Leasehold Purchase Agreement dated March 8, 2012

This Leasehold Purchase Agreement (the “Agreement”) is effective as of the 8th day of March, 2012 (the “Effective Date”), by and between CIRCLE STAR ENERGY CORP., a Nevada corporation (the “Purchaser”) and WEVCO PRODUCTION, INC., an Ohio corporation (the “Seller”).

WHEREAS, Seller desires to sell, without warranty of title, either expressed or implied, all of its rights, title and working interest in and to those certain Oil and Gas Leases, containing up to 64,575 net acres, more or less, situated in Gove and Trego Counties, Kansas, described more fully in Exhibit A attached hereto and made a part hereof (the “Leaseholds”); and,

WHEREAS, Seller desires to sell, and Purchaser agrees to purchase, all of Seller’s rights, title and working interests in and to the Leaseholds, without warranty of title, either expressed or implied, for the purchase price hereinafter set forth, and subject to the terms and conditions contained herein.

NOW, THEREFORE, in consideration of the promises and mutual obligations of the parties contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be bound, hereby agree to incorporate the Recitals as if fully rewritten in this Agreement, and further agree as follows:

1. PURCHASE AND SALE:  Seller hereby agrees to sell, and Purchaser hereby agrees to purchase, all of Seller’s rights, title and working interests in and to the Leaseholds, without warranty of title, either expressed or implied, for the purchase price set forth below and subject to the terms and conditions set forth herein.

2. LEASEHOLDS:  The Leaseholds consist of all of Seller’s rights, title and interest in and to the oil and gas in and under the net acreage covered by the Leaseholds, subject to prior reservations totaling 4.5% of 8/8 overriding royalty interest recorded in the Office of the Register of Deeds, Trego County, Kansas in Book 175 at Pages 558 and 566 and in Book 176 at Page 339 and recorded in the Office of the Register of Deeds, Gove County, Kansas in Book 176 at Pages 342 and 344 and in Book 177 at Pages 397.  The Leaseholds represent a 100% working interest in the Leaseholds and no less than an eighty three percent (83%) net revenue interest.

3. PURCHASE PRICE:  The purchase price for the Leaseholds is Five Million and no/100 U.S. Dollars ($5,000,000.00) payable in cash and One Million (1,000,000) shares of common stock of the Purchaser (“Shares”) (collectively, the “Purchase Price”), all delivered on or before Closing.

4. NON-REFUNDABLE EARNEST MONEY:  Contemporaneously with the execution of this Agreement, Purchaser shall wire or cause to be wired to Seller the non-refundable sum of One Hundred Thousand and no/100 U.S. Dollars ($100,000.00) (“Signing Bonus”).  No later than 11:59 PM EST on March 15, 2012, Purchase shall: (i) wire or cause to be wired to Seller the non-refundable sum of Two Hundred Thousand and no/100 U.S. Dollars ($200,000.00) (“Delayed Signing Bonus”) and (ii) have authorized the issuance of and delivered or cause to be delivered to Seller, the Shares.  The Signing Bonus, Delayed Signing Bonus and Shares are collectively referred to herein as “Earnest Money”.  Purchaser acknowledges and agrees that the Earnest Money is reasonable with respect to the total Purchase Price and the time the Leaseholds will remain off the market on account of this Agreement.  If Purchaser fails to take the actions contemplated by Section 8(b) on or before the Closing Date, the Earnest Money shall be retained by Seller as consideration paid to leave Seller's irrevocable and exclusive offer open to Purchaser through the Closing Date and shall not act as a credit to the Purchase Price or towards the purchase of the Leaseholds.  If Purchaser takes the actions contemplated by Section 8(b) on or before the Closing Date, the Earnest Money shall be credited against the Purchase Price.  Seller’s receipt of the Earnest Money shall in no way prejudice Seller's rights in any action for damages or specific performance.

5. DELAY RENTALS:  Seller shall pay any delay rentals, minimum rentals and/or shut-in payments on the Leaseholds which become due and payable on or before the Closing Date.  Purchaser shall pay any delay rentals, minimum rentals and/or shut-in payments on the Leaseholds which become due and payable after the Closing Date.

6. CONDITIONS TO SELLER'S OBLIGATION TO CLOSE:  The obligation of Seller to deliver the Transaction Documents (defined below) in accordance with Section 8(a) is subject to the satisfaction to Purchaser timely wiring and delivering the Earnest Money to Seller in full in accordance with the terms and conditions set forth in Section 4.

7. CLOSING:  The closing (the “Closing”) of the transaction contemplated herein shall take place at the law offices of Dinsmore & Shohl, LLP, 191 W. Nationwide Blvd, Ste 300, Columbus, Ohio, and shall occur as soon as reasonably practicable after the Effective Date, but in all events no later than 11:59 PM EST on April 30, 2012 (the “Closing Date”).

8. CLOSING OBLIGATIONS.  At the Closing, Seller and Purchaser shall take the following actions:

(i)           Duly execute and acknowledge the assignee's counterparts to the Assignments, and record original copies of the Assignments with the appropriate recording authorities in the counties where the Leaseholds are situated; and

(ii)           Deliver to Seller the Purchase Price less the Earnest Money in cash and fully executed copies of the Assignments.

9. EVENTS OF TERMINATION:  This Agreement may be immediately terminated and the transaction contemplated hereby abandoned as follows:

(a)           By the mutual written consent of the Seller and Purchaser;

 

In addition, Seller may, upon written notice, terminate this Agreement in the event the Purchaser materially breaches any representation, warranty or covenant in this Agreement.  Upon termination of this Agreement by Seller pursuant to Section 9, the Earnest Money (or any part if less than all is delivered) shall be retained by Seller as its exclusive remedy for Purchaser’s default.

