Document:

EXHIBIT 10.5

                               THREE FORKS, INC.

               EXECUTIVE EMPLOYMENT AGREEMENT (CHARLES W. POLLARD)

This AGREEMENT (the  "Agreement") is made as of the 12th day of February,  2013.
The "Effective  Date" shall be considered to be the date that Employee  actually
and physica11y begins his employment with the Corporation,  expected to be on or
before the 1st day of March, 2013.

  BETWEEN:

  THREE FORKS, INC.
  with its registered office at
  555 Eldorado Blvd., Suite 100
  Broomfield, Colorado 80021 USA

  (hereinafter called the "Corporation")               PARTY OF THE FIRST PART

  AND:

  CHARLES W. POLLARD
  4745 W. 105th Way
  Westminster, Colorado, 80031 USA

  (hereinafter called "Employee")                      PARTY OF THE SECOND PART

WHEREAS the Corporation is incorporated  under the laws of the State of Colorado
and carries on business as an oil and gas exploration and production company;

AND WHEREAS the  Corporation  wishes to employ the Employee as its President and
Chief Operating Officer and to act as a Director,  and additionally as its Chief
Executive  Officer and President of its wholly owned  subsidiary,  TFI Operating
Company,  Inc., and the Employee has agreed to such  employment as the President
and Chief  Operating  Officer of the  Corporation,  and to  employment  as Chief
Executive  Officer and President of its wholly owned operating  company,  and to
act as a Director  of both  business  entities,  on the terms and subject to the
conditions herein set forth;

AND WHEREAS the parties wish to formally  record the terms of  employment of the
Employee and his responsibilities, remuneration and other benefits;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
mutual covenants herein and other good and valuable  consideration,  the receipt
and  sufficiency of which is hereby  acknowledged  by both parties,  the parties
hereby covenant and agree with each other as follows:

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1.0  EMPLOYMENT

     1.1  The  Corporation  agrees  to employ  and to  continue  to  employ  the
          Employee  and the  Employee  agrees  to serve the  Corporation  in the
          capacity of President  and Chief  Operating  Officer  ("COO") and as a
          Director, during the term of this Agreement.

     1.2  Subject to all necessary regulatory  approvals,  the employment of the
          Employee under this Agreement shall commence on the Effective Date and
          continue until terminated as hereinafter provided.

     1.3  The Employee shall report to and be directly  responsible to the Chief
          Executive  Officer of the Corporation (the "CEO").  The Employee shall
          perform,  observe and conform to such duties and  instructions as from
          time to time are reasonably assigned or communicated to him by the CEO
          and which are reasonably  consistent with the employment and status of
          the Employee as President and COO of the  Corporation,  and shall make
          such  reports  to the CEO as may be  necessary  to fully and  properly
          inform it of the matters of business of the  Corporation for which the
          Employee is responsible as well as such additional  reports as the CEO
          may from time to time reasonably request.

     1.4  The Employee  understands  that it is the  Corporation's  intention to
          take the  Corporation  public in a short period of time, and it is the
          Employee's  and the  Corporation's  intention  that the Employee  will
          assume  the  position  of  President,  COO and a  Director  of any new
          business  entity created as a result of the public  offering.  Any new
          employment  agreement that might result from this expected event shall
          contain terms and conditions  materially and  essentially  the same as
          contained in this Agreement, with the new business entity.

     1.5  CORRUPT PRACTICES.  Employee agrees and covenants that he has not, and
          will not make, in the performance of this Agreement, any payment, loan
          or gift or promise or offer of  payment,  loan or gift ofany  money or
          anything of value, directly or indirectly:

          (i)  to or for the use or  benefit  of any  official  employee  of any
               government or agency or instrumentality of any such government;

          (ii) to any political party or official or candidate thereof;

          (iii)to any  other  person if  Corporation  or  Employee  knows or has
               reason to know that any part of such  payment.  loan or gift will
               be directly or indirectly given or paid to any such  governmental
               official or employee or political  party or candidate or official
               thereof; or

          (iv) to any other  person or any  entity,  the  payment of which would
               violate the laws of the State of Colorado,  the United States, or
               any  country  where  the  Corporation  is  seeking  to  or  doing
               business.

          Corporation  will make its counsel  available to Employee to advise on
          the laws of the  respective  states  and  countries  relating  to this
          subject.

          Corporation  also  agrees  and  covenants  that  it will  not  require
          Employee  to  engage  in,  on  behalf  of  Corporation,   any  of  the
          aforementioned activities or practices.

2.0  COMPENSATION

     2.01 SALARY:  The  Corporation  agrees to pay the Employee and the Employee
          agrees to accept as remuneration  for his services  hereunder a salary
          in the amount of USD $17,500 (Seventeen thousand

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          five  hundred  United  States  Dollars)  per month  payable as per the
          Corporation's  monthly pay schedule  while this  Agreement  remains in
          force,  exclusive of any other benefits referred to herein. The amount
          of any subsequent  salaiy will be reassessed by the Board of Directors
          annually  on  the  anniversary  of the  Effective  Date  based  on the
          performance of the Employee.

     2.02 INITIAL STOCK OPTIONS: Upon the Effective Date of this Agreement,  the
          Employee  will be awarded  2,250,000  (Two  million two hundred  fifty
          thousand)  non-qualified  stock  options  of Three  Forks,  Inc.  (the
          "Initial  Stock  Options").  The Initial  Stock Options will have 1) a
          $1/share  option  strike price,  2) ear term,  3) a cashless  exercise
          option for Employee,  4) an exercise loan option for Employee  wherein
          the Corporation  will loan the Employee the money to exercise  options
          at a 3% interest  rate and up to year loan term (term  length to be at
          the sole discretion of the Employee) with no prepayment  penalty,  and
          5) a tag along sales option for the  Employee  should the CEO or other
          Board of  Directors  elect  to sale  stock  prior  to a  public  stock
          offering.

     2.03 PERFORMANCE  SHARES:  The  Corporation  agrees to set up an  incentive
          share plan for the benefit of the Employee  whereby the Employee shall
          have the right to earn up to 500,000 common shares of the  Corporation
          based  upon   meeting  or   exceeding   some   reasonably   measurable
          quantitative  milestones  to be mutually  agreed upon by the Employee,
          CEO and Corporation's  Board of Directors  following the completion of
          the  Employee's  first year of employment  with the  Corporation.  For
          clarity,  these  500,000  incentive  shares  will  be  distributed  in
          increments   tied  to  the   production  and  reserve  growth  of  the
          Corporation.  For example, when the Corporation's net production first
          averages  1,000 BOEPD for one  calendar  quarter,  the  Employee  will
          receive  100,000  shares,  and so on for  ever  increasing  production
          plateaus.  The shares shall be  distributed in addition to any company
          wide   incentive   compensation   plan   established   to  incentivize
          Corporation employees.

     2.04 BENEFITS  AND  INSURANCE  COVERAGE:  The  Corporation  is  required to
          acquire Directors and Officers insurance normal to the business of the
          Corporation  concurrent  with the employment of Employee and to invoke
          employee family group medical,  vision and dental plans, employee life
          insurance,  employee long-term  disability  insurance,  employee 401 K
          plan, and other  insurance and benefits  programs  consistent with oil
          and gas  industry  practices  in the  Denver  area for the  benefit of
          Employee (and other employees) starting no later than January 1, 2014.

     2.05 ADDITIONAL   STOCK   OPTIONS:   The  Employee  shall  be  entitled  to
          participate  in any and all  incentive  programs,  including,  without
          limiting the  generality of the foregoing,  share option plans,  share
          purchase  plans,  share  and/or  cash  bonus  plans  and/or  financial
          assistance  plans,  in  accordance  with and on terms  and  conditions
          determined by the  applicable  provisions of such plans as established
          by the  Corporation  from  time to time or by the  Board  in its  sole
          discretion.  The Employee acknowledges that his participation in these
          plans or programs  will be to such  extent and in such  amounts as the
          Board in its sole discretion may decide from time to time,  except for
          the  Additional  Stock Options that the  Corporation  hereby agrees to
          allocate to him as the COO.  The  Corporation  will  allocate not less
          than l 0% of the  Corporation's  share option pool,  typically  10% of
          shares outstanding, to the COO based on performance criteria/goals set
          by the Board,  pursuant to the  provisions  of this  Agreement and the
          Corporation' s Share Option Plan, once it is in existence.

     2.06 Any amounts to which the Employee may be entitled  under any such plan
          or program as described in Sections  2.2, 2.3 and 2.5 above shall not,
          for the purposes of this Agreement, be treated as salaiy.

     2.07 The  Employee  agrees that the  Corporation  may  substitute,  reduce,
          modify, or if necessary, eliminate the incentive programs described in
          2.5 at any time, after prior  consultation with Employee.  Any and all
          stock option  shares or share awards as described in Section 2.5 which
          have not vested at the time of the incentive  program change will vest
          immediately, and will become the property of

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          the  Employee.  All such plans or  programs  shall be  governed by the
          policies of the various regulatory bodies which have jurisdiction over
          the affairs of the Corporation.

     2.08 All transactions in the shares assigned and vested in the Employee are
          to be  subject  to  the  applicable  stock  exchange  regulations  and
          securities acts pertaining to insider trading.

     2.09 In the event this Agreement is terminated by the Employee,  all shares
          not  vested  in the  Employee  at the time of the  termination,  shall
          return to the  Corporation.  All shares already vested will remain the
          property of Employee.  This paragraph does not apply to termination of
          the  Agreement  by the  Corporation  or in the  event of a  change  of
          control,  whereupon  all shares and options  assigned to the  Employee
          shall vest immediately at the time of termination of this Agreement.

     2.10 VACATION: The Employee shall initially be entitled to 24 (twenty four)
          days vacation,  without reduction in salary, in each calendar year, to
          be taken at such  time or times as shall be  convenient  to him and to
          the  Corporation  acting  reasonably,  for which  purpose the Employee
          shall obtain  approval  from the CEO.  Holidays for each calendar year
          will be agreed upon annually.  The Corporation  acknowledges  that the
          Employee has no fixed  requirements  with respect to his working hours
          so  long as the  Employee  meets  his  employment  obligations  as the
          President and COO; however,  it is agreed that personal time away from
          the office  will be focused on  Wednesday  and Friday  afternoons  for
          purposes of scheduling internal and external meetings.

     2.11 EXPENSES:  The Employee  shall be reimbursed by the  Corporation  on a
          monthly basis for all out of pocket expenses actually, necessarily and
          properly  incurred  by him in the  discharge  of his  duties  for  the
          Corporation. The Employee agrees that such reimbursements shall be due
          only after he has rendered an itemized expense account,  together with
          receipts where  applicable,  showing all monies  actually  expended on
          behalf of the Corporation and such other infom1ation as may reasonably
          be required and requested by the Corporation.  The Corporation  agrees
          to provide Employee with a computer (with necessary software),  a cell
          phone and all other equipment  required for the purposes of conducting
          business.  In the case of air  travel,  any journey of three (3) hours
          total duration or less is to be taken in economy class and on journeys
          greater  than three (3) hours total  duration may be taken in Business
          Class or equivalent.

     2.12 VEHICLE:  The  Corporation  will not provide  Employee  with a company
          vehicle, but agrees to reimburse Employee for miles driven in personal
          vehicle  for  company  business or for rental  vehicle  expenses  when
          appropriate.

3.0  TERM AND TERMINATION

     3.01 EFFECTIVE DATE - This Agreement will take effect on the Effective Date
          and will continue in full force and effect until the earlier of:

          (a) expiration of a three year period from the date of this Agreement;
          and

          (b) date of  termination  as  otherwise  provided  for  hereunder  and
          pursuant to this Section 3.

     3.02 TERMINATION  BY  CORPORATION  FOR  CAUSE -  Notwithstanding  any other
          provision of this Agreement,  the  Corporation  may, at any time, give
          written  notice to the Employee of its  intention  to  terminate  this
          Agreement if the Employee's acts or omissions would  constitute  Cause
          as defined below and at such time this Agreement  shall be terminated.
          Upon such  termination,  any remuneration  payable  hereunder shall be
          proportioned to the date of such  termination and shall be paid on the
          date of such termination together

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          with any other  amounts then due and owing to the Employee  including.
          without  limitation,   any  bonuses   (proportioned  to  the  date  of
          termination)  and  expenses.  In addition,  any stock options or other
          stock  awards as described  in Sections  2.2,  2.3, and 2.5 above then
          held by the  Employee  that have  vested as of the date of the  notice
          shalt be governed,  with respect to their term and exercisability,  by
          the  terms  of  this  Agreement  or  the  stock  option  plan  of  the
          Corporation  and the stock  option  agreement  under  which such stock
          options were granted; provided that any stock options then held by the
          Employee  that have not vested as of the date of the  notice  shall be
          deemed to have expired and cancelled.

          "Cause", for purposes of this Agreement shall arise, in respect to the
          Employee,  because of the Employee's (i) theft,  embezzlement,  fraud,
          obtaining funds or property under false pretences, with respect to the
          property of the  Corporation  or its  employees  or the  Corporation's
          customers or suppliers;  or (ii) guilty plea or any  conviction of the
          Employee of any indictable  offence or of a summary conviction offence
          under applicable criminal laws.

     3.03 If the  Employee  should  die  during  the  period  of his  employment
          hereunder,  termination of his employment shall be deemed to have been
          effected by the  Corporation  and the provisions of Section 3.02 shall
          apply and any  payment  to be made to the  Employee  pursuant  to this
          Agreement shall be paid to the legal representatives of the Employee.

     3.04 If Employee should become incapacitated by accident, sickness or other
          circumstance  which  renders him mentally or  physically  incapable of
          performing  the duties and  services  required of him  hereunder  on a
          full-time  basis  for  a  period  of at  least  90  consecutive  days,
          termination of his employment shall be deemed to have been effected by
          the  Corporation and the provisions of Section 3.2 shall apply and any
          payment to be made to the Employee pursuant to this Agreement shall be
          paid to the legal representatives of the Employee.

     3.05 Any termination by the  Corporation  pursuant to Sections 3.2, 3.3 and
          3.4 shall be  communicated  by written  notice of  termination  to the
          Employee or to Employee's  legal  representative,  if  necessary.  For
          purposes of this  Agreement,  a "notice of  termination"  shall mean a
          notice which shall indicate the specific termination provision of this
          Agreement  relied  upon and shall set forth in  reasonable  detail the
          facts and circumstances  claimed to provide a basis for termination of
          the Employee's employment. For the purposes of this Agreement, no such
          purported termination shall be effective without such notice.

     3.06 On the date of termination of the employment of the Employee  pursuant
          to Section 3.2, 3.3 or 3.4 the Corporation's  obligation  hereunder in
          respect of all compensation referred to herein shall terminate.

     3.07 TERMINATION BY EITHER PARTY WITHOUT CAUSE:  Notwithstanding  any other
          provision of this agreement,  the Employee or the Corporation may give
          30-day  written  notice of the intention to terminate  this  Agreement
          without cause and this Agreement shall be terminated 30 days from such
          notice.  In the  event  of a  termination  of  this  Agreement  by the
          Corporation  in  accordance  with this  Section,  all  Employee  Stock
          Options  shall  become  immediately  vested and fully  released to the
          Employee on the date of termination of this Agreement. In the event of
          a termination  of this  Agreement by the Employee in  accordance  with
          this Section,  any Employee  Stock Options not vested to the Employee,
          as at the date of delivery of notice of termination by the Employee to
          the Company, shall be cancelled.

