Document:

Form of Stock Option Agreement

 EXHIBIT 10.27 
 THE WET SEAL, INC. 
 2005 STOCK INCENTIVE PLAN 
 STOCK OPTION AGREEMENT 
 This Stock
Option Agreement (the “Agreement”) is made and entered into as of the date of grant set forth below (the “Date of Grant”) by and between The Wet Seal, Inc., Delaware corporation (the
“Company”), and participant named below (“Participant”). Capitalized terms not defined herein will have the meaning ascribed to them in the Company’s 2005 Stock Incentive Plan (the
“Plan”). 
  

					
	Participant:	  	  
	  	
			
	Total Option Shares:	  	  
	  	
			
	Exercise Price Per Share:	  	  
	  	
			
	Date of Grant:	  	  
	  	
			
	Type of Stock Option	  		  	
	(Check One):	  	 ̈  Incentive Stock Option, to the maximum
extent permissible
		
		  	x  Nonqualified Stock Option

 1. Grant of Option. The Company hereby grants to Participant an option (this
“Option”) to purchase the total number of shares of Common Stock of the Company set forth above as Total Option Shares (the “Shares”) at the Exercise Price Per Share set forth above (the
“Exercise Price”), subject to all of the terms and conditions of this Agreement and the Plan. If designated as an Incentive Stock Option above, the Option is intended to qualify as an “incentive stock option” (the
“ISO”) within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), although the Company makes no representation or guarantee that such Option will qualify as
an ISO. The Option will be an ISO to the maximum extent permitted under the Code and any portion which cannot qualify will be a Nonqualified Stock Option 
 2. Exercise Period. 
 2.1 Provided Participant continues to provide Continuous Service to the
Company or any Subsidiary, the Option will become vested and exercisable with respect to 33 1/3% of the Shares subject thereto on each of the next three (3) anniversaries of the Date of Grant until the Option is 100% vested. Except as provided
in this Agreement, unvested Options will not be exercisable on or after Participant’s termination of Continuous Service (“Termination Date”) and will immediately terminate on such Termination Date. 
  

 Page 1 of 6 

 2.2 The Option will expire on the date five (5) years from the Date of Grant, or earlier as provided
in this Agreement or the Plan. 
 3. Termination of Continuous Service. 
 3.1 If Participant’s Continuous Service is terminated, Options will remain exercisable as follows: 
 (a) If Participant’s termination of Continuous Service is due to death, all unvested Options will terminate and all vested Options will be
exercisable by Participant’s designated beneficiary, or if none, the person(s) to whom such Participant’s rights under the Option are transferred by will or the laws of descendent and distribution for one (1) year following the
Termination Date (but in no event beyond the term of the Option). 
 (b) If Participant’s termination of Continuous Service is due to
disability, all unvested Options will terminate and all vested Options will be exercisable by Participant for one (1) year following the Termination Date (but in no event beyond the term of the Option). 
 (c) If Participant’s termination of Continuous Service is due to termination for Cause, the Option will terminate on the Termination Date,
regardless of whether the Option was then exercisable. 
 (d) If Participant’s termination of Continuous Service is due to any other
reason, all unvested Options will terminate on the Termination Date and all Options (to the extent exercisable as of the Termination Date) will be exercisable for a period of three (3) months following such Termination Date (but in no event
beyond the term of the Option) and will thereafter terminate. The Participant’s status as an employee will not be considered terminated in the case of leave of absence agreed to in writing by the Company (including but not limited to military
and sick leave); provided, that, such leave is for a period of not more than three (3) months or reemployment upon expiration of such leave is guaranteed by contract or statute. 
 3.2 Nothing in the Plan or this Agreement will confer on Participant any right to the continuation of service with the Company, or any of its
Subsidiaries, or interfere in any way with the right of the Company or its Subsidiaries to terminate his or her Continuous Service at any time. 
 4. Manner of Exercise. 
 4.1 A Participant (or in the case of exercise after Participant’s death or incapacity,
Participant’s executor, administrator, heir or legatee, as the case may be) may exercise his or her Option by giving written notice of exercise to the Company in a form approved by the Company specifying the number shares of Common Stock to be
purchased. Such notice must be accompanied by the payment in full of the Option exercise price. The exercise price of the Option may be paid by in the following manner: (i) cash or certified or bank check, (ii) surrender of Common Stock
held by the Participant for at least 6 months prior to exercise (or such longer or shorter period as may be required to avoid a charge to earnings for 

  

