Document:

Exhibit
10.2

    

    STONERIDGE,
INC.

    LONG-TERM
CASH INCENTIVE PLAN

    2010
PHANTOM SHARE GRANT AGREEMENT

     

    Stoneridge,
Inc., an Ohio corporation (the “Company”), pursuant to the terms and conditions
hereof, hereby grants to ______________(“Grantee”) the right to receive an
amount of cash equal to the value of XXXX Common Shares, without par value, of
the Company (the “Phantom Shares”).  The grant of Phantom Shares (the
“Award”), as embodied by this Agreement (the “Agreement”), is described
below.

     

    1.           The
Phantom Shares are in all respects subject to the terms, conditions and
provisions of this Agreement and the Company’s Long-Term Cash Incentive Plan
(the “Plan”).

     

    2.           The
Phantom Shares shall be phantom (notional) Common Shares of the
Company.  Subject to the satisfaction of the applicable performance
criteria, a Phantom Share shall entitle Grantee to the right to an amount of
cash equal to (i) the Fair Market Value of a Common Share as of the Vesting Date
(as set forth in Section 3 below), plus (ii) any Dividend Equivalent Rights
(“DERs”) relating to the Phantom Shares.  Such amount in satisfaction
of the vested Phantom Shares and related DERs shall be paid to Grantee in cash,
less withholding obligations, as promptly as practical on or after February 14,
2013, but no in event later than February 28, 2013.

     

    For
purposes of this Agreement, DERs shall mean a contingent right, automatically
granted in tandem with a Phantom Share, to the right to an amount in cash equal
to the cash distributions made by the Company with respect to Common Shares
during the period from February 14, 2010, through February 14, 2013, and subject
to the same vesting conditions as the related Phantom Shares.  The
Company shall track DERs by providing to Grantee a credit under a bookkeeping
account (without interest) equal to cash distributions made by the Company with
respect to Common Shares at the respective time(s) such distributions are made
to holders of Common Shares.

     

    For
purpose of this Agreement, “Fair Market Value” of a Common Share shall mean as
of a given date (in order of applicability): (i) the closing price of a Common
Share on the principal exchange on which the Common Shares are then trading, if
any, on the day immediately prior to such date, or if Common Shares were not
traded on the day previous to such date, then on the next preceding trading day
during which a sale occurred; or (ii) if Common Shares are not traded on an
exchange but are quoted on NASDAQ or a successor quotation system, (A) the last
sale price (if Common Shares are then listed as a National Market Issue under
the NASD National Market System) or (B) if Common Shares are not then so listed,
the mean between the closing representative bid and asked prices for Common
Shares on the day previous to such date as reported by NASDAQ or such successor
quotation system; or (iii) if Common Shares are not publicly traded on an
exchange and not quoted on NASDAQ or a successor quotation system, the mean
between the closing bid and asked prices for Common Shares, on the day previous
to such date, as determined in good faith by the Compensation Committee of the
Board of Directors (the “Committee”); or (iv) if Common Shares are not publicly
traded, the fair market value established by the Committee acting in good
faith.

     

    3.           The
Phantom Shares may not be sold, transferred, pledged, assigned or otherwise
encumbered, whether voluntarily, involuntarily or by operation of law, and,
except in the case of (i) retirement, (ii) death, (iii) Permanent Disability (as
defined in the Plan), (iv) Change in Control (as defined in the Plan) or (v)
termination without cause, each as provided below, will be forfeited to the
Company on February 14, 2013 if (a) the Grantee is not employed with the Company
on the Vesting Date (defined below), or (ii) the applicable performance criteria
has not been satisfied. 

     

    Special Provisions
Applicable to Retirement.

     

    Subject
to the conditions in the next paragraph, in the case of retirement, the Phantom
Shares shall not be forfeited as a result of the retirement but shall be vested
upon satisfaction of the performance criteria applicable to the Award, and shall
be settled in cash as promptly as practical after February 14, 2013, but in no
event later than February 28, 2013.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Only a
Grantee who (i) is 63 or older at the time of retirement, (ii) has provided
written notice to the Committee of the intent to retire at least one year prior
to the retirement date, and (iii) has executed prior to retirement a customary
one year non-competition agreement, shall be permitted to vest Phantom Shares
upon retirement.

