Document:

Enertopia Corp.: Exhibit 10.1 - Prepared by newsfilecorp.com

Exhibit 10.1

ASSET AND SHARE PURCHASE AGREEMENT

THIS AGREEMENT dated for reference the 8th day of February,
2010.

AMONG:

MARK SNYDER, a person residing
in the State of California with an office at 12900 Brookprinter PL, #200, Poway
CA 92064 

(herein called “Vendor”)

AND:

GLOBAL SOLAR WATER POWER
SYSTEMS, a corporation existing under the laws of California with its
principal office at #105, 2500 Sweetwater Springs Blvd, Spring Valley
California, USA 

(herein called “GSWPS”)

AND:

ENERTOPIA CORP., a corporation
existing under the laws of the State of Nevada with its executive office at 950
– 1130 West Pender Street, Vancouver BC Canada 

(herein called “Purchaser”or
“GLCP”)

WHEREAS:

A. GSWPS owns technology invented and
developed by the Vendor, the rights of which have been legally assigned from the
Vendor to GSWPS, for the design and manufacturing of water filtration equipment
and processes that uses mechanical, membrane, ultra violet and/or reverse
osmosis components COMBINED with solar photo voltaic panels that passively track
the sun without themselves consuming any electricity (such solar powered
filtration equipment herein called the “Products”). 

B. GSWPS has on or about January 19,
2010 entered a Letter of Intent with the Purchaser wherein the Purchaser may
purchase up to 20% equitable interest in the Vendor if certain terms and
conditions are met (the “LOI”). 

C. The Purchaser and GSWPS have on or
about February 2 entered a definitive agreement wherein the Purchaser will act
as GSWPS’s exclusive sales and marketing representative for the continent of
Africa and non exclusive sales and marketing representative for the rest of the
world excluding at this time Iraq, to market and sell the Products on a
commission basis (the “Sales Agreement”). 

D. GSWPS has exactly 100,000 common
shares of equity issued and outstanding in total, all 100,000 of which are
shares currently held without encumbrance by the Vendor. E. GSWPS hereby agrees
and does not and will not raise any objection to, each of the Sections of this
Agreement, including that GSWPS agrees to it proportionate sale of any IP rights
it may have or may acquire in connection with the Products the Purchaser, and
confirms the receipt of $1.00 payment from the Purchaser for this IP rights
sale. 

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A. The Vendor has agreed to sell and the Purchaser has agreed
to purchase, in stages, up to 20% of the Global Solar Water Power Systems common
shares (the “Purchased Asset”); 

B. The Purchase Price for the first 10% (half of the 20%
interest available) Purchased Asset will be cash payments, deferred commission
payments and payments of GLCP common stock payable by:

	 	a. 	
      the issuance of 500,000 restricted shares of common stock
      of GLCP at a deemed price of US $0.20 per share, payable within 10 days of
      signing this Agreement; and,

	 	 	 
	 	b. 	
      cash payments and/or deferred commissions totalling
      $150,000 paid a minimum of $3,500 per month, first and last month’s
      payment previously made as of executing the Letter of Intent and as
      explained more fully in Section (4), below.

C. The Purchase Price for the second 10% (half of the 20%
interest available) Purchased Asset will be cash payments, deferred commission
payments and payment of GLCP common stock payable by: 

	 	a. 	
      at any time up to December 31, 2011, the issuance of
      500,000 restricted shares of common stock of GLCP; and,

	 	 	 
	 	b. 	
      cash payments and/or deferred commissions totalling
      $250,000 paid a minimum of $3,500 per month and beginning not later than
      December 31, 2011, and as explained more fully in Section (4),
    below.

D. Upon signing this Agreement, Vendor and GSWPS each agrees to
allow Purchaser, as a minority interest owner, the use of certain IP Rights of
the Products. Such rights specifically prohibit the Purchaser from using the
Products or IP Rights in any manner which might damage the Vendor GSWPS or the
Vendor’s or GSWPS’s business or the Vendor’s or GSWPS’s current use and future
modification of the Products.

NOW THEREFORE in consideration of the premises and the
respective covenants, agreements representations, warranties and indemnities of
the parties herein contained and for other good and valuable consideration (the
receipt and sufficiency of which is hereby acknowledged) the parties hereto
covenant and agree as follows: 

	1. 	
      DEFINED TERMS

	 	 
	1.1 	
      For the purposes of this Agreement, unless the context
      otherwise requires, the following terms will have the respective meanings
      set out below and grammatical variations of such terms will have
      corresponding meanings:

	 	(a) 	
      “Affiliate” has the meaning given to that term in the
      Securities Act of 1933, as amended, and the Rules and Regulations of the
      Securities and Exchange Commissions promulgated thereunder;

	 	 	 
	 	(b) 	
      “Business Day” means any day which is not a Saturday,
      Sunday or statutory holiday in the United States and/or Canada;

	 	 	 
	 	(c) 	
      “Closing” means the completion of the transactions
      contemplated in this Asset Purchase Agreement;

	 	 	 
	 	(d) 	
      “Closing Date” means February 17, 2010, or such
      other date as the Vendor and GSWPS and the Purchaser may mutually
      determine;

	 	 	 
	 	(e) 	
      “Contract” means any agreement, indenture, contract,
      lease, deed of trust, license, option, instrument or other commitment,
      whether written or oral;

- 3 - 

	 	(f) 	
      “Encumbrance” means any encumbrance, lien, charge,
      hypothec, pledge, mortgage, title retention agreement, security interest
      of any nature, adverse claim, exception, reservation, easement, right of
      occupation, any matter capable of registration against title, option,
      right of pre-emption, privilege or any Contract to create any of the
      foregoing;

	 	 	 
	 	(g) 	
      ”Licenses” means all licenses, permits, approvals,
      consents, certificates, registrations and authorizations (whether
      governmental, regulatory, or otherwise) required for the conduct in the
      ordinary course of the uses to which the Assets have been put;

	 	 	 
	 	(h) 	
      “Losses” means, in respect of any matter, all claims,
      demands, proceedings, losses, damages, liabilities, deficiencies, costs
      and expenses (including, without limitation, all legal and other
      professional fees and disbursements, interest, penalties and amounts paid
      in settlement) arising directly or indirectly as a consequence of such
      matter and actually incurred by a party entitled to be indemnified
      hereunder, net of (i) any tax adjustments, benefits, savings or reductions
      to which such indemnified party is entitled resulting from such matter,
      and (ii) any insurance proceeds, in either case to which such indemnified
      party is entitled by virtue of such claims, demands, proceedings, losses,
      damages, liabilities, deficiencies, costs and expenses;

	 	 	 
	 	(i) 	
      “Purchased Asset” means the IP of GSWPS and the Vendor
      AND the common shares of GSWPS owned by the Vendor;

	 	 	 
	 	(j) 	
      “Purchase Price” means the aggregate sum payable
      by the Purchaser to the Vendor for the Purchased
Asset.

	1.2 	
      Currency. Unless otherwise indicated, all dollar
      amounts in this Agreement are expressed in United States funds.

	 	 
	1.3 	
      Sections and Headings. The division of this
      Agreement into Articles, sections and subsections and the insertion of
      headings are for convenience of reference only and will not affect the
      interpretation of this Agreement. Unless otherwise indicated, any
      reference in this Agreement to an Article, section, subsection or Schedule
      refers to the specified Article, section or subsection of or Schedule to
      this Agreement.

	 	 
	1.4 	
      Number, Gender and Persons. In this Agreement,
      words importing the singular number only will include the plural and vice
      versa, words importing gender will include all genders and words importing
      persons will include individuals, corporations, partnerships,
      associations, trusts, unincorporated organizations, governmental bodies
      and other legal or business entities of any kind whatsoever.

	 	 
	1.5 	
      Accounting Principles. Except as otherwise stated,
      any reference in this Agreement to generally accepted accounting
      principles refers to generally accepted accounting principles (“GAAP”)
      that have been established in the United States of America, including
      those approved from time to time by the American Institute of Certified
      Public Accountants or any successor body thereto.

	 	 
	1.6 	
      Entire Agreement. This Agreement constitutes the
      entire agreement between the parties with respect to the subject matter
      hereof and supersedes all prior agreements, understandings, negotiations
      and discussions, whether written or oral. There are no conditions,
      covenants, agreements, representations, warranties or other provisions,
      express or implied, collateral, statutory or otherwise, relating to the
      subject matter hereof except as herein provided.

	 	 
	1.7 	
      Time of Essence. Time will be of the essence of
      this Agreement.

	 	 
	1.8 	
      Applicable Law. This Agreement will be construed,
      interpreted and enforced in accordance with, and the respective rights and
      obligations of the parties will be governed by, the laws of California.
      All claim demands, disputes, controversies, differences, or
      misunderstandings between the Parties relating to this Agreement shall be
      settled by arbitration before one arbitrator to be appointed in accordance
      with the California Arbitration Act (CAA), Code of Civil Procedure
      Sections 1280 et seq, such proceeding to
be held in California but not in San Diego County in the English language and
      judgment upon the award rendered by the arbitrator may be entered in any
      court having jurisdiction thereof.

- 4 - 

	1.9 	
      Amendments and Waivers. No amendment or waiver of
      any provision of this Agreement will be binding on either party unless
      consented to in writing by such party. No waiver of any provision of this
      Agreement will constitute a waiver of any other provision, nor will any
      waiver constitute a continuing waiver unless otherwise provided.

	 	 
	1.10 	
      Adjustments for Stock Splits, Etc.. Wherever in
      this Agreement there is a reference to a specific number of common shares
      of stock, then, upon the occurrence of any subdivision, combination or
      stock dividend of such stock, the specific number of shares so referenced
      in this Agreement shall automatically be proportionally adjusted to
      reflect the effect on the outstanding shares of such class or series of
      stock by such subdivision, combination or stock dividend.

	 	 
	1.11 	
      Schedules. The following Schedules are attached to
      and form part of this Agreement: All terms defined in the body of this
      Agreement will have the same meaning in the Schedule attached
  hereto

	 	Schedule 1 	Description of Purchased Asset 
	 	Schedule 2 	Consents 
	 	Schedule 3 	Share Purchase Agreement

	 	
       
	2. 	
      PURCHASE AND SALE

	 	 
	2.1 	
      Subject to the terms and conditions of this Agreement,
      effective as at the Closing Date the Vendor will sell, transfer, and
      assign to the Purchaser and the Purchaser agrees to purchase from the
      Vendor, the first proportionate tranche of the Purchased Asset as
      determined by the proportion of cash and common stock delivered to the
      Vendor as of the Closing Date, free and clear of all
  Encumbrances.

	 	 
	 	
       
	3. 	
      PURCHASE PRICE AND ALLOCATION

	 	 
	3.1 	
      The total Purchase Price payable by the Purchaser to the
      Vendor for the Purchased Asset shall consist of 1,000,000 shares of
      restricted common stock of GLCP (the “Purchase Shares”) as well as
      $400,000 in cash payments, all to be made in a number of payments as
      defined in Section (4). Four times each year, the Vendor will issue to the
      Purchaser the additional fractional interest of the Purchased Asset as per
      the proportionate fraction of the Purchase Price that has been received to
      each respective quarterly date and as described more fully in Section (6),
      below. In any case, this Agreement shall take effect on the day it is
      executed by both Parties.

	 	 
	 	
       
	4. 	
      PAYMENT OF THE PURCHASE PRICE

	 	 
	4.1 	
      The Purchase Price is hereby allocated as
  follows:

	 	(a) 	
      For the first 10% (10,000 shares of GSWPS) the price is
      $250,000 in total, comprised of $100,000 shares of common stock of GLCP
      (500,000 shares x $0.20 each) plus $150,000 cash
  payments.
	 	 	
       	
      Since $250,000 / 100 = $2,500; 
and
since 100% / 100 = 1%; 
and since 10,000 common shares of GSWPS / 100 = 100
common shares of GSWPS; then it follows that for each $2,500 payment of cash
or GLCP stock paid by the Purchaser to the Vendore, the Purchaser is entitled to
receive from the Vendor, 100 common shares of GSWPS. 

 

- 5 - 

	 	(b) 	
      For the second 10% (10,000 shares of GSWPS) the price is
      $250,000 cash payments PLUS $100,000 shares of common stock of GLCP
      (500,000 shares x $0.20 each)
	 	 	
       	
      Since $350,000 / 100 = $3,500;
and
since 100% /100 = 1%;
and since 10,000 common shares of GSWPS / 100 = 100
common shares of GSWPS,
then it follows that for each $3,500 payment of
cash or GLCP stock paid by the 
Purchaser to the Vendor, the Purchaser
is entitled to receive from the Vendor, 100 
common shares of
GSWPS. 

	 	
       
	4.2 	
      The Purchase Price is understood to be paid by the
      Purchaser and received by the Vendor in a number of payments that
      include:

	 	(a) 	
      Minimum $3,500 paid by the Purchaser, or at the
      Purchser’s exclusive option more than $3,500 per month at any time and
      multiple times, to the Vendor each month until the total Purchase Price is
      paid in full, and;

	 	 	 
	 	(b) 	
      First and last month’s payments acknowledged to having
      been paid and received prior to executing this Agreement, and;

	 	 	 
	 	(c) 	
      500,000 shares of the purchaser valued at 20 cents per
      share (deemed value $100,000) to be issued to the Vendor and credited
      against the outstanding balance of $250,000 payable to the Vendor prior to
      the Closing Date, and;

	 	 	 
	 	(d) 	
      Purchaser will remit 80% of the profit Distributions as
      referred to below in Section.(5), below, and;

	 	 	 
	 	(e) 	
      if Enertopia completes any IPO or equity financing during
      2010 and 2011 of more than $100,000 in any individual instance, then it
      shall remit to Vendor 5% of the net IPO or financing amount as payment
      first against any balance then owing of the first 10% ownership of the
      Purchased Asset, or second and at its exclusive option, of the second 10%
      ownership of the Purchased Asset.

	 	
       
	5. 	
      MINORITY OWNER PROFIT
  DISTRIBUTIONS

	 	 
	5.1 	
      GSWPS will remit to the Purchaser not later than 55 days
      of each fiscal quarter end and based upon the quarterly financial
      statements that are delivered to the Purchaser not more than 40 days after
      each fiscal quarter end, that proportion of estimated after tax profit for
      each quarter (the “Distributions”) SUBJECT
TO:

	 	(a) 	
      retentions and completed contracts using cash accrual
      method, and;

	 	 	 
	 	(b) 	
      fully completed contracts (not estimated income),
    and;

	 	 	 
	 	(c) 	
      proportionate Distribution in relation to proportion of
      Purchase Price paid (Example: If Purchaser has paid $125,000 of the total
      $250,000 due as of a particular quarter end, then the Distribution of
      profits for that quarter that Purchaser will receive is $125,000 /
      $250,000 x 10% = 5% of net profits), and;

	 	 	 
	 	(d) 	
      for the purposes of calculating the Distributions,
      proportions due shall be rounded to the nearest 1/10th of one percentage
      point every quarter, and;

	 	 	 
	 	(e) 	
      until such time as the full $250,000 for the first 10%
      ownership of the Purchased Asset has been paid in full, Enertopia will
      remit to Vendor, 80% of the amount above in Section (5.1.(c)),
    within 15 days of having received same from GSWPS, as accelerated
payment of and credited towards the Purchase Price, and;

- 6 - 

	 	(f) 	
      at such time that Payment in full has been received by
      the Vendor for the Purchased Asset, GSWPS shall be obligated to continue
      making the Distribution payments to the Purchaser without exception, each
      and every quarter, and the Purchaser will at that time be relieved of the
      obligation described in Section (5.1.(e)).

	 	
       
	6. 	
      DELIVERY OF GSWPS COMMON SHARES TO THE
      PURCHASER

	 	 
	6.1 	
      Purchaser has certain obligations and options to pay the
      Vendor as fully described in Section 4. As of the date that is each fiscal
      quarter end, the Vendor and Puchaser shall agree on an accounting of the
      amount that has been paid during the most recent quarter, and if for the
      first 10% Purchased Assets, the Vendor shall transfer to the Purchaser 100
      common shares of GSWPS for each $2,500 the Vendor has received; and if for
      the second 10% Purchased Assets, the Vendor shall transfer to the
      Purchaser 100 common shares of GSWPS for each $3,500 the Vendor has
      received.

