EX-10.2



 





Exhibit 10.2




LEASE PURCHASE AND SALE AGREEMENT




     This PURCHASE AND SALE AGREEMENT (“Agreement”) is made to be EFFECTIVE as of the
21st day of March, 2007 (the “Effective Date”), by and between HEMUS, Ltd., a Texas
limited liability company, with its principal place of business located at 6565 West Loop South,
Suite 555, Bellaire, Texas, 77401 (“Seller”) and Great Plains Exploration, LLC, an Ohio limited
liability company, with its principal place of business at 8500 Station Street, Suite 345, Mentor,
Ohio 44077, or its nominee (“Purchaser”).



RECITALS




     WHEREAS, Seller owns the oil, gas and mineral leasehold estates in a prospect known as the
“Missouri Breaks” (the “Prospect”), which covers that certain tract of real property located in
Fergus County, State of Montana and consisting of the approximately 150,000 acres of land that
generally shown on Exhibit “A” attached hereto (the “Lease Block Area”);



     WHEREAS, the Seller’s interest in the aforementioned leasehold estates is evidenced by certain
lease agreements and other related documents (collectively, the “Leases”);



     WHEREAS, subject to the terms, conditions and other contingencies contained herein, Seller
desires to sell to Purchaser and Purchaser desires to purchase a seventy-five percent (75%)
interest in some or all of the Leases from Seller on the terms and conditions set forth in this
Agreement;



     NOW, THEREFORE, for good and valuable consideration and for the mutual covenants herein
contained, Seller and Purchaser agree as follows:



I. PURCHASE AND SALE




     Subject to the terms, conditions and other contingencies specified in this Agreement,
Seller shall sell and Purchaser shall purchase as of the Closing Date a seventy-five percent (75%)
interest in the Defensible Title Leases (as defined in Section VI(A)), and all of Seller’s
related interests in all contracts, easements, rights of way and all other agreements concerning
the Defensible Title Leases (collectively, the “Transferred Lease Interest”), subject to an
overriding royalty interest in favor of Seller in a percentage equal to the difference between the
Lease burdens and 81.5%.



II. PURCHASE PRICE




     A. Amount of Purchase Price. As more fully set forth in Section VI(B) hereof, the
purchase price for Purchaser’s seventy-five percent (75%) interest in the Leases shall be equal
to the number of Defensible Title Acres (as defined in Section VI(B)), multiplied by Twenty-Two
Dollars and 22/100 ($22.22), which amount shall then be multiplied by seventy-five percent
(75%) (the “Purchase Price”).



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     B. Manner of Payment. The Purchase Price shall be paid by Purchaser as follows:




	 	1.	 	Within three (3) business days after the Effective Date of this
Agreement, a deposit in the Amount of One Hundred Thousand Dollars ($100,000)
shall be paid to Seller as an earnest money deposit (“Initial Deposit”), to be
credited against the Purchase Price at Closing.
	 
	 	2.	 	The balance of the Purchase Price shall be paid in immediately
available funds to Seller on the Closing Date.





III. CLOSING




     A. Time and Place. The sale and purchase of the Transferred Lease Interest shall take
place on a date and time mutually agreeable to the parties, which date shall be no later than ten
(10) days after the expiration of the Due Diligence Period (the “Closing Date”). On the Closing
Date Purchaser shall pay or cause to be paid to Seller the Purchase Price and Seller shall deliver
or cause to be delivered instruments sufficient to convey the Transferred Lease Interest to
Purchaser. The Closing shall occur at the office of the Purchaser. The following shall occur on
the Closing Date:




	 	1.	 	Seller shall deliver an executed and acknowledged Assignment of
Leasehold Interest Agreement in a form mutually acceptable to Purchaser and
Seller. The assignment shall be provided with warranty of title by,
through, and under Seller, and subject only to the Permitted Encumbrances,
as defined in Article VI.
	 
	 	2.	 	Purchaser shall wire the balance of the Purchase Price to an
account to be specified by Seller.
	 
	 	3.	 	Seller shall deliver to Purchaser exclusive physical possession
of the Defensible Title Leases and all related documents.
	 
	 	4.	 	Seller shall provide Purchaser with copies of all files
relating to the Defensible Title Leases and to the Defensible Title Acres.
This will include all property files, including all environmental, engineering,
geophysical land, accounting and other technical files, to the extent that they
exist.





     B. Notification. Immediately after the Closing Date, Purchaser and Seller shall
notify all vendors, government agencies and lessors (only as those leases that require
notification of assignment of oil and gas lease) under the Leases that Purchaser has purchased



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the Transferred
Lease Interest and execute any and all necessary documentation (such as transfer orders) to reflect
the same.