 Page 2 of 6 

 
financial accounting purposes) or the attestation of ownership of such shares, in either case, if so permitted by the Company, (iii) if established by
the Company, through a “same day sale” commitment from the Participant and a broker-dealer selected by the Company that is a member of the National Association of Securities Dealers (an “NASD Dealer”) whereby the Participant
irrevocably elects to exercise the Option and to sell a portion of the shares so purchased sufficient to pay for the total exercise price and whereby the NASD Dealer irrevocably commits upon receipt of such shares to forward the total exercise price
directly to the Company, or (iv) by any combination of the foregoing, and, in all instances, to the extent permitted by applicable law. A Participant’s subsequent transfer or disposition of any Common Stock acquired upon exercise of an
Option will be subject to any Federal and state laws then applicable, specifically securities law, and the terms and conditions of the Plan. 
 4.2 Upon (a) disposition of shares of Common Stock acquired pursuant to the exercise of an Incentive Stock Option granted pursuant to the Plan within two years of the grant of the Incentive Stock Option or within one year after
exercise of the Incentive Stock Option, or (b) exercise of a Nonqualified Stock Option (or an Incentive Stock Option treated as a Nonqualified Stock Option), or (c) under any other circumstances determined by the Committee in its sole
discretion, the Company will have the right to require any Participant, and such Participant by accepting the Awards granted under the Plan agrees, to pay to the Company the amount of any Federal, state, local income taxes or other taxes incurred by
reason of the exercise of Options granted hereunder that the Company may be required to withhold with respect thereto. In the event of clauses (a), (b) or (c), Participant will pay to the Company such amount as the Company deems necessary to
satisfy its minimum tax withholding obligation and such payment will be made: (i) in cash, (ii) to the extent authorized by the Committee, having the Company retain shares which would otherwise be delivered upon exercise of an Option,
(iii) to the extent authorized by the Committee, delivering or attesting to ownership of Shares owned by the holder of the Option for at least 6 months prior to the exercise of such Option (or such longer or shorter period as may be required to
avoid a change to earnings for financial accounting purposes), or (iv) any combination of any such methods. For purposes hereof, Shares will be valued at Fair Market Value. 
 5. Issuance of Shares. Except as otherwise provided in the Plan or this Agreement, as promptly as practicable after receipt of such written
notification of exercise and full payment of the Exercise Price and any required income tax withholding, the Company will issue or transfer to Participant the number of Shares with respect to which Options have been so exercised (less shares
withheld in satisfaction of tax withholding obligations, if any), and will deliver to Participant a certificate or certificates therefor, registered in Participant’s name. 
 6. Company; Participant. 
 6.1
The term “Company” as used in this Agreement with reference to Continuous Service will include the Company and its Subsidiary, if any, as appropriate. 
 6.2 Whenever the word “Participant” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the beneficiaries, the executors, the
administrators, or the person or persons to whom the Options may be transferred by will or by the laws of descent and distribution, the word “Participant” will be deemed to include such person or persons. 
  

 Page 3 of 6 

 7. Non-Transferability. The Options are not transferable by Participant otherwise than to a
designated beneficiary upon death or by will or the laws of descent and distribution, and are exercisable during Participant’s lifetime only by him or her. No assignment or transfer of the Options, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise (except to a designated beneficiary, upon death, by will or the laws of descent and distribution), will vest in the assignee or transferee any interest or right herein whatsoever, but
immediately upon such assignment or transfer the Options will terminate and become of no further effect. 
 8. Rights as
Shareholder. Participant or a transferee of the Options will have no rights as shareholder with respect to any Shares until he or she will have become the holder of record of such share, and no adjustment will be made for dividends or
distributions or other rights in respect of such Shares for which the record date is prior to the date upon which he or she will become the holder of record thereof. 
 9. Adjustments. Options may be adjusted or terminated in any manner as contemplated by the Plan. 
 10. Change of Control. Upon the occurrence of a Change of Control, all Options will become 100% vested and exercisable; provided, that, Participant is then in Continuous Service. 
 11. Compliance with Law. Notwithstanding any of the provisions hereof, Participant hereby agrees that he or she will not exercise the
Options, and that the Company will not be obligated to issue or transfer any shares to Participant hereunder, if the exercise hereof or the issuance or transfer of such shares will constitute a violation by Participant or the Company of any
provisions of any law or regulation of any governmental authority. Any determination in this connection by the Committee will be final, binding and conclusive. The Company will in no event be obliged to register any securities pursuant to the
Securities Act (as now in effect or as hereafter amended) or to take any other affirmative action in order to cause the exercise of the Options or the issuance or transfer of shares pursuant thereto to comply with any law or regulation of any
governmental authority. 
 12. Notice. Every notice or other communication relating to this Agreement will be in writing, and
will be mailed to or delivered to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided; provided, that, unless and until
some other address be so designated, all notices or communications by Participant to the Company will be mailed or delivered to the Company at its principal executive office, and all notices or communications by the Company to Participant may be
given to Participant personally or may be mailed to him or her at his or her address as recorded in the records of the Company. 
 13.
Binding Effect. Subject to Section 7 hereof, this Agreement will be binding upon the heirs, executors, administrators and successors of the parties hereto. 
  

