Document:

Exhibit 10.1

 

NEITHER THE ISSUANCE NOR SALE OF THE SECURITIES
REPRESENTED BY THIS NOTE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT.

 

	Principal Amount: $100,001.00	Issue Date: January 19, 2022

 

 

	
     

    PROMISSORY NOTE

     

  

FOR VALUE RECEIVED, VPR
Brands, LP, a Delaware limited partnership (the “Company”), hereby promises to pay to the order of Kevin Frija or registered
assigns (the “Holder”) on January 19th, 2023 (the “Maturity Date”), the principal amount set forth above (the
“Principal Amount”), and to pay interest on the outstanding Principal Amount at the rate of Twenty Four percent (24%) per
annum (the “Note”). Interest shall commence accruing on the date hereof (the “Issue Date”), computed on the basis
of a 365-day year and the actual number of days elapsed, provided that any payment otherwise due on a Saturday, Sunday or legal Bank holiday
may be paid on the following business day. All payments due hereunder, shall be made in lawful money of the United States of America.

 

1.          Transfers
of Note to Comply with the 1933 Act. The Holder agrees that this Note may not be sold, transferred,
pledged, hypothecated or otherwise disposed of except as follows:  (a) to a person whom the Note may legally be transferred
without registration and without delivery of a current prospectus under the 1933 Act with respect thereto and then only against receipt
of an agreement of such person to comply with the provisions of this Section 1 with respect to any resale or other disposition of the
Note; or (b) to any person upon delivery of a prospectus then meeting the requirements of the 1933 Act relating to such securities and
the offering thereof for such sale or disposition, and thereafter to all successive assignees.

 

2.          Right
of Prepayment. The Company may repay any amount of the Note at any time. On each business
day, the Holder may deduct one (1) ACH payment from the bank account of the Borrower (as specified on Exhibit “A” of this
Note) in the amount of $500.00 per business day until such time as the Borrower has paid an amount equal to the principal and accrued
interest as set forth in the Note. Each such payment shall be applied first to accrued and unpaid interest and the balance shall be applied
towards the reduction of the principal amount due under this Note.

 

3.          Representations
and Warranties.  The Company represents and warrants to the Holder that:

 

		(a)	such party is duly organized, validly existing and in good standing (if applicable) under the laws of
the jurisdiction of its organization;

 

		(b)	such party has authority to own its property and assets and to carry on its business as now conducted,
except, in each case, where the failure to do so, or so possess, individually or in the aggregate would not reasonably be expected to
result in a material adverse effect;

 

		(c)	such party has all requisite organizational power and authority to execute and deliver and perform all
its obligations under this Note;

 

		(d)	such party is qualified to do business in, and is in good standing (where such concept exists) in, every
jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such

    	 

    	 

    

qualification necessary, except where the failure to be so qualified
or in good standing individually or in the aggregate would not reasonably be expected to result in a material adverse effect;

 

		(e)	the transactions contemplated hereby is within such party’s organizational powers and have been
duly authorized by all necessary corporate or limited liability company action;

 

		(f)	this Note has been duly executed and delivered by such party and constitutes a legal, valid and binding
obligation of such party, enforceable in accordance with its terms; and

 

		(g)	the transactions to be entered into and contemplated by this Note (a) do not require any consent or
approval of, registration or filing with, or any other action by, any governmental authority except for the Company’s disclosure
obligations under federal securities laws, (b) will not (i) violate any applicable law or (ii) the organizational documents, bylaws, charter,
operating agreement, certificate of formation or certificate of incorporation of such party, (c) will not violate or result in a
default under any indenture or any other agreement, instrument or other evidence of indebtedness, and (d) will not result in the
creation or imposition of any lien on any asset of such party.

 

4.          Remedies
Upon Default.  In the event that the Company defaults on its payment obligations under
this Note, the Holder may proceed to protect and enforce its rights and remedies under this Note by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any covenant or agreement contained in this Note and proceed to enforce
the payment thereof or any other legal or equitable right of the Holder.

 

5.          Cancellation
of Note. Upon the repayment by the Company of all of its obligations hereunder to the Holder,
including, without limitation, the principal amount of this Note, plus accrued but unpaid interest, the indebtedness evidenced hereby
shall be deemed canceled and paid in full.  Payments received by the Holder hereunder shall be applied first against interest
accrued on this Note, and next in reduction of the outstanding principal balance of this Note.

 

6.          Severability.  If
any provision of this Note is, for any reason, invalid or unenforceable, the remaining provisions of this Note will nevertheless be valid
and enforceable and will remain in full force and effect.  Any provision of this Note that is held invalid or unenforceable
by a court of competent jurisdiction will be deemed modified to the extent necessary to make it valid and enforceable and as so modified
will remain in full force and effect.

 

7.          Amendment
and Waiver.  This Note, or any provision of this Note, may only be amended or waived
if set forth in a writing executed by the Company and Holder.  The waiver by Holder of a breach of any provision of this Note
shall not operate or be construed as a waiver of any other breach.

 

8.          Successors.  Except
as otherwise provided herein, this Note shall bind and inure to the benefit of and be enforceable by the Holder and its permitted successors
and assigns.

 

9.          Assignment.  This
Note shall not be directly or indirectly assignable or delegable by the Company or the Holder, except as provided in a writing executed
by the Company and Holder.

 

10.      Further
Assurances.  The Holder will execute all documents and take such other actions as the
Company may reasonably request in order to consummate the transactions provided for herein and to accomplish the purposes of this Note.

 

11.      Notices,
Consents, etc.  Any notices, consents, waivers or other communications required or
permitted to be given under the terms hereof must be in writing and will be deemed to have been delivered:  (i) upon receipt,
when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one (1) business day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications
shall be:

 

	If to Company:	
    VPR BRANDS, LP

    3001 Griffin Road

    Fort Lauderdale, FL 33312

    	 

    	 

    

 

	 	
    Attention: Kevin Frija

    Telephone: 954.715.7001

    Facsimile: Kevin.Frija@vprbrands.com

	 	 
	With a Copy to (which shall not constitute notice):	
     

    Anthony LG, PLLC

    Attention: Laura E. Anthony, Esq.

