Exhibit 10.23


 


Fourth Amendment


November 21, 2018


 


FOURTH
AMENDMENT TO


MINING
AND MINERAL LEASE AGREEMENT


 


This
FOURTH AMENDMENT TO MINING & MINERAL LEASE AGREEMENT (“Fourth Amendment”), dated and made effective as
of November 21, 2018, is made and entered into by and between ASPHALT RIDGE, INC., a Utah corporation having offices at
6083 Carriage House Way, Reno, NV 89519 (“Lessor”), and TMC CAPITAL, LLC, a Utah limited liability company
having offices at: c/o Petroteq Energy, Inc., 4370 Tujunga Ave Ste. #320, Studio City, CA 91604 (“Lessee”)
(the parties are sometimes referred to herein individually as a “Party” or collectively as the “Parties”).


 


R
E C I T A L S


 


A.
Lessor and Lessee are Parties to that certain that certain “Mining and Mineral Lease Agreement” dated as of July 1,
2013, as amended by the First Amendment to Mining & Mineral Lease Agreement dated as of October 15, 2015, the Reinstatement
of and Second Amendment to Mining & Mineral Lease Agreement dated March 1, 2016, and the Third Amendment to Mining & Mineral
Lease Agreement dated February 21, 2018 (collectively, the “Lease”), whereby Lessor granted to Lessee an exclusive
right to explore for, mine, produce, extract and sell or otherwise dispose of Tar Sands and any Minerals which are associated
with or contained in any Tar Sands (as defined in the Lease), subject to a depth limitation of above 3,000 feet above Mean Sea
Level (MSL), located in and under the Properties in Uintah County, Utah more particularly described in Exhibit A of the Lease
and to use in connection therewith the Water Rights described in Exhibit B of the Lease attached hereto;


 


B.
Lessor and Lessee desire to amend the Lease effective as of November 21, 2018 in order to (1) add to and include in the Lease
certain Properties that were excluded from the Lease under the Third Amendment to Mining & Minerals Lease Agreement dated
February 21, 2018, and (2) modify and revise certain other provisions of the Lease upon the terms and conditions set forth in
this Fourth Amendment.


 


NOW,
THEREFORE, in consideration of the covenants, promises and obligations contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:


 


1.
AMENDMENT TO LANDS UNDER LEASE. Lessor and Lessee hereby agree to amend the Lease to include the Properties described in Exhibit
A attached hereto and further agree that the Properties described in Exhibit A hereto shall constitute all of the Properties made
subject to and included in and as part of the Lease effective as of the date of the Third Amendment.


 


2.
OTHER AMENDMENTS TO LEASE. The Lease shall be and is hereby further amended in in accordance with and as set forth below.


 


(a)
Amendment of Paragraph 11 of the Lease. Paragraph 11 of the Lease is hereby amended in its entirety and replaced with
the following:


 


11)
Termination.


 


Lack
of Financial Commitment. Lessee intends to construct a minimum of two similar processing facilities to the 1,000 barrel
per day facility currently under construction. This Lease shall automatically terminate without notice, if a written letter
from a financially capable institution or individual providing a binding commitment, satisfactory to Lessor, in Lessor’s sole
discretion, to fund the full cost of the second 1,000 barrel/day processing facility to be constructed for the benefit of the
Properties (the “Financial Commitment”) is not obtained or secured by Lessee and a true and accurate copy of the
Financial Commitment is received by Lessor on or before July 1, 2019 for the 2nd processing facility and a similar Financial
Commitment for the 3rd processing facility by July 1, 2020. The period of time between March 1, 2018 and the earlier of (i)
March 1, 2019 or (ii) the date on which a true and accurate copy of the Financial Commitment is received by Lessor shall be
referred to herein as the “Extension Period.”


 






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Fourth Amendment


November 21, 2018


 



For
the avoidance of doubt, the requirement hereinabove that Lessee obtain Financial Commitments for a second 1,000 barrel/day processing
facility and a third 1,000 barrel//day processing facility may be satisfied, as may be determined by Lessee, by one or more Financial
Commitments for (1) any expansion (or series of expansions) to any existing or future processing facility, or (2) the construction
of one or more new or additional processing facilities, in each (or either) case that will achieve (or exceed) the increases in
processing capacity required under this Lease.


