Document:

agrmtofpurchse Ex 10-2

OPTION AGREEMENT

This AGREEMENT dated this 1st day of April 2003, between Production Specialties Co., Inc., a California Corporation (the "Optionor") and Barola Oil & Gas Co. Inc., a Nevada Corporation (the "Optionee").

WHEREAS:

1.     The Optionor currently owns a 5.3% working interest, in the prospect area known as Triangle T Ranch, the referenced Producing Wells being known as the Triangle T 1-28; 1-29; 1-33; 2-33, located in Madera County in the State of California (the "Prospect Wells");

2.     The Optionor has estimated that the Producing wells are likely to be valued at $3,392,700.00 (see attached) and deemed commercial. Also included are rights to participate for it’s proportionate share of all lands and seismic for future development of this project.

3.     The Optionee desires to acquire an option to acquire a working interest in the Prospect Wells and future lands of not less than 5% and not more than 50% of the Grantor’s working interest (the "Subject Interest") on the terms and subject to the conditions set forth in this Agreement;

4.     The Optionor desires to grant the Optionee the Subject Interest on the terms and subject to the conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the premises and covenants contained in this agreement and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.     Effective Date and Option Period

 

               1.01.     This Agreement is effective from the date written above to the date on which the Prospect Wells are ready for drilling or 18 months, whichever 

                            occurs first (the "Option Period")

 

2.     Grant of Option

 

               2.01.     For and in consideration of the sum of twenty five thousand ($25,000) dollars, non refundable (the "Initial Option Payment") payable to 

                            NANCO, the Optionor hereby grants the Optionee the exclusive right to acquire the Subject Interest in the Prospect Wells in an amount of not 

                            less than 5% and not more than 50% of the Optionor’s working interest in the Prospect Wells; and suture seismic and lands.

 

3.     Purchase Price and Related Items

 

               3.01.     Purchase Price. The purchase price (the "Purchase Price") for the Subject Interest shall be determined prior to or upon the expiry of the Option 

                            Period in accordance with the percentage interest that the Optionee elects to purchase. The purchase price shall be thirty four thousand 

                            ($34,000.00) dollars per percentage point.

               

               3.02.     Upon exercising the option, the Optionee shall become liable for its proportionate share of the all costs associated with drilling, completion, 

                            facilities, lands, leasing, and seismic as declared and estimated by the authority for expenditure (the "AFE"), and any and all additional costs 

                            relating to said Prospect Wells which are joint interest billed ("JIB’d") proportionately to all working interest owners, which shall correspond to 

                            the interest percentage acquired by the Optionee hereunder. Once option has been exercised, optionee shall have the benefit of accepting its 

                            acquired 

	 	1 	 
	

                            proportionate share relating to proceeds from the sale of hydrocarbons from said prospect. All payments shall be distributed from Optionor to 

                            Optionee.

               

               3.03.     In the event the Optionor receives a bonified offer of greater value which Optionor shall grant Optionee 30 days the right to accept or refuse 

                            those terms given by third party. If the offer is not accepted by Optionee this agreement shall be null and void.

4.      Exercise of Option

 

               4.01.     The Option shall be exercised, if at all, by the giving of written notice (the "Exercise Notice") by the Optionee to the Optionor stating of the 

                            Optionee’s election to acquire the Subject Interest , including the actual interest percentage to be purchased at any time during the Option 

                            Period and for a period ending ten business days following receipt by the Optionee of written notice from the Optionor stating that the wells are 

                            ready for drilling or ten business days following the expiry of 12 months from the date of this agreement (collectively the "Termination Date");

              

               4.02.     The Exercise Notice shall set forth the date on which the closing shall occur (the "Closing Date"), provided that in no event shall the Closing 

                            Date be later than thirty (30) days after the Termination Date;

 

5.      Closing

 

               5.01.      The Closing ("Closing") of the sale and purchase provided herein shall be consummated through the execution by the parties of a purchase and 

                             sale agreement on or before 1:00 p.m. Pacific Time on the Closing Date.

 

6.      Representation and Warranties of the Optionor

               

               6.01.     The Optionor shall use its best commercially reasonable efforts to prepare or have prepared the Prospect Well for drilling;

 

7.      Representations and Warranties of the Optionee

               

               7.01.      The Optionee represents and warrants that each of the statements contained in this paragraph are correct and complete as of the date of this 

                             Agreement and will be correct and complete as of the Closing Date (as though made then as though the Closing Date were substituted for the 

                             date of this Agreement);

 

8.     Closing Documents

                

                 8.01.     Optionor’s Closing Documents. At the Closing, the Optionor shall provide the Optionee with the following documents or instruments (the 

                             "Optionor’s Closing Documents"): 

               

               (a)     Such assignments or other appropriate instruments assigning and transferring the Subject Interest to the Optionee; 

               (b)     Such other documents as may be required by this Agreement or as may be reasonably required by counsel to the Optionee.

