Document:

Sale and Purchase Agreement

PURCHASE AND SALE AGREEMENT

This PURCHASE and SALE AGREEMENT ( the "Agreement") is made this 17th  day of June, 2008, by and between RETAMCO OPERATING, INC., ("Seller"), and DEJOUR ENERGY (USA) CORP., ("Detour"), and BROWNSTONE VENTURES (US) INC., ("Brownstone") (Dejour and Brownstone, collectively, the "Buyers"). The Buyers and Seller may be collectively referred to herein as the "Parties" and individually as a "Party."

RECITALS

1.

The Parties entered into that certain Participation Agreement dated July 14, 2006 regarding the Overthrust Project and the Resource Project (the "Participation Agreement");

2.

Seller now desires to assign some of the leases subject to the Participation Agreement to Fidelity Exploration & Production Company ("Fidelity") with Fidelity becoming the new operator of such leases and to assign other interests to Buyers;

3.

The Parties desire to assign Seller's interests in the leases identified as the Gibson Gulch, Book Cliffs, Plateau, West Grand Valley, Rangely and Dinosaur projects (the "Subject Leases"), to Buyers; and

4.

In exchange for the foregoing interests, Buyers will pay cash and will assign all of their respective interests in the Barcus Creek and Rio Blanco Deep prospects, including Buyers' interests in the North Barcus Creek Number 1-12 and 2-12 wells (the "Exchange Leases"), to Seller.

5. 

In consideration of their mutual promises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyers agree to the purchase and sale of the oil and gas properties described below, in accordance with the following terms and conditions:

AGREEMENT

1.

LEASES BEING SOLD: At closing, Seller shall convey, assign and transfer to Buyers all of Seller's right, title and interest in and to the Subject Leases described on Exhibit A, which shall include but is not limited to the following rights and interest:

(a)

All of Seller's right, title and interest in and to the Subject Leases.

(b)

Rights in production including reversionary interests, back-in interest, overriding royalty, production payments, net profits interests, mineral and royalty interests.

(c)

Fee interests, fee mineral interests and fee royalty interests.

(d)

Rights and interests in or derived from pooling or unit agreements, orders and decisions of state and federal regulatory authorities establishing units covering the Subject Leases. Rights in orders and decisions of regulatory authorities establishing or relating to units, unit operating agreements, operating agreements, gas purchase agreements, oil purchase agreements, gathering agreements, transportation agreements, processing or treating agreements, farmout agreements and farmin agreements.

(e)

Personal property, surface equipment, down-hole equipment and pipelines, buildings and inventory used or obtained in connection with the Subject Leases, easements or permits conveyed herein.

(f)

Rights-of-way, easements, road use agreements, surface fees, servitudes and franchises acquired or used in connection with operations for the exploration and production of oil, gas or other minerals from the Subject Leases.

(g)

Permits or licenses of any nature owned, held or operated in connection with operations for the exploration and production of oil, gas or other minerals to the extent the same are used or obtained in connection with any of the Subject Leases.

(h)

Records as provided in Section 7.

(i)

All claims and causes of action in favor of Seller, arising from breaches, acts, omissions or events or damage to or destruction of property occurring prior to the Effective Date.

(j)

All of Seller's electronic mapping data.

(k)

All other rights and interests in, to or under or derived from the Subject Leases, even though the same may be improperly described in or omitted from the Exhibits. It is the express intent of the parties that all of Seller's right, title and interest in any and all oil and gas properties described on Exhibit A, and interests appurtenant thereto, be assigned to Buyers hereunder.

2.

PURCHASE PRICE. Buyers agree to pay to Seller for the Subject Leases the sum of Five Million Four Hundred Thousand Dollars ($5,400,000.00) (the "Cash Purchase Price") and to assign to Seller all of Buyers' right, title and interest in and to the "Exchange Leases" which shall consist of the leases and wells listed on Exhibit B and shall include all of the rights as are included in the Subject Leases (the Exchange Leases, along with the Cash Purchase Price, collectively, the "Purchase Price"); provided, however, Buyers shall reserve, at Closing, $600,000.00. The amount in reserve will be available to Buyers for any assigned title failures that are not cured and for any final settlement of claims arising from the joint interest audit on the North Barcus Creek No. 1 and 2 wells; provided, however, that the amount in reserve shall not constitute an absolute cap on claims for assigned title defects or joint interest audit claims, but a reserve available to settle such claims after Closing. The balance of the funds held in reserve, less any identified claims will be released to Seller in accordance with the Final Settlement Statement (defined in Section 16 below).

The Purchase Price shall be reduced at Closing by the amounts listed on Schedule 2, which shall include:

a.

The estimated amount of unused funds attributable to the Barcus Creek Well AFE's as to which no controversy remains; and

b.

Reimbursement for all the leasehold interests in the Overthrust Project and Resource Project that were paid for upon closing of the Participation Agreement and later determined to be expired or otherwise invalid prior to July 14, 2006.

3.

REMOVAL FROM PARTICIPATION AGREEMENT. Upon Closing, Seller and Buyers agree that the Subject Leases, Exchange Leases and the Green River Leases being sold to Fidelity shall cease to be subject to the Participation Agreement, including any obligations to convey overriding royalty interests contained in Section 3.07 of the Participation Agreement. The Participation Agreement will remain in effect as to the remaining leases.

4.

FIDELITY CLOSING. The Closing of this Purchase and Sale Agreement is contingent upon (i) Seller closing the Purchase and Sale Agreement with Fidelity regarding the Green River Leases and (ii) Buyers closing the Joint Operating Agreement with Fidelity to operate the Green River Leases.

5.

CONVEYANCE EFFECTIVE DATE. The conveyances shall be effective as of June 1, 2008 at 7:00 a.m., local time where the Leases are located, hereinafter called the "Effective Date".

6.

CLOSING. Unless extended by mutual consent of Buyers and Seller, the Closing (the "Closing") shall be held on or before June 17, 2008 (the "Closing Date"). The Closing shall take place in the offices of Buyers' counsel in Denver, Colorado at a time mutually agreed upon by the parties. At Closing, Buyers will make payment of the Cash Purchase Price by cashier's check or wire transfer payable to Seller, and Seller shall execute and deliver to Buyers an Assignment of Oil and Gas Leases in the form of Exhibit C attached hereto. In addition, Seller shall deliver executed separate governmental form assignments of the Subject Leases on officially approved forms, in sufficient counterparts to satisfy applicable statutory and regulatory requirements. Buyers shall execute and deliver to Seller an Assignment of Oil and Gas Leases and Wells in the form of Exhibit D attached hereto. In addition, Buyers shall deliver executed separate governmental form assignments of the Exchange Leases on officially approved forms, in sufficient counterparts to satisfy applicable statutory and regulatory requirements.

7.

FILES AND RECORDS. Upon Closing, or as soon as feasibly possible thereafter, Seller shall furnish Buyers, at their offices in Denver, Colorado, with all Seller's original records pertaining to the Subject Leases, including but not limited to all lease files, gas contracts, operating agreements, deeds and documents of title and all other Lease records, and other documents and pertinent information or files Seller may possess pertaining to the Subject Leases being conveyed by the Assignment.

Prior and subsequent to Closing, Seller shall allow Buyers to examine, at Seller's offices, any land and contract files, to the extent not delivered, which relate to the Subject Leases for the purposes of conducting a review of title pursuant to Section 8, or which relate to the Exchange Leases for the purposes of conducting an audit pursuant to Section 9. In this connection, Seller shall make available to Buyers for examination such title information with respect to the Subject Leases which is in Seller's files or to which Seller has access, and to the joint interest records for the North Barcus Creek wells to which are in Seller's files or to which Seller has access. Seller shall have no obligations to update any title currently in Seller's files.

8.

TITLE DEFECTS.

Buyers shall, at their sole expense, conduct such examinations of title and data as they see fit and shall notify Seller, in writing, on or before ninety (90) days after the Closing Date, of any title defects which would cause Seller's title to not be merchantable, failing which, Buyers will be deemed to have approved title. For the purposes of this Agreement, a "Title Defect" shall mean a deficiency in, or occurrence of, one (or more) of the following, to-wit:

a.

Seller's title, as to one or more Subject Leases, is subject to an outstanding mortgage, deed of trust, lien or encumbrance or other adverse claim;

b.