     

    If the
Grantee is employed by the Company on the Vesting Date the Phantom Shares shall
vest and will no longer be subject to a substantial risk of forfeiture in the
amounts set forth below:

     

    
      
        
          	
                  Award

                	
                  EPS
      Performance and Time-Based
Vesting

                

        

      

      

      
        
          
            
              	
                      Vesting Date

                    	 
      	
                      Maximum Number of Phantom Shares that May
      Vest

                    
	 
      	 
      	 
      
	
                      February
      14, 2013

                    	
                        

                    	
                      XXXX  (1/3
      for each of 2010, 2011 and
2012)

                    

            

          

        

      

    

     

    2010

     

    Maximum Number of 2010
Phantom Shares that May Vest:

     

    If
Earnings Per Share (“EPS”) for the 2010 calendar year equals or exceeds $(0.125)
(the “2010 Maximum Threshold”), then YYY Phantom Shares shall vest
conditionally, contingent upon Grantee’s continued employment with the Company
through the Vesting Date.

     

    If EPS
for the 2010 calendar year exceeds $(0.25) (the “2010 Target Threshold”) but is
less than $(0.125), then the number of Phantom Shares that shall vest shall be
ZZZ Phantom Shares plus the result of the following calculation: AAA times (the
Company’s aggregate EPS for 2010 less $(0.25)) divided by .125.  Such
vesting shall be conditional, contingent upon Grantee’s continued employment
with the Company through the Vesting Date.  The remaining 2010 Phantom
Shares shall be forfeited on February 14, 2013, unless otherwise vested under
Section 5.

     

    If EPS
for the 2010 calendar year equals the 2010 Target Threshold, then the number of
Phantom Shares that shall vest shall be ZZZ Phantom Shares.  Such
vesting shall be conditional, contingent upon Grantee’s continued employment
with the Company through the Vesting Date.  The remaining 2010 Phantom
Shares shall be forfeited on February 14, 2013, unless otherwise vested under
Section 5.

     

    If EPS
for the 2010 calendar year exceeds $(0.375) (the “2010 Minimum Threshold”) but
is less than $(0.25), then the number of Phantom Shares that shall vest shall be
AAA Phantom Shares plus the result of the following calculation: AAA times (the
Company’s aggregate EPS for 2010 less $(0.375)) divided by .125.  Such
vesting shall be conditional, contingent upon Grantee’s continued employment
with the Company through the Vesting Date.  The remaining 2010 Phantom
Shares shall be forfeited on February 14, 2013, unless otherwise vested under
Section 5.

     

    If EPS
for the 2010 calendar year equals the 2010 Minimum Threshold, then the number of
Phantom Shares that shall vest shall be AAA Phantom Shares.  Such
vesting shall be conditional, contingent upon Grantee’s continued employment
with the Company through the Vesting Date.  The remaining 2010 Phantom
Shares shall be forfeited on February 14, 2013, unless otherwise vested under
Section 5.

     

    If EPS
for the 2010 calendar year is less than the 2010 Minimum Threshold,
then  YYY Phantom Shares shall be forfeited on February 14, 2013,
unless otherwise vested under Section 5.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	 	
              NOTE:

            	
              The
      following sections applicable to 2011 and 2012 performancevesting are
      subject to the 2011 and 2012 Addenda to
  thisAgreement.

            

    

     

    2011

     

    Maximum Number of 2011
Phantom Shares that May Vest:

     

    If EPS
for the 2011 calendar year equals or exceeds the 2011 Maximum Threshold (as set
forth in the 2011 Addendum to this Agreement), then all YYY Phantom Shares shall
vest conditionally, contingent upon Grantee’s continued employment with the
Company through the Vesting Date.

     

    If EPS
for the 2011 calendar year exceeds the 2011 Target Threshold (as set forth in
the 2011 Addendum to this Agreement), but is less than the 2011 Maximum
Threshold, then the number of Phantom Shares that shall vest shall be ZZZ
Phantom Shares plus the result of the following calculation: AAA times (the
difference between the Company’s aggregate EPS for 2011 and the 2011 Target
Threshold) divided by (the difference between the 2011 Maximum Threshold and the
2011 Target Threshold).  Such vesting shall be conditional, contingent
upon Grantee’s continued employment with the Company through the Vesting
Date.  The remaining 2011 Phantom Shares shall be forfeited on
February 14, 2013, unless otherwise vested under Section 5.

     

    If EPS
for the 2011 calendar year equals the 2011 Target Threshold (as set forth in the
2011 Addendum to this Agreement), then the number of Phantom Shares that shall
vest shall be ZZZ Phantom Shares.  Such vesting shall be conditional,
contingent upon Grantee’s continued employment with the Company through the
Vesting Date.  The remaining 2011 Phantom Shares that shall be
forfeited on February 14, 2013, unless otherwise vested under Section
5.

