Document:

Blueprint

  EXHIBIT
10.17

 

PROMISSORY
NOTE

 

THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED OR SOLD UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE AND THEN ONLY IN COMPLIANCE WITH THE
RESTRICTIONS ON TRANSFER SET FORTH HEREIN.

 

	

$3,250,000.00

	

December
1, 2017

 

 

Torchlight Energy,
Inc., a Nevada corporation (together with its successors and
permitted assigns, “Maker”), for value
received, HEREBY PROMISES TO PAY to the order of McCabe Petroleum
Corporation, a Texas corporation (together with their successors
and assigns, the “Holder”), at the
Holder’s address set forth in Section 6 hereof or as
otherwise directed by Holder, the principal sum of THREE MILLION
TWO HUNDRED FIFTY THOUSAND AND NO/100 UNITED STATES DOLLARS
($3,250,000.00), together with an annual interest rate of
five-percent (5.00%), in strict accordance with these terms and
provisions in lawful currency of the United States of
America.

 

Interest on this
Promissory Note (“Note”) is due and payable
in 36 monthly, interest-only installments of $13,541.66 beginning
on January 1, 2018, and continuing thereafter the fifteenth day of
each following month. All unpaid principal will be due and payable
in full three years after the initial payment (“Maturity
Date”).

 

All
payments of the indebtedness evidenced by this Note will be applied
in the following order of priority: (a) to the payment or
reimbursement of any expenses, costs, or obligations (other than
the outstanding principal balance of and interest under this Note)
for which Maker is obligated or to which Holder is entitled under
this Note, (b) to any accrued but unpaid interest then due and
payable, and (c) to the principal amount then due and
payable.

 

1. Voluntary Prepayment of Note.
Maker may, from time to time and at any time without premium or
penalty, prepay all or any part of the principal amount of this
Note, together with all accrued and unpaid interest thereon through
the date of prepayment and all accrued and unpaid fees and expenses
then payable hereunder. In the event of such partial prepayment,
the Holder shall record the date and amount of any such prepayments
on the reverse side of this Note, and interest shall cease to
accrue on such prepaid principal amounts.

 

2. Events of Default. The
occurrence of any of the following events constitutes an event of
default hereunder (each, an “Event of
Default”):

 

(i) Maker defaults in
the payment of any portion of the principal of, interest on, or
other amounts owing under, this Note when due and payable as
provided herein; or

 

 

1

 

 

(ii) Maker,
pursuant to or within the meaning of Title 11 of the United States
Code or any similar Federal or state law for the relief of debtors
(each, a “Bankruptcy
Law”), (A) commences a voluntary case in bankruptcy or
any other action or proceeding for any other similar relief under
any Bankruptcy Law, (B) consents by answer or otherwise to the
commencement against him of an involuntary case of bankruptcy, (C)
seeks or consents to the appointment of a receiver, trustee,
assignee, liquidator, custodian or similar official (collectively,
a “Custodian”) of him or for
all or substantially all of his assets, or (D) makes a general
assignment for the benefit of his creditors; or

 

(iii) a
court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (A) is for relief against Maker in an
involuntary case of bankruptcy against Maker, (B) appoints a
Custodian of Maker for all or substantially all of Maker’s
assets, or (C) orders the liquidation of Maker’s assets,
and the order or decree remains undismissed or unstayed and in
effect for 60 days, or any dismissal, stay, rescission or
termination thereof ceases to remain in effect;

 

(iv) any
representation or warranty made by Maker in this Note shall be, or
shall prove to have been, false or misleading in any material
respect when so made; or

 

(v) this Note shall
cease, for any reason, to be in full force and effect; any
provision of this Note shall for any reason cease to be valid and
binding on or enforceable against Maker; the validity or
enforceability of this Note is contested by Maker or any other
person or entity; or Maker denies he has any further liability or
obligation under this Note.