	 	 
	6.2 	
      The common shares delivered as per the calculation in
      Section 6.1 shall be not later than 30 days following the end of the
      fiscal quarter.

	 	 
	6.3 	
      The cumulative total calculation of all such calculations
      made in Section 6.1 shall serve as the basis for calculating the
      Distributions for the subsequent fiscal quarter described in Section 5 of
      this Agreement.

	 	 
	 	
       
	7. 	
      ENERTOPIA COMMON SHARES

	 	 
	7.1 	
      The Vendor acknowledges that the Enertopia common shares
      issued pursuant to the terms and conditions set forth in this Agreement
      will have such hold periods as are required under applicable securities
      laws and as a result may not be sold, transferred or otherwise disposed,
      except pursuant to an effective registration statement under the
      Securities Act, or pursuant to an exemption from, or in a transaction not
      subject to, the registration requirements of the Securities Act and in
      each case only in accordance with all applicable securities
laws.

	 	 
	7.2 	
      The vendor acknowledges and agrees that the Enertopia
      common shares are being issued pursuant to an exemption from the
      prospectus and registration requirements of the Securities Act. As
      required by applicable securities law, the Vendor agrees to abide by all
      applicable resale restrictions and hold periods imposed by all applicable
      securities legislation. All certificates representing the Enertopia common
      shares issued on Closing will be endorsed with substantially one of the
      following legends pursuant to the Securities Act in order to reflect the
      fact that the Enertopia common shares will be issued pursuant to an
      exemption from the registration requirements of the Securities
  Act:

	 	(a) 	
      For those not resident in the United
  States:

“THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN
OFFSHORE TRANSACTION TO A PERSON WHO IS NOT A U.S. PERSON (AS DEFINED HEREIN)
PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “1933 ACT”). 

NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED
UNDER THE 1933 ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO U.S.
PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE 1933
ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE
1933 ACT.” 

- 7 - 

	 	(b) 	
      For those who ARE resident in the United
  States:

“NONE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR
ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, MAY NOT BE OFFERED OR
SOLD, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES (AS DEFINED HEREIN) OR TO
U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER THE
1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933
ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE
1933 ACT.” 

	8. 	
      CLOSING, POSSESSION, AND NO
    ADJUSTMENTS

	 	 
	8.1 	
      The Closing will take place on February 17, 2010 at
      11:00AM (PST), on the Closing Date at the offices of the Purchaser, or at
      such other place, date, and time as may be mutually agreed upon by the
      parties hereto.

	 	 
	8.2 	
      The Vendor will deliver possession of the Purchased
      Asset, free of any other claim to possession and any tenancies, to the
      Purchaser not more than 10 business days after the Closing Date.

	 	 
	8.3 	
      Provided that there has been no material
      misrepresentation on the part of the parties to this agreement and all of
      their respective obligations under this Agreement have been fulfilled,
      there will be no adjustment of the Purchase Price for any reason
      whatsoever.

	 	 
	 	
       
	9. 	
      REPRESENTATIONS AND WARRANTIES OF THE
      VENDOR

	 	 
	9.1 	
      The Vendor represents and warrants to the Purchaser, with
      the intent that the Purchaser will rely thereon in entering into this
      Agreement and in concluding the transactions contemplated hereby, as
      follows:

- 8 - 

	 	(a) 	
      the execution and delivery of this Agreement and the
      completion of the transaction contemplated hereby are duly and validly
      authorized by the Vendor, and this Agreement constitutes a valid and
      binding obligation of the Vendor enforceable against the Vendor in
      accordance with its terms; except as enforcement may be limited by
      bankruptcy, insolvency and other laws affecting the rights of creditors
      generally and except that equitable remedies may be granted only in the
      discretion of a court of competent jurisdiction;

	 	 	 
	 	(b) 	
      except as will be remedied by the consents, approvals,
      releases, and discharges described in Schedule 3 - Consents attached
      hereto, neither the execution and delivery of this Agreement nor the
      performance of the Vendor’s obligations hereunder
will:

	 	(i) 	
      violate or constitute default under any order, decree,
      judgment, statute, by-law, rule, regulation, or restriction applicable to
      the Vendor, the Purchased Asset, or any contract, agreement, instrument,
      covenant, mortgage, or security, to which the Vendor is a party or which
      are binding upon the Vendor,

	 	 	 
	 	(ii) 	
      to the knowledge of the Vendor, result in any fees,
      duties, taxes, assessments, penalties or other amounts becoming due or
      payable by the Purchaser under any sales tax legislation. .

	 	 	 
	 	(iii) 	
      give rise to the creation or imposition of any
      Encumbrance on the Purchased Asset,

	 	 	 
	 	(iv) 	
      violate or constitute default under any license, permit,
      approval, consent or authorization held by the Vendor, or

	 	 	 
	 	(v) 	
      violate or trigger any liability on behalf of the
      Purchaser pursuant to any legislation governing the sale of the Purchased
      Asset by the Vendor.

	 	(c) 	
      the Vendor owns and possesses and has good and marketable
      title to the Purchased Asset free and clear of all Encumbrances of every
      kind and nature whatsoever;

	 	 	 
	 	(d) 	
      the Vendor does not have any indebtedness in excess of
      $10,000.00 which might by operation of law or otherwise now or hereafter
      constitute an Encumbrance upon the Purchased Asset;

	 	 	 
	 	(e) 	
      no person other than the Purchaser has any written or
      oral agreement or option or any right or privilege (whether by law,
      pre-emptive or contractual) capable of becoming an agreement or option for
      the purchase or acquisition from the Vendor of the Purchased
  Asset;

	 	 	 
	 	(f) 	
      except as otherwise provided herein, this Agreement
      discloses all contracts, engagements, and commitments, whether oral or
      written, relating to the Purchased Asset including in particular
      contracts, engagements, and commitments:

	 	(i) 	
      out of the ordinary course of business,

	 	 	 
	 	(ii) 	
      which entail the payment of in excess of $10,000.00
      during any one year period,

	 	 	 
	 	(iii) 	
      respecting ownership of or title to any interest or claim
      in or to any real or personal property making up the Purchased
    Asset,

	 	 	 
	 	(iv) 	
      respecting any agreement of guarantee, support,
      indemnification, assumption or endorsement of, or any similar commitment
      with respect to, the obligations, liabilities (whether accrued, absolute,
      contingent or otherwise) or indebtedness of any other person except for
      cheques endorsed for collection in the ordinary course of the
    business;

- 9 - 

	 	(v) 	
      any confidentiality, secrecy or non-disclosure contract,
      (whether the Vendor is a beneficiary or obligant thereunder) relating to
      any proprietary or confidential information or any non-competition or
      similar contract;

	 	 	 
	 	(vi) 	
      there has not been any default in any obligation or
      liability in respect of said contracts, engagements, or commitments by the
      Vendor and the Vendor has performed all of the material obligations
      required to be performed by it and is entitled to all benefits under any
      contracts;

	 	 	 
	 	(vii) 	
      there has not been any amendment, modification,
      variation, surrender, or release of said contracts, engagements, and
      commitments; and

	 	 	 
	 	(viii) 	
      each of said contracts, engagements, and commitments is
      in good standing and in full force and effect and the Vendor has performed
      all of the material obligations required to be performed by it and is
      entitled to all benefits thereunder, and is not in default or alleged to
      be in default in respect of any material contract or any other contracts,
      engagements or commitments provided for in this Agreement, to which the
      Vendor is a party or by which it is bound;

	 	(g) 	
      all material Licenses required for the uses to which the
      Purchased Asset have been put have been obtained and are in good standing
      and such conduct and uses are in compliance in all material respects with
      such licenses and permits and with all laws, zoning and other bylaws,
      building and other restrictions, rules, regulations, and ordinances
      applicable to the Purchased Asset and neither the execution and delivery
      of this Agreement nor the completion of the purchase and sale hereby
      contemplated will give any person the right to terminate or cancel the
      said licenses or permits or affect such compliance;

	 	 	 
	 	(h) 	
      there are no actions, suits, proceedings, investigations,
      complaints, orders, directives, or notices of defect or noncompliance by
      or before any court, governmental or domestic commission, department,
      board, tribunal, or authority, or administrative, licensing, or regulatory
      agency, body, or officer issued, pending, or to the best of the Vendor’s
      knowledge threatened against or affecting the Vendor or in respect of the
      Purchased Asset;

	 	 	 
	 	(i) 	
      there is no requirement applicable to the Vendor to make
      any filing with, give any notice to or to obtain any license, permit,
      certificate, registration, authorization, consent or approval of, any
      governmental or regulatory authority as a condition to the lawful
      consummation of the transactions contemplated by this Agreement, except
      for the filings, notifications, licenses, permits, certificates,
      registrations, consents and approvals described in Schedule 3 - Consents,
      or that relate solely to the identity of the Purchaser or the nature of
      any business carried on by the Purchaser except for the notifications,
      consents and approvals described in Schedule 3 - Consents;

	 	 	 
	 	(j) 	
      Vendor has filed or caused to be filed all material tax
      returns of Vendor which have become due (taking into account valid
      extensions of time to file) prior to the date hereof, such returns are
      accurate and complete in all material respects and Vendor has paid or
      caused to be paid all taxes due, in each case to the extent Purchaser
      would incur liability for Vendor’s failure to file such returns or pay
      such taxes. There are no outstanding tax liens that have been filed by any
      tax authority against the Purchased Asset. No claims are being asserted in
      writing with respect to any taxes relating to the Vendor’s business for
      which Purchaser reasonably could be held liable and Vendor knows of no
      basis for the assertion of any such claim;

	 	 	 
	 	(k) 	
      the Vendor has never received any notice of or been
      prosecuted for non-compliance with any Environmental Laws, nor has the
      Vendor settled any allegation of non-compliance short of prosecution.
      There are no orders or directions relating to environmental matters
      requiring any work, repairs or construction or capital expenditures to be
      made with respect to the Purchased Asset, nor has the Vendor received
      notice of any of the same;

- 10 - 

	 	(l) 	
      Intellectual Property is all registered or pending
      Intellectual Property (including particulars of registration or
      application for registration, continuances, or PCT’s) and all licenses,
      registered user agreements and other contracts that comprise or relate to
      Intellectual Property. The Intellectual Property comprises all trade or
      brand names, business names, trade marks, service marks, copyrights,
      patents, trade secrets, know-how, inventions, designs and other industrial
      or intellectual property necessary for use with the Assets. The Vendor is
      a beneficial owner of the Intellectual Property, free and clear of all
      Encumbrances, and is not a party to or bound by any contract or any other
      obligation whatsoever that limits or impairs its ability to sell,
      transfer, assign or convey, or that otherwise affects, the Intellectual
      Property. No person has been granted any exclusive interest in or
      exclusive right to use all or any portion of the Intellectual Property.
      The use of the Assets does not infringe upon the industrial or
      intellectual property rights, domestic or foreign, of any other person.
      The Vendor is not aware of a claim of any infringement or breach of any
      industrial or intellectual property rights of any other person, nor has
      the Vendor received any notice that the use of the Assets, including the
      use of the Intellectual Property, infringes upon or breaches any
      industrial or intellectual property rights of any other person, and the
      Vendor, after due inquiry, has no knowledge of any infringement or
      violation of any of its rights in the Intellectual Property. The Vendor is
      not aware of any state of facts that casts doubt on the validity or
      enforceability of any of the Intellectual Property. The Vendor has
      provided to the Purchaser a true and complete copy of all contracts and
      amendments thereto that comprise or relate to the Intellectual Property;
      and

	 	 	 
	 	(m) 	
      there are no liabilities of the Vendor or its associates
      or Affiliates, whether or not accrued and whether or not determined or
      determinable, in respect of which the Purchaser may become liable on or
      after the Closing Date; and

	 	 	 
	 	(n) 	
      Vendor will not interfere with, delay or prevent in his
      capacity as executive of or major owner of GSWPS, any of the profit
      Distributions payable from GSWPS to the
Purchaser.

	 	
       
	10. 	
      REPRESENTATIONS OF THE PURCHASER

	 	 
	10.1 	
      The Purchaser represents and warrants to the Vendor as
      follows, with the intent that the Vendor will rely thereon in entering
      into this Agreement and in concluding the purchase and sale contemplated
      hereby, that:

	 	(a) 	
      the Purchaser is a corporation duly incorporated, validly
      existing, and in good standing under the laws of the State of Nevada and
      has the power, authority, and capacity to enter into this Agreement and to
      carry out its terms;

	 	 	 
	 	(b) 	
      the execution and delivery of this Agreement and the
      completion of the transactions contemplated hereby has been duly and
      validly authorized by all necessary corporate action on the part of the
      Purchaser, and this Agreement constitutes a valid and binding obligation
      of the Purchaser enforceable against the Purchaser in accordance with its
      terms; except as enforcement may be limited by bankruptcy, insolvency and
      other laws affecting the rights of creditors generally and except that
      equitable remedies may be granted only in the discretion of a court of
      competent jurisdiction;

	 	 	 
	 	(c) 	
      there is no requirement for the Purchaser to make any
      filing with, give any notice to or obtain any license, permit,
      certificate, registration, authorization, consent or approval of, any
      government or regulatory authority as a condition to the lawful
      consummation of the transactions contemplated by this Agreement;

	 	 	 
	 	(d) 	
      neither the execution and delivery of this Agreement nor
      the performance of the Purchaser’s obligations hereunder will violate or
      constitute a default under the constating documents, by-laws, or articles
      of the Purchaser, any order, decree, judgment, statute, by-law, rule,
      regulation, or restriction applicable to the Purchaser, or any contract,
      agreement, instrument, covenant, mortgage or security to which the
      Purchaser is a party or which are binding upon the
  Purchaser;

- 11 - 

	 	(e) 	
      Purchaser hereby notifies Vendor that a true and complete
      copy of each annual, quarterly and other reports, registration statements
      (without exhibits) filed by Purchaser with the Securities and Exchange
      Commission (the “SEC”) since January 10, 2006 (the “Purchaser SEC
      Documents”) is available for examination at the www.sec.gov website. As of their respective
      filing dates, the Purchaser SEC Documents complied in all material
      respects with the requirements of the Securities Act and the Securities
      Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be,
      and the rules and regulations of the SEC promulgated thereunder applicable
      to such Purchaser SEC Documents, and none of the Purchaser SEC Documents
      contained on their filing dates any untrue statement of a material fact or
      omitted to state a material fact required to be stated therein or
      necessary to make the statements therein, in light of the circumstances
      under which they were made, not misleading, except to the extent corrected
      by a subsequently filed Purchaser SEC Document. The financial statements
      of Purchaser included in the Purchaser SEC Documents (the “Purchaser
      Financial Statements”) complied as to form in all material respects with
      the published rules and regulations of the SEC with respect thereto, were
      prepared in accordance with generally accepted accounting principles
      applied on a consistent basis throughout the periods indicated (except as
      may be indicated in the notes thereto or, in the case of unaudited
      financial statements, as permitted under Form 10-QSB under the Exchange
      Act) and fairly presented the consolidated financial position of Purchaser
      and its consolidated subsidiaries as of the respective dates thereof and
      the consolidated results of Purchaser’s operations and cash flows for the
      periods indicated (subject to, in the case of unaudited statements, to
      normal and recurring year-end audit adjustments). There has been no change
      in Purchaser’s accounting policies, except as described in the notes to
      the Purchaser Financial Statements or as required by generally accepted
      accounting principles. Since the date of the most recent balance sheet
      included in a Purchaser SEC Document, there has been no material adverse
      effect on the business, operations, assets, condition (financial or
      otherwise) or prospects of the Purchaser;

	 	 	 
	 	(f) 	
      The authorized stock of the Purchaser consists of
      37,500,000 shares of Common Stock of which 14,652,740 were issued and
      outstanding as of January 31, 2010. The common shares to be issued to the
      Vendor under this Agreement will, when so issued, be duly authorized,
      validly issued, fully paid, non-assessable, free of any Encumbrances and
      not subject to any preemptive rights or rights of first refusal created by
      statute or the charter documents or Bylaws of Purchaser or any agreement
      to which Purchaser is a party or is bound and will be issued in compliance
      with federal and state securities laws; and

	 	 	 
	 	(g) 	
      except as disclosed in the Purchaser SEC Documents, (i)
      there are no actions, suits, proceedings, investigations, complaints,
      orders, directives, or notices of defect or non-compliance by or before
      any court, governmental or domestic commission, department, board,
      tribunal, or authority, or administrative, licensing, or regulatory
      agency, body, or officer issued, pending, or to the best of the
      Purchaser’s knowledge threatened against or affecting the Purchaser; and
      (ii) the Purchaser is in compliance in all material respects with all
      applicable laws applicable to Purchaser and its
business.