               

               8.02.      Optionor’s Closing Documents. At the Closing, the Optionee shall provide the Optionor with the following documents or instruments (the 

                             "Optionee’s Closing Documents"):

	 	2 	 
	

  

                            (a)     The Purchase Price required to be paid by the Optionee pursuant hereto in the form required hereby; 

                            (b)     Such assignment or other appropriate instruments assigning and transferring the Subject Interest to the Optionee;

                            (c)     Such documents as may be necessary to reflect the good standing and authority of the Optionee as may be reasonably required by the 

                                     Optionor; and

                            (d)     Such other documents as may be required by this Agreement or as may be reasonably required by counsel to the Optionor.

 

9.      Relationship of the Parties

               9.01.     Except as specifically provided in this Agreement, the Optionee shall not be authorized, empowered or constituted as the agent of the Optionor 

                            in any manner; nor is the Optionee authorized or empowered to assume or create any obligation or responsibility whatsoever, expressed or 

                            implied, on behalf of or in the name of the Optionor; or is the Optionee authorized or empowered to bind the Optionor in any manner; or 

                            authorized or empowered to make any representation, warranty, covenant, agreement or commitment on behalf of the Optionor.

10.      Non-Disclosure

 

               10.01.    The Optionor and the Optionee each hereby agree, on behalf of itself and its Affiliates as follows:

                              

                             (a)     Neither the Optionor not the Optionee shall at any time or in any manner or fashion, either directly or indirectly, without the prior 

                                       agreement of the other party divulge, disclose or communicate to any third party or entity whomsoever and of the Confidential 

                                       Information (as hereinafter defined), except as may be required by a court of competent jurisdiction in order to comply with the 

                                        requirements of any law, governmental order or regulation;

                              (b)     The Optionor and the Optionee shall take all reasonable action, which shall be necessary or appropriate, to prevent the unauthorized 

                                        use and disclosure of any Confidential Information, and to protect the interests of each other in and to the Confidential Information;

                              (c)     The Optionor and the Optionee shall each require their affiliates to abide by the terms of this Agreement and retain all Confidential 

                                        Information in strict confidence;  
                              (d)     For the purposes of this Agreement, Confidential Information shall be defined as any and all communications, documents and all other 

                                        information, documents, items or communication related to the Optionor or the Optionee and disclosed by or to the Optionor or the 

                                       Optionee;  

                              (e)     In the event information becomes available to the Optionor or the Optionee, on a non-confidential basis from a source other than  

                                        the Optionor, or the Optionee provided that to the best knowledge of the Optionor or the Optionee, such party is not bound by a 

                                        confidentiality agreement with respect to such information.

 

11.     Miscellaneous Provisions

                

                11.01.     This Agreement may not be modified except in writing signed by the parties hereto;

 

                11.02.     This Agreement shall be considered unique and personal to the parties hereto. Therefore, neither the Optionee nor the Optionor may assign 

                               all or any part of the 

	 	3 	 
	

                               obligations undertaken pursuant to this Agreement without first having obtained the prior written consent of the other party hereto;

               

               11.03.      The parties signing this Agreement represent and warrant that they have the full authority to do so;

               

               11.04.      This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute   

                               one and the same Agreement;

               

               11.05.      Facsimile signatures on counterparts of this Agreement are hereby authorized and shall be acknowledged as if such facsimile signatures were  

                               an original execution;

              11.06.      This Agreement shall be interpreted in accordance with and be governed by laws of the State of California, irrespective of the fact that one or 

                               more parties hereto is now or may hereafter be a resident of a different state, jurisdiction or country;

               

               11.07.      All notices to be given under this Agreement shall be in writing, and may be given, served or made by depositing the same with a recognized 

                               overnight delivery service or by delivering the same in person to such party as follows:

 

If to the Optionor:

Production Specialites Co., Inc.    

285 W. Court Street, Suite 204        

Woodland, Ca 95776        

530-668-5326

If to the Optionee:

Barola Oil & Gas Co. Inc.

6423 112th Avenue S.E.

Newcastle, Washington

USA, 98056

Ph: 206.333.5262

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

OPTIONOR:                      PRODUCTION SPECIALTIES CO., INC.:

/s/ Charlene Scott                 ______________         Per:   /s/ Dero Parker                          

                       Witness:

____________________________________                                        Per: ____________________________                 

                        Witness:

OPTIONEE:                       BAROLA OIL & GAS CO. INC.

/s/ Douglas Bolen                                                                                        Per:   /s/ Henry Starek__________        

                        Witness:

 /s/ Douglas Bolen                                                                                      Per:                 /s/ Duane Kilburn              _  

                        Witness:

	 	4Yukon Resources Corp. - Property Agreement

PROPERTY
AGREEMENT

THIS
AGREEMENT is made effective the 14th day of May, 2004.

