Module and Segment Reference


    Exhibit
      10.6

     

     

     

    
      
        
        

      

      
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      OPTION
        TO ACQUIRE INTERESTS

       

      IN
        OIL AND GAS PROPERTIES

       

      This
        agreement
        dated
        for reference May 1, 2004, is between Brek Petroleum, Inc., a Nevada corporation
        (“Brek”), and Griffin Asset Management, LLC, a Delaware limited liability
        company (“Griffin”). Brek and Griffin are collectively referred to as the
        Parties and individually as a Party.

       

      RECITALS

       

      A. On
        July
        16, 2002, Brek and others entered into a purchase agreement with Gasco Energy,
        Inc. Pannonian Energy Inc. and San Joachin Oil & Gas Ltd. (together, “
Gasco”) under which Brek acquired interests in certain oil and gas leases,
        wells, related equipment, and other lands and participatory rights in Wyoming,
        Utah and California identified in the agreement (the “Gasco Agreement”). Brek
        has 25% of whatever interest Gasco had on July 16, 2002. Gasco is usually
        but
        not always the operator. Gasco and Brek are entitled to a share of production
        net of various royalties, overriding royalties and other burdens (the “Burdens”)
        that must be paid before any production is distributed to Brek and Gasco
        (the
“Net Interest”).

       

      B. Griffin
        wishes to acquire an interest in production from wells that Brek is entitled
        to
        drill under the Gasco Agreement on leases in Wyoming and Utah by contributing
        to
        the drilling costs as described by Gasco or another operator in its written
        notices and authorizations for expenditure (“AFEs”) or by Brek in an AFE if Brek
        initiates a drilling program.

       

      Now
        therefore,
        in
        consideration of the foregoing recitals and the following respective
        representations, warranties, covenants and agreements, and other good and
        valuable consideration, the receipt and sufficiency of which the Parties
        acknowledge, the Parties agree as follows:

       

      AGREEMENT

       

      ARTICLE I  

      Offer
        to Acquire

       

      Section 1.1   The
        Interest.
        Brek
        grants Griffin the right to acquire an interest in production by contributing
        cash for the drilling of wells on the Wyoming and Utah properties that it
        owns
        together with Gasco or has a right to acquire as described in the Gasco
        Agreement (the “Properties”). This right applies to drilling programs for a
        total of one hundred wells to be drilled on the Properties for which Brek
        receives a notice and AFE from Gasco or another joint owner, or for which
        Brek
        initiates a drilling program, after the day on which both Parties have signed
        this agreement (the “Effective Date”). The right is subject to the following
        terms and conditions:

       

      a.  Griffin
        may contribute 50% of the amount of Brek’s portion of the AFE in return for 50%
        of Brek’s working interest in each well and 50% of Brek’s Net Interest minus a
        7% royalty (the “Royalty”) payable to Brek (“Griffin’s Net Interest”). Griffin’s
        Net Interest cannot be less than 75% of 50% of Brek’s Net Interest. If Griffin’s
        Net Interest is less than 75% of 50% of Brek’s Net Interest, then the Royalty
        must be adjusted: i.e, if the sum of the Burdens is more than 18%, then the
        Royalty is reduced so that the sum of the two is equal to 25% and Griffin’s Net
        Interest is equal to 75% of 50% of Brek’s Net Interest; if the sum of the
        burdens and the Royalty is less than 25%, then Brek is entitled to the entire
        Royalty, and Griffin’s net interest is more than 75%.1

       

      

        1.For
          example: if Brek’s share of production equals $100,000 and the Burdens equal
          12.5%, then Brek’s Royalty is equal to 7% and Griffin’s Net Interest is equal to
          80.5% of $50,000; if the Burdens equal 20%, then Brek’s Royalty is equal to 5%
          and Griffin’s Net Interest is equal to 75% of $50,000.

