Exhibit 10.24


 


AGREEMENT GOVERNING ASSIGNMENT
OF OPERATING RIGHTS


UNDER UTAH STATE MINERAL LEASES


 


This AGREEMENT GOVERNING ASSIGNMENT OF OPERATING RIGHTS
(“Agreement”), dated and made effective as of October 15, 2021 (“Effective Date”), is entered
into by and between TMC CAPITAL, LLC (“TMC Capital”), a Utah limited liability company, having offices at 15315
W. Magnolia Boulevard, Suite 120, Sherman Oaks, California 91402, and VALKOR ENERGY HOLDINGS, LLC (“Valkor”), a
Utah limited liability company, having offices at 21732 Provincial Boulevard, Suite 160, Katy, Texas 77450 (the parties hereto
sometimes herein referred to individually as a “Party” or collectively as the “Parties”).


 


W I T N E S S E T H


 


A.
TMC Capital and Valkor have entered into an Agreement Governing Reciprocal Assignment of Mineral Leases dated October 15, 2021
(the “Agreement”), in and under Valkor has agreed to assign and transfer to TMC Capital all of its right, title and
interest in and to certain Utah State Mineral Leases for Bituminous-Asphaltic Sands, executed between the State of Utah, acting by and
through the School and Institutional Trust Lands Administration (“SITLA”), as lessor, and Valkor Energy Holdings, LLC,
as lessee (successor-in-interest to the original lessee), all as more particularly described in Exhibit A hereto (collectively,
the “Leases”);


 


B. Upon
SITLA’s approval of Valkor’s assignment of the Leases to TMC Capital as contemplated under the Agreement, TMC Capital
shall hold the Record Title and 100% of the operating rights (working interests) under the Leases.


 


C.
TMC Capital desires, upon becoming the owner of Record Title under the Leases, to assign and transfer to Valkor certain Operating
Rights under the Leases within the Specified Depths, subject to a reservation of Participation Rights, under and in accordance with the
terms of this Agreement.


 


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


 


ARITICLE
I


DEFINITIONS; PROCEDURAL USAGE


 


1.01
Defined Terms.


 


Capitalized terms used in this Agreement,
unless otherwise defined in the text hereof, shall have the following meanings:


 


“Actual
Invoice” means an invoice prepared by Valkor and delivered to TMC Capital under or pursuant to Section 3.05, which describes
in reasonable detail the Costs that have been incurred by Valkor in conducting any E&P Operation and the Cost-Share that is owed by
each Party that has elected to participate in the E&P Operation as provided in Article III.


 


“Advance
Cost Estimate” means a written estimate of all or a part of the Costs associated with any E&P Operation conducted or proposed
by Valkor that describes in reasonable detail the estimated Costs of such E&P Operation and the Cost-Share that will be owed by each
Party that has elected to participate in the E&P Operation as provided in Article III.


 






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“AFE”
means an Authority for Expenditure prepared for the purpose of estimating the costs to be incurred in connection with any proposed
E&P Operation.


 


“Affiliate”
means, with reference to a Party, any Person owning fifty percent (50%) or more of the voting stock or similar equity interest of such
Party; any Person in which such Party owns fifty percent (50%) or more of its voting stock or similar equity interests; or any Person
fifty percent (50%) or more of whose voting stock or similar equity interests is owned by the same entity that owns fifty percent (50%)
or more of the voting stock or similar equity interests of such Party.


 


“Assignment
of Operating Rights” means the assignment instrument executed and delivered by TMC Capital to Valkor substantially in the form
of Exhibit B hereto.


 


“Confidentiality Period” has the meaning
specified in Section 6.01.


 


“Costs” means
all of the costs and expenses incurred in conducting any E&P Operation or in the design, construction and/or operation of any Oil
Sands Processing Plant.


 


“Cost-Share” or
“Cost Allocation” means that portion of any Costs owed or to be borne by a Party that is attributable to its Participation
Interest in any E&P Operation or in the design, construction and/or operation of any Oil Sands Processing Plant.


 


“Disclosing Party” has the meaning specified
in Section 6.01.


 


“Dispute” has the meaning specified
in Section 11.02.


 


“E&P Data” means Exploratory Data
or Production Data, or both.


 


“E&P
Operation” means either an Exploratory Operation or a Production Operation, in each case under or pursuant to Valkor’s
commercial exploitation of the Operating Rights assigned to Valkor under or pursuant to the terms of this Agreement.


 


“Exploratory
Data” means any and all airborne, surface and subsurface information and data, whether geological or geophysical in nature or
generated by use of sensory devices, techniques or technologies, that are or may be useful in evaluating the surface or subsurface of
lands for the presence of Leased Substances and other minerals in various structures and formations at any depth, including seismic, gravity
and magnetic data; well data, logs, coring, cuttings and bottom samples; gas detector readings, formation fluid tests, and pressure data;
and images and imaging, contouring and mapping resulting from the deployment of sensor or sensory systems that utilize, among other things,
acoustic, seismic, optic or electro-optic, infrared, hyperspectral, radiological, meteorological, and other active or passive sensory
data, devices, techniques or technologies; and reports, analyses, tests and test results, electronic images, surveys, maps and other devices
that evaluate and process any of the foregoing.


 


“Exploratory
Operation” means any exploratory activity or operation conducted by Valkor within the scope of the Operating Rights granted
to Valkor hereunder or pursuant to this Agreement, including seismic studies, mapping, remote sensing imaging, core drilling, geophysical
studies or profiling and any other operation whose primary objective is the exploration for, characterization and measurement of deposits
or reservoirs of Leased Substances, or any of them.


 


“Leased Substances”
means, and is synonymous with, the term “leased substances” as defined and used in the Leases.


 






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“Mine”
means any mining claim, mine or mine site, mineral deposit, ore deposit, quarry or mining lease and any related shaft, tunnel, incline,
drift or excavation on or within the lands included in or within any of the Leases, including any mine or mine site under any permit issued
by the Utah Division of Oil, Gas and Minerals.


 


“Net Production”
means production and capture of Raw Production at the surface of any Mine, Well or other E&P Operation, subject to (and as may
be reduced by) any part or portion thereof required for the payment of any applicable severance, production, sales, value added and other
taxes imposed based on the value thereof and in the payment of any Royalty payable thereon or attributable thereto.


 


“Net Revenue”
means the gross revenue received from the first sale of any Leased Substance, including any hydrocarbon or non-hydrocarbon product,
byproduct or substance produced or derived from any Leased Substance through extraction, processing and upgrading at any Oil Sands Processing
Plant, less and except (a) all applicable severance, production, sales, value added and other taxes imposed based on the value thereof,
(b) all transportation and related costs incurred in transporting or moving any such hydrocarbons, hydrocarbon products and other products
from the tailgate of the Plant (or adjoining storage tanks) to the first purchaser thereof or to a delivery point designated in any sales
and purchase agreement relating thereto, and (c) the applicable amount of any Royalty and other burdens payable to any owner of such Royalty
under or with respect to any of the Leases.


 


“Oil Sands
Processing Plant” or “Plant” means any oil sands plant or facility located on or within the lands included
in the Leases, or any of them, designed, constructed and operated primarily for the extraction, processing and upgrading Leased Substances,
or any of them, into marketable crude oil, hydrocarbon substances, and other products (including any constituent or derivative of any
Leased Substances and any byproduct produced or generated by or from the extraction, processing or upgrading of any Leased Substance).


 


“Operating
Rights” means the exclusive right, subject to the grant or reservation of Participation Rights under this Agreement or in the
Assignment of Operating Rights, to explore for, mine, extract, produce, capture and market Leased Substances, or any derivative or product
thereof, under or within the scope of terms of the Leases, or any of them, subject to and within the Specified Depths. The term “Operating
Rights” shall not include the primary obligation of the owner(s) of the Record Title in and to the Leases with respect to the payment
of royalty and the right to assign or dispose of any interest under the Leases.


 


“Participation
Interest” means the percentage of participation that TMC Capital elects to assume in any E&P Operation conducted by Valkor
under or pursuant to the Operating Rights granted to Valkor in and under the Leases, in each case in the exercise of its Participation
Right expressed as a percentage of 100% of the working interests in the E&P Operation.


