Document:

Exhibit 10.1

 

PURCHASE
AND SALE AGREEMENT

 

This Purchase
and Sale Agreement (“Agreement”) is entered into and effective this 23rd
day of December, 2008, (“Effective Date”) by and between Venoco, Inc., a
Delaware Corporation (“Venoco”), as buyer, and Carpinteria Bluffs, LLC, a
Colorado limited liability corporation (“Bluffs”), as seller. Venoco and Bluffs
are individually referred to as a “Party” and collectively as “Parties” in this
Agreement.

 

RECITALS

 

WHEREAS,
Venoco desires to purchase from Bluffs those certain parcels of land in the
City of Carpinteria identified on Exhibit A
hereto (the “Property”) and Bluffs desires to sell Property to Venoco, subject
to the terms and conditions of this Agreement; and.

 

WHEREAS, the
Parties acknowledge that the Property has served as an oil and gas process
facility since the 1960’s and the Venoco has continuously owned or leased the
Property since 1999.

 

NOW,
THEREFORE, in consideration of the mutual promises set forth in this Agreement,
Bluffs and Venoco hereby agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

The following
terms, when used in this Agreement, will have the following definitions:

 

1.01        Associated Parties. Successors, assigns, directors, officers, employees,
agents, contractors, subcontractors, and affiliates.

 

1.02        Purchase Price. The amount set forth in Article 3.

 

1.03        Claim or Claims. Collectively, claims, demands, causes of action, and
lawsuits asserted or filed by any person, including an artificial or natural
person; a local, state, or federal governmental entity; an Associated Party of
Venoco or Bluffs; or a third party.

 

1.04        Closing. The delivery of the conveyancing instruments and
funds by the Parties to close the purchase and sale of the Property.

 

1.05        Closing Date. The date on which Closing is scheduled to and does
occur.

 

1.06        Code. The Internal Revenue Code of 1986, as amended.

 

 

1.07        Environmental Laws. Applicable federal, state, and local laws, including
statutes, regulations, orders and ordinances, previously or currently enacted
or enacted in the future, and common law, relating to protection of public
health, welfare, and the environment, including those laws relating to storage,
handling, and use of chemicals and other hazardous materials; those relating to
the generation, processing, treatment, storage, transport, disposal, cleanup,
remediation, or other management of waste materials or hazardous substances of
any kind; and those relating to the protection of environmentally sensitive or
protected areas. “Environmental Laws” includes the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act of 1976, the Clean Water Act, the Safe Drinking Water Act, the
Hazardous Materials Transportation Act, the Toxic Substance Control Act, and
the Clean Air Act, as each is amended from time to time.

 

1.08        Liability or
Liabilities. Collectively,
all damages (including consequential and punitive damages), including those for
personal injury, death, or damage to personal or real property (both surface
and subsurface) and costs for remediation, restoration, or clean up of
contamination, whether the injury, death, or damage occurred or occurs on or
off the Property by migration, disposal, or otherwise; losses; fines;
penalties, expenses; costs to remove or modify facilities on or under the
Property; plugging liabilities for all wells; attorneys’ fees; court and other
costs incurred in defending a Claim; liens; and judgments; in each instance,
whether these damages and other costs are foreseeable or unforeseeable.

 

1.09        NORM. Naturally occurring radioactive material.

 

1.10        Strict Liability. Includes strict statutory liability and strict
products liability.

 

ARTICLE 2

 

PURCHASE AND SALE

 

Pursuant to
Venoco’s offer, Bluffs agrees to sell the Property to Venoco, and Venoco agrees
to buy Property from Bluffs, for the consideration recited in and subject to
the terms of this Agreement. The conveyed interests include but are not limited
to the right of surface entry and the right to pass through the subsurface of
the Property for the purpose of exploring, drilling, producing and marketing
oil, gas and minerals located outside
the Property. Bluffs shall relinquish all right of surface entry with respect
to the Property.

 

 

ARTICLE 3

 

PURCHASE PRICE

 

The total purchase
price of the Property shall be five-million three-hundred thousand dollars
($5,300,000).

 

ARTICLE 4

 

VENOCO’S REVIEW

 

By entering
into this Agreement, Venoco acknowledges and represents that it has reviewed
the Property to its satisfaction to enable Venoco to make its offer and execute
this Agreement. Venoco has undertaken all appropriate inquiry, to its
satisfaction, and has made an informed decision to acquire the Property on the
basis of its own investigations and without reliance on statements or
investigations by any other person, including Bluffs and its Associated
Parties.

 

4.01        Environmental
Assessment. Venoco and its
Associated Parties may inspect the Property and conduct an environmental
assessment of the Property.

 

4.02        No Warranty of Accuracy;
Disclaimer. Bluffs makes
no warranty, and expressly disclaims all warranties, as to the accuracy or
completeness of the files and other information that it may provide to Venoco
or that may be provided by others.

 

4.03        Venoco’s Use of
Property.  The
Parties acknowledge that the Property has been used as an oil and gas
processing facility since the 1960’s. 
The Parties further acknowledge that Venoco has continuously owned or
leased the Property since 1999.

 

ARTICLE 5

 

VENOCO’S RELEASE, DISCHARGE,
AND COVENANT NOT TO SUE; VENOCO’S OBLIGATIONS TO INDEMNIFY, DEFEND, AND HOLD
HARMLESS

 

5.01        Venoco’s Release and
Discharge of Bluffs and its Associated Parties. Venoco releases and discharges Bluffs and its
Associated Parties from each Claim and Liability relating to the Property
regardless of when or how the Claim or Liability arose or arises or whether the
Claim or Liability was foreseeable or unforeseeable. VENOCO’S
RELEASE AND DISCHARGE OF BLUFFS AND ITS ASSOCIATED PARTIES INCLUDE CLAIMS AND
LIABILITIES RESULTING IN ANY WAY FROM THE NEGLIGENCE OR STRICT LIABILITY OF
BLUFFS OR ITS ASSOCIATED PARTIES, WHETHER THE NEGLIGENCE OR STRICT LIABILITY IS
ACTIVE, PASSIVE, JOINT, CONCURRENT, OR SOLE. The only exception to Venoco’s release and discharge of
Bluffs and its Associated Parties is

 

 

stated in Section 5.04(C), and the release and
discharge are binding on Venoco and its successors and assigns.

