Document:

ex10-46_1.htm

     

    
      

       

      EXHIBIT
10.46(1)

       

      AMENDED
AND RESTATED EMPLOYMENT AGREEMENT

       

      This
Amended and Restated Employment Agreement (the “Agreement”), effective as of the
12 day of March, 2008, between Immtech Pharmaceuticals, Inc., a Delaware
corporation (the “Company”), and Mr. Eric L. Sorkin, an individual residing in
Montclair, New Jersey (the “Executive”).

       

      W
I T N E S S E T H:

       

      WHEREAS,
the Company desires to continue to employ the Executive as President and Chief
Executive Officer of the Company upon the terms and conditions set forth herein;
and

       

      WHEREAS,
Executive is willing to continue such employment upon the terms and conditions
set forth herein;

       

      NOW
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties agree as follows:

       

      Section
1.  Duties.  The
Company agrees that Executive shall be employed by the Company during the Term
(as defined below) as President and Chief Executive Officer of the
Company.  Executive shall perform such duties and shall have such
responsibilities consistent with the Bylaws of the Company, the Company’s
polices for senior executive officers and customary for the duties and position
of his office, in each instance subject to the direction of the Board of
Directors.  Executive agrees to be so employed and shall devote his
best efforts to advance the interests of the Company.

       

      Section
2.  Term.  Subject
to Sections 4, 5 and 6 hereof, the term of the Executive’s employment hereunder
(the “Term”) shall be for a period commencing on January 30, 2006 (the
“Effective Date”) to March 31, 2007, and thereafter shall automatically renew
for successive one year periods unless notice of non-renewal is given by either
party not less than 30 days prior to each successive anniversary date of this
Agreement while Executive is employed.

       

      Section
3.  Compensation.

       

      (a) Base
Salary.  During the Term, beginning on April 1, 2008, Executive
shall be paid at a per annum rate of $250,000 (“Base Salary”) for a one-year
period ending March 31, 2009. Beginning on April 1, 2009, Executive shall be
paid at a per annum
rate of $375,000 (“Base Salary”). The Base Salary shall be payable by the
Company to Executive in accordance with the Company’s regular payroll practices
for senior management.

       

      (b) Stock
Options.  Executive shall be eligible for stock option grants
(“Options”) under the Company’s 2007 Stock Incentive Plan or any successor
thereto (collectively, the “Incentive Plan”) as determined by Executive and the
Compensation Committee (the “Committee”) of the Company’s Board of Directors or
the Committee and the other independent directors of the Company (as directed by
the Board of Directors).  All such Options shall be evidenced by stock

       

      
        
           

        

        
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      option
agreements and shall contain the following terms:  (i) the exercise
price shall equal the fair market value of the underlying shares of the
Company’s common stock on the grant date, (ii) the term shall be ten years,
(iii) the Option shall be subject to settlement on a net share basis (to enable
Executive to make a cashless exercise and payment of minimum statutory tax
liabilities), (iv) the Option shall be an incentive stock option to the extent
possible, and (v) the Option shall remain exercisable for the full term,
whether or not Executive remains employed with the Company.

       

      (c) Bonuses.  Executive
shall be eligible to receive an annual performance bonus in cash of up to 60% of
the Base Salary for each year of employment hereunder, beginning with the fiscal
year ending March 31, 2008.  Any such bonus shall be determined in the
sole discretion of the Committee or the Committee and the other independent
directors of the Company (as directed by the Board of Directors) based on
certain milestones determined in the sole discretion of the Committee or the
Committee and the other independent directors of the Company (as directed by the
Board of Directors).  Any bonus due Executive under this Section 3(c)
shall be payable by the Company to Executive within 120 days after end of the
Company’s applicable fiscal year.

       

      (d) Vacation, Sick Leave and
Holidays.  During the Term, Executive shall be entitled to
20 days paid vacation on an annual basis, and shall be entitled to sick
leave and holidays at full pay (beginning on April 1, 2007) in accordance with
the Company’s policies established and in effect from time to time.

       

      (e) Welfare
Benefits.  During the Term, Executive shall be entitled to
participate in all insurance, retirement, employee benefits, pension and
profit-sharing plans and other fringe benefit programs established by the
Company, including health insurance (collectively, “Welfare
Benefits”).

       

      (f) Reimbursement of
Expenses.  During the Term, Executive shall be reimbursed for
all items of travel and entertainment and miscellaneous expenses reasonably
incurred by him on behalf of the Company.  Executive shall, as a
condition of such reimbursement, provide sufficient documentation in such detail
as will allow Company to deduct such expenses.  Reimbursement of
expenses not claimed within sixty (60) days after incurred shall be deemed
waived, and all reimbursement payments for a particular calendar year shall be
paid within two and one half months after the end thereof.

       

      (g) Severance.  Upon
termination of Executive’s employment hereunder by the Company without Cause (as
defined below), including non-renewal of the Agreement by the Company, or by
Executive for Good Reason (as defined below (other than pursuant to Section 4 or
5 below), the Company will pay or provide to the Executive (the following,
collectively, “Severance”): (1) salary, at the greater of (i) $375,000 and
(ii) Executive’s Base Salary rate in effect on the date of termination, equal to
six months, payable in accordance with normal payroll practices applicable to
the Company’s senior executives, (2) Welfare Benefits and insurance in which
Executive was a participant or which covered Executive on the date of
termination (less any amounts Executive is paying immediately prior to such
termination to participate in such Welfare Benefits or insurance) for the twelve
month period following any such termination (or, at the Company’s option, the
Company may provide to Executive after-tax payments to purchase 

       

      
        
           

        

        
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      equivalent
benefits), (3) a cash bonus, on the date on which such bonus would otherwise be
due under Section 3(c) hereof, equivalent to the cash bonus amount to which
Executive would have been entitled had he continued working until the end of the
then current Term and (4) immediate vesting of all outstanding options then held
by Executive, and the right to exercise such options for the remainder of their
respective terms.  The Severance shall be the sole payment and shall
satisfy all obligations of the Company and its affiliates to Executive in the
event of any such termination of Executive’s employment and shall be contingent
on Executive’s execution of the Company’s standard release and waiver
agreement.  To the extent the value of the Severance paid to Executive
under clauses (1) through (4) of this Agreement is equal to or less than
Executive’s annualized Base Salary as of the date of his termination, the
Severance is being paid to Executive in consideration for Executive’s
non-competition covenant set forth in Section 13 hereof.

       

      (h) Insurance.  During
the Term, subject to insurability of Executive, the Company shall provide
Executive with disability insurance in an amount not less than $375,000 or
Executive’s Base Salary then in effect that would have been payable pursuant to
the terms of this Agreement.

       

      Section
4.   Death or Total Disability of
Executive.

       

      (a) Death.  In
the event of the death of Executive during the Term, this Agreement shall
terminate effective as of the date of the Executive’s death and the Company
shall have no further obligations or liability hereunder, except the Company
shall pay or provide to the Executive’s estate (i) twelve months of the
Executive’s then current Base Salary or $375,000 if not then receiving a Base
Salary (payable in accordance with the Company’s normal payroll practices for
senior management) and a pro
rata share of the cash bonus under Section 3(c) for the period up to the
date of termination, (ii) all amounts due pursuant to the Welfare Benefits and
insurance in which Executive was a participant or covered and (iii) immediate
vesting of all options then held by Executive and the right to exercise the
options through the remainder of their respective terms.

       

      (b)  Total
Disability.  In the event of the Total Disability (as
hereinafter defined) of Executive for a period of 120 consecutive days during
the Term, the Company shall have the right to terminate Executive’s employment
hereunder by giving Executive ten (10) days’ written notice thereof, and upon
expiration of such ten (10) day period, the Company shall have no further
obligations or liability under this Agreement, except the Company shall pay or
provide to Executive (i) twelve months of Executive’s then current Base
Salary or $375,000 if not then receiving a Base Salary (payable, to the extent
available, from the proceeds of the disability insurance described in Section
3(h) hereof, and when salary payments are made to other Company senior
executives during the applicable term following Executive’s Total Disability)
and a pro rata share of
the cash bonus under Section 3(c) for the period up to Executive’s date of Total
Disability, (ii) Welfare Benefits and/or insurance in which Executive is a
participant or which covered Executive on the date of Total Disability (without
deduction for any amounts Executive was paying immediately prior to such
determination to participate in said Welfare Benefits or insurance) for the
twelve month period following the date of determination of Total Disability (or,
at the Company’s option, the Company may provide to Executive after tax-payments
to purchase equivalent benefits) and (iii) immediate vesting of all options then
held by Executive and the right to exercise such options for the remainder of
their respective terms.

       

      
        
           

        

        
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      The term
“Total Disability”, when used herein, shall mean a mental or physical condition
which, based upon competent medical evidence, renders the Executive unable or
incompetent to carry out substantially all of the material job responsibilities
he held or tasks to which he was assigned, to be determined in the sole
discretion of the Company’s Board of Directors.

       

      Section
5.  Discharge for
Cause.  The Company may terminate Executive’s employment
hereunder for the following reasons (each of which shall constitute “Cause”);
(a) habitual intoxication; (b) drug addiction; (c) conviction of Executive of a
felony (d) a unanimous vote of non-confidence by the Board of Directors
(excluding executive), or (e) a material breach by Executive of any term or
provision of this Agreement or any Company policies applicable to Executive,
which Executive fails to cure within 30 days after receipt of written notice
from the Company advising Executive, in reasonable detail, of the
breach.  In the event that the Company shall discharge the Executive
pursuant to this Section 5, the Company shall have no further obligations or
liability under this Agreement, except the Company shall pay to Executive the
portion, if any, of Executive’s Base Salary earned through the date employment
terminates.

