New Century Energy Corp.
SECURED TERM NOTE (GULF COAST)
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>ex10-3.txt
<DESCRIPTION>SECURED TERM NOTE (GULF COAST)
<TEXT>
Exhibit 10.3



                                SECURED TERM NOTE
                                -----------------

     FOR VALUE RECEIVED, GULF COAST OIL CORPORATION, a Delaware corporation (the
"COMPANY"),  promises  to  pay  to  LAURUS  MASTER FUND, LTD., c/o M&C Corporate
Services  Limited,  P.O.  Box  309 GT, Ugland House, South Church Street, George
Town,  Grand  Cayman,  Cayman  Islands,  Fax: 345-949-8080 (the "HOLDER") or its
registered  assigns  or successors in interest, the sum of Forty Million Dollars
($40,000,000),  together with any accrued and unpaid interest hereon, on October
28,  2009  (the  "MATURITY  DATE")  if  not  sooner  paid.

     Capitalized  terms  used  herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the  date hereof by and between the Company and the Holder (as amended, modified
and/or  supplemented  from  time  to  time,  the  "PURCHASE  AGREEMENT").

     The  following  terms  shall  apply  to  this  Secured  Term  Note  (this
     "NOTE"):

                                    ARTICLE 1
                         CONTRACT RATE AND AMORTIZATION

     1.1 Contract Rate. Subject to Sections 2.2 and 3.9, interest payable on the
         -------------
outstanding  principal amount of this Note (the "PRINCIPAL AMOUNT") shall accrue
at  a  rate  per  annum  equal  to the "PRIME RATE" published in The Wall Street
                                                                 ---------------
Journal  from  time  to  time  (the  "PRIME  RATE"),  plus two percent (2%) (the
-------
"CONTRACT  RATE"). The Contract Rate shall be increased or decreased as the case
may  be  for  each  increase or decrease in the Prime Rate in an amount equal to
such  increase  or decrease in the Prime Rate; each change to be effective as of
the day of the change in the Prime Rate. The Contract Rate shall not at any time
be  less  than eight percent (8%). Interest shall be (i) calculated on the basis
of  a  360 day year, and (ii) payable monthly, in arrears, commencing on July 1,
2006,  on  the  first business day of each consecutive calendar month thereafter
through  and  including  the Maturity Date, and on the Maturity Date, whether by
acceleration  or  otherwise.

     1.2  Payments.  Amortizing  payments  of  the  aggregate  principal  amount
          --------
outstanding  under  this Note at any time (the "PRINCIPAL AMOUNT") shall be made
by  the Company on July 1, 2006 and on the first business day of each succeeding
month thereafter through and including the Maturity Date (each, an "AMORTIZATION
DATE").  So  long  as  no  Event  of  Default  shall  have  occurred and then be
continuing,  interest  hereunder  shall  only  be  payable as a component of the
Amortization  Amount (as hereafter defined) in accordance with the terms of this
Section  1.2. Subject to Article III below, commencing on the first Amortization
Date,  the  Company shall make monthly payments of principal and interest to the
Holder  on  each  Amortization  Date  equal to the Amortization Amount. All such
payments  shall  be  applied by the Holder first to accrued and unpaid interest,
fees and expenses owing by the Company to the Holder and then to the outstanding
principal  balance  owing  hereunder.  In  the event the Amortization Amount (as
hereafter  defined)  during  any  month  is less than $150,000, then the Company