 

5.02        Venoco’s Covenant Not
to Sue Bluffs or its Associated Parties. Venoco covenants not to sue Bluffs or its Associated
Parties with regard to any Claim or Liability relating to the Property
regardless of when or how the Claim or Liability arose or arises or whether the
Claim or Liability was foreseeable or unforeseeable. VENOCO’S
COVENANT NOT TO SUE BLUFFS OR ITS ASSOCIATED PARTIES INCLUDES CLAIMS AND
LIABILITIES RESULTING IN ANY WAY FROM THE NEGLIGENCE OR STRICT LIABILITY OF
BLUFFS OR ITS ASSOCIATED PARTIES, WHETHER THE NEGLIGENCE OR STRICT LIABILITY IS
ACTIVE, PASSIVE, JOINT, CONCURRENT OR SOLE. The only exception to Venoco’s covenant not to sue Bluffs or
its Associated Parties is stated in Section 5.04 (C), and the covenant is
binding on Venoco and its successors and assigns.

 

5.03        Venoco’s Obligations
to Indemnify, Defend, and Hold Bluffs and its Associated Parties Harmless. Venoco will indemnify, defend, and hold Bluffs and
its Associated Parties harmless from each Claim and Liability relating to the
Property, or this transaction, regardless of when or how the Claim or Liability
arose or arises or whether the Claim or Liability was foreseeable or
unforeseeable. VENOCO’S OBLIGATIONS TO
INDEMNIFY, DEFEND, AND HOLD BLUFFS AND ITS ASSOCIATED PARTIES HARMLESS INCLUDE
CLAIMS AND LIABILITIES RESULTING IN ANY WAY FROM THE NEGLIGENCE OR STRICT
LIABILITY OF BLUFFS OR ITS ASSOCIATED PARTIES, WHETHER THE NEGLIGENCE OR STRICT
LIABILITY IS ACTIVE, PASSIVE, JOINT, CONCURRENT OR SOLE. The only exception to Venoco’s obligations to
indemnify, defend, and hold Bluffs and its  Associated Parties harmless is stated in Section 5.04(C),
and the obligations are binding on Venoco and its successors and assigns.

 

5.04        Venoco’s Obligations.

 

(A)                              In each
instance of Venoco’s obligations to release, discharge, indemnify, defend, and
hold Bluffs and its Associated Parties harmless and its covenant not to sue
Bluffs or its Associated Parties, the Claims and Liabilities subject to the
obligations include the following:

 

(1)           the ownership of the
Property by Bluffs, their operation by Bluffs or its Associated Parties, and
the acts or omissions of Bluffs or its Associated Parties in connection with
the Property.

 

(2)           the ownership of the
Property by Venoco, their operation by Venoco or its Associated Parties, and
the acts or omissions of Venoco or its Associated Parties in connection with
the Property or under this Agreement.

 

(3)           the acts or
omissions of third parties relating to the Property.

 

 

(B)                                Venoco’s
obligations under this Agreement to release, discharge, indemnify, defend, and
hold Bluffs and its Associated Parties harmless and its covenant not to sue
Bluffs or its Associated Parties include Claims and Liabilities arising in any
manner from the following:

 

(1)           any preferential or
similar rights held by third parties to purchase any portion of the Property.

 

(2)           the review,
inspection, and assessment of the Property by Venoco and its Associated
Parties.

 

(3)           an error in
describing the Property or an error in the conveyance instruments.

 

(4)           closing without a
third-party consent or approval.

 

(5)           failure by third
parties to approve or consent to any aspect of this transaction after Closing.

 

(6)           obligations to
remediate the Property.

 

(7)           payment of real
property taxes or other taxes applicable to the Property.

 

(8)           payments or
disbursements paid or payable by Bluffs or Venoco to third parties.

 

(9)           a physical or
environmental condition relating to the Property, including Claims and
Liabilities under the Environmental Laws, or failure to comply with the
Environmental Laws.

 

(10)         remediation
activities, including damages incurred by Venoco or its Associated Parties
during or arising from remediation activities.

 

(11)         lawsuits filed before
the Effective Date, but amended after the Effective Date to include the
Property or Bluffs’ ownership of or activities regarding the Property.

 

(C)                                Venoco’s
release and discharge of Bluffs and its Associated Parties and its obligation
to indemnify, defend and hold Bluffs harmless under this Agreement does not
include claims that Bluffs reached this Agreement. Any such claims will be
resolved in accordance with Article 11.

 

 

ARTICLE 6

 

ENVIRONMENTAL MATTERS

 

6.01        Venoco’s
Acknowledgment Concerning Possible Contamination of the Property. Venoco is aware that the Property has been used for
exploration, development, and production of oil and gas and that there may be
petroleum, produced water, wastes, or other materials located on or under the
Property or associated with the Property. Equipment and sites included in the
Property may contain asbestos, hazardous substances, or NORM. VENOCO
WILL ASSUME ALL LIABILITY FOR THE ASSESSMENT, REMEDIATION, REMOVAL,
TRANSPORTATION, AND DISPOSAL OF WASTES, ASBESTOS, HAZARDOUS SUBSTANCES, AND
NORM FROM THE  PROPERTY AND ASSOCIATED
ACTIVITIES AND WILL CONDUCT THESE ACTIVITIES IN ACCORDANCE WITH ALL APPLICABLE
LAWS AND REGULATIONS, INCLUDING THE ENVIRONMENTAL LAWS.

 

6.02        Disposal of Materials,
Substances, and Wastes; Compliance with Law. Venoco will store, handle, transport, and dispose of or
discharge all materials, substances, and wastes from the Property (including
produced water, drilling fluids, NORM, and other wastes), whether present
before or after the Effective Date, in accordance with applicable local, state,
and federal laws and regulations. Venoco will keep records of the types,
amounts, and location of materials, substances, and wastes that are stored,
transported, handled,discharged, released, or disposed of onsite and offsite.

 

ARTICLE 7

 

VENOCO’S REPRESENTATIONS

 

7.01        Representations Not
Exclusive. Venoco’s
representations under this article are in addition to its other representations
under this Agreement.

 

7.02        Basis of Venoco’s
Decision. Venoco
represents that:

 

(A)          It has reviewed and
investigated the Property to its satisfaction in order to enter into this
Agreement.

 

(B)           It has evaluated the
Property to its satisfaction and has made an informed decision, as a prudent
and knowledgeable purchaser, to acquire the Property.

 

(C)           It is knowledgeable
and experienced in the evaluation, acquisition, and operation of the Property.

 

(D)          It has evaluated the
merits and risks of purchasing the Property and has formed an opinion based
solely upon its knowledge and experience and not in reliance on any statements
or actions by Bluffs or its Associated Parties.

 

 

(E)           It will acquire the
Property “as is, where is,” and with all faults.

 

7.03                        Material
Factor. Venoco acknowledges that its
representations under this article and the rest of this Agreement are a
material inducement to Bluffs to enter into this Agreement with, and close the
sale to, Venoco.