       

      Section
6.  Discharge Without Cause;
Good Reason.  The Company may terminate Executive’s employment
hereunder, for any or no reason, at any time upon at least thirty (30) days’
prior written notice to Executive.  Executive may resign upon thirty
days’ notice for “Good Reason” which shall be deemed a termination without Cause
if not cured within said 30 day notice period.  In the event of a
discharge by the Company without Cause or resignation by Executive for Good
Reason (provided that Executive’s resignation occurs within six months of the
event constituting Good Reason, Executive shall be entitled to receive the
applicable Severance provided for in Section 3 hereof.  In the event
of a Change in Control Event, whether or not Executive terminates his employment
hereunder, all outstanding stock options then held by Executive shall be
immediately and fully vested.  “Good Reason” means (i) breach by the
Company of any of the material terms and conditions of this Agreement or any
Company policies applicable to Executive, (ii) relocating Executive, without his
prior consent, outside of the Chicago, IL or New York, NY metropolitan areas,
(iii) assignment of duties that are significantly different, whether diminution
or promotion, without Executive’s consent, (iv) any reduction of Base Pay,
Welfare Benefits or Bonus unless applied uniformly to all Company executives, or
(v) a Change in Control Event.  A “Change in Control Event” shall mean
any of the following: (i) any person or entity (except for a current
stockholder) or “group” (as contemplated by Section 13(d)(3) of the Securities
Exchange Act of 1934) becomes the beneficial owner of greater than 50% of the
then outstanding voting power of the Company; (ii) a merger or consolidation
with another entity where the voting securities of the Company outstanding
immediately before the transaction constitute less than a majority of the voting
power of the voting securities of the Company or the surviving entity
outstanding immediately after the transaction; (iii) the sale or disposition of
all or substantially all of the Company’s assets; or (iv) the stockholders of
the Company approve a plan or proposal for liquidation or dissolution of the
Company.

       

      Section
7.  Supersedes Other Agreements;
Entire Agreement.  This Agreement supersedes and is in lieu of
any and all other employment arrangements between Executive and the
Company.  This Agreement constitutes the entire agreement of the
parties hereto and supersedes all prior contracts or agreements with respect to
the subject matter herein, whether oral or written.

       

      
        
           

        

        
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      Section
8.  Amendments.  Any
Amendment to this Agreement, excluding any extension or renewal of the Term,
shall be made in writing and signed by the parties hereto.

       

      Section
9.  Enforceability.  If
any provision of this Agreement shall be held invalid or unenforceable, in whole
or in part, then such provision shall be deemed to be modified or restricted to
the extent and in the manner necessary to render the same valid and enforceable,
or shall be deemed excised from this Agreement as the case may require, and this
Agreement shall be construed and enforced to the maximum extent permitted by
law, as if such provision had been originally incorporated herein as so modified
or restricted, or as if such provision had not been originally incorporated
herein, as the case may be.

       

      Section
10.  Governing
Law.  The validity and effect of this Agreement shall be
governed exclusively by the laws of the State of New York, excluding the
“conflicts of laws” rules of that state.

       

      Section
11.  Assignment.  This
Agreement and the obligations created hereunder may not be assigned by the
Company without the prior written consent of Executive.  This
Agreement and the obligations created hereunder may not be assigned by the
Executive.

       

      Section
12.  Notices.  All
notices required or permitted to be given hereunder shall be in writing and
shall be deemed to have been given when personally delivered or mailed, by
certified or registered mail, return receipt requested, addressed to the
intended recipient as follows:

       

      If to
Executive:

       

      Eric L.
Sorkin

      c/o
Immtech Pharmaceuticals, Inc.

      One North
End Avenue

      New York,
New York 10282

       

      If to the
Company:

       

      Immtech
Pharmaceuticals, Inc.

      150
Fairway Drive, Suite 150

      Vernon
Hills, Illinois 60061

      Attention:  Secretary

       

      Any party
may from time to time change its address for the purposes of notices to that
party by a similar notice specifying a new address, but no such change shall be
deemed to have been given until it is actually received by the party sought to
be charged with its contents.

       

      Section
13.  Covenant Not to
Compete.  Executive agrees that he will not, either directly or
indirectly, at any time during his employment with the Company, compete or
interfere, or setup to compete or interfere, or aid others to so compete or
interfere or set up to compete or interfere with the Company in the conduct or
transaction of any business or enterprise in which the Company (i) is presently
engaged, or (ii) is planning to become engaged and has made significant monetary
investment in order to be engaged, or (iii) is engaged at any time during
Executive’s employment by the Company.

       

      
        
           

        

        
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      Executive
further agrees that, upon any termination of his employment with the Company, he
will not, for a period of twelve (12) months from the date of termination (the
“Restriction Period”), within any geographic markets where the Company is then
active, directly or indirectly compete with the Company by engaging in a
competitive business, as an owner, partner, officer, director, associate,
employee, consultant, salesperson or stockholder or aid others, directly or
indirectly, in competing with the Company.  For the purposes of this
Agreement, competition and/or engaging in a competitive business shall include,
but shall not be limited to, any disclosure of confidential, proprietary,
promotional or marketing information, trade secrets, names of the Company’s
employees or research consultants, names of suppliers, names of customers or any
other information acquired prior to termination of employment which is not
already in the public domain.

       

      Executive
expressly agrees that, upon a breach or violation of the provisions of this
section, the Company shall be entitled, in addition to all other remedies
available to it, to appropriate injunctive relief, without bond, in any court of
competent jurisdiction.

       

      Section
14.  Confidentiality and
Non-Disclosure.  Executive covenants and agrees:

       

      (a) Not
to use, publish or otherwise disclose, except in the course of his duties as
Executive of the Company, any confidential, proprietary, patentable or
copyrightable information or materials generated by or disclosed to him in the
course of his duties as an employee of the Company, except for data
which:

       

      (i)         Is
or through no fault of the Executive comes into the public domain;

       

      (ii)         After
the time of disclosure to Executive, is published or becomes a part of the
public domain through no fault of Executive; or

       

      (iii)           Was
in the possession of Executive prior to the time of disclosure by the Company,
which can be demonstrated by Executive’s written records or other competent
evidence.

       

      (b) Not
to disclose or utilize, other than in connection with the performance of his
duties as an employee of the Company, any information that Executive is under a
duty not to disclose.

       

      (c) Upon
termination of his employment with the Company, to promptly return to the
Company all written and other information, data and materials which are secret
or confidential in nature of which relate to patentable, copyrightable or
proprietary information relating to the business of the Company.

       

      Section
15.  Waiver.  No
claim or right arising out of a breach or default under this Agreement can be
discharged in whole or in part by a waiver of that claim or right unless the
waiver is supported by consideration and is in writing and executed by the
aggrieved party hereto or its or his duly authorized agent. A waiver by any
party hereto of a breach of default by the other party hereto of any provision
of this Agreement shall not be deemed a waiver of any prior or subsequent
compliance herewith, and such provision shall remain in full force and
effect.

       

      
        
           

        

        
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      Section
16.  Taxes
and Code Section 409A Over-ride.  Executive is solely
responsible for the payment of any tax liability (including any taxes and
penalties arising under Section 409A of the Code) that may result from any
payments or benefits that he receives pursuant to this Agreement.  The
Company shall not have any obligation to pay, mitigate, or protect Executive
from any such tax liabilities.  Nevertheless, if the Company
reasonably determines that Executive’s receipt of payments or benefits pursuant
to Section 5 above would cause him to incur liability for additional tax under
Section 409A of the Code, then the Company may in its discretion suspend such
payments or benefits until the end of the six-month period following termination
of Executive’s employment (the “409A Suspension Period”).  As soon as
reasonably practical after the end of the 409A Suspension Period, the Company
will make a lump sum payment to me, in cash, in an amount equal to any payments
and benefits that the Company does not make during the 409A Suspension
Period.  Thereafter, Executive will receive any remaining payments and
benefits due pursuant to Section 5 in accordance with the terms of that Section
(as if there had not been any suspension beforehand).

       

      
        
           

        

        
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      IN
WITNESS WHEREOF, this Employment Agreement has been executed by the Company, by
a duly authorized member of the Board of Directors, and by the Executive on the
date first above written.

       

      
      

       

      
        	 	      
                IMMTECH
      PHARMACEUTICALS, INC.

              
	 	 	 
	 	 	 
	 	By:	/s/ Gary C.
      Parks 
	 	 	      
                Chief
      Financial Officer

              
	 	 	 
	 	 	 
	 	 	/s/ Eric L.
      Sorkin        
	 	 	      
                Eric
      L. Sorkin

              

      

    

     

     

    -8-exhibit10one.htm

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      ASSET ACQUISITON
AGREEMENT

      

      

      This Asset Acquisition Agreement (the
“Agreement”) is
effective this 6th day of
June 2008, by and between Gulf Onshore, Inc., a Nevada corporation whose address
is 15851 Dallas Parkway, Suite 190, Addison Texas 75001 (the “Purchaser”) and
K&D Equity Investments, Inc., a Texas corporation, whose address is the same
(the “Seller”).  Seller and Purchaser are sometimes together referred
to herein as the “Parties”.

      

      
        	
                a.  

              	
                Whereas, Seller owns or
      is the assignor of certain oil and gas leasehold interests located in
      Throckmorton and Shackelford Counties, Texas (the “Leases”) and related
      production assets more fully described on the exhibits
      hereto.  Legal descriptions are set out in Exhibit “A” attached
      hereto.

              

      

      

      
        	
                b.  

              	
                Whereas, Seller desires
      to sell and Purchaser desires to acquire these interests and related
      assets on the terms and conditions hereinafter
  provided.

              

      

      

      
        	
                c.  

              	
                Whereas, Purchaser is
      currently under contract to purchase 100% of the issued and outstanding
      stock of Curado Energy Resources, Inc., a Texas corporation that serves as
      the operator of the Leases.  The purchase of this stock is a
      condition to the performance of Purchaser on this
    agreement.