         

      

      
        
          
          

        

        
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      b.  
        Gasco,
        or another party with the right to initiate drilling, delivers to Brek notices
        that it intends to drill in accordance with the terms of the joint operating
        agreement that governs the drill site (“JOA”). These notices are written or, if
        a drill rig is on the site, telephoned. Brek has 30 days from its receipt
        of a
        written notice and 48 hours (excluding Saturday, Sunday and legal holidays)
        from
        a telephoned notice in which to notify Gasco that it consents to the drilling.
        Brek will deliver the notice to Griffin on the next business day following
        the
        day that it receives the notice. Griffin will inform Brek within twenty-one
        days
        if it elects to contribute, or within 36 hours of the telephoned notice.
        Griffin
        is liable for its portion of all costs of the drilling program in accordance
        with the terms of the governing JOA as of the date on which it notifies Brek
        that it intends to contribute to the drilling program. 

       

      c.  The
        operator delivers to Brek invoices for drilling in accordance with the terms
        of
        the governing JOA. Brek will deliver each invoice to Griffin on the next
        business day following its receipt with an invoice for its contribution.
        Griffin
        will pay its contribution directly to the operator within the time required
        by
        the JOA and deliver confirmation to Brek that it has paid its contribution.
        If
        Griffin fails to pay the invoiced contribution as required, then it is deemed
        to
        have elected to decline to participate and loses its right to contribute
        and
        share in the production of the well.

       

      d.  If
        Brek
        initiates a drilling program then the notice provisions and response times
        of
        the governing JOA apply to AFEs and invoices.

       

      e.  If
        Griffin elects to contribute, Griffin will pay Brek a fee equal to 7.5% of
        the
        amount of Griffin’s contribution to the drilling and completion costs (the
“Fee”) as consideration for the right to contribute and acquire the working
        interests and net share of production. Griffin will pay the Fee when it delivers
        its written consent to Brek.
        The
        amount of the Fee must be adjusted when the well is completed to reflect
        the
        actual costs: if the costs are more than the AFE, then Griffin will pay Brek
        7.5% of the difference; if the costs are less, then Brek will refund 7.5%
        of the
        difference to Griffin.

       

      f.  When
        Griffin has paid its contributions for drilling and completion and the Fee
        to
        Brek, it has earned its working interest and share of production and is subject
        to the terms of the governing JOA. Brek then will inform Gasco (or whoever
        is
        the operator if Gasco is not) of Griffin’s interest with instructions to record
        Griffin’s interest and send Griffin’s net share of production on Griffin’s
        instructions. Nothing in this agreement grants Griffin a right to acquire
        an
        interest in the Properties or a right under the Gasco Agreement.

       

      g.  If
        Griffin fails to contribute its portion of the costs that accrue to its working
        interest in wells, then its entire interest reverts to Brek and Griffin is
        not
        entitled to any further share of production or the return of any costs that
        it
        has contributed.

       

      h.  If
        Griffin elects to contribute to an AFE for drilling a well but does not elect
        to
        contribute to the completion of a well following the drilling, then its entire
        interest reverts to Brek and Brek is entitled to 100% of the working interest
        and the share of production to which Griffin would otherwise be
        entitled.

       

      i.  Griffin’s
        right is not exclusive. If Griffin declines to contribute to a well, then
        Brek
        may invite others to contribute to the drilling of the well that Griffin
        declined. 

       

      Section 1.2   Invited
        Participants.
        Griffin
        may invite others to participate in its contribution and share of production.
        If
        it does, then it must deliver to Brek a notice with the name, address, and
        payment instructions of the invited participant. When Griffin has earned
        its
        interest, Brek will instruct Gasco to make a division order in the favor
        of the
        invited participants. Nothing in this arrangement, however, requires that
        Brek
        or Gasco deal directly with the invited participants or relieves Griffin
        of any
        obligations under this agreement; all dealings are between Griffin and the
        invited participants and Brek is entitled to rely on Griffin’s instructions and
        representations in connection with the invited participants and their
        participation until they have earned their interests, at which point they
        will
        deal directly with the operator under the JOA.

