Document:

EXHIBIT
      10.1

    

    SPECIFIC
      TERMS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST TO THE SECURITIES
      AND EXCHANGE COMMISSION. THE OMITTED INFORMATION HAS BEEN SEPARATELY FILED
      WITH
      THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED TERMS HAVE BEEN MARKED
      AT
      THE APPROPRIATE PLACE WITH TWO ASTERISKS (**).

     

    CARBON
      DIOXIDE SALE & PURCHASE AGREEMENT

    Effective
      February 1, 2008

    

    BETWEEN

    

    EXXONMOBIL
      GAS & POWER MARKETING COMPANY

    (a
      division of Exxon Mobil Corporation)

    

    AND

    

    RANCHER
      ENERGY CORP.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    CARBON
      DIOXIDE SALE & PURCHASE AGREEMENT

     

    
      
        
          	
                  ARTICLE
                    1 - DEFINITIONS

                	 	
                  3

                
	
                  ARTICLE
                    2 - COMMITMENTS BY SELLER AND BUYER

                	 	
                  7

                
	
                  ARTICLE
                    3 - NOMINATIONS, EARLY VOLUMES AND EXCESS VOLUMES

                	 	
                  9

                
	
                  ARTICLE
                    4 - PRICE

                	 	
                  10

                
	
                  ARTICLE
                    5 - BILLING AND PAYMENT

                	 	
                  13

                
	
                  ARTICLE
                    6 - TERM

                	 	
                  17

                
	
                  ARTICLE
                    7 - ROYALTY

                	 	
                  17

                
	
                  ARTICLE
                    8 - TAXES

                	 	
                  18

                
	
                  ARTICLE
                    9 - DELIVERY POINT, TITLE, RATE AND PRESSURE

                	 	
                  19

                
	
                  ARTICLE
                    10 - MEASUREMENT AND COMPUTATION OF VOLUMES

                	 	
                  20

                
	
                  ARTICLE
                    11 - MISCELLANEOUS

                	 	
                  21

                
	
                  EXHIBIT
                    A - DAILY CONTRACT QUANTITY

                	 	
                  34

                
	
                  EXHIBIT
                    B - EXPERT PROCEDURES

                	 	
                  35

                

        

      

      
         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

      

    

    CARBON
      DIOXIDE SALE AND PUCHASE AGREEMENT

     

    THIS
      CARBON DIOXIDE SALE AND PURCHASE AGREEMENT ("Agreement") is made and entered
      into effective as of the 1st day of February, 2008, ("Effective Date") by and
      between ExxonMobil Gas & Power Marketing Company (a division of Exxon Mobil
      Corporation) ("Seller"), and Rancher Energy Corp., as operator of the Big Muddy,
      South Glenrock, and Cole Creek South fields located in Converse County, Wyoming
      ("Buyer").

    

    WHEREAS,
      Buyer desires to purchase Carbon Dioxide from Seller for use in tertiary oil
      recovery projects ("Project") including, but not limited to the Big Muddy,
      South
      Glenrock, and Cole Creek South fields; and

    

    WHEREAS,
      Seller is undertaking a CO2 Expansion Project and anticipates it will have
      Carbon Dioxide available for sale after the Start-Up Date; and 

    

    WHEREAS,
      Seller desires to sell Carbon Dioxide to Buyer from the LaBarge field in
      Wyoming; 

    

    NOW
      THEREFORE, for and in consideration of the premises and the mutual benefits
      and
      covenants herein contained, Buyer and Seller agree as follows:

     

    ARTICLE
      1 - DEFINITIONS

    

    Defined
      Words and Terms:
      As used
      in this Agreement, the following words and terms shall have the meanings
      indicated:

    

    
      	(a)	
              "Affiliate"
                with respect to a Party means any entity that directly or indirectly
                (through one or more entities) controls, is controlled by, or is
                under
                common control with such Party. For the purposes of this definition
                and
                the definition of “Controlling Party” set forth below in this Article 1,
                the term “control” means the right to cast more than 50% of the votes
                exercisable at an annual general meeting (or its equivalent) of the
                entity
                concerned or, if there are no such rights, ownership of more than
                50% of
                the equity share capital of or other ownership interests in such
                entity,
                or the right to direct the policies or operations of such
                entity.

            

    

    

    
      	
              (b)

            	
              "Annual
                Contract Quantity" or "ACQ" means the total sum of all DCQ for a
                Contract
                Year.

            

    

    

    
      	(c)	
              "BCF”
                means one billion Standard Cubic
                Feet.

            

    

    

    
      	(d)	
              "Business
                Day” means a day when banks are open for business in the United
                States.

            

    

    

    
      
        
          	(e)	
                  "Buyer's
                    Facilities" means the pipelines transporting the CO2 from the
                    Delivery
                    Point to the Buyer’s fields, the CO2 distribution and injection facilities
                    in the Buyer’s fields, Buyer’s CO2 compressors, and any metering related
                    to the aforementioned Buyer’s pipelines, injection and distribution
                    facilities, or CO2
                    compressors.

                

        

      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    
      	(f)	
              "Contract
                Price" means the amount per MCF payable by Buyer to Seller for Carbon
                Dioxide sold under this Agreement as set forth in Article 4, which
                price
                is exclusive of any royalty or tax reimbursement, if any, paid by
                Buyer
                pursuant to Articles 7 and 8.

            

    

    

    
      	(g)	
              "Contract
                Year" means each successive twelve (12) Month period during the Term,
                commencing on the first Day of the Month following the Start-Up Date
                of
                this Agreement.

            

    

    

    
      	(h)	
              "Carbon
                Dioxide" or "CO2" means a substance primarily composed of molecules
                containing one atom of carbon and two atoms of oxygen and secondarily
                of
                the other substances identified in the definition of Quality
                Specifications.

            

    

    

    
      
        
          	(i)	
                  "CO2
                    Expansion Project" means
                    Seller's project at its Shute Creek plant whereby Seller will
                    install or
                    cause to be installed approximately 23,000 horsepower of additional
                    compression facilities, increasing the Carbon Dioxide sales capacity
                    from
                    the Shute Creek plant.

                

        

      

    

    

    
      	(j)	
              "Controlling
                Party" means
                with
                respect to a Party, any parent company or corporation of such Party
                or any
                of the companies constituting such Party which directly or indirectly
                owns
                more than fifty percent (50%) of the shares carrying voting rights
                of such
                Party.

            

    

    

    
      	(k)	
              "Daily
                Contract Quantity" or "DCQ" means for each Day during the Term, the
                volume
                of Carbon Dioxide as set forth on Exhibit A, attached hereto and
                made a
                part hereof. 

            

    

    

    
      	(l)	
              "Day"
                means a period beginning at 7:00 a.m. Mountain Standard Time on a
                calendar
                day and ending at 7:00 a.m. Mountain Standard Time on the next succeeding
                calendar day. 

            

    

    

    
      	(m)	
              "Deficiency
                Price" means the simple average Contract Price in effect as of the
                first
                (1st) Day of each Month during the relevant Contract
                Year.

            

    

    

    
      	(n)	
              "Deficiency
                Volumes" has the meaning ascribed to it in Article
                2.2(b).

            

    

    

    
      	(o)	
              "Delivery
                Point" has the meaning ascribed to it in Article
                9.1.

            

    

    

    
      	(p)	
              "Early
                Volumes" has the meaning ascribed to it in Article
                3.2.

            

    

    

    
      	(q)	
              "Effective
                Date" means the date upon which this Agreement came into force, which
                is
                the date specified as such in the preamble of this
                Agreement.

            

    

    

    
      	(r)	
              "Excess
                Volumes" means volume in excess of Buyer's nominated volume, as described
                in Article 3.3.

            

    

    

    
      	(s)	
              "Expert"
                shall have the meaning ascribed to it in Exhibit B, attached hereto
                and
                made a part hereof.

            

    

    

    
      	(t)	
              "Extension
                Period" has the meaning ascribed to it in Article
                2.2(f).

            

    

    

    
      	(u)	
              "ExxonMobil
                CO2 Pipeline" means the pipeline constructed for the transportation
                of
                Carbon Dioxide and extending from Shute Creek plant to various points
                of
                delivery including the Delivery
                Point.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	(v)	
              "Greenhouse
                Gas Reduction Rights" or "GHGRR" has the meaning ascribed to it in
                Article
                11.22.

            

    

     

    
      
        
          	(w)	
                  "Interconnect
                    Agreement" means that agreement between Buyer and Seller establishing
                    the
                    details, terms and conditions associated with the design, installation
                    and
                    construction of an alternate delivery
                    point.

                

        

      

    

    

    
      	(x)	
              "Interest
                Rate" means thirty (30) day London Interbank Offered Rate, or LIBOR,
                as
                published in the Wall
                Street Journal
                "Money Rates" table on the first date of publication for the calendar
                month in which the payment is due.

            

    

    

    
      	(y)	
              "Key
                Terms" shall mean Daily Contract Quantity, Take-or-Pay Quantity,
                Quality
                Specifications, Greenhouse Gas Reduction Rights and Performance
                Assurance.

            

    

    

    
      	(z)	
              "Make-Up
                Volumes" has the meaning ascribed to it in Article
                2.2(c).

            

    

    

    
      	(aa)	
              "MCF"
                means one thousand Standard Cubic
                Feet.

            

    

    

    
      	(ab)	
              "MMCF"
                means one million Standard Cubic
                Feet.

            

    

    

    
      	(ac)	
              "Month"
                means a period beginning at 7:00 A.M. Mountain Standard Time on the
                first
                day of a calendar month and ending at 7:00 A.M. Mountain Standard
                Time on
                the first day of the next succeeding calendar
                month.

            

    

    

    
      	(ad)	
              "Oil
                Price Factor" has the meaning ascribed to it in Article 4, expressed
                in
                dollars per barrel.

            

    

     

    
      	(ae)	
              "Parties" means
                the entities described in the preamble to this Agreement, collectively,
                and "Party" means any of them, individually (and in each case their
                successors and permitted assigns).

            

    

    

    
      
        
          	(af)	
                  "Performance
                    Assurance" means any
                    assurance of performance of Buyer's obligations under this Agreement
                    by a
                    Performance Assurance Provider in favor of the Seller. Each Performance
                    Assurance shall be acceptable to Seller, provided in a form (including
                    but
                    not limited to cash or a letter of credit) as determined by Seller
                    from
                    time to time, and each in an amount as prescribed herein this
                    Agreement.

                

        

      

    

    

    
      
        
          	(ag)	
                  "Performance
                    Assurance Provider" means a person or entity providing Performance
                    Assurance in respect of a Party's obligations under this Agreement
                    in
                    favor of the requiring
                    Party.

                

        

      

    

     

    
      	(ah)	
              "Primary
                Term" has
                the meaning ascribed to it in
                Article 6.1.

            

    

    

    
      	(ai)	
              "Project"
                has the meaning ascribed to it in the first "Whereas" clause,
                above.

            

    

    

    
      	(aj)	
              "Psia"
                means pounds per square inch
                absolute.

            

    

    

    
      	(ak)	
              "Psig"
                means pounds per square inch gauge.

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	(al)	
              "Quality
                Specifications" means the following specifications for the Carbon
                Dioxide
                delivered hereunder:

            

    

    

    
      	
            	(i)	
              Water:
                Product shall contain no free water and shall not contain more than
                thirty
                (30) pounds of water per 1 MMCF in the vapor phase at 14.73 Psia
                and 60
                degrees Fahrenheit (60o F).

            

    

    

    
      	
            	(ii)	
              Total
                Sulfur:
                Containing not more than thirty-five (35) grains of sulfur per one
                hundred
                (100) Standard Cubic Feet of Carbon
                Dioxide.

            

    

    

    
      	
            	(iii)	
              Purity:
                Comprised of at least ninety-five percent (95%) by volume of Carbon
                Dioxide.

            

    

    

    
      	
            	(iv)	
              Nitrogen:
                Containing not more than four percent (4%) by volume of nitrogen.
                

            

    

    

    
      	
            	(v)	
              Temperature:
                Product shall not exceed a temperature of one hundred twenty (120)
                degrees
                Fahrenheit (120o F). 

            

    

    

    
      	
            	(vi)	
              Hydrogen
                Sulfide:
                Product shall not contain more than forty (40) parts per million,
                by
                weight, of hydrogen sulfide.

            

    

    

    
      	(am)	
              "Seller's
                Facilities" means the LaBarge field and associated production facilities,
                the Shute Creek plant, Carbon Dioxide compression facilities, the
                ExxonMobil CO2 Pipeline, associated meter stations, and any new facilities
                and appurtenances upstream of an alternate delivery
                point.

            

    

    

    
      	(an)	
              "Standard
                Cubic Foot" means the amount of Carbon Dioxide which would occupy
                one
                cubic foot of space at a base pressure of 14.73 Psia and at a base
                temperature of sixty degrees Fahrenheit (60o
F).

            

    

    

    
      	(ao)	
              “Start-Up
                Date” means the first Day of the Month following Seller's notice to Buyer
                that Seller has completed the expansion of Seller's Facilities and
                constructed the CO2 Expansion Project and is prepared to delivery
                Daily
                Contract Quantities. Seller agrees to keep Buyer informed of the
                potential
                Start-Up Date, and in no event shall Seller’s start-up notice be less than
                fifteen (15) Days prior to the end of a Month. Seller anticipates,
                but
                neither warrants nor represents, that the Start-up Date will be between
                (**).

            

    

    

    
      	(ap)	
              “Subsequent
                Term" has the meaning ascribed to it in Article
                6.1.

            

    

    

    
      	(aq)	
              “Take-or-Pay
                Quantity" has the meaning ascribed to it in Article
                2.2(b).

            

    

    

    
      	(ar)	
              "Term"
                means the term of this Agreement, as described in Article
                6.1.

            

    

    

    
      	
              (as)

            	
              "West
                Texas Intermediate" or "WTI" shall mean the Mean WTI-Cushing price
                in US
                dollars per barrel for the month in which Carbon Dioxide was delivered
                as
                published by Platts. 

            

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      2 - COMMITMENTS BY SELLER AND BUYER

    

    
      	2.1	
              Commitments
                by Seller 

            

    

    

    
      	
            	(a)	
              Subject
                to the terms and conditions of this Agreement Seller agrees that
                each Day
                during the Term after the Start-Up Date it shall sell to Buyer and
                deliver
                to the Delivery Point the volume of Carbon Dioxide nominated by Buyer
                in
                accordance with Article 3.1, up to the DCQ, subject to the provisions
                of
                Article 2.4. 

            

    

    

    
      	
            	(b)	
              Seller
                may sell to the Buyer and deliver to the Delivery Point Early Volumes
                and
                Excess Volumes as provided in Article 3.

            

    

    

    
      	2.2	
              Commitments
                by Buyer 

            

    

     

    
      	 	
              (a)

            	
              Each
                Day during the Term, Buyer shall purchase from Seller and receive
                at the
                Delivery Point the volume nominated by Buyer in accordance with Article
                3.1 and any Early Volumes and Excess Volumes requested by Buyer and
                agreed
                to by Seller in accordance with Article
                3.