IV. PURCHASER’S DUE DILIGENCE




     A. Due Diligence Period. During the period beginning upon the Effective Date and
ending at 5:00 p.m. MT on the 60th day thereafter (hereinafter referred to as the
“Initial Due Diligence Period”), Purchaser and its representatives, at their sole costs and
expense, shall have the right to investigate the feasibility of the Prospect (the “Due Diligence
Investigation”) which investigation may include, but is not limited to:




	 	1.	 	Reviewing the Leases and all documentation relating to the
Leases and the Lease Block Area;
	 
	 	2.	 	Obtaining title examinations and opinions on a random sample of
the larger parcels that make up the Lease Block Area;
	 
	 	3.	 	Investigating the accessibility of transmission pipelines to
determine distance, pressures, capacities and transport costs;
	 
	 	4.	 	Meeting with the Montana Oil and Gas Commission to ascertain
permitting and bonding requirements, costs and time;
	 
	 	5.	 	Ascertaining the tax structures on oil and gas production;
	 
	 	6.	 	Reviewing the general terrain of the Lease Block Area; and
	 
	 	7.	 	Meeting with Seller’s major vendors, including drilling
companies, logging companies, cement companies, frac companies and pipeline
companies to determine cost and availability.





     B. Due Diligence Extension. Purchaser shall have the right to extend the Due
Diligence Period (the “Extended Due Diligence Period”) and to continue its Due Diligence
Investigation for an additional sixty (60) after the expiration of the Initial Due Diligence Period
by: (i) giving Seller written notice of said extension prior to the expiration of the Initial Due
Diligence Period, and (ii) delivering an additional One Hundred Thousand Dollars ($100,000.00)
deposit (the “Second Deposit”) to Seller which amount shall be credited against the Purchase Price
at closing. For purposes of this Agreement, the Initial Due Diligence Period and the Extended Due
Diligence Period shall be collectively referred to as the “Due Diligence Period”.



     C. Access to Seller’s Non-Proprietary Information. During the Due Diligence
Period, Seller shall make available to Purchaser during normal business hours at Seller’s
offices, or other locations designated by Seller, the Leases and all files, records,
documents and other data in Seller’s possession or control relating to the Leases or the Lease
Block Area, including but not limited to all title documents relating to the Leases (including
any abstracts of title, title opinions, title commitments, title insurance policies, and title curative
documents), regulatory and environmental files, contracts, correspondence, permitting files, engineering,



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production and well files (to the extent that they exist).




     D. Access to Seller’s Vendors. Within five (5) days after the Effective Date, Seller
shall provide Purchaser a list of Seller’s primary vendors, including but not limited to the types
of vendors listed in Section IV(A)(7) above. Seller shall use reasonable efforts in assisting
Purchaser in scheduling meetings with Seller’s vendors.



     E. Right to Terminate. In the event that Purchaser is not satisfied with the results
of its Due Diligence Investigation for any reason whatsoever, Purchaser shall have the right to
terminate this Agreement by giving written notice thereof to Seller within seven (7) business days
following the expiration of the Due Diligence Period, in which case both parties shall be released
from any duties or obligations, each to the other, with respect to the transaction contemplated by
this Agreement.



V. REPRESENTATIONS AND WARRANTIES.




     A. Mutual Representations. Each party to this Agreement represents that:




	 	1.	 	if the party is not an individual then it is an
entity duly organized, validly existing and in good standing under the laws of
the State of its organization or incorporation;
	 
	 	2.	 	the party has all authority necessary to enter into
this Agreement and to perform all of the party’s obligations hereunder;
	 
	 	3.	 	the party’s execution, delivery and performance of this
Agreement and the transactions contemplated hereby will not: (a) violate
or conflict with any provision of its Certificate of Organization or
Incorporation, By-Laws or other governing documents; (b) result in the breach
of any term or condition of or constitute a default or cause the
acceleration of any obligation under any agreement or instrument to which
the party is a party or by which the party is bound; or (c) violate or
conflict with any applicable judgment, decree, order, permit, law, rule or
regulation;
	 
	 	4.	 	this Agreement has been duly executed and delivered on
the party’s behalf, and on the Closing Date all documents and instruments
required hereunder will have been duly executed and delivered. This
Agreement, and all documents and instruments required hereunder, shall
constitute legal, valid and binding obligations enforceable in accordance with
their respective terms;
	 
	 	5.	 	the party has been represented by legal counsel of its
own selection who has reviewed this Agreement; and
	 
	 	6.	 	neither Seller nor Purchaser has incurred any obligation
or liability, contingent or otherwise, for brokers’ or finders’ fees in
connection with




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	 	 	 	this Agreement in respect of which the other party may have any
responsibility; and any such obligation or liability that might exist
shall be the sole obligation of the party whose action gave rise thereto.





