Exhibit 10.1

 

FARMOUT AGREEMENT

BETWEEN

Bancorp Holdings, LLC, Carrier Acquisitions, LLC, LHMF, LLC,

as farmors

AND

RICHLAND RESOURCES CORPORATION, SUN DELTA, INC., AND AMERRIL
ENERGY LLC,

 AS FARMEES

 

This Farmout Agreement (this “Agreement”) is entered into effective as of the
23rd day of July, 2012 (the “Effective Date”), by and between BANCORP HOLDINGS,
LLC, an Arkansas limited liability company, CARRIER ACQUISITIONS, LLC, an
Arkansas limited liability company and LHMF, LLC, a Nevada limited liability
company (each a “Farmor”, collectively, “Farmors”), and RICHLAND RESOURCES
CORPORATION, a Nevada corporation d/b/a RRCH Corp. (“Richland”), SUN DELTA,
INC., a Colorado corporation (“Sun Delta”), and AMERRIL ENERGY LLC, an Oklahoma
limited liability company (“Amerril”)(each a “Farmee,” collectively, “Farmees”).
Where applicable, Farmors and Farmees may be referred to herein collectively as
the “Parties” or individually as a “Party.”

 

WHEREAS, Farmors own the entire working interest in the oil, gas and mineral
leases more particularly described on Schedule 1.1, attached hereto
(collectively, the “Subject Leases”);

 

WHEREAS, Farmees desire to drill a well on the Subject Leases in search of oil
and gas and thereby earn an assignment of the Subject Leases; and

 

WHEREAS, Farmors are willing to grant Farmees the right to drill a well on the
Subject Leases in search of oil and gas and thereby earn an assignment of the
Subject Leases.

 

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:

 

That, for and in consideration of the premises and the mutual covenants and
agreements contained herein, Farmors and Farmees hereby agree as follows:

 

ARTICLE I

SUBJECT INTERESTS; WELL UNITS

 

1.1           Definition of Subject Interests. The “Subject Interests” refer to
all of Farmors’ right title and interest in and to the Subject Leases; less,
save and except an 18.75% working interest and 14.0625% net revenue interest in
the Subject Leases INSOFAR AND ONLY INSOFAR as the Subject Leases cover
production from the Test Well and corresponding Well Unit (“Farmors’ Retained
Interest”).

 

1.2           Well Units. As used in this Agreement, the term “Well Unit” shall
mean a tract of land surrounding a well producing or capable of producing oil
and/or gas in paying quantities and that consists of the total number of acres
established by the spacing order or applicable field rules of the Texas Railroad
Commission (or other governmental authority having jurisdiction) as the amount
of acreage that must be included in the proration unit for such well in order
for such well to receive or be assigned its maximum allowable amount of
production. If no such spacing order or field rules have been issued, such tract
of land shall consist of the maximum allowable unit acreage provided for in the
Subject Leases. The acreage to be included in each Well Unit shall be selected
by Farmees in conformity with any such spacing order or field rules.

 

 

 

 

1.3           Warranties. Farmors warrant to Farmees, as to matters arising by,
through or under Farmors, that as of the date hereof and as of the date the
Assignment (hereinafter defined) is delivered to Farmees, Farmors are and will
be vested with and shall have good and marketable title to the Subject
Interests, free and clear of all liens and encumbrances other than the Permitted
Encumbrances (as defined in the Assignment). Further, each Farmor represents and
warrants that such Farmor has not conveyed or contracted to convey, any of such
Farmors’ right, title and interest in and to the Subject Leases to anyone other
than Farmees, and such Farmor has not created any overriding royalties,
reversionary rights or similar burdens on the Subject Leases.

 

ARTICLE II

TEST WELL

 

2.1           Test Well. Farmees shall commence or caused to be commenced, on or
before forty-five (45) days from the Effective Date, or, in the event a suitable
rig is under contract but cannot commence drilling until after the expiration of
such 45 day period, as soon as commercially practicable thereafter (but in no
event longer than 90 days) (the “Commencement Date”), actual drilling operations
on a well (the “Test Well”) in search of oil and/or gas at any legal location on
the Subject Interests/at the location specified on Exhibit A hereto. Thereafter,
Farmees shall continue to drill the Test Well with due diligence and in a good
and workmanlike manner to a depth sufficient to penetrate and test in a
horizontal wellbore the Woodbine formation (the “Objective Depth”); provided
that Farmees shall not be precluded from drilling deeper than the Objective
Depth. When Farmees have completed drilling operations on the Test Well, Farmees
agree that (i) if the Test Well can be completed as a well capable of producing
in paying quantities, to be determined at Farmees’ sole discretion, Farmees
shall diligently prosecute the completion of the Test Well without unreasonable
delays, or (ii) if the Test Well cannot be completed as a well capable of
producing in paying quantities, Farmees shall plug and abandon the Test Well in
accordance with the terms of the Subject Leases and all applicable laws and
regulations. If Farmees do not commence, or cause to be commenced, the actual
drilling of the Test Well on or prior to the Commencement Date, Farmees’ right
to earn the Assignment hereunder shall terminate and, except as otherwise
expressly provided herein, neither Party shall have any further rights or
obligations hereunder.