            

    

    

    
      	 	
              (b)

            	
              During
                each Contract Year of the Term after the Start-Up Date, if Buyer
                does not
                purchase at least (**) percent ((**)%) of the ACQ for such Contract
                Year
                ((**)% of the ACQ being the "Take-or-Pay Quantity"), then Buyer shall
                pay
                Seller for the volume difference between the Take-or-Pay Quantity
                and the
                volume actually purchased (such difference is hereinafter referred
                to as
                "Deficiency Volumes") at the Deficiency
                Price.

            

    

    

    The
      Take-or-Pay Quantity for each Contract Year shall be reduced to the extent
      that:

     

    
      	
            	(i)	
              Buyer
                does not receive volumes nominated by Buyer because of Seller's failure
                to
                deliver, up to the DCQ (including pro-rata deliveries made pursuant
                to
                Article 2.4) other than suspension due to Buyer's default as provided
                in
                Articles 5.3 and 5.4; or

            

    

     

    
      	
            	(ii)	
              Seller
                delivers Carbon Dioxide that does not meet Quality Specifications
                and that
                is refused by Buyer as provided in Article 11.3;
                or

            

    

     

    
      	
            	(iii)	
              Buyer
                has planned maintenance, as described in Article 11.19
                or;

            

    

     

    
      	
            	(iv)	
              Either
                Party's performance is suspended due to an event of Force Majeure;
                

            

    

    

    provided,
      however, that should any event qualify for simultaneous consideration under
      more
      than one of the conditions outlined above ((i), (ii), (iii) or (iv)), volumes
      associated with the event will only be counted once in the Deficiency Volume
      reduction. 

    

    
      	
               

            	
              (c)

            	
              Buyer
                shall have the right, without making further payment, to take delivery
                of
                Carbon Dioxide and to make-up Deficiency Volumes for which it has made
                payment under Article 2.2(b) (such deliveries and make-up are hereinafter
                referred to as Make-Up Volumes), provided
                that:

            

    

     

    
      	
            	(i)	
              Buyer
                has purchased and received one hundred percent (100%) of the ACQ
                for the
                Contract Year in which such Make-Up Volumes are scheduled to be delivered;
                and

            

    

     

    
      	 	 	
              (ii)

            	
              all
                such Make-Up Volumes are delivered during the Term;
                and

            

    

     

    
      	 	 	
              (iii)

            	
              Seller,
                in its sole judgment, has sufficient volumes to provide Make-Up Volumes
                to
                Buyer on the Day(s) on which Buyer requests delivery.
                

            

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	
            	(d)	
              Buyer’s
                requested Make-Up Volumes shall be given scheduling priority over
                Seller's
                other buyers' requests for volumes in excess of their contracted
                volumes
                unless such other buyers’ requests for excess volumes are also for their
                make-up volumes (howsoever named in Seller's agreements with other
                buyers), in which case Seller shall schedule Make-Up Volumes and
                other
                buyers' make up volumes pro-rata among Buyer and all other such buyers
                based on the DCQ and the other buyers' contracted volumes. However,
                Seller
                shall have no obligation to reserve delivery capacity for Buyer's
                Make-Up
                Volumes by foregoing the opportunity to enter into new sales agreements
                or
                renew existing sales agreements with other buyers committing to
                take-or-pay obligations.

            

    

    

    
      	 	
              (e)

            	
              Promptly
                after written request from Buyer to Seller for delivery of Make-Up
                Volumes, Buyer and Seller shall cooperate and use commercially reasonable
                efforts to schedule delivery of Make-Up Volumes. Seller shall never
                be
                obligated to provide any volume that exceeds the DCQ for a Day. It
                is
                recognized that Deficiency Volumes result from Buyer's Take-or-Pay
                obligation under this Agreement, and that upon termination or cancellation
                of this Agreement for any reason, Seller shall have no obligation
                to
                provide any Make-Up Volumes to Buyer.

            

    

    

    
      	 	
              (f)

            	
              Buyer
                may extend the Term for the purpose of taking Make-Up Volumes (“Extension
                Period”) by providing notice to the Seller at least six (6) months in
                advance of the expiration of the Primary Term, or if the Term has
                been
                extended, then at least six (6) months in advance of the expiration
                of the
                Subsequent Term. The term of the Extension Period shall be the lesser
                of
                (i) the time necessary for Buyer to take all Make-Up Volumes or (ii)
                twelve (12) Months. Any provisions hereof to the contrary notwithstanding,
                during the Extension Period one hundred percent (100%) of all volumes
                received by Buyer shall be considered Make-Up Volumes. At expiration
                of
                the Extension Period, Seller shall retain all amounts paid by Buyer
                pursuant to Article 2.2(b).

            

    

     

    
      	2.3	
              DCQ
                and Take-or-Pay Reduction 

            

    

    

    
      	
            	(a)	
              Buyer
                shall have the right with notice as outlined below, to offer to release
                back to Seller portions of the DCQ, and to reduce Take-or-Pay obligations
                accordingly, if Buyer estimates, in good faith, its future requirements
                for Carbon Dioxide will be less than the DCQ. In its notice to release
                a
                portion of the DCQ, Buyer shall provide verification, satisfactory
                to
                Seller, that the release is a result of Buyer's reduced Carbon Dioxide
                requirements and not because Buyer may purchase Carbon Dioxide from
                a
                third party seller at more favorable terms, including more favorable
                pricing terms. Seller shall have the right but not the obligation,
                in its
                sole discretion, to accept the offer of permanent release.
                

            

    

    

    
      	
            	(b)	
              If
                Buyer elects to offer permanent release of DCQ, Buyer shall provide
                Seller
                with at least twenty-four (24) Month's notice of its request. Buyer's
                request shall specify the amount of proposed DCQ reduction and the
                proposed effective date of the reduction. Any proposed DCQ reductions
                shall only be effective on an anniversary of the Start-Up Date.
                

            

    

    

    
      	
            	(c)	
              Seller
                shall respond to Buyer's offer of release with notice within ninety
                (90)
                Days of Buyer's offer to release. If Seller agrees to accept Buyer's
                offer
                of release of portions of DCQ, the Parties shall amend this Agreement
                to
                reflect the reduction, in quantity and term, of the
                DCQ.

            

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	2.4	
              Other
                Contracts 

            

    

    

    Subject
      to Article 11.6 (Force Majeure), if Seller is unable to satisfy its daily
      delivery obligations under all of Seller's LaBarge field / Shute Creek plant
      Carbon Dioxide sales agreements, including this Agreement, Seller shall use
      commercially reasonable efforts to deliver Carbon Dioxide hereunder on such
      Day(s), on a pro-rata basis based on the DCQ and the other buyers' contracted
      volumes. Any volumes delivered pro-rata by Seller pursuant to this Article
      2.4
      shall be deemed to satisfy Seller's obligation to sell Carbon Dioxide to Buyer
      on such Day(s), and Seller shall have no liability to Buyer for any undelivered
      volumes. Buyer's Take-or-Pay Quantity shall be reduced proportionally, via
      the
      DCQ for such Day being deemed to be the actual quantity delivered by Seller.
      Seller agrees to provide notice to Buyer within a reasonable time after Seller
      has determined that it will make pro-rata deliveries as described in this
      Article 2.4, specifying to the extent practicable the prorata volume to be
      delivered to Buyer on the affected Day(s). 

    

    ARTICLE
      3 - NOMINATIONS, EARLY VOLUMES AND EXCESS VOLUMES

    

    
      	3.1	
              Nominations 

            

    

    

    No
      later
      than five (5) days prior to the beginning of each Month, Buyer shall provide
      Seller with notice of Buyer's nominations for each Day of such Month. Such
      nomination shall specify daily deliveries at uniform rates not in excess of
      the
      applicable DCQ, unless otherwise agreed in advance by Seller pursuant to Article
      3.3. 

    

    If
      Buyer
      fails to provide such nomination within the prescribed period, Buyer's
      nomination shall be deemed to be the quantities which were nominated during
      the
      immediately preceding Month. Buyer shall use its best efforts to submit
      nominations which accurately reflect Buyer's anticipated daily requirements.
      

    

    Buyer
      may
      increase or decrease its nomination at any time during the Month with two (2)
      days advance notice subject to Article 3.3.

    

    
      	3.2	
              Early
                Volumes

            

    

    

    
      	
            	(a)	
              If
                after June 30, 2008 but prior to the Start-Up Date, Buyer has the
                ability
                and the desire to take Carbon Dioxide from Seller, Buyer shall provide
                Seller with notice specifying its proposed purchase quantity ("Early
                Volumes") and the proposed delivery commencement date. Seller shall
                have
                the right, but not the obligation, in its
                sole discretion, to elect to supply all or any portion of the proposed
                Early Volumes and shall notify Buyer of its election, specifying
                with
                notice the quantity of Early Volumes it agrees to supply, within
                thirty
                (30) days after receipt of Buyer's notice. If Seller has elected
                to supply
                only a portion of the Early Volumes requested by Buyer, then Buyer
                may
                accept or reject Seller's lesser proposed Early Volumes within three
                (3)
                days of receipt of Seller's proposal.

            

    

    

    
      	
            	(b)	
              Buyer
                shall have no take-or-pay obligation with respect to Early Volumes,
                and no
                Early Volumes purchased and sold shall affect, impact, offset, accrue
                or
                count towards ACQ, Take-or-Pay Quantity, Deficiency Volumes or Make-up
                Volumes.

            

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
            	(c)	
              Either
                Party may interrupt the purchase or sale of Early Volumes at any
                time,
                provided that the interrupting Party shall make commercially reasonable
                efforts to provide at least two (2) days prior notice to the other
                Party
                of the interruption. 

            

    

    

    
      	3.3	
              Excess
                Volumes 

            

    

    

    
      	
            	(a)	
              If
                on any Day Buyer determines that it requires more Carbon Dioxide
                for the
                Project than the DCQ that Buyer has nominated for any Day, Buyer
                shall
                make a written request to Seller for delivery of such volume ("Excess
                Volumes"), up to 30 MMCF per Day. Seller shall have the right, but
                not the
                obligation to supply all or any portion of such Excess Volumes requested
                by Buyer subject to (i) that within two (2) Business Days after such
                request is made, Seller confirms in writing the amount (if any) of
                Excess
                Volumes it agrees to deliver and (ii) Seller can make such deliveries
                within Buyer’s requested delivery schedule.

            

    

    

    
      	
            	(b)	
              Excess
                Volumes supplied pursuant to this Article 3.3 shall be counted first
                toward current Contract Year ACQ and then toward Make-Up Volumes
                attributable to previous Contract Years' Deficiency Volumes if one
                hundred
                percent (100%) of the current Contract Year ACQ has been delivered.
                If the
                current Contract Year ACQ has already been achieved and all previous
                Contract Years’ Deficiency Volumes have been made up, Buyer may still
                request other Excess Volumes. Other Excess Volumes shall not affect,
                impact, offset, accrue or count towards ACQ, prospective Take-or-Pay
                Quantity, Deficiency Volumes or Make-up Volumes.
                

            

    

    

    
      	
            	(c)	
              Either
                Party may interrupt the purchase or sale of Excess Volumes at any
                time,
                provided that the interrupting Party shall make commercially reasonable
                efforts to provide at least two (2) days prior notice to the other
                Party
                of the interruption. 

            

    

    

    ARTICLE
      4 - PRICE

    

    
      	4.1	
              Contract
                Price 

            

    

    

    The
      Contract Price to be paid by Buyer for all volumes purchased shall be calculated
      as follows: (**)

    

    
      
        	4.2	
                Oil
                  Price Factor

              

      

    

    

    The
      "Oil
      Price Factor" shall be WTI. Should Platts
      cease to
      publish a Mean WTI-Cushing price, the Parties shall mutually agree upon an
      alternative Oil Price Factor within thirty (30) days of the last day of the
      Month that there exists a Platts
      Mean
      WTI-Cushing published price. In selecting an alternative Oil Price Factor,
      the
      Parties shall strive to select the published price that is most comparable
      to
      the Mean WTI-Cushing published price. 

    If
      the
      Parties fail to agree on an alternative Oil Price Factor within the thirty
      (30)
      day period, then a provisional Oil Price Factor shall be used to determine
      a
      provisional Contract Price until such time as the Parties settle on an
      alternative Oil Price Factor. The provisional Oil Price Factor shall be the
      last
      published Mean WTI-Cushing price. Within thirty (30) days of agreement between
      the Parties or issuance of an Expert decision regarding the alternative Oil
      Price Factor, the Contract Price shall be recalculated using the alternative
      Oil
      Price Factor for the relevant Months, and the Seller shall issue an invoice
      or
      credit notice to the Buyer reflecting any sum which becomes owing as a result
      of
      an adjusted Contract Price becoming effective. Such sum shall be paid by the
      Buyer or the Seller (as the case may be) ten (10) days after receipt of said
      invoice or credit notice by the Buyer. Interest will be payable on such amount
      calculated at an annualized rate equivalent to Interest Rate plus one per cent
      (1%) (compounded monthly) from the effective date of the adjusted Contract
      Price
      until payment is made.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    
      	4.3	
              Redetermination
                of Contract Price

            

    

     

    
      	
            	(a)	
              Scheduled
                Contract Price Redetermination.

            

    

    

    Either
      Party may request that the Contract Price for Months beginning on or after
      May
      1, 2012 be redetermined by giving notice to the other Party between November
      1,
      2011 and February 1, 2012. 

    

    Either
      Party may also request that the Contract Price for Months beginning on or after
      September 1, 2015 be redetermined by giving notice to the other Party between
      March 1, 2015 and June 1, 2015.

    

    If
      the
      Parties agree to extend the Agreement for a Subsequent Term pursuant to Article
      6.1, (i) either Party may request that the Contract Price for Months beginning
      on or after May 1, 2022 be redetermined by giving notice to the other Party
      between November 1, 2021 and February 1, 2022; and (ii) either Party may also
      request that the Contract Price for Months beginning on or after September
      1,
      2025 be redetermined by giving notice to the other Party between March 1, 2025
      and June 1, 2025.

    

    
      	
            	(b)	
              Unscheduled
                Contract Price Redetermination: 

            

    

    

    In
      addition to the scheduled Contract Price redeterminations pursuant to Article
      4.3(a):

    

    
      	
            	(i)	
              At
                any time during the Primary Term, Seller and Buyer may each, on one
                separate occasion, request that the Contract Price be redetermined
                by
                giving notice to the other Party. The effective date of a new Contract
                Price determined pursuant to this Article 4.3(b) shall be the first
                day of
                the Month following one hundred twenty (120) Days after the date
                of the
                notice.

            

    

    

    
      	
            	(ii)	
              If
                the Parties agree to extend the Agreement for a Subsequent Term pursuant
                to Article 6.1, then at any time during the Subsequent Term, Seller
                and
                Buyer may each, on one separate occasion, request that the Contract
                Price
                be redetermined by giving notice to the other Party. The effective
                date of
                a new Contract Price determined pursuant to this Article 4.3(b) shall
                be
                the first day of the Month following one hundred twenty (120) Days
                after
                the date of the notice.

