Document:

Exhibit
      10.5

     

    CANCELLATION
      AGREEMENT

     

    CANCELLATION
      AGREEMENT,
      dated
      as of August 31, 2007 (this “Agreement”),
      by
      and among, RUSSOIL
      CORPORATION,
      a
      Nevada corporation (the “Company”),
      and
SILVESTRE
      HUTCHINSON
      (“Hutchinson”).

     

    BACKGROUND

     

    The
      Company had entered into a Share Exchange Agreement with Smolenergy, the
      Gorstovoye Holder and the Stockholders named therein, dated as of August 31,
      2007, pursuant to which the Company is going to acquire from the Stockholders
      named therein all of the issued and outstanding capital stock of OJSE
      Smolenergy, a Corporation formed under the laws of the Russian Federation
      (“Smolenergy”) in exchange for an aggregate amount of 110,000,000 shares of the
      Company's Common Stock (the “Share
      Exchange Transaction”)
      to the
      Gorstovoye Holder, who will cancel all indebted of Smolenergy to him arising
      from Smolenergy’s acquisition of 51% of the membership interest in “Gorstovoye”
LLC.

     

    It
      is a
      condition precedent to the consummation of the Share Exchange Transaction that
      Hutchinson enters into this Agreement which will effectuate the cancellation
      of
      242,000,000 shares (the “Subject
      Shares”)
      of
      Common Stock of the Company held by Hutchinson.

     

    AGREEMENT

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises herein contained and for other good and
      valuable consideration, the receipt and sufficiency of which is hereby
      acknowledged, the parties hereto agree as follows:

     

    1. Cancellation
      of Subject Shares.
      Hutchinson has delivered to the Company for cancellation stock certificates
      representing the Subject Shares along with duly executed medallion guaranteed
      stock powers covering the Subject Shares and hereby irrevocably instructs the
      Company and the Company's transfer agent to cancel the Subject Shares such
      that
      the Subject Shares will no longer be outstanding on the stock ledger of the
      Company and such that Hutchinson shall no longer have any interest in the
      Subject Shares whatsoever. The Company shall immediately deliver to the
      Company's transfer agent irrevocable instructions providing for the cancellation
      of the Subject Shares.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    2. Representations
      by Hutchinson.

     

    (a) Hutchinson
      owns the Subject Shares, of record and beneficially, free and clear of all
      liens, claims, charges, security interests, and encumbrances of any kind
      whatsoever. Hutchinson has sole control over the Subject Shares or sole
      discretionary authority over any account in which they are held.

     

    (b) Except
      for the Subject Shares, Hutchinson has no subscription, warrant, option,
      convertible security, or other right (contingent or other) to purchase or
      otherwise acquire securities, including equity or debt securities, of the
      Company, although he will retain 250,000 shares of the Company’s common
      stock.

     

    (c) Hutchinson
      has full right, power and authority to execute, deliver and perform this
      Agreement and to carry out the transactions contemplated hereby. This Agreement
      has been duly and validly executed and delivered by Hutchinson and constitutes
      a
      valid, binding obligation of Hutchinson, enforceable against him in accordance
      with its terms (except as such enforceability may be limited by laws affecting
      creditor's rights generally).

     

      3. Miscellaneous.
      All
      representations, warranties and agreements in this Agreement shall survive
      the
      date hereof until the expiration of the applicable statute of limitations.
      This
      Agreement shall be binding upon the parties' their respective successors,
      representatives, heirs and estate, as applicable. This Agreement may be executed
      in one or more counterparts, all of which shall be considered one and the same
      agreement and shall become effective when one or more counterparts have been
      signed by each of the parties and delivered to the other party, it being
      understood that all parties need not sign the same counterpart. Facsimile
      execution and delivery of this Agreement is legal, valid and binding execution
      and delivery for all purposes. This Agreement shall be governed in all respects,
      including validity, interpretation and effect, by the internal laws of the
      State
      of New York, without regard to the conflicts of law principles thereof. This
      Agreement may not be amended except by an instrument in writing signed by each
      of the parties hereto. This Agreement constitutes the entire agreement of the
      parties with respect to the subject matter hereof and supersedes in its entirety
      any other agreement relating to or granting any rights with respect to the
      subject matter hereof.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    IN
      WITNESS WHEREOF,
      the parties hereto have executed this Agreement as of the date first above
      written.