 

As set forth in Section IV, hereinbelow, Richland shall be designated as
“Operator” for operations conducted on the Subject Leases. Notwithstanding such
designation, any Farmee shall be entitled to commence, or cause to be commenced,
actual drilling operations on the Test Well if, in Farmee’s sole discretion
based on good-faith belief, Richland is unable or will be unable to commence or
cause to be commenced actual drilling operations on the Test Well before the
Commencement Date.

 

As used herein, “Operator” shall mean and refer to the Party designated as
“Operator” under the Operating Agreement (as hereinafter defined).

 

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2.2 Substitute Well or Wells. If, during the drilling of a Test Well, Farmees
suffer mechanical difficulties or encounters an impenetrable formation, cavity,
excessive pressure or water flow, loss of circulation or any other formation,
substance or condition, similar or dissimilar, which cannot reasonably or
economically be overcome by usual and customary drilling methods, Farmees shall
have the option, but not the obligation, not more than sixty (60) days following
the cessation of drilling operations on such Test Well, to commence actual
drilling operations on a substitute well, at any legal location on the Subject
Interests, and such substitute well, if drilled in the manner and to the depth
herein required for the drilling of the original Test Well, shall be considered
and treated for all purposes herein as though the same were the original Test
Well. Farmees shall have the right to drill any number of substitute wells
pursuant to the foregoing, each of which shall be considered and treated for all
purposes hereof as though the same was the original Test Well for which such
substitute well is being drilled; provided, however, not more than sixty (60)
days shall elapse between the time drilling operations for one substitute well
are terminated and actual drilling operations on another substitute well have
commenced.

 

2.3 Insurance. Richland covenants and agrees that Richland, or the successor
operator, if necessary, shall maintain the insurance coverages to be described
in the “Operating Agreement” (hereinafter defined) during the performance of all
operations hereunder. All such insurance shall be carried with a company or
companies reasonably satisfactory to Farmors, shall be endorsed to name Farmors
as additional insured parties thereunder and shall provide for a waiver of
subrogation in favor of Farmors. Prior to commencing any operations on the
Subject Leases, Richland shall furnish Farmors with certificates of insurance
evidencing the coverages described above. Each such certificate shall reflect
that Farmors shall be provided with at least sixty (60) days prior written
notice of any material change or termination of any coverage described therein.

 

ARTICLE III

INTEREST TO BE EARNED

 

3.1 Designation of Well Unit. Upon the Test Well being drilled and completed,
Farmees shall designate a Well Unit therefor. The location of the Test Well
within the Well Unit shall comply with the then prevailing rules and regulations
(or exceptions thereto) of the Texas Railroad Commission or other lawful
governmental authority relative to well location and spacing. Farmees shall
designate the Well Unit for the Test Well by executing and recording an
instrument setting forth the location of the well, the completion date thereof,
and a valid legal description of that portion of the Subject Leases to be
included therein (the “Unit Designation”). Not more than ninety (90) days after
the completion of the Test Well, Farmees shall record the Unit Designation in
the appropriate records of real property of Leon County. A copy of the Unit
Designation shall be mailed to Farmors within thirty (30) days after the date
such Unit Designation is recorded. If Farmees fails to comply with this
paragraph, Farmors shall be entitled to perform the obligations set forth in
this Section 3.1, and Farmees shall be liable for all costs and expenses
associated therewith.

 

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3.2 Assignment.

 

(a) If Farmees drill and complete the Test Well, Farmees shall have earned the
Subject Interests, whereupon Farmors shall execute, acknowledge and deliver to
Farmees an Assignment of Oil, Gas and Mineral Leases in the form attached hereto
as Exhibit B (the “Assignment”). The Assignment shall assign unto Farmees one
hundred percent (100%) of the working interest in the Subject Leases, and a
corresponding seventy-five percent (75%) net revenue interest in the Subject
Leases, together with a like interest in the Test Well and all downhole, surface
and other equipment (up to and including the wellhead check meter) associated
with such Test Well (collectively, the “Assigned Interests”), but SAVING,
EXCEPTING AND RESERVING therefrom Farmors’ Retained Interest. The Subject
Interests shall be assigned to Farmees in the following percentages:

 

Richland   50%        Sun Delta   25%        Amerril   25%

 

(b) The interests assigned by Farmors under this Paragraph 3.2 shall be
proportionately reduced to the extent that Farmors owns less than the entire
oil, gas and/or mineral leasehold estate in the Leases or the Leases cover less
than the entire oil, gas and/or mineral fee in the Subject Interests.

 

(c) The obligation to execute the Assignment when herein provided shall be
absolute. To the extent Farmors fail to execute and provide the Assignment to
Farmees, in addition to any other available remedies, Farmees shall be entitled
to seek specific performance. Pending resolution, Farmees shall be entitled,
without recourse in favor or Farmors, to file a lis pendens in Leon County and
any other necessary counties.