 

(a) Upon the occurrence
and during the continuance of any Event of Default, if not cured
within ten business days following notice to Maker of such Event of
Default, the Holder shall have the right, without notice, demand,
presentment, notice of nonpayment or nonperformance, protest,
notice of protest, notice of intent to accelerate, notice of
acceleration or any other notice or action of any kind, ALL OF
WHICH MAKER HEREBY EXPRESSLY WAIVES AND RELINQUISHES, (i) by
notice to Maker, to declare the entire principal amount then
outstanding on this Note, and all accrued and unpaid interest
thereon and all other accrued and unpaid amounts under this Note,
immediately due and payable, whereupon all such principal, interest
and other amounts shall become immediately due and payable, and the
Holder may proceed to enforce the payment of such principal,
interest and other amounts, or part thereof, in such manner as the
Holder may elect and (ii) to exercise all rights and remedies
available to it at law or in equity; provided, however, upon the occurrence of
any Event of Default defined in Sections 2(a)(iii), upon the
expiration of the sixty (60) day period mentioned therein), the
unpaid principal amount of this Note, and all accrued and unpaid
interest thereon and all other accrued and unpaid amounts
hereunder, shall automatically become due and payable without
further act of the Holder. Provided, however, that in the Event of
Default, Holder’s right to enforce the obligations under this
Note are fully subordinate to all debt Maker has with any bank,
whether secured or unsecured.

 

3. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of
the Holder, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder or
thereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law, in equity or otherwise.

 

 

2

 

 

4. Representations and Warranties.
Maker hereby represents and warrants to the Holder that
(a) Maker has the requisite power, authority and legal
capacity to enter into and perform his obligations under this Note;
(b) this Note has been duly executed and delivered to the
Holder by Maker; and (c) this Note is the legal, valid and
binding obligation of Maker, enforceable against him in accordance
with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforceability of creditors’ rights generally and by general
principles of equity.

 

5. Right of Set-off. If an Event
of Default shall have occurred and be continuing, the Holder is
hereby authorized at any time and from time to time, to the fullest
extent permitted by applicable law, to set off and apply any and
all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by
the Holder to or for the credit or the account of Maker against any
and all of the obligations of Maker now or hereafter existing under
this Note, although such obligations may be unmatured. The Holder
agrees promptly to notify Maker after any such set-off and
application, provided that the failure to give such notice shall
not affect the validity of such set-off and application. The rights
of the Holder under this Section 8 are in addition
to other rights and remedies (including, without limitation, other
rights of set-off) which the Holder may have.

 

6. Notices. All notices, requests
and other communications required or permitted under this Note
shall be in writing and shall be personally delivered or sent by a
recognized overnight delivery service, certified mail, postage
prepaid, return receipt requested, or by facsimile or other
electronic delivery to Maker or the Holder, as the case may be, at
its address set forth below:

 

	

If to
Holder:

	

If to
Maker:

	

 

Greg
McCabe

McCabe
Petroleum Company, Inc.

500 W
Texas Ave Ste. 890

Midland,
Texas 79702

 

	

 

John
Brda

Torchlight
Energy, Inc.

5700 W.
Plano Pkwy., Ste. 3600

Plano,
Texas 75093

7. Relationship of the Parties.
Notwithstanding any business or personal relationship between Maker
and the Holder, that may exist or have existed, the relationship
between Maker and the Holder under and with respect to this Note is
solely that of debtor and creditor, the Holder has no fiduciary or
other special relationship with Maker by virtue of this Note, Maker
and the Holder are not partners or joint venturers, and no term or
condition of any of this Note shall be construed so as to deem the
relationship between Maker and the Holder to be other than that of
debtor and creditor.

 

8. Modification and Waiver of this
Note. None of the provisions of this Note may be waived,
amended, supplemented or otherwise modified except in a writing
signed by Maker and the Holder.

 

9. Successors and Assigns;
Transfer. This Note shall be binding upon the successors and
assigns of Maker and Holder, and shall inure to the benefit of
their successors, assigns, heirs and beneficiaries; provided, however, that neither Maker or
Holder may assign, delegate or otherwise transfer any of its rights
or obligations under this Note without the prior written consent of
the other, which will not be unreasonably withheld. No transfer,
assignment, or pledge of this Note shall be valid unless made in
compliance with any applicable state and Federal securities laws
restrictions and effected on the register. Any transfer,
assignment, or pledge of this Note in violation of this paragraph
is void ab
initio.

