Document:

EX-10.43

LOAN AGREEMENT

This Loan Agreement (this “Agreement”) is made and entered into as of the 1st day of August,
2007 by and between Baseline Capital, Inc. (“Lender”), Permian Legend Petroleum LP (“Borrower”),
and Permian Leger d LLC (“Guarantor”), with reference to the following facts:

A. Contemporaneously with the execution of this Agreement, Borrower is acquiring interests in
certain oil and gas properties, pipe and equipment from Ward Energy LP and affiliated sellers (the
"Acquisition”).

B. A portion of the purchase price in the Acquisition is being funded by the proceeds of a
loan from American State Bank (the “Bank”) to Borrower (the “Senior Debt”).

C. Borrower and Guarantor have requested that Lender loan to Borrower up to $500,000.00 to
fund a portion of the purchase price in the Acquisition and provide working capital for workovers
and similar operations, and Lender has agreed to make such loan pursuant and subject to the terms
of this Agreement and the other Loan Documents (as defined herein).

NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual promises, covenants and agreements set
forth herein and in the other Loan Documents, the parties hereto agree as follows:

1. Closing.

(a) Closing of the loan contemplated hereby (“Closing”) shall occur contemporaneously with the
closing of the Acquisition. Closing shall occur at the offices of Lender, or at such other time or
place as agreed upon by the parties. At Closing, Borrower shall deliver to Lender the following
fully executed documents (as such capitalized terms are defined herein):

(i) This Agreement.

	 	 	 
	(ii)

(iii)

(iv)

	 	The Note.

The Security Documents.

The Guaranty.

(v) A copy of the resolutions of Borrower and Guarantor authorizing this
transaction and the Acquisition, certified by the general partner of Borrower.

(b) Closing shill be conditioned upon Lender’s receipt of the foregoing documents and upon the
following:

(i) Borrower obtaining the loan from Bank constituting the Senior Debt pursuant
to lean documents acceptable to Lender.

(ii) The contemporaneous consummation of the Acquisition.

(iii) Lender shall have received certificates of existence and good standing of
Borrower and Guarantor.

(iv) Borrower and its affiliates and related parties shall not be in default of
any obligations owed to Lender.

2. Loan and Collateral 

(a) In conjunct on with the execution of this Agreement, Borrower will execute and deliver to
Lender a Promissory Note dated as of the date of this Agreement in the maximum principal amount of
$500,000.00 payable to Lender in substantially the form attached hereto as Exhibit “A”
(which Promissory Note along with any renewals, extensions and amendments thereto is hereinafter
referred to as the “Note”). Borrower shall be entitled to an initial advance of $350,000.00 in
principal amount under the Note at Closing, and subsequent advances (each, an “Advance”) after
Closing up to an aggregate principal amour{ together with the initial advance of $500,000.00, as
follows: (i) each Advance must be at least $20,000.00, (ii) Borrower shall provide Lender with a
written request for each Advance at least five (5) days prior to funding of such Advance, which
must set forth a proper use of proceeds (as provided in Section 8(i) hereof), (iii) no default or
Event of Default shall have occurred under this Agreement or any other Loan Document, (iv) each
Advance is subject to and contingent upon Lender determining, in its discretion, that Borrower is
creditworthy, and (v) Borrower and its affiliates and related parties shall not be in default of
any obligations owed to Lender. No Advances will be made after the expiration of six (6) months
from the date of this Agreement.

(b) In consideration of the extension of credit under the Note and to secure all amounts owing
under the Note and any other indebtedness now or hereafter owed by Borrower to Lender
(collectively, the “Indebtedness”), Guarantor shall execute and deliver to Lender a guaranty of the
Indebtedness (the “Guaranty”) and Borrower will execute and deliver to Lender (i) a Subordinated
Deed of Trust covering al] of Borrower’s oil and gas properties (the “Mortgaged Properties”), and
(ii) a Security Agreement covering all of the non-real property assets of Borrower other than those
assets located on the Mortgaged Properties (the “Pledged Assets”) (said Deed of Trust and Security
Agreement are referred to collectively herein as the “Security Documents”). The Note, this
Agreement, the Security Documents, the Guaranty and all other documents or instruments related
thereto. are referred to herein as the “Loan Documents”.

3. Senior Debt. So long as any Indebtedness is owed to Lender by Borrower, Borrower
agrees not to seek or agree to an increase of the total amount owed or available to be borrowed
under a borrowing base or otherwise by Borrower from Bank to a total amount in excess of
$1,600,000.00 without the prior written consent of Lender.