 

ARTICLE 8

 

BROKER’S AND FINDER’S FEES

 

Bluffs and
Venoco each represents and warrants to the other that it has incurred no
liability, contingent or otherwise, for broker’s or finder’s fees in connection
with this Agreement or the transaction contemplated by it for which the other
Party will have any responsibility.

 

ARTICLE 9

 

VENOCO’S DEFAULT

 

If Venoco
defaults under this Agreement in a material way, including Venoco’s failure to
perform its obligations to close this transaction, Bluffs may, at its sole
option, terminate this Agreement and retain any performance deposit, in
addition to all of its other rights at law or in equity.

 

ARTICLE 10

 

BLUFFS’ DISCLAIMER OF
WARRANTIES AND REPRESENTATIONS

 

BLUFFS HAS
NOT MADE, AND WILL NOT MAKE, ANY WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED,
OR STATUTORY, WHATSOEVER IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTION
CONTEMPLATED BY IT, INCLUDING THE ACCURACY OR COMPLETENESS OF DATA,
INFORMATION, OR MATERIALS FURNISHED AT ANY TIME TO VENOCO IN CONNECTION WITH
THE PROPERTY. NONE OF BLUFFS’ ASSOCIATED PARTIES ARE AUTHORIZED TO MAKE ANY
WARRANTY OR REPRESENTATION ON BLUFFS’ BEHALF. ALL DATA, INFORMATION, AND OTHER
MATERIALS FURNISHED BY BLUFFS ARE PROVIDED TO VENOCO AS A CONVENIENCE, AND
RELIANCE ON OR USE OF THEM IS AT VENOCO’S SOLE RISK.

 

This conveyance
is made and accepted subject to all valid and subsisting restrictions,
reservations, covenants, conditions, rights-of-way, and easements properly of
record, if any, affecting the Property.

 

 

ARTICLE 11

 

ALTERNATIVE DISPUTE RESOLUTION AND ARBITRATION.

 

Any controversy, dispute or
claim arising out of, in connection with, or in relation to the interpretation,
performance or breach of this Agreement shall be resolved, at the request of
either Party, by binding arbitration by a retired judge mutually agreed upon by
the Parties and appointed pursuant to the provisions of California Code of
Civil Procedure Sections 638 et seq., and Sections 1281 et seq., with said
arbitration to be conducted in accordance with the above statutory provisions
and the California Civil Procedure and Evidence Codes. The Parties intend this
general reference agreement to be specifically enforceable in accordance with
Code of Civil Procedure Section 638. If the Parties cannot agree upon a
retired judge, one shall be appointed by the Presiding Judge of the Superior
Court of Santa Barbara County, State of California.

 

ARTICLE
12

 

ESCROW

 

12.01                 Opening of
Escrow. Upon the Effective Date of this
Agreement, Venoco and Bluffs shall open an escrow (“Escrow”) with Chicago Title Company, 1225 Coast Village Road, Montecito
, CA 93108 (“Escrow Holder”).

 

12.02                 Agreement and
Escrow Instructions. A copy of this
Agreement shall be deposited with the Escrow Holder and shall constitute the escrow
instructions of Venoco and Bluffs. Venoco and Bluffs agree to execute, deliver
and be bound by any reasonable or customary supplemental escrow instructions or
other instruments reasonably required by Escrow Holder to consummate the
transaction contemplated by this Agreement; provided, however, that no such
instruments shall be inconsistent or in conflict with, amend or supersede any
portion of this Agreement. If there is any conflict or inconsistency between
the terms of such instruments and the terms of this Agreement, then the terms
of this Agreement shall control.

 

12.03                 Closing. Unless
extended in accordance with this Agreement, the escrow must close on or before December 24,
2008 (“Closing Date”). The Escrow Holder shall confirm the date Escrow is
opened and the Closing Date to Venoco and Bluffs immediately upon the date
Escrow is opened. As used in this Agreement, “Close of Escrow” shall mean the time the deeds have been recorded as
described in Section 13.03.

 

 

ARTICLE 13

 

CLOSING

 

13.01                 Bluffs’
Delivered Items. At least one (1) business
day prior to the Closing Date, Bluffs shall deposit or cause to be deposited
with Escrow Holder the following items, duly executed and, where appropriate,
acknowledged:

 

(A)                              Deeds. The grant
deed for the Property in favor of Venoco (“Grant Deed”) in the form attached
hereto as Exhibit B.

 

(B)                                Costs. All costs and
expenses to be borne by Bluffs pursuant to Section 13.03 (B) (3).

 

(C)                                Certificates. Bluffs’
certification of non-foreign status, real estate withholding certificate and
such other certificates and forms as may be required by Escrow Holder.

 

(D)                               Authority. Such proof of
Bluffs’ authority and authorization to enter into this Agreement and to
consummate the transaction contemplated hereby as may be reasonably requested
by Venoco or the Escrow Holder.

 

13.02                 Venoco’s
Delivered Items. At least one (1) business
day prior to the Closing Date, Venoco shall deposit or cause to be deposited
with Escrow Holder the following items, duly executed and, where appropriate,
acknowledged:

 

(A)                              Costs. All costs and
expenses to be borne by Venoco pursuant to Section 13.03 (B) (2).

 

(B)                                Certificates.  Such certificates and forms as may be
required by Escrow Holder.

 

(C)                                Authority. Such proof of
Venoco’s authority and authorization to enter into this Agreement and to
consummate the transaction contemplated hereby as may be reasonably requested
by Bluffs or the Escrow Holder.

 

13.03                 Escrow Holder
Instructions.

 

(A)                              Title Insurance. Escrow Holder
is authorized and directed to close the Escrow at such time as it is in receipt
of the funds and documents referred to in Sections 13.01 and 13.02 and the
Escrow Holder can issue standard California Land Title Association Owner’s
Policy of Title Insurance for the Property and insuring title to the Property
in Venoco (“Property Title Insurance”) in the amount of five-million
three-hundred thousand dollars ($5,300,000).

 

 

(B)                                Recordation and
Distribution. Upon satisfaction of the requirements in Section 13.03
(A) above, the Escrow Holder shall:

 

(1)                                  cause the Grant
Deed to be recorded in the Office of the County Recorder of the County of Santa
Barbara, California;

 

(2)                                  from the funds
contributed by Venoco, pay the costs borne by Venoco pursuant to this Agreement
which include the following: one-half of the Escrow Holder’s fee; all real
property taxes and special assessments against the Property; all documentary
transfer tax amounts; premiums for the Property Title Insurance

 

(3)                                  from the funds
contributed by Bluffs, pay the costs borne by Bluffs pursuant to this Agreement
which include the following: one-half of the Escrow Holder’s fee; recording
fees for the Grant Deeds.

