Document:

Glen
Rose Petroleum Corporation

    One
Energy Square

    4925
Greenville Avenue

    Suite
200

    Dallas,
TX 75206

    

    8.5% SENIOR SECURED
CONVERTIBLE DEBENTURE  AND WARRANT PURCHASE
AGREEMENT

    

    As of
July 2, 2009

     

    
      TO:  Blackwood
Ventures, LLC (“Purchaser”)

    

    

    Glen Rose Petroleum Corporation, a
Delaware corporation (the “Company”), hereby
agrees with Purchaser as follows:

     

    ARTICLE
I

    PURCHASE
AND SALE OF

    DEBENTURE

     

    Section
1.01     The
Debenture.  The Company has authorized the issuance and sale to
the Purchaser of a minimum of $500,000 and a maximum of $1,500,000 8.5% Senior Secured
Convertible Debenture of the Company (the “Debenture”).  The
Debenture issued to the Purchaser pursuant to this Agreement may be referred to
in this Agreement as the “Debenture.”  The
Debenture shall carry the following legend:

     

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

     

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page
      1 or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Said
Debenture shall be in the form attached as Exhibit A to this Purchase
Agreement.

     

    Section
1.02     The
Warrants.  The Purchaser shall receive cashless warrants to
subscribe for new shares of Common Stock of the Company as to one share of
Common Stock at $0.33 expiring December 31, 2010 in the form attached as Exhibit
C and one share of common stock at $0.67 expiring June 30, 2012 for every 4
shares of Common Stock converted in the form attached as Exhibit D pursuant to
the conversion terms of the Debenture, provided that any such shares of Common
Stock issued pursuant to the execution of said Warrants may not be sold within
12 months of the date of this Agreement unless sold at a price of $1.50 per
share or better as adjusted for stock splits, dividends, mergers, acquisitions,
and other changes to the Company’s common stock.  Said Warrant shall
be in the form attached to Exhibit B to this Purchase Agreement.

     

    Section
1.03     Purchase and Sale of
Debenture and Warrants at Initial Closing.  The Company hereby
agrees to issue and sell to Purchaser, and subject to and in reliance upon the
representations, warranties, covenants, terms and conditions of this Agreement,
Purchaser agrees to purchase from the Company a Debenture in the minimum amount
of $500,000 and a maximum amount of $1,000,000, with an initial payment of
$400,000 contemporaneous with the execution of this Agreement.  Such
purchase and sale shall take place at the closing (the “Closing”) to be held
at the offices of the Company at One Energy Square, 4925 Greenville Avenue,
Suite 200, Dallas, Texas 75206 on June 30, 2009 at 1:00 p.m., or at such other
time and place as the Company and Purchaser mutually agree upon, orally or in
writing.  At the Closing, the Company shall deliver to Purchaser the
duly-executed Debenture being purchased by such Purchaser in the form attached
as Exhibit A to this Agreement and Security Agreement for such Debenture in the
form attached as Exhibit B to this Agreement and a signed and properly
authenticated 8.5% Senior Secured Convertible Debenture and Warrant Purchase
Agreement.

     

    ARTICLE
II

    CONDITIONS TO PURCHASERS’
OBLIGATIONS

     

    The obligations of Purchaser to
purchase Debenture at the Closing are subject to the fulfillment, at or prior to
such Closing, of each of the following conditions, unless otherwise
waived:

    

    Section
2.01     Representations and
Warranties.  Each of the representations and warranties of the
Company set forth in Article III hereof shall be true and correct on the
date of the Closing.

     

    Section
2.02     Performance.  The
Company shall have performed and complied with all covenants, agreements,
obligations and conditions contained in this Agreement that are required to be
performed or complied with by the Company on or before such
Closing.

     

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page 2
      or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
2.03     Certificate of
Incorporation.  The Company shall have filed the Certificate of
Incorporation with the Secretary of State of Delaware on or prior to the
Closing, which shall continue to be in full force and effect as of the
Closing.

     

    Section
2.04     Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body of the United States or of any state that are required in
connection with the lawful issuance and sale of the Debenture pursuant to this
Agreement shall be obtained and effective as of such Closing and applicable
state securities laws, which filings have been made or will be made by the
Company in a timely manner.

     

    ARTICLE
III

    REPRESENTATIONS AND
WARRANTIES OF THE COMPANY

     

    The Company represents and warrants to
Purchaser as follows, each of which representation and warranty is true and
correct as of the date hereof and will be true and correct as of the
Closing:

    

    Section
3.01     Organization, Qualifications
and Corporate Power.  The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of
Delaware.  The Company has the corporate power and authority to own
and hold its properties and to carry on its business as now conducted, to
execute, deliver and perform this Agreement and to issue, sell and deliver the
Debenture of the Company (the “Debenture”).

     

    Section
3.02     Authorization of Agreements,
Etc.  The execution and delivery by the Company of this
Agreement, the performance by the Company of its obligations hereunder and the
issuance, sale and delivery of the Debenture have been duly authorized by all
requisite corporate action and will not violate any provision of law, any order
of any court or other agency of government, the Certificate of Incorporation, as
amended, or the Bylaws of the Company, as amended, or will not result in a
violation of any provision of any indenture, agreement or other instrument to
which the Company, or any of its properties or assets is bound, or conflict
with, result in a material breach of or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other instrument,
or result in the creation or imposition of any lien, charge, restriction,
encumbrance, or, to the Company’s knowledge, claim of any nature whatsoever upon
any of the properties or assets of the Company, the result of any of which would
have a material adverse effect on the business or assets of the
Company.

     

    Section
3.03     The issuance, sale or delivery of the
Debenture are not subject to any preemptive right of stockholders of the Company
that has not been waived or to any right of first refusal or other right in
favor of any person that has not been waived.

     

    Section
3.04     Validity.  This
Agreement has been duly executed and delivered by the Company and constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.  The Debenture, when issued,
sold and delivered in accordance with the terms and for the consideration set
forth in this Agreement, will be validly issued, fully paid and nonassessable
and free of restrictions on transfer other than applicable state and federal
securities laws and liens or encumbrances created by or imposed by
Purchaser.  The Debenture will be issued in compliance with all
applicable federal and state securities laws.

     

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page 3
      or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
3.05     Governmental
Approvals.  No registration or filing with, or consent or
approval of or other action by, any Federal, state or other governmental agency
or instrumentality is or will be necessary for the valid execution, delivery and
performance by the Company of this Agreement or the issuance, sale and delivery
of the Debenture and applicable state securities laws, which filings have been
made or will be made by the Company in a timely manner.

     

    Section
3.06    Capitalization; Status of
Capital Stock.  Immediately prior to the Closing, the Company
has authorized and unissued Debenture in excess of the number of shares to be
delivered pursuant to this agreement.  There are no restrictions on
the transfer of shares of capital stock of the Company other than those imposed
by relevant federal and state securities laws and as otherwise contemplated by
this Agreement.  The Company is not a party to, and to the best of the
Company’s knowledge, there are, no agreements, understandings, trusts or other
collaborative arrangements or understandings concerning the voting of the
capital stock of the Company to be issued to Purchaser.

     

    Section
3.07     No
Insolvency.  No insolvency proceeding of any character,
including, without limitation, bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary or involuntary, affecting
the Company or any of its assets or properties, is pending or, to the knowledge
of the Company, threatened.  The Company has not taken any action in
contemplation of, or that would constitute the basis for, the institution of any
such insolvency proceedings.

     

    Section
3.08     Disclosure.  Neither
this Agreement nor any other agreement, document, certificate or written
statement furnished to the Purchaser by or on behalf of the Company in
connection with the transactions contemplated hereby (which has not subsequently
been supplemented) contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
or therein not misleading.

     

    ARTICLE
IV

    REPRESENTATIONS AND
WARRANTIES OF  PURCHASER

     

    Purchaser represents and warrants to
the Company that: (a) Purchaser has full power and authority to enter into
and perform this Agreement in accordance with its terms; (b) Purchaser has made
an investigation of the Company and its business as it deemed necessary and has
had an opportunity to discuss and review the Company’s business, management and
financial affairs with the Company’s management as it deemed necessary; (c)
Purchaser is the record owner of a majority of the Company’s common stock and is
familiar with Company operations and financial condition; (d) the Debenture
and Warrants and any Common Shares to be issued upon conversion of said
Debenture or Warrant is being purchased by Purchaser are being or will be
acquired for its own account for the purpose of investment and not with a view
to or for sale in connection with any distribution thereof; (e) it
understands that (1) the Debenture, Warrant, and Common Shares to be issued
upon conversions of the Debenture and Warrant have not been and will not be
registered under the Securities Act by reason of their issuance in a transaction
exempt from the registration requirements of the Securities Act pursuant and the
regulations promulgated thereunder, (2) the Debenture must be held
indefinitely unless a subsequent disposition thereof is registered under the
Securities Act or is exempt from such registration, (3) the Debenture will
bear legends to such effect and (iv) the Company will make a notation on
its transfer books to such effect.

    

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page 4
      or 10

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ARTICLE
V

    COVENANTS OF THE COMPANY AND
PURCHASER

     

    The Company hereby covenants and agrees
with Purchaser, except as otherwise specifically provided in this
Article V, so long as such Purchaser continues to own Debenture or
Debenture issued upon conversion of Debenture, as follows:

     

    Section
5.01     Piggyback Registration
Rights.  If the Company files a registration statement with the
U.S. Securities and Exchange Commission, the Company shall provide 10 days
notice to Purchaser of said registration statement and include Purchaser’s
shares acquired under this Agreement in said Registration Statement at
Purchaser’s option.  Purchaser acknowledges that plans to file a
registration statement may be material non-public information and hereby
covenants not to trade in company shares between the time of receipt of notice
of the planned registration statement filing and the actual filing of the
registration statement.  Purchaser’s registration rights shall not
apply to Form S-8 registration statements.

     

    Section
5.02     Termination of
Covenants.  The covenants of the Company set forth in Sections
5.01 shall terminate in all respects upon the removal of the restrictive legend
referenced in Section 1.01 herein from Purchaser’s share certificate or
certificates.

     

    Section
5.03     Right of First
Refusal.  Should the Company determine to seek further equity
financing or other form of financing convertible into equity, the Company shall
offer Purchaser the opportunity to provide such financing and reasonable
opportunity not to exceed ten days to meet or better any competing offers
involving equity financing of financing instruments convertible into
equity.  This provision shall not apply to the Company seeking
financing from a bank as defined by Section 3(a)(6) of the Securities Exchange
Act of 1934 or  to any firmly-underwritten equity securities offering
registered under the Securities Act of 1933 or any State Securities
Act.

     

    Section
5.04     Expense Reimbursement.
The Company shall pay Purchaser’s incurred and payable expenses incurred
in relation to due diligence and investment documentation relating to this
Agreement, including legal expenses.  In order to claim such expenses,
Purchaser must provide the Company with documentation that it has paid the
designated expense or incurred the designated expense.  If the
Purchaser has incurred but not paid the designated expense, Purchaser shall
authorize the Company to directly pay the payee for that expense without paying
Purchaser and the Company shall receive credit under this section of this
Agreement for any such payments.  All expenses to be reimbursed under
this section must be submitted for payment within 90 days of the date of this
Agreement.

     

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page 5
      or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Section
5.05     Publicity.  Purchaser
and the Company acknowledge that upon the execution of this Agreement, the
Company may be required to file a Form 8-K with the Securities and Exchange
Commission under Items 1.01 and 3.02 of Form 8-K relating to the entry into a
material definitive agreement and the unregistered sale of equity securities and
that said Form 8-K may contain a copy of this Agreement as an
exhibit.  The Company’s decision to file a Form 8-K and attach a copy
of this Agreement, or to issue a press release about this agreement, shall be
within the Company’s sole discretion.

     

    ARTICLE
VI

    MISCELLANEOUS

     

    Section
6.01     No Waiver; Cumulative
Remedies.  No failure or delay on the part of any party to this
Agreement in exercising any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right,
power or remedy preclude any other or further exercise thereof or the exercise
of any other right, power or remedy hereunder.  The remedies herein
provided are cumulative and not exclusive of any remedies provided by
law.

     

    Section
6.02     No
Brokers.  No non-party to this Agreement has acted directly or
indirectly as a broker, finder or financial advisor for any Party in connection
with the negotiations relating to the transactions contemplated by this
Agreement, and no person is entitled to any fee or commission or like payment in
respect thereof based in any way on any agreement, arrangement or understanding
made by or on behalf of any Party, except as stated herein.

     

    Section
6.03     Amendments, Waivers and
Consents.   Notwithstanding any other provisions of this
Agreement to the contrary, changes in or additions to this Agreement may be
made, and compliance with any provision herein may be omitted or waived, if the
Company obtains written consent from Purchaser.

     

    Section
6.04     Addresses for Notices,
etc.  All notices, requests, demands and other communications
provided for hereunder shall be in writing and mailed, sent via facsimile or
hand-delivered:

     

    If to Purchaser:

    

    Blackwood
Ventures LLC

    400 Rella
Boulevard

    Montebello,
NY 10901

    Attention:
Walter Reissman

    

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page 6
      or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    If to the Company:

    

    Glen Rose Petroleum
Corporation

    One
Energy Square

    4925
Greenville Avenue

    Suite
200

    Dallas,
TX 75206

    Attn:  Joseph F. “Chip”
Langston

    

    or at
such other address as shall be designated by Purchaser or the Company in a
written notice to the other parties complying as to delivery with the terms of
this Section 6.03.

    

    All such notices, requests, demands and
other communications shall be effective: (i) when mailed (registered mail,
return receipt requested, postage prepaid), when deposited in the mail, (ii)
when sent via facsimile, when acknowledgment of complete transmission is
received, and (iii) when hand-delivered, on such date of hand-delivery, unless
otherwise provided herein.

    

    Section
6.05      Binding Effect;
Assignment.  This Agreement shall be binding upon and inure to
the benefit of the Company and Purchaser and their respective heirs, successors
and assigns.

     

    Section
6.06     Survival of Representations
and Warranties.  All representations and warranties made in
this Agreement or any other instrument or document delivered in connection
herewith shall survive the execution and delivery hereof or
thereof.

     

    Section
6.07     Prior
Agreements.  This Agreement constitutes the entire agreement
between the parties hereto and supersedes any other prior understandings or
agreements among them concerning the subject matter hereof.

     

    Section
6.08      Severability.  The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision.

     

    Section
6.09      Governing
Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the Delaware.

     

    Section
6.10     Counterparts.  This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any of the parties
hereto may execute this Agreement by signing any such counterpart.

     

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page 7
      or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
6.11     Other Interpretive
Matters.  Unless a clear contrary intention
appears:  (a) the singular number includes the plural number and
vice versa; (b) reference to any gender includes each other gender, the
masculine, the feminine and neuter; (c) reference to any agreement
(including this Agreement), document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms hereof (and
without giving effect to any amendment or modification that would not be
permitted in accordance with the terms hereof); (d) reference to any
applicable law means such applicable law as amended, modified, codified or
reenacted, in whole or in part, and in effect from time to time, including rules
and regulations promulgated thereunder and reference to any particular provision
of any applicable law shall be interpreted to include any revision of or
successor to that provision regardless of how numbered or classified; (e)
“hereunder,” “hereof,” “hereto” and words of similar import shall be deemed
references to this Agreement as a whole and not to any particular section or
other provision hereof; and (f) “including” (and with correlative meaning
“include”) means including without limiting the generality of any description
preceding such term; (g) “or”, “either” and “any” are not
exclusive.

     

    Section
6.12     Construction.  The
parties hereto have participated in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted by the
parties hereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

     

    Section
6.13     Arbitration.

     

    
      	
               
      

            	
              (a)

            	
              Upon the request of any Party,
      any dispute, controversy or claim arising out of or in connection with, or
      relating to, employee stock options held by Purchaser, this Agreement or
      any breach or alleged breach hereof shall be submitted to, and settled by,
      binding arbitration in Dallas or Tarrant Counties, Texas administered by
      the American Arbitration Association (“AAA”) in accordance with the
      Commercial Arbitration Rules and the Optional Rules for Emergency Measures
      of Protection of AAA. 

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      disputing Parties may also agree to arbitration at any time or at any
      other place or under any other form of arbitration mutually acceptable to
      the Parties so involved.  The AAA arbitration award shall be
      final and binding, and a court having jurisdiction may enter judgment upon
      the award rendered by the
arbitrator(s).

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Parties hereby irrevocably consent and submit to the jurisdiction of any
      federal or state court in the Dallas County, Texas, for this purpose and
      waive any objections to such judgment based on venue and/or forum non
      conveniens.  Any provisional remedy which would be available
      from a court of law shall be available from the arbitrator(s) to the
      Parties to this Agreement pending arbitration.  Three neutral
      arbitrators chosen by AAA shall conduct the
  arbitration.

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Parties agree to request that AAA provide arbitrator(s) with experience
      with oil and gas exploration and production business such as Glen Rose
      Petroleum Corporation

            

    

     

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page 8
      or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (e)

            	
              The
      Parties shall equally bear the arbitration expenses, provided that each
      Party shall pay for and bear the cost of its own experts, evidence, and
      counsel’s fees.

            

    

     

    
      	
              Debenture Purchase Agreement
    Between

            	 
      
	
              Glen Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page 9
      or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the parties hereto
have executed this Agreement on the day, month and year first above
written.

    

    
      
        
          
            
              
                	
                        Glen
      Rose Petroleum Corporation

                      
	 
      	 
      
	
                        By:

                      	  
      
	
                        Name:  Joseph
      F. “Chip” Langston

                      
	
                        Title:  President

                      
	 
      	 
      
	
                        PURCHASER:

                      
	 
      	 
      
	
                        Blackwood
      Ventures LLC

                      
	 
      	 
      
	
                        By:

                      	  
      
	
                        Name:
      Walter
Reissman

                      

              

            

          

        

      

    

     

    
      	
              Debenture
      Purchase Agreement Between

            	 
      
	
              Glen
      Rose Petroleum Corporation and

            	 
      
	
              Blackwood
      Ventures LLC

            	
              Page
      10 or 10

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
A

    

    FORM OF
DEBENTURE

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

     

    Original
Issue Date: July 2, 2009

    Original
Conversion Price: $0.09 per share of Common Stock

     

    $[500,000-1,500,000]

     

    8.5%
SENIOR SECURED CONVERTIBLE DEBENTURE

    DUE
JUNE 30, 2011

    

    THIS SENIOR SECURED DEBENTURE
is one of a series of duly authorized and validly issued 8.5% Senior Secured
Convertible Debentures of Glen Rose Petroleum Corporation, a Delaware
corporation, (the “Company”), having its principal place of business at Suite
200, One Energy Square, 4925 Greenville Avenue, Dallas, Texas 75206 designated
as its 8.5% Senior Secured Convertible Debenture due June 30, 2011 (this
debenture, the “Debenture” and, collectively with the other debentures of such
series, the “Debentures” shall total the principal sum of [$500,000-$1,500,000]
pursuant to which the Company shall have received a total of
[$500,000-$1,500,000]) at a price of $1.00 for each $1.00 of Debenture
principal.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 1
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    FOR VALUE
RECEIVED, the Company promises to pay to Blackwood Ventures LLC or its
registered assigns (the “Holder”), or shall have paid pursuant to the terms
hereunder, the principal sum of a minimum of Five Hundred Thousand Dollars and a
maximum of One Million Five Hundred Thousand Hundred Thousand Dollars
($500,000-$1,500,000) on June 30, 2011 (the “Maturity Date”) or such earlier
date as this Debenture is required to be repaid as provided hereunder, and to
pay interest to the Holder on the aggregate unconverted and then outstanding
principal amount of this Debenture in accordance with the provisions
hereof.  This Debenture is subject to the following additional
provisions:

    

    Section
1.         Definitions.  For
the purposes hereof, in addition to the terms defined elsewhere in this
Debenture, (a) capitalized terms not otherwise defined herein shall have the
meanings set forth in the Purchase Agreement and (b) the following terms shall
have the following meanings:

     

    “Alternate
Consideration” shall have the meaning set forth in Section
5(e).

    

    “Bankruptcy Event”
means any of the following events: (a) the Company or any Significant Subsidiary
(as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a
case or other proceeding under any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction relating to the Company or any Significant
Subsidiary thereof, (b) there is commenced against the Company or any
Significant Subsidiary thereof any such case or proceeding that is not dismissed
within 60 days after commencement, (c) the Company or any Significant Subsidiary
thereof is adjudicated insolvent or bankrupt or any order of relief or other
order approving any such case or proceeding is entered, (d) the Company or any
Significant Subsidiary thereof suffers any appointment of any custodian or the
like for it or any substantial part of its property that is not discharged or
stayed within 60 calendar days after such appointment, (e) the Company or any
Significant Subsidiary thereof makes a general assignment for the benefit of
creditors, (f) the Company or any Significant Subsidiary thereof calls a meeting
of its creditors with a view to arranging a composition, adjustment or
restructuring of its debts or (g) the Company or any Significant Subsidiary
thereof, by any act or failure to act, expressly indicates its consent to,
approval of or acquiescence in any of the foregoing or takes any corporate or
other action for the purpose of effecting any of the foregoing.

    

    “Base Conversion
Price” shall have the meaning set forth in Section 4(b).

    

    “Beneficial Ownership
Limitation” shall have the meaning set forth in Section 4I.

    

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

    

    “Buy-In” shall have
the meaning set forth in Section 4(d)(v).

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 2
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Change of Control
Transaction” means the occurrence after the date hereof of any of (a) an
acquisition after the date hereof by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 33% of the
voting securities of the Company (other than by means of conversion of the
Debentures), (b) the Company merges into or consolidates with any other Person,
or any Person merges into or consolidates with the Company and, after giving
effect to such transaction, the stockholders of the Company immediately prior to
such transaction own less than 66% of the aggregate voting power of the Company
or the successor entity of such transaction, or (c) the Company sells or
transfers all or substantially all of its assets to another Person and the
stockholders of the Company immediately prior to such transaction own less than
66% of the aggregate voting power of the acquiring entity immediately after the
transaction, (d) a replacement at one time or within a three year period of more
than one-half of the members of the Board of Directors which is not approved by
a majority of those individuals who are members of the Board of Directors on the
date hereof (or by those individuals who are serving as members of the Board of
Directors on any date whose nomination to the Board of Directors was approved by
a majority of the members of the Board of Directors who are members on the date
hereof), or (e) the execution by the Company of an agreement to which the
Company  is a party or by which it is bound, providing for any of the
events set forth in clauses (a) through (d) above.  Said Change of
Control Transaction does not include any transaction as referenced or described
in the Purchase Agreement.

    

    “Conversion” shall
have the meaning ascribed to such term in Section 4.

    

    “Conversion Date”
shall have the meaning set forth in Section 4(a).

    

    “Conversion Price”
shall have the meaning set forth in Section 4(c).

    

    “Conversion Schedule”
means the Conversion Schedule in the form of Schedule 1 attached
hereto.

    

    “Conversion Shares”
means, collectively, the shares of Common Stock and Warrants issuable upon
conversion of this Debenture in accordance with the terms hereof.

    

    “Debenture Register”
shall have the meaning set forth in Section 2(b).

    

    “Dilutive Issuance”
shall have the meaning set forth in Section 5(b).

    

    “Dilutive Issuance
Notice” shall have the meaning set forth in Section 5(b).

    

    “Event of Default” shall have the meaning set forth in Section
7(a).

    

    “Fundamental
Transaction” shall have the meaning set forth in Section
5(e).

    

    “Interest Payment
Date” shall have the meaning set forth in Section 2(a).

    

    “Late Fees” shall have
the meaning set forth in Section 2I.

     

    “Notice
of Conversion” shall have the meaning set forth in Section 4(a).

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 3
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Original Issue Date”
means the date of the first issuance of the Debentures, regardless of any
transfers of any Debenture and regardless of the number of instruments which may
be issued to evidence such Debentures.

    

    “Permitted
Indebtedness” means (a) the indebtedness evidenced by the
Debentures;  (b) up to $1,000,000 of non-equity linked indebtedness
under accounts receivable or inventory lines of credit with a federal or state
regulated bank or nationally recognized commercial lending institution whose
primary business is not investing in securities; and (c) indebtedness related to
services and goods provided by trade creditors including oilfield services and
materials providers, auditors, accountants, and (d) indebtedness previously
outstanding as of the date of this Debenture.

    

    “Permitted Lien” means
the individual and collective reference to the following: (a) Liens for taxes,
assessments and other governmental charges or levies not yet due or Liens for
taxes, assessments and other governmental charges or levies being contested in
good faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Company) have been established in
accordance with GAAP; (b) Liens imposed by law which were incurred in the
ordinary course of the Company’s business, such as carriers’, warehousemen’s and
mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
the ordinary course of the Company’s business, and which (x) do not individually
or in the aggregate materially detract from the value of such property or assets
or materially impair the use thereof in the operation of the business of the
Company and its consolidated Subsidiaries or (y) are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing for the foreseeable future the forfeiture or sale of the property or
asset subject to such Lien; (c) Liens incurred in connection with Permitted
Indebtedness; and liens previously filed against Company property or relating to
Company indebtedness existing on or before the date of this
Debenture.

     

    “Purchase Agreement”
means the Securities Purchase Agreement, dated as of July 2, 2009 among the
Company and BVL, as amended, modified or supplemented from time to time in
accordance with its terms and including any disclosure schedules provided in
connection with the Securities Purchase Agreement.