     

    If EPS
for the 2011 calendar year exceeds the 2011 Minimum Threshold (as set forth in
the 2011 Addendum to this Agreement), but is less than the 2011 Target
Threshold, then the number of Phantom Shares that shall vest shall be AAA
Phantom Shares plus the result of the following calculation: AAA times (the
difference between the Company’s aggregate EPS for 2011 and the 2011 Minimum
Threshold) divided by (the difference between the 2011 Target Threshold and the
2011 Minimum Threshold).  Such vesting shall be conditional,
contingent upon Grantee’s continued employment with the Company through the
Vesting Date.  The remaining 2011 Phantom Shares shall be forfeited on
February 14, 2013, unless otherwise vested under Section 5.

     

    If EPS
for the 2011 calendar year equals the 2011 Minimum Threshold, then the number of
Phantom Shares that shall vest shall be AAA Phantom Shares.  Such
vesting shall be conditional, contingent upon Grantee’s continued employment
with the Company through the Vesting Date.  The remaining 2011 Phantom
Shares shall be forfeited on February 14, 2013, unless otherwise vested under
Section 5.

     

    If EPS
for the 2011 calendar year is less than the 2011 Minimum Threshold,
then  YYY Phantom Shares shall be forfeited on February 14, 2013,
unless otherwise vested under Section 5.

     

    2012

     

    Maximum Number of 2012
Phantom Shares that May Vest:

     

    If EPS
for the 2012 calendar year equals or exceeds the 2012 Maximum Threshold (as set
forth in the 2012 Addendum to this Agreement), then all YYY Phantom Shares shall
vest.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    If EPS
for the 2012 calendar year exceeds the 2012 Target Threshold (as set forth in
the 2012 Addendum to this Agreement), but is less than the 2012 Maximum
Threshold, then the number of Phantom Shares that shall vest shall be ZZZ
Phantom Shares plus the result of the following calculation: AAA times (the
difference between the Company’s aggregate EPS for 2012 and the 2012 Target
Threshold) divided by (the difference between the 2012 Maximum Threshold and the
2012 Target Threshold).  Such vesting shall be conditional, contingent
upon Grantee’s continued employment with the Company through the Vesting
Date.  The remaining 2012 Phantom Shares shall be forfeited on
February 14, 2013, unless otherwise vested under Section 5.

     

    If EPS
for the 2012 calendar year equals the 2012 Target Threshold, then the number of
Phantom Shares that shall vest shall be ZZZ Phantom Shares.  Such
vesting shall be conditional, contingent upon Grantee’s continued employment
with the Company through the Vesting Date.  The remaining 2012 Phantom
Shares shall be forfeited on February 14, 2013, unless otherwise vested under
Section 5.

     

    If EPS
for the 2012 calendar year exceeds the 2012 Minimum Threshold (as set forth in
the 2012 Addendum to this Agreement), but is less than the 2012 Target
Threshold, then the number of Phantom Shares that shall vest shall be AAA
Phantom Shares plus the result of the following calculation: AAA times (the
difference between the Company’s aggregate EPS for 2012 and the 2012 Minimum
Threshold) divided by (the difference between the 2012 Target Threshold and the
2012 Minimum Threshold).  Such vesting shall be conditional,
contingent upon Grantee’s continued employment with the Company through the
Vesting Date.  The remaining 2012 Phantom Shares shall be forfeited on
February 14, 2013, unless otherwise vested under Section 5.

     

    If EPS
for the 2012 calendar year equals the 2012 Minimum Threshold, then the number of
Phantom Shares that shall vest shall be AAA Phantom Shares.  Such
vesting shall be conditional, contingent upon Grantee’s continued employment
with the Company through the Vesting Date.  The remaining 2012 Phantom
Shares shall be forfeited on February 14, 2013, unless otherwise vested under
Section 5.

     

    If EPS
for the 2012 calendar year is less than the 2012 Minimum Threshold,
then  YYY Phantom Shares shall be forfeited on February 14, 2013,
unless otherwise vested under Section 5.

     

    Earnings
Per Share (“EPS”) under this Agreement shall be the aggregate fully diluted
earnings per Common Share of the Company calculated in accordance with generally
accepted accounting principals, excluding any adjustments for goodwill
impairments and the tax effect thereof.

     

    The 2011
and 2012 Addenda to this Agreement shall be appended to this Agreement and
incorporated herein by reference, effective upon their respective adoption by
the Committee.