     

	 	 
	If to the Holder:	
    Kevin Frija

    Attention:

    Telephone:

    Facsimile: ______________________

	 	 

or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three
(3) trading days prior to the effectiveness of such change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile machine containing
the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

12.      Governing
Law.  Except in the case of the Jurisdiction provisions of Section 13 below, this Note
shall be delivered and accepted in and shall be deemed to be contracts made under and governed by the internal laws of the State of Delaware,
and for all purposes all questions concerning the construction, validity and interpretation of this Note and any and all disputes or controversies
arising out of the subject matter hereof (whether by contract, tort or otherwise) shall be governed by and construed in accordance with
the domestic laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision (whether of the State
of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.

 

13.      Jurisdiction.  EACH
PARTY HERETO AGREES THAT JURISDICTION AND VENUE IN ANY ACTION BROUGHT BY THE HOLDER PURSUANT TO THIS NOTE SHALL PROPERLY (BUT NOT EXCLUSIVELY)
LIE IN ANY FEDERAL OR STATE COURT LOCATED IN BROWARD COUNTY, FLORIDA.  BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY
HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH COURTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY WITH RESPECT TO SUCH ACTION.  EACH
PARTY HERETO IRREVOCABLY AGREES THAT VENUE WOULD BE PROPER IN SUCH COURT, AND HEREBY WAIVES ANY OBJECTION THAT SUCH COURT IS AN IMPROPER
OR INCONVENIENT FORUM FOR THE RESOLUTION OF SUCH ACTION.  EACH PARTY HERETO FURTHER AGREES THAT THE MAILING BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, OF ANY PROCESS REQUIRED BY ANY SUCH COURT SHALL CONSTITUTE VALID AND LAWFUL SERVICE OF PROCESS
AGAINST THEM, WITHOUT NECESSITY FOR SERVICE BY ANY OTHER MEANS PROVIDED BY STATUTE OR RULE OF COURT.

 

14.       No
Inconsistent Agreements.  No party hereto will hereafter enter into any agreement,
which is inconsistent with the rights granted to the Holder in this Note.

 

15.      Third
Parties.  Nothing herein expressed or implied is intended or shall be construed to
confer upon or give to any person or entity, other than the Holder and its permitted successor and assigns, any rights or remedies under
or by reason of this Note.

  

16.      Waiver
of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS NOTE. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE HOLDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE HOLDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY HERETO UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH

    	 

    	 

    

PARTY HERETO MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HERETO HAS BEEN INDUCED TO ENTER
INTO THIS NOTE BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

17.      Usury
Savings Clause. Notwithstanding any provision in this Note to the contrary, the total
liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions,
or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction
governing this Note or any other applicable law. In the event the total liability of payments of interest and payments in the nature of
interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall,
for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit
imposed by the usury laws of the jurisdiction governing this Note, all sums in excess of those lawfully collectible as interest for the
period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the
outstanding principal balance due hereunder immediately upon receipt of such sums by the Holder hereof, with the same force and effect
as though the Company had specifically designated such excess sums to be so applied to the reduction of the principal balance then outstanding,
and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Holder may, at
any time and from time to time, elect, by notice in writing to the Company, to waive, reduce, or limit the collection of any sums in excess
of those lawfully collectible as interest, rather than accept such sums as a prepayment of the principal balance then outstanding. It
is the intention of the parties that the Company does not intend or expect to pay, nor does the Holder intend or expect to charge or collect
any interest under this Note greater than the highest non-usurious rate of interest which may be charged under applicable law.

 

18.      Entire
Agreement.  This Note (including any recitals hereto) set forth the entire understanding
of the parties with respect to the subject matter hereof, and shall not be modified or affected by any offer, proposal, statement or representation,
oral or written, made by or for any party in connection with the negotiation of the terms hereof, and may be modified only by instruments
signed by all of the parties hereto.

 

 

[Signature page to follow]

    	 

    	 

    

 

 

IN WITNESS WHEREOF, this
Note is executed by the undersigned as of the date hereof.

 

  

	VPR BRANDS, LP	 
	
    By: Soleil Capital Management LLC,

    its General Partner
	 
	 	 
	 	 
	By: /s/ Kevin Frija                                       	 
	Name: Kevin Frija	 
	Title:   Manager and Chief Executive OfficerExhibit 10.1

 

Acquisition
and Participation AGREEMENT 

(Lustre-Midfork
Prospect)

 

This
Acquisition and Participation Agreement (“Agreement”), dated effective as of June 3, 2021 (“Effective Date”),
is between and among CAT CREEK HOLDINGS LLC, a Montana limited liability company with an office located at 398 Sage Lane, Winnett,
Montana 59087 (“Operator” or “Cat Creek”), Laredo Oil, Inc.,
a Delaware corporation with an office located at 398 Sage Lane, Winnett, Montana 59087 (“Laredo Oil”) and Lustre
Oil Company LLC, a Montana limited liability company with an office located at 398 Sage Lane, Winnett, Montana 59087 (“Lustre
Oil”) (Laredo Oil and Lustre Oil, collectively with their Representatives “Lustre”) and LARIS OIL & GAS, LLC,
a Colorado limited liability company with an office located at 9876 Clairton Way, Highlands Ranch, Colorado 80126 (“Laris Oil”)
and Erehwon Oil & Gas, LLC, a Colorado limited liability company with an office
located at 9876 Clairton Way, Highlands Ranch, Colorado 80126 (“Erehwon Oil”), (Laris Oil and Erehwon Oil, collectively with
their Representatives “Erehwon”). Erehwon and Lustre may be referred to herein individually as a “Party” or collectively
as the “Parties”.

 

RECITALS

 

		A.	Lustre
                                            Oil is a wholly owned subsidiary of Laredo Oil.

 

		B.	Erehwon
                                            Oil is a wholly owned subsidiary of Laris Oil.

 

		C.	Laredo
                                            Oil and Laris Oil entered into: (a) that certain Non-Disclosure and Non-Circumvention Agreement
                                            dated effective as of June 17, 2020, and that certain Option Agreement dated effective as
                                            of September 12, 2020 (“Option Agreement”).