    

     “Registration
Statement” means a registration statement that registers the resale of
Conversion Shares of the Holder and names the Holder as a “selling stockholder”
therein.

    

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

    

    “Share Delivery Date”
shall have the meaning set forth in Section 4(d)(ii).

    

    “Subsidiary” shall
have the meaning set forth in the Purchase Agreement.

    

    “Texas Courts” shall
have the meaning set forth in Section 8(d).

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 4
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Trading Day” means a
day on which the New York Stock Exchange is open for business.

    

    “Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the American Stock Exchange, the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange or the OTC Bulletin Board.

    

    “Transaction
Documents” shall have the meaning set forth in the Purchase
Agreement.

    

    “VWAP” means, for any
date, the price determined by the first of the following clauses that applies:
(a) if the Common Stock is then listed or quoted on a Trading Market, the daily
volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted for trading as reported by Bloomberg L.P. (based on a Trading Day from
9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)); (b)  if
the OTC Bulletin Board is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on the
OTC Bulletin Board; (c) if the Common Stock is not then quoted for trading on
the OTC Bulletin Board and if prices for the Common Stock are then reported in
the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported; or (d) in all other cases,
the fair market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holder and reasonably acceptable to the
Company.

    

    Section
2.             Interest.

    

    a)           Payment of Interest.
The Company shall pay interest to the Holder on the aggregate unconverted and
then outstanding principal amount of this Debenture at the rate of 8.5% per
annum, payable quarterly on March 1, June 1, September 1 and December 1,
beginning on the first such date after the Original Issue Date, on each
Conversion Date (as to that principal amount then being converted) and on the
Maturity Date (each such date, an “Interest Payment
Date”) (if any Interest Payment Date is not a Business Day, then the
applicable payment shall be due on the next succeeding Business Day), in cash or
shares of the Company’s common stock (“Interest Shares”), at
the option of the Company. The number of Interest Shares to be issued will be
determined by dividing the interest payment by the VWAP for the 20 consecutive
Trading Days prior to the Interest Payment Date, provided that under no
circumstances shall the number of Interest shares be determined by using a
denominator less than the par value of the Company’s common
stock.  Interest Shares shall be delivered to the Purchaser within
five business days of the Interest Payment Date.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 5
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    b)           Interest
Calculations. Interest shall be calculated on the basis of a 360-day
year, consisting of twelve 30 calendar day periods, and shall accrue daily
commencing on the Original Issue Date until payment in full of the outstanding
principal, together with all accrued and unpaid interest, liquidated damages and
other amounts which may become due hereunder, has been made.  Interest
shall cease to accrue with respect to any principal amount converted, provided
that, the Company actually delivers the Conversion Shares within the time period
required by Section 4(e)(ii) herein.  Interest hereunder will be paid
to the Person in whose name this Debenture is registered on the records of the
Company regarding registration and transfers of this Debenture (the “Debenture
Register”).

    

    c)           Late
Fee.  All overdue accrued and unpaid interest to be paid
hereunder shall entail a late fee at an interest rate equal to the lesser of 18%
per annum or the maximum rate permitted by applicable law (the “Late Fees”) which
shall accrue daily from the date such interest is due hereunder through and
including the date of actual payment in full.

    

    d)           Prepayment.  The
Company may not prepay any portion of the principal amount of this Debenture
without the prior written consent of the Holder, which consent may be withheld
in the Holder’s absolute discretion.

    

    Section
3.             Registration of Transfers
and Exchanges.

    

    a)           Different
Denominations. This Debenture is exchangeable for an equal aggregate
principal amount of Debentures of different authorized denominations, as
requested by the Holder surrendering the same.  No service charge will
be payable for such registration of transfer or exchange.

    

    b)           Investment
Representations. This Debenture has been issued subject to certain
investment representations of the original Holder set forth in the Purchase
Agreement and may be transferred or exchanged only in compliance with the
Purchase Agreement and applicable federal and state securities laws and
regulations.

    

    c)           Reliance on Debenture
Register. Prior to due presentment for transfer to the Company of this
Debenture, the Company and any agent of the Company may treat the Person in
whose name this Debenture is duly registered on the Debenture Register as the
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes, whether or not this Debenture is overdue, and neither the
Company nor any such agent shall be affected by notice to the
contrary.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 6
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Section
4.             Conversion.

    

    a)           Optional Conversion.
At any time after the Original Issue Date until this Debenture is no longer
outstanding, this Debenture shall be convertible, in whole or in part, into
shares of Common Stock and Warrants at the option of the Holder, at any time and
from time to time (subject to the conversion limitations set forth in
Section 4I hereof).  The Holder shall effect conversions by
delivering to the Company a Notice of Conversion, the form of which is attached
hereto as Annex
A (each, a “Notice of
Conversion”), specifying therein the principal amount of this Debenture
to be converted and the date on which such conversion shall be effected (such
date, the “Conversion
Date”).  If no Conversion Date is specified in a Notice of
Conversion, the Conversion Date shall be the date that such Notice of Conversion
is deemed delivered hereunder.  To effect conversions hereunder, the
Holder shall not be required to physically surrender this Debenture to the
Company unless the entire principal amount of this Debenture, plus all accrued
and unpaid interest thereon, has been so converted. Conversions hereunder shall
have the effect of lowering the outstanding principal amount of this Debenture
in an amount equal to the applicable conversion.  The Holder and the
Company shall maintain records showing the principal amount(s) converted and the
date of such conversion(s).  The Company may deliver an objection to
any Notice of Conversion within one Business Day of delivery of such Notice of
Conversion.  In the event of any dispute or discrepancy, the records
of the Holder shall be controlling and determinative in the absence of manifest
error. The Holder, and any assignee by acceptance of this Debenture, acknowledge
and agree that, by reason of the provisions of this paragraph and those
provisions contained in Section 2(d), following conversion of a portion of this
Debenture, the unpaid and unconverted principal amount of this Debenture may be
less than the amount stated on the face hereof.

    

    b)           Optional Conversion –
Company.  At any time after the Original Issue Date until this
Debenture is no longer outstanding, this Debenture shall be convertible, in
whole or in part, into shares of Common Stock at the option of the Company, at
any time the Company’s common stock closing bid price as defined by NASDAQ Rule
5005(a)(3)  for the 20 consecutive Trading Days preceding said
Optional Conversion equals $1.00 or above (subject to the conversion limitations
set forth in Section 4(d) hereof).  The Holder shall effect
conversions by delivering to the Company a Notice of Conversion, the form of
which is attached hereto as Annex B (each, a
“Company Notice of
Conversion”), specifying therein the principal amount of this Debenture
to be converted and the date on which such conversion shall be effected (such
date, the “Company
Conversion Date”).  If no Company Conversion Date is specified
in a Company Notice of Conversion, the Company Conversion Date shall be the next
business day after the date that such Company Notice of Conversion is deemed
delivered hereunder.  To effect conversions hereunder, the Holder
shall not be required to physically surrender this Debenture to the Company
unless the entire principal amount of this Debenture, plus all accrued and
unpaid interest thereon, has been so converted. Conversions hereunder shall have
the effect of lowering the outstanding principal amount of this Debenture in an
amount equal to the applicable conversion.  The Holder and the Company
shall maintain records showing the principal amount(s) converted and the date of
such conversion(s).  The Holder may deliver an objection to any
Company Notice of Conversion within one Business Day of delivery of such Company
Notice of Conversion.  In the event of any dispute or discrepancy, the
records of the Holder shall be controlling and determinative in the absence of
manifest error. The Holder shall comply with the prospectus delivery
requirements under the applicable securities laws in connection with any
transfer of the Common Stock issued pursuant to such Conversion. The Holder, and
any assignee by acceptance of this Debenture, acknowledge and agree that, by
reason of the provisions of this paragraph and those provisions contained in
Section 2(d), following conversion of a portion of this Debenture, the unpaid
and unconverted principal amount of this Debenture may be less than the amount
stated on the face hereof.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 7
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    c)           Conversion
Price.  The conversion price in effect on any Conversion Date
shall be equal to $0.09 per share of Common Stock for any principal amount of
the Debenture for which payment has been received by July 31,
2009.  For purchase amounts of the Debenture paid after July 31, 2009,
the conversion price in effect on any Conversion Date shall be the average
“Closing Bid Price” for the Company’s Common Stock price for the previous 20
consecutive trading days.  For each four shares issued upon said
Conversion, the Company shall also issue Debenture Holder a warrant to subscribe
for one new share of Common Stock at $0.33 for a period of 18 months from the
date of this Debenture, and a further share of Common Stock at $0.67 for a
period of 36 months from the date of this Debenture for every four shares of
Common Stock created by the conversion of this Debenture subject to adjustment
herein (the “Conversion
Price”).  Said “Closing Bid Price” shall be determined by
reference to  (a) if the Common Stock is then listed or quoted on a
Trading Market, the closing bid price of the Common Stock for such date (or the
nearest preceding date) on the Trading Market on which the Common Stock is then
listed or quoted for trading as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time));
(b)  if the OTC Bulletin Board is not a Trading Market, the closing bid
price of the Common Stock for such date (or the nearest preceding date) on the
OTC Bulletin Board; (c) if the Common Stock is not then quoted for trading on
the OTC Bulletin Board and if prices for the Common Stock are then reported in
the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices).

    

    d)           Conversion
Limitations.

    

    i.           Aggregate
Issuances. Notwithstanding anything contained herein to the contrary, the
Company shall not effect any conversion of this Debenture  or any of
the Debentures or Warrants in an amount that would be convertible into such
number of Conversion Shares and Warrant Shares which would exceed 19.99% of the
outstanding shares of Common Stock of the Company on the date of issuance of
this Debenture and the Warrants.  The Conversion Shares limitation
described in this Section 4I(ii) shall automatically become null and void upon
the Company obtaining Stockholder Approval and Nasdaq Approval (both as defined
in the Purchase Agreement).

    

    
      e)          
Mechanics of
Conversion.

    

    

    i.           Conversion Shares Issuable
Upon Conversion of Principal Amount.  The number of Conversion
Shares issuable upon a conversion hereunder shall be determined by the quotient
obtained by dividing (x) the outstanding principal amount of this Debenture to
be converted by (y) the Conversion Price.

    

    ii.           Delivery of Certificate Upon
Conversion. Not later than three Trading Days after each Conversion Date
(the “Share Delivery
Date”), the Company shall deliver, or cause to be delivered, to the
Holder (A) a certificate or certificates representing the Conversion Shares
which, on or after the earlier of (i) the one year anniversary of the Original
Issue Date or (ii) the Effective Date, shall be free of restrictive legends and
trading restrictions (other than those which may then be required by the
Purchase Agreement) representing the number of Conversion Shares being acquired
upon the conversion of this Debenture and (B) a bank check in the amount of
accrued and unpaid interest. On or after the earlier of (i) the one year
anniversary of the Original Issue Date or (ii) the Effective Date, the Company
shall use its best efforts to deliver any certificate or certificates required
to be delivered by the Company under this Section 4(d) electronically through
the Depository Trust Company or another established clearing corporation
performing similar functions.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 8
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    iii.           Failure to Deliver
Certificates.  If in the case of any Notice of Conversion such
certificate or certificates are not delivered to or as directed by the
applicable Holder by the third Trading Day after the Conversion Date, the Holder
shall be entitled to elect by written notice to the Company at any time on or
before its receipt of such certificate or certificates, to rescind such
Conversion, in which event the Company shall promptly return to the Holder any
original Debenture delivered to the Company and the Holder shall promptly return
to the Company the Common Stock certificates representing the principal amount
of this Debenture unsuccessfully tendered for conversion to the
Company.

    

    iv.           Obligation Absolute; Partial
Liquidated Damages.  The Company’s obligations to issue and
deliver the Conversion Shares upon conversion of this Debenture in accordance
with the terms hereof are absolute and unconditional, irrespective of any action
or inaction by the Holder to enforce the same, any waiver or consent with
respect to any provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder or any
other Person of any obligation to the Company or any violation or alleged
violation of law by the Holder or any other Person, and irrespective of any
other circumstance which might otherwise limit such obligation of the Company to
the Holder in connection with the issuance of such Conversion Shares; provided, however, that such
delivery shall not operate as a waiver by the Company of any such action the
Company may have against the Holder.  In the event the Holder of this
Debenture shall elect to convert any or all of the outstanding principal amount
hereof, the Company may not refuse conversion based on any claim that the Holder
or anyone associated or affiliated with the Holder has been engaged in any
violation of law, agreement or for any other reason, unless an injunction from a
court, on notice to Holder, restraining and or enjoining conversion of all or
part of this Debenture shall have been sought and obtained, and the Company
posts a surety bond for the benefit of the Holder in the amount of 150% of the
outstanding principal amount of this Debenture, which is subject to the
injunction, which bond shall remain in effect until the completion of litigation
of the underlying dispute and the proceeds of which shall be payable to the
Holder to the extent it obtains judgment, except provided that this provision
shall not apply to Company refusals to convert made pursuant to Section 4(d)(ii)
of this Debenture.  In the absence of such injunction, the Company
shall issue Conversion Shares or, if applicable, cash, upon a properly noticed
conversion.  Notwithstanding anything contained herein to the
contrary, the Company shall not be obligated to issue free trading shares of
common stock in violation of applicable federal and/or state securities
laws.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 9
      or 23

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    v.           Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Conversion. In addition to
any other rights available to the Holder, if the Company fails for any reason to
deliver to the Holder such certificate or certificates by the Share Delivery
Date pursuant to Section 4(d)(ii), and if after such Share Delivery Date the
Holder is required by its brokerage firm to purchase (in an open market
transaction or otherwise), or the Holder’s brokerage firm otherwise purchases,
shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
Conversion Shares which the Holder was entitled to receive upon the conversion
relating to such Share Delivery Date (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder (in addition to any other remedies
available to or elected by the Holder) the amount by which (x) the Holder’s
total purchase price (including any brokerage commissions) for the Common Stock
so purchased exceeds (y) the product of (1) the aggregate number of shares of
Common Stock that the Holder was entitled to receive from the conversion at
issue multiplied by (2) the actual sale price at which the sell order giving
rise to such purchase obligation was executed (including any brokerage
commissions) and (B) at the option of the Holder, either reissue (if
surrendered) this Debenture in a principal amount equal to the principal amount
of the attempted conversion or deliver to the Holder the number of shares of
Common Stock that would have been issued if the Company had timely complied with
its delivery requirements under Section 4(d)(ii).  For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover
a Buy-In with respect to an attempted conversion of this Debenture with respect
to which the actual sale price of the Conversion Shares (including any brokerage
commissions) giving rise to such purchase obligation was a total of $10,000
under clause (A) of the immediately preceding sentence, the Company shall be
required to pay the Holder $1,000.  The Holder shall provide the
Company written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of the Company, evidence of the amount of such
loss.  Nothing herein shall limit a Holder’s right to pursue any other
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of this Debenture as required pursuant to
the terms hereof.

    

    vi.           Reservation of Shares
Issuable Upon Conversion. The Company covenants that it will at all times
reserve and keep available out of its authorized and unissued shares of Common
Stock for the sole purpose of issuance upon conversion of this Debenture, as
herein provided, free from preemptive rights or any other actual contingent
purchase rights of Persons other than the Holder (and the other holders of the
Debentures), not less than such aggregate number of shares of the Common Stock
as shall (subject to the terms and conditions set forth in the Purchase
Agreement) be issuable (taking into account the adjustments and restrictions of
Section 5) upon the conversion of the outstanding principal amount of this
Debenture.  The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly authorized, validly issued,
fully paid and nonassessable and, if a Registration Statement is then effective
under the Securities Act, shall be registered for public sale in accordance with
such Registration Statement.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 10
      or 23

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    vii.           Fractional Shares. No
fractional shares or scrip representing fractional shares shall be issued upon
the conversion of this Debenture.  As to any fraction of a share which
Holder would otherwise be entitled to purchase upon such conversion, the Company
shall at its election, either pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Conversion Price
or round up to the next whole share.

    

    viii.           Transfer
Taxes.  The issuance of certificates for shares of the Common
Stock on conversion of this Debenture shall be made without charge to the Holder
hereof for any documentary stamp or similar taxes that may be payable in respect
of the issue or delivery of such certificates, provided that, the Company shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issuance and delivery of any such certificate upon conversion in
a name other than that of the Holder of this Debenture so converted and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.

    

    Section
5.             Certain
Adjustments.

    

    a)           Stock Dividends and Stock
Splits.  If the Company, at any time while this Debenture is
outstanding: (i) pays a stock dividend or otherwise makes a distribution or
distributions payable in shares of Common Stock on shares of Common Stock or any
Common Stock Equivalents (which, for avoidance of doubt, shall not include any
shares of Common Stock issued by the Company upon conversion of the Debentures),
(ii) subdivides outstanding shares of Common Stock into a larger number of
shares, (iii) combines (including by way of a reverse stock split) outstanding
shares of Common Stock into a smaller number of shares or (iv) issues, in the
event of a reclassification of shares of the Common Stock, any shares of capital
stock of the Company, then the Conversion Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding any treasury shares of the Company) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event.  Any adjustment made
pursuant to this Section shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or re-classification.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 11
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    b)           Subsequent Equity
Sales.  Until the one year anniversary of the Effective Date,
if at any time during this period while this Debenture is
outstanding,  the Company or any Subsidiary, as applicable, sells or
grants any option to purchase or sells or grants any right to reprice, or
otherwise disposes of or issues (or announces any sale, grant or any option to
purchase or other disposition), any Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock at an effective price per
share that is lower than the then Conversion Price (such lower price, the “Base Conversion
Price” and such issuances, collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with
such issuance, be entitled to receive shares of Common Stock at an effective
price per share that is lower than the Conversion Price, such issuance shall be
deemed to have occurred for less than the Conversion Price on such date of the
Dilutive Issuance), then the Conversion Price shall be reduced to equal the Base
Conversion Price.  Such adjustment shall be made whenever such Common
Stock or Common Stock Equivalents are issued.  If the Company enters
into a Variable Rate Transaction, despite the prohibition set forth in the
Purchase Agreement, the Company shall be deemed to have issued Common Stock or
Common Stock Equivalents at the lowest possible conversion price at which such
securities may be converted or exercised. The Company shall notify the Holder in
writing, no later than one Business Day following the issuance of any Common
Stock or Common Stock Equivalents subject to this Section 5(b), indicating
therein the applicable issuance price, or applicable reset price, exchange
price, conversion price and other pricing terms (such notice, the “Dilutive Issuance
Notice”).  For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon
the occurrence of any Dilutive Issuance, the Holder is entitled to receive a
number of Conversion Shares based upon the Base Conversion Price on or after the
date of such Dilutive Issuance, regardless of whether the Holder accurately
refers to the Base Conversion Price in the Notice of Conversion.

     

    c)           Subsequent Rights
Offerings.  If the Company, at any time while the Debenture is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share that is lower than the VWAP on the record date
referenced below, then the Conversion Price shall be multiplied by a fraction of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered (assuming delivery to the Company in full of all consideration payable
upon exercise of such rights, options or warrants) would purchase at such
VWAP.  Such adjustment shall be made whenever such rights or warrants
are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.

    

    d)           Pro Rata
Distributions. If the Company, at any time while this Debenture is
outstanding, distributes to all holders of Common Stock (and not to the Holders)
evidences of its indebtedness or assets (including cash and cash dividends) or
rights or warrants to subscribe for or purchase any security (other than the
Common Stock, which shall be subject to Section 5(b)), then in each such case
the Conversion Price shall be adjusted by multiplying such Conversion Price in
effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then
fair market value at such record date of the portion of such assets or evidence
of indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors of the Company in good
faith.  In either case the adjustments shall be described in a
statement delivered to the Holder describing the portion of assets or evidences
of indebtedness so distributed or such subscription rights applicable to one
share of Common Stock.  Such adjustment shall be made whenever any
such distribution is made and shall become effective immediately after the
record date mentioned above.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 12
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    e)           Fundamental
Transaction. If, at any time while this Debenture is outstanding, (i) the
Company effects any merger or consolidation of the Company with or into another
Person and the Company is not the surviving corporation, (ii) the Company
effects any sale of all or substantially all of its assets in one transaction or
a series of related transactions, (iii) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent conversion of this Debenture,
the Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of
such Fundamental Transaction, the same kind and amount of securities, cash or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of one share of Common Stock (the “Alternate
Consideration”).  For purposes of any such conversion, the
determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Conversion Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration.  If holders
of Common Stock are given any choice as to the securities, cash or property to
be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any conversion of
this Debenture following such Fundamental Transaction.  To the extent
necessary to effectuate the foregoing provisions, any successor to the Company
or surviving entity in such Fundamental Transaction shall issue to the Holder a
new debenture consistent with the foregoing provisions and evidencing the
Holder’s right to convert such debenture into Alternate Consideration. The terms
of any agreement pursuant to which a Fundamental Transaction is affected shall
include terms requiring any such successor or surviving entity to comply with
the provisions of this Section 5(e) and insuring that this Debenture (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

    

    f)           Calculations.  All
calculations under this Section 5 shall be made to the nearest cent or the
nearest 1/100th of a
share, as the case may be.  For purposes of this Section 5, the number
of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding any treasury
shares of the Company) issued and outstanding.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 13
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    g)           Notice to the
Holder.

    

    i.           Adjustment to Conversion
Price.  Whenever the Conversion Price is adjusted pursuant to
any provision of this Section 5, the Company shall promptly deliver to each
Holder a notice setting forth the Conversion Price after such adjustment and
setting forth a brief statement of the facts requiring such
adjustment.

    

    ii.           Notice to Allow Conversion
by Holder.  If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock of rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property or (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company, then, in each case, the Company shall cause to be filed at each office
or agency maintained for the purpose of conversion of this Debenture, and shall
cause to be delivered to the Holder at its last address as it shall appear upon
the Debenture Register, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken,
the date as of which the holders of the Common Stock of record to be entitled to
such dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the
failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified
in such notice.  The Holder is entitled to convert this Debenture
during the 20-day period commencing on the date of such notice through the
effective date of the event triggering such notice.

    

    Section
6.           Negative Covenants.
As long as any portion of this Debenture remains outstanding, unless the holders
of at least 75% in principal amount of the then outstanding Debentures shall
have otherwise given prior written consent, the Company shall not, and shall not
permit any of its subsidiaries (whether or not a Subsidiary on the Original
Issue Date) to, directly or indirectly:

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 14
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    a)           other than Permitted Indebtedness, enter into, create,
incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including, but not limited to, a guarantee, on or with respect to
any of its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom;

    

    b)           other than Permitted Liens, enter into, create, incur,
assume or suffer to exist any Liens of any kind, on or with respect to any of
its property or assets now owned or hereafter acquired or any interest therein
or any income or profits therefrom;

    

    c)           amend its charter documents, including, without
limitation, its certificate of incorporation and bylaws, in any manner that
materially and adversely affects any rights of the Holder;

    

    d)           repay, repurchase or offer to repay, repurchase or
otherwise acquire any Indebtedness, other than the Debentures if on a pro-rata
basis, other than regularly scheduled interest payments as such terms are in
effect as of the Original Issue Date;

    

    e)           pay cash dividends or distributions on any equity
securities of the Company;

    

    f)           enter
into any transaction with any Affiliate of the Company which would be required
to be disclosed in any public filing with the Commission, unless such
transaction is made on an arm’s-length basis and expressly approved by a
majority of the disinterested directors of the Company (even if less than a
quorum otherwise required for board approval); or

    

    g)           enter
into any agreement with respect to any of the foregoing.

    

    Section
7.             Events
of Default.

    

    a)           “Event
of Default” means, wherever used herein, any of the following events (whatever
the reason for such event and whether such event shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

     

    i.           any default in the payment of (A) the principal amount
of any Debenture or (B) interest, liquidated damages and other amounts owing to
a Holder on any Debenture, as and when the same shall become due and payable
(whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default,
solely in the case of an interest payment or other default under clause (B)
above, is not cured within five Trading Days after notice of failure is sent by
the Holder;

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 15
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    ii.           the
Company shall fail to observe or perform any other covenant or agreement
contained in the Debentures (other than a breach by the Company of its
obligations to deliver shares of Common Stock to the Holder upon conversion,
which breach is addressed in clause (xi) below) or any of the Transaction
Documents which failure is not cured, if possible to cure, within the earlier to
occur of (A) five Trading Days after notice of such failure sent by the Holder
or by any other Holder to the Company and (B) 10 Trading Days after the Company
has become or should have become aware of such failure;

     

    iii.           a
default or event of default (subject to any grace or cure period provided in the
applicable agreement, document or instrument or any amendment thereof) shall
occur under (A) any of the Transaction Documents or (B) any other material
agreement, lease, document or instrument to which the Company or any Subsidiary
is obligated (and not covered by clause (vi) below), except for any material
agreement, lease, document or instrument listed on the Disclosure Schedules as
currently in default;

     

    iv.           any
representation or warranty made in this Debenture, any other Transaction
Documents, any written statement pursuant hereto or thereto or any other report,
financial statement or certificate made or delivered to the Holder or any other
Holder shall be untrue or incorrect in any material respect as of the date when
made or deemed made;

    

    v.           
the Company or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;

     

    vi.           the
Company or any Subsidiary shall default on any of its obligations under any
mortgage, credit agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issued, or by which there
may be secured or evidenced, any indebtedness for borrowed money or money due
under any long term leasing or factoring arrangement that (a) involves an
obligation greater than $25,000, whether such indebtedness now exists or shall
hereafter be created, and (b) results in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable, except for any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument obligations listed
on the Disclosure Schedules as currently in default;

    

    vii.           the
Common Stock shall not be eligible for listing or quotation for trading on a
Trading Market and shall not be eligible to resume listing or quotation for
trading thereon within five Trading Days;

     

    viii.           the
Company shall be a party to any Change of Control Transaction or Fundamental
Transaction, other than the Purchase Agreement, or shall agree to sell or
dispose of all or in excess of 33% of its assets in one transaction or a series
of related transactions (whether or not such sale would constitute a Change of
Control Transaction);

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 16
      or 23

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ix.           the
Company shall fail for any reason to deliver certificates to a Holder prior to
the fifth Trading Day after a Conversion Date pursuant to Section 4(d) or the
Company shall provide at any time notice to the Holder, including by way of
public announcement, of the Company’s intention to not honor requests for
conversions of any Debentures in accordance with the terms hereof;

    

    x.           any
Person shall breach any agreement delivered to the initial Holders pursuant to
Section 2.2 of the Purchase Agreement; or

     

    xi.           any
monetary judgment, writ or similar final process shall be entered or filed
against the Company, any subsidiary or any of their respective property or other
assets for more than $25,000, and such judgment, writ or similar final process
shall remain unvacated, unbonded or unstayed for a period of 45 calendar
days.