 


b)
Cessation of Operations or Inadequate Production. If the technology, techniques or process deployed by Lessee in the development
of the Lease prove to be uneconomic and operations cease due to increased operating costs or decreased marketability, this Lease
shall automatically terminate without notice if operations are not resumed at 80% of capacity within three (3) months of any such
cessation.


 


If
the proposed 3,000 barrel/day processing facility to be constructed for the benefit of the Properties fails to produce an average
at a minimum of 80% of its rated capacity for at least 180 calendar days during the Lease Year commencing July 1, 2021, or any
successive Lease Year, this Lease shall terminate within thirty (30) days after Lessor delivers to Lessee a written notice of
termination. The 3,000 barrel/day rated capacity is determined solely by the quantity of ore processed from the Property to produce
3,000 barrels/day prier to being diluted by condensate or any other dilutant.


 


c)
Surrender by Lessee. Lessee may at any time after the Effective Date surrender this Lease provided thirty (30) days advance
written notice of termination is given to Lessor, after which all rights and obligations of Lessee hereunder shall cease, save
and excepting all accrued obligations and any reclamation and similar obligations that were occasioned by Lessee’s operations
and Lessee’s environmental obligations, which shall survive any termination. Lessee shall leave the Properties in a clean, good
and safe condition and in accordance with all applicable laws and regulations. Upon termination of this Lease, Lessee shall comply
with all DOGM and/or BLM reclamation requirements and shall have a continuing right to enter upon the Properties to complete required
reclamation and to remove from the Properties all equipment, machinery, facilities and other items belonging to Lessee in accordance
with DOGM’s standards, in accordance with all relevant operating permits and reclamation plans, and to DOGM’s satisfaction. Lessee’s
reclamation obligations hereunder shall be deemed complete upon final release by DOGM and/or the BLM of Lessee’s surety bond
or other financial guarantee.


 


d)
Breach of Lease by Lessee. In the event of Lessee’s failure to comply with any material provision of this Lease,
Lessor shall provide Lessee with written notice setting forth the nature of such non-compliance after receipt of which, if the
non-compliance relates to the payment of money, Lessee shall within thirty (30) days of receipt of notice cure such non-compliance.
If the noncompliance relates other than to the payment of money, Lessee shall within thirty (30) days of receipt of notice pursue
diligently all appropriate actions to cure the non-compliance within one hundred fifty (150) days of receipt of notice. If the
non-compliance is not timely cured, Lessor may thereupon terminate this Lease by giving Lessee written notice to that effect.
However, should there be a dispute as to whether or not non-compliance has occurred or remained, then the provisions of paragraph
12 below shall apply.


 






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Fourth
Amendment 


November 21, 2018






 


In the event
of any breach of this Lease by Lessee and the failure to cure after notice as provided above, Lessor, in addition to the other
rights or remedies it may have, shall have the immediate right of reentry and may remove all persons and property from the premises;
such property may be removed and stored in a public warehouse or elsewhere at the cost of, and for the account of Lessee. Should
Lessor elect to reenter, as herein provided, or should it take possession pursuant to legal proceedings or pursuant to any notice
provided for by law, Lessor may terminate this Lease. Should Lessor at any time terminate this Lease for any breach, in addition
to any other remedy it may have, Lessor may recover from Lessee all damages incurred by reason of such breach, including the cost
of recovering the premises. If Lessee doesn’t remove personal property, after six (6) months it will become Lessor’s property.


 


(b) Amendment of Paragraph
2 of the Lease. Paragraph 2 of the Lease is hereby amended in its entirety and replaced with the following:


 


a) Term.
This Lease is granted for a primary term of six (6) years plus the Extension Period provided in Paragraph 11 (the “Primary
Term”) commencing July 1, 2013 (the “Effective Date”). If at any time during the Primary Term, Lessee
fails to achieve (or exceed) the requirements of Continuous Operations (as defined below), this Lease shall terminate unless mutually
agreed in writing by both Parties. If within the Primary Term, Lessee meets or exceeds the applicable requirements of Continuous
Operations, then this Lease shall continue after the Primary Term for so long as such requirements continue to be met or maintained.
If, at any time following the Primary Term, the operations conducted by Lessee cease for longer than 180 days during any Lease
Year or 600 days in any three consecutive Lease Years, Lessor shall be entitled, upon complying with the provisions contained
in Paragraphs 12 (Termination) and 14 (Notices), respectively, to terminate this Lease. a) Definition of “Continuous
Operations”. For purposes of this Lease, the term “Continuous Operations” means:


 


		(i)	the construction or operation of one or more facilities having the capacity to produce, from bituminous
ores, sands and compounds mined or extracted from the Properties, an average daily quantity (“ADQ”) of bitumen, synthetic
crude oil and/or bitumen products (excluding blending agents and dilutant) that, in the aggregate, equals or exceeds the following:



 


By 07-01-2019, at 80% of the ADQ of
1,000 bbls/day;


By 07-01-2020, at 80% of the ADQ of
2,000 bbls/day; and


By 07-01-2021, and thereafter during
the remainder of this Lease, at 80% of the ADQ of 3,000 bbls/day or greater; and


 


		(ii)	from and after 07-01-2019, the continuation of operations for a minimum period of 180 days during
each Lease Year or 600 days in any period of three consecutive Lease Years at (or in excess of) the applicable ADQ specified hereinabove.



 


		(iii)	The requirement that Lessee construct or operate facilities having
specified (or minimum) processing capacities as provided herein may be satisfied by (A) any expansion (or series of expansions)
to any existing or future processing facility located on or near the Properties, or (B) the construction of any new or additional
processing facility, in each (or either) case that satisfies (or exceeds) the applicable processing capacity requirement. If permitting
allows for further increases in the capacity of the processing facilities constructed for the benefit of the leasehold in Exhibit
A beyond an ADQ of 3,000 bbls/day, the site(s) of any additional
processing facilities shall be given priority for any additional capital expenditure by TMC Capital for expanding the rate of production
from the Properties.



 




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Fourth
Amendment 


November 21, 2018


 


b)
Offsite Operations. Operations conducted by Lessee off the Properties shall be included in determining whether the applicable
requirements of Continuous Operations have been met if they are conducted in connection with an integrated mining operation involving
the Properties and other properties in which Lessee holds an interest, provided that, during any period of three (3) Lease Years,
at least fifty percent (50%) percent of the ores, tar sands, or feed stock of whatever nature mined or otherwise extracted from
or in the integrated mining operation comes from the Properties.


 


c) Smaller
Operations. In the event that the operation of any facility or facility constructed or deployed by Lessee to produce bitumen,
synthetic crude oil and/or bitumen products from the Properties fails to achieve (or exceed) the requirements for Continuous Operations
in or for any Lease Year (or any period of three consecutive Lease Years), Lessor shall be entitled, upon complying with the provisions
contained in Paragraphs 12 (Termination) and 14 (Notices), respectively, to terminate this Lease.”


 


(c) Amendment solely to Paragraph
4(g) of the Lease. Paragraph 4(g) of the Lease is hereby amended
in its entirety and replaced with the following:


 


g) Minimum
Expenditures. During the Lease Year commencing July 1, 2021, and each year thereafter in which Lessee fails to achieve (or
exceed) an ADQ of at least 3,000 bbls/day during a 180-day period, Lessee shall make expenditures (which shall include operational
costs but shall not include depreciation or corporate overhead) for the benefit of the Properties of not less than $2,000,000 per
year. Any amount of Expenditures in excess of those stated above in or during any Lease Year may be carried forward to the next
Lease Year. The term “benefit’ shall mean expenditures for exploration, mapping, developing or acquiring water rights, assaying,
metallurgical testing, permitting, preparing feasibility studies, and construction of plant and surface facilities, including facilities
constructed and/or operated on property located near the Properties. (Any acquisition of water rights shall be made in the name
of the Lessor with Lessee’s right to utilize said water rights during the Term of the Lease. Lessee is responsible for maintaining
and/or perfecting any newly acquired water rights and the existing Water Right in Exhibit B.) Lessee will provide Lessor with copies
of all acquired data relating to such expenditures, other than data considered proprietary to Lessee or that are or include the
trade secrets of Lessee, which shall become the sole property of the Lessor on termination for any reason including copies of expenditures
made for those qualifying categories above.