     

    5.           Notwithstanding
the foregoing, in addition to the vesting of the Phantom Shares set forth above,
the Phantom Shares shall no longer be subject to a substantial risk of
forfeiture and shall vest upon the occurrence of an event described
below.

     

    (i)           The
Phantom Shares shall vest and not be forfeited in the event of:

     

    (a)           the
Grantee’s death or Permanent Disability in proportion to the number of months,
including any partial month, elapsed in the vesting period divided by
36;

     

    (b)           a
Change in Control of the Company; or

     

    (c)           the
termination “without cause” of the Grantee’s employment by the Company;
provided, however only in proportion to the number of months, including any
partial month, elapsed in the vesting period divided by 36.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Subject to the pro rata provisions for
death, Permanent Disability and termination without cause set forth above, in
the event of the Grantee’s death, Permanent Disability or termination without
cause the Phantom Shares granted under the Award shall vest in amounts in
accordance with the Company’s actual EPS for each of 2010, 2011, and 2012 as
determined under the EPS performance conditions of Section 3.  Cash
payment in satisfaction of the vested Phantom Shares shall be paid to the
Grantee or the Grantee’s estate on February 14, 2013 or as promptly as practical
thereafter, but no in event later than February 28, 2013.  In the
event of a Change in Control of the Company, the Phantom Shares shall vest in
amounts which assume the Company’s EPS satisfied the respective 2010, 2011 and
2012 Target Thresholds.  Cash payment in satisfaction of the vested
Phantom Shares shall be delivered to the Grantee as promptly as practical after
the Change in Control but in no event later than 30 days following the Change in
Control; provided, however, if the Grantee is eligible to retire from the
Company and not forfeit  his or her Phantom Shares under Section 3
under the heading “Special Provisions Applicable to Retirement,” then the cash
payment in the event of a Change in Control will be made on February 14, 2013,
or as promptly as practical thereafter but in no event later than February 28,
2013.

     

    (ii)           Termination
shall be deemed to be “without cause” unless the Board of Directors of the
Company, or its designee, in good faith determines that termination is because
of any one or more of the following, in which case such termination shall be
deemed to be for “cause”:

     

    The
Grantee’s:

     

    
      	
               
      

            	
              (a)

            	
              fraud;

            

    

     

    
      	
               
      

            	
              (b)

            	
              misappropriation
      of funds from the Company;

            

    

     

    
      	
               
      

            	
              (c)

            	
              commission
      of a felony or of an act or series of acts which result in material injury
      to the business reputation of the
Company;

            

    

     

    
      	
               
      

            	
              (d)

            	
              commission
      of a crime or act or series of acts involving moral
    turpitude;

            

    

     

    
      	
               
      

            	
              (e)

            	
              commission
      of an act or series of repeated acts of dishonesty that are materially
      inimical to the best interests of the
Company;

            

    

     

    
      	
               
      

            	
              (f)

            	
              willful
      and repeated failure to perform his duties, which failure has not been
      cured within fifteen (15) days after the Company gives notice thereof to
      the Grantee;

            

    

     

    
      	
               
      

            	
              (g)

            	
              material
      breach of any material provision of an employment agreement, if any, which
      breach has not been cured in all substantial respects within ten (10) days
      after the Company gives notice thereof to the Grantee;
  or

            

    

     

    
      	
               
      

            	
              (h)

            	
              failure
      to carry out the reasonable directions or instructions of the Grantee’s
      superiors, provided the directions or instructions are consistent with the
      duties of the Grantee’s office, which failure has not been cured in all
      substantial respects within ten (10) days after the Company gives notice
      thereof to the Grantee.

            

    

     

    Provided, however, the Company’s
obligation to provide notice and an opportunity to cure, pursuant to subsections
5(ii)(f)-(h) above, shall only apply to the Grantee’s first breach, first
failure to perform or first failure to follow directions, as the case may be, of
the nature giving rise to the right of the Company to provide notice
thereof.

     

    (iii)           In
addition, the Grantee may terminate his employment with the Company, and such
termination shall be deemed a termination by the Company “without cause”
if:

     

    
      	
               
      

            	
              (a)

            	
              the
      Company reduces the Grantee’s title, responsibilities, power or authority
      in comparison with his title, responsibilities, power or authority on the
      date hereof;

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (b)

            	
              the
      Company assigns the Grantee duties which are inconsistent with the duties
      assigned to the Grantee on the date hereof and which duties the Company
      persists in assigning to the Grantee despite the prior written objection
      of the Grantee; or

            

    

     

    
      	
               
      

            	
              (c)

            	
              the
      Company reduces the Grantee’s annual base compensation (unless such
      decrease is proportionate with a decrease in the base compensation of the
      officers of the Company as a group), or materially reduces his group
      health, life, disability or other insurance programs, his pension,
      retirement or profit-sharing benefits or any benefits provided by the
      Company, or excludes him from any plan, program or arrangement, including
      but not limited to bonus or incentive
plans.