 


“Participation
Rights” means the right granted to or reserved by TMC Capital hereunder and in the Assignment of Operating Rights to participate
as a working interest owner in any E&P Operation and in any Oil Sands Processing Plant.


 


“Person”
means any natural person, corporation, company, partnership (including both general and limited partnerships), limited liability company,
sole proprietorship, association, joint stock company, firm, trust, trustee, joint venture, unincorporated organization, executor, administrator,
legal representative or other legal entity, including any governmental authority.


 




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“Plant
AFE” means an AFE covering the design, construction and operation of a proposed Oil Sands Processing Plant as provided in Section
4.01.


 


“Plant
Net Proceeds” means the proceeds received by the operator of an Oil Sands Processing Plant from and based on the sale or disposition
of crude oil, bitumen, hydrocarbon products or substances, and other byproducts (whether or not such byproducts are derived from Leased
Substances or other minerals or materials) produced, extracted, processed or upgraded at the Plant, less and as reduced by (a) all applicable
severance, production, sales, value added and other taxes imposed based on the value thereof,


(b) all transportation
and related costs incurred in transporting or moving any such hydrocarbons, hydrocarbon products and other products from the tailgate
of the Plant (or adjoining storage tanks) to the first purchaser thereof or to a delivery point designated in any sales and purchase agreement
relating thereto, and (c) the applicable amount of any Royalty and other burdens payable under or with respect to any of the Leases.


 


“Production
Data” means any information or data generated from any mine, production or injection well, or other facility or structure from
which hydrocarbons and hydrocarbon substances (including the constituents of any hydrocarbon deposit or reservoir) may be mined, extracted,
produced, processed and/or upgraded into marketable oil and other products.


 


“Production
Operation” means any activity or operation conducted by Valkor within the scope of the Operating Rights, including drilling,
mining, excavation, in situ operations (involving thermal, gasification or other method, technique, process or technology), extraction,
production or other operation whose primary objective is the capture, extraction and production of any Leased Substance from subsurface
strata to the surface, including any conventional or unconventional primary, secondary or tertiary production, injection or recovery method,
technique, process or technology.


 


“Raw Production”
means any Leased Substance or any ore, sediments, sandstones, rock, or other material or matter consisting of or containing any Leased
Substance, whether in solid, semi-solid, liquid or gaseous form, in the form produced and captured at the surface of lands included within
any of the Leases.


 


“Receiving Party” has the meaning specified
in Section 6.01.


 


“Record
Title” means, as set forth in the SITLA Regulations, § R850-22-175(20), the legal ownership of a mineral lease issued by
SITLA as established in the records of SITLA.


 


“Representative(s)”
means, with respect to a Party, its Affiliates and each of the respective officers, directors, principals, members, managers, employees,
advisors, attorneys, accountants, and duly authorized agents or representatives of such Party and each of its Affiliates.


 


“Royalty”
means any advance royalty, production royalty or overriding royalty reserved or granted in, under or in respect of any of the Leases or
the lands covered thereby.


 


“SITLA” means the State of Utah’s
School and Institutional Trust Lands Administration.


 


“SITLA Regulations”
means Rule 22 (Bituminous-Asphaltic Sands and Oil Share Resources) promulgated and administered by SITLA (codified at Utah Admin.
Code § R850-22 et seq).


 


“Specified
Depth” means, with respect to the Operating Rights assigned to Valkor as contemplated in this Agreement, a subsurface depth
that is 500 feet or more below the surface on or with respect to which any E&P Operation is conducted by Valkor.


 




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“Third Person” means any Person other than
the Parties or their respective Representatives.


 


“TMC Indemnitees” has the meaning specified
in Section 8.02(a).


 


“Valkor Indemnitees” has the meaning specified
in Section 8.01(a).


 


“Well(s)”
means any well or series of wells, including any type of conventional or unconventional primary, secondary or tertiary production, insitu,
injection or recovery wells, in any combination, proposed or commenced by Valkor under and pursuant to the Operating Rights assigned to
Valkor as provided in this Agreement.


 


1.02
Procedural Usage; Protocols.


 


(a) 
The name assigned to this Agreement and the Article and Section (or subsection) captions used herein are for reference only and
shall not be construed to affect the meaning or construction of the text hereof. Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa. Unless otherwise specified:


 


		(1)	The terms “hereof,” “herein” and similar
terms refer to this Agreement as a whole and references herein to Articles and Sections refer to the Articles and Sections of this Agreement;



 


		(2)	Pronouns in masculine, feminine, and neuter genders will be
construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless
the context otherwise requires; and



 


		(3)	The words, “include,” “includes” and
“including,” when used herein, shall be deemed in each case to be followed by the words “without limitation”.



 


(b) Unless
stated otherwise, references to money herein shall mean and refer to the currency (U.S. Dollars) of the United States of
America.


 


1.03
Exhibits and Schedules.


 


The Exhibits and Schedules attached to this
Agreement are made a part hereof and are incorporated herein for all purposes.


 






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ARTICLE
II


ASSIGNMENT OF OPERATING RIGHTS


 


2.01
Assignment & Transfer; Operating Rights.


 


(a) Subject to the terms and conditions of this Agreement, TMC agrees to assign, convey and otherwise transfer to Valkor, and Valkor
agrees to accept, all of the Operating Rights under the Leases at or below, and limited to, the Specified Depths. To implement the assignment
and transfer of the Operating Rights, TMC Capital shall execute and deliver to Valkor an Assignment of Operating Rights in Mineral Leases
substantially in the form of Exhibit B hereto (the “Assignment of Operating Rights”).


 


(b)
 The Operating Rights assigned and transferred to Valkor as contemplated herein shall consist of all of the working interests under
the Leases, in each case limited to the Specified Depths and subject to TMC Capital’s reservation of Participation Rights in and
with respect thereto.


 


2.02
SITLA Approvals; Cooperation & Assistance.


 


Within twenty
(20) days after the Effective Date, the Parties shall submit to SITLA for its approval in accordance with the SITLA Regulations, the assignment
and transfer of Operating Rights to Valkor as contemplated herein. The Parties shall each cooperate with and assist each other in providing
SITLA with any required information and in otherwise facilitating the assignment application in accordance with SITLA’s requirements
and the SITLA Regulations.


 


2.03
Closing; Term of Agreement.


 


(a)
Upon and following SITLA’s approval of the assignment and transfer of the Operating Rights to Valkor, this Agreement shall
continue in full force and effect for as long as Valkor owns or holds any interest in the Leases, whether in the form of Operating Rights
or otherwise, or upon a mutual cancellation of this Agreement in a writing signed by each of the Parties.


 


(b)
If, for any reason, SITLA has not approved the assignment of Operating Rights to Valkor by January 1, 2022, this Agreement shall
automatically expire and the Parties shall have no further rights or obligations hereunder.


 


ARTICLE III


PARTICIPATION RIGHTS; ELECTIONS & COST
ALLOCATION


 


3.01
Participation Interests; Elections.


 


(a)
At least forty-five (45) days prior to commencing an E&P Operation, Valkor shall prepare and submit to TMC Capital an AFE that
specifies the estimated cost of the E&P Operation through its completion (and its projected completion date). Within thirty (30) days
after receiving an AFE for a proposed E&P Operation, TMC Capital shall advise Valkor in writing whether it elects to participate in
the E&P Operation and the Participation Interest (expressed as a percentage of 8/8ths or 100% of the working interests in the E&P
Operation) that it elects to assume in the E&P Operation. Notwithstanding anything to the contrary in this Agreement, TMC Capital
shall not be entitled to elect a Participation Interest that exceeds fifty percent (50%) in any E&P Operation.


 


(b)
If TMC Capital elects in a timely manner to participate in an E&P Operation, the Participation Interests and Cost Obligations
of the Parties with respect to the E&P Operation shall be allocated between or among them based on, and as determined by, the Participation
Interest elected by TMC Capital in the E&P Operation, with the remaining Participation Interest in the E&P Operation being retained
and owned by Valkor (and any other joint participant, if any).