            

    

     

    
      	
            	(c)	
              Price
                Redetermination Basis

            

    

     

    The
      purpose of any Contract Price redetermination shall be to determine the then
      current market price for Carbon Dioxide sold and delivered under contracts
      containing similar terms and conditions to those under this
      Agreement.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
            	(d)	
              Price
                Redetermination Notice

            

    

    

    A
      Contract Price redetermination notice served pursuant to Articles 4.3(a) or
      4.3(b) shall include the Contract Price proposed by the Party serving notice
      together with substantiated reasons for the redetermination. Upon receipt of
      the
      Contract Price redetermination notice, the Parties shall negotiate in good
      faith
      to agree upon a new Contract Price.

     

    
      	
            	(e)	
              Confidentiality
                of Proceedings

            

    

    

    No
      Party
      shall be required to divulge confidential information nor to provide information
      in support of the other Party's claim unless required to do so by the laws
      applicable to the arbitration procedures provided for in this Agreement.

     

    
      	
            	(f)	
              Arbitration

            

    

    

    If
      agreement on a new Contract Price is not reached within ninety (90) Days of
      the
      date of the requesting Party's notice requesting redetermination, then the
      requesting Party may submit the resolution of this matter to arbitration at
      any
      time within thirty (30) Days after the end of the ninety (90) Day negotiating
      period by giving the other Party notice. 

    

    
      	
            	(g)	
              Payment
                and Effect

            

    

    

    For
      as
      long as no agreement has been reached between the Parties in respect of a
      Contract Price redetermination and no arbitration decision has been issued
      or
      taken effect, the rights and obligations of the Parties and the prevailing
      Contract Price under the Agreement shall continue in full force and
      effect.

    

    Following
      agreement between the Parties or issuance of an arbitral decision, any
      redetermined Contract Price shall be effective from the date specified in the
      redetermination notice. Within thirty (30) days of agreement between the Parties
      or an arbitral decision, the Seller shall issue an invoice or credit notice
      to
      the Buyer reflecting any sum which becomes owing as a result of an adjusted
      Contract Price becoming effective. Such sum shall be paid by the Buyer or the
      Seller (as the case may be) ten (10) days after receipt of said invoice or
      credit notice by the Buyer. Interest will be payable on such amount calculated
      at an annualized rate equivalent to Interest Rate plus one per cent (1%)
      (compounded monthly) from the effective date of the adjusted Contract Price
      until payment is made.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    ARTICLE
      5 - BILLING AND PAYMENT

    

    
      	5.1	
              Monthly
                Statements 

            

    

    

    No
      later
      than the tenth (10th) Business Day of the Month following the Month of delivery,
      Seller shall furnish Buyer a monthly statement specifying the following
      information with respect to the Month of delivery and Contract
      Year:

     

    (a) Contract
      Price to be paid by Buyer for Carbon Dioxide purchased in the Month of
      delivery

     

    (b) Quantity
      of Carbon Dioxide delivered and purchased in the Month of delivery, including
      applicable Excess Volumes. (Such quantities shall not include any Excess Volumes
      counted toward Make-Up Volumes attributable to previous Contract Years'
      Deficiency Volumes.) 

     

    (c) Total
      Month of delivery Excess Volumes delivered and purchased (if any)

     

    (d) Month
      of
      delivery Excess Volumes counted toward ACQ (if any)

     

    (e) Month
      of
      delivery Excess Volumes counted toward Make-Up Volumes attributable to previous
      Contract Years' Deficiency Volumes (if any)

     

    (f) Other
      Month of delivery Excess Volumes (if any)

     

    (g) Payment
      due by Buyer as a result of Carbon Dioxide purchased in the Month of
      delivery

     

    (h) Deficiency
      Volumes balance at start of Month of delivery

     

    (i) Deficiency
      Price for Contract Year

     

    (j) ACQ

     

    (k) Contract
      Year Take-or-Pay Quantity (reflecting reductions consistent with Article
      2.2(b))

     

    (l) Payment
      due by Buyer attributable to Contract Year Take-or-Pay Quantity 

     

    (m) Deficiency
      Volumes balance at end of Month of delivery

     

    (n) Cumulative
      volumes of Carbon Dioxide sold under this Agreement

    

    Seller
      will only report Items, (i), (j), (k) and (l) above on monthly statements for
      the last Month of any Contract Year.

    

    In
      the
      event that actual delivery data is not available by the tenth (10th) Day of
      the
      Month following the Month of delivery, then the Seller may render to the Buyer
      a
      provisional monthly statement in which the quantity of Carbon Dioxide shall
      be
      estimated by the Seller using the best data available to the Seller. The Seller
      shall, as soon as practicable after the actual delivery
      data becomes known, render to the Buyer a statement of adjustment showing the
      appropriate adjustments to the monthly statement.

    

    If
      any
      billing was based on a provisional quantity, the Seller shall, as soon as
      reasonably practicable after the actual data is available, render to the Buyer
      a
      statement of adjustment showing the appropriate adjustments to the provisional
      monthly statement in the same manner as described herein. The amount resulting
      from the adjustment, including interest, shall be paid by the relevant Party
      ten
      (10) days after receipt of the statement of adjustment. Interest shall be at
      an
      annualized rate equivalent to Interest Rate plus one per cent (1%) (compounded
      monthly) for the period starting from and including the due date of the relevant
      provisional monthly statement and ending on the date of the payment of said
      adjustment.

    

    
      	5.2	
              Auditing

            

    

    

    Each
      Party, at its own expense, shall have the right during reasonable business
      hours
      to examine the books, records, and measurement documents of the other Party
      to
      the extent necessary to verify the accuracy of any statement, payment,
      calculation, or determination made pursuant to the provisions of this Agreement
      for any calendar year within two (2) calendar years following the end of such
      calendar year. If any such examination shall reveal, or if either Party shall
      discover any error or inaccuracy on its own or the other Party's statement,
      payment, calculation, or determination, then proper adjustment and correction
      thereof shall be made as promptly as practicable thereafter. Each Party further
      agrees to retain the books, records and measurement documents for the
      above-stated period of time. 

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    
      	5.3	
              Payments 

            

    

    

    On
      or
      before (i) the twentieth (20th) day of a Month (or the next Business Day in
      case
      of weekends or holidays) in which the monthly statement is issued or (ii) ten
      (10) days after Buyer's receipt of such monthly statement, whichever is later,
      the Buyer shall pay to Seller the amounts due under such monthly statement.
      Payment shall be made by wire transfer to the bank account as designated below,
      without any discount associated with the transfer of moneys and at the expense
      of the Buyer, except that any expenses charged by the Seller's bank with respect
      to such payments shall be borne by the Seller. 

    

    Wire
      Transfer Account:

    Exxon
      Mobil Corporation

    Citibank,
      N.A.

    New
      York,
      NY ABA #021000089

    Gas
      Marketing Remittance Account #30439217

    

    Seller's
      designation of a bank account shall remain in effect during the Term unless
      changed by notice to Buyer signed by a duly authorized representative of
      Seller.

    

    If
      the
      Buyer fails to make payment of any sum due hereunder which is not the subject
      of
      a bona fide dispute, interest thereon shall accrue at an annualized rate
      equivalent to the Interest Rate plus four per cent (4%) (compounded monthly)
      from the date when such payment was due until payment is made in full.

    

    When
      any
      amount included within a monthly statement is the subject of a bona fide
      dispute, the Buyer shall immediately notify the Seller in writing of the amount
      in dispute and the reasons therefor. The undisputed portion shall promptly
      be
      paid and after settlement of the dispute any amount agreed, adjudged or
      determined to be due shall be included in the next monthly statement to be
      rendered hereunder together with interest thereon at an annualized rate
      equivalent to the Interest Rate plus one per cent (1%) (compounded monthly)
      from
      the date when such payment would, in the absence of a dispute, have been payable
      until payment is made. If the dispute is later determined not to be bona fide,
      interest shall instead accrue at an annualized rate equivalent to the Interest
      Rate plus four per cent (4%) (compounded monthly) from the date when such
      payment would, in absence of a dispute, have been payable. 

    

    If
      the
      Buyer fails to pay any sum due hereunder which is not the subject of a bona
      fide
      payment dispute, the Seller may, immediately on giving notice to the Buyer
      of
      its intention to do so, suspend delivery of Carbon Dioxide hereunder until
      payment is duly made; provided, however, that a suspension effected by the
      Seller in accordance with the provisions of this Article 5.3 shall not,
      in
      any circumstances, relieve the Buyer of its accrued obligations under this
      Agreement, or entitle the Buyer to any form of deduction from the Take-or-Pay
      Quantity as described in 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    Article
      2.2.

     

    If
      Buyer
      fails to pay any sum due hereunder which is not the subject of a bona fide
      payment dispute within thirty (30) days after the due date thereof, then the
      Seller shall have the right, at the Seller’s sole election, to cancel this
      Agreement in accordance with this paragraph. The Seller's right to cancel this
      Agreement shall be conditioned upon the Seller having provided the Buyer a
      minimum fourteen (14) days notice, which notice may be sent at any time after
      the due date; provided, however, that regardless of the timing of the notice
      the
      Seller shall not have the right to cancel this Agreement any sooner than
      thirty-one (31) days after the payment due date. Any cancellation shall be
      without prejudice to any other rights and remedies that accrued to each Party
      prior to cancellation, including but not limited to the right of a Party to
      receive payment for all claims which arose or accrued prior to such
      cancellation. 

    

    Seller's
      drawing on Buyer's Performance Assurance shall not effect Seller's termination
      or suspension rights under this Article 5.3.

    

    
      	5.4	
              Financial
                Circumstances

            

    

    

    
      	
            	(a)	
              Seller
                shall have no obligation to commence deliveries of Carbon Dioxide
                under
                this Agreement until Buyer provides Seller with adequate Performance
                Assurances. Before the Start-Up Date such Performance Assurances
                shall not
                be less than that necessary to cover four (4) Months of delivery
                and sales
                of anticipated Early Volumes. After the Start-Up Date such Performance
                Assurances shall not be less than that necessary to cover
                four (4) Months of delivery and sales of the DCQ plus anticipated
                Excess
                Volumes. In the
                event Buyer does not provide adequate initial Performance Assurances
                within thirty (30) days after the Start-Up Date, Seller shall have
                the
                right to cancel this agreement with thirty (30) days
                notice.

            

    

    

    
      	
            	(b)	
              Following
                the end of any Month after the Start-Up Date, if Seller determines
                the
                cumulative quantity of Carbon Dioxide that the Buyer has purchased
                and
                received in the current Contract Year is less than (**) percent ((**)%)
                of
                the product of the DCQ and the number of Days since the start of
                the
                current Contract Year, then within ten (10) Days following receipt
                of
                notice from Seller, Buyer shall provide Seller revised or additional
                Performance Assurances such that all active Performance Assurances
                shall
                not be less than that necessary to cover (i) the amount specified
                in
                Article 5.4(a) plus (ii) the difference between (**) percent ((**)%)
                of
                the product of the DCQ and the number of Days since the start of
                the
                current Contract Year and the amount of Carbon Dioxide that Buyer
                has
                purchased and received in the Contract Year. If Buyer fails to provide
                the
                revised or additional Performance Assurances within the prescribed
                period,
                Seller shall have reasonable grounds for believing that Buyer
                may be unable to meet its obligations under this
                Agreement.

            

    

    

    
      	
            	(c)	
              If
                at any time within the Term, Seller has reasonable grounds for believing
                that: (i) the Buyer or its Performance Assurance Provider may be
                unable to
                meet its obligations under this Agreement or under any Performance
                Assurance; or (ii) the financial circumstances of any or all of the
                Buyer,
                its Performance Assurance Provider, or Buyer's Controlling Party
                have
                deteriorated to a level unacceptable to the Seller; then the Seller
                may
                give notice to the Buyer and request a new or replacement Performance
                Assurance. 

            

    

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    Seller
      may suspend its obligations under this Agreement with immediate effect of said
      notice until such time as the Buyer provides such adequate Performance Assurance
      if reasonably requested by the Seller; provided, however, that a suspension
      effected by the Seller in accordance with the provisions of this Article 5.4
      shall not, in any circumstances, relieve the Buyer of its accrued obligations
      under this Agreement, or entitle the Buyer to any form of deduction from the
      Take-or-Pay Quantity as described in Article 2.2. In the event the Buyer
      is unable
      or
      unwilling to provide adequate Performance Assurance within thirty (30) days
      of
      receipt of said notice, the Seller shall have the right to cancel this Agreement
      with immediate effect upon providing notice of such cancellation to the Buyer.
      Such cancellation shall be without prejudice to any other rights and remedies
      that accrued to each Party prior to cancellation, including but not limited
      to
      the right of a Party to receive payment for all claims which arose or accrued
      prior to such cancellation.

    

    
      	
            	(d)	
              Either
                Party shall have the right to terminate this Agreement immediately,
                by
                giving notice, in the event the other Party, its Controlling Party,
                or, if
                applicable, its Performance Assurance Provider (collectively, the
                “Defaulting Party”):

            

    

     

    
      	
            	(i)	
              files
                a voluntary application in or for liquidation, receivership or
                bankruptcy;

            

    

     

    
      	
            	(ii)	
              has
                an involuntary petition in bankruptcy filed against
                it;

            

    

     

    
      	
            	(iii)	
              is
                finally and validly declared and adjudged to be liquidated, bankrupt
                or
                insolvent;

            

    

     

    
      	
            	(iv)	
              is
                subject to a resolution passed by its members for the purposes of
                placing
                it in voluntary administration;

            

    

     

    
      	
            	(v)	
              is
                subject to an order by any court of competent jurisdiction for its
                winding
                up;

            

    

     

    
      	
            	(vi)	
              is
                the subject of an appointment of a receiver or receiver and manager
                or
                like officer of the whole or any part of its
                assets;

            

    

     

    
      	
            	(vii)	
              has
                a secured party take possession of all or substantially all its assets
                or
                has a distress, execution, attachment, sequestration or other legal
                process levied, enforced or sued on or against all or substantially
                all
                its assets; 

            

    

     

    
      	
            	(viii)	
              is
                the subject of an appointment of an administrator, official manager
                or
                like officer in circumstances where the Defaulting Party is or is
                likely
                to become insolvent; or

            

    

     

    
      	
            	(ix)	
              enters
                into a scheme of arrangement with its creditors or any of them, provided
                that the foregoing shall not include any voluntary proceeding for
                the
                purpose of amalgamation, reconstruction or reorganization not taken
                at the
                request or to meet the requirements of the Defaulting Party’s
                creditors.

            

    

    

    
      	5.5	
              Greenhouse
                Gas Reduction Rights

            

    

    

    At
      such
      time during the Term of this Agreement (**) as contemplated under Article 11.22,
      Buyer shall promptly notify Seller. 

    

    
      	
            	(a)	
              (**)
                Until the actions contemplated under Article 5.5(b) are completed,
                Buyer
                shall continue to provide
                Seller with revised or additional Performance Assurances such that
                all
                active Performance Assurances shall not be less than that necessary
                to
                cover the amounts specified in Article 5.4 (**).
                If
                Buyer fails to provide the revised or additional Performance Assurances
                within the prescribed period, Seller shall have reasonable grounds
                for
                believing that Buyer
                may be unable to meet its obligations under this
                Agreement.