If Seller owns less than the 65% working interest, or Seller owns less than 52% net revenue interest in the Gibson Gulch, Book Cliffs, Plateau, West Grand Valley, Rangely Projects; except as to those leases in the foregoing projects listed on Exhibit F, in which case, if Seller owns less than 32.5% working interest or owns less than a 26% net revenue interest, or if Seller owns less than 77.5% working interest, or Seller owns less than 62% net revenue interest in the Dinosaur Project;

c.

Seller's rights and interest are subject to being reduced by virtue of the exercise by a preferential right, prior consent rights, and first call on production rights, third party of reversionary, back-in or other similar right not reflected on Exhibit A; and

d.

Seller is in default under some material provision of a lease agreement affecting the Subject Leases.

e.

Buyer is required to bear a share of the working interest greater than the working interest listed in (b.) above without a corresponding increase in the net revenue interest.

In the event Buyers notify Seller of such Title Defects, Seller may, at its option, attempt to cure any and all such Title Defects. In the event of a Title Defect which renders title to all or a portion of a Subject Lease unmerchantable,. and Seller elects to not cure the same, the Parties shall adjust the Purchase Price based upon a reduction for the Subject Lease, or portion thereof, affected by such Title Defect. For the purposes of determining the dollar amount of each a Title Defect (the "Title Defect Amount"), each acre which makes up the Subject Leases in the following projects shall be deemed (solely for this purpose only) to have a Title Defect Amount equal to the following: $500 per net acre for Gibson Gulch acreage; $170 per net acre for West Grand Valley acreage; $170 per net acre for Book Cliffs acreage; $300 per net acre for Plateau acreage; $150 per net acre for Rangely acreage; and $25 per net acre for Dinosaur acreage for each acre affected by the Title Defect. As used herein "merchantable" shall mean record title to Subject Leases which is free from reasonable doubt to the end that a prudent operator engaged in the business of owning, exploring, developing, operating and producing oil and gas properties with knowledge of the facts and the legal effect thereof would accept same.

9.

AUDIT. Buyers shall, at their sole expense, for ninety (90) days after the Closing Date, have the right to conduct a joint interest audit on the North Barcus Creek No. 1 and 2 wells, with any audit claims settled in the Final Settlement Statement (as defined below).

10.

WARRANTY. Seller shall convey to Buyers at Closing, title to the Subject Leases free and clear of all liens and encumbrances created by, through or under Seller. Buyers shall convey to Seller at Closing title to the Exchange Leases free and clear of all liens and encumbrances created by, through or under Buyers.

11.

BROKER'S FEES AND COMMISSIONS. Buyers and Seller have incurred no obligation or liability, contingent or otherwise, for broker or finder fees with respect to the matters provided for in this Agreement which will be the responsibility of the other party; and such obligation or liability that might exist shall be the sole obligation of the creating party.

12.

INDEMNIFICATION. BUYERS SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD SELLER HARMLESS FROM THE PAYMENT OF ANY JUDGMENTS (INCLUDING INTEREST), CLAIMS, COSTS, EXPENSES AND LIABILITIES, DIRECT, CONTINGENT OR OTHERWISE ("DAMAGES"), ASSESSED AGAINST SELLER WHICH ARE PAYABLE WITH RESPECT TO THE OWNERSHIP OF THE SUBJECT LEASES DURING THE PERIOD OF TIME FROM AND AFTER THE EFFECTIVE DATE. SELLER SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD BUYERS HARMLESS FROM THE PAYMENT OF SELLER'S PROPORTIONATE SHARE OF ANY DAMAGES ASSESSED AGAINST BUYERS WHICH ARE PAYABLE WITH RESPECT TO THE OWNERSHIP OF THE SUBJECT LEASES DURING THE PERIOD OF TIME PRIOR TO THE EFFECTIVE DATE.

SELLER SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD BUYERS HARMLESS FROM THE PAYMENT OF ANY DAMAGES, ASSESSED AGAINST BUYERS WHICH ARE PAYABLE WITH RESPECT TO THE OWNERSHIP OF THE EXCHANGE LEASES DURING THE PERIOD OF TIME FROM AND AFTER THE EFFECTIVE DATE. BUYERS SHALL PROTECT, DEFEND, INDEMNIFY AND HOLD SELLER HARMLESS FROM THE PAYMENT OF BUYERS' PROPORTIONATE SHARE OF ANY DAMAGES ASSESSED AGAINST SELLER WHICH ARE PAYABLE WITH RESPECT TO THE OWNERSHIP OF THE EXCHANGE LEASES DURING THE PERIOD OF TIME PRIOR TO THE EFFECTIVE DATE. SELLER FURTHER AGREES TO ASSUME AND AGREES TO INDEMNIFY AND HOLD HARMLESS BUYERS FROM AND AGAINST DAMAGES FOR THE PLUGGING AND ABANDONING OBLIGATIONS ON THE NORTH BARCUS CREEK NUMBER 1-12 AND 2-12 WELLS.

NOTWITHSTANDING THE FOREGOING, BUYERS AND SELLER AGREE TO ASSUME ALL LIABILITY FOR ANY AND ALL NOW-EXISTING ENVIRONMENTAL DEFECTS ON THE SUBJECT LEASES AND THE EXCHANGE LEASE, RESPECTIVELY; AND THE PARTIES ACKNOWLEDGE THAT, WITH RESPECT TO ENVIRONMENTAL DEFECTS, THE SUBJECT LEASES AND THE EXCHANGE LEASES ARE CONVEYED "AS IS, WHERE IS AND WITH ALL FAULTS".

13.

REPRESENTATIONS AND WARRANTIES OF THE PARTIES. The respective parties represent and warrant to each other, as applicable, that, as of the Closing Date:

a.

Binding Obligation. This Agreement constitutes the legal, valid and binding obligation of Buyers and Seller enforceable against each in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of creditor's rights.

b.

Authority. Seller owns an interest in the Subject Leases and has the full power and right to sell and convey the same, and Buyers have the full power and right to acquire and operate the same, all pursuant to the terms and conditions of this Agreement. Buyers own an interest in the Exchange Leases and have the full power and right to sell and convey the same, and Seller has the full power and right to acquire and operate the same, all pursuant to the terms and conditions of this Agreement. Seller and Buyers have the requisite corporate authority to enter into, deliver and perform this Agreement and carry out the transactions contemplated by this Agreement.

c.

Governmental Approvals. Buyers and Seller shall obtain all required local, state and federal governmental and/or agency permissions, approvals, permits, bonds and consents, as may be required to assume the obligations and responsibilities attributable to each party under this Agreement, including any and appropriate bonds with all governmental agencies having jurisdiction over the properties subject to this Agreement, and each party shall assist the other party in obtaining same.

d.

Leases. The Subject Leases are in full force and effect and are valid and subsisting documents covering the entire estates which they purport to cover. To the best of Seller's knowledge, Exhibit A attached hereto accurately reflects all of the Leases in the Gibson Gulch, Book Cliffs, Plateau, West Grand Valley, Rangely and Dinosaur projects which were originally subject to the Participation Agreement and retained and owned by Seller pursuant to the Participation Agreement. Buyers and Seller have acquired no interest in any other leases pursuant to the Area of Mutual Interest which is defined in the Participation Agreement.

e.

Net Revenue Interest. As to each of the Subject Leases, Seller is vested of record with a fractional decimal interest of not less than the Net Revenue Interest set forth in Section 8 of this Agreement.

f.

Liens. The Subject Leases are free and clear of any liens, mortgages, security interest or other similar encumbrances arising by, through or under Seller, except for those which shall be released of record prior to the Closing Date. The Exchange Leases are free and clear of any liens, mortgages, security interest or other similar encumbrances arising by, through or under Buyers, except for those which shall be released of record prior to the Closing Date.

g.

Rents and Royalties. All rentals, royalties and other payments due under the Subject Leases have been fully and promptly paid. To the best of Buyer's knowledge, all rentals, royalties and other payments due under the Exchange Leases have been fully and promptly paid.

h.

Taxes. All due and payable ad valorem, property, production, severance and similar taxes and assessments based on or measured by the ownership of property or the production of hydrocarbons or the receipt of proceeds therefrom on the Subject Leases, which become due prior to the Effective Date, have been properly paid.

i.

