Document:

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                                                                Exhibit 10.51

                                 LOAN AGREEMENT

         THIS LOAN AGREEMENT (the "Agreement") executed as of July 12, 2000,
by and between NEW WEST RESOURCES, INC., a Texas corporation ("Borrower");
CAP ROCK ELECTRJC COOPERA~VE, INC. ("Corporate Guarantor"); Thomas E. Kelly
and Richard C. Skillem (each referred to individually as an "Individual
Guarantor" and collectively as the "Individual Guarantors"); and BANK UNIThD
TEXAS FSB, ("Bank").

                                   WITNESSETH:

         WHEREAS, Borrower has requested Bank to lend it $15,000,000.00; and

         WHEREAS, the Bank has agreed to make such a loan to Borrower.

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

         1. Definitions. When used herein the terms "Agreement", "Bank",
"Borrower", "Corporate Guarantor", "Individual Guarantor", and "Individual
Guarantors" shall have the meanings indicated above. When used herein the
following terms shall have the following meanings:

         AFFILIATE MEANS any Person which, directly or indirectly, controls,
is controlled by or is under common control with the relevant Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as used with
respect to any Person, shall mean a member of the board of directors, a
partner or an officer of such Person, or any other Person with possession,
directly or indirectly, of the power to direct or cause the direction ofthe
management and policies of such Person, through the ownership (of record, as
trustee, or by proxy) ofvoting shares, partnership interests or votmg rights,
through a management contract or otherwise. Any Person owning or controlling
directly or indirectly ten percent or more of the voting shares, partnership
interests or voting rights, or other equity interest of another Person shall
be deemed to be an Affiliate of such Person.

         BUSINESS DAY means a day (other than Saturdays or Sundays) on which
banks are legally open for business in Houston, Texas.

         CHANGE.OF CONTROL shall occur if any Person (or syndicate or group
of Persons which is deemed a Person for the purposes of Sections 13(d) or
14(d)(ii) of the Securities Act of 1934, as amended) shall acquire, directly
or indirectly an amount of issued and outstanding voting stock of Borrower or
Corporate Guarantor (including the acquisition of newly-issued stock)
sufficient to change the control of Borrower or Corporate Guarantor by
causing e election ()~ change of a majority of the directors of Borrower or
Corporate Guarantor.

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         CHANGE OF MANAGEMENT means a Change of Management shall occur if
David Pruitt ever ceases to act as Chief Executive Officer of Borrower or of
Corporate Guarantor, whether in the capacity of President or Chairman, and a
replacement for such officer, acceptable to Bank, is not appointed within
thirty (30) days thereafter.

         COLLATERAL means all collateral for the Loan described in the
Security Documents.

         CORPORATE GUARANTOR'S GUARANTV means the Unconditional Guaranty,
substantially inthe form of Exhibit "B-1" hereto executed by Corporate
Guarantor to Bank, together with all modifications, renewals and extensions
thereof or any part thereof.

         CURRENT ASSETS means the total of the current assets of the
indicated person as determined in accordance with GAAP.

         CURRENT LIABILITIES means the total of current obligations of the
indicated person as deternined in accordance with GAAP, excluding therefrom
current maturities of the Loan.

         DEFAULT means all the events specified in Section 19 hereof,
regardless of whether there shall have occurred any passage of time or giving
of notice, or both, that would be necessary in order to constitute such event
as an Event of Default

         EFFECTIVE DATE means the date of this Agreement.

         ENVIRONMENTAL LAWS means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superflmd
Amendments and Reauthorization Act of 1986, 42 U.S.C.A. Section 9601, et.
seq., the Resource Conservation and Recovery Act, as amended by the Hazardous
Solid Waste Amendment of 1984, 42 U.S.C.A. Section 6901, et seq., the Clean
Water Act, 33 U.S.C.A. Section 1251, et ~., the Clean Air Act, 42 U.S.C.A.
Section 1251, et ~., the Toxic Substances Control Act, 15 U.S.C.A. Section
2601, et m~,se. The Oil Pollution Act of 1990, 33 U.S.C. Section 2701, et
seq., and all other laws, statutes, codes, acts, ordinances, orders,
judgments, decrees, injunctions, ruies, regulations, orders, permits and
restrictions of any federal, state, county, municipal and other governments,
departments, commissions, boards, agencies, courts, authorities, officials
and officers, domestic or foreign, relating to oil pollution, air pollution,
water pollution, noise control and/or the handling, discharge, disposal or
recovery ofon-site or off-site asbestos, radioactive materials, spilled or
leaked petroleum products, distillates or fractions and industrial solid
waste or "hazardous substances" as defined by 42 U.S.C. Section 9601, et
seq., as amended, as each of the foregoing may be amended from time to time.

         ENVIRONMENTAL LIABILITY means any claim, demand, obligation,

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cause of action, order, violation, damage, injury,judgment, penalty or fine,
cost of enforcement, cost of remedial action or any other costs or expense
whatsoever, including reasonable attorneys' fees and disbursements, resulting
from the violation or alleged violation of any Environmental Law or the
release of any substance into the environment which is required to be
remcdiated by a regulatory agency or governmental authority or the imposition
of any Environmental Lien (as hereinafter defined) which could reasonably be
expected to individually or in the aggregate have a Material Adverse Effect.

         ENVIRONMENTAL LIEN means a Lien in favor of any court, governmental
agency or instrnmentality or any other Person (i) for any Environmental
Liability or (ii) for damages arising from or cost incurred by such court or
governmental agency or instrumentality or other person in response to
arelease or threatened release ofasbestos or "hazardous substance" into the
environment, the imposition of which Lien could reasonably be expected to
have a Material Adverse Effect

         ERISA means the Employee Retirement Income Security Act of 1974, as
amended.

         EWC means Eddins-Walcher Company, a Texas corporation.

         EWC NOTE means the Note given by EWC to Borrower pursuant to the
EWC/FFI Loan Agreement.

         EWC/F FL LOAN AGREEMENT means the Loan Agreement dated July 12, 2000
between EWC and FFI as borrowers and Borrower as lender, and others as
guarantors.

         EWC/FFI LOAN TRANSACTION means the loan and entire transaction
described in and made pursuant to the EWC/FFI Loan Agreement.

         EWC/FFI SECURITV INSTRUMENTS means the instrnments and documents
described in Section 7.1(a) through (p), (aa), (ab), and (ac) of Article VII
of the EWG/FFl Loan Agreement.

         FFI means Frank's Fuels, Inc., a Texas corporation.

         FFI NOTE means the Note given by FFI to Borrower pursuant to the
EWCIFFI Loan Agreement.

         FINANCIAL STATEMENTS means balance sheets, income statements,
statements of cash flow, and appropriate footnotes and schedules, prepared in
accordance with GAAP.

         GAAP means generally accepted accounting principles, consistently
applied.

         GUARANTIES mean unconditional guaranties in the form of Exhibits
"B-l" through "B-3" hereto.

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         INDIVIDUAL GUARANTOR'S GUARANTY means the Unconditional Gusranties,
substantially in the forms of Exhibits "B-2" and "B-3" hereto executed by
Individual Guarantors to Bank, together with all modifications, renewals and
extensions thereof or any part thereof.

         LIEN means any mortgage, deed of trust, pledge, security interest,
assignment, encnmbrance or lien (statutory or otherwise) of every kind and
character.

         LOAN means the loan made pursuant to Section 2 hereof

         LOAN DOCUMENTS means this Agreement, the Note, the Security
Instruments and all other documents executed in connection with the
transaction described in this Agreement.

         MATERIAL ADVERSE EFFECT shall mean a material adverse effect on (i)
the assets or properties, liabilities, financial condition, business,
operations, affairs or circumstances of the Borrower or Corporate Guarantor,
(il) the ability of the Borrower or the Corporate Guarantor to carry out its
businesses as of the date of this Agreement or as proposed at the date of
this Agreement to be conducted, (iii) the ability of Borrower or the
Corporate Guarantor to perform fiiIly and on a timely basis its obligations
under any of the Loan Documents, or (iv) the validity or enforceability of
any of the Loan Documents or the rights and remedies of the Bank thereunder.

         MATURITY DATE means July 12, 2003.

         MAXIMUM RATE means at any particular time in question, the maximum
non-usurious rate of interest which wider applicable law may then be charged
on the Note. If such Maximum Rate changes after the date hereof, the Maximum
Rate shall be automatically increased or decreased, as the case may be,
without notice to Borrower from time to time as the effective date of each
change in such Maximum Rate.

         NET INCOME means Borrowe?s and Corporate Guarantor's combined net
income after income taxes calculated in accordance with GAAP.

         NET WORTH means Borrower's and Corporate Guarantor's combined net
worth calculated in accordance with GAAP.

         NOTE means the Note, substantially in the form of Exhibit "A" hereto
executed by Borrower, to evidence Borrower's indebtedness to Bank, together
with all modifications, renewals and extensions thereof or any part thereof.

         PERMITTED LIENS shall mean any lien or encumbrance approved in
writing by Bank before it is imposed on any of the Collateral.

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         PERSON means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof

         PLAN means any plan subject to Title IV of ERISA and maintained by
Borrower, or any such plan to which Borrower is required to contribute on
behalf of its employees.

         PRIME RATE means a rate per annum equal to the prime rate of
interest announced from time to time by the Wall Street Journal (which is not
necessarily the lowest rate charged any customer of Bank), changing when and
as said prime rate changes.

         SECURITY INSTRUMENTS is used collectively herein to mean this
Agreement, the Guaranties, the Security Agreement, the Financing Statements
and other collateral documents covering theFFl Note, the EWC Note, all
collateral securing the FFI Note and the EWC Note, the UFEC Warrant, and all
collateral described in Article HI of the EWC/FFI Loan Agreement or the
EWC/FFI Security Instruments; all of such documents to be in form and
substance satisfactory to Bank.

         SUBSIDIARY means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority
of the board of directors or other persons performing similar flmctions are
at the time directly or indirectly owned by Borrower or another subsidiary of
Borrower, or the Corporate Guarantor or another subsidiary of the Corporate
Guarantor.

         UFEC means United Fue1 & Energy Corporation, a Texas corporation.

         UFEC GUARANTY meansthe Guaranty given by UFEC to NWRas apart
oftheEWC/FFILoan Transaction.

         UFEC WARRANT means the Warrant given by UFEC to NWR as a part of the
EWC/FFl Loan Transactiorn

         2. Commitment of the Bank. Bank has agreed to loan Borrower the sum
of $15,000,000.00 subject to the terms and provisions ofthis Agreement,
repayable over 36 months as provided in the Note.

         3. Note Evidencing Loan. The Loan shall be evidenced by a promissory
note of Borrower in the principal amount of$1 5,000,000.00, in the form
ofExhibit "A" hereto (the "Note"). The unpaid principal balance of the Note
shall beer interest from time to time as set forth in Section 4 hereof. The
principal of th6 Note and interest thereon are payable monthly as provided
inthe Note, with all unpaid principal and interest king due on the Maturity
Date unless earlier due in whole or in part as a result

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of an acce1eration of the amount due. Any payment or prepayment received by
Bank at &iy time after 12:00 noon, Midland, Texas, time on a Business Day
shall be deemed to have been received on the next Business Day. Interest
shall cease to accrue on any principal as of the end of the day preceding the
Business Day on which any such payment or prepayment of principal is received
by Bank.

         4. Interest Rates. Borrower agrees to pay interest on the Note
calculated on the basis of the actual number of days over 360 days elapsed in
a year with respect to the unpaid principal amount of the Loan from and
including the date of finding at a varying rate per annum equal to the lesser
of (i) the Maximum Rate, or (ii) the Prime Rate plus l% per annum. The
initial interest rate provided in the Note is 10.5% and shall vary from time
to time as the Prime Rate varies. Past due principal and, to the extent
permitted by Iaw, past due interest, shall bear interest, payable on demand,
at a rate per annum equal to the Maximum Rate. The Bank shall determine each
interest rate applicable to the Loan. The Bank shall give prompt notice to
the Borrower of each rate of interest so determined and its determination
thereof shall be concIusive absent error. If at any time the applicable rate
of interest selected pursuant to Section 4 shall exceed the Maximum
Rate,-thereby causing the interest on the Note to be limited to the Maximum
Rate, then any subsequent reduction in the interest rate so selected or
subsequently selected shall not reduce the rate of interest on the Note below
the Maximum Rate until the total amount of interest accrued on the Note
equals the amount of interest which would have accrued on the Note if the
rate or rates selected pursuant to Section 4 had at all times been in effect.

         5. Special Provisions Relating to EWC Note and FFI Not& Borrower
agrees that at no time will the aggregate unpaid principal balance of the FFI
Note and the EWC Note be less than the principal balance then owed on the
Note. Ml payments or prepayments of principal, and all payments of interest
up to the amount of interest accrued on the Note, made by EWC on the EWC
Note, or FFI on the FFI Note, shall be paid by Borrower to Bank either as a
part of the next payment due on the Note, or as a prepayment of principal of
the Note, as the case may be. Bank may require EWC or FFI to make all
payments directly to Bank, and upon Bank so requiring Borrower agrees to
notif\r EWC and FFI to make such payments directly to Bank.

         6. Collateral Security. To secure the performance by Borrower of its
ob1igations -hereunder, and under the Note and Security Instruments, whether
now or hereafter incurred, matured or unmatured, direct or contingent, joint
or several, or joint and several, including extensions, modifications,
renewals and increases thereof and substitutions therefore, Borrower shall
grant and -assign to Bank a security interest inthe FFI Note, the EWC Note,
the UFEC Guaranty, all collateral for the EWC Note and the FFI Note and the
UFEC Guaranty as described in Article HI of the EWC/FFI Loan Agreement, and
the UFEC Warrant. Ml security

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interests and other collateral which -Borrower grants to Bank are hereinafter
collectively called the "Collateral".

         The granting and assigning of such security interests and Liens by
Borrowershallbepursuant to Security Instruments in form and substance
reasonably satisfactory to the Bank. Concurrently with -the delivery of each
of the Security Instruments or within a reasonable time thereafter as
specified in Section 12 hereof, Borrower shall fnrnishto the Bank an opinion
letter from counsel for Borrower and Corporate Guarantor as to the priority
and validity of the Note, the Agreenient, the Guaranties, and the Security
Instruments, in form and substance acceptable to Bank. Borrower will cause to
be executed and delivered to the Bank, in the fiiture, additional Security
Instruments if the Bank reasonably deems such are necessary to insure
perfection or maintenance of Bank' security interests in the Collateral, or
any part thereof

         Bank, at its option at any time it deems it appropriate and at
Borrower's sole expense, may obtain an appraisal of the Collateral or any
part thereof. If such appraisal shows that the real and personal property
portion of the Collateral has declined in value below $20,000,000.00, then
upon demand by Bank Borrower wiJl either pledge additional Collateral
acceptable to Bank to raise the value of the Collateral to $20,000,000.00 or
make such prepayments as may be necessary to reduce the outstanding principal
of the Note to Iess than 75% of the appraised value determined by the Bank.

         7. Commitment Fee and expenses. The Borrower shall pay to Bank a
commitment fee 9f$45,000.00 upon finding of the Loan. At the closing of the
funding, Borrower shall also pay Bank an amount equal to all reasonable
expenses Bank incurs with respect to the Loan or perfection of security
interests for the Loan, including (but not limited to) attorneys fees,
appraisal fees or charges (including but not limited to reappraisal costs or
charges pursuant to Paragraph 6 hereof), title insurance costs and fees,
surveyors costs or fees, recording or ffiing fees, reproduction costs, and
all other costs or expenses incurred by Bank. Borrower agrees to pay all of
such expenses from time to time incurred by Bank during the period the Loan
is outstanding upon presentation of billings by Bank for such expenses.

         8.       Prepayments.

         (a) VOLUNTARY PREPAYMENTS. Subject to the provisions of Section 5
hereo?, the Borrower may at any time and from time to time, without penalty
or premium, prepay the Note, in whole or inpart.

         (b) MANDATORY PREPAYMENT FOR PRINCIPAL REDUCTION OF FFI NOTE OR EWC
NOTE. If EWC with respect to the EWC Note, or FFI with respect to the FFI
Note, ever makes a prepayment of principal on such note then Borrower shall
make a prepayment on the Note in an

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equal amount. In the event the aggregate principal balance of the EWC Note
and the FFI Note is ever less than the principal balance of the Note, the
Borrower shall, within &3, (30) days after notification from the Bank,
immediately prepay a sufficient amount of principal on the Note to reduce the
principal balance of the Note to the theft aggregate principal balance of the
EWC Note and the FFI Note.