            

    

    

    
      	
            	(b)	
              The
                Parties shall work together to timely revise Articles 5.1, 5.2, 5.3,
                5.4
                and 5.5(a) as necessary to accommodate (**), including statement
                details
                and timing, payment details and timing, special audit considerations
                and
                Performance Assurances quantification and timing.
                

            

    

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      6 - TERM

    

    6.1          
      Term 

    

    This
      Agreement shall become effective as of the Effective Date, but pursuant to
      the
      terms of this Agreement the rights and obligations associated with the delivery,
      sale, receipt and purchase of the DCQ shall commence on the Start-Up Date.
      Subject to termination and cancellation as otherwise provided herein, the
      Agreement shall continue for a primary term of ten (10) years from the Start-Up
      Date (“Primary Term”). Seller agrees to keep Buyer informed of the potential
      Start-Up Date, so as to allow Buyer to be ready to receive its DCQ on the actual
      Start-Up Date.

    

    Either
      Party may exercise an election to extend this Agreement for a second term of
      (10) years ("Subsequent Term") by providing notice to the other Party at least
      thirty-six (36) months but no more than thirty-nine (39) months in advance
      of
      the expiration of the Primary Term. Any extension shall be subject to the
      Parties agreeing to the following within six (6) months of the electing Party's
      notice: (i) a Contract Price to be effective from the first Day of the
      Subsequent Term until any Subsequent Term Contract Price redetermination
      pursuant to Article 4.3; and (ii) amendments to any Key Terms. If the Parties
      fail to agree on a new Contract Price or amended Key Terms within the prescribed
      six (6) months, then this Agreement shall terminate at the end of the Primary
      Term.

    

    The
      Primary Term, the Subsequent Term and the Extension Period are hereinafter
      collectively known as the “Term”. 

    

    
      	6.2	
              Force
                Majeure Termination

            

    

    

    If
      an
      event of Force Majeure affects deliveries by Seller or receipts by Buyer for
      a
      consecutive period of twenty-four (24) months or more, then, at any time after
      such period has elapsed but prior to the time such event has been remedied,
      either Party may terminate this Agreement by giving thirty (30) days notice
      to
      the other Party. 

     

    ARTICLE
      7 - ROYALTY

    

    
      	7.1	
              Payment
                of Royalty

            

    

    

    As
      between Seller and Buyer, Seller shall be responsible for all payments to the
      owners of all working interests, mineral interests, royalties, overriding
      royalties, bonus payments and production payments. Buyer assumes no liability
      to
      Seller’s working or mineral interest, royalty, or other owners under this
      Agreement except as provided for in Article 7.2.

    

    
      
        	7.2	
                Royalty
                  Reimbursement 

              

      

    

    

    If,
      due
      to circumstances not within Seller's control or pursuant to the terms of a
      good
      faith settlement of a royalty dispute, Seller is required to pay excess royalty
      (royalty based on a value higher than the price paid by Buyer for Carbon Dioxide
      delivered by Seller under this Agreement) to any royalty owner including the
      United States of America, the State of Wyoming and any overriding royalty owner,
      with respect to Carbon Dioxide delivered by Seller under this Agreement, Buyer
      shall reimburse Seller one hundred percent (100%) of the amount of such excess
      royalty. Seller must notify Buyer of a potential claim or bring its claim to
      Buyer within three (3) years of the date the Carbon Dioxide delivery in question
      was made. Seller represents that as of the date of this Agreement, Seller has
      not received a notice of (actual, constructive or otherwise) nor is Seller
      aware
      of any royalty assessment requiring the payment of excess royalty and is not
      aware of any royalty underpayment claim against it involving the Carbon Dioxide.
      

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    

    For
      the
      purposes of this Article 7.2, "excess royalty" as it applies to royalty paid
      the
      United States of America shall be the royalty paid in excess of the royalty
      calculated pursuant to any methodology in use by the Minerals Management Service
      as of the date of this Agreement based on the statutes, regulations and leases
      in effect on the date of this Agreement.

     

    ARTICLE
      8 - TAXES

    

    
      	8.1	
              Payment
                of Taxes 

            

    

    

    Subject
      to the reimbursement provisions of Articles 8.2 and 8.3, Seller shall pay or
      cause to be paid all taxes and assessments imposed on Seller with respect to
      the
      Carbon Dioxide delivered by Seller under this Agreement prior to its delivery
      to
      Buyer at the Delivery Point. 

    

    Buyer
      shall pay or cause to be paid all taxes and assessments imposed on Buyer with
      respect to the Carbon Dioxide delivered hereunder at and after its receipt
      by
      Buyer at the Delivery Point, including, but not limited to, sales taxes imposed
      by any applicable state, county, municipality or other governmental authority
      located therein. Neither Party shall be responsible or liable for any taxes
      nor
      other statutory charges levied or assessed against any of the facilities of
      the
      other Party used for the purpose of carrying out the provisions of this
      Agreement. 

    

    
      	8.2	
              Reimbursement
                of Sales Taxes 

            

    

    

    Buyer
      shall reimburse Seller for one hundred percent (100%) of all sales or use taxes
      paid by Seller which may be imposed or assessed currently or hereafter with
      respect to the transaction between Buyer and Seller which is the subject of
      this
      Agreement unless Buyer has previously furnished Seller with and maintained
      with
      Seller a valid exemption certificate for such taxes.

    

    
      	8.3	
              Reimbursement
                of Certain Other Taxes 

            

    

    

    Buyer
      shall, subject to the conditions hereinafter specified, reimburse Seller for
      one
      hundred percent (100%) of any new, increased or additional tax paid by Seller
      which is attributable to the deliveries of Carbon Dioxide made by Seller under
      this Agreement. The term "new, increased or additional tax" shall mean
      production and severance taxes, taxes based on extraction of Carbon Dioxide
      from
      the ground, ad valorem taxes calculated on the basis of production or sales
      of
      Carbon Dioxide, taxes based on gathering or transportation occurring up to
      the
      Delivery Point, and any other tax, assessment, or fee of a similar nature or
      equivalent in effect levied, assessed, or fixed by governmental authority for
      which Seller may be liable in addition to or greater than those in effect on
      the
      date of full execution hereof. For purposes of this Article 8.3, the term "new,
      increased or additional tax" shall not include any income, excess profit,
      capital stock, or excise tax, any sales or use tax which is covered under
      Article 8.2, and any ad valorem or general property tax (to the extent such
      ad
      valorem or general property tax may be assessed on or attributable to the value
      of surface and subsurface production equipment and manufacturing and
      transmission facilities utilized by Seller to deliver Carbon Dioxide hereunder).
      Seller must bring its claim for such tax reimbursement within three (3) years
      of
      the date of delivery of the Carbon Dioxide at issue.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    

    ARTICLE
      9 - DELIVERY POINT, TITLE, RATE AND PRESSURE

    

    
      	9.1	
              Delivery
                Point

            

    

    

    
      	
            	(a)	
              The
                Delivery Point shall be the flange connection between the ExxonMobil
                CO2
                Pipeline at mile post 112 and the Anadarko CO2 pipeline near Bairoil,
                Fremont County unless and until Buyer and Seller otherwise mutually
                agree
                pursuant to Article 9.1(b). Nothing in this Agreement shall require
                either
                Party to enter into an Interconnect Agreement and implement an alternate
                delivery point under terms it determines to be unacceptable.
                

            

    

    

    
      	 	
              (b)

            	
              If
                Buyer seeks to implement an alternate delivery point other than the
                Delivery Point specified in Article 9.1(a), Buyer shall provide Seller
                with a notice to this effect. The Parties may then work together
                to
                develop and execute a mutually acceptable Interconnect Agreement
                specifying the terms necessary to implement the alternate delivery
                point.
                The Parties anticipate that the Interconnect Agreement would include,
                but
                not be limited to, terms specifiying the
                following:

            

    

     

    
      	 	
              (i)

            	
              a
                definitive location of the alternate delivery
                point;

            

    

     

    
      	 	
              (ii)

            	
              an
                engineering, procurement and construction schedule to effect CO2
                deliveries to the alternate delivery
                point;

            

    

    
       

      
        
          	
                	(iii)	
                  Buyer's
                    and Seller's respective roles in, liabilities asscoiated with,
                    and
                    financial responsibility related to the design, installation
                    and
                    construction of new facilities associated with the alternate
                    delivery
                    point; provided however, Buyer and Seller agree in principle
                    under this
                    Agreement that Buyer shall either pay for or shall reimbuse Seller
                    for
                    costs and expense Seller incurs as a result of modifications
                    or additions
                    to Seller's Facilities;

                

        

      

    

     

    
      
        
          	
                	(iv)	
                  Seller's
                    and Buyer's respective ownership of facilities upstream and downstream
                    of
                    the alternate delivery
                    point.

                

        

      

    

     

    
      	9.2	
              Passage
                of Title 

            

    

    

    Title
      to,
      risk of loss of or damage to, liability for injury of damage caused by, and
      ownership of all Carbon Dioxide delivered hereunder shall pass to and vest
      in
      Buyer at the Delivery Point.

    

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    
      	9.3	
              Constant
                Deliveries 

            

    

    

    To
      the
      best of their abilities, Seller shall deliver and Buyer shall accept Carbon
      Dioxide hereunder at a daily rate which is as reasonably constant as is
      practicable. 

    

    
      	9.4	
              Delivery
                Pressure 

            

    

    

    Seller
      shall cause the delivery of Carbon Dioxide hereunder at the pressure prevailing
      from time to time in ExxonMobil’s CO2 Pipeline, but not less than 1750
      Psig.

    

    ARTICLE
      10 - MEASUREMENT AND COMPUTATION OF VOLUMES

    

    
      	10.1	
              Measurement
                Point 

            

    

    

    The
      Carbon Dioxide delivered hereunder shall be measured and/or allocated at the
      Delivery Point.

    

    
      	10.2	
              Procedure 

            

    

    

    Measurement
      of Carbon Dioxide shall be determined on the basis of pound-mass quantities,
      which shall be converted to Standard Cubic Feet quantities. The molecular weight
      of the metered stream of Carbon Dioxide, calculated from compositional analyses,
      shall be the basis for conversion of pound-mass measurement units to Standard
      Cubic Feet. The compressibility factor of the Carbon Dioxide shall be determined
      in accordance with the NIST
      Standard Reference Database 14
      with any
      subsequent amendments, revisions and additions which are mutually acceptable
      to
      Seller and Buyer. Seller shall, if requested, furnish a detailed explanation
      of
      the Carbon Dioxide volume calculation used by Seller per this Article
      10.2.

    

    
      	10.3	
              Meter
                Stations 

            

    

    

    At
      or
      near the Delivery Point, Seller or its representative shall ensure that a meter
      station for purposes of determining the volume of Carbon Dioxide purchased
      and
      received hereunder is constructed and installed in accurate working order at
      Buyer's cost and expense. Seller or its representative shall operate and
      maintain the meter station in accurate working order at Seller’s risk, cost and
      expense. The station shall be equipped in accordance with the standards
      referenced in Article 10.5 and shall initially consist of orifice meters, an
      on-line recording thermometer, and a flow computer for real-time calculation
      of
      metered flow. 

    

    
      	10.4	
              Atmospheric
                Pressure 

            

    

    

    The
      atmospheric pressure at the Delivery Point shall be deemed to be 14.73 Psia
      at
      sea level corrected to actual elevation.

    

    
      	10.5	
              Meter
                Standards 

            

    

    

    The
      Carbon Dioxide delivered hereunder shall be measured with orifice meters.
      Seller's computations of pound-mass shall be made in accordance with the latest
      revision of American Petroleum Institute Manual of Petroleum Measurement
      Standards, Chapter 14, Parts 1, 2 and 4 with any subsequent amendments,
      revisions, and additions which may be mutually acceptable to Seller and
      Buyer.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    

    
      	10.6	
              Temperature 

            

    

    

    The
      temperature of the Carbon Dioxide shall be determined by an on-line recording
      thermometer so installed that it will sense the temperature of the Carbon
      Dioxide flowing through the meters.

    

    
      	10.7	
              Meter
                Tests 

            

    

    

    Seller
      shall ensure that the measuring equipment is accurate and in repair, and that
      such periodic tests as Seller may deem necessary are made, at least once each
      calendar quarter. Seller agrees to ensure that Buyer is given reasonable notice
      of each such test of the measuring equipment in order that, if Buyer desires,
      Buyer may have its representative present to witness such tests. Such
      representative shall comply with all relevant site access policies and
      agreements. If, upon any test, any measuring equipment is found to be
      inaccurate, such equipment shall be recalibrated, and, to the extent that it
      affects the aggregate measurement accuracy by an amount exceeding two percent
      (2%), registrations thereof shall be corrected for a period extending back
      to
      the time such inaccuracy occurred, if such time is ascertainable, and, if not
      ascertainable, then back one-half of the time elapsed since the last date of
      calibration; provided no retroactive correction shall be made for recorded
      inaccuracies of less than two percent (2%) in the aggregate. Either party may
      request special or additional tests of the measuring equipment at the requesting
      party’s’ sole expense.

    

    
      	10.8	
              Meter
                Out of Service 

            

    

    

    If,
      for
      any reason, any meter is out of service or out of repair so that the amount
      of
      Carbon Dioxide delivered cannot be ascertained or computed from the readings
      thereof or corrected under Article 10.7, the Carbon Dioxide delivered during
      the
      period such meter is out of service or out of repair shall be estimated and
      agreed upon by the parties upon the basis of the best data available, using
      the
      first listed of the following methods which is feasible:

    

    
      	
            	(a)	
              by
                using the registration of any check meter, if installed and accurately
                registering;

            

    

    

    
      	
            	(b)	
              by
                correcting the error if the percentage of error is ascertainable
                by
                calibration, test, or mathematical
                calculation;

            

    

    

    
      	
            	(c)	
              by
                using other meters on the ExxonMobil CO2 Pipeline to calculate such
                an
                estimate by use of material
                balance;

            

    

    

    
      
        
          	
                	(d)	
                  by
                    estimating the quantity delivered on the basis of deliveries
                    during
                    preceding periods under similar conditions when the meter was
                    registering
                    accurately.

                

        

      

    

     

    ARTICLE
      11 - MISCELLANEOUS

    

    
      	11.1	
              Warranty
                of Title

            

    

    

    Notwithstanding
      anything herein to the contrary, at its sole option Seller may from time to
      time
      and at any time deliver to Buyer, in lieu of Carbon Dioxide owned by Seller,
      Carbon Dioxide which is attributable to other working interest owners owning
      Carbon Dioxide which is produced at LaBarge field. As between the Parties,
      any
      such Carbon Dioxide delivered to Buyer shall be deemed Carbon Dioxide purchased
      by Buyer from Seller under this Agreement. Seller warrants title to all Carbon
      Dioxide sold to Buyer hereunder and that it has the right to control and to
      dispose of all Carbon Dioxide delivered to Buyer under this Agreement and shall
      indemnify Buyer against all damages, costs, losses and expenses arising from
      or
      out of adverse claims of ownership in or to such Carbon Dioxide and/or sales
      proceeds, royalties or charges thereon. 