 Page 4 of 6 

 14. Governing Law. This Agreement will be construed and interpreted in accordance with the
laws of the State of California without regard to its conflict of law principles. 
 15. Plan. The terms and provisions of the
Plan are incorporated herein by reference, and Participant hereby acknowledges receiving a copy of the Plan. In the event of a conflict or inconsistency between the discretionary terms and provisions of the Plan and the provisions of this Agreement,
this Agreement will govern and control. 
 16. Notice of Disqualifying Disposition of ISO Shares. If the Option is an ISO, and
if Participant sells or otherwise disposes of any of the Shares acquired pursuant to the ISO on or before the later of (i) the date 2 years after the Date of Grant, and (ii) the date 1 year after transfer of such Shares to Participant upon
exercise of the Option, Participant will immediately notify the Company in writing of such disposition. Participant agrees that Participant may be subject to income tax withholding by the Company on the compensation income recognized by Participant
from the early disposition by payment in cash or out of the current wages or other compensation payable to Participant. 
 17. Tax
Consequences. Set forth below is a brief summary as of the Effective Date of the Plan of some of the federal tax consequences of exercise of the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS
AND REGULATIONS ARE SUBJECT TO CHANGE. PARTICIPANT SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES. 
 17.1 If the Option qualifies as an ISO, there will be no regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise
Price will be treated as a tax preference item for federal alternative minimum tax purposes and may subject Participant to the alternative minimum tax in the year of exercise. 
 17.2 If the Option does not qualify as an ISO, there may be a regular federal income tax liability upon the exercise of the Option. Participant will be
treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price. If Participant is a current or former employee
of the Company, the Company may be required to withhold from Participant’s compensation or collect from Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of
exercise. 
 17.3 The following tax consequences may apply upon disposition of the Shares. 
 (a) If the Shares are held for more than 12 months after the date of the transfer of the Shares pursuant to the exercise of an ISO and are disposed of
more than 2 years after the Date of Grant, any gain realized on disposition of the Share will be treated as long term capital gain for federal income tax purposes. If Shares purchased under an ISO are disposed of within the applicable 1 year or 2
year period, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to extent of the excess, if any, of the Fair Market Value of the Shares on the date of exercise over the Exercise Price.

  

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 (b) If the Shares are held for more than 12 months after the date of the transfer of the Shares pursuant
to the exercise of an Nonqualified Stock Options, any gain realized on disposition of the Share will be treated as long term capital gain. 
 (c) The Company may be required to withhold from Participant’s compensation or collect from Participant and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income. 
 18. Successors and Assigns. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to
the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon Participant and Participant’s heirs, executors, administrators, legal representatives.

 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed in triplicate by its duly authorized representative and
Participant has executed this Agreement in triplicate, effective as of the Date of Grant. 
  

			
	“COMPANY”	 	
	
	 The Wet Seal, Inc.,
 a Delaware
corporation

			
		
	 By
	 	  

		 	John Luttrell
		 	EVP, Chief Financial Officer
	
	“OPTIONEE”
	  
  

  

 Page 6 of 6Gladewater National Bank Loan Agreement dated February 27, 2007

 Exhibit 10.139 
 LOAN AGREEMENT 
 THIS LOAN AGREEMENT is between ENERGYTEC, INC. (the “Borrower”) and GLADEWATER NATIONAL
BANK, a Texas Banking corporation (the “Bank”), as follows: 
 The Borrower desires to borrow from the Bank the amount of FOUR
MILLION AND NO/100 ($4,000,000.00) DOLLARS, and the Bank is willing to lend such amounts to the Borrower, subject to and upon the terms and conditions set forth. 
 NOW, THEREFORE, it is agreed: 
 As security for and to guarantee the full and timely payment of the principal
and interest on the Note and all other Indebtedness or liabilities of the Borrower to the Bank, whether now existing or hereafter arising: 
 1. Borrower will furnish Bank the following date: 
 a. Railroad Commission number and name of lease/well(s).

 b. Name of lease operator and mailing address. 
 c. Purchaser of product, mailing address, owner and lease number. 
 d. Borrowers decimal interest and type (RI, ORR, WI, NRI). 
 2. Ownership of minerals must be in same name as borrower. 
 3. Lien Instruments. Borrower shall duly
execute and deliver to the Bank Promissory Note, Deed(s) of Trust and Security Agreement(s), together with Financing Statement(s) pursuant to the Texas Uniform Commercial Code, and Assignment(s) of Production, in form and
substance satisfactory to the Bank and its counsel, covering the property securing the Indebtedness, and any and all other documents deemed necessary by the Bank and its counsel to perfect a security interest with properties being pledged to secure
payment of the loan contemplated hereunder. 
 4. Filing and Recording. Bank will, at Borrower’s cost and expense, cause all
instruments and documents given as security pursuant to this Agreement to be duly recorded and/or filed in all places necessary, in the opinion of the Bank, to perfect and protect the Deed of Trust lien, or security interest of the Bank in the
property covered thereby. Borrower hereby authorizes the Bank to file any Financing statement in respect of any security interest created pursuant to this Agreement which may at any time be required or which, in the opinion of the Bank, may at any
time be desirable although the same may have been executed only by the Bank, or, at the option of the Bank, should Borrower refuse to execute same after notice from Bank, to sign such Financing Statement on behalf of the Borrower and file the same,
and the Borrower hereby irrevocably designates the Bank, its agents, representative, and designees as agents and attorney in fact for the Borrower for this purpose. If, after notice and opportunity, Borrower refuses to execute any Financing
Statement, and Bank signs and files such Financing Statement on behalf of Borrower as herein provided, Bank shall promptly furnish a copy of said financing Statement to Borrower. In the event that any re- recording or re-filing thereof (or the
filing of any statements of continuation or 

