Document:

EXHIBIT 10.16

EXHIBIT 10.16

MEMORANDUM OF AGREEMENT

This Memorandum of Agreement (hereinafter the ‘Agreement’) is made on the 11th day of October  2004 in Bad Driburg Republic of Germany, by and between:

Elgrande International, Inc.

1450 Kootenay St.

Vancouver, B.C., V5K 4R1

Canada

a public company incorporated in the state of Nevada; and

Walther-Glas GmbH & Co KG

Glashuettenweg 23

D-33014 Bad Driburg-Siebenstern

Germany

a private company incorporated in the Federal Republic of Germany

Whereas:

Elgrande International, Inc. (Elgrande) is a North American based importer and wholesale distributor of giftware and decorative accessories and has sole North American distribution rights to the Love Plates line of pressed glass tableware manufactured by Walther-Glas GmbH & Co KG,

Walther-Glas GmbH & Co KG (Walther-Glas) manufacturers and exports pressed glass decorative accessories and the Love Plates line of pressed glass tableware, 

Elgrande is soliciting equity investment from Walther-Glas to support expansion of operations and sales of Walther-Glas products in the North American market, and

Walther-Glas is looking to strengthen the distribution of Walther-Glas products within the North American marketplace through equity investment into Elgrande. 

The parties agree as follows:

·

Walther-Glas will make an equity investment in Elgrande for an amount not less than $US 400,000 and up to $US 600,000.

·

The first $US 400,000 will be in the form of Loves Plates inventory,

·

Any investment in excess of $US 400,000 and up to $US 600,000 will be through exercise of a warrant (the “Warrant”) for the purchase of up to $US 200,000 in common shares in the stock of Elgrande.

·

Payment to Walther-Glas for the $US 400,000 of Love Plates inventory will be in un-registered common shares in the stock of Elgrande issued under the U.S. Securities and Exchange Commission (SEC) Regulation S. The pricing formula used to determine the number of shares to be issued will be based on an initial price of $0.20 per share with provision to adjust the share price on the 6 month anniversary of the signing of this Agreement. The adjusted share price will be the lower of $0.20 per share or the average daily share price calculated over the 6 month period commencing on the date of signing this Agreement.

·

The Warrant shares will be issued under SEC Regulation S, at a per share price of $0.30 or one hundred and fifty (150) percent of the average daily share price calculated over the 6 month period commencing on the date of signing this Agreement, whichever is less. The Warrant will be valid for a period of three years commencing on the date of the signing of this Agreement.

·

Elgrande will file a Registration Statement with the SEC for all shares issued to Walther-Glas pursuant to this Agreement, and shall use best efforts to have the Registration Statement declared effective by the SEC as soon as is practicable. Elgrande will commence filing the Registration Statement with the SEC within 6 months of the issuance of shares for the $400,000 of inventory equity. Elgrande shall maintain the registration statement in effect for a period of one year after it is declared effective by the SEC.

IN WITNESS WHEREOF, the parties have executed this Agreement at the place and on the date first written above.

Walther-Glas GmbH & Co KG

Elgrande International, Inc.

Date:

_____________________

Date:

_____________________

By:

_____________________

By:

_____________________

Print

Print

_____________________

_____________________

(signing officer)

(signing officer)PETROHAWK [LOGO GOES HERE]
                               ENERGY CORPORATION

JULY 14, 2003

VIA EMAIL AND OVERNIGHT DELIVERY

MI MIKE NEWPORT PRESIDENT
MAINLAND   RESOURCES, INC
117314  SH  249,  SUITE  306
HOUSTON, TEXAS 77064

RE   LETTER AGREEMENT  RELATING  TO  DEVELOPMENT  OF  ACREAGE  IN DESOTO PARISH,
     LOUISIANA

DEAR MR. NEWPORT:

PETROHAWK ENERGY CORPORATION AND/OR ITS AFFILIATES  (HEREINAFTER  REFERRED TO AS
"HAWK") IS PLEASED TO PROVIDE  YOU THIS  "LETTER  AGREEMENT"  SETTING  FORTH OUR
UNDERSTANDING  OF A JOINT  DEVELOPMENT  PROJECT BETWEEN  MAINLAND  RESOURCES INC
AND/OR ITS  AFFILIATES ( MAINLAND)  AND HAWK.  IT IS OUR INTENT THAT THIS LETTER
AGREEMENT SHALL BE BINDING ON BOTH PARTIES TO THE EXTENT SET FORTH HEREIN.