 

		D.	Laris
                                            Oil, in conjunction with Mr. Eric Johnson (“Johnson”) and Mr. Duane Estelle (“Estelle”)
                                            generated an oil and gas prospect known to the Parties as the Lustre-Midfork Prospect located
                                            in Valley County, Montana (“Prospect”). Johnson and Estelle may be referred to
                                            herein as the “Prospect Generators”.

 

		E.	On
                                            December 3, 2021, the Parties jointly filed a declaratory judgement action (“Litigation”)
                                            against A&S Mineral Development Co., LLC (“A&S”) and Anadarko Minerals,
                                            Inc. (“AMI”) seeking to quiet title to the Parties recently acquired oil and
                                            gas leases in Valley County, Montana.

 

		F.	Lustre
                                            and Erehwon desire to set forth herein the terms and conditions pursuant to which they desire
                                            to acquire oil and gas interests and drill, complete, re-enter, re-complete, sidetrack, and
                                            equip wells within the Contract Area.

     

     

    

AGREEMENT

 

In
consideration of the mutual promises contained herein, the benefits to be derived by each Party, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

		1.	DEFINITIONS:

 

		a.	BIAPO.
                                            The term “BIAPO” shall mean Erehwon’s 10.0% back-in after Payout (defined
                                            below) in the: (i) Initial Recompletions (defined below), and (ii) Initial Wells (defined
                                            below).

 

		b.	AMI.
                                            The Area of Mutual Interest (“AMI”) to which this Agreement applies is defined
                                            as Valley County, Daniels County and Roosevelt County, Montana.

 

		c.	DRC.
                                            The term “DRC” shall mean Diamond Resources Co. DRC is a lease brokerage company
                                            located in Williston, North Dakota and is the lease broker that the Parties agree to use
                                            to acquire new leases within the Contract Area.

 

		d.	Initial
                                            Leases. The term “Initial Leases” shall mean those leases acquired by mutual
                                            consent of the Parties within the Contract Area until such time that the total lease bonus
                                            costs plus the brokerage costs charged by DRC total $500,000 (“Initial Lease Cap”).
                                            The Litigation Costs shall not be included in the Initial Lease Cap calculation.

 

		e.	Initial
                                            Payout Balance. The term “Initial Payout Balance” shall mean the sum of money
                                            equal to 20.0% of the Litigation Costs (defined below). The Initial Payout Balance shall
                                            be repaid to Lustre by Erehwon from 20.0% of Erehwon’s share of the Revenue (defined
                                            below) until such time that Lustre has recovered Erehwon’s 20.0% share of the Litigation
                                            Costs. Twenty percent (20.0%) of Erehwon’s share of the Revenue shall be referred to
                                            as the “Payout Revenue”.

 

		f.	Initial
                                            Recompletions. The first ten wells recompleted within the Contract Area pursuant to this
                                            Agreement are defined as the “Initial Recompletions”. The term Initial Recompletions
                                            includes the perforating, re-perforating, acidizing, hydraulic fracture stimulating, treatment,
                                            sidetracking and any other method or technique used to return or enhance the production of
                                            an existing well, including without limitation wells that may be currently shut-in or plugged
                                            and abandoned.

 

		g.	Initial
                                            Wells. The first ten new wells drilled within the Contract Area pursuant to this Agreement
                                            are defined as the “Initial Wells”.

 

		h.	JOA.
                                            The terms “JOA” shall mean an AAPL Form 610-1989 Operating Agreement.

 

		i.	Litigation
                                            Costs. The ultimate cost of litigating the quiet title actions shall be referred to herein
                                            as the “Litigation Costs.” Lustre shall initially pay 100.0% of the Litigation
                                            Costs, provided, however, Erehwon’s 20.0% share of such costs shall be added to the
                                            Initial Payout Balance pursuant to Section 1.e above.

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		j.	ORRI.
                                            The variable overriding royalty assigned the Prospect Generators shall be referred to herein
                                            as the “ORRI”. The magnitude of the ORRI in any given lease shall be determined
                                            in accordance with Section 4 of this Agreement.

 

		k.	Payout:

 

		a.	Initial
                                            Wells and Initial Recompletions: With respect to each of the Initial Wells and each of
                                            the Initial Recompletions, the term “Payout” shall mean that point in time when
                                            Lustre’s share of the Revenue equals Lustre’s actual out-of-pocket costs paid
                                            to third parties to drill and complete the Initial Wells and to recomplete the Initial Recompletions,
                                            on an individual well basis (i.e. not a project-wide basis), without including any allocation
                                            of management or overhead costs or expenses. The term Payout applies to the ten Initial Wells
                                            and the ten Initial Recompletions. Notwithstanding anything to the contrary herein above,
                                            in the event the Operator completes one of the Initial Wells or Initial Recompletions, the
                                            drilling or recompletion of which was consented to by Erehwon, as a dry hole, 10.0% of the
                                            cost of such dry hole shall be added to the Payout calculation for all then producing wells
                                            by amortizing Erehwon’s back-in after payout share of the cost of the dry hole, in
                                            equal shares, to all then producing wells. For purposes of example only, if the Operator
                                            completes one of the Initial Wells as a dry hole at a cost of $500,000 and at the time of
                                            completion of such dry hole, there are five producing wells, then the cost of the dry hole
                                            attributable to Erehwon’s back-in after payout for such dry hole (i.e. 10% or $50,000)
                                            shall be divided by five and $10,000 shall be added to the payout calculation for each of
                                            the five then producing wells drilled by the Operator within the Contract Area.

 

		b.	Accounting:
                                            Lustre shall provide to Erehwon a monthly accounting for each well then subject to a Payout
                                            calculation. Such accounting shall provide the dollar amount of the Payout valuation and
                                            the remaining balance required to achieve Payout. Each such monthly accounting shall be delivered
                                            to Erehwon within 45 days of the end of the month.