     B. Seller’s Representations. Seller represents and warrants the following as of the
Effective Date hereof and as of the Closing Date:




	 	1.	 	Seller is the owner of the leasehold interests conveyed
pursuant to the Leases and related documents, and Seller has the authority and
capacity to sell and convey the leasehold interest that is being conveyed
hereunder;
	 
	 	2.	 	Seller has not breached, defaulted or otherwise violated
any agreement to which it is a party in any material respect or any material
obligation to which Seller is bound affecting or pertaining to the Leases or
the Lease Block Area;
	 
	 	3.	 	There are no threatened or pending suits, actions,
claims, investigations or any legal, administrative or arbitration
proceedings affecting or pertaining to the Leases;
	 
	 	4.	 	The Leases are in full force and effect, enforceable on their
terms, and comply with all regulatory requirements and laws, ordinances,
statutes and regulations and convey good and marketable title to the mineral
rights described therein, and are free and clear of all Title Defects except
for the Permitted Encumbrances;
	 
	 	5.	 	Seller is not in breach of any laws, ordinances, statues,
regulations, bylaws or decrees to which it is subject or which applies to it
which would adversely effect the Leases.
	 
	 	6.	 	All material royalties, rentals and other payments due under
the Leases have been properly and timely paid, and all conditions necessary
to keep such Leases in force have been fully performed. No notices have
been received by Seller of any claim to the contrary;
	 
	 	7.	 	No person, company or entity has the right, agreement or option
to purchase any interest in, or portion of, the Leases;
	 
	 	8.	 	Any assignment from Seller to Purchaser shall conform to the
regulations of the State of Montana and the United States Bureau of Land
Management, and any other governmental authority or other entity or third party
whose consent may be required;
	 
	 	9.	 	Seller holds all permits, licenses, consents and authorities
issued and/or required by any governmental authority having jurisdiction over
the Leases and/or the Transferred Lease Interest or any subdivision thereof,




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	 	 	 	including without limitation, any governmental department, commission, bureau,
board or administrative agency which are necessary in relation to Seller’s
interest in the Leases and its ability to sell and transfer the Transferred
Lease Interest to Purchaser;






	 	10.	 	Seller has no knowledge of or reason to suspect the existence
of any environmental hazards that will materially adversely effect the drilling
of wells or transmission of oil and gas within the Lease Block Area. Seller
has complied with all environmental laws, ordinances and regulations pertaining
to the Lease Block Area and the Leases;
	 
	 	11.	 	The Transferred Lease Interest will be conveyed to Purchaser on
the Closing Date free and clear of all liens, encumbrances and unsatisfied
judgments that negatively impact the Transferred Lease Interest or prevent
Seller from having Defensible Title therein; and
	 
	 	12.	 	From the Effective Date until the Closing Date, there has not
been and shall not be:






	 	a.	 	Any material adverse change which will
adversely effect Purchaser’s ability to drill wells or transport oil
and gas within the Lease Block Area;
	 
	 	b.	 	Any sale, assignment, lease or other
disposition of the mineral rights subject to the Leases;
	 
	 	c.	 	Any mortgage, pledge or grant of a lien or
security interest in any of the Leases; or
	 
	 	d.	 	No suit, action or other proceeding by a third
party or a governmental authority shall be pending or threatened which
seeks damage, fines or other penalties from either party in connection
with the Leases or the Lease Block Area, or seeks to restrain, enjoin
or otherwise prohibit the consummation of the transaction contemplated
by this Agreement.
	 
	 	e.	 	Any contract or commitment to do any of the
foregoing.





     C. Seller understands that Purchaser has entered into this Agreement in reliance on the
representations and warranties contained in this Section V.



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VI. DEFENSIBLE TITLE.




     A. Defensible Title and Title Defects. For the purpose of this Agreement,
“Defensible Title” shall mean title to the Leases reflected in the real property records of the
county and, if applicable, in the records of the appropriate governmental agency, that (i) entitles
Purchaser to receive operating rights to the net mineral acres to be conveyed at Closing as set
forth in the Title Letter and (ii) is free and clear of encumbrances, liens, unsatisfied judgments
and defects which negatively impact Purchaser’s ability to enter upon the real property subject to
the Leases for purposes of drilling any wells and/or transporting oil and gas within any portion of
the Lease Block Area, or which negatively effects Purchaser’s entitlement set forth in (i) of this
Section. Any Leases which do not meet the standards of “Defensible Title” shall be deemed to have a
“Title Defect”.