4. Payout Interests. la conjunction with the execution of the Loan Documents and
various services provided by Base Line in connection with the Acquisition and the Senior Debt,
Borrower shall execute two (2) Assignments from Borrower to Lender assigning to Lender 15% and 20%,
respectively, of Borrower’s right, title and interest in and to the Mortgaged Properties in
substantially the form and substance attached hereto as Exhibit “B" (the “Assignments”) and
deliver said Assignments to Lender to be held by Lender until Payout, and Borrower shall also
execute and deliver to Lender a Memorandum of Assignment in substantially the form of Exhibit
"C" to be filed of record to evidence Lender’s interest in the Mortgaged Properties as provided
herein and in the Assignments. Upon Borrower’s full payment to Lender of any and all principal,
interest and other costs, expenses and fees under the Loan Documents (“Payout”) (a) on or before
11:59 p.m. on August 1, 2008, Lender will be entitled to the Assignment of 15% of Borrower’s right,
title and interest in and to the Mortgaged Properties, or (b) after 11:59 p.m. on August 1, 2008,
Lender will b!, entitled to the Assignment of 20% of Borrower’s right, title and interest in and to
the Mortgaged Properties. Upon Payout, Lender may file of record the Assignment to which Lender is
entitled pursuant to the foregoing, and Borrower shall cause the Bank to release any lien or
interest it may have in such assigned interest. Said Assignment will be free and clear of any and
all liens and other encumbrances. In the event Borrower is unable to obtain a release from the Bank
of its lien as to the interest assigned within 30 days from the date of Borrower’s full payment of
the obligations under the Loan Documents, Borrower agrees to pay Lender liquidated damages of
$75,000.00 within said 30-day period and $5,000.00 per month as additional liquidated damages for
every month thereafter that a release of the Bank’s lien is not delivered. The liquidate) damages
are in addition to any and all revenue which Lender and/or its assigns is entitled to under the
terms and conditions of the Assignment. Borrower further agrees to execute and deliver such other
documents and instruments, including without limitation assignments of federal and state leases,
which Lender requests with respect to the matters discussed in this Section 4, and shall execute
and deliver to Lender together with this Agreement a Limited Power of Attorney in substantially the
form of Exhibit “D" authorizing Lender to execute and deliver such documents and
instruments on behalf of and in the name of Borrower.

5. Adverse Condition or Event. Each of Borrower and Guarantor agrees to promptly
advise Lender in writing of (i) any condition, event or act which comes to its attention that would
or might materially adversely affect the financial condition or operations of Borrower or
Guarantor, or Lender’s rights under the Loan Documents, (ii) any litigation filed by or against
Borrower or Guarantor, (iii) any event that has occurred that would constitute a default or event
of default under any Loan Document, and (iv) any event that has occurred that would constitute a
default or an event of default under any other indebtedness or material agreement of Borrower or
Guarantor.

6. Service Fee. Borrower agrees to pay Lender at closing a fee of $7,500.00 in
consideration for Lender’s commitment and consulting and other services provided by Lender in
connection with Borrower’s acquisition of the Mortgaged Properties, and to pay Lender a continuing
service fee of $1,000 00 per month during the term of the Note for such services following the
Acquisition.

7. Representations and Warranties. Each of Borrower and Guarantor represents and
warrants to Lender as follows:

(a) Good Standing. Borrower is a limited partnership, duly organized, validly existing
and in good standing under the laws of the state of Texas. Guarantor is a limited liability
company, duly organized, validly existing and in good standing under the laws of the State of
Texas. Each of Borrower and Guarantor has qualified as a foreign entity and is in good standing in
each other state or jurisdiction wherein its operations, transaction of business or ownership of
property make such qualification necessary.

(b) Authority and Consents. Each of Borrower and Guarantor has full power and
authority to execute and deliver the Loan Documents to which it is a party and to perform the
obligations provided for therein, all of which have been duly authorized by all proper and
necessary action of the appropriate governing body of Borrower and Guarantor. Guarantor is the only
general partner of Borrower and the persons signing as limited partners of Borrower are the only
limited partners of Borrower. The persons signing on behalf of Guarantor are the only Members and
Managers of Guarantor. No consent or approval of or notice to any public authority or other third
party is required in connection with any Loan Document, the transaction contemplated by the Loan
Documents or the Acquisition.

(c) Binding Agreement. This Agreement and the other Loan Documents executed by each
of Borrower and Guarantor constitutes valid and legally binding obligations of each of Borrower and
Guarantor, as applicable, enforceable in accordance with their terms.

(d) Litigation. There is no litigation or similar proceeding involving Borrower or
Guarantor pending or, to the knowledge of Borrower or Guarantor, threatened before any court or
governmental authority, agency or arbitration authority.

(e) No Conflicting Agreements. There is no provision in any agreement or other
document pertaining to the organization, power or authority of either Borrower or Guarantor and no
provision of any existing agreement, mortgage, indenture or contract binding on Borrower or
Guarantor, which would conflict with or in any way prevent the execution, delivery or carrying out
of the terms of this Agreement and the other Loan Documents.

(f) Ownership of Assets. Borrower has good and defensible title to all of its assets
free and clear of liens, claims and other encumbrances, except liens on the Mortgaged Properties
securing the Senior Debt.

(g) Taxes. All taxes and assessments due and payable by each of Borrower and Guarantor
have been paid or are being contested in good faith by appropriate proceedings. Each of Borrower
and Guarantor has filed all tax returns which it is required to file.

(h) Financial Statements. The financial statements of Borrower and Guarantor
heretofore delivered to Lender have been prepared on a consistent basis throughout the period
involved and fairly present Borrower’s and Guarantor’s financial condition as of the date pr dates
thereof, and there has been no material adverse change in its financial condition or operations
since the dates of such financial statements. There are no liabilities of Borrower or Guarantor
which are not reflected in such financial statements.

(i) Information. The recitals set forth at the beginning of this Agreement and all
factual information furnished by Borrower and Guarantor to Lender in connection with this Agreement
and the other Loan Documents is and will be accurate and complete on the date as of which such
information is delivered to Lender and is not and will not be incomplete by the omission of any
material fact necessary to make such information not misleading.

(j) Environmental. The conduct of Borrower’s and Guarantor’s business operations and
the condition of their assets does not and will not violate any federal laws, rules or ordinances
for environmental protection, any applicable local or state law, rule, regulation or rule of common
law or any judicial interpretation thereof relating primarily to the environment, except where such
matter would not have a material adverse effect on Borrower or Guarantor.

(k) Permits. Each of Borrower and Guarantor has all permits, licenses, certifications
and similar authorizations, has made all filings and obtained all consents (collectively, the
"Permits”) necessary and appropriate for the conduct of its business and ownership of its assets.