  

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 assignment of any Financing Statement) is required to protect and preserve such mortgage, lien or security interest, the
Bank will, at Borrower’s cost and expense, cause the same to be recorded and/or filed at the time and in the manner requested by the Bank. 
 5. Title Opinion. Borrower will furnish the Bank with Title Opinions showing Bank as first lien holder, before funding of the loan contemplated hereunder. 
 6. Production payments to come to Bank. Borrower hereunder has, in accordance with the Deed of Trust, Security Agreement, Financing Statement and Assignment of Production, assigned to Bank all of the oil, gas,
casing head gas, condensate, and other minerals set forth in the Deed of Trust that may be produced from the mortgaged property, as defined in the Deed of Trust. Bank will notify any and all purchasers of production from the mortgaged property of
said assignment(s) and provide Borrower with a copy of such notification. Bank will receive directly from the purchaser or purchasers of production all proceeds of oil and gas production accruing to the mortgaged property, for credit to Borrower
hereunder. Upon receipts of the monthly run check, Bank will deposit all proceeds to Borrower’s Gladewater National Bank checking account. Proceeds in the amount of the monthly payment as described in Borrower’s note will be held until
such time of the due date of each monthly payment. At that time, the regularly scheduled monthly payment will be automatically debited from Borrower’s checking account and applied to Borrower’s note. Bank will mail Borrower copies of the
deposit slip as well as the check vouchers. Upon Borrower being delinquent in making payment on its note more than twice during any twelve month period, Bank shall have the right, but not the obligation, at its sole discretion, and without notice to
Borrower, to apply proceeds of productions, at the time such proceeds are received by the Bank, to pay any monthly payment that is to become due and payable under the note within 30 days for receipt by the Bank of the production payment. Bank shall
always have the right to apply production proceeds when received to pay any past due amount under the note. Production run checks must be made payable as follows: 
 Gladewater National Bank for the benefit of 
 ENERGYTEC, INC. 
 P O Box 1749 
 Gladewater, Texas 75647 
 7.
Bank will automatically charge Borrower’s account for note payments of principal plus interest on the twenty seventh (27th) working day of each month, copies of transactions will be mailed to Borrower. 
 8. If Borrower operates the lease/wells, he will furnish Bank a list of all equipment, including serial numbers, used on pledged properties.
Borrower agrees to pay for any/all inspections of equipment made by Bank or its agent. 
 9. Approval of Operator. Borrower will
furnish Bank with the name and address of the Operator. Any change in Operators must be pre-approved by Bank. If at any time the Bank should feel that its collateral is in jeopardy due to inefficient operations, Bank may require a change in
operators. 
  

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 10. Properties Operated by Borrower. If Borrower is the Operator of properties, such properties
must be operated in a manner consistent with state regulatory requirements. 
 11. Borrowing Base. During the term of the loan
contemplated hereunder, the Bank will, from time to time, re-evaluate the value of the properties pledged to secure the loan contemplated hereunder, based on pricing adjusted to market fluctuations. If such re-evaluation shall reveal that the
Borrower exceeds the borrowing base of the loan (being 80% of present worth of the properties pledged, as calculated by the Bank, discounted 17.5%, or 80% of the average of the preceding 6 months’ net monthly income times 32 months, whichever
is less), then and in such event, within thirty (30) day’s written notice by the Bank, the Borrower shall, as required by the Bank, either: 
  

	 	(1)	pledge additional collateral acceptable by the Bank, in its sole discretion, in an amount sufficient to cure the borrowing base deficiency; or 

  

	 	(2)	make a principal reduction on the loan, sufficient to cure the borrowing base deficiency. 

 12. Affirmative Covenants. So long as the Borrower has any indebtedness with the Bank, Borrower will: 
  

	 	a.	Furnish to the Bank, within 30 days after the end of the fiscal year, a copy of its financial statement and related statement of income and expense prepared in accordance with
generally accepted accounting principles by an independent certified public accountant selected by the Borrower and satisfactory to the Bank. 