Maintenance of Interests. Prior to the Effective date, Seller has maintained and operated the Subject Leases in a reasonable and prudent manner, in full compliance with applicable law and orders of any governmental authority, and maintained insurance and bonds now in force with respect to the Subject Leases, paid when due all costs and expenses coming due and payable in connection with the Subject Leases, and has performed all of the covenants and conditions contained in the Subject Leases.

j.

Litigation and Claims. There is no claim (including claims for taxes), demand, cause of action or litigation pending against Seller or Buyers which would materially affect the Seller or Buyers' ownership or operation of the Subject and Exchange Leases as currently being operated. To the best of their respective knowledge, there is no claim (including claims for taxes), demand, cause of action or litigation threatened against Seller or Buyers which would materially affect the Seller or Buyers' ownership or operation of the Subject and Exchange Leases as currently being operated.

k.

Contracts. The only agreements the Subject and Exchange Leases are subject to are those agreements listed on Exhibit E.

1.

Prepayments and Wellhead Imbalances. Seller is not obligated, by virtue of a production payment, prepayment arrangement under any contract for the sale of hydrocarbons and containing a "take or pay", advance payment or similar provision, gas balancing agreement or any other arrangement to deliver hydrocarbons produced from the Subject Leases at any time after the Effective Date without then or thereafter receiving full payment therefor, and the hydrocarbons produced from the Subject Leases are not dedicated to any gas purchase contract or other similar contract which obligates Seller (and after Closing, Buyers) to sell hydrocarbons produced from the Subject Leases to a third party.

m.

Preferential Rights to Purchase. The Subject and Exchange Leases are not subject to any preferential right to purchase, option, right of first refusal or other similar right in favor of third parties.

n.

Environmental Matters. To the best of Seller's knowledge, Seller is not, or if Seller is not the operator of record of the Subject Leases, such operator is not, in violation of any applicable Environmental Laws, or any limitations, restrictions, conditions, standards, obligations or timetables contained in any such Environmental Laws. No notice or action alleging such violation is pending or, to Seller's best knowledge, threatened against the Subject Leases. For the purposes of this Agreement, "Environmental Laws" shall mean (i) the common law, and (ii) any and all federal, state and local statutes, regulations, rules, orders, ordinances or permits of any governmental authority which pertain to health, the environment, wildlife and natural resources in effect in any and all jurisdictions in which the Subject Property is located, including without limitation, the Clean Air Act, as amended, and the Federal Water Pollution Control Act, as amended, the Oil Pollution Act of 1990 ("OPA90"), as amended, the Rivers and Harbors Act of 1899, as amended, the Safe Drinking Water Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), as amended, the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), as amended, the Resource Conservation and Recovery Act ("RCRA"), as amended, the Hazardous and Solid Waste Amendments Act of 1984, as amended, the Toxic Substances Control Act, as amended, and the Hazardous Materials Transportation Act, as amended.

o.

Wells. To the best of Seller's knowledge, there are no oil and gas wells on lands associated with the Subject Leases.

m.

Existing Condition. No material adverse changes in the condition of the Subject Leases from the effective date of the Participation Agreement to the Effective Date have occurred.

If, on or before Closing, it is discovered that either Party is in default under any of the above representations and warranties applicable to it, the defaulting Party shall use reasonable efforts to cure the same before Closing, but if it is unable to do so, then the Parties shall use reasonable efforts to adjust the Purchase Price on an equitable basis due to such default. If the Parties are unable to agree as to such adjustment on or before Closing, then the Party not in default may terminate this Agreement by giving written notice to the other on or before the Closing Date. The representations and warranties shall survive closing.

14.

PRESERVATION OF RIGHTS AND INTEREST. Seller agrees to preserve all leasehold rights in the Subject Leases being conveyed pursuant to this Agreement pending the Closing of the transaction. Seller agrees to pay all rentals (including any shut-in rental or royalty payment), royalties, taxes or payments of any kind required under the Subject Leases, which mature within sixty (60) days after the date of this Agreement, and deliver to Buyers proper receipts at the time of Closing under this Agreement, or if payment is made after Closing, immediately upon receiving the proper receipts. All such payments apportionable to the times subsequent to the Effective Date shall be repaid in accordance with the Final Settlement Statement to Sellers by Buyers. Seller shall maintain the Subject Leases in a prudent, businesslike manner pending the Closing, and shall take no action which would hinder or decrease the value of the Subject Leases between the date this Agreement is signed and Closing. Seller shall bear the risk of loss through the Closing date.

15.

OPERATING AGREEMENTS. Buyers are agreeable with Fidelity becoming the operator for the Green River Leases that Retamco is selling to it, provided Buyers and Fidelity can agree upon and execute simultaneously with the Closing herein, a Joint Operating Agreement between Fidelity and Buyers. Buyers and Seller agree to amend the Joint Operating Agreement for the Overthrust and Resource Projects, each dated July 14, 2006, as amended, by executing the Amendment to Operating Agreement in the form attached hereto as Exhibit G.

16. 

CLOSING AND POST-CLOSING. Buyers shall provide Seller a "Preliminary Closing Settlement Statement" prior to Closing respecting adjustments to the Purchase Price. Upon the Closing, the following shall occur: 

Buyers and Seller shall agree upon a "Closing Settlement Statement," which shall include adjustments to the Purchase Price, which are known as of the Closing Date, as including the following:

a.

Amounts listed on Schedule 2

b.

An amount attributable to know Title Defects as of Closing.

c.

An amount equal to the Buyer's proportionate share of the proceeds from production of condensate from the North Barcus Creek Well No. 2-12 for production which is attributable to the time before the Effective Date.

d. other expenses as may be incurred by the Parties after the Effective Date which are attributable to the obligations of the Seller's or Buyers' respective interests in the Subject Leases and Exchange Leases prior to the Effective Date

After Closing, but not more than ninety (90) days after the Closing, Buyers shall prepare and deliver to Seller a "Final Settlement Statement" setting forth each adjustment or payment which was not finally determined as of the Closing Date and showing the calculation of such adjustments to show final Purchase Price. The Final Settlement Statement shall reflect adjustments to the Cash Purchase Price based on the amounts determined to be owed based on (i) the results of the joint interest audit of the North Barcus Creek operating records; (ii) identified Title Defects; (iii) the amount of proceeds received by Seller for disposition, after the Effective Date, of any substances produced and sold from the Exchange Leases prior to the Effective Date 

which are attributable to Buyers' interest therein to the extent not determined at Closing; and (iv) such other expenses as may be incurred by the Parties after the Effective Date which are attributable to the obligations of the Seller's or Buyers' respective interests in the Subject Leases and Exchange Leases prior to the Effective Date, including, without limitation, taxes attributable to the Subject and Exchange Leases prior to the effective date, expenses paid by the respective Parties between the Effective Date and the Closing Date, and rentals paid by Seller in accordance with Section 14 of this Agreement. As soon as practicable after receipt of the Final Settlement Statement, Seller shall deliver to Buyers a written report containing any changes which Seller proposes be made to the Final Settlement Statement. The parties shall undertake with diligence to agree with respect to the amounts due pursuant to such post-Closing adjustments no later than one-hundred and twenty (120) days after the Closing. The Final Settlement Statement shall be the final accounting amongst the Parties with respect to this Agreement and no other adjustments to the Purchase Price or claims for payment may be made by either party unless made in the Final Settlement Statement.

17.

ASSUMPTION OF OBLIGATIONS. Except as provided in Section 14, from and after the Effective Date, Buyers assume, will be bound by, and agree to perform its proportionate share of the express and implied covenants and obligations of Seller relating to the Subject Leases, whether arising under (i) the leases, prior assignments of the leases, contracts, easements, permits or any other contractually-binding arrangements to which the Subject Leases (or any component thereof) may be subject and which will be binding on Buyers and/or the Subject Leases (or any component thereof) after the Closing or (ii) any applicable laws, ordinances, rules and regulations of any governmental or quasi-governmental authority having jurisdiction over the Subject Leases;

From and after the Effective Date, Seller assumes, will be bound by, and agrees to perform its proportionate share of the express and implied covenants and obligations of Buyers relating to the Exchange Leases, whether arising under (i) the leases, prior assignments of the leases or any other contractually-binding arrangements to which the Exchange Leases (or any component thereof) may be subject and which will be binding on Seller and/or the Exchange Property (or any component thereof) after the Closing, (ii) any applicable laws, ordinances, rules and regulations of any governmental or quasi-governmental authority having jurisdiction over the Exchange Leases.