     

    
      	
               

            	
               

            	
               

            
	
               

            	
              RUSSOIL
                CORPORATION

            
	
               

               

            	
               

               

            	
               

            
	
                

            	
              By:  

            	
              /s/
                Silvestre Hutchinson 

            
	 	
              Name:
                Silvestre Hutchinson

            
	
               

            	
              Title: 
                President

            
	
               

            	 
	
               

            	
               

            	
               

            
	
               

            	
              SILVESTRE
                HUTCHINSON

            
	
               

               

            	
               

               

            	
               

            
	
               

            	
              By:  

            	
              /s/
                Silvestre Hutchinson

            
	
               

            	
              Silvestre
                Hutchinson 

            

    

     

    
      
         

      

      
        3Exhibit
      10.6

     

    RUSSOIL
      CORPORATION

    CONVERTIBLE

    PROMISSORY
      NOTE

    
      	$200,000 	
               July
                3, 2007

              New
                York, New
                York

            

    

        

    For
      value
      received, RUSSOIL
      CORPORATION,
      a
      corporation formed under the laws Nevada (“Maker”),
      hereby promises to pay to the order of Bluewater
      Partners, S.A.. a
      corporation formed under the laws of the Cayman Islands or its affiliates
      (collectively, “Lender”)
      the
      principal sum of up to Two Hundred Thousand Dollars ($200,000). Interest shall
      accrue daily based on a 360-day year from the date set forth above, at the
      rate
      of ten percent (10%) per annum. The principal amount of this Note, together
      with
      accrued interest, shall be due and payable on demand. At the option of Lender,
      the principal of this Note and any interest accrued thereon, may be converted
      into shares of the common stock of a Maker, at the rate of one share for each
      $0.10 (ten cents) of indebtedness (the “Conversion Price”).

     

    1.
      This
      Note shall be construed in accordance with the laws of the State of New York
      as
      such laws apply to contracts made and to be performed entirely within the State
      of New York, without regard to the conflicts of laws provisions therefore or
      the
      actual domicile of the Maker or the Lender.

     

    2.
      If
      this Note is not paid on demand, the Lender may, in its discretion, proceed
      to
      protect and enforce its rights by such appropriate judicial proceedings as
      the
      Lender shall deem most effectual to protect and enforce any such rights, whether
      for the specific enforcement of any covenant or agreement under this Note or
      in
      aid of the exercise of any power granted herein, or to enforce any other proper
      remedy.

     

    3.
      The
      Conversion Price and the number of shares of common stock purchasable upon
      the
      conversion of this Note are subject to adjustment from time to time upon the
      occurrence of any of the events specified in this paragraph 3.

     

    (a)
      In
      case the Lender shall (i) pay a dividend or make a distribution in shares of
      common stock or other securities, (ii) subdivide its outstanding shares of
      common stock into a greater number of shares, (iii) combine its outstanding
      shares of common stock into a smaller number of shares, or (iv) issue by
      reclassification of its shares of common stock other securities of the Maker,
      then the Conversion Price in effect at the time of the record date for such
      dividend or on the effective date of such date, shall be proportionately
      adjusted so that if the Note or any part thereof is exercised, the Lender shall
      be entitled to receive the aggregate number and kind of shares of common stock
      (or such other securities other than common stock) of the Maker, at the same
      aggregate Conversion Price, that, if such Note had been exercised immediately
      prior to such date, the Lender would have owned upon such exercise and been
      entitled to receive by virtue of such dividend, distribution, subdivision,
      combination or reclassification. Such adjustment shall be made successively
      whenever any event listed above shall occur.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (b)
      In
      case the Maker shall fix a record date for the making of a distribution to
      all
      holders of common stock (including any such distribution made in connection
      with
      a consolidation or merger in which the Maker is the surviving corporation)
      of
      cash, evidences of indebtedness or assets, or subscription rights or warrants,
      the Conversion Price to be in effect after such record date shall be determined
      by multiplying the Conversion Price in effect immediately prior to such record
      date by a fraction, the numerator which shall be the current market price per
      share of common stock on such record date, less the amount of cash so to be
      distributed (or the fair market value as determined in good faith by, and
      reflected in a formal resolution of, the Board of Directors of the Maker) of
      the
      portion of the assets or evidences of indebtedness so to be distributed, or
      of
      such subscription rights or warrants, applicable to one share of common stock,
      and the denominator of which shall be such current market price per share of
      common stock. Such adjustment shall be made successively whenever such a record
      date is fixed; and in the event that such distribution is not so made, the
      Conversion Price shall again be adjusted to be the Conversion Price which would
      then be in effect if such record date had not been fixed.

    

    (c)
      Notwithstanding any provision herein to the contrary, no adjustment in the
      Conversion Price shall be required unless such adjustment would require an
      increase or decrease of at least one (1%) percent in the Conversion Price;
      provided,
      however,
      that
      any adjustments which by reason of this subsection (c) are not required to
      be
      made shall be carried forward and taken into account in any subsequent
      adjustment. All calculations under this paragraph
      3
      shall be
      made to the nearest cent or the nearest one-hundredth of a share, as the case
      may be.