 

		l.	Revenue.
                                            For the purposes of this Agreement, the term “Revenue” shall mean all funds received
                                            by Lustre attributable to: (a) production from the Initial Recompletions, (b) production
                                            from the Initial Wells, (c) the sale of any Leases, Wells or equipment acquired by the Parties
                                            within the Contract Area, and (d) any funds received from AMI or A&S related to the Litigation.

 

		m.	Single
                                            Party Leases. A “Single Party Lease” or “Single Party Leases”
                                            shall mean an oil and gas lease or leases, the acquisition of which was consented to by only
                                            one of the two Parties to this Agreement.

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		n.	Subsequent
                                            Leases. Leases acquired by mutual consent of the Parties after the Initial Lease Cap
                                            has been met by Lustre shall be referred to herein as “Subsequent Leases”.

 

		o.	Subsequent
                                            Recompletions. The eleventh well and all subsequent wells recompleted thereafter pursuant
                                            to this Agreement are defined as the “Subsequent Recompletions”.

 

		p.	Subsequent
                                            Wells. The eleventh well and all subsequent wells drilled thereafter pursuant to this
                                            Agreement are defined as the “Subsequent Wells”.

 

		q.	SWD
                                            Well. The term “SWD Well” shall mean any existing wellbore acquired for the
                                            purpose of converting it to a saltwater disposal well or an injection well or, in the event
                                            no suitable existing wellbore can be acquired for such purposes, a new well drilled for the
                                            purpose of disposing or injecting produced water.

 

		r.	WI.
                                            The respective working interest of the Parties in leases and wells may be referred to herein
                                            as a “WI”. The magnitude of the Parties’ respective WI in leases and wells
                                            shall be determined in accordance with the terms of Section 8 of this Agreement.

 

		2.	JOINT
                                            OPERATING AGREEMENT:

 

		a.	Concurrent
                                            with the execution of this Agreement, the Operator, Lustre and Erehwon shall execute a new
                                            JOA.

 

		b.	The
                                            JOA shall name Cat Creek as the “Operator”.

 

		c.	The
                                            “AMI” under the JOA shall be the same as the AMI defined in this Agreement.

 

		d.	The
                                            “Non-Consent” penalty under the JOA shall not exceed 250%.

 

		e.	The
                                            JOA shall include a Tax Partnership election.

 

		f.	All
                                            wells drilled within the AMI shall be drilled subject to the JOA; provided, however, in the
                                            event of any conflict between this Agreement and the JOA, this Agreement shall be the controlling
                                            instrument.

 

		g.	The
                                            Parties hereby agree to amend Exhibits A-1 and A-2 to the JOA to include any additional leases
                                            acquired within the AMI subsequent to the execution of the JOA.

 

		3.	LEASE
                                            ACQUISITION & ASSIGNMENT:

 

		a.	Leasing
                                            Decisions. DRC shall acquire oil and gas leases at the direction of Lustre and Erehwon.
                                            In the event either Lustre or Erehwon does not consent to the acquisition of any individual
                                            lease, the consenting party may acquire such Single Party Lease for its own individual account,
                                            provided, however, the non-consenting Party shall not be obligated to pay for any portion
                                            of the costs associated with any such Single Party Lease.

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		b.	Confidentiality.
                                            To preserve confidentiality prior to the spudding of the first well drilled within the Contract
                                            Area, the Parties shall require DRC initially to record all acquired leases under the name
                                            of DRC in the Office of the Valley County Clerk & Recorder in Valley County, Montana.

 

		c.	Assignments.
                                            Prior to spudding the first well within the Contract Area, DRC shall be contractually obligated
                                            to assign the ORRI and WI to the appropriate parties in accordance with the terms and conditions
                                            of this Agreement. Such assignments shall be made pursuant to a form of assignment mutually
                                            acceptable to the Parties.

 

		4.	OVERRIDING
                                            ROYALTY INTERESTS:

 

		a.	Lustre
                                            or DRC, as appropriate, shall assign to the Prospect Generators a variable overriding interest
                                            (“ORRI”) in all leases, including Single Party Leases, located within the Contract
                                            Area equal to the positive difference between: (a) 20.0% and (b) (1) the percentage of the
                                            landowner royalty (for newly acquired leases), or (2) the total existing lease burden (for
                                            acquired leases and wells); provided, however, no ORRI granted hereunder shall exceed 6.0%
                                            of 8/8th nor be less than 3.0% of 8/8th. The ORRI shall be assigned separately
                                            in equal 50.0% shares to Johnson and Estelle pursuant to an Assignment of ORRI acceptable
                                            to each of Johnson and Estelle, respectively.

 

		b.	If
                                            any lease covers less than the entire oil and gas mineral fee estate in any tract of the
                                            land, then the ORRI assigned to the Prospect Generators shall be reduced in the proportion
                                            that the interest in the oil, gas and related hydrocarbons therein covered by the lease bears
                                            to the entire fee estate in such tract.

 

		5.	SUCCESS
                                            FEE IN LIEU OF PROSPECT FEE:

 

		a.	In
                                            lieu of an upfront prospect fee, Lustre shall pay the Prospect Generators a “Success
                                            Fee” equal to 5.0% of the cost to drill, complete, and equip each of the first ten
                                            Initial Wells drilled within the Contract Area. The Success Fee shall be a completion cost
                                            line-item on the AFE for each of the Initial Wells. The Success Fee shall be delivered in
                                            equal 50.0% shares to Johnson and Estelle within 30-days after the date of completion for
                                            each of the first ten wells as a producing well. In the event one or more of the Initial
                                            Wells drilled within the Contract Area is completed as a dry hole, no Success Fee shall be
                                            payable to the Prospect Generators for such dry hole. No Success Fee shall be payable to
                                            the Prospect Generators upon the completion of Subsequent Wells.