18.

ARBITRATION. Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Any arbitration shall occur in Denver, Colorado by a panel of three (3) arbitrators. Each party shall elect an arbitrator within five (5) days of respondent's receipt of a demand for arbitration, and the two selected arbitrators shall then have five (5) days to select a neutral third arbitrator.

19. 

NOTICE. All notices and communications required or permitted under this Agreement shall be in writing, delivered to or sent by U. S. Mail or Express Delivery, postage prepaid, addressed as follows:

Seller

Retamco Operating, Inc. 

Attn: Steve Gose, President 

P.O. Box 790

One South Broadway Ave., Suite 2

Red Lodge, Montana 59068 

Phone 406.446.1568

Fax: 406.446.1748

Buyers 

Dejour Energy (USA) Corp. 

5023 West 120th Avenue, #340 

Broomfield, Colorado 80020 

Fax: (303) 280-3177

Brownstone Ventures (US), Inc. 

130 King Street West, Suite 2810 

Toronto, Ontario

Canada M5X 1A9

Fax: (416) 941-1090

20.

OTHER ACTIONS. The parties agree to execute such further documents or take such further actions after the Closing Date which may be necessary in order to effectuate the transactions contemplated hereunder.

21.

SURVIVAL. The terms and conditions of this Agreement shall survive the Closing of the transactions contemplated hereby.

22.

BINDING EFFECT. Upon execution hereof, this Agreement shall be binding on the Parties hereto, their respective heirs, devisees, personal representatives, successors and assigns.

23.

LAW APPLICABLE. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado.

24. 

COUNTERPARTS. This Agreement may be executed by Seller and Buyers in counterparts, each of which shall be deemed to be an original and all of which shall be deemed to constitute one Agreement.

[Signatures on following page]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed below by their duly authorized representatives.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed below by their duly authorized representatives.Farmout Agreement

FARMOUT AGREEMENT

Rio Blanco County and Moffat County, Colorado

This Farmout Agreement ("Agreement") is entered into this 14th day of November, 2008, by and between Laramie Energy II, LLC, (hereinafter referred to as "Laramie") and Dejour Energy (USA) Corp., (hereinafter referred to as "Dejour") and Brownstone Ventures (US), Inc., (hereinafter referred to as "Brownstone") (Dejour and Brownstone are, sometimes, hereinafter collectively referred to as "Dejour/Brownstone"). Laramie and Dejour/Brownstone may be referred to individually as a "Party" or collectively as the "Parties."

RECITALS

A.

This Agreement pertains to the land located in Rio Blanco and Moffat Counties, Colorado, which are described on Exhibit A ("Farmout Lands").

B.

Dejour/Brownstone is the owner of certain interests in the oil and gas leases covering the Farmout Lands, including the oil and gas leases as more particularly described in Exhibit B (collectively, the "Leases").

C.

Laramie desires to obtain an opportunity to earn interests in the Leases by drilling and producing wells on the Leases.

D.

To accomplish the foregoing, the Parties wish to enter into this Agreement.

Now, therefore, for and in consideration of $100.00, the promises set forth below and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1.

EXHIBITS.

The following exhibits are attached and shall be considered part of this Agreement: Exhibit A - Descriptions of lands covered by this Agreement ("Farmout Lands").

Exhibit B - Lease Schedule describing oil and gas leases subject to this Agreement (the "Leases").

Exhibit C - Operating Agreement.

Exhibit D - Area of Mutual Interest. 

Exhibit E - Form of Assignment.

2.

INITIAL EARNING WELL.

2.1.

Well Specifications. Laramie shall drill a well, (the "Initial Earning Well"), subject to Section 7 herein and in compliance with the following specifications:

(a)

Location:

A legal location within the Farmout Lands, the surface and bottom hole locations of which are selected by Laramie.

(b)

Spudding Deadline: On or before December 1, 2009-

(c)

Contract Depth: A depth of 100 feet below the top of the Carlisle shale, being the stratigraphic equivalent of 4,695 feet below the surface of the earth in the Petro Lewis Corp. Calvin-Federal No. 1 well, located in the SW/4NE/4SW/4 of Section 28, Township 3 North, Range 103 West, Rio Blanco County, Colorado (herein, the "Contract Depth").

2.2.

Earned Assignment. Upon drilling the Initial Earning Well to the Contract Depth and completing that well as a well capable of producing oil and/or gas in Paying Quantities, Dejour/Brownstone shall deliver to Laramie an assignment, as set forth in Section 6, below, of an undivided 70% of Dejour/Brownstone's right, title and interest in the Leases, as to the Earned Acreage, as defined in Section 6.3, below, for the Initial Earning Well, as to all depths. The term "Paying Quanties" means the production of hydrocarbons from a wellbore in amounts greater than 300 barrels or 1,800 Mcf over the first 30 days of production.. There is no Earned Acreage with respect to a well that does not produce in Paying Quantities. Upon drilling the Initial Earning Well to the Contract Depth and completing that well as a well capable of producing oil and/or gas, but the well fails to produce in Paying Quantities, Dejour/Brownstone shall deliver to Laramie an assignment, as set forth in Section 6, below, of an undivided 100% of Dejour/Brownstone's right, title and interest in the wellbore, the associated production equipment, the associated hydrocarbon production through such wellbore, the surface rights necessary to operate and produce the well and the Leases, insofar and only insofar as to the quarter quarter section (40 acres, more or less) or comparable legal subdivision on which the well bottomhole is located, as to all depths.

3.

ADDITIONAL EARNING WELLS

3.1.

Laramie's Option. If the Initial Earning Well is drilled within the time set forth above, and thereafter completed as a well capable of producing in Paying Quantities, is completed as a well capable of producing but not in Paying Quantities, or is plugged and abandoned, Laramie shall have the right to drill Additional Earning Wells, subject to Section 7, as a continuous optional drilling program. Such right shall continue so long as not more than 6 months (or 8 months with respect to a well that is producing but Laramie is evaluating whether it is production in Paying Quantities) elapses between the release of the drilling rig of the immediately preceding well and the commencement of spudding operations on the next Additional Earning Well. Each Additional Earning Well shall be drilled at a legal location on the Farmout Lands, but may not be drilled on any Farmout Lands on which Laramie has then earned an assignment hereunder, and shall be drilled to the Contract Depth.

3.2.

Earned Assignments. Upon drilling an Additional Earning Well to the Contract Depth and completing that well as a well capable of production in Paying Quantities, Dejour/Brownstone shall deliver to Laramie an assignment, as set forth in Section 6, of an undivided 70% of Dejour/Brownstone's right, title and interest in the Leases, as to the Earned Acreage, as defined in Section 6.3, for each Additional Initial Earning Well, as to all depths. Upon drilling the Additional Earning Well to the Contract Depth and completing that well as a well capable of producing oil and/or gas, but the well fails to produce in Paying Quantities, Dejour/Brownstone shall deliver to Laramie an assignment, as set forth in Section 6, below, of an undivided 100% of Dejour/Brownstone's right, title and interest in the wellbore, the associated production equipment, the associated hydrocarbon production through such wellbore, the surface rights necessary to operate and produce the well and the Leases, insofar and only insofar as to the quarter quarter section (40 acres, more or less) or comparable legal subdivision on which the well bottomhole is located, as to all depths.

3.3. 

Drilling Term. The period in which Laramie shall have the right to commence the drilling of Additional Earning Wells shall terminate 3 years following the date of this Agreement ("Drilling Term"); provided, however, in the event that the Initial Earning Well or any Additional Earning Well is completed as a well capable of production in Paying Quantities, then such Drilling Term shall be extended for an additional year, for a total of 4 years following the date of this Agreement.

4. 

SUBSTITUTE WELLS.

4.1.

 If Laramie has failed to earn an assignment under the terms of this Agreement because the applicable Earning Well failed to reach the required depth as a result of mechanical problems or impenetrable strata or other conditions in the hole which make further drilling impracticable, under generally accepted oil field practices, Laramie shall have the option, but not the obligation, to drill a substitute well subject to the following provisions:

(a)

Laramie shall give Dejour/Brownstone written notice describing the status of the well and stating whether or not Laramie elects to drill a substitute well. This notice shall be given while the drilling rig or completion unit is on the well, or within 10 days after its release. Failure to timely make such an election shall be deemed to be an election by Laramie not to drill a substitute well.

