Document:

EXHIBIT 10.1

                                 DEBT AGREEMENT

           This Agreement is made and entered into this 1st day of November
2003, by and between G.S. Beckwith Gilbert, of 35 Vista Drive, Greenwich,
Connecticut 06830 ("Lender"), and MEGADATA CORPORATION, a New York corporation,
with its principal place of business at 35 Orville Drive, Bohemia, New York
11716 ("Borrower" or "Megadata"):

                                   WITNESSETH

WHEREAS, Megadata has issued numerous promissory notes to Lender for value
received;

WHEREAS, the principal amount of such notes is due at December 31, 2003, with
interest due and owing at the end of each calendar quarter at an annual rate of
9% calculated on the basis of a 360 day year;

WHEREAS, the total amount due and owing under the promissory notes as of
November 1, 2003 is $ 8,466,465; and

WHEREAS, Lender and Megadata desire to modify certain terms and conditions of
the outstanding promissory notes as of the date of this Agreement and issue a
Replacement promissory note for value received upon the terms and conditions set
forth herein.

NOW, THEREFORE, in consideration of the foregoing and the agreements contained
herein, the parties hereby agree as follows:

1. DEFINED TERMS:

   "FAIR MARKET VALUE PRICE" shall mean the price per share of Megadata's common
   stock as reported on the OTC Bulletin Board, NASDAQ or other national
   securities exchange, as applicable.

2. MODIFICATION OF PREVIOUS NOTES: All outstanding promissory notes
   previously issued to Lender totaling $ 8,466,465 in aggregate principal
   amount shall be modified as set forth herein.

3. ISSUANCE AND TERMS OF REPLACEMENT NOTE: For value received, Megadata shall
   issue a Replacement Note (the "Replacement Note") to Lender in the aggregate
   principal amount of $ 8,466,465. The Replacement Note will be in the form
   attached as Exhibit A hereto.

     a. TERM. The principal amount of the Replacement Note, together with any
        and all accrued and unpaid interest thereon, shall be paid in full on
        November 1, 2004.

                                       1
<PAGE>

     b. INTEREST. The Replacement Note shall bear interest on the unpaid
        principal amount, from the date of issuance until paid in full. The
        amount of interest due and payable under the Replacement Note for the
        period of November 1, 2003 through November 1, 2004 shall equal the
        amount obtained by multiplying 600,000 shares of Megadata common stock
        by the Fair Market Value Price of the Company's common stock on January
        15, 2004. Interest for the period of November 1, 2003 through November
        1, 2004 will be paid in advance on January 15, 2004 in the form of
        600,000 shares of Megadata common stock.

     c. METHOD OF PAYMENT. The Replacement Note payments of interest will be in
        the form of fully paid and non-assessable shares of Megadata common
        stock. The Company will transfer 600,000 shares of common stock to
        Lender as payment of annual interest on the unpaid amount of the
        Replacement Note for each quarter commencing November 1, 2003. The
        Company will transfer the total annual interest payment in the form of
        common stock on a one-time annual basis.

     d. LIMITATIONS. In addition to any other applicable resale restrictions,
        Lender agrees that he shall not be permitted in any one fiscal quarter,
        to sell or transfer more than 150,000 shares of the total 600,000 shares
        of common stock issued by the Company pursuant to this agreement.

4. MISCELLANEOUS.

     a. AMENDMENT AND MODIFICATION. This Agreement may be amended, modified and
        supplemented only by a written instrument signed by all of the parties
        hereto expressly stating that such instrument is intended to amend,
        modify or supplement this Agreement.

     b. ENTIRE AGREEMENT. This Agreement contains the entire agreement between
        the parties hereto with respect to the subject matter hereof and
        supersedes all prior agreements and understandings, oral or written,
        with respect to such matters.

     c. SEVERABILITY. If any provision of this Agreement shall be determined to
        be invalid or unenforceable under law, such determination shall not
        affect the validity or enforceability of the remaining provisions of
        this Agreement.

     d. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
        construed in accordance with the laws of the State of New York, without
        regard to the conflicts of law rules of such state.

                                       2
<PAGE>

     e. COUNTERPARTS. This Agreement may be executed in one or more
        counterparts, each of which shall be deemed an original, and all of
        which shall constitute one and the same agreement and shall become
        effective when one or more counterparts have been signed by each of the
        parties and delivered to the other party, it being understood that both
        parties need not sign the same counterpart.

           IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year written above.

MEGADATA CORPORATION
35 Orville Drive
Bohemia, New York 11716

By: /s/ JAMES T. BARRY
--------------------------------------------
Name: James T. Barry
Title: President and Chief Executive Officer

By: /s/ LOUIS J. PETRUCELLY
--------------------------------------------
Name: Louis J. Petrucelly
Title: Chief Financial Officer

LENDER
G.S. Beckwith Gilbert
35 Vista Drive
Greenwich, Connecticut 06830

By: /s/ G.S. BECKWITH GILBERT
--------------------------------------------
Name: G.S. Beckwith Gilbert

                                       3
<PAGE>

                                                                       EXHIBIT A

                             SECURED PROMISORY NOTE

$  8,466,465                                              New York, New York

                                                          AS OF NOVEMBER 1, 2003

           For value received, the Company and G.S. Beckwith Gilbert retire all
notes issued prior to such date, the undersigned, MEGADATA CORPORATION, a New
York corporation (hereinafter referred to as "Borrower"), hereby unconditionally
PROMISES TO PAY to the order of G.S. Beckwith Gilbert ("Lender"), or his
permitted assigns, to an account designated by Lender, in lawful money of the
United States of America and in immediately available funds, the principal sum
of eight million four hundred sixty six thousand and four hundred six five
dollars ($8,466,465) together with interest on the unpaid principal amount of
this note outstanding in the form of 600,000 shares of Megadata Common Stock.

           Interest due and owing hereunder shall be payable in the form of
600,000 shares of Megadata Common Stock. Interest for the period of November 1,
2003 through November 1, 2004 will be paid in advance on January 15, 2004 in the
form of 600,000 non-assessable shares of Megadata Common Stock. The principal
amount evidenced hereby will be repaid in full on November 1, 2004. All accrued
and unpaid interest or any unpaid principal balance remaining unpaid hereunder
as of November 1, 2004, shall be payable on such date.

           Notwithstanding the foregoing, the principal amount of the
indebtedness evidenced hereby together with all accrued interest shall be
immediately due and payable upon written notice to Borrower from Lender upon the
happening of any of the following Events of Default:

(a) Any representation or warranty in the Securities Purchase Agreement, dated
September 18, 1996, between Borrower and Lender shall be untrue or incorrect in
any material respect;

(b) Any of the assets of Borrower shall be attached, seized, levied upon or
subjected to a writ or distress warrant, or come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors of
Borrower and shall remain unstayed or undismissed for thirty (30) consecutive
days; or any person other than Borrower shall apply for the appointment of a
receiver, trustee or custodian for any of the assets of Borrower and shall
remain unstayed or undismissed for thirty (30) consecutive days; or Borrower
shall have concealed, removed or permitted to be concealed or removed, any part
of its property, with the intent to hinder, delay or defraud its creditors or
any of them or made or suffered a transfer of any of its property or the
incurring of an obligation which may be fraudulent under any bankruptcy,
fraudulent conveyance or other similar law;

(c) A case or proceeding shall have been commenced against Borrower in a court
having competent jurisdiction seeking a decree or order in respect of Borrower
(i) under title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) of Borrower or of any substantial
part of its properties, or (iii) ordering the winding-up or liquidation of the
affairs of Borrower and such case or proceeding shall remain undismissed or
unstayed for thirty (30) consecutive days or such court shall enter a decree or
order granting the relief sought in such case or proceeding;

                                       4
<PAGE>

(d) Borrower shall (i) file a petition seeking relief under title 11 of the
United States Code, as now constituted or hereafter amended, or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
consent to the institution of proceedings thereunder or to the filing of any
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) of
Borrower or of any substantial part of its properties, (iii) fail generally to
pay its debts as such debts become due, or (iv) take any corporate action in
furtherance of any such action;

(e) Final judgment or judgments (after the expiration of all times to appeal
therefrom) for the payment of money in excess of $100,000 in the aggregate shall
be rendered against Borrower and the same shall not be vacated, stayed, bonded,
paid or discharged for a period of thirty (30) days; or

(f) Any other event shall have occurred which would have a material adverse
effect on Borrower or its assets or financial condition in Lender's reasonable
judgment and Lender shall have been given Borrower at least twenty (20) days
notice thereof.

