Document:

NEITHER THIS NOTE NOR THE SECURITIES
INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OR
ANY STATE SECURITIES LAWS AND NEITHER THIS NOTE NOR ANY INTEREST THEREIN NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE
MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.

 

 

SECURED
CONVERTIBLE PROMISSORY NOTE

 

	Principal
    Amount: $250,000 	Issue
    Date: March 28,  2012
	 	Maturity Date:
    September 30, 2012

 

 

For good and valuable consideration, Next 1 Interactive,
Inc., a Nevada Corporation (“Maker”), hereby makes and delivers this Promissory Note (this “Note”)
in favor of. Monaco Investment Partners II, LP.or its assigns (“Holder”), and hereby agrees as follows:

 

ARTICLE I.

PRINCIPAL AND INTEREST; SECURITY AGREEMENT

 

Section 1.1For value received,
Maker promises to pay to Holder at such reasonable place as Holder may designate in writing, in currently available funds of the
United States, the principal sum of Two Hundred Fifty Thousand Dollars ($250,000.00). Maker’s obligation under this
Note shall accrue interest at the rate of Twelve Percent (12.0%) per annum commencing on the first business day after the
Issue Date and continuing until payment in full of the principal sum has been made or duly provided for. Interest shall be computed
on the basis of a 365-day year or 366-day year, as applicable, and actual days lapsed.

 

Section 1.2

a.All accrued interest
then outstanding shall be due and payable by the Maker on a quarterly basis on or before the last day of the Maturity Date.

 

b.All payments shall
be applied first to interest and then to principal and shall be credited to the Maker's account on the date that such payment,
if paid electronically, is confirmed by a Fed Reference No. or, if paid by check, is received by the Holder.

 

c.All principal and
accrued interest then outstanding shall be due and payable by the Maker to the Holder on or before September 30, 2012 (the
“Maturity Date”).

 

d.In the event of
the occurrence and continuance of an Event of Default (as defined herein), interest shall accrue on the balance due hereunder at
the rate of Eighteen Percent (18.0%) per annum from the date of such Event of Default until the earlier of: (i) the date
such Event of Default is cured; or (ii) until all obligations hereunder are paid in full. Interest shall be computed on the basis
of a 365-day year or 366-day year, as applicable, and actual days lapsed.

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e.Maker shall have
the right to prepay all or any part of the interest and/or principal owed under this Note. The penalty for prepaying the Note before
maturity is the difference between the total amount of interest due at maturity ($6,721.31) minus any interest already paid.

 

Section 1.3Exchangeability of
Notes: This Note along with the $250,000 Note issued January 12th 2012 to Donald P Monaco Insurance Trust will have
the right to exchange in whole or in part to the Newly Issued Next 1 Interactive Preferred B convertible shares at any time up
to the maturity date being September 30th 2012.

 

Section 1.4As collateral security
for the complete, and timely satisfaction of all present and future indebtedness, liabilities, duties, and obligations of Maker
to Holder evidenced by or arising under this Note, and including, without limitation, all principal and interest payable under
this Note and all reasonable attorneys’ fees, costs and expenses incurred by Holder in the collection or enforcement of the
same (collectively, the “Obligations”), Maker hereby pledges, assigns and grants to Holder a continuing security
interest and lien in all of Maker’s right, title and interest in and to the property, whether now owned or hereafter acquired
by Maker and whether now existing or hereafter coming into existence, including the proceeds of any disposition thereof, described
on Exhibit “A” attached hereto and incorporated herein by this reference (collectively, the “Collateral”).
As applicable, the terms of this Note with respect to Maker’s granting of a security interest in the Collateral to Holder
shall be deemed to be a security agreement under applicable provisions of the Uniform Commercial Code (“UCC”),
with Maker as the debtor and Holder as the secured party.

 

Section 1.5Upon the execution
and delivery of this Note, Maker authorizes Holder to file such financing statements and other documents in such offices as shall
be necessary or as Holder may reasonably deem necessary to perfect and establish the priority of the liens granted by this Note,
including any amendments, modifications, extensions or renewals thereof. Maker agrees, upon Holder’s request, to take all
such actions as shall be necessary or as Holder may reasonably request to perfect and establish the priority of the liens granted
by this Note, including any amendments, modifications, extensions or renewals thereof. Until all Obligations of Maker are satisfied
hereunder, Maker shall cooperate fully with Holder in establishing and maintaining Holder’s perfection of Holder’s
security interest in the Collateral, including notifying and keeping Holder apprised of any change in the location of any Collateral.
Upon satisfaction of all of the Obligations hereunder by Maker, Holder shall take all such actions as shall be necessary or as
Maker may reasonably request to remove the security interest on the Collateral.

 

Section 1.6With regard to the
Collateral, Maker hereby represents and warrants the following to Holder, the security interest granted hereby shall be a first
priority lien on the Collateral and no prior or superior liens, security interests or encumbrances exist with respect to any part
of the Collateral.

 

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Section 1.7 Covenants of
Maker with regard to Collateral. For so long as any Obligations remain outstanding:

 

a.Maker shall not
sell, assign or transfer any of the Collateral, or any part thereof or interest therein, except in the ordinary course of its business;

 

b.Maker shall pay
or cause to be paid promptly when due all taxes and assessments on the Collateral, unless disputed in good faith; and

 

c.By the Issue Date,
Maker shall have notified Holder as to the current location of all of the Collateral, providing Holder with such information so
that Holder may perfect and maintain the priority of its security interest therein.

 

Section 1.8Use of Collateral.
For so long as no Event of Default shall have occurred and be continuing under this Note, Maker shall be entitled to use and
possess the Collateral and to exercise its rights, title and interest in all contracts, agreements, and licenses, subject to the
rights, remedies, powers and privileges of Holder under this Note, provided the use, possession or exercise of the Collateral
does not otherwise constitute an Event of Default. Notwithstanding anything herein to the contrary, Maker shall remain liable to
perform its duties and obligations under the contracts and agreements included in the Collateral in accordance with their respective
terms to the same extent as if this Note had not been executed and delivered; the exercise by Holder of any right, remedy, power
or privilege in respect of this Note shall not release the Maker from any of its outstanding duties and obligations under such
contracts and agreements; and Holder shall have no duty, obligation or liability under such contracts and agreements included in
the Collateral by reason of this Note, nor shall Holder be obligated to perform any of the duties or obligations of Maker under
any such contract or agreement or to take any action to collect or enforce any claim (for payment) under any such contract or agreement.