    

    b)           Remedies Upon Event of
Default. If any Event of Default occurs, the outstanding principal amount
of this Debenture, plus accrued but unpaid interest, liquidated damages and
other amounts owing in respect thereof through the date of acceleration, shall
become, at the Holder’s election, immediately due and payable in
cash.  Commencing five days after the occurrence of any Event of
Default that results in the eventual acceleration of this Debenture, the
interest rate on this Debenture shall accrue at an interest rate equal to the
lesser of 18% per annum or the maximum rate permitted under applicable
law.  Upon the payment in full, the Holder shall promptly surrender
this Debenture to or as directed by the Company.  In connection with
such acceleration described herein, the Holder need not provide, and the Company
hereby waives, any presentment, demand, protest or other notice of any kind, and
the Holder may immediately and without expiration of any grace period enforce
any and all of its rights and remedies hereunder and all other remedies
available to it under applicable law.  Such acceleration may be
rescinded and annulled by Holder at any time prior to payment hereunder and the
Holder shall have all rights as a holder of the Debenture until such time, if
any, as the Holder receives full payment pursuant to this Section
7(b).  No such rescission or annulment shall affect any subsequent
Event of Default or impair any right consequent thereon.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 17
      or 23

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
8.               Miscellaneous.

    

    a)           Notices.  Any
and all notices or other communications or deliveries to be provided by the
Holder hereunder, including, without limitation, any Notice of Conversion, shall
be in writing and delivered personally, by facsimile, or sent by a nationally
recognized overnight courier service, addressed to the Company, at the address
set forth above, or such other facsimile number or address as the Company may
specify for such purpose by notice to the Holder delivered in accordance with
this Section 8(a).  Copies of all notices to the Company shall be
simultaneously sent to Joseph ‘Chip’ Langston, telephone no. (972) 962 4892, by
both facsimile to (972) 962 3766 and by email to chip3@flash.net. Any and all
notices or other communications or deliveries to be provided by the Company
hereunder shall be in writing and delivered personally, by facsimile, or sent by
a nationally recognized overnight courier service addressed to each Holder at
the facsimile number or address of the Holder appearing on the books of the
Company, or if no such facsimile number or address appears, at the principal
place of business of the Holder.  Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number specified on the signature page prior to 5:30
p.m. (New York City time), (ii) the date immediately following the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified on the signature page between 5:30 p.m. (New York
City time) and 11:59 p.m. (New York City time) on any date, (iii) the second
Business Day following the date of mailing, if sent by nationally recognized
overnight courier service or (iv) upon actual receipt by the party to whom such
notice is required to be given.

    

    b)           Absolute Obligation.
Except as expressly provided herein, no provision of this Debenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, liquidated damages and accrued interest, as applicable, on
this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed.  This Debenture is a direct debt obligation of the
Company.  This Debenture ranks pari passu with all other
Debentures now or hereafter issued under the terms set forth
herein.

    

    c)           Lost or Mutilated
Debenture.  If this Debenture shall be mutilated, lost, stolen
or destroyed, the Company shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Debenture, or in lieu of
or in substitution for a lost, stolen or destroyed Debenture, a new Debenture
for the principal amount of this Debenture so mutilated, lost, stolen or
destroyed, but only upon receipt of evidence of such loss, theft or destruction
of such Debenture, and of the ownership hereof, reasonably satisfactory to the
Company.

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

    
      

      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                Blackwood
      Ventures LLC Senior Secured Debenture

              	
                Page 18
      or 23

              

      

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    e)           Waiver.  Any
waiver by the Company or the Holder of a breach of any provision of this
Debenture shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Debenture.  The failure of the Company or the Holder to insist upon
strict adherence to any term of this Debenture on one or more occasions shall
not be considered a waiver or deprive that party of the right thereafter to
insist upon strict adherence to that term or any other term of this
Debenture.  Any waiver by the Company or the Holder must be in
writing.

    

    f)           Severability.  If
any provision of this Debenture is invalid, illegal or unenforceable, the
balance of this Debenture shall remain in effect, and if any provision is
inapplicable to any Person or circumstance, it shall nevertheless remain
applicable to all other Persons and circumstances.  If it shall be
found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due
hereunder shall automatically be lowered to equal the maximum rate of interest
permitted under applicable law. The Company covenants (to the extent that it may
lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law or other law which would prohibit or forgive the Company from
paying all or any portion of the principal of or interest on this Debenture as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this indenture, and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefits or advantage of any such law, and covenants that it will not, by resort
to any such law, hinder, delay or impede the execution of any power herein
granted to the Holder, but will suffer and permit the execution of every such as
though no such law has been enacted.

    

    g)           Next Business
Day.  Whenever any payment or other obligation hereunder shall
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day.

    

    h)           Headings.  The
headings contained herein are for convenience only, do not constitute a part of
this Debenture and shall not be deemed to limit or affect any of the provisions
hereof.

    
      
        

        
          	
                  Glen
      Rose Petroleum Corporation

                	 
      
	
                  Blackwood
      Ventures LLC Senior Secured Debenture

                	
                  Page 19
      or 23

                

        

         

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    i)           Assumption.  Any
successor to the Company or any surviving entity in a Fundamental Transaction
shall (i) assume, prior to such Fundamental Transaction, all of the obligations
of the Company under this Debenture and the other Transaction Documents pursuant
to written agreements in form and substance satisfactory to the Holder (such
approval not to be unreasonably withheld or delayed) and (ii) issue to the
Holder a new debenture of such successor entity evidenced by a written
instrument substantially similar in form and substance to this Debenture,
including, without limitation, having a principal amount and interest rate equal
to the principal amount and the interest rate of this Debenture and having
similar ranking to this Debenture, which shall be satisfactory to the Holder
(any such approval not to be unreasonably withheld or delayed).  The
provisions of this Section 8(i) shall apply similarly and equally to successive
Fundamental Transactions and shall be applied without regard to any limitations
of this Debenture.

    

    j)           Secured
Obligation.  The obligations of the Company under this
Debenture are secured by all assets of the Company and each Subsidiary pursuant
to the Security Agreement, dated as of July 2, 2009 between the Company, the
Subsidiaries of the Company and the Secured Parties (as defined
therein).

     

    IN
WITNESS WHEREOF, the Company has caused this Debenture to be duly executed by a
duly authorized officer as of the date first above indicated.

    

    
      
        
          
            
              
                
                  
                    	
                            GLEN
      ROSE PETROLEUM CORPORATION

                          	 
	 
      	 
	
                            By:

                          	 
      	 
	 
      	
                            Name:
      Joseph F. Langston, Jr.

                          	 
	 
      	
                            Title:
      President

                          	 
	 
      	
                            Facsimile
      No. for delivery of Notices: (214) 800-2662

                          	 

                  

                

              

            

          

        

      

    

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 20
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    ANNEX
A

    

    NOTICE
OF CONVERSION

    

    The undersigned hereby elects to
convert principal under the 8.5% Senior Secured Convertible Debenture due June
30, 2011 of Glen Rose Petroleum Corporation, a Delaware corporation (the “Company”), into
shares of common stock (the “Common Stock”), of
the Company according to the conditions hereof, as of the date written
below.  If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all transfer taxes
payable with respect thereto and is delivering herewith such certificates and
opinions as reasonably requested by the Company in accordance
therewith.  No fee will be charged to the holder for any conversion,
except for such transfer taxes, if any.

    

    The undersigned agrees to comply with
the prospectus delivery requirements under the applicable securities laws in
connection with any transfer of the aforesaid shares of Common
Stock.

    

    Conversion
calculations:

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  	 
      	
                                                                                          Date
      to Effect Conversion:

                                                                                        
	 
      	 
      
	 
      	
                                                                                          Principal
      Amount of Debenture to be Converted:

                                                                                        
	 
      	 
      
	 
      	
                                                                                          Number
      of shares of Common Stock to be issued:

                                                                                        
	 
      	 
      
	 
      	
                                                                                          Signature:

                                                                                        
	 
      	 
      
	 
      	
                                                                                          Name:

                                                                                        
	 
      	 
      
	 
      	
                                                                                          Address
      for Delivery of Common Stock Certificates:

                                                                                        
	 
      	 
      
	 
      	
                                                                                          Or

                                                                                        
	 
      	 
      
	 
      	
                                                                                          DWAC
      Instructions:

                                                                                        
	 
      	 
      
	 
      	
                                                                                          Broker No: 

                                                                                        	 
      	 
	 
      	
                                                                                          Account No: 

                                                                                        	 
      	 

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 21
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

     ANNEX
B

    

    NOTICE
OF CONVERSION

    

    Glen Rose Petroleum Corporation hereby
elects to convert principal under the 8.5% Senior Secured Convertible Debenture
(“Debenture”) due June 30, 2011 of Glen Rose Petroleum Corporation, a Delaware
corporation (the “Company”), held by
Debenture Holder (“Holder”) into shares of common stock (the “Common Stock”), of
the Company according to the conditions hereof, as of the date written
below.    No fee will be charged to the holder of the
Debenture for any conversion.  Share Certificates shall be delivered
to the delivered personally or sent by a nationally recognized overnight courier
service addressed to the Holder at the address of the Holder appearing on the
books of the Company

    

    Conversion
calculations:

    
      
        	 
      	
                Date
      to Effect Conversion:

              
	 
      	 
      
	 
      	
                Principal
      Amount of Debenture to be Converted:

              
	 
      	 
      
	 
      	
                Number
      of shares of Common Stock to be issued:

              
	 
      	 
      
	 
      	
                Signature:

              
	 
      	 
      
	 
      	
                Name:

              
	 
      	 
      
	 
      	
                Title:

              
	 
      	 
      
	 
      	
                Glen
      Rose Petroleum Corporation

              

      

    

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 22
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    Schedule
1

    

    CONVERSION
SCHEDULE

    

    The 8.5%
Senior Secured Convertible Debentures due on June 30, 2011 in the aggregate
principal amount of $500,000.00 to $1,500,000 are issued by Glen Rose Petroleum
Corporation, a Delaware corporation.  This Conversion Schedule
reflects conversions made under Section 4 of the above referenced
Debenture.

    

    Dated:

    

    
      
        
          	
                  Date of Conversion

                  (or for first entry, Original Issue

                  Date)

                	 	
                   

                  Amount of Conversion

                	 	
                  Aggregate Principal Amount

                  Remaining Subsequent to Conversion

                  (or original Principal Amount)

                	 	
                   

                  Company Attest

                
	 
      	 	 
      	 	 
      	 	 
      
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

        

      

    

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 23
      or 23

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
B

    

    FORM OF SECURITY
AGREEMENT

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SECURITY
AGREEMENT

    

                This
SECURITY AGREEMENT, dated as of July 2, 2009 (this “Agreement”), is among
Glen Rose Petroleum Corporation, a Delaware corporation (the “Company”), UHC
Petroleum Corporation, a Texas Corporation and a subsidiary of the Company
(the “Guarantor” and
together with the Company, the “Debtors”) and the
holders of the Company’s  8.5% Senior Secured Convertible
Debentures due June 30, 2011 (collectively, the “Debentures”) issued pursuant
to the Purchase Agreement (as defined in the Debentures) to the signatories
hereto, their endorsees, transferees and assigns (collectively, the “Secured
Parties”).

    

    WITNESSETH:

    

                WHEREAS,
pursuant to the Purchase Agreement (as defined in the Debentures), the Secured
Parties have severally agreed to extend the loans to the Company evidenced by
the Debentures;

    

                WHEREAS,
pursuant to a certain Subsidiary Guarantee, dated as of the date hereof (the
“Guarantee”), the Guarantor have jointly and severally agreed to
guarantee and act as surety for payment of such Debentures; and

    

                WHEREAS,
in order to induce the Secured Parties to extend the loans evidenced by the
Debentures, each Debtor has agreed to execute and deliver to the Secured Parties
this Agreement and to grant the Secured Parties, pari passu with each other
Secured Party and through the Agent, a security interest in certain property of
such Debtor to secure the prompt payment, performance and discharge in full of
all of the Company’s obligations under the Debentures and the Guarantor’
obligations under the Guarantee.

    

                NOW,
THEREFORE, in consideration of the agreements herein contained and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:

    

                
1.               Certain Definitions. As used
in this Agreement, the following terms shall have the meanings set forth in this
Section 1.  Terms used but not otherwise defined in this Agreement
that are defined in Article 9 of the UCC (such as “account”, “chattel paper”,
“commercial tort claim”, “deposit account”, “document”, “equipment”, “fixtures”,
“general intangibles”, “goods”, “instruments”, “inventory”, “investment
property”, “letter-of-credit rights”, “proceeds” and “supporting obligations”)
shall have the respective meanings given such terms in Article 9 of the
UCC.

    

    (a)          “Collateral” means the
collateral in which the Secured Parties are granted a security interest by this
Agreement and which shall include the following personal property of the
Debtors, whether presently owned or existing or hereafter acquired or coming
into existence, wherever situated, and all additions and accessions thereto and
all substitutions and replacements thereof, and all proceeds, products and
accounts thereof, including, without limitation, all proceeds from the sale or
transfer of the Collateral and of insurance covering the same and of any tort
claims in connection therewith, and all dividends,
interest, cash, notes, securities, equity interest or other property at any time
and from time to time acquired, receivable or otherwise distributed in respect
of, or in exchange for, any or all of the Pledged Securities (as defined
below):

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 1
      or 24

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (i)          
All goods, including, without limitation, (A) all machinery, equipment,
computers, motor vehicles, trucks, tanks, boats, ships, appliances, furniture,
special and general tools, fixtures, test and quality control devices and other
equipment of every kind and nature and wherever situated, together with all
documents of title and documents representing the same, all additions and
accessions thereto, replacements therefor, all parts therefor, and all
substitutes for any of the foregoing and all other items used and useful in
connection with any Debtor’s businesses and all improvements thereto; and (B)
all inventory;

    

    (ii)           All
contract rights and other general intangibles, including, without limitation,
all partnership interests, membership interests, stock or other securities,
rights under any of the Organizational Documents,
agreements related to the Pledged Securities, licenses, distribution and other
agreements, computer software (whether “off-the-shelf”, licensed from any third
party or developed by any Debtor), computer software development rights, leases,
franchises, customer lists, quality control procedures, grants and rights,
goodwill, trademarks, service marks, trade styles, trade names, patents, patent
applications, copyrights, and income tax refunds;

     

    (iii)          All
accounts, together with all instruments, all documents of title representing any
of the foregoing, all rights in any merchandising, goods, equipment, motor
vehicles and trucks which any of the same may represent, and all right, title,
security and guaranties with respect to each account, including any right of
stoppage in transit;

    

    (iv)          All
documents, letter-of-credit rights, instruments and chattel paper;

    

    (v)           All
commercial tort claims;

    

    (vi)          All
deposit accounts and all cash (whether or not deposited in such deposit
accounts);

    

    (vii)         All
investment property;

    

    (viii)       
All supporting obligations; and

    

    (ix)          All
files, records, books of account, business papers, and computer programs;
and

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 2
      or 24

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (x)           the
products and proceeds of all of the foregoing Collateral set forth in clauses
(i)-(ix) above.

    

    Without limiting the generality of the foregoing, the
“Collateral” shall include all investment property and general
intangibles respecting ownership and/or other equity interests in each
Guarantor, including, without limitation,
the shares of capital stock and the other equity interests listed on Schedule H
hereto (as the same may be modified from time to time pursuant to the terms
hereof), and any other shares of capital stock and/or other equity interests
of any
other direct or indirect subsidiary of any Debtor obtained in the future, and,
in each case, all certificates representing such shares and/or equity interests
and, in each case, all rights, options, warrants, stock, other securities and/or
equity interests that may hereafter be received, receivable or
distributed in respect of, or exchanged for, any of the foregoing and all rights
arising under or in connection with the Pledged Securities, including, but not
limited to, all dividends, interest and cash.

     

    Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any
asset which, in the event of an assignment, becomes void by operation of
applicable law or the assignment of which is otherwise prohibited by applicable
law (in each case to the extent that such applicable law is not overridden by
Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law);
provided, however, that to the
extent permitted by applicable law, this Agreement shall create a valid security
interest in such asset and, to the extent permitted by applicable law, this
Agreement shall create a valid security interest in the proceeds of such
asset.

    

    (b)           “Intellectual
Property” means the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including, without
limitation, (i) all copyrights arising under the laws of the United States, any
other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished, all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, (ii) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof, and all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, (iii) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade dress, service marks, logos,
domain names and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common law
rights related thereto, (iv) all trade secrets arising under the laws of the
United States, any other country or any political subdivision thereof, (v) all
rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all
licenses for any of the foregoing, and (vii) all causes of action for
infringement of the foregoing.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 3
      or 24

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (c)           “Majority in
Interest” means, at any time of
determination, the majority in interest (based on then-outstanding principal
amounts of Debentures at the time of such determination) of the Secured
Parties.

    

    (d)           “Necessary
Endorsement” means undated stock
powers endorsed in blank or other proper
instruments of assignment duly executed and such other instruments or documents
as the Agent (as that term is defined below) may reasonably request.

    

    (e)           “Obligations” means
all of the liabilities and obligations (primary, secondary, direct,
contingent, sole, joint or several) due or to become due, or that are now or may
be hereafter contracted or acquired, or owing to, of any Debtor to the Secured
Parties, including, without limitation, all obligations under this Agreement,
the Debentures, the Guarantee and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith, in each
case, whether now or hereafter existing, voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from any of the
Secured Parties as a preference, fraudulent transfer or otherwise as such
obligations may be amended, supplemented, converted, extended or modified from
time to time.  Without limiting the generality of the foregoing, the
term “Obligations” shall include, without limitation: (i) principal of, and
interest on the Debentures and the loans extended pursuant thereto; (ii) any and
all other fees, indemnities, costs, obligations and liabilities of the Debtors
from time to time under or in connection with this Agreement, the Debentures,
the Guarantee and any other instruments, agreements or other documents executed
and/or delivered in connection herewith or therewith; and (iii) all amounts
(including but not limited to post-petition interest) in respect of the
foregoing that would be payable but for the fact that the obligations to pay
such amounts are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving any
Debtor.

    

    (f)           “Organizational
Documents” means with respect to any Debtor, the documents by which such
Debtor was organized (such as a certificate of incorporation, certificate of
limited partnership or articles of organization, and including, without
limitation, any certificates of designation for preferred stock or other forms
of preferred equity) and which relate to the internal governance of such Debtor
(such as bylaws, a partnership agreement or an operating, limited liability or
members agreement).

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 4
      or 24

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    (g)           “Permitted
Indebtedness” means (a) the indebtedness evidenced by the
Obligations;  (b) up to $1,000,000 of non-equity linked indebtedness
under accounts receivable or inventory lines of credit with a federal or state
regulated bank or nationally recognized commercial lending institution whose
primary business is not investing in securities; and (c) indebtedness related to
services and goods provided by trade creditors including oilfield services and
materials providers, auditors, accountants, (d) indebtedness previously
outstanding as of the date of this Debenture, (e) indebtedness relating to
short-term financing as referenced in promissory notes issued in July 2008 with
up to $180,000 in principal, and (f) any and all indebtedness incurred in
connection with satisfying any Company obligations relating to Company stock or
other options through the issuance of debt to the optionholders.

    

    (h)           “Permitted Lien” means
the individual and collective reference to the following: (a) Liens for taxes,
assessments and other governmental charges or levies not yet due or Liens for
taxes, assessments and other governmental charges or levies being contested in
good faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Company) have been established in
accordance with GAAP; (b) Liens imposed by law which were incurred in the
ordinary course of the Company’s business, such as carriers’, warehousemen’s and
mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in
the ordinary course of the Company’s business; (c) Liens incurred in connection
with Permitted Indebtedness; and (d) liens previously filed against Company
property or relating to Company indebtedness existing on or before the date of
this Security Agreement.

     

     (i)           “Pledged Securities”
shall have the meaning ascribed to such term in Section 4(i).

    

     (j)           “Purchase Agreement”
means the Securities Purchase Agreement, dated as of July 2, 2009 among the
Company and the original Holders, as amended, modified or supplemented from time
to time in accordance with its terms and including any disclosure schedules
provided in connection with the Securities Purchase Agreement.

    

    (k)           “UCC” means the
Uniform Commercial Code of the State of Texas and or any other applicable law of
any state or states which has jurisdiction with respect to all, or any portion
of, the Collateral or this Agreement, from time to time.  It is the
intent of the parties that defined terms in the UCC should be construed in their
broadest sense so that the term “Collateral” will be construed in its broadest
sense.  Accordingly if there are, from time to time, changes to
defined terms in the UCC that broaden the definitions, they are incorporated
herein and if existing definitions in the UCC are broader than the amended
definitions, the existing ones shall be controlling.

    

    2.           Grant of Security Interest in Collateral. As an
inducement for the Secured Parties to extend the loans as evidenced by the
Debentures and to secure the complete and timely payment, performance and
discharge in full, as the case may be, of all of the Obligations, each Debtor
hereby unconditionally and irrevocably pledges, grants and hypothecates to the
Secured Parties a security interest in and to, a lien upon and a right of
set-off against all of their respective right, title and interest of whatsoever
kind and nature in and to, the Collateral (a “Security Interest”
and, collectively, the “Security
Interests”).

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 5
      or 24

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    3.           
Delivery of Certain
Collateral.  Contemporaneously to
the execution of this Agreement, each Debtor shall deliver or cause to be
delivered to the Agent (a) any and all certificates and other instruments
representing or evidencing the Pledged Securities, and (b) any and all
certificates and other instruments or documents representing any of the other
Collateral, in each case, together with all Necessary
Endorsements.  The Debtors are, contemporaneously with the execution
hereof, delivering to Agent, or have previously delivered to Agent, a true and
correct copy of each Organizational Document governing any of the Pledged
Securities.

    

    4.           
Representations, Warranties,
Covenants and Agreements of the Debtors. Except as set forth under the
corresponding section of the disclosure schedules delivered to the Secured
Parties concurrently herewith (the “Disclosure
Schedules”), which Disclosure Schedules shall be deemed a part hereof,
each Debtor represents and warrants to, and covenants and agrees with, the
Secured Parties as follows:

    

    (a)        
Each Debtor has the requisite corporate, partnership, limited liability company
or other power and authority to enter into this Agreement and otherwise to carry
out its obligations hereunder. The execution, delivery and performance by each
Debtor of this Agreement and the filings contemplated therein have been duly
authorized by all necessary action on the part of such Debtor and no further
action is required by such Debtor.  This Agreement has been duly
executed by each Debtor.  This Agreement constitutes the legal, valid
and binding obligation of each Debtor, enforceable against each Debtor in
accordance with its terms except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization and similar laws of general
application relating to or affecting the rights and remedies of creditors and by
general principles of equity.

    

    (b)        
The Debtors have no place of business or offices where their respective books of
account and records are kept (other than temporarily at the offices of its
attorneys or accountants) or places where Collateral is stored or located,
except as set forth on Schedule A attached hereto.  Except as
specifically set forth on Schedule A, each Debtor is the record owner of the
real property where such Collateral is located, and there exist no mortgages or
other liens on any such real property.  Except as disclosed on
Schedule A, none of such Collateral is in the possession of any consignee,
bailee, warehouseman, agent or processor.

    

    (c)        
Except as set forth on Schedule B attached hereto, the Debtors are the sole
owner of the Collateral (except for non-exclusive licenses granted by any Debtor
in the ordinary course of business), free and clear of any liens, security
interests, encumbrances, rights or claims, and are fully authorized to grant the
Security Interests.  Except as set forth on Schedule B attached
hereto, there is not on file in any governmental or regulatory authority, agency
or recording office an effective financing statement, security agreement,
license or transfer or any notice of any of the foregoing (other than those that
will be filed in favor of the Secured Parties pursuant to this Agreement)
covering or affecting any of the Collateral.  Except as set forth on
Schedule B attached hereto and except pursuant to this Agreement, as long as
this Agreement shall be in effect, the Debtors shall not execute and shall not
knowingly permit to be on file in any such office or agency any other financing
statement or other document or instrument (except to the extent filed or
recorded in favor of the Secured Parties pursuant to the terms of this
Agreement).