	 	
       
	11. 	
      REPRESENTATIONS AND WARRANTIES OF
    GSWPS

	 	 
	11.1 	
      GSWPS represents and warrants to the Purchaser as
      follows, with the intent that the Purchaser will rely thereon in entering
      into this Agreement and in concluding the purchase and sale contemplated
      hereby, that:

	 	(a) 	
      GSWPS is a corporation duly incorporated, validly
      existing, and in good standing under the laws of the State of California
      and has the power, authority, and capacity to enter into this Agreement
      and to carry out its terms;

	 	 	 
	 	(b) 	
      the authorized stock of the GSWPS consists of 100,000
      shares of Common Stock of which 100,000 were legally and validly and
      without any encumberance issued and outstanding as of January 30,
    2010;

- 12 - 

	 	(c) 	
      GSWPS has not issued, is not in the process of issuing,
      and will not in the future issue any equity options, warrants or promises
      of any kind to issue equity options or warrants whatsoever, without
      express written permission from the Board of Directors of the
      Purchaser;

	 	 	 
	 	(d) 	
      GSWPS hereby warrants that it may not and will not issue
      any additional common or preferred shares, or make or enter into any
      promise to issue equity of any kind, without the express written approval
      of the Board of Directors of the Purchaser; and that this ANTI DILUTION
      Section shall remain valid for a period of not less than 20 years from the
      date of this Agreement irrespective of the survivability of this Agreement
      in any other respect;

	 	 	 
	 	(e) 	
      will prepare in accordance with GAAP, quarterly financial
      statements for GSWPS in a timely manner not to exceed 37 calendar days of
      quarter end, and deliver those financial statements on electronic
      documents to the Purchaser via email not later than 37 calendar days after
      each quarter- end;

	 	 	 
	 	(f) 	
      the execution and delivery of this Agreement and the
      completion of the transaction contemplated hereby are duly and validly
      authorized by GSWPS and this Agreement constitutes a valid and binding
      obligation of GSWPS enforceable against GSWPS in accordance with its
      terms; except as enforcement may be limited by bankruptcy, insolvency and
      other laws affecting the rights of creditors generally and except that
      equitable remedies may be granted only in the discretion of a court of
      competent jurisdiction;

	 	 	 
	 	(g) 	
      except as will be remedied by the consents, approvals,
      releases, and discharges described in Schedule 3 - Consents attached
      hereto, neither the execution and delivery of this Agreement nor the
      performance of GSWPS’s obligations hereunder
will:

	 	(i) 	
      violate or constitute default under any order, decree,
      judgment, statute, by-law, rule, regulation, or restriction applicable to
      GSWPS, the Purchased Asset, or any contract, agreement, instrument,
      covenant, mortgage, or security, to which GSWPS is a party or which are
      binding upon GSWPS,

	 	 	 
	 	(ii) 	
      to the knowledge of GSWPS, result in any fees, duties,
      taxes, assessments, penalties or other amounts becoming due or payable by
      the Purchaser under any sales tax legislation. .

	 	 	 
	 	(iii) 	
      give rise to the creation or imposition of any
      Encumbrance on the Purchased Asset,

	 	 	 
	 	(iv) 	
      violate or constitute default under any license, permit,
      approval, consent or authorization held by GSWPS, or

	 	 	 
	 	(v) 	
      violate or trigger any liability on behalf of the
      Purchaser pursuant to any legislation governing the sale of the Purchased
      Asset by GSWPS.

	 	(h) 	
      GSWPS owns and possesses and has good and marketable
      title to the Purchased Asset free and clear of all Encumbrances of every
      kind and nature whatsoever;

	 	 	 
	 	(i) 	
      GSWPS does not have any indebtedness in excess of
      $10,000.00 which might by operation of law or otherwise now or hereafter
      constitute an Encumbrance upon the Purchased Asset;

	 	 	 
	 	(j) 	
      no person other than the Purchaser has any written or
      oral agreement or option or any right or privilege (whether by law,
      pre-emptive or contractual) capable of becoming an agreement or option for
      the purchase or acquisition from GSWPS of the Purchased Asset;

	 	 	 
	 	(k) 	
      except as otherwise provided herein, this Agreement
      discloses all contracts, engagements, and commitments, whether oral or
      written, relating to the Purchased Asset including in particular
      contracts, engagements, and commitments:

- 13 - 

	 	(i) 	
      out of the ordinary course of business,

	 	 	 
	 	(ii) 	
      which entail the payment of in excess of $10,000.00
      during any one year period,

	 	 	 
	 	(iii) 	
      respecting ownership of or title to any interest or claim
      in or to any real or personal property making up the Purchased
    Asset,

	 	 	 
	 	(iv) 	
      respecting any agreement of guarantee, support,
      indemnification, assumption or endorsement of, or any similar commitment
      with respect to, the obligations, liabilities (whether accrued, absolute,
      contingent or otherwise) or indebtedness of any other person except for
      cheques endorsed for collection in the ordinary course of the
    business;

	 	 	 
	 	(v) 	
      any confidentiality, secrecy or non-disclosure contract,
      (whether GSWPS is a beneficiary or obligant thereunder) relating to any
      proprietary or confidential information or any non- competition or similar
      contract;

	 	 	 
	 	(vi) 	
      there has not been any default in any obligation or
      liability in respect of said contracts, engagements, or commitments by
      GSWPS and GSWPS has performed all of the material obligations required to
      be performed by it and is entitled to all benefits under any
    contracts;

	 	 	 
	 	(vii) 	
      there has not been any amendment, modification,
      variation, surrender, or release of said contracts, engagements, and
      commitments; and

	 	 	 
	 	(viii) 	
      each of said contracts, engagements, and commitments is
      in good standing and in full force and effect and GSWPS has performed all
      of the material obligations required to be performed by it and is entitled
      to all benefits thereunder, and is not in default or alleged to be in
      default in respect of any material contract or any other contracts,
      engagements or commitments provided for in this Agreement, to which GSWPS
      is a party or by which it is bound;

	 	 	 
	 	(ix) 	
      Vendor will not interfere with, delay or prevent in his
      capacity as executive of or major owner of GSWPS, any of the profit
      Distributions payable from GSWPS to the
Purchaser.

	 	(l) 	
      all material Licenses required for the uses to which the
      Purchased Asset have been put have been obtained and are in good standing
      and such conduct and uses are in compliance in all material respects with
      such licenses and permits and with all laws, zoning and other bylaws,
      building and other restrictions, rules, regulations, and ordinances
      applicable to the Purchased Asset and neither the execution and delivery
      of this Agreement nor the completion of the purchase and sale hereby
      contemplated will give any person the right to terminate or cancel the
      said licenses or permits or affect such compliance;

	 	 	 
	 	(m) 	
      there are no actions, suits, proceedings, investigations,
      complaints, orders, directives, or notices of defect or noncompliance by
      or before any court, governmental or domestic commission, department,
      board, tribunal, or authority, or administrative, licensing, or regulatory
      agency, body, or officer issued, pending, or to the best of GSWPS’s
      knowledge threatened against or affecting GSWPS or in respect of the
      Purchased Asset;

	 	 	 
	 	(n) 	
      there is no requirement applicable to GSWPS to make any
      filing with, give any notice to or to obtain any license, permit,
      certificate, registration, authorization, consent or approval of, any
      governmental or regulatory authority as a condition to the lawful
      consummation of the transactions contemplated by this Agreement, except
      for the filings, notifications, licenses, permits, certificates,
      registrations, consents and approvals described in Schedule 3 - Consents,
      or that relate solely to the identity of the Purchaser or the nature of
      any business carried on by the Purchaser except for the notifications,
      consents and approvals described in Schedule 3 -
  Consents;

- 14 - 

	 	(o) 	
      Vendor has filed or caused to be filed all material tax
      returns of Vendor which have become due (taking into account valid
      extensions of time to file) prior to the date hereof, such returns are
      accurate and complete in all material respects and Vendor has paid or
      caused to be paid all taxes due, in each case to the extent Purchaser
      would incur liability for Vendor’s failure to file such returns or pay
      such taxes. There are no outstanding tax liens that have been filed by any
      tax authority against the Purchased Asset. No claims are being asserted in
      writing with respect to any taxes relating to GSWPS’s business for which
      Purchaser reasonably could be held liable and Vendor knows of no basis for
      the assertion of any such claim;

	 	 	 
	 	(p) 	
      GSWPS has never received any notice of or been prosecuted
      for non-compliance with any Environmental Laws, nor has GSWPS settled any
      allegation of non-compliance short of prosecution. There are no orders or
      directions relating to environmental matters requiring any work, repairs
      or construction or capital expenditures to be made with respect to the
      Purchased Asset, nor has GSWPS received notice of any of the
  same;

	 	 	 
	 	(q) 	
      Intellectual Property is all registered or pending
      Intellectual Property (including particulars of registration or
      application for registration, continuances, or PCT’s) and all licenses,
      registered user agreements and other contracts that comprise or relate to
      Intellectual Property. The Intellectual Property comprises all trade or
      brand names, business names, trade marks, service marks, copyrights,
      patents, trade secrets, know-how, inventions, designs and other industrial
      or intellectual property necessary for use with the Assets. The GSWPS is a
      beneficial owner of the Intellectual Property, free and clear of all
      Encumbrances, and is not a party to or bound by any contract or any other
      obligation whatsoever that limits or impairs its ability to sell,
      transfer, assign or convey, or that otherwise affects, the Intellectual
      Property. No person has been granted any exclusive interest in or
      exclusive right to use all or any portion of the Intellectual Property.
      The use of the Assets does not infringe upon the industrial or
      intellectual property rights, domestic or foreign, of any other person.
      The GSWPS is not aware of a claim of any infringement or breach of any
      industrial or intellectual property rights of any other person, nor has
      the GSWPS received any notice that the use of the Assets, including the
      use of the Intellectual Property, infringes upon or breaches any
      industrial or intellectual property rights of any other person, and the
      GSWPS, after due inquiry, has no knowledge of any infringement or
      violation of any of its rights in the Intellectual Property. The GSWPS is
      not aware of any state of facts that casts doubt on the validity or
      enforceability of any of the Intellectual Property. The GSWPS has provided
      to the Purchaser a true and complete copy of all contracts and amendments
      thereto that comprise or relate to the Intellectual Property;
and

	 	 	 
	 	(r) 	
      there are no liabilities of GSWPS or its associates or
      Affiliates, whether or not accrued and whether or not determined or
      determinable, in respect of which the Purchaser may become liable on or
      after the Closing Date; and

	 	
       
	12. 	
      COVENANTS OF THE
VENDOR

Between the date of this Agreement and
the Closing Date, the Vendor covenants and agrees that the Vendor:

	 	(a) 	
      will work to ensure that GSWPS has a year-end for
      accounting purposes of August 31;

	 	 	 
	 	(b) 	
      will maintain insurance coverage of the scope and in the
      amounts now held in full force and effect and will give all notices and
      present all claims under all policies of insurance in a due and timely
      fashion;

	 	 	 
	 	(c) 	
      will use its best efforts to procure and obtain at or
      prior to the Closing Date all such consents, approvals, releases, and
      discharges as may be required to effect the transactions contemplated
      hereby from all federal, state, municipal or other governmental or
      regulatory bodies and from all other third parties as
  necessary;

- 15 - 

	 	(d) 	
      at the request of the Purchaser, the Vendor will execute
      such consents, authorizations and directions as may be necessary to enable
      the Purchaser or its authorized representatives to obtain full access to
      all files and records relating to the Purchased Asset maintained by
      governmental or other public authorities;

	 	 	 
	 	(e) 	
      the Vendor will use its best efforts to take or cause to
      be taken all necessary corporate action, steps and proceedings to approve
      and authorize validly and effectively the transfer of the Purchased Asset
      to the Purchaser and the execution and delivery of this Agreement and any
      other Agreements or documents contemplated hereby and to cause all
      necessary meetings of members or managers of the Vendor to be held for
      such purpose; and

	 	 	 
	 	(f) 	
      will not, without the prior written consent of the
      Purchaser, enter into any transaction or refrain from doing any action
      that, if effected before the date of this Agreement, would constitute a
      breach of any representation, warranty, covenant or other obligation of
      the Vendor contained herein, and the Vendor will not enter into any
      material supply agreements relating to the Purchased Asset or make any
      material decisions or enter into any material contracts with respect to
      the Purchased Asset without the consent of the Purchaser, which consent
      will not be unreasonably withheld.

	 	
       
	13. 	
      COVENANTS OF GSWPS

Between the date of this Agreement and
the Closing Date, the Vendor covenants and agrees that the Vendor:

	 	(a) 	
      will ensure that GSWPS has a year-end for accounting
      purposes of August 31;

	 	 	 
	 	(b) 	
      will maintain insurance coverage of the scope and in the
      amounts now held in full force and effect and will give all notices and
      present all claims under all policies of insurance in a due and timely
      fashion;

	 	 	 
	 	(c) 	
      will use its best efforts to procure and obtain at or
      prior to the Closing Date all such consents, approvals, releases, and
      discharges as may be required to effect the transactions contemplated
      hereby from all federal, state, municipal or other governmental or
      regulatory bodies and from all other third parties as necessary;

	 	 	 
	 	(d) 	
      at the request of the Purchaser, the Vendor will execute
      such consents, authorizations and directions as may be necessary to enable
      the Purchaser or its authorized representatives to obtain full access to
      all files and records relating to the Purchased Asset maintained by
      governmental or other public authorities;

	 	 	 
	 	(e) 	
      the Vendor will use its best efforts to take or cause to
      be taken all necessary corporate action, steps and proceedings to approve
      and authorize validly and effectively the transfer of the Purchased Asset
      to the Purchaser and the execution and delivery of this Agreement and any
      other Agreements or documents contemplated hereby and to cause all
      necessary meetings of members or managers of the Vendor to be held for
      such purpose; and

	 	 	 
	 	(f) 	
      will not, without the prior written consent of the
      Purchaser, enter into any transaction or refrain from doing any action
      that, if effected before the date of this Agreement, would constitute a
      breach of any representation, warranty, covenant or other obligation of
      the Vendor contained herein, and the Vendor will not enter into any
      material supply agreements relating to the Purchased Asset or make any
      material decisions or enter into any material contracts with respect to
      the Purchased Asset without the consent of the Purchaser, which consent
      will not be unreasonably withheld.

- 16 - 

	14. 	
      COVENANTS OF THE PURCHASER

	 	 
		
      Between the date of this Agreement and the Closing Date,
      the Purchaser will make all reasonable efforts to obtain and procure in
      co-operation with the Vendor all consents, approvals, releases, and
      discharges required to effect the transactions contemplated
  hereby.

	 	 
	 	
       
	15. 	
      INDEMNIFICATION, REMEDIES,
  SURVIVAL

	 	 
	15.1 	
      Certain Definitions

	 	 
		
      For the purposes of this Section 15 the terms
      “Loss” and “Losses” mean any and all demands, claims,
      actions or causes of action, assessments, losses, damages, Liabilities,
      costs, and expenses, including without limitation, interest, penalties,
      fines and reasonable attorneys, accountants and other professional fees
      and expenses, but excluding any indirect, consequential or punitive
      damages including damages for lost profits or lost business
      opportunities.

	 	 
	15.2 	
      Agreement of Vendor to Indemnify

	 	 
		
      Vendor will indemnify, defend, and hold harmless, to the
      full extent of the law, for a period of five years from the Closing Date,
      the Purchaser and its shareholders from, against, and in respect of any
      and all Losses asserted against, relating to, imposed upon, or incurred by
      the Purchaser and its shareholders by reason of, resulting from, based
      upon or arising out of:

	 	(a) 	
      the breach by Vendor of any representation or warranty of
      Vendor contained in or made pursuant to this Agreement, any Vendor
      document or any certificate or other instrument delivered pursuant to this
      Agreement; or

	 	 	 
	 	(b) 	
      the breach or partial breach by Vendor of any covenant or
      agreement of Vendor made in or pursuant to this Agreement, any Vendor
      document or any certificate or other instrument delivered pursuant to this
      Agreement.