 

3.3 Working Interest in Test Well and Additional Working Interests.

 

(a) Farmors’ Retained Interest shall be carried to the tanks only, in the Test
Well, subject to proportionate reduction as provided in subsection 3.2(b),
above. During the “carry period” Farmees will effectively own a one hundred
percent (100%) working interest in the Test Well. Farmees will be obligated to
pay one hundred percent (100%) of the costs associated with drilling and
completing the Test Well (the “Carry”). For purposes of this Agreement, the Test
Well is “completed” when the well has been drilled to total intended depth,
stimulated and completed through and including the tanks in the case of an oil
well, or in the case of a gas well, through either (i) the lease production
facility and/or (ii) equipment and facilities such that the well would be able
to produce into temporary flow lines, as applicable. After the Carry period, the
ownership of the Test Well and corresponding Well Unit, insofar and only insofar
as production occurs from the Test Well, shall be owned as follows:

 

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        Figure 1               Working Interest   Net Revenue Interest        
   Farmors   18.75%   14.0625%             Richland   40.625%   30.46875%   
         Sun Delta   20.3125%   15.234375%             Amerril   20.3125% 
 15.234375%             Farmors’ ORRI   0%   5%             Lessor Royalty   0% 
 20%

 

(b) For the avoidance of doubt, subsequent wells drilled pursuant to this
Section shall not include substitute wells drilled pursuant to Section 2.2.
Subsequent wells will be owned as follows:

 

        Figure 2              Working Interest   Net Revenue Interest           
Farmees   0%   0%             Richland   50%   37.5%             Sun Delta 
 25%   18.75%             Amerril   25%   18.75%             Farmors’ ORRI   0% 
 5%             Lessor Royalty   0%   20%

 

3.4          Fee to Farmors

 

Farmees shall pay to Farmors a one-time fee (“Fee”) of $500,000, within
forty-eight (48) hours execution of this Agreement in the following proportions:
50.00% of the Fee shall payable by Richland; 25% of the Fee shall be payable by
Sun Delta; and 25% of the Fee shall be payable by Amerril. If any Farmee does
not pay its proportionate share of the Fee, the other Farmee or Farmees, as
applicable, shall be entitled to pay the non-paying Farmee’s proportionate share
of the Fee and shall be entitled to all rights of the non-paying Farmee
hereunder. Upon failure to remit its proportionate share of the Fee, the
non-paying Farmee shall have no further right to earn interest pursuant to this
Agreement.

 

Unless otherwise provided in written instructions to Farmees executed by all
Farmors, 64.32501834% of this Fee shall be payable to Farmor Bancorp Holdings,
26.48569333% shall be payable to Farmor Carrier Acquisitions and 9.189288333%
shall be payable to Farmor LHMF.

 

ARTICLE IV

OPERATIONS

 

Subject to removal pursuant to Section V.B.1 of the Operating Agreement, as
defined hereinbelow, Richland shall be designated Operator for any well drilled
and completed under this Agreement on the Subject Interests. The operations on
the Well Unit for any well shall be in accordance with the terms of an Operating
Agreement to be entered into by the Parties at least ten (10) days prior to the
Commencement Date (the “Operating Agreement,” attached herein as Exhibit C). If
there are any conflicts between the terms of this Agreement and the terms of the
Operating Agreement, the terms of this Agreement shall control.

 

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ARTICLE V

LEASE MAINTENANCE

 

Farmors shall maintain the Subject Leases in full force and effect by the
payment of delay rentals, minimum annual royalties, or any other lease
maintenance payments that may come due under the terms of the Subject Leases. In
the event that Farmors elects not to maintain any Subject Lease by the payment
of delay rentals, minimum annual royalties or any other lease maintenance
payments, Farmors shall give Farmees notice thereof at least thirty (30) days
prior to the date any such payment shall become due, and Farmees, at their sole
election, may make any such payment, and thereafter, Farmors shall have no
interest in any such Subject Lease. If Farmors elect not to make any such
payment and any or all of the Subject Leases terminate, Farmors shall refund the
Fee in full. Farmors agree to use reasonable care and diligence in making the
payments described in this Article V, provided that Farmors shall incur no
liability to Farmees for the failure to make any such payment, or any failure to
make the same properly, timely, in the correct amount, to the proper Party or
otherwise, for whatever reason such failure may occur. Farmors shall indemnify
Farmees against claims made by any third party against Farmees for Farmors’
failure to make any such payment properly, timely, in the correct amount, to the
proper Party or otherwise.

 

ARTICLE VI

MISCELLANEOUS

 

6.1 Access and Information. During the drilling of the Test Well, Operator shall
(i) permit Farmors’ authorized representatives to have access to the rig floor
at all reasonable times, upon reasonable notice to Operator, at Farmors’ sole
risk and expense, (ii) furnish to Farmors at the address indicated in the notice
provisions hereof, daily drilling reports covering the preceding 24 hours
operations, and giving the depth drilled, formations penetrated and any shows of
oil or gas encountered, (iii) provide Farmors with sufficient prior notice of
any log being run, any core samples being taken or any drillstem or production
test being made so that Farmors may have a representative present, and (iv) upon
request by Farmors, furnish Farmors with a copy of core samples, results of
drillstem tests and field prints of any and all logs or surveys which may be run
or made during drilling of the Test Well. Operator shall only be obligated to
provide one complete copy of information and date required under this Section.
Additional copies requested by Farmors shall be at Farmors’ sole expense.