4.0  CHANGE IN CONTROL

     4.0l In a Change of Control (see definition  below) event,  the Corporation
          shall treat this Agreement as terminated by Corporation  without cause
          in which event  Corporation shall be obligated to provide the Employee
          with a severance  payment in lieu of notice.  Such  severance  payment
          shall be

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          payable  on the  fifth  day  following  the date on which  Corporation
          notifies  the  Employee of his  termination  and shall  consist of the
          following amounts:

          (i)  the  Employee's  full salary  through to the date of  termination
               specified in the notice of  termination  at the rate in effect at
               the time notice of termination was given, plus an amount equal to
               the amount, if any, of any awards previously made to the Employee
               which have not been paid; plus

          (ii) in lieu of further salary and benefits for periods  subsequent to
               the date of  termination,  an amount  which shall be equal to the
               salary and benefits which would otherwise have been payable to or
               paid on behalf of the  Employee  for the twelve (12) month period
               following the date of termination; plus

          (iii)any remaining or outstanding  stock grants,  options or awards as
               described  in Sections  2.2,  2.3 and 2.5 above shall fully vest,
               with a cashless  option  provision  provided to the  Employee for
               option exercising purposes.

          Additionally,  any common  shares owned by the Employee and subject to
          vesting will be immediately released from escrow to the Employee.

          Termination  of this  Agreement in accordance  with this Section shall
          relieve the  Corporation  from any and all  obligation,  liability  or
          claim by the  Employee,  exclusive  of  monies  owing to the  Employee
          pursuant to this Section.

          For purposes of this  Agreement,  the term  "Change in Control"  shall
          mean  (1)  any  merger,  consolidation,  or  reorganization  in  which
          Corporation  is not  the  surviving  entity  (or  survives  only  as a
          subsidiary  of an entity),  (2) any sale,  tease,  exchange,  or other
          transfer of (or  agreement  to sell,  lease,  exchange,  or  otherwise
          transfer) all or substantially all of the assets of Corporation to any
          other  person or entity  (in one  transaction  or a series of  related
          transactions),  (3) dissolution or liquidation of  Corporation,  (4) a
          new  individual or party,  or group of  individuals  or parties acting
          jointly  or in  concert  coming to own of record or  beneficially,  or
          coming to control or exercise  direction over, for the first time, 50%
          or more of the  then  issued  and  outstanding  voting  shares  of the
          Corporation,  (5) as a result  of or in  connection  with a  contested
          election of directors,  the persons who were  directors of Corporation
          before such  election  cease to  constitute a majority of the Board of
          Directors,  (6) a unilateral  requirement  that  Employee  permanently
          relocate  to any place more than 25 miles away from the  Corporation's
          Denver,  Colorado  office to perfom1  required  work duties,  or (7) a
          material  reduction  in  Employee's  duties,  title,  compensation  or
          benefits  in  effect  as of the  date of the  Change  of  Control,  or
          position of responsibility  as set forth in this Agreement;  provided,
          however,  that the term  "Change in  Control"  shall not  include  any
          reorganization,  merger,  consolidation,  sale,  lease,  exchange,  or
          similar  transaction  involving solely the Corporation and one or more
          previously wholly owned subsidiaries of the Corporation.

     4.02 Subject to all  applicable  regulations  governing  the  Corporation's
          common shares,  if any "person",  or any person and any "associate" of
          such person, begins a tender or exchange offer,  circulates a proxy to
          shareholders  or takes other steps to effect a takeover of the control
          of  Corporation  (a "Take Over") all common stock shares and incentive
          stock options to purchase  common shares of the  Corporation  owned by
          the Employee shall vest  immediately on the  commencement of such Take
          Over subject to Exchange escrow and vesting requirements.

     4.03 For purposes of this Agreement  takeover of control shall be evidenced
          by the acquisition by any person, or by any person and its associates,
          whether directly or indirectly, of common shares of the

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          Corporation  that,  when added to all other common  shares at the time
          held by such person and its affiliates, totals for the first time more
          than 50% of the outstanding common shares of the Corporation.

5.0  DUTIES OF THE EMPLOYEE

5.01 During the term of this  Agreement,  the Employee  shall devote his working
     time,  attention  and  energies  to the  business  of the  Corporation  and
     undertake such tasks as are ordinarily  undertaken by a person in a similar
     position at a similar company to the Corporation. Without the prior consent
     of the Board,  the Employee shall not,  during the term of this  Agreement.
     directly  or  indirectly   engage  in  any  business  which  is  in  direct
     competition with that of the Corporation or its associates or affiliates or
     accept  employment  with any other company,  firm or individual,  whether a
     competitor or  otherwise,  or take any other action  inconsistent  with the
     fiduciary relationship of a President and COO to his corporation.

5.02 Notwithstanding  the  above,  the  Employee  may  serve,  with  or  without
     compensation,  on the  boards  of such  companies  or  corporations,  Crown
     corporations  or on such  industry  associations  or on such  government or
     other  public  boards or  committees  (domestic  or  international)  as the
     Employee may determine, subject to the approval of the Board, such approval
     not to be  unreasonably  withheld,  provided  that the  objectives  of such
     boards or committees  are not, in the opinion of the Board,  similar to the
     interests of the Corporation  and may devote such reasonable  amount of his
     time  (including  time during business hours) to the affairs of such boards
     or  committees  as the  Employee,  in  consultation  with  the  Board,  may
     determine as reasonable.

5.03 In the event that the  Corporation  becomes  involved  in any legal  action
     relating to events which occur during the Employee's  employment under this
     Agreement  and about which the Employee has  knowledge,  the Employee  will
     cooperate  with the  Corporation  to the  fullest  extent  possible  in the
     preparation, prosecution, or defense of the Corporation's case.

6.0  NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

     6.01 The Employee  agrees that during  engagement  under this Agreement and
          for one (1) year after  termination  of such  engagement  assuming the
          Corporation  has met and fulfilled all of its  obligations  under this
          Agreement,  the Employee will not.  without express written consent of
          the Corporation,  divulge or use confidential  business information or
          trade  secrets  obtained by the  Employee in the course of  engagement
          with the Corporation,  directly or indirectly,  for the Employee's own
          benefit  or for the  benefit  of any  other  person,  firm,  business,
          corporation,  or entity,  except in accordance  with this Agreement or
          with the written permission of the Corporation.

7.0  NON-HIRING

     7.01 The Employee  agrees that during  engagement  under this Agreement and
          for  a  period  of  one ( l )  year  after  the  termination  of  such
          engagement  assuming the  Corporation  has met or fulfilled all of its
          obligations  under this  Agreement,  he will not,  without the express
          written  consent of the  Corporation,  personally  or on behalf of any
          other  person,   business,   corporation,   or  entity,   directly  or
          indirectly,  make any effort to induce any employee of the Corporation
          to leave his or her employment with the Corporation.

8.0  RETURN OF DOCUMENTS

     8.0l The Employee  acknowledges  that all  originals and copies of records,
          reports,  documents,  lists, memoranda, notes, and other documentation
          related to the business of the  Corporation or containing any business
          information of the Corporation  (whether  developed or prepared by the
          Corporation or others) shall be the sole and exclusive property of the
          Corporation and shall be returned to the

                                      -7-
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          Corporation  upon the  termination of engagement  under this Agreement
          for  any  reason  whatsoever  or  upon  the  written  request  of  the
          Corporation.  The  Employee  shall not take with him any  documents or
          data of any  kind or any  reproductions  in  whole  or in part of such
          documents or of the information contained in such documents.

9.0  BUSINESS OPPORTUNITIES

     9.01 The Employee  agrees to  communicate to the  Corporation  all business
          opportunities,  inventions  and  improvements  in  the  nature  of the
          business of the Corporation which, while his employment continues,  he
          may  conceive,  make  or  discover,   become  aware  of,  directly  or
          indirectly, or have presented to him in any manner, that relate in any
          way to the type of business of the Corporation, either as it is now or
          as it may develop,  and such business  opportunities,  inventions  and
          improvements  shall become the exclusive  property of the  Corporation
          without  any  obligation  on the part of the  Corporation  to make any
          payment  therefore  in addition to the salary and  benefits  described
          herein to the  Employee.  Notwithstanding  the above  requirement  for
          fully  divulging  business  opportunities  to the  Corporation,  it is
          hereby agreed that if the Corporation  elects not to pursue a business
          opportunity  for whatever  reason and  Employee  wishes to pursue such
          opportunity,  Board permission for Employee to pursue such opportunity
          shall not be unreasonably withheld.

     9.02 The Employee hereby advises the Corporation  that he has a non-compete
          commitment  with his  prior  employer  which  could  prevent  him from
          participating  in  oil  and  gas  competitive  operations  in an  area
          surrounding  Section 33, T4N,  R68W,  Weld County,  Colorado and in an
          area surrounding the Credo North prospect in Glasscock County,  Texas,
          for a period of one year commencing on December 31, 2012.

10.0 SUCCESSORS OR ASSIGNS

     10.01The rights and  obligations  of the  Corporation  under this Agreement
          shall inure to the benefit of and be binding  upon the  successors  or
          assigns of the Corporation.

11.0 MISCELLANEOUS

     11.01This  Agreement and the  employment of the Employee shall be governed,
          interpreted, construed and enforced according to the laws of the State
          of Colorado.

     11.02The nondisclosure,  non-solicitation  and non-hiring covenants of this
          Agreement contained in Sections 6.0 and 7.0 are severable,  and if any
          clause  or  clauses  are found to be  unenforceable  as  written,  the
          Agreement  and its  remaining  covenants  shall  not fail but shalt be
          construed and enforced as stated in the  Agreement.  The parties agree
          that no covenant of this  Agreement  shall be  invalidated  because of
          over-breadth  insofar as the parties acknowledge that the scope of the
          covenants  contained herein is reasonable and necessary to protect the
          Corporation and are not unduly  restrictive of the Employee.  Should a
          court  determine not to enforce any covenant of this  Agreement due to
          over-breadth,  then the  parties  agree  that said  covenant  shall be
          enforced  to the  extent  reasonable,  with  the  court  to  make  any
          necessary  revisions  to said  covenant  to  permit  its  enforcement,
          whether such revisions be in time,  territory,  or scope of prohibited
          activities.

     11.03This  Agreement and the  completion  of the  obligation of the parties
          contained  herein,  including but not limited to the granting of Stock
          Options or other stock awards, is subject to the approval of any other
          regulatory body having jurisdiction. The Stock Options and awards will
          be issued only in compliance with all applicable securities laws.

                                      -8-
<PAGE>
     11.04This  Agreement  shall inure to the benefit of and be  enforceable  by
          the  Employee's  legal  representatives,   executors,  administrators,
          successors,  heirs,  distributees,   devisees  and  legatees.  If  the
          Employee  should  die  while any  amounts  are  still  payable  to him
          hereunder,  all such amounts,  unless otherwise provided herein, shall
          be paid in accordance  with the terms of this  Agreement to such legal
          representatives,   executors,   administrators,   successors,   heirs,
          distributees,  devisees and legatees or, if there be no such designee,
          to his estate.

     11.05This Agreement  represents the entire  Agreement  between the Employee
          and  the   Corporation   concerning  the  subject  matter  hereof  and
          supersedes    any   previous    oral   or   written    communications,
          representations,  understandings or agreements with the Corporation or
          any officer or agent thereof.

     11.06Any  notice,  acceptance  or  other  document  required  or  permitted
          hereunder  shall be  considered  and deemed to have been duly given if
          delivered by hand or mailed by postage (Special  Delivery) prepaid and
          addressed as follows:

                To the Employee:

                Charles W. Pollard
                4745 W. 105th Way
                Westminster, Colorado 80031

                To the Corporation:

                Three Forks, Inc.
                555 Eldorado Blvd, Suite 100
                Broomfield, Colorado 80021
                Attn: CEO

          or to such other  address  as any party may  specify in writing to the
          other and shall be deemed to have been received, if delivered,  on the
          date of  delivery  and if  mailed  as  aforesaid,  then on the  second
          business day  following the date of mailing  thereof  provided that if
          there  shall be, at the time of mailing or within  two  business  days
          thereof, a strike, slowdown or other labour dispute which might affect
          delivery  of  notice  by the  mails  then  the  notice  shall  only be
          effective if actually delivered.

     11.07The waiver by the  Employee or by the  Corporation  of a breach of any
          provision  of this  Agreement  shall not operate or be  construed as a
          waiver of any subsequent breach by the Corporation or by the Employee.

     11.08 Time shall be of the essence of this Agreement.

     11.09This  Agreement may be executed in one or more  counterparts,  each of
          which  shall be deemed to be an  original,  but all of which  together
          will constitute one and the same Agreement.

          The  obligations  of each party under this  Agreement.  other than the
          obligations  to make payments of money and provide other  benefits and
          perquisites (including but not limited to the vesting of stock options
          or stock awards) to Employee as provided in this  Agreement,  shall be
          excused or suspended  while such party is  prevented or hindered  from
          complying  therewith,  in whole or in part, by Force  Majeure.  In the
          event Force  Majeure  causes a suspension  of the  obligations  of any
          party as  aforesaid,  such party shall give notice  thereof as soon as
          reasonably  possible to the other party stating the date and extent of
          such

                                      -9-
<PAGE>
          suspension,  whether in whole or in part,  and the nature of the Force
          Majeure.  Any party whose obligations have been suspended as aforesaid
          shall take all reasonable steps to remove the Force Majeure  situation
          and shall  resume  the  performances  of such  obligations  as soon as
          reasonably  possible  after the removal of the Force Majeure and shall
          so notify the other party.

     11.l0Corporation shall indemnify,  defend, and hold harmless Employee,  his
          heirs, assigns and personal representatives,  from and against any and
          all loss, cost, damage,  liability or expense,  relating to, resulting
          from or arising out of Employee's  performance of services  hereunder,
          except to the  extent  that such  loss,  cost,  damage,  liability  or
          expense  results from the gross  negligence  or willful  misconduct of
          Employee.  Notwithstanding  Employee's  right to receive  his  salary,
          benefits and out of pocket  expenses  while  performing his duties for
          the Corporation,  Employee shall indemnify,  defend, and hold harmless
          Corporation,  its subsidiaries,  associates, and affiliates, and their
          respective  officers,  directors and executives,  from and against any
          and all loss,  costs,  damage,  liability  or  expense,  sustained  by
          Employee,  resulting from or arising out of Corporation's  performance
          hereunder,  except  to  the  extent  that  such  loss,  cost,  damage,
          liability  or expenses  results from the gross  negligence  or willful
          misconduct of Corporation.  Neither  Corporation nor Employee shall be
          liable to the other for any of its incidental or consequential damages
          (including without  limitation,  lost profits).  Neither of them shall
          assert  any  such  claim  against  the  other or its  subsidiaries  or
          affiliates,  or their respective directors or employees, or its heirs,
          assigns or personal representatives.

12.0 ENFORCEMENT

     12.01Both the Employee and the Corporation  recognize and agree that in the
          event  of  a  breach  or  threatened  breach  of  the   nondisclosure,
          non-competition,   or   non-hiring   covenants   of  this   Agreement,
          irreparable  harm might result to the  Corporation  and its  business.
          Therefore,  the  parties  agree  that if the  Corporation  has met and
          fulfilled  all of its  obligations  under this  Agreement  and in such
          event  of  breach  or  threatened  breach,  the  Corporation  shall be
          entitled to an injunction to restrain actual or potential violation of
          the nondisclosure,  non-solicitation, and non-hiring covenants of this
          Agreement in addition to all other remedies,  damages, or legal relief
          available to the Corporation.