BETWEEN:

Thornton J. Donaldson, an
individual having an office at 206-475 Howe Street, Vancouver, B.C.,
Canada, V6C 2B3.

(hereinafter called “Donaldson”)

OF THE FIRST PART

AND:

Thornton J. Donaldson,
Trustee for Yukon Resources Corp. a company duly
incorporated under the laws of the State of Nevada, each having an
office at 206-475 Howe Street, Vancouver, B.C., Canada, V6C
2B3.

(hereinafter called “Trustee” and “Yukon”
respectively)

OF THE SECOND PART

WHEREAS:

	
	Donaldson is the sole beneficial owner of 100%
	of the right, title and interest in and to the BILL 1, BILL 2 and
	BILL 5 mining claims, which are situated in the Cariboo Mining
	Division, in the province of British Columbia, Canada, which mining
	claims are more particularly described in Schedule “A”
	attached hereto and forming part of hereof (hereinafter called the
	“Claim”); and

	
	
	The parties now wish to enter into an agreement
	granting to Yukon through Trustee an undivided 100% of the right,
	title and interest in and to the Claim on the terms and conditions
	are hereinafter set forth.

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

	
	Representation and Warranties

		
		1.1 Yukon represents and warrants to
		Donaldson that:

			
			Yukon is a body corporate duly incorporated,
			organized and validly subsisting under the laws of its
			incorporating jurisdiction;

			
	
			Yukon has full power and authority to carry
			on its business and to enter into this Agreement and any agreement
			or instrument referred to or contemplated herein.

			
	
			neither the execution and delivery of this
			Agreement nor any of the agreements referred to herein or
			contemplated hereby, nor the consummation of the transactions
			hereby contemplated will conflict with, result in the breach of or
			accelerate the performance required by any agreement to which
			Yukon is a party; and

			
	
			the execution and delivery of this Agreement
			and the agreements contemplated hereby will not violate or result
			in the breach of the laws of any jurisdiction applicable or
			pertaining thereto or of Yukon constating documents.

		

		
		1.2 Donaldson represents and warrants to Yukon:

			
			the Claim consists of the Bill Mineral Claim
			which has been duly and validly staked and recorded, as accurately
			described in Schedule “A”, is presently in good
			standing under the laws of the jurisdiction in which they are
			located and, except as set forth herein, is free and clear of all
			liens, charges and encumbrances;

			
	
			the Claim will be increased by four units as
			the units are expected to become available in the near future;

			
	
			Donaldson is or will be the owner of a 100%
			interest in and to the Claim and has the exclusive right to enter
			into this Agreement and all necessary authority to dispose of an
			undivided 100% interest in and to the Claim in accordance with the
			terms of this Agreement;

			
	
			no person, firm or corporation has or will
			have any proprietary or possessory interest in the Claim other
			than Donaldson and no person is entitled to any royalty or other
			payment in the nature of rent or royalty on any minerals, ores,
			metals or concentrates or any such products removed from the
			Claim;

			
	
			neither the execution and delivery of this
			Agreement nor any of the agreements referred to herein or
			contemplated hereby, nor the consummation of the transactions
			hereby contemplated will conflict with, result in the breach of or
			accelerate the performance required by any agreement to which
			Donaldson is a party or by which Donaldson is bound; and

			
	
			the execution and delivery of this Agreement
			and the agreements contemplated hereby will not violate or result
			in the breach of the laws of any jurisdiction applicable or
			pertaining thereto.

		

		
		1.3 The representation and warranties hereinbefore
		set out are conditions on which the parties have relied in entering
		into this Agreement and will survive the acquisition of any
		interest in the Claim by Yukon and each party will indemnify and
		save the other party harmless from all loss, damage, costs, actions
		and suits arising our of or in connection with any breach or any
		representation, warranty, covenant, agreement or condition made by
		the other party and contained herein.

	
	
	Purchase
	Price

		
		2.1 Donaldson hereby gives and grants to Yukon an
		undivided 100% of the right, title and interest of Donaldson in and
		to the Claim and an additional four units, in accordance with the
		terms of this Agreement for and in consideration of 2,500,000
		shares of Yukon's common stock on the Effective Date.

	
	
	Transfer
	of Title

		
		3.1 Donaldson hereby transfers and assigns to
		Yukon an undivided 100% of the right, title and interest in and to
		the Claim and an additional four units. Upon execution of this
		Agreement, Donaldson shall execute and deliver any and all
		documents required of it to deliver registered title of the Claim
		to Yukon's trustee.