(l) Compliance. Each of Borrower and Guarantor is in compliance with all laws, rules
and regulations applicable to its business, properties or transactions.

(m) Payout Interests. The value of the interests covered by the Assignments is
currently uncertain and speculative due to the risks associated with the Mortgaged Properties and
the oil and gas business, and the period of time prior to Payout. Borrower and Guarantor
acknowledge receipt of various services rendered by BaseLine in connection with the Acquisition and
the Senior Debt in partial consideration of the Assignments.

8. Affirmative Covenants. Until full payment and performance of all obligations of
Borrower and Guarantor under the Loan Documents, each of Borrower and Guarantor will, unless Lender
consents otherwise in writing (and without limiting any obligation of Borrower and Guarantor under
any other Loin Document):

(a) Financial Statements and Other Information.

(i) Furnish to Lender unaudited financial statements (including a balance sheet
and profit and loss statement) of Borrower and Guarantor, prepared in accordance
with generally accepted accounting practices for each fiscal year within 90 days
after the close of each such fiscal year, which shall include a statement of cash
flow and contingent obligations.

(ii) If financial statements in addition to annual financial statements are
delivered or required to be delivered to Bank, Borrower shall furnish to Lender
unaudited financial statements (including a balance sheet and profit and loss
statement) of Borrower and Guarantor for each quarter within thirty (30) days after
the close of each fiscal quarter, which shall include a statement of cash flow and
contingent obligations and a certification by the general partner of Borrower as to
accuracy, completeness and consistent application of generally accepted accounting
practices.

(iii) Furnish to Lender copies of Borrower’s and Guarantor’s tax returns.

(iv) Furnish to Lender upon (A) any default hereunder, and (B) at least once
every twelve (12) months, an oil and gas reserve evaluation as of said dates
covering Borrower’; oil and gas properties, prepared by independent petroleum
engineers acceptable: to Lender at Borrower’s expense.

(v) Furnish to Lender copies of all agreements, documents and correspondence
between Borrower and Guarantor and Bank related to the Senior Debt.

(vi) Furnish to Lender promptly such additional information, reports and
statements respecting the business operations and financial condition of Borrower
and Guarantor, from time to time, as Lender may reasonably request.

(b) Insurance. maintain insurance with responsible insurance companies and in such
amounts as are satisfactory to Lender and providing for at least 30 days prior notice to Lender
before any cancellation thereof Satisfactory evidence of such insurance will be supplied to Lender
upon request.

(c) Existence and Compliance. Maintain its existence, good standing and qualification
to do business where required and comply with all laws, regulations and governmental requirements
including, without limitation, environmental laws applicable to it or to any of its property,
business operations and transactions.

(d) Taxes and Other Obligations. Pay all of its taxes, assessments and other
obligations, including, but not limited to taxes, costs or other expenses arising out of this
transaction, as the same become due and payable, except to the extent the same are being contested
in good faith by appropriate proceedings in a diligent manner. Promptly upon payment and otherwise
upon request of Lender, Borrower and Guarantor shall provide to Lender evidence of payment of all
taxes.

(e) Maintenance and Inspection. Maintain its assets in good condition and repair, and
provide access to Lender, upon reasonable prior notice by Lender and during normal business hours,
to inspect its assets and all records of Borrower and Guarantor.

(f) Environmental. Immediately advise Lender in writing of (i) any and all
enforcement, cleanup, remedial, removal, or other governmental or regulatory actions instituted,
completed or threatened pursuant to any applicable federal, state, or local laws, ordinances or
regulations relating to any hazardous materials affecting either Borrower or Guarantor or their
respective assets; and (ii) all claims made or threatened by and third party against it relating to
damages, contribution, cost recovery, compensation, loss or injury resulting from any hazardous
materials. Borrower and Guarantor shall immediately notify Lender of any remedial action taken by
either of them under environmental laws, regulations or agreements. Borrower and Guarantor will not
use or permit any other party to use any hazardous materials at their respective premises except
such materials as are inc dental to its normal course of business, maintenance and repairs and
which are handled in compliance with all applicable environmental laws. Each of Borrower and
Guarantor agrees to (I) permit Lender, its agents, contractors, employees and representatives to
enter and inspect its premises at any reasonable times upon three (3) days prior notice for the
purposes of conducting an environmental investigation and audit (including taking physical samples)
to insure compliance with this covenant and Borrower and Guarantor shall reimburse Lender on demand
for the costs of any such environmental investigation and audit; and (II) provide Lender, its
agents, contractors, employees and representatives with access to and copies of any and all data
and documents relating to or dealing with any hazardous materials used, generated, manufactured,
stored or disposed of by its business operations within five (5) days of Lender’s request therefor.

(g) Title to Assets. Each of Borrower and Guarantor shall maintain good and defensible
title to all of its assets, free and clear of all liens, claims and other encumbrances except for
those on the Mortgaged Properties securing the Senior Debt, and shall provide to Lender evidence of
such title upon request.

(h) Permits. Each of Borrower and Guarantor shall maintain all Permits necessary and
appropriate for the conduct of its business and ownership of its assets.

(i) Use of Proceeds. Borrower agrees to use the loan proceeds along with the loan
proceeds under the Senior Debt for the purpose of completing the Acquisition and performing
workover and similar operations on the Mortgaged Properties.