     12.02The  Employee  represents  and  admits  that  his or her  considerable
          business talents,  past experience,  and proven  capabilities are such
          that the Employee  can obtain  employment  in some other  business and
          that  enforcement  of  this  Agreement  by  way of  injunction  is not
          intended  to  and  will  not  prevent  the  Employee  from  earning  a
          livelihood.   For  enforcement  purposes,  the  non-disclosure,   non-
          solicitation,  and  non-hiring  covenants of this  Agreement  shall be
          construed as obligation  independent of any other obligations  between
          the parties,  and the existence of any claim or cause of action by the
          Employee against the Corporation shall not constitute a defense to the
          enforcement   by  the   Corporation   by  way  of  injunction  of  the
          nondisclosure,  non-solicitation,  and  non-hiring  covenants  of this
          Agreement.  This clause is relevant and  enforceable  only if and when
          Corporation  has met and fulfilled all of its  obligations  under this
          Agreement.

13.0 AGREEMENT VOLUNTARY AND EQUITABLE

     13.0lThe Corporation and the Employee further  acknowledge and declare that
          they  each  have  carefully  considered  and  understand  the terms of
          employment contained in this Agreement including, but without limiting
          the   generality  of  the  foregoing,   the  Employee's   rights  upon
          termination and the  restrictions  on the Employee after  termination,
          and acknowledge and agree that the said terms of employment and rights
          and restrictions upon termination are mutually fair and equitable, and
          that they executed this  Agreement  voluntarily  and of their own free
          will.

                                      -10-
<PAGE>
IN WITNESS  WHEREOF the  Corporation has caused this Agreement to be executed by
its duly  authorized  officers  on its  behalf  and the  Employee  has  hereunto
executed this Agreement as of the day and year first above written.

THREE FORKS, INC.

Per: /s/ Donald Walford
------------------------------
Authorized Signatory

Donald Walford CEO
------------------------------
Name

SIGNED AND DELIVERED                            )
BY CHARLES W. POLLARD IN THE PRESENCE OF:       )
                                                )
/s/ W. Edward Nichols                           )
--------------------------------                )
Name                                            )
                                                )
555 Eldorado Blvd                               )       /s/ Charles W. Pollard
--------------------------------                )       ------------------------
Address                                         )       Charles W. Pollard
                                                )
Broomfield, CO  80021                           )
--------------------------------                )
City                                            )
                                                )
Chairman                                        )
--------------------------------                )
Occupation                                      )

                                      -11-EXHIBIT 10.6

THE  INTERESTS  IN THE LIMITED  LIABILITY  COMPANY  THAT IS  REGULATED  BY THESE
REGULATIONS  HAVE NOT BEEN  REGISTERED  UNDER  THE  SECURITIES  ACT OF 1933,  AS
AMENDED,  OR THE COLORADO  SECURITIES AND INVESTOR PROTECTION ACT, AND ARE BEING
OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACTS. THE INTERESTS MAY NOT BE SOLD,  TRANSFERRED,  PLEDGED OR HYPOTHECATED
WITHOUT REGISTRATION UNDER SUCH ACTS OR AN OPINION OF COUNSEL THAT SUCH TRANSFER
MAY BE LEGALLY EFFECTED WITHOUT SUCH  REGISTRATION.  ADDITIONAL  RESTRICTIONS ON
TRANSFER AND SALE ARE SET FORTH IN THESE REGULATIONS.
--------------------------------------------------------------------------------

                               OPERATING AGREEMENT

                                       OF

                             THREE FORKS NO. 1, LLC

                      A COLORADO LIMITED LIABILITY COMPANY

         THIS  OPERATING  AGREEMENT is made effective as of November 12, 2012 by
and among the Owners of the Company, Three Forks No 1, LLC.

                             ARTICLE I - DEFINITIONS

         The following  terms used in this  Operating  Agreement  shall have the
following meanings unless otherwise expressly provided herein:

                  "ADDITIONAL  OWNER"  shall mean any Person or Entity who is or
which is  admitted to the Company as an  Additional  Owner  pursuant to Title 7,
Article 80, Part 701 of the Colorado Revised Statutes.

                  "AFFILIATE"  shall mean,  with respect to any Person,  (i) any
Person directly or indirectly controlling, controlled by or under common control
with such Person, (ii) any officer, director,  shareholder, member or partner of
such Person, (iii) any person who is an officer, director, shareholder,  member,
partner,  trustee or employee of any Person described in clauses (i) and (ii) of
this sentence, or (iv) any child, grandchild (whether through marriage, adoption
or otherwise),  parent,  brother,  sister or spouse of a Person. For purposes of
this  definition,  the term  "controls,  is  controlled  by, or is under  common
control  with" shall mean the  possession,  direct or indirect,  of the power to
direct  or cause the  direction  of the  management  and  policies  of a Person,
whether through the ownership of voting securities, by contract or otherwise.
<PAGE>

                  "CAPITAL  ACCOUNT"  means a capital  account to be established
for each Owner,  and including any  transferee  of an Owner,  and  maintained in
accordance  with the rules of Code Section 704(b) and Code  Regulations  Section
1.704-1(b)(2)(iv), as amended from time to time.

                  In cases  where  Code  Section  704(c)  and  Code  Regulations
         Section 1.704-3 apply to property of the Company,  the Capital Accounts
         of the Owners  shall be adjusted in  accordance  with Code  Regulations
         Section  1.704-1(b)(2)(iv)(g) for allocations to such Owners of income,
         gain,   loss  and   deduction   (including   depreciation,   depletion,
         amortization or other cost recovery) as computed for book purposes with
         respect  to the  property.  Adjustment  to an Owner's  Capital  Account
         hereunder  shall be made with reference to the Federal tax treatment of
         the item giving rise to the  adjustment  at the Company  level  without
         regard to any elective tax treatment of such item at the Owner's level.

                  In the event any Owner  transfers an Economic  Interest in the
         Company in accordance with the terms of this Operating  Agreement,  the
         transferee shall succeed to the Capital Account of the transferor Owner
         to the extent such Capital Account relates to such transferred Economic
         Interest.  In  determining  the amount of any liability for purposes of
         this section, there shall be taken into account Code Section 752(c) and
         any  other  applicable  provisions  of the Code  and  Code  Regulations
         promulgated thereunder.

                  "CAPITAL  CONTRIBUTION"  shall  mean any  contribution  to the
capital of the Company in cash or property by an Owner whenever  made.  "INITIAL
CAPITAL  CONTRIBUTION" shall mean the initial contribution to the capital of the
Company  pursuant to this  Operating  Agreement,  such value to be determined by
agreement between the parties, net of liabilities,  assumed by the Company or to
which the contributed  property is subject.  The Initial Capital Contribution of
each Owner is set forth opposite such Owner's name on the attached  EXHIBIT "A."
"ADDITIONAL CAPITAL CONTRIBUTION" shall mean any additional capital contribution
to the capital of the Company pursuant to this Operating Agreement.

                  "CODE"  shall  mean  the  Internal  Revenue  Code  of  1986 or
corresponding provisions of subsequent superseding federal revenue laws.

                  "COMPANY"  shall  refer  to this  Colorado  limited  liability
company.

                  "DISTRIBUTABLE  CASH" shall mean all cash,  revenues and funds
received  by the  Company  from  the  Company  operations,  less  the sum of the
following to the extent paid or set aside by the Company:  (i) all principal and
interest  payments  on  indebtedness  of the  Company and all other sums paid to
lenders; (ii) all cash expenditures incurred incident to the normal operation of
the  Company's  business;  and (iii) such cash reserves as the  Manager(s)  deem
reasonably necessary to the proper operation of the Company's business.

                  "ECONOMIC INTEREST" shall mean a Member's or Economic Interest
Owner's share of the Company's Net Profits,  Net Losses and distributions of the
Company's  assets pursuant to this Operating  Agreement and the Colorado Revised
Statutes,  but shall not, of itself, include any right to vote on, consent to or

                                      -2-
<PAGE>

otherwise  participate  in any decision of the Members or Managers.  The Initial
Economic Interests are set forth in EXHIBIT "A" hereto.

                  "ECONOMIC  INTEREST OWNER" Shall mean the owner of an Economic
Interest who is a Member.

                  "ENTITY"   shall  mean  any   general   partnership,   limited
partnership,  limited  liability  company,  corporation,  joint venture,  trust,
business trust, cooperative or association.

                  "FISCAL  YEAR" shall mean the  Company's  fiscal  year,  which
shall be from January 1 to December 31.

                  "COLORADO  STATUTES" shall mean the Colorado  Revised Statutes
Title 7 Article 80, as amended.

                  "GROSS  ASSET VALUE"  means,  with respect to any asset of the
Company,  the asset's adjusted basis for federal income tax purposes,  except as
follows:

                           (i)  The  initial  Gross  Asset  Value  of any  asset
         contributed  by an Owner to the Company  shall be the gross fair market
         value of such asset as  determined  by the  contributing  Owner and the
         Company;

                           (ii) The  Gross  Asset  Value of all  Company  assets
         shall be adjusted to equal their  respective  gross fair market  values
         (taking  into  account  Code  Section  7701(g))  as  determined  by the
         Company, as of the following times:

                                    a) The acquisition of an additional Economic
                  Interest  in the  Company  by any  new or  existing  Owner  in
                  exchange for more than a de minimis Capital Contribution;

                                    b) The  distribution  by the  Company  to an
                  Owner (or an assignee of an Owner with  respect to the Owner's
                  Economic  Interest  in the  Company) of more than a de minimis
                  amount of Company assets as consideration  for the disposition
                  of an interest in the Company; and

                                    c) The liquidation of the Company within the
                  meaning of Code Regulations Section 1.704-1(b)(2)(ii)(g).

                  Adjustments  pursuant to  subsections a) and b) above shall be
         made only if the Manager(s)  reasonably determine that such adjustments
         are necessary or appropriate to reflect the relative Economic Interests
         of the Owners in the Company;

                           (iii) If the Gross  Asset  Value of an asset has been
         determined or adjusted as provided in this definitional  Section (other
         than  subparagraph  (iv)  below),  Gross Asset Value of the  respective
         asset  thereafter  shall be  adjusted  by the  Depreciation  taken into
         account with respect to the asset for purposes of computing  Profit and
         Loss;

                                      -3-
<PAGE>

                           (iv)  The  Gross  Asset  Value of any  Company  asset
         distributed  to any Owner shall be the gross fair  market  value of the
         distributed  asset,  as  determined  by the  Company,  on the  date  of
         distribution; and

                           (v) The Gross Asset Value of Company  assets shall be
         increased  (or  decreased) to reflect any  adjustments  to the adjusted
         basis of the Company  assets  pursuant  to Code  Section  732(d),  Code
         Section 734(b) or Code Section 743(b), but only to the extent that such
         adjustments  are taken into account in determining  the Owner's Capital
         Account pursuant to Code Regulations Section 1.704-1(b)(2)(iv)(m).  The
         Gross Asset Value of the Company assets, however, shall not be adjusted
         under this subparagraph (v) to the extent that the Manager(s) determine
         that an adjustment  pursuant to  subparagraph  (ii) is not necessary or
         appropriate  in connection  with a  transaction  that  otherwise  would
         result in an adjustment pursuant to this subparagraph (v).

                  "INTERESTS"  shall  mean  the  Economic  Interests  or  Voting
Interests of a Member,  as the use of such term may imply. For the purposes of a
purchase or sale between Members of their  respective  Interests in the Company,
it shall  mean both the  Economic  Interests  and the  Voting  Interests  in the
aggregate for the selling Member.

                  "MANAGER" shall mean Three Forks, Inc., a Colorado corporation
upon its  resignation,  or any other Person or Entity that  succeeds any of such
persons or entities in that capacity.  References to the Manager in the singular
or as him,  her, it,  itself,  or other like  references  shall also,  where the
context so requires,  be deemed to include the corporate plural or the masculine
or feminine reference, as the case may be.

                  "MEMBER"  shall  mean  each  of the  parties  who  executes  a
counterpart of this Operating  Agreement as a Member and each of the parties who
may  hereafter  become  Additional  or  Substitute  Owners  having voting rights
pursuant to the terms of this  Agreement.  Each  Member  shall have the right to
vote his or her respective Voting Interests set forth in EXHIBIT "B" hereto.

                  "NET PROFITS" shall mean, for each Fiscal Year, the income and
gains of the Company  determined in accordance  with the  accounting  principals
consistently  applied  from  year to year,  as  reported,  separately  or in the
aggregate,  as  appropriate,  on the Company's  information tax return filed for
federal  income  tax  purposes,  plus  any  income  described  in  Code  Section
705(a)(1)(B).

                  "NET LOSSES" shall mean,  for each Fiscal Year, the losses and
deductions of the Company  determined in accordance with  accounting  principals
consistently  applied  from  year  to  year  as  reported  separately  or in the
aggregate,  as  appropriate,  on the Company's  information tax return filed for
federal  income tax purposes,  plus any  expenditures  described in Code Section
705(a)(2)(B).

                  "OPERATING  AGREEMENT" shall mean this Operating  Agreement as
originally executed and as amended from time to time, and which shall constitute

                                      -4-
<PAGE>
the "Regulations" or "Operating Agreement" of the Company under Title 7, Article
80, Part 108 of the Colorado Revised Statutes.

                  "ORGANIZATION  EXPENSES" shall mean those expenses incurred in
connection with the formation of the Company.

                  "OWNERS"   shall  mean   collectively   the  Members  and  the
non-voting Economic Interest Owners of this Company.

                  "PERSON" shall mean any  individual or Entity,  and the heirs,
executors,  administrators,  legal representatives,  successors,  and assigns of
such "PERSON" where the context so admits.

                  "PROFIT  AND  LOSS"  means,  for each  fiscal  year and  other
period, an amount equal to the Company's taxable income or loss for such year or
period, determined in accordance with Code Section 703(a) (for this purpose, all
items of income,  gain,  loss,  or  deduction  required to be stated  separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:

                           (i) Any  income of the  Company  that is exempt  from
         federal  income tax and not  otherwise  taken into account in computing
         Profit  or Loss  pursuant  to this  definition  shall  be added to such
         taxable income or loss;

                           (ii) Any  expenditures  of the Company  described  in
         Code  Section  705(a)(2)(B)  of the  Code or  treated  as Code  Section
         705(a)(2)(B)   expenditures   pursuant  to  Code  Regulations   Section
         1.704-1(b)(2)(iv)(i)  and not otherwise taken into account in computing
         Profit or Loss pursuant to this  definition  shall be  subtracted  from
         taxable income or loss;

                           (iii)  In the  event  the  Gross  Asset  Value of any
         Company asset is adjusted  pursuant to  subparagraphs  (ii) and (iv) of
         the definition of "Gross Asset Value"  hereinabove,  the amount of such
         adjustment  shall  be  taken  into  account  as gain or loss  from  the
         disposition of such asset for purposes of computing Profit or Loss;

                           (iv) Gain or loss resulting  from any  disposition of
         Company  property with respect to which gain or loss is recognized  for
         federal income tax purposes shall be computed by reference to the Gross
         Asset  Value of the  property  disposed  of,  notwithstanding  that the
         adjusted tax basis of such property differs from its Gross Asset Value;

                           (v) In lieu of the  depreciation,  amortization,  and
         other cost  recovery  deductions  taken into account in computing  such
         taxable income or loss, there shall be taken into account  Depreciation
         for such fiscal year or other period;

                           (vi) To the extent an  adjustment to the adjusted tax
         basis of any  Company  asset  pursuant to Code  Section  734(b) or Code
         Section  743(b)  is  required  pursuant  to  Code  Regulations  Section

                                      -5-
<PAGE>

         1.704-1(b)(2)(iv)(m)  to be taken into account in  determining  Capital
         Accounts as a result of a distribution  other than in liquidation of an
         Owner's Economic Interest in the Company, the amount of such adjustment
         shall be treated as an item of gain (if the  adjustment  increases  the
         basis of the asset) or loss (if the  adjustment  decreases the basis of
         the asset)  from the  disposition  of the asset and shall be taken into
         account for purposes of computing Profit or Loss; and

                           (vii) To the extent an adjustment to the adjusted tax
         basis of any  Company  asset  pursuant to Code  Section  734(b) or Code
         Section  743(b)  is  required  pursuant  to  Code  Regulations  Section
         1l704-1(b)(2)(iv)(m)  to be taken into account in  determining  Capital
         Accounts  as a  result  of a  distribution  to  an  Owner  in  complete
         liquidation  of his or her interest in the Company,  the amount of such
         adjustment to the Capital  Accounts shall be treated as an item of gain
         (if the  adjustment  increases  such basis) or loss (if the  adjustment
         decreases  such  basis),  and  such  gain or loss  shall  be  specially
         allocated to the Owners in accordance with their Economic  Interests in
         the   Company   in   the   event   that   Code   Regulations    Section
         1.704-1(b)(2)(iv)(m)(2) applies, or the Owner to whom such distribution
         was   made   in   the    event    that   Code    Regulations    Section
         1.704-1(b)(2)(iv)(m)(4) applies.

