--------------------------------------------------------------------------------

 

 

DATED 31 December, 2012

 

 

KAVSAR GENERAL TRADING FZE

 

and

DWM PETROLEUM AG

 

 

Relating to the sale and purchase of
80% of the issued share capital
of TF Petroleum AG

 

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Table of Contents

     ARTICLE 1 INTERPRETATION 4      ARTICLE 2 SALE AND PURCHASE OF THE SHARES 4
     ARTICLE 3 CONDITIONS FOR COMPLETION AND EARLIER STEPS 5      ARTICLE 4
INTERIM PERIOD 7      ARTICLE 5 COMPLETION 9      ARTICLE 6 INDEPENDENT
ACCOUNTANTS 9      ARTICLE 7 LOANS AND GUARANTEES 10      ARTICLE 8 THE SELLER'S
WARRANTIES 10      ARTICLE 9 PURCHASER'S WARRANTIES 11      ARTICLE 10
PROTECTIVE COVENANTS 11      ARTICLE 11 TAX 11      ARTICLE 12 CONFIDENTIALITY
11      ARTICLE 13 NOTICES 13      ARTICLE 14 FURTHER ASSURANCES 14      ARTICLE
15 ASSIGNMENTS 14      ARTICLE 16 GENERAL 14      ARTICLE 17 WHOLE AGREEMENT 15
     ARTICLE 18 GOVERNING LAW 15      ARTICLE 19 ARBITRATION 16 SIGNATORIES   18

SCHEDULE 1 CORPORATE DETAILS AND INTERESTS SCHEDULE 2 MAP OF AREAS FOR WHICH
SELLER WILL OBTAIN NEW PETROLEUM EXPLORATION RIGHT SCHEDULE 3 SELLER'S
WARRANTIES SCHEDULE 4 LIMITS ON WARRANTY CLAIMS SCHEDULE 5 SELLER’S OBLIGATIONS
AND PURCHASER’S OBLIGATIONS AT COMPLETION SCHEDULE 6 INSURANCE POLICIES SCHEDULE
7 DEAL STRUCTURE SCHEDULE 8 INTERPRETATION   ANNEXURE 1 OPTION AGREEMENT
ANNEXURE 2 AUDIT REPORT ANNEXURE 3 PURCHASER’S NOTICE FOR EXERCISE OF OPTION

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THIS AGREEMENT is made on 31 December, 2012

BY AND BETWEEN:

KAVSAR GENERAL TRADING FZE a company organised under the laws of The UAE whose
registered office is at Hamriyah Free Zone, P.O. Box No 51393, Sharjah, UAE
(hereinafter “Seller”); and

DWM PETROLEUM AG, a company registered in Switzerland, having its registered
office at Bahnhofstrasse 9, Baar, Switzerland (hereinafter “Purchaser”).

RECITALS:

  A.

That Energy Partners Austria GmbH, a company registered in Austria, which is
wholly-owned subsidiary of the Seller (hereinafter “EPA”) is the legal and
beneficial owner of 57.42% shares in Petroleum Sugd, a joint venture with
limited liability incorporated under the laws of Tajikistan (hereinafter “PS”),
and the remaining 42.58% shares in PS are held by Sugdneftugas, state oil
company of Tajikistan (hereinafter “SNG”).

        B.

That PS is the 100% owner of rights in petroleum licences for the fields in
Tajikistan identified in the Schedule 1 (hereinafter “LICENSING AGREEMENTS”).
LICENSING AGREEMENTS are new licences covering areas of certain old licences
pursuant to which PS has had been operating since 2006, as successor in interest
of another Tajik joint venture with limited liability also known as Petroleum
Sugd, which was liquidated in 2006 (hereinafter “Liquidated PS”), and which was
also partly owned by Petroleum & Gas Vivalo International Company Limited
(hereinafter “Vivalo”) in addition to EPA and SNG.

        C.

That the Seller and the Purchaser are party to an Option Agreement effective 5
May 2012 (hereinafter “Option Agreement”), which is attached hereto as Annexure
1 of this Agreement. Under the Article 1(b) of the Option Agreement, Seller gave
an option (hereinafter “Option”) to the Purchaser to purchase 80% shares in a
new company incorporated in Switzerland which would own 100% shares of PS
(hereinafter “Shares”) upon payment of a security deposit of USD 10 million
(“Security Deposit”).

        D.

That pursuant to the Option Agreement, Seller has already incorporated TF
Petroleum AG (hereinafter “TF”) in Switzerland as per details in Schedule 1
hereof. On request of Purchaser, Seller has appointed a nominee of Purchaser, as
a director of TF at the time of incorporation. Further, Purchaser has spent
approx. USD 100,000 to assist Seller in incorporation of TF by paying CHF
100,000 share capital on behalf of Seller. Such costs shall hereinafter be
referred to as “Purchaser’s Advance in respect of TF”.