  

	 	b.	Furnish to the Bank financial statements and related statements of income and expense as stated on page 6 of this Agreement, certified by a proper accounting officer of the
Borrower. 

  

	 	c.	Pay and discharge all taxes, assessments and governmental charges imposed upon the Borrower or its property prior to the date on which penalties or liens attach thereto.

  

	 	d.	Promptly give notice to the Bank of all litigation and all proceedings before governmental or regulatory agencies affecting the Borrower except litigation or proceedings not
materially affecting the financial condition of the Borrower. 

  

	 	e.	From time to time, upon request by the Bank, execute and deliver to the Bank any instrument, document, assignment of other writing which may be necessary or advisable in the
Bank’s opinion to carry our the terms of the Agreement and to perfect the Bank’s security interest in and facilitate the collection of any collateral securing the advances. 

  

 3 

	 	f.	Maintain insurance with responsible companies in the amount and types presently carried by the Borrower with the Bank named as loss payee as its interest may appear, such policies
to be non-cancelable without prior written notice to the Bank. 

  

	 	g.	Make available to the Bank’s officers the books and records of the Borrower, including, but not limited to, the subsidiary journals, accounts receivable files, inventory
records, general ledger, and correspondence files. The Bank has the right to examine its collateral at any reasonable time without prior notice. 

  

	 	h.	Pay reasonable expenses, including reasonable legal expenses and attorney’s fees, of the Bank which have been or may be incurred by the Bank in connection with the preparation
of this agreement and the lending and incurring of obligations or liabilities hereunder, the collection of any note authorized hereby, or for the enforcement of any of the Borrowers or the Guarantors’ obligations hereunder and under any
document executed to secure the payment of any note authorized hereunder, or the guaranty thereof and for the recording and filing and re-recording and re-filing of any such document. 

  

	 	i.	Give notice to the Bank in writing of the occurrence of any default, any change in the name of the Borrower, any change in name, identity or Company structure.

  

	 	j.	Give notice to the Bank in writing of any uninsured or partially uninsured loss through fire, theft, liability or property damage. 

 13. Negative Covenants. The Borrower covenants and agrees that without written consent of the Bank it shall not: 
  

	 	a.	Make any loans to officers of the Company. 

  

	 	b.	From the date of this Agreement, increase the salaries of its officers by more than 10% annually. 

  

	 	c.	Form any new subsidiary or merge or invest in or consolidate with any corporation or other entity, or sell, lease, assign, transfer, or otherwise dispose of (whether in one
transaction or as a series of related transaction) all or substantially all of its assets, now pledged or hereafter pledged as collateral on loan. 

 14. Default. The Borrower shall be in default hereunder if any one of the following events of default shall occur and be continuing, namely: 
  

	 	a.	 Default by the Borrower in the payment of any sums owing to the Bank or others (hereinafter referred to as the 

  

 4 

	 	 
“Indebtedness”) or if the holder of any such Indebtedness declares such Indebtedness due prior to the stated maturity because of any default
thereunder; or 

  

	 	b.	Any representation, statement, warranty, projection, or certificate made by the Borrower in the Loan Documents, or hereafter furnished to the Bank in connection with any loan or
loans hereunder, shall prove to have been incorrect in any material respect at the time of making or issuance thereof; or 

  

	 	c.	Default by the Borrower or any other party to the Loan Documents in the performance of any of the covenants or agreements set forth in the Loan Documents or in any other agreement
or instrument executed pursuant hereto provided, however, that the provisions of this Agreement shall control in the event that any of such provisions are in conflict with the provisions of any other agreement, mortgage, indenture or instrument
executed pursuant hereto and all of such provisions in such other instruments shall be deemed to be cumulative of the provisions hereof to the extent such provisions are not inconsistent herewith; or 

  

	 	d.	The Borrower shall apply for or consent to, or acquiesce in the appointment of a receiver, trustee, or liquidator of itself or himself or of its or his property, or admit in writing
of its or his inability to pay its or his debts as they mature, or make a general assignment for the benefit of creditors or an Order of Relief be entered with respect to the Borrower by any court having competent jurisdiction in the premises, or
file a voluntary petition in bankruptcy or a petition or answer seeking reorganization, composition, readjustment or arrangement, or similar relief with creditors, under any present or future statute, law or regulation, or otherwise, or take
advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it or him for the purpose of affecting any of the foregoing, or it or he shall have a receiver or trustee or assignee in bankruptcy or
insolvency appointed for it or him, or its or his property, without its application or consent; or 

  

	 	e.	 The Bank determines in the exercise of its judgment that the Borrowers financial condition has deteriorated, the prospect of Repayment of the Indebtedness is
impaired or that the value of the Collateral has lessened materially. Thereupon in any such case, the obligation of the Bank to extend credit hereunder to or for the 

  

 5 

	 	 
account of the Borrower pursuant hereto shall immediately terminate, and the Bank shall be entitled to each and every remedy and to take each and every
action permitted by the Loan Documents. 