         (c) MANDATORY PREPAYMENT TO REDUCE PRINCIPAL. Borrower agrees to
make such prepayments of principal as may be required by Bank pursuant to
Paragraph 6 of this Agreement if Borrower cannot or will not pledge
additional collateral acceptable to Bank

         - 9. Borrower's Representations and Warranties. In order to induce
the Bank to enter into this Agreement, the Borrower represents and warrants
to the Bank (which representations and warranties will survive the deIivery
of the Note) that:

                  (a) CREATION AND EXISTENCE. Borrower is a corporation duly
         organzed, valid1y existing and in good standing under the laws
         ofthejurisdiction in which it was formed and is duly qualified in all
         jurisdictions wherein failure to qualify may result in a Material
         Adverse Effect. Borrower has all power and authority to own its
         properties and assets and to transact the business in which each is
         engaged.

         (b) POWER AND AUTHORITY. Borrower is duly authorized and empowered
to create and issue the Note; and Borrower is duly authorized and empowered
to execute, deliver and perform the Loan Documents, including this Agreement;
and all corporate action on Borrower's part requisite for the due creation
and issuance of the Note and for the due execution, delivery and performance
ofthe Loan Documents, including this Agreement, has been duly and effectively
taken.

         (c) BINDING OBLIGATIONS. This Agreement does, and the Note and other
Loan Documents upon their creation, issuance, execution and delivery will,
constitute valid and binding obligations of Borrower, enforceable in
accordance with their respective terms (except that enforcement may be
subject to any applicable bankruptcy, insolvency, or similar debtor relief
laws now or kreafter in effect and relating to or affecting the enforcement
of creditors' rights generally).

         (d) NO LEGAL BAROR RESULTANT LIEN. TheNote and the Loan Documents,
including this Agreement, do not and will not violate any provisions of any
contract, agreement, law, regulation, order, injunction,judgment, decree or
writ to which Borrower is subject, or result in the creation or imposition of
any lien or other encumbrance upon any assets or properties of Borrower,
other than those contemplated by this Agreement.

         (e) NO CONSENT. The execution, delivery and performance by Borrower of
the Note and the Loan Documents, including this

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Agreement, does not require the consent or approval of any other Person,
including without limitation any consent required under the indenture or any
regulatory authority or governmental body of the United States or any state
thereof or any political subdivision of the United States or any state thereof

         (f) FINANCIAL CONDITION. The unaudited Financial Statements of
Borrower dated March 31, 2000, which have been delivered to Bank are complete
and correct in all material respects, and filly and accurately reflect in all
material respects the financial condition and results of the operations of
the Borrower as of the date or dates and for the period or periods stated. No
change has since occurred inthe condition, financial or otherwise, ofthe
Borrower which is reasonably expected to have a Material Adverse Effect.

         (g) LIABILITIES. BORROWER has no material liability, direct or
contingent, except as disclosed to the Bank in such March 31, 2000 Financial
Statements. No unusual or unduly burdensome restrictions, restraint, or
hazard exists by contract, law br governmental regulation or otherwise
relative to the business, assets or properties of Borrower which is
reasonably expected to have a Material Adverse Effect.

         (h) LITIGATION. There is no litigation, legal or administrative
proceeding, investigation or other action of any nature pending or, to the
knowledge of the officers of Borrower threatened against or affecting
Borrower which involves the possibility of any judgment or liability not
fiiily covered by insurance, or which presents a risk (other than a remote
risk) of having a Material Adverse Effect.

         (i) TAXES: GOVERNMENTAL CHARGES. Borrower has filed all tax returns
and reports required to be filed and has paid all taxes, assessments, fees
and other governmental charges levied Up0fl them or their assets, properties
or income which are due and payable, including interest and penalties, the
failure of which to pay presents a risk (other than a remote risk) of having
a Material Adverse Effect, except such as are being contested in good faith
by appropriate proceedings and for which adequate reserves for the payment
thereofas required by GAAP has been provided and levy and execution thereon
have been stayed and continue to be stayed.

         (j) TITLES. BORROWER has good and defensible title to substantially
all of its assets, free and clear of all liens or other encumbrances except
as disclosed on the March 31, 2000 Financial Statements or Permitted Liens
and contracts, agreements and instruments, and all defects and irregularities
and other matters affecting Borrower's assets and properties which were in
existence at the time Borrower's assets and properties were originally
acqulred by Borrower, and all routine operational agreements entered into in
the ordinary course of business, which contracts, agreements, instruments,
defects, irregularities and other matters and routine operational agreements
are not such as

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to, individually or in the aggregate, interfere materially with the
operation, value or use of Borrower's assets and properties, considered in
the aggregate.

         (k) DEFAULTS. BORROWER is not in default and no event or
circumstance has occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default under any loan or credit
agreement, mdenture, mortgage, deed of trust, security agreement or other
agreement or instrument to which Borrower is a party in any respect that
presents a risk (other than a remote risk) of having a Material Adverse
Effect No Default or Event of Default hereunder has occurred and is
continuing.

         (l) CASUALTIES: TAKING OF PROPERTIES. Since the dates of the latest
Financial Statements of the Borrower delivered to Bank, neither the business
nor the assets or properties of Borrower has been affected (to the extent it
is reasonably likely to cause a Material Adverse Effect), as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of prope?ty or
cancellation of contracts, permits or concessions by any domestic or foreign
government or any agency thereofi riot, activities of armed forces or acts of
God or of any public enemy.

         (m) USE OF PROCEEDS: MARAIN STOCK. The proceeds of the Loan may be
used by the Borrower for the purposes ofworking capital and other general
corporate purposes. Borrower is not engaged principally or as one of its
important activities in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System (12 C.F.- Part 221), or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of
said Regulation G or U.

         Neither Borrower nor any Person acting on behalf of Borrower has
taken or will take any action which might cause the loans hereunder or any of
the Loan Documents, including this Agreement, to violate Regulation G or U or
any other regulation of the Board of Governors of the Federal Reserve System
or to violate the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereafter be in
effect

         (n) LOCATION OF BUSINESS AND OFFICES. The principal place of
business and chief executive offices of the Borrower is located at the
address stated in Section 2l hereof

         (o)      COMPLIANCE WITH THE LAW. Borrower:

         (i) is not in violation of any law, judgment, decree, order,
ordinance, or governmental rule or regulation to which Borrower, or any of
its assets or properties are subject; or

<PAGE>

         (ii) has not failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of any of its
assets or properties or the conduct of its business;

         which violation or failure presents a risk (other than a remote
risk) of having a Material Adverse Effect.

         (p) NO MATERIAL MISSTATEMENTS. No information, exhibit or report
firnished by Borrower to the Bank in connection with the negotiation of this
Agreement contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statement contained therein
not materially misleading.

         (q) NOT A UTILITY. Borrower is not an entity engaged in the State of
Texas in the (i) generation, transmission, or distribution and sale of
electric power; (ii) transportation, distribution and sale through a local
distribution system of natural or other gas for domestic, commercial,
industrial, or other use; (lii) provision of telephone or telegraph service
to others; (iv) production, transmission, or distribution and sale of steam
or water; (v) operation of a railroad; or (vii) provision of sewer service to
others.

         (r) ERISA. Borrower is in compliance in all material respects
withthe applicable provisions of ERISA, and no "reportable event", as such
term is defined in Section 403 of ERISA, has occurred with respect to any
Plan of Borrower.

                  (s) PUBLIC UTILITY HOLDING COMPANY ACT. Borrower is not a
         "holding company", or "subsidiary company" of a "holding company", or
         an "affiliate" of a "holding company" or of a"subsidiary company" of a
         "holding company", or a "public utility" within the meaning of the
         Public Utility Holding Company Act of 1935, as amended.

                   (t) SUBSIDIARIES. All of the Borrower's Subsidiaries are
         listed on Schedule "1" hereto.

                  (u) ENVIRONMENTAL MATTERS. Borrower (i) has not received
         notice or otherwise learned of any Environmental Liability which
         presents a risk (other than a remote flak) of having a Material Adverse
         Effect arising in connection with (A) any noncompliance with or
         violation of the requirements of any Environmental Law or (B) the
         release or threatened re1ease of any toxic or hazardous waste into the
         environment, (ii) has not received notice of any threatened or actual
         liability in connection with the release or notice of any threatened
         release of any toxic or hazardous waste into the environment which
         would present a risk (other than a remote risk) of having a Material
         Adverse Effect or (iii) has not received notice or otherwise learned of
         any federal or-state investigation evaluating whether any remedial
         action is needed to respond to a release or threatened release of any

<PAGE>

         toxic or hazardous waste into the environment for which Borrower is or
         may be liable which may reasonably be expected to result in a Material
         Adverse Effect

         10. Corporate Guarantor's Representations and Warranties. In order
to induce the Bank to enter into this Agreement, the Corporate Guarantor
represents and warrants to the Bank (which representations and warrantibs
will survive the delivery of the Corporate Guarantor's Guaranty) that:

                  (a) CREATION AND EXISTENCE. Corporate Guarantor is a
         corporation duly organized, validly existing and in good standing under
         the laws of the jurisdiction in which it was formed and is duly
         qualified in all jurisdictions wherein failure to qualifY may result in
         a Material Adverse Effect. Corporate Guarantor has all power and
         authority to own its - properties and assets and to trsact the business
         in which each is engaged.

                  (b) POWER AND AUTHORITY. Corporate Guarantor is duly
         authorized and empowered to create and issue the Corporate Guarantor's
         Guaranty; and Corporate Guarantor is duly authorized and empowered to
         execute, deliver and perform the Loan Documents, including this
         Agredment; and all corporate action on Corporate Guarantor's part
         requisite for the due creation and issuance of the Corporate
         Guarantor's Guaranty and for the due exeeution, delivery and
         performance of the Loan Documents, including this Agreement, has been
         duly and effectively taken.

                  (c) BINDING OBLIGATIONS. This Agreement does, and the
         Corporate Guarantor's Guaranty and other Loan Documents upon their
         creation, issuance, execution and delivery will, constitute valid and
         binding obligations of Corporate Guarantor, enforceable in accordance
         with their respective terms (except that enforcement may be subject to
         any applicable bankruptcy, insolvency, or similar debtorrelieflaws now
         or hereafter in effect and relating to or affecting the enforcement of
         creditors' rights general1y).

                  (d) NO LEGAL BARORRESULTANT LIEN. The Corporate Guarantor's
         Guaranty andthe Loan Documents, including this Agreement, do not and
         will not violate any provisions of any contract, agreement, law,
         regulation, order, injunction,judginent, decree or writto which
         Corporate Guarantor is subject, or result in the creation or imposition
         of any lien or other encumbrance upon any assets or properties of
         Corporate Guarantor, other than those contemplated by this Agreement.

                  (e) NO CONSENT. The execution, delivery and performance by
         Corporate Guarantor of the Corporate Guarantor's Guaranty and the Loan
         Documents, including this

<PAGE>

         Agreement, does not require the consent or approval of any other
         Person, including without limitation any consent required under the
         indenture or any regulatory authority or governmental body of the
         United States or any state thereof or any political subdivision of
         the United States or any state thereof.

                  (f) FINANCIAL CONDITION. The unaudited Financial Statements of
         Corporate Guarantor dated March 31, 2000, which have been delivered to
         Bank are complete and correct in all material respects, and fii1ly and
         accurately reflect in all material respects the financial condition and
         results of the operations of the Corporate Guarantor as of the date or
         dates and for the period or periods stated. No change has since
         occurred in the condition, fmancial or otherwise, of the Corporate
         Guarantor which is reasonably expected to have a Material Adverse
         Effect.

                  (g) LIABILITIES. Corporate Guarantor has no material
         liability, direct or contingent, except as disclosed to the Bank in
         such March 31, 2000 Financial Statements. No unusual or unduly
         burdensome restrictions, restraint, or hazard exists by contract, law
         or governmental regulation or otherwise relative to the business,
         assets or properties of Corporate Guarantor which is reasonably
         expected to have a Material Adverse Effect

                  (h) LITIGATION. There is no litigation, legal or
         administrative proceeding, investigation or other action of any nature
         pending or, to the knowledge of the officers of Corporate
         Guarantorthreatened against or affecting Corporate Guarantorwhich
         involves the possibility ofanyjudgment or liability not %Ily covered by
         insurance, or which Wesents a risk (other than a remote risk) of having
         a Material Adverse Effect.

                  (i) TAXES; GOVERNMENTAL CHARGES. Corporate Guarantor has filed
         all tax returns and reports required to be filed and has paid all
         taxes, assessments, fees and other governmental charges levied upon
         them or their assets, properties or income which are due and payable,
         including interest and penalties, the failure ofwhich to pay presents
         arisk (other than a remote risk) of having a Material Adverse Effect,
         except such as are being contested in good faith by appropriate
         proceedings and for which adequate reserves for the payment thereof as
         required by GAAP has been provided and levy and execution thereon have
         been stayed and continue to be stayed.

         (j) TITLES. CORPORATE Guarantor has good and defensible title to
substantially all of its assets, free and clear of all liens or other
encumbrances except as disclosed in the Financial Statements dated March 31,
2000 or Permitted Liens and contracts, agreements

<PAGE>

and instruments, and all defects and irregularities and other matters
affecting Corporate Guarantor's assets and properties which were in existence
at the time Corporate Guanto?s assets and properties were originally acquired
by Corporate Guarantor, and all routine operational agreements entereQ into
in the ordinary course of business, which contracts, agreements, Instruments,
defects, irregularities and other matters and routine operational agreements
are not such as to, individually or in the aggregate, interfere materially
with the operation, value or use of Corporate Guarantor's assets and
properties, considered in the aggregate.

         (k) DEFAULTS. CORPORATE Guarantor is not in default and no event or
circumstance has occurred which, but for the passage of time or the giving of
ndtice, or both, would constitute a default under any loan or credit
agreement, indenture, mortgage, deed of trust, security agreement or other
agreement or instrument to which Corporate Guarantor is aparty in any respect
that presents a risk (other than a remote risk) of having a Material Adverse
Effect. No Default 6r Event of Default hereunder has occurred and is
continuing.

         (I) CASUALTIES: TAKING OF PROPERTIES. Since the dates of the latest
Financial Statements of the Corporate Guarantor delivered to Bank, neither
the business nor the assets or properties of Corporate Guarantor has been
affected (to the extent it is reasonably likely to cause a Material Adverse
Effect), as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition
or taking of property or cancellation 'of contracts, permits or concessions
by any domestic or foreign government or any agency thereof, riot, activities
of armed forces or acts of God or of any public enemy.

         (m) LOCATION OF BUSINESS AND OFFICES. The principal place of
business and chief executive offices of the Corporate Guarantor is located at
the address stated in Section 21 hereof

         (n)      COMPLIANCE WITH THE LAW. Corporate Guarantor:

         (i) is not in violation of any law, judgment, decree, order,
ordinance, or governmental rule or regulation to which Corporate Guarantor,
or any of its assets or properties are subject; or

         (ii) has not failed to obtain any license, permit, franchise or
other governmental authorization necessary to the ownership of any of its
assets or properties or the conduct of its business;

which violation or failure presents a risk (other than a remote risk) of
having a Material Adverse Effect

         (o) NO MATERIAL MISSTATEMENTS. No information, exhibit or report
fiirnished by Corporate Guarantor to the Bank in connection with the
negotiation of this Agreement contained any material misstatement of fact or
omitted to state a material fact or any

<PAGE>

fact necessary to make the statement contained therein not materially
misleading.

         (p) ERISA. Corporate Guarantor is in compliance in all material
respects with the applicable provisions of ERISA, and no "reportable event",
as such term is defined in Section 403 of ERISA, has occrrred with r9spect to
any Plan of Corporate Guarantor.

         (q) PUBLIC UTILITY HOLDING COMPANY ACT. Corporate Guarantor is not a
"holding company", or "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a"subsidiary company" of a "holding
company", or a "public utility" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.

         (r) SUBSIDIARIES. All of the Corporate Guarantor's Subsidiaries are
listed on Schedule "l" hereto.