 

(C)                                No Prorations. Pursuant to
existing agreements between the Parties, Venoco shall continue to be
responsible for all real and personal property taxes, assessments, and special
levies in the Property; therefore, Escrow Holder shall not prorate any item
customarily prorated in the County of Santa Barbara, California.

 

ARTICLE 14

POST CLOSING OBLIGATIONS

 

Bluffs shall obtain the consent of Chevron to the transfer (“Chevron
Consent”), which consent Bluffs agrees to use its commercially reasonable
effort to obtain.  The Parties hereby
acknowledge that without the Chevron Consent the transfer can not be
consummated.

 

ARTICLE 15

 

NOTICES

 

Any notice, tender,
delivery, or other communication pursuant to this Agreement shall be in writing
and shall be deemed to be properly given if delivered, mailed, or sent by wire
or other telegraphic communication in the manner provided in this Section, to
the following persons:

 

	
   

  	
  If to Bluffs:

  	
   

  	
  Carpinteria Bluffs, LLC

  	
   

  
	
   

  	
   

  	
   

  	
  370 17th
  Street, Suite 3900

  	
   

  
	
   

  	
   

  	
   

  	
  Denver, CO 80202

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If to Venoco:

  	
   

  	
  Venoco, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
  6267 Carpinteria
  Avenue, Suite 100

  	
   

  

 

 

	
   

  	
   

  	
   

  	
  Carpinteria, CA  93013-1423

  	
   

  

 

Either party may change that
party’s address for these purposes by giving written notice of the change to
the other party in the manner provided in this section. If sent by mail, any
notice, delivery, or other communication shall be effective or deemed to have
been given 48 hours after it has been deposited in the United States mail, duly
registered or certified, with postage prepaid, and addressed as set forth
above.

 

ARTICLE 16

 

TERMINATION
OF CERTAIN EXISTING AGREEMENTS

 

Bluffs acknowledges and
agrees that as of the Closing Date, the following agreements shall be of no
further force and effect:

 

(1)                                  The Option
Agreement contained in Section 8 of the Dividend Distribution Agreement by
and among Venoco, Bluffs and Timothy M. Marquez and Bernadette B. Marquez, as
Trustees of the Marquez Trust made effective as of August 21, 2006.

 

(2)                                  The Ground
Lease by and between Venoco and Bluffs made and entered into as of August 21,
2006.

 

(3)                                  That
Development Agreement by and between Venoco and Bluffs made effective as if August 21,
2006.

 

ARTICLE 17

 

MISCELLANEOUS

 

17.01                 Attorneys’
Fees.  If any
action, proceeding, or arbitration arising out of this Contract is commenced by
either party to this Agreement or by the escrow holder, then as between Venoco
and Bluffs, the prevailing party shall be entitled to receive from the other
party, in addition to any other relief that may be granted, the reasonable
attorneys’ fees, costs, and expenses incurred in the action, proceeding, or
arbitration by the prevailing party.

 

17.02                 Headings. The headings of the Articles and Sections of this
Agreement are for guidance and convenience of reference only and shall not
limit or otherwise affect any of the terms or provisions of this Agreement.

 

17.03                 Counterparts.
This Agreement may be executed by
Venoco and Bluffs 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.

 

 

 

 

17.04                 Expenses, Fees
and Taxes. Each of the parties hereto shall
pay its own fees and expenses incident to the negotiation and preparation of
this Agreement and consummation of the transactions contemplated hereby,
including broker fees, if any. Venoco shall be responsible for the cost of all
fees for the recording of transfer documents. All other costs shall be borne by
the party incurring them. Notwithstanding anything to the contrary herein, it
is acknowledged and agreed by and between Venoco and Bluffs that the purchase
price excludes any sales taxes or other taxes in connection with the sale of
property pursuant to this Agreement. If a determination is ever made that a
sales tax or other transfer tax applies, Venoco shall be liable for such tax as
well as any applicable conveyance, transfer and recording fees, and real estate
transfer stamps or taxes imposed on any transfer of property pursuant to this
Agreement.

 

17.05                 Not to Be
Construed against the Drafter. Each Party acknowledges that it has read this Agreement, has
had opportunity to review it with an attorney of its choice, and has agreed to
all of its terms. Under these circumstances, the Parties agree that the rule of
construction that a contract be construed against the drafter may not be
applied in interpreting this Agreement.

 

17.06                 Waiver. No waiver by either party of any part of this
Agreement will be deemed to be a waiver of any other part of this Agreement or
a waiver of strict performance of the waived part in the future.

 

17.07                 Execution by
the Parties.  Neither the submission of this instrument or any information
concerning the Property for Venoco’s examination, nor discussions or
negotiations between the Parties constitutes an offer to sell, a reservation
of, or an option for the Property, and this instrument and the underlying
transaction will become enforceable and binding between the Parties only upon
execution and delivery of this instrument by both Bluffs and Venoco. The
Parties have executed this Agreement on the date below their signatures, to be
enforceable and binding as of the Effective Date.

 

17.08                 Exhibits. All exhibits referenced in and attached to this
Agreement are incorporated into it.

 

17.09                 Conflicts. If the text of this Agreement conflicts with the
terms of any exhibit to this Agreement, then the text of this Agreement will
control.

 

17.10                 Severability
and Modification.  Any extension, modification or amendment of this Agreement
must be in writing and signed by the Parties to be affected thereby or their
respective successors in interest. If any term, covenant, condition or
provision of this Agreement is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of this Agreement shall remain in
full force and effect, and shall in no way be affected, impaired, or
invalidated thereby.

 

Carpinteria
Bluffs, LLC

 

 

	
   

  	
  By:

  	
  /s/
  David Mokros

  
	
   

  	
  Name:
  

  	
  David
  Mokros

  
	
   

  	
  Title:
  

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:
  

  	
  12/23/08

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Venoco, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William S. Schneider

  
	
   

  	
  Name:
  

  	
  William
  S. Schneider

  
	
   

  	
  Title:
  

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:
  

  	
  12/23/08EXHIBIT 4.1

                                    EXHIBIT A

     THIS  WARRANT  AND THE  SHARES  OF  COMMON  STOCK  ISSUABLE  UPON
     EXERCISE  OF THIS  WARRANT  HAVE NOT BEEN  REGISTERED  UNDER  THE
     SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.
     THIS WARRANT AND THE COMMON STOCK  ISSUABLE UPON EXERCISE OF THIS
     WARRANT  MAY  NOT  BE  SOLD,   OFFERED   FOR  SALE,   PLEDGED  OR
     HYPOTHECATED  IN THE  ABSENCE  OF (A) AN  EFFECTIVE  REGISTRATION
     STATEMENT  AS TO THIS WARRANT  UNDER SAID ACT AND ANY  APPLICABLE
     STATE SECURITIES LAWS OR (B) AN EXEMPTION FROM SUCH  REGISTRATION
     REQUIREMENTS.