      B. Purchase Price Calculation.





	 	1.	 	Title Notice. Purchaser shall give Seller a written
“Title Letter” as soon as reasonably possible but no later than three (3) days
prior to the Closing Date at 5:00 p.m., MT. The Title Letter shall state the
number of net mineral acres for which Purchaser has confirmed that Seller has
Defensible Title (the “Defensible Title Acres”), and shall also list the Leases
covering said acres (collectively, the “Defensible Title Leases”). At the
Closing, Purchaser shall purchase a seventy-five percent (75%) interest in the
Defensible Title Leases. The Title Letter shall also contain a calculation of
the Purchase Price to be paid by Purchaser which shall be equal to the number
of Defensible Title Acres, multiplied by Twenty-Two Dollars and 22/100
($22.22), which amount shall then be multiplied by seventy-five percent (75%).
With respect to the net mineral acres on which Purchaser has not confirmed that
Seller has Defensible Title, Seller shall diligently attempt to cure same to
Defensible Title standards on or before sixty (60) days after the Closing Date,
and Purchaser shall subsequently have the option to acquire same, as and when
cured, pursuant to the acquisition terms set forth in this Agreement. If
Seller is unable to cure the defects within sixty (60) days from the Closing
Date, said Leases shall be owned by Seller and not subject to this Agreement.
	 
	 	2.	 	Seller has represented that it has Defensible Title to 150,000
net mineral acres within the Lease Block Area. In the event that the number of
Defensible Title Acres, as set forth in the Title Letter, comprise less than
one hundred one hundred twenty thousand (120,000) net acres, Purchaser, in its
sole discretion, may elect to terminate this Agreement. In such event
Purchaser shall so notify Seller in writing and the Initial Deposit and the
Second Deposit (if applicable) shall be immediately returned to Purchaser, and
both parties shall be released from any duties or obligations, each to the
other, with respect to the transaction contemplated by this Agreement.





     C. Permitted Encumbrances. The following shall not be considered Title Defects



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hereunder (collectively the “Permitted Encumbrances”):





	 	1.	 	Liens for current taxes or assessments not yet due or
delinquent on the Closing or, if delinquent, that are being contested in
the ordinary course of business;
	 
	 	2.	 	Materialmen’s, mechanic’s, repairman’s, employee’s,
contractor’s, operator’s and other similar liens or charges arising in the
ordinary course of business, for amounts not yet delinquent; and
	 
	 	3.	 	All rights to consent by, required notices to, filings
with or other actions by governmental authorities in connection with the sale
or conveyance of oil and gas leases or interests therein or sale of
production therefrom if the same are customarily obtained subsequent to such
sale or conveyance.





VII. CONDITIONS OF CLOSING.




     Purchaser’s obligation to consummate the transaction contemplated by this Agreement is subject
to the satisfaction or waiver by Purchaser of all of the following conditions:



     A. Representations. The representations contained in Article V hereof shall be true
and correct in all material respects on the Closing Date as though made on and as of the Closing
Date.



     B. Performance. Seller shall have performed in all material respects the obligations,
covenants and agreements hereunder to be performed by it at or prior to the Closing Date.



     C. Pending Matters. No suit, action or other proceeding by a third party or a
governmental authority shall be pending which seeks damages, fines or other penalties from
either party in connection with the Leases or the Lease Block Area, or seeks to restrain, enjoin
or otherwise prohibit the consummation of the transactions contemplated by this Agreement.



     D. Joint Venture Agreement. The parties shall have entered into a Joint Venture
Agreement to develop oil and gas wells within the Lease Block Area upon terms and conditions
mutually agreeable to the parties. The Joint Venture Agreement shall provide that all costs and net
profits from the Joint Venture shall be divided seventy-five percent (75%) to Purchaser and
twenty-five percent (25%) to Seller and/or its assigns. Purchaser shall be the operator of the
Joint Venture and shall have the right to determine the well locations, provided, however, that
Seller shall have the right to “opt out” of any particular well prior to drilling, in which case
Seller shall not participate in the costs or profits generated from said well and further provided
that once Seller “opts out” of a specific well, Seller shall be prohibited from participating in
any other well drilled within a six hundred forty (640) acre block surrounding the original “opt
out” well. The Joint Venture Agreement shall also include a right of first refusal in favor of
Purchaser in the event that Seller wishes to transfer its retained interest in the Leases or the Joint Venture,
and Purchaser shall have ten (10) days from receipt of the offer to purchase Seller’s



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interest, provided, however, that this right of right of first refusal shall not apply to any transfer which
(i) takes place within thirty (30) days of the Closing Date, and (ii) transfers one-half (1/2 ) or
less of Seller’s retained interest in the Leases or the Joint Venture. The Joint Venture Agreement
shall also include an Area of Mutual Interest (“AMI”) covering the land described in Exhibit “B”.
In the event that either party acquires any interest in the mineral rights on any land conveyed by
the AMI, the other party shall be entitled to participate in the purchase and development of said
acquisition pursuant to the terms and conditions of the Joint Venture Agreement, with Seller being
entitled to own twenty-five percent (25%) of the acquired interest and Purchaser being entitled to
own seventy-five percent (75%) of the acquired interest.