        E.

That pursuant to Article 1(d) of the Option Agreement, Purchaser has conducted
legal due diligence (hereinafter “Due Diligence”) regarding EPA, PS and
Liquidated PS, and thereafter also completed an independent audit (hereinafter
“Audit”) of all books and accounts of EPA, PS and Liquidated PS to follow-up on
the concerns raised in the Due Diligence. Audit report is attached hereto as
Annexure 2 of this Agreement.

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  F.

That On October 23, 2012, pursuant to Article 1(e) of the Option Agreement,
Purchaser has exercised the Option, subject to Seller taking certain actions
(hereinafter “Actions”) as described in Schedule A of its notice to exercise
Option, attached hereto as Annexure 3 of this Agreement, to bring LICENSING
AGREEMENTS and related agreements in order.

        G.

That pursuant to Article 1(f) of the Option Agreement, Seller and Purchaser have
agreed on a purchase price based on the findings of the Audit (hereinafter
“Consideration”), and pursuant to the Option Agreement, the Security Deposit
shall be construed as part payment towards the Consideration. Further,
Purchaser’s Advance in respect of TF shall also be construed as part payment
towards the Consideration.

NOW THEREFORE, IT IS AGREED as follows:

ARTICLE 1     Interpretation

1.1

In addition to terms defined elsewhere in this Agreement, the definitions and
other provisions in the Schedule 8 apply throughout this Agreement, unless the
contrary intention appears.

    1.2

In this Agreement, unless the contrary intention appears, a reference to a
clause, Article or Schedule is a reference to a clause, Article or Schedule to
this Agreement. The Schedules, Annexures and the Disclosure Letter accompanying
this Agreement shall form integral part of this Agreement.

    1.3

The headings in this Agreement do not affect its interpretation.

ARTICLE 2     Sale and Purchase of the Shares

2.1

Subject to the terms and conditions of this Agreement, Seller shall sell and
procure the sale of and the Purchaser shall purchase and procure the purchase of
the Shares at the Completion Date, but with effect from the Economic Date.

    2.2

The consideration for the sale of the Shares shall be USD 21 million (the
“Consideration”).

    2.3

As recited in Recital G above, it is acknowledged that USD 10,100,000 of the
Consideration is already paid.

    2.4

Purchaser shall advance to Seller, USD 7 million (hereinafter “Next Advance”)
within thirty (30) days of the date conditions mentioned in Article 3.1 below
are satisfied.

    2.5

Purchaser shall make remaining payment of USD 3,900,000 subject to any necessary
downward adjustment in accordance with this Agreement, to Seller on the
Completion Date once conditions mentioned in Article 3.2 are satisfied.

    2.6

All payments hereunder shall be paid by the Purchaser via wire transfer to the
Seller’s bank account with following details under the name of Kavsar General
Trading FZE:

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IBAN: AE580260001022581327701
Bank: EMIRATES NBD PJSC
Swift: EBILAEAD

ARTICLE 3     Conditions for Completion and Earlier Steps

3.1

Conditions for the Next Advance

    3.1.1

Purchaser has obtained the requisite approval of TSX-V (TSX Venture Exchange)
for the transaction envisaged by this Agreement.

    3.1.2

PS has completed Actions other than Actions related to re-issuance of
Certificate of land usage under the name of PS. i.e. following documents are
re-issued under the name of PS:

   

Allotments (mining lease); Ecological expertise; and

   

Contract (for subsoil use) with the Government setting bonuses rates.

    3.1.3

Seller has provided to Purchaser, a list of all lands owned or leased by PS
(hereinafter “Real Estate Properties”).

    3.1.4

Seller has provided to Purchaser, Accounts as of the Accounts Date.

    3.1.5

Seller has provided to Purchaser, tax book value of assets and liabilities of TF
and PS as of the Economic Date.

    3.1.6

Seller shall place its 65% shares of EPA in an escrow acceptable to Purchaser
(hereinafter “Escrow”), for the benefit of the Purchaser.

    3.1.7

Seller has entered into a share purchase arrangement with the Government to
purchase remaining shares in PS of SNG from the Government. In this regard,
Seller shall provide to the Purchaser an official letter issued by responsible
Government authority confirming that remaining shares in PS of SNG are subject
to sale.

    3.2

Conditions Precedent for Completion - Completion is conditional upon, and
subject to, the fulfilment or waiver pursuant to Clause 3.3 of the following
conditions (hereinafter “Conditions Precedent”):

    3.2.1

Seller has purchased remaining shares in PS of SNG from the Government, and
subsequently transferred 100% interests in PS to TF, in the manner described as
Step 2 and 3 in the contemplated deal structure described in Schedule 7 of this
Agreement.