       

      
        
          
          

        

        
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      Section 1.3   Non-consent.
        If Brek
        elects not to participate in a drilling program, then Griffin may contribute
        Brek’s portion to earn Brek’s entire interest and the well is counted as one
        well for the purpose of counting the 100 wells in which Griffin can acquire
        an
        interest under this agreement. If Brek does not participate at Griffin’s
        request, then the well is counted as two wells. In either case, if Griffin
        contributes Brek’s portion of a drilling program, Brek remains entitled to the
        Royalty and the Fee calculated on the whole of Griffin’s participation and
        interest. 

       

      Section 1.4   Conflict
        of Terms.
        Where
        the terms of this agreement and a governing JOA conflict, the terms of this
        agreement prevail unless they cause a Party to breach the JOA, in which case
        the
        terms of the JOA prevail.

       

      Section 1.5   Programs
        Underway.
        The
        Parties acknowledge that Brek received two AFEs from Gasco during the month
        of
        April before the terms of this agreement were finalized for which drilling
        programs are underway. Griffin may contribute to the AFEs. The Parties will
        work
        out the terms of payment for these two wells if Griffin elects to
        contribute.

       

      Section 1.6   Notice
        to Others.
        Brek
        will notify the other parties to a JOA of the terms of this agreement as
        required by the governing JOA. 

       

      Section 1.7  Term.
        This
        agreement and Griffin’s right to acquire the interests described above end when
        Griffin has acquired its interests in 100 wells under this agreement or at
        the
        end of eight years from the date of this agreement, whichever is the
        earlier.

       

      Section 1.8  Force
        Majeure.
        If
        Gasco or Brek is unable to drill on the Properties during the term of this
        agreement because of force majeure (as defined in Article XI of the AAPL
        Form
        610-Model Form Operating Agreement-1982 attached to the Gasco Agreement as
        Exhibit D, a copy of which Griffin acknowledges having received) then Brek
        will
        inform Griffin and Article XI in the exhibited model form operating agreement
        applies.

       

      ARTICLE II  

      Representations
        and Warranties of Brek

       

      Brek
        represents to Griffin as follows:

       

      Section 2.1  Organization
        and Qualification.
        Brek is
        a corporation duly organized, validly existing and in good standing under
        the
        laws of Nevada, and has the requisite corporate power and authority to own
        or
        lease all material property that it purports to own or lease and to carry
        on its
        business as now being conducted. It is duly qualified as a foreign corporation,
        and is in good standing in each jurisdiction where the character of its
        properties owned or held under lease or the nature of its activities makes
        such
        qualification necessary, unless the failure to so qualify would not have
        a
        material adverse effect on its business or financial condition. It is qualified,
        to its Knowledge and where qualification is required, with all applicable
        governmental authorities to own and operate the properties and interests
        which
        are the subject matter of this agreement.

       

      Section 2.2  Authorization
        of Agreement.
        It has
        full right, power and authority to enter into this agreement and to deliver
        the
        interests to Griffin. The execution and delivery of this agreement and the
        performance of the transactions contemplated by it have been duly authorized
        by
        its board of directors. The consummation of the transactions contemplated
        herein
        do not and will not, whether with or without the giving of notice or passage
        of
        time or both, conflict with or constitute a breach of, or default under,
        or
        result in the creation or imposition of any tax, lien, charge or encumbrance
        upon the properties or interests which are the subject matter of this agreement
        pursuant to any contract, indenture, mortgage, deed of trust, loan or credit
        agreement, note, license, lease or other agreement or instrument to which
        it is
        a party or by which it may be bound, or to which any of its property or assets
        is subject, nor will such action result in any violation of the provisions
        of
        its articles of incorporation or bylaws or any applicable treaty, law, statute,
        rule, regulation, judgment, order, writ or decree of any government,
        governmental instrumentality or court, domestic or foreign, having jurisdiction
        over it or any of its properties.