 

ARTICLE II.

CONVERSION RIGHTS; CONVERSION PRICE

 

Section 2.1Conversion.
The Holder shall have the right, from time to time, commencing on the Issue Date, to convert any part of the outstanding interest
or principal amount of this Note into fully paid and non-assessable shares of Common Stock (the “Common Stock”)
of the Maker (the “Conversion Stock”) at the Conversion Price determined as provided herein. Promptly after
delivery to Maker of a Notice of Conversion of Convertible Note in the form attached hereto as Exhibit “1” that is
completed and duly executed by the Holder assigns (a “Conversion Notice”), the Maker shall issue and deliver
to Holder that number of shares of Common Stock for that portion of this Note that is to be converted as set forth in the Conversion
Notice.

 

No fraction of a share of Common Stock
or scrip representing a fraction of a share of Common Stock will be issued upon conversion, but the number of shares of Common
Stock issuable shall be rounded to the nearest whole share. The date on which the Notice of Conversion is given (the “Conversion
Date”) shall be deemed to be the date on which the Holder faxes (and receives confirmation of delivery for) the Notice
of Conversion duly executed to the Maker. Facsimile delivery of the Notice of Conversion shall be accepted by the Maker at facsimile
number 1-888 693-0961, Attn.: [William Kerby, Chief Executive Officer and Chairman]. Certificates representing the
Common Stock upon conversion will be delivered to the Holder within ten (10) Trading Days (as defined below) (“Delivery
Due Date”) from the date the Notice of Conversion is received by the Maker. Delivery of shares of Common Stock upon conversion
to Holder shall be made to the address specified by the Holder in the Notice of Conversion.

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Provided Maker is participating in the
Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon
request of the Holder and in lieu of delivering physical certificates representing the Common Stock issuable upon conversion, the
Maker shall use its best efforts to cause its transfer agent to electronically transmit the Common Stock issuable upon conversion
to the Holder by crediting the account of Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission
(“DWAC”) system.

 

Section 2.2[Reserved]

 

Section 2.3. Conversion; Ownership
Limitation and Waiver. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined
by dividing (i) the amount of principal and interest to be converted by (ii) the Conversion Price, provided, however,
that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion
of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares
of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Note or the unexercised
or unconverted portion of any other security of the Maker subject to a limitation on conversion or exercise analogous to the limitations
contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect
to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates
of more than 49.99% of the outstanding shares of Common Stock of the Maker.

 

The limitations on conversion may be waived
by the Holder upon, at the election of the Holder, not less than 61 days’ prior written notice to the Maker, and the provisions
of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may
be specified in such notice of waiver).

 

Section 2.4. Conversion Price;
Adjustment. Upon any conversion of this Note, the conversion price will be determined as follows:

 

Up until maturity date the conversion price
shall be $0.012 (one and one fifth cents) per share (subject to equitable adjustments for stock splits,
stock dividends or rights offerings by the Maker relating to the Maker’s securities or the securities of any Subsidiary (as
defined herein) of the Maker, combinations, recapitalization, reclassifications, extraordinary distributions and similar events).

 

(a)Shareholder
Rights. Nothing contained in this Note shall be construed as conferring upon the Holder or any other person or entity the right
to vote or to consent or to receive notice as a shareholder in respect of meeting of shareholders for the election of directors
of the Maker or any other matters or any rights whatsoever as a shareholder of the Maker; and no dividends shall be payable or
accrued in respect of this Note.

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(b)Adjustment.
Upon the occurrence of a stock split or stock dividend, the number of shares of Common Stock issuable
upon conversion of the Note shall be equitably adjusted. 

 

(c)Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets. In case the Maker shall reorganize its capital, reclassify
its capital stock, consolidate or merge with or into another corporation (where the Maker is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock of the Maker), or sell, transfer or otherwise dispose of
all or substantially all its property, assets or business to another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of common stock of the successor or acquiring corporation,
or any cash, shares of stock or other securities or property of any nature whatsoever (including warrants or other subscription
or purchase rights) in addition to or in lieu of common stock of the successor or acquiring corporation (“Other Property”),
are to be received by or distributed to the holders of Common Stock of the Maker, then Holder shall have the right thereafter to
receive, upon conversion of this Note, the number of shares of common stock of the successor or acquiring corporation or of the
Maker, if it is the surviving corporation, and Other Property receivable upon or as a result of such reorganization, reclassification,
merger, consolidation or disposition of assets by a holder of the number of shares of Common Stock into which this Note is convertible
immediately prior to such event. In case of any such reorganization, reclassification, merger, consolidation or disposition of
assets, Maker shall use it commercially reasonable best efforts to cause the successor or acquiring corporation (if other than
the Maker) to assume the observance and performance of each and every covenant and condition of this Note to be performed and observed
by the Maker and all the obligations and liabilities hereunder, subject to such modifications as may be deemed appropriate (as
determined in good faith by resolution of the Board of Directors of the Maker) in order to provide for adjustments of the number
of shares of common stock into which this Note is convertible which shall be as nearly equivalent as practicable to the adjustments
provided for in this Section 2.4(c). For purposes of this Section 2.4(c), “common stock of the successor or acquiring corporation”
shall include stock of such corporation of any class which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also include any evidences of indebtedness, shares of stock
or other securities which are convertible into or exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other rights to subscribe for or purchase any such stock.
The foregoing provisions of this Section 2.4(c) shall similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.

(d)Notice of Adjustment.
Whenever the number of shares of Common Stock or number or kind of securities or other property issuable upon the conversion of
this Note or the Conversion Price is adjusted, as herein provided, the Maker shall promptly mail by registered or certified mail,
return receipt requested, to the Holder of this Note notice of such adjustment or adjustments setting forth the number of shares
of Common Stock (and other securities or property) issuable upon the conversion of this Note and the Conversion Price of such shares
of Common Stock (and other securities or property) after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was made. Such notice, in the absence of manifest error,
shall be conclusive evidence of the correctness of such adjustment.