 

 

3

 

 

10. Severability. Any provision of
this Note which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other
jurisdiction.

 

11. Governing Law. This Note shall
be governed by, and for all purposes construed in accordance with,
the laws of the State of Texas, without regard to conflicts of law
principles thereof.

 

12. Jurisdiction, Etc.  THIS
NOTE SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE
OF TEXAS. Maker and Holder hereby irrevocably and unconditionally
submit to the exclusive jurisdiction of the United States District
Court for the Southern District of Texas and of any Texas State
court sitting in Harris County, Texas, and any appellate court from
any thereof, for purposes of any action or proceeding arising out
of or relating to this Note, or for recognition or enforcement of
any judgment, and Maker and Holder hereby irrevocably and
unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such court.
Maker and Holder agree that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Note shall affect any right that
the Holder may otherwise have to bring any action or proceeding
relating to this Note in the courts of any jurisdiction to collect
on a judgment for this Note.

 

 

IN
WITNESS WHEREOF, Maker has caused this instrument to be duly
executed and delivered to the Holder as of the Issuance
Date.

 

	

 

	
MAKER:

	

 

	

 

	

 

	

 

	

 

	

 

	TORCHLIGHT ENERGY,
INC.	

 

	

 

	 	

 

	

 

	

 

	

 

	

 

	
 

	
By:  

	
/s/
John
Brda

	

 

	

 

	

 

	
John
Brda

	

 

	

 

	

 

	

Chief
Executive Officer

	

 

 

 

 

 

 

 

4Blueprint

  EXHIBIT
10.18

 

ASSIGNMENT OF FARMOUT AGREEMENT

 

THIS
Assignment of Farmout Agreement (“Assignment”) is
entered into on November 15, 2017, but to be effective as of
October 1, 2017 (“Effective Date”) by and among
Founders Oil & Gas, LLC (“Founders”) and Hudspeth
Oil Corporation (“Hudspeth”), Torchlight Energy
Resources (“Torchlight”) and Wolfbone Investments, LLC
(“Wolfbone”) (Hudspeth, Torchlight and Wolfbone,
collectively “Partners”) and Pandora Energy, LP
(“Pandora”)( Pandora is a Party to this Assignment only
as to Section 1.2). The companies named above and their respective
successors and assigns (if any), may sometimes individually be
referred to as “Party” and collectively as the
“Parties.”

 

RECITALS

 

WHEREAS, Hudspeth,
Pandora and Founders have previously entered into Farmout Agreement
dated September 23, 2015 (“Original Farmout
Agreement”), a copy of which is attached hereto as Exhibit
“A” and made a part hereof. The capitalized terms
contained in the Original Farmout Agreement shall have the same
meaning in this Assignment unless they are otherwise defined in
this Assignment.

 

WHEREAS, in the
Original Farmout Agreement, Hudspeth, Pandora and Founders agreed,
among other things, that in consideration for Founders paying
specified amounts and drilling a number of wells, Hudspeth and
Pandora would assign to Founders an undivided 50% working interests
and a 37.5% net revenue interests in the Oil and Gas Leases on the
terms and conditions set forth therein;

 

WHEREAS, Founders
has met its obligations through the Effective Date under the
Original Farmout Agreement and in doing so has spent approximately
$9,588,000;

 

WHEREAS, Founders
desires to assign certain of its rights and its remaining
obligations under the Original Farmout Agreement to Partners and
Partners desires to acquire such rights and assume such
obligations; and

 

WHEREAS, some of
the Oil and Gas leases, generally known as the General Land Offices
leases described in the Farmout Agreement have terminated and the
remaining Oil and Gas leases generally known as the University
Lands leases described on Exhibit B, attached hereto and made a
part hereof, and only such University Land Board Leases shall be
subject to this Assignment (“Remaining Leases”) and in
this Assignment the expression “Farmout Lands” shall
refer only to the lands and Hydrocarbons covered by the Remaining
Leases.

 

NOW,
THEREFORE, for and in consideration of the sum of Ten Dollars and
00/100 ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, together
with the mutual covenants, conditions and obligations contained
herein, the Parties agree as follows:

 

 

- 1 -

 

 

I.          
ASSIGNMENT, ASSUMPTION and RELEASE

 

1.1

Assignment

 

A.