       

      
        
          
          

        

        
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      Section 2.3  Title
        to the Properties.
        Brek
        makes the following representations and warranties regarding the interests
        which
        are the subject matter of this agreement.

       

      a.  No
        Liens.
        To its
        Knowledge it will convey the interests to the Purchasers as required from
        time
        to time free and clear of all liens, restrictions and encumbrances created
        by,
        through or under it or any Affiliate which would have a material adverse
        affect
        upon the value, operation or use of the interests unless they were created
        as a
        result of a drilling program to which Griffin contributed under this agreement.
        As used in this agreement, “Affiliate” means, with respect to a specific person
        or entity, another person or entity that directly, or indirectly through
        one or
        more intermediaries, Controls or is Controlled by or is under common Control
        with the specified person or entity; and “Control,”
and
        its
        correlative forms, means the possession, directly or indirectly, of the power
        to
        direct or cause the direction of the management or policies of a person or
        entity, whether through the ability to exercise voting power, by contract
        or
        otherwise. 

       

      Section 2.4  Absence
        of Further Requirements.
        Except
        for applicable reporting requirements under the Securities Act of 1933, the
        Securities Exchange Act of 1934, or any other applicable legislation, no
        filing
        with, or consent, approval, authorization, order, registration, notification
        or
        decree of any court or governmental authority or agency, domestic or foreign,
        is
        necessary or required for the performance of its obligations hereunder or
        in
        connection with the sale and delivery of the interests hereunder or the
        consummation of the transactions contemplated by this agreement.

       

      Section 2.5  No
        Bankruptcy.
        No
        bankruptcy proceedings are pending, being contemplated by or, to its Knowledge,
        threatened against it.

       

      Section 2.6  No
        Broker Fees.
        It has
        not engaged any broker, finder or investment banker for which Griffin could
        be
        liable for any fees or commissions in connection with the transactions
        contemplated hereby.

       

      Section 2.7  Compliance
        with Law.
        To its
        Knowledge, all of the properties owned or operated by it are so operated
        in
        compliance with applicable laws and regulations (including, without limitation,
        Environmental Laws) in all material respects. With respect to Environmental
        Laws, compliance therewith is deemed to include, without limitation that,
        to its
        Knowledge:

       

      a.  With
        respect to the properties operated by it, it has acquired all material permits,
        licenses and authorization required under any Environmental Laws in order
        to
        conduct its business as it has been historically conducted and such is in
        compliance with all such permits, licenses and authorizations;

       

      b.  With
        respect to the properties operated by it, there has been no material Release
        by
        it or by any other person of any Hazardous Substances, Oils, Pollutants or
        Contaminants or any other wastes produced by, or resulting from, any business,
        commercial, or industrial activities operations, or processes, on, beneath,
        or
        adjacent to any of the properties for which it may be held liable under any
        Environmental Laws; and

       

      c.  There
        exists no written or tangible report, synopsis or summary of any asbestos,
        toxic
        waste or Hazardous Substances, Oils, Pollutants or Contaminants investigation
        made with respect to all or any portion of the properties operated by
        it.

       

      
        
          
          

        

        
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      The
        following
        definitions apply to the foregoing provisions regarding Environmental
        Laws:

       

      i.  “Environmental
        Laws” means all federal, state and local laws, regulations, rules and ordinances
        relating to pollution or protection of the environment, including, without
        limitation, laws relating to Releases or threatened Releases of Hazardous
        Substances, Oils, Pollutants or Contaminants into the indoor or outdoor
        environment (including, without limitation, ambient air, surface water,
        groundwater, land, surface and subsurface strata) or otherwise relating to
        the
        manufacture, processing, distribution, use, treatment, storage, Release,
        transport or handling of Hazardous Substances, Oils, Pollutants or
        Contaminants.