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Section 2.5. Notice of
Corporate Action. If at any time:

 

(a)the Maker shall take a record
of the holders of its Common Stock for the purpose of entitling them to receive a dividend or other distribution, or any right
to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property,
or to receive any other right, or

 

(b)there shall be any capital reorganization
of the Maker, any reclassification or recapitalization of the capital stock of the Maker or any consolidation or merger of the
Maker with, or any sale, transfer or other disposition of all or substantially all the property, assets or business of the Maker
to, another corporation or,

 

(c)there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Maker;

 

then, in any one or more of such
cases, the Maker shall give to Holder (i) at least thirty (30) days’ prior written notice of the date on which a record date
shall be selected for such dividend, distribution or right or for determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer, disposition, dissolution, liquidation or winding up, at
least thirty (30) days’ prior written notice of the date when the same shall take place. Such notice in accordance with the
foregoing clause also shall specify (x) the date on which any such record is to be taken for the purpose of such dividend, distribution
or right, the date on which the holders of Common Stock shall be entitled to any such dividend, distribution or right, and the
amount and character thereof, and (y) the date on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place and the time, if any such time is to be fixed, as
of which the holders of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each such written notice shall be sufficiently given
if addressed to Holder at the last address of Holder appearing on the books of the Maker and delivered in accordance with Section
5.1.

 

Section 2.6. Restrictions on
Securities. This Note has been issued by the Maker pursuant to the exemption from registration under the Securities Act of
1933, as amended (the “Act”). None of this Note or the shares of Common Stock issuable upon conversion of this
Note may be offered, sold or otherwise transferred unless (i) they first shall have been registered under the Act and applicable
state securities laws or (ii) the Maker shall have been furnished with an opinion of legal counsel (in form, substance and scope
reasonably acceptable to Maker) to the effect that such sale or transfer is exempt from the registration requirements of the Act.
Each certificate for shares of Common Stock issuable upon conversion of this Note that have not been so registered and that have
not been sold pursuant to an exemption that permits removal of the applicable legend, shall bear a legend substantially in the
following form, as appropriate:

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THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE SECURITIES REPRESENTED HEREBY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, OR
SUCH OFFERS, SALES AND TRANSFERS ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.

 

Upon the request of Holder to remove the
foregoing legend from the stock certificate, if any, representing any shares of Common Stock issuable upon conversion of this Note,
the Maker shall remove the foregoing legend from such certificate or issue to Holder a new stock certificate free of any transfer
legend if (a) with such request, the Maker shall have received an opinion of counsel, reasonably satisfactory to the Maker in form,
substance and scope, to the effect that any such legend may be removed from such stock certificate or (b) a registration statement
under the Act covering such securities is in effect.

 

Section 2.7. Reservation of Common
Stock.

 

(a)The Maker
covenants that during the period the Note is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of Common Stock of the Maker upon the Conversion of the Note. The Maker further covenants
that its issuance of this Note shall constitute full authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary stock certificates for shares of Common Stock of the Maker issuable upon the conversion
of this Note. The Maker will take all such reasonable action as may be necessary to assure that such shares of Common Stock may
be issued as provided herein without violation of the Act or applicable state laws, or of any requirements of the OTCBB (or such
other principal market upon which the Common Stock of the Maker may be listed or quoted).

 

(b)The Maker
shall not by any action, including, without limitation, amending its articles of incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this Note, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder against
impairment. Without limiting the generality of the foregoing, the Maker will (a) take all such action as may be necessary or appropriate
in order that the Maker may validly and legally issue fully paid and nonassessable shares of Common Stock upon the conversion of
this Note, and (b) use its commercially reasonable best efforts to obtain all such authorizations, exemptions or consents from
any public regulatory body having jurisdiction thereof as may be necessary to enable the Maker to perform its obligations under
this Note.

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(c)Upon
the request of Holder, the Maker will at any time during the period this Note is outstanding acknowledge in writing, in form reasonably
satisfactory to Holder, the continuing validity of this Note and the obligations of the Maker hereunder.

 

(d)Before
taking any action which would result in an adjustment in the number of shares of Common Stock into which this Note is convertible
or in the Conversion Price, the Maker shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be
necessary from any public regulatory body or bodies having jurisdiction thereof.

 

(e)If at
any time the Maker does not have a sufficient number of authorized and available shares of Common Stock for issuance upon conversion
of the Note, then the Maker shall call and hold a special meeting of its stockholders within forty-five (45) days of that time
for the sole purpose of increasing the number of authorized shares of Common Stock.

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

Section 3.1. The Holder represents and warrants to the
Maker:

 

(a)The Holder of
this Note, by acceptance hereof, agrees that this Note is being acquired for investment and that such Holder will not offer, sell
or otherwise dispose of this Note or the Common Stock issuable upon conversion hereof except under circumstances that will not
result in a violation of the Act or any applicable state securities laws or similar laws relating to the sale of securities;

 

(b)That Holder
understands that none of this Note or the Common Stock issuable upon conversion hereof have been registered under the Act in reliance
upon the exemptions from the registration provisions of the Act and any continued reliance on such exemption is predicated on the
representations of the Holder set forth herein;

 

(c)Holder (i) has
adequate means of providing for his current needs and possible contingencies, (ii) has no need for liquidity in this investment,
(iii) is able to bear the substantial economic risks of an investment in this Note for an indefinite period, (iv) at the present
time, can afford a complete loss of such investment, and (v) does not have an overall commitment to investments which are not readily
marketable that is disproportionate to Holder’s net worth, and Holder’s investment in this Note will not cause such
overall commitment to become excessive;

 

(d)Holder is an
“accredited investor” (as defined in Regulation D promulgated under the Act) and the Holder’s total investment
in this Note does not exceed 10% of the Holder’s net worth; and

 

(e)Holder recognizes
that an investment in the Maker involves significant risks and only investors who can afford the loss of their entire investment
should consider investing in the Maker and this Note.

 

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Section 3.2The Maker represents
and warrants to Holder:

 

(a)Organization
and Qualification. The Maker and each of its Subsidiaries (as defined below), if any, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate
and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated
and conducted. The Maker and each of its Subsidiaries is duly qualified as a foreign corporation to do business and is in good
standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such
qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.
“Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition
or prospects of the Maker or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements
or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other organization,
whether incorporated or unincorporated, in which the Maker owns, directly or indirectly, at least fifty one percent (51%) of the
outstanding equity or other ownership interest.