         (s) ENVIRONMENTAL MATTERS. Corporate Guarantor (i) has not received
notice or otherwise learned of any Environmental Liability which presents a
risk (other than a remote risk) ofhaving a Material Adverse Effect arising in
connection with (A) any noncompliance with or violation of the requirements
of any Environmental Law or (B) the release or threatened release of any
toxic or hazardous waste into the environment, (ii) has not received notice
of any threatened or actual liability in connection with the release or
notice of any threatened release of any toxic or hazardous waste into the
environment which would present a risk (other than a remote risk) of having a
Material Adverse Effect or (iii) has not received notice or otherwise learned
of any federal or state investigation evaluating whether any remedial action
is needed to respond to a release or threatened release of any toxic or
hazardous waste into the environment for which Corporate Guarantor is or may
be liable which may reasonably be expected to result in a Material Adverse
Effect.

         (t) LIENS. Except (i) as disclosed on the March 31, 2000 Financial
Statements and (il) for Permitted Liens, the assets and properties ofthe
Corporate Guarantor are free and clear of all Liens and encumbrances.

Il. Individual Guarantor's Representations and Warranties. In order to induce
the Bank to enter into this Agreement, each Individual Guarantor represents
and warrants to the Bank

(which representations and warranties will survive the delivery of the
Individual Guarantor's Guaranty) that:

                  (a) BINDING OBLIGATIONS. This Agreement does, and the
         Individual Guarantor's Guaranty and other Loan Documents upon
<PAGE>

         their creation, issuance, execution and delivery will, constitute valid
         and binding obligations of Individual Guarantor, enforceable in
         accordance with their respective tens (except that enforcement may be
         subject to any applicable bankruptcy, insolvency, or similar debtor
         relieflaws now or hereafter in effect and relating to or affecting the
         enforcement of creditors' rights generally).

                  (b) NO LEGAL BARORRESULTANTLIEN. The Individual Guarantor's
         Guaranty and the Loan Documents, including this Agreement, do not and
         will not violate any provisions of any contract, agreement, law,
         regulation, order, injunction,judument, decree or writ to which
         Individual Guarantor is subject, or result in the creation or
         imposition of any lien or other encumbrance upon any assets or
         properties of Individual Guarantor, other than those contemplated by
         this Agreement.

                  (c) NO CONSENT. The execution, delivery and performance by
         Individual Guarantor of the Individual Guarantor's Guaranty and the
         Loan Documents, including this Agreement, does not require the consent
         or approval of any other Person, including without limitation any
         consent required under the indenture or any regulatory authority or
         governmental hody of the United States or any state thereof or any
         political subdivision of the United States or any state thereof.

                  (d) FINANCIAL CONDITION. The unaudited Financial Statements of
         Individual Guarantor dated December 31, 1999,. which have been
         delivered to Bank are complete and correct in all material respects,
         and filly and accurately reflect in all material respects the financial
         condition and results of the operations of the Individual Guarantor as
         of the date or dates and for the period or periods stated. No change
         has since occurred in the condition, financial or otherwise, of the
         Individual Guarantor which is reasonably expected to have a Material
         Adverse Effect.

                  (e) LIABILITIES. INDIVIDUAL Quarantorhas no material
         liability, direct orcontingent, except as disclosed to the Bank in such
         December 31, 1999 Financial Statements. No unusual or unduly burdensome
         restrictions, restraint, or hazard exists by contract, law or
         governmental r6gulation or otherwise relative to the business, assets
         or properties of Individual Guarantor which is reasonably expected to
         have a Material Adverse Effect

                  (f) LITIGATION. There is no litigation, legal or
         administrative proceeding, investigation or other action of any nature
         pending or, to the knowledge of the Individual Guarantor threatened
         against or affecting Individual Guarantor which involves the
         possibility of any judgment or liability not fill1y covered by
         insurance, or which presents

<PAGE>

         a risk (other than a remote risk) of having a Material Adverse Effect.

         (g) TAXES: GOVERNMENTAL CHARGES. Individual Guarantor has filed all
tax returns and reports required to be filed and has paid all taxes,
assessments, fees and other governmental charges levied upon them or their
assets, properties or income which are due and payable, including interest
and penalties, the failure ofwhich to pay presents arisk (other than a remote
risk) of having a Material Adverse Effect, except such as are being contested
in good faith by appropriate proceedings and for which adequate reserves for
the payment thereof as required by GAAP has been provided and levy and
execution thereon have been stayed and continue to be stayed.

         (h) TITLES. INDIVIDUAL Guarantor has good and defensible title to
substantially all of its assets, free and clear of all liens or other
encumbrances except as disclosed on the December 31, I 999 Financial
Statements or Permitted Liens and contracts, agreements and instruments, and
all defects and irregularities and other matters affecting Individual
Guarantor's assets and proporties which were in existence at the tinie
Individual Guarantor's assets and properties were originally acquired by
Individual Guarantor, and all routine operational agreements entered into in
the ordinary course of business, which contracts, agreements, instruments,
defects, irregulariti es and other matters and routine operational agreements
are not such as to, individually or in the aggregate, interfere materially
with the operation, value or use of Individual Guarantor's assets and
properties, considered in the aggregate.

         (i) DEFAULTS. INDIVIDUAL Guarantor is not in default and no event or
circumstance has occurred which, but for the passage of time or the giving of
notice, or both, would constitute a default under any loan or credit
agreement, indenture, mortgage, deed of trust, security agreement or other
agreement or instrument to which Individual Guarantor is aparty in any
respect that presents a risk (other than a remote risk) of having a Material
Adverse Effect. No Default or Event of Default hereunder has occurred and is
continuihg.

         (j) CASUALTIES: TAKING OF PROPERTIES. Since the dates of the latest
Financial Statements of the Individual Guarantor delivered to Bank, neither
the business nor the assets or properties of Individual Guarantor has been
affected (to the extent it is reasonably likely to cause a Material Adverse
Effect), as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition
or takihg of property or cancellation of contracts, permits or concessions by
any domestic or foreign government or any agency thereof, riot, activities of
armed forces or acts of God or of any public enemy.

         (k) LOCATION OF BUSINESS AND OFFICES. The principal place

<PAGE>

of business offices of the Individual Guarantor is located at the address
stated in Section 21 hereoL

         (l) COMULIANCE WITH THE LAW. Individual Guarantor is not in
violation of any law, judgment, decree, order, ordinance, or governmental
rule or regulation to which Individual Guarantor, or any of his assets or
properties are subject, which presents a risk (other than a remote risk) of
having a Material Adverse Effect.

                  (m) NO MATERIAL MISSTATEMENTS. No information, exhibit or
         report fiunished by Individual Guarantor to the Bank in connection with
         the negotiation of this Agreement contained any material misstatement
         of fact or omitted to state a material fact or any fact necessary to
         make the statement co;itained therein not materially misleading.

                  (n) CORPORATIONS. All of the corporations or other entities
         (other than publicly traded corporation in which Individual Guarantor
         owns less than 1% interest) in which Individual Guarantor owns an
         interest are listed on Schedule "2" hereto.

                  (o) ENVIRONMENTAL MATTERS. Individual Guarantor (i) has not
         received notice or otherwise learned of any Environmental Liability
         which presents a risk (other than a remote risk) ofhaving a Material
         Adverse Effect arising in connection with (A) any noncompliance with or
         violation of the requirements of any Environmental Law or (B) the
         release or threatened release ofany toxic or hazardous waste into the
         environment, (ii) has not received notice of any threatened or actual
         liability in connection with the release or notice of any threatened
         release ofany toxic or hazardous waste into the environment which would
         present a risk (other than a remote risk) of having a Material Adverse
         Effect or (ill) has not received notice or otherwise learned of any
         federal or state investigation evaluating whether any remedial action
         is needed to respond to a release or thrcatened release of any toxic or
         hazardous waste into the environment for which Individual Guarantor is
         or may be liable which may reasonably be expected to result in a
         Material Adverse Effect.

                  (p) LIENS. Except (i) as disclosed on the December 31, 1999
         Financial Statements and (ii) for Permitted Liens, the assets and
         properties ofthe Individual Guarantor are free and clear of all liens
         and encumbrances.

         12.      Condition, of Lending.

         (a) The effectiveness of this Agreement, and the obligation to make
the Loan under the commitment shall be subject to satisfaction of the
following conditions precedent:

                  (i) EXECUTION AND DELIVERY. (A)The Borrower shall have
         executed and delivered the Agreement, the Note and other

<PAGE>

         required Loan Documents, all in form and substance satisfactory to the
         Bank; and (B) the Corporate Guarantor and the Individual Guarantors
         shall have executed and delivered their respective Guaranties in the
         form of Exhibits "B-l" through "B-3" hereto;

                  (ii) LEGAL OPINION. The Bank shall have received: (A) from
         Borrowe?s legal counsel, a favorable legal opinion in form and
         substance satisfactory to it (i) as to the matters set forth in
         Subsections 9(a), (b), (c), (d), (e), (h), (q), (s), and (t) hereof and
         (ii) as to such other matters as Bank or its counsel may reasonably
         request; (B)from Corporate Guarantor's legal counsel, a favorable legal
         opinion in form and substance satisfactory to it (i) as to the matters
         set forth in Subsections 10(a), (b), (c), (d), (e), (h),(q), and (r)
         hereof and (ii) as to such other matters as Bank or its counsel may
         reasonably request; and (C) from Individual Guarantor's legal counsel,
         a favorable legal opinion in form and substance satisfactory to it (i)
         as to the matters set forth in Subsections 11(a), (b), and (c) hereof
         and (ii) as to such other matters as Bank or its counsel may reasonably
         request

         (iii) CORPORATE RESOLUTIONS. The Bank shall have received
appropriate certified corporate resolutions of Borrower and Corporate
Guarantor authorizing the Loan and the execution of the Note, the Corporate
Guarantor's Guaranty, and all of the Loan Documents;

         (iv) GOOD STANDING. The Bank shall have received evidence of
existence, due qualification, and good standing for Borrower and Corporate
Guarantor from appropriate state officials in Texas;

         (v) INCUMBENCY. The Bank shall have received a signed certificate of
Borrower and Corporate Guarantor certifying the names of the officers of
Borrower and Corporate Guarantor authorized to sign loan documents on behalf
of Borrower and Corporate Guarantor, together with the true signatures ofeach
such officer. The Bank may conclusively rely on such certificate unffl the
Bank receives a fliher certificate ofBorrower or Corporate Guarantor
canceling or amending the prior certificate and submitting signatures of the
officers named in such fbrther certificate;

         (vi) ARTICLES OF INCORPORATION AND BVLAWS. The Bank shall have
received copies of the Articles of Incorporation of Borrower and Corporate
Guarantor and all amendments thereto, certified by the Secretary of State of
the State of its incorporation, and a copy of the bylaws of Borrower arid
Corporate Guarantor and all amendments thereto, certified by Borrower as
being true, correct and complete;

         (vii) SECURITY AGREEMENTS. The Bank shall have received Security
Instruments covering (a) the Borrower's EWC Note, FFI

<PAGE>

Note, and all collateral securing payment thereof and all guaranties
therefor, as listed in detail in Article III ofthe EWC/FFI Loan Agreement;
and (b) the ECW/FFI Warrant; satisfactory to Bank and its counsel;

         (viii) REPRESENTATION AND WARRANTIES. The representations and
warranties of Borrower under this Agreement are true and correct in all
material respects as of such date, as if then made (except to the extent that
such representations and warranties related solely to an earlier date);

         (ix) NO EVENT OF DEFAULT. No Event of Default shall have occurred
and be continuIng nor shall any event have occurred or failed to occur which,
with the passage of time or service of notice, or both, would constitute an
Event of Default;

              (x) OTHER DOCUMENTS. Bank shall have received such other
         instruments, documents and local counsel opinions inci4ental and
         appropriate to the transaction provided for herein as Bank or its
         counsel may reasonably request, and all such documents shall be in form
         and substance reasonably satisfactory to the Bank; and

              (xi) LEGAL MATTERS SATISFACTORY. All legal matters incident to the
         consummation of the transactions contemplated hereby..shall be
         reasonably satisfactory to special counsel for Bank retained at the
         expense of the Borrower.

              (xii) CONDITIONS IN THE EWC/FFI LOAN AGREEMENT SATISFIED. All
         of the Conditions for Lending set forth in Article VII of the EWC/FFI
         Loan Agreement shall be satisfied, in Bank's opinion.

              (xiii) MINIMUM  NET WORTH REQUIREMENT. Corporate  Guarantor shall
         have a minimum Net Worth of $7,500,000.00 calculated according to GAAP.

         13. Affirnative Covenanft ofBorrower. A deviation from the
provisions ofthis Section 13 shall not constitute an Event of Default under
this Agreement if such deviation is consented to in writing by the Bank prior
to the date of deviation. The Borrower will at all times comply with the
covenants contained in this Section l3 from the date hereof and for so long
as any amount is owed to the Bank under this Agreement or the other Loan
Documents.

                  (a) FINANCIAL STATEMENTS AND REPORTS. Borrower shall promptly
         finnish to Bank from lime to time upon request such inf6rmation
         regarding the business and affairs and financial condition of Borrower,
         as the Bank may reasonably request, and will also fiiniish to Bank:

                  (i) ANNUAL AUDITED FINANCIAL STATEMENTS. As soon as available,
                  and in any event within ninety (90) days after the'close of
                  each fiscal year, the annual audited

<PAGE>

                  consolidated and consolidating Financial Statements of
                  Corporate Guarantor (Borrower's parent corporation) together
                  with an unaudited annual Financial Statement of Borrower
                  prepared by Borrower's chief financial officer whIch discloses
                  the individual financial condition of Borrower, prepared in
                  accordance wiffi GAAP accompanied by an opinion rendered by an
                  independent accounting firm reasonably acceptable to the Bank
                  as to such consolidated Financial Statements;

                  (ii) MONTHLY OR OUARTERLV FINANCIAL STATEMENTS. As soon as
                  available, and in any event within forty-five (45) days after
                  the end of the calendar month or quarter as applicable of each
                  year, the monthly (if prepared by Borrower, or if not,
                  quarterly) unauditedconsolidatedandconsolidatingFinanciai
                  Statements ofBorrowerprepared in accordance with GAAP;

                  (iii) OUARTERLY REPORT ON PROPERTIES. At the end of each
                  calendar quarter, and at such other times as Bank may request,
                  a report of all property owned;

                  (iv) MONTHLY SALES REPORTS. Within forty-five (45) days after
                  the end of each month, a monthly report, in form and substance
                  satisfactory to the Bank, indicating the next preceding
                  month's revenues, expenses and net income, with detailed
                  calculations and .worksheets, all in form and substance
                  satisfactory to Bank;

                  (v) ADDITIONAL INFORMATIOIT Promptly upon request of the Bank
                  from time to time any additional financial information or
                  other information that the Bank may reasonably request.

All such reports, information, balance sheets and Financial Statements
referred to in Subsection 13(a) above shall be in such detail as the Bank may
reasonably request and shall be prepared in a manner consistent with the
Financial Statements.

In addition Borrower shall firnish all financial information, reports, and
certificates of compliance that EWC and/or FFI shall fijrflish to Borrower
pursuant to Article V of the EWC/FFI Loan Agreement within 10 business days
of receipt thereof.

         (b) CERTIFICATES OF COMPLIANCE. Concurrently with the finnishing of
the annual audited Financial Statements pursuant to Subsection I 3(a)(i)
hereof and the monthly or quarterly unaudited Financial Statements pursuant
to Subsection 13(a)(ii) hereoi, Borrower will frrnish or cause to be
fi1mished to the Bank a certificate signed by the President or Chief
Financial Officer of Borrower, (i) stating that Borrower has &Ifilled in all
material respects its obligations under the Note and the Loan Documents,
including this Agreement, and that all representations and warranties made
herein and therein continue as of the date of such

<PAGE>

certificate (except to the extent they relate solely to an earlier date) to
be true and correct in all material respects (or speci?ying the nature of any
change), or if a Default has occurred, specifring the Default and the nature
and status thereol; (ii) that EWC and FFI have fiiIfillcd in all material
respects their obligations under the FWC Note or the FFI Note and the EWC/FFI
Loan Agreement and all of the Loan Documents described therein, and that all
representations and warranties made in the EWC/F Fl Loan Agreement continue
as of the date of such certificate (except to the extent they relate solely
to an earlier date) to be true and correct in all material respects (or
specifying the nature of any change), or if a Default has occurred,
specil~ing the Default and the nature and status ffiereol; (ili) to the
extent requested from time to time by the Bank, specifically affirming
compliance of Borrower in all material respects with any of its
representations (except to the extent they relate solely to an earlier date)
or obligations under said instruments; (iv) summarizing any property sales
during such period; and (v) containing or accompanied by such financial or
other details, information and material as the Bank may reasonably request to
evidence such compliance.