           Right to Purchase up to 1,000,000 Shares of Common Stock of
                            Petrol Oil and Gas, Inc.
                   (subject to adjustment as provided herein)

                      FORM OF COMMON STOCK PURCHASE WARRANT

No. POIG-001                                      Issue Date:  December 17, 2008

     Petrol Oil and Gas,  Inc., a  corporation  organized  under the laws of the
State of Nevada (the  "Company"),  hereby  certifies  that, for value  received,
___________________,  or assigns (the  "Holder"),  is  entitled,  subject to the
terms set forth below, to purchase from the Company (as defined herein) from and
after the Issue Date of this Warrant and at any time or from time to time before
5:00 p.m., New York time,  through the close of business  December 17, 2008 (the
"Expiration  Date"), up to One Million (1,000,000) fully paid and non-assessable
shares of Common Stock (as hereinafter  defined),  $0.01 par value per share, at
the  applicable  Exercise  Price per share (as  defined  below).  The number and
character of such shares of Common Stock and the  applicable  Exercise Price per
share are subject to adjustment as provided herein.

     As used herein the following terms,  unless the context otherwise requires,
have the following respective meanings:

          (a) Common  Stock" means (i) the  Company's  Common  Stock,  par value
     $0.01 per share;  and (ii) any other securities into which or for which any
     of the securities described in the preceding clause (i) may be converted or
     exchanged pursuant to a plan of recapitalization,  reorganization,  merger,
     sale of assets or otherwise.

          (b) "Company"  means Petrol Oil and Gas, Inc. and any person or entity
     which shall succeed, or assume the obligations of, Petrol Oil and Gas, Inc.
     hereunder.

<PAGE>

          (c)  "Exercise  Price"  means a price of $0.20 per  share,  subject to
     adjustment as provided herein.

          (d) "Other  Securities"  means any stock (other than Common Stock) and
     other  securities  of  the  Company  or  any  other  person  (corporate  or
     otherwise)  which the Holder at any time shall be entitled  to receive,  or
     shall have  received,  on the  exercise of this  Warrant,  in lieu of or in
     addition to Common  Stock,  or which at any time shall be issuable or shall
     have been issued in exchange for or in replacement of Common Stock or Other
     Securities pursuant to Section 4 or otherwise.

     1. Exercise of Warrant.
        -------------------

        1.1 Number of Shares  Issuable  upon  Exercise.  From and after the date
hereof through and including the  Expiration  Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original  or fax copy of an  exercise  notice  in the form  attached  hereto  as
Exhibit  A (the  "Exercise  Notice"),  shares of  Common  Stock of the  Company,
subject to adjustment pursuant to Section 4.

        1.2 Fair Market Value. For purposes hereof, the "Fair Market Value" of a
share of Common Stock as of a particular date (the  "Determination  Date") shall
mean:

            (a) If the  Company's  Common Stock is traded on the American  Stock
      Exchange  or another  national  exchange  or is quoted on the  National or
      Capital  Market of The Nasdaq  Stock  Market,  Inc.  ("Nasdaq"),  then the
      closing or last sale price,  respectively,  reported for the last business
      day immediately preceding the Determination Date.

            (b) If the  Company's  Common  Stock is not  traded on the  American
      Stock Exchange or another national exchange or on the Nasdaq but is traded
      on the NASD Over The Counter Bulletin Board,  then the mean of the average
      of the closing bid and asked  prices  reported  for the last  business day
      immediately preceding the Determination Date.

            (c) Except as provided in clause (d) below, if the Company's  Common
      Stock is not publicly traded,  then as the Holder and the Company agree or
      in the absence of agreement by  arbitration  in accordance  with the rules
      then in effect of the American  Arbitration  Association,  before a single
      arbitrator to be chosen from a panel of persons qualified by education and
      training to pass on the matter to be decided.

            (d)  If  the  Determination  Date  is  the  date  of a  liquidation,
      dissolution  or  winding  up,  or any event  deemed  to be a  liquidation,
      dissolution  or winding up pursuant  to the  Company's  charter,  then all
      amounts to be payable per share to holders of the Common Stock pursuant to
      the charter in the event of such  liquidation,  dissolution or winding up,
      plus all other  amounts to be  payable  per share in respect of the Common
      Stock in liquidation under the charter,  assuming for the purposes of this
      clause  (d) that all of the  shares of Common  Stock  then  issuable  upon
      exercise of this Warrant are outstanding at the Determination Date.

                                       2

<PAGE>

        1.3  Company  Acknowledgment.  The  Company  will,  at the  time  of the
exercise of this Warrant,  upon the request of the Holder acknowledge in writing
its continuing obligation to afford to the Holder any rights to which the Holder
shall  continue  to be  entitled  after such  exercise  in  accordance  with the
provisions of this  Warrant.  If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to the Holder any such rights.

        1.4  Trustee  for  Warrant  Holders.  In the event  that a bank or trust
company  shall  have been  appointed  as  trustee  for the  Holder  pursuant  to
Subsection  3.2, such bank or trust company shall have all the powers and duties
of a warrant agent (as hereinafter  described) and shall accept, in its own name
for the  account of the  Company  or such  successor  person as may be  entitled
thereto, all amounts otherwise payable to the Company or such successor,  as the
case may be, on exercise of this Warrant pursuant to this Section 1.

     2. Procedure for Exercise.
        ----------------------

        2.1  Delivery of Stock  Certificates,  Etc.,  on  Exercise.  The Company
agrees that the shares of Common Stock  purchased  upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of  business  on the date on which  this  Warrant  shall  have been
surrendered and payment made for such shares in accordance herewith.  As soon as
practicable  after the exercise of this  Warrant in full or in part,  and in any
event  within  three (3) business  days  thereafter,  the Company at its expense
(including  the payment by it of any  applicable  issue  taxes) will cause to be
issued  in the name of and  delivered  to the  Holder,  or as the  Holder  (upon
payment by the Holder of any applicable transfer taxes) may direct in compliance
with applicable securities laws, a certificate or certificates for the number of
duly and validly issued,  fully paid and  non-assessable  shares of Common Stock
(or Other  Securities)  to which the Holder shall be entitled on such  exercise,
plus,  in lieu of any  fractional  share to which the Holder would  otherwise be
entitled,  cash equal to such fraction  multiplied by the then Fair Market Value
of one full  share,  together  with any  other  stock  or other  securities  and
property (including cash, where applicable) to which the Holder is entitled upon
such exercise pursuant to Section 1 or otherwise.

