AMENDING AGREEMENT NO. 4 (MERGER AGREEMENT AND PLAN OF MERGER)

(A) Mainland and American Exploration (each a “Party” and, together, the “Parties”) have entered into a Merger Agreement and Plan of Merger dated March 22, 2010, as amended by a Letter Agreement dated July 28, 2010, as further amended by an Amending Agreement dated September 7, 2010 and an Amending Agreement dated December 23, 2010 (as so amended, the “Merger Agreement”) which, subject to certain conditions, contemplates a merger between the Parties to be effected pursuant to Chapters 78 (Private Corporations) and 92A – Mergers, Conversions, Exchanges and Domestications, of the Nevada Revised Statutes, with Mainland as the surviving corporation;

(C) The Merger Agreement is subject to termination by either Party under Section 7.3 of the Merger Agreement if certain conditions specified in the Merger Agreement are not satisfied at or before the “Termination Date”, which is defined in Section 1.1 of the Merger Agreement to mean March 31, 2011, or such later date as may be mutually agreed by the Parties;  and

(D) The Parties wish to amend the terms of the Merger Agreement to extend the Termination Date as described in this Agreement.

 

3. Except as expressly amended hereby, the Merger Agreement is in all respects ratified and confirmed and all the terms, conditions, and provisions thereof shall remain in full force and effect as of the date hereof.

4. This Amendment shall form a part of the Merger Agreement for all purposes, and each Party thereto and hereto shall be bound hereby. From and after the execution of this Amendment by the Parties hereto, any reference to the Merger Agreement shall be deemed a reference to the Merger Agreement as amended hereby.

(a) American Exploration intends to grant 50,000 stock options (each, an “Option”) to each of Harbance Dhaliwal and Manmohan Minhas in their respective capacities as directors of American Exploration;

 

(b) each Option will entitle the holder to purchase one share of common stock in the capital of American Exploration for a period of 10 years;

 

(c) each Option will be granted at an exercise price that will be determined with reference to the market price of American Exploration’s common stock on the date of grant, and is currently expected to be approximately $0.13 per share;

 

(d) the Options will be exchangeable for Mainland Exchange Options in accordance with section 2.2(d) of the Merger Agreement; provided, however, that, notwithstanding anything to the contrary in the Merger Agreement, each such Mainland Exchange Option will be exercisable at an exercise price of $0.52; and

 

(e) for greater certainty, all other Mainland Exchange Options issued in accordance with section 2.2(d) of the Merger Agreement will be exercisable at an exercise price of $1.50 per share.

 

6. American Exploration hereby acknowledges and agrees that, on February 2, 2011, Mainland granted 1,350,000 stock options to Steven Harding in connection with his engagement as a consulting geologist on Mainland’s Buena Vista project located in Jefferson County, Mississippi.  Each option is exercisable for a period of 10 years, at an exercise price of $0.75 per share.

 

 

7. The Parties acknowledge and agree that, as of the date hereof, American Exploration has issued and outstanding:

 

(a) 60,273,333 shares of common stock;

 

(b) 250,000 common stock purchase warrants; and

 

(c) 2,450,000 common stock options (which number, for greater certainty, excludes the 100,000 Options referred to in Section 5(a) above).

 

 

6. This Agreement constitutes the entire agreement between the Parties, and supersedes every previous agreement, communication, expectation, negotiation, representation or understanding, whether oral or written, express or implied, statutory or otherwise between the Parties, with respect to the subject matter of this Agreement.  Nothing in this Section 6 will limit or restrict the effectiveness and validity of any document with respect to the subject matter of this Agreement that is executed and delivered contemporaneously with or pursuant to this Agreement.

 

 

7. This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia and the laws of Canada applicable therein and shall be treated in all respects as a British Columbia contract.

 

 

8. This Agreement may be executed in any number of counterparts, in original form or by facsimile, each of which will together, for all purposes, constitute one and the same instrument, binding on the Parties, and each of which will together be deemed to be an original, notwithstanding that each Party is not a signatory to the same counterpart.

 

 

9. The descriptive headings of the several Sections of this Amendment were formulated, used and inserted in this Amendment for convenience only and shall not be deemed to affect the meaning or construction of any of the provisions hereof.