Document:

AGREEMENT AND AMENDMENT

AMENDMENT TO

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amendment ("Amendment") dated this 23rd day of January 2008 ("Amendment Date") between Choice Hotels International, Inc. (together with its subsidiaries, "Employer"), a Delaware corporation with principal offices at 10750 Columbia Pike, Silver Spring, Maryland 20901, and Thomas Mirgon ("Employee"), sets forth certain terms and conditions governing the employment relationship between Employee and Employer and amends that certain Amended and Restated Employment Agreement dated April 13, 1999 ("Agreement"). 

In consideration of the mutual covenants and promises herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

	A new definitions section is added at the beginning of the Agreement:

Definitions.  As used in this Agreement, the following terms shall have the ascribed meaning:

(a) "Board" means the Board of Directors of Employer.

(b)  "Cause" means any one or more of the following: (i) Employee's deliberate and continued refusal to carry out duties and instructions of the Board and CEO consistent with the position; (ii)  Employee's commission of an act materially detrimental to the financial condition, operations and/or goodwill of Employer; (iii) Employee's gross negligence or willful misconduct in the performance of duties to Employer; (iv) Employee's commission of any act of theft, fraud, dishonesty, breach of trust or breach of fiduciary duty involving Employer; (v) Employee's conviction of, or plea of guilty or nolo contendere to, a felony or any crime involving moral turpitude, fraud or embezzlement; (vi) any breach by Employee of the covenants contained in this Agreement, or (vii) the material violation by Employee of any Employer policy or any statutory or common law duty to Employer.

(c)  "Change in Control" means the happening of the earliest of the following to occur:

(i)Any "person" as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (other than (i) Employer, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of Employer, (iii) any corporations owned, directly or indirectly, by the stockholders of Employer in substantially the same proportions as their ownership of stock, or (iv) Stewart Bainum, his wife, their lineal descendants and their spouses (so long as they remain spouses) and the estate of any of the foregoing persons, and any partnership, trust, corporation or other entity to the extent shares of common stock (or their equivalent) are considered to be beneficially owned by any of the persons or estates referred to in the foregoing provisions of this subsection 1(c) or any transferee thereof) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Employer representing 33% or more of the combined voting power of Employer's then outstanding voting securities.

(ii)Individuals constituting the Board on the date of this Agreement and the successors of such individuals ("Continuing Directors") cease to constitute a majority of the Board.  For this purpose, a director shall be a successor if and only if he or she was nominated by a Board (or a Nominating Committee thereof) on which individuals constituting the Board on the date of this Agreement and their successors (determined by prior application of this sentence) constituted a majority.

(iii)The stockholders of Employer approve a plan of merger or consolidation ("Combination") with any other corporation or legal person, other than a Combination which would result in stockholders of Employer immediately prior to the Combination owning, immediately thereafter, more than sixty-five percent (65%) of the combined voting power of either the surviving entity or the entity owning directly or indirectly all of the common stock, or its equivalent, of the surviving entity; provided, however, that if stockholder approval is not required for such Combination, the Change in Control shall occur upon the consummation of such Combination.

(iv)The stockholders of Employer approve a plan of complete liquidation of Employer or an agreement for the sale or disposition by Employer of all or substantially all of Employer's stock and/or assets, or accept a tender offer for substantially all of Employer's stock (or any transaction having a similar effect); provided, however, that if stockholder approval is not required for such transaction, the Change in Control shall occur upon consummation of such transaction.

(d)  "Change in Control Termination" means and includes the termination of Employee's employment with Employer at any time during the twelve (12) month period after a Change in Control if such termination is (i) by Employer for any reason other than Cause, (ii) by Employee for Good Reason.

(e)  "Competing Business" means any business or enterprise that: (i) is engaged in the mid-market or economy hotel franchising business, (ii) competes in the same upscale, select service segment as Cambria Suites or any successor or substantially similar Employer brand, or (iii) competes in any other line of business in which Employer is materially engaged at the time of the Termination Date.

(f)  "Confidential Information" means any non-public information, in any format, relating to the business of Employer, including, but not limited to, present or prospective operating, marketing and development plans, training manuals, training policies and procedures, financial and technical information, passwords, source codes, personnel information, franchisee information, business systems, trade secrets, pricing and cost information, contact lists, strategic plans or strategies, operating data or Employer policies.