<PAGE>

shall  nevertheless  be  required to make a monthly payment to the Holder during
such  month  in  an amount equal to the difference between $150,000 and the then
applicable  Amortization  Amount,  which  such  payment  shall be applied by the
Holder to accrued and unpaid interest, fees and expenses owing by the Company to
the  Holder;  provided,  however,  during such time as an Event of Default shall
              --------   -------
have  occurred  and  be  continuing,  the  Company  shall make interest payments
hereunder  to  the  Holder  in accordance with Sections 1.1 and 2.2 of this Note
without  regard  to  any  reduction  in  such  case  interest  payment which may
otherwise  have  been  applicable under this Section 1.2 had no Event of Default
then  been  in  existence.  Any  outstanding  Principal Amount together with any
accrued  and unpaid interest and any and all other unpaid amounts which are then
owing  by  the  Company  to  the  Holder under this Note, the Purchase Agreement
and/or  any  other  Related  Agreement  shall be due and payable on the Maturity
Date.  For  purposes  of  this Section, (a) the term "AMORTIZATION AMOUNT" shall
mean  an amount equal to eighty percent (80%) of the Net Revenue relating to all
oil  and  gas  properties  of  the  Company  (collectively,  the  "OIL  AND  GAS
PROPERTIES") for the calendar month immediately preceding the Amortization Date;
provided,  however, such percentage shall increase to one hundred percent (100%)
--------   -------
upon  the  occurrence  and during the continuance of an Event of Default and (b)
"NET  REVENUE"  shall  mean the gross proceeds paid to the Company in respect of
oil,  gas  and/or  other  hydrocarbon  production  in  which  the Company has an
interest whether or not such proceeds are remitted to the lockbox account and/or
any  other  blocked  account  established  by the Company in connection with the
transactions contemplated hereby net of, in  each  case,  with  respect  to  the
period for which such Net Revenue relates (i) the reasonable ordinary day to day
expenses  associated  with  the  Company's  operation  of  the leases, wells and
equipment, including fuel, materials,  labor,  maintenance,  routine  production
equipment  replacement, repairs,  routine workover costs to maintain  production
from  an  existing completed  well,  royalty,  severance tax and ad valorem tax,
in each case using accounting practices and procedures ordinary and customary in
the oil and gas industry (the "LEASE OPERATING EXPENSES") and (ii) the Company's
reasonable estimate of its federal tax (including federal income tax)  liability
(after  taking  into  account  all applicable deductions, depletion and credits)
(the "ESTIMATED TAXES"), all of which, in the case of the foregoing clauses  (i)
and  (ii),  shall  be subject to Laurus approval which shall be provided in the
exercise of Laurus reasonable discretion based on such supporting documentation
from the Company as Laurus shall request.

                                    ARTICLE 2
                                EVENTS OF DEFAULT

     2.1  Events  of  Default. The occurrence of any of the following events set
          -------------------
forth  in  this  Section  4.1  shall  constitute  an event of default ("EVENT OF
DEFAULT")  hereunder:

          (a)  Failure to Pay. The Company fails to pay when due any installment
               --------------
     of  principal, interest or other fees hereon in accordance herewith, or the
     Company  fails to pay any of the other Obligations (under and as defined in
     the  Master  Security  Agreement)  when  due,  and,  in any such case, such
     failure  shall  continue  for a period of three (3) days following the date
     upon  which  any  such  payment  was  due.

          (b)  Breach  of  Covenant.  The  Company  or  any  of its Subsidiaries
               --------------------
     breaches  any  covenant  or any other term or condition of this Note in any
     material  respect  and  such  breach,  if  subject to cure, continues for a
     period  of  fifteen  (15)  days  after  the  occurrence  thereof.

          (c)  Breach  of  Representations  and  Warranties. Any representation,
               --------------------------------------------
     warranty  or  statement  made or furnished by New Century Energy Corp. (the
     "Parent"),  the  Company,  any of its Subsidiaries or any guarantor (each a
     "Guarantor") issuing to the Holder a guaranty agreement (each a "Guaranty")
     in  connection  with  the transaction contemplated hereby in this Note, the
     Purchase  Agreement  or  any  other  Related Agreement shall at any time be
     false or misleading in any material respect on the date as of which made or
     deemed  made.