10. EXPENSES OF PURCHASER:  Purchaser shall pay for the following expenses relative to this transaction: (i) all costs and expenses of recording the Assignment; (ii) its own financing expenses, if any; (iii) its own attorneys’ fees; and (iv) all costs and expenses relating to conveyance fees or taxes, if applicable.

11. EXPENSES OF SELLER: Seller shall pay its own attorneys’ fees incurred in this transaction.

12. REPRESENTATIONS AND WARRANTIES OF SELLER:  Seller represents and warrants that: (i) Seller is not warranting title to the Leaseholds either express or implied; (ii) Seller is the owner of those interests being sold pursuant to this Agreement; (iii) Seller has the right and authority to sell and convey the Leasehold interest; (iv) the Leaseholds are free and clear of all encumbrances created by, through or under Seller; (v) the undersigned has the authority to execute, deliver and perform this Agreement on Seller’s behalf and has been authorized to execute the Agreement on behalf of Seller; and (vi) except as set forth on Exhibit C, to Seller’s knowledge there are no set of facts, events or occurrences that would be reasonably likely to prevent or materially delay the performance by Seller of any of its obligations under this Agreement or the consummation of the transactions contemplated hereby.

13. REPRESENTATIONS AND WARRANTIES OF PURCHASER:  Purchaser represents and warrants that: (i) Purchaser has relied or will rely upon its own examination of the Leaseholds with regard to its title, physical condition, character, and suitability for Purchaser’s intended uses thereof; (ii) the undersigned has the authority to execute, deliver and perform this Agreement on Purchaser’s behalf and has been authorized to execute the Agreement on behalf of Purchaser; (iii) Seller shall have no obligation to pay any commission or broker’s or finder’s fees in connection with the transaction contemplated herein, except as otherwise noted herein; (iv) the Agreement is for real property and is not a security or required to be registered as a security; (v) the Shares, when delivered by the Purchaser, will be in compliance with all applicable laws, including federal and state securities laws; and (vi) Seller will have good title to the Shares, free and clear of any preemptive rights, rights of first refusal, rights of first offer, drag along rights or similar rights, liens, proxies, voting agreements, voting trusts or similar agreements.

14. PIGGYBACK REGISTRATION.  Whenever the Purchaser proposes to register any of its capital stock or other equity securities (“Equity Securities”) under the Securities Act of 1933, as amended, in a registered public offering and listing or quotation of the Equity Securities on one or more national securities exchanges (“Public Offering”), the Purchaser shall give prompt written notice to Seller of the Purchaser’s intention to effect such a registration and shall include the Shares in the registration unless the Seller notifies the Purchaser within twenty (20) days after the Seller’s receipt of the Purchaser’s notice that it wishes to be excluded from such registration (“Piggyback Registration”).  The registration expenses incurred in connection with a Piggyback Registration shall be paid by the Purchaser.  This Section 14 shall survive the Closing indefinitely.

15. EXCHANGE ACT REGISTRATION; RULE 144.  The Purchaser covenants and agrees that, until such time as Seller no longer holds the Shares:

16. ENTIRE AGREEMENT:  The provisions hereof and the exhibits attached hereto constitute the complete and entire agreement between the parties, and no representation, warranty, agreement, promise or other undertaking not specifically set forth herein or therein shall be binding upon or inure to the benefit of either party hereto.

17. BINDING EFFECT:  The provisions hereof shall be binding upon and shall inure to the benefit of the parties hereto and their heirs, executors, administrators, successors and assigns.

18. TITLE HEADINGS:  The title headings hereof are being used for convenience purposes only, and shall not be used to construe or interpret this Agreement.

19. ASSIGNMENT:  Purchaser may not assign his rights herein without the prior written consent of Seller, which consent may be withheld in Seller’s sole and absolute discretion.

20. NOTICES:  All notices and other communications under this Agreement must be in writing and will be considered to be effective as of: (i) the date personally delivered to that party at the address for that party set forth below; (ii) three (3) days after mailing by U. S. certified mail (postage prepaid and return receipt requested) at the address for that party set forth below; or; (iii) on the date of delivery by Federal Express or any similar express delivery service, fee prepaid, and addressed to the address for that party set forth below:

A delivery under this Agreement will be considered to be effective when made even though a party refuses to receive the communication.  A party may change the party’s address for communications under this Agreement by giving the other party notice of such change in the manner specified above.  If a party changes the party’s address and does not notify the other party in the manner specified above, a notice or other communication will be effective three days after it is sent by U. S. regular mail, postage prepaid, to the party’s address set forth above.

21. GOVERNING LAW:  This Agreement, and all disputes and questions arising hereunder, will be interpreted and decided in accordance with the laws of the State of Ohio, without regard to the conflicts of law provisions thereof.  The parties hereby designate the state and federal courts located in Franklin County, Ohio as the sole courts of proper venue and jurisdiction for any and all actions arising under and relating to this Agreement, its interpretation, or application, and hereby waive any and all defenses pertaining to venue and jurisdiction in any action maintained by any such court.

22. COUNTERPARTS.  This Agreement may be executed in two or more signature counterparts, each of which shall constitute an original, but all of which taken together shall constitute but one and the same instrument.  Delivery of an executed counterpart of this Agreement by telefacsimile shall be equally as effective as delivery of a manually executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by telefacsimile also shall deliver a manually executed counterpart of this Agreement, but the failure to deliver a manually executed counterpart shall not affect the validity, enforceability, or binding effect of this Agreement.

IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the date set forth above.