 15. Waiver. No failure to exercise and no delay in exercising on the part
of the Bank of any right, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder, preclude any other right power or privilege. The rights and remedies
herein provided are cumulative and not exclusive of any rights or remedies provided by law or in any other agreement. 
 16. Survival of
Agreements. All agreements, representations and warranties herein made, shall survive the execution and delivery of the Notes and the Security Instruments and the making and renewal thereof. 
 17. Amendment. This Agreement may not be amended except in writing signed by the Borrower, the Guarantors and the Bank. 
 18. Successors. This Agreement shall be binding upon and inure to the benefit of the Borrower, the Guarantors, the Bank and the successors and
assigns of each party hereto. 
 19. Severability. In the case any one or more of the provisions contained in the Loan Documents
should be invalid, illegal, or unenforceable, in any respect, the validity, legality, and enforceability of the remaining provisions contained therein shall not in any way be affected thereby. 
 20. Lawsuits. The Borrower certifies that there are no outstanding lawsuits in which it is named. 
  

 6 

 AGREEMENT 
 This Agreement is between ENERGYTEC, INC., (the “Borrower”) and GLADEWATER NATIONAL BANK, a Texas Banking corporation (the “Bank”) as follows: 
 The Borrower desires to borrow from the Bank the amount of FOUR MILLION AND NO/100 ($4,000,000.00) DOLLARS and the Bank is willing to lend such amount to
the Borrower subject to and upon the terms and conditions set forth: 
  

			
	FINANCIAL STATEMENTS	  	REQUIRED
	HOW
OFTEN                                    	  	QUARTERLY & ANNUALLY
	FYE                                      
               	  	DECEMBER 31
		
	INCOME AND EXPENSE	  	REQUIRED
	HOW
OFTEN                                    	  	QUARTERLY & ANNUALLY
		
	INCOME TAX RETURNS	  	REQUIRED
	HOW
OFTEN                                    	  	ANNUALLY

  

					
		 	ENERGYTEC, INC.
			
	03-29-2007	 	BY:	 	 /s/ Don Lambert

	DATE	 		 	DON LAMBERT, PRESIDENT
	TO BE EFFECTIVE 02-27-2007	 		 	
			
		 	BY:	 	 /s/ Dorothea Krempein

		 		 	 DOROTHEA KREMPEIN,
 VICE
PRESIDENT

		
		 	-BORROWER-
		
		 	GLADEWATER NATIONAL BANK
			
	03-29-2007	 	BY:	 	 /s/ Redonia Harper

	DATE	 		 	REDONIA HARPER, PRESIDENT
	 TO BE EFFECTIVE 02-27-2007
	 	
	
	-BANK-

  

 7 

					
	ENERGYTEC, INC.	 	GLADEWATER NATIONAL BANK	 	
	4965 PRESTON PARK BLVD. SUITE 270 EAST	 	PO BOX 1749	 	Loan Number 8403287
	PLANO, TX 75093	 	GLADEWATER, TX 75647	 	Date 02-27-2007
		 		 	Maturity Date 02-27-2011
		 		 	 Loan Amount $4,000,000.00

		 		 	Renewal Of 8403287
			
	 BORROWER’S NAME AND ADDRESS
 “I” includes each borrower above, jointly and severally.
	 	 LENDER’S NAME AND ADDRESS
 “You” means the lender, its successors and assigns.
	 	

 For value received, I promise to pay to you, or your order, at your address listed above the PRINCIPAL sum
of FOUR MILLION AND N0/100 Dollars $4,000,000.00 
  

	x  Single	Advance: I will receive all of this principal sum on 02-27-2007 . No additional advances are contemplated under this note. 

  

	 ̈	Multiple Advance: The principal sum shown above is the maximum amount of principal I can borrow under this note. On
                                         I
will receive the amount of $                     and future principal advances are contemplated. 

  

	
	Conditions: The conditions for future advances
are                                       
                                        
                                        
                                       
 
	
	  

	
	  

  

	 	 ̈	Open End Credit: You and I agree that I may borrow up to the maximum amount of principal more than one time. This feature is subject to all other conditions and expires on
                                        
            . 

  

	 	 ̈	Closed End Credit: You and I agree that I may borrow up to the maximum only one time (and subject to all other conditions). 

 INTEREST: I agree to pay interest on the outstanding principal balance from 02-27-2007 at the rate of 9.750 % per year until 02-28-2007. 
  

	x  Variable	Rate: This rate may then change as stated below. 

  

	 	x	Index Rate: The future rate will be 1.500 PERCENT ABOVE the following index rate: THE BASE RATE ON CORPORATE LOANS POSTED BY AT LEAST 75% OF THE NATION’S 30 LARGEST BANKS KNOWN
AS THE WALL STREET JOURNAL PRIME RATE. THE RESULT OF THIS CALCULATION WILL BE ROUNDED TO THE NEAREST 0.125 

  

	 	 ̈	Ceiling Rate: The interest rate ceiling                      for
this note is the ceiling rate announced by the Credit Commissioner from time to time. 