Founders does
hereby grant, assign and transfer unto Partners all of its right,
title and interest, except as provided in paragraph B, below in and
to the Original Farmout Agreement and the Remaining Leases subject
to the terms and provisions of III, below (“Assigned
Interest”).

 

B.

Founders shall
retain an undivided 9.5% of 8/8ths working interest and a 9.5% of
75% of 8/8ths net revenue interest (collectively, “Retained
Interest”) in and to the Remaining Leases. The Retained
Interest shall be “carried” by Partners as
follows:

 

1.

Partners shall pay
(a) all Carry Costs on all wells drilled on the Remaining Leases
and (b) all other costs and expenses, including land costs such as
bonuses, delay rentals and brokerage, relating to or arising out of
the Remaining Leases until such time as Partners has paid
$40,500,000 in total costs (“Founders’
Carry”).

 

2.

Partners shall
provide to Founders on a regular basis its plans relating to its
future compliance with Drilling and Development Agreement No. 2837
between the General Land Office of the State of Texas and Founders
Oil & Gas Operating, LLC (“Development Agreement”)
If at any time prior to the satisfaction of Founders’ Carry,
Partners elects (a) not to continue meeting the continuous drilling
schedule under the Development Agreement or (b) not to otherwise
comply with the Development Agreement or (c) not to comply with the
terms of all of the Remaining Leases, Partners shall notify
Founders in writing at least 90 days before such well must be
commenced or action or inaction taken to avoid otherwise failing to
comply with the Development Agreement or failing to comply with
such Remaining Leases and, at the request of Founders, Partners
shall immediately reassign to Founders the Assigned Interest and
use good faith efforts to have Founders Oil & Gas Operating,
LLC appointed as operator under the Operating Agreement, or in the
case of (c) at the request of Founders, Partners shall immediately
reassign to Founders the Assigned Interest in such Remaining
Leases. If, however, Founders elects not to proceed with its
obligations under the Development Agreement, then Founders shall
give at least 60 days written notice in advance of any deadline to
Partners, so that Partners may endeavor to find another farmee. In
such case, Founders will assign the Remaining Leases to Partners,
or to their farmee; provided that, Founders shall retain its
interest in any wells drilled prior to such assignment and the
sections upon which they are located.

 

3.

After Partners has
satisfied the Founders’ Carry on the Remaining Leases,
Founders will be responsible for its entire proportional share of
expenses related to its Retained Interest, and the Parties will
operate under the terms of the Operating Agreement and the
Remaining Leases.

 

 

- 2 -

 

 

1.2

Assumption, Substitution and Vesting

 

A.

Partners do hereby
assume and agree to pay, perform and to be responsible for all
obligations of Founders under the Original Farmout
Agreement.

 

B.

Hudspeth and
Pandora do hereby agree to the complete substitution of Partners
for Founders as the “Farmee” party to the Original
Farmout Agreement and do hereby release and discharge Founders from
all of its obligations and responsibilities under the Original
Farmout Agreement. Hudspeth and Pandora agree that their execution
of this Assignment shall constitute their prior written consent for
purposes of Section 9.5 of the Original Farmout
Agreement.

 

C.

Hudspeth and
Pandora confirm that as of the Effective Date, Founders has fully
and properly complied with all of its obligations under the
Original Farmout Agreement accruing as of such date.

 

D.

Hudspeth and
Pandora do hereby agree that Founders is fully vested with the
Retained Interest and the Retained Interest is no longer subject to
the Original Farmout Agreement.

 

E.

Partners, Hudspeth
and Pandora agree that they will not terminate, allow to lapse or
amend the Original Farmout Agreement without the prior written
consent of Founders.

 

F.

Hudspeth and
Pandora agree if they are reassigned the Assigned Interest by
virtue of Early Termination under Section 3.2 of the Original
Farmout Agreement or are reassigned the Assigned Interest by virtue
of failure of performance under Section 3.5(B) of the Original
Farmout Agreement or otherwise reassigned the Assigned Interest,
the Founders’ Carry will continue to burden and encumber the
Assigned Interest after such reassignment and will continue until
satisfaction and all owners of the Assigned Interest subsequent to
such reassignment shall pay and be responsible for the
Founders’ Carry as if such Assigned Interest had been
assigned as provided in Section 3.2. For the elimination of any
doubt, nothing in this Section shall enlarge Founders’ Carry
beyond the Retained Interest.