              

      

      

      NOW, THEREFORE, for and in
consideration of the mutual covenants and agreements hereinafter set forth,
Seller and Purchaser hereby agree as follows:

      

      

      ARTICLE 1 –
DEFINITIONS

      

      1.1           “Agreement” shall mean this
Asset Acquisition, as amended from time to time, between Seller and
Purchaser.

      

      1.2           “Arbitration Procedure” shall
refer to the process for resolution of disputes between the Partiesafter good
faith negotiations have failed.  All such disputes between the Parties
shall be submitted to a binding arbitration in accordance with the rules of the
American Arbitration Association.  Each Party shall select one
arbitrator, and the two arbitratorsselected sha1l choose a third arbitrator. If
either Party fails to select an arbitrator within ten (10) days of its receipt
of a written request for arbitration from the other Party or if the two selected
arbitrators fail to select a third arbitrator within fifteen (15) days following
the latter’s selection, the American Arbitration Association shall make a
selection; provided, however, that the third arbitrator so selected shall have a
minimum of ten (10) years working experience in the oil and gas
industry.  Judgment upon the award of the arbitration panel may be
entered in any court of competent jurisdiction.  Each Party shall bear
its own cost of arbitration.

      

      1.3           “Assets” shall mean the
following described assets and properties (except to the extent constituting
Excluded Assets):

       

      1

      
        
          

        

      
        	
                a.  

              	
                the
      Leases; and

              

      

      

      
        	
                b.  

              	
                the
      Personal Property and Incidental
Rights.

              

      

      

      1.4     “Environmental Obligations or
Liabilities” shall mean all liabilities, obligations, expenses
(including, without limitation, all attorneys’ fees), fines, penalties, costs,
claims, suits or damages (including natural resource damages) of any nature,
including personal injury, illness, disease, or wrongful death, associated with
the Assets and attributable to or resulting from:  (i) pollution or
contamination of soil, groundwater or air, on the Assets and any other
contamination of or adverse effect upon the environment; (ii) underground
injection activities and waste disposal onsite; (iii) clean-up responses,
remedial, control or compliance costs, including the required cleanup or
remediation of spills, pits, ponds or lagoons, including any subsurface or
surface pollution caused by such spills, pits, ponds or lagoons; (iv)
noncompliance with applicable land use, permitting, surface disturbance,
licensing or notification requirements; and (v) violations of any federal, state
or local environmental or land use law.

      

      1.5     “Leases” shall mean, except to
the extent constituting Excluded Assets, any and all interests owned by Seller
and set forth on Exhibit “A” along
with any changes thereto, to this Agreement following its execution by mutual
agreement of the Parties), or which Seller is entitled to receive by reason of
any participation, joint venture, farm-in, farm-out, Joint Operating Agreement
or other agreement, in and to the oil, gas and/or mineral leases, permits,
licenses concessions, leasehold estates, royalty interests, overriding
interests, net revenue interests, executory interests, net profit interests,
working interests, reversionary interests, fee and term mineral interests, and
any other interests of Seller in Hydrocarbons, it being the intent hereof that
the legal descriptions and depth limitations set forth in Exhibit “A” shall not
be deemed to restrict the interests assigned to the extent that such interests
are incorrect or incompletely described, and conversely, that the term “Leases”
includes all of Seller’s right, title, and interest in the interests described
in Exhibit “A”
even though such interests may be incorrectly described.

      

      1.6     “Personal Property and Incidental
Rights” shall mean all right, title and interest of Seller in and to or
derived from the following insofar as the same do not constitute Excluded
Assets  and are assignable and are attributable to, appurtenant to,
incidental to, or used for the operation of the Leases:

      

      
        	
                a.

              	
                all
      surface leases, surface contracts, easements, rights-of-way, permits,
      licenses, servitudes or other interest, including, but not limited to,
      those specifically described in Exhibit
      “A”.

              
	 
      	 
      
	
                b.

              	
                all
      equipment and other personal property, inventory, spare parts, tools,
      fixtures, pipelines, tank batteries, appurtenances, and improvements
      situated upon the Leases and used or held for use in connection with the
      development or operation of the Leases or the production, treatment,
      storage, compression, processing or transportation of Hydrocarbons from or
      in the Leases;

              

      

       

       

      2

      
        
 

       

       

      
        	 
      	 
      
	
                c.

              	
                all
      contracts, agreements, suspense accounts and title instruments to the
      extent attributable to and affecting the Assets in existence at Closing,
      including all Hydrocarbon sales, purchase, gathering, transportation,
      treating, marketing, exchange, processing and fractionating contracts,
      joint operating agreements and division orders; and

              
	 
      	 
      
	
                d.

              	
                originals
      of all lease files, land files, well files, production records, division
      order files, abstracts, title opinions and contract files, insofar as the
      same are directly related to the Leases; including, without limitation,
      all seismic, geological, geochemical and geophysical information and data,
      to the extent that such data is not subject to any third party
      restrictions.

              

      

      

       

      
         

      ARTICLE 2 – AGREEMENT TO
PURCHASE AND SELL

      

      Subject
to the terms and conditions of this Agreement, Seller agrees to sell and convey
to Purchaser, and Purchaser agrees to purchase and pay for the
Assets.

      

      

      ARTICLE 3 – PURCHASE PRICE
AND PAYMENT

      

      Subject to adjustment as set forth
below, the purchase price for the Assets shall be 10,000,000 shares of the
Purchaser’s .0001 par value common stock.

      

      

      ARTICLE 4 – REPRESENTATIONS
AND WARRANTIES

      

      4.1 Seller’s
Representations and Warranties. Seller represents and
warrants to Purchaser as follows:

      

      
        	
                a.

              	
                Seller’s
      Organization.  Seller has been duly organized and
      is validly existing and in good standing under the laws of the State of
      Texas, and is qualified to do business in all jurisdictions where the
      nature of the Assets or its business so requires such
      qualification.

              
	 
      	 
      
	
                b.

              	
                Seller’s
      Authority.  Seller has the power and authority to
      enter into and perform the Agreement and to consummate the transactions
      contemplated hereby.  The execution, delivery, and performance
      by Seller of the Agreement and the consummation of the transactions
      contemplated hereby have been duly authorized by all requisite corporate
      action and the Agreement has been duly executed and delivered by
      Seller.  This authority shall include express acknowledgements
      that Seller’s board of directors has approved this transaction, and that
      the board will provide, prior to close, signed board resolutions approving
      this transaction.  Furthermore, Seller expressly acknowledges
      that Seller has not relied on any written or oral representations by
      Purchaser or purchaser’s agents regarding any provision of this Agreement,
      or any implied or express written or oral
  representation.

              

      

       

       

       

       3

        
          

        

      

       

      
        	
                c.

              	
                Enforceability
      Against Seller.  This Agreement constitutes the
      legal and binding obligation of Seller, enforceable according to its
      terms. The execution and delivery hereof by Seller does not, and the
      fulfillment and compliance with the terms and conditions hereof, will not
      result in the creation of imposition of any lien, charge or other
      encumbrance on the Assets.

              
	 
      	 
      
	
                d.

              	
                Seller’s Title to
      Assets.  To the best of Seller’s knowledge, Seller
      has Defensible Title to the Assets, free and clear of all liens,
      encumbrances, burdens, claims and defects of title of any kind. Seller
      approves the title to the leases which are being acquired. Seller is
      buying the leases in their AS IS
      condition.

              
	 
      	 
      
	
                e.

              	
                Effective Leases.  To the
      best of Seller’s knowledge, the Leases are in full force and effect, are
      valid and subsisting, and collectively cover the entire oil and gas
      mineral estates in the lands covered by the Leases.

              
	 
      	 
      
	
                f.

              	
                Absence of
      Default.  To the best of Seller’s knowledge,
      Seller is not in default under any material contract or agreement
      pertaining to the Assets.

              
	 
      	 
      
	
                g.

              	
                Lease
      Maintenance.  To the best of Seller’s knowledge,
      all royalties, rentals and other payments due under the Leases have been
      properly and timely paid, and all conditions necessary to keep the Leases
      in force have been fully performed.

              
	 
      	 
      
	
                h.

              	
                Pending
      Contract:   This contract is pending the
      successful completion of the purchase of 100% of the Stock of Curado
      Energy Resources, Inc., on or before July 7, 2008.

              
	 
      	 
      
	
                i.

              	
                Third
      Party Consents.  To the best of Seller’s knowledge,
      Seller has all right, power and authority to sell and convey the Assets to
      Purchaser, without obtaining the consent of any third party or parties,
      with exception of item (h) above and without necessity of offering the
      Assets to any third party who holds a preferential right to purchase the
      same.

              

      

      

      

      4.2 Purchaser’s
Representations and Warranties.  Purchaser represents and
warrants to Seller as follows:

      

      
        	
                a.

              	 	
                Purchaser’s
      Organization.  Purchaser has been duly organized
      and is validly existing and in good standing under the laws of the State
      of Nevada, and is qualified to do business in all jurisdictions where the
      nature of the Assets or its business so requires such
      qualification.

              
	 
      	 	 
      
	
                b.

              	 	
                Purchaser’s
      Authority.  Purchaser has the power and authority
      to enter into and perform the Agreement and to consummate the transactions
      contemplated hereby

              

      

      .

      
        4

           

        

        
           

          
            

          

        

        
           

        

      

      

      

      ARTICLE 5 –
COVENANTS

      

      5.1 Seller’s
Covenants.  Seller covenants and agrees with Purchaser as
follows:

      

      
        	
                a.