	15.3 	
      Agreement of Purchaser to Indemnify

	 	 
		
      Purchaser will indemnify, defend, and hold harmless, to
      the full extent of the law, for a period of five years from the Closing
      Date, Vendor from, against, for, and in respect of any and all Losses
      asserted against, relating to, imposed upon, or incurred by Vendor by
      reason of, resulting from, based upon or arising out
of:

	 	(a) 	
      the breach by Purchaser of any representation or warranty
      of Purchaser contained in or made pursuant to this Agreement, any
      Purchaser document or any certificate or other instrument delivered
      pursuant to this Agreement; or

	 	 	 
	 	(b) 	
      the breach or partial breach by Purchaser of any covenant
      or agreement of Purchaser made in or pursuant to this Agreement, any
      Purchaser document or any certificate or other instrument delivered
      pursuant to this Agreement.

	 	
       
	16. 	
      NON MERGER

	 	 
	16.1 	
      The representations, warranties, covenants, and
      agreements of the Vendor contained herein and those contained in the
      documents and instruments delivered pursuant hereto or in connection
      herewith will survive the Closing Date for a period of eighteen months,
      and notwithstanding the completion of the transactions contemplated
      hereby, the waiver of any condition contained herein (unless such
      waiver expressly releases the Vendor of such representation, warranty,
covenant, or agreement), or any investigation by the Purchaser, same will remain
in full force and effect. 

- 17 - 

	16.2 	
      The representations, warranties, covenants, and
      agreements of the Purchaser contained herein and those contained in the
      documents and instruments delivered pursuant hereto or in connection
      herewith will survive the Closing Date for a period of eighteen months,
      and notwithstanding the completion of the transactions contemplated
      hereby, the waiver of any condition contained herein (unless such waiver
      expressly releases the Purchaser of such representation, warranty,
      covenant, or agreement), or any investigation by the Vendor, same will
      remain in full force and effect.

	 	 
	 	
       
	17. 	
      CONDITIONS PRECEDENT

	 	 
	17.1 	
      The obligation of the Purchaser to consummate the
      transactions herein contemplated is subject to the fulfillment of each of
      the following conditions precedent at the times
  stipulated:

	 	(a) 	
      that the representations and warranties of the Vendor
      contained herein are true and correct on and as at the Closing Date with
      the same force and effect as if such representations and warranties were
      made as at the Closing Date, except as may be in writing disclosed to and
      approved by the Purchaser;

	 	 	 
	 	(b) 	
      that all the terms, covenants, conditions, agreements,
      and obligations hereunder on the part of the Vendor to be performed or
      complied with at or prior to the Closing Date, including in particular the
      Vendor’s obligation to deliver the documents and instruments herein
      provided for in Section 14, have been performed and complied with as at
      the Closing Date;

	 	 	 
	 	(c) 	
      that between the date hereof and the Closing Date no
      force majeure, change, event, or circumstance has occurred which
      materially adversely affects the Purchased Asset or which, significantly
      reduces the value of the Purchased Asset to the Purchaser;

	 	 	 
	 	(d) 	
      that between the date hereof and the Closing Date there
      has not been any substantial loss, damage, or destruction, whether or not
      covered by insurance, to the Purchased Asset;

	 	 	 
	 	(e) 	
      no legal or regulatory action or proceeding will be
      pending or threatened by any person to enjoin, restrict or prohibit the
      purchase and sale of the Purchased Asset contemplated hereby;

	 	 	 
	 	(f) 	
      that at the Closing Date, there will have been obtained
      from all appropriate federal, state, municipal or other governmental or
      administrative bodies such licenses, permits, consents, approvals,
      certificates, registrations and authorizations as are required to be
      obtained by the Vendor to permit the change of ownership of the Purchased
      Asset contemplated hereby, and all notices, consents and approvals with
      respect to the transfer or assignment of any contracts;

	 	 	 
	 	(g) 	
      that at the Closing Date, the Vendor will have given or
      obtained the notices, consents and approvals described in Schedule 3 -
      Consents, in each case in form and substance satisfactory to the
      Purchaser, acting reasonably;

	17.2 	
      The foregoing conditions of this Section 17.1 are for the
      exclusive benefit of the Purchaser and may be waived in whole or in part
      by the Purchaser at any time. If any of the conditions contained in
      Section 17.1 will not be performed or fulfilled at or prior to the Closing
      Date to the satisfaction of the Purchaser, acting reasonably, the
      Purchaser, may, by notice to the Vendor, terminate this Agreement and the
      obligations of the Vendor and the Purchaser under this agreement, provided
      that the Purchaser may also bring an action pursuant to Section 15.2
      against the Vendor for damages suffered by the Purchaser where the non-
      performance or non-fulfillment of the relevant condition is as a result of
      a breach of covenant, representation or warranty by the
  Vendor.

- 18 - 

	17.3 	
      The obligation of the Vendor to consummate the
      transactions herein contemplated is subject to the fulfillment of each of
      the following conditions precedent at the times
  stipulated:

	 	(a) 	
      that the representations and warranties of the Purchaser
      contained herein are true and correct on and as of the Closing Date with
      the same force and effect as if such representations and warranties were
      made as at the Closing Date, except as may be in writing disclosed to and
      approved by the Vendor; and

	 	 	 
	 	(b) 	
      that all terms, covenants, conditions, agreements, and
      obligations hereunder on the part of the Purchaser to be performed or
      complied with at or prior to the Closing, including in particular the
      Purchaser’s obligation to deliver the documents and instruments herein
      provided for in Section 15, have been performed and complied with as at
      the Closing.

	17.4 	
      The foregoing conditions of this Section 17.3 are for the
      exclusive benefit of the Vendor and may be waived in whole or in part by
      the Vendor at any time. If any of the conditions contained in this Section
      17.3 will not be performed or fulfilled at or prior to the Closing Date to
      the satisfaction of the Vendor acting reasonably, the Vendor may, by
      notice to the Purchaser, terminate this Agreement and the obligations of
      the Vendor and the Purchaser under this Agreement, provided that the
      Vendor may also bring an action pursuant to Section 15.3 against the
      Purchaser for damages suffered by it where the non- performance or
      non-fulfillment of the relevant condition is as a result of a breach of
      covenant, representation or a warranty by the
Purchaser.

	 	
       
	18. 	
      TRANSACTIONS OF THE VENDOR AT THE
      CLOSING

	 	 
	18.1 	
      At the Closing Date, the Vendor will execute and deliver
      or cause to be executed and delivered all deeds, conveyances, bills of
      sale, transfers, assignments, agreements, certificates, documents, and
      instruments as may be necessary to effectively vest good and marketable
      title to the Purchased Asset in the Purchaser free and clear of any
      Encumbrances and without limiting the foregoing, will execute and deliver
      or cause to be executed and delivered:

	 	(a) 	
      all consents, approvals, releases, and discharges as may
      be required to effect the transactions contemplated hereby, including in
      particular those described in Schedule 3 - Consents;

	 	 	 
	 	(b) 	
      a certificate of the Vendor dated the Closing, acceptable
      in form and content to the solicitors for the Purchaser, certifying that
      the conditions set out in Section 16.1 have been satisfied;

	 	 	 
	 	(c) 	
      executed releases by any third parties which have any
      Encumbrances against the Purchased Asset;

	 	 	 
	 	(d) 	
      a certified copy of a resolution of the Directors of the
      Vendor duly passed authorizing the execution and delivery of this
      Agreement and the completion of the transactions contemplated
    hereby;

	 	 	 
	 	(e) 	
      a subscription agreement for the Purchase Shares;
    and

	 	 	 
	 	(f) 	
      all such other documents and instruments as the
      Purchaser’s lawyers may reasonably require.

	 	
       
	19. 	
      TRANSACTIONS OF THE PURCHASER AT THE
      CLOSING

	 	 
	19.1 	
      At the Closing the Purchaser will deliver or cause to be
      delivered to the Vendor:

	 	(a) 	
      Irrevocable instructions to the transfer agent of the
      Purchaser as to the issuance of the Purchased Shares, in form and
      substance satisfactory to the Vendor;

- 19 - 

	 	(b) 	
      a certified copy of a resolution of the Directors of the
      Purchaser duly passed authorizing the execution and delivery of this
      Agreement and the completion of the transactions contemplated
    hereby;

	 	 	 
	 	(c) 	
      a certificate of an officer of the Purchaser dated as of
      the Closing Date, acceptable in form and content to the solicitors for the
      Vendor, certifying that the conditions precedent set out in Section 13.3
      have been satisfied; and

	 	 	 
	 	(d) 	
      all such other documents and instruments as the Vendor or
      its solicitors may reasonably require.

	 	
       
	20. 	
      TAXES

	 	 
	20.1 	
      All sales, use and other transfer taxes payable in
      respect of the transactions arising out of the purchase of the Assets as
      contemplated hereby will be paid by the Vendor, as far as these taxes are
      being levied by the country of residence of the Vendor, i.e.
  France.

	 	 
	 	 
	21. 	
      FURTHER ASSURANCES

	 	 
	21.1 	
      From time to time subsequent to the Closing Date, the
      parties covenant and agree, at the expense of the requesting party, to
      promptly execute and deliver all such further documents and instruments
      and do all such further acts and things as may be required to carry out
      the full intent and meaning of this Agreement and to effect the
      transactions contemplated hereby.

	 	 
	 	 
	22. 	
      ASSIGNMENT

	 	 
	22.1 	
      This Agreement may not be assigned by any party hereto
      without the prior written consent of the other parties hereto.

	 	 
	 	 
	23. 	
      SUCCESSORS AND ASSIGNS

	 	 
	23.1 	
      This Agreement will enure to the benefit of and be
      binding upon the parties hereto and their respective successors and
      permitted assigns.

	 	 
	 	 
	24. 	
      COUNTERPARTS

	 	 
	24.1 	
      This Agreement may be executed in several counterparts,
      each of which will be deemed to be an original and all of which will
      together constitute one and the same instrument.

	 	 
	 	 
	25. 	
      NOTICES

	 	 
	25.1 	
      Any notice required or permitted to be given under this
      Agreement will be in writing and may be given by personal service or by
      prepaid registered mail, and addressed to the proper party or transmitted
      by electronic facsimile generating proof of receipt of
transmission at the address or facsimile number stated below: 

- 20 - 

	(a) 	
      if to the Vendor:

MARK SNYDER 
12900 Brookprinter PL,
#200,
Poway CA 92064 
Fax No.: 858-798-0252 
Email: 
marksnyderelectric@sbcglobal.net 

	(b) 	
      if to GSWPS:

	(c) 	
      Global Solar Water Power Systems 
#105, 2500
      Sweetwater Springs Blvd
Spring Valley California, USA 
Fax
      No:619-660-7503 
Email: mseprojects@sbcglobal.net

	 	 
	(d) 	
      if to the Purchaser:

Enertopia Corp. 
Suite 950 – 1130
West Pender St 
Vancouver BC Canada 
Fax 604-685-1602 
Email: kameo300@gmail.com or 
bossbunka@gmail.com 

with a copy to: 

Clark Wilson 
Attn: Conrad Nest

Suite 800 – 885 W Georgia Street 
Vancouver BC Canada 
Fax
604-687-6314 
Email: CYN@cwilson.com

or to such other address or facsimile
number as any party may specify by notice. Any notice sent by registered mail as
aforesaid will be deemed conclusively to have been effectively given on the
fifth business day after posting; but if at the time of posting or between the
time of posting and the third business day thereafter there is a strike, lockout
or other labour disturbance affecting postal service, then such notice will not
be effectively given until actually received. Any notice transmitted by
electronic facsimile will be deem conclusively to have been effectively given if
evidence of receipt is obtained before 5:00 p.m. (recipient’s time) on a
Business Day, and otherwise on the Business Day next following the date evidence
of receipt of transmission is obtained by the sender. 

- 21 - 

	26. 	
      REFERENCES TO AGREEMENT

	 	 
	26.1 	
      The terms “this Agreement”, “hereof’, “herein”, “hereby”,
      “hereto”, and similar terms refer to this Agreement and not to any
      particular Section, paragraph or other part of this Agreement. References
      to particular Sections are to Sections of this Agreement unless another
      document is specified.

IN WITNESS WHEREOF the parties have executed and delivered
these presents on the dates indicated below. 

	MARK SNYDER 
	 
	Per: 	                                                                                                     
     
	  	Mark Snyder                                                                                
	 	 
	Dated: 	Februrary 10, 2010                                                                     
     
	 	 
	 	 
	GLOBAL SOLAR WATER POWER SYSTEM 
	 
	Per: 	                                                                                                     
     
	  	Mark Snyder - President 
	 	 
	Dated: 	February 10, 2010                                                                      
     
	 	 
	 	 
	ENERTOPIA CORP. 
	 
	Per: 	                                                                                                   
     
	  	Robert McAllister - President 
	 	 
	Dated: 	February 24, 2010                                                                    
     

LIST OF SCHEDULES 

	Schedule 	Description 
	 	 
	1 	Description of Purchased Asset
    
	2 	Consents 
	3 	Subscription Agreement
  

SCHEDULE 1 

DESCRIPTION OF PURCHASED ASSET 

The Purchased Asset is a Credit Note with a value of US $
1,000,000.00 for the manufacture and supply of articulated downhole screen
filters.

SCHEDULE 2 

CONSENTS 

Mark Snyder ?? 

GSWPS:

              
Consent of Board of Directors;

              
Certificate of Incorporation; 

              
Articles and Bylaws;

              
Evidence of Contracts or pending contracts;

              
Valuation report

              
Other? 

Enertopia:

              
Consent of Board of Directors;

              
Other??? 

SCHEDULE 3 

STOCK PURCHASE AGREEMENT 

THIS STOCK PURCHASE AGREEMENT, dated February 28, 2010,
is entered into by and between,

MARK SNYDER, a person residing in the State of
California with an office at 12900 Brookprinter PL, #200, Poway CA 92064 

(herein called “Seller”) 

AND: 

ENERTOPIA CORP., (soon to be renamed Enertopia
Corporation) a corporation existing under the laws of the State of Nevada with
its executive office at 950 – 1130 West Pender Street, Vancouver BC Canada 

(Herein called “purchaser”) 

W I T N E S S E T H: 

WHEREAS, Purchaser and Seller have entered an Asset and Share
Purchase Agreement on February 8, 2010, of which this Stock Purchase Agreement
is attached as Schedule 3; and 

WHEREAS, Purchaser desires to purchase from Seller, and Seller
desires to sell to Purchaser, in any number of individual transactions as may be
required and four times each year, up to a cumulative total of twenty thousand
(20,000) shares (the “Shares”) of the common capital stock of Global
Solar Water Power Systems pursuant to the comprehensive terms and conditions
more particularly set forth in the Asset and Share Purchase Agreement; and 

WHEREAS, Purchaser and Seller desire to set forth certain
representations, warranties and covenants made by each to the other as an
inducement to the execution and delivery of this Agreement and certain
additional agreements related to the transactions contemplated hereby; 

NOW, THEREFORE, in consideration of the above premises and of
the mutual representations, warranties and covenants herein contained, the
parties hereby agree as follows: 

ARTICLE 1 
PURCHASE AND SALE 

1.1 Consideration. Seller agrees to deliver or cause to
be delivered to Purchaser the Shares, free and clear of any and all liens,
pledges, security interests, encumbrances, buy-sell agreements, preemptive
rights or any adverse claims of every kind and character, and Purchaser agrees
to deliver or cause to be delivered to Seller the Purchase Price (as hereinafter
defined). 

1.2 Purchase Price. Purchaser has between December 01,
2009 and February 28, 2010, delivered funds and/or shares to Seller in the
amount US$__$140,500__________.

ARTICLE 2 
REPRESENTATIONS, WARRANTIES AND
ACKNOWLEDGEMENTS BY SELLER 

Seller has the full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, all proceedings
required to be taken by it to authorize the execution, delivery and performance
of this Agreement and the agreements relating hereto have been properly taken
and this Agreement constitutes the valid and binding obligation of Seller
enforceable in accordance with its terms. There are no outstanding agreements or
arrangements of any character or nature whatever under which Seller is or may
become obligated to issue, assign or transfer the Shares. There are no voting
trust or other agreements or understandings of any kind relating to the Shares.