 


3.
EFFECT OF FOURTH AMENDMENT. Except as amended by this Fourth Amendment,
the terms of the Lease shall continue in full force and effect in accordance with the terms thereof.


 


IN
WITNESS WHEREOF, the Parties have executed this Fourth Amendment as
of the date(s) written below.


 


	TMC CAPITAL, LLC	 	ASPHALT RIDGE, INC.
	 	 	 
	By:	/s/ Aleksandr Blyumkin      	 	By:	/s/ Sam Arentz   









	Name: Aleksandr Blyumkin 	 	Name: Sam Arentz, III 
	Title: Manager	 	Title: President
	Date: November 21,
    2018	 	Date: November 21,
2018







 




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Fourth Amendment


November 21, 2018


 


ACKNOWLEDGEMENTS


 


	STATE OF NEVADA	)
	 	) ss
	COUNTY OF WASHOE	)


 


The foregoing instrument
was acknowledged before me on November 21st, 2018, by Sam S. Arentz, III, the President of Asphalt Ridge, Inc., a Utah
corporation.


 


	 	/s/ Jackie Moritzky
		Notary Public


 


CALIFORNIA ACKNOWLEDGEMENT


 





	A notary public
or other officer completing this certificate verifies only the identity of the individual who signed the document to which this
certificate is attached, and not the truthfulness, accuracy, or validity of that document.	 



 


	STATE OF CALIFORNIA	)
	 	)
	COUNTY OF LOS ANGELES	)


 


On November    ,
2018, before me,                                                ,
Notary Public in and for                                       ,
State of California, personally appeared Aleksandr Blyumkin, who proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.


 


I certify under PENALTY
OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.


 


WITNESS my hand and official seal.


 


	Signature
                                                                 (Seal)


 




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Fourth Amendment


November 21, 2018


 


EXHIBIT A


THE PROPERTIES


 


Certain lands and property
situated and lying in Uintah County (SLM), State of Utah, being and comprising all of the lands and property described in Exhibit
A to that certain Mining and Mineral Lease Agreement dated July 1, 2013, executed between Asphalt Ridge, Inc., as lessor, and TMC
Capital, LLC, as lessee, all as more particularly described as follows:


 


Township 4 South, Range 20 East (SLM),
Uintah County, Utah. This property, also owned by Asphalt Ridge, Inc. and the Telecommunication sites are not included in this
Lease.


 


	Section 25:	Lots
1 & 2, W1⁄2NE1⁄4
	 	(Enterprise No. 6 patented mining claim)


 


Township 4 South, Range 21 East (SLM),
Uintah County, Utah. This property, also owned by Asphalt Ridge, Inc. and the Telecommunication sites are not included in this
Lease.


 


	Section 30:	Lots
1 & 2, W1⁄2NE1⁄4NW1⁄4, SE1⁄4NE1⁄4NW1⁄4, SE1⁄4NW1⁄4
	 	(Enterprise No. 5 patented mining claim)


 


Township 5 South, Range 21 East (SLM),
Uintah County, Utah.


 


	Section 4:	SW1⁄4NW1⁄4,
NW1⁄4SW1⁄4, E1⁄2SW1⁄4
	 	 
	Section 15:	W1⁄2NW1⁄4,
SE1⁄4NW1⁄4, SW1⁄4NE1⁄4
	 	 
	Section 25:	SW1⁄4
	 	(Cameron No. 7 patented mining claim)
	 	 
	Section 25:	Lots 9 & 10,
W1⁄2SE1⁄4
	 	(Cameron No. 5 patented mining claim)
	 	 
	Section 25:	Lots 4 & 5,
S1⁄2NW1⁄4
	 	(Cameron No. 8 patented mining claim)


 


Township 5 South, Range 22 East (SLM),
Uintah County, Utah.


 


	Section 31:	Lot
3, SW1⁄4SE1⁄4, E1⁄2SW1⁄4
	 	 
	Section 31:	N1⁄2SE1⁄4,
SE1⁄4SE1⁄4
	 	(Cameron No. 1 patented mining claim)
	 	 
	Section 32:	SW1⁄4


 


[containing 1,229.82 acres, more or less].


 




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