                  "RESERVES"  shall  mean,  with  respect to any fiscal  period,
funds set aside or amounts  allocated during such period to reserves which shall
be maintained in amounts deemed sufficient by the Manager(s) for working capital
and to pay taxes, insurance, debt service or other costs or expenses incident to
the ownership or operation of the Company's business.

                  "SUBSTITUTE  OWNER"  shall  mean any  Person or Entity  who or
which is  admitted  to the  Company as a  Substitute  Owner  pursuant to Title 7
Article 80 Part 702(3) of the Colorado Revised Statutes.

                  "VOTING INTEREST" shall mean the percentage voting interest of
a Member in the Company as set forth in EXHIBIT "B" hereto, according to its pro
rata ownership interest.

                      ARTICLE II - FORMATION OF THE COMPANY

         2.1  FORMATION.  On November 8, 2012 the  Company  was  organized  as a
Colorado  Limited  Liability  Company under and pursuant to the Colorado Limited
Liability Company Act within the Colorado Revised Statutes. The Company is not a
partnership  (including a limited  partnership) or any other venture.  Except as
provided by law, no Member will be construed to be a partner in the Company or a
partner  of any  other  Member  or  person,  and the  Articles,  this  Operating
Agreement and the  relationships  created thereby and arising therefrom will not
be construed to suggest otherwise. The foregoing statement regarding partnership
status does not apply for purposes of  classifying  the Company as a partnership
or its Members as partners for income tax purposes  under Section  301.7701-2 of
the Income Tax Regulations  promulgated  under the Code, as such regulations may
be amended from time to time.

         2.2 NAME. The name of the Company is Three Forks No. 1, LLC

                                      -6-
<PAGE>

         2.3 PRINCIPAL  PLACE OF BUSINESS.  The Company may locate its places of
business and  registered  office at any other place or places as the  Manager(s)
may deem advisable from time to time.

         2.4 REGISTERED  OFFICE AND REGISTERED  AGENT. The Company's  registered
agent and its registered  office shall be at the offices of its registered agent
Michael A. Littman, Attorney at Law, at 7609 Ralston Road, Arvada, CO 80002.

         2.5 TERM.  The term of the Company  shall be for 20 years from the date
of filing  the  Articles  of  Organization  with the  Secretary  of the State of
Colorado,  unless the Company is earlier  dissolved or  continued in  accordance
with either the  provisions  of the  Articles of  Organization,  this  Operating
Agreement or the relevant Colorado Statutes.

                      ARTICLE III - BUSINESS OF THE COMPANY

         3.1      PERMITTED BUSINESS.  The business of the Company shall be:

                  (a) To conduct a private  offering  of  $3,125,000  to acquire
participation  in oil and gas  exploration  and  production  activities  through
leases, farmouts or other forms of participation.

                  (b) To exercise  all other powers  necessary to or  reasonably
connected with the Company's  business which may be legally exercised by limited
liability companies under the Colorado Statutes; and

                  (c)  To  engage  in  all  activities   necessary,   customary,
convenient, or incident to any of the foregoing.

                   ARTICLE IV - NAMES AND ADDRESSES OF OWNERS

         The names  and  addresses  of the  initial  Owners  are as set forth in
EXHIBIT "B" hereto which will be amended from time to time as additional members
are admitted.

                   ARTICLE V - RIGHTS AND DUTIES OF MANAGER(S)

         5.1  MANAGEMENT.  The  business  and  affairs of the  Company  shall be
managed solely by its designated Manager(s),  which the Manager(s) need not be a
Member.  The Members shall from time to time select a Manager,  who shall be the
Executive and  Operating  Manager of the Company and shall have the authority to
bind the Company in all matters in the ordinary course of business. Three Forks,
Inc.  is hereby  designated  as the current  Manager  until the  resignation  or
removal  from  office or until his  successor  is  elected  and  qualified.  The
Manager(s) may, from time to time, apportion and delegate responsibilities among
the various  Manager(s).  In the event that there is only one Manager elected by
the Members,  it will automatically  become the Sole Manager.  Three Forks, Inc.
shall serve as  manager,  and shall have  authority  to bind the Company for any
consulting service obligation and for any LLC administrative function of banking
or finance.

                                      -7-
<PAGE>

         5.2 NUMBER,  TENURE AND  QUALIFICATIONS.  The number of Managers of the
Company shall be fixed from time to time by the Members holding a super-majority
of two-thirds  (2/3) of the Voting  Interests in a duly  constituted  meeting of
such. By signing this Operating Agreement,  the Members confirm that the Manager
is currently  Three Forks,  Inc.  Each Manager  shall hold office until the next
annual  meeting of Members or until its  successor  shall have been  elected and
qualified.  Managers  shall be elected by the Members  holding a majority of the
Voting Interests in a duly constituted  meeting of such. A Manager need not be a
resident of the State of Colorado or a Member of the Company.

         5.3 CERTAIN POWERS OF THE MANAGER(S). Without limiting the generalities
of Section 5.1 hereof,  but subject to the express  provisions  of this  Section
5.3, the Manager(s) shall have full, complete and unilateral power to do any and
all things,  including  acting through a Manager or through any duly  authorized
manager or other agent,  except as otherwise  provided herein,  on behalf of the
Company:

                  (a)  To  acquire  oil  and  gas  leases,  farmouts,  or  other
participation in the drilling, completion and production of oil and gas.

                  (b) To purchase  liability and other  insurance to protect the
Company's property and business;

                  (c)  To  hold  and  own  any  Company  real  and/or   personal
properties in the name of the Company;

                  (d) To invest any Company funds temporarily (by way of example
but not  limitation)  in time  deposits,  short-term  governmental  obligations,
commercial paper and other investments;

                  (e)  Upon  the  affirmative  vote  of the  Members  holding  a
super-majority of two-thirds (2/3) of the Voting Interests, to sell or otherwise
dispose of all or  substantially  all of the assets of the  Company as part of a
single transaction or plan so long as such disposition is not in violation of or
a cause of a default under agreement to which to Company may be bound;

                  (f) To execute on behalf of the  Company all  instruments  and
documents,  including  without  limitation,  checks,  drafts,  notes  and  other
negotiable  instruments,   or  documents  providing  for  the  acquisition,   or
disposition of the Company's property,  assignment, bills of sale, and any other
instruments  or documents  necessary,  in the sole and absolute  opinion of such
Manager, to the business of the Company.

                  (g) To employ accountants,  legal counsel,  managing agents or
other experts to perform  services for the Company and to  compensate  them from
Company funds;

                  (h) To enter  into any and all other  agreements  on behalf of
the Company,  with any other Person or Entity for any purpose,  in such forms as
the Manager(s) may approve; and

                                      -8-
<PAGE>

                  (i) To do and  perform all other acts as may be  necessary  or
appropriate to the conduct of the Company's business.

                  (j)  To  appoint  a  Secretary  to act  as an  officer  of the
Company, for administrative purposes only.

         5.4 SPECIFIC LIMITATIONS ON MANAGER(S). Notwithstanding anything to the
contrary in this Operating Agreement or the Colorado Statutes, without the prior
approval of the Members of the specific act in question,  the  Manager(s)  shall
have no right, power or authority to do any of the following acts, each of which
is considered outside of the ordinary course of Company business:

                  (a) Any act in contravention of this Operating Agreement;

                  (b) Change or  reorganize  the  Company  into any other  legal
form;

                  (c)  Make  any  capital  expenditure  for  equipment  or other
assets;

                  (d)   Reconstitute  the  Company  and  continue  its  business
following a dissolution of the Company;

                  (e)  Knowingly  or  willingly  do any act that would cause the
Company to be classified as an association  under Code Section 7701 taxable as a
corporation, except for such acts that are expressly provided for herein; or

                  (f) Knowingly  perform any act that would subject any Owner to
liability as a general partner in any jurisdiction.

         Unless authorized to do so by this Operating  Agreement or by a Manager
of the Company, no Member, agent or employee of the Company shall have any power
or  authority  to bind the Company in any way, to pledge its credit or to render
it liable  pecuniary  for any  purpose.  However,  a  Manager  may act by a duly
authorized attorney-in-fact.

         5.5 LIABILITY FOR CERTAIN ACTS.  Manager(s) shall exercise its business
judgment in managing the business, operations and affairs of the Company. Unless
fraud, deceit,  gross negligence,  willful misconduct or a wrongful taking shall
be proved by a nonappealable court order, judgment, decree or decision,  Manager
shall  not be liable or  obligated  to the  Owners  for any  mistake  of fact or
judgment or the doing of any act or the failure to do any act by such Manager(s)
in conducting  the business,  operations  and affairs of the Company,  which may
cause or result in any loss or damage to the Company or its Owners. Manager does
not, in any way, guarantee the return of the Owner's Capital  Contributions or a
profit for the Owners from the  operation  of the Company.  No Manager  shall be
responsible  to any  Owner  because  of a loss of his  investments  or a loss in
operations,  unless the loss shall have been the result of fraud,  deceit, gross
negligence,  willful misconduct or a wrongful taking by such Owner proved as set
forth in this Section 5.5. Manager shall incur no liability to the Company or to
any Owner as a result of engaging in any other business or venture.

                                      -9-
<PAGE>

         5.6 MANAGER HAS NO  EXCLUSIVE  DUTY TO  COMPANY.  Manager  shall not be
required to manage the  Company as its sole and  exclusive  function  and he may
have other business  interests and may engage in other activities in addition to
those relating to the Company.  Neither the Company nor any Owner shall have any
right,  by virtue of this Operating  Agreement,  to share or participate in such
other  investments  or  activities  of a Manager  or to the  income or  proceeds
derived therefrom.

         5.7 BANK ACCOUNTS.  Manager may from time to time open bank accounts in
the name of the Company,  and Manager shall be a signatory  thereon,  unless the
Manager determine otherwise.

         5.8 INDEMNITY OF THE  MANAGER(S).  Manager shall be  indemnified by the
Company  under the following  circumstances  and in the manner and to the extent
indicated:

                  (a) In any threatened,  pending or completed  action,  suit or
proceeding  to which a Manager was or is a party or is  threatened  to be made a
party by reason of the fact that it is or was a Manager  of the  Company  (other
than an action by or in the right of the Company)  involving an alleged cause of
action for damages  arising from the  performance of his activities on behalf of
the  Company,  the  Company  shall  indemnify  such  Manager  against  expenses,
including  attorneys' fees,  judgments and amounts paid in settlement,  actually
and reasonably incurred by it in connection with such action, suit or proceeding
if a Manager acted in good faith and in a manner it reasonably believed to be in
or not opposed to the best  interests  of the  Company,  and  provided  that its
conduct has not been found by a nonappealable  court judgment,  order, decree or
decision to constitute  gross  negligence,  willful or wanton  misconduct,  or a
breach of its  fiduciary  obligations  to the  Owners.  The  termination  of any
action,  suit or proceeding  by judgment,  order,  or  settlement  shall not, of
itself,  create a presumption that such Manager did not act in good faith and in
a manner  which  it  reasonably  believed  to be in or not  opposed  to the best
interests of the Company.

                  (b) To the extent a Manager has been  successful on the merits
or  otherwise  in defense  of any  action,  suit or  proceeding  referred  to in
subparagraph  5.8(a) above, or in defense of any claim, issue or matter therein,
the  Company  shall  indemnify  such  Manager  against the  expenses,  including
attorneys'  fees,   actually  and  reasonably  incurred  by  him  in  connection
therewith.

                  (c) The  indemnification  set forth in this paragraph shall in
no way  cause the  Owners to incur any  liability  beyond  their  total  Capital
Contributions plus their share of any undistributed  profits of the Company, nor
shall it result in any liability of the Owners to any third party.

         5.9  RESIGNATION.  Manager  of the  Company  may  resign at any time by
giving written notice to the Members of the Company.  The  resignation of such a
Manager  shall take effect upon  receipt of the notice  thereof or at such later
time as shall be  specified  in such  notice;  and  unless  otherwise  specified
therein,  the acceptance of such  resignation  shall not be necessary to make it
effective.

                                      -10-
<PAGE>

         5.10  REMOVAL.  At a  meeting  called  expressly  for that  purpose,  a
Manager,  may be removed  at any time,  with or without  cause,  by the  Members
holding a  super-majority  of two-thirds (2/3) of the Voting Interests in a duly
constituted meeting of such.

         5.11 VACANCIES.  Any vacancy  occurring for any reason in the number of
Managers of the Company shall be filled by the Members holding a  super-majority
of two-thirds  (2/3) of the Voting  Interests in a duly  constituted  meeting of
such. Any Manager's position to be filled by reason of an increase in the number
of Managers  shall be filled by the  affirmative  vote of the Members  holding a
super-majority of two-thirds (2/3) of the Voting Interests in a duly constituted
meeting of such.  A Manager  elected to fill a vacancy  shall be elected for the
unexpired  term of his  predecessor  in office and shall hold  office  until the
expiration  of such term and  until his  successor  shall be  elected  and shall
qualify, or until his earlier death, resignation or removal. A Manager chosen to
fill a position  resulting from an increase in the number of Managers shall hold
office until the next annual meeting of Members and until his successor shall be
elected and qualify, or until his earlier death, resignation or removal.

         5.12 SALARIES.  The salaries and other compensation of Manager shall be
fixed from time to time by the Members  holding a  super-majority  of two-thirds
(2/3) of the Voting  Interests  in a duly  constituted  meeting of such,  and no
Manager shall be prevented from receiving such salary by reason of the fact that
he is also a Member of the Company.  As  compensation  for acting as Manager the
Company  shall pay Three Forks,  Inc the sum of $000000 per month from  revenues
from operations.

         5.13 OTHER  OFFICES.  The Manager may elect such other officers such as
President, Vice President, Secretary and Treasurer, as they deem appropriate and
the Manager(s) shall set the duties of such officers.

