PURCHASE AND SALE AGREEMENT

1.  

PURCHASE PRICE. The total purchase price for the Leasehold Interests shall be Two Hundred Thousand Dollars ($200,000.00) cash paid in hand and Two Hundred Thousand Stock Shares for Stratex Oil and Gas, Inc, hereinafter referred to as the “Purchase Price”.  The effective date shall be November 1st, 2012, meaning SELLER shall retain revenue from production through October 31st, 2012.

2.  

DEPOSIT.  Upon BUYER’s receipt of a fully executed copy of this Agreement, BUYER shall tender Twenty Thousand Dollars ($20,000.00) (the “Deposit”) by cashier’s check or wire transfer of immediately available funds to the credit of SELLER. In the event BUYER is unable or unwilling for any reason to close the sale, or otherwise terminates the Agreement in accordance with the terms of this Agreement, SELLER shall immediately refund the Deposit to BUYER in immediately available funds. If the purchase and sale of the Leasehold Interests is consummated in full and the terms of this Agreement are satisfied, the Deposit shall be deducted from the Purchase Price or the Adjusted Purchase Price at Closing.

3.  

CLOSING. The sale and conveyance by SELLER and purchase and receipt by BUYER of the Leasehold Interests will occur at a closing (the “Closing”) to be held October 30th, or at an earlier or later date approved by the Parties hereto.  The Closing will be held at a mutually agreeable location.  At the Closing, SELLER shall execute, acknowledge and deliver to BUYER recordable assignments conveying the Leasehold Interests on a form of assignment attached hereto as Attachment “1” (the “Assignment of Oil and Gas Lease”) and Attachment “2” (the “Assignment of Oil and Gas Lease”).  Concurrently, BUYER will pay to SELLER, the Purchase Price or Adjusted Purchase Price, as applicable, via wire transfer to the depositary designated by SELLER.  Upon confirmation of good, paid funds deposited into SELLER’s account, SELLER will deliver to BUYER the signed and notarized Assignment of Leasehold Interests. The Parties shall take such other actions, and execute such other instruments as may be reasonably required to consummate the transaction set forth herein.

4.  

REPRESENTATIONS AND WARRANTIES. BUYER acknowledges that the Leasehold Interests, described in Exhibit “B”, were derived from Check Stubs sent to, and relied upon by, SELLER.  SELLER warrants and agrees to defend title to said Leasehold Interests.  SELLER agrees to defend title to the Leasehold Interests as to all liens, claims, and encumbrances of all persons lawfully claiming, through or under SELLER, but not otherwise. SELLER further represents and warrants that there are no lawsuits pending against SELLER which do or could affect the title or interests conveyed; that SELLER is not aware of any such lawsuits or other claims which are threatened; that the Leasehold Interests are not subject to any agreement, indenture, order, judgment, decree or other restrictions or provisions whether shown of record or unrecorded; that there are no unrecorded assignments of overriding royalty interest executed by BUYER burdening the Leasehold Interests; that there are no carried interests executed by BUYER burdening the Leasehold Interests and no other obligations to third parties creating a disproportionate obligation for costs relating thereto;  and that SELLER has the full power and right to sell and convey the same.  BUYER may terminate this Agreement if SELLER is in material breach of any of the representations and warranties contained herein without any further liability to SELLER.

5.  

DUE DILIGENCE.  Upon SELLER’s acceptance of the terms of this Agreement, SELLER will make available to BUYER all documents in possession of SELLER with respect to the Leasehold Interests.  Thereafter, BUYER shall have the right at BUYER’s sole cost and risk to commence a due diligence examination of the Leasehold Interests and Lands, including but not limited to a title review of the Leasehold Interests and Lands, a survey of the Lands and an environmental assessment of the Leasehold Interests and the Lands.  SELLER agrees to cooperate fully and assist with BUYER’s examination of title and other assessments provided for herein.

6.  

INDEMNITY AND RISK OF LOSS.  SELLER shall indemnify and hold BUYER harmless from and against all costs, expenses, attorneys’ fees, liens, judgments, claims, demands and causes of action whatsoever relating directly or indirectly to the ownership of the Leasehold Interests prior to the Closing Date, whether such fees, liens, judgments, claims, demands and causes of action (including, but not limited to all environmental matters) arise before or after the Closing date. Risk of loss only as to ownership of the Leasehold Interests that arises after the Closing date shall pass from SELLER to BUYER at Closing.

7.  

NOTICES. All communications required or permitted under this Agreement may be delivered by registered or certified mail, courier service, facsimile transmission or email, addressed as set forth below.  Either Party may, by written notice to the other, change the address for such mailing such notices.  Faxes may be sent for convenience but must be followed up with mailing on any important notice issues as follows:

8.  

EXCLUSIVITY.  Upon written acceptance of this Agreement, SELLER shall not offer the Leasehold Interests or any portion thereof to, entertain offers from, negotiate for their sale to, or make information about them available to, any third Party prior to Closing or the earlier termination of this Agreement.

9.  

DISCLOSURE.  It is agreed BUYER shall have the sole right to make any and all public announcements regarding this Agreement.   BUYER and its ultimate parent shall be permitted to disclose information regarding this transaction to U.S. securities regulators, stock exchanges, its advisors, potential investors and the investing public, whether by way of prospectus, information memorandum, filing with the securities regulatory authorities or otherwise.  Notwithstanding anything to the contrary herein, SELLER shall be permitted to disclose information regarding this transaction to its partners, shareholders, officers, directors, lending institutions, advisors or regulatory agencies.

10.  

AMENDMENTS AND ASSIGNABILITY.  No amendments or other changes to this Agreement shall be effective or binding on either of the Parties unless the same shall be in writing and signed by the Parties.  This Agreement shall not be assigned either in whole or in part by either Party without the express written consent of the other Party.

11.  

ATTORNEY’S FEE.  Each Party shall be responsible for its own costs and reasonable attorneys’ fees; provided, however, that the prevailing Party in any dispute arising out of this Agreement, upon entry of a final non-appealable order, shall be awarded all costs and expenses, including without limitation reasonable attorney’s fees and court costs, which it incurred as a result of any court proceeding arising therefrom, notwithstanding the initial clause of this sentence to the contrary.

12.  

ENTIRE AGREEMENT.  This Agreement, together with Exhibits A and B attached hereto and incorporated herein, shall constitute the entire agreement of the Parties, expressly superseding all prior written and oral understandings and agreements.

13.  

GOVERNING LAW.  This Agreement shall be governed by the laws of the State of North Dakota which will have exclusive jurisdiction over any legal dispute arising from this Agreement.  SELLER and BUYER agree that any legal dispute or court proceeding shall be conducted in Williams County, North Dakota

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Fortuna Energy, Inc

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