     In the event that one or more of the Conditions of Closing set forth in subsections A through
D above fail, Purchaser shall so notify Seller in writing and the Initial Deposit and the Second
Deposit (if applicable) shall be immediately returned to Purchaser and both parties shall be
released from any duties or obligations, each to the other, with respect to the transaction
contemplated by this Agreement.



VIII. TAXES AND PRORATION.




     A. Apportionment of Ad Valorem and Property Taxes. All ad valorem taxes, real
property taxes, personal property taxes and similar obligations with respect to the Defensible
Title Leases for the tax period in which the Closing Date occurs shall be prorated as of the
Closing Date between Seller and Purchaser, taking into account the fact that Seller is retaining a
Twenty-Five Percent (25%) interest in the Leases. The portion of such apportioned tax liability
which is attributable to the Seller shall be credited to Purchaser as an adjustment of the
Purchase Price and each party shall file or cause to be filed all required reports and returns
incident to its share of such taxes and shall pay or cause to be paid to the taxing authorities all
such taxes arising out of the tax period in which the Closing Date occurs.



     B. Proration of Other Taxes, Etc. All other taxes, including, but not limited
to, excise taxes, state severance taxes, and any other local, state, and/or federal taxes or
assessments relating to or arising out of the Leases prior to the Closing Date shall remain
Seller’s responsibility. All such taxes relating to or arising out of the Leases after the
Closing Date shall be allocated in accordance with the terms of the Joint Venture Agreement.



     C. Transfer Taxes. Purchaser and Seller agree to each be liable for one-half (1/2) of
the total amount of all transfer, recording and registration fees and real estate transfer,
documentary stamp and similar transfer taxes imposed with respect to the sale, conveyance and
assignment of the Transferred Lease Interest hereunder.



     D. Rental Payments. The rental payment of One Dollar ($1.00) per acre due the lessors
under the Defensible Title Leases shall not be prorated as of the Closing Date. Any such
payment due prior to the Closing Date shall be paid by Seller and thereafter shall be
apportioned between Seller and Purchaser pursuant to the terms of the Joint Venture Agreement.



IX. INDEMNIFICATION.




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     A. Definitions. As used in this paragraph and the subparagraphs hereunder,
“Claim” and “Claims” shall include claims, demands, causes of action, liabilities, damages, fines,
penalties and judgments of any kind or character, whether matured or unmatured, absolute
or contingent, accrued or unaccrued, liquidated or unliquidated or known or unknown, and whether
or not resulting from third party claims, and all costs and fees (including, without
limitation, interest, reasonable attorneys’ fees, reasonable costs of experts, court costs and
reasonable costs of investigation, including those incurred in enforcing the indemnification
provisions contained in this Agreement) in connection therewith.



     B. Indemnification of Purchaser. Seller hereby agrees to indemnify and hold harmless
Purchaser, each affiliate of Purchaser, their respective directors and officers, and their
respective successors and assigns (collectively, “Purchaser Indemnitees”), from and against any and
all Claims suffered or incurred by any Purchaser Indemnitee arising from: (i) any breach of any
indemnity, obligation, covenant, representation or warranty of Seller contained in this Agreement;
and (ii) any act, omission, duty or obligation of Seller relating to or arising out of the
ownership, operation, management or control of the Leases prior to the Closing Date.



     C. Indemnification of Seller. Subject to the limitations set forth in Section IX(E)
below, Purchaser hereby agrees to indemnify and hold harmless Seller, each affiliate of Seller,
their respective directors and officers, and their respective successors and assigns (collectively,
“Seller Indemnitees”), from and against any and all Claims suffered or incurred by any Seller
Indemnitee arising from: (i) any breach of any indemnity, obligation, covenant, representation, or
warranty of Purchaser contained in this Agreement; and (ii) any act, omission, duty or obligation
of Purchaser relating to or arising out of the ownership, operation, management or control of the
Defensible Title Leases after the Closing Date, taking into account the fact that Seller is
retaining a twenty-five percent (25%) interest in the Defensible Title Leases.