 

6.2 Regulations and Agreements. This Agreement is entered into subject to all
applicable laws, rules, regulations and orders of all governmental authorities
having jurisdiction over the Subject Interests and to all applicable provisions,
conditions, covenants and obligations, express or implied, of the Subject
Leases. Subject to the terms of this Agreement, Farmees assumes and agree to
fully comply with and timely perform each and every duty, obligation, covenant,
provision and condition, both express and implied, arising under the Subject
Leases and any intermediate assignments thereof (if any), to the extent the same
are imposed upon the lessee and/or assignee thereunder.

 

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6.3 Confidentiality. The Parties agree that all geophysical, geological,
engineering, technical, production test or other information obtained by Farmees
with respect to all wells drilled hereunder shall be the property of Farmees.
All such information shall be maintained by Farmors as confidential information
for a period of three (3) years from the date hereof, unless all Parties agree
in writing to a lesser period of time.

 

6.4 Termination and Survival. The failure of Farmees to commence the drilling of
the Test Well as required under Section 2.1 above shall cause the forfeiture of
all rights, privileges and benefits of Farmees hereunder without the necessity
of any action or notice by Farmors, and Farmees shall not be entitled to any
Assignment hereunder. This Agreement shall survive Farmors’ execution and
delivery of any Assignment(s) hereunder and shall be binding upon Farmors and
Farmees and their respective successors and assigns.

 

6.5 Approval of Assignment. If the Assignment of the Subject Interests requires
approval of any party who is not a Party to this Agreement, including, but not
limited to, any state or federal authority having jurisdiction, Farmors agree to
cooperate with Farmees in Farmee’s efforts to obtain all such approvals. If any
such approval cannot be obtained, Farmors and Farmees shall execute an
instrument or instruments containing provisions reflecting the terms and
conditions of this Agreement which, in all other respects, effectuate the
provisions contained herein, but which do not violate any restrictions on
assignment.

 

6.6 Renewals, Extensions and Acquisitions. If during the term of this Agreement,
Farmors (i) renew or extend any of the Subject Leases, then all such renewals or
extensions of the Subject Leases and all of Farmors’ interest in any such new
leases shall be covered by this Agreement.

 

6.7 Force Majeure. Should any Party be prevented or hindered from complying with
any obligation created hereunder, other than the obligation to pay money, by
reason of fire, flood, storm, act of God, act of governmental authority, labor
disputes, war, or any other cause not enumerated herein but which is beyond the
reasonable control of the Party whose performance is affected, then the
performance of any such obligation shall be suspended during the period of such
prevention or hindrance, provided the affected Party exercises all reasonable
diligence to remove the cause of force majeure. The requirement that any force
majeure shall be remedied with all reasonable diligence shall not require the
settlement of strikes, lockouts, or other labor difficulties by the Party
involved.

 

6.8 Notices. Any notice required or permitted to be given under or in connection
with this Agreement shall be in writing and shall be mailed by postage prepaid
certified mail, return receipt requested or sent by facsimile, email or other
electronic transmission. No notice shall be deemed to have been given to a Party
until it is actually received by such Party at the address set forth below or
until receipt of a facsimile or other electronic transmission and confirmation
to sender that such facsimile or other electronic transmission has been
received. All such notices shall be mailed, sent or delivered to:

 

7

 

 

Farmors:

 

Bancorp Holdings, LLC

One Information Way

Suite 400

Little Rock, AR 72202

Attn: Walter Quinn

501.664.8722

wquinn@rockfncl.com

 

Carrier Acquisitions, LLC

One Information Way

Suite 201

Little Rock, AR 72202

Attn: John Lewis

501.664.8722

jlewis@rockfncl.com

 

LHMF, LLC

13355 Noel Rd., Suite 1850

Dallas, TX 75240

Attn: Lane McNamara

214.674.5825

Lm1185@aol.com

 

Farmees:

 

Richland Resources Corp.

2255 Ridge Road, Suite 100

Rockwall, TX 75087

972.722-7520

Fax: 972.722.7501

Attn: Kenneth A. Goggans, CEO

Ken.goggans@richlandcorp.com

 

Sun Delta Inc.

c/o U.S. King King, LLC

3721 Briarpark Drive, Suite 155

Houston, TX 77042

713.660.1620

Fax: 713.660.1627

Attn: John Kenny

jk@kennycapital.com.au

 

U.S. King King, LLC

3721 Briarpark Drive, Suite 155

Houston, TX 77042

713.660.1620

Fax: 713.660.1627

Attn: Ping He

phe@amerrienergy.com

 

8

 

 

No change of address, facsimile number or email address shall become effective
until written notice of such change shall have been given by the Party desiring
its address, facsimile number or e-mail address changed, and same has been
received by the other Party.

 

6.9 Relationship of the Parties. Each Party shall have the right to take in kind
and separately dispose of its share of production from the Subject Interests.
The respective obligations and liabilities of the Parties hereto shall be
separate and each Party shall be responsible only for its own obligations. It is
not the purpose or intention of this Agreement to create, and this Agreement
shall never be construed as creating, a joint venture, agency, general
partnership, mining partnership or other relationship whereby either of the
Parties shall be liable for the acts, either of commission or omission, of the
other Party hereto.