<PAGE>

          (d)  Default Under Other Agreements. The occurrence of any default (or
               ------------------------------
     similar  term)  in  the observance or performance of any other agreement or
     condition  relating  to  any indebtedness or contingent obligation, in each
     case  in  an aggregate amount of not less than $100,000, of the Parent, the
     Company or any of its Subsidiaries beyond the period of grace (if any), the
     effect  of  which  default  is to cause, or permit the holder or holders of
     such  indebtedness  or  beneficiary  or  beneficiaries  of  such contingent
     obligation  to  cause,  such indebtedness to become due prior to its stated
     maturity  or  such  contingent  obligation  to  become  payable;

          (e) Material Adverse Effect. Any change or the occurrence of any event
              -----------------------
     which  could  reasonably  be  expected  to  have a Material Adverse Effect;

          (f)  Bankruptcy.  The  Parent, the Company, any of its Subsidiaries or
               ----------
     any  Guarantor  shall  (i)  apply  for,  consent  to or suffer to exist the
     appointment  of,  or  the  taking  of possession by, a receiver, custodian,
     trustee  or  liquidator  of  itself  or of all or a substantial part of its
     property,  (ii)  make  a  general  assignment for the benefit of creditors,
     (iii)  commence  a voluntary case under the federal bankruptcy laws (as now
     or  hereafter  in effect), (iv) be adjudicated a bankrupt or insolvent, (v)
     file  a  petition  seeking to take advantage of any other law providing for
     the relief of debtors, (vi) acquiesce to, without challenge within ten (10)
     days  of  the  filing  thereof, or failure to have dismissed, within thirty
     (30) days, any petition filed against it in any involuntary case under such
     bankruptcy  laws, or (vii) take any action for the purpose of effecting any
     of  the  foregoing;

          (g)  Judgments.  Attachments  or  levies  in excess of $100,000 in the
               ---------
     aggregate are made upon the Parent, the Company, or its Subsidiary's or any
     Guarantor's  assets or a judgment is rendered against the Company's, any of
     its  Subsidiary's or any Guarantor's property involving a liability of more
     than  $100,000  which  shall  not  have been vacated, discharged, stayed or
     bonded  within  thirty  (30)  days  from  the  entry  thereof;

          (h) Insolvency. The Parent or the Company or any Guarantor shall admit
              ----------
     in  writing its inability, or be generally unable, to pay its debts as they
     become  due  or  cease  operations  of  its  present  business;

          (i)  Change  of  Control. A Change of Control (as defined below) shall
               -------------------
     occur  with  respect  to  the  Company,  unless Holder shall have expressly
     consented to such Change of Control in writing. A "CHANGE OF CONTROL" shall
     mean  any  event  or  circumstance as a result of which (i) any "PERSON" or
     "GROUP"  (as  such  terms  are  defined  in Sections 13(d) and 14(d) of the
     Exchange  Act,  as in effect on the date hereof), other than the Holder, is
     or  becomes the "BENEFICIAL OWNER" (as defined in Rules 13(d)-3 and 13(d)-5
     under  the Exchange Act), directly or indirectly, of 35% or more on a fully
     diluted basis of the then outstanding voting equity interest of the Company
     (other  than  a  "PERSON"  or "GROUP" that beneficially owns 35% or more of
     such  outstanding  voting  equity  interests  of  the  Company  on the date
     hereof), (ii) unless the Holder provides its written consent thereto (which
     shall  not be unreasonably withheld), the Board of Directors of the Company
     shall  cease  to  consist  of  a  majority  of  the  Company's  board  of

<PAGE>

directors  on the date hereof (or directors appointed by a majority of the board
of  directors  in  effect  immediately  prior  to such appointment) or (iii) the
Company  or any of its Subsidiaries merges or consolidates with, or sells all or
substantially  all  of  its  assets  to,  any  other  person  or  entity;

          (j)  Indictment;  Proceedings. The indictment or threatened indictment
               ------------------------
     of the Parent, the Company, any of its Subsidiaries or any Guarantor or any
     executive  officer  of  the  Parent, the Company or any of its Subsidiaries
     under  any  criminal statute, or commencement or threatened commencement of
     criminal  or  civil  proceeding against the Parent, the Company, any of its
     Subsidiaries  or  any Guarantor or any executive officer of the Parent, the
     Company, any of its Subsidiaries or any Guarantor pursuant to which statute
     or  proceeding penalties or remedies sought or available include forfeiture
     of  any  of  the  property  of  the Company, any of its Subsidiaries or any
     Guarantor;  or