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    

    
      	11.2	
              Disclaimer
                of Certain Warranties 

            

    

    

    EXCEPT
      AS EXPRESSLY PROVIDED IN ARTICLE 11.1, SELLER MAKES NO WARRANTIES OF ANY KIND
      OR
      CHARACTER EITHER EXPRESS OR IMPLIED UNDER THIS AGREEMENT. 

    

    SELLER
      EXPRESSLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
      PURPOSE EITHER EXPRESS OR IMPLIED WITH RESPECT TO THE CARBON DIOXIDE DELIVERED
      HEREUNDER.

    

    SELLER
      AND BUYER UNDERSTAND AND AGREE THAT THE DCQ PROVIDED HEREIN IS ONLY AN ESTIMATE
      OF THE VOLUME OF CARBON DIOXIDE WHICH MAY BE AVAILABLE HEREUNDER, AND NO
      GUARANTEE OR WARRANTY OF ANY SPECIFIC VOLUME OF CARBON DIOXIDE TO BE DELIVERED
      HEREUNDER IS MADE BY SELLER INITAILLY OR AT ANY TIME DURING THE TERM OF THIS
      AGREEMENT. 

    

    
      	11.3	
              Failure
                of Carbon Dioxide to Meet Quality Specifications 

            

    

    

    
      	
            	(a)	
              In
                the event that either Party becomes aware that Carbon Dioxide actually
                delivered or expected to be delivered by Seller to the Delivery Point
                does
                not meet Quality Specifications, such Party shall promptly notify
                the
                other Party. Buyer, upon prompt notice to or from Seller (as the
                case may
                be), shall have the right to refuse to accept delivery of Carbon
                Dioxide
                that does not meet Quality Specifications in whole or part and Seller,
                upon receipt of such notice, shall reduce or cease deliveries of
                Carbon
                Dioxide in accordance with Buyer's instructions. Buyer shall also
                have the
                right to waive objection to such deliveries and to continue to accept
                and
                receive such Carbon Dioxide. Buyer's failure to provide the above
                described notice to Seller within forty-eight (48) hours of delivery
                of
                such off-specification Carbon Dioxide shall be deemed an election
                by Buyer
                to waive its right to refuse in whole or part to accept delivery
                of Carbon
                Dioxide that does not meet Quality Specifications. Notwithstanding
                the
                preceding sentence, Buyer shall also have the right, at any time
                except as
                provided for in Article 11.3 (b) (III), upon notice to the Seller
                to cease
                accepting deliveries by Seller of Carbon Dioxide that does not meet
                Quality Specifications. Seller shall provide Buyer with a copy of
                Seller's
                monthly report of the average daily Carbon Dioxide quality data at
                Buyer's
                request, and Buyer shall have the right to obtain samples of the
                Carbon
                Dioxide for analysis upon request.

            

    

    

    
      	
            	(b)	
              IF
                SELLER HAS REDUCED OR CEASED DELIVERIES HEREUNDER IN RESPONSE TO
                A NOTICE
                FROM BUYER AS PROVIDED IN ARTICLE 11.3 (a),
                SELLER SHALL HAVE THE RIGHT TO ELECT, BY NOTICE TO BUYER GIVEN WITHIN
                SIXTY (60) DAYS AFTER RECEIPT OF BUYER'S NOTICE TO CEASE OR REDUCE
                DELIVERIES, TO CURE THE CAUSE OF SUCH FAILURE, AND, IF SELLER SO
                ELECTS,
                SELLER SHALL PROCEED WITH ALL DUE DILIGENCE, TO TIMELY EFFECT SUCH
                CURE.
                IF SELLER DOES NOT SO ELECT TO CURE SUCH FAILURE WITHIN SUCH PERIOD
                OR
                SELLER ELECTS BUT DOES NOT THEREAFTER CURE SUCH FAILURE TO BUYER’S
                SATISFACTION WITHIN THIRTY (30) DAYS OF SELLER'S DELIVERY TO BUYER
                OF
                NOTICE OF ITS ELECTION TO CURE, THEN BUYER, UPON NOTICE TO SELLER,
                SHALL
                HAVE THE RIGHT TO EITHER (I) ADJUST THE DCQ DOWNWARD, OR (II) CANCEL
                THIS
                AGREEMENT WITHOUT FURTHER LIABILITY EXCEPT FOR PREVIOUSLY ACCRUED
                OBLIGATIONS, OR (III) PERMANENTLY WAIVE THE NONCONFORMITY TO THE
                QUALITY
                SPECIFICATIONS THAT EXIST AT THE TIME OF THE WAIVER.
                

            

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    
      	
            	(c)	
              Buyer's
                elections under Article 11.3 (b) to adjust the DCQ, cancel the Agreement
                or waive the nonconformity to the quality specifications shall be
                Buyer's
                sole and exclusive remedy for failure of the Carbon Dioxide to meet
                such
                Quality Specifications and Buyer waives all other rights or remedies
                at
                law or in equity regarding such failure.

            

    

    

    
      	11.4	
              Limitation
                of Liability and General
                Indemnities

            

    

    

    
      	
            	(a)	
              Except
                as otherwise expressly provided in this Agreement, including but
                not
                limited to Article 11.4(b), each Party shall indemnify, defend and
                hold
                the other Party harmless from all claims, demands and causes of action
                asserted against the other Party by any other persons (including
                employees
                of either Party) for personal injury, loss of or damages to property,
                or
                for alleged violations of law resulting directly
                from:

            

    

    

    
      	
            	(i)	
              the
                gross negligence, willful misconduct or negligent acts or omissions
                of the
                indemnifying Party; and

            

    

    

    
      	
            	(ii)	
              any
                act, omission or accident occurring while title to and risk of the
                Carbon
                Dioxide is vested in the indemnifying Party, except to the extent
                such
                damages, claims, demands, proceedings and causes of action are caused
                by
                the other Party; provided that where personal injury, death or loss
                of or
                damage to property is the result of joint negligence or misconduct
                of the
                Parties, the Parties expressly agree to indemnify each other in the
                proportion to their respective share of such joint negligence or
                misconduct.

            

    

    

    
      	
            	(b)	
              NOTWITHSTANDING
                ANYTHING TO THE CONTRARY IN THIS AGREEMENT, ANY REMEDIES OR DAMAGES
                ARISING FROM A BREACH OF THIS AGREEMENT BY EITHER SELLER OR BUYER
                SHALL BE
                LIMITED TO ACTUAL DIRECT AND FORESEEABLE COSTS, LOSSES, OR DAMAGES
                CAUSED
                BY OR RESULTING FROM THE BREACH AND INCURRED BY THE PARTY CLAIMING
                DAMAGES. NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY FOR ANY LOSS
                OF
                PROFIT OR ANTICIPATED PROFIT, BUSINESS INTERRUPTION, LOSS OF REVENUE,
                LOSS
                OF USE, LOSS OF CONTRACT, LOSS OF GOOD WILL, INCREASED COST OF WORKING
                OR
                LOSS OF BUSINESS OPPORTUNITY, NOR FOR ANY INDIRECT LOSS, CONSEQUENTIAL
                LOSS, OR EXEMPLARY DAMAGES SUFFERED BY A PARTY OR ANY OTHER PERSON,
                ALL OR
                ANY PART OF WHICH ARISE OUT OF OR RELATE TO THIS AGREEMENT OR THE
                PERFORMANCE OR BREACH OF THIS AGREEMENT, OR TO ANY ACT OR OMISSION
                RELATED
                TO THIS AGREEMENT, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING
                BUT NOT
                LIMITED TO GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), STRICT LIABILITY,
                OR
                ANY OTHER THEORY IN CONTRACT, LAW, OR EQUITY. FOR THE PURPOSES OF
                THIS
                AGREEMENT, “DIRECT COSTS, LOSSES, OR DAMAGES” SHALL NOT INCLUDE ANY COST,
                EXPENSE, LOSS, AWARD OR DAMAGE SUFFERED OR INCURRED BY A PARTY IN
                RESPECT
                OF ANY ACTIONS, PROCEEDINGS, CLAIMS, OR DEMANDS MADE AGAINST THAT
                PARTY BY
                ANY OF ITS CUSTOMERS OR ANY OTHER THIRD PARTY.
                

            

    

    

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

    

    
      	
            	
              (c)

            	
              If,
                for reasons other than Force Majeure or Buyer's failure to take,
                Seller
                fails to deliver the volumes nominated by Buyer for a period of thirty
                (30) consecutive Days, Buyer shall have the right to cancel this
                Agreement
                by so notifying Seller in writing. Such election to cancel this Agreement
                shall be Buyer's sole and exclusive remedy for this particular breach
                and
                Buyer waives all other rights and remedies at law or equity with
                respect
                to this particular breach. 

            

    

    

    
      	
            	(d)	
              This
                Article 11.4 shall survive termination or cancellation of this
                Agreement.

            

    

     

    
      	11.5	
              Choice
                of Law 

            

    

    

    This
      Agreement shall be governed by and construed under the laws of the State of
      Texas, excluding any choice of law that would refer a matter to another
      jurisdiction. The
      forum
      of any litigation arising out of this Agreement shall be exclusively in a state
      or federal court in Harris County, Texas and the Parties hereby consent to
      the
      jurisdiction and venue of such courts.

    

    
      	11.6	
              Force
                Majeure

            

    

    

    Force
      Majeure means acts of God, lightning, earthquakes, fires, storms, floods,
      strikes, lockouts, or other industrial disturbances, acts of the public enemy,
      wars, insurrections, riots, blockades, epidemics, sabotage, acts of terrorism,
      embargoes or other import or export restrictions, civil disturbances,
      explosions, breakage, malfunction, freezing or accident resulting in the partial
      or complete shutdown to machinery, equipment, lines of pipe, facilities,
      equipment or wells, reservoir failure, any laws, orders, rules, regulations,
      acts, or restraints of or delays caused by any government body or authority,
      civil or military, and any other cause or causes, whether of the kind herein
      enumerated or otherwise, not reasonably within the control of the Party claiming
      suspension and which by the exercise of due diligence such Party is unable,
      wholly or in part, to prevent or overcome. Such term shall likewise include
      (a)
      in those instances where either Party hereto is required to obtain servitudes,
      right-of-way grants, permits or licenses to enable such Party to perform
      hereunder, the inability of such Party in acquiring, at reasonable cost and
      after the exercise of reasonable diligence, such servitudes, right-of-way
      grants, permits, or licenses, and (b) in those instances where either Party
      hereto is required to furnish materials and supplies for the purpose of
      constructing or maintaining facilities or is required to secure permits or
      permissions from any governmental agency to enable such Party to perform
      hereunder, the inability of such Party to acquire, or the delays on the part
      of
      such Party in acquiring, at reasonable cost and after the exercise of reasonable
      diligence, such materials and supplies, permits and permissions, or (c) in
      the
      event either Party is required to secure permits or permissions from any
      governmental agency or is required by any governmental agency to modify or
      add
      facilities, the, cost of such permits, permissions, modifications, or additions
      render uneconomic the operation of LaBarge field, Shute Creek plant, or the
      Project and results in the cessation of such operation.

    

    In
      the
      event of any Party being rendered unable, wholly or in part, by Force Majeure
      to
      carry out its obligations under this Agreement, such Party shall give notice
      and
      reasonably full particulars of such Force Majeure in writing or by facsimile
      to
      the other Party within a reasonable time after the occurrence of the Force
      Majeure event; provided, however, that this Force Majeure provision shall take
      effect as of the moment the Force Majeure event occurs. 

    

    The
      obligations of the Party claiming Force Majeure, so far as they are affected
      by
      such Force Majeure shall be suspended during the continuance of any inability
      so
      caused, but for no longer period, and such cause shall so far as possible be
      remedied with all reasonable dispatch; provided any obligation of Buyer to
      make
      payments for Carbon Dioxide theretofore delivered hereunder shall not be
      suspended. The Term of this Agreement shall not be extended due to Force
      Majeure, and the DCQ shall be adjusted proportionally to reflect all volumes
      that are not delivered or purchased as a result of Force Majeure. 

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    

    
      	11.7	
              Assignment 

            

    

     

    
      	
            	(a)	
              Written
                Consent:
                Except as provided in Article 11.17 (c), neither this Agreement nor
                any
                rights or obligations hereunder may be assigned to any other person,
                without the prior written consent (which shall not be unreasonably
                withheld or delayed) of the non-assigning
                Party.

            

    

    

    
      	
            	(b)	
              Assignment: Any
                Party wishing to assign this Agreement or any of its rights or obligations
                hereunder must give notice of its intended assignment to the non-assigning
                Party, at least ninety (90) days prior to the proposed effective
                date of
                the assignment, provided that notice of an intended assignment to
                an
                Affiliate may be given forty-five (45) days prior to the proposed
                effective date of the assignment.

            

    

    

    
      	
            	(c)	
              Assignment
                to Affiliate:

            

    

    

    
      	
            	(i)	
              A
                Party having satisfied the notice requirement of Article 11.7 (b)
                may
                without the consent of the non-assigning Party, assign this Agreement
                or
                any of its rights or obligations hereunder to an Affiliate provided
                that
                the assigning Party shall remain jointly and severally liable with
                the
                assignee (and any subsequent Affiliate assignees of such assignee)
                for the
                performance by the assignee (and any subsequent Affiliate assignees
                of
                such assignee) of all such rights, duties, liabilities and obligations
                so
                assigned.

            

    

    

    
      	
            	(ii)	
              The
                Affiliate assignee shall covenant directly with the non-assigning
                Party
                (in a document acceptable to the non-assigning Party) to observe
                and
                perform all of the assigning Party's rights and obligations under
                this
                Agreement which have been assigned to it and to be bound by this
                Agreement
                in every way as if the Affiliate assignee were a Party to this
                Agreement.

            

    

    

    
      	
            	(d)	
              Notice:
                The
                notice referred to in Article 11.7 (b) shall contain all particulars
                relevant to the proposed assignment, including but not limited to
                the
                following information:

            

    

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

       

    

    
      	
            	
              
                (i)

              

            	
               The
                identity and all other relevant information in respect of the proposed
                assignee for the purposes of this
                Agreement;

            

    

    

    
      	
            	(ii)	
              In
                a case where part of the Agreement is proposed to be assigned, a
                clear
                identification, by means of referral to the articles of this Agreement,
                of
                which rights and obligations would be assigned to the proposed assignee
                and which rights and obligations, if any, would remain with the assigning
                Party;

            

    

    

    
      	
            	(iii)	
              A
                description of the relationship, if any, between the assigning Party
                and
                the proposed assignee; and

            

    

    

    
      	
            	(iv)	
              A
                description of the proposed assignee's financial resources and
                organizational relationship to companies which would be its Affiliates
                if
                it were a Party to this Agreement.

            

    

    

    
      	
            	(e)	
              Release
                of Assigning Party: Subject
                to Article 11.7 (g), the assigning Party under an assignment consented
                to
                by the non-assigning Party in accordance with this Article 11.7 shall
                be
                relieved and released of all rights, duties, liabilities and obligations
                so assigned, except with respect to any and all such rights, duties,
                liabilities and obligations that have arisen or accrued prior to
                the
                effective date of the assignment.