(g)  "Disability" means if Employee is unable to perform the essential functions of Employee's position, after any legally required reasonable accommodation, for more than 180 days (whether or not consecutive) in any period of 365 consecutive days.

(h)  "Good Reason" means a voluntary termination by Employee following a change in Employer's CEO and a material, substantial change in either Employee's compensation or position and responsibilities, provided such termination occurs within forty-five days of the change in compensation or position.  Employee must provide Employer with at least thirty (30) days' prior written notice of electing a Good Reason termination.  

(i)  "Release Agreement" means the release of claims attached as Exhibit A.

(j)  "Severance Benefits" means the benefits specified in Section 7(b).

(k)  "Severance Benefit Period" means the eighteen (18) month period following the Termination Date.

(l)  "Termination Date" means the date the Employee's employment with Employer ends.

(m)  "Works" means any ideas, concepts, methods of operation, processes, programs or other materials (including training manuals, policies and procedures) that Employee conceived, created, developed or wrote while employed by Employer that relate in any manner to the business of Employer. 

	Section 2 of the Agreement is deleted in its entirety and replaced with the following:

"2.  Term.  This Agreement shall be for an indefinite term and may be terminated by either party as provided in Section 10."

	The parties acknowledge that as of the Amendment Date, the base salary under Section 3(a) is $325,000 and the target bonus under Section 3(b) is 50%.
	Section 5 of the Agreement is deleted in its entirely and replaced with the following:

"5.  Restrictions on Employee.

(a) Confidentiality.  Employee acknowledges that Confidential Information and Works are valuable and unique assets belonging to Employer.  During employment and after the Termination Date, Employee shall not, except as required by law or by Employee's duties for Employer and for the benefit of Employer, directly or indirectly, or cause others to, make use of or disclose to others any Confidential Information or Works.  Notwithstanding the foregoing, Confidential Information does not include information which was or becomes generally available to the public other than as a result of a disclosure by Employee.  Works constitute works made for hire and in all circumstances shall be and remain the sole and exclusive property of Employer, whether or not protectable under any laws, including patent, trademark, copyright or trade secret laws.  

(b) Non-Solicitation.  During employment and for a period of eighteen (18) months after the Termination Date, Employee agrees, except as required by Employee's duties for Employer and for the benefit of Employer or with the prior written consent of Employer,  not to solicit or attempt to solicit, directly or indirectly, on Employee's behalf or on behalf of any other person or entity, any person or entity who then is or who was as of the Termination Date, an employee, business partner or franchisee of Employer, or was actively solicited to have such a relationship with Employer within six (6) months prior to the Termination Date, to cease, curtail or refrain from entering into such a relationship with Employer.  Nothing in the foregoing shall be construed as preventing Employee from otherwise lawfully soliciting business from any then current or prospective business partner or franchisee that is for a line of business other than any Competing Business.

(c) Non-Competition.  During employment and for a period of eighteen (18) months after the Termination Date, Employee will not, except as required by Employee's duties for Employer and for the benefit of Employer, or with the prior written consent of the Board, directly or indirectly, own, manage, operate, join, control, finance or participate in the ownership, management, operation, control or financing of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or in any other capacity, or use or permit Employee's name to be used in connection with, any business or enterprise that is engaged in a Competing Business in the U.S. or Canada; provided, however, that the foregoing shall not be construed as preventing Employee from otherwise lawfully (i) investing Employee's assets in (A) the securities of any Competing Business that is a public company, or (B) the securities of any Competing Business that is a privately-held corporation, limited partnership, limited liability company or other business entity, if such holdings are passive investments of one percent (1%) or less of such entity's outstanding securities or (ii) becoming an employee, agent or representative of, consultant to, or otherwise connected with, any business entity that has multiple lines of business, some of which are not a Competing Business, if Employee's services for such entity are restricted so that Employee will provide no services or other assistance in support of, and will not otherwise be involved with, any such Competing Business conducted by such entity."