Furthermore, Seller acknowledges that there exists the
possibility that Enertopia Corp, may enter into or effect a business transaction
that will cause the value of the Shares to materially increase, and that Seller
waives any and all rights it may have to seek recession of this transaction
should such event occur.

ARTICLE 3 
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser represents and warrants to Seller that Purchaser is
acquiring the Shares hereunder for his own account, for investment and with no
present intention of reselling or otherwise distributing same. Purchaser
acknowledges that this representation has been relied upon by Seller in
conveying the Shares pursuant to the terms and conditions of this Agreement.

ARTICLE 4 
OBLIGATIONS

Seller shall deliver to Purchaser the certificate representing
the Shares duly endorsed to affect the transfer of the Shares to Purchaser not
more than 30 days following the execution of this agreement, which is March 30,
2010. Purchaser has delivered the purchase price in full as of February 28,
2010. 

ARTICLE 5 
MISCELLANEOUS 

5.1 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other party. 

5.2 Complete Agreement. This Agreement contains the
entire understanding of the parties with respect to the transactions
contemplated hereby and supersedes all prior arrangements or understandings with
respect thereto. There are no representations, agreements, promises, warranties,
covenants or undertakings other than those expressly set forth herein or
therein. 

5.3 Governing Law. This Agreement shall be governed by
the laws of the State of Nevada (regardless of the laws that might be applicable
under principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect and performance. 

5.4 Counterparts. This Agreement may be executed in two
or more counterparts and by facsimile, all of which shall be considered one and
the same agreement and each of which shall be deemed an original. 

IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written. 

	 	PURCHASER: 
	 	 
	 	Enertopia Corp 
	 	 
	 	 
	 	                                                    
                         
	 	Signature 
	 	 
	 	 
	 	SELLER: 
	 	 
	 	Mark Snyder 
	 	 
	 	                                                       
    
	 	 
	 	Signaturef8k022610ex10i_recovery.htm

    Exhibit
10.1

     

    CREDIT
AGREEMENT

     

    THIS
CREDIT AGREEMENT (together with all Exhibits hereto, and as supplemented,
modified, amended or restated from time to time in the manner provided herein,
this “Agreement”),
effective as of January 29, 2010 (the “Effective Date”), is
by and between RECOVERY ENERGY, INC., a Nevada corporation (“Borrower”), and
HEXAGON INVESTMENTS, LLC, a Colorado limited liability company (“Lender”).

     

    RECITALS

     

    A. Borrower
has acquired certain oil and gas properties, as described in Exhibit A
attached hereto, together with all improvements located thereon, including,
without limitation, any fixtures, structures and appurtenances now or later to
be located thereon (the “Oil and Gas
Properties”);

     

    B. Pursuant
to that certain Letter Agreement re Acquisition Loan for Nebraska Properties,
from Lender to Borrower, dated January 29, 2010 (the “Letter Agreement”),
Lender has extended a term loan to Borrower in the principal amount of
$4,500,000, which was used by Borrower in connection with the acquisition of the
Oil and Gas Properties;

     

    C. Borrower
and Lender desire to enter into this Agreement and the other Loan Documents (as
defined below) in order to replace and restate the agreements set forth in the
Letter Agreement, and more fully set forth the terms of the transactions
described in the Letter Agreement; and

     

    D. Lender
and Borrower have agreed to replace and restate the Letter Agreement by the
execution and delivery of this Agreement and the other Loan
Documents.

     

    AGREEMENT

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, the parties hereto agree as follows:

     

    I.   DEFINITIONS AND
REFERENCES

     

    Section
1.1 Defined
Terms. As used
in this Agreement, each of the following terms shall have the meaning given it
in this Section 1.1 or
in the sections and subsections referred to below:

     

    “Agreement” has the
meaning set forth in the introductory paragraph.

     

    “Applicable Environmental
Law” means any law, order, rule or regulation pertaining to health or the
environment (as the same now exist or are hereafter enacted and/or
amended).

     

    “Borrower” has the
meaning set forth in the introductory paragraph.

     

    “Business Day” means
any day which is not a Saturday, a Sunday or a legal holiday on which commercial
banks are authorized or required to be closed in Denver, Colorado.

     

    “Collateral” means all
tangible or intangible real or personal property which, under the terms of any
Security Document, is or is purported to be covered thereby or subject
thereto.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    “Debt” means, as to
any Person, all indebtedness, liabilities and obligations of such Person,
whether primary or secondary, direct or indirect, absolute or
contingent.

     

    “Default” means any
Event of Default and any default, event or condition which would, with the
giving of any requisite notice and/or the passage of time, constitute an Event
of Default.

     

    “Default Rate” is
20.00% per annum.

     

    “Earned Properties”
has the meaning set forth in Section
7.1(b).

     

    “Event of Default” has
the meaning set forth in Section 7.1.

     

    “Fiscal Quarter” means
a three-month period ending on the last day of March, June, September or
December of any year.

     

    “Fiscal Year” means a
twelve-month period ending on December 31 of any year.

     

    “GAAP” means those
generally accepted accounting principles and practices which are recognized as
such by the Financial Accounting Standards Board (or any generally recognized
successor) and which, in the case of Borrower: (a) are applied for all
periods in a consistent manner, and (b) are consistently applied for all
periods after the date hereof so as to properly reflect the financial condition,
and the results of operations and changes in financial position, of
Borrower.

     

    “Gross Proceeds of
Production” means the gross proceeds from the sale of hydrocarbon
production attributable to the Oil and Gas Properties and actually received by
or on behalf of Borrower during any calendar month, less Third-Party Proceeds for
the same calendar month associated with the Oil and Gas Properties.

     

    “Initial Engineering
Report” means the engineering report dated December 8, 2009, covering the
Oil and Gas Properties, prepared by Kent B. Lina, Certified Petroleum
Engineer.

     

    “Initial Financial
Statement” means the financial statement of Borrower dated as of
December 31, 2009, a copy of which has heretofore been delivered by
Borrower to Lender.

     

    “Lien” means, with
respect to any property or assets, any right or interest therein of a creditor
to secure Debt owed to him or any other arrangement with such creditor which
provides for the payment of such Debt out of such property or assets or which
allows him to have such Debt satisfied out of such property or assets prior to
the general creditors of any owner thereof, including any lien, mortgage,
security interest, pledge, deposit, production payment, rights of a vendor under
any title retention or conditional sale agreement or lease substantially
equivalent thereto, or any other charge or encumbrance for security purposes,
whether arising by law or agreement or otherwise, but excluding any right of
offset which arises without agreement in the ordinary course of
business.

     

    “Loan Documents” means
this Agreement, the Security Documents, the Note, and all other agreements,
certificates, legal opinions and other documents, instruments and writings
heretofore or hereafter delivered in connection herewith or therewith pertaining
to the Loan.

     

    “Loan” has the meaning
set forth in Section 2.1.

     

    “Maturity Date” means
December 1, 2010.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Monthly Statement”
has the meaning set forth in Section
6.1(c).

     

    “Mortgages” means (i)
that certain Mortgage, Security Agreement, Assignment of Production and
Proceeds, Financing Statement and Fixture Filing, dated as of January 29, 2010,
from Borrower in favor of Lender, covering the Oil and Gas Properties located in
the State of Colorado, and (ii) that certain Deed of Trust, Mortgage, Security
Agreement, Assignment of Production and Proceeds, Financing Statement and
Fixture Filing, dated as of January 29, 2010, from Borrower for the benefit of
Lender, covering the Oil and Gas Properties located in the State of
Nebraska.

     

    “Net Proceeds” means
for any calendar month, Gross Proceeds of Production less the sum of
(i) Permitted Expenses paid during such calendar month and not accrued in
any previous period and (ii) Permitted Expenses accrued during the relevant
calendar month but not actually paid.

     

    “Note” has the meaning
set forth in Section 2.1.

     

    “Obligated Person”
means Borrower or any other Person now or hereafter liable for repayment of any
or all of the Obligations, whether by guaranty or otherwise.

     

    “Obligations” means
all Debt from time to time owing by Borrower to Lender under or pursuant to any
of the Loan Documents. “Obligation” means any
part of the Obligations.

     

    “Oil and Gas
Properties” has the meaning set forth in Recital A.

     

    “Permitted Expenses”
means, for each period for which the Net Proceeds is determined, the sum of the
following, to the extent only that Borrower has been billed for such or the
payment obligation of Borrower with respect thereto has otherwise accrued during
the relevant period only and to the extent not already deducted in any
remittance to Borrower and without duplication of any item: (a) lease operating
expenses attributable to the Oil and Gas Properties; (b) transportation and
marketing expenses attributable to the Oil and Gas Properties; (c) facility
lease expenses attributable to the Oil and Gas Properties; and (d) production
and ad valorem taxes attributable to Borrower’s share of Gross Proceeds of
Production.

     

    “Person” means an
individual, corporation, partnership, association, joint-stock company, trust or
trustee thereof, estate or executor thereof, limited liability company,
unincorporated organization or joint venture, court or governmental unit or any
agency or subdivision thereof, or any other legally recognizable
entity.

     

    “Security Documents”
means the Mortgages and all other security agreements, deeds of trust,
mortgages, chattel mortgages, pledges, guaranties, financing statements,
continuation statements, extension agreements and other agreements or
instruments now, heretofore, or hereafter delivered by any or all of the
Obligated Persons or any other person to Lender in connection with this
Agreement or any transaction contemplated hereby, to secure or guaranty the
payment of any part of the Obligations or the performance of any other duties
and obligations of any or all of the Obligated Persons under the Loan Documents,
whenever made or delivered.

     

    “Third-Party Proceeds”
means that portion, if any, of proceeds from the sale of hydrocarbon production
attributable to the interest of, and owned by, any Person other than Borrower in
any oil and gas property received by Borrower (including royalty interests,
overriding royalty interests, net profits interests, production payments and
other interests payable out of or measured by production).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Section
1.2 Amendment
Of Defined Instruments. Unless
the context otherwise requires or unless otherwise provided herein, the terms
defined in this Agreement which refer to a particular agreement, instrument or
document also refer to and include all renewals, extensions and modifications of
such agreement, instrument or document, provided that nothing contained in this
section shall be construed to authorize any such renewal, extension or
modification.

     

    Section
1.3 References
and Titles. All
references in this Agreement to Exhibits, Schedules, articles, sections,
subsections and other subdivisions refer to the Exhibits, Schedules, articles,
sections, subsections and other subdivisions of this Agreement unless expressly
provided otherwise. Titles appearing at the beginning of any subdivisions are
for convenience only and do not constitute any part of such subdivisions and
shall be disregarded in construing the language contained in such subdivisions.
The words “this Agreement”, “this instrument”, “herein”, “hereof”, “hereby”,
“hereunder” and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited The phrases “this
section” and “this subsection” and similar phrases refer only to the sections or
subsections hereof in which such phrases occur. The word “or” has the inclusive
meaning frequently identified by the phrase “and/or”. The term “including” means
“including without limitation”. Pronouns in masculine, feminine and neuter
genders shall be construed to include any other gender, and words in the
singular form shall be construed to include the plural and vice versa, unless
the context otherwise requires.

     

    Section
1.4 Calculations
And Determinations. All
interest accruing under the Loan Documents shall be calculated on the basis of
actual days elapsed (including the first day but excluding the last) and a year
of 360 days. Unless otherwise expressly provided herein or unless Lender
otherwise consents, all financial statements and reports furnished to Lender
hereunder shall be prepared and all financial computations and determinations
pursuant hereto shall be made in a manner consistent with GAAP.

     

    II.           THE
LOAN

     

    Section
2.1 The
Loan.

     

    (a) Lender
has made a term loan to Borrower in the amount of $4,500,000.00 (the “Loan”) pursuant to
the Letter Agreement.

     

    (b) Lender
and Borrower hereby agree that the Letter Agreement is deemed amended, restated
and replaced by this Agreement and the other Loan Documents.

     

    (c) The Loan
is evidenced by a promissory note made by Borrower to the order of Lender, dated
as of the Effective Date, in an amount equal to $4,500,000.00 (the “Note”). All of the
terms and conditions of the Note are incorporated herein by this
reference.

     

    (d) The Loan
shall bear interest at a rate of 15.00% per annum.

     

    Section
2.2 Mandatory
Payments. Each
month, 100% of the Net Proceeds shall be used to repay the Loan.

     

    Section
2.3 Voluntary
Prepayments.
Borrower shall have the right to prepay the Loan at any time, in whole or in
part, without penalty or premium.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    III.           SECURITY;
TAXES

     

    Section
3.1 Security. The
Obligations will be secured by any and all Security Documents executed and
delivered contemporaneously with the execution and delivery of this Agreement
and any additional Security Documents hereafter delivered by any Obligated
Person.

     

    Section
3.2 Perfection And Protection Of
Security Interests And
Liens.
Borrower will from time to time deliver to Lender any amendments, financing
statements, continuation statements, extension agreements and other documents,
properly completed and executed (and acknowledged when required) by Borrower in
form and substance reasonably satisfactory to Lender, which Lender may request
for the purpose of perfecting, confirming or protecting Lender’s Liens and other
rights in the Collateral.

     

    Section 3.3 Taxes. All
payments by Borrower of principal of, and interest on, the Loan and all other
amounts payable hereunder shall be made free and clear of and without deduction
for any present or future income, excise, stamp or franchise taxes and other
taxes, fees, duties, withholdings or other charges of any nature whatsoever
imposed by any taxing authority, but excluding franchise taxes and taxes imposed
on or measured by Lender’s net income or receipts (such non-excluded items being
called “Taxes”). In the event
that any withholding or deduction from any payment to be made by Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, Borrower will: (a) pay directly to the relevant authority
the full amount required to be so withheld or deducted; (b) promptly forward to
Lender an official receipt or other documentation satisfactory to Lender
evidencing such payment to such authority; and (c) pay Lender such additional
amount or amounts as may be necessary to ensure that the net amount actually
received by Lender will equal the full amount Lender would have received had no
such withholding or deduction been required. Moreover, if any Taxes are directly
asserted against Lender with respect to any payment received by Lender
hereunder, Lender may pay such Taxes and Borrower will promptly pay such
additional amounts (including any penalties, interest or expenses) as may be
necessary in order that the net amount received by Lender after the payment of
such Taxes (including any Taxes on such additional amount) shall equal the
amount Lender would have received had not such Taxes been asserted. If Borrower
fails to pay any Taxes when due to the appropriate taxing authority or fail to
remit to Lender the required receipts or other required documentary evidence,
then Borrower shall indemnify, save and hold harmless Lender from and against
any incremental Taxes, interest or penalties that may become payable by Lender
as a result of any such failure.

     

    Section
3.4 Letters
in Lieu; Reimbursement of Permitted Expenses.
Borrower agrees to execute such letters in lieu of transfer orders, payment
orders, division orders and any other similar such instruments as may be needed
to direct payment of all proceeds from production attributable to Borrower’s
interest in the Oil and Gas Properties by purchasers of oil and gas production
into an account established in Lender’s name established for the receipt of such
funds (the “Proceeds
Account”). Borrower hereby authorizes and directs all such pipeline
companies, purchasers, transporters, operators, if appropriate, and other
parties owing monies to Borrower under contracts comprising the Oil and Gas
Properties, to pay such amounts direct to the Proceeds Account, and such
authorization shall continue until the Loan is paid in full or as otherwise
directed by Lender. No party making payment shall have any responsibility to see
to the application of any funds paid to the Proceeds Account but shall be fully
protected in making such payment as provided herein. Should Lender bring suit
against any third party for collection of any amounts or sums payable to the
Proceeds Account (and Lender shall have the right to bring any such suit), it
may sue either in its own name or in the name of Borrower with Borrower’s
consent, which consent shall not be 

     

    
      
        
        

      

      
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      unreasonably
withheld; provided that, if an Event of Default has occurred Borrower’s consent
shall not be required.  Each month, if Lender approves the Monthly
Statement (which approval shall not be unreasonably withheld, conditioned or
delayed), Lender will release (a) Third-Party Proceeds, (b) any Net Proceeds
associated with the Earned Properties, and (c) Permitted Expenses and any other
funds due to Borrower within 5 Business Days of receipt of each Monthly
Statement; provided, however, Lender does not hereby waive any of its rights
under the default and remedies provisions of this Agreement. All remaining funds
in the Proceeds Account after each such release shall be used to repay the
Loan.  Receipt of funds pursuant to this Section 3.4 shall not
be deemed a payment of the Loan or other Obligations until the Lender has
approved the applicable Monthly Statement and the funds described in subsections
(a), (b) and (c) above have been released, and upon such release, any remaining
amounts shall be credited at that time as a payment of the
Loan.