        2.2 Exercise.
            --------

            (a)  Payment  may be made  either  (i) in cash by wire  transfer  of
      immediately available funds or by certified or official bank check payable
      to the order of the Company  equal to the  applicable  aggregate  Exercise
      Price, (ii) by delivery of this Warrant,  or shares of Common Stock and/or
      Common Stock  receivable  upon exercise of this Warrant in accordance with
      the formula set forth in subsection  (b) below,  or (iii) by a combination
      of any of the foregoing methods,  for the number of shares of Common Stock
      specified  in such  Exercise  Notice  (as such  exercise  number  shall be
      adjusted to reflect any adjustment in the total number of shares of Common
      Stock issuable to the Holder per the terms of this Warrant) and the Holder
      shall  thereupon  be entitled  to receive  the number of duly  authorized,
      validly issued,  fully-paid and non-assessable  shares of Common Stock (or
      Other Securities) determined as provided herein.

                                       3

<PAGE>

            (b)  Notwithstanding  any provisions herein to the contrary,  if the
      Fair  Market  Value of one  share of  Common  Stock  is  greater  than the
      Exercise Price (at the date of calculation as set forth below), in lieu of
      exercising  this Warrant for cash,  the Holder may elect to receive shares
      equal to the value (as  determined  below) of this Warrant (or the portion
      thereof  being  exercised)  by surrender of this Warrant at the  principal
      office of the Company together with the properly  endorsed Exercise Notice
      in which event the Company shall issue to the Holder a number of shares of
      Common Stock computed using the following formula:

        X=                  Y(A-B)
                            ------
                              A

        Where X =   the  number of  shares  of Common  Stock to be issued to the
                    Holder

        Y =         the number of shares of Common Stock  purchasable under this
                    Warrant  or,  if only a  portion  of this  Warrant  is being
                    exercised,  the portion of this Warrant being  exercised (at
                    the date of such calculation)

        A =         the Fair Market Value of one share of the  Company's  Common
                    Stock (at the date of such calculation)

        B =         the  Exercise  Price per share (as  adjusted  to the date of
                    such calculation)

        [Notwithstanding  anything to the contrary  set forth in Section  2.2(a)
        above, to the extent that a registration  statement  registering all the
        shares of Common  Stock of the Company  issuable  upon  exercise of this
        Warrant has been  declared  effective  by the  Securities  and  Exchange
        Commission and remains effective as of the date of the proposed exercise
        set forth in an Exercise  Notice,  the Holder  shall upon such  proposed
        exercise,  make payment to the Company of each respective Exercise Price
        set  forth  in  such  Exercise  Notice  in  cash  by  wire  transfer  of
        immediately  available  funds or by  certified  or  official  bank check
        only.]

        3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.
           ------------------------------------------------------------

           3.1 Reorganization,  Consolidation,  Merger, Etc. If there occurs any
capital  reorganization  or any  reclassification  of the  Common  Stock  of the
Company,  the consolidation or merger of the Company with or into another person
(other than a merger or consolidation of the Company in which the Company is the
continuing   entity  and  which  does  not  result  in  any   reorganization  or
reclassification  of its outstanding  Common Stock) or the sale or conveyance of
all or substantially  all of the assets of the Company to another person,  then,
as  a  condition  precedent  to  any  such   reorganization,   reclassification,
consolidation,  merger,  sale or  conveyance,  the Holder  will be  entitled  to
receive  upon  surrender  of this Warrant to the Company (x) to the extent there
are cash  proceeds  resulting  from  the  consummation  of such  reorganization,
reclassification,  consolidation,  merger,  sale or conveyance,  in exchange for
such Warrant,  cash in an amount equal to the cash proceeds that would have been
payable to the Holder had the Holder exercised such Warrant immediately prior to
the  consummation  of  such  reorganization,  reclassification,   consolidation,
merger,  sale or  conveyance,  less the  aggregate  Exercise  Price payable upon
exercise  of this  Warrant,  and (y) to the  extent  that  the  Holder  would be

                                       4

<PAGE>

entitled to receive  Common  stock (or Other  Securities)  (in addition to or in
lieu of cash in  connection  with  any  such  reorganization,  reclassification,
consolidation,  merger,  sale or  conveyance),  the  same  kind and  amounts  of
securities or other assets,  or both, that are issuable or  distributable to the
holders of  outstanding  Common Stock (or Other  Securities) of the Company with
respect to their Common Stock (or Other  Securities)  upon such  reorganization,
reclassification,  consolidation, merger, sale or conveyance, as would have been
deliverable  to the Holder had the Holder  exercised  such  Warrant  immediately
prior   to  the   consummation   of   such   reorganization,   reclassification,
consolidation,  merger,  sale or  conveyance  less an amount of such  securities
having a value equal to the  aggregate  Exercise  Price payable upon exercise of
this Warrant.

           3.2  Dissolution.  In the  event of any  dissolution  of the  Company
following the transfer of all or substantially  all of its properties or assets,
the Company,  concurrently with any distributions  made to holders of its Common
Stock,  shall at its expense  deliver or cause to be delivered to the Holder the
stock and other  securities  and property  (including  cash,  where  applicable)
receivable  by the Holder  pursuant to Section  3.1,  or, if the Holder shall so
instruct the  Company,  to a bank or trust  company  specified by the Holder and
having  its  principal  office in New York,  NY as trustee  for the Holder  (the
"Trustee").

           3.3 Continuation of Terms.  Upon any  reorganization,  consolidation,
merger or transfer (and any dissolution  following any transfer)  referred to in
this  Section 3, this  Warrant  shall  continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property  receivable on the exercise of this Warrant after the  consummation  of
such   reorganization,   consolidation  or  merger  or  the  effective  date  of
dissolution  following  any such  transfer,  as the case  may be,  and  shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer,  the person acquiring all or substantially all of the
properties  or assets of the  Company,  whether  or not such  person  shall have
expressly  assumed  the terms of this  Warrant as  provided in Section 4. In the
event  this  Warrant  does not  continue  in full  force  and  effect  after the
consummation of the transactions described in this Section 3, then the Company's
securities and property  (including  cash, where  applicable)  receivable by the
Holder will be delivered to the Holder or the Trustee as contemplated by Section
3.2.