              	 	
                Exclusive
      Dealing.  From and after the date of this
      Agreement until Closing, except (i) as otherwise consented to by Purchaser
      in writing; (ii) in connection with the communications required to comply
      with preferential rights to purchase; or (iii) the termination of
      deadlines with other parties with whom Seller had previously communicated
      regarding the purchase of the Assets, Seller shall not either directly or
      indirectly through a representative (i) provide information to any person
      or representative of such person, which would assist such person in
      evaluating the prospects of purchasing the Assets; (ii) initiate,
      encourage, solicit or respond to inquiries, offers, proposals, bids or
      other investigations by any person to acquire all or any of the Assets
      (other than to indicate that the Assets are under contract for sale);
      (iii) enter into or agree to enter into any transaction, the result of
      which would interfere, hinder, delay or materially change the effect the
      transaction contemplated by this Agreement; or (iv) negotiate with any
      person with respect to such transaction.

              
	 
      	 	 
      
	
                b.

              	 	
                Maintenance
      of Assets.  Between the Effective Time and the Closing,
      Seller will (i) act as a reasonably prudent operator to cause the Assets
      to be produced, operated and maintained in a good workmanlike manner
      consistent with prior practices and in such manner as to continue the
      Leases in effect according to their terms; (ii) not abandon any of the
      Assets; (iii) maintain insurance now in force with respect to the Assets;
      (iv) will pay or cause to be paid all costs and expenses in connection
      therewith; and (v) perform and comply with all covenants and conditions
      contained in any of the Leases and all agreements relating to the
      Assets.  Without Purchaser’s written consent, Seller will not
      conduct or authorize any operation requiring approval by working interest
      owners under applicable operating agreements or requiring an expenditure
      of fifteen thousand dollars ($15,000.00) or more (for the 100% interest)
      for any single project, except in case of emergency.

              
	 
      	 	 
      
	
                c.

              	 	
                Modification of Property
      Agreements.  Without Purchaser’s prior written
      consent, except as may occur in the ordinary course of Seller’s business
      in accordance with its past practices, Seller shall not (i) enter into any
      new agreements or commitments with respect to the Assets; (ii) will not
      modify or settle any dispute arising out of any agreement relating to the
      assets; and (iii) will not encumber, sell, transfer, assign, convey,
      farm-out or otherwise dispose of any of the Assets, other than personal
      property which is replaced by substantially equivalent property or
      consumed in the operation of the Assets.

              
	 
      	 	 
      
	
                d.

              	 	
                Legal
      Compliance.  Until the Closing, Seller shall comply with
      all laws, rules, regulations, ordinances and orders of all local, state
      and federal governmental bodies, authorities, agencies and tribunals
      having jurisdiction over the
Assets.

              

      

       

       

       5

        
          

        

      

       

      
        	 
      	 	 
      
	
                e.

              	 	
                Warranty
      Maintenance.  Seller shall use its best efforts to
      cause all the representations and warranties of Seller contained in this
      Agreement to be true and correct on and as of the Closing
      Date.  To the extent the conditions precedent to the obligations
      of Purchaser are within the control of Seller, Seller shall use its best
      efforts to cause such conditions to be satisfied on or prior to the
      Closing Date and, to the extent the conditions precedent to the
      obligations of Purchaser are not within the control of Seller, Seller
      shall use its best efforts to cause such conditions to be satisfied on or
      prior to the Closing Date.

              
	 
      	 	 
      
	
                f.

              	 	
                Notification of
      Breach.  Seller shall promptly notify Purchaser
      (i) if any representation or warranty of Seller contained in this
      Agreement is discovered to be or becomes untrue or (ii) if Seller fails to
      perform or comply with any covenant or agreement contained in this
      Agreement or it is reasonably anticipated that Seller will be unable to
      perform or comply with any covenant or agreement contained in this
      Agreement.

              
	 
      	 	 
      

      

      5.2 Purchaser’s
Covenants.  Purchaser covenants and agrees with Seller as
follows:

      

      
        	
                a.

              	 	
                Warranty
      Maintenance.  Purchaser shall use its best efforts
      to cause all the representations and warranties of Purchaser contained in
      this Agreement to be true and correct on and as of the Closing
      Date.  To the extent the conditions precedent to the obligations
      of Seller are within the control of Purchaser, Purchaser shall use its
      best efforts to cause such conditions to be satisfied on or prior to the
      Closing Date and, to the extent the conditions precedent to the
      obligations of Seller are not within the control of Purchaser, Purchaser
      shall use its best efforts to cause such conditions to be satisfied on or
      prior to the Closing Date.

              

      

      

      ARTICLE 6 – ACCESS TO
INFORMATION AND INSPECTIONS

      

      6.1           Title
Files.  Promptly after the execution of this Agreement and
until the earlier of five business days before closing, or July 1, 2008,
whichever is earlier, Seller shall permit Purchaser and its representatives at
reasonable times during normal business hours to examine and, at Purchaser’s
expense, make such copies of, in Seller’s office at their actual location, all
abstracts of title, title opinions, title files, ownership maps, lease files,
assignments, division orders, payout statements and agreements pertaining to the
Assets as requested by Purchaser, insofar as the same may now be in existence
and in the possession of Seller.

      

      6.2           Other
Files.  Promptly after the execution of this Agreement and
until the earlier of five business days before closing, or July 1, 2008, Seller
shall permit Purchaser and its representatives at reasonable times during normal
business hours to examine and, at Purchaser’s expense, make such copies of, in
Seller’s offices at their actual location, all production, well, regulatory,
engineering, land, legal, accounting, seismic, geological, geophysical
information, and other information, files, books, records and data pertaining to
the Assets as requested by 

       

      6

      
        
 

       

      Purchaser,
insofar as the same may now be in existence and in the possession of Seller,
excepting economic evaluations, reserve reports and any such information that is
subject to the attorney/client and work product privileges.  No
warranty of any kind is made by Seller as to the information so supplied, and
Purchaser agrees that any conclusions drawn therefrom are the result of its own
independent review and judgment.

       

       

         

      

      
 

      6.3     Inspections.  Promptly
after the execution of this Agreement and until July 1, 2008, Seller, subject to
any necessary third party operator approval, shall permit Purchaser and its
representatives at reasonable times and at their sole risk, cost and expense, to
conduct reasonable on-site inspections of the Assets.

      

      

      ARTICLE 7 – ENVIRONMENTAL
MATTERS,

      ADJUSTMENTS AND
TERMINATION

      

      7.1     Site
Inspections.  Upon execution of and pursuant to the terms of
this Agreement, Purchaser shall have the right, at reasonable times during
normal business hours, to conduct its investigation into the status of the
physical and environmental condition of the Assets.

      

      

      ARTICLE 8 – TITLE DEFECTS,
TERMINATION AND ADJUSTMENTS

      

      8.1     Definitions.  For
purposes hereof, the terms set forth below shall have the meanings assigned
thereto:

      

      
        	
                a.

              	 	
                “Defensible Title”,
      subject to and except for the Permitted Encumbrances (as hereinafter
      defined), means that Seller has such title that (i) entitles Seller to
      receive not less than the net revenue interest shown on Exhibit “B” of all oil and gas produced,
      saved and marketed from or attributable to the well or unit indicates;
      (ii) obligates Seller to bear the costs and expenses relating to the
      maintenance, development and operation of such well or unit in an amount
      not greater than the expense interest of Seller set forth in Exhibit “B” (unless Seller’s net revenue
      interest therein is proportionately increase); and (iii) the Assets are
      free and clear of any liens, burdens or encumbrances of any kind or
      character.

              
	 	 	 
      
	
                b.

              	 	
                “Title Defect” shall mean
      any matter that causes Seller to have less than Defensible Title to any of
      the Assets as of the Closing Date. Absent waiver or modification of this
      Agreement in writing by Purchaser, all title defects will be removed on or
      before July 7, 2008, and the leases will be acquired in their AS IS
      condition.

              
	 	 	 
      
	
                 c.

              	 	
                “Title Defect Property”
      shall mean any Lease or portion thereof burdened by a Title
      Defect.

              
	 	 	 
      
	
                 d.

              	 	
                 “Permitted Encumbrances”
      shall mean any of the following
matters:

              

      

       

       

       7

        
          

        

      

       

      
        	 
      	 
      	 
      
	 
      	
                i.

              	
                tax
      liens and mechanics’ liens for amounts not yet due and
      payable.

              
	 
      	 
      	 
      
	 
      	
                ii.

              	
                any
      liens or security interests created by law or reserved with respect to the
      Assets for royalty, bonus, rental, other payment obligations or created to
      secure compliance with the terms of the leases.

              
	 
      	 
      	 
      
	 
      	
                iii.

              	
                any
      valid, subsisting and applicable laws, rules and orders of governmental
      authority.

              
	 
      	 
      	 
      

      

      

      

      8.2           Notice of
Title Defects.  On or prior to 5:00 p.m. on the July 1, 2008,
Purchaser may provide Seller with written notice of any Title Defect Properties
along with a description of those matters that, in Purchaser’s reasonable
opinion, constitute Title Defects and setting forth in detail Purchaser’s
calculation of the Title Defect Value for each Title Defect.  Seller
shall correct, at its sole cost and expense, all or any portion of such Title
Defects. The obtaining of clear title is a condition of the close of the
transaction unless agreed to otherwise by the Parties in writing, in which case
Purchaser shall receive an offset to the Purchase Price for any and all defects
which exist.

      

      8.3           Title
Warranty Limitation.  SELLER CONVEYS ITS INTEREST IN AND TO
THE ASSETS TO PURCHASER SUBJECT TO ALL ROYALTIES, OVERRIDING ROYALTIES, BURDENS
AND ENCUMBRANCES, ABSENT ANY MANNER OF WARRANTY. TITLE SHALL BE CONVEYED IN “AS
IS” CONDITION.