            

    

     

    6.           Upon
any change in the number or kind of outstanding Common Shares of the Company by
reason of a recapitalization, merger, consolidation, reorganization, separation,
liquidation, share split, share dividend, combination of shares or any other
change in the corporate structure or Common Shares of the Company, the Company,
by action of the Committee, is empowered to make such adjustment, if any, in the
number and kind of Phantom Shares subject to this Agreement as it considers
appropriate for the protection of the Company and of the Grantee.

     

    7.           No
later than the date as of which an amount first becomes includable in the gross
income of the Grantee for federal income tax purposes with respect to the
Phantom Shares granted hereunder, the Grantee shall pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any
federal, state or local taxes of any kind required by law to be withheld with
respect to that amount.  The making of that payment or those
arrangements is a condition to the obligations of the Company under the Plan,
and the Company and its subsidiaries and affiliates may, to the extent permitted
by law, deduct any taxes from any payment of any kind otherwise payable to the
Grantee.

     

    8.           Nothing
in this Agreement shall affect in any manner any conflicting or other provision
of any other agreement between the Grantee and the Company.  Nothing
contained in this Agreement shall limit whatever right the Company might
otherwise have to terminate the employment of the Grantee.

     

    9.           The
laws of the State of Ohio govern this Agreement, the Plan and the Phantom Shares
granted hereby.

     

    10.         This
Agreement shall be binding upon Grantee, Grantee’s legal representatives, heirs,
delegates and distributes, and upon the Company, its successors and
assigns.

     

    11.         Nothing
in this Agreement shall affect the right of the Company (or any subsidiary
thereof) to terminate the employment of the Grantee at any time for any, or no,
reason, or confer upon Grantee the right to continued employment with the
Company (or any subsidiary thereof).

     

    IN
WITNESS WHEREOF, the Company has caused its corporate name to be subscribed by
its duly authorized officer as of the 14th day of February 2010.

     

    
      
        
          	
                  STONERIDGE,
      INC.

                
	 
      	 
      
	
                  By

                	  
      
	 
      	
                  John
      Corey

                

        

      

    

    

    The
foregoing is hereby accepted.

    

    
      
        	
                  
      

              
	
                (Signature)

              

      

    

     

    
      
        
        

      

      
        6Unassociated Document

     

    PURCHASE
AGREEMENT

     

    This
agreement is entered into this the 6th day of
May, 2010, between CHARLIE HEATER, d/b/a H 5 PRODUCERS, a sole proprietorship,
herein Seller and GRYPHON PRODUCTION CO., LLC, herein Buyer, the terms of which
are as follows:

    1.           Seller
agrees to sell and Buyer agrees to buy, subject to the contingencies hereinafter
set forth, all of Seller's right, title and ownership interest in and unto each
of the oil, gas and/or casinghead gas leasehold estates as owned by Seller more
fully described in Exhibit "A" attached as located in Hutchinson County, Texas
together with all wells, casing, tubing, tanks (both metal and fiberglass),
rods, pumps, flow lines, water lines, pump jacks, heater treaters and all other
equipment, structures and personal property now located upon said lands as
described in Exhibit "A" attached as used in connection with Seller's oil and
gas operations thereon except only those as may hereinafter be reserved by
Seller.

    2.           The
sale by Seller of the oil and gas leasehold estates as set out in Exhibit "A"
attached shall also include all oil, gas and casinghead gas and associated
hydrocarbons attributable to said lands, or any lands pooled therewith,
effective as of date of closing.

    3.           Purchase
price to be paid buy Buyer to Seller at closing is $150,000.00 of which Buyer
agrees to deposit with Robert L. Finney Trust Account, as escrow agent, the full
purchase price sum on or before the expiration of seven (7) days from the date
of the signing of this agreement by the Buyer by wire transfer into account No.
400-73354-7 at
FirstBank Southwest, Pampa, Texas (routing No. 111308057).

    4.           Seller
warrants that all ad valorem property taxes due on said Exhibit "A" properties
have been paid to and including the year 2009 without exception and that 2010 ad
valorem property taxes on each lease shall be prorated to date of
closing.