 

6.10 Income Tax Election. If, for federal income tax purposes, this Agreement
and the operations hereunder are regarded as a partnership, Farmors and Farmees
each elect to be excluded from the application of the provisions of Subchapter
“K”, Chapter 1, Subtitle “A” of the Internal Revenue Code of 1986, as amended
(the “Code”), as permitted and authorized by Section 761 of the Code and the
regulations promulgated thereunder. Richland, as Operator under the Operating
Agreement, is authorized and directed to execute on behalf of Farmors and
Farmees such evidence of this election as may be required. In addition, Farmors
shall execute such documents and furnish such other evidence as may be required
to reflect this election. In making the foregoing election, Farmors and Farmees
each acknowledge that the income derived by each from the operations hereunder
can be adequately determined without the computation of partnership taxable
income. If the income tax laws of the state in which the Subject Interests are
located contain, or may hereafter contain, provisions similar to those in
Subchapter “K”, Chapter 1, Subtitle “A” of the Code, under which a similar
election is permitted, Farmors and Richland each agree that such election shall
be made.

 

6.11 Memorandum of Farmout Agreement. Upon execution of this Agreement, Farmors
and Farmees shall execute, acknowledge and deliver to each other a memorandum of
this Agreement in the form of Exhibit D attached hereto (the “Memorandum”),
which Memorandum shall be filed in the appropriate records of real property of
Leon County, Texas.

 

6.12 Further Assurances. Farmors and Farmees hereby agree to execute or perform,
or cause to be executed or performed, any and all further documents and things
which may be necessary or appropriate to give effect to this Agreement. Without
limiting the generality of the foregoing, Farmors agrees, upon request from
Farmees, to execute and deliver any and all Assignments or other instruments, in
recordable form, as may be necessary or appropriate to confirm title to the
interests to be assigned to Farmees pursuant to the provisions of Section 3.2
hereof.

 

6.13 Assignment. The terms hereof shall be binding upon and shall inure to the
benefit of Farmors and Farmees and their respective successors and assigns.

 

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6.14 Entire Agreement. This Agreement and the Exhibits hereto embody the entire
agreement between the Parties and supersede any and all prior written or oral
understandings or agreements relative to the subject matter hereof. No
amendment, modification, extension or change to this Agreement shall be binding
upon any Party hereto unless and until a written instrument evidencing such
amendment, modification, extension or change has been duly executed by a duly
authorized representative of both Parties.

 

6.15 Captions. Captions for the Sections in this Agreement are used only for
identification purposes and shall have no effect upon the construction or
interpretation of any part of this Agreement.

 

6.16 Governing Law/Venue. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of Texas, without regard to
the conflicts of law provisions thereof. The Parties hereby irrevocably agree
that any dispute hereunder shall be brought in the Federal or State District
Courts in Harris County, Texas.

 

6.17 Time of the Essence. Time is of the essence with respect to the performance
of all provisions of this Agreement.

 

6.18 Severability. If any provision of this Agreement is held to be illegal,
invalid or unenforceable under applicable law, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof; and the
remaining provisions hereof shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid and enforceable.

 

6.19 Amendment. Any amendment or modification of this Agreement (including,
without limitation, a waiver of a condition or deadline set forth in this
Agreement) shall be in a writing specifically identifying this Agreement and
signed by the Party to be charged with such amendment or waiver and delivered by
such Party to the Party claiming the benefit of such amendment or waiver.

 

6.20 Counterparts. This Agreement may be executed by Farmees and Farmors in any
number of counterparts, each of which shall be deemed an original instrument,
but all of which together shall constitute one and the same instrument.
Execution can be evidenced by fax signatures with original signature pages to
follow in due course.

 

6.21 Due Diligence. Farmees shall have fourteen (14) days from the execution of
this Agreement to conduct due diligence upon the Subject Interests (the “Due
Diligence Period”). Whether such due diligence is satisfactory to Farmees shall
be determined by Farmees in their sole and absolute discretion. In the event
that such due diligence reveals defects in title as to any of the Subject
Leases, Farmors and Farmees agree to negotiate in good faith to determine an
adequate resolution as to any title defects. However, in the event that any
Farmee determines that it is not able to agree to a resolution, then this
Agreement will be null and void as to all Parties and Farmors shall return the
Fee to Farmees within forty-eight (48) hours of Farmees’ notice of termination
for title defect(s).

 

[The remainder of this page intentionally left blank.]

 

10

 

 

EXECUTED as of the date first above written.

 

FARMEES   FARMORS       RICHLAND RESOURCES CORPORATION   BANCORP HOLDINGS, LLC  
        BY: /s/ Kenneth A. Goggans   BY: /s/ Walter Quinn         Kenneth A.
Goggans, Chief Executive Officer     Walter Quinn, Manager

 

 

SUN DELTA INC.   CARRIER ACQUISITIONS, LLC           BY: /s/ John Kenny   BY:
/s/ J.L. Lewis         John Kenny, Authorized Representative     Manager

 

 

AMERRIL ENERGY LLC   LHMF, LLC           BY: /s/ Ping He   BY: /s/ Lane McNamara
        Ping He, President     Manager

 

11

 

 

Signature Page- Farmout Agreement between Bancorp Holdings, LLC, Carrier
Acquisitions, LLC, LHMF, LLC and Richland Resources Corp, Sun Delta Inc., and
Amerril Energy LLC.