           As security for any and all liabilities of the Borrower to Lender,
now existing or hereafter arising hereunder, or otherwise, Lender is hereby
given a lien upon and a security interest in any and all moneys or other
property (i.e., goods and merchandise, as well as any and all documents relative
thereto; also, funds, securities, chooses in action and any and all other forms
of property whether real, personal or mixed, and any right, title or interest of
the Borrower therein or thereto), and/or the proceeds thereof, including
(without limitation of the foregoing) that in safekeeping or in which Borrower
may have any interest. In the event of the happening of any one or more Events
of Default, Lender shall have all of the rights and remedies provided to a
secured party by the Uniform Commercial Code in effect in New York State at that
time and, in addition thereto, the Borrower further agrees that (1) in the event
that notice is necessary, written notice delivered to the Borrower at its
principal executive offices ten business days prior to the date of public sale
of the property subject to the lien and security interest created herein or
prior to the date after which private sale or any other disposition of said
property will be made shall constitute reasonable notice, but notice given in
any other reasonable manner or at any other reasonable time shall be sufficient,
(2) in the event of sale or other disposition of such property, Lender may apply
the proceeds of any such sale or disposition to the satisfaction of Lenders
reasonable attorneys' fees, legal expenses and other costs and expenses incurred
in connection with the retaking, holding, preparing for sale, and selling of the
property, and (3) without precluding any other methods of sale, the sale of
property shall have been made in a commercially reasonable manner if conducted
in conformity with reasonable commercial practices of banks disposing of similar
property.

           Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by Borrower.

                                       5
<PAGE>

           This Note has been executed, delivered and accepted in the State of
New York and shall be interpreted, governed by, and construed in accordance
with, the laws of the State of New York.

                                                MEGADATA CORPORATION

                                                By:/s/ LOUIS J. PETRUCELLY
                                                ------------------------------
                                                Louis J. Petrucelly

                                                Title: Chief Financial Officer

                                       6
<PAGE>Exhibit 10.1
                     SETTLEMENT AGREEMENT AND MUTUAL RELEASE

         This Settlement Agreement And Mutual Release  ("Agreement") is made and
entered into as of the 23rd day of December,  2003 by and between  Trans Energy,
Inc. ("TEI"), a Nevada Corporation,  George Woodburn and Loren Bagley on the one
hand and Baker  Hughes  Oilfield  Operations,  Inc.  d/b/a Baker  Hughes  Inteq,
Western Geophysical, a division of Western Atlas International,  Inc. and any of
their  subsidiaries,  affiliates or related  entities  (collectively  the "Baker
Entities") on the other hand.

                                   1. RECITALS
                                      --------

         A. The Baker Entities  obtained a judgment against TEI in the amount of
$600,665.36 plus post-judgment interest at the rate of 10% per annum by entry of
an Agreed Final Judgment (the "Agreed  Judgment") in the 189th Judicial District
Court of  Harris  County,  Texas,  Cause No.  1998-  48248.  The Baker  Entities
obtained an additional  judgment  against TEI in the amount of  $41,142.00  plus
post-judgment interest at the rate of 10% per annum by entry of a Final Judgment
(the "Judgment") in the 152nd Judicial  District Court of Harris County,  Texas,
Cause No.  1998-8777.  Collectively both judgments are herein referred to as the
"Judgments."

         B. The Baker Entities and TEI entered into a Settlement Agreement dated
February 2, 2001 (the "February Agreement")  concerning the terms of the payment
for  the  obligations  owed by TEI to the  Baker  Entities  for  the  Judgments.
Pursuant to the  February  Agreement,  TEI agreed to pay the Baker  Entities the
amount  of  $759,664.31,  plus  interest  thereon  at 10%  from  the date of the
"Initial Payment as defined in the February Agreement and in accordance with the
payment  schedule  contained  in  the  February  Agreement.   As  part  of  such
settlement,  Mr.  Woodburn (the  "Woodburn  Pledge") and Mr. Bagley (the "Bagley
Pledge") each delivered their Security  Agreement/Pledge  dated February 1, 2001
and TEI delivered to the Baker  Entities a Deed Of Trust dated February 1, 2001,
and recorded  February 14, 2001, in Book 1646 at Page 478 - 479 in the Office of
the County Clerk, Campbell County, Wyoming (the "Deed of Trust").  Subsequently,
TEI assigned to the Baker Entities TEI's' right to certain  production  payments
by agreement  dated February 28, 2002, and recorded March 15, 2002, in Book 1140
of Photos at Pages 346-349 in the Office of the County Clerk,  Campbell  County,
Wyoming (the "Production Assignment").