(b)

If Laramie elects not to drill a substitute well, or if Laramie has waived its right to do so as provided above, Dejour/Brownstone shall advise Laramie within 10 days after receipt of Laramie's notice, or within 72 hours if the rig is on location, whether or not Dejour/Brownstone elects to take over the well as provided in paragraph below. If Dejour/Brownstone elects not to take over the well or fails to make an election, Laramie shall promptly plug and abandon the well and restore the surface.

(c)

Any substitute well drilled by Laramie shall be spudded within 30 days after Laramie's discontinuance of drilling the well for which it is a substitute and the well shall be drilled, tested, and completed or plugged and abandoned in accordance with all of the requirements specified for the original Earning Well and with the same consequences. The substitute well shall be considered as the applicable Earning Well for all purposes of this Agreement.

5.

TAKEOVER OF WELLS

5.1.

If Laramie shall determine that any Earning Well is incapable of producing or that the Earning Well should be plugged and abandoned, Laramie shall promptly notify Dejour/Brownstone by telephone, to be confirmed in writing, of such determination and furnish copies of all logs, any production information, and any reservoir analysis to Dejour/Brownstone. Should Dejour/Brownstone agree with this determination (and a failure to respond in the manner and within the time indicated below shall constitute agreement), Laramie shall proceed at its sole cost, risk and expense, to plug and abandon the Earning Well in accordance with applicable state or federal laws and shall level the ground around the location and clear and clean the premises to the satisfaction of the surface owners and surface lessees. Should Dejour/Brownstone disagree with this determination, it shall have Forty Eight (48) hours following the receipt of the logs, excluding nonworking days in Dejour/Brownstone's office, within which to advise Laramie by telephone, to be confirmed in writing, of its decision to continue operations on said well, and, if this is done, all further operations on the Earning Well, including, if indicated, the plugging and abandonment thereof, shall be conducted entirely by Dejour/Brownstone, at its sole cost, risk and expense. If Dejour/Brownstone shall elect to continue operations on said well, Laramie shall be deemed to have relinquished to Dejour/Brownstone all of its right, title and interest in and to the Earning Well, the material and equipment therein and used or acquired in connection therewith which Dejour/Brownstone retains for conducting operations hereunder; however, Laramie shall retain full responsibility for and shall cleanup any and all facilities and pits and dispose of all mud, used during operations prior to Dejour/Brownstone's takeover of operations, unless Dejour/Brownstone specifically requests, in writing, that such mud, pits and/or facilities are to be left for Dejour/Brownstone's use following its takeover of operations, in which case Dejour/Brownstone shall assume all liability therefor. If Dejour/Brownstone shall elect to continue operations on said well, Laramie will promptly execute such documents as may be necessary to transfer the operatorship of the well to Dejour. Notwithstanding the above, the Earning Well shall be considered, solely for the purpose of calculating the time limits in Section 3.1, to have been completed by Laramie on the date that Dejour/Brownstone elected to continue operations on said well. If Dejour/Brownstone shall elect to continue operations, as above provided, it shall reimburse Laramie for the salvage value of all material and equipment in the Earning Well used and acquired in connection therewith which are retained by Dej our/Browns tone hereunder.

6.

ASSIGNMENTS AND EARNED ACREAGE.

6.1.

Net Revenue Interest Assigned and Reserved Overriding Royalty Interest. In each assignment by Dejour/Brownstone hereunder, Dejour/Brownstone shall convey Laramie a net revenue interest of not less than 80% in each Lease. If, prior to the assignment, Dejour/Brownstone's net revenue interest therein is greater than 80%, then Dejour/Brownstone shall reserve an overriding royalty interest in production from the assigned Leases equal to the difference between the net revenue interest prior to the assignment and 80%. Such overriding royalty shall be calculated on the same basis, and subject to the same adjustments or deductions, as is the landowner's royalty for the Lease on which the overriding royalty applies.

 6.2. 

Scope of Assignment. Any assignment of interest earned by Laramie shall be subject to all of the provisions of this Agreement and shall be in form attached hereto as Exhibit E. The assignments shall be made with warranty of title against claims arising by, through or under Dejour/Brownstone, but not otherwise. In addition, if any of the Leases are federal, state, or other governmental entity leases, then Dejour/Brownstone shall provide Laramie with executed forms of assignment required by such entity. No Assignment shall be depth limited unless the Lease is depth limited.

6.3. 

Earned Acreage. Whenever an assignment relates to the "Earned Acreage" for the applicable Earning Well, the term "Earned Acreage" means 1,800 acres (including the 640 acre governmental section on which the applicable Earning Well is located plus additional contiguous or cornering acreage selected by Laramie such that the total acreage assigned equals 1,800 acres), which is the acreage that the Parties anticipate will be necessary to attribute to the Earning Well.

6.4. 

Option Interests. If Laramie drills 4 Earning Wells, completed as wells capable of producing oil and/or gas in Paying Quantities, during the Drilling Term or extended Drilling Term as set forth in Section 3.3, and pays for the costs thereof in accordance with Section 7, below, then Laramie shall be entitled to exercise an option to acquire an undivided 50% of Dejour/Brownstone's right, title and interest in and to all or part of the Farmout Lands and Leases in which Laramie has not previously earned any interests hereunder by notifying Dejour/Brownstone, identifying the Farmout Lands and Leases as to which it wishes to exercise the option and tendering to Dejour/Brownstone good funds equal to $25 per net mineral acre for such option acreage within 60 days of the date that the fourth Earning Well is determined to be capable of producing oil and/or gas in Paying Quantities,. Upon receipt of such good funds, Dejour/Brownstone shall promptly execute an assignment, as provided in Section 6.2, to Laramie.

7. 

COSTS OF EARNING WELLS.

 

7.1. 

For the Initial Earning Well and all Additional Earning Wells, Laramie shall pay for all costs and liabilities incurred to the date of first production, including all costs incurred to drill, complete and equip the wells to the date of first production or if Laramie elects to plug and abandon an Earning Well without completing it as a producer and Dejour/Brownstone did not elect under Section 5 to take over such Earning Well, then Laramie shall pay for all costs to plug and abandon the Earning Well(including any restoration or remediation obligations) including, without limitation, any claims arising therefrom, and shall indemnify and hold Dejour/Brownstone harmless therefrom. Laramie shall allow no liens (other than inchoate liens) to be imposed on the Leases, other than mortgage liens applicable to Laramie's interest in the Leases or liens which Laramie is contesting in good faith and with due diligence. Thereafter, pursuant to the Operating Agreement described in Section 9, below, Laramie and Dejour/Brownstone shall each be responsible for their respective working interest ownership share of the costs of such wells, including, without limitation, operating expenses, reworking and recompletion expenses, and the costs to plug and abandon such wells.

8.

RELINQUISHMENT OF EARNING RIGHTS AND DEFAULT BY LARAMIE.

 

8.1. 

At any time after Laramie has earned interests in any Earned Acreage hereunder, but before Laramie has earned interest in all of the Farmout Lands, Laramie may notify Dejour/Brownstone that Laramie relinquishes its right to earn any additional interests hereunder. Such election shall not affect any interests already earned hereunder. Upon such election, all subsequent wells drilled on the Earned Acreage shall be subject to the Operating Agreement described in Article 9, below.

8.2. 

Failure to Drill. Should Laramie fail to commence the Initial Earning Well, or any Additional Earning Well within the applicable time period set forth in this Agreement, (taking into consideration Article 4), then the sole remedy of Dejour/Brownstone, and the sole liability of Laramie for such failure shall be that Laramie shall forfeit its right to drill any additional Earning Wells or earn any additional acreage but shall retain any Earned Acreage or Farmout Lands previously assigned. Subject to Sections 7.1 and 14.2, Laramie shall have no liability to Dejour/Brownstone resulting from a Failure to Drill other than the loss of its right to earn additional Farmout Lands and Leases. Laramie will retain any obligations to Dejour/Brownstone that have accrued during activities undertaken under this Agreement. Upon Failure to Drill and loss of rights, all subsequent wells drilled on the Earned Acreage or Farmout Lands previously assigned to Laramie shall be subject to the Operating Agreement described in Article 9, below.