    

    (d)
      In
      the event that at any time, as a result of an adjustment made pursuant to
      subsection (a) above, the Lender shall become entitled to receive any shares
      of
      capital stock of Maker other than shares of Common Stock, thereafter number
      of
      such other shares so receivable upon exercise of this Note shall be subject
      to
      adjustment from time to time in a manner and on terms as nearly equivalent
      as
      practicable to the provisions with respect to the shares of common stock
      contained in this paragraph
      3,
      and the
      other provisions of this Note shall apply on like terms to any such other
      shares.

     

    (e)
      If
      Maker merges or consolidates into or with another corporation or entity, or
      if
      another corporation or entity merges into or with Maker (excluding such a merger
      in which the Maker is the surviving or continuing corporation and which does
      not
      result in any reclassification, conversion, exchange, or cancellation of the
      outstanding shares of common stock), or if all or substantially all of the
      assets or business of the Maker are sold or transferred to another corporation,
      entity, or person, than, as a condition to such consolidation, merger, or sale
      (a “Transaction”), lawful and adequate provision shall be made whereby the Maker
      shall have the right from and after the Transaction to receive, upon conversion
      of this Note and upon the terms and conditions specified herein and in lieu
      of
      the shares of the common stock that would have been issuable if this Note had
      been converted immediately before the Transaction, such shares of stock,
      securities, or assets as the Lender would have owned immediately after the
      Transaction if the Lender had converted this Note immediately before the
      effective date of the Transaction.

    

    4.
      The
      Maker agrees at all times to reserve and hold available out of its authorized
      but unissued shares of common stock the number of shares of common stock
      issuable upon the full exercise of this Note. The Maker further covenants and
      agrees that all shares of common stock that may be delivered upon the conversion
      of this Note will, upon delivery, be fully paid and nonassessable and free
      from
      all taxes, liens and charges with respect to the purchase thereof
      hereunder.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    5.
      If at
      any time prior to the date two (2) years from the date of this Note or such
      earlier date when all shares of common stock issuable upon conversion of this
      Note (the “Note
      Shares”)
      (a)
      have been sold, or (b) may be sold without volume restrictions pursuant to
      Rule
      144(k) as determined by the counsel to the Maker pursuant to a written opinion
      letter to such effect, addressed and acceptable to the Lender’s transfer agent
      and the Lender , that there is not an effective registration statement covering
      the Note Shares, and the Lender shall determine to prepare and file with the
      SEC
      a registration statement relating to an offering for its own account or the
      account of others under the Securities Act of any of its equity securities,
      other than on Form S-4 or Form S-8 (each as promulgated under the Securities
      Act) or their then equivalents relating to equity securities to be issued solely
      in connection with any acquisition of any entity or business or equity
      securities issuable in connection with the stock option or other employee
      benefit plans, then the Company shall send to the Lender a written notice of
      such determination.

    

    6.
      The
      Maker and each surety, endorser, guarantor, and other party ever liable for
      payment of any sums of money payable on this Note, jointly and severally, waive
      presentment and demand for payment, protest, notice of protest and nonpayment,
      notice of the intention to accelerate, notice of acceleration, and agree that
      their liability on this Note shall not be affected by any renewal or extension
      in the time of payment hereof, by any release or change in any security for
      the
      payment of this Note, and hereby consent to any and all renewals, extensions,
      indulgences, releases, or changes, regardless of the number of such renewals,
      extensions, releases, or changes.

    

    7.
      In
      case any provision in this Note shall be invalid, illegal, or unenforceable,
      the
      validity, legality, and enforceability of the remaining provisions shall not
      in
      any way be affected or impaired thereby.

    

    8.
      In any
      case where any date provided herein shall not be a business day, then
      (notwithstanding any other provision of this Note), the event required or
      permitted on such date shall be required or permitted, as the case may be,
      on
      the next succeeding business day with the same force and effect as if made
      on
      the date upon which such event was required or permitted pursuant
      hereto.

    

    No
      delay
      or omission of Lender to exercise any right or remedy accruing upon any event
      of
      default shall impair any such right or remedy or constitute a waiver of any
      such
      event or default or any acquiescence therein. Every right or remedy given hereby
      or by law may be exercised from time to time, and as often as may be deemed
      expedient.

    

      IN
        WITNESS
        WHEREOF,
        the
        undersigned hereby executes this Promissory Note as of the date first above
        written

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	 	 
	 	“MAKER”
	 	 
	 	RUSSOIL
              CORPORATION
	 
 	 
 	 
 
	
            	By:  	/s/
              Silvestre Hutchinson
	 	
              
                

              

              Silvestre Hutchinson 

              Chief
                Executive Officer and

              President

            

    

     

    
      	
              ACKNOWLEDGED
                AND ACCEPTED

              BY
                “LENDER”

            	 	 	 
	 	 	 	 
	BLUEWATER PARTNERS,
              S.A.	 	 	 
	 	 	 	 
	By:
/s/
              Myron Gushlak	 	 	
            
	
              
                

              

            	 	 	
            
	
              Name: Myron
                Gushlak 

            	 	 	
            
	Title: Managing
              Director

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