          (k)  The  Purchase  Agreement  and Related Agreements. (i) An Event of
               ------------------------------------------------
     Default  shall  occur under and as defined in the Purchase Agreement or any
     other  Related  Agreement (including, without limitation, the breach by any
     Guarantor  of any provision of any Guaranty), (ii) the Parent, the Company,
     any of its Subsidiaries or any Guarantor shall breach any term or provision
     of  the  Purchase  Agreement or any other Related Agreement in any material
     respect  and  such  breach,  if capable of cure, continues unremedied for a
     period of fifteen (15) days after the occurrence thereof, (iii) the Parent,
     the  Company,  any  of  its  Subsidiaries  or  any  Guarantor  attempts  to
     terminate, challenges the validity of, or its liability under, the Purchase
     Agreement or any Related Agreement, (iv) any proceeding shall be brought to
     challenge  the  validity,  binding  effect of the Purchase Agreement or any
     Related  Agreement,  (v)  the  Purchase  Agreement or any Related Agreement
     ceases to be a valid, binding and enforceable obligation of the Parent, the
     Company,  any  of  its  Subsidiaries  or  any Guarantor (to the extent such
     persons  or entities are a party thereto) or (vi) an Event of Default shall
     occur  under  and as defined in any one or more of the following documents:
     the  Securities Purchase Agreement dated as of June 30, 2005 by and between
     the Parent and Laurus (the "June 2005 Securities Purchase Agreement"), each
     Related  Agreement  referred  to  in  the  June  2005  Securities  Purchase
     Agreement, the Securities Purchase Agreement dated as of September 19, 2005
     by  and  between  the  Parent  and  Laurus  (the "September 2005 Securities
     Purchase  Agreement")  and  each  Related  Agreement  referred  to  in  the
     September  2005  Securities  Purchase  Agreement,  as  each may be amended,
     modified  and  supplemented  from  time  to  time.

     2.2  Default  Interest. Following the occurrence and during the continuance
          -----------------
of  an  Event of Default, the Company shall pay additional interest on this Note
in  an  amount  equal  to  two  percent  (2%)  per  month,  and  all outstanding
obligations  under  this  Note,  the  Purchase  Agreement and each other Related
Agreement,  including unpaid interest, shall continue to accrue interest at such
additional  interest  rate from the date of such Event of Default until the date
such  Event  of  Default  is  cured  or  waived.

     2.3 Default Payment. Following the occurrence and during the continuance of
         ---------------
an  Event of Default, the Holder, at its option, may demand repayment in full of
all  obligations and liabilities owing by Company to the Holder under this Note,
the  Purchase  Agreement and/or any other Related Agreement and/or may elect, in
addition  to  all rights and remedies of the Holder under the Purchase Agreement
and  the  other  Related  Agreements  and all obligations and liabilities of the
Company  under  the  Purchase  Agreement  and  the  other Related Agreements, to
require  the  Company to make a Default Payment ("DEFAULT PAYMENT"). The Default

<PAGE>

Payment  shall  be  130%  of  the outstanding principal amount of the Note, plus
accrued but unpaid interest, all other fees then remaining unpaid, and all other
amounts  payable  hereunder.  The  Default Payment shall be applied first to any
fees  due  and  payable  to  the  Holder  pursuant  to  this  Note, the Purchase
Agreement,  and/or  the  other  Related  Agreements,  then to accrued and unpaid
interest  due on this Note and then to the outstanding principal balance of this
Note.  The Default Payment shall be due and payable immediately on the date that
the  Holder  has  exercised  its  rights  pursuant  to  this  Section  2.3.

                                    ARTICLE 3
                                  MISCELLANEOUS

     3.1  Cumulative Remedies. The remedies under this Note shall be cumulative.
          -------------------

     3.2  Failure  or  Indulgence Not Waiver. No failure or delay on the part of
          ----------------------------------
the  Holder  hereof  in  the exercise of any power, right or privilege hereunder
shall  operate  as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of  any  other  right,  power  or  privilege.  All  rights and remedies existing
hereunder  are  cumulative  to,  and  not  exclusive  of, any rights or remedies
otherwise  available.