    3.2.2

Transfer of 100% shares in PS to TF has been registered in all official
registers in Tajikistan.

    3.2.3

Seller has provided an affidavit certifying that Vivalo has no claim against
Seller, in respect of section 4.1.2 of the Audit Report, and if in future a
claim arises from Vivalo in respect of Liquidated PS or PS, Seller shall settle
it at its own cost and expense.

    3.2.4

Purchaser’s accountants BDO Tajikistan, at PS’s expense, have audited all books
and accounts of PS in line with international standards and issued an
unqualified opinion.

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3.2.5

PS has downsized its employee force and Seller has provided to Purchaser, a list
of employees of PS that it expects as of Completion Date.

    3.2.6

the receipt of the requisite Government Approval to the sale and purchase of the
Shares in so far as required; and

    3.2.7

the receipt of the Economic Date Accounts by the Purchaser.

    3.2.8

Seller has obtained a letter from the Government which states that the
Government recognizes the rights of investors and guarantees stability of terms
of concluded agreements concerning investment activity of investors in
Tajikistan as stipulated in Chapter 2 “Guarantee for Protection of Investment
and Investors rights” of the Law of Republic of Tajikistan “on investment” - to
allow TF to obtain financing from international sources. In this regard,
Purchaser shall provide to TF, a draft letter addressed to the Government, which
it will prepare in consultation with ABG.LA, its local counsel in Republic of
Tajikistan.

    3.2.9

Scope of the LICENSING AGREEMENTS has been extended to cover exploration in open
areas around the areas covered by the LICENSING AGREEMENTS, which is more fully
described in the map attached hereto as Schedule 2 of this Agreement.

    3.2.10

PS has completed Actions related to re-issuance of Certificate of land usage
under the name of PS.

    3.2.11

Seller and Purchaser have agreed on the Environmental Baseline pursuant to
Schedule 3, clause 1.12(b).

    3.3

The Seller and the Purchaser shall use all reasonable endeavours to procure or
seek waiver regarding the fulfilment of the Conditions for the Next Advance and
the Conditions Precedent as soon as reasonably practicable after the signing of
this Agreement. Purchaser shall also notify Seller regarding the process and
current status of obtaining the requisite approval of TSX-V (TSX Venture
Exchange).

    3.4

Refund

    3.4.1

If the Conditions Precedent are not fulfilled or, to the extent applicable,
waived on or before the date falling 120 days after the date of this Agreement,
this Agreement shall cease to have effect, except for the obligations in
Articles 12, 18 and 19 and neither of the Parties (provided it shall have used
reasonable endeavours as aforesaid) will, save in relation to any accrued rights
or obligations as at such date, have any rights or liabilities under this
Agreement. In such case, Seller shall refund to Purchaser, USD 17,100,000 (being
Security Deposit, Purchaser’s Advance in respect of TF and Next Advance, all of
which is already paid by such time) less a penalty of USD2 million as a
compensation of the Seller’s expenses within 365 days of the date of signing of
this Agreement.

    3.4.2

If Purchaser fails to advance Next Advance to Seller, within the time period
stipulated in Article 2.4 above, where Seller duly performed all actions
stipulated in the Articles 3.1.2-3.1.7 of this Agreement, the Seller must refund
to Purchaser, USD10,100,000 (being Security Deposit and Purchaser’s Advance in
respect of TF, (all of which is already paid by such time) by delivering within
reasonable period to Purchaser, 65% shares of EPA (which is owner of 57.42%
shares of PS, which are placed in Escrow for the benefit of Purchaser, as
specified in clause 3.1.6 of this Agreement. In the above case, on account of
transfer of 65% shares of EPA (which is owner of 57.42% shares of PS at that
time) Purchaser shall also pay to Seller, additional amount of USD2 million (as
a compensation of the Seller’s expenses) within 365 days from the date of
signing of this Agreement. If at the time of the aforementioned delivery of 65%
shares of EPA to Purchaser, EPA owns more than 57.42% shares of PS, then
Purchaser shall pay to Seller, additional amount corresponding to shares more
than 57.42% shares of PS (calculated on the assumption that 80% shares of EPA,
if EPA owns 100% shares of PS, are worth USD 21 million), within 365 days from
the date of signing of this Agreement or accept pro-rata reduction in the number
of deliverable shares of EPA in order to re-establish status quo.

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3.4.3

If Conditions for Next Advance are not satisfied to the satisfaction of
Purchaser, within 90 days of the signing of this Agreement, and consequently
transaction envisaged by this Agreement is not Completed, then Seller shall
refund to Purchaser, USD10,100,000 (being Security Deposit and Purchaser’s
Advance in respect of TF, all of which is already paid by such time) less a
penalty of USD2 million as a compensation of Seller’s expenses, within 365 days
of the date of signing of this Agreement.