     

    
      
        
          
            
              	
                      Glen
      Rose Petroleum Corporation

                    	 
      
	
                      Blackwood
      Ventures LLC Senior Secured Debenture

                    	
                      Page 6
      or 24

                    

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (e)        
Each Debtor shall at all times maintain its books of account and records
relating to the Collateral at its principal place of business and its Collateral
at the locations set forth on Schedule A attached hereto and may not relocate
such books of account and records or tangible Collateral unless it delivers to
the Secured Parties at least 30 days prior to such relocation (i) written notice
of such relocation and the new location thereof (which must be within the United
States) and (ii) evidence that appropriate financing statements under the UCC
and other necessary documents have been filed and recorded and other steps have
been taken to perfect the Security Interests to create in favor of the Secured
Parties a valid, perfected and continuing perfected first priority lien in the
Collateral.

    

    (f)        
This Agreement creates in favor of the Secured Parties a valid security
interest in the Collateral securing the payment and performance of the
Obligations.  Upon making the filings described in the immediately
following paragraph, all security interests created hereunder in any Collateral
which may be perfected by filing Uniform Commercial Code financing statements
shall have been duly perfected.  Except for the filing of the Uniform
Commercial Code financing statements referred to in the immediately following
paragraph, the recordation of the Intellectual Property Security Agreement (as
defined below) with respect to copyrights and copyright applications in the
United States Copyright Office referred to in paragraph (m), the execution and
delivery of deposit account control agreements satisfying the requirements of
Section 9-104(a)(2) of the UCC with respect to each deposit account of the
Debtors, and the delivery of the certificates and
other instruments provided in Section 3, no action is necessary to create, perfect or
protect the security interests created hereunder.  Without limiting
the generality of the foregoing, except for the filing of said financing
statements, the recordation of said Intellectual Property Security Agreement,
and the execution and delivery of said deposit account control agreements, no
consent of any third parties and no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for (i) the execution, delivery and performance of this Agreement,
(ii) the creation or perfection of the Security Interests created hereunder in
the Collateral or (iii) the enforcement of the rights of the Agent and the
Secured Parties hereunder.

    

    (g)        
Each Debtor hereby authorizes the Agent to file one or more financing statements
under the UCC, with respect to the Security Interests, with the proper filing
and recording agencies in any jurisdiction deemed proper by it.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 7
      or 24

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (h)          The
execution, delivery and performance of this Agreement by the Debtors does not
(i) violate any of the provisions of any Organizational Documents of any Debtor
or any judgment, decree, order or award of any court, governmental body or
arbitrator or any applicable law, rule or regulation applicable to any Debtor or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing any Debtor's debt or otherwise) or other understanding to
which any Debtor is a party or by which any property or asset of any Debtor is
bound or affected. If any, all required consents (including, without limitation,
from stockholders or creditors of any Debtor) necessary for any Debtor to enter
into and perform its obligations hereunder have been obtained.

    

    (i)           The capital stock and other equity interests listed on
Schedule H hereto (the “Pledged Securities”) represent all of the capital stock
and other equity interests of the Guarantor, and represent all capital stock and
other equity interests owned, directly or indirectly, by the
Company.  All of the Pledged Securities are validly issued, fully paid
and nonassessable, and the Company is the legal and beneficial owner of the
Pledged Securities, free and clear of any lien, security interest or other
encumbrance except for the security interests created by this
Agreement.

    

    (j)           The ownership and other equity interests in partnerships
and limited liability companies (if any)
included in the Collateral (the “Pledged
Interests”) by their express terms do not provide that they are securities
governed by Article 8 of the UCC and are not held in a securities account or by
any financial intermediary.

    

    (k)          Each
Debtor shall at all times maintain the liens and Security Interests provided for
hereunder as valid and perfected first priority liens and security interests in
the Collateral in favor of the Secured Parties until this Agreement and the
Security Interest hereunder shall be terminated pursuant to Section 11
hereof.  Each Debtor hereby agrees to defend the same against the
claims of any and all persons and entities. Each Debtor shall safeguard and
protect all Collateral for the account of the Secured Parties.  At the
request of the Agent, each Debtor will sign and deliver to the Agent on behalf
of the Secured Parties at any time or from time to time one or more financing
statements pursuant to the UCC in form reasonably satisfactory to the Agent and
will pay the cost of filing the same in all public offices wherever filing is,
or is deemed by the Agent to be, necessary or desirable to effect the rights and
obligations provided for herein. Without limiting the generality of the
foregoing, each Debtor shall pay all fees, taxes and other amounts necessary to
maintain the Collateral and the Security Interests hereunder, and each Debtor
shall obtain and furnish to the Agent from time to time, upon demand, such
releases and/or subordinations of claims and liens which may be required to
maintain the priority of the Security Interests hereunder.

    

    (l)           No
Debtor will voluntarily transfer, pledge, hypothecate, encumber, license, sell
or otherwise dispose of any of the Collateral (except for non-exclusive licenses
granted by a Debtor in its ordinary course of business and sales of inventory by
a Debtor in its ordinary course of business) without the prior written consent
of a Majority in
Interest.  Secured Parties acknowledge the previous existence
of liens against Debtor properties and the previous existence of other
outstanding liabilities that may lead to the filing of liens against Debtor
properties; such liens and liabilities are fully disclosed in the Purchase
Agreement.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 8
      or 24

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (m)         Each
Debtor shall use its best efforts to keep and preserve its equipment, inventory
and other tangible Collateral in good condition, repair and order and shall not
operate or locate any such Collateral (or cause to be operated or located) in
any area excluded from insurance coverage.

    

    (n)          Each Debtor shall, to the extent of its financial
ability, maintain with financially sound and reputable insurers, insurance with
respect to the Collateral, including Collateral hereafter acquired, against loss
or damage of the kinds and in the amounts
customarily insured against by entities of established reputation having similar
properties similarly situated and in such amounts as are customarily carried
under similar circumstances by other such entities and otherwise as is prudent
for
entities engaged in similar businesses but in any event sufficient to cover the
full replacement cost thereof.  Each Debtor shall cause each insurance
policy issued in connection herewith to provide, and the insurer issuing such
policy to certify to the Agent, that (a) the Agent will be named as lender loss
payee and additional insured under each such insurance policy; (b) if such
insurance be proposed to be cancelled or materially changed for any reason
whatsoever, such insurer will promptly notify the Agent and
such cancellation or change shall not be effective as to the Agent for at least
thirty (30) days after receipt by the Agent of such notice, unless the effect of
such change is to extend or increase coverage under the policy; and (c) the
Agent will have the right (but no obligation) at its election to
remedy any default in the payment of premiums within thirty (30) days of notice
from the insurer of such default.  If no Event of Default (as defined
in the Debentures) exists and if the proceeds arising out of any
claim or series of related claims do not exceed $50,000, loss payments in each
instance will be applied by the applicable Debtor to the repair and/or
replacement of property with respect to which the loss was incurred to the
extent reasonably feasible, and any loss payments or the balance thereof
remaining, to the extent not so applied, shall be payable to the applicable
Debtor; provided, however, that payments received by any Debtor after an Event
of Default occurs and is continuing or in excess of $500,000
for any occurrence or series of related occurrences shall be paid to the Agent
on behalf of the Secured Parties and, if received by such Debtor, shall be held
in trust for the Secured Parties and immediately paid over to the Agent unless
otherwise directed in writing by the
Agent.   Copies of such policies or the related certificates, in
each case, naming the Agent as lender loss payee and additional insured shall be
delivered to the Agent at least annually and at the time any new policy
of
insurance is issued.

    

    (o)          Each
Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the
Secured Parties promptly, in sufficient detail, of any material adverse change
in the Collateral, and of the occurrence of any event which would have a
material adverse effect on the value of the Collateral or on the Secured
Parties’ security interest, through the Agent, therein.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 9
      or 24

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (p)        Each
Debtor shall promptly execute and deliver to the Agent such further deeds,
mortgages, assignments, security agreements, financing statements or other
instruments, documents, certificates and assurances and take such further action
as the Agent may from time to time request and may in its sole discretion deem
necessary to perfect, protect or enforce the Secured Parties’ security interest
in the Collateral including, without limitation, if applicable, the execution
and delivery of a separate security agreement with respect to each Debtor’s
Intellectual Property (“Intellectual Property
Security Agreement”) in which the Secured Parties have been granted a
security interest hereunder, substantially in a form reasonably acceptable to
the Agent, which Intellectual Property Security Agreement, other than as stated
therein, shall be subject to all of the terms and conditions
hereof.

    

    (q)        Each
Debtor shall permit the Agent and its representatives and agents to inspect the
Collateral during normal business hours and upon reasonable prior notice, and to
make copies of records pertaining to the Collateral as may be reasonably
requested by the Agent from time to time.

    

    (r)         Each
Debtor shall take all steps reasonably necessary to diligently pursue and seek
to preserve, enforce and collect any rights, claims, causes of action and
accounts receivable in respect of the Collateral.

    

    (s)         Each
Debtor shall promptly notify the Secured Parties in sufficient detail upon
becoming aware of any attachment, garnishment, execution or other legal process
levied against any Collateral and of any other information received by such
Debtor that may materially affect the value of the Collateral, the Security
Interest or the rights and remedies of the Secured Parties
hereunder.  Secured Parties acknowledge having knowledge and awareness
as of the date or this Security Agreement of liens and other current claims
against Debtor properties and outstanding unpaid obligations that may lead to
further liens and claims against Debtor Properties.  The Company has
provided the Secured Parties with a complete list and description of its assets
secured by such outstanding liens and all outstanding unpaid obligations in the
Purchase Agreement.

    

    (t)          All
information heretofore, herein or hereafter supplied to the Secured Parties by
or on behalf of any Debtor with respect to the Collateral is accurate and
complete in all material respects as of the date furnished.

    

    (u)         The
Debtors shall at all times preserve and keep in full force and effect their
respective valid existence and good standing and any rights and franchises
material to its business.

    

    (v)         No
Debtor will change its name, type of organization, jurisdiction of organization,
organizational identification number (if it has one), legal or corporate
structure, or identity, or add any new fictitious name unless it provides at
least 30 days prior written notice to the Secured Parties of such change and, at
the time of such written notification, such Debtor provides any financing
statements or fixture filings necessary to perfect and continue the perfection
of the Security Interests granted and evidenced by this Agreement.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 10
      or 24

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (w)         Except
in the ordinary course of business, no Debtor may consign any of its inventory
or sell any of its inventory on bill and hold, sale or return, sale on approval,
or other conditional terms of sale without the consent of the Agent which shall
not be unreasonably withheld.

    

    (x)          No
Debtor may relocate its chief executive office to a new location without
providing 30 days prior written notification thereof to the Secured Parties and
so long as, at the time of such written notification, such Debtor provides any
financing statements or fixture filings necessary to perfect and continue the
perfection of the Security Interests granted and evidenced by this
Agreement.

    

     (y)        Each
Debtor was organized and remains organized solely under the laws of the state
set forth next to such Debtor’s name in Schedule D attached hereto, which
Schedule D sets forth each Debtor’s organizational identification number or, if
any Debtor does not have one, states that one does not exist.

    

    (aa)        At
any time and from time to time that any Collateral consists of instruments,
certificated securities or other items that require or permit possession by the
secured party to perfect the security interest created hereby, the applicable
Debtor shall deliver such Collateral to the Agent.

    

    (bb)       Each Debtor, in its capacity as issuer, hereby agrees to
comply with any and all orders and instructions of Agent regarding the Pledged
Interests consistent with the terms of this Agreement without the further
consent of any Debtor as contemplated by
Section 8-106 (or any successor section) of the UCC.  Further, each
Debtor agrees that it shall not enter into a similar agreement (or one that
would confer “control” within the meaning of Article 8 of the UCC) with any
other person or entity.

     

    (cc)        Each
Debtor shall cause all tangible chattel paper constituting Collateral to be
delivered to the Agent, or, if such delivery is not possible, then to cause such
tangible chattel paper to contain a legend noting that it is subject to the
security interest created by this Agreement.  To the extent that any
Collateral consists of electronic chattel paper, the applicable Debtor shall
cause the underlying chattel paper to be “marked” within the meaning of Section
9-105 of the UCC (or successor section thereto).

    

    (dd)       If
there is any investment property or deposit account included as Collateral that
can be perfected by “control” through an account control agreement, the
applicable Debtor shall cause such an account control agreement, in form and
substance in each case satisfactory to the Agent, to be entered into and
delivered to the Agent for the benefit of the Secured Parties.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 11
      or 24

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (ee)        To
the extent that any Collateral consists of letter-of-credit rights, the
applicable Debtor shall cause the issuer of each underlying letter of credit to
consent to an assignment of the proceeds thereof to the Secured
Parties.

    

    (ff)         To
the extent that any Collateral is in the possession of any third party, the
applicable Debtor shall join with the Agent in notifying such third party of the
Secured Parties’ security interest in such Collateral and shall use its best
efforts to obtain an acknowledgement and agreement from such third party with
respect to the Collateral, in form and substance reasonably satisfactory to the
Agent.

    

    (gg)       If
any Debtor shall at any time hold or acquire a commercial tort claim, such
Debtor shall promptly notify the Secured Parties in a writing signed by such
Debtor of the particulars thereof and grant to the Secured Parties in such
writing a security interest therein and in the proceeds thereof, all upon the
terms of this Agreement, with such writing to be in form and substance
satisfactory to the Agent.

    

    (hh)       Each
Debtor shall immediately provide written notice to the Secured Parties of any
and all accounts which arise out of contracts with any governmental authority
and, to the extent necessary to perfect or continue the perfected status of the
Security Interests in such accounts and proceeds thereof, shall execute and
deliver to the Agent an assignment of claims for such accounts and cooperate
with the Agent in taking any other steps required, in its judgment, under the
Federal Assignment of Claims Act or any similar federal, state or local statute
or rule to perfect or continue the perfected status of the Security Interests in
such accounts and proceeds thereof.

    

     (ii)        Each
Debtor shall cause each subsidiary of such
Debtor to immediately become a party hereto (an “Additional Debtor”),
by executing and delivering an Additional Debtor Joinder in substantially the
form of Annex A attached hereto and comply with the provisions hereof applicable
to the Debtors.  Concurrent therewith, the Additional Debtor shall
deliver replacement schedules for, or supplements to all other Schedules to (or
referred to in) this Agreement, as applicable, which replacement schedules shall
supersede, or supplements shall modify, the Schedules then in
effect.  The Additional Debtor shall also deliver such authorizing
resolutions, good standing certificates, incumbency certificates, organizational
documents, financing statements and other information and documentation as the
Agent may reasonably request.  Upon delivery of the foregoing to the
Agent, the Additional Debtor shall be and become a party to this Agreement with
the same rights and obligations as the Debtors, for all purposes hereof as fully
and to the same extent as if it were an original signatory hereto and shall be
deemed to have made the representations, warranties and covenants set forth
herein as of the date of execution and delivery of such Additional Debtor
Joinder, and all references herein to the “Debtors” shall be deemed to include
each Additional Debtor.

    

    (jj)         Each Debtor shall vote the Pledged Securities to comply
with the covenants and agreements set forth herein and in the
Debentures.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 12
      or 24

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (kk)        Each Debtor shall register the pledge of the applicable
Pledged Securities on the books of such Debtor.  Each Debtor shall
notify each issuer of Pledged Securities to register the pledge of the
applicable Pledged Securities in the name of the Secured Parties on the books of
such issuer.  Further, except with respect to certificated securities
delivered to the Agent, the applicable Debtor shall deliver to Agent an
acknowledgement of pledge (which, where appropriate, shall comply with the
requirements of the relevant UCC with respect to perfection by registration)
signed by the issuer of the applicable Pledged Securities, which acknowledgement
shall confirm that: (a) it has registered the pledge on its books and records;
and (b) at any time directed by Agent during the continuation of an Event of
Default, such issuer will transfer the record ownership of such Pledged
Securities into the name of any designee of Agent, will take such steps as may
be necessary to effect the transfer, and will comply with all other instructions
of Agent regarding such Pledged Securities without the further consent of the
applicable Debtor.

    

    (ll)          In the event that, upon an occurrence of an Event of
Default, Agent shall sell all or any of the
Pledged Securities to another party or parties (herein called the “Transferee”) or
shall purchase or retain all or any of the Pledged Securities, each Debtor
shall, to the extent applicable: (i) deliver to Agent or the Transferee, as the
case may be, the articles of incorporation, bylaws, minute books,
stock certificate books, corporate seals, deeds, leases, indentures, agreements,
evidences of indebtedness, books of account, financial records and all other
Organizational Documents and records of the Debtors and
their direct and indirect subsidiaries; (ii) use its best efforts to obtain
resignations of the persons then serving as officers and directors of the
Debtors and their direct and indirect subsidiaries, if so requested; and (iii)
use its best efforts to obtain any approvals that are required by any
governmental or regulatory body in order to permit the sale of the Pledged
Securities to the Transferee or the purchase or retention of the Pledged
Securities by Agent and allow the Transferee or Agent to continue the
business of the Debtors and their direct and indirect
subsidiaries.

     

    (mm)      Without
limiting the generality of the other obligations of the Debtors hereunder, each
Debtor shall promptly (i) cause to be registered at the United States Copyright
Office all of its material copyrights, (ii) cause the security interest
contemplated hereby with respect to all Intellectual Property registered at the
United States Copyright Office or United States Patent and Trademark Office to
be duly recorded at the applicable office, and (iii) give the Agent notice
whenever it acquires (whether absolutely or by license) or creates any
additional material Intellectual Property.

    

     (nn)       Each
Debtor will from time to time, at the joint and several expense of the Debtors,
promptly execute and deliver all such further instruments and documents, and
take all such further action as may be necessary or desirable, or as the Agent
may reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Secured Parties to
exercise and enforce their rights and remedies hereunder and with respect to any
Collateral or to otherwise carry out the purposes of this
Agreement.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 13
      or 24

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Schedule F attached
hereto lists all of the patents, patent applications, trademarks, trademark
applications, registered copyrights, and domain names owned by any of the
Debtors as of the date hereof.  Schedule F lists all
material licenses in favor of any Debtor for the use of any patents, trademarks,
copyrights and domain names as of the date hereof.  All material
patents and trademarks of the Debtors have been duly recorded at the United
States Patent and Trademark Office and all material copyrights of the Debtors
have been duly recorded at the United States Copyright Office.

     

    5.           Effect of Pledge on Certain
Rights. If any of the Collateral subject to this Agreement
consists of nonvoting equity or ownership interests (regardless of class,
designation, preference or rights) that may be converted into voting equity or
ownership interests upon the occurrence of certain events (including, without
limitation, upon the transfer of all or any of the other stock or assets of the
issuer), it is agreed that the pledge of such equity or ownership interests
pursuant to this Agreement or the enforcement of any of Agent’s rights hereunder
shall not be deemed to be the type of event which would trigger such conversion
rights notwithstanding any provisions in the Organizational Documents or
agreements to which any Debtor is subject or to which any Debtor is
party.

    

    6.           
Defaults. The following
events shall be “Events of
Default”:

    

    (a)   
The occurrence of an Event of Default (as defined in the Debentures) under the
Debentures;

    

    (b)   
Any representation or warranty of any Debtor in this Agreement shall prove to
have been incorrect in any material respect when made;

    

    (c)   
The failure by any Debtor to observe or perform any of its obligations hereunder
for five (5) days after delivery to such Debtor of notice of such failure by or
on behalf of a Secured Party unless such default is capable of cure but cannot
be cured within such time frame and such Debtor is using best efforts to cure
same in a timely fashion; or

    

    (d)   
If any provision of this Agreement shall at any time for any reason be declared
to be null and void, or the validity or enforceability thereof shall be
contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by
any governmental authority having jurisdiction over any Debtor, seeking to
establish the invalidity or unenforceability thereof, or any Debtor shall deny
that any Debtor has any liability or obligation purported to be created under
this Agreement.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 14
      or 24

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.            Duty To Hold In
Trust.

    (a)           Upon
the occurrence of any Event of Default and at any time thereafter, each Debtor
shall, upon receipt of any revenue, income,
dividend, interest or other sums subject to the Security Interests,
whether payable pursuant to the Debentures or otherwise, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay any
such sum, hold the same in trust for the Secured Parties and shall forthwith
endorse and transfer any such sums or instruments, or both, to the Secured
Parties, pro-rata in proportion to their respective then-currently outstanding
principal amount of Debentures for application to the satisfaction of the
Obligations (and if any Debenture is not outstanding, pro-rata in proportion to
the initial purchases of the remaining Debentures).

    

    (b)           If any Debtor shall become entitled to receive or shall
receive any securities or other property (including, without limitation, shares
of Pledged Securities or instruments representing Pledged Securities acquired
after the date hereof, or any options, warrants, rights or other similar
property or certificates representing a dividend, or any distribution in
connection with any recapitalization, reclassification or increase or reduction
of capital, or issued in connection with any reorganization of such Debtor or
any of its direct or indirect subsidiaries) in respect of the Pledged Securities
(whether as an addition to, in substitution of, or in exchange for, such Pledged
Securities or otherwise), such Debtor agrees to (i) accept the same as the agent
of the Secured Parties; (ii) hold the same in trust on behalf of and for the
benefit of the Secured Parties; and (iii) to deliver any and all certificates or
instruments evidencing the same to Agent on or before the close of business on
the fifth business day following the receipt thereof by such Debtor, in the
exact form received together with the Necessary Endorsements, to be held by
Agent subject to the terms of this Agreement as Collateral.

    

    8.            Rights and Remedies Upon
Default.

    

    (a)           Upon
the occurrence of any Event of Default and at any time thereafter, the Secured
Parties, acting through the Agent, shall have the right to exercise all of the
remedies conferred hereunder and under the Debentures, and the Secured Parties
shall have all the rights and remedies of a secured party under the
UCC.  Without limitation, the Agent, for the benefit of the Secured
Parties, shall have the following rights and powers:

    

    (i)         The
Agent shall have the right to take possession of the Collateral and, for that
purpose, enter, with the aid and assistance of any person, any premises where
the Collateral, or any part thereof, is or may be placed and remove the same,
and each Debtor shall assemble the Collateral and make it available to the Agent
at places which the Agent shall reasonably select, whether at such Debtor's
premises or elsewhere, and make available to the Agent, without rent, all of
such Debtor’s respective premises and facilities for the purpose of the Agent
taking possession of, removing or putting the Collateral in saleable or
disposable form.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 15
      or 24

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)        Upon notice to the Debtors by Agent, all rights of each
Debtor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise and all rights of each Debtor to receive the
dividends and interest which it would otherwise be authorized to receive and
retain, shall cease.  Upon such notice, Agent shall have the right to
receive, for the benefit of the Secured Parties, any interest, cash dividends or
other payments on the Collateral and, at the option of Agent, to exercise in
such Agent’s discretion all voting rights pertaining thereto.  Without
limiting the generality of the foregoing, Agent shall have the right (but not
the obligation) to exercise all rights with respect to the Collateral as it were
the sole and absolute owner thereof, including, without limitation, to vote
and/or to exchange, at its sole discretion, any or all of the Collateral in
connection with a merger, reorganization, consolidation, recapitalization or
other readjustment concerning or involving the Collateral or any Debtor or any
of its direct or indirect subsidiaries.

    

    (iii)       The
Agent shall have the right to operate the business of each Debtor using the
Collateral and shall have the right to assign, sell, lease or otherwise dispose
of and deliver all or any part of the Collateral, at public or private sale or
otherwise, either with or without special conditions or stipulations, for cash
or on credit or for future delivery, in such parcel or parcels and at such time
or times and at such place or places, and upon such terms and conditions as the
Agent may deem commercially reasonable, all without (except as shall be required
by applicable statute and cannot be waived) advertisement or demand upon or
notice to any Debtor or right of redemption of a Debtor, which are hereby
expressly waived.  Upon each such sale, lease, assignment or other
transfer of Collateral, the Agent, for the benefit of the Secured Parties, may,
unless prohibited by applicable law which cannot be waived, purchase all or any
part of the Collateral being sold, free from and discharged of all trusts,
claims, right of redemption and equities of any Debtor, which are hereby waived
and released.

    

    (iv)       The
Agent shall have the right (but not the obligation) to notify any account
debtors and any obligors under instruments or accounts to make payments directly
to the Agent, on behalf of the Secured Parties, and to enforce the Debtors’
rights against such account debtors and obligors.

    

    (v)        The
Agent, for the benefit of the Secured Parties, may (but is not obligated to)
direct any financial intermediary or any other person or entity holding any
investment property to transfer the same to the Agent, on behalf of the Secured
Parties, or its designee.

    

    (vi)       The
Agent may (but is not obligated to) transfer any or all Intellectual Property
registered in the name of any Debtor at the United States Patent and Trademark
Office and/or Copyright Office into the name of the Secured Parties or any
designee or any purchaser of any Collateral.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 16
      or 24

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (b)           The Agent shall comply with any applicable law in
connection with a disposition of Collateral and such compliance will not be
considered adversely to affect the commercial reasonableness of any sale of the
Collateral.  The Agent may sell
the Collateral without giving any warranties and may specifically disclaim such
warranties.  If the Agent sells any of the Collateral on credit, the
Debtors will only be credited with payments actually made by the
purchaser.  In addition, each Debtor
waives any and all rights that it may have to a judicial hearing in advance of
the enforcement of any of the Agent’s rights and
remedies hereunder, including, without limitation, its right following an Event
of Default to take immediate possession of the
Collateral and to exercise its rights and remedies with respect
thereto.