HAWK HAS UTILIZED  INFORMATION  PROVIDED BY MAINLAND FOR PURPOSES OF MAKING THIS
OFFER. THIS PROPOSAL IS BASED ON THE ASSUMPTION THAT MAINLAND OWNS ALL RIGHTS TO
ALL DEPTHS BELOW THE BASE OF THE COTTON  VALLEY  FORMATION  (WHICH SHALL INCLUDE
THE HAYNESVILLE SHALE  FORMATION,)  PURSUANT TO THE OIL AND GAS LEASES (TOTALING
APPROXIMATELY 2,695 NET ACES.) AS DESCRIBED ON EXHIBIT A (THE 'LEASES') AND OWNS
AT LEAST A 75.00% NET REVENUE INTEREST IN THE LEASES HAWK WILL BE SUBJECT TO THE
TERMS OF THAT CERTAIN  LETTER  AGREEMENT  DATED DECEMBER 11, 2007 BY AND BETWEEN
PERMIAN BASIN ACQUISITION FUND AND KINGSLEY RESOURCES INC (THE 'PERMIAN-KINGSLEY
AGREEMENT")  PARAGRAPH  6 TO  THE  PERMIAN-KINGSLEY  AGREEMENT  CREATED  AN  AMI
CONSISTING OF SECTIONS 11  12.13.14.15.16 20 21.22.23 OF T13N-RMW AND SECTION 7,
T13N-R13W  DESOTO PARISH LOUISIANA THE AMI SHALL BE FOR A TERM OF SIX YEARS FROM
DECEMBER 11, 2007. IN THE EVENT ANY  ADDITIONAL  LEASES ARE ACQUIRED BY MAINLAND
(SUCCESSOR IN TITLE) TO KINGSLEY RESOURCES INC. PETROLEUM BASIN ACQUISITION FUND
WILL RECEIVE A 2% ORRI.  HAWK AND MAINLAND  WILL ENTER INTO AN AMI COVERING THIS
SAME AREA.

MAINLAND AND HAWK HAVE AGREED TO THE FOLLOWING

         1.   ASSETS  TO BE  TRANSFERRED  TO HAWK  BY  MAINLAND.  MAINLAND  WILL
              TRANSFER  60% OF THE  LEASES  TO HAWK AT  CLOSING  BUT ONLY AS THE
              LEASES  RELATE TO ALL DEPTHS  BELOW THE BASE OF THE COTTON  VALLEY
              FORMATION.  THIS TRANSFER WILL INCLUDE 60% OF MAINLAND'S  INTEREST
              IN  RIGHTS OF WAY  EASEMENTS  SERVITUDES  AND 60% OF ALL  CONTRACT
              RIGHTS AND ALL OTHER

                  1000 Louisiana. Suite 5600 Houston. TX 7 7002
                       Ph. 032 204 2700 Fax: 032 204 2800

<PAGE>

MR. MIKE NEWPORT
MAINLAND RESOURCES, INC.
PAGE 2

              RELATED  REAL  PROPERTY   PERTAINING  TO  THE  OWNERSHIP  OF  SUCH
              PROPERTIES,   INCLUDING  ANY  OVERRIDING  ROYALTY  INTEREST,   FEE
              INTEREST, NET PROFITS INTEREST, PRODUCTION PAYMENTS,  REVERSIONARY
              INTERESTS  AND OTHER  INTERESTS IN THE OIL AND GAS IN PLACE OR THE
              PRODUCTION  THEREOF FROM THE  AFFECTED  LANDS.  COLLECTIVELY,  THE
              ASSETS TO BE  TRANSFERRED  MAY BE REFERRED TO HEREIN AS  "ACQUIRED
              PROPERTIES".  HAWK WILL BE ALLOWED  TO COPY ALL  LEASE,  TITLE AND
              OTHER FILES  RELATED TO THE  ACQUIRED  PROPERTIES.  MAINLAND  WILL
              RETAIN ALL RIGHTS ABOVE THE BASE OF THE COTTON VALLEY FORMATION.