      

      ARTICLE 9 – CLOSING
CONDITIONS

      

      9.1    Seller’s
Closing Conditions.  The obligations of Seller under this
Agreement are subject, at the option of Seller, to the satisfaction, at or prior
to the Closing, of the following conditions:

      

      
        	
                a.  

              	
                all
      necessary consents of and filing with any state or federal governmental
      authority or agency relating to the consummation of the transactions
      contemplated by this Agreement shall have been obtained, accomplished or
      waived, except to the extent that such consents and filings are normally
      obtained, accomplished or waived after
Closing;

              

      

      

      
        	
                b.  

              	
                as
      of the Closing Date, no suit, action or other proceeding (excluding any
      such matter initiate by Seller) shall be pending or threatened before any
      court or governmental agency seeking to restrain Seller or prohibit the
      Closing or seeking damages against Seller as a result of the consummation
      of this Agreement;

              

      

      

      
        	
                c.  

              	
                as
      of the Closing Date, all of Purchaser’s representations and warranties
      shall be true; and

              

      

      

      
        	
                d.  

              	
                as
      of the Closing Date, Purchaser shall have fulfilled all of the terms,
      conditions precedent and covenants imposed under the terms of this
      Agreement.

              

      

      

      
        	
                e.  

              	
                Seller
      must obtain title to 100% of the issued and outstanding shares of Curado
      Energy Resources, Inc., a Texas
corporation.

              

      

       

       

       

        8

          

        

      

      
 

      9.2     Purchaser’s
Closing Conditions. The obligations of Purchaser under this Agreement are
subject, at the option of Purchaser, to the satisfaction, at or prior to the
Closing, of the following conditions:

      

      
        	
                 
      a.

              	
                 

              	
                all
      necessary consents of and filings with any state or federal governmental
      authority or agency relating to the consummation of the transactions
      contemplated by this Agreement shall have been obtained, accomplished or
      waived, except to the extent that such consents and filings are normally
      obtained, accomplished or waived after
Closing.

              

      

      

      
        	
                 
      b.

              	
                 

              	
                It
      is agreed that once the agreement is executed and the funds have been
      placed in deposit with escrow holder. That Seller will within five days
      execute an assignment of oil and gas leases to Purchaser,  which
      Purchaser shall record.

              

      

      

      

      ARTICLE 10 –
CLOSING

      

      10.1           Closing.  The
closing of this transaction (the “Closing”) shall be held at the
offices of Purchaser in Dallas, Texas, at
10:00 a.m. on  July 7, 2008, or at such earlier date or place as the
Parties may agree in writing (the “Closing Date”).

      

      10.2           Seller’s
Closing Obligations.  At Closing, except to the extent
comprising the Excluded Assets, Seller shall deliver to Purchaser the
following:

      

      
        	
                 
      

              	
                a.

              	
                such
      assignment forms and other documents as may be required by applicable
      governmental authorities reasonably necessary to convey all of Seller’s
      interest in the Assets to Purchaser in accordance with the provisions
      hereof;    

              

      

       

            

        
          	 	 b.	 exclusive
      possession of the Assets:

        

         

      

       

      
        	
                 
      

              	
                c.

              	
                Letters-in-lieu
      of transfer orders in form acceptable to Seller and
    Purchaser;

              

      

      

      
        	
                 
      

              	
                d.

              	
                such
      executed forms as are required by the relevant authorities to effect a
      transfer of operations as to those Assets for which Seller acts as
      operator; and

              

      

      

      
        	 	
                f.  

              	
                any
      other documents reasonably deemed necessary by the Purchaser to consummate
      the terms of this Agreement.

              

      

      

      
        	 	
                g.

              	
                It
      is agreed that upon execution of this agreement, That Seller gives to
      Purchaser full access to all files, well data, information, contacts and
      any other information necessary over the leases. Purchaser shall have the
      right to make copies of any and all data so
  requested.

              

      

       

       

      9

      
        
          

        

      

      
        	 	
                h.  

              	
                In
      the event that Seller is unable to deliver to Purchaser a recordable
      assignment of the oil and gas leases, on or before July 7, 2008. It is
      agreed that after Purchaser has placed the purchase price, that Seller
      will cooperate with seller in executing any and all drilling permits or
      such other documents that are necessary to develop the
    leases.

              

      

      

      ARTICLE 11 – LIMITATION ON
WARRANTIES AND REMEDIES

      

      THE EXPRESS REPRESENTATIONS AND
WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT ARE EXCLUSIVE AND ARE IN LIEU
OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR STATUTORY,
INCLUDING, WITHOUT LIMITATION, ANY REPRESENTATION OR WARRANTYWITH RESPECT TO THE
QUALITY, QUANTITY OR VOLUME OF OIL, GAS OR OTHER HYDROCARBONS IN OR UNDER THE
LEASES, OR THE ENVIRONMENTAL CONDITION OF THE ASSETS.  THE ITEMS OF
PERSONAL PROPERTY, EQUIPMENT, IMPROVEMENTS, FIXTURES AND APPURTENANCES CONVEYED
AS PART OF THE ASSETS ARE SOLD HEREUNDER “AS IS, WHERE IS, AND WITH ALL FAULTS”
AND NO WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR CONDITION, ARE GIVEN BY ON BEHALF OF SELLER.  IT
IS UNDERSTOOD THAT PRIOR TO CLOSING PURCHASER SHALL HAVE INSPECTED THE ASSETS
FOR ALL PURPOSES AND HAS SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL
CONDITION, BOTH SURFACE AND SUBSURFACE, AND THAT PURCHASER ACCEPTS SAME IN ITS
“AS IS, WHERE IS AND WITH ALL FAULTS” CONDITION.  THE WARRANTIES OF
SELLER CONTAINED IN THIS AGREEMENT ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, AND PURCHASER HEREBY WAIVES ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR CONDITION, OR CONFORMITY TO
SAMPLES.

      

      

      ARTICLE 12 – CASUALTY LOSS
AND CONDEMNATION

      

      If, after
the execution of this Agreement, but prior to Closing, any portion of the Assets
is destroyed by fire or other casualty or is taken in condemnation or under
right of eminent domain, Purchaser shall nevertheless be required to close and
Seller shall elect by written notice to Purchaser prior to Closing either to (a)
cause the Assets affected by any casualty or taking to be repaired or restored
to at least its condition prior to such casualty, at Seller’s sole cost, as
promptly as reasonably practicable (which work may extend after the Closing
Date); (b) treat such casualty or taking as a Title Defect with respect to the
affected Asset or Assets under Article 8 (with the understanding if Seller
elects either of the options described in (a) or (b) above, Seller shall retain
all rights to insurance and other claims against third parties with respect to
the casualty or taking, except to the extent that the Parties otherwise agree in
writing); or (c) proceed with Closing as to the affected Asset, with the
Purchaser being required to acquire the affected Asset (with the understanding
that if Seller elects this particular option, Seller shall pay to Purchaser, at
Closing, all sums paid to Seller by third parties by reason of such casualty or
taking, and shall assign, transfer and set over to Purchaser or subrogate
Purchaser all of Seller’s right, title, and interest (if any) in insurance
claims, unpaid awards and other rights against third parties arising out of the
casualty or taking.

      

       

       

       10

        
          

        

      

      
 

      ARTICLE 13 – DEFAULT AND
REMEDIES

      

      13.1           Seller’s
Remedies.  If Purchaser fails to comply with the terms of this
Agreement, or if Seller’s closing conditions as set out in this Agreement are
not satisfied or waived by Seller, in either case by the Closing Date, as it
shall be extended in accordance herewith, upon notification from Purchaser to
Seller.

      

      13.2           Purchaser’s
Remedies.  If Seller fails to comply with the terms of this
Agreement, or if Purchaser’s closing conditions as set out in this Agreement are
not satisfied or waived by Purchaser, in either case by the Closing Date, as it
may be extended hereunder, at its sole option, may select among the following
(i) enforce specific performance, or (ii) terminate this Agreement and receive a
refund of the Performance Deposit, as some but not all of Purchaser’s remedies
for such default, all other remedies not being waived by Purchaser.

      

      13.3           Other
Remedies.  The prevailing Party in any legal proceeding brought
under or to enforce this Agreement shall be additionally entitled to recover
court costs and reasonable attorneys’ fees from the non-prevailing
Party.

      

      

      ARTICLE 14 – ASSUMPTION AND
INDEMNITY

      

      14.1           Assumed
Obligations; Pre-Closing Liabilities.  Purchaser shall assume
all risk and loss with respect to and any change in the condition of the Assets
from the Effective Time until Closing for production of Hydrocarbons through
normal depletion (including the watering-out or sand infiltration of any well)
and the depreciation of personal property through ordinary wear and
tear.  Upon and after Closing Purchaser shall own the Assets, together
with all of the rights, duties, obligations and liabilities accruing after
Closing, including the Assumed Obligations and Purchasers indemnity obligations
hereunder.  Purchaser agrees to assume and pay, perform, fulfill and
discharge all Assumed Obligations. To the extent not included in Assumed
Obligations, or those matters for which Seller is indemnified, Seller agrees to
pay, perform, fulfill and discharge all costs, expenses and liabilities incurred
by Seller with respect to the ownership or operation of the Assets and accruing
prior to Closing.

      

      14.2           Purchaser’s
Indemnity.

      

      
        	 	
                a.  

              	
                Except
      as provided for in Section 14.3, Purchaser agrees to indemnify, defend and
      hold Seller harmless from and against all claims, demands, losses,
      damages, punitive damages, expenses, causes of action or judgments of any
      kind or character with respect to all liabilities and obligations or
      alleged or threatened liabilities and obligations caused by or related to
      damage to property, environmental damage or pollution, including liability
      based on strict liability or condition of the Assets, attributable to or
      arising out of (i) the Assumed Obligations, specifically including, but
      not limited to, the Environmental Obligations or Liabilities; (ii)
      Purchaser’s acts or omissions; and (iii) the ownership or operation of the
      Assets by Purchaser or its successors and assigns at any time after the
      Effective Time, including, without limitation, any interest, penalty,
      reasonable attorneys’ fees and court and other costs and expenses incurred
      in connection therewith or the defense
thereof.