     3.3  Notices.  Any notice herein required or permitted to be given shall be
          -------
in  writing and shall be deemed effectively given: (a) upon personal delivery to
the party notified, (b) when sent by confirmed telex or facsimile if sent during
normal  business  hours of the recipient, if not, then on the next business day,
(c)  five  days  after  having been sent by registered or certified mail, return
receipt  requested,  postage  prepaid,  or  (d)  one  day  after  deposit with a
nationally  recognized  overnight  courier,  specifying  next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at  the  address  provided  in  the  Purchase  Agreement  executed in connection
herewith,  and  to  the Holder at the address provided in the Purchase Agreement
for  such  Holder,  with  a copy to John E. Tucker, Esq., 825 Third Avenue, 14th
Floor,  New  York,  New  York 10022, facsimile number (212) 541-4434, or at such
other  address  as  the  Company or the Holder may designate by ten days advance
written  notice  to  the  other  parties hereto. A Notice of Conversion shall be
deemed  given  when  made  to  the  Company  pursuant to the Purchase Agreement.

     3.4  Amendment  Provision.  The  term "NOTE" and all references thereto, as
          --------------------
used  throughout  this  instrument,  shall  mean  this  instrument as originally
executed,  or  if  later  amended  or  supplemented,  then  as  so  amended  or
supplemented,  and  any successor instrument as such successor instrument may be
amended  or  supplemented.

     3.5  Assignability.  This  Note  shall  be binding upon the Company and its
          -------------
successors  and  assigns,  and  shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements  of  the  Purchase Agreement. The Company may not assign any of its
obligations under this Note without the prior written consent of the Holder, any
such  purported  assignment  without  such  consent  being  null  and  void.

<PAGE>

     3.6  Cost  of  Collection. In case of any Event of Default under this Note,
          --------------------
the  Company  shall  pay  the  Holder  reasonable costs of collection, including
reasonable  attorneys'  fees.

     3.7  Governing  Law,  Jurisdiction  and  Waiver  of  Jury  Trial.
          -----------------------------------------------------------

          (a)  THIS  NOTE  SHALL  BE  GOVERNED  BY AND CONSTRUED AND ENFORCED IN
     ACCORDANCE  WITH  THE  LAWS  OF  THE  STATE  OF NEW YORK, WITHOUT REGARD TO
     PRINCIPLES  OF  CONFLICTS  OF  LAW.

          (b)  THE  COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
     COURTS  LOCATED  IN  THE  COUNTY  OF NEW YORK, STATE OF NEW YORK SHALL HAVE
     EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
     THE COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING
     TO  THIS  NOTE  OR  ANY  OF  THE  OTHER RELATED AGREEMENTS OR TO ANY MATTER
     ARISING  OUT  OF  OR RELATED TO THIS NOTE OR ANY OF THE RELATED AGREEMENTS;
     PROVIDED,  THAT THE COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS
     --------
     MAY  HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK,
     STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL BE
                            ------- --------
     DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER
     LEGAL  ACTION  IN  ANY  OTHER  JURISDICTION  TO COLLECT THE OBLIGATIONS, TO
     REALIZE  ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
     ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE HOLDER. THE COMPANY
     EXPRESSLY  SUBMITS  AND  CONSENTS  IN  ADVANCE  TO SUCH JURISDICTION IN ANY
     ACTION  OR  SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY WAIVES
     ANY  OBJECTION  WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
     IMPROPER  VENUE OR FORUM NON CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL
                        --------------------
     SERVICE  OF  THE  SUMMONS,  COMPLAINT  AND OTHER PROCESS ISSUED IN ANY SUCH
     ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
     PROCESS  MAY  BE  MADE  BY  REGISTERED  OR  CERTIFIED MAIL ADDRESSED TO THE
     COMPANY AT THE ADDRESS SET FORTH IN THE PURCHASE AGREEMENT AND THAT SERVICE
     SO  MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S ACTUAL
     RECEIPT  THEREOF  OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
     POSTAGE  PREPAID.