     D. Indemnification Procedure for Third Party Claims. Any Claim for indemnity shall be made by written notice from the party seeking indemnification (the “Indemnified Party”) to the party required to
 provide same (the “Indemnifying Party”), together with a written description of the Claim, stating the nature and
basis of such Claim and, if ascertainable, the amount thereof. The Indemnifying Party shall
 have a period of thirty (30) days after receipt of such notice within which to respond
 thereto or, in the case of a third-party Claim which requires a shorter time for response,
 within such shorter period as specified by the Indemnified Party in such notice (the “Notice Period”). If the Indemnifying Party denies responsibility or fails to respond to the notice within the Notice Period, the Indemnified
 Party may defend or compromise the Claim as it deems appropriate without prejudice to any of the Indemnified Party’s rights hereunder, and the Indemnifying Party shall have no right to approve or disapprove any actions taken in
 connection therewith by the Indemnified Party. If the Indemnifying Party accepts responsibility, it shall so notify the Indemnified Party within the Notice Period and elect
 either (a) to undertake the defense or compromise of such third-party Claim with counsel selected by the Indemnifying Party and reasonably approved by the
Indemnified Party or (b) to instruct the Indemnified Party to defend or compromise such Claim. If the Indemnifying Party undertakes the defense or compromise of such third-party Claim, the Indemnified Party shall be entitled, at its own




10










 




expense, to participate in such defense. No compromise or settlement of any third-party
Claim shall be made without reasonable notice to the Indemnified Party and without the prior
written approval of the Indemnified Party, unless such compromise or settlement includes a
general release of the Indemnified Party in respect of the matter with no admission of liability
on the part of the Indemnified Party and no constraints on the future conduct of its
business.




     E. Liquidated Damages. Notwithstanding the foregoing, in the event that Purchaser
defaults on its obligations to consummate the transaction contemplated hereunder in accordance with
the terms and conditions of this Agreement, then this Agreement shall terminate and the Initial
Deposit shall be paid to Seller as final and liquidated damages, the Seller specifically waiving
any other legal or equitable remedy and all other rights and obligations of the parties hereunder
shall automatically be terminated.



     F. Obligation to Cooperate. In the defense of any third party Claim, regardless of
who is in control, the Indemnified Parties and the Indemnifying Parties shall fully cooperate in
good faith in connection with such defense and shall cause their legal counsel, accountants and
affiliates to do so, and shall make available to the other party all relevant books, records and
information.



X. FURTHER ASSURANCES.




     A. Performance of Obligations. Seller and Purchaser shall use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to carry out all of their respective obligations under this
Agreement and to consummate and make effective the purchase and sale of the Transferred Lease
Interest pursuant to this Agreement. Seller shall cooperate with Purchaser after the Closing Date
in obtaining any governmental approvals required for the development of the Prospect and shall
assist Purchaser in obtaining access and tapping into transmission lines.



     B. Further Conveyances and Assumptions. After the Closing Date, Seller and
Purchaser shall execute, acknowledge and deliver or cause to be executed, acknowledged and
delivered all such further conveyances, transfer orders, notices, assumptions and releases
and such other instruments, and shall take such further actions, as may be necessary or
appropriate to assure fully to Purchaser and its successors or assigns all of the
Transferred Lease Interest and to otherwise carry out the terms and provisions of this Agreement.



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XI. MISCELLANEOUS




     A. Notices. All notices and consents to be given hereunder shall be in writing
and shall be deemed to have been duly given if delivered personally; faxed with
receipt acknowledged; mailed by registered mail, return receipt requested, postage prepaid; or
delivered by a recognized commercial courier to the party at the address set forth below or
such other address as any party shall have designated for itself by ten (10) days’ prior
notice to the other party. Notice is deemed to have been duly received: on the day personally
delivered; on the day after it is sent by fax; seven (7) days after mailing by registered mail; or
the day after it is received from a recognized commercial courier.



	 	 	 
	IF TO SELLER:

	 	Hemus, Ltd.
	 

	 	6565 West Loop South, Suite 555
	 

	 	Bellaire, Texas 77401
	 

	 	Attn: Solly Hemus
	 

	 	Telephone: 713.668.0987
	 

	 	Fax: 713.668.0111
	 
	 	 
	With a copy to:

	 	Hemus, Ltd.
	 