 

(b)Authorization;
Enforcement. (i) The Maker has all requisite corporate power and authority to enter into and perform this Note and to consummate
the transactions contemplated hereby and to issue the Common Stock, in accordance with the terms hereof, (ii) the execution and
delivery of this Note by the Maker has been duly authorized by the Maker’s Board of Directors and no further consent or authorization
of the Maker, its Board of Directors, or its shareholders is required, (iii) this Note has been duly executed and delivered by
the Maker by its authorized representative, and such authorized representative is the true and official representative with authority
to sign this Note and the other documents executed in connection herewith and bind the Maker accordingly, and (iv) this Note constitutes,
a legal, valid and binding obligation of the Maker enforceable against the Maker in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, reorganization, moratorium, liquidation, conservatorship, receivership
or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable
principles of general application.

 

(c)Capitalization.
As of the date hereof, the authorized capital stock of the Maker consists of 2,500,000,000 shares of Common Stock, $0.00001 par
value per share, of which 722,455,590 shares are issued and outstanding. No shares of Common
Stock of the Maker are subject to preemptive rights or any other similar rights. 

 

(d)Issuance
of Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note, will be validly
issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof
(except for those imposed by the federal and state securities laws of the United States) and shall not be subject to preemptive
rights or other similar rights of shareholders of the Maker and will not impose personal liability upon the Holder.

 

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(e)Acknowledgment
of Dilution. The Maker understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of
the Conversion Shares upon conversion of this Note.

 

(f)No
Conflicts. The execution, delivery and performance the Note by the Maker and the consummation by the Maker of the transactions
contemplated hereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not
(i) conflict with or result in a violation of any provision of the Articles of Incorporation or By-laws of the Maker or (ii) violate
or conflict with, or result in a breach of any provision of, or constitute an Event of Default
(or an event which with notice or lapse of time or both could become an Event of Default) under,
or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement or instrument to which the
Maker or any of its Subsidiaries is a party (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have a Material Adverse Effect). 

 

(g)SEC
Documents. The Maker has filed all reports, schedules, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission (“SEC”) pursuant to the reporting requirements of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”).

 

(h)Absence
of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body against or affecting the Maker or any of its Subsidiaries that could have
a Material Adverse Effect.

 

(i)No
Integrated Offering. The issuance of the Conversion Stock to the Holder will not be integrated with any other issuance of the
Maker’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Maker
or its securities.

 

(j)No
Investment Company. The Company is not, and upon the issuance and sale of the Conversion Stock as contemplated by this Note
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Maker is not controlled by an Investment Company.

 

ARTICLE IV.

EVENTS OF DEFAULT

 

Section 4.1.Default.
The following events shall be defaults under this Note (“Events of Default”):

 

(a)default
in the due and punctual payment of all or any part of any payment of interest or the principal amount as and when such amount or
such part thereof shall become due and payable hereunder; provided, however, that such failure shall not result in
an Event of Default to the extent such payment is made on or before the fifth (5th) business day after the due date;
or

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(b)failure
on the part of the Maker duly to observe or perform in all material respects any of the covenants or agreements on the part of
the Maker contained herein (other than those covered by clause (a) above) for a period of thirty (30) business days after the date
on which written notice specifying such failure, stating that such notice is a “Notice of Default” hereunder and demanding
that the Maker remedy the same, shall have been given by the Holder by registered or certified mail, return receipt requested,
to the Maker; or

 

(c)any representation,
warranty or statement of fact made by the Maker herein when made or deemed to have been made, false or misleading in any material
respect; provided, however, that such failure shall not result in an Event of Default to the extent it is corrected
by the Maker within a period of ten (10) business days after the date on which written notice specifying such failure, stating
that such notice is a “Notice of Default” hereunder and demanding that the Maker remedy same, shall have been given
by the Holder by registered or certified mail, return receipt requested; or

 

(d)any of
the following actions by the Maker pursuant to or within the meaning of Title 11 of the U.S. Code or any similar federal or state
law for the relief of debtors (collectively, the “Bankruptcy Law”): (A) commencement of a voluntary case or
proceeding, (B) consent to the entry of an order for relief against it in an involuntary case or proceeding, (C) consents to the
appointment of a receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law (each, a “Custodian”),
of it or for all or substantially all of its property, (D) a general assignment for the benefit of its creditors, or (E) admission
in writing its inability to pay its debts as the same become due; or

 

(e)entry
by a court of competent jurisdiction of an order or decree under any Bankruptcy Law that: (A) is for relief against the Maker in
an involuntary case, (B) appoints a Custodian of the Maker or for all or substantially all of the property of the Maker, or (C)
orders the liquidation of the Maker, and such order or decree remains unstayed and in effect for one hundred twenty (120) days;
or

 

(f)The Borrower
shall cease to be subject to the reporting requirements of the Exchange Act; or

 

(g)the Maker shall (i) fail to
maintain quotation or listing of its Common Stock on the OTCBB or an equivalent replacement exchange for any period of thirty (30)
days or longer or (ii) be suspended from trading on any electronic quotation system upon which the Common Stock of the Maker may
be quoted for any period of time.

 

Section 4.2.Remedies Upon
Event of Default. Upon the occurrence of an Event of Default by Maker under this Note, then, in addition to all other rights
and remedies at law or in equity, Holder may exercise any one or more of the following rights and remedies:

 

a. Accelerate the
time for payment of all amounts payable under this Note by written notice thereof to Maker, whereupon all such amounts shall be
promptly due and payable;

 

b. Pursue and enforce
all of the rights and remedies provided to a secured party with respect to the Collateral under the Uniform Commercial Code;

    	11

    	 

    

 

c. Make such appearance
and take such action as Holder deems necessary, in its sole discretion, to protect Holder’s interest, including, but not
limited to, (i) entry upon the Maker’s property to make repairs to the Collateral and (ii) procurement of satisfactory insurance.
Any amounts disbursed by Holder pursuant to this Section, with interest thereon, shall become additional indebtedness of the Maker
secured by this Note and shall bear interest from the date of disbursement at the annual rate stated in this Note. Nothing contained
in this Section shall require Holder to incur any expense or take any action;

 

d. Require Maker
to assemble the Collateral and make it available to the Maker at the place to be designated by the Holder which is reasonably convenient
to both parties. The Holder may sell all or any part of the Collateral as a whole or in part either by public auction, private
sale, or other method of disposition. The Holder may bid at any public sale on all or any portion of the Collateral. Unless the
Collateral threatens to decline speedily in value, Holder shall give Maker reasonable notice of the time and place of any public
sale or of the time after which any private sale or other disposition of the Collateral is to be made, and notice given at least
fifteen (15) days before the time of the sale or other disposition shall be conclusively presumed to be reasonable; and

 

e. Pursue any other
rights or remedies available to Holder at law or in equity.