         C. TEI admits  that it is in default of its payment  obligations  under
the  February  Agreement  and the  Judgments  and that  the  unpaid  balance  of
$577,702.01  (representing principle and accrued interest through July 14, 2003)
is now past due and owing (the "Claims").

                                       1
<PAGE>

         D. The Baker Entities, Mr. Woodburn, Mr. Bagley and TEI enter into this
Agreement to resolve fully and finally all TEI obligations to the Baker Entities
arising  from  TEI's  default  of  the  February  Agreement,  the  Judgments  or
otherwise.

                                  II. AGREEMENT
                                      ---------

         In  consideration  of the covenants and agreements  herein,  and of the
payment of $350,000 in cash or by cashier(s) check made payable to Baker Hughes,
Inc.  by Loren  Bagley to the Baker  Entities,  and for other good and  valuable
consideration,  the  receipt  and  sufficiency  of  which  is  hereby  expressly
acknowledged by TEI, TEI, Mr. Bagley, Mr. Woodburn and the Baker Entities hereby
agree as follows:

         A.       Payment to the Baker Entities from Trans Energy. Inc.
                  -----------------------------------------------------
         Mr. Bagley, for the benefit of TEI agrees to pay the Baker Entities the
amount of $350,000 in cash or by cahier's  check made  payable to Baker  Hughes,
Inc.,  contemporaneously  with the delivery to the parties.  (i) this Agreement,
(ii) the Release and Reassignment of Production Payment and Deed of Trust, (iii)
documents  releasing any judgment  liens against TEI by the Baker Entities filed
in West Virginia and/or Texas,  (iv) a UCC Termination  Statement to be filed in
West  Virginia,  (v)  cancelled  originals  of the Deed of Trust and the  pledge
agreements  of Mr.  Woodburn  and  Mr.  Bagley  and  (vi)  the  original.  stock
certificates and cancelled,  blank stock powers certificates  delivered with the
pledge agreements (collectively the "Settlement Documents").

         B.       Prior payments and production payments
                  --------------------------------------
         The Baker Entities will retain all prior payments received from TEI, or
on its behalf, in addition to all payments  heretofore  received or which may be
or become  due under the  Production  Assignment  on or before  the date of this
Agreement.  Any such payments  received by TEI shall be immediately  paid to the
Baker Entities.

         C.       Delivery of the Settlement Documents
                  ------------------------------------
         Contemporaneously  with the  delivery  of the  $350,000.  by TEI to the
Baker  Entities,  the Baker  Entities  shall deliver the  Settlement  Documents,
appropriately  executed and notarized (as may be required).  TEI shall be solely
responsible for filing any of the Settlement Documents with any state,  federal,
county  or  other  government  entity,  department  or  agency,  as TEI may deem
appropriate, at TEI's sole cost and expense.

                                       2
<PAGE>

                        III. RELEASE AND INDEMNIFICATION

         A.       TEI's Release of the Baker Entities
                  ----------------------------------
         For and in  consideration  of the covenants and agreements of the Baker
Entities in this  Agreement,  each of TEI, Mr. Woodburn and Mr. Bagley (the "TEI
Releasors") hereby RELEASES,  DISCHARGES,  AND ACQUITS the Baker Entities, their
employees,   agents,   representatives,   directors,   shareholders,   officers,
affiliates, subsidiaries, heirs, executors,  administrators,  insurers, assigns,
attorneys and legal  representatives,  and each of them (the "Baker  Releasees")
from any and all judgments and claims of any kind whatsoever,  including without
limitation,  demands, debts, dues, liens, or causes of action at law, in equity,
in contract, or in tort, under the common law or a statute,  regulation,  or law
of the State of Texas or any other state or jurisdiction,  or the United States,
as  well as  claims  for  damages  of any  kind  whatsoever,  including  without
limitation,  lost profits, loss of income, any other economic losses or damages,
punitive, exemplary,  consequential,  treble, or additional damages of any kind,
attorneys fees, court costs,  prejudgment interest,  post-judgment interest, and
any other damages, that the TEI Releasors, or any of them, have or might have or
have incurred or might incur,  irrespective of when or how any such arose or may
have arisen, whether now or in the future, including without limitation,  in any
way arising from or related to the Claims, the Judgments, or either of them, the
collection and enforcement of the Judgments or either of them, the filing of the
2003 Bankruptcy and/or any involuntary  bankruptcy  petition and/or the entry of
any order for relief in any such bankruptcy case,  including without  limitation
claims related to venue or any other matter,  whether now known or unknown,  and
irrespective  of whether any such could have,  with the  exercise of  reasonable
diligence been discovered,  it being the specific intention of the TEI Releasors
by this Agreement to release and discharge the Baker  Releasees from any and all
claims the TEI Releasor's, or any of them, have or may have, arising, or alleged
to have arisen, as a result of any conduct of any sort, of any person or entity,
including without  limitation the Baker Releasees,  or any of them, on or before
the  date of this  Agreement  or in  connection  with  the  filing  of the  2003
Bankruptcy, the Judgments or the February Agreement, or otherwise, and excepting
from this  release  only  claims  for the breach of this  Agreement.  As further
consideration for this Agreement,  TEI hereby stipulates that the Baker Entities
properly and timely  served the  Involuntary  Petition and the Summons on TEI in
the 2003 Bankruptcy.