9.

OPERATING AGREEMENT.

9.1. 

The Operating Agreement attached as Exhibit C to this Agreement, is deemed to have been executed at the time this Agreement is executed. The Operating Agreement is effective upon execution of this Agreement, subject to the earning obligations and termination provisions set out elsewhere in this Agreement. When (a) Dejour/Brownstone and Laramie become co-owners of working interest in any of the Farmout Lands, and (b) Dejour/Brownstone become responsible for its working interest ownership share of costs and expenses, then the Operating Agreement is deemed modified so that a separate Operating Agreement applies to the Earned Acreage, as its Contract Area, effective on the date of first production and is deemed executed at that time. As to the Option Interests under Section 6.4, the Operating Agreement applies to such acreage, subject to the earning obligations and termination provisions set out elsewhere in this Agreement, and its Contract Area is modified to cover the acreage as to which the option was exercised and to exclude the Contract Areas previously created as to each separate Earned Acreage. The Operating Agreement shall govern all operations on jointly-owned Farmout Lands, but shall be subject to this Agreement so that in the event of any conflict between the Operating Agreement and this Agreement, this Agreement shall be the governing Agreement.

10.

DELAY RENTALS.

10.1.

Until a Lease included in the Farmout Lands is assigned in whole or in part to Laramie, Dejour/Brownstone shall use its reasonable efforts to pay all delay rentals required to maintain the lease(s) in effect. After a Lease has been assigned in whole or in part to Laramie, the responsibility for making delay rental payments shall belong to Laramie, and within 15 days after receipt of an invoice from Laramie, Dejour/Brownstone shall promptly reimburse Laramie for Dejour/Brownstone's share of the delay rentals paid. Each Party shall not be liable to the other Party in damages or otherwise for failure to properly pay any rentals and shut-in payments where such failure was due to clerical error, inadvertence or mistake. Each Party shall provide evidence to the other Party at least 30 days in advance of any due date for delay rentals required to maintain a Lease in effect.

11.

TITLES AND ACCESS TO FARMOUT LANDS.

11.1.

Title Information. On written request by Laramie, Dejour/Brownstone shall make available to Laramie copies of all title opinions, abstracts of title and other title information in Dejour/Brownstone's possession with respect to the Farmout Lands; provided, however, furnishing such items shall not be construed as a warranty or representation by Dejour/Brownstone of title or ownership. Any curative work or additional title examination required by Laramie shall be conducted by Laramie at its sole cost and risk. Laramie shall provide Dejour/Brownstone with a copy of all curative work and title information resulting from any additional title examinations conducted by Laramie

11.2.

 Access by Laramie and Deiour/Brownstone. To the extent Dejour/Brownstone can authorize it, Laramie and its contractors and subcontractors shall be entitled to exercise all of Dejour/Brownstone's rights of ingress and egress pertaining to the Farmout Lands for the purpose of conducting operations. Dejour/Brownstone shall advise Laramie of any unusual limitations or restrictions on ingress or egress, known to Dejour/Brownstone, and Laramie and its contractors and subcontractors shall comply with such limitations or restrictions. During Laramie's operations Dejour/Brownstone and Dejour/Brownstone's representatives shall have access at all times to the well-site, including the derrick floor, for the purpose of observation, at Dejour/Brownstone's sole risk and liability.

12.

AREA OF MUTUAL INTEREST.

12.1

AMI. Upon the execution hereof, the Parties shall establish the Area of Mutual Interest covering the lands depicted on the attached Exhibit D, ("AMI"). The term of the AMI shall continue through the Drilling Term. During the term of the AMI, if an oil or gas lease, or other interest within the AMI is acquired by one Party (the "Acquiring Party"), the Acquiring Party shall offer the other Parties ("Non-acquiring Parties") their proportionate share of such lease or interest (including all obligations associated with such lease or interest) as set forth below.

12.2 

The Acquiring Party shall offer the Non-Acquiring Parties its respective interest, being a proportionate 21.471% to Dejour, 8.529% to Brownstone and the remainder to Laramie within 30 business days of the date of the acquisition.

(a)

Such offers shall be made by written notice to the Non-Acquiring Parties and shall detail the leases or interests so acquired, the per acre costs of the leases and interests and all other information, terms and conditions material to the acquisition so that the Non-Acquiring Parties may evaluate the acquisition.

(b)

If an Non-Acquiring Party accepts such offer in writing within 30 business days after receipt of the Acquiring Party's offer and pays the proportionate share of the acquisition costs within that 30-day period, the ownership of the leases offered shall, effective as of the date of the acquisition of such leases by the Acquiring Party, be acquired in the proportion of the Parties' interests. If such payment is not received within that 30-day period, the Non-Acquiring Party shall be deemed not to have accepted the Acquiring Party's offer.

(c)

All assignments of any leases or interests acquired by the Acquiring Party shall be made to the Non-Acquiring Parties electing to participate in the acquisition within 30 days of acceptance of the offers by the Non- Acquiring Party.

(d)

If the acquisition covers lands both within and outside the AMI boundaries, then only that portion of the acquisition lying within the AMI boundary shall be offered to the Non-Acquiring Parties. The Acquiring Party's cost is that portion of the acquisition within the AMI as it bears to the total acquisition cost on a net mineral acreage basis.

(e)

The Operating Agreement attached as Exhibit C to this Agreement shall be amended to include all jointly owned lands acquired within the AMI.

13.

 CONDUCT OF OPERATIONS.

13.1.

Performance Standards. All of Laramie's operations shall be conducted in a diligent, good and workmanlike manner consistent with good oil field practice and in accordance with all applicable federal, state and local laws, regulations and orders and shall be in accordance with and subject to the limitations set forth in the Operating Agreement, as applicable. Upon Dejour/Brownstone becoming responsible for its working ownership share of costs and expenses for any well, Laramie's liability for operations shall be as set out in the Operating Agreement.

13.2.

Well Information. During Laramie's operations, Laramie shall promptly furnish to each of Dejour and Brownstone, at no cost to Dejour/Brownstone, the following information pertaining to the Initial Earning Well and any Additional Earning Well drilled by Laramie on the Farmout Lands:

(a)

Written notice of the time and date on which the well is spudded.

(b)

A daily drilling report showing all formations encountered and the depths at which those formations were encountered during the immediately preceding day, and the well operations conducted during the immediately preceding day.

(c)

Written reports on all cuttings and cores taken in the well, along with representative samples of the cuttings and cores if requested by Dejour or Brownstone.

(d)

Reasonable advance notice of any production tests, pressure tests, cores and logs to be run in the well so that Dejour/Brownstone may witness the operations. Written report of such operations, when they are completed, shall be furnished to Dejour and to Brownstone.

(e)

Copies of all reports and other forms filed with any federal, state or local governmental authority concerning the well.

(f)

A complete copy of the driller's log and a complete copy of all electrical logs (if such logs are run), on a scale of not less than 2 inches per 100 feet, from the bottom of the surface casing to the total depth of the well.

(g)

Copies of all fluid analyses and other reports or information obtained with respect to the well.

(h)

If any Earning Well is completed as a well capable of production, Laramie shall, within 60 days of that completion, furnish Dejour/Brownstone with a full and detailed statement of all costs of drilling, equipping and completing that well.

13.3. 

Confidentiality. Dejour/Brownstone shall not divulge any information obtained from Laramie's operations under the terms of this Agreement to any person or entity other than any (1) representative, accountant, potential investor or investor, potential lender or lender, consultant, or officer or employee of Dejour/Brownstone that agrees that the information obtained from Laramie's operations hereunder are proprietary and are, in many instances, trade secrets and that such person or entity shall not disclose such information to any other person or entity except, (i) to the extent the information was already in the public domain, (ii) to any party owning an interest in the well, and/or (iii) to the appropriate governmental authority(s) as necessary or as required by applicable security laws or as may be required to be produced in legal proceeding; provided however, no public release of information may be made in compliance with applicable securities law, unless the releasing person has given the other Party prior written notice of such disclosure. Any Party desiring to make a press release or other public announcement concerning this Agreement or operations on the Leases shall allow the other Parties to review and comment on the proposed language prior to the release of the press release of public announcement. The targeted formation will not be disclosed until after an Earning Well has been drilled.