         (c) ACCOUNTANTS' CERTIFICATE. Concurrently with the fiimishing of
the annual audited Financial Statement pursuant to Section I 3(a)(i) hereof;
Borrower will firnish a statement from the firm of independent public
accountants which prepared such Financial Statement to the effect that
notlting has come to their attention to cause them to believe that there
existed on the date of such statements any Event of Default

         (d) TAXES AND OTHER LIENS. The Borrower will pay and discharge
promptly all taxes, assessments and governmental charges or levies iinposed
upon the Borrower or upon the income or any assets or property of Borrower,
as well as all claims of any kind (including claims for labor, materials,
supplies and rent) which, if unpaid, might become a Lien or other encumbrance
upon any or all of the assets or property of Borrower; provided, however,
that Borrower shall not be required to pay any such tax, assessment, charge,
levy or claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings diligently
conducted, levy and execution thereon have been stayed and continue to be
stayed and if Borrower shall have set up adequate reserves therefor, if
required, under GAAP.

         (e) COMPLIANCE WITH LAWS AND CONTRACTS. Borrower will observe and
comply, in all material respects, with all applicable laws, statutes, cpdes,
acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, orders and restrictions of all federal, state, county, municipal
and other governments, departtnents, commissions, boards, agencies, courts,
authorities, officials and officers, domestic or foreign, and with all
indentures, oil and gas leases and other material leases, contracts and
agreements binding upon Borrower or its properties.

<PAGE>

         (f) FURTHER ASSURANCES. The Borrower will cure promptly any defects
in the creation and issuance of the Note and the execut;on and delivery ofthe
Note and the Loan Documents, including this Agreement. The Borrower at its
sole expense will promptly execute and deliver to Bank upon reasonable
request by Bank all such other and fiwther documents, agreements and
instruments in compliance with or accomplishment of the covenants and
agreements in this Agreement, or to correct any omissions in the Note or more
Amy to state the obligations set out herein.

         (g) PERFORMANCE OF OBLIGATIONS. The Borrower will pay the Note and
other obligations incurred by it hereunder according to the reading, tenor
and effect thereof and hereof; and Borrower will do and perform every act and
discharge all of the obligations provided to be performed and discharged by
the Borrower under the Loan Documents, including this Agreement, at the time
or times and in the manner specified.

         (h) INSURANCE. The Borrower now maintains and will continue to
maintain insurance with financially sound and reputable iuuurers with respect
to its assets against such liabilities, fires, casualties, risks and
contingencies and in such types and amounts as is customary in the case of
persons engaged in the same or similar businesses and similarly situated.
Upon request of the Bank, the Borrower will Thrnirish or cause to be
frnnished to the Bank from time to time a summary of the respective insurance
coverage of Borrower in form and substance satisfactory to the Bank, and, if
requested, will fiinish the Bank copies of the applicable policies. Upon
demand by Bank any insurance policies covering any such property shall be
endorsed (i) to provide that such policies may not be canceled, reduced or
affected in any manner for any reason without fifteen (IS) days prior notice
to Bank, (ii) to provide for insurance against fire, casualty and oTher
hazards normally insured against, in the amount of the hill value (less a
reasonable deductible not to exceed amounts customary in The industry for
similarly situated business and properties) ofthe property msured, and (iii)
to provide for such other matters as the Bank may reasonably require. The
Borrower shall at all times maintain adequate insrance with respect to all of
its assets against its liability for ii'jury to persons or property, which
insurance shall be by financially sound and reputable insurers and shall
without limitation provide the following coverages: comprehensive general
liability, worker's compensation and automobile liability. Additionally, the
Borrower shall at all times maintain adequate insurance with respect to all
of its other assets and wells in accordance with prudent business practices.

         (i) ACCOUNTS AND RECORDS. Borrower will keep books, records and
accounts in which hill, true and correct entries will be made of all dealings
or transactions in relation to its business and activities, prepared in a
manner consistent with prior years, subject to changes suggested by such
Borrower's auditors.

<PAGE>

         (j) Ri ht ofins ction. Borrower will permit any officer, employee or
agent ofthe Bank to examine Borrower's books, records and accounts, and take
copies and extracts therefrom, all at such reasonable times during normal
business hours and as often as the Bank may reasonably request. The Bank will
use reasonable efforts to keep all Confidential Information (as herein
defined) confidential and not to disclose or reveal the Confidential
Information or any part thereof other tl1in (i) as required by law or
judicial order, and (ii) to its Affiliates, officers, employees, legal
counsel, regulatory authorities, accountants or advisors, or (iii) as may be
advisable or required in connection with the enforcement of The Bank's rights
and remedies under the Note, this Agreement and the other Loan Documents. As
ueed herein, "Confidential Information" means information about The Borrower
fbnlshed by the Borrower to the Bank, but does not include information (i)
which was publicly known, or otherwise known to the Bank, at the time of the
disclosure, (ii) which subsequently becomes publicly known through no act or
omission by The Bank, or (iii) which otherwise becomes known to the Bank,
other than through disclosure by the Borrower.

         (k) NOTICE OF CERTAIN EVENTS. The Borrower shall promptly noti?y The
Bank if Borrower learns of The occurrence of(i) any event which constitutes a
Default or an Event of Default together with a detailed statement by Borrower
ofthe steps being taken to cure such Event of Default; (ii) any legal,
judicial or regulatory proceedings affecting Borrower or any of the assets or
properties of Borrower which, if adversely determined, would present a risk
(other than a remote risk) of having a Material Adverse Effect; (iii) any
dispute between Borrower and any governmental or regulatory body or any other
Person which, if adversely determined, would present a risk (other than a
remote risk) of having a Material Adverse Effect; (iv) any other matter which
in Borrower's reasonable opinion could have a Material Adverse Effect; and
(v) any default or Event of Default by ECW, FFI, or UFEC under the EWC/FFI
Loan Agreement

         (l) ERISA INFORMATION AND COMPLIANCE. The Borrower will promptly
funrnish to the Bank immediately upon beeomihg aware of the occurrence of any
"reportable event", as such term is defined in Section 4043 of ERISA, or of
any "prohibited transaction", as such term is defined in Section 4975 ofthe
Internal Revenue Code of 1954, as amehded, in connection with any Plan or any
trust created thereunder, a written notice signed by the chief financial
officer ofBorrower specifying the nature thereof, what action Borrower is
taking or proposes to take with respect thereto, and, when known, any action
taken by the Internal Revenue Service with respect thereto.

         (m) ENVIRONMENTAL REPORTS AND NOTICES. The Borrower will deliver to
the Bank: (i) promptly upon its becoming available, one copy of each report
sent by Borrower to any court, governmental agency or instrmentaiity pursuant
to any Environmental Law; and (ii) notice, in writing, promptly upon
Borrower's receipt of

<PAGE>

notice or otherwise Iearning of any claim, demand, action, event, condition,
report or mvestigation indicating any potential or actual liability arising
in connection with (x) the non-compliance with or violation ofthe
requirements of any Environmental Law would present a risk (other than a
remote risk) of having a Material Adverse Effect or (y) the release or
threatened release of any toxic or hazardous waste into the environment which
would present a risk (other than a remote risk) of having a Material Adverse
Effect or which release Borrower would have a duty to report to any court or
government agency or instrumentality.

         (n) COMPLIANCE AND MAINTENANCE. The Borrower will observe and comply
in all material respects with all Environmental Laws.

         (o) CHANGE OF PRINCIPAL PLACE OF BUSINESS. Borrower shall give Bank
at least thirty (30) days prior written notice of its intention to move its
principal place of business from the address set forth in Section 21 hereofl

         14. Negative Covenants of Borrower. A deviation from the provisions
of this Section 14 shall not constitute an Event of Default under this
Agreement if such deviation is consented to in writing by the Bank prior to
the date of deviation. The Borrower will at all times comply with the
covenants contained in this Section 14 from the date hereof and for so long
as the conunitment is in existence or any amount is owed to the Bank or the
Bank~der this Agreement or the other Loan Documents.

         (a)      NEGATIVE PLEDGE. Borrower shall not:

                    (i) create, incur, assume or permit to exist any Lien,
                    security interest or other encumbrance on any of its assets
                    or properties except Permitted Liens; or

                    (ii) sell, lease, transfer or otherwise dispose of any of
                    its assets except for (A) sales, leases, transfers or other
                    dispositions made in the ordinary course of Borrowe?s
                    businesses and (B) sales made with the consent of Bank.

         (b) CONSOLIDATIONS AND MERGERS. Without the written consent ofBank,
Borrower will not consolidate or merge with or into any other Person.

         (c) DEBTS. GUARANTIES AND OTHER OBLIGATIONS. Borrower will not
incur, create, assume or in any manner become or be liable in respect of any
indebtedness, nor will Borrower guarantee or otherwise in any manner become
or be liable in respect of any indebtedness, liabilities or other obligations
of any other Person, whether by agreement to purchase the indebtedness of any
other Person or agreement for the finnishing of funds to any other Person
through the purchase or lease of goods, supplies or services (or by way of
stock purchase, capital contribution,

<PAGE>

advance or loan) for the purpose of paying or discharging the indebtedness of
any other Person, or otherwise, except that the foregoing restrictions shall
not apply to:

                    (i) the Note and any renewal or increase thereof, or other
         indebtedness of the Borrower heretofore disclosed to Bank in the
         Borrower's Financial Statements; or

                  (ii) taxes, assessments or other government charges which are
         not yet due or are being contested in good faith by appropriate action
         promptly initiated and diligently conducted, if such reserve as shall
         be required by GAAP shall have been made therefor and levy and
         execution thereon have been stayed and continue to be stayed; or

                    (iii) other indebtedness of any nature not in excess of
         $100,000 in the aggregate; or

                    (iv) lease or rentai agreements not requiring annual rental
         payments in excess of $100,000 in the aggregate; or

                    (v) any renewals or extensions of (but not increases in) any
         of the foregoing.

         (d) DIVIDENDS. Without the written consent of Bank, Borrower will
not declare or pay any cash dividend, purchase, redeem or otherwise acquire
for value any of its stock now or hereafter outstanding, return any capital
to its stockholders, or make any distribution of its assets to its
stockholders as such.

         (e) LOANS AND ADVANCES. Other than the loan made pursant to the
EWC/FFI Loan Agreement, Borrower shall not make or permit to remain
outstanding any loans or advances to or in any Person, except that the
foregoing restriction shall not apply to:

                  (i) loans or advances to any Person, the material details of
         which have been set forth in the Financial Statement of the Borrower
         heretofore fiJnished to Bank; or

                  (ii) advances made in the ordinary course of Borrower's
         business to Persons who are not its Affiliates.

         (f) PAYABLES AND RECEIVABLES. Borrower wi1l not discount or sell
with recourse, or sell for less than the greater of the face or market value
thereof, any of its notes receivable or accounts receivable. Borrower will
diligently attempt to collect all of its receivables, including those owing
by Affiliates. Borrower will not permit any account payable-to remain
outstanding for more than ninety (90) days unless such account payable is
being contested by Borrower in good faith, with the exception of
inter-company accounts involving its parent compan or wholly owned
subsidiaries of

& its~arentcompany,.~~ ~~% Oc&&~ ~tLL&~di&cies.

<PAGE>

                  (h) NATURE OF BUSINESS. Borrower will not permit any
         material change to be made in the character of its business as carried
         on at the date hereof.

                  (i) TRANSACTIONS WITH AFFILIATES. Borrower will not enter into
         any transaction with any Affiliate, except transactions upon terms that
         are no less favorable to Borrower than would be obtained in a
         transaction negotiated at arm's length with an unrelated third parry.

                  (j) INVESTMENTS. Borrower shall-not make any investments in
         any Person, except such restriction shall not apply to:

                           (i) investments in dIrect obligations of the United
                  States of Ameri ca or any agency thereof;

                           (ii) investments in certificates of deposit issued by
                  the Bank or certificates of deposit with maturities of less
                  than one year, issued by other commercial banks in the United
                  States having capital and surplus in excess of $500,000,000
                  and which have a rating of(A) 50 or above by Sheshunoff and
                  (B) "B" or above by Keef-Bmett; or

                           (iii) investments in insured money markef fluids and
                  other similar accounts at Bank or such investment with
                  maturities of less than ninety (90) days at other commercial
                  banks having capital and surplus in excess of $500,000,000 and
                  which have a rating of (A) 50 or above by Sheshunoff and (B)
                  "B" or above by Keef-Bruett.

                  (k) AMENDMENT TO ARTICLES OF INCORPORATION OR BNRLAWS.
         Borrower will not permit any amendment to, or any alteration of; its
         Articles of Incorporation or Bylaws.

                  (l) ISSUANCE OF STOCK. Borrower shall not issue apy stock
         after the Effective Date.

                  (m) AMENDMENTS TO AND REDEMPTION OF EQUITY. Borrower shall not
         (i) amend any outstanding equity issue after the Effective Date without
         the consent of Bank, or (ii) redeem any stock without the written
         consent of Bank.

                  (n) PAYMENT OR PRE-PAVMENT OF OTHER INDEBTEDNESS. Except as
         otherwise provided for in this Agreement, while the Note is
         outstanding, without the written consent of Bank Borrower shall not
         make any unscheduled principal payments on or redeem any of its
         indebtedness (other than indebtedness owed the Bank hereunder) or
         purchase or redeem any of its equity.

<PAGE>

         15. Affirmative Covenants of Corporate Guarantor. A deviation from the
provisions of this Section 15 shall not constitute an Event of Default under
this Agreement if such deviation is consented to in writing by the Bank prior to
the date of deviation. The Corporate Guarantor 'will at all times comply with
the covenant contained in this Section IS from the date hereof and for so long
as any amount is owed to the Bank or the Bank under this Agreement or the other
Loan Documents.

         (a) FINANCIAL STATEMENT AND REPORTS. CORPORATE Guarantor shall promptLy
krnish to Bank from time to time upon request such information regarding the
business and affairs and financial condition of Corporate Guarantor, as the Bank
may reasonably request, and will also finish to Bank:

                  (i) ANNUAL AUDITED FINANCIAL STATEMENTS. As soon as available,
                  and in any event within ninety (90) days after the close of
                  each fiscal year, the annual audited consoIidated and
                  consolidating Financial Statements of Corporate Guarantor
                  (including a statement of shareholders' equity), prepared in
                  accordance with GAAP accompanied by an opinion rendered by an
                  independent accounting firm reasonably acceppable to the Bank
                  as to such consolidated Financial Statements;

                  (ii) MONTHIY OR OUARTERLV FINANCIAL STATEMENTS. As soon as
                  available, and in any event within forty-five (45) days after
                  thp end of the calendar month or quarter as applicable of each
                  year, the monthiy (if prepared by Corporate Guarantor, or if
                  not, quarterly) unaudited consolidated and consolidating
                  Financial Statements of Corporate Guarantor prepared in
                  accordance with GAAP; and

                  (iii) ADDITIONAL INFORMATION. Upon request of the Bank from
                  time to time any additional financial information or other
                  information that the Bank may reasonably request.

All such reports, information, balance sheets and Financial Statements
referred to in Subsection 15(a) above shall be in such detail as the Bank may
reasonably request and shall be prepared in a manner consistent with the
Financial Statements.

         (b) CERTIFICATES OF COMPLIANCE. Concurrently with the fUrnishing of
the annual audited Financial Statements pursuant to Subsection 13(a)(i)
hereof and the monthiy or quarterly unaudited Financial Statements pursuant
to Subsection 13(a)(ii) hereof, Corporate Guarantor will fUrnish or cause to
be fUrnished to the Bank a certificate signed by the President or Chief
Financial Officer of Corporate Guarantor, (i) stating that Corporate
Guarantor has &1filled in all material respects its obligations under the
Corporate Guarantor's Guaranty and the Loan Documents, including this
Agreement, and that all representations and

<PAGE>

warranties made herein and therein continue as of the date of such
certificate (except to the extent they relate solely to an earlier date) to
be true and correct in all material respects (or specilving the nature of any
change), or if a Default has occurred, specifying the Default and the nature
and status thereof; (ii) to the extent requested from time to time by the
Bank, specifically affirming compliance of Corporate Guarantor in all
material respects with any of its representations (except to the extent they
relate solely to an earlier date) or obligations under said instruments; and
(iii) contaming or accompanied by ~ucli financial or other details,
rnformation and material as the Bank may reasonably request to evidence such
compliance.