 


(c)
If TMC Capital elects not to participate in an E&P Operation (or fails to respond to an AFE for a proposed E&P Operation
on a timely basis), Valkor shall hold and have 100% of the Participation Rights and Cost Obligations in the E&P Operation.


 


[Reserved].


 






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3.02
Producing Operations; Allocation of Production and Costs.


 


With respect
to each E&P Operation conducted by Valkor that results in the production of any Leased Substance, or any product, byproduct or other
substance generated by or derived therefrom, each Party shall be entitled to that percentage of Net Production that is attributable to
its Participation Interest in the E&P Operation. With respect to each such E&P Operation, each Party shall be responsible to pay
the Costs associated with such operation that are attributable to and correspond with its Participation Interest in the operation.


 


3.03
Exploratory Operations; Rights in Data & Allocation of Costs.


 


With respect to
each E&P Operation conducted by Valkor that results in the generation of E&P Data, all such E&P Data shall be owned by TMC
Capital regardless of whether it elects to assume a Participation Interest in the E&P Operation generating the data, and Valkor shall
have a permanent, fully- paid, non-exclusive, royalty-free license and right to access and use all such E&P Data for any purpose,
subject only to its confidentiality obligations under Article VI. For or with respect to each such E&P Operation, each Party shall
be responsible to pay the Costs associated with such E&P Operation that are attributable to and correspond with its Participation
Interest in the operation.


 


3.04
Designated Operator; E&P Operations.


 


Unless otherwise
agreed by the Parties in writing, Valkor shall be the designated operator for and with respect to each E&P Operation proposed and
conducted by Valkor pursuant to the Operating Rights granted to Valkor as contemplated under this Agreement.


 


3.05
Cost Recovery & Invoicing.


 


(a)
For each E&P Operation conducted by Valkor in or as to which TMC Capital has elected a Participation Interest, Valkor shall
be entitled to recover or collect the Costs associated with the E&P Operation by requiring TMC Capital to pay its proportionate share
of any Advance Cost Estimate prepared and delivered to TMC Capital on a periodic basis and at such times as Valkor may determine. Alternatively,
and at Valkor’s option, Valkor may pay all or a part of the Costs associated with the E&P Operation as such Costs are incurred
or become due and then deliver to TMC Capital, at such times as Valkor may determine, an Actual Invoice showing the Costs that have been
or will be paid by Valkor in connection with the E&P Operation and a statement of the Cost-Share owed by TMC Capital based on its
Participation Interest in the E&P Operation.


 


(b)
In the event that Valkor elects to prepare and deliver an Advance Cost Estimate to TMC Capital from time to time for an E&P
Operation in which TMC Capital has elected a Participation Interest, Valkor shall thereafter deliver an Actual Invoice to TMC Capital
that sets forth the final amount of the Costs incurred in connection with the E&P Operation, together with any adjustments, including
credits or additional payments that may be owed by TMC Capital under the Actual Invoice.


 


(c)   Unless
otherwise agreed by the Parties in writing, all Advance Cost Estimates and Actual Invoices in respect of any E&P Operation
conducted by Valkor shall be at or within the 110% of the applicable Cost estimated in the AFE issued for the E&P Operation. All
Actual Invoices delivered to TMC Capital with respect to any E&P Operation in which TMC Capital has elected a Participation
Interest shall be accompanied by invoices, billing statements, purchase orders, services or work agreements, work orders and other
supporting documentation. All Costs reflected in such Actual Invoices must be reasonable under industry standards, must relate
directly to the E&P Operation, and must be verifiable by TMC Capital’s accountants and auditors.


 






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(d)
Each of the Parties shall pay or remit to Valkor, as the case may be, its respective Cost-Share for or with respect to any E&P
Operation within thirty (30) days after Valkor delivers an Advance Cost Estimate or Actual Invoice to TMC Capital based on its Participation
Interest, if any, in any such E&P Operation.


 


3.06
Periodic Inspection & Audit Rights.


 


Upon giving
Valkor’s advance written notice of at least ten (10) days, TMC Capital shall have the right periodically to inspect and audit Valkor’s
book and records to ensure compliance with this Agreement and to verify the authenticity, validity and amount(s) of all Costs allocated
to or paid by TMC Capital in or with respect to any E&P Operation in which TMC Capital has elected a Participation Interest.


 


ARTICLE IV


PLANT PARTICIPATION RIGHTS;
ALLOCATION OF REVENUE & COSTS


 


4.01
Processing Plant Development; Ownership.


 


(a)
In the event that either Party (the “Proposing Party”), during the term of one or more of the Leases, proposes
to design, construct and operate an Oil Sands Processing Plant on lands included within the Leases, or upon any of the lands covered thereby,
the Proposing Party shall deliver to the other Party (the “Other Party”) a Plant AFE that contains a general description
and location of the proposed Plant, its projected throughput or processing capacity, and an initial estimate of the Costs required to
complete and achieve a successful start-up of the Plant. Within ninety (90) days after receiving the Plant AFE, the Other Party shall
advise the Proposing Party in writing whether it elects to participate in the development, construction and operation of the Plant and
the percentage of ownership (the “Ownership Interest”) that it desires to hold in the Plant. Unless otherwise agreed
by the Parties in writing, the Other Party shall not be entitled to an Ownership Interest in the Plant that exceeds fifty percent (50%)
of the ownership rights in the Plant as a whole.


 


(b)
If, upon receiving a Plant AFE from the Proposing Party, the Other Party elects to participate in the design, construction and
operation of the proposed Plant, the Proposing Party shall be entitled, subject to compliance with any requirements under the applicable
Lease encompassing the lands on which the Plant will be located and obtaining any required permits or approvals from Governmental Authorities,
to proceed with the design, construction and operation of the Plant, in which case the Parties shall hold their respective Ownership Percentages
in the Plant as agreed upon (or elected by the Other Party) and each Party shall be subject to a proportionate share of the Costs associated
with the design, construction and operation of the Plant that is attributable to and corresponds with its Ownership Interest in the Plant.


 


(c)
If, upon receiving a Plant AFE from the Proposing Party, the Other Party elects not to participate in the design, construction
and operation of the proposed Plant, the Proposing Party shall be entitled, subject to compliance with any requirements under the applicable
Lease encompassing the lands on which the Plant will be located and obtaining any required permits or approvals from Governmental Authorities,
to proceed with the design, construction and operation of the Plant as the sole owner and participant therein. In such event, the Proposing
Party shall hold an Ownership Percentage of 100% in the Plant as a whole and shall be responsible for 100% of the Costs associated therewith.


 




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(d)
 All of the Costs associated with the design, construction and operation of the Plant shall be allocated between the Parties based
on their respective Ownership Interests in the Plant.


 


(e)
If, at any time, either Party refuses or is unable, for any reason (and without regard to force majeure), to pay its proportionate
share of the Costs associated with the design and construction of the Plant, the Ownership Interest of such Party in the Plant shall be
reduced to a level that corresponds with the proportionate share of the Costs that such Party pays or is able to pay in the design and
construction of the Plant.


 


(f)  
If, any time, either Party refuses or is unable, for any reason (and without regard to force majeure) to pay its proportionate
share of the Costs associated with the operation and maintenance of the Plant, the operator of the Plant shall be entitled, upon giving
written notice to the non-paying Party, to withhold any revenue generated by the Plant that is attributable to the Ownership Interest
of the non-paying Party and to allocate and credit all such withheld amounts against the Costs owed by such non-paying Party in the operation
or maintenance of the Plant. Failure of any Party to pay its proportionate share of the Costs associated with the operation and/or maintenance
of the Plant shall not result in any change or modification of the Ownership Interest of the non-paying Party in the Plant unless each
Party (including the non-paying Party) agrees to such change or modification in a writing signed by each Party.


 


4.02
Financing Arrangements; Commitments.


 


Each Party shall
be entitled, in accordance with its Ownership Interest in an Oil Sands Processing Plant, to arrange its own financing to meet and pay
its proportionate share of the Costs associated with the design, construction, operation and maintenance of the Plant. Alternatively,
the Parties shall be entitled to obtain joint financing designed to pay 100% of the Costs associated with the design, construction, operation
and/or maintenance of the Plant.