    3.5

Seller shall send a copy of the Government Approvals to the Purchaser promptly
following receipt thereof and notify the Purchaser of the Completion Date once
the Conditions Precedent have been fulfilled or waived.

ARTICLE 4     Interim Period

4.1

The Seller shall procure that, between the date of this Agreement and
Completion, the Companies shall:

    4.1.1

carry on business in the ordinary course and meet their obligations under the
LICENSING AGREEMENTs;

    4.1.2

conduct their affairs in relation to the Interest in accordance with applicable
laws, the LICENSING AGREEMENTs and good industry practice;

    4.1.3

continue to meet all expenditures and receive all income relating to the
Interest;

    4.1.4

maintain or cause to be maintained in force any insurance which the Companies
hold or which is held on their behalf as at the date of this Agreement as
described in Schedule 6 of this Agreement and make and diligently pursue claims
which can be made under such policies;

    4.1.5

keep proper accounting records and in them make true and complete entries of all
dealings and transactions in relation to their business and afford to the
Purchaser full access thereto;

    4.1.6

engage an independent accounting firm to audit annual financial statements or
review interim period financial statements, given year end or period end fall
into the Interim Period;

    4.1.7

promptly notify the Purchaser of any law suits, claims, legal proceedings or
governmental investigations which may occur, be threatened, brought, asserted or
commenced against the Companies or the Operator involving or affecting the
Interest.

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4.1.8

keep the Purchaser informed and consult with the Purchaser in respect of all
material facts, matters and things relating to the Companies and the Interest
and all material operations carried out there under;

    4.1.9

not exercise any rights in respect of material matters under the relevant
LICENSING AGREEMENTs or relating to the Interest, except in a case of emergency,
without first obtaining the Purchaser’s consent,

    4.1.10

as soon as possible following any material decision made under the LICENSING
AGREEMENTs, or relating to any of the Interest , notify the Purchaser of that
decision; and

    4.1.11

not without the Purchaser’s prior written approval amend or terminate any of the
LICENSING AGREEMENTs.

   

Without prejudice to the generality of the foregoing provisions of this Clause
4, the Seller shall, between the date of this Agreement and Completion, procure
that the Companies shall keep the Purchaser informed of the making of any
payments for amounts greater than the equivalent of USD10,000 (or its equivalent
in foreign currency).

    4.2

Between the date of this Agreement and Completion the Seller shall procure that,
unless consented to by the Purchaser, the Companies shall not nor shall they
agree to:

    4.2.1

allot or issue (whether by way of option over shares or the issue of any rights
convertible into shares or otherwise) any shares in their capital;

    4.2.2

create, or agree to create, any Encumbrance over any shares,

    4.2.3

make any alteration to their deed of incorporation including the articles of
association;

    4.2.4

dispose, or agree to dispose or grant any option or right in respect of the
Interest;

    4.2.5

discontinue or cease to operate all or a material part of their business;

    4.2.6

make any change in the nature of their business;

    4.2.7

enter into, amend or terminate any Major Contract;

    4.2.8

approve any work programs or budgets; or

    4.2.9

sell or transfer any assets of the Companies other than those which would
normally be made in the usual conduct of its business;

    4.2.10

give notice of or otherwise institute any sole risk operations or agree to
surrender any area covered by the LICENSING AGREEMENTs;

    4.2.11

declare or pay any dividend or other distribution or repay any share premiums.
These provisions do not include restriction on distribution of retained profit
of PS for paying dividends which were accumulated before Economic Date;

    4.2.12

perform or omit any act which would cause a breach of any Major Contract of the
Companies;

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4.2.13

make any capital commitment, borrowing or expenditure other than those which
would normally be made in the usual conduct of its business;

    4.2.14

execute any document amending, waiving or cancelling any provision of the
LICENSING AGREEMENTs.

   

For purposes of this Clause 4, a matter is “material” if it is entailing
financial impacts exceeding USD 10,000 (or its equivalent in foreign currency).

ARTICLE 5     Completion

Completion shall occur at the office of Seller, not later than the seventh
Business Day after the notification by the Seller pursuant to Article 3.5 above
that the Conditions Precedent have been fulfilled.

5.1

At Completion:

    5.1.1

the Seller shall do or procure to be done those things set out in Part 1of the
Schedule 5, provided that the Seller shall be the custodian of all closing
documentation;

    5.1.2

the Purchaser shall do or procure to be done those things set out in Part 2 of
Schedule 5; and

    5.2

As soon as reasonably practicable, but in any case within twenty (20) Business
Days after Completion, the Purchaser undertakes to the Seller that it shall (a)
record the transfer of the Shares in the share register book of TF, (b) register
or file all matters in connection with Completion which are required or
necessary to register or to file with the Ministry of Energy and Industry,
Republic of Tajikistan, including but not limited to the change of directors of
the Companies, and the filing of the new shareholders list of the Companies, and
(c) notify the relevant banks and effect the change of authorised signatories in
connection with the banking facilities of the Companies. Upon completion of all
the registrations and notifications described above, the Purchaser shall as soon
as reasonably practicable notify the Seller, and provide the Seller with
reasonably satisfactory evidence of such registration, filing, and notification,
as the case may.