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		6.	PAYMENTS
                                            TO PROSPECT GENERATORS: Payments to the Prospect Generators shall be made in equal shares
                                            as follows:

 

		a.	Success
                                            Fees:

 

Johnson
Geophysical, Inc. (50%) 

811
Poly Drive 

Billings,
Montana 59102 

Attn:
Mr. Eric Johnson

 

Blackstone
Energy, LLC (50%) 

Box
2250 

Red
Lodge, Montana 

Attn:
Mr. Duane Estelle

 

		b.	ORRI:

 

Eric & Connie Johnson, JTROS (50%) 

811
Poly Drive 

Billings,
Montana 59102

 

Mr.
Duane Estelle (50%) 

Box
2250 

Red
Lodge, Montana

 

The
Prospect Generators may, at any time, change how such payments are directed by providing written notice to the Operator.

 

		7.	ALLOCATION
                                            OF COSTS:

 

		a.	Lease
                                            Acquisition Costs. The cost to acquire the Initial Leases within the Contract Area shall
                                            be paid 100.0% by Lustre. If either Party objects to the acquisition of a particular lease,
                                            the non-objecting Party shall have the right but not the obligation to pay 100% of the lease
                                            bonus and annual rentals (if any) associated with such a Single Party Lease.

 

		b.	Drilling,
                                            Completion and Equipping Costs.

 

		i.	Initial
                                            Ten Wells. Lustre shall pay 100.0% of the cost to drill, complete, and equip each of
                                            the ten Initial Wells drilled within the Contract Area.

 

		ii.	Subsequent
                                            Wells. Subject to Section 8 below, the cost to drill, complete, and equip all Subsequent
                                            Wells shall be paid 80.0% by Lustre and 20.0% by Erehwon, subject to the terms and conditions
                                            of the JOA.

 

		iii.	Initial
                                            Saltwater Disposal or Injection Well. Lustre shall pay 100% of the cost of the SWD Well
                                            and, for the purpose of calculating Payout for each of the first three oil wells drilled
                                            by the Parties, one-third of the cost of the SWD Well shall be added to the cost of each
                                            of the first three oil wells drilled. The cost of the SWD Well shall include the cost to
                                            recomplete and equip an existing well or, in the alternative, the cost to drill, complete
                                            and equip a new well.

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		iv.	Subsequent
                                            Saltwater Disposal or Injection Well(s). In the event the Parties determine that one
                                            or more additional SWD Wells are needed, Erehwon shall have the option to: (1) pay its 20.0%
                                            share of the cost of the well heads-up, or (2) elect to have Lustre shall pay 100% of the
                                            cost of the subsequent SWD Well and the cost of the new SWD shall be divided by the number
                                            of then producing wells still that have a remaining Payout balance, and that fraction of
                                            the cost shall be added to the Payout balance of each of the producing wells with a remaining
                                            Payout balance. For purposes of example, if at the time the Parties decide to drill a new
                                            SWD Well at a cost of $1,000,000.00, there are six producing wells, and only one of the six
                                            producing wells has reached Payout, the cost of the new SWD Well shall be divided by five,
                                            and 20.0% of the cost of the new SWD Well ($200,000.00) shall be added to the Payout balance
                                            of the five producing wells that have not yet reached Payout.

 

		c.	Leasing
                                            Costs.

 

		i.	Initial
                                            Leases. Lustre shall pay 100.0% of the cost to acquire the Initial Leases.

 

		ii.	Subsequent
                                            Leases. Subject to Section 8.d below, Lustre shall pay 100.0% of the Subsequent Leases,
                                            provided, however, Erehwon shall have the right but not the obligation to pay 10.0% of the
                                            cost to acquire the Subsequent Leases.

 

		d.	Seismic
                                            Data.

 

		i.	In
                                            the event the Parties desire to acquire or reprocess any seismic data covering lands within
                                            the Contract Area, Lustre shall initially pay 100% of the cost to acquire and/or reprocess
                                            the data and shall be reimbursed by Erehwon for its 20% share of any such costs from the
                                            Payout Revenue until such debt is fully repaid. If, at the time such seismic data is acquired,
                                            all wells have already paid out, Erehwon’s 20.0% share of the cost shall be repaid
                                            from 20.0% of Erehwon’s share of the Revenue at that time. In the event such seismic
                                            data covers lands in which Erehwon owns a 10.0% WI in some of the leases and a 20.0% WI in
                                            other leases, the Parties shall negotiate in good faith to determine Erehwon’s pro-rata
                                            share of the cost of the seismic data based on the weighted average by acreage of Erehwon’s
                                            working interest in the leases covered by the seismic data.

 

		ii.	In
                                            the event Lustre sells, trades, or otherwise divests of its interest in all, or substantially
                                            of the wells and leases comprising the Prospect and Erehwon elects to retain its interests
                                            in the same wells and leases, Lustre shall, concurrent with the closing on the divestiture
                                            of its interests in the wells and leases, reimburse Erehwon for its share of the cost to
                                            acquire or reprocess the data paid to Lustre as of the date of Lustre’s divestiture.

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		8.	ALLOCATION
                                            AND ASSIGNMENT OF INTERESTS:

 

		a.	Leases
                                            Acquired Prior to Spudding the First Well. Prior to spudding the first well within the
                                            Contract Area, DRC shall first record the applicable Assignment of ORRI to the Prospect Generators
                                            and then record a Partial Assignment of Oil & Gas Lease conveying the applicable WI to
                                            Lustre and Erehwon, as determined by Sections 8.c and 8.d of this Agreement in all then acquired
                                            leases for which the acquisition was mutually agreed upon by both Parties. For any then acquired
                                            Single Party Lease, DRC shall record an assignment conveying all right title and interest
                                            in that lease to the sole consenting Party.

 

		b.	Leases
                                            Acquired by Mutual Consent After Spudding the First Well. All leases acquired my mutual
                                            consent after the spudding of the first well shall initially be recorded in the name of Lustre
                                            or DRC. Immediately after recording each lease, Lustre or DRC, as applicable, shall record
                                            an Assignment of ORRI conveying the applicable ORRI to the Prospect Generators and immediately
                                            thereafter record a Partial Assignment of Oil and Gas Lease conveying the applicable WI to
                                            Erehwon and Lustre, as determined by Sections 8.c and 8.d of this Agreement. Lustre shall
                                            not reserve unto itself or convey to any third party, other than the Prospect Generators,
                                            any non-paying interest or any paying working interest without the prior written consent
                                            of Erehwon.