Section 4.3.
Payment of Costs. The Maker shall promptly reimburse the Holder for any and all reasonable costs and expenses, including
reasonable attorneys’ fees and disbursement and court costs, incurred by the Holder in collecting or otherwise enforcing
this Note or in attempting to collect or enforce this Note.

Section 4.4.
Powers and Remedies Cumulative; Delay or Omission Not Waiver of Event of Default. No right or remedy herein conferred upon
or reserved to the Holder is intended to be exclusive of any other right or remedy available to Holder under applicable law, and
every such right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. No
delay or omission of the Holder to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence therein;
and every power and remedy given by this Note or by law may be exercised from time to time, and as often as shall be deemed expedient,
by the Holder.

Section 4.5. Waiver of
Past Defaults. The Holder may waive any past default or Event of Default hereunder and its consequences, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon.

 

Section 4.6. Waiver of Presentment
etc. The Maker hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as specifically provided herein.

    	12

    	 

    

 

ARTICLE V.

MISCELLANEOUS

 

Section 5.1. Notices. Any notice herein
required or permitted to be given shall be in writing and may be personally served or delivered by courier or sent by United
States mail and shall be deemed to have been given upon receipt if personally served (which shall include telephone line
facsimile transmission) or sent by courier or three (3) days after being deposited in the United States mail, certified, with
postage pre-paid and properly addressed, if sent by mail. For the purposes hereof, the address of the Holder shall
be  Monaco Investment Partners II, LP. 201 Secretariat Court, Wheaton, IL  60189-2026; and the address of the
Maker shall be 2690 Weston Road, Suite 200, Weston, FL 33331. The Maker shall accept facsimile notice at the following number
1 888 693 0961 Attn.: [William Kerby, Chief Executive Officer and Chairman]. Both the Holder and the Maker may
change the address for service by delivery of written notice to the other as herein provided.

 

Section 5.2. Amendment. This
Note and any provision hereof may be amended only by an instrument in writing signed by the Maker and the Holder.

 

Section 5.3. Assignability.
This Note shall be binding upon the Maker and its successors and assigns and shall inure to be the benefit of the Holder and its
successors and assigns; provided, however, that so long as no Event of Default has occurred, this Note shall only
be transferable in whole subject to the restrictions contained in the restrictive legend on the first page of this Note.

 

Section 5.4. Governing Law; Venue.
This Note shall be governed by the internal laws of the State of Florida, without regard to conflicts of laws principles. Any action
brought by Holder or Maker against the other concerning the transactions contemplated by this Note shall be brought only in the
state courts of Florida or in the federal courts located in the state of Florida. Holder and Maker hereby irrevocably waive any
objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction
or venue or based upon forum non conveniens. Holder and Maker agree to submit to the in personam jurisdiction of such courts
and hereby irrevocably waive trial by jury.

 

Section 5.5. Replacement
of Note. The Maker covenants that upon receipt by the Maker of evidence reasonably satisfactory to it of the loss, theft, destruction
or mutilation of this Note, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it such
as the posting of a bond, and upon surrender and cancellation of such Note, if mutilated, the Maker will make and deliver a new
Note of like tenor.

 

Section 5.6. Severability.
In case any provision of this Note is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent
possible, and the validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired
thereby.

 

    	13

    	 

    

Section 5.7. Headings. The
headings of the sections of this Note are inserted for convenience only and do not affect the meaning of such section.

 

Section 5.8. Counterparts.
This Note may be executed in multiple counterparts, each of which shall be an original, but all of which shall be deemed to constitute
on instrument.

 

IN WITNESS WHEREOF,
with the intent to be legally bound hereby, the Maker as executed this Note as of the date first written above.

 

	
        NEXT 1 INTERACTIVE, INC.

 

        By: _____________________

        Its: _____________________

 

    	14

    	 

    

 

EXHIBIT 1

 

CONVERSION NOTICE

 

 

(To be executed by the Holder in order to
Convert the Note)

 

TO:

 

 

The undersigned hereby irrevocably elects
to convert US$______________ of the principal amount of the above Note into shares of Common Stock of Next 1 Interactive, Inc.,
according to the conditions stated therein, as of the Conversion Date written below. If shares are to be issued in the name of
a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Maker in accordance therewith. No fee will be charged to
the Holder for any conversion, except for such transfer taxes, if any.

 

Conversion Date: ___________________________________________

 

Applicable Conversion Price: $____________

 

	Signature:	___________________________________________
	 	 
	Name:	___________________________________________
	 	 
	Address:	___________________________________________
	 	 
	 	___________________________________________

 

	Tax I.D. or Soc. Sec. No:	_______________________________
	 	 
	Principal Amount to be converted:	US$____________________________
	 	 
	Amount of Note unconverted:	US$____________________________
	 	 
	Number of shares of Common Stock to be issued:	________________________

 

 

 

    	15

    	 

    

Exhibit “A”

 

Collateral 

 

All assets in which
Next 1 Interactive, Inc., a Nevada Corporation, has any right, title, or interest, regardless of the manner in which such items
are formally held or titled, including, but not limited to, the following, all as defined in the Nevada Uniform Commercial Code
- Secured Transactions (Nevada Revised Statutes (“NRS”) §§ 104.9101 et. seq.) as of the date of the Note,
and as the same may be amended hereafter:

 

(1) Accounts, as defined
in NRS 104.9102(1)(a)

 

(2) Cash proceeds,
as defined in NRS 104.9102(1)(I)

 

(3) Chattel paper,
as defined in NRS 104.9102(1)(k)

 

(4) Commercial tort
claims, as defined in NRS 104.9102(1)(m)

 

(5) Commodity accounts
and commodity contracts, as defined in NRS 104.9102(1)(n) and NRS 104.9102(1)(o), respectively,

 

(6) Deposit accounts,
as defined in NRS 104.9102(1)(cc)

 

(7) Documents, as defined
in NRS 104.9102(1)(dd)

 

(8) Electronic chattel
paper, as defined in NRS 1049102(1)(ee)

 

(9) Equipment, as defined
in NRS 104.9102(1)(gg)

 

(10) General intangibles,
as defined in NRS 104.9102(1)(pp)

 