 

12

 

 

SCHEDULE 1.1 – LEASES

Lease Id Lease Name Gross Acres Net Acres Recording Information 2646C-0075 James
Wesley Castleschouldt and wife, Evelyn Nelson Castleschouldt 71.11000000
35.55500000 11/30/2009, Book OR, Volume 1416, Page 634, Entry 00367101
2646C-0076 Dareleen Waldron 41.08000000 20.54000000 11/30/2009, Book OR, Volume
1416, Page 637, Entry 00367102 2646C-0077 T.J. Burk and wife, Charlotte Burk
87.71300000 11.88899907 11/30/2009, Book OR, Volume 1416, Page 640, Entry
00367103 2646C-0078 Garvin Ellis and wife, Mildred S. Ellis 154.50000000
141.62500000 11/30/2009, Book OR, Volume 1416, Page 643, Entry 00367104
2646C-0079 William R. Bitner, Sr.
aka Bill Bitner 120.79600000 61.19650000 11/30/2009, Book OR, Volume 1416, Page
648, Entry 00367105 2646C-0080 Betty H. Wingfield West 33.55000000 6.17875000
11/30/2009, Book OR, Volume 1416, Page 651, Entry 00367106 2646C-0081 John
Robert Beeler 408.20000000 397.49000000 01/11/2010, Book OR, Volume 1419, Page
920, Entry 00367863 2646C-0083 Joseph Cleveland Brewton, Jr. and wife, Winnie
Franks Brewton 10.00000000 5.00000000 11/30/2009, Book OR, Volume 1416, Page
658, Entry 00367108 2646C-0087 Ronald Brandon Ellis 51.50000000 12.87500000
11/30/2009, Book OR, Volume 1416, Page 673, Entry 00367112 2646C-0088 Linda
Brown Hunter 453.00000000 425.44000920 11/30/2009, Book OR, Volume 1416, Page
676, Entry 00367113 2646C-0089 Raymond Ellis and wife, Maudie Ruth Ellis
5.00000000 2.50000000 11/30/2009, Book OR, Volume 1416, Page 680, Entry 00367114
2646C-0090 Raymond Voisin and wife, Betty M. Voisin 16.00000000 4.00000000
11/30/2009, Book OR, Volume 1416, Page 683, Entry 00367115 2646C-0105 Stanley
Murff and wife, Linda Murff 87.71300000 8.92124907 11/30/2009, Book OR, Volume
1416, Page 728, Entry 00367128 2646C-0106 D. Ken Price and wife, Dorothy L.
Price 47.48400000 2.96775000 12/14/2009, Book OR, Volume 1417, Page 838, Entry
00367389 2646C-0108 Stanley Murff as Attorney-in-Fact for Laura Lorene Murff
108.00000000 27.55999080 11/30/2009, Book OR, Volume 1416, Page 735, Entry
00367130 2646C-0109 Diana Spiva Powell 190.00000000 95.00000000 11/30/2009, Book
OR, Volume 1416, Page 738, Entry 00367131 2646C-0110 Kenneth O. Goolsby
177.36700000 36.19350000 01/11/2010, Book OR, Volume 1419, Page 908, Entry
00367860 2646C-0111 James W. Wilson 45.13000000 7.09500000 11/30/2009, Book OR,
Volume 1416, Page 741, Entry 00367132 2646C-0114 LaNell Goolsby Beaird
177.36700000 18.09675000 01/11/2010, Book OR, Volume 1419, Page 916, Entry
00367862 2646C-0118 Terry Ann Garver Benner 90.00033000 7.50002720 12/14/2009,
Book OR, Volume 1417, Page 846, Entry 00367391 2646C-0119 Jody Gwynn Garver
90.00033000 7.50002720 12/14/2009, Book OR, Volume 1417, Page 850, Entry
00367392 2646C-0120 Amy Ruth Garver Corless 90.00033000 7.50002720 12/14/2009,
Book OR, Volume 1417, Page 854, Entry 00367393 2646C-0121 Lexi Lefkowitz
33.55000000 3.08937500 01/11/2010, Book OR, Volume 1420, Page 1, Entry 00367865
2646C-0122 Jacquelyn Sue Goolsby 177.36700000 18.09675000 01/11/2010, Book OR,
Volume 1420, Page 4, Entry 00367866     1,714.27000000 1,363.80970474  

 

13

 

 

EXHIBIT A – MAP

 

14

 

 

EXHIBIT B – FORM OF ASSIGNMENT

 

ASSIGNMENT OF OIL, GAS AND MINERAL LEASES

 

THE STATE OF TEXAS §   § COUNTY OF LEON §

 

THIS ASSIGNMENT OF OIL, GAS AND MINERAL LEASES (this “Assignment”) is executed
and entered into by and between ______________________________ a [Texas
corporation], whose address is _____________________________________________
(hereinafter called “Assignor”), and RICHLAND RESOURCES CORPORATION, a Nevada
corporation, whose address is 777 Main Street, Suite 1400, Fort Worth, Texas
76102, (“Richland”), SUN DELTA, INC., a Colorado corporation (“Sun Delta”), and
AMERRIL ENERGY LLC, an Oklahoma limited liability company (“Amerril”)
(hereinafter called “Assignees”).