 

	Sections 7(b) and (c) are deleted in their entirety and replaced with the following:

"(b)  If Employee terminates for Good Reason or is terminated by Employer for any reason other than Cause, Change in Control Termination, Disability or death and Employee executes the Release Agreement within twenty-one (21) days of the Termination Date (or forty-five (45) days if such longer review period is required by the ADEA) and has not revoked the Release Agreement as permitted therein, Employer shall provide to Employee, in consideration of Employee's promises and covenants contained in this Agreement and the Release Agreement, a Severance Benefit equal to:

(i)  During the Severance Benefit Period, a bi-weekly payment equal to Employee's bi-weekly base salary rate and automobile allowance on the Termination Date, less standard deductions, payable in installments in accordance with Employer's normal payroll practices ("Discretionary Pay") ;

(ii)  Any bonus(es) that would have otherwise been paid during the Severance Benefit Period.  Such bonuses shall be paid at 100% of Employee's target under the applicable bonus plan.

(iii)  Stock option and stock awards granted under Employer's Long-Term Incentive Plans shall continue to vest and be exercisable during the Severance Benefit Period. At the end of the Severance Benefit Period, vesting shall cease and Employee shall have thereafter such period as permitted in the plan to exercise all stock options that are vested at the end of the Severance Benefit Period.

(iv)  During the Severance Benefit Period, Employer will provide Employee at its expense with its standard outplacement services for executive level employees. Upon obtaining other employment, Employee will be ineligible to continue receiving these outplacement services at Employer's expense.

(v)  During the Severance Benefit Period, (i) Employee may continue deductions for medical, dental, and pre-tax spending accounts while receiving Discretionary Pay, and Employee consents to the customary deductions for such benefits from Discretionary Pay, and (ii) Employer will continue to pay employer contributions to Employee's medical and dental insurance, and pre-tax spending accounts while Employee is receiving Discretionary Pay.  Employer will stop optional deductions for items such as retirement plans and life insurance with Employee's last paycheck for regular hours worked through the Termination Date. Employee will be eligible to continue group health and dental  benefits at Employee's own expense in accordance with and to the extent required by the federal COBRA law. 

(c) After the Termination Date, Employee shall not be required to mitigate damages as a condition to receiving Severance Benefits, but nevertheless shall be entitled to pursue other employment as permitted by this Agreement.  If Employee chooses to pursue and accept other employment or consulting during the Severance Benefit Period, Employer shall be entitled to receive as an offset, and thereby reduce its payment under Sections 5(a) and (b), the amounts received by Employee from any other active employment.  Employee agrees to notify Employer within seven (7) days of accepting such employment by sending such notice to Employer Hotels International, 10750 Columbia Pike, Silver Spring, Maryland 20901, Attention: Vice President -- Human Resources.  As a condition to Employee receiving the Severance Benefits from Employer, Employee agrees to permit verification of Employee's employment records and Federal income tax returns by an independent attorney or accountant, selected by Employer but reasonably acceptable to Employee, who agrees to preserve the confidentiality of the information disclosed by Employee except to the extent required to permit Employer to verify the amounts received by Employee from other active employment.  Employer shall receive credit for unemployment insurance benefits, social security insurance or like amounts actually received by Employee."   

	Section 10 is deleted in its entirely and replaced with the following:

"10.  Termination of Agreement.  This Agreement shall terminate upon the following events and conditions:

(a)  Upon either party giving the other party sixty (60) days prior written notice;

(b)  For Cause, in which case, Employer shall give Employee fourteen (14) days prior written notice specifying in reasonable detail the grounds for Cause and Employee shall have an opportunity to contest to the Board during the fourteen day period;

(c) For Good Reason, in which case, Employee shall give Employer thirty (30) days prior written notice;

(d)  After a material breach by a party provided that the non-breaching party has given written notice and a thirty (30) day period to cure, and breaching party has failed to cure; or

(e) Upon the death or Disability of Employee."  

	Section 11 of the Agreement is deleted in its entirety and replaced with the following:

"11.  Change in Control.

(a)  If, within twelve (12) months after a Change in Control, there occurs a Change in Control Termination, Employee shall receive as severance compensation a payment in an amount equal to 200% of Employee's base salary at the rate in effect as of the Termination Date, plus 200% of the amount of any full year bonus awarded to Employee for the year immediately preceding the Change in Control (or the target bonus if no such bonus was awarded in the prior year). Additionally, all unvested restricted stock and stock option awards granted after the Amendment Date and then held by Employee shall automatically become fully vested as of the date of the Change of Control Termination.  Additionally, Employer will provide Employee and his family health insurance coverage, including, if applicable, COBRA reimbursement, for a period of twelve (12) months or until Employee starts other full-time employment.