            

    

    

    
      	
            	(f)	
              Deemed
                Consent: If
                the Party in receipt of a timely notice pursuant to Article 11.7
                (b) above
                fails to provide a notice giving or refusing consent at least thirty
                (30)
                days prior to the proposed effective date of the assignment, such
                Party
                shall be deemed to have given prior written consent. This Article
                11.7 (f)
                shall not apply to assignments to Affiliates pursuant to Article
                11.7
                (c).

            

    

    

    
      	
            	(g)	
              Effective
                Date of Assignment: Subject
                to the other provisions of this Article 11.7, an assignment shall
                be
                effective as of the date proposed in the notice given pursuant to
                Article
                11.7 (b) provided that no assignment under this Article 11.7 (excepting
                assignments to Affiliates) shall be effective, unless and
                until:

            

    

    

    
      	
            	(i)	
              the
                proposed assignee covenants directly with the non-assigning Party
                (in a
                document acceptable to the non-assigning Party) to observe and perform
                all
                of the assigning Party's rights and obligations under this Agreement
                which
                have been assigned to it and to be bound by this Agreement in every
                way as
                if the assignee were a Party to this Agreement;
                and

            

    

    

    
      	
            	(ii)	
              the
                assigning Party has provided to the non-assigning Party a certified
                copy
                of the assignment document (excluding the consideration paid or payable
                for, and any other commercial terms relating to such assignment which
                can
                have no effect upon the non-assigning Party). 

            

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    

    
      	11.8	
              Notices 

            

    

    

    All
      notices, statements, and other communications required or permitted to be given
      hereunder shall be in writing and shall be deemed to have been given effectively
      when deposited in the United States Mail, postage prepaid, sent by mutually
      acceptable electronic means, delivered by courier service with charges prepaid,
      or transmitted by a facsimile transmission device (telecopier), as the case
      may
      be, and addressed as follows:

    

    Buyer:

    

    Rancher
      Energy Corp.

    999
      -18th
      Street,
      Suite 3400

    Denver,
      Colorado 80202

    Attention:
      Chief Operating Officer 

    Telephone:
      303-629-1125

    Telecopier:
      303-904-5698

    

    Seller:
      

    ExxonMobil
      Gas & Power Marketing Company

    800
      Bell
      Street, CORP-EMB-3597F

    Houston,
      Texas 77002

    Attention:
      Manager - CO2 Business

    Telephone:
      (713) 656-8306

    Telecopier:
      (713) 656-7011 

    

    or,
      to
      such other address as a Party shall hereafter direct by notice to the other
      Party from time to time. If an emergency affects significantly the ability
      of a
      party to perform under this Agreement, such Party shall notify the other Party
      by telephone or in person as soon as possible of the consequences and
      anticipated duration of such emergency and confirm such notification in writing
      as soon thereafter as is practicable.

    

    
      	11.9	
              Waiver 

            

    

    

    
      	
            	(a)	
              No
                waiver by or on behalf of a Party for any breach of a provision of
                this
                Agreement or failure to require performance of any obligation arising
                under this Agreement shall occur unless expressed in writing, duly
                executed and delivered by the waiving Party in accordance with the
                notice
                provisions of this Agreement.

            

    

    

    
      	
            	(b)	
              No
                waiver by either Party shall operate or be construed as a waiver
                in
                respect of any failure or default not expressly identified by such
                written
                waiver, whether of a similar or different character, and whether
                occurring
                before or after that waiver.

            

    

    

    
      	
            	(c)	
              No
                failure to exercise or delay in exercising any right or remedy arising
                from this Agreement shall operate or be construed as a waiver of
                such
                right or remedy.

            

    

    

    
      	11.10	
              Headings 

            

    

    

    The
      topical headings and table of contents used herein are inserted for convenience
      only and shall not be construed as having any substantive significance or
      meaning whatsoever or as indicating that all of the provisions of this Agreement
      relating to any particular topic or to be found in any particular
      section.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

       

    

    
      
        
          	
                  11.11

                	
                  Right
                    of Ingress and Egress 

                

        

      

    

    

    Buyer
      hereby grants unto Seller, to the extent it has a right to do so, full right
      of
      ingress or egress across properties of Buyer (or those of a third party, if
      applicable) for purposes of carrying out its obligations under this
      Agreement.

    

    Seller
      hereby grants unto Buyer right of ingress or egress across properties of Seller
      for purposes of carrying out Buyer's rights under Article 10.7 subject to
      Buyer's compliance with relevant site access policies and agreements of Seller
      and its Affiliates.

    

    
      	11.12	
              Compliance
                with Laws and Regulations 

            

    

    

    This
      Agreement shall be subject to all valid and applicable laws, orders, rules,
      and
      regulations of any duly constituted governmental authority or body having
      jurisdiction hereof; but nothing contained herein shall be construed as a waiver
      by either party of any right to question or contest to final conclusion any
      such
      law, order, rule, or regulation in any forum having jurisdiction in the
      premises.

    

    It
      is
      recognized that it may be necessary for Seller and/or Buyer to make certain
      filings with federal or state regulatory authorities with respect to the sale
      and purchase of Carbon Dioxide hereunder. Each Party hereto agrees to file
      promptly with the applicable regulatory authority and to prosecute diligently
      to
      final conclusion all such required applications, notices, or
      reports.

    

    In
      the
      performance of this Agreement, the Parties hereto shall not engage in any
      conduct or practice which violates any applicable law, order, or regulation
      prohibiting discrimination against any person by reason of race, color,
      religion, national origin, sex, or age.

    

    If
      this
      is an Agreement subject to the rules and regulations approved by the Secretary
      of Labor under Executive Order 11246, as amended to date, the provisions of
      that
      Executive Order and the implementing rules and regulations of the Secretary
      of
      Labor are by reference hereby incorporated in and made a part of this
      Agreement.

    

    If
      this
      is a Agreement subject to the Affirmative Action Regulations with respect to
      Disabled or Vietnam Era Veterans, regulations contained in the United States
      Code of Federal Regulations (41 CFR §60-741.1 et seq. and 41 CFR §60-250.1 et
      seq.) are by reference hereby incorporated in and made a part of this
      Agreement.

    

    
      	11.13	
              Business
                Practices 

            

    

    

    
      	
            	(a)	
              Each
                Party shall establish precautions to prevent its employees, agents
                or
                representatives from making, receiving, providing or offering any
                substantial gifts or entertainment, or any payments, loans or other
                considerations to or from the other Party's employees, agents or
                representatives. This obligation shall apply to the activities, arising
                from the Agreement, of employees of a Party in their relations with
                the
                employees of the other Party, their families and/or third party
                representatives. 

            

    

    

    
      	
            	(b)	
              All
                statements rendered by a Party to the other Party under or pursuant
                to
                this Agreement including, but not limited to, Monthly Statements,
                billings, notices, reports, financial settlements and other undertakings
                between the Parties, shall accurately reflect the facts about all
                activities and transactions between the Parties, and those renderings
                may
                be relied upon as being complete and accurate in any further reportings
                made by the other Party or its representatives for whatever
                purpose.

            

    

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    

    
      	
            	(c)	
              Should
                any Party to this Agreement discover a failure to comply with any
                portion
                of this Article 11.13 by its company, or any employee, agent or
                representative acting on behalf of its company, that Party shall
                promptly
                notify the other Party.

            

    

     

    
      	11.14	
              Dispute
                Resolution:
                

            

    

    

    
      	
            	(a)	
              Except
                for matters related to the replacement of the Oil Price Factor or
                to
                technical matters related to Carbon Dioxide measurement, disputes
                shall be
                resolved first through good-faith negotiations between the Parties
                and
                then through arbitration as outlined in Article 11.14(b). Disputes
                related
                to replacement of the Oil Price Factor or to technical matters related
                to
                Carbon Dioxide measurement shall be resolved first through good-faith
                negotiations between the Parties and then through the Expert procedures
                as
                outlined in Exhibit B. 

            

    

    

    
      	
            	(b)	
              Arbitration:
                If a dispute has not been resolved within forty-five (45) days after
                receipt of the original notice of a dispute or, in the case of Contract
                Price redetermination, within ninety (90) Days of the date of the
                requesting Party's notice requesting redetermination, then either
                Party
                may provide the other Party with notice to initiate arbitration
                proceedings, which proceedings shall be conducted as provided herein
                below. 

            

    

    

    
      	
            	(i)	
              
                Scope/Final
                  and Binding
                  --
                  Any dispute, controversy or claim, of any and every kind or type,
                  whether
                  based on contract, tort, statute, regulations, or otherwise, arising
                  out
                  of, connected with, or relating in any way to this Agreement, the
                  relationship of the Parties, the obligations of the Parties or
                  the
                  operations carried out under this Agreement, including without
                  limitations, any dispute as to the existence, validity, construction,
                  interpretation, negotiations, performance, non-performance, breach,
                  termination, or enforceability of this Agreement, shall be settled
                  through
                  final and binding arbitration, it being the intention of the Parties
                  that
                  this is a broad form arbitration agreement designed to encompass
                  all
                  possible disputes among the parties relating to the Agreement.
                  Initiation
                  of arbitration shall toll the running of all statutes of limitation
                  relating to the matters in
                  dispute.

              

            

    

    

    
      	
            	(ii)	
              
                Institutional
                  Arbitration
                  --
                  The arbitration shall be conducted in accordance with the Commercial
                  Arbitration Rules of the American Arbitration Association ("AAA")
                  as in
                  effect on the date of commencement of the arbitration proceeding,
                  except
                  as modified herein.

              

            

    

    

    
      	
            	(iii)	
              
                Number
                  of Arbitrators
                  --
                  If the amount in dispute involves less than $1 million, exclusive
                  of
                  interest and costs, then the arbitration shall be conducted and
                  finally
                  settled by a sole arbitrator. If the amount in controversy, exclusive
                  of
                  interest and costs, is $1 million or more, if the amount in dispute
                  is
                  unknown, or if relief other than damages is sought, then the arbitration
                  shall be conducted and finally settled by the majority vote of
                  three (3)
                  arbitrators.

              

            

    

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    

    
      	
            	(iv)	
              
                Method
                  of Selecting Arbitrators
                  --
                  If the arbitration is to be conducted by a sole arbitrator, then
                  the
                  arbitrator will be jointly selected by the Parties. If the Parties
                  fail to
                  agree on the arbitrator within thirty (30) days after the initiation
                  of
                  the arbitration, then the AAA shall appoint the arbitrator. If
                  the
                  arbitration is to be conducted by three (3) arbitrators, each Party
                  shall
                  within fifteen (15) days after initiation of the arbitration select
                  one
                  arbitrator, and these two arbitrators shall select a third presiding
                  arbitrator. If the two party-appointed arbitrators fail to agree
                  on the
                  third arbitrator within fifteen (15) days after the appointment
                  of the
                  later of the two, then the third arbitrator shall be appointed
                  by the
                  AAA.

              

            

    

    

    
      	
            	(v)	
              
                Place
                  of Arbitration
                  --
                  Unless otherwise agreed by all Parties to the arbitration, the
                  situs of
                  the arbitration under this Agreement shall be Houston,
                  Texas.

              

            

    

    

    
      	
            	(vi)	
              Qualifications
                and Conduct of the Arbitrators
                --
                The arbitrators selected to act hereunder shall be qualified by education,
                experience, and training to decide upon the particular question in
                dispute, and shall not be an employee or former employee of either
                Party
                or an affiliate of either Party. All arbitrators, no matter how selected,
                shall be and remain at all times wholly independent, unbiased and
                impartial and shall provide the parties with a statement that they
                can and
                shall decide the case impartially.

            

    

    

    
      	
            	(vii)	
              Decision
                --
                The arbitrators so appointed, after giving the Parties due notice
                of
                hearing and responsible opportunity to be heard, shall promptly hear
                and
                determine the question submitted and shall render their decisions
                within
                one hundred twenty (120) days after the appointment of the third
                or sole
                arbitrator. The decision of the arbitrators, or of a majority thereof,
                made in writing, shall be final and binding upon the Parties hereto
                as to
                the questions submitted, and the Parties will abide by and comply
                with
                such decisions.

            

    

    

    
      	
            	(viii)	
              Interim
                Measures
                --
                The arbitrators, or in an emergency the presiding arbitrator acting
                alone
                in the event one or more of the other arbitrators are unable to be
                involved in a timely fashion, may grant interim measures including
                injunctions, attachments and conservation orders in appropriate
                circumstances, which measures the parties agree may be immediately
                enforced by the arbitrators or by a court of competent jurisdiction.
                Notwithstanding the requirement for negotiation, prior to the constitution
                of the arbitration tribunal and thereafter as necessary to enforce
                the
                arbitrators' rulings or in the absence of the jurisdiction of the
                arbitrators to rule on interim measures in a given jurisdiction,
                any Party
                may apply to a court of competent jurisdiction for interim measure,
                and
                the Parties agree that seeking and obtaining such measures shall
                not waive
                the right to arbitration. Furthermore, notwithstanding the above
                provisions regarding negotiation, if either Party deems that time
                is of
                the essence in resolving the dispute, it may initiate arbitration
                and seek
                interim measures, as provided herein, and then comply with the
                requirements for negotiations as long as they are fully completed
                before
                the commencement of the final hearing on the merits in the arbitration
                proceeding.

            

    

    

    
      	
            	(ix)	
              Waiver
                of Appeals
                --
                To the extent permitted by law, any right to appeal from or to cause
                a
                review of any arbitral award by any court is hereby waived by the
                Parties
                except for claims of actual fraud. 

            

    

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    

    
      	
            	(x)	
              Costs
                and Attorneys' Fees
                --
                Each Party shall bear the expense of its arbitrator and attorneys'
                fees
                and the expenses of the third arbitrator shall be borne equally by
                Buyer
                and Seller. 

            

    

    

    
      	
            	(xi)	
              Interest
                --
                The award may include interest from the date of any breach or violation
                of
                this Agreement, as determined by the arbitral award, and from the
                date of
                the award until paid in full. Interest shall be awarded at an annualized
                rate equivalent to the Interest Rate plus one per cent (1%) (compounded
                monthly).

            

    

    

    
      	
            	(xii)	
              Punitive
                Damages
                --
                Penal, punitive, treble, multiple, consequential, incidental or similar
                damages may not be recovered or
                awarded.

            

    

    

    
      	11.15	
              Severability 

            

    

    

    If
      any
      provision (or part thereof) of this Agreement is or becomes unlawful or void,
      the legality, validity, or enforceability of any other part of that provision
      or
      any other provision of this Agreement shall not be affected, but shall continue
      in force and effect. The unlawful or void provision shall be deleted from this
      Agreement by written consent of the Parties or final court order, but only
      to
      the extent of any invalidity so as to preserve the Agreement to the maximum
      extent.

    

    The
      Parties agree to negotiate in good faith to replace those provisions (or parts
      thereof) deleted from the Agreement pursuant to the paragraph above within
      ninety (90) Days of such deletion, so as to restore the original economic value
      of each Party's obligations. The Agreement shall continue in force with the
      deletion of the unlawful or void provisions (or part thereof) notwithstanding
      that agreement cannot be reached between the Parties on replacement provisions
      within such ninety (90) Day period.

    

    
      	11.16	
              Variations
                to Agreement 

            

    

    

    Any
      variations or additions or amendments to this Agreement shall be in writing
      and
      shall not be valid unless duly signed and executed by the Parties.