 

		c.	Wells.

 

		i.	Initial
                                            Wells & Initial Recompletions Before Payout: Before Payout (as defined in Section
                                            1.k above), Lustre shall have a 90.0% WI and Erehwon shall have a 10.0% WI in each of the
                                            ten Initial Wells and each of the ten Initial Recompletions. Erehwon’s 10.0% WI in
                                            each of the Initial Wells and Initial Recompletions shall be carried through the tanks.

 

		1.	Unless
                                            otherwise agreed in writing, Lustre shall cause the first of the ten Initial Wells or the
                                            first of the ten Initial Recompletions to commence operations not later than 6-months after
                                            the Effective Date of this Agreement.

 

		ii.	Initial
                                            Wells and Initial Recompletions After Payout: After Payout (as defined in Section 1.k
                                            above), Lustre shall have an 80.0% WI and Erehwon shall have a 20.0% WI in each of the ten
                                            Initial Wells and each of the ten Initial Recompletions.

 

		iii.	Subsequent
                                            Wells: In all Subsequent Wells, Lustre and Erehwon shall have a WI equal to their respective
                                            working interest in the leases that comprise the spacing unit for each such Subsequent Well.

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		iv.	Summary
                                            Table of WI in Initial Wells and Initial Recompletions: For purposes of example, assuming
                                            Erehwon owns a 20% WI in the lease on which the example well is located, the following table
                                            summarizes the respective WI of each Party:

 

	 	WI
    in Initial Wells (1st 10 wells)	 	Wl
    in Subsequent Wells
	 	BPO	APO	 	Heads-Up
    Interests
	Lustre	90.0%	80.0%	 	80.0%
	Erehwon*	10.0%	20.0%	 	20.0%
	Totals	100.0%	100.0%	 	100.0%
	*Erehwon’s
    10.0% BPO Interest is carried through the tanks.	 	 

 

	 	WI
    in Initial Recompletions (1st 10 Recompletions)	 	WI
    in Subsequent Recompletions
	 	BPO	APO	 	Heads-Up
    Interests
	Lustre	90.0%	80.0%	 	80.0%
	Erehwon*	10.0%	20.0%	 	20.0%
	Totals	100.0%	100.0%	 	100.0%
	*Erehwon’s
    10.0% BPO Interest is carried through the tanks.	 

  

		v.	Saltwater
                                            Disposal or Injection Wells: Lustre shall have an 80.0% working interest and Erehwon
                                            shall have a 20% working interest in the SWD Well.

 

		d.	Leases.

 

		i.	Initial
                                            Leases. Lustre shall have an 80.0% WI and Erehwon shall have a 20.0% WI in the Initial
                                            Leases.

 

		ii.	Subsequent
                                            Leases. Lustre shall have a 90.0% and Erehwon shall have a 10.0% WI in the Subsequent
                                            Leases unless Erehwon elects to pay 10.0% of the cost to acquire one or more Subsequent Leases
                                            in which case Lustre shall have an 80.0% WI and Erehwon shall have a 20.0% WI in such Subsequent
                                            Lease(s).

 

		9.	WELLBORE
                                            DESIGN:

 

		a.	Subject
                                            to such modifications as a prudent operator would reasonably make, the first well shall be
                                            designed and equipped as follows:

 

		i.	The
                                            well shall have, at a minimum, the following equipment on-site and operational such that
                                            the pay zones can be drilled and completed underbalanced:

 

		1.	Rotating
                                            head

 

		2.	Underbalanced
                                            choke manifold

 

		3.	4-phase
                                            separator

 

		4.	Gas
                                            flare

 

		5.	At
                                            least one rented frac tank dedicated to store any oil produced while drilling and testing.

 

		6.	At
                                            least one rented frac tank dedicated to store any water produced while drilling and testing.

 

		7.	Mud-Logging
                                            unit equipped with a mud gas chromatograph and two mud-loggers from surface casing to TD.

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		ii.	Intermediate
                                            casing shall be set approximately 10’ above the top of the specific pay zone targeted
                                            by the well.

 

		iii.	After
                                            setting intermediate casing above the targeted pay zone, employ an underbalanced drilling
                                            package and drill the pay zone using a solids-free, non-wetting phase drilling fluid (i.e.
                                            air, nitrogen, crude oil, or LVT drilling fluid) while using best efforts to maintain underbalanced
                                            conditions at all time.

 

		iv.	The
                                            well shall be completed open-hole or by hanging a pre-cut slotted liner across the pay zone.
                                            No casing shall be cemented across the pay zone and under no-circumstances, absent an imminent
                                            risk of catastrophic loss of control of the well, shall any water be put on the pay zone.

 

		b.	The
                                            design and equipping of subsequent wells shall be modified in accordance with the results
                                            from the preceding well(s) and agreed to mutually by both Erehwon and Lustre.

 

		10.	SUBSTITUTE
                                            WELLS:

 

		a.	Substitute
                                            Wells. If Operator discontinues drilling any Initial Well before reaching its intended
                                            depth because of encountering impenetrable substances, heaving shale, excessive salt, mechanical
                                            conditions, or because of other conditions out of Operator’s control as a prudent operator,
                                            which make further drilling impracticable and which Operator, after a diligent effort, is
                                            unable to overcome, Operator shall have the right, but not the obligation, to drill a substitute
                                            well at a legal location selected by it in the same quarter section in which the discontinued
                                            well was located, provided the actual drilling of said substitute well is commenced as soon
                                            as is practicable after the abandonment of drilling operations on the discontinued well.
                                            The substitute well shall be drilled in the manner and to the depth specified for the discontinued
                                            well and shall be treated as if it were the well for which it is a substitute under the terms
                                            of this Agreement. For purposes of calculating payout for a substitute well, the cost of
                                            the discontinued well shall be added to the cost of the substitute well.

 

		11.	CONDUCT
                                            OF OPERATIONS:

 

		a.	Performance
                                            Standards. All operations shall be conducted under the rights, duties, performance standards
                                            and obligations of the Operator under the JOA, and in accordance with all applicable federal,
                                            state and local laws, regulations and orders.