              

      

       

       

       11

        
          

        

      

      
 

      14.3     Seller’s
Indemnity.

      

      
        	 	
                a.

              	
                Except
      as provided for in Section 14.2, Seller agrees to indemnify, defend and
      hold Purchaser harmless from and against any and all claims, demands,
      losses, damages, punitive damages, costs, expenses, causes of action or
      judgments of any kind or character with respect to all liabilities and
      obligations or alleged or threatened liabilities and obligations caused by
      or related to damage to property, including liability based on strict
      liability or condition of the Assets, attributable to or arising out of
      Seller’s ownership or operation of the Assets by Seller and its
      subsidiaries or affiliates at any time prior to the Effective Time,
      including, without limitation, any interest, penalty, reasonable
      attorneys’ fees and court and other costs and expenses incurred in
      connection therewith or the defense thereof.  Nothing in this
      Section 14.3 shall be interpreted to require Seller to indemnify Purchaser
      for any liability arising from (i) the Assumed Obligations, specifically
      including, but not limited to, the Environmental Obligations or
      Liabilities; (ii) Purchaser’s acts or omissions; and (iii) the ownership
      or operation of the Assets by Purchaser or its successors and assigns at
      any time after the Effective Time, including, without limitation, any
      interest, penalty, reasonable attorneys’ fees and court and other costs
      and expenses incurred in connection therewith or the defense
      thereof.

              

      

      

      
        	 	
                b.

              	
                Seller
      further agrees to indemnify, defend and hold Purchaser harmless from and
      against any and all claims for personal injury, illness, disease and
      wrongful death which arise or are asserted prior to the Effective Time and
      which are attributable to the ownership and operation of the Assets by
      Seller and its subsidiaries or affiliates, including, without limitation,
      any interest, penalty, reasonable attorneys’ fees and court and other
      costs and expenses incurred in connection therewith or the defense
      thereof.  Once again, nothing in this Section 14.3 shall be
      interpreted to require Seller to indemnify Purchaser for any liability
      arising from (i) the Assumed Obligations, specifically including, but not
      limited to, the Environmental Obligations or Liabilities; (ii) Purchaser’s
      acts or omissions; and (iii) the ownership or operation of the Assets by
      Purchaser or its successors and assigns at any time after the Effective
      Time, including, without limitation, any interest, penalty, reasonable
      attorneys’ fees and court and other costs and expenses incurred in
      connection therewith or the defense
thereof.

              

      

       

       

       12

        
          

        

      

      
 

      14.4           Broker or
Finder’s Fee.  Each Party agrees to indemnify and hold the
other harmless from and against any brokerage or finder’s fee or commission in
connection with this Agreement or the transactions contemplated by this
Agreement to the extent such claim arises from or is attributable to the actions
of such indemnifying Party, including, without limitation, any and all loses,
damages, punitive damages, attorneys’ fees, costs and expenses of any kind or
character arising out of or incurred in connection with any such claim or
defending against the same.

      

      14.5           Miscellaneous.  There
shall be no upward or downward adjustment in the Purchase Price as a result of
any matter for which Purchaser or Seller is indemnified under this
Agreement.  The indemnities in this Agreement shall not relieve
Purchaser or Seller from any obligations to third parties.  The
indemnities of Seller and Purchaser herein shall not relieve the indemnified
Party from, or extend to cover, any obligations of the indemnified Party under
the terms of any operating agreement or other cost-sharing arrangement which is
applicable to any claim.  With respect to any claim for which an
indemnifying Party may be required to provide partial or full indemnity, or for
which a Party may be obligated to defend in warranty, such Party shall have the
right, but not the obligation, to participate fully in the defense of any such
claim.  Reasonable attorneys’ fees, court costs, interest, penalties
and other expenses incurred in connection with the defense of such claims shall
be included in Seller’s and Purchaser’s indemnities herein.

      

      

      ARTICLE 15 –
GENERAL

      

      15.1           Fees and
Costs.  Except as may be otherwise specifically provided in
this Agreement, all fees, costs and expenses incurred by Purchaser or Seller in
negotiating this Agreement or in consummating the transactions contemplated
hereby shall be paid by the Party incurring that fee or cost, including, without
limitation, legal and accounting fees, and any and all costs of due
diligence.

      

      15.2           Filing
and Recording of Assignments, etc.  Purchaser shall be solely
responsible for all filings and recording of assignments related to the Assets
and for all fees connected therewith, and upon request Purchaser shall advise
Seller of the pertinent recording data.  Seller shall not be
responsible for any loss to Purchaser because of Purchaser’s failure to file or
record documents correctly or promptly other than those losses attributable to
bad faith actions taken by Seller.  Purchaser shall promptly file all
appropriate forms, declarations or bonds with federal and state agencies
relative to its assumption of operations and Seller shall cooperate with
Purchaser in connection with such filings.

      

      15.3           Further
Assurances and Records.  After the Closing each of the Parties
will execute, acknowledge and deliver to the other such further instruments, and
take such other action, as may be reasonably requested in order to more
effectively assure to said Party all of the respective properties, rights,
titles, interests, estates and privileges intended to be assigned, delivered or
inuring to the benefit of such Party in consummation of the transactions
contemplated hereby.

      

      
        	
                15.4  

              	
                Notices.  Except
      as otherwise expressly provided herein, all communications required or
      permitted under this Agreement shall be in writing and any communication
      or delivery hereunder shall be deemed to have been duly given and received
      (a) three days after being placed in United States first class mail,
      postage prepaid; (b) when actually delivered by fax or other
      telecommunication; (c) when actually delivered by certified United States
      mail, postage prepaid, return receipt requested; or (d) when actually
      delivered by receipted overnight delivery service, to the address of the
      Parties to be notified.

              

      

       

       

       13

        
          

        

      

      
 

      To
Seller:                                Michele
Sheriff

      K&D Equity Investments,
Inc.

      416 Cr 364

      Melissa Texas 75454

      

      With
Copy to:

      

      

      

      

      To
Purchaser:                        Jeffery
Joyce

      Gulf Onshore, Inc.

      4310 Wiley Post Rd. #201

      Addison Texas 75001

      

      

      

      Any Party
may, by written notice so delivered to the other, change the address to which
delivery shall thereafter be made.

      

      15.5           Incidental
Expenses.  Purchaser shall bear and pay (i) all state or local
government sales, transfer, gross proceeds or similar taxes incident to or
caused by the transfer of the Assets to Purchaser; (ii) all documentary,
transfer and other state and local government taxes incident to the transfer of
the Assets to Purchaser; and (iii) all filing, recording or regulation fees for
any assignment or conveyance delivered hereunder.

      

      15.6           Waiver.  Any
of the terms, provisions, covenants, representations, warranties or conditions
hereof may be waived only by written instrument executed by the Party waiving
compliance.  Except as otherwise expressly provided in this Agreement,
the failure of any Party at any time or times to require performance of any
provision hereof shall in no manner affect such Party’s right to enforce the
same.  No waiver by any Party of any condition, or of the breach of
any term, provision, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be or constructed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or of the breach of any
other term, provision, covenant, representation or warranty.

      

      15.7     Binding
Effect; Assignment.  All the terms, provisions, covenants,
obligations, indemnities, representations, warranties and conditions of this
Agreement shall be enforceable by the Parties hereto and their respective
successors and assigns.  Any attempt to assign this Agreement over the
objection or without the express written consent of the other Party shall be
absolutely void.  Seller may condition its consent to assign this
Agreement on Purchaser providing Seller with an appropriate guarantee of its
assignee’s performance.  In the event Purchaser sells or assigns all
or a portion of the Assets, this Agreement shall remain in effect between
Purchaser and Seller as to all the Assets regardless of such
assignment.

       

       

       14

        
          

        

      

      
 

      15.8   Taxes.

      

      
        	
                a.  

              	
                Seller
      and Purchaser agree that this transaction is not subject to the reporting
      requirement of Section 1060 of the Internal Revenue Code of 1986, as
      amended, and that, therefore, IRS Form 8594, Asset Acquisition statement,
      is not required to be and will not be filed for this
      transaction.  In the event the Parties mutually agree that a
      filing of Form 8594 is required, the Parties will confer and cooperate in
      the preparation and filing of their respective forms to reflect a
      consistent reporting of the agreed upon
  allocation.

              

      

      

      
        	
                b.  

              	
                Seller
      shall be responsible for and shall pay all taxes attributable to or
      arising from the ownership or operation of the Assets prior to the
      Effective Time.  Purchaser shall be responsible for and shall
      pay all taxes attributable to or arising from the ownership or operation
      of the Assets after the Effective Time.  Any Party which pays
      such taxes for the other Party shall be entitled to prompt reimbursement
      upon evidence of such payment.  Each Party shall be responsible
      for its own federal income taxes, if any, as may result from this
      transaction.

              

      

      

      15.9    Like-Kind
Exchange.  Each Party consents to the other Party’s assignment
of its rights and obligations under this Agreement to its Qualified Intermediary
(as that term is defined in Section 1.103 (k)-1(g)(4)(v) of the Treasury
Regulations), or to its Qualified Exchange Accommodation Titleholder (as that
term is defined in Rev. Proc. 2000-37), in connection with effectuation of a
like-kind exchange.  However, Seller and Purchaser acknowledge and
agree that any assignment of this Agreement to a Qualified Intermediary or to a
Qualified Exchange Accommodation Titleholder does not release either Party from
any of their respective liabilities and obligations to each other under this
Agreement.  Each Party agrees to cooperate with the other to attempt
to structure the transaction as a like-kind exchange.