    

    
      	11.17	
              Entire
                Agreement 

            

    

    

    This
      Agreement, including its exhibits, contains the entire agreement between the
      Parties relating to the subject matter hereof, and supersedes all previous
      negotiations, agreements (including but not limited to the letter agreement
      dated June 28, 2007), understandings, undertakings, representations, documents,
      minutes of meetings, letters and notices (whether oral or written) between
      the
      Parties and/or their respective Affiliates with respect to such subject matter.
      

    

    
      	11.18	
              Confidentiality

            

    

    

    Except
      as
      required by law, regulation or order of governmental authority, Seller and
      Buyer
      shall keep and maintain this Agreement and all the terms and provisions hereof
      in confidence for the term of the Agreement and will not transmit, reveal,
      disclose or otherwise communicate the
      substance or any of the terms or provisions of this Agreement to any other
      person not an employee, officer, director, attorney, partner, working interest
      owner, agent or contractor of Seller or Buyer, provided that Seller may make
      such disclosures as may be required in its lease agreements with royalty owners
      and taxing authorities or any litigation or arbitration concerning Carbon
      Dioxide prices. The terms of this Agreement may be disclosed in any litigation
      or arbitration involving this Agreement and to the Affiliates (and their
      respective agents, employees, officers, directors and attorneys), investors,
      auditors, counsel, lenders or potential
      lenders, and other professional advisors, and agents or contractors of Seller
      or
      Buyer, or potential purchasers of Buyer’s properties in which Carbon Dioxide is
      injected; provided that, (i) in any such disclosure other than litigation
      involving this Agreement, the person or party to whom such disclosure is made
      agrees to be bound by this confidentiality provision and (ii) the Party making
      such disclosure shall be responsible for the compliance of persons to whom
      such
      disclosure is made.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    

    
      	11.19	
              Maintenance 

            

    

    

    Seller's
      Facilities and Buyer's Facilities may require periodic maintenance shutdowns.
      A
      Party anticipating maintenance shall use commercially reasonable efforts to
      give
      at least thirty (30) days prior notice to the other Party. During periods of
      maintenance for which notice has been properly given and maintenance was
      performed, the Parties shall be relieved of all volume delivery and take
      obligations that otherwise would accrue during such periods; provided, however,
      that Buyer shall be entitled to a maximum of five (5) Days of such maintenance
      for Buyer's Facilities in a Contract Year. The DCQ shall be adjusted to reflect
      only actual volume reductions resulting from such maintenance. Subject
      to the foregoing, each Party shall reasonably cooperate with the other Party
      to
      minimize interruptions in volume delivery and take schedules.

    

    
      	11.20	
              Drug
                and Alcohol Policy 

            

    

    

    Each
      Party agrees that its employees, personnel, and contractors shall not use,
      be
      under the influence of, possess, distribute, or sell alcohol beverages, illicit
      or unprescribed controlled drugs, drug paraphernalia, or impairment causing
      drugs while performing their respective obligations under this Agreement. Each
      Party has or will adopt its own policy (including testing policy) to assure
      a
      drug and alcohol free workplace. Each Party will not use an employee, personnel
      or contractor to perform the obligations under this Agreement who either refuses
      to take, or tests positive in any alcohol or drug test or who refuses to
      cooperate with any search. Each Party will comply with applicable laws
      concerning employee alcohol and drug use and assure that its contractors agree
      to do so.

    

    
      	11.21	
              Survival

            

    

    

    Except
      as
      expressly provided otherwise in this Agreement, termination or cancellation
      of
      this Agreement, regardless of cause, shall be without prejudice to any rights
      or
      remedies that may have accrued to any of the Parties prior to the date thereof.
      In addition, the provisions of Articles 11.4 (Limitation
      of Liability and General Indemnities),
      11.14
      (Dispute
      Resolution),
      11.1
      (Warranty of Title), 11.2 (Disclaimers
      of Certain Warranties),
      5.2
      (Auditing),
      5.4
      (Financial
      Circumstances)
      and any
      other Article or Exhibit either expressed to survive termination of this
      Agreement or requiring either Party to indemnify the other Party pursuant
      hereto, shall survive the termination of this Agreement.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    

    
      	11.22	
              Greenhouse
                Gases 

            

    

    

    (**)
      GHGRR shall mean the recognition, award, or allocation of credits, allowances,
      permits, or other tangible rights or obligations, whether created through
      government program or private contract now or in the future, associated with
      the
      production, avoidance, capture, sequestration, or other control of greenhouse
      gases subject to this Agreement. (**) This right includes the right to count
      or
      claim any applicable reductions pursuant to the U.S. Department of Energy’s
      Climate Challenge Program as modified from time to time, to register all such
      reductions pursuant to Section 1605 of the Energy Policy Act of 1992 and other
      related public and private registries, and any other governmental, public,
      or
      private program designed to encourage or reward the reduction of greenhouse
      gas
      emissions or emission reductions. (**)

    

    (**)

    

    
      	11.23	
              Relationship
                of the Parties

            

    

     

    
      Nothing
        in this Agreement and no action taken by the Parties pursuant to this Agreement
        shall constitute, or be deemed to constitute, a partnership, unincorporated
        association or other co-operative entity. The obligations and liabilities
        of the
        Parties to this Agreement are several and not joint, nor joint and
        several. 

       

    

    
      	
              "
                SELLER "

              EXXONMOBIL
                GAS & POWER MARKETING COMPANY

              (a
                division of ExxonMobil Corporation)

               

              By:
                

              
                

              

               

              Name:
                ______________________

               

              Title:
                _________________________

               

              DATED
                this ___ day of ______, 20__

            	 	
              "BUYER"

              RANCHER
                ENERGY CORP.

               

               

              By:
                

              
                

              

               

              Name:
                _______________________

               

              Title:
                _________________________

               

              DATED
                this ___ day of ______ 20__

            

    

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A - DAILY CONTRACT QUANTITY

     

    

    DCQ
      -
      MMCFD

    

      
        	
                Contract
                  Year 1

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 2

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 3 

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 4

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 5

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 6

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 7

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 8

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 9

              	 	 	
                70.0

              	 
	 	 	 	 	 
	
                Contract
                  Year 10

              	 	 	
                70.0

              	 
	
                 

              	 	 	 	 

      

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B - EXPERT PROCEDURES

    

    
      	B.1.	
              Appointment
                of Expert

            

    

    

    "Expert
      means an individual selected by the Parties to resolve a dispute as outlined
      in
      this Exhibit B.

    

    Whenever
      an Article of this Agreement provides for a matter to be referred to an Expert,
      or whenever the Parties agree that a disputed matter shall be resolved by an
      Expert, the following procedures shall apply:

    

    
      	
            	B.1.1	
              The
                Party wishing the appointment to be made shall give notice to that
                effect
                to the other Party and with such notice shall give details of the
                matter
                which is proposed to be resolved by the
                Expert.

            

    

    

    
      	
            	B.1.2	
              The
                Parties shall meet in an endeavor to agree upon a single Expert to
                whom
                the matter in dispute shall be referred for
                determination.

            

    

    

    
      	
            	B.1.3	
              If
                within twenty-one (21) days from the service of a notice pursuant
                to
                Article B.1.1 the Parties have either failed to meet or failed to
                agree
                upon an Expert, then the matter may forthwith be referred by either
                Party,
                together with a copy of this Exhibit B, to the American Arbitration
                Association which shall be requested to select an Expert by notice
                to the
                Parties within thirty (30) days, and in so doing, a Party considering
                referral, may take such independent advice as it thinks
                fit.

            

    

    

    
      	
            	B.1.4	
              Upon
                an Expert being agreed or selected under the foregoing provisions
                of this
                Exhibit B, the Parties shall forthwith notify such Expert of the
                selection
                together with a copy of Articles B.2 and B.4 of this Exhibit B, and
                shall
                request advice within fourteen (14) days as to whether or not the
                appointment will be accepted.

            

    

    

    
      	
            	B.1.5	
              If
                such Expert shall be either unwilling or unable to accept such appointment
                or shall not have confirmed willingness and ability to accept such
                appointment within the said period of fourteen (14) days, then (unless
                the
                Parties are able to agree upon the appointment of another Expert)
                the
                matter shall again be referred (by either Party) in the aforesaid
                manner
                to the American Arbitration Association,which shall be requested
                to make a
                further selection, and the process shall be repeated until an Expert
                is
                found who accepts the appointment.

            

    

    

    
      	B.2	
              Qualification

            

    

    

    
      	
            	B.2.1	
              No
                person shall be appointed or accept appointment to act as the Expert
                under
                this Exhibit B unless qualified by education, experience and training
                to
                determine the matter in dispute.

            

    

    

    
      	
            	B.2.2	
              Any
                person appointed or selected as the Expert in accordance with the
                above
                provisions shall be entitled to act as such Expert provided that
                before
                accepting such appointment the proposed Expert shall have fully disclosed
                to the Parties any relationship, interest, or duty which could, in
                the
                reasonable view of either Party, materially conflict with performing
                functions required by appointment and/ or prejudice the Expert's
                ability
                to render an independent, impartial determination.
                

            

    

     

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

    

    

    
      	
            	B.2.3	
              No
                person, without the prior written agreement of both Parties, shall
                be
                appointed as the Expert who is (or has been at any time within the
                preceding six years) an employee of either Party or of an Affiliate
                of
                either Party or who is (or has been at any time within the preceding
                three
                (3) years) a consultant to or contractor of either Party or of an
                Affiliate of either Party or who has served in a similar expert capacity
                for either Party or who holds any significant financial interest
                in either
                Party.

            

    

    

    
      	B.3	
              Confidentiality

            

    

    

    No
      person
      shall be appointed as an Expert who has not agreed to hold in confidence any
      and
      all information furnished by each of the Parties in connection with the dispute
      under this Agreement, the existence of such dispute and his determination
      thereof.

    

    
      	B.4	
              Remuneration

            

    

    

    The
      appointment of the Expert shall only take effect after agreement has been
      reached between the Parties and the Expert as to the Expert's remuneration.
      The
      arrangement agreed on shall be clearly set out in writing and shall be part
      of
      the agreement between the Parties and the Expert.

    

    
      	B.5	
              Determination
                

            

    

    

    
      	
            	B.5.1	
              The
                Expert may request data, information or submissions as the Expert
                thinks
                fit, and the Parties shall use reasonable endeavors to comply promptly
                with such requests. However, no Party shall be required to divulge
                confidential information nor to provide information in support of
                the
                other Party's claim. All information supplied to the Expert in writing
                by
                a Party shall be served by notice simultaneously to the other Party.
                In
                the event that the Expert shall request oral submissions to be made,
                the
                Party requested to make such submissions shall give the other Party
                not
                less than four (4) Business Days' notice of the time and place where
                such
                submissions are to be made and shall promptly afford the other Party
                the
                opportunity to be present.

            

    

    

    
      	
            	B.5.2	
              The
                Expert shall make a determination in writing and in such determination
                give reasons for the determination, not later than thirty (30) days
                after
                acceptance of the appointment and shall ignore data, information
                and
                submissions supplied and made after such thirty (30) days unless
                the same
                are furnished in response to the Expert's specific
                request.

            

    

    

    
      	
            	B.5.3	
              The
                Expert may obtain such independent professional and/or technical
                advice,
                as the Expert may reasonably require, from a person meeting the
                Qualifications requirements of Articles B.2.2 and B.2.3, provided
                that
                disclosure required by Article B.2.2 shall be made by the prospective
                advisor to the Expert who shall promptly forward same to the Parties.
                Consent of both Parties must be obtained before the advisor is
                engaged.

            

    

     

    
      	
            	B.5.4	
              If
                within a reasonable period (which shall not without the prior written
                consent of both Parties exceed sixty (60) days after the acceptance
                by an
                Expert of the appointment), the Expert shall not have rendered a
                determination then (at the request of either Party) a new Expert
                shall be
                appointed under the provisions of this Exhibit B and upon the acceptance
                of the appointment by such new Expert the appointment of the previous
                Expert shall cease. Provided however, that if the previous Expert
                shall
                have rendered a determination prior to the date upon which the new
                Expert
                accepts the appointment such determination shall be binding upon
                the
                Parties and the instructions to the new Expert shall be
                withdrawn.

            

    

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    

    
      	
            	B.5.5	
              The
                Expert shall be deemed not to be an arbitrator but shall render a
                determination as an Expert and the law or legislation relating to
                arbitration shall not apply to such Expert or the determinations
                or the
                procedure by which such determinations are
                reached.

            

    

    

    
      	
            	B.5.6	
              The
                determination of the Expert shall be final and binding upon the Parties
                save in the event of fraud, manifest error or failure by the Expert
                to
                disclose any relevant interest or duty in accordance with this Exhibit
                B.

            

    

    

    
      	
            	B.5.7	
              Each
                Party shall bear the costs and expenses of all counsel, witnesses
                and
                employees retained by it; the costs and expenses of the Expert shall
                be
                apportioned between the Seller and the Buyer in a manner proportionate
                to
                the determination made by the Expert. The Expert determination shall
                address the proportions in which the Parties should bear the Expert's
                costs.

            

    

     

    
      
        
        

      

      
        37THIS
                NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE
                HAVE NOT
                BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS
                NOTE
                AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT
                BE
                SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
                AN
                EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT OR
                AN
                OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
                REGISTRATION IS NOT REQUIRED. 

            	
               

            

    

     

    AMENDED
      AND RESTATED

    5%
      SENIOR CONVERTIBLE NOTE

    

    FOR
      VALUE
      RECEIVED, Lantis Laser Inc., a Nevada Corporation (hereinafter called
      "Borrower"), hereby promises to pay to _________________________ (the "Holder"),
      or its registered assigns or successors in interest or order, without demand,
      the sum of [_________] Dollars ($___________) (“Principal Amount”), with simple
      and unpaid interest thereon, 36 months from closing date of March ___, 2007
      (the
      "Maturity Date"), if not sooner paid.

    

    As
      of the
      date hereof, the Holder and the Borrower hereby amend and restate in their
      entirety the terms of the original 5% Senior Convertible Note, issued on March
      ___, 2007, in the form of this Amended and Restated 5% Senior Convertible Note
      (this “Note”).

    

    ARTICLE
      I

    

    INTEREST
      

    

    1.1.    Interest
      Rate.
      Subject
      to Section 5.7 hereof, interest payable on this Note shall accrue at a rate
      per
      annum (the "Interest Rate") of five percent (5%). Interest on the Principal
      Amount shall accrue from the date of this Note and shall be payable annually.
      The Company shall issue the first year’s interest to the Holder twelve months
      (12) following the date this note is Issued.

     

    1.2    Default
      Interest Rate.
      Following the occurrence and during the continuance of an Event of Default,
      which, if susceptible to cure is not cured within twenty (20) days, otherwise
      then from the first date of such occurrence, the annual interest rate on this
      Note shall (subject to Section 5.7) automatically be increased to ten percent
      (10%) per annum. 