 

		b.	Lease
                                            Obligations. The Operator shall comply in all material respects with the express and
                                            implied covenants and other obligations of the applicable lease or leases.

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		c.	Well
                                            Information. The Operator shall promptly furnish the non-operators, at no cost to the
                                            non-operators, the following information pertaining to all wells drilled within the Prospect:

 

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

 

		ii.	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.

 

		iii.	Written
                                            reports on all cuttings and cores taken in the well.

 

		iv.	Reasonable
                                            advance notice of any drill stem tests, production tests, pressure tests, cores and logs
                                            to be run in the well so that any Party desiring to do so may witness the operations. Written
                                            reports of such operations, when they are completed, shall be furnished to all Parties.

 

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

 

		vi.	A
                                            complete copy of the driller’s log and a complete copy of all well logs in hard copy format
                                            and in digital pdf file format as well as in .las file format.

 

		d.	Confidentiality.
                                            Without the other Party’s prior written consent, neither Party shall divulge information
                                            obtained from the operations under the terms of this Agreement to any party other than its
                                            Representatives, affiliates, or a party owning an interest in any well drilled within the
                                            Prospect and the appropriate governmental authority.

 

		e.	Person;
                                            Representatives; Affiliates. As used in this Agreement, (i) the term “person”
                                            shall be interpreted broadly to include, without limitation, any corporation, company, group,
                                            partnership, limited liability company, unincorporated association, trust, other entity or
                                            individual, (ii) the term “Representatives”, used with respect to a person, shall
                                            include the directors, officers, employees, members, affiliates, subsidiaries, associates,
                                            agents, lawyers, consultants, accountants, engineers, financial and other advisors, and banks
                                            and other financing sources of or to such person, and (iii) the terms “affiliates”,
                                            “subsidiaries”, “associates” and derivations thereof shall mean any person
                                            which, directly or indirectly, controls, or is controlled by or is under common control with
                                            such designated person and, without limiting the generality of the foregoing, shall include
                                            (a) any person which beneficially owns or holds 5.0% or more of any class of voting
                                            securities of such designated person or 5.0% or more of the equity interest in such designated
                                            person and (b) any person of which such designated person beneficially owns or holds
                                            5.0% or more of any class of voting securities or in which such designated person beneficially
                                            owns or holds 5.0% or more of the equity interest. For the purposes of this definition, “control”
                                            (including, with correlative meanings, the terms “controlled by” and “under
                                            common control with”), as used with respect to any Person, shall mean the possession,
                                            directly or indirectly, of the power to direct or cause the direction of the management and
                                            policies of such person, whether through the ownership of voting securities or by contract
                                            or otherwise.

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		12.	ASSIGNMENTS,
                                            ENCUMBRANCES AND RESTRICTIONS:

 

		a.	This
                                            Agreement shall be binding on the respective heirs, successors, and assigns of Lustre and
                                            Erehwon. Neither Party shall assign or encumber its interest under this Agreement without
                                            the prior written consent of the other Party, which consent shall not be unreasonably withheld,
                                            conditioned, or delayed. Notwithstanding anything to the contrary herein, either Party may
                                            assign its respective interest to any affiliate of that Party without the prior consent of
                                            non-assigning Party.

 

		13.	TAG-ALONG
                                            RIGHTS:

 

		a.	If
                                            Lustre at any time or from time to time desires to enter into an agreement to sell, transfer
                                            or convey all or any portion of its WI to any person, entity or group (“Proposed Transferee”),
                                            then Erehwon shall have the right, but not the obligation, to cause Lustre to require, as
                                            a condition to such sale, that the Proposed Transferee purchase from Erehwon the same proportionate
                                            share of Erehwon’s WI on the same terms and conditions realized by Lustre. Lustre shall
                                            cause the offer from the Proposed Transferee to be reduced to a writing that includes the
                                            name and address of the Proposed Transferee, the interest to be purchased and the terms and
                                            conditions of the proposed sale, transfer or conveyance. Lustre shall cause the written offer
                                            to be sent to Erehwon within 5 business days following Lustre’s receipt of an offer
                                            from any Proposed Transferee.

 

		14.	AUDIT
                                            RIGHTS:

 

		a.	Erehwon,
                                            upon reasonable notice to Operator, shall have the right to inspect and audit, during normal
                                            business hours and using best efforts not to disrupt Operator’s normal business operations,
                                            Operator’s accounts, books, records and other information in Operator’s possession
                                            reasonably necessary to verify any invoices delivered or payments made, including without
                                            limitation, any costs associated with new seismic data, and Revenue received during any calendar
                                            year within the twenty-four month period following the end of the calendar year; provided
                                            that the making of an audit shall not extend the time for the taking of written exception
                                            to invoices or payments. Upon receipt of the auditor’s report, Erehwon shall provide
                                            a copy to Operator and Lustre. Erehwon shall bear all costs of the audit unless the audit
                                            identifies an underpayment discrepancy of 5.0% or more, in which case Operator or Lustre
                                            shall promptly reimburse Erehwon for the cost of the audit along with any underpayment identified
                                            by the audit.

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		15.	NOTICES
                                            AND WELL INFORMATION:

 

		a.	In
                                            General. All well data, information and notices to be given to a Party as provided in
                                            this Agreement shall be given as follows:

 

	 	EREHWON:	LUSTRE:
	 	 	 
	 	Erehwon
    Oil & Gas, LLC	Lustre
    Oil Company LLC
	 	9876
    Clairton Way	398
    Sage Lane
	 	Highlands
    Ranch, Colorado 80126	Winnett,
    Montana 59087
	 	Attn:
    John Stafford	Attn:
    Mark See
	 	John@LarisOil.com	msee@wyooil.com
	 	(303)
    471-4109 office	(720)
    295-1214 office
	 	(303)
    204-0429 cell	(512)
    520-7349 cell
	 	 	 
	 	 	With
    a copy to:
	 	 	Christopher
    E. Lindsey
	 	 	clindsey@stranded-oil.com
	 	 	 
	 	 	CAT
    CREEK HOLDINGS LLC:
	 	 	398
    Sage Lane
	 	 	Winnett,
    Montana 59087
	 	 	Attn:
    Mark See
	 	 	msee@wyooil.com
	 	 	(720)
    295-1214 office
	 	 	(512)
    520-7349 cell

  

Erehwon,
Operator and Lustre may change their address at any time by furnishing a written notice of change of address to the other Party.