         (c) ACCOUNTANTS' CERTIFICATE. Concurrently with the fUrnishing of
the annual audited Financial Statement pursuant to Section I 3(a)(i) hereo?,
Corporate Guarantor will fUrnish astatement from the firm of independent
public accountants which prepared such Financial Statement to the effect that
nothing has come to their attention to cause them to believe that there
existed on the date of such statements any Event of Default.

         (d) TAXES AND OTHER LIENS. The Corporate Guarantor will pay and
discharge promptly all taxes, assessments and governmental charges or levies
imposed upon the Corporate Guarantor or upon the income or any assets or
property of Corporate Guarantor, as well as all claims of any kind (including
claims for labor, materials, supplies and rent) which, if unpaid, might
become a lien or other encumbrance upon any or all of the assets or property
of Corporate Guarantor; provided, however, that Corporate Guarantor shall not
be required to pay any such tax, assessment, charge, levy or claim if the
amount, applicability or validity thereofshall currently be contested in good
faith by appropriate proceedings diligently conducted, levy and execution
thereon have been stayed and continue to be stayed and if Corporate Guarantor
shall have set up adequate reserves therefor, if required, under GAAP.

         (e) COMPLIANCE WITHLAWS AND CONTRACTS. Corporate Guarantor will
observe and comply, in all material respects, with all applicable laws,
statutes, codes, acts, ordinances, orders, judgments, decrces, injunctions,
ruies, regulations, orders and restrictions of all~federal, state, county,
municipal and other governments, departments, commissions, boards, agencies,
courts, authorities, officials and officers, domestic or foreign, and with
all indentures, oil and gas leases and other material leases, contracts and
agreements binding upon Corporate Guarantor or its properties.

         (f) FURTHER ASSURANCES. The Corporate Guarantor will dure promptly
any defects in the creation and issuance of the Loan Documents, including
this Agreement. The Corporate Guarantor at its sole expense will promptly
execute and deliver to Bank upon reasonab1e request by Bank all such other
and firther documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements in this Agreement, or to
correct any

<PAGE>

omissions in the Corporate Guarantor's Guaranty or more filly to
state the obligations set out herein.

         (g) PERFORMANCE OF OBLIGATIONS. The Corporate Guarantor will do and
perform every act and discharge all of the ob1igations provided to be
performed and discharged by the Corporate Guarantor under the Loan Documents,
including this Agreement, at the time or times and in the manner specified.

         (h) INSURANCE. The Corporate Guarantor now maintains and will
continue to nuiintain insurance with financially sound and reputable insurerS
with respect to its assets against such liabilities, fires, casualties, risks
and contingencies and in such types and amounts as is customary in the ease
of persons engaged in the same or simi1ar businesses and similarly situated.

         (i) ACCOUNTS AND RECORDS. Corporate Guarantor will keep books,
records and accounts in which fiiIl, true and correct entries will be made of
all dealings or transactions in relation to its business and activities,
prepared in a manner consistent with prior years, subject to changes
suggested by such Corporate Guarantor's auditors.

         (j) RIGHT OF INSPECTION. Corporate Guarantor will permit any
officer, employee or agent of the Bank to examine Corporate Guarantor's
books, records and accounts, and take copies and extracts therefrom, all at
such reasonable times during normal business hours and as often as the Bank
may reasonably request. The Bank will use reasonable efforts to keep all
Confidential Information (as herein defined) confidential and not to disclose
or reveal the Confidential Information or any part thereof other than (i) as
required by law or judicial order, and (ii) to its Affiliates, officers,
employees, legal counsel, regulatory authorities, accountants or advisors, or
(iii) as may be advisable or required in connection with the enforcement of
the Bank's rights and remedies underthe Corporate Guarantor's Guaranty, this
Agreement and the other Loan Documents. As used herein, "Confidential
Information" means information about the Corporate Guarantor fUrnished by the
Corporate Guarantor to the Bank, but does not include information (i) which
was public1y known, or otherwise known to the Bank, at the time of the
disclosure, (ii) which subsequently becomes publicly known through no act or
omission by the Bank, or (iii) which otherwise becomes known to the Bank,
other than through disclosure by the Corporate Guarantor.

         (k) NOTICE OF CERTAIN EVENTS. The Corporate Guarantor shall promptly
notiiy the Bank if Corporate Guarantor learns of the occurrence of(i) any
event which constitutes a Default or an Event of Default together with a
detailed statement by Corporate Guarantor of the steps being taken to cure
such Event of Default; (iD any legal, judicial or regulatory proceedings
affecting Corporate Guarantor or any of the assets or properties of Corporate
Guarantor which, if adversely determined, would present

<PAGE>

a risk (other than a remote risk) of having a Material Adverse Effect; (ili)
any dispute between Corporate Guarantor and any governmental or regulatory
body or any other Person which, if adversely determined, would present arisk
(otherthan arernote risk) of having a Material Adverse Effect; (iv) any other
matter which in Corporate Guaranto?s reasonable opinion could have a Material
Adverse Effect; and (v) any default or Event of Default by ECW, FFI, or UFEC
under the EWC/FFI Loan Agreement.

         (l) ERISA INFORMATION AND COMPLIANCE. The Corporate Guarantor will
promptly fUrnish to the Bank imrnediately upon becoming aware of the occurrence
of any "reportable event", as such term is defined in Section 4043 of ERISA, or
of any "prohibited transaction", as such term is defined in Section 4975 of the
Internal Revenue Code of 1954, as amended, in connection with any Plan or any
trust created thereunder, a written notice signed by the chief financial officer
of Corporate Guarantor specil~ing the nature thereof, what action Corporate
Guarantor is taking or proposes to take with respect thereto, and, when known,
any action taken by the Interual Revenue Service with respect thereto.

         (m) Chan e of Princi al Place of Business. Corporate Guarantor shall
give Bank at least thjrw (30) days prio written notice of its intention to move
its principal place of business from the address set forth in ection 21 hereof.

         (n) Main in MiniInum Net Worth. At all times while any part of the Loan
is unpaid Corporate Guaranto will maihtain a iniiiirnum Net Worth of
$7,500,000.00 calculated according to GAAP.

         16. Nega e Covenants of Corporate Guarantor. A deviation from the
provisions of this Section 16 shall not constitute an Event of Default under
this Agreement if such deviation is consented to in wri g by the Bank prior to
the date of deviation. The Corporate Guarantor will at all times comply wi the
covenants contained in this Section 16 from the date hereof and for so long as
the Loan is in exi ence or any amount is owed to the Bank or the Bank under this
Agreement or the other Loan Doc ents.

         (a)      Ne a ive Pled e. Corporate Guarantor shall not:

                  (i) create, incur, assume or permit to exist any lien,
                  security interest or other encumbrance on any of its assets or
                  properties except Permitted Liens; or

                  (ii) sell, lease, transfer or otherwise dispose of any of its
                  assets except for (A) sales, leases, transfers or other
                  dispositions made in the ordinary course of Corporate
                  Guarantor's businesses and (B) sales made with the consent of

<PAGE>

         (b) Cons lidations and Mer ers.V?rporate Guarantor will hot conso1idate
or merge with~~ or into any other Per on.

         (c) Debts Guaranties and Other Obli ations. Corporate Guarantor wiU not
guaantee or otherwise in any m er bocome or be liab1e in respect of any
indebtedness, Iiabilities or other -obligations of any o er Person, whether by
agreement to purchase the indebtedness of any other Person or agreement for the
fUrnishing of fluids to any other Person through the purchase or lease of goods,
supplies o services (or by way of stock purchase, capital contribution, advance
or loan) for the purpose of pa ing or discharging the indebtedness of any other
Person, or otherwise, except that Qe foregoing re (Degree)ctions shall not apply
to:

                  (i) the Corporate Guarantor's Guaranty and any renewal or
             increase thereof, or other indebte ess ofthe Corporate Guarantor
             heretofore disclosed to Bank in the Corporate Guarantor's ancial
             Statements; or

                  (ii) taxes, assessments or other government charges which
             are not yet due or are being conte ed in good faith by
             appropriate action promptly initiated and diligently conducted,
             if such reserve as shall be required by GAAP shall have been
             made therefor and levy and execution thereon have been stayed and
             continue to be stayed; or

                  (iii) other indebtedness of any nature not in excess of
             $500,000 in the aggregate; or

                  (iv) lease-or rental agreements not requiring annual rental
             payments in excess of $ 100,000 in the aggregate; or

                  (v) any renewals or extensions of (but not increases in) any
             of the foregoing.

         (d) DIVIDENDS. Without the written consent of Bank, Corporate Guarantor
will not declare or pay any cash dividend, purchase, redeem or otherwise acquire
for value any of its stock now or hereafter outstanding, return any capital to
its stockholders, or make any distribution of its assets to its stockholders as
such; provided, however, that the Corporate Guarantor may continue the program
of redeeming equity ownership of its customers as set forth in ;HATZZRTAIN
PROFLP?CTU3 DATED
       P.  199  INNU:D K' Corporate Guarantor.       %ft~~ft~.v~ ~o~p~r'Ac
                  p(cL~ oW ~
         (e) LOANS AND ADVANCES. Other than the loan made pursuant to the
EWC/FFI Loan Agreement, Corporate Guarantqr shall not make or permit to remain
outstanding any loans or advances to or in any Person, except that the foregoing
restriction shall not apply to loans or advances to any Person, the material
details of which

<PAGE>

have been set forth in the Financial Statements of the Corporate Guarantor
heretofore fUrnished to Bank.

         (f) PAVABLES AND RECEIVABLES. Corporate Guarantor will not discount or
sell with recourse, or sell for less than the greater of the face or market
value thereof, any of its notes receivable or accounts receivable. Corporate
Guarantor will diligently attempt to collect all of its receivables, including
those owing by Affiliates. Corporate Guarantor will not permit any account
payable to remain outstanding for more than ninety (90) days unless such account
payable is being contested by Corporate Guarantor in good faith, with the
exception of inter-company accounts involving its parent company or wholly owned
subsidiaries of its parent company.

         (g) NATURE OF BUSINESS. Corporate Guarantor will not permit any
material change to be made in the character of its business as carried on at the
date hereof.

         (h) TRANSACTIONS WITH AFFILIATES. Corporate Guarantor will not enter
into any transaction with any Affiliate, except transactions upon terms that are
no less favorable to Corporate Guarantor than would be obtained in a traction
negotiated at arm's length with an unrelated third party.

         (i) INVESTMENTS. Corporate Guarantor shall not make any investments in
any Person, except such restriction shall not apply to:

                  (i) investrnents in direct obligations of the United States of
             America or any agency thereof;

                  (ii) invesSments in certificates of deposit issued by the
             Bank or certificates of deposit with maturities ofless than one
             year, issued by other commercial banks in the United States
             having capital and surplus in excess of $500,000,000 and which
             have a rating of (A) 50 or above by Sheshunoff and (B) "B" or
             above by Keef-Bruett; or

                  (iii) investments in insured money market fluids and other
             similar accounts at Bank or such investment with maturities of
             less than ninety (90) days at other commercial banks having
             capital and surplus in excess of $500,000,000 and which have a
             rating of(A) 50 or above by Sheshunoff and (B) "B" or above by
             Keef-Bruett.

         (j) AMENDMENT TO ARTICLES OF INCORPORATION OR BYLAWS. Corporate
Guarantor will not permit any arnendment to, or any alteration ot, its Articles
of Incorporation or Bylaws.

         (k) ISSUANCE OF STOCK. Corporate Guarantor shall not issue any stock
after the Effective Date.

<PAGE>

                  (l) AMENDMENTS TO AND REDEMPTION OFEQUITV. Corporate Guarantor
         shall not (i) amend any outstanding equity issue after the Effective
         Date without the consent of Bank, or (ii) redeem any stock without the
         consent of Bank; provided, however, that the Corporate Guarantor may
         continue the program of redeeniing equity ownership of its customers as
         set forth in
I,,~AU1-TCD ~, 199  I53UJ BY Corporate Guarantor.    4&U
rwr               c'
                  (m) . PAYMENT OR PRE-PAYMENT OF OTHER INDEBTEDNESS. Except as
         otherwise provided for in this Agreement, while the Note is
         outstanding, Corporate Guarantor shall-not make any unscheduled
         principal payments on or redeem any of its indebtedness (other than
         indebtedness owed the Bank by Borrower) or purchase or redeem any of
         its equity.

                           17. Affirmative Covenants of Individual Guarantor. A
         deviation from the provisions of this Section 17 shall not constitute
         an Event of Default under this Agreement if such deviation is consented
         to in writing by the Bank prior to the date of deviation The Individual
         Guarantor will at all times comply with the covenants contained in this
         Seetion 17 from the date hereof and for so long as any amount is owed
         to the Bank or the Bank under this Agreement or the other Loan
         Documents.

                  (a) FINANCIAL STATEMENTS AND REPORTS. Individual Guarantor
         shall promptly fUrnish to Bank from time to time upon request such
         information regarding the business and affairs and financial condition
         of Individual Guarantor, as the Bank may reasonably request, and will
         also fUrnish to Bank:

                  (i) ANNUAL FINANCIAL STATEMENTS. As soon as available, and in
                  any event within ninety (90) days after the close of each
                  fiscal year, the annual Financial Statements of Individual
                  Guarantor, prepared in accordance with GAAP;

                  (ii) MONTHIV OR OUARTERLV FINANCIAL STATEMENTS. As soon as
                  available, and in any event within forty-five (45) days after
                  the end of the calendar month or quarter as applicable of each
                  year, the monthly (if prepared by Individual Guarantor, or if
                  not, quarterly) unaudited Financial Statements of Individual
                  Guarantor prepared in accordance with GAAP;

                  (iii) ADDITIONAL INFORMATION. Promptly upon request ofthe Bank
                  from time to time any additional financial information or
                  other information that the Bank may reasonably request.

such reports, information, balance sheets and Financial Statements

<PAGE>

referred to in Subsection a) above shall be in such detail as the Bank may
reasonably request and shall be prepared in a nner consistent with the
Financial Statements.

         (b) CERTIFICATES OF COMPLIANCE. Concurrently with the fUrnishing of the
annual audited ancial Statements pursuant to Subsection l 7(a)(i) hereof and the
monthly or quarterly unaudited ancial Statements pursuant to Subsection
17(a)(ii) hereof, Individual Guarantor will fUrnish to Bank a signed
certificate; (i) stating that Individual Guarantor has hi1fllled in all material
respects obligations under the Loan Documents, including this Agreement, and
that all representations (Degree) warranties made herein and therein continue as
of the date of such certificate (except to the ~t they relate solely to an
earlier date) to be true and correct in all material respects (or cifying the
nature of any change), or if a Default has occurred, specifying the Default and
the ire and status thereof; (ii) to the extent requested from time to time by
the Bank, specifically rrning compliance of Individual Guarantor in all material
respects with any of his representations :ept to the extent they relate solely
to an earlier date) or obligations under said instruments; and containing or
accompanied by such financial or other details, information and material as the
Lk may reasonably request to evidence such compliance.

         (c) TAXES AND OTHER LIENS. The Individual Guarantor will pay and
discharge promptly axes, assessments and governmental charges or levies imposed
upon the Individual Guarantor ipon the income or any assets or property of
Individual Guarantor, as well as all claims of any i (including claims for
labor, materials, supplies and rent) which, if unpaid, might become a Lien ther
encumbrance upon any or all of the assets or property of Individual Guarantor;
provided, 'ever, that Individual Guarantor shall not be required to pay any such
tax, assessment, charge, for claim if the amount, applicability or validity
thereof shall currently be contested in good faith Lppropriate proceedings
diligently conducted, levy and execution thereon have been stayed and Linue to
be stayed and if Individual Guarantor shall have set up adequate reserves
therefor, if iired, under GAAP.

         (j) NOTICE OF CERTAIN EVENTS. The Individual Guarantor shall promptly
noti?y the Bank if Individual Guarantor lean's of the occurrence of (i) any
even; which constitutes a Default or an Event of Default; (ii) any legal,
judicial or regulatory proceedings affecting Individual Guarantor or any ofthe
assets or properties ofIndividual Guarantor which, ifadversely determined, would
present a risk (other than a remote risk) of having a Material Adverse Effect;.
(iii) any dispute between Individual Guarantor and any governmental or
regulatory body or any other Person which, if adversely determined, would
present a risk (other than a remote risk) of having a Material Adverse Effect;
(iv) any other matter which in Individual Guarantor's reasonable opinion

<PAGE>

could have a Material Adverse Effect; and (v) any default or Event of Default
by ECW, FFI, or UFEC under the EWC/FFI Loan Agreement.

