof. In addition, this definition shall include the definition
of “equipment” as that term is defined in the Uniform Commercial Code of each state in which the Grantor’s Equipment is located. 
  
 All of Debtor’s presently existing or hereafter arising depository accounts and all of Debtor’s rights, title and interest in and to any deposits or other sums
at any time credited by or due from financial institutions to Debtor. 
  
 All
accessions to, substitutions for and all replacements, products and proceeds of the foregoing, including, without limitation, proceeds of insurance policies insuring any of the foregoing. 
  
 All books and records (including, without limitation, customer lists, credit files, computer programs, printouts and other computer
materials and records) of Debtor pertaining to any of the foregoing. 
  

 SCHEDULES TO EXHIBIT OMITTED

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