 

G.

The Original
Farmout Agreement shall in all respects remain in full force and
effect and this Assignment shall not constitute an amendment
thereto except to the extent otherwise provided in this
Assignment.

 

1.3

Allocation of Revenues and Expenses

 

A.

All revenues,
proceeds, income, costs and expenses paid prior to the Effective
Date relating to the Assigned Interest shall be allocated to
Founders and all revenues, proceeds, income, costs and
expenses paid on or after the Effective Date relating to the
Assigned Interest shall be allocated to Partners.

 

 

- 3 -

 

 

B.

To the extent
Founders has spent as of the date hereof an amount greater than
$9,500,000 relating to activities and commitments under the
Original Farmout Agreement, Partners will reimburse Founders for
such greater amount up to $100,000 within 30 days of the signing of
this Assignment.

 

 

II.         
TITLE AND ENCUMBRANCES

 

2.1

Founders Makes No
Warranty of Title. Founders does not represent or warrant
title to the Farmout Lands, but represents that:

 

A.

except for the
Encumbrances, it has not granted any Mineral Interests (or the
right to earn any Mineral Interests) in the Farmout Lands, whereby
a third party may acquire any portion of Founders’ Mineral
Interests in the Farmout Lands;

 

B.

it is not aware of
any act or omission whereby Founders is (or would be) in default
under the terms of the Remaining Leases and it has not received, or
otherwise become aware of, any notice of default for the Farmout
Lands that has not been remedied;

 

C.

the Farmout Lands
are as of the date hereof free and clear of all liens, charges,
encumbrances, demands and adverse claims or other burdens created
by, through or under Founders, other than the Encumbrances;
and

 

D.

as of the date
hereof, none of the Mineral Interests of Founders in the Farmout
Lands is subject to any preferential, pre-emptive or first purchase
rights created by through or under Founders that become operative
by virtue of this Assignment or the transactions to be effected by
it.

 

2.2

Maintaining Title -
Carrying Phase.

 

A.

During the period
that Partners has the obligation to carry Founders under Section
1.1 B (the “Carry Period”),

 

(1)

Partners will not
grant any Mineral Interests in the Farmout Lands and will not do or
cause to be done any act or omission whereby the Farmout Lands
become encumbered, terminated or forfeited except with the prior
written consent of Founders, not to be unreasonably withheld or
delayed; and

 

(2)

Partners will not
enter into any joint operating agreement or other material
agreement affecting the Farmout Lands without the prior written
consent of Founders, not to be unreasonably withheld or
delayed;

 

 

- 4 -

 

 

B.

If, prior to the
end of the Carry Period, the payment of an extension, renewal,
bonus, security, penalty or compensatory royalty is required to
maintain in good standing any portion of the Farmout Lands, which
obligation accrues after the date of this Assignment, Partners may
elect to either pay such amount or fail to pay such amount, but if
it elects to pay such amount it shall pay the entire amount and
such amount shall count against the Founders’ Carry.
Notwithstanding the foregoing, nothing herein shall require
Partners to obtain extensions or renewals of the Remaining
Leases.

 

 

III.        
ASSIGNMENT TO PARTNERS

 

3.1

Assignment of
Farmout Lands. Concurrently with the signing of this
Assignment, Founders shall execute, acknowledge and deliver to
Partners the assignment attached hereto as Schedule
“C”. Such assignment shall convey to Partners title to
Assigned Interest in the Remaining Leases except the Retained
Interest and the Parties shall take such other actions as are
necessary to effect the transfer to Partners of such interest with
all applicable Governmental Entities. In the event the Assigned
Interests include state, federal or Indian leases, such assignment
may assign operating rights (in lieu of record title) as may be
necessary or desirable under applicable regulations.