9. Negative Covenants. Until full payment and performance of all obligations of
Borrower and Guarantor under the Loan Documents, each of Borrower and Guarantor will not, without
the prior written consent of Lender (and without limiting any obligation of Borrower and Guarantor
under any other Loan Documents):

(a) Transfer of Assets or Change of Control. (i) Sell, lease, assign or otherwise
dispose of or transfer any interest in any of its assets, other than in the ordinary course of
business, (ii) enter into any merger, consolidation or similar transaction, or (iii) allow a Change
of Control (as defined herein) of Borrower or Guarantor. As used herein, “Change of Control” means,
with respect to Borrower or Guarantor, an event or series of events by which the holders of the
ownership interests of Borrower or Guarantor as of the date of this Agreement cease to own and
control, directly and indirectly, at least fifty-one percent (51 %) of such ownership interests of
Borrower or Guarantor, a change of general partner of B mower or a material change of the
management personnel of Guarantor.

(b) Liens. Grant, suffer or permit any contractual or noncontractual lien on or
security interest in its assets, except for liens securing the Senior Debt, fail to promptly pay
when due all lawful claims, whether for labor, materials or otherwise, or incur or permit any
indebtedness to ‘De secured by its assets other than the Senior Debt to Bank permitted by Section
3.

(c) Restrictions on Dividends, Distributions and Payments. Upon any Event of Default,
Borrower and Guarantor shall not make any dividends, distributions, compensation or other payments
to any of its partners, members or other equity holders, directly or indirectly.

(d) Extensions o Credit. Investments. Make any loan or advance to any person or
entity, or purchase or otherwise acquire, any capital stock, assets, obligations or other
securities or make an:’ capital contribution to, or otherwise invest or acquire any interest in any
entity, or participate as a partner or joint venturer with any person or entity, except for the
purchase of direct obligations of the United States or any agency thereof with maturities of less
than one year.

(e) Other Debt. Create, incur, assume or become liable in any manner for any
indebtedness (for borrowed money, deferred payment for the purchase of assets, lease payments, a
surety or guarantor for the debt of another or otherwise), except for normal trade debts incurred
in the ordinary course of business, the Indebtedness and the Senior Debt.

(f) Character of Business. Change the general character of its business as conducted
on the date of this Agreement, or engage in any type of business not reasonably related to its
business as presently conducted.

(g) Transfer of Securities/Change of Control. Guarantor shall not transfer any of its
ownership interests in Borrower, and there shall not be any Change of Control of Borrower or
Guarantor, without the prior written consent of Lender, which shall not be unreasonably withheld,
and the execution and delivery of such guaranties, Loan Document amendments, and other documents
and instruments as are requested by Lender.

10. Arbitration. Lender, and Borrower and Guarantor agree that upon the written demand
of either party, whether made before or after the institution of any legal proceedings, but prior
to the rendering of any judgment in that proceeding, all disputes, claims and controversies between
them, whether individual, joint, or class in nature, arising from this Agreement, any other Loan
Document or otherwise, including without limitation contract disputes and tort claims, shall be
resolved by binding arbitration pursuant to the Commercial Rules of the American Arbitration
Association (“AAA”). Any arbitration proceeding held pursuant to this arbitration provision shall
be conducted in Midland, Texas. No act to take or dispose of any collateral shall constitute a
waiver of this arbitration agreement or be prohibited by this arbitration agreement. This
arbitration provision shall not limit the right of either party during any dispute, claim or
controversy to seek, use, and employ ancillary, or preliminary rights and/or remedies, judicial or
otherwise, for the purposes of realizing upon, preserving, protecting, foreclosing upon or
proceeding under forcible entry and detainer for possession of, any real or personal property, and
any such action shall not be deemed an election of remedies. Such remedies include, without
limitation, obtaining injunctive relief or a temporary restraining order, invoking a power of sale
under any security agreement, deed of trust or mortgage, obtaining a writ of attachment or
imposition of a receivership, or exercising any rights relating to personal property, including
exercising the right of set-off, or taking or disposing of such property with or without judicial
process pursuant to the Uniform Commercial Code. Any disputes, claims or controversies concerning
the lawfulness of reasonableness of an act, or exercise of any right or remedy concerning any
collateral, including any claim to rescind, reform, or otherwise modify any agreement relating to
the collateral, shall also be arbitrated; provided, however that no arbitrator shall have the right
or the power to enjoin or restrain any act of either party. Judgment upon any award rendered by any
arbitrator may be entered in any court having jurisdiction. The statute of limitations, estoppel,
waiver, laches and similar doctrines which would otherwise be applicable in an action brought by
party shall be applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of any action for these purposes. The Federal
Arbitration Act (Title 9 of the United States Code) shall apply to the construction,
interpretation, and enforcement of this arbitration provision.

11. Default. Borrower and Guarantor shall be in default under this Agreement and under
each of the other Loan Documents upon the occurrence of any of the following (an “Event of
Default”):

(a) Borrower defaults in the payment of any amounts due and owing under the Note;

(b) either Borrower or Guarantor fails to timely and properly observe, keep or perform any
term, covenant, agreement or condition of this Agreement or in any other Loan Document or in any
other loan agreement, promissory note, security agreement, deed of trust, mortgage, assignment or
other contract securing, guaranteeing or evidencing payment of an indebtedness of Borrower or
Guarantor to Lender, or if a default or an event of default shall occur under any Loan Document, or
if a default or an event of default shall occur ender any material agreement of Borrower or
Guarantor;

(c) a default or en event of default shall occur under or in connection with the Senior Debt
from Bank;

(d) any representation, warranty or statement made by Borrower or Guarantor herein, in any of
the other Loan Documents or in any certificate furnished to Lender hereunder shall be breached or
shall prove to be untrue or misleading in any material respect at the time when made;