         B.       TEI's Indemnification of the Baker Entities
                  -------------------------------------------
         FOR THE SAME  CONSIDERATION AS HEREINABOVE GIVEN BY THE BAKER ENTITIES,
THE TEI  RELEASORS,  AND  EACH  OF  THEM,  EXPRESSLY  AGREE  TO  FULL Y  DEFEND,
INDEMNIFY,  AND HOLD  HARMLESS  THE  BAKER  RELEASEES  FROM ANY  CLAIM,  DEMAND,
LIABILITY,  COST,  OR  EXPENSE  OF ANY  KIND OR  CHARACTER,  INCLUDING,  WITHOUT
LIMITATION,  FOR ATTORNEY'S FEES INCURRED,  WHICH MAY ARISE,  ARISE,  AND/OR ARE
ALLEGED TO HAVE ARISEN AS A RESULT OF CLAIMS

                                       3
<PAGE>

AND/OR  ALLEGATIONS  MADE BY ANY PERSON OR ENTITY ARISING BY, THROUGH,  OR UNDER
THE TEI  RELEASORS,  OR ANY OF THEM,  IN  CONNECTION  WITH ANY  MATTER  RELEASED
HEREUNDER,  REGARDLESS  OF  WHETHER  SAID  LIABILITY  BE  DIRECT  OR BY  WAY  OF
INDEMNITY, CONTRIBUTION, OR SUBROGATION.

         C.       The Baker Entities' Release of TEI. Woodburn and Bagley
                  -------------------------------------------------------
         For and in consideration of the covenants and agreements of TEI in this
Agreement,  The Baker Entities  hereby RELEASE,  DISCHARGE,  AND ACQUIT TEI, its
employees,   agents,   representatives,   directors,   shareholders,   officers,
affiliates, subsidiaries, heirs, executors,  administrators,  insurers, assigns,
attorneys and 1egal  representatives,  Mr. Bagley and Mr. Woodburn,  and each of
them,  (the "TEI  Releasees")  from any and all judgments and claims of any kind
whatsoever, including without limitation, demands, debts, dues, liens, or causes
of action at law, in equity, in contract,  or in tort, under the common law or a
statute,  regulation,  or law of the  State  of  Texas  or any  other  state  or
jurisdiction,  or the United  States,  as well as claims for damages of any kind
whatsoever,  including without  limitation,  lost profits,  loss of income,  any
other economic losses or damages, punitive, exemplary, consequential, treble, or
additional  damages  of any  kind,  attorneys  fees,  court  costs,  prejudgment
interest,  post-judgment  interest,  and  any  other  damages,  that  the  Baker
Entities,  or any of  them,  have or  might  have or have  incurred,  in any way
arising at any time prior to the effective date of this Agreement,  irrespective
of how any such arose or may have arisen,  including without limitation,  in any
way arising from or related to the Claims, the Judgments,  or either of them, or
any other matter,  whether now known or unknown, and irrespective of whether any
such could have, with the exercise of reasonable diligence been discovered prior
to the execution of this Agreement, it being the specific intention of the Baker
Entities by this  Agreement to release and discharge the TEI Releasees  from any
and all  claims  which  could or may be made or  brought by through or under the
Baker Entities,  or any of them, arising, or alleged to have arisen, as a result
of any conduct of any sort, of the TEI Releasees,  or any of them,  occurring on
or before the date of this Agreement,  including without  limitation all matters
in any way related to the Judgments and excepting  from this release only claims
for the breach of this Agreement.  The Deed of Trust, the Woodburn  Pledge,  the
Bagley  Pledge  and  the  Production  Assignment  are  hereby,  in  all  things,
cancelled. The Judgments are hereby RELEASED.