  

	 	x	Frequency and Timing: The rate on this note may change as often as EVERY DAY BEGINNING 02-28-2007. 

 A change in the interest rate will take effect ON THE SAME DAY. 
  

	 	x	Limitations: During the term of this loan, the applicable annual interest rate will not be more than N/A % or less than 9.750%. The rate may not change more than
                     % each
                            . 

 Effect of Variable Rate: A change in the interest rate will have the following effect on the payments: 
  

	 	x	The amount of each scheduled payment will change.     ̈  The amount of the final payment will change. 

  

			
	 ̈	  	  

  

	ACCRUAL	METHOD: Interest will be calculated on a ACTUAL/365 basis. 

  

	POST	MATURITY RATE: I agree to pay interest on the unpaid balance of this note owing after maturity, and until paid in full, as stated below: 

  

	 	 ̈	on the same fixed or variable rate basis in effect before maturity (as indicated above). 

  

	 	x	at a rate equal to HIGHEST RATE PERMITTED BY LAW. 

  

	x  LATE	CHARGE: If a payment is made more than 10 days after it is due, I agree to pay a late charge of 5.000% OF THE LATE AMOUNT 

  

	 	 ̈	ADDITIONAL CHARGES: In addition to interest, I agree to pay the following charges which     ̈  are     ̈  are not included in the
principal amount
above:                                       
                                        
                                        
                                        
     . 

 PAYMENTS: I agree to pay this note as follows: 
 ON DEMAND, BUT IF NO DEMAND IS MADE THEN 48 MONTHLY PAYMENTS OF $100,952.50 BEGINNING 03-27-2007. THIS IS A VARIABLE RATE LOAN AND THE PAYMENT AMOUNTS MAY CHANGE.

 ADDITIONAL TERMS: 
  

			
		  	 x SECURITY: This note is separately secured by (describe separate document by type and date):

 
 BUSINESS CONSUMER SECURITY AGREEMENT DATED 02-27-2007
  
 (This section is for your internal use. Failure to list a separate security document does not mean
the agreement will not secure this note.)

		
	THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES.	  	PURPOSE: The purpose of this loan is RENEW LOAN ORIGINALLY FOR OPERATIONS
		
	 THERE ARE NO UNWRITTEN ORAL
 AGREEMENTS BETWEEN THE PARTIES.
	  	SIGNATURES: I AGREE TO THE TERMS OF THIS NOTE (INCLUDING THOSE ON PAGE 2). I have received a copy on today’s date.
		
		  	ENERGYTEC, INC. SIGNED 03-29-2007 TO BE EFFECTIVE 02-27-2007
		
		  	 /s/ Don Lambert

	Signature for Lender	  	DON LAMBERT, PRESIDENT
		
	 /s/ Redonia Harper
	  	 /s/ Dorothea Krempein

	REDONIA HARPER, PRESIDENT	  	DOROTHEA KREMPEIN, VICE PRESIDENT
		
		  	  

		
		  	  

		
	 UNIVERSAL NOTE
 

©1984, 1991
Bankers Systems, Inc., St. Cloud, MN Form UN-TX 3/7/2002
	  	

 (page 1 of 2)

  

			
	DEBTOR NAME AND ADDRESS	  	SECURED PARTY NAME AND ADDRESS
	 ENERGYTEC, INC.
 4965 PRESTON PARK BLVD. SUITE 270
EAST
 PLANO, TX 75093
	  	 GLADEWATER NATIONAL BANK
 PO BOX 1749
 GLADEWATER, TX 75647

		
	 Type:   ̈    individual   ̈    partnership  x    corporation   ̈                
 State of organization/registration if applicable) TX                          
      
  ̈    If checked, refer to addendum for additional Debtors and signatures.
	  	

 COMMERCIAL SECURITY AGREEMENT 
 The date of this Commercial Security Agreement (Agreement) is 02-27-2007
                                        
                                        
                                        
                                        
                                  
 SECURED DEBTS. This Agreement will secure all sums advanced by Secured Party under the terms of this Agreement and the payment and
performance of the following described Secured Debts that (check one)  x    Debtor   ̈                                      
           
                                       
                                        
       (Obligor) owes to Secured Party: 
  

	 	x	Specific Debts. The following debts and all extensions, renewals, refinancings, modifications, and replacements (describe): 

 PROMISSORY NOTE #8403287 DATED 02-27-2007 IN THE NAME OF ENERGYTEC, INC. IN THE AMOUNT OF $4,000,000.00 
  

	 	 ̈	All Debts. All present and future debts, even if this Agreement is not referenced, the debts are also secured by other collateral, or the future debt is unrelated to or of a
different type than the current debt. Nothing in this Agreement is a commitment to make future loans or advances.  