    

    

     

    IV.           CONDITIONS
PRECEDENT TO LOAN

     

    Section
4.1 Conditions
Precedent. Lender
shall have no obligation under this Agreement unless Lender shall have received
all of the following, duly executed and delivered and in form, substance and
date satisfactory to Lender: (a) the Note, (b) the Security Documents
(c) evidence satisfactory to Lender that the Collateral has been and
continues to be operated in a reasonable and prudent manner without giving rise
to any liabilities or obligations under any Applicable Environmental Law
(d) all other Loan Documents, and (e) such other documents,
certificates and instruments as Lender or its counsel may have reasonably
requested, such documents, certificates and instruments to be satisfactory to
Lender and its counsel in all respects in their sole discretion.

     

    V.           REPRESENTATIONS
AND WARRANTIES

     

    Section
5.1 Borrower’s
Representations and Warranties. To
induce Lender to enter into this Agreement and to make the Loan, Borrower
represents and warrants to Lender (which representations and warranties shall
survive the delivery of the Note and shall be deemed to be continuing
representations and warranties until repayment in full of the Loan)
that:

     

    (a) No Default. Borrower
is not in default in the performance of any of the covenants and agreements
contained herein. No event has occurred and is continuing which constitutes a
Default.

     

    (b) Organization and Good
Standing. Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of Nevada, having all powers
required to carry on its business and enter into and carry out the transactions
contemplated hereby. Borrower is duly qualified, in good standing, and
authorized to do business in all other jurisdictions wherein the character of
the properties owned or held by it or the nature of the business transacted by
it makes such qualification necessary.

     

    (c) Authorization.
Borrower has duly taken all action necessary to authorize the execution and
delivery by it of the Loan Documents and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder.

     

    (d) No Conflicts or
Consents. The execution and delivery by the various Obligated Persons of
the Loan Documents to which each is a party, the performance by each of its
obligations under such Loan Documents, and the consummation of the transactions
contemplated by the various Loan Documents, do not and will not:
(1) conflict with any provision of: (A) any domestic or foreign law,
statute, rule or regulation, 

     

    
      
        
        

      

      
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      (B) the
governing documents of any Obligated Person, or (C) any agreement, judgment,
license, order or permit applicable to or binding upon any Obligated Person,
(2) result in the acceleration of any Debt owed by any Obligated Person, or
(3) result in or require the creation of any Lien upon any assets or
properties of any Obligated Person except as expressly contemplated by the Loan
Documents. Except as expressly contemplated by the Loan Documents, no consent,
approval, authorization or order of, and no notice to or filing with, any court
or governmental authority or third party is required in connection with the
execution, delivery or performance by any Obligated Person of any Loan Document
or to consummate any transactions contemplated by the Loan
Documents.

    

     

    (e) Enforceable
Obligations. This Agreement is, and the other Loan Documents when duly
executed and delivered will be, legal and binding obligations of each Obligated
Person which is a party hereto or thereto, enforceable in accordance with their
respective terms, except as limited by bankruptcy, insolvency, fraudulent
conveyance or similar laws of general application relating to the enforcement of
creditors’ rights and as limited by general equitable principles.

     

    (f) Initial Financial
Statement. The Initial Financial Statement fairly presents Borrower’s
financial position at the date thereof. Since the date of the Initial Financial
Statement, no material adverse change has occurred in Borrower’s financial
condition or business.

     

    (g) Other Obligations.
Borrower has no outstanding Debt of any kind (including contingent obligations,
tax assessments, and unusual forward or long-term commitments) which is not
shown in the Initial Financial Statement or which has not been previously
disclosed in writing to Lender.

     

    (h) Full Disclosure. No
certificate, statement or other information delivered herewith or heretofore by
Borrower to Lender in connection with the negotiation of this Agreement or in
connection with any transaction contemplated hereby contains any untrue
statement of a material fact or omits to state any material fact known to
Borrower necessary to make the statements contained herein or therein not
misleading in any material respect as of the date made or deemed made. At the
date of this Agreement, Borrower is not aware of any material fact that has not
been disclosed to Lender in writing which could materially and adversely affect
Borrower’s properties, businesses, prospects or condition (financial or
otherwise). To the best of Borrower’s knowledge, the Initial Engineering Report
is based upon complete and accurate factual information in all material
respects.

     

    (i) Litigation. Except as
disclosed in the Initial Financial Statement or as otherwise previously
disclosed in writing by Borrower to Lender: (1) there are no actions, suits
or legal, equitable, arbitrative or administrative proceedings pending, or to
the knowledge of Borrower threatened, against any Obligated Person before any
federal, state, municipal or other court, department, commission, body, board,
bureau, agency, or instrumentality, domestic or foreign, which do or may
materially and adversely affect any Obligated Person, any affiliate of Borrower,
any Obligated Person’s ownership or use of any of its assets or properties, its
business or financial condition or prospects, or the right or ability of any
Obligated Person to enter into the Loan Documents or perform its obligations
thereunder and (2) there are no outstanding judgments, injunctions, writs,
rulings or orders by any such governmental entity against any Obligated Person
which have or may have any such effect.

     

    (j) Title to Properties.
Borrower has title to the Oil and Gas Properties as represented and warranted in
Section 2.1(B)
of each of the Mortgages.

     

    
      
        
        

      

      
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    (k) Place of Business.
The chief executive office and principal place of business of Borrower are
located at the addresses of Borrower set forth in the signature pages
hereto.

     

    (l) Taxes. All tax
returns required to be filed by Borrower in any jurisdiction prior to the date
hereof have been filed; all taxes, assessments, fees and other governmental
charges upon Borrower or upon any of its properties, income or franchises, which
are due and payable have been paid, or adequate reserves have been provided for
payment thereof.

     

    (m) Use of Proceeds.
Borrower is not engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U or X of the Board of
Governors of the Federal Reserve System), and no part of the proceeds of Loan
will be used to purchase or carry any such margin stock or to extend credit to
any Person for the purpose of purchasing or carrying any such margin stock.
Neither Borrower nor any Person acting on Borrower’s behalf has taken or will
take any action which might cause this Agreement or the Note or the application
of the proceeds of the Loan to violate either of said Regulations U or X or
any other regulation of the Board of Governors of the Federal Reserve System or
to violate the Securities Exchange Act of 1934, in each case as now in effect or
as the same may hereafter be in effect.

     

    (n) Environmental
Matters. As of the date of this Agreement, neither Borrower nor any
property of Borrower, including any of the Oil and Gas Properties, is in
violation, in any material respect, of any Applicable Environmental Law,
assuming disclosure to the applicable governmental authorities of all relevant
facts, conditions and circumstances pertaining thereto. There is no existing,
pending or, to the best knowledge of Borrower, threatened investigation or
inquiry by any governmental authority in connection with Borrower or any
property of Borrower under any Applicable Environmental Law. Borrower has taken
all reasonable steps necessary to determine that no hazardous substances or
solid wastes have been disposed of or otherwise released on or to any of the Oil
and Gas Properties or any other property of Borrower. Borrower has not caused or
permitted the disposal or other release of any hazardous substance or solid
waste (as defined in any Applicable Environmental Law) on or to any of the Oil
and Gas Properties or any other property of Borrower, except in accordance with
all Applicable Environmental Laws.

     

    (o) Investment Company Act Not
Applicable. Borrower is not an “investment company” or a person
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

     

    (p) Capital
Structure.  As of the Effective Date, 10,991,889 shares of
Borrower’s common stock are issued and outstanding, and such common stock
represents all of the issued stock of Borrower.  The 1,000,000 shares
of common stock in the Borrower, to be issued to Lender pursuant to
Section 6.1(b)(5) below, have been duly and validly authorized for issuance
by Borrower and when issued by Borrower to Lender will be duly authorized,
validly issued, fully paid and non-assessable and will not be subject to any
preemptive or similar rights.

     

    VI.           COVENANTS
OF BORROWER

     

    Section
6.1 Affirmative
Covenants.
Borrower warrants, covenants and agrees that, until the full and final payment
of the Obligations and the termination of this Agreement, unless Lender has
previously agreed otherwise in writing:

     

    
      
        
        

      

      
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    (a) Payment and
Performance. Borrower will pay all amounts due under the Loan Documents
in accordance with the terms thereof and will in all respects observe, perform
and comply with every covenant, term and condition in the Loan
Documents.

     

    (b) Post-Effective Date
Deliverables. On or prior to February 25, 2010, Borrower will deliver to
Lender:

     

    (1) the
Note;

     

    (2) duly
executed copies of all Security Documents necessary to create first and prior
Liens in the Oil and Gas Properties in favor of Lender;

     

    (3) copies of
the letters in lieu of transfer orders, payment orders, division orders and
other similar such instruments described in Section 3.4;
and

     

    (4) stock
certificates representing 1,000,000 newly issued shares of Borrower’s common
stock, par value $0.0001 per share, duly issued to Lender, as
stockholder.

     

    (c) Monthly Statements.
Within 20 Business Days of the end of each calendar month, Borrower shall
deliver a statement to Lender (a “Monthly Statement”),
setting forth for the prior month: (a) the amount of production sold from the
Oil and Gas Properties (excluding any production sold from the Earned
Properties) and the price received for such production, (b) the production sold
from the Earned Properties and the price received for such production, (c)
Third-Party Proceeds paid to Lender identified by third-party and amount,
(d) reimbursements of Permitted Expenses, (e) the dollar amount and
estimated time remaining before Borrower has recovered all of its costs of
drilling, testing, completing and operating the Earned Properties, (f) the
status of Borrower’s capital raising efforts, and (g) such other
information as Lender may reasonably request.

     

    (d) Books, Financial Statements
and Records. Borrower will at all times maintain full and accurate books
of account and records, will maintain a standard system of accounting in
accordance with GAAP and will furnish the following statements and reports to
Lender at Borrower’s expense: (1) as soon as available and in any event within
60 days after the end of each Fiscal Quarter, commencing with the Fiscal
Quarter ending March 31, 2010, unaudited consolidated and consolidating
financial statements of Borrower for such Fiscal Quarter and for the
then-current Fiscal Year, prepared by Borrower in reasonable detail and in
accordance with GAAP and containing at least a balance sheet, statements of
earnings and cash flow and a reconciliation of Borrower’s equity, setting forth
in comparative form the corresponding figures for the preceding Fiscal Year,
each certified as true by an officer of Borrower; (2) by June 30, 2010, update
of the Initial Engineering Report, and (3) by April 1 of each year,
commencing April 1, 2011, an engineering report and economic evaluation
prepared as of the preceding December 31 by one or more independent
petroleum engineers chosen by Borrower and reasonably acceptable to Lender,
covering the Oil and Gas Properties. Each such engineering report shall be in
form and substance satisfactory to Lender and shall contain information and
analysis comparable in scope to that contained in the Initial Engineering
Report.

     

    (e) Other Information and
Inspections. Borrower will furnish to Lender any information which Lender
may from time to time reasonably request concerning any covenant, provision or
condition of the Loan Documents or any matter in connection with Borrower’s
business and operations. Borrower will permit representatives appointed by
Lender, including independent 

     

    
      
        
        

      

      
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      accountants,
agents, attorneys, appraisers and any other persons, to visit and inspect, at
their sole risk (and, except during the continuance of an Event of Default, at
their cost and expense), any of Borrower’s property, including its books of
account, other books and records, and any facilities or other business assets,
and to make extra copies therefrom and photocopies and photographs thereof, and
to write down and record any information such representatives obtain, and
Borrower shall permit Lender or its representatives to investigate and verify
the accuracy of the information furnished to Lender in connection with the Loan
Documents and to discuss all such matters with its officers, managers, employees
and representatives.

    

     

    (f) Notice of Material
Events. Borrower will promptly notify Lender: (1) of any material
adverse change in the financial condition of Borrower, (2) of the
occurrence of any Default, (3) of the acceleration of the maturity of any
Debt owed by Borrower or of any material default by Borrower under any
indenture, mortgage, agreement, contract or other instrument to which Borrower
is a party or by which Borrower or any of Borrower’s properties is bound,
(4) of any uninsured claim of $50,000 or more asserted against Borrower or
any of its properties, and (5) of the filing of any suit or proceeding
against Borrower (or the occurrence of any material development in any such suit
or proceeding) in which an adverse decision could have a material adverse effect
upon Borrower’s financial condition, business or operations (or could result in
a judgment not covered by insurance of $50,000 or more against Borrower). Upon
the occurrence of any of the foregoing, Borrower will take all necessary or
appropriate steps to remedy promptly any such material adverse change, Default,
or default, to protect against any such adverse claim, to defend any such suit
or proceeding, and to resolve all controversies on account of any of the
foregoing. Borrower will also notify Lender in writing at least 20 Business Days
prior to the date that Borrower changes its name or the location of its chief
executive office or principal place of business or the place where it keeps its
books and records concerning the Collateral.

     

    (g) Maintenance of Existence and
Qualifications. Borrower will maintain and preserve its existence and its
rights and franchises in full force and effect and will qualify to do business
in all states or jurisdictions where required by applicable law, except where
the failure so to qualify will not have any material adverse effect on
Borrower.

     

    (h) Maintenance of
Properties. Borrower will in all respects maintain, preserve, protect and
keep all property operated by Borrower and used or useful in the conduct of its
business in accordance with the standards of a reasonable and prudent operator,
and for all other property of Borrower, will use commercially reasonable efforts
to cause all such other property to be maintained, preserved and kept in
accordance with the standards of a reasonable and prudent operator.

     

    (i) Payment of Trade Debt,
Taxes, etc. Borrower will: (1) timely file all required tax returns;
(2) timely pay all taxes, assessments, and other governmental charges or
levies imposed upon it or upon its income, profits or property; (3) pay all
Debt owed by it on ordinary trade terms to vendors, suppliers and other Persons
providing goods and services used by it in the ordinary course of its business;
and (4) maintain appropriate accruals and reserves for all of the foregoing
Debt in accordance with its present system of accounting. Borrower will pay and
discharge in all material respects, when due, all other Debt, taxes or
assessments now or hereafter owed by it. Borrower may, however, delay paying or
discharging any such Debt so long as it is in good faith contesting the validity
thereof by appropriate proceedings and has set aside on its books adequate
reserves therefor.

     

    (j) Insurance. Borrower
will maintain with financially sound and reputable insurance companies insurance
with respect to its business, operations and properties, in at least such
amounts and against at least such risks as are usually insured against in the
same general area by companies of established repute engaged in the same or a
similar business.

     

    
      
        
        

      

      
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    (k) Payment of Expenses.
Borrower will be responsible for payment of all reasonable costs and expenses
incurred by or on behalf of Lender (including attorneys’ fees) in connection
with: (1) the preparation, execution and delivery of this Agreement and the
other Loan Documents (including any and all future amendments or supplements
thereto or restatements thereof), and any and all consents, waivers or other
documents or instruments relating thereto, (2) the filing, recording,
refiling and re-recording of any Security Documents and any other documents or
instruments or further assurances required to be filed or recorded or refiled or
re-recorded by the terms of any Loan Document, (3) the examination of
Borrower’s title to the Collateral, and (4) the enforcement, after the
occurrence of a Default or an Event of Default, of the Loan
Documents.  All payments referred to in the prior sentence, and all
expenses related to the update to the Initial Engineering Report referred to in
Section
6.2(d)(2), shall be paid pursuant to Section 5.10 of each of the
Mortgages.

     

    (l) Performance on Borrower’s
Behalf. If Borrower fails to pay any taxes, insurance premiums or other
amounts it is required to pay under any Loan Document, Lender may pay the same.
Borrower shall immediately reimburse Lender for any such payments, and each
amount paid shall constitute a part of the Obligations, shall be secured by the
Security Documents and shall bear interest at the Default Rate, from the date
such amount is paid by Lender until the date such amount is repaid to
Lender.

     

    (m) Compliance with Agreements
and Law. Borrower will perform all obligations it is required to perform
under the terms of each indenture, mortgage, deed of trust, security agreement,
lease, franchise, agreement, contract or other instrument or obligation to which
it is a party or by which it or any of its properties is bound in such a way
that they result in no material adverse effect upon the Oil and Gas Properties
or Borrower’s ability to perform its obligations under this Agreement. Borrower
will in all respects conduct its business and affairs in compliance with all
laws, regulations, and orders applicable thereto (including those relating to
pollution and other environmental matters).