      

    ARTICLE
      II

    

    CONVERSION
      RIGHTS

    

    2.1.    Holder's
      Conversion Rights.
      The
      Holder shall have the right at all times, but not the obligation, to convert
      all
      or any portion of the then aggregate outstanding Principal Amount of this Note
      plus accrued interest, into shares of Common Stock (the “Conversion Shares”),
      subject to the terms and conditions set forth in this Article II at the rate
      of
      $0.15 per share of Common Stock (“Fixed Conversion Price”) as same may be
      adjusted pursuant to this Note and the Subscription Agreement. The Holder may
      exercise such right by delivery to the Borrower of a written Notice of
      Conversion pursuant to Section 3.2. 

    

    Notwithstanding
      anything to the contrary set forth in the Subscription Agreement, in no event
      shall the Borrower be required to register any shares of common stock issuable
      upon the conversion of accrued and unpaid interest prior to the Holder
      exercising such conversion right as set forth in the preceding
      paragraph.

    

    Notwithstanding
      anything to the contrary set forth in the Subscription Agreement, in the event
      that publicly-available written guidance, rules of general applicability of
      the
      Securities and Exchange Commission (the “SEC”) staff, or written comments,
      requirements or request of the SEC staff to the Borrower in connection with
      the
      review of any registration statement, in any case (the "SEC Guidance") does
      not
      permit the Borrower’s initial registration statement (the “Initial Registration
      Statement”) to include all of the Conversion Shares, then the Borrower will use
      reasonable best efforts to file such additional registration statements (the
      "Subsequent Registration Statements") at the earliest practicable date on which
      the Borrower is permitted by SEC Guidance to file such Subsequent Registration
      Statements related to the Conversion Shares. If any SEC Guidance sets forth
      a
      limitation on the number of the Conversion Shares to be registered on a
      particular registration statement, the number of Conversion Shares to be
      registered on such registration statement will be reduced on a pro rata basis
      among all Note Holders based on the total number of unregistered Conversion
      Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

      

    2.2.    Mechanics
      of Holder's Conversion.
      

    

    (a)    In
      the event that the Holder elects to convert any amounts outstanding under this
      Note into Common Stock, the Holder shall give notice of such election by
      delivering an executed and completed notice of conversion (a "Notice of
      Conversion") to the Borrower, which Notice of Conversion shall provide a
      breakdown in reasonable detail of the Principal Amount, accrued interest and
      amounts being converted. The original Note is not required to be surrendered
      to
      the Borrower until all sums due under the Note have been paid. On each
      Conversion Date (as hereinafter defined) and in accordance with its Notice
      of
      Conversion, the Holder shall make the appropriate reduction to the Principal
      Amount, accrued interest and fees as entered in its records. Each date on which
      a Notice of Conversion is delivered or telecopied to the Borrower in accordance
      with the provisions hereof shall be deemed a "Conversion Date." A form of Notice
      of Conversion to be employed by the Holder is annexed hereto as Exhibit
      A.

    

    

    (b)    Pursuant
      to the terms of a Notice of Conversion, the Borrower will issue instructions
      to
      the transfer agent accompanied by an opinion of counsel, if so required by
      the
      Borrower's transfer agent and shall cause the transfer agent to transmit the
      certificates representing the Conversion Shares to the Holder by crediting
      the
      account of the Holder's designated broker with the Depository Trust Corporation
      ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within
      three (3) business days after receipt by the Borrower of the Notice of
      Conversion (the "Delivery Date"). In the case of the exercise of the conversion
      rights set forth herein the conversion privilege shall be deemed to have been
      exercised and the Conversion Shares issuable upon such conversion shall be
      deemed to have been issued upon the date of receipt by the Borrower of the
      Notice of Conversion. The Holder shall be treated for all purposes as the record
      holder of such shares of Common Stock, unless the Holder provides the Borrower
      written instructions to the contrary. Notwithstanding the foregoing to the
      contrary, the Borrower or its transfer agent shall only be obligated to issue
      and deliver the shares to the DTC on the Holder’s behalf via DWAC (or
      certificates free of restrictive legends) if the registration statement
      providing for the resale of the shares of Common Stock issuable upon the
      conversion of this Note is effective and the Holder has complied with all
      applicable securities laws in connection with the sale of the Common Stock,
      including, without limitation, the prospectus delivery requirements. In the
      event that Conversion Shares cannot be delivered to the Holder via DWAC, the
      Borrower shall deliver physical certificates representing the Conversion Shares
      by the Delivery Date.

    

    2.3.    Conversion
      Calculations.

    

    (a)    The
      number of shares of Common Stock to be issued upon each conversion of this
      Note
      pursuant to this Article III shall be determined by dividing that portion of
      the
      Principal Amount and interest and fees to be converted, if any, by the then
      applicable Fixed Conversion Price.

     

    (b)    The
      Fixed Conversion Price and number and kind of shares or other securities to
      be
      issued upon conversion shall be subject to adjustment from time to time upon
      the
      happening of certain events while this conversion right remains outstanding,
      as
      follows:

    

    A.    Merger,
      Sale of Assets, etc.
      If the
      Borrower at any time shall consolidate with or merge into or sell or convey
      all
      or substantially all its assets to any other corporation, this Note, as to
      the
      unpaid principal portion thereof and accrued interest thereon, shall thereafter
      be deemed to evidence the right to purchase such number and kind of shares
      or
      other securities and property as would have been issuable or distributable
      on
      account of such consolidation, merger, sale or conveyance, upon or with respect
      to the securities subject to the conversion or purchase right immediately prior
      to such consolidation, merger, sale or conveyance. The foregoing provision
      shall
      similarly apply to successive transactions of a similar nature by any such
      successor or purchaser. Without limiting the generality of the foregoing, the
      anti-dilution provisions of this Section shall apply to such securities of
      such
      successor or purchaser after any such consolidation, merger, sale or
      conveyance.

    

    B.    Reclassification,
      etc.
      If the
      Borrower at any time shall, by reclassification or otherwise, change the Common
      Stock into the same or a different number of securities of any class or classes,
      this Note, as to the unpaid principal portion thereof and accrued interest
      thereon, shall thereafter be deemed to evidence the right to purchase an
      adjusted number of such securities and kind of securities as would have been
      issuable as the result of such change with respect to the Common Stock
      immediately prior to such reclassification or other change.

    

    C.    Stock
      Splits, Combinations and Dividends.
      If the
      shares of Common Stock are subdivided or combined into a greater or smaller
      number of shares of Common Stock, or if a dividend is paid on the Common Stock
      in shares of Common Stock, the Conversion Price shall be proportionately reduced
      in case of subdivision of shares or stock dividend or proportionately increased
      in the case of combination of shares, in each such case by the ratio which
      the
      total number of shares of Common Stock outstanding immediately after such event
      bears to the total number of shares of Common Stock outstanding immediately
      prior to such event.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    D.    
      Share
      Issuance.
      If the
      Borrower shall conduct any subsequent private placements or public offerings
      of
      Common Stock prior to the complete conversion or payment of this Note, for
      a
      consideration less than the Fixed Conversion Price that would be in effect
      at
      the time of such issue, then, and thereafter successively upon each such
      issuance, the Fixed Conversion Price shall be reduced to such other lower issue
      price. 

      

    

    (c)    Whenever
      the Conversion Price is adjusted pursuant to this section, the Borrower shall
      promptly mail to the Holder a notice setting forth the Conversion Price after
      such adjustment and setting forth a statement of the facts requiring such
      adjustment.

    

    2.4.   Reservation.
      During
      the period the conversion right exists, Borrower will reserve from its
      authorized and unissued Common Stock not less than one hundred fifty percent
      (150%) of the number of shares to provide for the issuance of Common Stock
      upon
      the full conversion of this Note. Borrower represents that upon issuance,
      such shares will be duly and validly issued, fully paid and non-assessable.
      Borrower agrees that its issuance of this Note shall constitute full authority
      to its officers, agents, and transfer agents who are charged with the duty
      of
      executing and issuing stock certificates to execute and issue the necessary
      certificates for shares of Common Stock upon the conversion of this
      Note.

    

    2.5   Issuance
      of Replacement Note.
      Upon
      any partial conversion of this Note, a replacement Note containing the same
      date
      and provisions of this Note shall, at the written request of the Holder, be
      issued by the Borrower to the Holder for the outstanding Principal Amount of
      this Note and accrued interest which shall not have been converted or paid,
      provided Holder has surrendered an original Note to the Company. In the event
      that the Holder elects not to surrender a Note for reissuance upon partial
      payment or conversion, the Holder hereby indemnifies the Borrower against any
      and all loss or damage attributable to a third-party claim in an amount in
      excess of the actual amount then due under the Note.

     

    ARTICLE
      III

    

    EVENTS
      OF DEFAULT

    

    The
      occurrence of any of the following events of default ("Event of Default") shall,
      at the option of the Holder hereof, make all sums of principal and interest
      then
      remaining unpaid hereon and all other amounts payable hereunder immediately
      due
      and payable, upon demand, without presentment, or grace period, all of which
      hereby are expressly waived, except as set forth below:

     

    3.1    
      Failure
      to Pay Principal or Interest.
      The
      Borrower fails to pay any installment of Principal Amount, interest or other
      sum
      due under this Note or any Transaction Document when due and such failure
      continues for a period of ten (10) business days after the due
      date.

    

    3.2    
      Breach
      of Covenant.
      The
      Borrower breaches any material covenant or other term or condition of this
      Note
      any material respect and such breach, if subject to cure, continues for a period
      of ten (10) business days after written notice to the Borrower from the
      Holder.

    

    3.3    
      Breach
      of Representations and Warranties.
      Any
      material representation or warranty of the Borrower made herein or in any
      agreement, statement or certificate given in writing pursuant hereto or in
      connection herewith or therewith shall be false or misleading in any material
      respect as of the date made and the Closing Date.

      

    3.4    
      Receiver
      or Trustee.
      The
      Borrower or any Subsidiary of Borrower shall make an assignment for the benefit
      of creditors, or apply for or consent to the appointment of a receiver or
      trustee for them or for a substantial part of their property or business; or
      such a receiver or trustee shall otherwise be appointed.

    

    3.5    
      Judgments.
      Any
      money judgment, writ or similar final process shall be entered or filed against
      Borrower or any subsidiary of Borrower or any of their property or other assets
      for more than $25,000 and shall remain unvacated, unbonded or unstayed for
      a
      period of forty-five (45) days.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    3.6    
      Bankruptcy.
      Bankruptcy, insolvency, reorganization or liquidation proceedings or other
      proceedings or relief under any bankruptcy law or any law, or the issuance
      of
      any notice in relation to such event, for the relief of debtors shall be
      instituted by or against the Borrower or any Subsidiary of Borrower and if
      instituted against them are not dismissed within sixty (60) days of
      initiation.

    

    3.7    
      Delisting.
      Failure
      of the Common Stock to be quoted or listed on the OTC Pink Sheets; failure
      to
      comply with the requirements for continued listing on the OTC Pink Sheets for
      a
      period of seven consecutive trading days; or notification from the OTC Pink
      Sheets that the Borrower is not in compliance with the conditions for such
      continued listing on the OTC Pink Sheets..

    

    3.8    Stop
      Trade.
      An SEC
      or judicial stop trade order or OTC Pink Sheets trading suspension with respect
      to Borrower’s Common Stock that lasts for five or more consecutive trading
      days.

    

    3.9
        
      Failure
      to Deliver Common Stock or Replacement Note.
      Borrower's failure to timely deliver Common Stock to the Holder pursuant to
      and
      in the form required by this Note, or if requested by Borrower, a replacement
      Note, and such failure continues for a period of five (5) business days after
      the due date.

    

    3.10   Non-Registration
      Event.
      The
      failure of the company to obtain an effective registration statement by June
      30,
      2008.

    

    3.11   Reverse
      Splits.
      The
      Borrower effectuates a reverse split of its Common Stock without twenty days
      prior written notice to the Holder.

     

    ARTICLE
      IV

    

    MISCELLANEOUS

    

    4.1   Failure
      or Indulgence Not Waiver.
      No
      failure or delay on the part of Holder hereof in the exercise of any power,
      right or privilege hereunder shall operate as a waiver thereof, nor shall any
      single or partial exercise of any such power, right or privilege preclude other
      or further exercise thereof or of any other right, power or privilege. All
      rights and remedies existing hereunder are cumulative to, and not exclusive
      of,
      any rights or remedies otherwise available.

    

    4.2   Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be: (i) 

    

    4.3   Amendment
      Provision.
      The
      term "Note" and all references thereto, as used throughout this instrument,
      shall mean this instrument as originally executed, or if later amended or
      supplemented, then as so amended or supplemented.

    

    4.4   Assignability.
      This
      Note shall be binding upon the Borrower and its successors and assigns, and
      shall inure to the benefit of the Holder and its successors and
      assigns.

    

    4.5   Cost
      of Collection.
      If
      default is made in the payment of this Note, Borrower shall pay the Holder
      hereof reasonable costs of collection, including reasonable attorneys'
      fees.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    4.6   Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of New Jersey, without regard to conflicts of laws principles that would result
      in the application of the substantive laws of another jurisdiction. Any action
      brought by either party against the other concerning the transactions
      contemplated by this Agreement shall be brought only in the state courts of
      New
      York or in the federal courts located in the State of New Jersey. The prevailing
      party shall be entitled to recover from the other party its reasonable
      attorney's fees and costs. In the event that any provision of this Note is
      invalid or unenforceable under any applicable statute or rule of law, then
      such
      provision shall be deemed inoperative to the extent that it may conflict
      therewith and shall be deemed modified to conform with such statute or rule
      of
      law. Any such provision which may prove invalid or unenforceable under any
      law
      shall not affect the validity or unenforceability of any other provision of
      this
      Note. Nothing contained herein shall be deemed or operate to preclude the Holder
      from bringing suit or taking other legal action against the Borrower in any
      other jurisdiction to collect on the Borrower's obligations to Holder, to
      realize on any collateral or any other security for such obligations, or to
      enforce a judgment or other court in favor of the Holder.

      

    4.7    Maximum
      Payments.
      Nothing
      contained herein shall be deemed to establish or require the payment of a rate
      of interest or other charges in excess of the maximum permitted by applicable
      law. In the event that the rate of interest required to be paid or other charges
      hereunder exceed the maximum permitted by such law, any payments in excess
      of
      such maximum shall be credited against amounts owed by the Borrower to the
      Holder and thus refunded to the Borrower.

    

    4.8    Redemption.
      This
      Note may not be redeemed or called without the consent of the Holder except
      as
      described in this Note.

    

    4.9    Shareholder
      Status.
      The
      Holder shall not have rights as a shareholder of the Borrower with respect
      to
      unconverted portions of this Note. However, the Holder will have the rights
      of a
      shareholder of the Borrower with respect to the Shares of Common Stock to be
      received after delivery by the Holder of a Conversion Notice to the
      Borrower.

     

    IN
      WITNESS WHEREOF,
      Borrower has caused this Note to be signed in its name by an authorized officer
      as of the ____ day of March, 2007.

    
      	 	 	 
	 	
              Lantis
                Laser Inc.

            
	 
 	 
 	 
 
	
            	By:  	
            
	 	
              

              Name:
                Stanley B. Baron 

            
	 	
              Title: President
                & CEO

            

    

     

    
      	
              WITNESS: 

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
               

            	
               

            
	
              
                
 

            	
               

            	
               

            	 

    

    

    
      
         

      

      
        5

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