 


4.03
Allocation of Net Revenue from Plant Operations.


 


(a)
Upon completion and start-up of the Oil Sands Processing Plant, each Party shall be entitled to receive a proportionate share of
Plant Net Proceeds determined in accordance with the following:


 


(1)
First, each Party shall receive, from the Plant Net Proceeds received by designated operator of the Plant, an amount representing
the “market value” of Raw Production supplied as feedstock to the Plant that such Party owns (or has acquired from Third Persons)
or that is attributable to its Participation Interest in any Mine, Well or other E&P Operation that is the source of the Raw Production
delivered to the Plant; and


 


(2)
The balance of the Plant Net Proceeds received by the designated operator of the Plant shall be allocated and paid to each Party
in accordance with its Ownership Interest in the Plant (subject to the right of the designated operator of the Plant, upon providing written
notice to the Parties, to allocate a proportionate amount of the Plant Net Proceeds to pay any Costs associated with the operation and/or
maintenance of the Plant, including any management, operating and other charges, fees and payments required to be made to Third Parties
providing materials or services to the Plant).


 


(b)
In determining the “market value” of Raw Production supplied as feedstock to the Plant by the Parties, the values agreed
upon or stipulated by the Parties, determined as an average market value or price on a weekly or monthly basis, shall be deemed conclusive
absent manifest error.


 


[Reserved].


 




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4.04
Designated Operator of the Facility.


 


(a)
In the event that only one of the Parties elects to design, construct and operate an Oil Sands Processing Plant on lands included
in one or more of the Leases, such Party shall be both the owner and the operator of the Plant for all purposes.


 


(b)
In the event that both Parties elect to participate in the design, construction and operation of the Plant, the Parties shall own
the Plant in accordance with their respective Ownership Interests and shall, in a writing signed by each Party, designate one of the Parties
as the operator of the Plant under or pursuant to such contractual services contracts or other arrangements as the Parties may agree upon.
Alternatively, the Parties may, with the agreement of each Party holding Ownership Interests in the Plant, designate a Third Person to
be the operator of the Plant pursuant to a written services agreement executed by the Parties and such Third Person.


 


ARTICLE V


ACCOUNTING; LEASE DEVELOPMENT
& ROYALTY


 


5.01
Accounting/Royalty Payment Obligations.


 


(a)
As the owner of Record Title under the Leases, TMC Capital shall be considered the “lessee” thereunder and shall have
the obligation to prepare and maintain records of the production of Leased Substances from the Leases and to ensure the timely payment
of Royalties owed under or with respect to the Leases.


 


(b)  
In connection with TMC Capital’s responsibilities under the Leases, Valkor agrees to provide to TMC Capital all accounting
and related services in respect of all of the activities and operations conducted on or with respect to the Leases and to provide and
discharge, on TMC Capital’s behalf, all reporting required of TMC Capital under the Leases or under Applicable Law and to report
and pay, on a timely basis, all Royalties and other burdens owed under or as provided in the Leases, including any advance royalties,
rentals, shut-in payments and other fees and payments owed under or with respect to the Leases and in accordance with the terms thereof,
respectively.


 


(c)  
Notwithstanding anything to the contrary in this Agreement, Valkor agrees to pay, and to reimburse TMC Capital for, fifty percent
(50%) of any annual rentals, shut-in rentals or other payments, other than Royalty, owed to SITLA or other lessor under the Leases from
time to time.


 


5.02
Accounting Services Arrangements.


 


The accounting
and related services provided by Valkor with respect to operations conducted on or with respect to the Lease shall be memorialized in
a separate written services agreement that shall include such terms and conditions as the Parties may agree upon.


 






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ARTICLE
VI


CONFIDENTIALITY


 


6.01
Confidentiality Obligations.


 


The Parties acknowledge
that each Party may from time to time furnish or disclose (in each such case, a “Disclosing Party”) to the other
Party or its Representatives (in each such case, a “Receiving Party”) information, data and materials that
consist of or include Confidential Information, the improper or unauthorized disclosure or release of which will likely cause
irreparable harm to the Disclosing Party. Accordingly, during the term of this Agreement and for a period of three (3) years
following the expiration or termination hereof or the Closing, whichever occurs first (the “Confidentiality
Period”), the Receiving Party agrees to keep and maintain on a private and confidential basis any Confidential Information
that it receives from a Disclosing Party and will not, without the prior written consent of the Disclosing Party, (1) publish,
release or otherwise disclose the Confidential Information to any Person other than another Party and its Representatives that have
a “need to know” such information, except as required by applicable law, and (2) use any of the Confidential Information
for any purpose other than in connection with this Agreement and the consummation of the transactions contemplated hereby.


 


6.02
Mandatory Disclosure.


 


The Parties
shall use and deploy reasonable best efforts to preserve and protect the Confidential Information from any unauthorized disclosure or
publication. In the event that a Party determines that it is legally obligated to publish, release or disclose any provision of this Agreement
or any other Confidential Information, in whole or in part, such Party shall provide the other Party with prompt written notice and shall
seek to limit the dissemination, release or public disclosure of such Confidential Information. In the case of legal proceedings in which
disclosure of any Confidential Information is required or compelled by law, the Parties shall cooperate to obtain an appropriate protective
order limiting the disclosure of such information. Notwithstanding the foregoing, the Parties acknowledge that each Party may be required
under the terms of securities laws or regulations, or in connection with any public offering of securities, to disclose the existence
of this Agreement and the terms hereof.


 


ARTICLE VII


RELATIONSHIP OF THE PARTIES;
TAXATION


 


7.01
Relationship of Parties. The rights, duties, obligations and liabilities of the Parties under this Agreement shall be individual,
not joint or collective. It is not the intention of the Parties to create, nor shall this Agreement be deemed or construed as creating,
a mining or other partnership, joint venture or association or (except as explicitly provided in this Agreement) a trust. This Agreement
shall not be deemed or construed to authorize any Party to act as an agent, servant or employee for any other Party for any purpose whatsoever
except as explicitly set forth herein or in a separate agreement executed by the Parties. In their relations with each other under this
Agreement, the Parties shall not be considered fiduciaries except as expressly provided in this Agreement or in a separate agreement executed
by the Parties.


 


7.02
Taxes. Each Party shall be responsible for reporting and discharging its own tax measured by the profit or income of the
Party and the satisfaction of such Party’s share of all contract obligations under this Agreement or under any of the oil and gas
leases described in this Agreement. Each Party shall protect, defend and indemnify the other Party from any and all loss, cost or liability
arising from the indemnifying Party’s failure to report and discharge such taxes or satisfy such obligations. The Parties intend
that all income and all tax benefits (including deductions, depreciation, credits and capitalization) with respect to the expenditures
made by the Parties hereunder will be allocated by the government tax authorities to the Parties based on the share of each tax item actually
received or borne by each Party. If such allocation is not accomplished due to the application of applicable law, the Parties shall attempt
to adopt mutually agreeable arrangements that will allow the Parties to achieve the financial results intended. The Party acting as the
designated operator in or with respect to any E&P Operation or for an Oil Sands Processing Plant shall provide each Party, in a timely
manner and at such Party’s sole expense, such information with respect to all such operations as each Party may reasonably request
for preparation of its tax returns or responding to any audit or other tax proceeding.


 




    Page 11 of 25


     


    


 


7.03
United States Tax Election.


 


(a)  
If, for United States federal income tax purposes, this Agreement or any of the operations conducted under any of the oil and gas
leases described in this Agreement are regarded as a partnership and if the Parties have not agreed to form a tax partnership, each U.S.
Party elects to be excluded from the application of all of the provisions of Subchapter “K”, Chapter 1, Subtitle “A”
of the United States Internal Revenue Code of 1986, as amended (the “Code”), to the extent permitted and authorized by Section
761(a) of the Code and the regulations promulgated thereunder. Each Party shall be responsible for executing and filing, either individually
or jointly, such evidence of this election as may be required by the Internal Revenue Service, including all of the returns, statements,
and data required by United States Treasury Regulations Sections 1.761-2 and 1.6031(a)-1(b)(5) and shall provide a copy thereof to each
Party.