         5.14 RIGHT TO RELY ON OFFICERS.  No Person or governmental body dealing
with the  Company  shall be  required  to inquire  into,  or to obtain any other
documentation  as to,  the  authority  of any  officer  acting  on behalf of the
Company.  Furthermore,  any Person or governmental body dealing with the Company
may rely upon a  certificate  signed by any  officer  of the  Company  as to the
following:

                  (a)      The identity of the Manager(s) and Owners;

                  (b) The  existence or  nonexistence  of any fact or facts that
constitute a condition precedent to acts by the officer or that are in any other
manner directly or indirectly related to or otherwise involve the affairs of the
Company;

                  (c) The Persons who are  authorized to execute and deliver any
instrument or document of the Company; or

                  (d) Any act or  failure  to act by the  Company  on any  other
matter whatsoever involving the Company or any Owner.

                                      -11-
<PAGE>

                 ARTICLE VI - RIGHTS AND OBLIGATIONS OF MEMBERS

         6.1 LIMITATION OF LIABILITY. Each Owner's liability shall be limited as
set forth in the Colorado Statutes and other applicable law.

         6.2 COMPANY DEBT LIABILITY.  An Owner will not personally be liable for
any  debts  or  losses  of the  Company  beyond  his or her  respective  Capital
Contributions, except as provided in Section 6.6 herein or as otherwise required
by law.

         6.3 LIST OF OWNERS.  Upon written request of any Owner,  the Manager(s)
shall provide a list showing the names, addresses and interests of all Owners in
the Company.

         6.4 APPROVAL OF SALE OF ASSETS. The Members holding a super-majority of
two-thirds (2/3) of the Voting Interests shall have the right,  voting in a duly
constituted meeting of such, to approve the sale, exchange, or other disposition
of all, or substantially  all, of the Company's assets which is to occur as part
of a single  transaction or plan,  however,  it is the intent that the assets be
distributed in kind 14 months after date hereof.

         6.5 COMPANY BOOKS. Manager shall maintain and preserve, during the term
of the Company,  and for five (5) years  thereafter,  all accounts,  books,  and
other relevant Company documents. Upon request, each Owner shall have the right,
during ordinary  business  hours, to inspect and copy such Company  documents at
the Owner's expense.

         6.6 PRIORITY AND RETURN OF CAPITAL.  No Owner shall have  priority over
any other Owner,  either as to the return of Capital  Contributions or as to Net
Profits, Net Losses or distributions; provided that this Section shall not apply
to loans (as distinguished from Capital  Contributions)  which an Owner has made
to the Company.

                        ARTICLE VII - MEETINGS OF MEMBERS

         7.1 ANNUAL MEETING.  The annual meeting of the Members shall be held at
such  time and  place  as shall be  determined  by  resolution  of the  Members,
commencing with the year following the year of this  Agreement,  for the purpose
of the transaction of such business as may come before the meeting.

         7.2 SPECIAL MEETINGS.  Special meetings of the Members, for any purpose
or  purposes,  unless  otherwise  prescribed  by  statute,  may be called by the
Manager or the Manager(s)  upon written  request of Members of record holding in
the  aggregate  ten percent  (10%) or more of the Voting  Interests  entitled to
vote,  such written  request to state the purpose or purposes of the meeting and
to be delivered to the Manager or the Manager(s).

         7.3 PLACE OF MEETINGS.  The Manager or the Manager(s) may designate any
place, either within or outside the State of Colorado as the place of meeting or
any meeting of the Members.  If no designation is made, or if a special  meeting
be otherwise  called,  the place of meeting shall be the principal office of the
Company in the State of Colorado.

                                      -12-
<PAGE>

         7.4 NOTICE OF  MEETINGS.  Except as  provided  in Section  7.5  hereof,
written notice stating the place, day and hour of the meeting and the purpose or
purposes for which the meeting is called  shall be given by or at the  direction
of the  Manager(s)  or Members of record  holding in the  aggregate  ten percent
(10%) or more of the Voting  Interests  entitled to vote,  not less than two (2)
nor more than fifty (50) days before the date fixed for such meeting;  except if
the Economic Interests are to be affected in any manner, directly or indirectly,
at least  ten (10) days  notice  shall be given.  A waiver  of such  notice,  in
writing, signed by the Person or Persons entitled to said notice, whether before
of after the time stated  herein,  shall be deemed  equivalent  to such  notice.
Except as otherwise required by statute,  notice of any adjourned meeting of the
Members  shall not be  required.  If mailed,  such notice  shall be deemed to be
delivered.

         7.5 MEETING OF ALL MEMBERS.  If all the Members  shall meet at any time
and place,  either  within or outside the State of Colorado,  and consent to the
holding of a meeting at such time and place, such meeting shall be valid without
call or notice, and at such meeting lawful action may be taken.

         7.6 RECORD DATE.  For the purpose of  determining  Members  entitled to
notice of or to vote at any meeting of Members or any  adjournment  thereof,  or
Members entitled to receive payment of any  distribution,  or in order to make a
determination of Members for any other purpose,  the date on which notice of the
meeting  is  mailed  or  the  date  on  which  the  resolution   declaring  such
distribution  is adopted,  as the case may be, shall be the record date for such
determination  of Members.  When a determination  of Members entitled to vote at
any  meeting  of  Members  has  been  made as  provided  in this  Section,  such
determination shall apply to any adjournment thereof.

         7.7 QUORUM. The majority of the Voting Interests  represented in person
or by proxy, shall constitute a quorum at any meeting of Members. In the absence
of a quorum at any such  meeting,  the Member so  represented  may  adjourn  the
meeting  from time to time for a period not to exceed  sixty  (60) days  without
further notice. However, if the adjournment is for more than sixty (60) days, or
if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the  adjourned  meeting  may be given to Member or record  entitled to
vote at the meeting.

         At such  adjourned  meeting  at which a  quorum  shall  be  present  or
represented,  any business may be transacted which might have been transacted at
the  meeting as  originally  noticed.  The Members  present at a duly  organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal  during such meeting of that number of Voting Interests whose absence
would cause less than a quorum.

         7.8  VOTING.  Except as may  otherwise  be  provided by statute or this
Operating Agreement, Member shall at every meeting of the Members be entitled to
vote that percentage in Voting Interests,  as shown on the attached EXHIBIT "A",
in person or by proxy,  then held by such Member.  No proxy,  however,  shall be
voted on after eleven (11) months from its date, unless the proxy provides for a
longer period.

                                      -13-
<PAGE>

         7.9 MANNER OF ACTING. If a quorum is present, the affirmative vote of a
majority of the Voting Interests represented at the meeting and entitled to vote
on the  subject  matter  shall be the act of the  Members,  unless the vote of a
greater or lesser  proportion  or number is  otherwise  required by the Colorado
Statutes, by the Articles of Organization, or by this Operating Agreement.

         7.10 PROXIES.  At all meetings of Members,  a Member may vote in person
or  by  proxy  executed  in  writing  by  the  Member  or by a  duly  authorized
attorney-in-fact.  Such proxy shall be filed with the  Manager(s) of the Company
before or at such time of the meeting. No proxy shall be valid after eleven (11)
months from the date of its execution, unless otherwise provided in the proxy.

         7.11 ACTION BY MEMBERS WITHOUT A MEETING.  Action required or permitted
to be taken at a meeting of Members may be taken without a meeting if the action
is evidenced by one or more written consents describing the action taken, signed
by Member  entitled  to vote and  delivered  to the  Manager of the  Company for
inclusion  in the minutes or for filing with the Company  records.  Action taken
under this  Section  7.11 is  effective  when all Members  entitled to vote have
signed the consent, unless the consent specifies a different effective date. The
record date for  determining  Members  entitled to take action without a meeting
shall be the date that the first Member signs a written consent.

         7.12  WAIVER OF NOTICE.  When any notice is required to be given to any
Member,  a waiver  therefore  in writing  signed by the Person  entitled to such
notice,  whether  before,  at,  or  after  the  time  stated  therein,  shall be
equivalent to the giving of such notice.

        ARTICLE VIII - CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS

         8.1 MANAGERS  INITIAL  CAPITAL  CONTRIBUTIONS.  Three Forks,  Inc. will
serve as Manager but will not make any Capital Contributions to the LLC and will
not participate in the revenues. Three Forks, Inc., and its related parties will
purchase and pay for its separate  working  interests in the lease. The LLC will
enter into a Purchase  and Sale  Agreement  with Three  Forks,  Inc.  to acquire
eighty-seven  percent (87%) of the working interest in the Archer County Farmout
of nine (9) wells, at Manager's basis

         8.2 CAPITAL  CONTRIBUTIONS.  The joining  members  shall,  make Capital
Contributions  of $31,250 per 1% interest (in accordance  with the terms of this
Operating  Agreement)  to  capitalize  the  business  of  the  Company  and  its
investment.  Each  new  joining  member  shall  sign a copy  of  this  Operating
Agreement or a Joinder Agreement and agreeing to the terms hereof.

         8.3 THIRD  PARTY  INVESTORS.  If any of the  total  amount of a Capital
Contribution  required by the Company is not  collected by the Company  within a
reasonable  amount of time after such  request is made of the  Owners,  then the
Manager  will be  permitted to offer  Economic  Interests to third  parties upon
terms no more  favorable than those offered  previously to the Owners.  Any such
sale of Economic  Interests to third parties must be made in accordance with the
terms of this  Operating  Agreement,  including  without  limitation  Article 13
hereof.

                                      -14-
<PAGE>

         8.4 RETURN OF CAPITAL  CONTRIBUTIONS.  No Owner  shall be  entitled  to
withdraw  or demand the return of any part of his  capital  contribution  except
upon  dissolution  of the  Company  and as  specifically  provided  for in  this
Operating Agreement.

         8.5 CAPITAL ACCOUNTS.

                  (a) A separate  Capital  Account will be  maintained  for each
Owner. Each Owner's Capital Account will be INCREASED by (1) the amount of money
contributed by such Owner to the Company;  (2) the fair market value of property
or  other  consideration  contributed  by  such  Owner  to the  Company  (net of
liabilities  secured by any contributed  property that the Company is considered
to assume or take subject to under Code Section 752);  and (3) the amount of Net
Profits  allocated to such Owner. Each Owner's Capital Account will be DECREASED
by (1) the amount of money  distributed  to such Owner by the  Company;  (2) the
fair market value of property  distributed  to such Owner by the Company (net of
liabilities  secured by such distributed  property that such Owner is considered
to assume or take subject to under Code Section 752);  and (3) the amount of Net
Losses allocated to such Owner.

                  (b) In  the  event  of a  permitted  sale  or  exchange  of an
Economic  Interest,  the  Capital  Account of the  transferor  shall  become the
Capital  Account of the  transferee to the extent it relates to the  transferred
interest.

                  (c) The manner in which Capital  Accounts are to be maintained
pursuant to this Section 8.5 is intended to comply with the requirements of Code
Section 704(b) and the Treasury Regulations promulgated thereunder.

                  (d) Upon  liquidation of the Company (or any Owner's  Economic
Interest),  liquidating  distributions  will  be  made in  accordance  with  the
positive Capital Account  balances of the Owners,  as determined after taking in
to account all Capital Account adjustments for the Company's taxable year during
which the  liquidation  occurs.  Liquidation  proceeds will be paid within sixty
(60) days of the date of the end of the taxable  year (or,  if later,  within 90
days after the date of liquidation).

         8.6  WITHDRAWAL OR REDUCTION OF OWNERS'  CONTRIBUTIONS  TO CAPITAL.  An
Owner  shall  not  receive  out  of  the  Company's  property  any  part  of its
contributions to capital until:

                  (a) All  liabilities  of the Company,  except  liabilities  to
Owners on account of their contribution to capital, have been paid or sufficient
property of the Company remains to pay them.

                  (b) The consent of the  Members  holding a  super-majority  of
two-thirds  (2/3) of the  Voting  Interests  is had,  unless  the  return of the
contribution  to capital may be rightfully  demanded as provided in the Colorado
Statutes.

                  (c) The Articles of Organization are canceled or so amended as
to set out the withdrawal reduction.

                                      -15-
<PAGE>
           ARTICLE IX - ALLOCATIONS, INCOME TAX, ELECTIONS AND REPORTS

         9.1 ALLOCATION OF PROFITS.  Profits for each fiscal year of the Company
shall be allocated:

                  (a) First,  to any Owner  previously  allocated  losses  under
Section 9.2 hereof,  to the extent of such losses (reduced by allocations  under
this Section  9.1(a) for all prior  years),  ratably and in inverse order to the
manner in which such losses were allocated; and

                  (b) The  remainder,  if any, to the Owners in accordance  with
their respective Economic Interests.

         9.2 ALLOCATION OF LOSS.  Loss for each fiscal year of the Company shall
be allocated:
                  (a) First,  to the Owners up to the positive  balance of their
Capital  Account,  ratably in  accordance  with the  positive  balances of their
Capital Account; and

                  (b) The  remainder,  if any, to the Owners in accordance  with
their respective Economic Interests.

         9.3  ALLOCATION  OF RECAPTURE  ITEMS.  If any gain on the sale or other
disposition of depreciable Company assets is recaptured as ordinary income, such
ordinary  income  shall be  allocated  among the Owners in the same ratio as the
depreciation  deductions  giving rise to such gains were  allocated,  but not in
excess of the amount of the gain otherwise allocable under this Article IX.

         9.4  MINIMUM  GAIN  CHARGEBACK.  Except as  otherwise  provided in Code
Regulations  Section  1.704-2(f),  notwithstanding  any other  provision of this
Article IX, if there is a net decrease in Company  Minimum Gain during any year,
each Owner shall be specially  allocated  items of income and gain for such year
(and, if necessary,  subsequent  years) in an amount equal to such Owner's share
of the net decrease in Company Minimum Gain,  determined in accordance with Code
Regulations  Section 1.704-2(g).  Allocations  pursuant to the previous sentence
shall be made in proportion to the respective  amounts  required to be allocated
to each Owner pursuant thereto. The items to be so allocated shall be determined
in accordance with Code Regulations  Sections  1.704-2(f)(6)  and  1.704-(j)(2).
This  Section  10.4 is  intended  to comply  with the  minimum  gain  chargeback
requirement  in Code  Regulations  Section  1.704-2(f)  and shall be interpreted
consistently therewith.

         9.5 CODE SECTION 704(C).  If any Owner  contributed any property to the
Company that has Gross Asset Value in excess or less than its adjusted basis for
federal  income tax  purposes at the time of such  contribution,  then all gain,
loss and deduction with respect to the contributed property,  solely for federal
income tax purposes,  shall be allocated  among the Owners so as to take account
of the  variation  between the adjusted  basis of such  property and its initial
Gross Asset Value as required by Code  Section  704(c) and the Code  Regulations
thereunder.

                                      -16-
<PAGE>

                  (a) In  accordance  with  Code  Section  704(c)  and the  Code
Regulations  thereunder,  income,  gain,  loss and deduction with respect to any
property  contributed  to the capital of the Company,  solely for tax  purposes,
shall be  allocated  among the  Owners so as to take  account  of any  variation
between the adjusted  basis of such  property to the Company for federal  income
tax purposes and its initial Gross Asset Value.