 

		16.	LUSTRE’s
                                            Representations, COVENANTS, and Warranties:

 

		a.	Lustre
                                            hereby represents and warrants to Erehwon that it is a limited liability company, duly organized,
                                            validly existing, and formed under the law in the State of Montana. The execution, delivery
                                            and performance of this Agreement have been duly and validly authorized by all requisite
                                            action on the part of Lustre.

 

		b.	Lustre
                                            hereby covenants that it shall cause the first well drilled pursuant to this Agreement shall
                                            be drilled using underbalanced drilling and completion techniques as described in Section
                                            9 above and that this covenant is a condition precedent for Erehwon to enter into this Agreement.
                                            Unless otherwise agreed in writing, Operator’s failure to drill and complete the first
                                            well drilled pursuant to this Agreement using such underbalanced drilling and completion
                                            techniques shall be an “Event of Default” entitling Erehwon to replace Cat Creek
                                            as Operator under the JOA. After the first well is drilled, Operator shall employ whatever
                                            drilling techniques it, in good faith, believes will minimize formation damage and maximize
                                            the economic value of such future wells.

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		17.	Cat
                                            Creek’S Representations and Warranties:

 

		a.	Cat
                                            Creek hereby represents and warrants to Erehwon that it is a limited liability company, duly
                                            organized, validly existing and formed under the law in the State of Montana and is qualified
                                            to do business in the State of Montana. The execution, delivery and performance of this Agreement
                                            have been duly and validly authorized by all requisite action on the part of Cat Creek.

 

		18.	EREHWON’S
                                            Representations and Warranties:

 

		a.	Erehwon
                                            hereby represents and warrants to Lustre that it is a limited liability company, duly organized,
                                            validly existing and formed under the law in the State of Colorado and is qualified to do
                                            business in the State of Montana. The execution, delivery and performance of this Agreement
                                            have been duly and validly authorized by all requisite action on the part of Erehwon.

 

		19.	INSURANCE:

 

		a.	Operator
                                            shall cause Erehwon to be named as an additional insured under its comprehensive general
                                            liability, control of well, and environmental insurance policies.

 

		20.	MISCELLANEOUS:

 

		a.	Governing
                                            Law and Venue. This Agreement shall be governed by the laws of the State of Colorado,
                                            excluding any conflict of laws rule or principle that might refer the governance or the construction
                                            hereof to another jurisdiction except as to matters and issues subject to laws of all other
                                            governmental bodies, including the federal laws and regulations and the State of Montana
                                            related to real property interests and to governmental jurisdiction over operations carried
                                            on under or pursuant to this Agreement.

 

		b.	No
                                            Partnership. This Agreement is not intended to create, and shall not be construed to
                                            create, a relationship of partnership or a joint venture between Lustre, Cat Creek and Erehwon.

 

		c.	Entire
                                            Agreement.With respect to the subject matter hereof, this Agreement, together with
                                            all exhibits attached hereto and incorporated herein, shall constitute the full and complete
                                            understanding and agreement of the Parties and there are no other understandings, obligations
                                            or relationships or agreements written or oral. This Agreement may only be amended by a writing
                                            signed by Lustre, Cat Creek and Erehwon.

 

		d.	Severability.
                                            If any term, provision, covenant, or condition of this Agreement is held by a court of competent
                                            jurisdiction to be invalid, void or unenforceable, the remainder of the provision herein
                                            shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

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                                            15

     

    

		e.	Counterparts.
                                            This Agreement may be executed by facsimile or by other electronic media 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.

 

		f.	Parties
                                            in Interest: This Agreement shall be binding upon, and shall inure to the benefit of,
                                            the Parties hereto and, except as otherwise prohibited herein, their respective successors
                                            and permitted assigns. Subject to Section 4 of this Agreement, nothing contained in this
                                            Agreement, either express or implied, is intended to confer upon any other person or entity
                                            any benefits, privileges, rights or remedies.

 

		g.	Further
                                            Assurances: After executing this Agreement, the Parties agree to execute, acknowledge
                                            and deliver or cause to be executed, acknowledged and delivered such instruments and take
                                            such other action as may be necessary or advisable to carry out their obligations hereunder
                                            and under any instrument delivered pursuant hereto.

 

		h.	Mutually
                                            Drafted: The Parties hereto stipulate and agree that this Agreement and the language
                                            used in this Agreement are the product of both Parties’ efforts in consultation with their
                                            attorneys and other consultants and each Party hereby irrevocably waives the benefit of any
                                            rule of contract construction which disfavors the drafter of an agreement or the drafter’s
                                            specific language in an agreement.

 

		21.	TERMINATION
                                            OF THE OPTION AGREEMENT:

 

		a.	Upon
                                            the execution and delivery of this Agreement by both Parties, the Option Agreement shall
                                            be deemed to have expired and shall be null and void.

 

In
witness whereof, the Parties have executed this Agreement
as of the Effective Date.

 

	EREHWON OIL & GAS, LLC	LUSTRE OIL COMPANY LLC
	 	 	 	 	 	 
	By:	LARIS
    OIL & GAS, LLC	 	By:	LAREDO
    OIL INC.	 
	 	Its
    sole Member	 	 	Its
    sole Member	 
	 	 	 	 	 	 
	By:	/s/ John
    M. Stafford	 	By:	/s/ Mark
    See	 
	 	John
    M. Stafford	 	 	Mark
    See	 
	 	President	 	 	President	 
	 	 	 	 	 	 
	CAT CREEK HOLDINGS LLC	 	 	 
	 	 	 	 	 	 
	By:	/s/ Mark
    See	 	 	 	 
	 	Mark
    See	 	 	 	 
	 	President	 	 	 	 

Page
                                            15 of
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