     4.  Extraordinary  Events  Regarding  Common  Stock.  In the event that the
Company shall (a) issue  additional  shares of the Common Stock as a dividend or
other  distribution on outstanding Common Stock or any preferred stock issued by
the Company, (b) subdivide its outstanding shares of Common Stock or (c) combine
its  outstanding  shares of the Common Stock into a smaller  number of shares of
the  Common  Stock,  then,  in  each  such  event,  the  Exercise  Price  shall,
simultaneously  with the happening of such event, be adjusted by multiplying the
then Exercise Price by a fraction, the numerator of which shall be the number of
shares of  Common  Stock  outstanding  immediately  prior to such  event and the
denominator  of which shall be the number of shares of Common Stock  outstanding
immediately  after such event,  and the product so obtained shall  thereafter be
the Exercise Price then in effect. The Exercise Price, as so adjusted,  shall be
readjusted  in the same manner upon the  happening  of any  successive  event or
events  described herein in this Section 4. The number of shares of Common Stock
that the Holder shall thereafter,  on the exercise hereof as provided in Section
1,  be  entitled  to  receive  shall  be  adjusted  to a  number  determined  by
multiplying  the number of shares of Common Stock that would  otherwise (but for

                                       5

<PAGE>

the  provisions of this Section 4) be issuable on such exercise by a fraction of
which (a) the numerator is the Exercise Price that would  otherwise (but for the
provisions  of this  Section 4) be in  effect,  and (b) the  denominator  is the
Exercise  Price in effect on the date of such exercise  (taking into account the
provisions of this Section 4). Notwithstanding the foregoing,  in no event shall
the Exercise Price be less than the par value of the Common Stock.

     5.  Certificate  as to  Adjustments.  In  each  case of any  adjustment  or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of this  Warrant,  the Company at its expense will  promptly  cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or  readjustment  in  accordance  with the terms of this  Warrant  and prepare a
certificate  setting forth such adjustment or readjustment and showing in detail
the facts upon which such  adjustment  or  readjustment  is based,  including  a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold,  (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding,  and (c) the Exercise Price
and the number of shares of Common  Stock to be received  upon  exercise of this
Warrant,  in effect  immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant.  The Company will  forthwith
mail a copy of each such  certificate to the Holder and any warrant agent of the
Company (appointed pursuant to Section 11 hereof).

     6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company
will at all times reserve and keep  available,  solely for issuance and delivery
on the exercise of this  Warrant,  shares of Common Stock (or Other  Securities)
from time to time issuable on the exercise of this Warrant.

     7. Assignment;  Exchange of Warrant.  Subject to compliance with applicable
securities  laws,  this  Warrant,  and  the  rights  evidenced  hereby,  may  be
transferred  by any  registered  holder hereof (a  "Transferor")  in whole or in
part.  On the  surrender  for exchange of this  Warrant,  with the  Transferor's
endorsement  in  the  form  of  Exhibit  B  attached  hereto  (the   "Transferor
Endorsement  Form") and together with evidence  reasonably  satisfactory  to the
Company  demonstrating  compliance with applicable  securities laws, which shall
include,  without limitation,  a legal opinion from the Transferor's counsel (at
the  Company's  expense)  that  provides  that such  transfer is exempt from the
registration  requirements  of applicable  securities  laws,  the Company at its
expense (but with payment by the  Transferor of any applicable  transfer  taxes)
will  issue  and  deliver  to or on the  order of the  Transferor  thereof a new
Warrant of like tenor,  in the name of the Transferor  and/or the  transferee(s)
specified in such Transferor Endorsement Form (each a "Transferee"),  calling in
the  aggregate  on the face or faces  thereof for the number of shares of Common
Stock  called  for on the face or faces of this  Warrant so  surrendered  by the
Transferor.

     8. Replacement of Warrant. On receipt of evidence  reasonably  satisfactory
to the Company of the loss,  theft,  destruction  or  mutilation of this Warrant
and, in the case of any such loss,  theft or  destruction  of this  Warrant,  on
delivery of an indemnity agreement or security  reasonably  satisfactory in form
and amount to the Company or, in the case of any such  mutilation,  on surrender
and  cancellation  of this Warrant,  the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

                                       6

<PAGE>

     9. Maximum Exercise. Notwithstanding anything herein to the contrary, in no
event shall the Holder be entitled  to exercise  any portion of this  Warrant in
excess of that portion of this Warrant upon exercise of which the sum of (1) the
number of  shares  of Common  Stock  beneficially  owned by the  Holder  and its
Affiliates  (other than shares of Common Stock which may be deemed  beneficially
owned  through the ownership of the  unexercised  portion of this Warrant or the
unexercised or  unconverted  portion of any other security of the Holder subject
to a limitation on conversion analogous to the limitations contained herein) and
(2) the  number of shares of Common  Stock  issuable  upon the  exercise  of the
portion of this Warrant with respect to which the  determination of this proviso
is being  made,  would  result in  beneficial  ownership  by the  Holder and its
Affiliates of any amount  greater than 9.99% of the then  outstanding  shares of
Common Stock (whether or not, at the time of such  exercise,  the Holder and its
Affiliates  beneficially own more than 9.99% of the then  outstanding  shares of
Common Stock).  As used herein,  the term "Affiliate" means any person or entity
that, directly or indirectly through one or more intermediaries,  controls or is
controlled by or is under common control with a person or entity,  as such terms
are used in and construed  under Rule 144 under the  Securities  Act of 1933, as
amended.  For purposes of the second preceding  sentence,  beneficial  ownership
shall be determined in accordance with Section 13(d) of the Securities  Exchange
Act of 1934, as amended,  and Regulations 13D-G thereunder,  except as otherwise
provided  in clause  (1) of such  sentence.  For any  reason  at any time,  upon
written or oral request of the Holder, the Company shall within one (1) business
day  confirm  orally and in writing to the Holder the number of shares of Common
Stock outstanding as of any given date. The limitations set forth herein (may be
waived by the Holder upon  provision of no less than  sixty-one  (61) days prior
written notice to the Company;  provided,  however, that, such written notice of
waiver  shall only be  effective  if  delivered  at a time when no  indebtedness
(including,  without limitation,  principal,  interest, fees and charges) of the
Company  of which the  Holder or any of its  Affiliates  was,  at any time,  the
owner, directly or indirectly is outstanding.

     10. Warrant Agent. The Company may, by written notice to the Holder of this
Warrant,  appoint an agent for the  purpose of  issuing  Common  Stock (or Other
Securities)  on the exercise of this Warrant  pursuant to Section 1,  exchanging
this  Warrant  pursuant to Section 7, and  replacing  this  Warrant  pursuant to
Section 8, or any of the foregoing,  and thereafter any such issuance,  exchange
or replacement, as the case may be, shall be made at such office by such agent.