    5.3

Within twenty (20) Business Days of the Completion Date, Parties shall with
mutual agreement, make following appointments in respect of TF:

  • Management team.   • Legal advisors.   • Auditor.

5.4

Within twenty (20) days of the Completion Date, Parties shall enter into a
fully-termed Shareholders Agreement (“SHA”), containing inter alia following
provisions:

  • Number of Directors: 4 Purchaser, 1 Seller.   • Chairperson shall be nominee
of Purchaser.   • Governing law shall be laws of England, UK.

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ARTICLE 6     Independent Accountants

6.1

If any matters are reserved for determination by Independent Accountants:

6.1.1

the Independent Accountants shall be instructed to:

  (a)

make its determination within the shortest practicable time following referral
of the matter to the Independent Accountant;

        (b)

prescribe the procedure to be followed by the parties in order to facilitate
determination; and

        (c)

submit the determination in writing to the Seller and the Purchaser.

6.1.2

the Seller and the Purchaser shall:

      (a)

notify the Independent Accountants in writing of the matters reserved for
determination and each provide (and to the extent they are reasonably able
procure that their respective accountants, and the Purchaser shall procure that
TF, provide) the Independent Accountants promptly, and in any event within ten
(10) Business Days of the Appointment Day, with all information which they may
reasonably require and the Independent Accountants shall be entitled (to the
extent they consider it appropriate) to base their opinion on such information
and on the accounting and other records of TF; and

      (b)

accept the determination of the Independent Accountants (in the absence of
manifest error) as final and binding;

      (c)

the Independent Accountants shall act as experts and not as arbitrators; and

      (d)

the costs of the determination, including fees and expenses of the Independent
Accountants, shall be borne equally by the Seller and the Purchaser.

ARTICLE 7     Loans and Guarantees

7.1

The parties acknowledge that the Consideration has been agreed on the basis that
no indebtedness of any kind (regardless of whether presently payable) is owed by
any member of the Seller’s Group to the Companies or from the Companies to the
Seller’s Group, other than:

      (a)

any amounts which may be due or become due by way of trade credit in the
ordinary course of trading as a result of goods or services supplied on normal
arm's length terms;

      (b)

any amounts which may fall to be paid pursuant to any express provision of this
Agreement or any of the documents required to be executed or delivered pursuant
to the provisions of this Agreement;

      (d)

any amounts provided for in connection with service agreements with Affiliates
of the Seller during the Interim Period; and

      (e)

any amounts provided for in the Economic Date Accounts.

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7.2

The Seller shall procure that on Completion, Companies are released from all
guarantees and indemnities given by it in respect of any liability or obligation
of any member of the Seller’s Group, or alternatively if such releases are not
granted, Seller shall defend, indemnify and hold harmless Purchaser’s Group
against any and all claims arising out of such guarantees and indemnities.
Purchaser shall ensure after the Completion Date that Seller’s Group is released
from all guarantees and indemnities given by it in respect of any liability or
obligation of the Companies; or, alternatively, if such releases are not
granted, Purchaser shall defend, indemnify, and hold harmless Seller’s Group
against any and all claims arising out of such guarantees and indemnities.

ARTICLE 8     the Seller's Warranties

8.1

The Seller represents and warrants to the Purchaser that, except as disclosed to
the Purchaser in the Disclosure Letter, as of the date of this Agreement and
such representations shall be deemed to be repeated immediately prior to
Completion, each of the statements set out in the Schedule 3 is true and
accurate.

    8.2

The liability of the Seller in connection either with the Warranties, and any
Warranty Claim, shall be subject to the limitations contained in, and to the
other provisions ofSchedule4 of this Agreement.

    8.3

Any payment made by the Seller in respect of a Warranty Claim brought by the
Purchaser shall: be reduced by the amount of any savings in Taxation enjoyed by
the Purchaser, and/or its Affiliates, or TF in connection with the circumstances
which gave rise to the claim.

    8.4

If the Purchaser becomes aware of a matter which is likely to give rise to a
Warranty Claim, the Purchaser shall give notice of the relevant facts to the
Seller as soon as reasonably practicable after becoming aware of those facts and
in any event within thirty (30) days of becoming aware of those facts.