         2.   CARRIED INTEREST OBLIGATION. IN CONSIDERATION OF THE TRANSFERS SET
              FORTH IN  PARAGRAPH  1 ABOVE,  HAWK WILL PAY 100% OF ALL COSTS (AS
              SUCH COSTS  RELATE TO THE  INTERESTS  OWNED BY HAWK AND  MAINLAND)
              ASSOCIATED  WITH THE  FIRST  WELL  DRILLED  BELOW  THE BASE OF THE
              COTTON VALLEY  FORMATION ON THE LEASES.  THE FIRST WELL  (GRIFFITH
              #1-H) WILL BE LOCATED 330 FNL & 510 FWL IN SECTION 11.  T13N-R14W.
              HAWK  WILL  ATTEMPT  TO DRILL A 4575'  LATERAL  TO A  BOTTOM  HOLE
              LOCATION AT 380 FWL AND 380 FSL IN SECTION 11. THE  LOCATION  PLAT
              DESCRIBING THE INITIAL  SURFACE  LOCATION AND LATERAL ARE ATTACHED
              HERETO AS EXHIBIT B. SUCH COSTS SHALL INCLUDE,  BUT NOT BE LIMITED
              TO, DRILLING,  COMPLETING, TITLE OPINIONS AND FRACTURE STIMULATING
              AND SHALL  INCLUDE  ALL  COSTS UP TO AND  INCLUDING  THE  PIPELINE
              CONNECTION,  IN ADDITION,  HAWK WILL PAY 80% OF ALL COSTS (AS SUCH
              COSTS RELATE TO THE  INTERESTS  OWNED BY HAWK AND MAINLAND) OF THE
              SECOND  WELL  DRILLED ON THE  LEASES  BELOW THE BASE OF THE COTTON
              VALLEY FORMATION AND MAINLAND SHALL PAY 20% OF SUCH COSTS. FOR THE
              THIRD AND ALL  SUBSEQUENT  WELLS  DRILLED ON THE LEASES  BELOW THE
              BASE  OF THE  COTTON  VALLEY  FORMATION,  HAWK  SHALL  PAY 60% AND
              MAINLAND  SHALL PAY 40% OF SUCH COSTS (AS SUCH COSTS RELATE TO THE
              INTERESTS  OF HAWK AND  MAINLAND).  HAWK WILL  ATTEMPT  TO LOG ALL
              DEPTHS IN AND TO EACH WELL  DRILLED AND PROVIDE THE RESULTS OF ALL
              LOGS TO MAINLAND.  MAINLAND WILL PAY FOR THE  INCREMENTAL  COST OF
              LOGGING THE ZONES ABOVE THE BASE OF THE COTTON VALLEY FORMATION.

         3.   ASSIGNMENT.  MAINLAND,  AT  CLOSING,  SHALL  CONVEY  THE  ACQUIRED
              PROPERTIES TO HAWK BY A MUTUALLY ACCEPTABLE ASSIGNMENT AND BILL OF
              SALE, WHICH SHALL INCLUDE A SPECIAL  WARRANTY OF TITLE,  DEFENDING
              AGAINST ANY PERSON CLAIMING BY. THROUGH OR UNDER MAINLAND, BUT NOT
              OTHERWISE.