(11) Goods, as defined
in NRS 104.9102(1)(rr)

 

(12) Instruments, as
defined in NRS 104.9102(1)(uu)

 

(13) Inventory, as
defined in NRS 104.9102(1)(vv)

 

(14) Investment property,
as defined in NRS 104.9102(1)(ww)

 

(15) Letter-of-credit
right, as defined in NRS 104.9102(1)(yy)

 

(16) Noncash proceeds,
as defined in NRS 104.9102(1)(fff)

 

(17) Payment intangible,
as defined in NRS 104.9102(1)(iii)

 

(18) Proceeds, as defined
in NRS 104.9102(1)(lll)

    	16

    	 

    

 

(19) Promissory notes,
as defined in NRS 104.9102(1)(mmm)

 

(20) Record, as defined
in NRS 104.9102(1)(qqq)

 

(21) Software, as defined
in NRS 104.9102(1)(www)

 

(22) Supporting obligations,
as defined in NRS 104.9102(1)(yyy)

 

(23) Tangible chattel
paper, as defined in NRS 104.9102(1)(zzz)

 

(24) The following,
as defined in NRS 104.9102(2): certificated securities, contracts for sale, leases, lease agreements, lease contracts, leasehold
interests, letters of credit, negotiable instruments, notes, proceeds of letters of credit, securities, security certificates,
security entitlements, and uncertificated securities.

 

In addition, the Collateral
shall include all copyrights, all patents and patent applications (including the inventions and improvements described and claimed
therein together with the reissues, divisions, continuations, renewals, extensions and continuations in-part thereof), all trade
names, trademarks and service marks, logos, trademark and service mark registrations (including all renewals of trademark and service
mark registrations, and all rights corresponding thereto throughout the world together, in each case, with the goodwill of the
business connected with the use of, and symbolized by, each such trade name, trademark and service mark, but excluding any such
registration that would be rendered invalid, abandoned, void or unenforceable by reason of its being included as part of the Collateral),
all inventions, processes, production methods, proprietary information, know-how and trade secrets, all licenses or user or other
agreements granted to the Maker with respect to any of the foregoing, in each case whether now or hereafter owned or used (including
the licenses or other agreements with respect to any of the foregoing).

 

    	17ex10-1.htm

Exhibit 10.1

 

 

OIL, GAS AND MINERAL LEASE

This Agreement made this the 1st day of March 2006 between the following named persons, to wit:

THE CECIL & ANNIE LOU BARLOW TRUST, herein represented by Sarah Virginia Barlow, Trustee, and as an agent and attorney in fact for Cecil Barlow, its mailing address being 9095 Springridge Texas Line Road, Keithville, La. 71047, LESSOR

And

FOUR STAR OIL COMPANY, a Louisiana Corporation, herein represented by Marlo Lanza, duly authorized, its mailing address being P.O Box 458, Oil City, La. 71061.

WITNESSETH:

1. LESSOR in consideration of TEN DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATIONS THE RECEIPT AND ADEQUACY OF WHICH IS HEREBY ACKNOWLED, of the royalties herein provided, and of the agreement of Lessee herein contained, hereby grants, leases and lets exclusively unto LESSEE for the purposes of investigating, exploring, prospecting, drilling, and mining for and producing oil, gas and other minerals, laying pipe lines, building tanks and other structures thereon to produce, save, take care of, treat, transport and own said products and for constructing roads, easements, servitudes and privileges which may be necessary, useful or convenient to or in connection with any operations conducted by LESSEE thereon, or on adjacent lands, the following described property, to wit:

SEE EXHIBIT “A” ATTACHED

Comprising 40 acres, more or less

This lease also covers and includes battures, accretions and all other land owned by Lessor adjacent to the land particularly described above.

2. Subject to the other provisions herein contained, this lease shall be for a period of one(1) year from this date(called “primary term”) as (1) oil, gas, sulphur or other minerals is being produced from said land hereunder of from land pooled therewith;  Or (2) it is maintained in force in any other manner herein provided.

(a.) It is the intention of the parties that this lease shall also extend and apply to all outstanding mineral rights or servitudes affecting the lands herein described as the same may apply to Lessor, his heirs or assigns from time to time.

  

  

  

3. For the consideration hereinabove stated, this lease shall remain in full force and effect during the primary term, without any additional payment and without Lessee being required to conduct any operations of the land (either before or after the discovery of minerals), except to drill such wells as might be necessary to protect the land from drainage, as hereinafter provided.

4. The royalties paid by Lessee are: (a.) on oil, and other hydrocarbons which are produced at the well in liquid form by ordinary production methods, 1/6th of that produced and saved from said land, same to be delivered at the wells or to the credit of the Lessor in the pipeline to which he wells may be connected; Lessors interest in either case will not bear is proportion of any expenses for treating oil to make it marketable as crude; Lessee may from time to time purchase any royalty oil or other liquid hydrocarbons in its possession, paying the market price therefore prevailing for the field where produced on the date of the purchase; (b) on gas, including casing head gas, or other gaseous substance produced from said land and sold or used off the premises or for the extraction of gasoline or other products therefrom the market value at the well of 1/6 of the gas so sold or used, provided that on gas sold at the wells the royalty shall be 1/6 of the amount realized from such sale; such gas, casinghead gas, residue gas or gas of any other nature or description whatsoever, as may be disposed of for no consideration to Lessee, either through unavoidable waster or leakage, or in order to recover oil or other liquid hydrocarbons, or return to the ground shall not be deemed to have been sold or used either on or off the premises within the meaning of this paragraph 3 hereof; (c) on all other minerals mined and marketed, 1/6 either in kind or value at the well or mine, at Lessees election, except that on sulphur the royalty shall be one (1) dollar per ton.