          (c)  THE  COMPANY  DESIRES  THAT  ITS  DISPUTES BE RESOLVED BY A JUDGE
     APPLYING  SUCH  APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION
     OF  THE  BENEFITS  OF  THE  JUDICIAL SYSTEM AND OF ARBITRATION, THE COMPANY
     HERETO  WAIVES  ALL  RIGHTS  TO  TRIAL  BY  JURY  IN  ANY  ACTION, SUIT, OR
     PROCEEDING  BROUGHT  TO  RESOLVE  ANY DISPUTE, WHETHER ARISING IN CONTRACT,
     TORT,  OR  OTHERWISE  BETWEEN  THE  HOLDER  AND THE COMPANY ARISING OUT OF,

<PAGE>

     CONNECTED  WITH,  RELATED  OR  INCIDENTAL  TO  THE RELATIONSHIP ESTABLISHED
     BETWEEN  THEM  IN CONNECTION WITH THIS NOTE, ANY OTHER RELATED AGREEMENT OR
     THE  TRANSACTIONS  RELATED  HERETO  OR  THERETO.

     3.8  Severability.  In the event that any provision of this Note is invalid
          ------------
or  unenforceable  under  any  applicable  statute  or  rule  of  law, then such
provision  shall  be  deemed  inoperative  to  the  extent  that it may conflict
therewith  and  shall be deemed modified to conform with such statute or rule of
law.  Any  such provision which may prove invalid or unenforceable under any law
shall  not  affect the validity or enforceability of any other provision of this
Note.

     3.9 Maximum Payments. Nothing contained herein shall be deemed to establish
         ----------------
or  require  the payment of a rate of interest or other charges in excess of the
maximum  permitted  by  applicable  law.  In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum rate permitted
by  such  law,  any  payments  in  excess of such maximum rate shall be credited
against  amounts  owed  by  the  Company  to the Holder and thus refunded to the
Company.

     3.10 Security Interest, Guarantee and Mortgage. The Holder has been granted
          -----------------------------------------
a  security interest (i) in certain assets of the Company and the Parent as more
fully  described  in  the Master Security Agreement dated as of the date hereof,
(ii)  in the equity interests of the Parent in the Company pursuant to the Stock
Pledge  Agreement  dated  as  of  the  date  hereof,  (iii)  in  the oil and gas
properties  of the Company pursuant to one or more deeds of trust as of the date
hereof  and  (iv)  in  the  oil  and gas properties of the Parent pursuant to an
amended  and restated deed of trust dated as of the date hereof. The obligations
of  the  Company  under  this  Note are guaranteed by the Parent pursuant to the
Guaranty  dated  as  of  the  date  hereof.

     3.11  Construction.  Each  party  acknowledges  that  its  legal  counsel
           ------------
participated in the preparation of this Note and, therefore, stipulates that the
rule  of  construction  that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against  the  other.

     3.12  Registered  Obligation.  This  Note  is  intended  to be a registered
           ----------------------
obligation  within  the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)
and  the  Company  (or its agent) shall register this Note (and thereafter shall
maintain  such  registration)  as  to  both  principal  and any stated interest.
Notwithstanding  any  document, instrument or agreement relating to this Note to
the  contrary,  transfer of this Note (or the right to any payments of principal
or  stated  interest  thereunder)  may only be effected by (i) surrender of this
Note  and either the reissuance by the Company of this Note to the new holder or
the  issuance  by  the  Company  of  a new instrument to the new holder, or (ii)
transfer  through  a book entry system maintained by the Company (or its agent),
within  the  meaning  of  Treasury  Regulation  Section  1.871-14(c)(1)(i)(B).

       [Balance of page intentionally left blank; signature page follows]

<PAGE>

     IN  WITNESS  WHEREOF,  the  Company has caused this Secured Term Note to be
signed  in  its  name  effective  as  of  this  27  day  of  April  2006.


                                  GULF  COAST  OIL  CORPORATION


                                  By: /s/ Edward R. DeStefano
                                     -----------------------------------
                                     Name: Edward R. DeStefano
                                     Title: President

WITNESS:

/s/ Kimberly Newman
------------------------------

<PAGE>

</TEXT>
</DOCUMENT>