     

    (c)           For the purpose of enabling the Agent to further
exercise rights and remedies under this Section 8 or elsewhere provided by
agreement or applicable law, each Debtor hereby grants to the Agent, for the
benefit of the Agent and the Secured Parties, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to such
Debtor) to use, license or sublicense following an Event of Default, any
Intellectual Property now owned or hereafter acquired by such Debtor, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout
thereof.

    

    9.             Applications of Proceeds.
After an Event of Default, the proceeds of any such sale, lease or other
disposition of the Collateral hereunder or from payments made on account of any
insurance policy insuring any portion of the Collateral shall be applied first,
to the expenses of retaking, holding, storing, processing and preparing for
sale, selling, and the like (including, without limitation, any taxes, fees and
other costs incurred in connection therewith) of the Collateral, to the
reasonable attorneys’ fees and expenses incurred by the Agent in enforcing the
Secured Parties’ rights hereunder and in connection with collecting, storing and
disposing of the Collateral, and then to satisfaction of the Obligations pro
rata among the Secured Parties (based on then-outstanding principal amounts of
Debentures at the time of any such determination), and to the payment of any
other amounts required by applicable law, after which the Secured Parties shall
pay to the applicable Debtor any surplus proceeds. If, upon the sale, license or
other disposition of the Collateral, the proceeds thereof are insufficient to
pay all amounts to which the Secured Parties are legally entitled, the Debtors
will be liable for the deficiency, together with interest thereon, at the rate
of 18% per annum or the lesser amount permitted by applicable law (the “Default Rate”), and
the reasonable fees of any attorneys employed by the Secured Parties to collect
such deficiency.  To the extent permitted by applicable law, each
Debtor waives all claims, damages and demands against the Secured Parties
arising out of the repossession, removal, retention or sale of the Collateral,
unless due solely to the gross negligence or willful misconduct of the Secured
Parties as determined by a final judgment (not subject to further appeal) of a
court of competent jurisdiction.

    

    10.           Securities Law Provision.  Each Debtor recognizes that Agent may be
limited in its ability to effect a sale to
the public of all or part of the Pledged Securities by reason of certain
prohibitions in the Securities Act of 1933, as amended, or other federal or
state securities laws (collectively, the “Securities Laws”),
and may be compelled to resort to one or more sales to a
restricted group of purchasers who may be required to agree to acquire the
Pledged Securities for their own account, for investment and not with a view to
the distribution or resale thereof.  Each Debtor agrees that sales so
made may be at prices and on terms less favorable than if the Pledged
Securities were sold to the public, and that Agent has no obligation to delay
the sale of any Pledged Securities for the period of time necessary to register
the Pledged Securities for sale to the public under the
Securities Laws.  Each Debtor shall cooperate with Agent in its
attempt to satisfy any requirements under the Securities Laws (including,
without limitation, registration thereunder if requested by Agent) applicable to
the sale of the Pledged Securities by Agent.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 17
      or 24

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    11.           Costs and Expenses. Each
Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses
incurred in connection with any filing required hereunder, including without
limitation, any financing statements pursuant to the UCC, continuation
statements, partial releases and/or termination statements related thereto or
any expenses of any searches reasonably required by the Agent.  The
Debtors shall also pay all other claims and charges which in the reasonable
opinion of the Agent is reasonably likely to prejudice, imperil or otherwise
affect the Collateral or the Security Interests therein.  The Debtors
will also, upon demand, pay to the Agent the amount of any and all reasonable
expenses, including the reasonable fees and expenses of its counsel and of any
experts and agents, which the Agent, for the benefit of the Secured Parties, may
incur in connection with (i) the enforcement of this Agreement, (ii) the custody
or preservation of, or the sale of, collection from, or other realization upon,
any of the Collateral, or (iii) the exercise or enforcement of any of the rights
of the Secured Parties under the Debentures. Until so paid, any fees payable
hereunder shall be added to the principal amount of the Debentures and shall
bear interest at the Default Rate.

    

    12.           Responsibility for Collateral.
The Debtors assume all liabilities and responsibility in connection with all
Collateral, and the Obligations shall in no way be affected or diminished by
reason of the loss, destruction, damage or theft of any of the Collateral or its
unavailability for any reason.  Without limiting the generality of the
foregoing, (a) neither the Agent nor any Secured Party (i) has any duty (either
before or after an Event of Default) to collect any amounts in respect of the
Collateral or to preserve any rights relating to the Collateral, or (ii) has any
obligation to clean-up or otherwise prepare the Collateral for sale, and (b)
each Debtor shall remain obligated and liable under each contract or agreement
included in the Collateral to be observed or performed by such Debtor
thereunder.  Neither the Agent nor any Secured Party shall have any
obligation or liability under any such contract or agreement by reason of or
arising out of this Agreement or the receipt by the Agent or any Secured Party
of any payment relating to any of the Collateral, nor shall the Agent or any
Secured Party be obligated in any manner to perform any of the obligations of
any Debtor under or pursuant to any such contract or agreement, to make inquiry
as to the nature or sufficiency of any payment received by the Agent or any
Secured Party in respect of the Collateral or as to the sufficiency of any
performance by any party under any such contract or agreement, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to the Agent or to which the
Agent or any Secured Party may be entitled at any time or times.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 18
      or 24

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    13.           Security Interests Absolute. All rights of the
Secured Parties and all obligations of the Debtors hereunder, shall be absolute
and unconditional, irrespective of: (a) any lack of validity or enforceability
of this Agreement, the Debentures or any agreement entered into in connection
with the foregoing, or any portion hereof or thereof; (b) any change in the
time, manner or place of payment or performance of, or in any other term of, all
or any of the Obligations, or any other amendment or waiver of or any consent to
any departure from the Debentures or any other agreement entered into in
connection with the foregoing; (c) any exchange, release or nonperfection of any
of the Collateral, or any release or amendment or waiver of or consent to
departure from any other collateral for, or any guarantee, or any other
security, for all or any of the Obligations; (d) any action by the Secured
Parties to obtain, adjust, settle and cancel in its sole discretion any
insurance claims or matters made or arising in connection with the Collateral;
or (e) any other circumstance which might otherwise constitute any legal or
equitable defense available to a Debtor, or a discharge of all or any part of
the Security Interests granted hereby.  Until the Obligations shall
have been paid and performed in full, the rights of the Secured Parties shall
continue even if the Obligations are barred for any reason, including, without
limitation, the running of the statute of limitations or
bankruptcy.  Each Debtor expressly waives presentment, protest, notice
of protest, demand, notice of nonpayment and demand for performance. In the
event that at any time any transfer of any Collateral or any payment received by
the Secured Parties hereunder shall be deemed by final order of a court of
competent jurisdiction to have been a voidable preference or fraudulent
conveyance under the bankruptcy or insolvency laws of the United States, or
shall be deemed to be otherwise due to any party other than the Secured Parties,
then, in any such event, each Debtor’s obligations hereunder shall survive
cancellation of this Agreement, and shall not be discharged or satisfied by any
prior payment thereof and/or cancellation of this Agreement, but shall remain a
valid and binding obligation enforceable in accordance with the terms and
provisions hereof.  Each Debtor waives all right to require the
Secured Parties to proceed against any other person or entity or to apply any Collateral which the Secured
Parties may hold at any time, or to marshal assets, or to pursue any other
remedy. Each Debtor waives any defense arising by reason of the application of
the statute of limitations to any obligation secured hereby.

    

    14.           Term of Agreement. This
Agreement and the Security Interests shall terminate on the date on which all
payments under the Debentures have been indefeasibly paid in full and all other
Obligations have been paid or discharged; provided, however, that all
indemnities of the Debtors contained in this Agreement shall survive and remain
operative and in full force and effect regardless of the termination of this
Agreement.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 19
      or 24

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    15.           Power of Attorney; Further
Assurances.

     

    (a)           Each
Debtor authorizes the Agent, and does hereby make, constitute and appoint the
Agent and its officers, agents, successors or assigns with full power of
substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in
the name of the Agent or such Debtor, to, after the occurrence and during the
continuance of an Event of Default, (i) endorse any note, checks, drafts, money
orders or other instruments of payment (including payments payable under or in
respect of any policy of insurance) in respect of the Collateral that may come
into possession of the Agent; (ii) to sign and endorse any financing statement
pursuant to the UCC or any invoice, freight or express bill, bill of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts, and other documents
relating to the Collateral; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened
against the Collateral; (iv) to demand, collect, receipt for, compromise, settle
and sue for monies due in respect of the Collateral; (v) to transfer any
Intellectual Property or provide licenses respecting any Intellectual Property;
and (vi) generally, at the option of the Agent, and at the expense of the
Debtors, at any time, or from time to time, to execute and deliver any and all
documents and instruments and to do all acts and things which the Agent deems
necessary to protect, preserve and realize upon the Collateral and the Security
Interests granted therein in order to effect the intent of this Agreement and
the Debentures all as fully and effectually as the Debtors might or could do;
and each Debtor hereby ratifies all that said attorney shall lawfully do or
cause to be done by virtue hereof.  This power of attorney is coupled
with an interest and shall be irrevocable for the term of this Agreement and
thereafter as long as any of the Obligations shall be
outstanding.  The designation set forth
herein shall be deemed to amend and supersede any inconsistent provision in the
Organizational Documents or other documents or agreements to which any Debtor is
subject or to which any Debtor is a party.  Without limiting
the generality of the foregoing, after the occurrence and during the continuance
of an Event of Default, each Secured Party is specifically authorized to execute
and file any applications for or instruments of transfer and assignment of any
patents, trademarks, copyrights or other Intellectual Property with the United
States Patent and Trademark Office and the United States Copyright
Office.

    

    (b)           On
a continuing basis, each Debtor will make, execute, acknowledge, deliver, file
and record, as the case may be, with the proper filing and recording agencies in
any jurisdiction, including, without limitation, the jurisdictions indicated on
Schedule C
attached hereto, all such instruments, and take all such action as may
reasonably be deemed necessary or advisable, or as reasonably requested by the
Agent, to perfect the Security Interests granted hereunder and otherwise to
carry out the intent and purposes of this Agreement, or for assuring and
confirming to the Agent the grant or perfection of a perfected security interest
in all the Collateral under the UCC.

     

    16.           Notices. All notices,
requests, demands and other communications hereunder shall be subject to the
notice provision of the Purchase Agreement (as such term is defined in the
Debentures).

    

    17.          Other Security. To the extent
that the Obligations are now or hereafter secured by property other than the
Collateral or by the guarantee, endorsement or property of any other person,
firm, corporation or other entity, then the Agent shall have the right, in its
sole discretion, to pursue, relinquish, subordinate, modify or take any other
action with respect thereto, without in any way modifying or affecting any of
the Secured Parties’ rights and remedies hereunder.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 20
      or 24

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

               

    18.          Miscellaneous.

    

    (a)           No
course of dealing between the Debtors and the Secured Parties, nor any failure
to exercise, nor any delay in exercising, on the part of the Secured Parties,
any right, power or privilege hereunder or under the Debentures shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder or thereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.

    

    (b)           All
of the rights and remedies of the Secured Parties with respect to the
Collateral, whether established hereby or by the Debentures or by any other
agreements, instruments or documents or by law shall be cumulative and may be
exercised singly or concurrently.

    

    (c)           This
Agreement, together with the exhibits and schedules hereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into this
Agreement and the exhibits and schedules hereto. No provision of this
Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an amendment, by the Debtors and the Secured
Parties or, in the case of a waiver, by the party against whom enforcement of
any such waived provision is sought.

    

    (d)           If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

    

    (e)           No
waiver of any default with respect to any provision, condition or requirement of
this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such
right.

    

    (f)           This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns.  The Company and the Guarantor
may not assign this Agreement or any rights or obligations hereunder without the
prior written consent of each Secured Party (other than by
merger).  Any Secured Party may assign any or all of its rights under
this Agreement to any Person to whom such Secured Party assigns or transfers any
Securities, provided such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions of this Agreement that apply to
the “Secured Parties.”

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 21
      or 24

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (g)           Each
party shall take such further action and execute and deliver such further
documents as may be necessary or appropriate in order to carry out the
provisions and purposes of this Agreement.

    

    (h)           All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of Texas, without regard to the principles
of conflicts of law thereof.  Each Debtor agrees that all proceedings
concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and the Debentures (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced exclusively in the
state and federal courts sitting in the Dallas County, Texas. Each Debtor hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in the Dallas County, Texas for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such proceeding is improper. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.  Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If any party
shall commence a proceeding to enforce any provisions of this Agreement, then
the prevailing party in such proceeding shall be reimbursed by the other party
for its reasonable attorney’s fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such proceeding.

    

    (i)           
This Agreement may be executed in any number of counterparts, each of which when
so executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.

    

    (j)           
All Debtors shall jointly and severally be liable for the obligations of each
Debtor to the Secured Parties hereunder.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 22
      or 24

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (k)           Each
Debtor shall indemnify, reimburse and hold harmless the Agent and the Secured
Parties and their respective partners, members, shareholders, officers,
directors, employees and agents (and any other persons with other titles that
have similar functions) (collectively, “Indemnitees”) from
and against any and all losses, claims, liabilities, damages, penalties, suits,
costs and expenses, of any kind or nature, (including fees relating to the cost
of investigating and defending any of the foregoing) imposed on, incurred by or
asserted against such Indemnitee in any way related to or arising from or
alleged to arise from this Agreement or the Collateral, except any such losses,
claims, liabilities, damages, penalties, suits, costs and expenses which result
from the gross negligence or willful misconduct of the Indemnitee as determined
by a final, nonappealable decision of a court of competent
jurisdiction.  This indemnification provision is in addition to, and
not in limitation of, any other indemnification provision in the Debentures, the
Purchase Agreement (as such term is defined in the Debentures) or any other
agreement, instrument or other document executed or delivered in connection
herewith or therewith.

    

    (l)           Nothing in this Agreement shall be construed to subject
any Secured Party to liability as a partner in any Debtor or any if its direct
or indirect subsidiaries that is a partnership or as a member in any Debtor or
any of its direct or indirect subsidiaries that is a limited liability company,
nor shall Agent or any Secured Party be deemed to have assumed any obligations
under any partnership agreement or limited liability company agreement, as
applicable, of any such Debtor or any if its direct or indirect subsidiaries or
otherwise, unless and until any such Secured Party exercises its right to be
substituted for such Debtor as a partner or member, as applicable, pursuant
hereto.

    

    (m)         To the extent that the grant of the security interest in
the Collateral and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of any Debtor or any
direct or indirect subsidiary of any Debtor or compliance with any provisions of
any of the Organizational Documents, the Debtors hereby grant such consent and
approval and waive any such noncompliance with the terms of said
documents.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 23
      or 24

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

           IN
WITNESS WHEREOF, the parties hereto have caused this Security Agreement to be
duly executed on the day and year first above written.

    

    

    
      
        
          
            	
                    GLEN
      ROSE PETROLEUM CORPORATION

                  
	 
      	 
      
	
                    By:

                  	
                     

                  
	 
      	
                    Name:
      Joseph F. Langston, Jr.

                  
	 
      	
                    Title:
      President

                  
	 
      	 
      
	
                    UHC
      PETROLEUM CORPORATION

                  
	 
      	 
      
	
                    By:

                  	
                     

                  
	 
      	
                    Name:  Joseph
      F. Langston, Jr.

                  
	 
      	
                    Title:    President

                  

          

        

      

    

    

    BLACKWOOD
VENTURES LLC:

    

    Signature of Investing
Entity: 

    ______________________________________________

    

    
      
        	
                Name
      of Authorized Signatory:

              	
                Andrew
      Taylor-Kimmins

              
	 
      	 
      
	
                Title
      of Authorized Signatory:

              	
                Managing
      Director

              

      

    

    

    [SIGNATURE
PAGE OF HOLDERS FOLLOWS]

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              Blackwood
      Ventures LLC Senior Secured Debenture

            	
              Page 24
      or 24

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
C

    

    FORM OF $.33
WARRANTS

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER THE ACT AND
APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.

     

    
      	
              Certificate
      No. WC-___

            	
              Warrant
      to Purchase 250,000 Shares of

            
	
              Dated:
      To be Determined

            	
              Common
      Stock (subject to adjustment)

            

    

     

    WARRANT
TO PURCHASE COMMON STOCK

    of

    GLEN
ROSE PETROLEUM CORPORATION

     

    This
certifies that, for value received, BLACKWOOD VENTURES LLC., or its registered
assigns (the “Holder”) is entitled,
subject to the terms set forth below, to purchase from Glen Rose Petroleum
Corporation, a Delaware corporation (the “Company”), up to
_________ shares of common stock, par value $0.001 per share (the “Common Stock”), as
constituted on the date hereof (the “Warrant Issue Date”),
upon surrender hereof, at the principal office of the Company referred to below,
with the Notice of Exercise form annexed hereto duly executed, and simultaneous
payment therefor in lawful money of the United States or otherwise as
hereinafter provided, at the Exercise Price set forth in Section 2 below. The
number and character of such shares of Common Stock and the Exercise Price are
subject to adjustment as provided herein. The term “Warrant” as used herein
shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein. This Warrant is being issued pursuant to
the 8.5% Senior Secured Debenture and Warrant Agreement, dated July 2, 2009), by
and between the Company and Blackwood Ventures LLC.

     

    1.           Term of Warrant. Subject to
the terms and conditions set forth herein, this Warrant shall be exercisable, in
whole or in part, during the term commencing on the Warrant Issue Date and
ending at 5:00 p.m., Eastern Standard Time, on the December 31, 2010 (the “Term”), and shall be
void thereafter.

     

    2.           Exercise Price. The exercise
price at which this Warrant may be exercised shall be $.33 per share of Common
Stock (the “Exercise
Price”), as such Exercise Price may be adjusted from time to time
pursuant to Section 11 hereof.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page
      1 or 11

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    3.           Number of
Warrants.  The number of warrants shall equal one share for
each four shares of Glen Rose Petroleum Corporation issued pursuant to the
conversion of the 8.5% Senior Secured Debenture dated July 2,
2009.  The Warrant Issue Date shall be the date upon which any such
warrant is issued.

     

    4.           Vesting and Exercise of
Warrant.

     

    (a)            Exercisability.
Notwithstanding anything herein to the contrary, this Warrant will only become
exercisable (“Vest”) when the Company has obtained shareholder approval of this
Warrant in accordance with applicable federal securities laws and the rules and
regulations of any national securities exchange or inter-dealer quotation system
upon which the Company’s Common Stock is then traded.

     

    (b)            Exercise of
Warrant.

     

    (i)           Method of Exercise. Subject
to section 3(a) above, the purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, at any time, or from time to
time, during the Term, by the surrender of this Warrant and the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder, at
the principal office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company), upon payment in cash by wire
transfer or by check acceptable to the Company of the purchase price of the
shares to be purchased.

     

    (ii)           Net Issue Exercise.
Notwithstanding any provisions herein to the contrary, if the fair market
value of one share of Common Stock is greater than the Exercise Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant for
cash, the Holder may elect to receive shares equal to the value (as determined
below) of this Warrant (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company together with the properly
endorsed Notice of Exercise and notice of such election, in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page
      2 or 11

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  X
      = 

                	
                    Y (A-B) 

                	 
      
	
                        
       A

                	 
      
	 
      	 
      	 
      	 
      
	
                  Where

                	
                  X

                	
                  =

                	
                  The
      number of shares of Common Stock to be issued to the
  Holder

                
	 
      	 
      	 
      	 
      
	 
      	
                  Y

                	
                  =

                	
                  the
      number of shares of Common Stock purchasable under this Warrant or, if
      only a portion of this Warrant is being exercised, the portion of this
      Warrant being canceled (at the date of such
calculation)

                
	 
      	 
      	 
      	 
      
	 
      	
                  A

                	
                  =

                	
                  the
      fair market value of one share of the Common Stock (at the date of such
      calculation)

                
	 
      	 
      	 
      	 
      
	 
      	
                  B

                	
                  =

                	
                  Exercise
      Price (as adjusted to the date of such
  calculation).

                

        

      

    

    

    For
purposes of the above calculation, fair market value of one share of Common
Stock shall be determined by the Company’s Board of Directors in good faith;
provided, however, that where there exists a public market for the Common Stock
at the time of such exercise, the fair market value of one share of Common Stock
shall be the average of the closing bid and asked prices of the Common Stock
quoted in the Over-The-Counter Market Summary or the last reported sale price of
the Common Stock or the closing price quoted on the Nasdaq Capital Market or on
any exchange on which the Common Stock is listed, whichever is applicable, as
reported by Bloomberg L.P. for the five (5) trading days prior to the date of
the Company’s receipt of this Warrant and delivery of the properly endorsed
Notice of Exercise and notice of Holder’s election to exercise without
cash.

     

    (c)            Issuance of Shares. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the Warrant Shares issuable upon such exercise shall
be treated for all purposes as the holder of record of such shares as of the
close of business on such date. As promptly as practicable on or after such date
and in any event within ten (10) days thereafter, the Company at its expense
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of Warrant Shares issuable upon such
exercise. In the event that this Warrant is exercised in part, the Company at
its expense will execute and deliver a new Warrant of like tenor exercisable for
the remaining number of Warrant Shares for which this Warrant may then be
exercised.

     

    5.           No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. In lieu of any fractional share to
which the Holder would otherwise be entitled (after aggregating all shares that
are being issued upon such exercise), the Company shall make a cash payment
equal to the Exercise Price multiplied by such fraction.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page
      3 or 11

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6.           Replacement of Warrant. On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement reasonably satisfactory in
form and substance to the Company or, in the case of mutilation, on surrender
and cancellation of this Warrant, the Company at its expense shall execute and
deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.

     

    7.           Rights of Stockholders.
Subject to Sections 10 and 12 of this Warrant, the Holder shall not be
entitled to vote or receive dividends or be deemed the holder of the Warrant
Shares or any other securities of the Company that may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, or change of stock to no
par value, consolidation, merger, conveyance, or otherwise) or to receive notice
of meetings, or to receive dividends or subscription rights or otherwise until
this Warrant shall have been exercised as provided herein.

     

    8.           Transfer of
Warrant.

     

    (a)            Warrant Register. The Company
will maintain a register (the “Warrant Register”)
containing the names and addresses of the Holder or Holders. Any Holder of this
Warrant or any portion thereof may change its address as shown on the Warrant
Register by written notice to the Company requesting such change. Any notice or
written communication required or permitted to be given to the Holder may be
delivered or given by mail to such Holder as shown on the Warrant Register and
at the address shown on the Warrant Register. Until this Warrant is transferred
on the Warrant Register of the Company, the Company may treat the Holder as
shown on the Warrant Register as the absolute owner of this Warrant for all
purposes, notwithstanding any notice to the contrary.

     

    (b)            Warrant Agent. The Company
may, by written notice to the Holder, appoint an agent for the purpose of
maintaining the Warrant Register referred to in Section 7(a) above, issuing the
Warrant Shares or other securities then issuable upon the exercise of this
Warrant, exchanging this Warrant, replacing this Warrant, or any or all of the
foregoing (the “Warrant Agent”).
Thereafter, any such registration, issuance, exchange or replacement, as the
case may be, shall be made at the office of the Warrant Agent.

     

    (c)            Transferability and Negotiability of
Warrant. This Warrant may not be transferred or assigned in whole or in
part without compliance with all applicable federal and state securities laws by
the transferor and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the “Act”), title to this
Warrant may be transferred by endorsement (by the Holder executing the
Assignment Form annexed hereto) and delivery in the same manner as a negotiable
instrument transferable by endorsement and delivery.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page 4 or
      11

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)            Exchange of Warrant Upon a Transfer.
Upon surrender of this Warrant for exchange, properly endorsed on the
Assignment Form and subject to the provisions of this Warrant with respect to
compliance with the Act and with the limitations on assignments and transfers
contained in this Section 7, the Company at its expense shall issue to or on the
order of the Holder a new warrant or warrants of like tenor, in the name of the
Holder or as the Holder (on payment by the Holder of any applicable transfer
taxes) may direct, for the number of shares issuable upon exercise
hereof.

     

    (e)            Compliance with Securities
Laws.

     

    (i)           The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the Warrant Shares to be issued upon exercise hereof are being acquired for
investment purposes, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof
except under circumstances that will not result in a violation of the Act or any
state securities laws.

     

    (ii)           This
Warrant and all Warrant Shares issued upon exercise hereof or conversion thereof
shall be stamped or imprinted with a legend in substantially the following form
(in addition to any legend required by state securities laws):

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.

    

    9.           Reservation of Stock. The
Company covenants that during the Term, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of this Warrant and,
from time to time, will take all steps necessary to amend its Certificate or
Articles of Incorporation (the “Certificate”) to
provide sufficient reserves of Warrant Shares issuable upon exercise of this
Warrant. The Company further covenants that all Warrant Shares that may be
issued upon the exercise of rights represented by this Warrant and payment of
the Exercise Price, all as set forth herein will be duly and validly authorized
and issued, fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously therewith). The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of this
Warrant.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page 5 or
      11

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    10.           Notices.

     

    (a)            Whenever
the Exercise Price or the shares purchasable hereunder shall be adjusted
pursuant to Section 11 hereof, the Company shall issue a certificate signed by
its Chief Financial Officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Exercise Price and the shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of such
certificate to be mailed (by first-class mail, postage prepaid) to the Holder of
this Warrant.