(e) Borrower or Guarantor shall (i) apply for or consent to the appointment of a receiver,
trustee or liquidator of it or of all or a substantial part of its assets; (ii) be unable, or admit
in writing its inability, to pay its debts as they become due; (iii) make a general assignment for
tl-w benefit of creditors; (iv) be adjudicated as bankrupt or insolvent or file a voluntary
petition in bankruptcy; (v) file a petition or an answer seeking reorganization or an arrangement
with creditors or to take advantage of any bankruptcy or insolvency law; (vi) file an answer
admitting the material allegations of, or consent to, or default in answering, a petition filed
against it in any bankruptcy, reorganization or insolvency proceedings; or (vii) take any action
(corporate or otherwise) for the purpose of effecting any of the foregoing;

(f) an order, judgment or decree shall be entered by any court of competent jurisdiction
approving a petition seeking reorganization of Borrower or Guarantor or appointing a receiver,
trustee or liquidator of Borrower or Guarantor or of all or a substantial part of their respective
assets, and such order, judgment or decree shall continue unstayed in effect for any period of
forty-five (45) consecutive days;

(g) any lien for failure to pay income, payroll, FICA or similar taxes shall be filed by any
governmental authority against Borrower or Guarantor or any of their respective assets;

(h) default shall occur in the payment of any indebtedness of Borrower or Guarantor
aggregating $50,000.00 or more under any note, loan agreement or credit agreement and such default
shall continue for more than the period of grace, if any, specified therein, or any such
indebtedness shall become due before its stated maturity by acceleration of the maturity thereof or
shall become due by its terms and shall not be promptly paid or extended;

(i) any final judgment or judgments for the payment of money in the amount of $50,000.00 or
more, in the aggregate, shall be rendered against Borrower or Guarantor and shall not be satisfied
or discharged at least thirty (30) days prior to the date on which any of its assets could 13,a
lawfully sold to satisfy such judgment or judgments;

(j) a Change of Control shall occur;

(k) any event that, in the reasonable good faith estimation of Lender, threatens the value of
any collateral securing the Indebtedness or casts doubt on the ability of Borrower to repay the
Indebtedness; or

(l) the dissolution of Borrower or Guarantor.

12. Remedies Upon Default. If an Event of Default shall occur, Lender shall have all
rights, powers and remedies available under each of the Loan Documents as well as all rights and
remedies available at law or n equity, including, without limitation, the right to declare the
Indebtedness immediately due and payable; provided, that in connection with any default or Event of
Default related to the insolvency of Borrower or Guarantor or any debtor relief laws, the full
amount of the Indebted less shall automatically become fully due and payable.

13. Notices. All notices, requests or demands which any party is required or may
desire to give to any other party under any provision of this Agreement or any other Loan Document
must be in writing delivered to the other party at the following address:

	 	 	 
	Borrower and Guarantor
	 	Permian Legend Petroleum LP

Permian Legend LLC

3327 W. Wadley Ave., Suite 3, #267

Midland, Texas 79707

Fax: (432) 685-1307

	Lender:
	 	BaseLine Capital, Inc.

508 West Wall Street, Suite 775

Midland, Texas 79701

Fax: (432) 687-1372

or to such other address as any party may designate by written notice to the other party. Each such
notice, request and demand shall be deemed given or made (a) if sent by mail, upon the earlier of
the date of receipt or five (5) days after deposit in the U.S. Mail, first class postage prepaid;
or (b) if sent by any other means, upon delivery.

14. Costs, Expenses ant Attorneys’ Fees. Borrower shall pay to Lender immediately upon
demand the full amount of all reasonable costs and expenses, including reasonable attorneys’ fees
incurred at any time by Lender (whether before, after or during the loan closing) in connection
with (a) the Loan, (1)) the negotiation and preparation of this Agreement and each of the Loan
Documents and any rights, remedies or interests hereunder or thereunder, (c) the maintenance,
renewal or collection of the Loan or any rights or remedies under any Loan Documents, and (d) all
other costs and attorneys’ fees incurred by Lender for which Borrower is obligated to reimburse
Lender in accordance with the terms of the Loan Documents.

15. Savings Clause. All agreements between Borrower, Guarantor and Lender, whether now
existing or hereafter arising and whether written or oral, are hereby limited so that in no
contingency shall the interest paid or agreed to be paid to Lender exceed the maximum amount
permitted under applicable law. If, under any circumstance whatsoever, interest would otherwise be
payable to Lender at a rate in excess of the highest lawful rate, then the interest payable to
Lender shall be reduced to the maximum amount permitted under applicable law, and if under any
circumstance whatsoever Lender shall ever receive anything of value deemed interest by applicable
law which would exceed interest at the highest lawful rate, then any excessive interest paid shall
be applied to the reduction of the aggregate principal amount of the Note and any other obligation
owing under the Loan Documents and not to the payment of interest or if such excess interest
exceeds all amounts due and owing under the Loan Documents, such excess shall be refunded to
Borrower. All interest paid or agreed to be paid to Lender shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full term of the
obligations of Borrower to Lender (including the period of any renewal or extension).

16. Miscellaneous. Borrower, Guarantor and Lender further covenant and agree as
follows, without limiting any obligation of Borrower and Guarantor of any other Loan Document:

(a) Cumulative Rights and Waiver of Notice. Each and every right granted to Lender
under any Loan Document, or allowed it by law or equity shall be cumulative of each other and may
be exercised in addition to any and all other rights of Lender, and no delay in exercising any
right shall operate as a waiver thereof, nor shall any single or partial exercise by Lender of any
right preclude any other or future exercise thereof or the exercise of any other right. Each of
Borrower and Guarantor expressly waives any presentment, demand, protest or other notice of any
kind, including but not limited to notice of intent to accelerate and notice of acceleration. No
notice to or demand on Borrower or Guarantor shall, of itself, entitle Borrower or Guarantor to any
other or future notice or demand in similar or other circumstances.