                  (b)  any  elections  or  other  decisions   relating  to  such
allocations  shall  be made by the  Manager(s)  in any  manner  that  reasonably
reflects the purpose and intention of this Operating  Agreement.  The Manager(s)
may  select  any  reasonable  method or methods  for  making  such  allocations,
including,  without limitation, any method described in Code Regulation Sections
1.704-3(b),  (c) or (d). In the event that allocations  pursuant to this Section
9.5 with  respect to an item of Company  property are limited by ceiling rule in
any taxable year, and the Company elects to use curative allocations pursuant to
Code Regulations Section 1.704-3(c):

                           (i) The  Company  may make  curative  allocations  in
         subsequent  taxable years over a reasonable period of time, such as the
         economic life of such item of property, to offset the effective ceiling
         rule to the extent permitted by Code Regulations Section  1.704(c)(ii);
         and

                           (ii) The Company  may make  curative  allocations  of
         gain from the sale or other  taxable  disposition  of such  property to
         offset the effect of the ceiling rule on allocations of depreciation or
         other  cost  recovery  with  respect  to such  property  to the  extent
         permitted by Code Regulations Section 1.704-3(c)(3)(iii)(B).

         9.6 COMPANY  ASSET  ADJUSTMENTS.  In the event any of any other Company
assets are adjusted  pursuant to Article I, under the definition of "Gross Asset
Value," subsequent Company  allocations of income,  gain, loss or deduction with
respect to such asset shall take account of any  variation  between the adjusted
basis of such asset for federal income tax purposes and its Gross Asset Value in
the  same  manner  as  required  under  the  Code  Section  704(c)  and the Code
Regulation thereunder.

         9.7  ADJUSTMENTS  BY THE  OWNERS.  Any  elections  or  other  decisions
relating to Company  tax  allocations  pursuant  to Sections  9.5 and 9.6 hereof
shall be made by the Manager(s) in a manner that reasonably reflects the purpose
and intention of this Operating  Agreement.  Company tax allocations pursuant to
Sections 9.5 and 9.6 hereof are solely for purposes of federal,  state and local
taxes and shall not affect,  or in any way be taken into  account in  computing,
any Owner's  Capital  Account or, other than is provided in Sections 9.5 and 9.6
hereof,  any  Owner's  share of the  Profit  or Loss (or any item  thereof),  or
Company distributions to any of the Owners under these Regulations.

         9.8      OTHER ALLOCATION RULES.

                  (a) For purposes of determining the Profit,  Loss or any other
items  allocable to any period,  Profit,  Loss and any such other items shall be
determined on a daily,  monthly or other basis,  as determined by the Manager(s)
using any  permissible  Method of  Accounting  under  Code  Section  706 and the
regulations thereunder.

                                      -17-
<PAGE>

                  (b) The Owners are aware of the income tax consequences of the
tax  allocations  made under this  Article X and hereby agree to be bound by the
provisions of this Article X in reporting  their share of the  Company's  income
for federal income tax purposes.

                  (c) Except as  otherwise  provided in these  Regulations,  all
Company income,  gain,  loss,  deduction and any items thereof as determined for
federal  income tax  purposes  shall be  allocated  among the Owners in the same
proportions  as they  share  Profit or Loss,  as the case may be, for the fiscal
year.

                  (d) All  Company  Profits and Losses  allocated  to the Owners
shall be allocated  among them in proportion to the Economic  Interests owned by
each Owner.  In the event that any Owner is admitted to the Company on different
dates during any Company  fiscal year,  Company Profit and Loss allocated to any
Owner for each such fiscal year shall be allocated  to each Owner in  proportion
to the  Economic  Interest  owned by each  Owner from time to time  during  such
fiscal year in accordance with Code Section 706, using any convention  permitted
by law and selected by the Manager(s).

         9.9 DISTRIBUTIONS. All distributions of cash or other property shall be
made to the Owners  according  to the manner in which Net Profits and Net Losses
were allocated pursuant to Section 10.1. All distributions of Distributable Cash
and property  shall be made at such time as  determined by the  Manager(s).  All
amounts  withheld  pursuant to the Code or any  provisions of state or local tax
law with respect to any payment or  distribution  to the Owners from the Company
shall be treated as amounts  distributed  to the relevant Owner pursuant to this
Section 9.9.

         9.10 LIMITATION UPON  DISTRIBUTIONS.  No distribution shall be declared
and paid, unless,  after the distribution is made, the assets of the Company are
in excess of all  liabilities  of the Company,  except  liabilities to Owners on
account of their contributions.

         9.11 ACCOUNTING PRINCIPLES. The profits and losses of the Company shall
be determined in accordance with accounting  principles  applied on a consistent
basis  under  the  method  of  accounting  determined  by the  Manager(s)  to be
consistent with the business of the Company.

         9.12 INTEREST ON AND RETURN OF CAPITAL CONTRIBUTIONS. No Owner shall be
entitled to interest  on its  Capital  Contribution  or to return of its Capital
Contribution, except as otherwise specifically provided for herein.

         9.13 RECORDS AND REPORTS. At the expense of the Company, the Manager(s)
shall maintain  records and accounts of all operations and  expenditures  of the
Company.  At a minimum the Company shall keep at its principal place of business
the following records:

                  (a) A current  list of the full name and last known  business,
residence, or mailing address of each Owner and Manager, both past and present;

                                      -18-
<PAGE>

                  (b) A copy of the Articles of  Organization of the Company and
all amendments thereto,  together with executed copies of any powers of attorney
pursuant to which any amendment has been executed;

                  (c) Copies of the  Company's  federal,  state and local income
tax returns and reports, if any, for the three (3) most recent years;

                  (d)  Copies  of  the  Company's  currently  effective  written
Operating  Agreement,  copies of any writings permitted or required with respect
to an Owner's obligation to contribute cash, property or services, and copies of
any financial statements of the Company for the three (3) most recent years;

                  (e) Minutes of every annual, special meeting and court-ordered
meeting;

                  (f) Any written  consents  obtained  from  members for actions
taken by Members without a meeting.

         9.14  RETURNS  AND OTHER  ELECTIONS.  The  Manager(s)  shall  cause the
preparation  and timely  filing of all tax  returns  required to be filed by the
Company  pursuant to the Code and all other tax  returns  deemed  necessary  and
required in each jurisdiction in which the Company does business. Copies of such
returns, or pertinent  information  therefrom,  shall be furnished to the Owners
within a reasonable time after the end of the Company's fiscal year.

         All  elections  permitted  to be made by the Company  under  federal or
state laws shall be made by the Manager(s).

                        ARTICLE X - TRANSFER RESTRICTIONS

         10.1     PERMITTED TRANSFER.

                  (a) No  Owner  shall  dispose  of all or part of his  Economic
Interest  except in compliance  with the terms and  conditions of this Operating
Agreement.  Any other proposed  disposition,  whether  voluntary or involuntary,
shall be void and shall not  operate to  transfer  any  interest or title in any
Interest.

                  (b) Notwithstanding anything to the contrary in this Operating
Agreement:

                          (i) An individual  Owner may at any time and from time
             to time without compliance with Sections 10.2 to 10.7 hereof make a
             gift of all or a part of his  Economic  Interest  to one or more of
             his Family  Donees (as defined in Section 10.6 hereof) if each such
             Family Donee upon  acquisition of such interest  becomes a party to
             this Operating Agreement;  provided, however, that the Family Donee
             shall not  participate in the management of the Company without the
             consent of the Members holding a majority of the Voting Interests;

                          (ii) A Family Donee of an individual  Owner may at any
             time and from time to time without compliance with Sections 10.2 to
             10.7 hereof make a gift of all or any part of his Economic Interest
             back to such Owner or to another  Family Donee of the same Owner if

                                      -19-
<PAGE>

             upon  acquisition  of such  Interest  the  recipient  Family  Donee
             becomes a party to this  Operating  Agreement;  provided,  however,
             that the  recipient  Family  Donee  shall  not  participate  in the
             management  of the  Company  without  the  consent  of the  Members
             holding a majority of the Voting Interests;

                          (iii) An Owner  may at any time and from time to time,
             without  compliance  with  Section  10.2  hereof  to  one  or  more
             Affiliates, transfer all or part of its Economic Interest to one or
             more Affiliates if such Affiliate upon acquisition of such Economic
             Interest  becomes  a  party  to  this  Operating  Agreement  and if
             permitted by the Colorado  Statutes;  provided,  however,  that the
             Affiliate  shall not  participate  in the management of the Company
             without the consent of the Members holding a majority of the Voting
             Interests;

                          (iv) Dispositions of an Economic Interest by an Owner,
             an Affiliate or a Family Donee to the Company or to an Owner may be
             made without compliance with Sections 10.2 or 10.7 hereof.

         10.2  COMPANY'S  OPTION TO PURCHASE  ECONOMIC  INTEREST.  An Owner (the
"Offering Interest Owner") who desires to dispose of any Economic Interest shall
give a notice  ("Notice")  signed by the Offering  Interest Owner to the Company
and to each of the other Owners.  The Notice shall specify the Economic Interest
("Offered Interest") the Offering Interest Owner intends to dispose of, identify
and give the address of the Person to whom the Offering  Interest  Owner intends
to dispose of the Offered Interest, and indicate the price, terms and conditions
of the proposed  disposition.  In the event that an Owner is not able to provide
Notice  of  any   proposed   disposition   of  Economic   Interest,   the  legal
representative, successor in interest or proposed transferee of such Owner shall
so notify the Company of such proposed disposition.

                  (a) In the case of a proposed sale to a bona fide  prospective
purchaser  who has  offered in writing to  purchase  the  Offered  Interest at a
stated price, the Company shall have the irrevocable and exclusive first option,
but not the  obligation,  to purchase all or, subject to Section 10.5 hereof,  a
part of the Offered  Interest  with  payment to be made in  accordance  with the
provisions  of Article XI hereof,  provided  that such  purchase  by the Company
shall be at the price and upon the terms and  conditions  equal to those offered
by such prospective  purchaser (as evidenced by a copy of such offer to purchase
which shall accompany the Notice),  and provided  further that the Company gives
notice of its election to purchase to the Offering  Interest Owner within thirty
(30) days after the Company receives the Notice.

                  (b) In the case of any other proposed  disposition  (including
any involuntary  disposition) of any Economic  Interest,  the Company shall have
the irrevocable and exclusive first option, but not the obligation,  to purchase
all or part of the Economic Interest at a price per percentage Economic Interest
to be purchased  equal to Fair Market Value (as defined in Section 10.10 hereof)
and with  payment to be made in  accordance  with the  provisions  of Article XI
hereof.  The Company  shall give notice of its election to purchase the Economic
Interest to the Offering  Interest  Owner (or other party  giving  notice of the
proposed  disposition) within thirty (30) days after the Company receives notice
of such proposed disposition.

                                      -20-
<PAGE>

         10.3 OWNERS' OPTION TO PURCHASE ECONOMIC INTEREST.  If the Company does
not elect,  as provided by Section 10.2  hereof,  to purchase all of the Offered
Interest covered by the Notice, then, subject to Section 10.7 hereof, each Owner
other than the Offering  Interest Owner shall have the irrevocable and exclusive
option, but not the obligation,  to purchase from the Offering Economic Interest
Owner that part of the  Offered  Interest  that the  Company  has not elected to
purchase,  pro rata in the  proportion  that the Interest owned by such Owner on
the date of the  Notice  bears the  aggregate  Economic  Interests  owned by all
Owners (exclusive of the Offered Interest offered for sale or otherwise owned by
the Offering Interest Owner).

                  (a) In the case of a proposed sale to a bona fide  prospective
purchaser  who has  offered in writing to  purchase  the  Offered  Interest at a
stated  price,  at the price and upon any  terms and  conditions  equal to those
offered by such  prospective  purchaser (as evidenced by a copy of such offer to
purchase which shall accompany the Notice); and

                  (b) In the  case  of any  other  proposed  disposition  of any
Economic  Interest,  at a  price  per  percentage  of  Economic  Interest  being
purchased  equal to Fair Market Value with payment to be made in accordance with
the provisions of Article XI hereof.

Each Owner that elects to purchase  all or a part of his pro rata portion of the
Offered  Interest  shall give notice of such  election to the Offering  Interest
Owner and to the other Owners  within  thirty (30) days after the receipt of the
Notice by the Company.  Each such notice shall state the  percentage of Economic
Interest  which the Owner  giving the notice  elects to  purchase.  If any Owner
fails to exercise his right to purchase his full pro rata portion of the Offered
Interest, each other Owner who has given notice of election to purchase his full
pro rata portion of the offered  interest shall have an additional ten (10) days
after  the  expiration  of such  30-day  period  in which  to give the  Offering
Interest Owner and to the other Owners further notice (the "Further  Notice") of
his  election to purchase  all or a part of the  Remaining  Interest (as defined
below).  Each Further Notice shall state the number of Remaining  Interest which
the Owner giving the Further Notice elects to purchase.  The Remaining  Interest
shall be  apportioned  among  those  Members  who have  given a  Further  Notice
according to the procedures described in Sections 10.3(c) and 10.3(d) hereof, or
in such different portions as such Owners may agree among themselves.

                  (c) Each of the Participating  Owners (as defined below) shall
be  apportioned  (i) that number of Remaining  Interest that such  Participating
Owner  elected to  purchase  in his  Further  Notice and which have not yet been
apportioned to such  Participating  Owner pursuant to this Section  10.3(c),  or
(ii) such Participating Owner's Pro Rata Portion of the Unpurchased Interest (as
defined below), whichever is less.

                  (d) If the apportionment in Section 10.3(c) hereof is followed
and there remain at least one Participating Owner and any Unpurchased  Interest,
the procedure described in Section 11.3(c) shall be repeated.

                  (e)  For  purposes  of  this  Section   10.3,   the  following
definitions shall apply:

                          (i) The  "Remaining  Interest"  shall mean the Offered
             Interest that the Company and Owners have not  theretofore  elected
             to purchase.

                                      -21-
<PAGE>

                          (ii) A  "Participating  Owner" shall mean an Owner who
             has given a  Further  Notice  and who has not yet been  apportioned
             pursuant  to  Section  10.3(c)  hereof  that  number of  additional
             Interest  that such  Interest  Owner's  elected to  purchase in his
             Further Notice.

                          (iii) "Unpurchased  Interest" shall mean the Remaining
             Interest that has not yet been apportioned to Participating  Owners
             pursuant to Section 10.3(c) hereof.

                          (iv) A Participating Owner's "Pro Rata Portion" of the
             Unpurchased Interests shall mean the number of Unpurchased Interest
             multiplied  by the  fraction  formed  by  dividing  the  percentage
             Economic  Interest that such  Participating  Owner held on the date
             the Company  received the Notice by the total  percentage  Economic
             Interest  all of the  Participating  Owners  held on the  date  the
             Company received the Notice.

         10.4 EFFECT OF AN ELECTION. The Company and each Owner giving notice of
election to purchase  pursuant to Sections  10.2 and 10.3 hereof,  respectively,
shall be  obligated  severally  and not  jointly to purchase  from the  Offering
Interest Owner,  and the Offering  Interest Owner,  provided the Company or such
other  Owners,  or a  combination  of the Company and such other Owners elect to
purchase all the Offered Interest,  shall be obligated to sell to the Company or
such other Owners, or the Company and such other Owners, as the case may be, the
portion of Offered  Interest stated therein,  at the price and on the conditions
determined pursuant to Sections 10.2 and 10.3 hereof and Article XI.