5.  If Lessee during or after the primary term should drill a well capable of producing gas or gaseous substance in paying quantities, (or which all although previously produced Lessee is unable to continue to produce) and should Lessee be unable to operate said well because of lake or market or marketing facilities or governmental restrictions, then Lessees rights may be maintained beyond or after the primary term without production of minerals for further drilling operations by paying Lessor as royalty ONE HUNDRED AND NO/100 ($100.00) DOLLARS per year, the first payment being due, if said well should be completed or shut-in after the primary term, within sixty (60) days after completion of such well or cessation of production and such payment will extend Lessees rights from one year from date of such completion or cessation.  If such a well should be completed during the primary term, the first payment, if made by Lessee, shall be due on or before the expiration date of the primary term herein fixed.  Thereafter Lessees rights may be continued from year to year by making annual payments in the amount stated on or before the end of the primary term as the case may be; each of such payments to extend to Lessees rights for one year.  It is provided, however, that in no event shall Lessees rights be so extended by annual payments herein fixed without drilling operations or the production of oil, gas or some other minerals for more than five (5) years beyond the end of the primary term hereinabove fixed.  The annual payments herein provided for may be deposited to Lessors credit in the TO THE ADDRESS SHOWN ABOVE UNLESS OTHERWISE NOTIFIED IN WRITING         Bank of                   ___________________, which bank shall be and remain Lessors agent for such purpose regardless of any change or changes of ownership of the land or mineral rights therein or Lessee may directly send said annual payments to Lessor at the address shown above, or until Lessor notifies Lessee otherwise.  It is the responsibility of Lessor to inform Lessee of any change of ownership of land and minerals which would affect payment of annual payments as herein provided to Lessor; if Lessor fails to notify Lessee of said change and Lessee pays annual payments to Lessor it is agreed that Lessor should forward said payments to the rightful mineral owner, and Lessee is held harmless for the same, and paying Lessor would be the same as paying other mineral owners.  The owners of the royalty as of the date of such payment shall be entitled thereto in proportion to their ownership of said royalty.  The provisions of this paragraph shall be recurring at all times during the life of this lease.  Should any well producing gas or gaseous substances be completed on a drilling unit which includes any part of the lands herein leased, the provisions of this paragraph should be subject to all other agreements herein contained allowing the pooling of the above described lands with other lands.

6.  If within ninety (90) days prior to the end of the primary term, Lessee should complete or abandoned a dry hole or holes on the land described above or on land pooled therewith, or if production previously secured should cease from any cause, this lease shall continue in full force and effect for ninety (90) days from such completion or abandonment or cessation of production.  If at the expirations of the primary term or at the expiration of the ninety (90) provided for in the preceding sentence, oil, gas, sulphur or other minerals is not being produced on said land or on land pooled therewith, but Lessee is engaged in operations for drilling or reworking thereon, or if production previously secured should cease from any cause after the expiration of the primary term, this lease shall remain in full force and the fact so long as and thereafter as Lessee either (a) is engaged in  operations for 

  

  

  

drilling or reworking or repairing said wells with no cessation between operations or between such cessation of production and additional operations of more than ninety (90) consecutive days; or (b) is producing oil, gas, sulphur or other minerals from said land hereunder or from land pooled therewith. If sulphur be encountered on said premises or on land pooled therewith, this lease shall continue in force and effect so long as Lessee is engaged with due diligence in explorations for and/or erecting a plant for sulphur and thereafter subject to the foregoing provisions here of so long as oil, gas, sulphur or other minerals is produced from said lands hereunder or from lands pooled therewith.

7.  Lessee is hereby granted the right as to all or part of the land described herein without Lessors joinder, to combine, pool or utilize the acreage royalty or mineral interest covered by the lease, or any portion thereon, with any other land, lease or leases, royalty or mineral interests and or under any other tracts of land in the vicinity thereon, whether owned by Lessee or some other person, or corporation, so as to create, but a combination of such lands, and leases, one or more operating units, provided that no one operating said unit shall, in the case of gas, including condensate, embrace more than six hundred and forty (640) acres, and in the case of oil including casinghead gas, embrace more than forty (40) acres; and provided further, however, that if any spacing or other rules and regulations of the state or Federal Commission Agency or regulatory body having or claiming jurisdiction has heretofore or shall at time here after prescribe a drilling or operating unit or spacing rule in the case of gas, including condensate, greater than six hundred forty (640) acres, or in the case of oil or casinghead gas greater than forty (40) acres, then the unit or units herein contemplated may have, or maybe redesigned so as to have, as the case may be, the same surface content as, but not more than, the unit or acreage in the spacing rules so prescribed.  However, it is further specifically understood and agreed anything herein to the contrary notwithstanding, that the Lessee shall have the right to, and the benefit of in acreage tolerance of ten per cent in excess of any drilling or operating unit authorized herein.  The commencement of a well, or the completion of a well to production of either oil, gas, casinghead gas, condensate or other minerals on any portion of the operation unit in which all or any part of the land described herein is embraced, or production of oil, gas, casinghead gas, condensate, or other minerals therefrom shall have the same effect under the terms of this lease as if a well were commenced completed for producing oil, gas, casinghead gas, condensate or other minerals in paying qualities on the land in braced by this lease.  Lessee shall execute in writing and file for record in the records of the Parish in which the lands herein leased are located, an instrument identifying or be scrapping the pooled acreage, or an instrument supplemental thereon redesignating same, as the case may be.  Either prior to the securing of production from any unit created under the authority hereinabove granted, or after cessation of production therefrom Lessee shall have the right to dissolve the unit so created without lessors joiner or further consent, by executing in writing and placing of record in Parish or Parishes on which the land making up such unit may be located, an instrument identifying and resolving such units.  The provision hereto shall be construed as a covenant running with the land and shall inure to the benefit of and are binding upon the parties hereto, their heirs, representatives, successors and assigns.  In the event such operating unit or units is/are created by Lessee, Lessor shall receive out of production of the proceeds from the production from such operating unit or units or out of the shut-in royalty provided above such portion of the                royalty or the shut-in royalty specified herein as the number of acres (mineral acres) out of this lease placed in any such operating unit or units bears to the total number of acres including in such operating unit or units.

8. If Lessor owns a less interest in the above described land than the entire and undivided fee simple estate therein, then the royalties herein provided shall be paid to Lessor only in the proportion which Lessors interest bears to the whole undivided fee.

9.  Lessee shall have free use of oil, gas, casinghead gas, condensate, coal and water from said land, except water from Lessor wells, for all operations hereunder, including repressuring, pressure maintenance and recycling, and the royalty shall be computed after deducting any so used.  Lessee shall have the right at any time during or after the expiration of this lease to remove all property and fixtures placed by Lessee on said land, including the right to draw and remove all casing.  When required by Lessor, Lessee will bury all pipelines below ordinary plow depth, and no well shall be drilled within two hundred feet of any residence or barn now on said land, without Lessors consent.  In the event a well or wells, producing oil, gas, casinghead gas or condensate in paying quantities should be brought in on adjacent lands not owned by Lessor and within one hundred fifty feet of leased premises, Lessee may or may not (at Lessees option) drill a well to offset same.