     

    (b)            In
case:

     

    (i)           the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant) for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

     

    (ii)           of
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consolidation or merger of the Company with or into
another corporation or entity, or any conveyance of all or substantially all of
the assets of the Company to another corporation or entity, or

     

    (iii)           of
any voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

     

    then, and
in each such case, the Company will mail or cause to be mailed to the Holder or
Holders a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
con-veyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 20
days prior to the record date specified in (A) above or 30 days prior to the
date specified in (B) above.

     

    11.           Amendments and
Waivers.

     

    (a)            Except
as provided in Section 10(b) below, this Warrant, or any provision hereof, may
be amended, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page 6 or
      11

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (b)            Any
term or condition of this Warrant may be amended with the written consent of the
Company and the Holder. Any amendment effected in accordance with this Section
10(b) shall be binding upon the Holder and each future holder of this Warrant
and the Company.

     

    (c)            No
waivers of, or exceptions to, any term, condition or provision of this Warrant,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.

     

    12.           Adjustments. The Exercise
Price and the shares purchasable hereunder are subject to adjustment from time
to time as follows:

     

    (a)            Merger, Sale of Assets, etc.
If at any time while this Warrant is outstanding and unexpired there shall be
(i) a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or (iii) a sale or transfer of the
Company’s properties and assets as, or substantially as, an entirety to any
other corporation or other entity, then, as a part of such reorganization,
merger, consolidation, sale or transfer, lawful provision shall be made so that
the holder of this Warrant shall thereafter be entitled to receive upon exercise
of this Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares of stock or other securities
or property of the successor corporation or other entity resulting from such
reorganization, merger, consolidation, merger, sale or transfer that a holder of
the shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 11. The foregoing provision of this Section 11(a) shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation or other
entity that are at the time receivable upon the exercise of this Warrant. If the
per-share consideration payable to the Holder for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
fair market value of such consideration shall be determined in accordance with
Section 3(b)(ii). In all events, appropriate adjustment (as determined in good
faith by the Company’s Board of Directors) shall be made in the application of
the provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.

     

    (b)            Reclassification, etc. If the
Company, at any time while this Warrant remains outstanding and unexpired, by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 11.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page 7 or
      11

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)            Split, Subdivision or Combination of
Shares. If the Company at any time while this Warrant remains outstanding
and unexpired shall split, subdivide or combine the securities as to which
purchase rights under this Warrant exist, into a different number of securities
of the same class, the Exercise Price for such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination and the number of such
securities shall be proportionately increased in the case of a split or
subdivision or proportionately decreased in the case of a
combination.

     

    (d)            Adjustments for Dividends in Stock
or other Securities or Property. If while this Warrant remains
outstanding and unexpired, the holders of the securities as to which purchase
rights under this Warrant exist (including without limitation securities into
which such securities may be converted) at the time shall have received, or, on
or after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock or other securities or property (other than cash) of the
Company by way of dividend, then and in each case, this Warrant shall represent
the right to acquire, in addition to the number of shares of the security
receivable upon exercise of this Warrant, and without payment of any additional
consideration therefor, the amount of such other or additional stock or other
securities or property (other than cash) of the Company that such holder would
hold on the date of such exercise had it been the holder of record of the
security receivable upon exercise of this Warrant (or upon such conversion) on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 11.

     

    (e)            Calculations. All
calculations under this Section 11 shall be made to the nearest four decimal
points.

     

    (f)            No Impairment. The Company
will not, by amendment of its charter or through reorganization, consolidation,
merger, dissolution, sale of assets or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against
impairment.

     

    13.           Saturdays, Sundays and
Holidays. If the last or appointed day for the taking of any action or
the expiration of any right granted herein shall be a Saturday, Sunday or legal
holiday, then (notwithstanding anything herein to the contrary) such action may
be taken or such right may be exercised on the next succeeding day that is not a
Saturday, Sunday or legal holiday.

     

    14.           Governing Law. This Warrant
shall be governed by and construed in accordance with the laws of the State of
Delaware applicable to agreements made and to be performed entirely within such
State, without regard to the conflicts of law principles of such
State.

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page 8 or
      11

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    15.           Binding Effect. The terms of
this Warrant shall be binding upon and inure to the benefit of the Company and
the Holder and their respective successors and assigns.

      

    IN WITNESS WHEREOF, Glen Rose
Petroleum Corporation has caused this Warrant to be executed by its officers
thereunto duly authorized.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Dated:
      

                                      	 	 
      	 
      
	 
      	 	 
      	 
      
	 	 	 
	
                                        HOLDER: BLACKWOOD
      VENTURES

                                        LLC

                                      	 	
                                        GLEN
      ROSE PETROLEUM

                                        CORPORATION

                                      
	 
      	 
      	 	 
      	 
      
	
                                        By:

                                      	 
      	 	
                                        By:

                                      	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	
                                        Name:
      Walter Reissman

                                        Its:
      Authorized Signatory

                                      	 	 
      	
                                        Name:  Joseph
      F. Langston

                                        Title:  President

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page 9 or
      11

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTICE
OF EXERCISE

     

    (1)           The
undersigned hereby (A) elects to purchase _______ shares of Common Stock of
GLEN ROSE PETROLEUM
CORPORATION, pursuant to the provisions of Section 3(b)(i) of the
attached Warrant, and tenders herewith payment of the purchase price for such
shares in full, or (B) elects to exercise this Warrant for the purchase
of_______ shares of Common Stock, pursuant to the provisions of Section 3(b)(ii)
of the attached Warrant.

     

    (2)           In
exercising this Warrant, the undersigned hereby confirms and acknowledges that
the shares of Common Stock to be issued upon exercise hereof are being acquired
for investment purposes, and that the undersigned will not offer, sell or
otherwise dispose of any such shares of Common Stock except under circumstances
that will not result in a violation of the Securities Act of 1933, as amended,
or any applicable state securities laws.

     

    (3)           Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:

     

    
      
        
          
            
              	
                        

                    
	
                      (Name)

                    
	 
      
	 
      
	
                      (Name)

                    

            

          

        

      

    

     

    (4)           Please
issue a new Warrant for the unexercised portion of the attached Warrant in the
name of the undersigned or in such other name as is specified
below:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	 	 	 	 
	 
      	 
      	 
      	 
      	
                                      (Name)

                                    
	 	 
      	 
      	
                                        

                                    	 
      	 
      
	
                                      (Date)

                                    	 
      	
                                      (Signature)

                                    	 
      	 
      

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    17

    

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page 10 or
      11

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

      
        

      

    

     

    ASSIGNMENT

     

    FOR VALUE RECEIVED, the
undersigned registered owner of this Warrant hereby sells, assigns and transfers
unto the Assignee named below all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Common Stock set forth
below:

     

    
      
        	
                Name
      of Assignee

              	
                Address

              	
                No.
      of Shares

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

    

    

    and does
hereby irrevocably constitute and appoint ____________________________ Attorney
to make such transfer on the books of GLEN ROSE PETROLEUM
CORPORATION, maintained for the purpose, with full power of substitution
in the premises.

     

    The
undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the shares of stock to be issued upon
exercise hereof are being acquired for investment purposes, and that the
Assignee will not offer, sell or otherwise dispose of this Warrant or any shares
of stock to be issued upon exercise hereof except under circumstances which will
not result in a violation of the Securities Act of 1933, as amended, or any
applicable state securities laws.

    

    Dated:
_________________________

     

    
      
        
          
            
              
                	
                          

                      
	
                        Signature
      of
Holder

                      

              

            

          

        

      

    

     

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.33
      Glen Rose Petroleum Warrants expiring December 31, 2010

            	
              Page 11 or
      11

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    EXHIBIT
D

    

    FORM OF $.67
WARRANTS

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO UNDER THE ACT AND
APPLICABLE LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND APPLICABLE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.

      

    
      	
              Certificate
      No. WC-___

            	
              Warrant
      to Purchase 250,000 Shares of

            
	
              Dated:
      To be Determined

            	
              Common
      Stock (subject to adjustment)

            

    

     

    WARRANT
TO PURCHASE COMMON STOCK

    of

    GLEN
ROSE PETROLEUM CORPORATION

     

    This
certifies that, for value received, BLACKWOOD VENTURES LLC., or its registered
assigns (the “Holder”) is entitled,
subject to the terms set forth below, to purchase from Glen Rose Petroleum
Corporation, a Delaware corporation (the “Company”), up to
_________ shares of common stock, par value $0.001 per share (the “Common Stock”), as
constituted on the date hereof (the “Warrant Issue Date”),
upon surrender hereof, at the principal office of the Company referred to below,
with the Notice of Exercise form annexed hereto duly executed, and simultaneous
payment therefor in lawful money of the United States or otherwise as
hereinafter provided, at the Exercise Price set forth in Section 2 below. The
number and character of such shares of Common Stock and the Exercise Price are
subject to adjustment as provided herein. The term “Warrant” as used herein
shall include this Warrant and any warrants delivered in substitution or
exchange therefor as provided herein. This Warrant is being issued pursuant to
the 8.5% Senior Secured Debenture and Warrant Agreement, dated July 2, 2009), by
and between the Company and Blackwood Ventures LLC.

     

    1.           Term of Warrant. Subject to
the terms and conditions set forth herein, this Warrant shall be exercisable, in
whole or in part, during the term commencing on the Warrant Issue Date and
ending at 5:00 p.m., Eastern Standard Time, on the July 2, 2012 (the “Term”), and shall be
void thereafter.

     

    2.           Exercise Price. The exercise
price at which this Warrant may be exercised shall be $.67 per share of Common
Stock (the “Exercise
Price”), as such Exercise Price may be adjusted from time to time
pursuant to Section 11 hereof.

     

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 1 or
      11

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    

    3.           Number of
Warrants.  The number of warrants shall equal one share for
each four shares of Glen Rose Petroleum Corporation issued pursuant to the
conversion of the 8.5% Senior Secured Debenture dated July 2,
2009.  The Warrant Issue Date shall be the date upon which any such
warrant is issued.

     

    4.           Vesting and Exercise of
Warrant.

     

    (a)            Exercisability.
Notwithstanding anything herein to the contrary, this Warrant will only become
exercisable (“Vest”) when the Company has obtained shareholder approval of this
Warrant in accordance with applicable federal securities laws and the rules and
regulations of any national securities exchange or inter-dealer quotation system
upon which the Company’s Common Stock is then traded.

     

    (b)            Exercise of
Warrant.

     

    (i)           Method of Exercise. Subject
to section 3(a) above, the purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part, at any time, or from time to
time, during the Term, by the surrender of this Warrant and the Notice of
Exercise annexed hereto duly completed and executed on behalf of the Holder, at
the principal office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company), upon payment in cash by wire
transfer or by check acceptable to the Company of the purchase price of the
shares to be purchased.

     

    (ii)           Net Issue Exercise.
Notwithstanding any provisions herein to the contrary, if the fair market
value of one share of Common Stock is greater than the Exercise Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant for
cash, the Holder may elect to receive shares equal to the value (as determined
below) of this Warrant (or the portion thereof being canceled) by surrender of
this Warrant at the principal office of the Company together with the properly
endorsed Notice of Exercise and notice of such election, in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:

     

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 2
      or 11

              

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  X
      = 

                	
                    Y (A-B) 

                	 
      
	
                        
       A

                	 
      
	 
      	 
      	 
      	 
      
	
                  Where

                	
                  X

                	
                  =

                	
                  The
      number of shares of Common Stock to be issued to the
  Holder

                
	 
      	 
      	 
      	 
      
	 
      	
                  Y

                	
                  =

                	
                  the
      number of shares of Common Stock purchasable under this Warrant or, if
      only a portion of this Warrant is being exercised, the portion of this
      Warrant being canceled (at the date of such
calculation)

                
	 
      	 
      	 
      	 
      
	 
      	
                  A

                	
                  =

                	
                  the
      fair market value of one share of the Common Stock (at the date of such
      calculation)

                
	 
      	 
      	 
      	 
      
	 
      	
                  B

                	
                  =

                	
                  Exercise
      Price (as adjusted to the date of such
  calculation).

                

        

      

    

    

    For
purposes of the above calculation, fair market value of one share of Common
Stock shall be determined by the Company’s Board of Directors in good faith;
provided, however, that where there exists a public market for the Common Stock
at the time of such exercise, the fair market value of one share of Common Stock
shall be the average of the closing bid and asked prices of the Common Stock
quoted in the Over-The-Counter Market Summary or the last reported sale price of
the Common Stock or the closing price quoted on the Nasdaq Capital Market or on
any exchange on which the Common Stock is listed, whichever is applicable, as
reported by Bloomberg L.P. for the five (5) trading days prior to the date of
the Company’s receipt of this Warrant and delivery of the properly endorsed
Notice of Exercise and notice of Holder’s election to exercise without
cash.

     

    (c)            Issuance of Shares. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the Warrant Shares issuable upon such exercise shall
be treated for all purposes as the holder of record of such shares as of the
close of business on such date. As promptly as practicable on or after such date
and in any event within ten (10) days thereafter, the Company at its expense
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of Warrant Shares issuable upon such
exercise. In the event that this Warrant is exercised in part, the Company at
its expense will execute and deliver a new Warrant of like tenor exercisable for
the remaining number of Warrant Shares for which this Warrant may then be
exercised.

     

    5.           No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall be
issued upon the exercise of this Warrant. In lieu of any fractional share to
which the Holder would otherwise be entitled (after aggregating all shares that
are being issued upon such exercise), the Company shall make a cash payment
equal to the Exercise Price multiplied by such fraction.

     

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 3
      or 11

              

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    6.           Replacement of Warrant. On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, on delivery of an indemnity agreement reasonably satisfactory in
form and substance to the Company or, in the case of mutilation, on surrender
and cancellation of this Warrant, the Company at its expense shall execute and
deliver, in lieu of this Warrant, a new warrant of like tenor and
amount.

     

    7.           Rights of Stockholders.
Subject to Sections 10 and 12 of this Warrant, the Holder shall not be
entitled to vote or receive dividends or be deemed the holder of the Warrant
Shares or any other securities of the Company that may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be
construed to confer upon the Holder, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof or to give or withhold
consent to any corporate action (whether upon any recapitalization, issuance of
stock, reclassification of stock, change of par value, or change of stock to no
par value, consolidation, merger, conveyance, or otherwise) or to receive notice
of meetings, or to receive dividends or subscription rights or otherwise until
this Warrant shall have been exercised as provided herein.

     

    8.           Transfer of
Warrant.

     

    (a)            Warrant Register. The Company
will maintain a register (the “Warrant Register”)
containing the names and addresses of the Holder or Holders. Any Holder of this
Warrant or any portion thereof may change its address as shown on the Warrant
Register by written notice to the Company requesting such change. Any notice or
written communication required or permitted to be given to the Holder may be
delivered or given by mail to such Holder as shown on the Warrant Register and
at the address shown on the Warrant Register. Until this Warrant is transferred
on the Warrant Register of the Company, the Company may treat the Holder as
shown on the Warrant Register as the absolute owner of this Warrant for all
purposes, notwithstanding any notice to the contrary.

     

    (b)            Warrant
Agent. The Company may, by written notice to the Holder, appoint an agent
for the purpose of maintaining the Warrant Register referred to in Section 7(a)
above, issuing the Warrant Shares or other securities then issuable upon the
exercise of this Warrant, exchanging this Warrant, replacing this Warrant, or
any or all of the foregoing (the “Warrant Agent”).
Thereafter, any such registration, issuance, exchange or replacement, as the
case may be, shall be made at the office of the Warrant Agent.

     

    (c)            Transferability and Negotiability of
Warrant. This Warrant may not be transferred or assigned in whole or in
part without compliance with all applicable federal and state securities laws by
the transferor and the transferee (including the delivery of investment
representation letters and legal opinions reasonably satisfactory to the
Company, if such are requested by the Company). Subject to the provisions of
this Warrant with respect to compliance with the Securities Act of 1933, as
amended (the “Act”), title to this
Warrant may be transferred by endorsement (by the Holder executing the
Assignment Form annexed hereto) and delivery in the same manner as a negotiable
instrument transferable by endorsement and
delivery.
  

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 4
      or 11

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (d)            Exchange of Warrant Upon a Transfer.
Upon surrender of this Warrant for exchange, properly endorsed on the
Assignment Form and subject to the provisions of this Warrant with respect to
compliance with the Act and with the limitations on assignments and transfers
contained in this Section 7, the Company at its expense shall issue to or on the
order of the Holder a new warrant or warrants of like tenor, in the name of the
Holder or as the Holder (on payment by the Holder of any applicable transfer
taxes) may direct, for the number of shares issuable upon exercise
hereof.

     

    (e)            Compliance with Securities
Laws.

     

    (i)           The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the Warrant Shares to be issued upon exercise hereof are being acquired for
investment purposes, and that the Holder will not offer, sell or otherwise
dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof
except under circumstances that will not result in a violation of the Act or any
state securities laws.

     

    (ii)           This
Warrant and all Warrant Shares issued upon exercise hereof or conversion thereof
shall be stamped or imprinted with a legend in substantially the following form
(in addition to any legend required by state securities laws):

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT THERETO UNDER SUCH ACT AND APPLICABLE LAWS OR
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND APPLICABLE LAWS
OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.

    

    9.           Reservation of Stock. The
Company covenants that during the Term, the Company will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of the Warrant Shares upon the exercise of this Warrant and,
from time to time, will take all steps necessary to amend its Certificate or
Articles of Incorporation (the “Certificate”) to
provide sufficient reserves of Warrant Shares issuable upon exercise of this
Warrant. The Company further covenants that all Warrant Shares that may be
issued upon the exercise of rights represented by this Warrant and payment of
the Exercise Price, all as set forth herein will be duly and validly authorized
and issued, fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in respect of any
transfer occurring contemporaneously therewith). The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of this
Warrant.

     

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 5
      or 11

              

      

       

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    10.           Notices.

     

    (a)           Whenever
the Exercise Price or the shares purchasable hereunder shall be adjusted
pursuant to Section 11 hereof, the Company shall issue a certificate signed by
its Chief Financial Officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated, and the Exercise Price and the shares purchasable
hereunder after giving effect to such adjustment, and shall cause a copy of such
certificate to be mailed (by first-class mail, postage prepaid) to the Holder of
this Warrant.

     

    (b)           In
case:

     

    (i)           the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant) for the
purpose of entitling them to receive any dividend or other distribution, or any
right to subscribe for or purchase any shares of stock of any class or any other
securities, or to receive any other right, or

     

    (ii)           of
any capital reorganization of the Company, any reclassification of the capital
stock of the Company, any consolidation or merger of the Company with or into
another corporation or entity, or any conveyance of all or substantially all of
the assets of the Company to another corporation or entity, or

     

    (iii)           of
any voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

     

    then, and
in each such case, the Company will mail or cause to be mailed to the Holder or
Holders a notice specifying, as the case may be, (A) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or (B)
the date on which such reorganization, reclassification, consolidation, merger,
con-veyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock
(or such stock or securities at the time receivable upon the exercise of this
Warrant) shall be entitled to exchange their shares of Common Stock (or such
other stock or securities) for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 20
days prior to the record date specified in (A) above or 30 days prior to the
date specified in (B) above.

     

    11.           Amendments and
Waivers.

     

    (a)           Except
as provided in Section 10(b) below, this Warrant, or any provision hereof, may
be amended, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.

    

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 6
      or 11

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (b)           Any
term or condition of this Warrant may be amended with the written consent of the
Company and the Holder. Any amendment effected in accordance with this Section
10(b) shall be binding upon the Holder and each future holder of this Warrant
and the Company.

     

    (c)           No
waivers of, or exceptions to, any term, condition or provision of this Warrant,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision.

     

    12.           Adjustments. The Exercise
Price and the shares purchasable hereunder are subject to adjustment from time
to time as follows:

     

    (a)           Merger, Sale of Assets, etc.
If at any time while this Warrant is outstanding and unexpired there shall be
(i) a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein), (ii) a merger or
consolidation of the Company with or into another corporation in which the
Company is not the surviving entity, or (iii) a sale or transfer of the
Company’s properties and assets as, or substantially as, an entirety to any
other corporation or other entity, then, as a part of such reorganization,
merger, consolidation, sale or transfer, lawful provision shall be made so that
the holder of this Warrant shall thereafter be entitled to receive upon exercise
of this Warrant, during the period specified herein and upon payment of the
Exercise Price then in effect, the number of shares of stock or other securities
or property of the successor corporation or other entity resulting from such
reorganization, merger, consolidation, merger, sale or transfer that a holder of
the shares deliverable upon exercise of this Warrant would have been entitled to
receive in such reorganization, consolidation, merger, sale or transfer if this
Warrant had been exercised immediately before such reorganization, merger,
consolidation, sale or transfer, all subject to further adjustment as provided
in this Section 11. The foregoing provision of this Section 11(a) shall
similarly apply to successive reorganizations, consolidations, mergers, sales
and transfers and to the stock or securities of any other corporation or other
entity that are at the time receivable upon the exercise of this Warrant. If the
per-share consideration payable to the Holder for shares in connection with any
such transaction is in a form other than cash or marketable securities, then the
fair market value of such consideration shall be determined in accordance with
Section 3(b)(ii). In all events, appropriate adjustment (as determined in good
faith by the Company’s Board of Directors) shall be made in the application of
the provisions of this Warrant with respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of this Warrant
shall be applicable after that event, as near as reasonably may be, in relation
to any shares or other property deliverable after that event upon exercise of
this Warrant.

     

    (b)           Reclassification, etc. If the
Company, at any time while this Warrant remains outstanding and unexpired, by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Warrant exist into the same or a
different number of securities of any other class or classes, this Warrant shall
thereafter represent the right to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities that were subject to the purchase rights under this Warrant
immediately prior to such reclassification or other change and the Exercise
Price therefor shall be appropriately adjusted, all subject to further
adjustment as provided in this Section 11.

     

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
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      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 7
      or 11

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (c)           Split, Subdivision or Combination of
Shares. If the Company at any time while this Warrant remains outstanding
and unexpired shall split, subdivide or combine the securities as to which
purchase rights under this Warrant exist, into a different number of securities
of the same class, the Exercise Price for such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination and the number of such
securities shall be proportionately increased in the case of a split or
subdivision or proportionately decreased in the case of a
combination.

     

    (d)           Adjustments for Dividends in Stock
or other Securities or Property. If while this Warrant remains
outstanding and unexpired, the holders of the securities as to which purchase
rights under this Warrant exist (including without limitation securities into
which such securities may be converted) at the time shall have received, or, on
or after the record date fixed for the determination of eligible stockholders,
shall have become entitled to receive, without payment therefor, other or
additional stock or other securities or property (other than cash) of the
Company by way of dividend, then and in each case, this Warrant shall represent
the right to acquire, in addition to the number of shares of the security
receivable upon exercise of this Warrant, and without payment of any additional
consideration therefor, the amount of such other or additional stock or other
securities or property (other than cash) of the Company that such holder would
hold on the date of such exercise had it been the holder of record of the
security receivable upon exercise of this Warrant (or upon such conversion) on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock available by it as aforesaid during such period, giving effect
to all adjustments called for during such period by the provisions of this
Section 11.

     

    (e)           Calculations. All
calculations under this Section 11 shall be made to the nearest four decimal
points.

     

    (f)           No Impairment. The Company
will not, by amendment of its charter or through reorganization, consolidation,
merger, dissolution, sale of assets or any other voluntary action, avoid or seek
to avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such action as may be necessary or appropriate in order to
protect the rights of the holder of this Warrant against
impairment.

     

    13.           Saturdays, Sundays and
Holidays. If the last or appointed day for the taking of any action or
the expiration of any right granted herein shall be a Saturday, Sunday or legal
holiday, then (notwithstanding anything herein to the contrary) such action may
be taken or such right may be exercised on the next succeeding day that is not a
Saturday, Sunday or legal holiday.

     

    14.           Governing Law. This Warrant
shall be governed by and construed in accordance with the laws of the State of
Delaware applicable to agreements made and to be performed entirely within such
State, without regard to the conflicts of law principles of such
State.

     

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 8
      or 11

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    15. Binding Effect. The terms of
this Warrant shall be binding upon and inure to the benefit of the Company and
the Holder and their respective successors and assigns.

      

    IN WITNESS WHEREOF, Glen Rose
Petroleum Corporation has caused this Warrant to be executed by its officers
thereunto duly authorized.

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Dated:

                              	 	 
      	 
      
	 
      	 	 
      	 
      
	 
      	 
      	 	 
      	 
      
	
                                HOLDER: BLACKWOOD
      VENTURES

                                LLC

                              	 	
                                GLEN
      ROSE PETROLEUM

                                CORPORATION

                              
	 
      	 
      	 	 
      	 
      
	
                                By:

                              	 
      	 	
                                By:

                              	 
      
	 
      	 	 
      	 	 
      	 	 
      
	 
      	
                                Name:
      Walter Reissman

                                Its:
      Authorized Signatory

                              	 	 
      	
                                Name:  Joseph
      F. Langston

                                Title:  President

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
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      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page 9
      or 11

              

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTICE
OF EXERCISE

     

    (1)           The
undersigned hereby (A) elects to purchase _______ shares of Common Stock of
GLEN ROSE PETROLEUM
CORPORATION, pursuant to the provisions of Section 3(b)(i) of the
attached Warrant, and tenders herewith payment of the purchase price for such
shares in full, or (B) elects to exercise this Warrant for the purchase
of_______ shares of Common Stock, pursuant to the provisions of Section 3(b)(ii)
of the attached Warrant.