(b)  Employee's right to receive the benefits described in Section 11(a) shall be conditioned upon Employee executing the Release Agreement."

	The following new Section 14 is added to the Agreement:

"14. Acknowledgments.  Employee and Employer acknowledge and agree as follows:

(a)  The restrictions contained in Section 5 are reasonable and necessary to protect and preserve the legitimate interests, properties, goodwill and business of Employer, that Employer would not have entered into this Agreement in the absence of such restrictions and that irreparable injury will be suffered by Employer should the Employee breach any of those provisions.  Employee represents and acknowledges that (i) the Employee has been advised by Employer to consult Employee's own legal counsel at Employee's expense prior to executing  this Agreement, and (ii) that the Employee has had full opportunity, prior to execution of this Agreement, to review thoroughly this Agreement with the Employee's counsel.  

(b)  A breach of any of the restrictions in this Agreement cannot be adequately compensated by monetary damages and Employer shall be entitled to seek preliminary and permanent injunctive relief, without the necessity of proving actual damages, as well as any other appropriate equitable relief, which rights shall be cumulative and in addition to any other rights or remedies to which Employer may be entitled.  

(c)  In the event that any of the provisions of this Agreement should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, it is the intention of the parties that the provision shall be amended to the extent of the maximum time, geographic, service, or other limitations permitted by applicable law, that such amendment shall apply only within the jurisdiction of the court that made such adjudication and that the provision otherwise be enforced to the maximum extent permitted by law.  The invalidity of any provision of this Agreement shall not effect the validity of the remaining provisions of this Agreement.

(d)  If required under Section 409A of the Internal Revenue Code, any Severance Benefit or Change of Control payment will made six (6) months following the Termination Date."

	All provisions of the Agreement not amended hereby remain in full force and effect.
	This Amendment, together with the Agreement, represents the entire agreement of the parties, and supersedes all other agreements, discussions or understandings, concerning its subject matter.  The Agreement may only be modified by a written document signed by both parties. 

 

IN WITNESS WHEREOF, the parties have executed this Amendment on the date first set forth above. 
Employer: 

CHOICE HOTELS INTERNATIONAL, INC. 

By:  ____/s/ Charles A. Ledsinger, Jr.___
Charles A. Ledsinger, Jr.

Vice Chairman and CEO

Employee:

_____/s/ Thomas Mirgon________
Thomas Mirgon

 

EXHIBIT A

RELEASE AGREEMENT

 

This Release Agreement ("Release Agreement") is made as of ___________, 20__  by Thomas Mirgon ("Employee") in favor of Choice Hotels International, Inc. and its subsidiaries  (collectively "Choice").  

WHEREAS, Employee and Choice have previously entered into an Amended and Restated Employment Agreement dated __________, as further amended on December __, 2007 ("Agreement"); and

WHEREAS, in consideration for certain covenants and benefits under the Agreement, Employee is obligated to execute this Release Agreement upon termination of employment; 

NOW, THEREFORE, in consideration of the promises contained in this Agreement, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree to the following terms:

1.  Last Day Worked.  Employee's employment terminated, or will terminate, on ___________, 20__ ("Termination Date").  Employee will return to Choice, no later than the close of business on the Termination Date, any Choice property, including original and copied computer hardware or software, credit cards, long distance telephone cards, and keys or passcards to Choice buildings, and all other property in Employee's possession, custody or control.

2.   Release.  Employee agrees, in exchange for the benefits set forth in the Agreement, to irrevocably and unconditionally release Choice and its parents, subsidiaries and affiliated entities, and each of their respective officers, directors, shareholders, employees, agents, representatives, insurers, attorneys, employee welfare benefit plans and pension or deferred compensation plans under Section 401 of the Internal Revenue Code of 1954, as amended, and their trustees, administrators and other fiduciaries; and all persons acting by, through, under or in concert with them, and each of their predecessors, successors and assigns or any of them (collectively "Choice Releasees"), of and from any and all manner of action or actions, cause or causes of action, in law or equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, grievances, damages, loss, cost or expense, of any nature, known or unknown, fixed or contingent, which Employee now has or may later have against the Choice Releasees, or any one of them, by reason of any matter, cause, or thing from the beginning of time to the Effective Date of this Agreement, including without limitation those arising out of, based on, or relating to the hire, employment, termination, remuneration (including any severance, salary, bonus, incentive or other compensation; vacation sick leave or medical insurance benefits; or any benefits from any employee stock ownership, profit-sharing and/or any deferred compensation plan under Section 401 of the Internal Revenue Code of 1954 ("Claims").  The Claims that Employee is releasing include, but are not limited to, a release of any rights or claims Employee may have under:

	the Age Discrimination in Employment Act, which prohibits age discrimination in employment; 

	Title VII of the Civil Rights Act of 1964, which prohibits discrimination in employment based on race, color, national origin, religion or sex; 

	the Civil Rights Act of 1991; 

	the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; 

	the Americans with Disabilities Act; 

	the Family and Medical Leave Act; 

	and any other federal, state or local laws or regulations prohibiting employment discrimination, harassment or retaliation.  

Employee also releases any Claims for wrongful discharge or breach of contract, Claims for fany personal injury or tort, Claims for any compensation, benefits, expenses, bonuses, or any other employee rights or benefits, Claims for employment or reinstatement, Claims for attorneys' fees and costs, and all other Claims under any applicable statute, contract or other cause of action.  This Agreement covers both Claims Employee knows about and those Employee may not know about.  Employee assumes the risk of any and all unknown Claims which may exist at the time Employee signs this Agreement, and Employee agrees that this Agreement shall apply to any and all known and unknown Claims.

3.  No Release of Rights Under Agreement.  By signing this Release Agreement, Employee does not waive or release Employee's right to enforce the Agreement. 

4.  Lawsuits.  To the fullest extent permitted by law, Employee promises never to file a lawsuit, claim, complaint, charge, demand, administrative proceeding, agency action or any other legal proceeding (collectively "Lawsuit") asserting any Claims that are released in this Agreement.  Employee agrees to withdraw with prejudice all Lawsuits, if any, Employee has filed against any Choice Releasee asserting any Claims with any agency or court.  Employee also waives the right to seek or receive any monetary benefits with respect to Lawsuits asserted by administrative agencies or other third parties on Employee's behalf. Employee further agrees not to assist any other person in bringing any Lawsuit against any Choice Releasee, unless compelled to do so pursuant to a valid court order or subpoena. Employee agrees not to make any derogatory remarks or provide and disparaging information about any Choice Releasee.  Employee agrees to reasonably assist Choice in any Lawsuit arising from circumstances that took place during Employee's employment, to the extent reasonably necessary to protect Choice's interests.  Choice will reimburse Employee for all reasonable and necessary expenses Employee incurs in complying with the foregoing sentence, provided they are approved by Choice in writing prior to being incurred.   

5.  No Admission.  Employee agrees that this Release Agreement is not an admission of guilt or wrongdoing by the Choice Releasees, and Employee acknowledges that the Choice Releasees do not believe or admit that they have done anything wrong.  Employee acknowledges that Employee has not suffered any wrongful treatment by any Choice Releasee.

6.  Breach.  If Employee breaches this Release Agreement and files a Lawsuit against any Choice Releasee on Claims that Employee released in this Release Agreement, Employee agrees to pay for all costs incurred by the Choice Releasee, including reasonable attorneys' fees, in defending against Employee's Lawsuit. Employee further agrees not to assist any other person in bringing any Lawsuit against any Choice Releasee, unless compelled to do so pursuant to a valid subpoena or court order.  If Employee breaches the promises in this Release Agreement, Choice may terminate all Severance Benefits under the Agreement that are still owed to Employee.

7.  Governing Law.  This Agreement is governed by Maryland law, without regard to the principles of conflicts of laws.  If a dispute arises under this Agreement, any Lawsuit must be brought exclusively in the courts for Montgomery County, Maryland.  Employee and Choice voluntarily submit to the jurisdiction and venue of said court.

8.  Binding.  Employee agrees and acknowledges this Release Agreement binds Employee's heirs, administrators, representatives, executors, successors, and assigns, and will inure to the benefit of all Choice Releasees and their respective heirs, administrators, representatives, executors, successors, and assigns.