 


(b)
No Party shall give any notice or take any other action inconsistent with the foregoing election. If any income tax laws of any
state or other political subdivision of the United States or any future income tax laws of the United States or any such political subdivision
contain provisions similar to those in Subchapter “K”, Chapter 1, Subtitle “A” of the Code, under which an election
similar to that provided by Section 761(a) of the Code is permitted, each Party shall make such election as may be permitted or required
by such laws. In making the foregoing election or elections, each Party states that the income derived by it from operations under this
Agreement or under the oil and gas leases described in this Agreement can be adequately determined without the computation of partnership
taxable income.


 


ARTICLE
VIII


INDEMNIFICATION & LIMITS OF LIABILITY


 


8.01 TMC Capital’s Indemnity.


 


(a)
TMC Capital agrees to defend, indemnify and hold harmless Valkor and its Affiliates, and each of their respective Representatives
(collectively, “Valkor Indemnitees”), from and against all claims, demands, administrative actions and/or civil actions
or suits (whether threatened, actual or otherwise) for damages, penalties, fines or other legal or equitable relief asserted, commenced
or requested by any Third Person, or any losses, liability or costs (including reasonable attorneys’ fees and litigation costs)
incurred by any of the Valkor Indemnitees as a result thereof, on account of:


 


		(1)	Any personal injury, disease or death of any person(s), or
any damage to or loss of property, resulting from or arising out of TMC Capital’s operations conducted under or within the scope
of this Agreement, including any injury, death or property damage caused by or attributable to (i) the sole, concurrent or combined negligence
or fault of TMC Capital or any of its Representatives, or (ii) where liability with or without fault is strictly imposed by operation
of law based on a condition created by TMC Capital or any of its Representatives;



 


		(2)	Any failure by TMC Capital to comply with applicable law,
including any EH&S Requirements that are applicable to TMC Capital’s operations conducted under or within the scope of this
Agreement;



 


		(3)	Liens, claims and demands arising from work performed by TMC
Capital’s contractors or subcontractors or from materials supplied to TMC Capital;



 


		(4)	Any breach or violation of any representation, warranty or
covenant of TMC Capital contained in this Agreement.



 






    Page 12 of 25


     


    

 


(b)  
The indemnity obligations undertaken by TMC Capital in favor of the Valkor Indemnitees under Section 8.01(a)(1), including any
defense obligations, claims, judgments and liability (including attorney’s fees and litigation costs), shall be limited to the amount
of insurance coverage or limits in the insurance policies required to be carried or maintained by TMC Capital under the provisions of
Section


9.01 (and whether or not TMC Capital
has acquired or put the required insurance coverage in place as required by Section 9.01). TMC Capital shall have no indemnification obligations
under Section 8.01(a)(1) for any obligation, claim, judgment or liability that is or would be outside the scope and coverage of the insurance
policies and coverage required to be maintained by TMC Capital under Section 9.01.


 


8.02
Valkor’s Indemnity.


 


(a)
Valkor agrees to defend, indemnify and hold harmless TMC Capital and its Affiliates, and each of their respective Representatives
(collectively, “TMC Indemnitees”), from and against all claims, demands, administrative actions and/or civil actions
or suits (whether threatened, actual or otherwise) for damages, penalties, fines or other legal or equitable relief asserted, commenced
or requested by any Third Person, or any losses, liability or costs (including reasonable attorneys’ fees and litigation costs)
incurred by any of the TMC Indemnitees as a result thereof, on account of:


 


		(1)	Any personal injury, disease or death of any person(s), or
any damage to or loss of property, resulting from or arising out of Valkor’s operations conducted under or within the scope of
this Agreement, including any injury, death or property damage caused by or attributable to (i) the sole, concurrent or combined negligence
or fault of Valkor or any of its Representatives, or (ii) where liability with or without fault is strictly imposed by operation of law
based on a condition created by Valkor or any of its Representatives;



 


		(2)	Any failure by Valkor to comply with applicable law, including
any EH&S Requirements that are applicable to Valkor’s operations conducted under or within the scope of this Agreement;



 


		(3)	Liens, claims and demands arising from work performed by Valkor’s
contractors or subcontractors or from materials supplied to TMC Capital;



 


		(4)	Any breach or violation of any representation, warranty or
covenant of Valkor contained in this Agreement.



 


(b)
The indemnity obligations undertaken by Valkor in favor of the TMC Indemnitees under Section 8.02(a)(1), including any defense
obligations, claims, judgments and liability (including attorney’s fees and litigation costs), shall be limited to the amount of
insurance coverage or limits in the insurance policies required to be carried or maintained by Valkor under the provisions of Section
9.01 (and whether or not Valkor has acquired or put the required insurance coverage in place as required by Section 9.01). Valkor shall
have no indemnification obligations under Section 8.02(a)(1) for any obligation, claim, judgment or liability that is or would be outside
the scope and coverage of the insurance policies and coverage required to be maintained by Valkor under Section 9.01.


 


8.03
Limitations of Liability.


 


NOTWITHSTANDING ANYTHING
TO THE CONTRARY CONTAINED IN THIS AGREEMENT, NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER OR TO ANY INDEMNITEE UNDER THE
INDEMNITY PROVISIONS CONTAINED IN THIS AGREEMENT FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY DAMAGES, INCLUDING
LOST PROFITS, REVENUE OR SAVINGS, REGARDLESS OF THE FORM OF ACTION GIVING RISE TO ANY CLAIM FOR SUCH DAMAGES, WHETHER IN CONTRACT OR
IN TORT, OR OTHERWISE, EVEN IF PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.


  



    Page 13 of 25


     


    

 


 


ARTICLE
IX INSURANCE


 


9.01 Insurance Requirements.


 


Each Party shall maintain, at its cost
or at their joint cost, the insurance policies and coverages set forth in Schedule Y hereto.


 


ARTICLE X


ASSIGNMENTS AND TRANSFERS OF
INTERESTS


 


10.01 Record Title Owner Control.


 


(a) As the
owner of Record Title under the Leases, TMC Capital shall have the exclusive right to grant or make any assignment, sublease or transfer
of any right, title or interest under the Leases, in each case subject to obtaining the prior approval of SITLA in accordance with the
SITLA Regulations.


 


10.02. Limitations on Assignments & Transfers.


 


Notwithstanding
the provisions contained in Section 10.01, neither TMC Capital nor Valkor shall have the power, authority or right to assign, sublease,
encumber or otherwise transfer any right, title or interest that it, or either of them, may own or hold in the Leases without the prior
written consent of the other Party, which consent shall not be unreasonably withheld. Any such assignment, sublease, encumbrance or other
proposed transfer by either Party, even if consented to in writing by the non- transferring Party, shall require the prior consent or
approval of SITLA and each such assignee, sublessee or transferee (including any mortgagee or secured party acquiring any interest in
the Leases by virtue or any foreclosure or in the exercise of secured rights) shall be required, as a condition to receiving any right,
title or interest in the Leases as the owner of working interests, to agree to become bound by the terms of this Agreement, including
the confidentiality provisions contained herein, or in any restatement or replacement agreement that may be developed and agreed upon
by the Parties.


 


ARTICLE XI


GOVERNING LAW & DISPUTE RESOLUTION


 


11.01
Governing Law.

 


THIS AGREEMENT
AND THE VALIDITY, INTERPRETATION, TERMINATION AND ENFORCEMENT THEREOF AND HEREOF SHALL BE SUBJECT TO AND GOVERNED IN ALL RESPECTS BY THE
LAWS OF THE STATE OF UTAH WITHOUT REGARD TO THE CHOICE OF LAWS OR CONFLICTS OF LAWS PRINCIPLES THEREOF.


 


11.02
Dispute Resolution.

 


ANY CLAIM, CONTROVERSY OR DISPUTE
BETWEEN THE PARTIES (WHETHER CONTRACTUAL OR NON-CONTRACTUAL IN NATURE) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (EACH A
“DISPUTE”) SHALL BE FINALLY AND EXCLUSIVELY RESOLVED IN ACCORDANCE WITH THE DISPUTE RESOLUTION PROVISIONS SET
FORTH IN SCHEDULE Z HERETO.