 

3.2

Limitation on
Assignment. Partners shall not assign the Assigned Interest
or any portion thereof without the prior written consent of
Founders, which consent may or may not be given at Founders’
sole discretion, and in any permitted assignment of the Assigned
Interest, the assignee shall specifically assume the obligations of
Partners to Founders under this Assignment and the parties shall
expressly provide that the obligations of Partners to Founders
under this Assignment are covenants that touch and run with the
land. Any assignment not receiving the consent of Founders shall be
void.

 

3.3

Subject to
Participation Agreement Provisions. Partners will bear its
proportionate share of the McCabe Back-In granted by Article III of
the Participation Agreement and will make all assignments provided
for in the same.

 

 

IV.        
INFORMATION TO PARTNERS

 

4.1

Founders and
Partners to Supply Information. As long as Founders Oil
& Gas Operating, LLC is the operator under the Operating
Agreements, Founders shall supply to Partners a full set of all
geologic, seismic and engineering data related to the Remaining
Leases. As long as Partners or any of them is the operator under
the Operating Agreements, Partners shall supply to Founders a full
set of all geologic, seismic and engineering data related to the
Remaining Leases.

 

 

- 5 -

 

 

V.          
OPERATIONS

 

5.1

Founders A 25 Well

 

A.

University Founders
A 25 Well. On behalf of Partners, Founders will cause
Founders Oil & Gas Operating, LLC (“Operating
Company”) to take such actions in accordance with the
applicable Operating Agreement as are reasonably necessary to spud
the University Founders A 25 Well (the “Well”) on or
before December 1, 2017 including preparation of roads and location
and consummation of the drilling contract. Operating Company shall
cash call Partners in accordance with paragraph S of Article XVI of
the Operating Agreement for all of the estimated costs and expenses
relating to the drilling and subsequent operations on such well.
Notwithstanding the terms of such paragraph S, Partners shall pay
such call within 14 days of receipt.

 

B.

Direction and
Indemnity In conducting operation on the Well after spudding
such well, as long as Operating Company is Operator, Founders will
cause Operating Company to follow the unanimous direction of
Torchlight, McCabe Petroleum Corporation and Greg McCabe in the
drilling and subsequent operations on the Well. At the request of
Partners, Founders will cause Operating Company to resign as
Operator and Founders will vote its Retained Interest to elect such
new Operator as directed by Partners. Additionally, at the request
of Partners, Operating Company will resign from the Operating
Committee, Founders will maintain its two seats and Partners may
name a replacement for Operating Company. Partners hereby agree to
release, indemnify and hold harmless Operating Company and Founders
and their directors, officer, employees representatives, agents,
contractors and subcontractors (collectively, “Founders
Indemnitees”) from and against any and all claims,
obligations, damages, liabilities, losses and causes of action
(including costs of litigation and attorneys’ fees), fines
and penalties (collectively, “Claims”) arising out or
related to the drilling of and subsequent operations on the Well
EVEN IF SUCH CLAIMS ARE CAUSED IN
WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER SOLE, GROSS, JOINT, OR
CONCURRENT, BUT EXCLUDING WILLFUL MISCONDUCT), STRICT LIABILITY OR
OTHER LEGAL FAULT OF THE FOUNDER INDEMNITEES.

 

5.2

University
Lands. The Development Agreement shall remain in place and
Partners shall be responsible and pay any transfer fees or consents
costs arising out such agreement and the various transactions
contemplated in this Assignment.

 

 

 

 

 

 

- 6 -

 

 

VI.        
GOVERNING LAW / DISPUTE RESOLUTION

 

6.1

Governing
Law. This Assignment and the relationship of the Parties
hereto shall be interpreted and construed in accordance with the
laws of the State of Texas.

 

6.2

Dispute
Resolution. If any dispute, controversy or claim arises
under or in connection with this Assignment (a "Dispute"), the
applicable provisions in the Joint Operating Agreement shall govern
the resolution of the Dispute.

 

6.3

Confidentiality
Regarding Disputes. All negotiations, mediation and
arbitration relating to a Dispute are confidential and neither
their existence nor their content may be disclosed by the Parties,
their employees, officers, directors, counsel, consultants and
expert witnesses.