9.  Severability.  Any invalidity, in whole or in part, of any provision of this Release Agreement shall not affect the validity of any other of its provisions.

10.  Period for Review and Consideration.  Employee has 21 days from the date Employee receives this Release Agreement to review and consider this document before signing it.  Employee may use as much of this 21 day period as Employee wishes before signing this Release Agreement.  Choice advises Employee to consult with an attorney at Employee's own expense before signing this Release Agreement; whether to do so is Employee's decision.  If Employee wishes to sign this Release Agreement and thereafter be eligible to receive the Severance Benefits under the Agreement, Employee must deliver one fully executed original of this Release Agreement, to Choice Hotels International, 10750 Columbia Pike, Silver Spring, Maryland 20901, Vice President-- Human Resources, no later than the close of business on the 21st day after Employee receives this Release Agreement.  Employee's failure to deliver timely the executed Release Agreement will nullify the Agreement, and Employee will not be entitled to receive the Severance Benefits. 

11.  Revocation of Release Agreement. Employee may revoke this Release Agreement within 7 days after signing it (the "Revocation Period").  If Employee wishes to revoke this Release Agreement after signing it, Employee must deliver a written notice of revocation to Choice Hotels International, 10750 Columbia Pike, Silver Spring, Maryland 20901, Attention: Senior Director, Human Resources. Choice must receive this revocation no later than the close of business on the 7th day after Employee signs this Release Agreement.  If Employee revokes this Release Agreement, it shall not be effective or enforceable and Employee will not receive the Severance Benefits under the Agreement.]  This Agreement will not become effective or enforceable until such date that is is signed by both parties and the Revocation Period expires without Employee exercising Employee's right of revocation (the "Effective Date"). 

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS HAD AN OPPORTUNITY TO REVIEW AND CONSIDER THIS RELEASE AGREEMENT WITH AN ATTORNEY, AND THAT EMPLOYEE HAS HAD SUFFICIENT TIME TO CONSIDER IT.  AFTER SUCH CAREFUL CONSIDERATION, EMPLOYEE KNOWINGLY AND VOLUNTARILY ENTERS INTO THIS RELEASE AGREEMENT WITH FULL UNDERSTANDING OF ITS MEANING AND EFFECT.

Employee:

 

______________________________

Thomas MirgonEX10-1

ASSIGNMENT AND ASSUMPTION OF LEASE AND DEBT AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND DEBT AGREEMENT (this "Agreement") is made effective January 18, 2007

AMONG:
CONSTITUTION MINING CORP., a Nevada corporation, with an address at Suite 

300 - 1055 West Hastings Street, Vancouver, British Columbia, Canada, V6E 2E9 

("Constitution");

FAYETTEVILLE OIL AND GAS, INC., a Nevada corporation, with an address at 

Suite 133, 800 - 15355 24th Avenue, Surrey, British Columbia, Canada V4A 2H9 

("Fayetteville");

IBERICA ENTERPRISES INC., with an address at Mattenwag 8 CH-5212 Hausen, 

Zurich, Switzerland; ("Iberica"); and

MONTEX FAYETTEVILLE, LLC, a Delaware limited liability company, with an 

address at 111 Presidential Boulevard, Suite 158, Bala Cynwyd, Pennsylvania, 19004.

WHEREAS:
A.   In April 2006, Constitution (formerly named Crafty Admiral Enterprises Limited) entered into that certain Oil and Gas Lease and Addendum thereto with Alice Ramsey, Paul Weber, Reid Weber and Rebecca Daniels (collectively, the "Lessors") with respect to certain property located in the County of St. Francis, Arkansas, as described in Exhibit A to such Oil and Gas Lease (the "Property");

B.   Such Oil and Gas Lease and Addendum thereto were subsequently amended pursuant to each of Addendum No. 2, Addendum No. 3 and Addendum No. 4 to such Oil and Gas Lease, each of which were entered into by and between Constitution and the Lessors (such Oil and Gas Lease, together with each of the Addendums thereto, is collectively referred to herein as the "Lease");

C.   In April 2006, Constitution entered into that certain Convertible Debenture Note with Iberica (the "Iberica Note"), whereby Constitution agreed to pay the principal sum of U.S.$500,000 and interest thereon to Iberica in accordance with the terms of the Iberica Note;