  

  

  

10.  The rights of either party hereunder may be assigned in whole or part and the provisions hereof shall extend to the heirs, executors, administrators, successors and assigns, but no change or division of ownership of the land, rentals, or royalties, however accomplished shall operate to enlarge the obligations or diminish the rights of Lessee.  No such change for division in the ownership of the land, rentals or royalties shall be binding upon Lessee for any purpose until such person acquiring an interest has furnished Lessee, Lessees heirs or assigns, at its principle place of business, or recorded copy of the instrument or instrument, constituting his chain of title from the original Lessor.  In the event of an assignment of this lease as to a segregated portion of said land, or as to an undivided interest therein, the rental payable hereunder shall be apportioned as between the several leasehold owners ratable according to the surface area of each, or according to the undivided interest of each, and default and rental payment by one shall not affect the rights of the other leasehold owners hereunder.  An assignment if this lease, in whole or part, shall, to the extent of such assignment, relieved and discharge Lessee of any obligations hereunder and if Lessee or assignee of parts or parts here on shall fail or make default in the payment of the proportionate part of the rentals due from such Lessee, or assignee, or fail to comply with any other provisions of the lease, such default shall not affect this lease insofar as it covers a part of said lands upon which lessee or any assignee thereof shall make payment of said rental.

11.  In the case of suit, adverse claim, dispute or question as to the ownership of the rentals or royalties (or some part thereof) payable under this lease, Lessee shall not be held in default in payment of such rentals or royalties (or part thereof in dispute) until such suit, claim, dispute for question has been finally disposed of, and Lessee, shall have thirty (30) days after being furnished with a certified copy of the instrument or instruments disposing said suit, claim or dispute, or after being furnished with proof sufficient, in Lessees opinion, to settle such questions, within which to make payment.  Should the rights or interests of Lessee hereunder be disputed by Lessor, or any other person, the time covered by the pendency of such dispute shall not be counted against Lessee either as affecting the term of the lease or for any other purpose, and Lessee may suspend all payments without interest until there's a final adjudication or other determination of such dispute.

12.  In case of cancellation or termination of this lease from any cause, Lessee shall have the right to retain, under the terms here of, around each well producing, being worked on, or drilling hereunder, the number of acres in the form of allocated to each such wells under spacing and proration rules by the Commissioner of Conservation of the state of Louisiana or Federal Authority having control of such matters; or, in the absence of such ruling forty (40) acres around each well in as near as square form as practicable, and in the event Lessor considers that operations are not being conducted in compliance with this contract, Lessee shall be notified in writing of the facts relied upon as constituting a breach hereof and Lessee shall have sixty (60) days after the receipt of such notice to comply with the obligations imposed by virtue of this instrument.  Upon receipt of Lessors  written notice to Lessee, if Lessee fails to respond to notice of breach or to comply with said notice, all all rights to said lease shall Ipso fact revert back to the Lessor, his heirs and assigns.

13. When drilling, reworking, production or other operations are delayed or interrupted by force majeure, that is, by storm, flood or other acts of God, fire, war, rebellion, insurrection, riot, strikes, difference with workmen, or failure of carriers to transport or furnish facilities for transportation, or as a result of some law, order, rule, regulation, requisition or necessity of the government, Federal or State, or as a result of any cause whatsoever beyond the control of Lessee, the time of such delay or interruption shall not be counted against Lessee, anything in this lease to the contrary notwithstanding, but this lease shall be extended for a period of time equal to that during which Lessee is so prevented from conducting such drilling or reworking operations or, or producing oil, gas, casinghead gas, condensate or other minerals from the premises; provided that during any period that this lease is continued in force after its primary term solely by force majeure as herein provided; Lessee shall pay to the owners of the royalty hereunder the shut-in royalty provided in paragraph 5 hereof, and in the manner therein provided, without regard to whether or not there is a producing well shut-in, located on said land or on land with which the lease premises or any part thereof has been pooled.

14. It is expressly understood and agrees that the premises leased herein shall, for all purposes of this lease, be considered and treated as owned in indivision by the Lessor and shall be developed and operated as one lease.

  

  

  

15. Notwithstanding the death of any party Lessor, or his successor in interest, the payment or tender of all sums accruing hereunder in the manner provided above shall be binding on the heirs, executors, and administrators of such person.

16. Lessor hereby warrants title to said lands described herein and agrees to defend title to said land, and agrees Lessee at its option shall have the right to redeem for Lessor, by payment, any mortgage, taxes or other liens on the above described lands, in the event of default of payment by Lessor, and be subrogated to the rights of the holder hereof. In the case of payment by Lessee of any such mortgage, taxes or other liens owed by Lessor in addition to the rights of subrogation herein granted, Lessee shall have the right to retain any royalties which become due Lessor hereunder and to repay itself therefrom, and the retention of such royalties by Lessee shall have the same effect as if paid to the Lessor in whose behalf payment of any mortgage, taxes or other liens was made.

17. This lease shall be binding upon all who execute it, whether or not named in the body hereof as Lessor and without regard to whether this instrument, or any copy thereof, shall be executed by any other Lessor named above.

  

  

  

EXHIBIT ‘A’

This is made apart of that certain oil, gas and mineral lease between The Cecil & Annie Lou Barlow Trust, as Lessor, and FOUR STAR OIL COMPANY, Lessee, dated March 1st, 2006, which covers and effects the following described property, to-wit:

SE1/4 of the NE1/4 of Section 6, Township 21 North, Range 15 West, Caddo Parish, Louisiana

For the following terms and conditions, to-wit:

1. The royalty interest provided herein shall be a 1/6th interest.

2. Lessee agrees to commence reworking operations on that certain well known as the Petrol – Cecil Barlow Well No. 1, Serial No. 040549, within 10 days from the effective date shown herein, taking in consideration of the weather conditions.

3. Lessee agrees to pay $1,000.00 per well site for surface damages for the drilling of any new wells.

4. The Primary term of this lease is for one year.

5. Lessor agrees to provide Lessee a key for the gate. It is agrees that the property shall be locked at all times. In the event the lock is replaced, Lessee shall give Lessor a copy of the replacement.

6. Lessee agrees to remove all equipment and restore the property back to the condition as it was in the time of this lease, and plug said well or wells, upon the end of this lease.

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