(b) APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
AND ARE PERFORMABLE IN MIDLAND, MIDLAND COUNTY, TEXAS.

(c) Amendment and Binding Effect. No modification, consent, amendment or waiver of
any provision of this Agreement, nor consent to any departure by Borrower or Guarantor therefrom,
shall be effective unless the same shall be in writing and signed by an officer of Lender, and then
shall be effective only in the specified instance and for the purpose for which given. This
Agreement is binding upon each of Borrower and Guarantor and its respective successors and assigns,
and inures to the benefit of Lender, its participants, successors and assigns; however, no
assignment or other transfer of Borrower’s or Guarantor’s rights or obligations hereunder shall be
made or be effective without Lender’s prior written consent, nor shall it relieve Borrower or
Guarantor of any obligations hereunder.

(d) Documents and Further Assurances. All documents, certificates and other items
required under this Agreement to be executed and/or delivered to Lender shall be in form and
content satisfactory to Lender and its counsel. Each of Borrower and Guarantor agrees to execute
and deliver to Lender such additional documents and instruments as Lender may request to evidence
and complete the transactions contemplated hereby.

(e) Partial Invalidity. The unenforceability or invalidity of any provision of this
Agreement shall not affect the enforceability or validity of any other provision herein and the
invalidity or unenforceability of any provision of any Loan Document to any person or circumstance
shall not affect the enforceability or validity of such provision as it may apply to other persons
or circumstances.

(f) INDEMNIFICATION. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, BORROWER AND
GUARANTOR SHALL INDEMNIFY, DEFEND AND HOLD LENDER AND ITS OFFICERS, EMPLOYEES, AGENTS,
SHAREHOLDERS, DIRECTORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “BASELINE PARTIES”) HARMLESS
FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, SUITS, LOSSES, DAMAGES, ASSESSMENTS, FINES,
PENALTIES, COSTS OR OTHER EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND COURT COSTS) ARISING
FROM OR IN ANY WAY RELATED TO ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING BUT NOT
LIMITED TO ANY OPERATIONS OR OPERATIONAL DECISIONS, OR ACTUAL OR THREATENED DAMAGE TO THE
ENVIRONMENT, AGENCY COSTS OF INVESTIGATION, PERSONAL INJURY OR DEATH, OR PROPERTY DAMAGE, DUE TO A
RELEASE OR ALLEGED RELEASE OF HAZARDOUS MATERIALS, ARISING FROM BORROWER’S OR GUARANTOR’S BUSINESS
OPERATIONS, ANY OTHER PROPERTY OWNED BY BORROWER OR GUARANTOR OR IN THE SURFACE OR GROUND WATER
ARISING FROM BORROWER’S OR GUARANTOR’S BUSINESS OPERATIONS, OR GASEOUS EMISSIONS ARISING FROM
BORROWER’S OR GUARANTOR’S BUSINESS OPERATIONS OR ANY OTHER CONDITION EXISTING OR ARISING FROM
BORROWER’S OR GUARANTOR’S BUSINESS OPERATIONS RESULTING FROM THE USE OR EXISTENCE OF HAZARDOUS
MATERIALS, WHETHER SUCH CLAIM PROVES TO BE TRUE OR FALSE. EACH OF BORROWER AND GUARANTOR FURTHER
AGREES THAT ITS INDEMNITY OBLIGATIONS SHALL INCLUDE, BUT ARE NOT LIMITED TO, LIABILITY FOR DAMAGES
RESULTING FROM THE PERSONAL INJURY OR DEATH OF AN EMPLOYEE OF BORROWER OR GUARANTOR, REGARDLESS OF
WHETHER BORROWER OR GUARANTOR HAS PAID THE EMPLOYEE UNDER THE WORKMEN’S COMPENSATION LAWS OF ANY
STATE OR OTHER SIMILAR FEDERAL OR STATE LEGISLATION FOR THE PROTECTION OF EMPLOYEES. THE TERM
"PROPERTY DAMAGE” AS USED IN ‘IRIS PARAGRAPH INCLUDES, BUT IS NOT LIMITED TO, DAMAGE TO ANY REAL OR
PERSONAL PROPERTY OF BORROWER OR GUARANTOR, THE LENDER, THE BASELINE PARTIES AND OF ANY THIRD
PARTIES. THE BORROWER’S AND GUARANTOR’S OBLIGATIONS UNDER THIS PARAGRAPH SHALL SURVIVE THE
REPAYMENT OF THE INDEBTEDNESS AND ANY DEED IN LIEU OF FORECLOSURE OR FORECLOSURE OF AI` Y DEED OF
TRUST, SECURITY AGREEMENT OR MORTGAGE SECURING THE INDEBTEDNESS. THE PARTIES HERETO INTEND FOR THE
PROVISIONS OF THIS PARAGRAPH TO APPLY TO AND PROTECT EACH INDEMNIFIED PARTY FROM THE CONSEQUENCES
OF ITS OWN NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING OR CONCURRING CAUSE
OF ANY CLAIMS INDEMNIFIED AGAINST IN THIS PARAGRAPH.

(g) Survivability. All covenants, agreements, representations and warranties made
herein or in the other Loan Documents shall survive the making of the Indebtedness and shall
continue in full force and effect so long as the Indebtedness is outstanding.