       

      ii.  “Hazardous
        Substances, Oils, Pollutants or Contaminants” means all substances defined as
        such in the National Oil and Hazardous Substances Pollutant Contingency Plan,
        40
        C.F.R. §300.6, or defined as such under any Environmental Laws.

       

      iii.  “Release”
        means any release, spill, emission, discharge, leaking, pumping, injection,
        deposit, disposal, discharge, dispersal, leaching or migration into the indoor
        or outdoor environmental (including, without limitation, ambient air, surface
        water, groundwater and surface or subsurface strata) or into or out of any
        property, including the movement of Hazardous Substances, Oils, Pollutants
        or
        Contaminants through or in the air, soil, surface water, groundwater or arty
        property.

       

      d.  Litigation.
        No
        action, suit, proceeding, claim or investigation by any person, entity,
        administrative agency or governmental body is pending before or, to its
        Knowledge, threatened against it by any governmental authority that impedes
        or
        is likely to impede its ability to consummate the transactions contemplated
        by
        this agreement.

       

      ARTICLE III  

      REPRESENTATIONS
        AND WARRANTIES OF Griffin

       

      Griffin
        hereby represents and warrants to
        the
        Brek as follows:

       

      Section 3.1  Organization
        and Qualification.
        Griffin
        is a limited liability company formed and in good standing under the laws
        of
        Delaware 
        and has
        the power and authority to carry on its business as it applies to this
        agreement. 

       

      Section 3.2  Authorization
        of Agreement.
        It has
        full right, power and authority to enter into this agreement. The execution
        and
        delivery of this agreement and the performance of the transactions contemplated
        hereby have been duly authorized by all necessary corporate or other action.
        The
        consummation of the transactions contemplated herein do not and will not,
        whether with or without the giving of notice or passage of time or both,
        conflict with or constitute a breach of, or default under, or result in the
        creation or imposition of any tax, lien, charge or encumbrance upon pursuant
        to
        any contract, indenture, mortgage, deed of trust, loan or credit agreement,
        note, license, lease or other agreement or instrument to which it is a party
        or
        by which it may be bound, or to which any of its property or assets of it
        is
        subject, nor will such action result in any violation of the provisions of
        its
        articles of incorporation or bylaws or other organizational document, if
        any, or
        any applicable treaty, law, statute, rule, regulation, judgment, order, writ
        or
        decree of any government, governmental instrumentality or court, domestic
        or
        foreign, having jurisdiction over it or any of its properties. This agreement
        has been duly authorized, executed and delivered by it and constitutes a
        legal,
        valid and binding obligation of it, enforceable against it in accordance
        with
        its terms (except as may be limited by bankruptcy, insolvency, moratorium,
        reorganization or similar laws affecting the rights of creditors generally
        and
        the availability of equitable remedies).

       

      Section 3.3  Absence
        of Further Requirements.
        No
        filing with, or consent, approval, authorization, order, registration,
        notification or decree of, any court or governmental authority or agency,
        domestic or foreign, is necessary or required for the performance of its
        obligations hereunder or the consummation of the transactions contemplated
        by
        this agreement.

       

      
        
          
          

        

        
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      Section 3.4  No
        Bankruptcy. No
        bankruptcy proceedings are pending, being contemplated by or, to its Knowledge,
        threatened against it.

       

      Section 3.5  No
        Broker Fees.
        It has
        not engaged any broker, finder or investment banker for which it could be
        liable
        for any fees or commissions in connection with the transactions contemplated
        hereby.

       

      Section 3.6  Litigation.
        No
        action, suit, proceeding, claim or investigation by any person, entity,
        administrative agency or governmental body is pending before or, to its
        Knowledge, threatened against it by any governmental authority that impedes
        or
        is likely to impede its ability to consummate the transactions contemplated
        by
        this agreement.