ARTICLE 9     Purchaser's Warranties

The Purchaser warrants to the Seller that each of the statements set out below
is true and accurate in all material respects:

9.1

Purchaser is a corporation validly existing under the laws of Switzerland, with
the requisite power and authority to enter into and perform, and has taken all
necessary corporate action to authorise the execution and performance of, its
obligations under this Agreement;

    9.2

this Agreement constitutes valid and binding obligations of the Purchaser;

    9.3

other than as contemplated by this Agreement, no notices, reports or filings are
required to be made by the Purchaser in connection with the transactions
contemplated by this Agreement, nor are any consents, approvals, registrations,
authorisations or permits required to be obtained by the Purchaser in connection
with the execution and performance of this Agreement; and

ARTICLE 10   Protective Covenants

10.1

The Seller covenants with the Purchaser that it shall not and shall procure that
no member of the Seller’s Group shall without the Purchaser’s consent (except as
required by law or any competent regulatory body, including the applicable rules
of any stock exchange) disclose or divulge to any third party any material
information of a secret or confidential nature relating exclusively to the
business or affairs of Companies, except to the extent the information has
entered the public domain other than by reason of an unauthorised act or default
of the Seller.

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10.2

The Purchaser covenants with the Seller that it shall not and shall procure that
no member of the Purchaser’s Group shall without the Seller’s consent (except as
required by law or any competent regulatory body, including the applicable rules
of any stock exchange) disclose or divulge to any third party any material
information of a secret or confidential nature relating exclusively to the
business or affairs of the Companies that has been disclosed to it pursuant to
this Agreement, except to the extent the information has entered the public
domain other than by reason of an unauthorised act or default of the Purchaser.

ARTICLE 11   Tax

11.1

The Seller shall be liable for any Taxation liabilities of the Companies and/ or
the Interest for periods up to the Economic Date and shall indemnify and hold
harmless the entity of the Purchaser’s Group against which any such Taxation
liability is levied.

    11.2

It is agreed that the Seller and the Purchaser shall each be responsible for the
payment of its own taxes, duties or other charges deriving from the transfer
under this Agreement in accordance with the laws, rules and regulations of
Tajikistan or other applicable laws, provided that any stamp duty related to the
registration process of the transaction or transfer of shares envisaged by this
Agreement owing under the laws, rules and regulations of Tajikistan shall be the
responsibility of and paid by the Purchaser.

ARTICLE 12   Confidentiality

12.1

Subject to Article 12.4, neither the Seller nor the Purchaser shall make (or
permit any other member of the Seller’s Group or the Purchaser's Group to make)
any announcement concerning this sale and purchase or any ancillary matter
before Completion, and on and thereafter without the prior written consent of
the other parties, the same not to be unreasonably withheld.

    12.2

The Purchaser, each member of the Purchaser’s Group, its lawyers and other
professional consultants shall:

  (a)

keep confidential all information provided to it by or on behalf of the Seller
or otherwise obtained by or in connection with this Agreement which relates to
any member of the Seller’s Group;

        (b)

if after Completion, Purchaser holds confidential information relating to the
Seller’s Group, it shall keep that information confidential and, to the extent
reasonably practicable, other than information as may be reasonably required by
the Purchaser to retain for legal, tax or financial/accounting purposes, shall
return that information to the Seller or destroy it, in each case without
retaining copies; and

        (c)

in respect of any Excluded Records which the Purchaser may receive or be in
possession of, the Purchaser agrees to hold the same in strict confidence, not
to disclose them to any third party and not to use them for any purpose
whatsoever. To the extent that the Purchaser becomes aware that it is possession
of Excluded Records in written or other tangible form (including information
stored electronically), the Purchaser agrees as soon as reasonably practicable
to return to the Seller or destroy such information, or cause such information
to be returned to the Seller, in each case at the Seller's sole discretion.

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12.3

The Seller, each member of the Seller Group, its lawyers and other professional
consultant shall:

      (a)

keep confidential all information provided to it by or on behalf of the
Purchaser or otherwise obtained by or in connection with this Agreement which
relates to any member of the Purchaser's Group; and

      (b)

if after Completion, the Seller, each member of the Seller Group, its lawyers
and other professional consultants hold confidential information relating to the
Companies, they shall keep that information confidential and, other than the
Excluded Records or as may be required by Seller to retain for legal, tax, or
financial/accounting purposes, shall return that information to the Purchaser or
destroy it, in each case without retaining copies.

12.4

Nothing in this clause prevents any announcement being made or any confidential
information being disclosed:

      (a)

with the written approval of the other parties, which in the case of any
announcement shall not be unreasonably withheld or delayed; or

      (b)

to the extent required by law, stock exchange regulations or any competent
regulatory body, but a party required to disclose any confidential information
shall promptly notify the other party, so far as practicable and lawful with
regard to timing, content and other requirements of such law, stock exchange
regulations or regulatory body, before disclosure occurs and co-operate with the
other party regarding the timing and content of such disclosure.