	 	25003 Pitkin Road, Suite 6500
	 

	 	The Woodlands, Texas 77386
	 

	 	Attn: Jason B. Lane
	 

	 	Telephone: 281.292.7266
	 

	 	Fax: 281.292.9378
	 
	 	 
	IF TO PURCHASER:

	 	Great Plains Exploration, LLC (or its Nominee)
	 

	 	8500 Station Street, Suite 113
	 

	 	Mentor, Ohio 44060
	 

	 	Attn: Gregory Osborne, President
	 

	 	Telephone: 440.951.1111
	 

	 	Fax: 444.255.8645
	 
	 	 
	With a copy to:

	 	Dworken & Bernstein Co., LPA
	 

	 	60 South Park Place
	 

	 	Painesville, OH 44077
	 

	 	Attn: Melvyn E. Resnick and Jodi Littman Tomaszewski
	 

	 	Telephone: 440.352.3391
	 

	 	Fax: 440.352.3469






     B. Severability. In the event any covenant, condition, or provision contained
herein is held to be invalid by a court of competent jurisdiction, the invalidity of
any such covenant, condition or provision shall in no way affect any other covenant,
condition, or provision contained herein.



12









 





     C. Waiver. No waiver of any of the provisions of this Agreement shall
constitute a waiver of any other provisions hereof (whether or not similar), nor shall
such waiver constitute a continuing waiver unless otherwise expressly provided.



     D. Construction of Ambiguity. In the event of any ambiguity in any of the terms or
conditions of this Agreement, including any exhibits hereto and whether or not placed of record,
such ambiguity shall not be construed for or against any party hereto on the basis that such
party did or did not author the same.



     E. Captions. The captions in this Agreement are for convenience only and shall
not be considered a part of or affect the construction or interpretation of any
provisions of this Agreement.



     F. Governing Law. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Montana without reference to the conflict of laws principles applied
by the courts of the State of Montana.



     G. Waiver of Jury Trial. SELLER AND PURCHASER DO HEREBY IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR
OTHER LEGAL PROCEEDING BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.



     H. Publicity. Seller agrees that it shall not make or cause to be made any disclosure
of the transaction contemplated herein to any third party or otherwise disseminate any news or
announcement of any kind with respect to this Agreement or the underlying transactions without
the express written approval of Purchaser. Seller further agrees to keep all information
regarding this Agreement and the underlying transactions confidential and not to disclose, reveal,
or discuss any such information without the written approval of Purchaser.



     I. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Signatures transmitted by facsimile shall be accepted as original signatures.



     J. Assignment. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors, assigns and/or nominees. All future
conveyances of all or any portion of the Interests shall expressly recognize and perpetuate the
rights and obligations set out in this Agreement. Seller acknowledges that Purchaser intends to
assign its interest in this Agreement to an affiliated company prior to the Closing Date.



     K. Cost and Expenses. Except as otherwise expressly provided herein, each party
shall bear and pay its own costs and expenses, including, but not limited to, attorneys fees,
incurred in connection with this transaction.



     L. Survival. All covenants, obligations, agreements and guarantees shall survive
the execution of this Agreement, the Closing Date and the delivery and recordation of any



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deeds, assignments or bills of sale which convey the Transferred Lease Interest from Seller to Purchaser.




     M. Entire Agreement. This Agreement, together with any Confidentiality Agreements
relating to the Interests previously executed by Purchaser, constitute the entire agreement
between the parties and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. No supplement, amendment,
alteration, modification, waiver or termination of this Agreement shall be binding unless
executed in writing by the parties hereto after the execution of this Agreement.



     N. Injunctive Relief. In the event of a breach or threatened breach of this Agreement
by Seller, Purchaser shall be entitled to equitable relief, including an injunction and specific
performance, alone or in combination, in addition to all other remedies available at law or in
equity. If a court determines that Purchaser is entitled to such injunctive or equitable relief,
Seller hereby waives any requirement for surety or posting of a bond in connection with such
remedy.



     O. Recordation of Agreement. Purchaser shall have the right to record this Agreement,
as well as the Assignment of Leasehold Interest Agreement contemplated in Section III(A)(1) hereof.



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date
set forth above.



	 	 	 	 	 
	 	SELLER:

HEMUS, LTD.

 	 
	 	By:  	/s/ Solly Hemus
 	 
	 	 	Solly Hemus, President 	 
	 	 	 	 
	 
	 	PURCHASER:

GREAT PLAINS EXPLORATION, LLC

 	 
	 	By:  	/s/ Gregory Osborne
 	 
	 	 	Gregory Osborne, President 	 
	 	 	 	 



14









 






	 	 	 	 	 



	 	 	 	 	 	 	 
	STATE OF TEXAS

	 	 	)

)	 	 	SS:
	COUNTY OF HARRIS

	 	 	)	 	 	 






     BEFORE ME, a Notary Public in and for said County and State, did personally appear the
above-named HEMUS, LTD. by Solly Hemus, its President, who acknowledged to me that he did sign the
foregoing instrument and that the same is his free act and deed on behalf of the company.