       

      ARTICLE IV 

      Survival
        of Representations and Warranties and Indemnification

       

      Section 4.1  Survival
        of Representations and Warranties.
        The
        representations and warranties contained in Articles II and III of this
        agreement as well as those contained in this Article shall survive the Effective
        Date and shall not be deemed to merge into any conveying documents executed
        as
        of the Effective Date or subsequently as provided for in this
        agreement.

       

      Section 4.2  Indemnification.
        With
        respect to those warranties and representations of Brek contained in Article
        II
        of this agreement, Brek will hold harmless, indemnify and defend Griffin
        from
        and against all suits, causes of action, proceedings, liabilities, damages,
        penalties, assessments, injuries, fees and costs, including reasonable attorneys
        fees (whether suit is instituted or not) arising from or related to their
        breach
        of such warranties and representations.

       

      ARTICLE V 

      Miscellaneous

       

      Section 5.1  Notices.
        Any
        notice or communication required or permitted hereunder shall be sufficiently
        given if in writing and (i) delivered in person or by overnight delivery
        or
        courier service or (ii) sent by facsimile or electronic transmission (provided
        that any notice given pursuant to clause (ii) is also confirmed by the means
        described in clause (1), as follows:

       

      To
        Brek:

      


      Brek
        Petroleum, Inc.

      Attention:
        Rick Jeffs

      42
        Brook
        Street

      London
        W1K 5DB 

      E-mail: rick@brekenergy.com

      


      R.H.
        Daignault Law Corporation

      1100
        Melville Street, Suite 600

      Vancouver,
        BC, V6E 4A6

      Attention:
        Rene Daignault

      E-mail:
        Rene@rhdlawcorp.com

       

      
        
          
          

        

        
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      To
        Griffin:

       

      Griffin
        Asset Management, LLC

      Attention:
        Shawne Malone

      1529
        S.
        State St. Suite 4L

      Chicago,
        Il 60605

      347-733-2565

      E-mail:
        Shawnepmalone@yahoo.com

      


      Such
        notice or other communication shall be deemed given when so delivered
        personally, or sent by facsimile or electronic transmission (or, if it is
        transmitted during non-business hours at the recipient’s location, at the
        opening of business on the next business day), or, if sent by overnight delivery
        or courier service, when delivered. Griffin will notify Brek concurrently
        by
        email of any notice that it is sending by another means under this
        agreement.

       

      Section 5.2  Knowledge.
        As used
        herein, the term “Knowledge” means (i) with respect to Brek, the actual
        knowledge of officers and employees of them involved in the transactions
        contemplated by this agreement or in the ownership or operation of the
        properties or interests which are the subject matter of this agreement, and
        (ii)
        with respect to a Griffin, the actual knowledge of officers and employees
        of it
        involved in the transactions contemplated by this agreement. “Known” shall have
        a correlative meaning.

       

      Section 5.3  Governing
        Law.
        Except
        as otherwise provided for herein or any exhibit hereto, this agreement and
        the
        legal relations between the Parties shall be governed by and construed in
        accordance with the internal laws of the State of Colorado without taking
        into
        account provisions regarding choice of law.

       

      Section 5.4  Entire
        Agreement.
        This
        agreement constitutes the entire agreement between the Parties with respect
        to
        the matters herein and supersedes all prior agreements and understandings
        between the Parties with respect thereto.

       

      Section 5.5  Amendments
        and Waivers.
        This
        agreement may not be amended except upon a written consent authorized and
        approved by each Party. By an instrument in writing, Griffin may waive
        compliance by the Brek with any term or provisions of this agreement that
        Brek
        was or is obligated to comply with or perform; provided, however, that such
        waiver shall not operate as a waiver of; or estoppel with respect to, any
        other
        or subsequent failure. No failure to exercise and no delay in exercising
        any
        right, remedy or power hereunder shall operate as a waiver thereof, nor shall
        any single or partial exercise of any right, remedy or power hereunder preclude
        any other or further exercise thereof or the exercise of any right, remedy
        or
        power hereunder shall operate as a waiver thereof, nor shall any single or
        partial exercise of any right, remedy or power hereunder preclude any other
        or
        further exercise thereof or the exercise of any other right, remedy or power
        provided herein or by law or in equity. The waiver by any Party of the time
        for
        performance of any act or condition hereunder shall not constitute a waiver
        of
        the act or condition itself.