         10.5  CONSEQUENCES IF ENTIRE ECONOMIC  INTEREST IS NOT TO BE PURCHASED.
If an Offering  Interest  Owner gives notice and the Company and other Owners do
not elect,  pursuant to Sections  10.2 and 10.3  hereof,  to purchase all of the
Offered Interest, the Offering Interest Owner may elect to:

                  (a) Sell to the Company if it has elected to purchase  part of
the Offered  Interest  and to the Owners,  if any,  who have elected to purchase
part of the Offered  Interest,  the aggregate  portion of such Offered  Interest
which the Company  and such Owners have  elected to purchase at the price and on
the terms and  conditions  determined  pursuant to Sections 10.2 and 10.3 hereof
and Article XI, and at any time or times after the 30th day  following  the date
of the  Notice  but  before  the  60th  day  following  the  date of the  Notice
("Disposition  Period"),  such  Offering  Interest  Owner may dispose of all the
remaining  Offered  Interest at the price and on any other terms and  conditions
specified  in the  Notice to the  Person or Persons  identified  in the  Notice;
provided,  however,  that such Person or Persons  shall not  participate  in the
management of the Company  without the consent of the Members holding a majority
of the Voting Interests.  Each such Person acquiring any of the Offered Interest
must  become a party to this  Operating  Agreement  upon such  acquisition.  Any
Economic  Interest not so disposed of by such Offering Interest Owner during the
Disposition  Period may not thereafter be disposed of, except in compliance with
the terms and conditions of this Operating Agreement;

                  (b) At any  time  or  times  during  the  Disposition  Period,
dispose of all the Offered Interest to the Person or Persons,  at the price, and
on any other terms and  conditions  specified in the Notice,  provided that each

                                      -22-
<PAGE>

such Person  acquiring  any  Economic  Interest  in any of the Offered  Interest
becomes  a party to this  Operating  Agreement  upon such  acquisition,  and any
Economic  Interest not so disposed of by such Offering Interest Owner during the
Disposition  Period may not thereafter be disposed of, except in compliance with
the terms and conditions of this Operating Agreement; or

                  (c) Withdraw the Notice and thereafter such Economic  Interest
may not be disposed of,  except in compliance  with the terms and  conditions of
this Operating Agreement.

         10.6 FAMILY DONEE. "Family Donee" with respect to an Owner shall mean:

                  (a) Any parent,  child,  descendant,  or sibling of the Owner,
the spouse of any of the foregoing, or the spouse of the Owner;

                  (b)  Any  trust  established  by the  Owner,  or any  trustee,
custodian,  fiduciary, or foundation which will hold the interest for charitable
purposes  or for the  benefit of the Owner or any of the  Persons  described  in
Section 10.6(a) above;

                  (c) Committees,  guardians,  or other legal representatives of
the  Interest  Owner  (whether  alive  or  deceased)  or of any  of the  Persons
described in Section 10.6(a) hereof.

         10.7  SUBSTITUTE  OWNER.  Assuming that the  provisions of Section 10.1
hereof have been complied with and said transfer duly approved,  or assuming the
provisions  of  Sections  10.2 to 10.7  hereof  apply  thereto,  no  assignee or
transferee  of the whole or any portion of an Owner's  Interest,  including  any
trustee  in  bankruptcy,  shall have the right to become a  Substitute  Owner in
place of the assignor unless all of the following conditions are satisfied:

                  (a) The fully executed and acknowledged  written instrument of
assignment  which has been filed with the Company setting forth the intention of
the assignor that the assignee become a Substitute Owner;

                  (b) The  assignor and assignee  execute and  acknowledge  such
other  instruments  as the  Manager(s) may deem necessary or desirable to effect
such admission, including the written acceptance and adoption by the assignee of
the provisions of this Operating Agreement and his execution, acknowledgment and
delivery to the  Manager(s) of such  documents as the  Manager(s) may require in
their sole  discretion,  the form and  content of which shall be provided by the
Manager(s);

                  (c) The  assignee  pays a  transfer  fee to the  Company in an
amount sufficient to cover all reasonable  expenses connected with the admission
of the assignee as a Substituted Member; and

                  (d)  The  other  Members  holding  a  majority  of the  Voting
Interests consent to the assignee becoming a Substitute Owner, which consent may
be withheld for any reason.

                                      -23-
<PAGE>

         10.8 ADDITIONAL  CONDITIONS.  The following additional conditions shall
apply with respect to a transfer of an Economic Interest:

                  (a) The  Manager(s)  may not  treat  an  assignee  who has not
become a Substitute Owner as a Substitute Owner in the place of his assignor.

                  (b) The  Manager(s)  will be required  to  promptly  amend the
Operating  Agreement to reflect the substitution of Owners.  Until the Operating
Agreement is so amended, an assignee shall not become a Substitute Owner for any
purpose.

                  (c) Upon the  death or  legal  incompetency  of an  individual
Owner, his personal  representative shall have all of the rights of an Owner for
the purpose of settling or managing  his estate,  and such power as the decedent
or  incompetent  possesses  to  constitute  a  successor  as an  assignee of its
Economic  Interest  in the  Company  and to join  with such  assignee  in making
application to substitute such assignee as an Owner. A trustee in bankruptcy for
any  individual  Owner  shall have only those  rights of an  assignee or general
unsecured  creditor of such Owner and shall not be entitled to be substituted as
an Owner or  participate  in the  management of the Company  except as expressly
provided herein.

                  (d)  Upon the  bankruptcy,  insolvency,  dissolution  or other
cessation  to  exist  as a legal  entity  of an  Owner  not an  individual,  the
authorized  representative  of such entity shall have all the rights of an Owner
for purposes of effecting the orderly winding up and disposition of the business
of such entity an such power as such entity  possessed to constitute a successor
as an  assignee  of its  Economic  Interest in the Company and to join with such
assignee in making application to substitute such assignee as an Owner.

                  (e)  Anything  in this  Operating  Agreement  to the  contrary
notwithstanding,  no Owner or other Person who has become the holder of Economic
Interests in the Company shall  transfer,  assign or encumber all or any portion
of his  Economic  Interests  in the  Company  during  any  fiscal  year  if such
transfer,  assignment or encumbrance would (in the sole and unreviewable opinion
of the  Manager(s))  result in the  termination  of the Company being taxed as a
partnership  for the purpose of the  then-applicable  provisions of the Internal
Revenue Code of 1986, as amended.

                  (f) In the event a vote of the Members shall be taken pursuant
to this  Operating  Agreement  for any reason,  a Member  shall,  solely for the
purpose  of  determining  the  percentage  of  Voting  Interests  held by him in
weighing his vote, be deemed the holder of any Voting  Interest  assigned by him
in respect of which the assignee has not become a Substitute Owner having voting
rights.

                  (g)  Anything  in this  Operating  Agreement  to the  contrary
notwithstanding,  no Owner or other  Person  who has  become  the  holder  of an
Economic Interest shall transfer,  assign, or encumber all or any portion of his
Economic Interests in the Company without obtaining the prior written consent of
the Director of the appropriate state Securities  Commission,  if required under
the  Commission's  rules,  or the opinion of counsel  for the  Company  that the

                                      -24-
<PAGE>

transfer  will not violate  any federal or  applicable  state  securities  laws;
provided, however, that receipt of an opinion may be waived by the Manager.

         10.9  VOLUNTARY  WITHDRAWAL.  In the  event  that an  Owner  wishes  to
withdraw  from the  Company,  such Owner may  withdraw  by making an  assignment
pursuant to Section 10.2 hereof and giving  thirty (30) days notice  pursuant to
this paragraph to all remaining Owners of such Owner's intention to withdraw and
of the assignment of such withdrawing  Owner's  membership.  As a result of such
voluntary  withdrawal,  such  withdrawing  Owner shall forfeit all rights to his
Capital Account and shall have no further liability to the Company.

         10.10 FAIR MARKET VALUE;  APPRAISAL  METHOD.  (a) fair market value per
percentage Economic Interest shall be determined by dividing (i) the fair market
value  established  for the Company  pursuant to the appraisal  method  outlined
below by (ii) 100.

                  (b) APPRAISAL  METHOD. In the event that the fair market value
per percentage Economic Interest, or for the Company, as the case may be, cannot
be agreed upon between the Members,  following (10) days after the determination
by either party that such fair market value cannot be  determined by the Members
(the  "Event"),  the fair  market  value  shall be  determined  by an  appraiser
familiar by experience  with similar  companies  agreed upon by the Members.  If
they fail to agree upon the appointment of an appraiser  within twenty (20) days
of the  Event,  then  the  disposing  Member  shall  name an  appraiser  and the
purchasing  Member  shall  name an  appraiser  within  ten (10)  days  after the
expiration of such 20-day period by sending  notification  of such  selection to
the other Member.  Any party failing to meet such deadline  shall lose the right
to name an appraiser. If two appraisers are selected in this manner, they shall,
within ten (10) days after appointment of the second  appraiser,  select a third
appraiser.  The appraisers so selected shall  determine the fair market value of
the Company by majority  vote.  The  valuation by the  appraisers  shall be made
within  thirty (30) days of  appointment  of the last  appraiser  required to be
appointed by this Section 5(a). The fair market value of the Company  determined
pursuant to this Section 10.10(b) shall be final and binding on all parties. The
cost of any valuation  undertaken pursuant to the terms of this Section 10.10(b)
shall be paid by the Company.

                  (c) Unless otherwise provided in the applicable  Section,  the
closing  shall be held within  fifteen (15) days after a  determination  of fair
market value pursuant to Section 10.10(b) hereof.

                  (d) If the disposing Member fails at the closing to tender the
transfer certificates representing the Interests being transferred,  the Company
shall treat such transfer as completed if the purchasing  Member delivers to the
Secretary of the Company,  for the benefit of the disposing  Member, a certified
check payable to the order of the disposing Member in the amount of the purchase
price  payable at the  closing.  The  Company  shall  deliver  such check to the
disposing Member at such time as the appropriate Interest certificates have been
delivered to the Company for cancellation. Upon completion of such transfer, the
disposing  Member no longer  shall  have any  right,  title or  interest  in the
Interests so transferred.

                                      -25-
<PAGE>

                         ARTICLE XI - METHOD OF PURCHASE

         11.1 MANNER OF PAYMENT.  The Company and each Owner, if any, purchasing
an Economic  Interest  pursuant to Article XI hereof shall pay for such Economic
Interest as follows:

                  (a) In the case of a  proposed  sale to a bona fide  purchaser
who has offered in writing to purchase the Offered  Interest at a stated  price,
payment shall be made in the manner and upon any terms and  conditions set forth
in the Notice or the offer  attached  thereto (if such stated price includes any
property other than case,  such stated price shall be deemed to be the amount of
any cash  included  in the  stated  price  plus the  value as  determined  by an
independent  appraiser  selected by the remaining  Members holding a majority of
the Voting Interests and approved by the Offering Interest Owner, which approval
shall not be  unreasonably  withheld,  of such other  property  included in such
price,  the fees and  expenses of such  appraiser to be paid for pro rata by the
Company and any Owners  purchasing  the Offered  Interest in  proportion  to the
portion of Offered Interest purchased by each of them); or

                  (b) In the case of any other proposed  disposition of Economic
Interest,  payment  shall  be made in  full,  in  cash  or by wire  transfer  or
certified bank check.

         11.2       MANNER OF CLOSING.

                  (a) In the case of any purchase of an Economic Interest by the
Company and Owners pursuant to Sections 10.2 to 10.7 hereof, the closing of such
purchase  shall take place at 10:00 a.m.,  Eastern  Standard  Time,  on the 15th
business  day after the date that the  Company  the  Owner,  as the case may be,
gives notice of its or his election to purchase pursuant to the terms hereof, at
the principal office of the Company, or at such different date, different place,
or both as the parties to such purchase agreement agree.

                  (b) Certificates  representing the Economic Interest purchased
shall be  delivered  by the selling  Owner at the closing  against  payment.  By
delivering  the  Economic  Interest at the closing,  the selling  Owner shall be
deemed  to  represent  that  the sale of the  Economic  Interest  has been  duly
authorized by all necessary  corporate  action on the part of the selling Owner,
the  certificates  evidencing  the Economic  Interest have been duly and validly
endorsed and  delivered  for transfer to the purchaser and that the purchaser of
such  Interest will receive good title to such  Interest,  free and clear of all
liens,  security  interests,  pledges,  charges or encumbrances other than those
created by this Operating Agreement.

         11.3  LEGEND.  A legend  shall be placed on each  certificate  or other
document,  if any,  evidencing  a Voting  Interest  in the  Company  stating the
following:

                  The Interests  represented by this  Certificate  have not been
                  registered  under the Securities  Act of 1933, as amended,  or
                  the securities  laws of any state.  These  Interests have been
                  acquired  for  investment  and may not be  sold,  transferred,
                  pledged  or  hypothecated  in the  absence  of  any  effective
                  registration statement for such Interests under the Securities
                  Act of 1933, as amended,  and any applicable  state securities

                                      -26-
<PAGE>

                  laws or an opinion of counsel  acceptable  to counsel  for the
                  Company that  registration is not required under such laws. In
                  addition, the sale, transfer, pledge or hypothecation of these
                  Interests  substantially  restricted by that certain Operating
                  Agreement  by and  among the  Company  and its  Owners,  dated
                  effective  November  12, 2012, a copy of which is on file with
                  the Company at its principal place of business.

                         ARTICLE XII - OWNERS' COVENANTS

         12.1  OWNER'S  PERSONAL  DEBTS.  In order to protect the  property  and
assets of the Company from any claim  against any Owner for personal  debts owed
by such Owner, each Owner shall indemnify,  defend, protect and hold the Company
harmless  from any claim that might be made to the  detriment  of the Company by
any personal creditor of such Owner.

         12.2  ALIENATION  OF  ECONOMIC  INTEREST.  No Owner  shall,  except  as
specifically  provided in this Operating Agreement,  sell, assign,  mortgage, or
otherwise  encumber  such  Owner's  Economic  Interest in its capital  assets or
property;  or enter  into any  agreement  of any kind  that  will  result in any
Person,  firm, or other organization  becoming interested with such Owner in the
Company; or do any act detrimental to the best interests of the Company.

                        ARTICLE XIII - ADDITIONAL OWNERS

         13.1  ADMISSION  OF NEW OWNERS.  From the date of the  formation of the
Company,  with the written  consent of the Members holding a  super-majority  of
two-thirds (2/3) of the Voting Interests,  any Person acceptable to such Members
may, subject to the terms and conditions of this Operating Agreement: (i) become
an  Additional  Owner in this Company by the sale of new Economic  Interests for
such consideration as such Members by their written consent shall determine,  or
(ii) become a Substitute Owner as a transferee of an Owner's Economic  Interests
or any portion thereof in accordance with the provisions of Article X.

         13.2 ALLOCATIONS TO NEW OWNERS. No Additional or Substitute Owner shall
be  entitled  to  any  retroactive  allocation  of  losses,  income  or  expense
deductions incurred by the Company.  The Manager may, at his option, at the time
an  Additional or Substitute  Owner is admitted,  close the Company's  books (as
though the Company's tax year had ended) or make pro rata  allocations  of loss,
income and expense  deductions to an  Additional  or  Substitute  Owner for that
portion of the Company's tax year in which an Additional or Substitute Owner for
that portion of the  Company's  tax year in which an  Additional  or  Substitute
Owner was admitted,  in accordance with the provisions of Section 706(d) and the
Treasury Regulations promulgated thereunder.

         13.3 ADDITIONAL ECONOMIC INTEREST OWNERS. Any person or Entity approved
by the  Members  holding a  super-majority  of  two-thirds  (2/3) of the  Voting
Interests  may  become  an  Economic  Interest  Owner  subject  to the terms and
conditions of this Operating Agreement.