     

    (n) Certifications of
Compliance. Borrower will furnish to Lender at Borrower’s expense all
certifications which Lender from time to time reasonably requests, as to the
accuracy and validity of or compliance with all representations, warranties and
covenants made by Borrower in the Loan Documents, the satisfaction of all
conditions contained therein, and all other matters pertaining
thereto.

     

    (o) Additional Security
Documents; Amendments. Promptly after a request therefor by Lender at any
time and from time to time, Borrower will execute and deliver to Lender such
additional Security Documents or amendments to existing Security Documents as
Lender may deem necessary or appropriate in order to grant to Lender a first
priority perfected lien on and security interest in the Oil and Gas Properties.
Without limiting the foregoing, upon receipt of assignments covering the Earned
Properties, Borrower shall promptly execute amendments to the Security Documents
to reflect Borrower’s ownership of the Earned Properties.

     

    (p) Environmental
Matters. Borrower will promptly notify Lender in writing of any existing,
pending or threatened investigation or inquiry by any governmental authority in
connection with any Applicable Environmental Law of which Borrower becomes
aware. Borrower will take all reasonable steps necessary to ensure that no
hazardous substances or solid wastes will be disposed of 

     

    
      
        
        

      

      
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      or
otherwise released on or to any of the property owned by Borrower in violation
of any Applicable Environmental Law. Borrower will keep all of its property in
all respects free of any hazardous substance or solid waste (other than
hazardous substances and solid wastes normally used or generated in the ordinary
course of operation of Borrower’s facilities and that are properly stored,
maintained and disposed of in accordance with Applicable Environmental Laws) and
will remove the same (or if removal is prohibited by law, take, at its sole
expense, whatever actions are required by law) in accordance with Applicable
Environmental Laws. Upon Lender’s request, at any time and from time to time
during the term of this Agreement (but no more often than once per calendar year
in the absence of the occurrence and continuance of an Event of Default),
Borrower will provide to Lender, at Borrower’s sole expense, an inspection or
audit, to be conducted by an engineering or consulting firm approved by Lender,
of the properties owned or operated by Borrower indicating the compliance by
Borrower in all material respects with all Applicable Environmental
Laws.

    

     

    (q) Registration Rights.
If at any time prior to payment in full of the Debt Borrower grants registration
rights covering any of the stock of Borrower to any other equity investor in
Borrower, then Borrower agrees to grant similar registration rights to
Lender.

     

    (r) Insurance.  On
or prior to March 31, 2010, Borrower shall deliver to Lender certificates from
Borrower’s insurance broker setting forth the insurance maintained by Borrower,
stating that such insurance is in full force and effect, and naming Lender as an
additional insured.

     

    Section
6.2 Negative
Covenants.
Borrower warrants, covenants and agrees that until the full and final payment of
the Obligations and the termination of this Agreement, unless Lender has
previously agreed otherwise in writing:

     

    (a) Limitation on Liens.
Borrower will not create, assume or permit to exist any mortgage, deed of trust,
pledge, encumbrance, lien or charge of any kind (including any security interest
in or vendor’s lien on property purchased under conditional sales or other title
retention agreements and including any lease intended as security or in the
nature of a title retention agreement) upon any of Borrower’s properties or
assets, whether now owned or hereafter acquired, except: (i) Liens at any time
existing in favor of Lender; and (ii) statutory Liens for taxes, statutory or
contractual mechanics’ and materialmen’s Liens incurred in the ordinary course
of business, and other similar Liens incurred in the ordinary course of
business; provided that such Liens secure only Debt which is not delinquent or
which is being contested as provided in Section 6.1(h).

     

    (b) Additional Debt.
Borrower will not create, incur, assume or permit to exist Debt of Borrower
except (i) the Loan, and (ii) Debt described in Section
6.1(i).

     

    (c) Limitation on Sales of
Collateral. Borrower will not sell, transfer, lease, exchange, alienate
or dispose of any of the Collateral except as follows (and the following
exceptions shall be subject to any limitations contained in the Security
Documents) (i) oilfield equipment, service and supply assets sold in the
ordinary course of business and (ii) inventory (including oil and gas sold
as produced) which is sold in the ordinary course of business.

     

    (d) Limitation on Credit
Extensions. Borrower will not extend credit, make advances or make
loans.

     

    (e) Fiscal Year. Borrower
will not change its fiscal year.

     

    
      
        
        

      

      
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    (f) Amendment of
Contracts. Borrower will not amend or permit any amendment to (to the
extent that Borrower has the power to prevent such amendment) any contract which
could reasonably be foreseen to release, qualify, limit, make contingent or
otherwise have any material adverse effect upon, the rights and benefits of
Lender under or acquired pursuant to any of the Security Documents.

     

    (g) Reorganizations;
Combinations; Change of Control. Borrower will not change its name or the
nature of its business, reorganize, liquidate, dissolve, enter into any merger
or other combination, or permit to occur any change in control of Borrower from
that in existence on the date hereof.

     

    (h) Hedging Transactions.
Without Lender’s prior written consent, Borrower will not at any time enter into
or be or become a party to any one or more hedging transactions with respect to
its oil and gas production.  If Borrower enters into a hedging
transaction with Lender’s prior written consent, and at any time prior to the
earlier of the  Maturity Date or the full and final payment of the
Obligations, Borrower is thereafter required to make a margin call payment in
connection with such hedging transaction, Borrower shall have the right, upon
reasonable prior notice to Lender, to request an advance on the Loan in the
amount of the required margin call payment, and Lender shall make such advance,
subject to satisfaction of the conditions set forth below.  Any such
advance made by Lender shall increase the principal amount outstanding on the
Loan, and shall bear interest at the rate provided in Section
2.1(d).  Lender’s obligation to make an advance to Borrower pursuant
to this Section 6.2(h) shall be subject to the following
conditions:

     

    (1) No
Default or Event of Default shall have occurred under any Loan
Documents;

     

    (2) The
maximum amount of advances made by Lender under this Section 6.2(h) shall
not exceed $2,250,000 in the aggregate; and

     

    (3) If the
amount of any such advance would cause the total amount outstanding under the
Loan to exceed $4,500,000, execution of an amendment to the Note to reflect the
new outstanding balance.

     

    Lender
and Borrower agree to promptly enter into such amendments of the Loan Documents
as may be necessary or appropriate to properly document the obligations under
this Section 6.2(h).

     

    (i) Capital Expenditures;
Development Drilling. Borrower will not make (whether in one transaction
or a series of transactions) capital expenditures, including expenses for
development drilling, for the period from the Effective Date until the repayment
in full of the Obligations; provided however, Borrower
shall be permitted to make capital expenditures necessary to retain the Earned
Properties.

     

    VII.           EVENTS
OF DEFAULT AND REMEDIES

     

    Section
7.1 Events
of Default. Each of
the following events constitutes an Event of Default under this
Agreement:

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    (a) Borrower
fails to pay any Obligation when due and payable, whether at a date for the
payment of a fixed installment or contingent or other payment to Lender or as a
result of acceleration or otherwise; or

     

    (b) Borrower
fails to raise sufficient capital to enable it to meet Borrower’s drilling
obligations necessary to earn and retain the Comanche Prospect Leases and Omega
Prospect Leases, as set forth in Section 11 of that certain Purchase and Sale
Agreement, dated January 29, 2010, between Borrower, as buyer, and Edward Mike
Davis, L.L.C., as seller (the “Earned
Properties”).

     

    (c) Borrower
fails to raise sufficient capital prior to October 29, 2010 to enable it to
repay the Obligations in full prior to the Maturity Date.

     

    (d) Any
“default” or “event of default” occurs under any Loan Document which defines
either term; or

     

    (e) Borrower
fails to duly observe, perform or comply with any covenant, agreement, condition
or provision of any Loan Document;

     

    (f) Any
representation or warranty previously, presently or hereafter made in writing by
or on behalf of any Obligated Person in connection with any Loan Document shall
prove to have been false or incorrect in any material respect on any date on or
as of which made; or

     

    (g) Any
Obligated Person:

     

    (1) suffers
the entry against it of a judgment, decree or order for relief by a court of
competent jurisdiction in an involuntary proceeding commenced under any
applicable bankruptcy, insolvency or other similar law of any jurisdiction now
or hereafter in effect, including the federal Bankruptcy Code, as from time to
time amended, or has any such proceeding commenced against it which remains
undismissed for a period of 60 days; or

     

    (2) suffers
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for a substantial part of its assets or for any
part of the Oil and Gas Properties in a proceeding brought against or initiated
by it, and such appointment is neither made ineffective nor discharged within
60 days after the making thereof, or such appointment is consented to,
requested by, or acquiesced to by it; or

     

    (3) commences
a voluntary case under any applicable bankruptcy, insolvency or similar law now
or hereafter in effect, including the federal Bankruptcy Code, as from time to
time amended; or applies for or consents to the entry of an order for relief in
an involuntary case under any such law or to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or other similar official of any substantial part of its assets or any part of
the Oil and Gas Properties; or makes a general assignment for the benefit of
creditors; or fails generally to pay (or admits in writing its inability to pay)
its debts as such debts become due; or takes action in furtherance of any of the
foregoing; or

     

    (4) suffers
the entry against it of a final judgment for the payment of money in excess of
$100,000 (not covered by insurance), unless the same is discharged within 60
days after the date of entry thereof or an appeal or appropriate proceeding for
review thereof is taken within such period and a stay of execution pending such
appeal is obtained; or

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    (5) suffers
the entry of an order issued by any court or tribunal taking, seizing or
apprehending all or any substantial part of its property or any part of the Oil
and Gas Properties and bringing the same into the custody of such court or
tribunal, and such order is not stayed or released within 30 days after the
entry thereof; or

     

    (h) Any
default, including the expiration of any applicable period of grace, occurs with
respect to any other indebtedness owed by Borrower to any Person.

     

    Upon the
occurrence of an Event of Default described in subsection (f)(1), (f)(2) or
(f)(3) of this Section
7.1, all of the Obligations shall thereupon be immediately due and
payable, without presentment, demand, protest, notice of protest, declaration or
notice of acceleration or intention to accelerate, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Borrower.
During the continuance of any other Event of Default, Lender at any time and
from time to time (unless all Events of Default have theretofore been remedied)
may declare any or all of the Obligations immediately due and payable, and all
such Obligations shall thereupon be immediately due and payable.

     

    Section
7.2 Remedies. If any
Event of Default shall occur, Lender may protect and enforce its rights under
the Loan Documents by any appropriate proceedings, including proceedings for
specific performance of any covenant or agreement contained in any Loan
Document, and Lender may enforce the payment of any Obligations due or enforce
any other legal or equitable right. All rights, remedies and powers conferred
upon Lender under the Loan Documents shall be deemed cumulative and not
exclusive of any other rights, remedies or powers available under the Loan
Documents or at law or in equity.

     

    Section
7.3 Indemnity.
Borrower hereby agrees to indemnify, defend and hold harmless Lender and its
successors and assigns and the respective agents, affiliates, officers,
directors and employees of Lender and its successors and assigns from and
against any and all claims, losses, demands, actions, causes of action and
liabilities whatsoever (including reasonable attorneys’ fees and expenses and
costs and expenses reasonably incurred in investigating, preparing or defending
against any litigation or claim, action, suit, proceeding or demand of any kind
or character) arising out of or resulting from: (a) the Loan Documents
(including the enforcement thereof), except to the extent such claims, losses
and liabilities are proximately caused by Lender’s gross negligence, bad faith
or willful misconduct, (b) any violation of any Applicable Environmental
Law, (c) any act, omission, event or circumstance resulting from or in
connection with the ownership, construction, occupancy, operation, use and/or
maintenance of the Oil and Gas Properties, regardless of whether the act,
omission, event or circumstance constituted a violation of any Applicable
Environmental Law at the time of its existence of occurrence, and (d) any
and all claims or proceedings (whether brought by a private party or
governmental agencies) for bodily injury, property damage, abatement or
remediation, environmental damage or impairment or any other injury or damage
resulting from or relating to any hazardous or toxic substance, solid waste or
contaminated material located upon or migrating into, from or through any of the
Oil and Gas Properties (whether or not the release of such materials was caused
by Borrower, a tenant or subtenant or a prior owner, tenant or subtenant on the
Oil and Gas Properties and whether or not the alleged liability is attributable
to the handling, storage, generation, transportation, removal or disposal of
such substance, waste or material or the mere presence of such substance, waste
or material on the Oil and Gas Properties), for which Lender may have liability
due to the making of the Loan, the granting of the Security Documents, the
exercise of Lender’s rights under the Loan Documents or Otherwise. WITHOUT
LIMITATION, IT IS THE INTENTION OF BORROWER, AND BORROWER AGREES, THAT THE
FOREGOING INDEMNITIES
SHALL APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO CLAIMS, DEMANDS,
LIABILITIES, LOSSES, DAMAGES, CAUSES OF ACTION, JUDGMENTS, PENALTIES, COSTS AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) WHICH IN WHOLE OR IN PART ARE
CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED
PARTY. 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    However,
such indemnities shall not apply to any particular indemnified party (but shall
apply to the other indemnified parties) to the extent the subject of the
indemnification is caused by or arises out of the gross negligence, bad faith or
willful misconduct of such particular indemnified party. The foregoing
indemnities shall not terminate upon the Maturity Date or upon the release,
foreclosure or other termination of the Security Documents, but will survive the
Maturity Date, foreclosure of the Security Documents or conveyances in lieu of
foreclosure, and the repayment of the Loan and the discharge and release of the
Security Documents and the other documents evidencing and/or securing the
Loan.

     

    VIII.           MISCELLANEOUS

     

    Section
8.1 Waiver
and Amendment. No
failure or delay by Lender in exercising any right, power or remedy which it may
have under any of the Loan Documents shall operate as a waiver thereof or of any
other right, power or remedy, nor shall any single or partial exercise by Lender
of any such right, power or remedy preclude any other or further exercise
thereof or of any other right, power or remedy. No waiver of any provision of
any Loan Document and no consent to any departure therefrom shall ever be
effective unless it is in writing and signed by Lender, and then such waiver or
consent shall be effective only in the specific instances and for the purposes
for which given and to the extent specified in such writing. No notice to or
demand on any Obligated Person shall in any case of itself entitle any Obligated
Person to any other or further notice or demand in similar or other
circumstances. No modification or amendment of or supplement to this Agreement
or the other Loan Documents shall be valid or effective unless the same is in
writing and signed by the party against whom it is sought to be
enforced.

     

    Section
8.2 Survival
of Agreements; Cumulative Nature. All of
the Obligated Persons’ various representations, warranties, covenants and
agreements in the Loan Documents shall survive the execution and delivery of
this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting of the Loan and the delivery of the
Note and the other Loan Documents, and shall further survive until all of the
Obligations are paid in full to Lender and all of Lender’s obligations to
Borrower are terminated. All statements and agreements contained in any
certificate or other instrument delivered to Lender under any Loan Document
shall be deemed representations and warranties by Borrower to Lender and/or
agreements and covenants of Borrower under this Agreement. The representations,
warranties, and covenants made by the Obligated Persons in the Loan Documents,
and the rights, powers, and privileges granted to Lender in the Loan Documents,
are cumulative, and no Loan Document shall be construed in the context of
another to diminish, nullify, or otherwise reduce the benefit to Lender of any
such representation, warranty, covenant, right, power or privilege. In
particular and without limitation, no exception set out in this Agreement to any
representation, warranty or covenant herein contained shall apply to any similar
representation, warranty or covenant contained in any other Loan Document, and
each such similar representation, warranty or covenant shall be subject only to
those exceptions which are expressly made applicable to it by the terms of the
various Loan Documents.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    Section
8.3 Notices. All
notices, requests, consents, demands and other communications required or
permitted under any Loan Document shall be in writing and, unless otherwise
specifically provided in such Loan Document, shall be deemed sufficiently given
or furnished if delivered by personal delivery, by expedited delivery service
with proof of delivery, or by registered or certified United States mail, return
receipt requested, postage prepaid, at the addresses specified on the signature
pages hereto (unless changed by similar notice in writing given by the
particular Person whose address is to be changed). Any such notice or
communication shall be deemed to have been given upon receipt.