(h) Participation of Loan. Borrower and Guarantor agree and consent to Lender
transferring participation interests in this Agreement, the Note and the other Loan Documents to
participants selected by Lender in its sole discretion, and to Lender providing any information or
documents to any such participant. Participated interests may be held in the name of the
participants or in Lender’s name on behalf of such participants, and each of Borrower and Guarantor
agrees to execute and deliver such documents and instruments as Lender may request in connection
with such participations.

(i) Entire Agreement. This Agreement along with the Note, the Security Documents, the
Guaranty aid the other Loan Documents contain the entire understanding among the Borrower,
Guarantor and Lender with respect to the subject matter contained herein. Neither this Agreement
nor a portion of the provisions hereof maybe changed, modified, amended, waived, supplemented,
discharged, canceled or terminated by any course of conduct or in the manner other than an
agreement in writing. If there are any conflicts or inconsistencies between this Agreement, the
Note, the Security Documents, the Guaranty or any of the other Loan Documents, this Agreement shall
prevail and control.

(j) Counterpart Execution. This Agreement may be executed in any number of
counterparts with the same effect as if all of the parties had signed the same document. All
counterparts shall be construed together and shall constitute one Agreement. Faxed signatures shall
be treated is and deemed original signatures and shall be binding for all purposes.

(k) Joinder of Owners. The partners of Borrower and members of Guarantor are joining
in this Agreement for the purpose of acknowledging and agreeing to the representations, warranties
and covenants of Borrower and Guarantor set forth herein.

[Remainder of Page Intentionally Left Blank]

1

NOTICE OF FINAL AGREEMENT

THIS AGREEMENT, THE NOTE, THE SECURITY DOCUMENTS, THE GUARANTY AND/OR ANY AND ALL OTHER
DOCUMENTS EXECUTED AT OR NEAR THE TIME OF EXECUTION OF THIS DOCUMENT CONSTITUTE A “LOAN AGREEMENT”
AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS & COMMERCE CODE, AND REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

LENDER:

BASELINE CAPITAL, INC., a Texas corporation

By:

Karl J. Reiter, President

BORROWER:

PERMIAN LEGEND PETROLEUM LP

By: Permian Legend LLC, its general partner

By:

Ronnie L. Steinocher, Manager

By:

Lisa P. Hamilton, Manager

	 	 	 	By:
Pierce-Hamilton Energy Partners LP, its Limited
	 
	 	 	 	Partner

	 	 	 	By:
Muscoda Hill Energy LLC, its general
partner,

By:

Lisa P. Hamilton, President

By:

Ronnie L. Steinocher, Limited Partner

[signatures continued on next page)

GUARANTOR:

PERMIAN LEGEND LLC

By:

Ronnie L. Steinocher, Member and Manager

By:

Lisa P. Hamilton, Manager

	 	 	 	By:
Pierce-Hamilton Energy Partners, LP, its Member

	 	 	 	By:
Muscoda Hill Energy LLC, its general
	 
	 	 	 	partner

	 	 	 	By:

Lisa P. Hamilton, President

2EX-10.44

CONSENT AND FIRST AMENDMENT

TO LOAN AGREEMENT

This Consent and First Amendment to Loan Agreement (this “Amendment”) is made and entered into
as of the 31st day of October, 2008 by and among BaseLine Capital, Inc. (“Lender”), Permian Legend
Petroleum LP (“Borrower”) and Permian Legend LLC (“Guarantor”) with reference to the following
facts:

A. Lender, Borrower and Guarantor entered into that certain Loan Agreement dated as of August
1, 2007 (the “Loan Agreement”).

B. Borrower desires to sell certain of its properties to Andalucia Oil Company pursuant to
those certain Partial Assignments and Bills of Sale dated effective October 1, 2008, copies of
which are attached hereto as Exhibit “1” (the “Andalucia Properties”) and has requested
that the Lender consent to such transfer in accordance with Section 9(a) of the Loan Agreement and
release its liens and security interests on the Andalucia Properties.

C. Subject to the terms and conditions set forth herein, Lender has agreed to consent to the
transfer of the Andalucia Properties and to release its liens and security interests on the
Andalucia Properties.

D. Lender, Borrower and Guarantor desire to amend the Loan Agreement as provided herein in
connection with the transfer of the Andalucia Properties.

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

1. Defined Terms. Certain terms are defined herein and capitalized terms used but not
defined herein shall have the meanings assigned thereto in the Loan Agreement.

2. Consent and Release. Subject to the terms and conditions of this Amendment, Lender
hereby consents to the transfer of the Andalucia Properties so long as such transfer is closed on
or before December 1, 2008, and agrees to release its liens and security interests on the Andalucia
Properties.

3. Amendment to Loan Agreement. The Loan Agreement is hereby amended to add the
following as Section 4A:

“4A. Partial Payout. In the event any of the Mortgaged Properties are sold (a
“Transferred Property”), Lender may, in its sole discretion, declare that Payout has
occurred with respect to the Transferred Property as part of any payment on the Note
or other consideration exchanged in connection with such transaction (a “Partial
Payout”). In connection with a Partial Payout, Borrower shall retain at least twenty
percent (20%) of its interest in the Transferred Property and shall execute and
deliver to Lender an Assignment of twenty percent (20%) of Borrower’s right, title
and interest in and to the Transferred Property (a “Partial Payout Assignment”).
Borrower shall also execute and deliver to Lender such replacement Assignments as
Lender requests to take into account the Transferred Property. All of the terms and
provisions set forth in this Agreement relating to Payout and Assignments shall be
applicable to any Partial Payout and any Partial Payout Assignment to the extent not
in conflict with this Section 4A.”