14. 

LIABILITY AND INSURANCE.

14.1. 

Relationship of Parties. In performing its obligations, Laramie shall be an independent contractor and not the agent of Dejour/Brownstone. Nothing in this Agreement shall be construed as creating a partnership or otherwise establishing joint or collective liability, or an agency relationship. If, for federal income tax purposes, this agreement and the operations hereunder are regarded as a partnership, and if the parties have not otherwise agreed to form a tax partnership between them, each party thereby affected elects to be excluded from the application of all of the provisions of Subchapter "K," Chapter 1, Subtitle "A," of the Internal Revenue Code of 1986, as amended ("Code"), as permitted and authorized by Section 761 of the Code and the regulations promulgated thereunder. Laramie is authorized and directed to execute on behalf of each party hereby affected such evidence of this election as may be required by the Secretary of the Treasury of the United States or the Federal Internal Revenue Service, including specifically, but not by way of limitation, all of the returns, statements, and the data required by Treasury Regulation §1.761.

14.2. 

Laramie's Indemnity. Laramie shall indemnify and hold harmless Dejour and Brownstone and its employees and agents from all claims, demands, losses, and liabilities of every kind and character arising out of Laramie's performance or failure to perform under this Agreement, or the acts of or failure to act by Laramie's employees, agents contractors and subcontractors; all to the extent prior to the conduct of operations under the Operating Agreement, at which time the provisions of the Operating Agreement shall govern the liability of the Parties, or claims by investors of Laramie with respect to operations under this Agreement.

14.3. 

Required Insurance Coverage. At all times while Laramie has the right to earn an assignment of interest or is conducting operations on the Farmout Lands, Laramie shall maintain, at its sole cost, the insurance coverages set forth in the Operating Agreement, which insurance shall designate Dejour and Brownstone as additional, named insureds. Laramie shall provide, prior to, and as a condition to, the commencement of surface operations with respect to any Earning Well, a copy of such insurance certificate to Dejour and to Brownstone.

15.

ASSIGNMENTS.

15.1. 

This Agreement shall be binding on the respective heirs, successors and assigns of Dejour/Brownstone and Laramie. Dejour/Brownstone may freely assign its interest at any time, provided such is made subject to terms of this Agreement, but Laramie shall not assign or encumber its interest in this Agreement without the prior written consent of Dejour/Brownstone, which consent shall not be unreasonably withheld. When a permitted assignment or encumbrance is made, Laramie shall promptly furnish a copy to Dejour/Brownstone. The foregoing shall not act to restrict any assignments by Laramie of Leases assigned to Laramie pursuant to this Agreement.

16.

TAG-ALONG RIGHTS.

16.1. 

Tag-Along Rights. There is no preferential purchase right in this Farmout Agreement nor in the Operating Agreement, attached as Exhibit C. However, in the event that Laramie, its successors and assigns, should sell, assign, farmout, or otherwise dispose of all or part of the rights, interests, assets and properties that are governed by this Farmout Agreement, including but not limited to the Leases (whether earned or not) and any and all wells, facilities and production equipment located thereon (the "Contract Interests") owned by Laramie (sometimes called the "Selling Party"), the following shall apply:

(a)

Subject to the provisions of Section 15.1, Laramie will cause the purchaser of the its Contract Interests to offer to acquire that portion of the Contract Interests of Dejour/Brownstone and their successors and assigns (the "Tag-Along Parties") equal to the ratio of the Contract Interests sold or to be sold by Laramie bears to the sum of the Contract Interests of all the Parties (for example, if the Selling Party desires to sell 50% of the total Contract Interests in the Farmout Area, the Selling Party would be obligated to cause the purchaser of the Selling Party's Contract Interests to offer to acquire 50% of the Contract Interests of the Tag-Along Parties in the Farmout Area) on the same and identical terms and conditions and at the same time;

(b)

Should the Selling Party's Contract Interests be only a portion of a larger transaction by the Selling Party, then the allocation of value given to the Selling Party's Contract Interests by the Selling Party or the third party purchaser shall be the basis for establishing the value of the Tag-Along Parties' Contract Interests, and the value of, and other property or asset information, of the Selling Party shall be confidential and not disclosed to the Tag-Along Parties.

(c)

Subject to appropriate confidentiality, the Selling Party will keep the Tag- Along Parties reasonably apprised of the status of negotiations with the proposed purchaser, but the offer, if any, for the Tag-Along Parties' Contract Interests, will be made by the proposed purchaser. If a Tag- Along Party receives a binding offer from the proposed purchaser, such Tag-Along Party will have 5 business days to consider the offer and either accept it or reject it. If such Tag-Along Party fails to accept or reject the offer within such period, it will be deemed to have rejected the offer.

(d)

The rights of the Tag-Along Party, under this Section 16.1, shall continue to apply as follows:

a.

If the Selling Party fails to consummate the transaction on the basis on which the offer was made, this Section 16.1 shall apply to any future offer; and

(e)

The provisions of this Section 16.1 shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

16.2. 

The provisions of Section 16.1 shall not apply in cases where any party wishes to mortgage its Contract Interests, or to transfer title to its Contract Interests to its mortgagee in lieu of or pursuant to a foreclosure of a mortgage of its Contract Interests or to dispose of its Contract Interests by transfer of its Contract Interests to, or merger, reorganization or consolidation with, a subsidiary or parent company or any company or entity in which such party owns a majority of the ownership or beneficial interests.

16.3. 

The term "Farmout Area" means that portion of the Farmout Lands included in the geographical area covered by the third party offer, or proposed sale or transfer which triggers this tag-along right.

17.

FORCE MAJEURE.

If a Party is rendered unable, wholly or in part, by Force Majeure, to carry out its obligations or rights under this Agreement, other than the obligation to make any payments due hereunder, the obligations of that Party, so far as they are affected by Force Majeure, shall be suspended from the inception and during the continuance of the inability, and the cause of the Force Majeure, as far as possible, shall be remedied with commercially reasonable diligence. The Party affected by Force Majeure shall provide the other Party with written notice of the Force Majeure event, with reasonably full detail of the Force Majeure within a reasonable time after the affected Party learns of the occurrence of the Force Majeure event. The settlement of strikes, lockouts and other labor difficulty shall be entirely within the discretion of the Party having the difficulty and nothing herein shall require the settlement of strikes, lockouts, or other labor difficulty. As used herein, "Force Majeure" means any cause or condition not within the reasonable control of the Party claiming suspension and which, by the exercise of reasonable diligence, such Party is unable to prevent or overcome, and without limiting the generality of the foregoing, such shall include delays or inabilities to obtain requisite permits to conduct the operations contemplated hereunder, but excluding any cause or condition due to economic or financial conditions.

18.

NOTICES AND WELL INFORMATION.

All well data, information and notices to be given to Dejour/Brownstone as provided in this Agreement, and all other notices from one party to the other, shall be given as follows:

	Laramie Energy H, LLC 

Attention: Mark R. Petry 

1512 Larimer Street, Suite 1000

Denver, Colorado 80202 

Phone: 303 339 4408

Fax: 303 339 4399

	Dejour Energy (USA) Corp. 

Attention: Harrison F. Blacker 

1401 17th Street, Suite 300 

Denver, Colorado 80202

Phone: 303 296 3535

Fax: 303 296 3888

Brownstone Ventures (US), Inc. 

Attention: Richard Patricio

130 King Street West, Suite 2500 

Toronto, Ontario, Canada M5X 1A9 

Phone: 416 941 9600

Fax: 416 941 1090

Laramie or Dejour/Brownstone may change their address at any time by furnishing a written notice of change of address to the other Party.

19. 

MISCELLANEOUS.

19.1. 

Governing Law. This Agreement shall be construed in accordance with the laws of the State of Colorado without regard to choice of law principles.

19.2.

 Entire Agreement. This Agreement, together with all Exhibits hereto, constitutes the entire agreement between the Parties as to the subject matter herein and supersedes all prior negotiations or agreements pertaining to such.

19.3. 

Relationship of the Parties. With respect to this Agreement, each Party shall not be considered the agent, partner, employee or fiduciary of any other Party, nor shall this Agreement be construed as creating a mining partnership, joint venture or other partnership or association. Each Party shall be responsible only for its obligations as provided in this Agreement and shall be liable only for its proportionate share of the costs of performing its obligations under this Agreement. All of the obligations and liabilities under this Agreement shall be several and not joint or collective. The Parties elect not to be treated as a partnership under the Internal Revenue Code of 1986 or under any Income Tax Laws of the state in which the lands covered hereby are located, and specifically elect to be excluded from all such provisions hereof.