         4.   LIENS  AND   ENCUMBRANCES.   THE  ACQUIRED   PROPERTIES  SHALL  BE
              TRANSFERRED  FROM  MAINLAND  TO HAWK FREE AND CLEAR OF ALL  LIENS,
              MORTGAGES,  RIGHTS OF REASSIGNMENT,  REVERSIONARY RIGHTS, CALLS ON
              PRODUCTION,  PREFERENTIAL RIGHTS, CONSENTS TO ASSIGN, TAXES (OTHER
              THAN  THOSE  FOR  THE  CURRENT   YEAR),   OBLIGATIONS   (INCLUDING
              DELINQUENT  OPERATING  EXPENSES),  CLAIMS,  SUITS,  OR  ANY  OTHER
              ENCUMBRANCES.

         5.   EFFECTIVE DATE. CLOSING AND OPERATIONS POST CLOSING. THE EFFECTIVE
              DATE OF THE CONVEYANCE OF THE ACQUIRED PROPERTIES SHALL BE AT 7:00
              A.M.  LOCAL  TIME ON THE  CLOSING  DATE  (THE  "EFFECTIVE  DATE").
              REVENUES AND EXPENSES, AND ALL BENEFITS,  BURDENS AND OBLIGATIONS,
              ATTRIBUTABLE TO THE ACQUIRED  PROPERTIES  SHALL BE PRO-RATED AS OF
              THE  EFFECTIVE  DATE.  THE PARTIES  WILL USE THEIR BEST EFFORTS TO
              CLOSE NO LATER THAN JULY 31,  2008 (THE  "CLOSING").  THE  PARTIES
              WILL  JOINTLY  DEVELOP  THE  LEASES  BELOW THE BASE OF THE  COTTON
              VALLEY  FORMATION.  HAWK  (OR ITS  AFFILIATE)  WILL BE  DESIGNATED
              OPERATOR BY THE  PARTIES  AND THE  PARTIES  AGREE TO ENTER INTO AN
              A.A.P.L.  FORM 610 MODEL  FORM  OPERATING  AGREEMENT  -- 1982 (THE
              "OPERATING  AGREEMENT").  THE BLANK IN  ARTICLE VI  (DEALING  WITH
              OPERATIONS BY LESS THAN ALL PARTIES) SHALL BE FILLED IN WITH 500%.
              IF

<PAGE>

MR, MIKE NEWPORT
MAINLAND RESOURCES, INC.
PAGE 3

              MAINLAND  OR HAWK  DOES NOT  PARTICIPATE  IN THE  FIRST  WELL IN A
              DESIGNATED  UNIT IT WILL FORFEIT ITS RIGHTS TO  PARTICIPATE IN ALL
              SUBSEQUENT  WELLS IN THAT UNIT.  HAWK WILL USE ITS REASONABLE BEST
              EFFORTS  TO CAUSE A WELL TO BE SPUD IN  SECTION 11 OF T13N R14W NO
              LATER THAN SEPTEMBER 30. 2008. IN THE EVENT HAWK DOES NOT SPUD THE
              WELL ON OR  BEFORE  THIS  DATE,  HAWK  WILL  REASSIGN  ALL  RIGHTS
              PREVIOUSLY ASSIGNED BY MAINLAND TO HAWK IN PARAGRAPH 1 ABOVE.

         6.   CONFIRMING  DUE  DILIGENCE.   HAWK  WILL  CONDUCT  CONFIRMING  DUE
              DILIGENCE  WHICH  SHALL  INCLUDE,   BUT  NOT  BE  LIMITED  TO  THE
              FOLLOWING:

              A.  CONFIRMATION  OF  THE   MARKETABILITY   OF  TITLE   (INCLUDING
                  VERIFICATION  OF HBP LEASES  BEING IN FULL FORCE AND  EFFECT).
                  IF, IN THE REASONABLE  OPINION OF HAWK,  MAINLAND DOES NOT OWN
                  MARKETABLE  TITLE TO AT LEAST A 75.00% NET REVENUE INTEREST IN
                  AT LEAST  2,000 NET ACRES  WHICH ARE  INCLUDED  IN THE LEASES,
                  HAWK,  AT ITS OPTION MAY TERMINATE  THIS LETTER  AGREEMENT AND
                  NEITHER PARTY SHALL HAVE ANY FURTHER  OBLIGATIONS TO THE OTHER
                  HEREUNDER.