     

    5.           Seller
covenants and agrees on date of closing that each of the Exhibit "A" properties
shall be free and clear of all mortgages, liens, mechanic's liens, debts or
other encumbrances applicable to the oil, gas and casinghead gas leasehold
estates and equipment located thereon as owned by Seller. Seller shall provide
Buyer at closing an Affidavit of no unrecorded liens or encumbrances as created
by Seller covering the Exhibit "A" properties.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6.            Buyer's
purchase of the leasehold estates described in Exhibit "A" attached is
specifically CONTINGENT UPON each of the following matters:

    a.            Approval
of said purchase and purchase price by CHANCELLOR GROUP, INC., a Nevada
Corporation, being the owner of Buyer herein on or before May 4,
2010.

    b.            Completion
by Buyer, within 21 days from the execution of this agreement, of its due
diligence necessary to satisfy itself as to Buyer's clear title to the working
interest in each of the Exhibit "A" properties as being free and clear of all
liens, mortgages, environmental defects and/or other encumbrances, provided
counsel for Buyer receives Seller's complete lease file records on or before May
4, 2010 at 4:00 p.m.

    C.              Buyer's
due diligence to verify the Seller's compliance with all rules and regulations
promulgated by the State of Texas and the Texas Railroad Commission or any other
entity having regulatory authority over the Exhibit "A" properties.

     

    d.              Net
revenue working interest to be acquired by Buyer shall be at least the
percentage hereinafter shown on each respective lease, or more:

     

    
      	
              (1)

            	
              T D
      LEWIS "A" LEASE:

            	
              81.25% of
      8/8

            
	
              (2)

            	
              MOORE
      LEASE:

            	
              81.25% of
      8/8

            
	
              (3)

            	
              TIMMS
      LEASE:

            	
              81.25% of
      8/8

            

    

     

    7.            Closing
of this sale shall occur on or before the 24th day
of May, 2010 in the office of Robert L. Finney, P. C., 309 West Foster, Pampa,
Texas 79065
or such other time or place as the parties may be able to mutually agree.
At closing Seller shall prepare, execute and deliver to Buyer an Assignment of
Interest and Bill of Sale on the form set out in Exhibit "B" attached, but with
all personal property and equipment to be conveyed "AS IS", "WHERE IS" with no
warranties expressed, implied or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.            At
closing, Seller shall execute all necessary documents and change of operator
forms as may be required or necessary to appoint Buyer, and/or its designated
agent, as sole operator of each of the leases in Exhibit "A"
attached.

    9.           On
or before May 4, 2010 at 4:00 p.m., Seller shall provide to Buyer, for
examination purposes Seller's complete lease file and all information in
Seller's possession as to name and address of first purchasers of oil, gas
and/or casinghead gas. In the event Seller is receiving or is entitled to
receive 100% of production for distribution purposes, Seller shall also furnish
to Buyer, at closing, a listing of all royalty, overriding royalty and other
third party payees that Sellers have in their possession on each lease entitled
to proceeds from production other than due Seller and the percentage of proceeds
ownership due each.

    10.           If
any of the contingencies set out in paragraph 6 above should occur, this
agreement, at the sole option of Buyer, shall be null and void and escrow agent
shall be authorized to return to Buyer the escrow deposit required of Buyer by
this agreement.

     

    11.           Buyer
agrees to pay Seller, for the use and benefit of JMR GAS, LLC., Pampa, Texas at
the posted price in the Texas Panhandle on date of sale, for 97.44 total barrels
of crude petroleum (representing seven feet (7') of tank oil), less production
taxes, in addition to the $150,000.00 purchase price required to be paid to
Seller under paragraph 3 of this agreement. Such payment shall be timely paid to
Seller from proceeds received by the Buyer from its sale of the first load of
oil from any of the properties described in Exhibit "A" attached. Upon receipt
of such payment Seller agrees to indemnify and hold harmless Buyer and all of
Buyer's properties from any and all claims for such proceeds due to JMR GAS,
LLC., by Seller herein and shall timely furnish to Buyer a receipt and
recordable release from JMR GAS, LLC. for such payment.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    DATED
this the 6th day
of May, 2010, but effective as of 7:00 a.m. on May 1, 2010.