12.5

Nothing in this clause prevents disclosure of confidential information by any
party:

      (a)

to the extent that the information is in or comes into the public domain other
than as a result of a breach of any undertaking or duty of confidentiality by
that party; or

      (b)

to that party's professional advisers, lawyers, auditors or bankers, but before
any disclosure to any such person the relevant party shall procure that he is
made aware of the terms of this clause and shall use its best endeavours to
procure that such person adheres to those terms as if he were bound by the
provisions of this clause.

ARTICLE 13   Notices

13.1

Any notice given in connection with this Agreement must be in English. Any other
document provided in connection with this Agreement must be in English or
accompanied by a certified English translation; in this case, the English
translation prevails unless the document is a statutory or other official
document.

    13.2

Any notice or other formal communication given under this Agreement must be in
writing (which includes fax, but not email) and may be delivered or sent by
courier or fax to the party to be served as follows:

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  (a) to the Seller at:   (b) to the Purchaser at:                 Building 3,
Apartment 5     Bahnhofstr. 9     Street Academic Rajabovs, 1 lane     6341
Baar, Switzerland     Dushanbe Zip Code 734025                 E-Mail:    
TajikistanE-Mail:     Wladwein@Manaspetroleum.Com     Khurshed.Nozimov@mail.ru  
              Attention: Dr. Werner Ladwein     Attention: Mr. Khurshed Nozimov
     

or at such other address or fax number as it may have notified to the other
party in accordance with this clause.

13.3

Any notice or other formal communication shall be deemed to have been given:

      (a)

if delivered personally, at the time of delivery; or

      (b)

if sent via courier, at 10.00 a.m. on the fourth Business Day after it was
accepted by the courier company for delivery; or

      (c)

if sent by fax, provided the fax is in readable form, on the date of
transmission, if transmitted before 3.00 p.m. on any Business Day, and in any
other case on the Business Day following the date of transmission, with a copy
of the notice or other communication also sent by post.

13.4

In proving service of a notice or other formal communication, it shall be
sufficient to prove that delivery was made or that the envelope containing the
communication was properly addressed and despatched via courier, as the case may
be or that the fax was properly addressed and successful transmission
electronically confirmed, as the case may be.

ARTICLE 14   Further Assurances

14.1

In relation to TF, the Seller shall procure the convening of all meetings, the
giving of all waivers and consents and the passing of all resolutions as are
necessary under the applicable laws dealing with private limited companies, its
articles of association, or any agreement or obligation affecting it to give
effect to this Agreement.

    14.2

On or after Completion, the parties shall, at their own cost and expense,
execute and do (or procure to be executed and done by any other necessary party)
all such deeds, documents, acts and items as may from time to time be reasonably
required in order to give full effect to all the transactions or activities
contemplated under this Agreement.

ARTICLE 15   Assignments

15.1

Each Party may assign the benefit of this Agreement to any member of its Group
and if it does so:

      (a)

the assignee may enforce the obligations of the other Party (including the
Warranties given by the Seller) under this Agreement as if it had been named in
this Agreement as a Party ;

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  (b)

each Party may nevertheless enforce this Agreement against the other Party, as
if that assignment had not occurred;

        (c)

the assignment shall not in any way operate so as to increase or reduce the
respective rights and obligations on the part of the assigning Party or its
assignee on the one hand and the other Party on the other hand; and

        (d)

where applicable, if the assignee ceases to be a member of the Seller’s Group or
the Purchaser's Group, the Seller or the Purchaser as the case may be shall
procure that the benefit of this Agreement is re-assigned to the Seller or the
Purchaser as the case may be or another member of the Seller’s Group or the
Purchaser's Group.

15.2

Except as permitted by this clause, none of the rights or obligations under this
Agreement may be assigned or transferred by a Party without prior approval of
the other Party.

ARTICLE 16   General

16.1

Each of the obligations, warranties and undertakings set out in this Agreement
(excluding any obligation which is fully performed at Completion) shall continue
in force after Completion.

    16.2

Unless otherwise agreed between Purchaser and Seller, if the Purchaser or Seller
defaults in the payment when due of any sum payable under this Agreement,
(howsoever determined) its liability shall be increased to include interest on
such sum from the date when such payment is due until the date of actual payment
(as well as before judgment) at a rate per annum of LIBOR plus one percent. Such
interest shall accrue from day to day.

    16.3

Each party shall pay the costs and expenses incurred by it in connection with
the entering into and completion of this Agreement.

    16.4

In addition to the provisions of Schedule 4, the Purchaser shall make available
to the Seller any books or records of Companies (or, if practicable, the
relevant parts of those books or records) which are required by the Seller for
the purpose of dealing with its corporate, tax, or reporting obligations or
affairs and, accordingly, the Purchaser shall, upon being given reasonable
notice by the Seller and subject to the Seller giving such undertaking as to
confidentiality as the Purchaser shall reasonably require, procure that such
books and records are made available to the Seller for inspection during working
hours and copying at the Seller’s expense for and only to the extent necessary
for such purpose and for a period of six years from Completion.