         (k) CHANGE OF PRINCIPAL PLACE OF BUSINESS. Individual Guarantor shall
give Bank at least thirty (30) days prior written notice of its intention to
move its principal place of business from the address set forth in Section 21
hereof.

         18. Negative Covenants of Individual Guarantor. A deviation from the
provisions of this Section 18 shall not constitute an Event of Default under
this Agreement if such deviation is. consented to in writing by the Bank prior
to the date of deviation. The Individual Guarantor will at all times comply with
the covenants contained in this Section 18 from the date hereof and for so long
as the Loan is in existence or any amount is owed to the Bank under this
Agreement or the other Loan Documents.

         (a)      NEGATIVE PLEDGE. Individual Guarantor shall not:

                  (i) create, incur, assume or permit to exist any Lien,
                  security interest or other encumbrance on any of its assets
                  or properties except Permitted Liens; or

                  (ii) sell, lease, transfer or otherwise dispose of any of
                  its assets except for (A) sales, leases, transfers or other
                  dispositions made in the ordin&y course of Individual
                  Guaranto?s businesses and (B) sales made with the consent
                  of Bank.

         (b) DEBTS. GUARANTIES AND OTHER OBLIGATIONS. Individual Guarantor will
not incur, create, assume or m any manner become or be liable in respect of any
indebtedness, nor will Individual Guarantor guarantee or otherwise in any manner
become or be liable in respect of any indebtedness, liabilities or other
obligations of any other Person, whether by agreement to purchase the
indebtedness of any other Person or agreement for the fUrnishing of fluids to
any other Person through the purchase or lease of goods, supplies or services
(or by way of stock purchase, capital contribution, advance or loan) for the
purpose ofpaying or discharging the indebtedness of any other Person, or
otherwise, except that the foregoing restrictions shall not apply to:

                  (i) the Individual Guarantor's Guaranty and any renewal or
             increase thereof, or other indebtedness ofthe Individual
             Guarantor heretofore disclosed to Bank in the Individual
             Guarantor's Financial Statements, including Individual Guarantor's
             obligations under the EWC/FFI Loan Agreement; or

                  (ii) taxes, assessments or other government charges which are
             not yet due or are being contested in - good faith by appropriate
             action promptly initiated and diligently conducted, if such
             reserve as shall be required by GAAP shall

<PAGE>

             have been made therefor and levy and execution thereon have been
             stayed and continue to be stayed; or

                  (iii) other indebtedness of any nature not in excess
             of $100,000 in the aggregate; or

                  (iv) lease or rental agreements not requiring annuM rental
             payments in excess of $100,000 in the aggregate; or

                  (v) any renewals or extensions of (but not increases in) any
             of the foregoing.

         (c) LOANS AND ADVANCES. Individual Guarantor shall not make or permit
to remain outstanding any loans or advances to or in any Person, except that the
foregoing restriction shall not apply to:

                  (i) loans or advances to any Person, the material details
             of which have been set forth in the Financial Statements of the
             Individual Guarantor heretofore fUrnished to Bank; or

                  (ii) advances made in the ordinary course of Individual
             Guaranto?s business to Persons who are not Affiliates.

         (d) PAVABLES AND RECEIVABLES. Individual Guarantor will not discount or
sell with recourse, or sell for less than the greater of the face or market
value thereof, any of his notes receivable or accounts receivable. Individual
Guarantor will diligently attempt to collect all of his receivables, including
those owing by Affiliates. Individual Guarantor will not permit any account
payable to remain outstanding for more than ninety (90) days unless such account
payable is being contested by Individual Guarantor in good faith.

         (e) NATURE OF BUSINESS. Individual Guarantor will not permit any
material change to be made in the character of its business as carried on at the
date hereof.

         (f) PAYMENT OR PRE-PAVMENT OF OTHER INDEBTEDNESS. Except as otherwise
provided for in this Agreement, while the Note is outstanding, Individual
Guarantor shall not make any unscheduled principal payments on or redeem any of
its indebtedness (other than indebtedness owed the Bank hereunder) or purchase
or redeem any of its equity.

         19. Events of Default. Any one or more of the following events shall be
considered an "Event of Default" as that term is used herein:

                  (a) The Borrower shall fail to pay when due or declared due
         the principal of, and the interest on, the Note, or any fee or any
         other indebtedness of the Borrower incurred pursuant to this Agreement
         or any other Loan Document; or

<PAGE>

                  (b) Any representation or warranty made by Borrower under this
         Agreement, or in any certificate or statement fUrnished or made to the
         Bank pursuant hereto, or in connection herewith, or in connection with
         any document fUrnished hereunder, shall prove to be untrue in any
         material respect as of the date on which such representation or
         warranty is made (or deemed made), or any representation, statement
         (including financial statements), certificate, report or other data
         finished or to be fUrnished or made by Borrower under any Loan
         Document, including this Agreement, proves to have been untrue in any
         material respect, as of the date as of which the facts therein set
         forth were stated or certified; or

                  (c) Default shall be made in the due observance or performance
         of any of the covenants or agreements of the Borrower or the Corporate
         Guarantor contained in the Loan Documents, including this Agreement,
         and such default shall continue for more than thirty (30) days; or

                  (d) Default shall be made in the due observance or performance
         of the covenants of Borrower contained in Sections 13 and 14 of this
         Agreement; or -

                  (e) Default shall be made in respect of any obligation for
         borrowed money, other than the Note, including but not limited to any
         default under the indenture, for which Borrower or Corporate Guarantor
         is liable (directly, by assumptidn, as guaantor or otherwise), or any
         obligations secured by any mortgage, pledge or other security interest,
         lien, charge or encumbrance with respect thereto, on any asset or
         property of Borrower or Corporate Guarantor or in respect of any
         agreement relating to any such obligations unless Borrower or Corporate
         Guarantor is not liable for same (i.e., unless remedies or recourse for
         failure to pay such obligations is limited to foreclosure of the
         collateral security therefor), and if such default shall continue
         beyond the applicable grace period, -if any; or

                  (f) Borrower or Corporate Guarantor shall commence a voluntary
         case or other proceeding seeking liquidation, reorganization or other
         reliefwithrespect to itself or its debts under any bankruptcy,
         insolvency or other similar law now or hereafter in effect or seeking
         an appointrnent of a trustee, receiver, liquidator, custodian or other
         similar official of it or any substantial part of its property, or
         shall consent to any such relief or to the appointment of or taking
         possession by any such official in an involuntary case or other
         proceeding commenced against it, or shall make a general assignnient
         for the benefit ofcreditors, or shall fail generally to pay its debts
         as they become due, or shall take any corporate action authorizing the
         foregoing; or

                  (g) An involuntary case or other proceeding, shall be

<PAGE>

         commenced against (Degree) Borrower or Corporate Guarantor seeking
         liquidation, reorganization or other relief with respect to it or its
         debts under any bankruptcy, insolvency or similar law now or hereafter
         in effect or seeking the appointment of a tsustee, receiver,
         liquidator, custodian or other similar (Degree) official of it or any
         substantial part of its property, and such involuntary case or other
         proceeding shall remain undismissed and unstayed for aperiod ofsixty
         (60) days; or an order for relief shall be entered against Borrower
         under the federal bankruptcy laws as now or hereinafter in effect; or

                  (h) A final judgment or order for the payment of money in
         excess of $ 100,000 (or judgments or orders aggregating in excess of
         $100,000) shall be rendered against Borrower or Corporate Guarantor and
         such judgments or orders shall continue unsatisfied and unstayed for a
         period of thtrty (30) days; or

                  (i)      A Change of Control shall occur; or

                  (j)      A Change of Management shall occur; or

                  (k) An event of default as defined in the EWC/FFI Loan
         Agreement shall occur.

         Upon occurrence of any Event of Default specified in Subsections 20(f)
or (g) hereo?, the entire principal amount due under the Note and all interest
then accrued thereon, and any other (Degree)liabilities of the Borrower
hereunder, shall become immediately due and payable all without notice and
without presentment, demand, protest, notice ofprotest or dishonor or any other
notice ofdefau1t of any kind, all of which are hereby expressly waived by the
Borrower. Upon the occurrence of any other Event of Default, the Bank shall by
notice to the Borrower declare the principal of, and all interest then accrued
on, the Note and any other liabilities hereunder to be forthwith due and
payable, whereupon the same shall forthwith become due and payable without
presentinent, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which the Borrower hereby
expressly waives, anything contained herein or in the Note to the contrary
notwithstanding. Nothing contained in this Section 19 shall be construed to
limit or amend in any way the Events of Default enumerated n the Note, or any
other document executed in connection with the transaction contemplated herein.

         Upon the occurrence and during the continuance of any Event of Default,
the Bank is hereby authorized at any time and from time to time, without notice
to the Borrower or Corporate Guarantor (any such notice being expressly waived
by the Borrower and Corporate Guarantor), to set-off and apply any and all
deposits (general or special, time or demand, provisional or

<PAGE>

final) at any time held and other indebtedness at any time owing by any of
the Bank to or for the credit or the account of the Borrower or Corporate
Guarantor against any and all of the indebtedness of the Borrower under the
No?e and the Loan Documents, including this Agreement, irrespective of
whether or not the Bank or the Bank shall have made any depiand under the
Loan Documents, including this Agreement or the Note and although such
indebtedness may be unmatured. Any amount set-off by any of the Bank shall be
applied against the indebtedness owed the Bank by the Borrower pursuant to
this Agreement and the Note. The Bank agree promptly to noti?y the Borrower
or Corporate Guarantor, as the case may be, after any such setoff and
application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Bank under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Bank may have.

         20. Exercise of Rights. No failure to exercise, and no delay in
exercising, on the part of the Bank, of any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereofpreclude any
other or fitrther exercise thereof or the exercise of any other right. The
rights of the Bank hereunder shall be in addition to all other rights provided
by law. No modification or waiver of any provision of the Loan Documents,
including this Agreement, or the Note nor consent to departure therefrom, shall
be effective unless in writing, and no such consent or waiver shall extend
beyond the particular case and purpose involved. No notice or demand given in
any case shall constitute a waiver of the right to take other action in the
same, similar or other circumstances without such notice or demand.

         21. Notices. Any notices or other communications required or permitted
to be given by this Agreement or any other documents and instruments referred to
herein must be given in writing (which may be by facsimile transmission) and
must be personally delivered or mailed by prepaid certified or registered mail
to the party to whom such notice or communication is directed at the address of
such party as follows:

         (a) BORROWER: NEW WEST RESOURCES, INC., 500 West Wall, Midland, Texas
79701, Facsimile No. (915) 684-0333, Attention: David Pruitt, President;

         (b)Bank: BANK UNITED, 401 West Texas Street, Midland, Texas 79701,
Facsimile No.915-687-5006, Attention: John E. Grist;

         (c) CORPORATh GUARANTOR: CAP ROCK., 500 West Wall, Midland, Texas
79701, Facsimile No. (915) 684-0333, Attn: David Pruitt, President;

         (d) INDIVIDUAL GUARANTOR: Thomas E. Kelly, 4411 Cardinal Lane, Midland,
Texas 79707, Facsimile No. (915) 498-8282.

<PAGE>

         (e) INDWIDUAL GUARANTOR Richard Skillem, 33 16 Trails End, Odessa,
Texas 79762, Facsimile No. (915) 498-8282

Any such notice or other communication shall be deemed to have been given
(whether actually received or not) on the day it is personally delivered or
delivered by facsimile as aforesaid or, if mailed, on the third day after it is
mailed as aforesaid. Any party may change its address for purposes of this
Agreement by giving notice of such change to the other party pursuant to this
Section 21.

         22. Expenses. The Borrower shall pay (i) all reasonable and necessary
out-of-pocket expenses of the Bank, including reasonable fees and disbursements
of special counsel for the Bank, in connection with the preparation of this
Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or Event of Default or alleged default or Event of Default hereunder,
and (ii) if a Default or an Event of Default occurs, all reasonable and
necessary out-of-pocket expenses incurred by the Bank, including fees and
disbursements of counsel, in connection with such default and Event of Default
and collection and other enforcement proceedings resulting therefrom. THE
BORROWER, THE CORPORATE GUARANTOR, AAD THEL"'DIWDUAL GUARANTORS
HEREBYACXNOW1EDGE TH4T KERR & WARD, LLR IS SPECIAL COUNSEL TO BANK UNITED AS
LEADER UYDER THISAGREEMENTAJW) IT IS NOT COUNSEL TO, NOR DOES IT REPRESENT, THE
BORROWER OR CORPORATE GUARANTOR OR THE mDIqDUAL GUARANTORS IN CONNECTION WITH
T"IE TRANSACTIONS DESCRIBED IN THIS AGREEMENT The Borrower, the Corporate
Guarantor, and the Individual Guarantors are relymg on separate counsel in the
transaction described herein. The Borrower shall indemnify the Bank and the Bank
against any transfer taxes, document taxes, assessments or charges made by any
governmental authority by reason of the execution, delivery and filing of the
Loan Documents. The obligations of this Section 22 shall survive any
-termination of this Agreement, the expiration of the Loans and the payment of
all indebtedness of the Borrower to the Bank hereunder and under the Note.

         23. Indemnity. The Borrower and the Corporate Guarantor agree to
indemnify and hold harmless the Bank, and the officers, employees, attorneys,
successors, assigns and representatives of the Bank (singularly, an "Indemnified
Party", and collectively, the "Indenmifled Parties") from and against any loss,
cost, liability, damage or expense (including the reasonable fees and
out-of-pocket expenses of counsel to the Bank, including all local counsel hired
by such counsel) (collectively, "Claims") incurred by the any Indemnified Parry
in investigating or preparing for, defending against, or providing evidence,
producing documents or taking any other action in respect of any commenced or
threatened litigation, a&ninistrative proceeding or investigation under any
federal securities law, federal or state environmental law, or any other statute
ofanyjurisdiction, or any regulation, or at common law or otherwise, which is
alleged to arise out of or is based upon any act, practices or omissions or
alleged acts, practices or

<PAGE>

omissions of the Borrower, the Corporate Guarantor, the Individual
Guarantors, EWC, FFI, UFEC, or theft agents or arises in connection with the
duties, obligations or performance of the Indemnifled Parties in negotiating,
preparing, executing, accepting, keeping, completing, countersigning,
issuing, selling, delivering, releasing, assigning, handling, certifying,
processing or receiving or taking any other action with respect to the Loan
Documents and all documents, items and materials contemplated thereby
EVENIFANY OF THE FOREGOING ARISES OUT Q AN INDEMNIFIED PARTY'S ORDINARY
NEGLIGENCE The indemnity set forth herein shall be in addition to any other
obligations or liabilities of the Borrower to the Bank hereunder or at common
law or otherwise, and shall survive any termination of this Agreement, the
expiration of the Loan and the payment of all indebtedness of the Borrower to
the Bank hereunder and under the Note, provided that the Borrower and the
Corporate Guarantor shall have no obligation under this Section to that
Indemnifled Parry with respect to any of the foregoing arising out of the
gross negligence or willfiiI misconduct of that Indemnified Parry. If any
Claim is asserted against any indemnifled Party, the Indemnifled Party shall
endeavor to notify the Borrower and the Corporate Guarantor of such Claim
(but failure to do so shall not affect the indemnification herein made except
to the extent of the actual harm caused by such failure). Each Indemiiified
Party shall have the right to employ, at the expense ofBorrower and Corporate
Guarantor, counsel of the Inden::nifled Parry's choosing and to control the
defense of the Claim. The Borrower or Corporate Guarantor may at its own
expense also participate in the defense of any Claim. Each Indemified Party
may employ separate counsel in connection with any(pound)laiin to the extent
such Indenmified Party believes it reasonably prudent to protect such
Indemnified Party. THE PAR TIES INTEND FOR THE PROVISIONS OF THIS SECTION
TOAPPLYTO AND PROTECTEACHmDEMNIFIED PARTY FROM THE CONSEQUENCES OFANY
LIABILITY INCLUDING STRICT LIABILITY IMPOSED OR THREATENED TO BE IMPOSED ON
BANK AS WELL AS FROM THE CONSEQUENCES OF ITS OWN NEGLIGENCE,
wHETHERORNOTTwlTNEGLIGENCEISTHESOLE, CONTRIBUTING, OR CONCURRING CAUSE OF ANY
CLAIM EXCEPT FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

         24. Governing Law. This AGREEMENT IS BEING EXECUTED AND DELIVERED, AND
IS IN tENDED TO BEPERFORMED, INMIDLAND, MIDLAND COUNTY, TEXAS, AND THE
SUBSTANTIVE LAWS OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUC~ON, ENFORCEMENT
AND INTERPRETATION OF ThIS AGREEMENTAND ALL OTHER DOCUMENTS AND INSTRUMENTS
REFERRED TO HEREIN, UNLESS OTHERWISE SPECIFIED THEREIN.