      

      15.10   Governing
Law.  THIS
AGREEMENT SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS
OTHERWISE APPLICABLE TO SUCH DETERMINATIONS. THE PARTIES WAIVE THE PROVISIONS OF
THE TEXAS DECEPTIVE TRADE PRACTICES ACT, OTHER THAN SECTION 17.555 THEREOF WHICH
IS NOT WAIVED.  IN ORDER TO EVIDENCE ITS ABILITY TO GRANT SUCH WAIVER,
PURCHASER HEREBY REPRESENTS AND WARRANTS TO SELLER THAT PURCHASER (i) IS IN THE
BUSINESS OF SEEKING OR ACQUIRING, BY PURCHASE OR LEASE, GOODS OR SERVICES FOR
COMMERCIAL OR BUSINESS USE; (ii) HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND
BUSINESS MATTERS THAT ENABLE IT TO EVALUATE THE MERITS AND RISKS OF THE
TRANSACTION CONTEMPLATED HEREBY; AND (iii) IS NOT IN A SIGNIFICANTLY DISPARATE
BARGAINING POSITION.

      

       

       

       15

        
          

        

      

      
 

      15.11        Entire
Agreement.  This Agreement constitutes the entire agreement
between the Parties and collectively replaces and supersedes all prior
agreements, arrangements and understandings related to the subject matter
hereof, whether written or oral.  No other agreement, statement or
promise made by any Party, or to any employee, officer or agent of any Party,
which is not contained in this Agreement shall be binding or
valid.  This Agreement may be supplemented, altered, amended, modified
or revoked by writing only, signed by the Parties hereto.  The
headings herein are for convenience only and shall have no significance in the
interpretation hereof.  The Parties stipulate and agree that this
Agreement shall be deemed and considered for all purposes, as prepared through
the joint efforts of the Parties, and shall not be construed against one Party
or the other as a result of the preparation, submission or other event of
negotiation, drafting or execution thereof.  It is understood and
agreed that there shall be no third party beneficiary of either Party to this
Agreement, and that the provisions hereof do not impart enforceable rights in
anyone who is not a Party or a successor or assignee of a Party
hereto.

      

      15.12        Exhibits.  All
Exhibits and Schedules attached to this Agreement, and the terms of those
Exhibits and Schedules which are referred to in this Agreement, are made a part
hereof and incorporated herein by reference.

      

      15.13        Counterparts.  This
Agreement may be executed in any number of counterparts, and each and every
counterpart shall be deemed for all purposes one (1) agreement.

      

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

      

      

      

      

      

        
          	
                  SELLER

                	 
      	
                  K&D
      Equities, Inc.

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                  By:______________________________

                
	 
      	 
      	
                  Title:
      ____________________________

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                  PURCHASER

                	 
      	
                  Gulf
      Onshore, Inc.

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                  By:
      ______________________________

                
	 
      	 
      	
                  Title:
      ____________________________

                

        

       16

        
          

        

      

                                                    CURADO WELL
INVENTORY

      

      Throckmorton
Co.,Tx

      

      I.
T.R.PUTNAM –
RRC # 08575

      

      #
1 N 42-447-35528

      D-
80 Pumping unit

      1,000’
4 1⁄2” Casing

      750’
2 3/8” tubing

      500’
rods

      Gear
Box, Power Pole, Meter , misc. valves & fittings

      

      T.R.
Putnam # 1 42-447-80907

      1,000’
4 1⁄2” casing

      750’
2 3/8” tubing

      500’
rods

      

      T.R.
Putnam # 6 42-447-30554

      750’
2 3/8” tubing

      500’
rods

      

      T.R.
Putnam # 18 42-447-32967

      1,000’
4 1⁄2” Casing

      750’
2 3/8 tubing

      500’
rods

      

      T.R.Putnam
# 103 42-447-33987

      1,000’
4 1⁄2” Casing

      750’
2 3/8 tubing

      500’
rods

      

      T.R.
Putnam # 104 42-447-34112

      1,000’
4 1⁄2” Casing

      750’
2 3/8 tubing

      500’
rods

      

      T.R.
Putnam # 106 42-447-34113

      1,000’
4 1⁄2” Casing

      750’
2 3/8 tubing

      500’
rods

      

      T.R.
Putnam # 111 42-447-34184

      1,000’
4 1⁄2” Casing

      750’
2 3/8 tubing

      500’
rods

      

      T.R.
Putnam # 105 42-447-34111

      Salt
Water Injector

      T.R.
Putnam #  108 42-447-34182

      
        
          
            17

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      Salt
Water Injector

      T.R.
Putnam # 2  42-447 -80906

      T.R.
Putnam #
3-         “  -80907

      T.R.
Putnam # 5-         “  -
80908

      T.R.
Putnam #7 -         “  -
30582

      T.R.
Putnam # 8-         “  -
30650

      T.R.
Putnam # 10-       “  -
30770

      Salt
Water Injector

      T.R.
Putnam # 11-       “  -
30798

      T.R.
Putnam # 13        “  -
31538

      T.R.
Putnam # 15        “  -
31906

      T.R.
Putnam # 101-     “  - 33988

      

      On
Lease

       Horizontal
Water Separator

       1-
150 Bbl Tank Battery

       1-
210 Bbl Tank Battery

       4- D- 40
Pumping Units to repair, misc. parts, rods, tubing,
etc.    

      

      II.
PUTNAM_A-8 RRC
# 17374 42-447-81867

      

      1-
114 Pumping Unit

      4,500’
4 1/2 Casing

      3,500’
2 3/8 Tubing

      3,500’
rods

      3
– 210 Tank Batteries

      Water
Separator

      1-150
Bbl Fiberglass Tank

      Misc.
parts, plungers, packer, motor, etc.

      

      III.
PUTNAM A-25 SWI
- RRC # 18814

      

      4,500’
4 1⁄2” Casing

      3,500  2
3/8” Tubing

      Misc.
valves,fittings, etc.

      

      IV.
TREADWELL 3-D
RRC # 29361 42-447-36106

      

      1-
220 Gentry Pump Jack  - Diesel  Engine

      4,500’
4 1⁄2 Casing

      3,500’
2 3/8 Tubing

      3,500’
rods

      Water
Separator

      2
– 210 Tank Batteries

      Misc.
parts, valves, fittings, etc. 

      
        
          
            18

          

           

        

        
           

          
            

          

        

        
           

        

      

      

                                                                                                                         

      V.
PUTNAM 3-D –
RRC # 17374 42-447-25781

      

      1-
114 Pump Jack

      4,500’
4 1⁄2 Casing

      3,500’
2 3/8 Tubing

      3,500’
rods

      2
– 210 Tank Batteries

      Water
Separator

      Misc.
downhole pump, motors, plunger, packer

      

      VI.
PUTNAM 11-B –
RRC # 25781 42-447-34829

      

      1-114
Pump Jack

      4,500’
4 1⁄2 Casing

      3,500’
2 3/8 Tubing

      3,500’
rods

      1-
210 Tank Battery

      Misc.
downhole pump, packer, etc.

      

      VII.
PUTNAM 11-A –
RRC # 24255 42-447- 36072

      

      4,500’
4 1⁄2 Casing

      3,500’
2 3/8 Tubing

      3,500’
rods

      Misc.

      

      VIII.
HARRELL 3-D -
RRC # 42-447-XXXXX

      

      1-
220 Pump Jack

      4,500’
4 1⁄2 Casing

      3,500’
2 3/8 Tubing

      3,500’
rods

      Water
Separator

      2
– 210 Tank Batteries

      Misc.
downhole pump, packer, meters, etc.

      

      IX.
JOE PUTNAM (
goes into Comeback Tanks) RRC # 29287

      

      Joe
Putnam # 103 – 42-447 36095- Salt Water Injector

      

      Joe
Putnam # 203 - 42-447-36096

      1-
D-80 Pump Jack

      950’
4 1⁄2” Casing

      750’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, motors, packers, etc.

      

      
        
          
            19

          

           

        

        
           

          
            

          

        

        
           

        

      

      Joe
Putnam # 303 – 42-447-36097

      1-D-80
Pump Jack

      950’
4 1⁄2” Casing

      750’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, motors, packers, etc.

      

      Joe
Putnam # 603 – 42-447-35109

      1-
D-80 Pump Jack

      950’
4 1⁄2” Casing

      750’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, motors, packers, etc.

      

      Joe
Putnam # 703 – 42-447-35110

      1-
D-80 Pump Jack

      950’
4 1⁄2” Casing

      750’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, motors, packers, etc.

      

      Joe
Putnam # 403 – 42-447-36098

      950’
4 1⁄2”  Casing

      750’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, motors, packers, etc.

      

      Joe
Putnam # 503 – 42-447-36099

      950’
4 1⁄2” Casing

      750’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump,motors, packers , etc.

      

      Joe
Putnam # 803

      950’
4 1⁄2” Casing

      

      X.
PUTNAM M – RRC
# 27328

      4,500’
4 1⁄2” Casing

      3,500’
2 3/8” Tubing

      Tri
Plex Water Pump

      Electric
Generated Water Injection System

      Separator

      2-210
Tank Batteries

      

      
        
          
            20

          

           

        

        
           

          
            

          

        

        
           

        

      

      XI.
COMEBACK – RRC
# 27330

      

      Comeback
# 1 – 42-447-35499

      1-
D-80 Pump Jack

      950’
4 1⁄2” Casing

      750’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, packer, motor, etc.

      

      Comeback
# 2 – 42-447-35636

      Salt
Water Injector

      

      Comeback
# 3 – 42-447-35652

      1-D-80
Pump Jack

      950’
4 1⁄2” Casing

      750’
2 3/8”Tubing

      500’
rods

      Misc.
downhole pump, packer, motor, etc.