     

    
      
        	 	
                SELLER:

              	 
	 	 	 	 
	 	      
                CHARLIE HEATER, d/b/a H S
      PRODUCERS, a sole proprietorship P. 0. Box 375

              
	 	      
                Stinnett, TX, 79083-0395

              
	 	 
	 	      
                MISTY
      HEATER

              
	 	 
	 	BUYER:
	 	 
	 	      
                GRYPHON
      PRODUCTION CO., LLC

              
	 	 
	
              	
                By:
      

              	 	 
	 	MAXWELL
      GRANT, Manager	 
	 	P.
      0. Box 742	 
	 	Pampa,
      Texas 79066-0742	 

      

    

     

     

    EXHIBIT "A"

     

     

     T.
D. LEWIS "A" LEASE:

     

    The
Northwest Quarter of the Northeast Quarter (NW/4 of NE/4) of Section Six (6), in
Block Twenty-Three (23), BS&F Railway Co., Survey, Hutchinson County,
Texas.

     

    MOORE
LEASE:

     

    The
Northwest Eighty (NW/80) acres of Section Twenty-One (21), Block M-2 1, TC
Railway Co., Survey, Hutchinson County, Texas.

     

    TIMMS
LEASE:

     

    The West
Half of the Northeast Quarter (W/2 of NE/4) of Section Five (5), Block 231 BS&F
Railway Co., Survey, Hutchinson County, Texas.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT "B"

     

    NOTICE
OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE
ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR
RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S
LICENSE NUMBER.

    

    ASSIGNMENT
OF OIL AND GAS LEASES

    

      
        	
                ASSIGNOR:

              	
                CHARLIE
      HEATER, d/b/a H 5 PRODUCERS,

              	 
      
	 
      	
                a
      sole proprietorship

              	 
      

      

      
        	 
      	
                     
      

              	 
      
	 
      	
                    
      

              	 
      

      

    

     

    
      	
              ASSIGNEE:

            	
              GRYPON
      PRODUCTION CO., LLC

            
	 	      
              P.
      O. Box 742

            
	 	      
              Pampa,
      Texas 79066-0742

            

    

    

    For and in consideration of Ten Dollars
($10.00) and other good and valuable consideration, paid to Assignor by
Assignee, the receipt and sufficiency of which is hereby acknowledged, Assignor
does hereby BARGAIN, GRANT,
SELL, CONVEY, TRANSFER, ASSIGN, SET OVER and DELIVER unto the said Assignee
all of Assignor's right, title and interest in and to the following described
properties situated in Hutchinson County, Texas:

    

    A.  The
oil and gas leases affecting lands in Hutchinson County, Texas, described on
Exhibit "A" attached hereto and made a part hereof, and the leasehold estates
evidenced thereby;

    

    B.  All
wells, casing, tubing, derricks, tanks, tank batteries, separators, rods, pumps,
flow lines, water lines, gas lines, equipment, structures and other personal
property and fixtures located upon the lands described on Exhibit "A" or used in
connection with oil and gas operations thereon, except as hereinafter excepted
and reserved to Assignor;

    

    C.  All
of the interest of Assignor in all permits, licenses, franchises, easements,
servitudes and rights-of-way of every character which are useful or appropriate
in exploring for, developing, operating, producing, gathering, treating, storing
or transporting oil, gas and other minerals on or off the lands described on
Exhibit "A";

    

    D.  All
of the interest of Assignor in, to and under all hydrocarbon sales agreements,
and other instruments, contracts and agreements of every character, except as
hereinafter excepted and reserved, insofar as they cover or affect the
properties described on Exhibit "A" or the production and marketing of oil, gas
and other hydrocarbons from the lands described on Exhibit "A"; and

     

    E.  All
of the interest of Assignor in and to all of the abstracts of title, records,
well logs, and all other instruments and files pertaining to the above described
oil and gas leases.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    all of
the foregoing being hereinafter sometimes called the "Conveyed
Properties".

    TO HAVE AND TO HOLD the
Conveyed Properties, together with all and singular all rights, privileges,
hereditaments and appurtenances thereto in anywise belonging unto said Assignee,
its successors and assigns forever, subject, however, to the terms, provisions,
conditions, exceptions, reservations, covenants and agreements herein set
forth:

    1.  This Assignment is
subject to all terms and conditions of the Leases covering said land (express
and implied) which terms and conditions Assignee accepts and agrees to perform
insofar as they relate to that portion of the Leases assigned
hereby.

    2.  This Assignment is
subject to all terms and conditions of all prior Assignments which appear of
record in the office of the County Clerk of Hutchinson County, Texas, affecting
the lands above described.

    3.  This Assignment is made
subject to all outstanding Overriding Royalty Interests of record in the office
of the County Clerk of Hutchinson County, Texas, affecting the lands above
described.