     

    (2)           In
exercising this Warrant, the undersigned hereby confirms and acknowledges that
the shares of Common Stock to be issued upon exercise hereof are being acquired
for investment purposes, and that the undersigned will not offer, sell or
otherwise dispose of any such shares of Common Stock except under circumstances
that will not result in a violation of the Securities Act of 1933, as amended,
or any applicable state securities laws.

     

    (3)           Please
issue a certificate or certificates representing said shares of Common Stock in
the name of the undersigned or in such other name as is specified
below:

     

    
      
        
          
            
              
                	
                          

                      
	
                        (Name)

                      
	 
      
	 
      
	
                        (Name)

                      

              

            

          

        

      

    

     

    (4)           Please
issue a new Warrant for the unexercised portion of the attached Warrant in the
name of the undersigned or in such other name as is specified
below:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	 	 	 	 	 
	 
      	 
      	 
      	 
      	
                                    (Name)

                                  
	 
      	 
      	 
      	 
      	 
      
	 	 
      	 
      	
                                      

                                  	 
      	 
      
	
                                    (Date)

                                  	 
      	
                                    (Signature)

                                  	 
      	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    17
 

    
      	
              Glen
      Rose Petroleum Corporation

            	 
      
	
              $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

            	
              Page
      10 or 11

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

      
        

      

    

     

    ASSIGNMENT

     

    FOR VALUE RECEIVED, the
undersigned registered owner of this Warrant hereby sells, assigns and transfers
unto the Assignee named below all of the rights of the undersigned under the
within Warrant, with respect to the number of shares of Common Stock set forth
below:

     

    
      
        	
                Name
      of Assignee

              	
                Address

              	
                No.
      of Shares

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

    

    

    and does
hereby irrevocably constitute and appoint ____________________________ Attorney
to make such transfer on the books of GLEN ROSE PETROLEUM
CORPORATION, maintained for the purpose, with full power of substitution
in the premises.

     

    The
undersigned also represents that, by assignment hereof, the Assignee
acknowledges that this Warrant and the shares of stock to be issued upon
exercise hereof are being acquired for investment purposes, and that the
Assignee will not offer, sell or otherwise dispose of this Warrant or any shares
of stock to be issued upon exercise hereof except under circumstances which will
not result in a violation of the Securities Act of 1933, as amended, or any
applicable state securities laws.

    

    Dated:
_________________________

     

    
      
        
          
            	
                      

                  
	
                    Signature
      of Holder

                  

          

        

      

    

     

    
      
        	
                Glen
      Rose Petroleum Corporation

              	 
      
	
                $.67
      Glen Rose Petroleum Warrants expiring June 30, 2012

              	
                Page
      11 or 11Unassociated Document

    EXHIBIT
10.1

     

    SUBLEASE
AGREEMENT

     

    THIS
SUBLEASE AGREEMENT (this "Sublease") dated as of
November 13, 2009 is entered into by and between WASATCH RESEARCH PARK 1, LLC, a
Utah limited liability company, as master tenant (“Landlord”), and EVANS &
SUTHERLAND COMPUTER CORPORATION, a Utah corporation ("Tenant").

     

    1.           MASTER
LEASE. Landlord is the tenant under that certain University of Utah Research
Park Master Form Lease - Lease Agreement dated April, 1 1988, as Amended
(collectively, the “Master
Lease”).  A copy of the Master Lease is attached hereto and
incorporated herein as Exhibit
C.  Landlord as Lessee under the Master Lease is leasing the
Premises to Tenant as sublessee.

     

    2.           PREMISES.

     

    (a)         Premises. The
premises (the “Premises”) is located in three
(3) structures situated on approximately 5.9 acres of land (the “Property”) in Salt Lake
County, Salt Lake City, Utah commonly known as 770 & 790 Komas Drive, Salt
Lake City, Utah 84108 shown on Exhibit A – Site Plan, attached hereto and
incorporated herein.  The Property includes (i) the 770
Office/Warehouse Building located at 770 Komas Drive (the “Office/Warehouse Building”),
(ii) the 790 Shop Building located at 790 Komas Drive (the “Shop”), (iii) the Electrical
Substation located on Komas Drive (the “Substation”), and (iv) the
surface parking stalls located on the Property (the “Parking Lot”).  The
Office/Warehouse Building, the Shop and the Substation are collectively referred
to herein as the “Buildings.”  A legal
description of the Property is attached hereto as Exhibit B and
incorporated herein.

     

    (b)         Sublease. Landlord
hereby subleases to Tenant, and Tenant hereby subleases from Landlord, for the
Term of this Sublease (defined in Section 3 below), and
subject to the terms and conditions hereinafter set forth, to each and all of
which Landlord and Tenant hereby mutually agree, the Premises which include a
total of approximately 60,021 rentable square feet (“RSF”), as
follows:

     

    
      	
               
      

            	
              (i)

            	
              Approximately
      49,853 RSF located in the Office / Warehouse Building consisting of 29,320
      RSF of office space (the “Office Space”) and
      20,533 RSF of warehouse space (the “Warehouse Space”);
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Approximately
      6,808 RSF located in the Shop; and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              Approximately
      3,360 RSF located in the
Substation.

            

    

     

    (c)         Common Area. In
addition, the Premises shall include the appurtenant right to use the site, the
Parking Lot and the landscaped areas appurtenant to or associated with the
Office/Warehouse Building, the Shop, and the Substation (collectively, the
“Common
Area”).

     

    (d)         Acceptance of
Premises.   Tenant, by taking possession of the Premises
shall be deemed to accept the Premises as being in the condition in which
Landlord is obligated to deliver the Premises.  Tenant shall at the
end of the Term and any extension herein surrender to Landlord the Premises and
all alterations, additions and improvements thereto in the same condition as
when received, ordinary wear and tear, damage by fire, earthquake, or act of God
excepted.  Landlord has no liability and has made no representation
that it will alter, improve, repair, or paint the Premises or any part
thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    3.           TERM.

     

    (a)           Sublease
Term.  The term of this Sublease (the “Term”) initially shall be five
(5) years and shall commence on the date in which possession of the Premises is
delivered to Tenant (the "Commencement
Date").  In the event possession is delivered on a date other
than the first day of a calendar month, the first month of the Term shall begin
on the first day of the next calendar month.

     

    (b)           Option to
Renew.  As long as Tenant is not in default of any provisions
of this Sublease at the time of exercise, Tenant shall have two (2) options to
extend the Term of this Sublease each for an additional period of five (5) years
(each an “Extended
Term”) provided that Tenant is leasing the same or greater square footage
during the option period(s).  The option must be exercised by written
notice to Landlord given at least six (6) months prior to the expiration of the
Term then in effect. Should Tenant fail to provide such notice timely, this
option to renew shall expire and be null and void for all time
thereafter.  Each Extended Term shall be upon the same covenants,
agreements, provisions and conditions that are contained in the Agreement,
except as expressly provided herein to the contrary.  The Base Rent
shall be adjusted to equal the then fair market rental for the Premises as
exists upon commencement of each of the Extended Terms.  In these
circumstances, the fair market rental for the Premises shall be determined by a
reputable, MAI appraiser licensed in the State of Utah mutually approved by
Landlord and Tenant.  If Landlord and Tenant cannot agree on the
selection of an appraiser, then they each shall select reputable, MAI appraisers
licensed in the State of Utah and if these appraisers cannot agree on the fair
market rental for the Premises for the Base Rent, then they shall select a third
MAI appraiser and the decision of a majority of the appraisers shall establish
the fair market rental for the Premises for the Base Rent.  The costs
for the appraiser(s) shall be equally split between Landlord and
Tenant.

     

    4.           RENT.

     

    (a)           Base
Rent.  The triple net, base rent shall be FIVE HUNDRED ONE
THOUSAND ONE HUNDRED FORTY-ONE AND 60/100 DOLLARS ($501,141.60) per annum (the
“Base
Rent”).  The Base Rent consists of the following and/or shall
be paid in this manner:

     

    
      	
               
      

            	
              (i)

            	
              FORTY
      ONE THOUSAND SEVEN HUNDRED SIXTY-ONE AND 80/100 DOLLARS ($41,761.80) per
      month from November 13, 2010 to October 31, 2015 (with the Base Rent
      prorated for any partial months).

            

    

     

    
      	
               
      

            	
              (ii)

            	
              The
      amount of the Base Rent consists of the following
    components:

            

    

     

    
      
        
          
            
              
                	
                        Space:

                      	 	
                        Monthly Rent

                      	 	 	
                        Annual Rent

                      	 
	
                        Office
      Space Rent:

                      	 	$	29,320.00	 	 	$	351,840.00	 
	
                        Warehouse
      Space Rent:

                      	 	$	10,263.80	 	 	$	123,165.60	 
	
                        Shop
      Rent:

                      	 	$	1,702.00	 	 	$	20,424.00	 
	
                        Substation
      Rent:

                      	 	$	476.00	 	 	$	5,712.00	 
	
                        TOTAL

                      	 	$	41,761.80	 	 	$	501,141.60	 

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (iii)

            	
              One
      twelfth (1/12) of the Base Rent shall be payable in advance each
      month on or before the 1st day of each month during the duration of this
      Sublease, with the first such monthly rental payment plus the security
      deposit referenced in Section 32
      below in the amount of ONE HUNDRED AND TWENTY FIVE THOUSAND AND NO/100
      DOLLARS ($125,000.00) being due upon the execution of this
      Sublease.  Any partial months shall be prorated
      accordingly.  Similarly, if the Substation is sold during the
      Term of this Sublease, the Rents (described hereafter) shall be reduced by
      the amount of allocated to the Substation set forth above.  All
      Base Rent and Additional Rent defined below (collectively, the "Rents") shall be paid to
      the following address, unless otherwise directed in writing: Wasatch
      Research Park I, LLC, 595 Riverwood Parkway, Suite 400, Logan, Utah
      84321.

            

    

     

    (b)           Additional
Rent.  All obligations payable by Tenant under this Sublease
other than the Base Rent are called "Additional
Rent."  Unless otherwise provided, Additional Rent shall be
paid with the monthly installment of Base Rent.

     

    (c)           Master Lease
Escalations.  Tenant shall pay as Additional Rent the amount of
any increase in the rental to be paid by Landlord after the Commencement Date of
the Sublease as determined under Section 1.4 “Escalation Clause” of the Master
Lease.

     

    (d)           Interest, Late Charges,
Costs and Attorneys' Fees.  If Tenant fails to pay within ten
(10) days of the date due any Rents which Tenant is obligated to pay under this
Sublease, the unpaid amount shall bear interest at twelve percent (12%) per
annum.  Tenant acknowledges that any late payments of Rents shall
cause Landlord to lose the use of that money and incur costs and expenses not
contemplated under this Sublease, including without limitation administrative,
collection and accounting costs, the exact amount of which is difficult to
ascertain.  Therefore, in addition to interest, if any payment is not
received by Landlord within ten (10) days from the date it is due, Tenant shall
also pay Landlord a late charge equal to five percent (5%) of the amount of each
such late Rents.  Further, as Additional Rent, Tenant shall be liable
to Landlord for costs and attorneys' fees incurred as a result of late payments
or non-payments.  Acceptance of any interest, late charge, costs or
attorneys' fees shall not constitute a waiver of any default by Tenant nor
prevent Landlord from exercising any other rights or remedies under this
Sublease or at law.

     

    5.           USE.

     

    (a)           The
Premises shall be used for general office, research and light manufacturing uses
and any other lawful purpose incidental to Tenant's business, and no other,
unless consented to in writing by Landlord.  Tenant shall not do or
permit to be done in or about the Premises, Buildings, or Common Area, anything
which is prohibited by or in any way in conflict with any and all laws,
statutes, ordinances, rules and regulations now in force or which may hereafter
be enacted or promulgated or which is prohibited by the standard form of fire
insurance policy, or which will increase the existing rate of or affect any fire
or other insurance upon the Premises, Buildings or any of its contents, or
Common Area or cause a cancellation of any insurance policy covering the
Premises or Buildings or any part thereof or any of its contents, or the Common
Area (in the case of hazardous material, Tenant shall notify Landlord of any
such materials and shall ensure that any such hazardous material is properly
controlled, safeguarded, and disposed).  Tenant shall not do or permit
anything to be done in or about the Premises, Buildings, or the Common Area
which will in any way violate Rules or Regulations attached hereto as Exhibit D
and those hereafter reasonably promulgated by Landlord and provided to Tenant,
or use or allow the Premises, Buildings or the Common Area to be used for any
improper, immoral, or unlawful purpose, nor shall Tenant cause, maintain or
permit any nuisance, in, on or about the Premises, Buildings, or the Common Area
or commit or suffer to be committed any waste in, on or about the Premises,
Buildings or the Common Area.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)           Tenant
shall not manufacture, assemble or store materials in the Common
Area.

     

    6.           MAINTAINANCE
AND REPAIR.

     

    Tenant,
at its sole cost and expense, shall insure and keep and maintain the entire
exterior and interior of the Premises, and all facilities and systems
appurtenant thereto, in good condition and repair, and in full compliance with
all governmental health and police regulations now or hereafter in
force.  Tenant shall further keep and maintain the improvements at any
time situated upon the Premises and the Parking Lot and the Common Area in good
repair, safe, secure and clean, including, without limitation, snow and ice
clearance and shrubbery removal, in conformity with the lawful and valid
requirements of any governmental authority having jurisdiction over the
Property.  Notwithstanding the forgoing, Landlord shall not require
any capital replacements that are not approved by Landlord and
Tenant.

     

    7.           ALTERATIONS.

     

    (a)           Tenant
will not make or suffer to be made any alterations, additions or improvements in
excess of $30,000 (collectively, the "Alterations") to or upon the
Premises, Buildings, or any part thereof, or attach any fixtures or equipment
thereto, without first obtaining Landlord's written approval, which shall not be
unreasonably withheld or delayed.  Any contractor selected by Tenant
to make the Alterations in excess of $30,000 shall be subject to Landlord's
reasonable prior written approval.  Any Alterations to or upon the
Premises shall be made by Tenant at Tenant's sole cost and
expense.  All such Alterations permanent in character, made in or upon
the Premises either by Tenant or Landlord, may at the option of Landlord, become
Landlord's property and, at the end of the term or any extension hereof, shall
remain on the Premises without compensation to Tenant unless Landlord requests
that Tenant remove any such Alterations.  Notwithstanding the above,
Tenant's trade equipment, fixtures, work stations and other items of personal
property shall remain Tenant's property.

     

    (b)           Any
Alterations shall, when completed, be of such a character as not to lessen the
value of the Premises or such improvements as may be located
thereon.  Any Alterations shall be made promptly and in a good
workmanlike manner, and in compliance with all applicable permits, building and
zoning laws, and with all other laws, ordinances, orders, rules, regulations and
requirements of all federal, state and municipal governments, departments,
commissions, boards and offices.  The costs of any such Alterations
shall be paid by Tenant, so that the Premises are free of liens, for services
performed, labor and material supplied or claimed to have been
supplied.  Before any Alterations shall be commenced, Tenant shall pay
any increase in premiums on insurance policies (provided for herein) or ensure
adequate coverage is in place for all risks related to the construction of such
Alterations and the increased value of the Premises.

     

    8.           SIGNAGE.

     

    Any
signage must be removed, at Tenant’s sole cost, at the end of the Term of this
Sublease or upon Tenant’s failing to have possession of the
Premises.  The cost of installation, maintenance and removal of
signage shall be paid by Tenant.  Tenant may place any signage upon
the Property permitted under the Master Lease and applicable law .

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    9.         9.           LIENS.

     

    Tenant
shall keep the Premises and the Buildings free from any mechanics' and/or
materialmen's liens or other liens arising out of any work performed, materials
furnished or obligations incurred by Tenant.  Tenant shall notify
Landlord in writing at least seventy-two (72) hours before any work or activity
is to commence on the Premises costing in excess of $30,000 which may give rise
to such liens to allow Landlord to post and keep posted on the Premises any
notices which Landlord may deem to be proper for the protection of Landlord and
the Premises from such liens.

     

    10.         DESTRUCTION
OR DAMAGE.

     

    (a)      
    If the Premises are partially damaged by fire or other
insured casualty:

     

    
      	
               
      

            	
              (i)

            	
              Tenant
      shall repair the same at Tenant’s expense (but also with the use of the
      insurance proceeds from the insurance policies purchased by Tenant as
      described in Section 14
      below), subject to the provisions of this Section and
      provided such repairs can, in Landlord's reasonable opinion, be made
      within ninety (90) days after the fire or casualty.  During such
      repairs, this Sublease shall remain in full force and effect but Rents
      shall be proportionately abated for such damaged part of the
      Premises.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              If
      in Landlord's reasonable opinion the partially damaged Premises can be
      repaired, but not within ninety (90) days, the Landlord may elect, upon
      written notice to Tenant within thirty (30) days (the “Notice Date”) of such
      damages, to have Tenant repair such damages within one hundred eighty
      (180) days after commencement of repair and continue this Sublease in full
      force and effect, but with Rents partially abated from the notice date
      until the completion of repair to the extent of the value of that portion
      of the Premises of whose use the Tenant is deprived during the period of
      such repair.  In the event such repairs cannot be made within
      one hundred eighty (180) days, Landlord may cancel this Sublease as of the
      date of damage by notice to Tenant on or before the Notice
      Date.  If Landlord fails to elect to have the Premises repaired
      or to cancel, Tenant will repair the Premises and rent will abate in the
      same manner as provided above as though Landlord had elected to have the
      Premises repaired.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              If
      the partially damaged Premises are to be repaired under this Section, Tenant
      shall repair such damages to the Premises itself.  Except in the
      event of damage resulting from Landlord's gross negligence or willful
      misconduct, Tenant shall be responsible for Tenant's equipment, furniture
      and fixtures, and other alterations, additions and improvements made by
      Tenant to the Premises and
Buildings.

            

    

     

    (b)          If
in Landlord's or Tenant’s reasonable opinion, the Premises is totally or
substantially destroyed by fire or other casualty and cannot be repaired or
replaced within one hundred eighty (180) days, this Sublease shall terminate
upon notice by either Landlord or Tenant.

    11.         This
Section
purposely omitted.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    12.         INDEMNIFICATION.

     

    Tenant
agrees to indemnify, defend and hold harmless Landlord and its officers,
directors, partners and employees from and against all loss liabilities,
judgments, demands, actions, expenses or claims, including reasonable attorney's
fees and court costs, for injury to or death of any person, the release of any
hazardous materials, or for damages to any property to the extent arising out of
or connected with (i) the use, occupancy or enjoyment of this Subleased
Premises, Buildings, or Common Area by Tenant or Tenant's agents, employees,
invitees, licensees, or contractors (collectively, the "Tenant's Agents"), or any work
or activity performed by Tenant or by Tenant's Agents in, or about the Premises,
the Buildings, or the Common Area, including any Tenant improvements (but
specifically excluding work performed by Landlord or its agents), (ii) any
breach or default in the performance of any obligation of Tenant under this
Sublease, or (iii) any negligent act of Tenant or Tenant's Agents (excluding
Tenant's licensees) on or about the Premises, Buildings, or Common Area or any
negligent act of Tenant's licensees on or about the Premises, Buildings or
Common Area.  Notwithstanding the foregoing, Tenant shall not be
liable to the extent that damage or injury is determined ultimately to be caused
by the negligent act of Landlord, or of Landlord's employees, agents, invitees,
licensees, or contractors (collectively, "Landlord's
Agents").  All property of Tenant kept or stored on this
Subleased Premises or in the Buildings shall be so kept or stored at the risk of
Tenant only, and Tenant shall hold Landlord free and harmless from any claims
arising out of damage to the same, unless such damage shall be caused by the
negligent act of Landlord or Landlord's Agents.  The indemnification
contained herein shall survive the expiration or earlier termination of this
Sublease as to acts occurring prior to such expiration or
termination.  If any action or proceeding is brought against Landlord,
its employees or agents by reason of any such claim, Tenant, upon notice from
Landlord, will defend the claim at Tenant’s expense.

     

    Landlord
agrees to indemnify, defend and hold harmless Tenant and its officers,
directors, partners and employees from and against all liabilities, judgments,
demands, actions, expenses or claims, including reasonable attorneys' fees and
court costs, for injury to or death of any person, the release of any hazardous
materials or for damages to any property to the extent arising out of or
connected with (i) the use, management or operation of the Premises, the
Buildings, the Parking Lot or the Common Area by Landlord or by Landlord's
Agents, or any work or activity performed by Landlord or by Landlord's Agents
in, on or about the same, (ii) any breach or default in the performance of any
obligation of Landlord under this Sublease, or (iii) any negligent act of
Landlord or Landlord's Agents on or about the Premises, the Buildings, the
Parking Lot or the Common Area.  Notwithstanding the foregoing,
Landlord shall not be liable to the extent that damage or injury is determined
ultimately to be caused by the negligent act of Tenant or Tenant's
Agents.  The indemnification contained herein shall survive the
expiration or earlier termination of this Sublease as to acts occurring prior to
such expiration or termination.  If any action or proceeding is
brought against Tenant, its employees or agents by reason of any such claim,
Landlord, upon notice from Tenant, will defend the claim at Landlord’s expense
with counsel reasonably satisfactory to Tenant.

     

    13.         COMPLIANCE
WITH LEGAL REQUIREMENTS.

     

    Tenant
shall, at its sole cost and expense, promptly comply with all laws, statutes,
ordinances and governmental rules, regulations or requirements now in force or
which may hereafter be in force, the requirements of any board of fire
underwriters or other similar body now or hereafter constituted, any direction
or occupancy certificate issued pursuant to any law by any public officer or
officers, as well as the provisions of all recorded documents affecting the
Premises, (collectively the "Applicable Laws"), insofar as
any thereof relate to or affect the use or occupancy of the Premises, Buildings,
or Common Area, excluding requirements of structural changes now related to or
affected by improvements made by or for Tenant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    14.         INSURANCE.

     

    (a)
Coverage.  Tenant shall, at all times during the term of this
Lease, and at its own cost and expense, procure and continue in force the
following insurance coverage:

    

    (i) 
 All Risk of Physical Loss Policy with full replacement cost. Business
interruption insurance in the event of loss of earnings resulting from physical
loss. Earthquake coverage. Landlord named on all policies with a loss payable
endorsement.

    

    (ii) 
Commercial General Liability including all coverage normally provided therein to
cover the Premises with a limit of $5,000,000.00 per occurrence.

    

    (iii) 
Business Auto with limit of $1,000,000.00 per occurrence for owned and non-owned
vehicles.

    

    (iv)
Workers compensation insurance with statutory limits.

    

    (v) 
Tenant's Additional Insurance.  Tenant shall, at its sole cost
and expense, cause all equipment, machinery, furniture and fixtures, personal
property, and Tenant Improvements supplied by Tenant from time to time used or
intended to be used in connection with the operation and maintenance of the
Premises, to be insured by Tenant against loss or damage.  Except for
losses caused by Landlord's gross negligence or willful misconduct, Landlord is
in no way liable for any property of the Tenant's.

     

    (b) Insurance
Policies.  The aforementioned minimum limits of policies shall
in no event limit the liability of Tenant hereunder.  The aforesaid
insurance shall name Landlord as an additional insured.  Said
insurance shall be with companies having a rating of not less than AX in “Best's
Insurance Guide” or as agreed by Landlord.  Tenant shall furnish from
the insurance companies or cause the insurance companies to furnish to Landlord
certificates of coverage on the Commencement Date and thereafter upon renewal of
each policy.  Insurer shall endeavor to provide thirty (30) days prior
written notice to Landlord of ,  reduction of coverage, other
modification or cancellation, except ten (10) days for non-payment of
premium.  All such policies shall be written as primary policies, not
contributing with and not in excess of the coverage which Landlord may
carry.  Tenant shall, at expiration of such policies, furnish Landlord
with  current certificates of insurance.  Tenant agrees that
if Tenant does not take out and maintain such insurance, Landlord may (but shall
not be required to), after ten (10) days written notice to Tenant and an
opportunity to cure by Tenant, procure said insurance on Tenant's behalf and
charge Tenant the premiums together with a fifteen percent (15%) handling
charge, payable upon demand.  Tenant shall have the right to provide
such insurance coverage pursuant to policies obtained by Tenant, provided such
policies expressly afford coverage to the Premises, Parking Lot and to Tenant as
required by this Lease.

     

    15.         ASSIGNMENT
AND SUBLETTING.

     

    In the
event Tenant should desire to assign this Sublease or sub-sublet the Premises,
Tenant shall give Landlord written notice of such desire at least thirty (30)
days in advance of the date on which Tenant desires to make such assignment or
sub-sublease.  Landlord shall then have a period of thirty (30) days
following receipt of such notice within which to notify Tenant in writing that
Landlord elects either (i) to terminate this Sublease as of the date so
specified by Tenant, in which event Tenant may either rescind its request to
assign or sub-sublease this Sublease or else Tenant will be relieved of all
further obligations hereunder, or (ii) to permit Tenant to assign or sub-sublet
such space, subject to prior written approval of the proposed assignee by
Landlord, such consent not to be unreasonably withheld or delayed, so long as
the use of the Premises by the proposed assignee would be a permitted use and
the proposed assignee is of sound financial condition as determined by
Landlord.  If Landlord should fail to notify Tenant in writing of such
election within said thirty (30) day period, Landlord shall have deemed to have
waived option (i) above, but written approval by Landlord of the proposed
assignee shall still be required.  Failure by Landlord to approve a
proposed assignee shall not cause a termination of this Sublease.  Any
rents or other consideration realized by Tenant under any such sub-sublease and
assignment in excess of the Rents hereunder, after amortization of the
reasonable costs of extra tenant improvements for which Tenant has paid and
reasonable sub-subletting and assignment costs, shall be divided and paid fifty
(50%) percent to Landlord and  (50%) percent to Tenant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Notwithstanding
the above, Tenant shall have the right to sub-sublease or assign all or any
portion of the Premises during the Term or any Option period to any related
entity, subsidiary, or affiliate of Tenant, having at least fifty-one (51%)
percent direct common ownership, without having to receive Landlord's consent,
but still requiring written notice to Landlord on or before such sub-sublease or
assignment has occurred.