 






    Page 14 of 25


     


    

 


ARTICLE XII GENERAL
PROVISIONS


 


12.01
Amendments.

 


This Agreement
may be amended, modified, changed, altered or supplemented only by a written instrument duly executed by each of the Parties specifically
for such purpose and that specifically refers to this Agreement.


 


12.02
Waiver.

 


Any of the terms,
provisions, covenants, representations or conditions hereof may be waived only by a written instrument executed by the Party waiving compliance.
Failure of any Party at any time to require performance of any provision contained in this Agreement shall not, in any way or manner,
affect its right to enforce the same. No waiver by any Party of any condition or of the breach of any provision contained in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of
any such condition or breach, or a waiver of any other condition or of any breach of any other provision hereof.


 


12.03
Notices & Notification.

 


(a)
Any notice required or permitted to be given by any Party will be deemed given when in writing and delivered to the address for notice
of the intended recipient by personal delivery or by courier, by prepaid certified or registered mail, or by facsimile or telecopier.
Any notice delivered by mail shall be deemed to have been received on the actual date of receipt. Any notice delivered personally or by
facsimile or telecopier shall be deemed to have been received on the actual date of delivery. The address for service of notice or process
to or on each of the Parties is as follows:


 


	
     

    (1) If to TMC Capital:

     

    TMC Capital, LLC Attention: R.
    Gerald Bailey

    15315 W. Magnolia Boulevard, Ste 120 Sherman Oaks,
    California 91402 Telephone: (713) 524-2542

    Email: executive@petroteq.energy
	
     

    (2) If to Valkor:

     

    Valkor Energy Holdings, LLC Attention: Steven Byle

    21732 Provincial Boulevard, Ste 160

    Katy, Texas 77450

    Telephone: (832) 859-5060 Email: steven.byle@valkor.com



 


(b) Any Party may, by
written notice to the other Parties, change its address for notice to some other address in the U.S. and shall be required to change
its address for notice purposes whenever its existing address ceases to be adequate for delivery by hand. A post office box may not
be used as an address for notices or for service of process hereunder.


 


[Reserved].


 






    Page 15 of 25


     


    

 


12.04
Recordation; Memorandum.

 


Each of the Parties
shall be entitled to record the assignment and title instruments delivered under the terms of this Agreement or, upon mutual agreement,
the Parties may execute a memorandum of any such assignment and title instrument and record such instrument, in each case in the county
in the State of Utah in which the lands covered by such instruments are located, in lieu of recording a full copy of each such assignment
and title instrument.


 


12.05
Reasonable Assurances.

 


Each Party shall
promptly execute, acknowledge, and deliver to the other Party such other instruments and take such other action as may be necessary or
convenient in order to effect the transaction contemplated in this Agreement.


 


12.06
Third Party Beneficiary.

 


This Agreement shall not confer any rights
or remedies upon any Person other than the Parties and their respective successors and permitted assigns.


 


12.07
Transaction Expenses.

 


Each Party shall
be responsible for its own costs and expenses (including legal, financial, advisory, investment banking and accounting fees and expenses)
incurred in connection with development of this Agreement.


 


12.08
Savings Clause; Severability.

 


If any part or portion of this Agreement
is held to be invalid, such invalidity of any such part or portion shall not affect any remaining part or portion hereof.


 


12.09
Entire Agreement.

 


When executed
by the duly authorized representatives of the Parties, this Agreement, together with the Exhibits and Schedules attached thereto, respectively,
shall constitute the entire agreement between and among the Parties with respect to the subject matter hereof, and shall supersede and
replace any and all other writings, understandings or memoranda of understanding entered into or discussed prior to the execution date
hereof. This Agreement sets forth the entire agreement and understanding of the Parties with respect to this transactions contemplated
hereby, and any prior agreements are hereby merged herein and terminated.


 


12.10 Counterparts.


 


This Agreement may be executed in as many
counterpart copies as may be required. All counterparts shall collectively constitute a single agreement.


 


[SIGNATURES OF PARTIES ON FOLLOWING
PAGE]


 






    Page 16 of 25


     


    

 


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


 


	 	TMC CAPITAL, LLC	 	 	VALKOR ENERGY HOLDINGS, LLC
	 	 	 	 	 
	 	 	 	 	 
	By:	/s/ R. Gerald Bailey	 	By:	/s/ Steven Byle
	 	Name: R. Gerald Bailey	 	 	Name: Steven Byle
	 	Title: Manager/Managing Member	 	 	Title: Manager/Managing Member



 



    Page 17 of 25


     


    

 


EXHIBIT
A THE LEASES


 


The Assignment
consists of all of the Operating Rights (operating working interests excluding Record Title), limited to all subsurface depths below 500
feet from the surface, in and under the following mineral leases:


 


	1.	Utah
State Mineral Lease No. 53831


 


Utah State Mineral Lease for Bituminous-Asphaltic
Sands dated as of September 1, 2018 (Mineral Lease No. 53831), executed between the State of Utah, acting by and through the School and
Institutional Trust Lands Administration (“SITLA”), as lessor, and Indago Oil and Gas, Inc., as lessee, with respect
to lands situated in Uintah County (Salt Lake Meridian), State of Utah, more particularly described as follows:


 


Township 4 South, Range 20 East (SLM)


Section 22: All


 


containing 640 acres, more or less.


 


 


	2.	Utah
State Mineral Lease No. 53832


 


Utah State Mineral Lease for Bituminous-Asphaltic
Sands dated as of September 1, 2018 (Mineral Lease No. 53832), executed between the State of Utah, acting by and through the School and
Institutional Trust Lands Administration (“SITLA”), as lessor, and Indago Oil and Gas, Inc., as lessee, with respect
to lands situated in Uintah County (Salt Lake Meridian), State of Utah, more particularly described as follows:


 


Township 4 South, Range 20 East
(SLM)


Section 23:      N1⁄2NE1⁄4, W1⁄2, S1⁄2SE1⁄4


Section 24:      Lots 2(32.30),
3(32.95), 4(32.97), W1⁄2E1⁄2, N1⁄2NW1⁄4, S1⁄2SW1⁄4 [Lots aka SE1⁄4NE1⁄4, E1⁄2SE1⁄4]


 


containing 898.22 acres, more or
less.


  


	3.	Utah State Mineral Lease No. 53805


 


Utah State Mineral Lease for Bituminous-Asphaltic
Sands dated as of June 1, 2018 (Mineral Lease No. 53805), executed between the State of Utah, acting by and through the School and Institutional
Trust Lands Administration (“SITLA”), as lessor, and Indago Oil and Gas, Inc., as lessee, with respect to lands situated
in Uintah County (Salt Lake Meridian), State of Utah, more particularly described as follows:


 


Township 4 South, Range 20 East (SLM)


Section
26 - All


Section 27 - All


Section 32 - All


 


containing 1,920 acres, more or less.


 



    Page 18 of 25


     


    

  


EXHIBIT
B


ASSIGNMENT
OF OPERATING RIGHTS


 


	Recording
                                            requested by/return to:

     

    

    ______________________

    

    

    ______________________

    

    

    _______________________

     

    The
    foregoing mailing address for the minerals assignee/lessee under this instrument may be used for tax and assessment purposes.
	 

     

    -----------
    Above This Line for Official Use Only ------------



 


ASSIGNMENT
OF OPERATING RIGHTS


 


UNDER
UTAH STATE MINERAL LEASES


FOR
BITUMINOUS-ASPHALTIC SANDS


 


[Uintah
County, Utah]


 


This
ASSIGNMENT OF OPERATING RIGHTS (“Assignment”), dated and made effective as of October , 2021, is entered into
by and between TMC CAPITAL, LLC, a Utah limited liability company, having offices at 15315 W. Magnolia Boulevard, Suite 120, Sherman
Oaks, California 91402 (“Assignor”), and VALKOR ENERGY HOLDINGS, LLC, a Utah limited liability company, having offices
at 21732 Provincial Boulevard, Suite 160, Katy, Texas 77450 (“Assignee”) (the parties sometimes referred to individually
as a “Party” or collectively as the “Parties”).