 

ARTICLE I

 

Assignment; Reservations

 

Section 1.1 Assignment. Assignor, for Ten Dollars ($10.00) and other good and
valuable consideration in hand paid by Assignee, the receipt and sufficiency of
which consideration are hereby acknowledged and confessed, does hereby GRANT,
BARGAIN, SELL, CONVEY, ASSIGN AND DELIVER unto Assignees, all of Assignor's
right, title and interest in and to those oil, gas and mineral leases described
on Exhibit A attached hereto (the “Subject Leases”), being a one hundred percent
(100%) of the leasehold interest and a corresponding seventy-five percent (75%)
net revenue interest in the Subject Leases.

 

Section 1.2 Reservations and Exceptions from Assignment. Assignor hereby excepts
and reserves to the Assignor an undivided three-sixteenths (3/16) leasehold
working interest in and to the Subject Leases insofar, and only insofar, as to
production from the following well:

 

[WELL IDENTIFICATION].

 

Section 1.3 Assigned Interest Percentages. The Subject Leases are assigned to
Assignees in the following percentages:

 

Richland   50%        Sun Delta   25%        Amerril   25%

 

TO HAVE AND TO HOLD the Assigned Interests unto Assignees, their successors and
assigns forever, subject, however, to the matters set forth herein.

 

15

 

 

ARTICLE II

 

Warranty of Title; Limitation of Warranties

 

Section 2.1 Warranty of Title. Assignor hereby binds itself to warrant and
forever defend, all and singular, the Assigned Interests unto Assignees, its
successors and assigns, against every person whomsoever lawfully claiming or to
claim the same or any part thereof, by, through or under Assignor, but not
otherwise, subject, however, to the matters set forth herein.

 

Section 2.2 Limitation of Warranties. Except for the warranty of title set forth
in Section 2.1 above, the Assigned Interests are assigned to Assignees without
warranty of any kind, express, implied or statutory.

 

Section 2.3 Permitted Encumbrances. The Assigned Interests are assigned and
conveyed by Assignor and accepted by Assignees expressly subject to the
following (the “Permitted Encumbrances”): the terms, conditions, restrictions
and limitations contained in the Subject Leases and any intervening assignments
through which Assignor acquired its interest in the Subject Leases.

 

ARTICLE III

 

Miscellaneous

 

Section 3.1 Additional Agreements. Assignor and Assignees each covenant and
agree to execute and deliver to the other Party such other and additional
instruments and documents as may be necessary to evidence of record the
respective interests of Assignor and Assignees in and to the Assigned Interests.

 

Section 3.2 Taxes. All ad valorem, property, production, severance and similar
taxes and assessments relative to the Assigned Interests shall be apportioned
and prorated between Assignor and Assignees as of the effective date hereof.

 

Section 3.3 Successors and Assigns. All of the provisions hereof shall inure to
the benefit of and be binding upon the respective successors and assigns of
Assignor and Assignees. All references herein to either Assignor or Assignees
shall include their respective successors and assigns.

 

Section 3.4 Counterparts. This Assignment may be executed in any number of
counterparts, and each counterpart hereof shall be deemed to be an original
instrument, but all such counterparts shall constitute but one and the same
assignment.

 

Section 3.5 No Ratification. The reference herein to the Permitted Encumbrances
is for the purposes of defining the nature and extent of Assignor's warranty and
shall not be deemed toratify or create any rights in third parties.

 

16

 

 

IN WITNESS WHEREOF, the Parties hereto have executed this Assignment on the
dates of the acknowledgments set forth below, to be effective, however, for all
purposes, as of the___ day of ___________________, 2____.

 

Address:               [Street] By:             [Street 2] Name:            
[City], Texas [Zip] Title:             “ASSIGNOR”      

 

  RICHLAND RESOURCES CORPORATION           Address:               777 Main
Street By:             Suite 1400 Name:             Fort Worth, Texas 76102
Title:    

 

“RICHLAND SUN DELTA INC.           Address:               c/o US King King LLC
By:             3721 Briarpark Dr., Ste. 155 Name:             Houston, Texas
77042 Title:             “SUN DELTA”      

 

  AMERRIL ENERGY LLC           Address:               3721 Briarpark Dr., Ste.
155 By:             Houston, Texas 77042 Name:             “AMERRIL” Title:    

 

THE STATE OF TEXAS §   § COUNTY OF ___________ §

 

17

 

 

This instrument was acknowledged before me on the day of , 201___, by
________________________, of ______________________________________________, a
Texas corporation, on behalf of said corporation.

 

(SEAL)

 

Notary Public in and for the State of Texas

 

My commission expires:                                                        

 

THE STATE OF TEXAS §   § COUNTY OF ___________ §

 

This instrument was acknowledged before me on the day of , 201___, by
_____________________________, of RICHLAND RESOURCES CORPORATION, a Nevada
corporation, on behalf of said corporation.

 

(SEAL)

 

Notary Public in and for the State of Texas

 

My commission expires:                                                         

 

THE STATE OF TEXAS §   § COUNTY OF ___________ §

 

This instrument was acknowledged before me on the day of , 201___, by
_____________________________, of SUN DELTA INC., a Colorado corporation, on
behalf of said corporation.