19.4. 

Compliance with Laws. This Agreement and all operations hereunder shall be subject to all valid and applicable Federal and State laws, and all valid and applicable orders, laws, rules and regulations of any Federal or State authority having jurisdiction, but nothing contained herein shall be construed as a waiver of any right to question or contest any such law, order, rule or regulation in any forum having jurisdiction within the premises.

19.5. 

Headings. The heading of the several paragraphs and/or sections of this Agreement are for convenience only and shall not control or affect the meaning or construction of the terms and provisions hereof.

19.6. 

Further Assurances. The Parties agree to execute, acknowledge and deliver any additional instruments, agreements or other documents and to do any other acts and things which may by necessary to more fully and effectively accomplish the intent of the Parties as set forth in this Agreement.

19.7. 

Counterparts/Facsimile Signatures. This Agreement may be executed by the Parties in any number of counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same instrument. Facsimile signatures are considered binding.

19.8. 

Exhibits. The Exhibits referred to in this Agreement are hereby incorporated in this Agreement by reference and constitute a part of this Agreement.

19.9. 

Costs and Expenses. All fees, costs and expenses incurred by a Party in negotiating this Agreement or in consummating the transaction shall be paid by the Party incurring the same, including, without limitation, engineering, land, title, legal and accounting fees, costs and expenses.

EXHIBIT A

Attached to and made a part of that certain Farmout Agreement

dated November 14, 2008, by and between

Laramie Energy H, LLC, and Dejour Energy (USA) Corp.,

and Brownstone Ventures (US), Inc.

DESCRIPTION OF LANDS COVERED BY THIS AGREEMENT

("FARMOUT LANDS"): 

TOWNSHIP 3 NORTH, RANGE 103 WEST, 6TH P.M. 

SECTION 13: S2SW, SE

SECTION 14: S2S2

SECTION 15: NENE, W2E2, W2, SESE 

SECTION 17: SE

SECTION 18: LOT 1, 2, E2NW 

SECTION 19: LOT 1-4, E2, E2W2 

SECTION 20• ALL

ALL OF SECTIONS 21 THRU 29 

SECTION 30: LOT 1-4, E2, E2W2 

SECTION 31: LOT 1-4, E2, E2W2 

ALL OF SECTIONS 32 THRU 36

TOWNSHIP 3 NORTH, RANGE 104 WEST, 6TH P.M.

SECTION 22: LOT 1-4 

SECTION 23: ALL

SECTION 24: N2, NESE

SECTION 25: SWNE, SW, N2SE, SESE

SECTION 26: ALL

SECTION 27: LOT 1-4 SECTION 34: LOT 1-4 SECTION 35: ALL

RIO BLANCO COUNTY, COLORADO

TOWNSHIP 3 NORTH, RANGE 102 WEST, 6TH P.M.

SECTION 7: LOT 1, 2, E2NW, SE

SECTION 8: SE, S2SW, NESW 

ALL OF SECTIONS 9 THRU 11 

SECTION 12: NWNW, S2N2, S/2 

ALL OF SECTION 13 THRU 15 

SECTION 17: ALL

SECTION 18: LOT 3, 4, E2SW, E2

MOFFAT COUNTY, COLORADO

EXHIBIT B

Attached to and made a part of that certain Farmout Agreement

dated November 14, 2008, by and between

Laramie Energy II, LLC, and Dejour Energy (USA) Corp.,

and Brownstone Ventures (US), Inc.

LEASE SCHEDULE DESCRIBING OIL AND GAS LEASES

SUBJECT TO THIS AGREEMENT

(THE "LEASES")

	Township

	Range

	Section

	Lenal Description

	Lease Name

	Gross Acres

	Net Acres

	WI

	3N

	103W

	13

	S2SW, SE;

	COC67403

	960.00

	960.00

	100.00%

	 	 	14

	S2S2;

	 	 	 	 
	 	 	15

	NENE, W2E2, W2,SESE;

	 	 	 	 
	 	 	 	Moffat County, CO

	 	 	 	 
	3N

	103W

	17

	SE;

	COC67404

	1,590.56

	1,590.56

	100.00%

	 	 	18

	Lot 1,2;

	 	 	 	 
	 	 	18

	E2NW;

	 	 	 	 
	 	 	19

	Lot 1-4;

	 	 	 	 
	 	 	19

	E2,E2W2;

	 	 	 	 
	 	 	20

	All;

	 	 	 	 
	 	 	 	Moffat & Rio Blanco Counties, CO

	 	 	 	 
	3N

	103W

	21

	All;

	COC67405

	2,560.00

	2,560.00

	100.00%

	 	 	22

	All;

	 	 	 	 
	 	 	23

	All;

	 	 	 	 
	 	 	24

	All;

	 	 	 	 
	 	 	 	Rio Blanco County, CO

	 	 	 	 
	3N

	103W

	25

	All;

	COC67406

	2,560.00

	2,560.00

	100.00%

	 	 	26

	All;

	 	 	 	 
	 	 	27

	All;

	 	 	 	 
	 	 	28:

	All;

	 	 	 	 
	 	 	 	Rio Blanco County, CO

	 	 	 	 
	3N

	103W

	29

	All;

	COC67407

	2,550.56

	2,550.56

	100.00%

	 	 	30

	Lot 1-4;

	 	 	 	 
	 	 	30

	E2, E2W2;

	 	 	 	 
	 	 	31

	Lot 1-4;

	 	 	 	 
	 	 	31

	E2,E2W2;

	 	 	 	 
	 	 	32

	All;

	 	 	 	 
	 	 	 	Rio Blanco County, CO

	 	 	 	 
	3N

	103W

	33

	All;

	0067408

	2,560.00

	2,560.00

	100.00%

	 	 	34

	All;

	 	 	 	 
	 	 	35

	All;

	 	 	 	 
	 	 	36

	All;

	 	 	 	 
	 	 	 	Rio Blanco County, CO

	 	 	 	 
	3N

	104W

	22

	Lot 1-4;

	COC67422

	1,163.88

	1,163.88

	100.00%

	 	 	23

	All;

	 	 	 	 
	 	 	24

	N2, NESE;

	 	 	 	 
	 	 	 	Rio Blanco County, CO

	 	 	 	 
	3N

	104W

	25

	SWNE, SW, N2SE, SESE;

	COC67423

	1,926.56

	1,926.56

	100.00%

	 	 	26

	All;

	 	 	 	 
	 	 	27

	Lot 1-4;

	 	 	 	 
	 	 	34

	Lot 1-4;

	 	 	 	 
	 	 	35

	All;

	 	 	 	 
	 	 	 	Rio Blanco, CO

	 	 	 	 
	3N

	102W

	7

	Lot I, 2;

	COC69433

	1,710.37

	1,710.37

	100.00%

	 	 	7

	E2NW, SE;

	 	 	 	 
	 	 	8

	SE, S2SW, NESW;

	 	 	 	 
	 	 	17

	All;

	 	 	 	 
	 	 	18

	Lot 3, 4;

	 	 	 	 
	 	 	18

	E2SW, E2;

	 	 	 	 
	 	 	 	Moffat County, CO

	 	 	 	 
	3N

	102W

	9

	All;

	COC69434

	1,920.00

	1,920.00

	100.00%

	 	 	10

	All;

	 	 	 	 
	 	 	15

	All;

	 	 	 	 
	 	 	 	Moffat County, CO

	 	 	 	 
	3N

	102W

	11

	All;

	C0C69435

	1,280.00

	1,280.00

	100.00%

	 	 	14

	All;

	 	 	 	 
	 	 	 	Moffat County, CO

	 	 	 	 
	3N

	102W

	12

	NWNW, S2N2, S2

	C0C69436

	1,160.00

	1,160.00

	100.00%

	 	 	13

	All;

	 	 	 	 
	 	 	 	Moffat County, CO

	 	 	 	 
	 	 	 	 	 	 	 	 
	TOTALS

	 	 	 	 	21,941.93

	21,941.93

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00160-of-00352.parquet"}]]