 SECURITY INTEREST. To secure the payment and performance of the Secured Debts, Debtor gives Secured Party a security interest in all of the Property described in this Agreement that Debtor owns or has
sufficient rights in which to transfer an interest, now or in the future, wherever the Property is or will be located, and all proceeds and products of the Property. “Property” includes all parts, accessories, repairs, replacements,
improvements, and accessions to the Property; any original evidence of title or ownership; and all obligations that support the payment or performance of the Property. “Proceeds” includes anything acquired upon the sale, lease, license,
exchange, or other disposition of the Property; any rights and claims arising from the Property; and any collections and distributions on account of the Property. This Agreement remains in effect until terminated in writing, even if the Secured
Debts are paid and Secured Party is no longer obligated to advance funds to Debtor or Obligor.  
 PROPERTY
DESCRIPTION. The Property is described as follows: 
  

	 	 ̈	Accounts and Other Rights to Payment: All rights to payment, whether or not earned by performance, including, but not limited to, payment for property or services sold,
leased, rented, licensed, or assigned. This includes any rights and interests (including all liens) which Debtor may have by law or agreement against any account debtor or obligor of Debtor. 

  

	 	 ̈	Inventory: All inventory held for ultimate sale or lease, or which has been or will be supplied under contracts of service, or which are raw materials, work in process, or
materials used or consumed in Debtor’s business. 

  

	 	 ̈	Equipment: All equipment including, but not limited to, machinery, vehicles, furniture, fixtures, manufacturing equipment, farm machinery and equipment, shop equipment,
office and record keeping equipment, parts, and tools. The Property includes any equipment described in a list or schedule Debtor gives to Secured Party, but such a list is not necessary to create a valid security interest in all of Debtor’s
equipment. 

  

	 	 ̈	Instruments and Chattel Paper: All instruments, including negotiable instruments and promissory notes and any other writings or records that evidence the right to payment of
a monetary obligation, and tangible and electronic chattel paper. 

  

	 	 ̈	General Intangibles: All general intangibles including, but not limited to, tax refunds, patents and applications for patents, copyrights, trademarks, trade secrets,
goodwill, trade names, customer lists, permits and franchises, payment intangibles, computer programs and all supporting information provided in connection with a transaction relating to computer programs, and the right to use Debtor’s name.

  

	 	 ̈	Documents: All documents of title including, but not limited to, bills of lading, dock warrants and receipts, and warehouse receipts. 

  

	 	 ̈	Farm Products and Supplies: All farm products including, but not limited to, all poultry and livestock and their young, along with their produce, products, and replacements;
all crops, annual or perennial, and all products of the crops; and all feed, seed, fertilizer, medicines, and other supplies used or produced in Debtor’s fanning operations. 

  

	 	 ̈	Government Payments and Programs: All payments, accounts, general intangibles, and benefits including, but not limited to, payments in kind, deficiency payments, letters of
entitlement, warehouse receipts, storage payments, emergency assistance and diversion payments, production flexibility contracts, and conservation reserve payments under any preexisting, current, or future federal or state government program.

  

	 	 ̈	Investment Property: All investment property including, but not limited to, certificated securities, uncertificated securities, securities entitlements, securities accounts,
commodity contracts, commodity accounts, and financial assets. 

  

	 	 ̈	Deposit Accounts: All deposit accounts including, but not limited to, demand, time, savings, passbook, and similar accounts.  

  

	 	x	Specific Property Description: The Property includes, but is not limited by, the following (if required, provide real estate description): 

 DEED OF TRUST COVERING 21 OIL AND GAS LEASES; 26 PRODUCING/ECONOMIC OIL WELLS LOCATED IN HOPKINS AND WOOD COUNTIES, TEXAS AS DESCRIBED ON EXHIBIT
“A” ATTACHED HERETO AND MADE A PART HEREOF 
 USE OF PROPERTY. The Property will be used for   ̈    personal  x    business   ̈    agricultural   ̈    
                         purposes. 
 THIS WRTTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN
 THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
 SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 
 SIGNATURES. Debtor agrees to the terms on pages 1 and 2 of this Agreement and acknowledges receipt of a copy of this Agreement. 

			
	 DEBTOR
	  	 SECURED PARTY

		
	 ENERGYTEC, INC. SIGNED 03-29-2007 TO BE EFFECTIVE
 02-27-2007
	  	GLADEWATER NATIONAL BANK
		
	 /s/ Don Lambert
	  	 /s/ Redonia Harper

	DON LAMBERT	  	REDONIA HARPER
	PRESIDENT	  	PRESIDENT
		
	 /s/ Dorothea Krempein
	  	
	DOROTHEA KREMPEIN	  	
	VICE PRESIDENT	  	

 

 ©2000 Bankers Systems, Inc., St. Cloud, MN Form SA-BUS-TX 10/24/2003 (page 1 of 2)

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