 

 

VII.
       GENERAL / MISCELLANEOUS

 

7.1

Further
Assurances. From time to time, as and when reasonably
requested by a Party, the other Party shall execute and deliver, or
cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further
and other actions to implement or give effect to this
Assignment.

 

7.2

Waiver. No
waiver by a Party hereto of any breach of any of the covenants,
provisos, conditions, restrictions or stipulations herein contained
shall take effect or be binding upon that Party unless the same be
expressed in writing under the authority of that Party and any
waiver so given shall extend only to the particular breach so
waived and shall not limit or affect any rights with respect to any
other or future breach.

 

7.3

Entire
Agreement. This Assignment supersedes any and all other
agreements, documents, writings and verbal understandings between
the Parties relating to the subject matter hereof, other than the
Original Farmout Agreement and the Operating Agreements, and any
amendments thereto and expresses the entire agreement of the
Parties with respect to the subject matter hereof.

 

7.4

Amendment.
No amendment or variation of the provisions of this Assignment
shall be binding upon any Party unless it is in writing executed by
the Parties.

 

7.5

Severability.
If any provision of this Assignment is deemed or determined to be
void, voidable or unenforceable, in whole or in part, it shall be
deemed not to affect or impair the validity of any other provision
of this Assignment and such void, voidable or unenforceable
provision shall be severable from this Assignment.

 

7.6

No
Partnership. Nothing contained in this Assignment shall be
construed as creating a partnership or similar
association.

 

 

- 7 -

 

 

7.7

Waiver of Consequential Damages. EACH PARTY HEREBY EXPRESSLY
DISCLAIMS, WAIVES AND RELEASES THE OTHER PARTY FROM SPECIAL,
EXEMPLARY, PUNITIVE, CONSEQUENTIAL, INCIDENTAL, AND INDIRECT
DAMAGES (INCLUDING LOSS OF, DAMAGE TO OR DELAY IN PROFIT, REVENUE
OR PRODUCTION) RELATING TO, ASSOCIATED WITH, OR ARISING OUT OF THIS
ASSIGNMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY. NO LAW,
THEORY, OR PUBLIC POLICY SHALL BE GIVEN EFFECT WHICH WOULD
UNDERMINE, DIMINISH, OR REDUCE THE EFFECTIVENESS OF THE FOREGOING
WAIVER, IT BEING THE EXPRESS INTENT, UNDERSTANDING, AND AGREEMENT
OF THE PARTIES THAT SUCH DAMAGE WAIVER IS TO BE GIVEN THE FULLEST
EFFECT, NOTWITHSTANDING THE NEGLIGENCE (WHETHER SOLE, JOINT OR
CONCURRENT), GROSS NEGLIGENCE, WILLFUL MISCONDUCT, STRICT LIABILITY
OR OTHER LEGAL FAULT OF ANY PARTY.

 

7.8

Execution of
Memorandum. The
Parties agree to execute a Memorandum of Assignment to be filed
against the Farmout Lands to evidence the Parties respective rights
and obligations under this Assignment.

 

7.9

Covenants.
The Parties agree that the covenants in this Agreement touch,
relate to and pertain to the Farmout Lands and therefore constitute
covenants that run with the land.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

- 8 -

 

 

 

IN
WITNESS WHEREOF the Parties hereto have executed this Assignment
effective as of the Effective Date.

 

	
 

	

Founders Oil & Gas, LLC  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	
/s/ Brian M.
Sirgo

	
 

	
 

	

Brian M. Sirgo, President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Hudspeth Oil Corporation  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	

/s/ John A. Brda

	
 

	
 

	

Name: John A.
Brda

	
 

	
 

	

Title: President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Torchlight Energy Resources  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	

/s/ John A. Brda

	
 

	
 

	

Name: John A. Brda

	
 

	
 

	

Title: CEO

 

 

 

 

 

 

 

 

- 9 -

 

 

	
 

	

Wolfbone Investments, LLC  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	
/s/ Greg
McCabe

	
 

	
 

	

Greg McCabe, President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

Pandora Energy, LP  

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

By:

	

/s/ R. Kenneth Dulin

	
 

	
 

	

Name: R. Kenneth Dulin

	
 

	
 

	

Title: General Partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- 10 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00281-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00281-of-00352.parquet"}]]