Exhibit
10.1


 


TERMS
OF FARM-OUT AGREEMENT


 


This
Agreement shall set forth the terms and conditions of the FARM-OUT AGREEMENT entered into on the 7th day of July 2014
by and between the following parties for the consideration stated herein:


 


First
Party: Northern Minerals & Exploration Ltd., a public Corporation, registered and existing under the laws of
Nevada, USA with offices located at 1301 Avenue M, Cisco, Texas, hereinafter referred to as Lessee.


 


Second
Party: Grasshoppers Unlimited Inc., a private Corporation, registered and existing under the laws of Texas, USA
with offices located at 717 Conrad Hilton Blvd., Cisco, Texas 76437, hereinafter referred to as Lessor.


 


WHEREAS
Lessor has good and valuable title in the two oil and gas leases identified as follows and more fully described in EXHIBIT
I and EXHIBIT II:


 


Callahan
County Shallow Oil Play: 


 


		●	3
                                         fully equipped wells



		●	1
                                         injection well



		●	Production
                                         flow lines



		●	Injection
                                         flow line



		●	Tank
                                         battery – two 150 BBL tanks with Separator



		●	Injection
                                         system – 150 BBL tank with Injection Pump



		●	Producing
                                         interval – Cook/Hope Sandstone at approximately 450 feet



		●	8
                                         un-drilled locations – spacing 2.5 acres per well



		●	60
                                         acres, more or less, in the lease – See Exhibit I for description of lease



		●	Net
                                         Revenue Interest of the lease is 70%



		●	Depth
                                         Limit is 1,000 feet



 


Lessee
agrees to earn 75% of the working interest in the lease, including the wells and equipment, from Lessor by causing and/or conducting
the following on the acreage/wells stated above:


 


		●	Bring
                                         the existing three wells back into production (these three wells have been inactive since
                                         November 2012)



		●	Conduct
                                         a H-5 pressure test on the Injection well



		●	Prepare
                                         a geological report on the acreage



		●	Agree
                                         to drill two (2) new wells prior to August 1, 2015



		●	Agree
                                         to drill six (6) new wells prior to August 1, 2016



		●	Pay
                                         $25,000 in cash on or before October 1, 2014



		●	Cause
                                         the issuance of 5,000,000 restricted shares of the Company’s common stock to be
                                         issued to Lessor or Lessor’s designee



		●	Enter
                                         into an Operating Agreement (A.A.P.L. Model Operating Form 610) with J.V. Rhyne, a licensed
                                         oil and gas operator in the State of Texas to operate the wells



 


Lessee
further agrees that any failure to meet the work commitments as stated herein will result in a forfeiture of the un-earned portion
of the lease.


 






    	 



    	 



    

 


Page Two


Terms of
Farm-Out Agreement


July 7,
2014 


 


Callahan/Eastland
Mississippi
Reef Play
in a Multiple
Pay Area: 


 


Lessee
further agrees to earn a 60% working interest in the oil & gas lease located near the Callahan
and Eastland County line in
Central Texas by conducting the
following:


 


		●	Prepare
                                         a geological report on the lease



		●	Agree
                                         to drill one (1) new well prior to August 1, 2015



		●	Pay
                                         $15,000 in cash on or before October 1, 2014



		●	Cause
                                         the issuance of 1,000,000 restricted shares of the Company’s common stock



 


The
total consideration for acquiring the 60% working interest is $65,000. 
The Net Revenue Interest of this lease is 75% and consists
of approximately 220 acres, more
or less, located in Callahan County, Texas.
This lease has no depth limit requirement on this lease.


 


Lessee
further agrees that any failure to meet the work commitments as stated will result in a forfeiture of the un-earned portion of
the lease.


 


LESSOR’S
WARRANTIES AND REPRESENTATIONS:


 


To
the best of Lessor’s knowledge, there is no existing or threatened litigation, arbitration or administrative proceedings
relating to these two leases being conveyed to Lessee;


 


Lessor
is not in violation of any existing laws, rules or regulations of the Railroad Commission of Texas (“RRC”).


 


Lessor
has not entered into, or agreed to enter into, any agreement, arrangement or understanding with any third party relating to these
two leases which may preclude Lessee from earning the Lessee’s Interest under this Agreement.


 


Lessor
acknowledges that there are no environmental or other liabilities, claims or circumstances relating to the conduct of oil and
gas operations on either of these two leases and are in good standing with the RRC.