         D.       Final Release.
                  -------------
         1. It is the mutual intent of the Parties hereto that this Agreement is
and shall be final, conclusive,  binding,  enforceable and non-terminable as of,
from and after the Effective Date of this Agreement, and
         2.  Regardless  of any  change  in the law  (statutory,  decisional  or
otherwise) at any time after the date of this  Agreement;  and/or whether any of
the  facts  with  respect  to or  otherwise  on the basis of which any Party has
entered into and/or executed this Agreement, is at  any time after  the date  of

                                       4
<PAGE>

this Agreement found or proven to be different in any manner whatsoever from the
facts now  believed by any Party to be true as of the date of the  execution  of
this Agreement; and/or
         3. The discovery after the date of the execution of this Agreement,  of
any additional claims which any Party to this Agreement may have had against any
other Party and all related facts and circumstances.

         E.       Further Documents - No Liability
                  --------------------------------
         Upon the  reasonable  request  of TEI to the  Baker  Entities,  and the
delivery to the Baker  Entities by TEI of the  appropriate  document,  the Baker
Entities  shall  execute and  deliver to TEI for filing,  such other and further
releases as may be necessary to fully  effectuate the intent of this  Agreement.
All  costs  of  preparation  and  filing  shall  be  paid  by  TEI.  Absent  the
unreasonable  failure  of  the  Baker  Entities  to  execute  and  deliver  such
documents,  if any,  within a reasonable  time,  which in no event shall be less
than sixty (60) days from the date the Baker Entities receive the document,  TEI
agrees that the Baker Entities shall have no liability whatsoever to TEI for any
damages incurred by TEI with respect to any release  delivered  pursuant to this
paragraph.

                          IV. THE BANKRUPTCY DISMISSAL
                              ------------------------

         A.       Motion to Dismiss the Bankruptcy Case.
                  -------------------------------------
         After the execution and delivery of this Agreement,  the Baker Entities
agree to submit to the Bankruptcy  Court a Motion to Dismiss the Bankruptcy Case
(the "Motion to Dismiss").  The motion to Dismiss shall provide, in part, that a
basis for the dismissal  includes the settlement of the Claims.  The parties may
also submit a request for  expedited  hearing on the Motion to Dismiss,  and the
parties  hereto  shall  consent  to  expedited  consideration  of the  Motion to
Dismiss.

         B.       Payment  of  Bankruptcy Costs,  Fees, Administrative Expenses,
                  Trustee's Fees and Trustee's Attorney's Fees
                  --------------------------------------------------------------
         Contemporaneously  with the dismissal of the Bankruptcy Case, TEI shall
pay all costs,  fees,  administrative  expenses,  Trustee's  fees and  Trustee's
attorney's fees incurred in connection with the Bankruptcy  Case,  excluding the
attorneys' fees of the Baker Entities.

                                 V. ARBITRATION
                                   ------------

         Any dispute  between the parties  arising by virtue of this  Agreement,
the Judgments,  or otherwise,  concerning any matter, at law, or in equity shall
be finally  determined by  arbitration  before an  arbitrator  from the American
Arbitration   Association,   in  accordance  with  the  rules  of  the  American
arbitration  Association as  promulgated  from time to time. A party may request
three

                                       5
<PAGE>

arbitrators  in which  event TEI and the Baker  Entities  shall each  choose one
arbitrator who shall together  choose a third,  but the party  requesting  three
arbitrators  shall pay for two of them in advance.  The cost of arbitration  and
attorneys fees incurred shall be paid by the  non-prevailing  party, which shall
be  determined by the  arbitrator.  Any such  arbitration  shall be conducted in
Houston,  Texas and the award shall.  not be  appealable in any state or federal
court and may be entered in any state or federal  court as a final  judgment  of
said court.

                          VI. MISCELLANEOUS PROVISIONS
                              ------------------------

         A. The Baker  Entities and TEI expressly  warrant and represent as part
of the  consideration  for  the  execution  of this  Agreement  that  they  have
consulted  with an attorney or advisor of their choosing prior to executing this
Agreement.  The Parties,  each for him or itself,  further warrant that they are
fully  competent to execute this  Agreement and that this  Agreement is executed
voluntarily and without reliance on any  representation of any kind or character
not expressly herein set forth.

