COMMON STOCK

CANCELLATION AGREEMENT

Dala Petroleum Corp.

328 Barry Av. S #210

Wayzata, MN  55391

Re:

Common Stock Cancellation Agreement pursuant to the Common Stock Purchase
Agreement (the “Agreement”) by and among Dala Petroleum Corp., a Minnesota
corporation (the “Company”), M2 Equity Partners LLC, a Minnesota limited
liability company (the “Purchaser”)

Gentlemen:

In consideration of the completion and closing of the Agreement, and the payment
to the undersigned of the sum of $________, the receipt of which is hereby
acknowledged, the undersigned hereby conveys to the Company and authorizes
American Registrar & Transfer Co., the Company’s transfer agent, to cancel
_________ shares of Common Stock owned by the undersigned in the Company, which
Common Stock the undersigned hereby represents and warrants are owned by the
undersigned, free and clear of any liens and encumbrances whatsoever, and that
the undersigned has full and uncontested authority to convey to the Company for
cancellation.

Mutual Releases.  The undersigned, jointly and severally, for themselves and
each of their present and former, direct and/or indirect, parents, subsidiaries,
affiliates, attorneys, agents, representatives, employees, consultants, brokers,
officers, directors, equity and/or debt holders, managers, members, successors,
predecessors, heirs and assigns, hereby expressly and irrevocably release, waive
and forever discharge and hold harmless each of the Company, the Purchaser, each
of the undersigned and each of all of their respective present and former,
direct and/or indirect, parents, subsidiaries, affiliates, attorneys, agents,
representatives, employees, consultants, brokers, officers, directors, equity
and/or debt holders, managers, members, successors, predecessors, and assigns
 from any and all actions, causes of action, suits, losses, liabilities, rights,
debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses,
liens, bonds, bills, specialties, covenants, contracts, controversies,
agreements, promises, variances, trespasses, damages, judgments, extents,
executions, claims, and demands, of every kind and nature whatsoever, whether
now known or unknown, suspected or unsuspected, foreseen or unforeseen, matured
or unmatured, suspected or unsuspected, in law, admiralty or equity.  

Governing Law.  This Agreement and the terms and conditions set forth herein,
shall be governed by and construed solely and exclusively in accordance with the
internal laws of the State of Minnesota without regard to the conflicts of laws
or principles thereof. The parties hereto hereby expressly and irrevocably agree
that any suit or proceeding arising directly and/or indirectly pursuant to or
under this Agreement shall be brought solely in a federal or state court located
in Hennepin County, Minnesota. By its execution hereof, the parties hereto
covenant and irrevocably submit to the in personam jurisdiction of the federal
and state courts located in Hennepin County and the State of Minnesota and agree
that any process in any such action may be served upon any of them personally,
or by certified mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally served upon them
in Minnesota. The parties hereto expressly and irrevocably waive any claim that
any such jurisdiction is not a convenient forum for any such suit or proceeding
and any defense or lack of in personam jurisdiction with respect thereto. In the
event of any such action or proceeding, the party prevailing therein shall be
entitled to payment from the other parties hereto of all of its reasonable
counsel fees and disbursements.

Acknowledgement.  The undersigned acknowledges receipt of information under a
Confidentiality Agreement about a potential merger or acquisition candidate for
the Company (the “Acquisition Candidate”) following the cancellation of the
shares of Common Stock of the undersigned hereunder, and the undersigned
represents and warrants that the undersigned has the necessary business acumen
to evaluate the information received, has requested and received any additional
information desired and assumes all risks of any kind or nature whatsoever or
otherwise that any such merger or acquisition with the Acquisition Candidate may
have on such Common Stock, without qualification.           

_____________

Dated: ___________________.

By: ________________________________

Print Name:__________________________

Title: _______________________________

DALA PETROLEUM CORP.

Dated: ___________________.

By:

________________________________

       

Print Name: __________________________

       

Title: ________________________________