 

(SEAL)

 

Notary Public in and for the State of Texas

 

My commission expires:                                                        

 

THE STATE OF TEXAS §   § COUNTY OF ___________ §

 

18

 

 

This instrument was acknowledged before me on the day of , 201___, by
_____________________________, of AMERRIL ENERGY LLC, an Oklahoma limited
liability company, on behalf of said company.

 

(SEAL)

 

Notary Public in and for the State of Texas

 

My commission expires:                                                         

 

19

 

 

EXHIBIT C

 

Joint Operating Agreement

 

(See attached)

 

20

 

 

EXHIBIT D – FORM OF MEMORANDUM OF AGREEMENT

 

MEMORANDUM OF FARMOUT AGREEMENT

 

THE STATE OF TEXAS §   § COUNTY OF LEON §

 

This Memorandum of Farmout Agreement (this “Memorandum”) is made and entered
into as of the day of _____________, 201__, by and between
_______________________, a Texas corporation (“Farmors”), and RICHLAND RESOURCES
CORPORATION, a Nevada corporation (“Richland”), SUN DELTA, INC., a Colorado
corporation (“Sun Delta”), and AMERRIL ENERGY LLC, an Oklahoma limited liability
company (“Amerril”) (each a “Farmee,” collectively, “Farmees”).

 

WITNESSETH:

 

WHEREAS, Farmors, as “Farmors,” and Farmees, as “Farmee,” entered into that
certain Farmout Agreement dated as of _____________, 2012 (the “Farmout
Agreement”), covering and describing Farmors’ interest in and to those oil, gas
and mineral leases described on Exhibit A attached hereto and made a part hereof
for all purposes (collectively, the “Subject Leases”); and

 

WHEREAS, Farmors and Farmees desire to evidence of record the existence of the
Farmout Agreement.

 

NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:

 

This Memorandum is given to place every person on notice of the existence of the
Farmout Agreement, to which reference is here made for all purposes, and the
respective rights and obligations of Farmors and Farmees in and to the Subject
Leases by virtue of the Farmout Agreement.

 

This Memorandum is not intended in any way to alter, amend or change any of the
terms and conditions of the Farmout Agreement.

 

21

 

 

IN WITNESS WHEREOF, this instrument is executed in multiple counterpart copies
as of the date first hereinabove:

 

Address:               [Street] By:             [Street 2] Name:            
[City], Texas [Zip] Title:             “ASSIGNOR”      

 

  RICHLAND RESOURCES CORPORATION           Address:               777 Main
Street By:             Suite 1400 Name:             Fort Worth, Texas 76102
Title:               SUN DELTA INC.  

 

Address:               c/o US King King LLC By:             3721 Briarpark Dr.,
Ste. 155 Name:             Houston, Texas 77042 Title:              “SUN DELTA”
     

 

  AMERRIL ENERGY LLC           Address:               3721 Briarpark Dr., Ste.
155 By:             Houston, Texas 77042 Name:             “AMERRIL” Title:    

 

22

 

 

THE STATE OF TEXAS §   § 'COUNTY OF ___________ §

 

This instrument was acknowledged before me on the day of , 201___, by
________________________, of ______________________________________________, a
Texas corporation, on behalf of said corporation.

 

(SEAL)

 

Notary Public in and for the State of Texas

 

My commission expires:                                                       

 

THE STATE OF TEXAS §   § 'COUNTY OF ___________ §

 

This instrument was acknowledged before me on the day of , 201___, by
_____________________________, of RICHLAND RESOURCES CORPORATION, a [Nevada]
corporation, on behalf of said corporation.

 

(SEAL)

 

Notary Public in and for the State of Texas

 

My commission expires:                                                       

 

THE STATE OF TEXAS §   § COUNTY OF ___________ §

 

This instrument was acknowledged before me on the day of , 201___, by
_____________________________, of SUN DELTA INC., a Colorado corporation, on
behalf of said corporation.

 

(SEAL)

 

Notary Public in and for the State of Texas

 

My commission expires:                                                     

 

23

 

 

THE STATE OF TEXAS §   § COUNTY OF ___________ §

 

This instrument was acknowledged before me on the day of , 201___, by
_____________________________, of AMERRIL ENERGY LLC, an Oklahoma limited
liability company, on behalf of said company.

 

(SEAL)

 

Notary Public in and for the State of Texas

 

My commission expires:                                                       

 

24

 

 

EXHIBIT E – GLOSSARY OF DEFINED TERMS

 

“Affected Acreage” defined in Article VI.

 

“Assigned Interests” defined in Article III, Section 3.2(a)

 

“Code” defined in Article VIII, Section 8.10

 

“Commencement Date” defined in Article II, Section 2.1

 

“Commencement of actual drilling operations” defined in Article II, Section
2.2(b)

 

“Drilling Option Period” defined in Article II, Section 2.2(a)

 

“Memorandum” defined in Article VIII, Section 8.11

 

“Objective Depth” defined in Article II, Section 2.1

 

“Operating Agreement” defined in Article IV.

 

“Partial Assignment” defined in Article III, Section 3.2(a)

 

“Subject Interests” defined in Article I, Section 1.1

 

“Subject Leases” defined in Article I, Section 1.1

 

“Unit Designation” defined in Article III, Section 3.1

 

“Well Unit” defined in Article I, Section 1.2.

 

“Working Interest” defined in Article III, Section 3.3(d)

 

25