 


W
I T N E S S E T H:


 


For
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in accordance with and pursuant to
the terms of that Agreement Governing Assignment of Operating Rights Under Utah State Mineral Leases, dated as of October 15, 2021, executed
by and between the Parties (the “Agreement”), Assignor hereby assigns, conveys and otherwise transfers to Assignee,
subject to the reservation of certain Participation Rights as more fully defined in the Agreement, the following:


 


All
of the “Operating Rights” (operating and working interests), consisting of the exclusive right to explore for, mine, excavate,
drill, produce, capture, process, upgrade and market Leased Substances (as defined in the Leases), including any hydrocarbon or non-hydrocarbon
product, byproduct or substances generated by or derived therefrom, located below a subsurface depth of 500 feet from the surface thereof,
under and within the scope of certain Utah State Mineral Leases for Bituminous-Asphaltic Sands as more particularly described in Exhibit
A hereto (the “Leases”);


 


Together
with all rights-of-way, easements and other appurtenances thereto within the lands covered by the Leases.


 






    Page 19 of 25


     


    

 


TO
HAVE AND TO HOLD the Operating Rights under the Leases unto Assignee, its successors and assigns, subject, however, to the following:


 


1.
This Assignment is made pursuant to the terms of the Agreement. The execution and delivery of this Assignment by Assignor, and the execution
and acceptance of this Assignment by Assignee, shall not operate to release or impair any surviving rights or obligations of Assignor
or Assignee, as the case may be, under the Agreement.


 


2.
This Assignment shall not include, and Assignor hereby reserves from this Assignment, ownership of “Record Title” in and
under the Leases, together with the rights and obligations attributable thereto, as such term is defined in the Section R850-22-175(2)
of the regulations promulgated and administered by the State of Utah’s School and Institutional Trust Lands Administration (“SITLA”),
with respect to mineral leases for bituminous-asphaltic sands (codified at Utah Admin. Code §R850-22- 175(20)).


 


3.
The assignment and transfer of Operating Rights to Assignee are and shall be limited to operations conducted at a subsurface depths below
500 feet from the surface thereof, measured vertically; provided, that Valkor, in the development of the Operating Rights, shall be entitled
to use as much surface as is reasonably necessary to its operations, with deference to the surface rights and other interests reserved
by Assignor from this Assignment and as more fully provided in the Agreement.


 


4.
Assignee shall, in the exercise or development of the Operating Rights transferred hereunder, comply at all times with the terms and
conditions set forth in the Leases and shall have primary responsibility and liability for the payment of all royalty and other burdens
under the Leases that are attributable to or arise from Assignee’s development of the Operating Rights hereunder.


 


5.
The term of this Assignment shall coincide with the term of the Leases.


 


6.
This Assignment is made without any warranty of title as to the Leases or as to the lands covered thereby. SUBJECT TO ANY REPRESENTATIONS
AND COVENANTS GIVEN BY ASSIGNOR IN OR UNDER THE AGREEMENT, ALL OF THE OPERATING RIGHTS ASSIGNED AND TRANSFERRED TO ASSIGNEE HEREUNDER
ARE TRANSFERRED ON AN “AS IS” BASIS WITHOUT ASSIGNOR MAKING ANY OTHER REPRESENTATIONS OR WARRANTIES, WRITTEN OR ORAL, STATUTORY,
EXPRESS OR IMPLIED, CONCERNING THE LEASES OR ANY OF THE RIGHTTS, OBLIGATION OR LIMITATIONS THEREIN, INCLUDING, WITHOUT LIMITATION, ANY
REPRESENTATION OR WARRANTY OF TITLE OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY EXPRESSLY DISCLAIMED.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, ASSIGNOR MAKES NO REPRESENTATION OR WARRANTY REGARDING THE FUTURE FINANCIAL PERFORMANCE
OF THE LEASES OR THE OPERATING RIGHTS ASSIGNED AND TRANSFERRED TO ASSIGNEE HEREUNDER OR REGARDING ANY BUSINESS OR FINANCIAL PROJECTIONS
MADE AVAILABLE TO ASSIGNEE REGARDING THE LEASES OR THE ESTIMATED VALUE AND QUANTITY OF LEASED SUBSTANCES OR OTHER MINERALS ON OR WITHIN
THE LEASES AND THE LANDS COVERED THEREBY.


 


7.
Assignee shall be entitled to record this Assignment in the county or other jurisdiction in which the lands covered by the Leases are
located or, at Assignee’s request, Assignor shall execute a Memorandum at or following the date of this Assignment that may be
recorded in lieu of recording this Assignment in its entirety. The recording of any such Memorandum shall include a description of the
Lease and the lands covered thereby and shall be binding upon Assignor and Assignee, their respective successors and assigns, as though
this Assignment had been filed in its entirety.


 


8.
This Assignment shall bind and inure to the benefit of the Parties and their respective successors and assigns.


 


9.
This Assignment and the effectiveness thereof shall be subject to the approval of SITLA.


 


10.
This Assignment may be executed in any number of counterparts, including counterpart signature pages, and each counterpart hereof shall
be deemed to be an original instrument, but all such counterparts shall constitute but one instrument.


 






    Page 20 of 25


     


    

 


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


 


	 	SIGNATURES
    OF PARTIES
	 	 
	 	TMC
    CAPITAL, LLC
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 
	 	VALKOR
    ENERGY HOLDINGS, LLC
	 	 
	 	By:	                                                                          
	 	Name:	 
	 	Title:	 


 


[ACKNOWLEDGEMENTS
ON FOLLOWING PAGE]


 




    Page 21 of 25


     


    


 


ACKNOWLEDGEMENTS


 


STATE
OF _____________)


 


COUNTY
OF ____________)


 


BEFORE
ME, the undersigned authority, on this day personally appeared R. Gerald Bailey, known to me to be the person whose name is subscribed
to the foregoing instrument as the Manager/Managing Member of TMC CAPITAL, LLC, a Utah limited liability company, and acknowledged to
me that the same was the act of said company and that he executed the same as the act of the company for the purposes and consideration
therein expressed and in the capacity therein stated.


 


Given
Under My Hand and Seal of Office on this ___________________day of October, 2021.


 








	 	[Seal]	_______________________________
	 	 	Notary Public in and for
  _____________



 








STATE
OF ___________)


 


COUNTY
OF _________)


 


BEFORE
ME, the undersigned authority, on this day personally appeared STEVEN BYLE, known to me to be the person whose name is subscribed to
the foregoing instrument as the Manager/Managing Member of VALKOR ENERGY HOLDINGS, LLC, a Utah limited liability company, and acknowledged
to me that the same was the act of said company and that he executed the same as the act of the company for the purposes and consideration
therein expressed and in the capacity therein stated.


 


Given
Under My Hand and Seal of Office on this ___________day of October, 2021.


 





	 	[Seal]	_______________________________
	 	 	Notary Public in and for
  _____________


 




    Page 22 of 25


     


    


 


EXHIBIT
A


Description
of the Leases


 


 


 


 


 


 


 


 


[To
be Added in Execution Document]


 




    Page 23 of 25


     


    


 


SCHEDULE
Y

INSURANCE REQUIREMENTS


 


1.
Insurance Coverages. (a) Each Party shall procure and maintain, at its sole cost, at all times during the conduct or performance
of operations under the Leases or on or with respect to any of the lands covered thereby, and for a period of two (2) years following
the termination or expiration of the Leases, the following insurance policies and coverage, with limits not less than the limits specified
below:


 


(1)
Commercial General Liability Insurance (“CGL Insurance”), with a combined single limit of One Million Dollars ($1,000,000),
covering personal injury, death or property damage resulting from each occurrence; CG 2503, or its equivalent, amending aggregate limits
shall apply;


 


(2)
Business Auto Liability Insurance (“AL Insurance”) covering owned, non-owned and hired motor vehicles, with a combined
single limit of One Million Dollars ($1,000,000);


 


(3)
Excess Liability Insurance, which may be “following form”, and extending coverage in excess of CGL Insurance and AL Insurance
coverages, with limits not less than Five Million Dollars ($5,000,000) combined single limit each occurrence and in the aggregate;


 


(4)
Workers' Compensation Insurance with Longshoremens' and Harbor Workers' endorsement (if applicable) as required by applicable law; and
Employer’s Liability Insurance with limits of One Million Dollars ($1,000,000) per accident or illness.