D.   As of December 31, 2007, the balance due on the Iberica Note is U.S.$306,378, which consists of principal of U.S.$250,000 and unpaid interest of U.S.$56,378;

E.   In June 2006, Constitution entered into that certain Convertible Debenture Note with Montex (the "Montex Note"), whereby Constitution agreed to pay the principal sum of U.S.$415,000 and interest thereon to Montex in accordance with the terms of the Montex Note;

F.   As of December 31, 2007, the balance due on the Montex Note is U.S.$482,241, which consists of principal of U.S.$415,000 and unpaid interest of U.S.$67,241;

G.   Constitution desires to assign the Lease to Fayetteville, and Fayetteville desires to assume the Lease, in consideration of Constitution assigning its payment obligations under the Iberica Note and the Montex Note, and Fayetteville assuming such payment obligations under such Notes, each on a demand basis, as more fully described herein;

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H.   Iberica agrees that Fayetteville's assumption of the payment obligations under the Iberica Note, on a demand basis, shall release Constitution's obligations under the Iberica Note; and

I.   Montex agrees that Fayetteville's assumption of the payment obligations under the Montex Note, on a demand basis, shall release Constitution's obligations under the Montex Note.

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and of the mutual covenants and agreements hereinafter contained, the parties hereto agree as follows:

Part I

Assignment and Assumption of Lease

1.1       Subject to the terms of this Agreement, Constitution hereby assigns to Fayetteville all of the right, title and interest of Constitution in and to the Lease and the Property.

1.2       In consideration of the assignment by Constitution of its right, title and interest in and to the Lease and the Property, Fayetteville hereby assumes all obligations of Constitution pursuant to the Lease, and agrees to discharge all obligations of Constitution pursuant to the Lease as the "Lessee" under the Lease.

1.3       As further consideration of the assignment by Constitution of its right, title and interest in and to the Lease and the Property, Fayetteville hereby assumes all payment obligations of Constitution, as of December 31, 2007, on a demand basis, under each of the Iberica Note and the Montex Note, as described in Part II of this Agreement.

Part II

Assignment and Assumption of Debt

2.1       As consideration of the assignment by Constitution of its right, title and interest in and to the Lease and the Property, Fayetteville hereby assumes all payment obligations of Constitution, as of December 31, 2007, on a demand basis, under each of the Iberica Note and the Montex Note; it being acknowledged and agreed by Constitution, Iberica and Fayetteville that such payment obligations under the Iberica Note as of December 31, 2007 equal U.S.$306,378, consisting of principal of U.S.$250,000 and unpaid interest of U.S.$56,378; it being acknowledged and agreed by Constitution, Montex and Fayetteville that such payment obligations under the Montex Note as of December 31, 2007 equal U.S.$482,241, consisting of principal of U.S.$415,000 and unpaid interest of U.S.$67,241.

2.2       Iberica hereby releases Constitution from any and all of its obligations under the Iberica Note.

2.3.       Montex hereby releases Constitution from any and all of its obligations under the Montex Note.

Part III

General

3.1       This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successor and assigns.

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3.2       This Agreement constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof and may not be amended except by means of a writing executed by all of the parties hereto.

3.3       The headings in this Agreement have been provided for the convenience of the parties and shall not have any effect on the interpretation of this Agreement.

3.4       The parties will execute all such further and other documents or assurances as may be required in order to carry out the terms of this Agreement.

3.5       This Agreement shall be interpreted in accordance with and governed by the laws of the State of Nevada.

3.6       This Agreement may be executed in counterparts, which together shall constitute one instrument.  Delivery of an executed copy of this Agreement by electronic facsimile transmission or other means of electronic communication capable of producing a printed copy will be deemed to be execution and delivery of this Agreement as of its effective date.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first above written. 

	
CONSTITUTION MINING CORP.

Per:      "Daniel Hunter"

             Authorized Signatory

	
FAYETTEVILLE OIL AND GAS, INC.

Per:      "John Martin"

             Authorized Signatory

	
IBERICA ENTERPRISES INC.

Per:      "Jose Silva" and "Dianeth de Ospino"

             Authorized Signatory

	
MONTEX FAYETTEVILLE, LLC

Per:      "Ernest Bartlett"

             Authorized Signatory

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