      

      Comeback
# 4 – 42-447-35727

      1-
D-80 Pump Jack

      950’
4 1⁄2” Casing

      750’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump,packer, motor, etc.

      2-210
Tank Batteries

      Separator

      

      XIII.
FT. GRIFFIN 3-D
– RRC # 29347 42-417-38373

      4,500’
4 1⁄2” Casing

      

      XIV.
J.C PUTNAM –
RRC # 10814

      

      J.C.
Putnam # 1 –42-447-81525

      750’
4 1⁄2” Casing

      650’
2 3/8” Tubing

      500’
rods

      J.C.
Putnam # 2 – 42-447-01497 – Salt Water Injector

      

      J.C.
Putnam # 4 – 42-447-30280 – Salt Water Injector

      

      J.C.
Putnam # 5 – 42-447-30249

      750’
4 1⁄2” Casing

      650’
2 3/8” Tubing

      500’ rods

      

      J.C.
Putnam # 6 – 42-447-30294

      

      
        
          
            21

          

           

        

        
           

          
            

          

        

        
           

        

      

      J.C.
Putnam # 7 – 42-447-81530

      1-
D-80 Pump Jack

      750’
4 1⁄2” Casing

      650’
2 3/8” Tubing

      500’
rods 750

      Misc.
downhole pump,packer, motor, etc.

      

      J.C.
Putnam # 8 – 42-447-31738

      1-D-80
Pump Jack

      750’
4 1⁄2”Casing

      650’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump,packer,motor, etc.

      

      J.C.
Putnam # 9 -42-447-31739

      1-
D-80 Pump Jack

      750’
4 1⁄2” Casing

      650’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, packer, motor,
etc.                                                         

      

      J.C.Putnam
# 40 – 42-447-36115

      1-
D-80 Pump Jack

      750’
4 1⁄2” Casing

      650’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, packer, motor, etc.

      

      J.C.
Putnam # 10 – 42-447-33177

      1-
D-80 Pump Jack

      750’
4 1⁄2” Casing

      650’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, packer,motor, etc.

      

      J.C.
Putnam # 11 – 42-447-33330

      1
D-80 Pump Jack

      750’
4 1⁄2” Casing

      650’
2 3/8” Tubing

      500’
rods

      Misc.
downhole pump, packer, motor, etc

      3
– 210 Tank Batteries

      1-
150 Bbl Fiberglass Water Tank

      Separator

       

       

      22

       

        
          

        

      

      
 

      SHACKELFORD
COUNTY, TEXAS

      

      XV.
J.P. MORRIS
LEASE –RRC # 03544

      

      J.P.Morris
#15-  42-417-81629

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 65- 42-417-81638

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 73- 42-417-31400

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 101 – 42-417-33236

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.
Morris # 102 – 42-417-35030

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.
Morris # 103 – 42-417-35031

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 104 -42-417-35146

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 71 -42-417-31398

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 88- 42-417-33491

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing
1,200’ rods 

      
        
          
            23

          

           

        

        
           

          
            

          

        

        
           

        

      

      

       

         

      J.P.
Morris # 112 – 42-417-35719

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 116 – 42-417-36642

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.
Morris # 118- 42-417-36959

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 114 -42-417-35724

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 109 -42-417-35292

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 111 – 42-417-35720

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 113 – 42-417-35724

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 72 – 42-417-31399

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      
        
          
            24

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      J.P.Morris
# 75- 42-417-31539

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 76- 42-417-31538

      1
D-80 Pump Jack

      1,700’
4 1⁄2” Casing

      1,500’
2 3/8” Tubing

      1,200’
rods 

      

      J.P.Morris
# 99

      

        1
D-228 Pump Jack

        1,700’
4 1⁄2” Casing

        1,500’
2 3/8” Tubing

        1,200’
rods

      

      On
Lease

      

      4-500
Bbl Tank Batteries

      1-Horizontal
Separator

      1
– 300 Bbl Water Tank

      1-210
Tank Battery

      1
3 –phase Triplex Salt Water Pump

       8
D-80 Pump Jacks – need repair

      15,000
ft. 2 3/8” untested tubing

      10,000
rods

      8
Salt water Injectors

      30,000’
buried poly pipe

      Misc.,
Meters, Motors, downhole pumps, valves, fittings, etc.

      

      

      

      
        
          
            25

          

           

        

        
           

          
            

          

        

        
           

        

      

       

      Lease
Inventory

       

      
        	
                1.  

              	
                Putnam
      "A" Well #8 and SWD Well #25-Lease #10758-Richards Ranch (Mississippi)
      Field: The Southwest 100
      of Acres of Comanche Indian Reservation Survey No. 9, Abstract No. 1122,
      Throckmorton County, Texas, less and except 40 acres in the form of a
      square Around the Mutual Oil of America, Inc: Putnam D-1 Well, being the
      southwest 40 acres of said survey, leaving 60 acres of land only insofar
      as such lease covers the subsurface depth between. 2,100 feet and 4,736
      feet beneath such 60 acres.

              

      

      50%
W.I/75%N.R.I.

      

      
        	
                2.  

              	
                3D
      Putnam:, 40 acres in the
      form of a square out of the southwest corner of Comanche Indian
      Reservation Survey, Block 11, Throckmorton County,
  Texas.

              

      

      

      54%
W.I./81.25 N.R.I.

      

      
        	
                3.  

              	
                TR
      Putnam: An oil and gas
      leased dated January 27, 1961, recorded in Book 138, Page 43, Deed Records
      of Throckmorton County, Texas, executed by James P. Putnam et al., as
      Lessors, to G.L. Palterson and Raymond L Hawkins, as Lessees, covering the
      following described land situated in Throckmorton County, Texas, to
      wit:

              

      

      

      Comanche
Indian Reservation Survey #25, Abstract No. 884, being the original 160-acre
tract patented to Samuel Cellars by Patent #463, Vol. 9, and the excess 13-acres
later purchased from the State of Texas, dated September 27, 1944, recorded in
Book 3, Page 16, Patent Records of said county, containing 173 acres of land,
more or less, from the surface of the ground to a depth of 1,500 feet below the
surface.

      

      75%
W.I./80% N.R.I.

      

      

      
        	
                4.  

              	
                Harrell
      3-D: East 53 acres of the north 93 acres of T&L Co Survey,
      Abstract No. 481, as to depths below fee below the surface
      only.

              

      

      

      97%
W.I/81.25% N.R.I.

      

      
        	
                5.  

              	
                JC
      Putnam: Oil and gas lease
      to depth of 1,500 fee beneath the surface to the following tract of land
      to wit:

              

      

      

      Beginning
at the southeast corner of Survey 24, Cir and an inner corner of said Survey 11;

      Thence N
20° W with east line of Survey and NW corner of Survey 11; Cir 1836.1 feet to N
NE corner of said Survey 11;

      Thence S
20°E with Survey line of said Survey 11 and the west line Survey 9 and the east
line of said Survey 11;

      Cir 1110
feet to a point 170 feet N 20° W of the Southwest corner of said survey 11,
CIR;

      Thence
70° 45' W 550 feet;

      Thence N
20° W 150 feet to a point 150 feet S 70° 45' W of Well No. 2 as not located on
the ground;

      Thence N
7° W 640 feet;

      Thence
71° 41 fee to place of beginning

      

      85%
W.I./82.03% N.R.I.

      

      
        
          
            26

          

           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                6.

              	
                Comeback: Being a tract out
      of the Comanche Indian Reservation Survey 10; Abstract No. 850, beginning
      at the intersection of the westerly boundary of said survey;
      to-wit:

              

      

      

      Thence in
a northeasterly direction 1,000 fee to a point;

      Thence in
a southeasterly direction parallel to the western boundary line to a point in
the southern boundary line of said survey;

      Thence
with the western boundary line of said survey in a northeasterly direction to
the place of beginning; Less, save and except a 300 foot square around any
existing wells located thereon.

      

      86.25%
W.I./75% N.R.I.

      

      
        	
                 
      

              	
                7

              	
                Treadwell
      3-D: Being 40 acres,
      more or less, in the form of a square out of the northwest corner of the
      H.R. Treadwell Survey, Abstract No. 876, Throckmorton, County, Texas,
      limited to 3600 feet below.

              

      

      64%
W.I./80% N.R.I.

      

      
        	
                 
      

              	
                8.

              	
                Fort
      Griffin: 3-D: 100-acre
      lease-Section A-140; T&L Co Survey No. 381,980 FNRL
      1000 FEL, Abstract No. 254.

              

      

      
        	
                 
      

              	
                79%
      W.I. 80% N.R.I.

              

      

      

      

      
        	
                 
      

              	
                9.

              	
                JP
      Morris; That oil and gas mineral leasehold estate created by oil
      and gas lease dated June 25, 1925, executed by David Proctor et al. to
      J.V. Howell recorded in Volume 78, Page 326, Deed Records of Shackelford
      County, Texas insofar as it covers the following tracts situated in the
      ETRR Co surveys covering approximately 1,880 acres in Shackelford County,
      Texas, to wit:

              

      

      

      W  1⁄2 Section 191,
Abstract No. 105;

      All
Section 201, except S 1⁄2  of SE 1/4, Abstract No.
114

      NW
1⁄4  of Section 204, Abstract No. 1010;

      E
1⁄2  of Section 205, Abstract No. 116;

      S 1⁄2 of SE
1⁄4 Section 201, Abstract No. 114

      40 Wells 100% W.I. 84.75%
N.R.I.                                                                20
Wells 52% W.I. 84.75 N.R.I.

      

       

      

       

       

      
        

         

         

         

      

       

      

      
        
          
            27

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