         25. Invalid Provisions. If any provision of this Agreement is held to
b6 illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provisions shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of the Agreement shall remain in fill force and effect and
shall not be affected by the

<PAGE>

illegal, invalid or unenforceable provision or by its severance from this
Agreement.

         26. Maximum Interest Rate. Regardless ofany provisions contained in
this Agreement or in any other documents and instruments reIerred to herein, the
Bank shall never be deemed to have contracted for or be entitled to receive,
collect or apply as interest on the Note any amount in excess of the Maximum
Rate orthe maximum amount of interest permitted under applicable law, and in the
event Bank ever receives, collects or applies as interest any such excess, or if
an acceleration of the maturities of any Note or if any prepayhient by the
Borrower results in the Borrower having paid any interest in excess of the
Maximum Rate or the maximum amount of interest permitted under applicable law,
such amount which would be excessive interest shall be applied to the reduction
of the unpaid principal balance of the Note for which such excess was received,
collected or applied, and, ifthe principal balance ofsuchNote is paid in fill,
any remaining excess shall forthwith be paid to the Borrower. Al1 sums paid or
agreed to be paid to the Bank for the use, forbearance or detention of the
indebtedness evidenced by the Note and/or this Agreement shall, to the extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the fill term of such indebtedness until payment in fill so that the
rate or amount of interest on account of such indebtedness does not exceed the
Maximum Rate. In determining whether or not the interest paid or payable under
any specific contingency exceeds the Maximum Rate of interest permitted by law,
the Borrower and the Bank shall, to the maximum extent permitted under
applicable law, (i) characterize any non-principal payment as an expense, fee or
premium, rather than as interest; and (ii) exclude voluntary prepayments and the
effect thereof; and (iii) compare the total amount of interest contracted for,
charged or received with the total amount of interest which could be contracted
for, charged or received throughout the entire contemplated term of the Note at
the Maximum Rate.

                  27. Amendments. This Agreement may be amended only by an
instrument in writing executed by an authorieed officer of the party against
whom such amendment is sought to be enforced.

                  28. Mulfiple Counterparts. This Agreement may be executed in a
number of identical separate counterparts, each of which for all purposes is to
be deemed an original, but all of which shall constitute, collectively, one
agreement. No party to this Agreement shall be bound hereby until a counterpart
of this Agreement has been executed by all parties hereto.

                  29. Conflict In the event any term or provision hereof is
inconsistent with or conflicts with any provision ofthe Loan Documents, the
terms or provisions contained in this Agreement shall be controlling.

                  30. Survival. All covenants, agreements, undertakings,

<PAGE>

representations and warranties, made in the Loan Documents, including this
Agreement, the Note or other documents and instruments referred to herein shall
survive all closings hereunder and shall not be affected by any inv&stigation
made by any party.

                  31. Parties Bound. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and theft respective successors,
assigns, heirs, legal representatives and estates, provided, however, that the
Borrower may not, without the prior written consent of the Bank, assign any
rights, powers, duties or obligations hereunder.

                  32.      Assignments and Participations.
         - (a) Bank shall have the right to sell, assign or transfer all or any
part of its Note and its rights and obligations hereunder to one or more
Affiliates, banks, financial institutions, pension plans, insurance companies,
investment fluids, or similar Persons who are eligible assignees or to a Federal
Reserve Bank. Any such assignee, transferee or recipient shall have, to the
extent of such sale, assignment, or transfer, the same rights, benefits and
obligations as it would if it were such Bank and a holder of such Note and
rights and obligations, including, without limitation, the right to vote on
decisions requiring consent or approval of Bank. On and after the effective date
of an assignment hereunder, the assignee shall for all purposes be a party to
this Agreement and any other Loan Document executed by the Bank and shall have
all the rights and obligations of Bank under the Loan Documents, to the same
extent as if it were an original party thereto, and no further consent or action
by Borrower shall be required to release the Bank with respect to its
obligations hereunder and Bank shall henceforth be so released.

                  (b) Bank shall have the right to grant participations in all
or any part of the Note to one or more pension plans, investment fluids,
insurance companies, financial institutions or other Persons, upon such terms
and conditions as Bank may deem appropriate.

                  (c) It is understood and agreed that Bank may provide to
assignees and participants and prospective assignees and participants financial
information and reports and data concermhg Borrower's properties and operations
which has been provided to Bank pursuant to or in connection with this Agreement
or the Loan.

                  (d) Upon the reasonable request of Borrower, Bank will
identify those to whom it has assigned or participated any part of its Note and
commitment, and provide the amounts so assigned or participated.

                  33. Choice of Forum: Consent to Service of Process and
Jurisdiction. THE OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS ARE
PERFORNABLE IN MIDLAND COUNTY, TEXAS. ANY SUIT, ACTION OR PROCEEDING AGMNST TIlE
BORROWER WITh RESPECT TO THE LOAN DOCUMENTS

<PAGE>

OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF, MAYBE BROUGHT INTHE
COURTS OFTHE STATE OFTEXAS, COUNTY OF MIDLAND, OR IN THE UNITED STATES COURTS
LOCATED IN MIDLAND COUNTY, TEXAS AND THE BORROWER HEREBY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUCH SUIT,
ACTION OR PROCEEDING. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO SER~CE OF
PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURT BY THE MAILING
THEREOF BY BANK BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREP AID, TO THE
BORROWER, AS APPLICABLE,AT THE ADDRESS FOR NO~CES AS PROVIDED IN SECTION 22.
THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT BROUGHT IN THE COURTS LOCATED
IN MIDLAND COUNTY, TEXAS; AND HEREBY FURTHER IRREVOCABLY WAFEES ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

                  34. Waiver of Jury TriaL THE BORROWER HEREBY WMVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

                  35. Other Agreements. THIS WRITTEN LOAN AGREEMENT REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENTORALAGREEMENTS
OFTHEPARTIES.THEREARENOUNWRITTEN ORAL AGREEMENTS BETWEEN THE PAR~ES.

                  36. Financial Terms. All accounting terms used in this
Agreement which are not specifically defined herein shall be construed in
accordance with GAAP.

         IN WI;i?(ESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and yew first above written.

                           BORROWER:

                           NEW WEST RESOURCES, INC.,
                           a Texas corporation

                                   John D. Parkers Vice President

                                        BANK:

                           BANK UNITED TEXAS FSB
                           a Federal Savings Bank

<PAGE>

                                   'In . Grist, President Midland Region

                           CORPORATE GUARANTOR:

                           CAP ROCK ELECTRIC COOPERATIVE, INC.

                                             By:
                                   John D. Parker, Vice President

                                          EXHIBIT "A"

The Note, which was Exhibit "A" to the Loan Agreement, was executed at closing.
A copy of the signed Note is at Tab 2.

                                          EXHIBIT ',B-1'1

The Cap Rock Guaranty Agreement, which was Exhibit "B-l"to the Loan Agreement,
was executed at closing. A copy of the signed Guaranty Agreement is at Tab 6.

                                          EXHIBIT "B-2"

The Kelly Guaranty Agreement, which was Exhibit "B-2" to the Loan Agreement, was
executed at closing. A copy of the signed Guaranty Agreement is at Tab 7.

                                          EXHIBIT "B-3'1

The Skillem Guaranty Agreement, which was Exhibit "B-3" to the Loan Agreement,
was executed at closing. A copy of the signed Guaranty Agreement is at Tab 8.

                                          SCHEDULE I and 2

The attached documents describe the wholly owned subsidiaries of New West
Resources, Inc. (Schedule l) and Cap Rock Electric Cooperative, Inc. (Schedule
2).

Harris Kerr

<PAGE>

from:              (Degree) (Degree) Wayne R. Mathis [wayneIaw~gvtc.com]
Sent:     Tuesday, July 11,2000 11:38PM
To:       Harn~ E. Kerr
Subject:  Fw: Sub~idianes

Attached is the subsidiary information that you requested.
  original Message
From:     ronnie lyon < rlyonl~airm~~l~net>
To:       < waynelaw8gvtc corn>
Sent:     Tuesday1 July 11, 2000 11:25 PM
Subject:  Re: Subsidiaries

> New West is a wholly owned subsidiary of Cap Rock.
It has two
> subsidiaries, New West Fuels, LLC which is basically
a shell, and Map
> Resources, Inc.  Cap Rock has the following
subsidiaries: New Corp
> Resources Electric Cooperative, Inc., Cap Rock
Cooperative Finance
> Corporation, CapStar Communications, Inc., Capstar
Resources, Inc.,
New
> West Resources, Inc., Cap Rock Energy (Nevada), and
Cap Rock Energy
> (Texas).  Capstar Resources, Inc. has one
subsidiary, Utility
Services,
> Inc.  Also, at the present time McCulloch Electric
Cooperative, Inc.
is
> technically a subsidiary, but it will be dissolved
as soon as the CCN
is
> transferred to Cap Rock.
>
> Wayne R. Mathis wrote:
>>
> > [Image)
>>
> > Harris Kerr needs a listing of the subsidiaries of
Cap Rock and New

07/12/2000        1
10:36 AM
HarrIsKerr

> > West.  Could you please send those to me?  Thanks.
>>

<PAGE>

>>
>> -

>

>>
> > THIS EMAIL MESSAGE IS A PRIVILEGED AND
CONFIDENTIAL ATTORNEY-CLIENT
> > COMMUNICATION AND IS TRANSMITTED FOR THE EXCLUSIVE
INFORMATION AND
USE
> > OF THE INTENDED ADRESSEE AND NO OTHER PERSON.
>>
> > PERSONS RESPONSIBLE FOR DELIVERING THIS
COMMUNICATION TO THE
INTENDED
> > RECIPIENT ARE ADMONISHED THAT THIS COMMUNICATION
MAY NOT BE COPIED
OR
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IF YOU RECEIVE
THIS
> > COMMUNICATION IN ERROR, PLEASE NOTIFY US
IMMEDIATELY BY TELEPHONE AT
> > 830-336-2587 OR VIA EMAIL AT waynelaw~gvtc.~0m
>>
>>
>>
> > THE LAW OFFICE OF WAYNE R. MATHIS, PLLC
>>
> > 2803 Highway 473
>>
> > Kendalia, Texas 78027
>>
> > Phone: 830-336-2587

> > Fax: 830-336-2586
>>
>>
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07/12/2000        2
10:36 AM
Harris Kerr<PAGE>

                                                                  Exhibit 10.52

                       UNCONDITIONAL GUARANTY

THIS UNCONDITIONAL GUARANTY ("Guaranty") is made July 12, 2000, by CAP ROCK
ELECTRIC COOPERATIVE, INC. ("Corporate Guarantor") for the benefit of BANK
UNITED TEXAS FSB ("Bank").

1. DEFINITIONS. As used in this Guaranty, the following terms shall have the
meanings indicated below:

a. The term "Bank" shall mean BANK UNITED TEXAS FSB.

b. The term "Borrower" shall mean New West Resources, Inc., a Texas Corporation.

c. The term "Corporate Guarantor" shall mean Cap Rock Electric Cooperative,
Inc., a Texas cooperative.

d. The term "Individual Guarantor" shall mean and refer to each of Thomas E.
Kelly and Richard C. Skillern (who are jointly referred to as "Individual
Guarantors").

2. The term "Guaranteed Indebtedness" shall mean (i) all indebtedness,
obligations and liabilities of Borrower to Bank of any kind or character now
existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several or joint and
several, and regardless of whether such indebtedness, obligations and
liabilities may, prior to their acquisition by Bank, be or have been payable to
or in favor of a third party and subsequently acquired by Bank (it being
contemplated that Bank may make such acquisitions from third parties), including
without limitation all indebtedness, obligations and liabilities of Borrower to
Bank now existing or hereafter arising by note, draft, acceptance, guaranty,
endorsement, letter of credit, assignment, purchase, overdraft, discount,
indemnity agreement or otherwise, (ii) all accrued but unpaid interest on any of
the indebtedness described in (i) above; (iii) all obligations of Borrower to
Bank under any documents evidencing, securing, governing and/or pertaining to
all or any part of the indebtedness described in (i) and (ii) above, (iv) all
costs and expenses incurred by Bank in connection with the collection and
administration of all or any part of the indebtedness and obligations described
in (i), (ii) and (iii) above or the protection or preservation of, or
realization upon, the collateral securing all or any part of such indebtedness
and obligations, including without limitation all reasonable attorneys' fees,
and (v) all renewals, extensions, modifications and rearrangements of the
indebtedness and obligations described in (i), (ii), (iii) and (iv) above,

3. OBLIGATIONS. As an inducement to Bank to extend or continue to extend credit
and other financial accommodations to Borrower, Corporate Guarantor, for value
received, does hereby

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unconditionally and absolutely guarantee the prompt and full payment and
performance of the Guaranteed Indebtedness when due or declared to be due and
at all times thereafter. The liability of Corporate Guarantor hereunder shall
be limited to the maximum amount of liability that can be incurred with
rendering the obligations of Corporate Guarantor hereunder voidable under
applicable laws relating to fraudulent conveyance or fraudulent transfer, and
not for a greater amount.

4. CHARACTER OF OBLIGATIONS. This is an absolute, continuing and unconditional
Guaranty of payment and not of collection and if at any time or from time to
time there is no outstanding Guaranteed Indebtedness, the obligations of the
Corporate Guarantor with respect to any and all Guaranteed Indebtedness of
Borrower to Bank incurred thereafter shall not be affected. All Guaranteed
Indebtedness heretofore, concurrently herewith or hereafter made by Bank to
Borrower shall be conclusively presumed to have been made or acquired in
acceptance hereof. Corporate Guarantor shall be primarily liable, jointly and
severally, with Borrower and any other guarantor of all or any part of the
Guaranteed Indebtedness.

5. RIGHT OF REVOCATION. Corporate Guarantor understands and agrees that
Corporate Guarantor may revoke Corporate Guarantor's future obligations under
this Guaranty at any time by giving Bank written notice that Corporate Guarantor
will not be liable hereunder for any indebtedness or obligations of Borrower
incurred on or after the effective date of such revocation. Such revocation
shall be deemed to be effective on the day following the day the Bank receives
such notice delivered either by (a) personal delivery to the address and
designed department of Bank identified in subparagraph I (a) above; or (b)
United States mail, registered or certified, return receipt requested, postage
prepaid, addressed to Bank. Notwithstanding such revocation, Corporate Guarantor
shall remain liable on Corporate Guarantor's obligations hereunder until payment
in full to Bank of (x) all of the Guaranteed Indebtedness that is outstanding on
the effective date of such revocation, and any renewals and extensions thereof,
and (y) all loans, advances and other extensions of credit made to or for the
account of Borrower on or after the effective date of such revocation pursuant
to the obligation of Bank under a commitment or agreement made to or with
Borrower prior to the effective date of such revocation. The terms and
conditions of this Guaranty, including without limitation the consents and
waivers set forth in paragraph 8 hereof, shall remain in effect with respect to
the Guaranteed Indebtedness described in the preceding sentence in the same
manner as if such revocation had not been made by Corporate Guarantor.