 


TIME


 


Time
shall be of the essence as regards the provisions of this Agreement, both as regards the times and periods mentioned herein and
as regards any times or periods which may, by agreement between the Parties, be substituted for them.


 


ENTIRE
AGREEMENT


 


This
Agreement supersedes any previous written or oral agreement between the Parties in relation to the matters dealt with in
this Agreement and contains the whole agreement between the Parties relating to the subject matter of this Agreement at the
date hereof to the exclusion of any terms implied by law which may be excluded by contract. Each of the Parties
acknowledges that it has not been induced to enter into this
Agreement by any representation, warranty or undertaking not expressly incorporated herein. So far as permitted by law and
except in the case of fraud, each Party agrees and acknowledges that it’s only right and remedy in relation to any
representation, warranty or undertaking made or given in connection with this Agreement shall be for breach of the terms of
this Agreement to the exclusion of all other rights and remedies (including those in tort or arising under
statute). 

 






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Page Three


Terms of
Farm-Out Agreement


July 7,
2014 


 





AMENDMENT: 


 


Save
as otherwise expressly provided herein, no modification, amendment or waiver of any of the provisions of this Agreement shall
be effective unless made in writing specifically referring to this Agreement and duly signed by both Parties.


 


GOVERNING
LAW:


 


This
Agreement shall be governed by, construed, interpreted and applied in accordance with the laws of Texas.


 


SUCCESSORS
AND ASSIGNS


 


This
Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Parties.


 


COUNTERPARTS:


 


This
Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together
shall constitute one and the same instrument.


 


IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.


 


NORTHERN
MINERALS & EXPLORATION LTD 


(LESSEE)


 


/s/
Howard Siegel 










 



Howard Siegel,
President & Director


 


GRASSHOPPERS
UNLIMITED INC.


(LESSOR)


 


 /s/ Ginger Bunn





 






Ginger Bunn,
President


 









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EXHIBIT
I 


 


The
following is a legal description of the 60 acres, more or less, located in Callahan County comprising of three tracts:


  


Tract
1: 20 acres, more or less, out of the Northwest corner of Survey No.7, Bayland Orphan Home Survey, described by metes and
bounds as follows:


 


BEGINNING
at the Northwest corner of said Survey; THENCE East 625 feet;, THENCE South parallel with the West line of said Survey No. 7,
1394 feet; THENCE West 625 feet to West line of said Survey No. 7, THENCE West 625 feet to West line of said Survey No. 7; THENCE
North with West line of said Survey No. 7; 1394 feet to the place of beginning;


 


Tract
2: 20 acres, more or less, out of the Northwest part of Survey No.7, Bayland Orphan Home Survey, described by metes and bounds
as follows:


 


BEGINNING
at a point in the West line of said Survey, 1394 feet South of the Northwest corner of said Survey; THENCE East 625 feet; THENCE
625 feet; THENCE South parallel with the West line of said Survey No. 7, 1394 feet; THENCE West 625 feet to the West line of said
Survey No. 7, 1394 feet; THENCE West 625 feet to the West line of said Survey No.7; THENCE North with the West line of said Survey
No. 7, 1394 feet to the place of beginning;


 


Tract
3: 20 acres, more or less, out of the Northwest corner of Survey No.8, Bayland Orphan Home Survey, described by metes and
bounds as follows:


 


BEGINNING
at the Northeast corner of said Survey; THENCE West 330 feet; THENCE South parallel with the East line of said Survey No. 8, 2,788
feet; THENCE East 330 feet to East line of said Survey No. 8; THENCE North with East line of said Survey No. 8; 2788 feet to the
place of beginning.


 


Depth
limitation on all three tracts shall be limited down to 1,000 feet only.


 




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EXHIBIT
II 


 


The
following is a legal description of the 220 acres, more or less, located in Callahan County, Texas:


 


220
acres, more or less, of the Wm. J. Morgan Survey, Cert. 16/14, Abstract 272, Patent 224, Vol. 20, dated June 11, 1874, situated
in Callahan County, Texas and described as follows:


 


BEGINNINGat
a stake in the middle of the South boundary line of said Wm. J. Morgan Survey; THENCE North 1050 varas, a stake for corner; THENCE
East 1181 varas, a stake for corner; THENCE South 1050 varas to stake in South boundary line of Morgan Survey; THENCE West with
said South boundary line of Morgan Survey 1181 varas to the place of Beginning.


 


No
depth limit.


 


 


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