         B. The  Parties  expressly  understand  and agree  that the  agreements
herein  contained and the  consideration  transferred is to compromise  disputed
claims,  avoid further litigation,  and buy peace, and that no payments made nor
releases or other  consideration  given shall be  construed  as an  admission of
liability, all liability being expressly denied.

         C. The Baker Entities,  TEI, Mr. Woodburn and Mr. Bagley each expressly
warrant and  represent  that each for himself or itself,  respectively,  has not
assigned,  pledged, or otherwise, in any manner whatsoever,  sold or transferred
any right, title,  interest, or claim which they have or may have,  individually
or  collectively,  in  connection  with,  related  to,  or  arising  out  of the
Settlement Documents,  Claims, the Judgments and/or the matters released by this
Agreement.

         D. The terms of this Agreement are contractual and not mere recitals.

         E. This Agreement may be executed in one or more  counterparts,  all of
which together shall constitute one instrument.

         F. This Agreement constitutes the entire agreement between the parties.
Unless  specifically set forth in this Agreement there are no  understandings or
representations  of any sort upon which any party hereto relies as an inducement
to execute this Agreement.

                                       6
<PAGE>

         G. No provisions of this Agreement shall be amended, modified or waived
except  by an  express  writing  duly  signed  by the  party  against  whom such
amendment, modification or waiver is asserted.

         H. THIS AGREEMENT  SHALL BE CONSTRUED  UNDER AND IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS  WITHOUT  GIVING ANY EFFECT TO ANY LAWS OR PROVISIONS
CONCERNING CONFLICTS OR CHOICES OF LAWS.

         I. All notices, requests,  demands, and other communications under this
Agreement  shall be deemed to have been duly  given on the date of  service  and
served  personally  on the party to whom notice is to be given,  or on the third
day after mailing if mailed to the party to whom notice is to be given, by first
class mail, registered or certified,  postage prepaid, and properly addressed as
follows:

         To:      Western Geophysical, a division
                  of Western Atlas International, Inc. and
                  Baker Hughes Oilfield Operations, Inc.
                  d/b/a Baker Hughes Inteq
                  c/o Michael A. Lam, P .C.
                  2000 Smith St.
                  Houston, Texas 77002

         To:      Trans Energy, Inc.
                  c/o Loren Bagley
                  210 Second Street
                  P.O. Box 393
                  St. Marys, West Virginia 26170

         J. The subject  headings in this Agreement are included for purposes of
convenience only and shall not affect the construction or  interpretation of any
of its provisions.

         K. No  consent  or waiver  expressed  or  implied  by any Party to this
Agreement to or of any breach or default by any other Party to this Agreement in
the performance by such other Party of its or his obligations hereunder shall be
deemed or  construed to be a consent or waiver to or of any breach or default of
any other Party of the same or any subsequent obligations hereunder.  Failure on
the part of any Party to this Agreement to complain of any act or failure to act
of any Party to this Agreement or to declare such Party in default, irrespective
of how long  such  failure  continues,  shall  not  constitute  a waiver  by the
non-defaulting Parties of their rights hereunder.

                                       7
<PAGE>

         L. If any provision of this  Agreement is held to be unlawful,  invalid
or unenforceable  under present or future laws effective during the term hereof,
such provision shall be fully  severable,  and this Agreement shall be construed
and enforced  without giving effect to such unlawful,  invalid or  unenforceable
provision.

         IN WITNESS WHEREOF, the parties sign this Agreement effective as of the
23rd day of December 2003.

                                       BAKER HUGHES OILFIELD OPERATIONS,
                                       INC. d/b/a BAKER HUGHES INTEQ and
                                       WESTERN GEOPHYSICAL, a division of
                                       WESTERN ATLAS INTERNATIONAL, INC.

                                       BY:  /s/ Christopher Ryan
                                           --------------------------------
                                            Christopher Ryan
                                       ITS: Manager of Collections,
                                            Authorized Agent

                                       TRANS ENERGY, INC.

                                       BY:  /s/ Loren Bagley
                                            --------------------------------
                                            Loren Bagley
                                       ITS: Vice President

                                                /s/ Loren Bagley
                                                --------------------------------
                                                Loren Bagley, Individually

                                                /s/ William Woodburn
                                                --------------------------------
                                                William Woodburn, Individually

                                       8

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