              B.  REVIEW OF ALL LEASE AGREEMENTS  (INCLUDING LEASE  EXPIRATIONS,
                  SURFACE ACCESS RESTRICTIONS AND DRILLING COMMITMENTS, IF ANY),
                  UNIT  AGREEMENTS,   AND  OTHER  CONTRACTS  APPLICABLE  TO  THE
                  ACQUIRED  PROPERTIES.  HAWK'S  OBLIGATIONS  HEREUNDER SHALL BE
                  SUBJECT TO ITS REASONABLE APPROVAL OF THE LEASE AGREEMENTS AND
                  OTHER MATERIAL AGREEMENTS AFFECTING THE ACQUIRED PROPERTIES,

              C.  OTHER ACTS OF DUE DILIGENCE  APPROPRIATE TO THE TRANSACTION AS
                  MUTUALLY AGREED BETWEEN THE PARTIES.

         7.   COOPERATION AND  EXCLUSIVITY.  HAWK AND MAINLAND WILL COOPERATE IN
              GOOD FAITH AND PROCEED  EXPEDITIOUSLY  IN THE  PREPARATION  OF ALL
              DOCUMENTS  NECESSARY TO CONSUMMATE  THE  TRANSACTION  CONTEMPLATED
              HEREBY.  MAINLAND  AGREES  THAT  AFTER  EXECUTION  OF THIS  LETTER
              AGREEMENT,  AND  FOR SO  LONG  AS IT IS IN  EFFECT,  IT  WILL  NOT
              DIRECTLY OR  INDIRECTLY  SOLICIT OR  ENTERTAIN  ANY OTHER OFFER TO
              ACQUIRE THE ACQUIRED  PROPERTIES OR ENTER INTO ANY  NEGOTIATION OR
              AGREEMENT THAT PROVIDES FOR THE JOINT  DEVELOPMENT OF THE ACQUIRED
              PROPERTIES.

         8.   ACCESS TO DATA.  MAINLAND AGREES TO PROVIDE HAWK REASONABLE ACCESS
              IN  MAINLAND'S  OFFICE  TO  THE  BOOKS  AND  RECORDS  OF  MAINLAND
              PERTAINING TO THE ACQUIRED  PROPERTIES PROMPTLY AFTER EXECUTION OF
              THIS LETTER AGREEMENT.

         9.   CONFIDENTIALITY.  IT IS  UNDERSTOOD  AND AGREED  THAT THIS  LETTER
              AGREEMENT  AND ITS  SUBSTANCE  SHALL  REMAIN  CONFIDENTIAL  BY AND
              BETWEEN  MAINLAND AND HAWK AND SHALL NOT BE DISCLOSED TO ANY THIRD
              PARTIES,   OTHER  THAN  THOSE  PERSONS  WHO  HAVE  A  CONFIDENTIAL
              RELATIONSHIP  WITH MAINLAND OR HAWK, ALL OF WHOM SHALL AGREE TO BE
              BOUND BY THIS CONFIDENTIALITY  OBLIGATION. ANY PUBLIC ANNOUNCEMENT
              OF THE PROPOSED  TRANSACTION  BY EITHER PARTY SHALL BE APPROVED IN
              ADVANCE BY THE OTHER PARTY.

         10.  COUNTERPARTS.  THIS LETTER AGREEMENT MAY BE EXECUTED IN ANY NUMBER
              OF COUNTERPARTS EACH OF WHICH WILL BE DEEMED TO BE AN ORIGINAL BUT
              ALL OF WHICH SHALL BE DEEMED ONE AND THE SAME DOCUMENT.

<PAGE>

MR. MIKE NEWPORT
MAINLAND RESOURCES, INC.
PAGE 4

         11.  GOVERNING  LAW.  THIS  LETTER  AGREEMENT  SHALL BE GOVERNED BY AND
              CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
              TEXAS.  THE PARTIES HERETO HEREBY CONSENT TO THE  JURISDICTION AND
              VENUE OF THE COURTS OF HARRIS COUNTY, TEXAS.