     IN WITNESS WHEREOF, I have hereunto set my hand and official seal at Houston, Texas, this
21st day of March, 2007.



	 	 	 	 	 
	 	 	 
	 	/s/ Yvonne G. Robbins
 	 
	 	NOTARY PUBLIC 	 
	 	 	 
	 



	 	 	 	 	 	 	 
	STATE OF OHIO

	 	 	)

)	 	 	SS:
	COUNTY OF LAKE

	 	 	)	 	 	 






     BEFORE ME, a Notary Public in and for said County and State, did personally appear the
above-named Great Plains Exploration, LLC, by Gregory Osborne, its President, who acknowledged to
me that he did sign the foregoing instrument and that the same is his/her free act and deed on
behalf of the company.



     IN WITNESS WHEREOF, I have hereunto set my hand and official seal at                     , Ohio,
this                      day of                     , 2007.



	 	 	 	 	 
	 	 	 
	 	 	 
	 	NOTARY PUBLIC 	 
	 	 	 
	 




15









 








EXHIBIT “A”




Lease Block Area




See attached





A-1









 








EXHIBIT “B”




Area of Mutual Interest




Township 18 North Range 17 East

Township 19 North Range 17 East

Township 20 North Range 17 East

Township 21 North Range 17 East

Township 22 North Range 17 East

Township 18 North Range 18 East

Township 19 North Range 18 East

Township 20 North Range 18 East

Township 21 North Range 18 East

Township 22 North Range 18 East

Township 18 North Range 19 East

Township 19 North Range 19 East

Township 20 North Range 19 East

Township 21 North Range 19 East

Township 22 North Range 19 East

Township 17 North Range 20 East

Township 18 North Range 20 East

Township 19 North Range 20 East

Township 20 North Range 20 East

Township 21 North Range 20 East

Township 22 North Range 20 East

Township 18 North Range 21 East

Township 19 North Range 21 East

Township 20 North Range 21 East

Township 21 North Range 21 East

Township 22 North Range 21 East





B-1









 








FIRST AMENDMENT TO LEASE PURCHASE AND SALE AGREEMENT 





     THIS FIRST AMENDMENT TO LEASE PURCHASE AND SALE AGREEMENT (“Amendment”) is made as of this
24th day of July, 2007, by and between and HEMUS, LTD., a Texas limited liability
company, (hereinafter referred to as “Seller”), and GREAT PLAINS EXPLORATION, LLC, an Ohio limited
liability company, (hereinafter referred to as “Purchaser”).



WITNESSETH:




     WHEREAS, Seller and Purchaser entered into a Lease Purchase and Sale Agreement dated March 21,
2007 (the “Purchase Agreement”) whereby Seller agreed to sell and Purchaser agreed to purchase a
seventy-five percent (75%) interest in some or all of the Leases (as defined in the Purchase
Agreement) from Seller on the terms and conditions set forth in the Purchase Agreement; and



     WHEREAS, Purchaser hereto desires to amend the Purchase Agreement.



     NOW THEREFORE, based on the mutual promises of the parties contained herein, the money
consideration provided for in the Purchase Agreement, and other good and valuable consideration,
the sufficiency of which is hereby acknowledged, Purchaser hereby agree as follows:



     1. The first sentence of Article III(A) shall be deleted and replaced with the following:



The sale and purchase of the Transferred Lease Interest shall take place on August 3, 2007 (the “Closing Date”).



     2. The Purchase Agreement is hereby revived and ratified and shall be in full force and effect
subject to the modification stated above.



     3. This Amendment may be executed in counterparts, each constituting a duplicate original, but
all counterparts shall constitute one and the same Amendment.



     4. In the event of a conflict or inconsistency between the provisions of this Amendment and
the Purchase Agreement, the provisions of this Amendment shall control and govern.



     5. This Amendment shall be binding upon and shall inure to the benefit of both the Seller and
Purchaser and each of their respective successors and assigns.



[SIGNATURES ON FOLLOWING PAGE]




 









 








     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year
first above written.



	 	 	 	 	 
	 	SELLER:

HEMUS, LTD.

 	 
	 	By:  	/s/ Jason B. Lane
 	 
	 	 	Jason B. Lane, Landman 	 
	 	 	 	 
	 
	 	PURCHASER:

GREAT PLAINS EXPLORATION, LLC

 	 
	 	By:  	/s/ Gregory Osborne
 	 
	 	 	Gregory Osborne, President 	 
	 	 	 	 
	 




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