4. Declaration of Partial Payout. Lender hereby declares that a Partial Payout has
occurred in connection with the transfer of the Andalucia Properties, and Borrower shall retain at
least twenty percent (20%) of its interest therein and execute and deliver a Partial Payout
Assignment related thereto.

5. Representations and Warranties of Borrower. Borrower represents and warrants to
Lenders as follows:

(a) The representations and warranties contained in Section 7 of the Loan Agreement are
true and correct on and as of the date hereof as though made on and as of the date hereof,
except for those representations and warranties which address matters only as of a
particular date (which remain true and correct as of such date).

(b) No Event of Default or default has occurred and is continuing under the Loan
Agreement.

(c) The execution, delivery and performance by Borrower and Guarantor of this Amendment
are within Borrower’s and Guarantor’s partnership and company powers, have been duly
authorized by all necessary action, require no action by or in respect of, or filing with,
any governmental body, agency or official and do not violate or constitute a default under
any provisions of applicable law or any material agreement binding upon Borrower or
Guarantor or result in the creation or imposition of any lien upon any of the assets of
Borrower or Guarantor.

(d) This Amendment constitutes the valid and binding obligation of Borrower and
Guarantor enforceable in accordance with its terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditor’s rights
generally, and (ii) the availability of equitable remedies may be limited by equitable
principles of general application.

6. Conditions Precedent. This Amendment shall be effective as of the date upon which
all of the following conditions have been satisfied:

(a) Lender shall have received counterparts of this Amendment duly executed by
Borrower, Guarantor and the Bank;

(b) Lender shall have received a Partial Payment Assignment relating to the Andalucia
Properties;

(c) Lender shall have received no less than $100,000 from the proceeds of the sale of
the Andalucia Properties; and

(d) Lender shall have received any other documents, certificates and opinions in
connection with this Amendment that may be requested by Lender, in form and substance
satisfactory to Lender.

7. Ratification of Loan Agreement and Other Loan Documents. Except as expressly
amended hereby, the Loan Agreement and all of the other Loan Documents are and shall be unchanged
and all of the terms, provisions, covenants, conditions, schedules and exhibits thereof shall
remain and continue in full force and effect and are hereby ratified and confirmed by Borrower,
Guarantor and Lender as of the date of this Amendment as if the Loan Agreement and the other Loan
Documents were executed by Borrower and the other parties thereto as of the date of this Amendment.
The amendments contemplated hereby shall not limit or impair any liens or security interests
securing the obligations under the Loan Documents, all of which are hereby ratified, affirmed and
extended to secure the obligations under the Loan Documents as they may be increased pursuant
hereto.

8. No Waiver. Neither the execution by Lender of this Amendment nor anything
contained herein shall in anywise be construed or operate as a waiver by Lender of any default or
Event of Default (whether now existing or that may occur hereafter) or of any of Lender’s rights
under the Loan Agreement as amended hereby or under any of the other Loan Documents.

9. Acknowledgment and Consent of the Bank. The Bank is joining in the execution of
this Amendment for the purpose of acknowledging and consenting to this Amendment and all documents,
instruments and actions related hereto.

10. Miscellaneous.

(a) Legal Expenses. Borrower hereby agrees to pay on demand all reasonable
fees and expenses of counsel to the Lender incurred by the Lender in connection with the
preparation, negotiation and execution of this Amendment and all related documents.

(b) Multiple Counterparts. This Amendment and all related documents may be
executed in a number of identical separate counterparts (including by facsimile
transmission), each of which for all purposes is to be deemed an original but all of which
shall constitute, collectively, one agreement.

(c) Reference to Agreement. Each of the Loan Documents is hereby amended so
that any reference in the Loan Documents to the Loan Agreement shall mean a reference to the
Loan Agreement as amended hereby.

(d) Governing Law. This Amendment is being executed and delivered, and is
intended to be performed, in Midland, Midland County, Texas, and the substantive laws of
Texas shall govern the validity, construction, enforcement and interpretation of this
Amendment and all other documents and instruments referred to herein, unless otherwise
specified therein.

(e) Plural and Singular Forms. The definitions given to terms defined hereby
shall be equally applicable to both the singular and plural forms of such terms.

(f) Final Agreement. THIS AMENDMENT, THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

LENDER:

BASELINE CAPITAL, INC.

By: /s/Karl J. Reiter

Karl J. Reiter, President

BORROWER:

PERMIAN LEGEND PETROLEUM LP

By: Permian Legend LLC, its general partner

By: /s/ Ronnie L. Steinocher

	 	 	Ronnie L. Steinocher, Manager

By::/s/ Lisa P. Hamilton

	 	 	Lisa P. Hamilton, Manager

By: Pierce-Hamilton Energy Partners LP,

its Limited Partner

By: Muscoda Hill Energy LLC, its

general partner

By:/s/ Lisa P. Hamilton

Lisa P. Hamilton, President

By:/s/ Ronnie L. Steinocher

	 	 	Ronnie L. Steinocher, Limited Partner

[signatures continued on next page]

1

GUARANTOR:

PERMIAN LEGEND LLC

By: /s/ Ronnie L. Steinocher

	 	 	Ronnie L. Steinocher, Member and Manager

By: /s/ Lisa P. Hamilton

	 	 	Lisa P. Hamilton, Manager

By: Pierce-Hamilton Energy Partners LP,

its Member

By: Muscoda Hill Energy LLC, its

general partner

By: /s/ Lisa P. Hamilton

Lisa P. Hamilton, President

ACKNOWLEDGED AND AGREED:

BANK:

AMERICAN STATE BANK

By: /s/ W. Allen Pruitt

W. Allen Pruitt

Senior Vice President

2

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