       

      Section 5.6  Time.
        Time is
        of the essence of this agreement and any amendment to it.

       

      Section 5.7  Severability.
        If any
        provision of this agreement, or the application thereof to any Party, place
        or
        circumstance, shall be held by a court of competent jurisdiction to be invalid,
        unenforceable or void, the remainder of this agreement and such provisions
        as
        applied to other parties, places and circumstances shall remain in full force
        and effect only if, after excluding the portion deemed to be unenforceable,
        the
        remaining terms shall provide for the consummation of the transactions
        contemplated hereby is substantially the same manner as originally set forth
        at
        the later of the date this agreement was executed or last amended.

       

      Section 5.8  Counterparts.
        This
        agreement may be executed in multiple counterparts, each of which shall
        constitute one and the same instrument.

       

      
        
          
          

        

        
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      Section 5.9  Interpretation
        of Agreement.
        The
        article, section and other headings used in this agreement are for reference
        purposes only and shall not constitute a part hereof or affect the meaning
        or
        interpretation of this agreement.

       

      Section 5.10  Expenses.
        Whether
        or not the transactions contemplated by this agreement are consummated, all
        costs and expenses incurred in connection with this agreement and the
        transactions contemplated hereby, will be paid by the Party incurring such
        costs
        and expenses, including but not limited to the cost of legal counsel,
        accountants and any other professionals.

       

      Section 5.11  Specific
        Performance.
        The
        Parties agree that irreparable damage would occur in the event that any of
        the
        provisions of this agreement were not performed in accordance with their
        specific terms or were otherwise breached. It is accordingly agreed that
        the
        Parties shall be entitled to an injunction or injunctions to prevent breaches
        of
        this agreement and to enforce specifically the terms and provisions hereof
        in
        any court of the United States or any state having jurisdiction, this being
        in
        addition to any other remedy to which they are entitled at law or in
        equity.

       

      Section 5.12  No
        Circumvention.
        Griffin
        will not circumvent Brek and deal directly with Gasco in any manner in
        connection with any of Brek’s properties that are subject to the Gasco
        Agreement, whether those properties are the subject of this agreement or
        excluded from it.

       

      Section 5.13  Attorneys’
        Fees.
        If any
        legal action is brought for the enforcement of this agreement or because
        of an
        alleged dispute, breach or default in connection with this agreement, the
        prevailing Party shall be entitled to recover reasonable attorneys’ fees and
        other costs incurred in such action or proceeding, in addition to any other
        relief to which it may he entitled.

       

      Section 5.14  Binding
        Effect.
        This
        agreement is binding upon and inures to the benefit of the Parties and their
        respective successors and permitted assigns.

       

      Section 5.15  Third
        Parties.
        Except
        as otherwise provided herein, this agreement does not benefit or create any
        right or cause of action or remedy of any nature whatsoever in any person
        or
        entity other than the Parties.

       

      Section 5.16  No
        Presumption of Drafting.
        Each
        Party participated in the drafting of this agreement and therefore no
        presumption that either Party or any other drafted it applies in any
        interpretation, construction, or enforcement of this agreement.

       

      In
        witness whereof,
        each
        Party has executed this agreement as of the date written below.

       

      Griffin
        Asset Management, LLC

      a
        Delaware limited liability company

      


      


      By:
        /s/
        Shawne Malone

      Its:
        President

      On:
        June
        1, 2004

      


      ________________________________

      


      Brek
        Petroleum, Inc.,
        a
        Nevada corporation

      


      By:
        /s/
        Richard N. Jeffs

      Its:
        President

      On:
        May
        28, 2004