     

    No
assignment or subletting by Tenant shall relieve Tenant of any obligation under
this Sublease.  Any assignment or subletting which conflicts with the
provisions hereof shall be void.

     

    16.         RULES.

     

    Tenant
shall faithfully observe and comply with all Rules and Regulations attached as
Exhibit D and
those hereafter reasonably promulgated by Landlord, in writing and after
reasonable notice, during the Term or any Option period herein.

     

    17.         ENTRY
BY LANDLORD.

     

    Landlord
may enter the Premises or Buildings at reasonable hours and upon at least 72
hours reasonable written notice to Tenant to (a) inspect the same, (b) show the
same to prospective purchasers, lenders or tenants, (c) determine whether Tenant
is complying with all of Tenant's obligations hereunder, (d) post notices of
non-responsibility or (e) make repairs required of Landlord under this Sublease,
repairs to adjoining space or utility service, or make repairs, alterations or
improvements to the Buildings, provided that all such work shall be done as
promptly as possible and with as little interference to Tenant as reasonably
possible.  Tenant hereby waives any claim for damages for any
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises occasioned by such entry.  Landlord
shall at all times have and retain a key to unlock all doors in, on or about the
Premises (excluding Tenant's vaults, safes and similar areas designated in
writing by Tenant).  In the event of an emergency, Landlord shall have
the right to use any and all means which Landlord may deem proper to enter the
Premises, without notice, for the limited purpose of abating as quickly as
possible said emergency.  Such emergency entrance shall not be
construed or deemed to be a forcible or unlawful entry into or a detainer of the
Premises or an eviction, actual or constructive, of Tenant from the Premises, or
any portion thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    18.         EVENTS
OF DEFAULT.

     

    The
occurrence of any one or more of the following events ("Events of Default") shall
constitute a breach of this Sublease by Tenant: (a) if Tenant fails to pay Rents
when and as the same becomes due and payable and such failure continues for more
than ten (10) days after written notice thereof, or (b) if Tenant fails to pay
any other sum when and as the same becomes due and payable and such failure
continues for more than ten (10) days after written notice thereof; or (c) if
Tenant fails to perform or observe any material term or condition of this
Sublease, such failure continues for more than thirty (30) days after written
notice from Landlord, and Tenant does not within such period begin with due
diligence and dispatch the curing of such default, or, having so begun,
thereafter fails or neglects to complete with due diligence and dispatch the
curing of such default; or (d) if Tenant shall make a general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
as they become due or shall file a petition in bankruptcy, or shall be
adjudicated as bankrupt or insolvent, or shall file a petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation, or
shall file any answer admitting or shall fail timely to contest the material
allegations of a petition filed against it in any such proceeding, or shall seek
or consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant or any material part of its properties; or (e) if within
thirty (30) days after the commencement of any proceeding against Tenant seeking
any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such proceeding shall not have been dismissed, or if, within thirty
(30) days after the appointment without the consent or acquiescence of Tenant,
of any trustee, receiver or liquidator of Tenant or of any material part of its
properties, such appointment shall not have been vacated; or (f) vacation or
abandonment of the Premises for a continuous period in excess of fifteen (15)
days, or (g) if this Sublease shall be levied upon under any attachment or
execution due to Tenant’s actions and such attachment or execution is not
vacated within ten (10) days of receipt thereof by Tenant.

     

    19.         TERMINATION
UPON TENANT'S DEFAULT.

     

    If an
Event of Default shall occur and not be cured in the  time frame
referenced herein, Landlord at any time thereafter may give a written
termination notice to Tenant, and on the date specified in such notice (which
shall not be less than fifteen (15) days after service) Tenant's right to
possession shall terminate and this Sublease shall terminate, unless on or
before such date all Rents, arrearages and other sums due by Tenant under this
Sublease, including reasonable costs and attorneys' fees incurred by or on
behalf of Landlord, shall have been paid by Tenant and all other Events of
Default by Tenant shall have been fully cured to the satisfaction of
Landlord.  Upon such termination, Landlord may recover from
Tenant:

     

    (a)           the
worth at the time of award of the unpaid Rents which had been earned at the time
of termination; plus

     

    (b)           the
worth at the time of award of the amount by which the unpaid Rents which would
have been earned after termination until the time of award exceeds the amount of
such Rents loss that Landlord proves could have been reasonably avoided;
plus

     

    (c)           the
worth at the time of award of the amount by which the unpaid Rents for the
balance of the term of this Sublease after the time of award exceeds the amount
of such Rents loss that Landlord proves could not be reasonably avoided; and
plus

     

    (d)           any
other amount reasonably necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Sublease or which in the ordinary course of things would be likely to result
therefrom; and/or

     

    (e)           At
Landlord's elections, such other amounts in addition or in lieu of the foregoing
as may be permitted from time to time herein or by applicable law.

     

    The
"worth at the time of award" of the amounts referred to in clauses (a) and (b)
above is computed by allowing interest at the rate of 7% per
annum.  The "worth at the time of award" of the amount referred to in
clause (c) above means the monthly sum of the Rents under this
Sublease.  Failure of Landlord to declare any default immediately upon
occurrence thereof, or delay in taking any action in connection therewith, shall
not waive such default, but Landlord shall have the right to declare any such
default at any time thereafter.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    20.         CONTINUATION
AFTER DEFAULT.

     

    Even
though Tenant has breached this Sublease and abandoned the Premises, this
Sublease shall continue in effect as long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all of its rights and
remedies under this Sublease, including the right to recover the Rents as they
become due under this Sublease.  Acts of maintenance or preservation
or efforts to relet the Premises or the appointment of a receiver upon
initiative of Landlord to protect Landlord's interest under this Sublease shall
not constitute a termination of Tenant's right to possession.  If any
fixture, equipment, improvement, installation or appurtenance shall be required
to be removed from the Premises and/or Buildings by Tenant, then Landlord (in
addition to all other rights and remedies) may, at its election by 10-day prior
written notice to Tenant, deem that the same has been abandoned by Tenant to
Landlord, or Landlord may remove and store the same and restore the Premises to
its original condition at the reasonable expense of Tenant, as Additional Rent
to be paid within ten (10) days after written notice to Tenant of such
expense.

     

    21.         LANDLORD'S
DEFAULT.

     

    If
Landlord fails to perform or observe any of its material Sublease obligations
herein and such failure continues for thirty (30) days after written notice from
Tenant, or such additional time, if any, that is reasonably necessary to
promptly and diligently cure such failure after receiving written notice,
Landlord shall be in breach of this Sublease (a "Default").  If
Landlord commits a Default, Tenant’s Rents may be abated and Tenant may pursue
any remedies given in this Sublease or under law.

     

    22.         RIGHT
TO CURE TENANT’S DEFAULTS.

     

    All terms
and provisions to be performed by Tenant under this Sublease shall be at
Tenant's sole cost and expense and without any abatement of Rents (except for
Landlord’s Default and failure to cure).  If Tenant fails to pay any
sum of money, other than Rents, required hereunder or fails to perform any other
act required hereunder and such failure continues for thirty (30) days after
notice by Landlord, Landlord may, but shall not be obligated, and without
waiving or releasing Tenant from any obligations of Tenant, make any such
payment or perform any such act on Tenant's part to be made or performed as
provided in this Sublease.  All sums paid by Landlord and all
incidental costs incurred by Landlord or the value of work performed by Landlord
shall be deemed Additional Rent hereunder and shall be payable within ten (10)
days of written notice of such sums paid.

     

    23.         ATTORNEYS'
FEES.

     

    In the
event either party places at issue the enforcement or interpretation of this
Sublease, or any part thereof, or the collection of any Rents, or recovery of
the possession of the Premises, or files suit upon the same, then the prevailing
party shall be awarded its reasonable attorneys' fees and costs from the other
party.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    24.         EMINENT
DOMAIN.

     

    If all or
any part of the Premises shall be taken or conveyed as a result of the exercise
of the power of eminent domain, this Sublease shall terminate as to the part so
taken as of the date of taking, and, in the case of a partial taking, either
Landlord or Tenant shall have the right to terminate this Sublease as to the
balance of the Premises by written notice to the other within thirty (30) days
after such date; provided, however, that a condition to the exercise by Tenant
of such right to terminate shall be that the portion of the Premises taken or
conveyed shall be of such extent and nature as to substantially handicap, impede
or impair Tenant's use of the balance of the Premises.  In the event
of any taking, Landlord shall be entitled to any and all compensation, damages,
income, rent awards or any interest therein whatsoever which may be paid or made
in connection therewith, and Tenant shall have no claim against Landlord for the
value of any unexpired term of this Sublease or otherwise, provided that Tenant
shall be entitled to any and all compensation, damages, income, rent or awards
paid for or on account of Tenant's moving expenses, trade fixtures, equipment
and any leasehold improvements in the Premises, the cost of which was borne by
Tenant, to the extent of the then unamortized value of such improvements for the
remaining term of this Sublease.  In the event of a taking of the
Premises which does not result in a termination of this Sublease, the monthly
rental herein shall be apportioned as of the date of such taking so that
thereafter the rent to be paid by Tenant shall be in the ratio that the area of
the Premises not so taken bears to the total area of the Premises prior to such
taking.

     

    25.         SUBORDINATION,
ATTORNMENT & NONDISTURBANCE; AND ESTOPPLE CERTIFICATE.

     

    (a)           This
Sublease and Tenant’s rights under this Sublease are subject and subordinate to
any first mortgage, first deed of trust or other first lien encumbrance or
indenture, together with any renewals, extensions, modifications,
consolidations, and replacements of them, which now or at any subsequent time
affect the Premises or any interest of Landlord in the Premises or Landlord’s
interest in this Sublease and the estate created by this Sublease (except to the
extent that (i) any such instrument expressly provides that this Sublease is
superior to it or (ii) the mortgagee under a mortgage or beneficiary or trustee
under a deed of trust subordinates the mortgage or deed of trust to this
Sublease by filing a notice of subordination with the Salt Lake County Recorder
at any time before a foreclosure sale is held pursuant to or in connection with
the mortgage or deed of trust, in which case the Tenant agrees to attorn to the
holder (herein the "Holder" of the first mortgage,
first deed of trust or first lien encumbrance)). This provision will be
self-operative and no further instrument of subordination will be required in
order to effect it.  Nevertheless, Tenant will execute, acknowledge
and deliver to Landlord, at any time and from time to time, upon demand by
Landlord, such documents as may be requested by Landlord or any mortgagee, or
any holder of a deed of trust or other instrument described in this paragraph,
to confirm or effect any such subordination.  Tenant shall be
authorized and hereby agrees to pay Rent and any and all other amounts due under
this Sublease to the Holder upon notice from the Holder that the Landlord’s
license or other authority to collect the Rents has been revoked.

     

    (b)           If
the interest of Landlord shall be acquired by Mortgagee (the term "Mortgagee" as used in this
Section 25
shall include any purchaser at a foreclosure sale occurring as a result of the
first mortgage, first deed of trust or other first lien encumbrance or
indenture), Tenant will pay to it all Rents and other sums subsequently payable
under this Sublease.  Tenant will, upon request of any one so
succeeding to the interest of Landlord, automatically become the Tenant of, and
attorn to, such Mortgagee without change in this Sublease.  Such
Mortgagee will not be:

     

    26.         Bound
by any payment of rent for more than one month in advance, or

     

    
      	
               
      

            	
              (i)

            	
              Bound
      by any amendment or modification of this Sublease made without its written
      consent, or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Obligated
      to cure existing defaults, other than defaults of a continuing nature of
      which Mortgagee received notice, and in response to which Tenant afforded
      Mortgagee a reasonable cure period following such
  notice;

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (iii)

            	
              Obligated
      to Tenant under any provision of this Sublease unless and until Tenant
      shall provide Mortgagee with notice of Mortgagee's default and a
      reasonable opportunity to cure the default before exercising any right to
      terminate this Sublease.

            

    

     

    Any
notice delivered to the Tenant by Mortgagee shall be valid if delivered to the
premises demised by this Sublease.

     

    Upon
request by Mortgagee and without cost to Landlord or Mortgagee, Tenant will
execute, acknowledge, and deliver an instrument or instruments confirming the
attornment.  The instrument of attornment will also provide that
Mortgagee will not disturb Tenant in its quiet enjoyment of the Premises, the
Parking Lot and the Common Areas in accordance with this Sublease.  If
Tenant fails or refuses to execute, acknowledge, and deliver any such instrument
within ten (10) days after written demand, Mortgagee will be entitled to
execute, acknowledge, and deliver any such document in behalf of Tenant as
Tenant’s attorney-in-fact.  Tenant constitutes and irrevocably
appoints Mortgagee as Tenant’s attorney-in-fact to execute, acknowledge and
deliver on behalf of Tenant any document described in this paragraph of Section
26.

     

    27.         NO
MERGER.

     

    The
voluntary or other surrender of this Sublease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord terminate all or any existing sub-subleases or sub-subtenancies, or
may, at the option of Landlord, operate as an assignment to it of any or all
such sub-subleases or sub-subtenancies.

     

    28.         SALE.

     

    In the
event the original Landlord hereunder, or any successor owner of the Premises,
Buildings, and Common Area shall sell or convey the Premises, Buildings, and
Common Areas, and the purchaser assumes the obligations of Landlord under this
Sublease, all liabilities and obligation on the part of the original Landlord,
or such successor owner, under this Sublease accruing after such Sale shall
terminate, and thereupon all such liabilities and obligations shall be binding
upon the new owner; provided Landlord’s successor expressly acknowledges to
Tenant its receipt of Tenant’s Security Deposit in full.  Tenant
agrees to attorn to such new owner.

     

    29.         NO
LIGHT OR VIEW EASEMENT.

     

    Any
diminution or shutting off of light or view by any structure erected on lands
adjacent to the Buildings shall in no way affect this Sublease or impose any
liability on Landlord.

     

    30.          HOLDING
OVER.

     

    If,
without objection by Landlord, Tenant holds possession of the Premises after
expiration of the Term or any Option period of this Sublease, Tenant shall
become a tenant from month to month upon the terms herein specified, but at a
monthly Base Rent equivalent to 150% of the Base Rent at the end of the term or
extension period pursuant to Section 4, payable in
advance on or before the first day of each month.  All Additional Rent
shall also apply.  Each party shall give the other notice at least one
month prior to the date of termination of such monthly tenancy of its intention
to terminate such tenancy.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    31.         ABANDONMENT.

     

    If Tenant
shall abandon or surrender the Premises, or be dispossessed by process of law or
otherwise, any personal property belonging to Tenant and left on the Premises
shall be deemed to be abandoned, at the option of Landlord, except such property
as may be mortgaged to Landlord.

     

    32.         SECURITY
DEPOSIT.

     

    (a)           Deposit.  Tenant
has deposited with Landlord the Security Deposit in the amount set as security
for the faithful performance by Tenant of all of the terms, covenants and
conditions required to be performed by Tenant hereunder.  The Security
Deposit shall be returned to Tenant (or, at Landlord's option, to the last
assignee of Tenant's interest hereunder) after the expiration of this Agreement
and delivery of possession of the Premises to Landlord if, at such time, Tenant
has performed fully and faithfully all of the terms, covenants and conditions
hereof.  In the event of termination of Landlord's interest in this
Agreement, Landlord shall transfer or credit the Security Deposit to Landlord's
successor in interest, and Landlord shall thereupon be released from any
liability for the return of the Security Deposit or the accounting therefore,
provided the successor in interest expressly acknowledges receipt of the
Security Deposit in full less any reductions made due to Tenant’s uncured
defaults.  Prior to the time when Tenant is entitled to any return of
the Security Deposit, Landlord may intermingle the Security Deposit with its own
funds and use the Security Deposit for such purposes as Landlord may
determine.  Tenant shall not be entitled to any interest on the
Security Deposit.

     

    (b)           Default.  If
an Event of Default shall occur and not be cured in the time frame referenced
herein, Landlord may use, apply or retain all or any part of the Security
Deposit for the payment of any monetary obligation due hereunder or to
compensate Landlord for any other reasonable expense or cost which Landlord may
expend, or any loss or damage which Landlord may suffer, by reason of Tenant's
default under the terms hereof, including any damages or deficiency in the
reletting of the Premises.  If any portion of the Security Deposit is
so used or applied, regardless of whether such use or application is before or
after Tenant has ceased to occupy the Premises, Tenant shall, within five (5)
days after written demand therefor, deposit with Landlord cash in an amount
sufficient to restore the Security Deposit to its original amount.

     

    33.         WAIVER.

    

    All
waivers by either party herein must be in writing and signed by such
party.  The waiver of any term or conditions herein shall not be
deemed to be a waiver of any subsequent breach of the same or any other
agreement, condition or provision herein contained, nor shall any custom,
practice or course of conduct between the parties be construed to waive or to
lessen the right of either party to insist upon the performance by the other
party in strict accordance with said terms.  The subsequent acceptance
of Rents hereunder by Landlord shall not be deemed to be a waiver of any breach
by Tenant of any term or condition of this Sublease, regardless of Landlord's
knowledge of such breach at the time of acceptance of such Rents.

     

    34.         NOTICES.

    

    All
notices and demands which may or are required to be given by either party to the
other under this Sublease shall be in writing and shall be deemed to have been
fully given upon the earlier of (a) receipt, or (b) three (3) days after being
deposited in the U.S. Mail or delivered to a reputable, nationally recognized
overnight courier/delivery service, for overnight delivery, addressed as
follows:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        
          	
                  To
      Tenant:

                	 
      	
                  Evans
      & Sutherland Computer Corporation

                
	 
      	 
      	
                  770
      Komas Drive

                
	 
      	 
      	
                  Salt
      Lake City, Utah 84108

                
	 
      	 
      	 
      
	
                  To
      Landlord:

                	 
      	
                  Wasatch
      Research Park I, LLC

                
	 
      	 
      	
                  595
      Riverwood Parkway, Ste 400

                
	 
      	 
      	
                  Logan,
      UT 84321

                
	 
      	 
      	 
      
	
                  With
      a copy to:

                	 
      	
                  Wasatch
      Commercial Property Mgmt.

                
	 
      	 
      	
                  175
      E. 400 S., Ste 150

                
	 
      	 
      	
                  Salt
      Lake City, UT 84111

                

        

      

    

    

    A party
may designate another place for notice, in place of those listed above, upon
notice to the other party in the manner set forth in this Section.

     

    35.   
     END OF TERM.

     

    At the
end of this Sublease, Tenant will promptly quit and surrender the Premises
broom-clean, in good order and repair, ordinary wear and tear
excepted.  If Tenant is not then in default, Tenant may remove from
the Premises any trade fixtures, equipment and movable furniture placed in the
premises by Tenant, whether or not such trade fixtures or equipment are fastened
to the Buildings; Tenant will not remove any trade fixtures or equipment without
Landlord’s written consent if such fixtures or equipment are used in the
operation of the Buildings or improvements or the removal of such fixtures or
equipment will result in impairing the structural strength of the Buildings or
improvements.  Whether or not Tenant is in default, Tenant will remove
such alterations, additions, improvements, trade fixtures, equipment and
furniture as Landlord has requested in accordance with Section
7.  Tenant will fully repair any damage occasioned by the
removal of any trade fixtures, equipment, furniture, alterations, additions and
improvements.  All trade fixtures, equipment, furniture, inventory,
effects, alterations, additions and improvements not so removed will be deemed
conclusively to have been abandoned and may be appropriated, sold, stored,
destroyed or otherwise disposed of by Landlord without notice to Tenant or any
other person and without obligation to account for them; and Tenant will pay
Landlord for all expenses incurred in connection with such property, including,
but not limited to, the cost of repairing any damage to the Buildings or
premises caused by the removal of such property.  Tenant’s obligation
to observe and perform this covenant will survive the expiration or other
termination of this Sublease.

     

    36.         COMPLETE
AGREEMENT.

     

    There are
no oral agreements between Landlord and Tenant affecting this Sublease, and this
Sublease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between Landlord and Tenant
with respect to the subject matter of this Sublease.  This Sublease
may not be altered, changed or amended, except by an instrument in writing
signed by both parties hereto.

     

    37.         AUTHORITY.

     

    The
person(s) executing this Sublease on behalf of the parties herein hereby
covenants and warrants that (a) such party is a duly authorized and validly
existing entity under the laws of the State in which it was formed, (b) such
party has and is qualified to do business in Utah, (c) such entity has full
right and authority to enter into this Sublease, and (d) each person executing
this Sublease on behalf of such entity is authorized to do so.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    38.         FAILURE
TO OCCUPY.

     

    Any
failure to occupy the Premises does not release the Tenant from the obligation
of paying Rents or any other terms set forth herein.

     

    39.         MISCELLANEOUS.

     

    (a)           The
words "Landlord" and "Tenant" as used herein shall include the plural as well as
the singular.  If there be more than one Tenant, the obligations
hereunder imposed upon Tenant shall be joint and several.

     

    (b)           Time
is of the essence in this Sublease and each and all of its terms and
conditions.

     

    (c)           The
terms and conditions, benefits and burdens of this Sublease shall inure to the
benefit of and be binding upon the heirs, executors, administrators, successors
and assigns of the parties hereto.

     

    (d)           The
captions of this Sublease are solely to assist the parties and are not a part of
the terms or conditions of this Sublease.

     

    (e)           This
Sublease shall be governed by and construed in accordance with the laws of the
State of Utah, and is deemed to be executed within the State of
Utah.

     

    (f)           In
the event that Landlord shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes, lockouts, labor
troubles, inability to procure materials, failure of power, restrictive
governmental laws or regulations, riots, insurrection, war, or other reason of a
like nature not the fault of the Landlord, then performance of such act shall be
excused for the period of the delay and the period for the performance of any
such act shall be extended for a reasonable period related to the duration of
such delay.

     

    (g)           This
Sublease is the result of negotiations between Landlord and Tenant and their
attorneys.  Consequently, Landlord or its attorney is the preparer of
some provisions, while Tenant or its attorney is the preparer of other
provisions.  The parties agree that this Sublease is not to be
construed against either party as the preparer.

     

    40.         SEVERABILITY.

     

    If any
term or provision of this Sublease, or the application thereof to any person or
circumstance, shall to any extent be invalid or unenforceable, the remainder of
this Sublease, or the application of such provision to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each provision of this Sublease shall be valid and shall
be enforceable to the extent permitted by law.

     

    41.    
    BROKERS.

     

    Landlord
and Tenant represent and warrant that there are no claims for brokerage
commissions or finder's fees in connection with this Sublease and agree to
indemnify each other against and hold each other harmless from all liabilities
arising from such claim, including any attorney's fees connected
therewith.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    [SIGNATURES
APPEAR ON THE FOLLOWING PAGE]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties have executed this Sublease dated the day and year
first above written.

     

    
      
        
          	
                  TENANT:

                	
                  EVANS
      & SUTHERLAND COMPUTER CORPORATION,

                
	 
      	
                  a
      Utah corporation

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /S/ David H. Bateman

                
	 
      	 
      	 
      
	 
      	
                  Its::

                	
                  President and CEO 

                
	 
      	 
      	 
      
	
                  LANDLORD:

                	
                  WASATCH
      RESEARCH PARK I, LLC,

                
	 
      	
                  a
      Utah limited liability company

                
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /S/ Dale Christiansen

                
	 
      	 
      	 
      
	 
      	
                  Its:
      :

                	
                  Manager

                

        

      

    

    
       

    

    
      
        
          
            
              	
                      STATE
      OF UTAH

                    	 
      	
                         
      )

                    
	 
      	 
      	
                        
      :

                    
	
                      COUNTY
      OF Salt Lake

                    	
                       )

                    	 
      

            

          

        

      

    

    

    The
foregoing Sublease Agreement was acknowledged before me this 13th day of
November, 2009, by Dale Christiansen, the Manager of Wasatch Research Park I,
LLC, for and on behalf of Wasatch Research Park I, LLC.

     

    
      
        
          
            
              	
                       

                    	 
      	 
      	
                      /s/ Carol A. Young

                    
	 
      	 
      	 
      	 
      
	
                      STATE
      OF Utah

                    	
                       )

                    	 
      	
                      NOTARY
      PUBLIC

                    
	 
      	 
      	
                        
      :

                    	 
      
	
                      COUNTY
      of Salt Lake

                    	
                       )

                    	 
      	 
      

            

          

        

      

    

    

    The
foregoing Sublease Agreement was acknowledged before me this 13th day of
November, 2009, by David H. Bateman, the President of Evans & Sutherland
Computer Corporation, for and on behalf of Evans & Sutherland Computer
Corporation.

     

    
      
        
          	 
      	
                  /s/ Carol A. Young

                
	 
      	
                  NOTARY
      PUBLIC

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