     11. Transfer on the Company's  Books.  Until this Warrant is transferred on
the books of the Company,  the Company may treat the registered holder hereof as
the absolute  owner hereof for all purposes,  notwithstanding  any notice to the
contrary.

     12. Rights of Shareholders.  No Holder shall be entitled to vote or receive
dividends  or be deemed the  holder of the  shares of Common  Stock or any other
securities  of the Company  which may at any time be issuable  upon  exercise of
this  Warrant  for any  purpose  (the  "Warrant  Shares"),  nor  shall  anything
contained  herein be  construed to confer upon the Holder,  as such,  any of the
rights of a shareholder  of the Company or any right to vote for the election of
directors or upon any matter  submitted to shareholders at any meeting  thereof,
or to give or  withhold  consent  to any  corporate  action  (whether  upon  the
recapitalization,  issuance  of shares,  reclassification  of shares,  change of
nominal  value,  consolidation,  merger,  conveyance or otherwise) or to receive
notice of meetings, or to receive dividends or subscription rights or otherwise,

                                       7

<PAGE>

in each case,  until the earlier to occur of (x) the date of actual  delivery to
Holder (or its designee) of the Warrant Shares issuable upon the exercise hereof
or (y) the third  business  day  following  the date such  Warrant  Shares first
become deliverable to Holder, as provided herein.

     13. Notices,  Etc. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail,  postage
prepaid, at such address as may have been furnished to the Company in writing by
the Holder from time to time.

     14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged  or terminated  only by an instrument in writing  signed by the party
against which  enforcement of such change,  waiver,  discharge or termination is
sought.  THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE  WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
ANY ACTION BROUGHT  CONCERNING  THE  TRANSACTIONS  CONTEMPLATED  BY THIS WARRANT
SHALL BE BROUGHT ONLY IN THE STATE  COURTS OF NEW YORK OR IN THE FEDERAL  COURTS
LOCATED IN THE STATE OF NEW YORK; PROVIDED,  HOWEVER, THAT THE HOLDER MAY CHOOSE
TO WAIVE THIS  PROVISION AND BRING AN ACTION  OUTSIDE THE STATE OF NEW YORK. The
individuals  executing  this Warrant on behalf of the Company agree to submit to
the  jurisdiction  of such courts and waive trial by jury. The prevailing  party
shall be entitled to recover from the other party its reasonable attorneys' fees
and  costs.  In the event  that any  provision  of this  Warrant  is  invalid or
unenforceable  under any applicable  statute or rule of law, then such provision
shall be deemed  inoperative  to the extent that it may conflict  therewith  and
shall be deemed  modified to conform  with such statute or rule of law. Any such
provision  which  may prove  invalid  or  unenforceable  under any law shall not
affect the validity or  enforceability  of any other  provision of this Warrant.
The headings in this Warrant are for purposes of reference  only,  and shall not
limit  or  otherwise  affect  any  of  the  terms  hereof.   The  invalidity  or
unenforceability  of any provision hereof shall in no way affect the validity or
enforceability  of any other provision  hereof.  The Company  acknowledges  that
legal counsel  participated in the  preparation of this Warrant and,  therefore,
stipulates  that the rule of  construction  that  ambiguities are to be resolved
against the drafting  party shall not be applied in the  interpretation  of this
Warrant to favor any party against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS]

                                        9

<PAGE>

                                SIGNATURE PAGE TO
                          COMMON STOCK PURCHASE WARRANT

     IN WITNESS  WHEREOF,  the Company has executed  this Warrant as of the date
first written above.

WITNESS:                                    Petrol Oil and Gas, Inc.

                                            By:
----------------------------------             --------------------------------
                                               Name:
                                               Title:

                                       9

<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION

                   (To Be Signed Only On Exercise Of Warrant)

To:      Petrol Oil and Gas, Inc.
         _____________________
         _____________________
         Attention:

         The  undersigned,  pursuant to the provisions set forth in the attached
Warrant (No.____) (the "Warrant"),  hereby irrevocably elects to purchase (check
applicable box):

_______        ________ shares of the common stock covered by the Warrant; or

_______        the maximum  number of shares of common  stock  covered by the
               Warrant pursuant to the cashless exercise  procedure set forth
               in Section 2 of the Warrant.

         The  undersigned  herewith makes payment of the full Exercise Price for
such  shares  at the  price  per share  provided  for in the  Warrant,  which is
$___________. Such payment takes the form of (check applicable box or boxes):

_______        $__________ in lawful money of the United States; and/or

_______        the  cancellation  of  such  portion  of  the  Warrant  as  is
               exercisable  for a total of  _______  shares of  Common  Stock
               (using a Fair Market  Value of $_______ per share for purposes
               of this calculation); and/or

_______        the  cancellation  of such number of shares of Common Stock as
               is  necessary,  in  accordance  with the  formula set forth in
               Section 2.2 of the  Warrant,  to exercise  this  Warrant  with
               respect  to the  maximum  number of  shares  of  Common  Stock
               purchasable  pursuant to the cashless  exercise  procedure set
               forth in Section 2 of the Warrant.

     The undersigned requests that the certificates for such shares be issued in
the name of,  and  delivered  to  ______________________________________________
whose address is _____________________________________________________________.

     The  undersigned  represents  and warrants that all offers and sales by the
undersigned  of the  securities  issuable  upon exercise of the Warrant shall be
made pursuant to  registration  of the Common Stock under the  Securities Act of
1933,  as amended  (the  "Securities  Act") or  pursuant  to an  exemption  from
registration under the Securities Act.

Dated: __________________                   ___________________________________
                                            (Signature  must  conform to name
                                            of holder as specified on the face
                                            of the Warrant)

                                            Address:___________________________

                                                    ___________________________

<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT

                   (To Be Signed Only On Transfer Of Warrant)

     For value received,  the undersigned hereby sells,  assigns,  and transfers
unto the  person(s)  named  below  under  the  heading  "Transferees"  the right
represented  by the within  Warrant to  purchase  the  percentage  and number of
shares of Common Stock of Petrol Oil and Gas, Inc. (the Company") into which the
within Warrant relates specified under the headings "Percentage Transferred" and
"Number Transferred,"  respectively,  opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of the Company with full power of substitution in the premises.

                                              Percentage               Number
                                              ----------               ------
Transferees            Address               Transferred            Transferred
-----------            -------               -----------            -----------

Dated:_______________________               ___________________________________
                                            (Signature  must  conform to name
                                            of holder as specified on the face
                                            of the Warrant)

                                            Address:___________________________

                                                    ___________________________

                                            SIGNED IN THE PRESENCE OF:

                                            ___________________________________
                                                         (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

_____________________________
          (Name)

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