         12.  EXPENSES.   EACH  PARTY  WILL  PAY  ITS  OWN  EXPENSES  AND  COSTS
              INCIDENTAL TO THE NEGOTIATION  AND COMPLETION OF THE  TRANSACTION,
              INCLUDING LEGAL AND ACCOUNTING FEES.

         13.  MAINTENANCE  OF LEASES HELD BY PRODUCTION.  THE PARTIES  RECOGNIZE
              THAT SOME OF THE LEASES ALLOW FOR OPERATIONS BELOW THE BASE OF THE
              COTTON VALLEY FORMATION BECAUSE OF PRODUCTION FROM WELLS ABOVE THE
              BASE OF THE COTTON VALLEY FORMATION.  BEFORE MAINLAND ABANDONS ANY
              SUCH WELL IT WILL GIVE WRITTEN  NOTICE TO HAWK OF ITS INTENTION TO
              DO SO AT LEAST 30 DAYS IN  ADVANCE  AND HAWK SHALL HAVE THE OPTION
              TO ELECT TO TAKE  OVER  OWNERSHIP  AND  OPERATION  OF SUCH WELL BY
              GIVING  WRITTEN  NOTICE TO  MAINLAND  WITHIN 10 DAYS OF THE NOTICE
              RECEIVED  FROM  MAINLAND.  IF HAWK SO  ELECTS,  IT WILL  INDEMNIFY
              MAINLAND  FROM  ANY AND ALL  LIABILITY  ASSOCIATED  WITH  THE WELL
              INCLUDING BUT NOT LIMITED TO PLUGGING AND ABANDONMENT LIABILITY.

         14.  MARKETING  OF  PRODUCTION.   HAWK  AGREES  TO  GATHER  AND  MARKET
              MAINLAND'S  PRODUCTION  FROM ABOVE THE BASE OF THE  COTTON  VALLEY
              FORMATION, PURSUANT TO A MUTUALLY ACCEPTABLE AGREEMENT.

IF YOU AGREE WITH THE  PROVISIONS  CONTAINED  IN THIS LETTER  AGREEMENT,  PLEASE
INDICATE  BY SIGNING  AND  RETURNING  THE  DUPLICATE  COPY OF THIS LETTER TO THE
UNDERSIGNED.  THE RETURN OF EXECUTED  DOCUMENTS  BY  FACSIMILE  TRANSMISSION  OR
ELECTRONIC MAIL SHALL BE EFFECTIVE  BETWEEN THE PARTIES AND SHALL BE FOLLOWED BY
RETURN OF EXECUTED  ORIGINALS.  IF HAWK HAS NOT  RECEIVED A WRITTEN  RESPONSE TO
THIS OFFER ON OR BEFORE JULY 16, 2008 AT 5:00 P.M., CDT, THIS OFFER WILL EXPIRE.

SINCERELY,

PETROHAWK ENERGY CORPORATION

/s/  STEVE W. HEROD

STEVE W. HEROD
EXECUTIVE VICE PRESIDENT - CORPORATE DEVELOPMENT

<PAGE>

MR. MIKE NEWPORT
MAINLAND RESOURCES, INC.
PAGE 5

AGREED TO AND ACCEPTED THIS 14TH DAY OF JULY, 2003

MAINLAND RESOURCES INC.

/s/ MICHAEL J. NEWPORT
_________________________

NAME:   MICHAEL J NEWPORT
TITLE:  PRESIDENT

<PAGE>

                                    EXHIBIT A

LETTER AGREEMENT DATED JULY 14.2008 BY AND BETWEEN PETROHAWK ENERGY CORPORATION
   AND MAINLAND RESOURCES, INC. EAST HOLLY PROSPECT DESOTO PARISH, LOUISIANA

                  [DETAILED GRID OF PROSPECT ACRES GOES HERE]

<PAGE>

                                   EXHIBIT B

                                [MAP GOES HERE]

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