     

    Section
8.4 Parties
in Interest. All
grants, covenants and agreements contained in the Loan Documents shall bind and
inure to the benefit of the parties thereto and their respective successors and
assigns; provided, however, that no Obligated Person may assign or transfer any
of its rights or delegate any of its duties or obligations under any Loan
Document without the prior consent of Lender.

     

    Section
8.5 Governing
Law. The
Loan Documents shall be deemed contracts and instruments made under the laws of
the State of Colorado and shall be construed and enforced in accordance with and
governed by the laws of the State of Colorado and the laws of the United States
of America, except (a) to the extent that the law of another jurisdiction
is expressly elected in a Loan Document, and (b) with respect to specific
Liens, or the perfection thereof, evidenced by Security Documents covering real
or personal property which by the laws applicable thereto are required to be
construed under the laws of another jurisdiction. Borrower hereby irrevocably
submits itself to the non-exclusive jurisdiction of the state and federal courts
of the State of Colorado.

     

    Section
8.6 Limitation
on Interest. Lender
and the Obligated Persons intend to contract in strict compliance with
applicable usury law from time to time in effect. In furtherance thereof such
persons stipulate and agree that none of the terms and provisions contained in
the Loan Documents shall ever be construed to create a contract to pay, for the
use, forbearance or detention of money, interest in excess of the maximum amount
of interest permitted to be charged by applicable law from time to time in
effect. Neither any Obligated Person nor any present or future guarantors,
endorsers, or other Persons hereafter becoming liable for payment of any
Obligation shall ever be liable for unearned interest thereon or shall ever be
required to pay interest thereon in excess of the maximum amount that may be
lawfully charged under applicable law from time to time in effect, and the
provisions of this section shall control over all other provisions of the Loan
Documents which may be in conflict or apparent conflict herewith. Lender
expressly disavows any intention to charge or collect excessive unearned
interest or finance charges in the event the maturity of any Obligation is
accelerated. If: (a) the maturity of any Obligation is accelerated for any
reason, (b) any Obligation is prepaid and as a result any amounts held to
constitute interest are determined to be in excess of the legal maximum, or
(c) Lender or any other holder of any or all of the Obligations shall
otherwise collect moneys which are determined to constitute interest which would
otherwise increase the interest on any or all of the Obligations to an amount in
excess of that permitted to be charged by applicable law then in effect, then
all such sums determined to constitute interest in excess of such legal limit
shall, without penalty, be promptly applied to reduce the then outstanding
principal of the related Obligations or, at Lender’s option, promptly returned
to Borrower or the other payor thereof upon such determination.

     

    Section
8.7 Severability. If any
term or provision of any Loan Document shall be determined to be illegal or
unenforceable all other terms and provisions of the Loan Documents shall
nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable law.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    Section
8.8 Counterparts. This
Agreement may be separately executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to constitute one and the same Agreement. Delivery of
this Agreement and the other documents to be delivered in connection herewith by
any party may be effected, without limitation, by faxing a signed counterpart of
any such document to Lender (any party that effects delivery in such manner
hereby agreeing to transmit promptly to each of the other parties an actual
signed counterpart).

     

    Section
8.9 Conflicts. To the
extent of any irreconcilable conflicts between the provisions of this Agreement
and the provisions of any of the Loan Documents, the provisions of this
Agreement shall prevail.

     

    Section
8.10 Entire
Agreement. This
Agreement, the Note, the Security Documents and the other Loan Documents from
time to time executed in connection herewith state the entire agreement between
the parties with respect to the subject matter hereof.

     

    Section
8.11 Waiver
Of Jury Trial.
EACH OF BORROWER AND LENDER HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION: (A) ARISING UNDER THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM IN RESPECT OF
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. EACH OF BORROWER AND LENDER HEREBY
AGREES THAT THE OTHER MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHTS TO TRIAL BY JURY.

     

    [Signature
Page follows]

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, this Agreement is executed as of the date first written
above.

     

    
      	
              Borrower:

            
	 
      
	
              RECOVERY
      ENERGY, INC.

            
	
              By:

            	
              /s/
      Jeffrey A. Beunier

            
	 
      	
              Jeffrey
      A. Beunier, Chief Executive Officer

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              Address:

            	
              1515
      Wynkoop Street, Suite 200

            
	 
      	
              Denver,
      Colorado 80202

            
	 
      	 
      
	 
      	 
      
	
              Facsimile:

            	
              (888)
      887-4449

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              Lender:

            
	 
      
	
              HEXAGON
      INVESTMENTS, LLC

            
	 
      
	
              By:   Hexagon
      Investments, Inc., Manager

            
	
              By:

            	
              /s/
      Brian Fleischmann

            
	 
      	
              Brian
      Fleischmann, President

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              Address:

            	
              730
      17th Street, Suite 800

            
	 
      	
              Denver,
      Colorado 80202

            
	 
      	 
      
	 
      	 
      
	
              Facsimile:

            	
              (303)
      571-1221

            
	 
      	 
      

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
A

    OIL AND GAS
PROPERTIES

    

    WILKE (DILL EAST FIELD)
LEASES and LANDS:

     

    
    

     

    
      	Lessor:	Gary
      L. Schneider, Individually and as heir of Maxine Schneider,
      deceased
	Lessee: 	Edward Mike Davis,
      L.L.C.
	Dated: 	May 20,
    2008
	Recorded:	Book 206 OG, Page
      44
	Description: 	Township 15 North,
      Range 56 West
	 	Section
      5:  S/2

    

     

    
      	Lessor:	Peggy
      Atkins and Howard Atkins, wife and husband
	Lessee:  	Edward Mike Davis,
      L.L.C.
	Dated:	May 20,
    2008
	Recorded: 	Book 206 OG, Page
      48
	Description: 	Township 15 North,
      Range 56 West
	 	Section
      5:  S/2

    

     

    
      
        	Lessor:	Galeen
      B. Hergenrader and Kenneth Hergenrader, wife and
  husband
	Lessee:    	Edward Mike Davis,
      L.L.C.
	Dated:  	May 16,
    2008
	Recorded: 	Book 206 OG, Page
      52
	Description:  	Township 15 North,
      Range 56 West
	 	Section
      5:  S/2

      

       

    

    
      
        	Lessor:	Paula
      Wilke, a/k/a Paula J. Wilke and Erwin Wilke, Jr., wife and
      husband
	Lessee:	Edward Mike Davis,
      L.L.C.
	Dated:  	June 26,
    2008
	Recorded:  	Book 206 OG, Page
      132
	Description:   	Township 15 North,
      Range 56 West
	 	Section
      5:  S/2

      

       

    

    
      	Amendment of Oil and
      Gas Dated: 	July 9,
    2008
	Recorded: 	Book 206 OG, Page
      221
	Description:  	Township 15 North,
      Range 56 West
	 	Section
      5:  S/2

    

     

    
    

    WILKE (DILL EAST FIELD)
WELLS

     

    
      	Well
      Name: 	Wilke
  24-5
	Located:	SE/4SW/4 of Section
      5, T15N-R56W, Kimball County, NE
	API:  26105226270000   	Working
      Interest:  87.50%    Net Revenue
      Interest: 70.00%
	Equipment and
      Inventory:	consisting of a
      pumping unit, rods, tubing and casing

    

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	Well Name:	Wilke
  23-5
	Located: 	NE/4SW/4 of Section
      5, T15N-R56W, Kimball County, NE
	API:  26105226250000	Working
      Interest:  87.50%    Net Revenue
      Interest: 70.00%
	Equipment and
      Inventory:	consisting of a
      pumping unit, rods, tubing and casing

    

     

    
      
        	Well
      Name:  	Wilke
  34-5
	Located:	SW/4SE/4 of Section
      5, T15N-R56W, Kimball County, NE
	API:  26105226290000 	Working
      Interest:  87.50%    Net Revenue
      Interest: 70.00%
	Equipment and
      Inventory:	consisting of a
      pumping unit, rods, tubing and casing

      

       

    

    
      	Well
      Name: 	Wilke
  33-5
	Located: 	NW/4SE/4 of Section
      5, T15N-R56W, Kimball County, NE
	API:  26105226280000    	Working
      Interest:  87.50%    Net Revenue
      Interest: 70.00%
	Equipment and
      Inventory: 	consisting of a
      pumping unit, rods, tubing and casing

    

     

    
      	Well
      Name: 	Wilke
  44-5
	Located: 	SE/4SE/4 of Section
      5, T15N-R56W, Kimball County, NE
	API:  26105226320000  	Working
      Interest:  87.50%    Net Revenue
      Interest: 70.00%
	Equipment and
      Inventory:	consisting of a
      pumping unit, rods, tubing and casing

    

     

    
      	Well
      Name: 	Wilke
  14-5
	Located: 	SW/4SW/4 of Section
      5, T15N-R56W, Kimball County, NE
	API:  26105226520000	Working
      Interest:  87.50%    Net Revenue
      Interest: 70.00%
	Equipment and
      Inventory:	consisting of a
      pumping unit, rods, tubing and casing

    

     

    Wilke
Tank Battery consisting of 8 400 bbl tanks and an 8 foot treater.

    

    LUKASSEN LEASES and
LANDS:

     

    
      	Lessor:	Antelope Energy
      Company, LLC, a Colorado limited liability company
	Lessee: 	Edward Mike Davis,
      L.L.C.
	Dated:	August 4,
    2008
	Recorded: 	Book 206 OG, Page
      647
	Covering:	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 16 NORTH,
      RANGE 56 WEST, 6th
  P.M.
	 	Section
      34:  S/2SW/4SW/4

    

     

    
      	Lessor:	Marian J. Payne, a
      single woman
	Lessee:	Edward Mike Davis,
      L.L.C.
	Dated:  	July 25,
    2008
	Recorded: 	Book 206 OG, Page
      487
	Correction of
      Description Recorded: 	Book 207, Page
      354
	Covering:  	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 15 NORTH,
      RANGE 56 WEST, 6th
  P.M.
	 	Section
      3:  N/2 of Lot 4, also described as
  N/2NW/4NW/4

    

     

    
      	Lessor:	Judith
      Ann Mays, a married woman dealing in her sole and separate
      property
	Lessee: 	Edward Mike Davis,
      L.L.C.
	Dated:   	July 25,
    2008
	Recorded:	Book 206 OG, Page
      487
	Correction of
      Description Recorded: 	Book 207, Page
      356
	Covering: 	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 15 NORTH,
      RANGE 56 WEST, 6th
      P.M.
	 	Section
      3:  N/2 of Lot 4, also described as
  N/2NW/4NW/4

    

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	Lessor:	William
      O. Smith a/k/a William Otis Smith and Rita Marie Smith, husband and
      wife
	Lessee:	Edward Mike Davis,
      L.L.C.
	Dated:  	May 16,
    2008
	Recorded:	Book 206 OG, Page
      33
	Correction of
      Description Recorded:  	Book 207, Page
      352
	Covering:  	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 15 NORTH,
      RANGE 56 WEST, 6th
      P.M.
	 	Section
      3:  N/2 of Lot 4, also described as
  N/2NW/4NW/4

    

     

    
      
        	Lessor:	Rita
      J. Bingaman f/k/a Rita Jeanne Smith and Gary P. Bingaman, wife and
      husband
	Lessee:    	Edward Mike Davis,
      L.L.C.
	Dated: 	May 16,
    2008
	Recorded:       	Book 206 OG, Page
      29
	Correction of
      Description Recorded:    	Book 207, Page
      350
	Covering:  	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 15 NORTH,
      RANGE 56 WEST, 6th
  P.M.
	 	Section
      3:  N/2 of Lot 4, also described as
  N/2NW/4NW/4

      

    

     

    
      	Lessor:	Mary
      L. Soper, individually and as Trustee of the Ronald R. Soper Family Trust,
      dated October 4, 1995
	Lessee:  	Edward Mike Davis,
      L.L.C.
	Dated:	July 15,
    2009
	Recorded: 	Book 208 OG, Page
      760
	Covering: 	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 15 NORTH,
      RANGE 56 WEST, 6th
  P.M.
	 	Section
      3:  N/2 of Lot 4, also described as
  N/2NW/4NW/4

    

     

    
      	Lessor:	Steven Knigge, a
      single man
	Lessee:  	Edward Mike Davis,
      L.L.C.
	Dated: 	July 15,
    2009
	Recorded:	Book 208 OG, Page
      763
	Covering:    	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 15 NORTH,
      RANGE 56 WEST, 6th
  P.M.
	 	Section
      3:  N/2 of Lot 4, also described as
  N/2NW/4NW/4

    

     

    
      	Lessor: 	Linda McDowall,
      f.k.a. Linda Wilson, a single woman
	Lessee: 	Edward Mike Davis,
      L.L.C.
	Dated:	July 15,
    2009
	Recorded:  	Book 208 OG, Page
      766
	Covering:  	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 15 NORTH,
      RANGE 56 WEST, 6th
  P.M.
	 	Section
      3:  N/2 of Lot 4, also described as
  N/2NW/4NW/4

    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      
        	Lessor: 	Marla Knigge, f.k.a.
      Marla Teasley, a single woman
	Lessee: 	Edward Mike Davis,
      L.L.C.
	Dated:	July 15,
    2009
	Recorded:  	Book 208 OG, Page
      769
	Covering: 	INSOFAR AND ONLY
      INSOFAR AS THE LEASE COVERS:
	 	TOWNSHIP 15 NORTH,
      RANGE 56 WEST, 6th
  P.M.
	 	Section
      3:  N/2 of Lot 4, also described as
  N/2NW/4NW/4

      

    

    

    LUKASSEN
WELL

     

    
      	Well Name:	Lukassen
    14-34
	Located:  	S/2SW/4SW/4 of
      Section 34, T16N-R56W, Kimball County, NE
	API: 26105226450000	Working
      Interest:  100.00%    Net Revenue
      Interest: 80.00%
	Equipment and
      Inventory: 	consisting of a
      pumping unit, rods, tubing and casing

    

     

    Lukassen
Tank Battery consisting of 3 – 400 bbl tanks and a 4 foot treater

     

    PIEPER LEASE and
LANDS:

     

    
    

     

    
      	Lessor:  	Dean Reed and
      Beaulah Reed, husband and wife
	Lessee:  	King Resources
      Company
	Dated:	August 10,
      1966
	Recorded: 	Book 583, Page
      71
	Description:	Township 1 North,
      Range 53 West
	 	Section
      29:  NE/4

    

     

    
      PIEPER
WELL

       

      
        	Well Name:	Pieper
    #3-29
	Located: 	NE/4 of Section 29,
      T1N-R53W, Washington County, CO
	API:  05-121-08367	Working
      Interest:  100.00%    Net Revenue
      Interest: 80.00%
	Equipment and
      Inventory:	consisting of a
      pumping unit, rods, tubing and casing

      

       

    

    Pieper
Tank Battery consisting of 2 – PR&R 500 bolted bbl tanks and a 6 X 20
vertical inside leg cold weather treater

    

    OMEGA PROSPECT LEASES and
LANDS:

     

    
      	Lessor:	Katharine
      E. Nelson,, Individually and as Trustee of the Katharine E. Nelson Living
      Trust, dated 5-19-2003
	Lessee:    	Edward Mike Davis,
      L.L.C.
	Dated:   	September 20,
      2008
	Recorded: 	Book 131 OG, Page
      455, in Banner County, Nebraska
	Description:  	Township 17 North,
      Range 55 West, 6th
  P.M.
	 	Section
      11:  NE, S2

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	Lessor:	Ruth
      L. Pile, individually and as Trustee of the Ruth L. Pile Revocable Trust,
      dated 6-26-1998
	Lessee:	Edward Mike Davis,
      L.L.C.
	Dated:   	October 9,
      2008
	Recorded:	Book 131 OG, Page
      459, in Banner County, Nebraska
	Description:	Township 17 North,
      Range 55 West, 6th
  P.M.
	 	Section
      12:  W/2

    

     

    COMANCHE FARMS PROSPECT
LEASES and LANDS:

     

    
      	Lessor:	State of
      Colorado    Lease # OG 8056.4
	 	State Board of Land
      Commissioners
	Lessee:	Contex Energy
      Company
	Dated: 	August 19,
      2004
	Recorded:	Reception Number B
      4199551, in Arapahoe County, Colorado
	Description:	Township 4 South,
      Range 62 West, 6th
  P.M.
	 	Section
      36:  ALL

    

     

     

    24

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