.


(b)
The insurance policies maintained by each Party shall be issued by or through insurance carriers that carry a financial strength rating
of at least A+ with A.M. Best Co. or that are otherwise acceptable to the other Party. Any deductible or self-insured retention of insurable
risk maintained by a Party in or under its insurance program shall be for such Party’s account.


 


2.
Proof of Coverage; Notice. Prior to commencing operations under the Leases or on or as to any of the lands covered thereby, and
on an annual basis thereafter, each Party shall have its insurance carriers furnish to each Party certificates specifying the types and
amounts of insurance coverage in effect and maintained by each such Party and the expiration dates of each policy. Each certificate shall
include a statement that no insurance will be canceled or materially changed without thirty (30) days prior written notice to both Parties.


 


3.
Additional Insured; Waiver of Subrogation. (a) To the extent permitted by applicable law:


 


(1)
The CGL Insurance, AL Insurance, and Excess Liability Insurance carried by each Party, and each certificate of insurance issued by carriers
providing such insurance, shall name the other Party (or Parties), its officers, directors, managers, employees, agents and representatives,
as an additional insured under endorsement forms that are determined to be acceptable to each Party; and


 


(2)
All insurance policies maintained by each Party, to the extent applicable, shall include clauses providing that each issuing company
(and underwriter) shall waive its rights of recovery, under any theory of subrogation or otherwise, against each Party and its officers,
directors, managers, employees, agents and representatives for liabilities or losses within the scope of such policies.


 


(b)
Each policy shall include clauses stating that the policy shall be primary and not excess or noncontributing to any insurance policies
carried by or otherwise available to either Party.


 




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SCHEDULE
Z

DISPUTE RESOLUTION


 


1.01
Mandatory Arbitration.


 


(a)
In the event of any Dispute, the Parties shall make a good faith effort to resolve the Dispute amicably through settlement and compromise.
If the Parties are unable to resolve a Dispute, the Dispute shall be finally and exclusively resolved by binding arbitration administered
by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules and the Mediation Procedures
(the “AAA Rules”). Unless otherwise agreed by the Parties in writing, the following rules and procedures shall supplement
the AAA Rules, or constitute an exception thereto, and shall govern any arbitration of a Dispute conducted thereunder:


 


		(1)	The
                                            place of the arbitration shall be at AAA’s offices in Houston, Texas, and the arbitration
                                            shall be conducted in the English language;



 


		(2)	The
                                            arbitration shall be conducted by a tribunal of three (3) arbitrators (the “Arbitral
                                            Tribunal”). One arbitrator shall be nominated by the claimant(s) and the second
                                            arbitrator shall be nominated by the respondent(s). The two nominated arbitrators shall then
                                            jointly nominate the third arbitrator, who shall act as chairman of the Arbitral Tribunal
                                            and shall be a qualified lawyer licensed to practice law in one or more states within the
                                            United States and shall have expertise in oil and gas law and related transactions. If the
                                            claimant(s) or the respondent(s) fails to nominate an arbitrator to the Arbitral Tribunal
                                            within thirty (30) calendar days after the date on which a written request for arbitration
                                            has been received by the AAA (the “Arbitration Commencement Date”), or
                                            the two arbitrators nominated by the claimant(s) and respondent(s), respectively, fail to
                                            designate the third arbitrator to the Arbitral Tribunal within thirty (30) calendar days
                                            after the Arbitration Commencement Date, the AAA shall appoint any arbitrator or arbitrators
                                            required to complete the Arbitral Tribunal, including the third arbitrator that is to act
                                            as the chairman of the Arbitral Tribunal;



 


		(3)	The
                                            appointing authority shall be the AAA; and



 


		(4)	No
                                            arbitrator selected or appointed to the Arbitral Tribunal shall be older than seventy (70)
                                            years of age at the time of his/her appointment unless the Parties waive this requirement
                                            in writing.



 


(b)
The decision or award of the Arbitral Tribunal (or of a sole arbitrator if the Parties agree to have the arbitration conducted by a single
arbitrator) shall be in writing and shall state and be supported by detailed reasoning for the award. Discovery of evidence shall be
conducted expeditiously by the Parties, bearing in mind the Parties’ desire to limit discovery and to expedite the decision or
award of the arbitrators at the most reasonable cost and expense of the Parties.


 


(c)
The decision or award of the Arbitral Tribunal (or of a sole arbitrator if the Parties agree to have the arbitration conducted by a single
arbitrator), shall be final, conclusive and binding on the parties thereto, and any right of application or appeal to the courts or any
judicial body in connection with any question of law or fact arising in the arbitration or in connection with any award or decision made
by the Arbitral Tribunal or the arbitrators shall, so far as lawfully possible, is and shall be waived and excluded (except as may be
necessary to enforce such award or decision). A judgment upon an award rendered by the Arbitral Tribunal, or by any arbitrator, pursuant
to any arbitration proceeding conducted hereunder may be entered in any court having jurisdiction or application may be made to such
court for a judicial acceptance of the award and/or an order of enforcement, as the case may be.


 


1.02
Limitations on Liability & Remedies.


 


In
any arbitration or litigation between the Parties, neither Party shall be liable for or assert any claim for consequential, incidental,
indirect, special or exemplary (punitive) damages unless it is determined that a Party (a) intentionally and knowingly breached or violated
this Agreement in an attempt to misappropriate or unlawfully distribute to others the property (including the intellectual property)
of a Party, or (b) willfully ignored or disregarded any emergency relief obtained by a Party hereunder.


 


		1.03	Confidentiality.



 


Each
Party in any arbitration conducted hereunder shall keep any Dispute and the proceedings relating thereto confidential and shall not publish
or disclose to any Person, other than those Persons involved in the proceedings, the existence of the arbitration or any information,
pleadings or other documents submitted in the arbitration, any oral submissions or testimony, transcripts, or any award, unless and to
the extent that disclosure is required by law or is necessary for the recognition or enforcement of any final arbitration decision or
award.


 


1.04
Enforcement; Limitations on Remedies.


 


(a)
Any final decision or award of the Arbitral Tribunal or the arbitrator(s) hereunder, including any interim measure or emergency relief
granted to a Party, shall be considered a final award under the U.S. Federal Arbitration Act and may be confirmed and enforced in accordance
therewith. Any such final arbitration decision or award may be enforced, and any interim measures or emergency relief required by a Party
may be obtained in aid of arbitration or to protect the status quo or the interests or property of the Parties prior to or during the
pendency of arbitration, in or from the federal or state courts located in Houston, Texas.


 


(b)
Each of the Parties hereby submits to the AAA in Houston, Texas (USA) as the mandatory forum of choice for the resolution of any Dispute
and to the jurisdiction of the federal and state courts sitting in Houston, Texas, for the enforcement of any final decision or award
issued by the Arbitral Tribunal or by any arbitrator(s) or the issuance of interim measures or emergency relief. Service of process in
any arbitral or judicial action or proceeding instituted hereunder may be made upon the Parties, or either of them, by delivering a request
for arbitration or other pleading or document, using the methods set forth in the “Notice” provisions contained in this Agreement,
to a Party at the address for such Party as listed therein. Each Party irrevocably, voluntarily and knowingly waives and relinquishes
(1) the right to institute, prosecute or maintain any action or proceeding, whether in the nature of a civil action, arbitration or other
proceeding, in any forum or in any jurisdiction other than AAA in the forum selected and agreed upon by the Parties herein, and (2) any
right to invoke, and hereby agrees not to invoke, any claim or defense of forum non conveniens, inconvenient or improper forum or transfer
or change of venue.


 


(c)
In any arbitration (or other legal action) involving a Dispute, or in any civil litigation to compel arbitration or to enforce any final
arbitration decision or award hereunder, each Party shall pay its own costs and expenses, including attorneys’ fees and the fees
and expenses of its experts and witnesses.


 


 


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