         13.4  ADDITIONAL  VOTING  MEMBERS/VOTING   INTERESTS.   Notwithstanding
anything contained in this Agreement to the contrary, an Economic Interest Owner
may only  become a voting  Member  by the  approval  of the  Members  holding  a

                                      -27-
<PAGE>

super-majority of two-thirds (2/3) of the then-existing  Voting Interests.  Upon
such approval,  the Voting  Interests  shall be  reallocated  among the existing
voting Members and such  additional  voting Member in order to equal one hundred
percent (100%).

                    ARTICLE XIV - DISSOLUTION AND TERMINATION

         14.1     DISSOLUTION.

                  (a) The Company shall be dissolved  upon the occurrence of any
of the following events:

                          (i) when the  period  fixed  for the  duration  of the
             Company shall expire;

                          (ii) by the written consent of an affirmative  vote to
             dissolve the Company of Members  holding the then  existing  Voting
             Interests; or

                          (iii)   upon  the  death,   retirement,   resignation,
             expulsion, bankruptcy, dissolution of a Member or occurrence of any
             other event which  terminates the continued  membership of a Member
             in the Company (a "WITHDRAWAL  EVENT"),  unless the business of the
             Company is  continued  by the  consent of the  Members  holding two
             thirds  (2/3) of the  Voting  Interests  and there are at least two
             remaining Members; or

                  (b) As soon as possible following the occurrence of any of the
events specified in this Section  effecting the dissolution of the Company,  the
appropriate representative of the Company shall execute a statement of intent to
dissolve in such form as shall be prescribed by the Colorado  Secretary of State
and file same with the Colorado Secretary of State's office.

         14.2 EFFECT OF FILING OF DISSOLVING STATEMENT. Upon the filing with the
Colorado  Secretary of State of a statement  of intent to dissolve,  the Company
shall cease to carry on its business, except insofar as may be necessary for the
winding up of its business,  but its separate  existence  shall continue until a
certificate of dissolution  has been issued by the Secretary of State or until a
decree  dissolving  the  Company  has  been  entered  by a  court  of  competent
jurisdiction.

         14.3  DISTRIBUTION  OF ASSETS UPON  DISSOLUTION.  In settling  accounts
after  dissolution,  the liabilities of the Company shall be entitled to payment
in the following order:

                  (a) those to  creditors,  in the order of priority as provided
by law,  except  those to Owners of the  Company  on  account  of their  Capital
Contributions;

                  (b) those to  Owners  of the  Company  with  respect  to their
Capital Accounts in accordance with Section 9.4(d) hereof; and

                  (c) those to Owners in respect of their  shares of the profits
and other compensation.

                                      -28-
<PAGE>

         14.4  ARTICLES  OF  DISSOLUTION.   When  all  debts,   liabilities  and
obligations  have been paid or discharged or adequate  provisions have been made
therefore and all of the remaining  property and assets have been distributed to
the Owners,  articles of dissolution shall be executed in duplicate and verified
by the  Person  signing  the  articles,  which  articles  shall  set  forth  the
information by the Colorado Statutes.

         14.5     FILING OF ARTICLES OF DISSOLUTION.

                  (a) Duplicate  originals of such articles of dissolution shall
be delivered to the Colorado Secretary of State.

                  (b) Upon the issuance of the certificate of  dissolution,  the
existence  of the Company  shall cease,  except for the purpose of suits,  other
proceedings and  appropriate  action as provided in the Colorado  Statutes.  The
Manager or Manager(s) in office at the time of dissolution,  or the survivors of
them, or if none,  the Members,  shall  thereafter be trustee for the Owners and
creditors  of the Company and as such shall have  authority  to  distribute  any
Company property discovered after dissolution,  convey real estate and take such
other action as may be necessary on behalf of an in the name of the Company.

         14.6  WINDING UP.  Except as provided by law,  upon  dissolution,  each
Owner  shall  look  solely to the  assets of the  Company  for the return of its
Capital  Contributions.  If the Company property  remaining after the payment or
discharge of the debts and  liabilities  of the Company is  sufficient to return
the  Capital  Contributions  of each  Owner,  such Owner  shall have no recourse
against  any other  Owner.  The winding up of the affairs of the Company and the
distribution of its assets shall be conducted exclusively by the Manager(s), who
are  hereby  authorized  to  take  all  actions  necessary  to  accomplish  such
distribution,  including  without  limitation,  selling any  Company  assets the
Manager(s) deem necessary or appropriate to sell.

         14.7  DISTRIBUTIONS  IN  KIND.  Any  property  distributed  in  kind in
liquidation shall be valued and treated as though the property were sold and the
cash proceeds were  distributed.  The  difference  between the value of property
distributed  in kind and its book  value  shall be  treated as a gain or loss on
sale of the  property  and shall be  credited  or  charged  to the Owners in the
manner set forth in Section 9.1 hereof.

                      ARTICLE XV - MISCELLANEOUS PROVISIONS

         15.1  NOTICES.  Any  notice,   demand,  or  communication  required  or
permitted to be given by any  provision  of this  Operating  Agreement  shall be
deemed to have been  sufficiently  given or served for all purposes if delivered
personally to the party or to an executive officer of the party to whom the same
is directed or, if sent by registered or certified  mail or reputable  overnight
courier, postage and charges prepaid,  addressed to the Owner's and/or Company's
address  as it appears  in the  Company's  records,  as  appropriate.  Except as
otherwise provided herein, any such notice shall be deemed to be given (a) three
business  days  after the date on which the same was  deposited  in a  regularly
maintained  receptacle for the deposit of United States mail, addressed and sent

                                      -29-
<PAGE>

as  aforesaid or (b) one business day after the date on which the same was given
to a reputable overnight courier, and sent as aforesaid.

         15.2 BOOKS OF ACCOUNT  AND  RECORDS.  Proper and  complete  records and
books of account  shall be kept or shall be caused to be kept by the  Manager(s)
in which  shall be  entered  fully and  accurately  all  transactions  and other
matters relating to the Company's business in such detail and completeness as is
customary and usual for  businesses of the type engaged in by the Company.  Such
books and records  shall be maintained in  accordance  with  generally  accepted
accounting principles. The books and records shall at all times be maintained at
the  principal  executive  office  of the  Company  and  shall  be  open  to the
reasonable  inspection and  examination  of the Owners of their duly  authorized
representatives during business hours.

         15.3  APPLICATION  OF COLORADO  LAW. This  Operating  Agreement and the
application of interpretation hereof, shall be governed exclusively by its terms
and by the  laws  of the  State  of  Colorado,  and  specifically  the  Colorado
Statutes.

         15.4  WAIVER OF ACTION FOR  PARTITION.  Each Owner  irrevocably  waives
during the term of the Company any right that it may have to maintain any action
for partition with respect to the property of the Company.

         15.5  AMENDMENTS.  Any  amendment to this  Operating  Agreement  may be
proposed by any voting  Member of the  Company.  A vote on an  amendment to this
Operating  Agreement shall be taken within thirty (30) days after notice thereof
has been given to the  Members  unless  such  period is  otherwise  extended  by
applicable  law,  regulations  or  agreement  of  the  Members.  This  Operating
Agreement may be amended at any time by the Members holding a super-majority  of
two-thirds (2/3) of the Voting Interests;

                  (a) without the consent of the Owner to be adversely  affected
by the amendment,  this Operating  Agreement may not be amended as to (i) modify
the limited  liability  of an Owner,  or (ii) alter the interest of any Owner in
the Net Profits or Net Losses or in cash distributions of the Company; and

                  (b) in the case of any  provision  hereof  which  requires the
action,  consent,  or approval of a specified  percentage in Voting Interests of
the  Members,  such  provision  may not be amended  without  the consent of such
specified percentage Voting Interests of the Members.

         A copy of any amendment  shall be promptly  mailed or delivered to each
Owner at his or her last known address.

         15.6 EXECUTION OF ADDITIONAL  INSTRUMENTS.  Each Owner hereby agrees to
execute  such  other  and  further   statements   of  interest   and   holdings,
designations,  powers of attorney and other instruments necessary to comply with
any laws, rules or regulations.

         15.7  CONSTRUCTION.  Whenever  the  singular  number  is  used  in this
Operating Agreement and when required by the context, the same shall include the
plural,  and the masculine  gender shall include the feminine and neuter genders
and vice versa.

                                      -30-
<PAGE>

         15.8 HEADINGS.  The headings in this  Operating  Agreement are inserted
for convenience only and are in no way intended to describe,  interpret, define,
or limit the scope, extent of this Operating Agreement or any provision hereof.

         15.9 WAIVERS. The failure of any party to seek redress for violation of
or to insist upon the strict  performance  of any  covenant or condition of this
Operating  Agreement  shall not  prevent a  subsequent  act,  which  would  have
originally  constituted  a  violation,  from  having the  effect of an  original
violation.

         15.10 RIGHTS AND REMEDIES CUMULATIVE.  The rights and remedies provided
by this  Operating  Agreement  are  cumulative  and the use of any one  right or
remedy by any  party  shall  not  preclude  or waive the right to use any or all
other remedies.  Said rights and parties may have by law, statute,  ordinance or
otherwise.

         15.11 SEVERABILITY. If any provision of this Operating Agreement or the
application thereof to any Person or circumstances shall be invalid,  illegal or
unenforceable to any extent,  the remainder of this Operating  Agreement and the
application  thereof  shall  not be  affected  and shall be  enforceable  to the
fullest extent permitted by law.

         15.12 HEIRS,  SUCCESSORS  AND ASSIGNS.  Each and all of the  covenants,
terms,  provisions and  agreements  herein  contained  shall be binding upon the
inure to the benefit of the parties hereto and, to the extent  permitted by this
Operating Agreement,  their respective heirs, legal representatives,  successors
and assigns.

         15.13  CREDITORS.  None of the provisions of this  Operating  Agreement
shall be for the benefit of or enforceable by any creditors of the Company.

         15.14  EXECUTION IN  COUNTERPARTS.  For the convenience of the parties,
this Agreement may be executed in counterparts, each of which shall be deemed an
original,  but all of which together shall constitute one and the same document.
Telefacsimile  transmissions of any executed  original and/or  retransmission of
any executed  telefacsimile  transmission  shall be deemed to be the same as the
delivery of an executed original.  At the request of any party hereto, the other
parties hereto shall confirm telefacsimile  transmissions by executing duplicate
original documents and delivering the same to the requesting party or parties.

                                      -31-
<PAGE>

         IN  WITNESS  WHEREOF,  the  following  initial  Owner has  caused  this
Operating Agreement to be duly executed as of the date first above written.

                                MANAGER

                                THREE FORKS, INC.

                                By:_______________________________________
                                    Don Walford, Chief Executive Officer

                                      -32-
<PAGE>

                                   EXHIBIT "A"

        INITIAL CAPITAL CONTRIBUTIONS/VOTING INTERESTS/ECONOMIC INTERESTS

                          VOTING      ECONOMIC                        DATE OF
 NAME AND ADDRESS       INTEREST %    INTEREST %    CONTRIBUTION   CONTRIBUTION
 ----------------       ----------    ----------    ------------   ------------

 No Initial Members

<PAGE>
<TABLE>
<CAPTION>

                                   EXHIBIT "B"
            CAPITAL CONTRIBUTIONS/VOTING INTERESTS/ECONOMIC INTERESTS
                               SEPTEMBER 30, 2013

                                                                       Voting      Economic         Capital
                       Name                             Units         Interest %   Interest %    Contributions ($)
------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>           <C>           <C>           <C>
Cain Griffin Group, Inc.                                       2         2.27%         2.27%          $ 50,000
Gerald Smart, The Gerald Smart Trust                         1.5         1.70%         1.70%            37,500
E. King Bare                                                 0.5         0.57%         0.57%            12,500
Stephen Medin                                                  1         1.14%         1.14%            25,000
David M. Allison                                               4         4.54%         4.54%           100,000
Ronald Anderson                                                1         1.14%         1.14%            25,000
Robert Ernest Long                                             2         2.27%         2.27%            50,000
Heading West LLC Jackie Duffing                                1         1.14%         1.14%            25,000
Johnny & Brenda Inman                                          1         1.14%         1.14%            25,000
James & Barbara Iverson                                        1         1.14%         1.14%            25,000
Barry and Joan Jacobson                                        2         2.27%         2.27%            50,000
Jeffrey Jacobson                                               1         1.14%         1.14%            25,000
Rich Sharpenter Trust                                        1.6         1.82%         1.82%            40,000
E. Dean Davis and Joyce                                        1         1.14%         1.14%            25,000
James A. or Linda Jordan                                       1         1.14%         1.14%            25,000
Tim Dender                                                     3         3.41%         3.41%            75,000
Gary & Sharon Edwards                                          2         2.27%         2.27%            50,000
Francis Construction Co, Inc.                                  4         4.54%         4.54%           100,000
Sid Jennette Jr. Mary Helen                                    1         1.14%         1.14%            25,000
William R. King, Jr.                                           9        10.22%        10.22%           225,000
AC Krepps III Janet B Krepps                                   1         1.14%         1.14%            25,000
Ronney Ledford, Jr.                                            1         1.14%         1.14%            25,000
Monroe Lawson Farmer                                           1         1.14%         1.14%            25,000
Lorie Mangham, Jr. Josephine Mangham                           1         1.14%         1.14%            25,000
Sauney R. Pippin Geraldine S. Pippin                           3         3.41%         3.41%            75,000
Harold Rahn                                                    1         1.14%         1.14%            25,000
Lester Ranew                                                   6         6.81%         6.81%           150,000
Charles Ras                                                    1         1.14%         1.14%            25,000
SCT Investments, LLC                                           1         1.14%         1.14%            25,000
Ronald G. Severson                                             1         1.14%         1.14%            25,000
James and Teresa Stewart                                       1         1.14%         1.14%            25,000
Judy Stewart                                                   1         1.14%         1.14%            25,000
William A Stewart                                              1         1.14%         1.14%            25,000
Christopher B. Swenson Emily B. Swenson                        1         1.14%         1.14%            25,000
Merritt A. Swenson                                             1         1.14%         1.14%            25,000
Bruce W. Theuerkauf Jr.                                        1         1.14%         1.14%            25,000
Robert H. or Cynthia L. Toftoy                                 3         3.41%         3.41%            75,000
William Babb                                                   1         1.14%         1.14%            25,000
C. Roan Berry                                                  2         2.27%         2.27%            50,000
Mary B. Bickles                                                2         2.27%         2.27%            50,000
Keith Butler and Jessie Smith                                  1         1.14%         1.14%            25,000
Laura Clausel                                                  1         1.14%         1.14%            25,000
John A. Cooper                                                 1         1.14%         1.14%            25,000
Juan M. Cortes                                               0.5         0.57%         0.57%            10,000
Gary Underhill                                                 1         1.14%         1.14%            25,000
Steve Scalf                                                    2         2.27%         2.27%            50,000
Terry Jacobson                                                 1         1.14%         1.14%            25,000
Barry Jacobson                                                 1         1.14%         1.14%            25,000
Ray Dender                                                     3         3.41%         3.41%            75,000
Bill Jones                                                     1         1.14%         1.14%            25,000
Brad and Kristine Jacobson                                     1         1.14%         1.14%            25,000
Bruce Akin                                                     1         1.14%         1.14%            25,000
Ralph and Joann King                                           1         1.14%         1.14%            25,000
James Iverson                                                  1         1.14%         1.14%            25,000
                                                      ------------------------------------------------------------
                                                           88.10       100.00%       100.00%       $ 2,200,000
                                                      ===========   ===========  ============   ==================

</TABLE>

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