    4.  Assignor agrees to timely
execute and deliver to Assignee, upon request, all necessary transfer orders,
and all such other and additional instruments as may be necessary to correctly
or to more fully describe and identify the properties and interests herein
intended to be conveyed.

    5.  Assignee has inspected
the Conveyed Properties for the purpose of detecting the presence or
concentration of naturally occurring radium, thorium and other such materials
("NORM") and satisfied itself as to their physical and environmental condition,
both surface and subsurface, and Assignee accepts all of the same in their "AS
IS, WHERE IS" condition.  Assignor disclaims any liability to Assignee
arising with the presence of NORM on the Conveyed Properties.

    6.  Assignor covenants and
represents to Assignee herein that all ad valorem taxes for the year 2009 and
prior years have been paid.  In connection with the ad valorem taxes
to become due on the Conveyed Properties for the year 2010, such taxes are to be
prorated between the Assignor and Assignee in the manner so that the Assignor
shall timely pay 5/12th thereof and the Assignee shall timely pay 7/12th
thereof.

    7.  The assignments and
conveyances made by this Assignment are made without warranty of title, express,
implied or statutory, and without recourse, even as to the return of the
purchase price or other consideration, but with full substitution and
subrogation of Assignee, and all persons claiming by, through or under Assignee,
to the extent assignable, in and to all covenants and warranties by Assignor's
predecessors in title and with full subrogation of all rights accruing under the
statutes of limitation or prescription under the laws of the State of Texas and
all rights or actions of warranty against all former owners of the Conveyed
Properties.  Any covenant or warranties implied by statute or law by
the use of the words "grant", "assign" or "convey" or other similar words in
this Assignment are hereby expressly disclaimed, waived and
negated.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    8.  Assignor and Assignee
agree that, to the extent required by applicable law to be operative, the
disclaimers of certain warranties contained herein are "conspicuous" disclaimers
for the purposes of any applicable law, rule or order.  The Conveyed
Properties are assigned to Assignee without recourse (even as to the return of
the purchase price or other consideration), covenant or warranty of any kind,
express, implied or statutory.  WITHOUT LIMITATION OF THE GENERALITY
OF THE FOREGOING, ASSIGNOR HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY
REPRESENTATION OR WARRANTY, EXPRESS, IMPLIED, AT COMMON LAW, BY STATUTE, OR
OTHERWISE RELATING TO THE CONDITION OF THE CONVEYED PROPERTIES (INCLUDING
WITHOUT LIMITATION, ANY IMPLIED OR EXPRESS WARRANTY OF MERCHANTABILITY, OR
FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS).

    9.  All the terms,
provisions, covenants and agreements herein contained shall extend to and be
binding upon the parties hereto and their respective successors and
assigns.  All references herein to the Assignor and Assignee shall
include their respective successors and assigns.

    10.  This Assignment has been
executed in a number of identical counterparts, each of which, for all purposes,
shall be deemed to be an original.

    11.  The effective date of
this Assignment shall be May 1, 2010, at 7:00 A.M. (CST).

    EXECUTED by Assignor and
Assignee on the dates of our respective acknowledgments.

     

    
      
        	      
                ASSIGNOR:

              	
              	 
	 	 	 	 
	
                 

              	
              	 	 
	 	 	      
                CHARLIE
      HEATER, d/b/aH5 PRODUCERS

              	 

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	      
                AGREED
      TO AND ACCEPTED BY:

              	 	 	 
	      
                ASSIGNEE:

              	 	 	 
	 	 	 	 
	 	 	      
                GRYPON
      PRODUCTION CO., LLC

              	 
	 	 	 	 
	 	By:  	   
       	 
	 	 	      
                MAXWELL
      GRANT, Manager

              	 

      

       

      
        	      
                THE
      STATE OF TEXAS 

              	§	 	 
	 	§	 	 

      

      
        	      
                COUNTY
      OF

              	    
        	 	§	 	 

      

       

    

    This instrument was acknowledged before
me on the ____ day of ____________, 2010, by CHARLIE HEATER, d/b/a H 5
PRODUCERS.

     

     

    
      
        	 	 	 	 	
              	 
	 	
                      
                  Notary
      Public, State of Texas

                

              	 	 	
              	 

      

    

    
       

      
        	      
                THE
      STATE OF TEXAS 

              	§	 	 
	 	§	 	 
	COUNTY
      OF HUTCHINSON    	§	 	 

      

    

    

    This instrument was acknowledged before
me on the ____ day of ___________, 2010, by MAXWELL GRANT, Manager
of GRYPON PRODUCTION
CO., LLC, a limited liability company, on behalf of said
company.

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