6. REPRESENTATIONS AND WARRANTIES. Corporate Guarantor hereby represents and
warrants the following to Bank:

a. This Guaranty may reasonably be expected to benefit, directly or indirectly,
Corporate Guarantor, and the Board of Directors of Corporate Guarantor has
determined that this Guaranty may

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reasonably be expected to benefit, directly or indirectly, Corporate
Guarantor;

b. Corporate Guarantor is familiar with, and has independently reviewed the
books and records regarding, the financial condition of Borrower (which is its
wholly owned subsidiary) and is familiar with the value of any and all
collateral intended to be security for the payment of all or any part of the
Guaranteed Indebtedness; provided, however, Corporate Guarantor is not relying
on such financial condition or collateral as an inducement to enter into this
Guaranty;

c. Corporate Guarantor has adequate means to obtain from Borrower on a
continuing basis information concerning the financial condition of Borrower and
Corporate Guarantor is not relying on Bank to provide such information to
Corporate Guarantor either now or in the future;

d. Corporate Guarantor has the power and authority to execute, deliver and
perform this Guaranty and any other agreements executed by Corporate Guarantor
contemporaneously herewith, and the execution, delivery and performance of this
Guaranty and any other agreements executed by Corporate Guarantor
contemporaneously herewith does not and will not violate, (i) any agreement or
instrument to which Corporate Guarantor is a party, (ii) any law, rule,
regulation or order of any governmental authority to which Corporate Guarantor
is subject, or (iii) Corporate Guarantor's Articles of Incorporation or Bylaws;

e. Neither Bank nor any other party has made any representation, warranty or
statement to Corporate Guarantor in order to induce Corporate Guarantor to
execute this Guaranty;

f. The financial statements and other financial information regarding Corporate
Guarantor heretofore and hereafter delivered to Bank are and shall be true and
correct in all material respects and fairly present the financial position of
Corporate Guarantor as of the dates thereof, and no material adverse change has
occurred in the financial condition of Corporate Guarantor reflected in the
financial statements and other financial information regarding Corporate
Guarantor heretofore delivered to Bank since the date of the last statement
thereof, and

g. As of the date hereof, and after giving effect to this Guaranty and the
obligations evidenced hereby, (i) Corporate Guarantor is and will be solvent,
(ii) the fair saleable value of Corporate Guarantor's assets exceeds and will
continue to exceed Corporate Guarantor's liabilities (both fixed and
contingent), (iii) Corporate Guarantor is and will continue to be able to pay
Corporate Guarantor's debts as they mature, and (iv) Corporate Guarantor has and
will continue to have sufficient capital to carry on its business and all
businesses in which it is about to engage.

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7. COVENANTS. Corporate Guarantor hereby covenants and agrees with Bank as
follows:

a. Corporate Guarantor shall not, so long as Corporate Guarantor's obligations
under this Guaranty continue, transfer or pledge any material portion of
Corporate Guarantor's assets for less than full and adequate consideration;

b. Corporate Guarantor shall promptly furnish to Bank at any time and from time
to time such financial statements and other financial information of Corporate
Guarantor as the Bank may require, in form and substance satisfactory to Bank;

c. Corporate Guarantor shall comply with all terms and provisions of the
instruments and agreements evidencing, governing and securing all or any part of
the Guaranteed Indebtedness that apply to Corporate Guarantor; and

d. Corporate Guarantor shall promptly inform Bank of (i) any litigation or
governmental investigation against Corporate Guarantor or affecting any security
for all or any part of the Guaranteed Indebtedness or this Guaranty which, if
determined adversely, might have a material adverse effect upon the financial
condition of Corporate Guarantor or upon such security or might cause a default
under any of the instruments or agreements evidencing, governing or securing all
or any part of the Guaranteed Indebtedness, (ii) any claim or controversy which
might become the subject of such litigation or governmental investigation, and
(iii) any material adverse change in the financial condition of Corporate
Guarantor.

8. CONSENT AND WAIVER.

a. Corporate Guarantor waives (i) promptness, diligence and notice of acceptance
of this Guaranty and notice of the incurring of any obligation, indebtedness or
liability to which this Guaranty applies or may apply and waives presentment for
payment, notice of nonpayment, protest, demand, notice of protest, notice of
intent to accelerate, notice of acceleration, notice of dishonor, diligence in
enforcement and indulgences of every kind, and (ii) the , taking of any other
action of Bank, including without limitation giving any notice of default or any
other notice to, or making any demand on, Borrower, Individual Guarantors, or
any other guarantor of all or any part of the Guaranteed Indebtedness or any
other party.

b. Corporate Guarantor waives any rights Corporate Guarantor has under, or any
requirements imposed by, Chapter 34 of the Texas Business and Commerce Code, as
in effect on the date of this Guaranty or as it may be amended from time to
time.

c. Bank may at any time, without the consent of or notice to Corporate
Guarantor, without incurring responsibility to Corporate Guarantor and without
impairing, releasing, reducing or affecting

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the obligations of Corporate Guarantor hereunder: (i) change the manner,
place or terms of payment of all or any part of the Guaranteed Indebtedness,
or renew, extend, modi~, rearrange or alter all or any part of the Guaranteed
Indebtedness; (ii) sell, exchange, release, surrender, subordinate, realize
upon or otherwise deal with in any manner and in any order any collateral for
all or any part of the Guaranteed Indebtedness or this Guaranty or setoff
against all or any part of the Guaranteed Indebtedness; (iii) neglect, delay,
omit, fail or refuse to take or prosecute any action for the collection of
all or any part of the Guaranteed Indebtedness or this Guaranty or to take or
prosecute any action in connection with any instrument or agreement
evidencing, governing or securing all or any part of the Guaranteed
Indebtedness or this Guaranty; (iv) exercise or refrain from exercising any
rights against Borrower or Individual Guarantors or others, or otherwise act
or refrain from acting; (v) settle or compromise all or any part of the
Guaranteed Indebtedness and subordinate the payment of all or any part of the
Guaranteed Indebtedness to the payment of any obligations, indebtedness or
liabilities which may be due or become due to Bank or others; (vi) apply any
deposit balance, fund, payment, collections through process of law or
otherwise or other collateral of Borrower to the satisfaction and liquidation
of the indebtedness or obligations of Borrower to Bank not guaranteed under
this Guaranty pursuant to paragraph 4 herein; and (vii) apply any sums paid
to Bank by Corporate Guarantor, Borrower, Individual Guarantors or others to
the Guaranteed Indebtedness in such order and manner as Bank, in its sole
discretion, may determine.

d. Notwithstanding any provision in this Guaranty to the contrary, Corporate
Guarantor hereby waives and releases (i) any and all rights of subrogation,
reimbursement, indemnification or contribution which Corporate Guarantor may
have, before payment in lull of the Guaranteed Indebtedness, against others
liable on all or any part of the Guaranteed Indebtedness, (ii) any and all
rights to be subrogated to the rights of Bank in any collateral or security for
all or any part of the Guaranteed Indebtedness before payment in full of the
Guaranteed Indebtedness, and (iii) any and all other rights and claims of such
Corporate Guarantor against Borrower or any third party as a result of such
Corporate Guarantor's payment before payment in full of the Guaranteed
Indebtedness.

e. Should Bank seek to enforce the obligations of Corporate Guarantor hereunder
by action in any court or otherwise, Corporate Guarantor waives any requirement,
substantive or procedural, that (i) Bank first enforce any rights or remedies
against Borrower, Individual Guarantors, or any other person or entity liable to
Bank for all or any part of the Guaranteed Indebtedness, including without
limitation that a judgment first be rendered against Borrower, Individual
Guarantors or any other person or entity, or that Borrower, Individual
Guarantors, or any other person or entity should be joined in such cause, or
(ii) Bank shall first

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enforce rights against any collateral which shall ever have been given to
secure all or any part of the Guaranteed Indebtedness or this Guaranty. Such
waiver shall be without prejudice to Bank's right, at its option, to proceed
against Borrower, Individual Guarantors, or any other person or entity,
whether by separate action or by joinder.

f. In addition to any other waivers, agreements and covenants of Corporate
Guarantor set forth herein, Corporate Guarantor hereby further waives and
releases all claims, causes of action, defenses and offsets for any act or
omission of Bank, its directors, officers, employees, representatives or agents
in connection with Bank's administration of the Guaranteed Indebtedness, except
for Bank's willful misconduct and gross negligence.

9. OBLIGATIONS NOT IMPAIRED.

a. Corporate Guarantor agrees that Corporate Guarantor's obligations hereunder
shall not be released, diminished, impaired, reduced or affected by the
occurrence of any one or more of the following events: (i) the lack of corporate
power of Borrower, Corporate Guarantor or any other guarantor of all or any part
of the Guaranteed Indebtedness, (ii) any receivership, insolvency, bankruptcy or
other proceedings affecting Borrower, Corporate Guarantor, Individual
Guarantors, or any other guarantor of all or any part of the Guaranteed
Indebtedness, or any of their respective property; (iii) the partial or total
release or discharge of Borrower, Individual Guarantors, or any other guarantor
of all or any part of the Guaranteed Indebtedness, or any other person or entity
from the performance of any obligation contained in any instrument or agreement
evidencing, governing or securing all or any part of the Guaranteed
Indebtedness, whether occurring by reason of law or otherwise; (iv) the taking
or accepting of any collateral for all or any part of the Guaranteed
Indebtedness or this Guaranty; (v) the taking or accepting of any other guaranty
for all or any part of the Guaranteed Indebtedness; (vi) any failure by Bank to
acquire, perfect or continue any lien or security interest on collateral
securing all or any part of the Guaranteed Indebtedness or this Guaranty; (vii)
the impairment of any collateral securing all or any part of the Guaranteed
Indebtedness or this Guaranty; (viii) any failure by Bank to sell any collateral
securing all or any part of the Guaranteed Indebtedness or this Guaranty in a
commercially seasonable manner or as otherwise required by law; (ix) any
invalidity or unenforceability of or defect or deficiency in any instrument or
agreement evidencing, governing or securing all or any part of the Guaranteed
Indebtedness or this Guaranty; or (x) any other circumstances which might
otherwise constitute a defense available to, or discharge of, Borrower,
Individual Guarantors, or any other guarantor of all or any part of the
Guaranteed Indebtedness, other than payment of the Guaranteed Indebtedness.

b. This Guaranty shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of all or any part

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of the Guaranteed Indebtedness is rescinded or must otherwise be returned by
Bank upon the insolvency, bankruptcy or reorganization of Borrower, Corporate
Guarantor, Individual Guarantors, or any other guarantor of all or any part
of the Guaranteed Indebtedness, or otherwise, all as though such payment had
not been made.

c. None of the following shall affect Corporate Guarantor's liability hereunder:
(i) the unenforceability of all or any part of the Guaranteed Indebtedness
against Borrower by reason of the fact that the Guaranteed Indebtedness exceeds
the amount permitted by law; (ii) the act of creating all or any part of the
Guaranteed Indebtedness is ultra vires; or (iii) the officers or partners
creating all or any part of the Guaranteed Indebtedness acted in excess of their
authority. Corporate Guarantor hereby acknowledges that withdrawal from, or
termination of; any ownership interest in Borrower now or hereafter owned or
held by Corporate Guarantor shall not alter, affect or in any way limit the
obligations of Corporate Guarantor hereunder.

10. ACTIONS AGAINST CORPORATE GUARANTOR In the event of a default in the payment
or performance of all or any part of the Guaranteed Indebtedness when such
Guaranteed Indebtedness becomes due, whether by its terms, by acceleration or
otherwise, Corporate Guarantor shall, without notice or demand, promptly pay the
amount due thereon to Bank, in lawful money of the United States, at Bank's
address set forth herein above. One or more successive or concurrent actions may
be brought against Corporate Guarantor, either in the same action in which
Borrower is sued or in separate actions, as often as Bank deems advisable. The
exercise by Bank of any right or remedy under this Guaranty or under any other
agreement or instrument, at law, in equity or otherwise, shall not preclude
concurrent or subsequent exercise of any other right or remedy. The books and
records of Bank shall be admissible in evidence in any action or proceeding
involving this Guaranty and shall be prima facie evidence of the payments made
on, and the outstanding balance of; the Guaranteed Indebtedness.

11. PAYMENT BY CORPORATE GUARANTOR. Whenever Corporate Guarantor pays any sum
which is or may become due under this Guaranty, written notice must be delivered
to Bank contemporaneously with such payment. Such notice shall be effective for
purposes of this paragraph when contemporaneously with such payment Bank
receives such notice either by: (a) personal delivery to the address and
designated department of Bank, or (b) United States mail, certified or
registered, return receipt requested, postage prepaid, addressed to Bank. In the
absence of such notice to Bank by Corporate Guarantor in compliance with the
provisions hereof, any sum received by Bank on account of the Guaranteed
Indebtedness shall be conclusively deemed paid by Borrower.

12. NOTICE OF SALE. In the event that Corporate Guarantor is entitled to receive
any notice under the Uniform Commercial Code, as it exists in the state
governing any such notice, of the sale or other disposition of any collateral
securing all or any part of

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the Guaranteed Indebtedness or this Guaranty, reasonable notice shall be
deemed given when such notice is deposited in the United States mail, postage
prepaid, at the address for Corporate Guarantor, five (5) days prior to the
date any public sale, or after which any private sale, of any such collateral
is to be held; provided, however, that notice given in any other reasonable
manner or at any other reasonable time shall be sufficient.

13. WAIVER OF BANK. No delay on the part of Bank in exercising any right
hereunder or failure to exercise the same shall operate as a waiver of such
fight. In no event shall any waiver of the provisions of this Guaranty be
effective unless the same be in writing and signed by an officer of Bank, and
then only in the specific instance and for the purpose given.

14. SUCCESSORS AND ASSIGNS. This Guaranty is for the benefit of Bank, its
successors and assigns, including, without limitation, any assignee or
participant. This Guaranty is binding upon Corporate Guarantor's successors and
assigns, including without limitation any person or entity obligated by
operation of law upon the reorganization, merger, consolidation or other change
in the organizational structure of Corporate Guarantor.

15. COSTS AND EXPENSES. Corporate Guarantor shall pay on demand by Bank all
costs and expenses (including without limitation all reasonable attorneys' fees)
incurred by Bank in connection with the preparation, administration, enforcement
and/or collection of this Guaranty. This covenant shall survive the payment of
the Guaranteed Indebtedness.

16. SEVERABILITY. If any provision of this Guaranty is held by a court of
competent jurisdiction to be illegal, invalid or enforceable under present or
future laws, such provision shall be fully severable, shall not impair or
invalidate the remainder of this Guaranty and the effect thereof shall be
confined to the provision held to be illegal, invalid or unenforceable.

17. NO OBLIGATION. NothIng contained herein shall be construed as an obligation
on the part of Bank to extend or continue to extend credit to Borrower.

18. AMENDMENT. No modification or amendment of any provision of this Guaranty,
nor consent to any departure by Corporate Guarantor therefrom, shall be
effective unless the same shall be in writing and signed by an officer of Bank,
and then shall be effective only in the specific instance and for the purpose
for which given.

19. CUMULATIVE RIGHTS. All rights and remedies of Bank hereunder are cumulative
of each other and of every other right or remedy which Bank may otherwise have,
at law or in equity or under any instrument or agreement, and the exercise of
one or more of such rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of any other rights or remedies.

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20. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS.

21. VENUE. This Guaranty has been entered into in Midland County, Texas, and it
shall be performable for all purposes in such county. Courts within the State of
Texas shall have jurisdiction over any and all disputes arising under or
pertaining to this Guaranty and venue for any such disputes shall be Midland
County, Texas.

22. COMPLIANCE WITH APPLICABLE USURY LAWS. Notwithstanding any other provision
of this Guaranty or of any instrument or agreement evidencing, governing or
securing all or any part of the Guaranteed Indebtedness, Corporate Guarantor and
Bank by its acceptance hereof agree that Corporate Guarantor shall never be
required or obligated to pay interest in excess of the maximum nonusurious
interest rate as may be authorized by applicable law for the written contracts
which constitute the Guaranteed Indebtedness. It is the intention of Corporate
Guarantor and Bank to conform strictly to the applicable laws which limit
interest rates, and any of the aforesaid contracts for interest, if and to the
extent payable by Corporate Guarantor, shall be held to be subject to reduction
to the maximum nonusurious interest rate allowed under said law.

23. DESCRIPTIVE HEADINGS. The captions in this Guaranty are for convenience only
and shall not define or limit the provisions hereof.

24. GENDER. Within this Guaranty, words of any gender shall be held and
construed to include the other gender.

25. NOTICE. For purposes of notice under this Guaranty, the addresses of the
parties is as follows:

Cap Rock Electric Cooperative, Inc.
500 West Wall
Midland, Texas 79701
Arm: David Pruitt, President
Fax 915/684-0333

Bank United Texas FSB
401 West Texas
Midland, Texas 79701
Attn: John E. Grist, President Midland Region
915/687-5006

26. ENTIRE AGREEMENT. This Guaranty contains the entire agreement between
Corporate Guarantor and Bank regarding the subject matter hereof and supersedes
all prior written and oral agreements and understandings, if any, regarding
same; provided, however, this Guaranty is in addition to and does not replace,
cancel, modify or affect any other guaranty of Corporate Guarantor now or
hereafter

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held by Bank that relates to Borrower or any other person or entity.

EXECUTED as of July 12, 2000.

CAP ROCK ELECTRIC COOPERATIVE, INC.

By:__________________________
     John D. Parker, Vice President.

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