	
	
	Covenants
	of Donaldson

		
		4.1 Donaldson will:

			
			not do any act or thing which would or might
			in any way adversely affect the rights of Yukon hereunder;

			
	
			make available to Yukon and its
			representatives all records and files in the possession of
			Donaldson relating to the Claim and permit Yukon and its
			representatives at its own expense to take abstracts therefrom and
			make copies thereof; and

			
	
			promptly provide Yukon with any and all
			notices and correspondence from government agencies in respect of
			the Claim.

		

	
	
	Covenants
	of Yukon

		
		5.1 Yukon will not do any act or thing which would
		or might any way adversely affect the rights of Donaldson
		hereunder.

	
	
	Further
	Assurances

		
		6.1 The parties hereto agree that they and each of
		them will execute all documents and do all acts and things within
		their respective powers to carry out and implement the provisions
		or intent of this Agreement.

	
	
	Notice

		
		7.1 Any notice, direction or other instrument
		required or permitted to be given under this Agreement will be in
		writing and will be given by the delivery or facsimile transmission
		or the same or by mailing the same by prepaid registered or
		certified mail in each case addressed as follows:

			
			if to Yukon Resources Corp.
206-475
			Howe Street,
Vancouver, British Columbia
Canada V6C 2B3

			
	
			if to Thornton J. Donaldson
206-475
			Howe Street,
Vancouver, British Columbia
Canada V6C 2B3

		

		
		7.2 Any notice, direction or other
		instrument aforesaid will, if delivered by courier or facsimile
		transmission, be deemed to have been given and received on the next
		business day following the day on which it was delivered or sent by
		facsimile, and if mailed, be deemed to have been given and received
		on the fifth business day following the day of mailing, except in
		the event of disruption of the postal services in which event
		notice will be deemed to be received only when actually received.

		
		7.3 Any party at any time give to the
		other notice in writing of any change of address of the party
		giving such notice and from and after the giving of such notice,
		the address or addresses of such party for the purpose of giving
		notice hereunder.

	
	
	Headings

		
		8.1 The headings to the respective sections herein
		will not be deemed part of this Agreement but will be regarded as
		having been used for convenience only.

	
	
	Payment

		
		9.1 All references to monies hereunder will be in
		Canadian funds except where otherwise designated. All payments to
		be made to any party hereunder will be mailed or delivered to such
		party at its address for notice purposes as provided herein, or for
		the account of such party at such bank or banks in Canada as such
		party may designate from time to time by written notice. Said banks
		or banks will be deemed the agent of the designating party for the
		purpose of receiving and collecting such payment.

	
	
	Enurement

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

	
	
	Terms

		
		11.1 The terms and provisions of this Agreement
		shall be interpreted in accordance with the laws of British
		Columbia.

	
	
	Entire
	Agreement

		
		12.1 This agreement constitutes the entire
		agreement between the parties and replaces and supersedes all prior
		agreements, memoranda, correspondence, communications, negotiations
		and representations, whether verbal or written, express or implied,
		statutory or otherwise between the parties with respect to the
		subject matter herein.

	
	
	Time of
	Essence

		
		13.1 Time will be of the essence in this Agreement.

	
	
	Enforcement
	of Agreement

		
		14.1 The covenants, promises, terms and conditions
		contained herein will be binding upon the parties jointly and
		severally any may be enforced by each as against each other
		interests.

IN
WITNESS WHEREOF the parties
hereto have executed this Agreement as of the day and year first
above written.

	
			Yukon
			Resources Corp.

			Per:

			
			

			 /s/ T. Donaldson

by
			its Authorized Trustee,
Thornton J. Donaldson

			
			Thornton
			J. Donaldson

			Per:

			
			

			 /s/ T. Donaldson

Thornton
			J. Donaldson

		

	
			Witness

			 /s/ K. McCullagh

			Signature of Witness

			
			

			Kerry McCullagh

			Printed Name of Witness

		

This is Schedule “A” to a
Property Agreement made as of the 14th day of May, 2004
between Thornton J. Donaldson and Yukon Resources Corp.

	
				Claim
				Name

				
				Tenure
				Number

				
				Mining
				Division

				
				Status

			
	
				BILL 1

				
				410792

				
				CARIBOO

				
				Good
				Standing 2005.05.14

			
	
				BILL 2

				
				410793

				
				CARIBOO

				
				Good
				Standing 2005.05.14

			
	
				BILL 5

				
				410794

				
				CARIBOO

				
				Good
				Standing 2005.05.14

			

	
				Claim
				Name

				
				Tenure
				Number

				
				Mining
				Division

				
				Status

			
	
				BILL 3

				
				to be
				determined

				
				to be
				determined

				
				to be
				determined

			
	
				BILL 4

				
				to be
				determined

				
				to be
				determined

				
				to be
				determined

			
	
				BILL 6

				
				to be
				determined

				
				to be
				determined

				
				to be
				determined

			
	
				BILL 7

				
				to be
				determined

				
				to be
				determined

				
				to be
				determined

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