    16.5

This Agreement may be executed in any number of counterparts. This has the same
effect as if the signatures on the counterparts were on a single copy of this
Agreement.

    16.6

The rights of each party under this Agreement:

  (a)

may be exercised as often as necessary;

        (b)

are cumulative and not exclusive of rights and remedies provided by law; and

        (c)

may be waived only in writing and specifically.

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Delay in exercising or non-exercise of any such right is not a waiver of that
right.

    16.7

Except as expressly stated in this Agreement, a person who is not a party to
this agreement may not enforce any of its terms under the Contracts (Rights of
Third Parties) Act 1999.

    16.8

This Agreement will only be signed in English. However, an unofficial
translation of this Agreement in Russian shall be initialled by the Seller. In
case of any conflict, this official English version of the Agreement shall
prevail.

ARTICLE 17   Whole Agreement

17.1

This Agreement and the documents referred to in it contain the whole agreement
between the parties relating to the transactions contemplated by this Agreement
and supersede all previous agreements between the parties relating to these
transactions.

    17.2

Each party acknowledges that in agreeing to enter into this Agreement it has not
relied on any representation, warranty, collateral contract or other assurance
(except those set out in this agreement) made by or on behalf of any other party
before the signature of this Agreement. Each party waives all rights and
remedies which, but for this Article, might otherwise be available to it in
respect of any such representation, warranty, collateral contract or other
assurance.

ARTICLE 18   Governing Law

This Agreement is governed by and shall be construed in accordance with laws of
England and Wales without giving effect to any choice of law principles thereof
which would result in the application of the laws of another jurisdiction.

ARTICLE 19   Arbitration

All disputes arising out of or in connection with this Agreement shall be
finally settled under the UNCITRAL arbitration rules by three (3) arbitrators
appointed in accordance with the said rules. The place of arbitration shall be
London, UK. The language of the arbitration shall be English.

THIS AGREEMENT HAS BEEN SIGNED BY THE PARTIES (OR THEIR DULY AUTHORISED
REPRESENTATIVES) ON THE DATE STATED AT THE BEGINNING OF THIS AGREEMENT.

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SCHEDULE 1

PART 1 – TF Corporate Details

Registered number: CH-170.3.037.214 -4

 

Registered office: TF Petroleum AG, Bahnhofstrasse
9, 6341 Baar, ZG, Switzerland

 

Date and place of incorporation: September 24, 2012,
6341 Baar, ZG, Switzerland

 

Directors:

Khurshed Nozimov
Werner Ladwein

 

Shareholders: Kavsar General Trading FZE

 

Paid-in capital stock: CHF 100,000 (i.e. 100%)

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SCHEDULE 1

PART 2 – TF’s Interests

A.

TF holds 100% interests in Petroleum Sugd, a joint venture company incorporated
under the laws of Tajikistan PS.

B.

PS owns 100% interests in several producing oilfields and acreage under
application onshore Tajikistan and related assets, including following existing
oil fields:

  - Airitan Field   - Kanibadam and North Kanibadam Fields   - Niazbek and North
Karachicum Field   - Obi Shifo and North Karatau Fields   - Ravat Field   -
SelRoho Field   - Mahram Field   - Madaniyat Field

C.

On 17 July 2012, Ministry of Energy and Industry has issued following new
licences in respect of above listed oil and gas fields, essentially re-issuing
Licences (i.e. LICENSING AGREEMENTS) and also valid until 20 December 2022:

Licence No 0003804 for Prospection and Exploration of oil and gas.
Licence No 0003805 for Operation of oil and gas fields.
Licence No 0003807 for Production (extraction) of oil and gas.

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SCHEDULE 2

Map of Areas for which Seller will obtain New Petroleum Exploration Rights

graphic3 [exhibit10-1x2x3x1.jpg]

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SCHEDULE 3

Seller’s Warranties

1.

GENERAL

1.1

Due Incorporation and Capacity

   

The Seller is a corporation validly existing under the laws of the UAE with the
requisite power and authority to enter into and perform, and has taken all
necessary corporate action to authorise the execution and performance of, its
obligations under this agreement.

    1.2

Valid Obligations

   

This Agreement constitutes valid and binding obligations of the Seller.

    1.3

Filings and Consents

   

Other than as contemplated by this Agreement, no material notices, reports or
filings are required to be made by the seller in connection with the
transactions contemplated by this Agreement, nor are any consents, approvals,
registrations, authorisations or permits required to be obtained by the seller
in connection with the execution and performance of this Agreement.

    1.4

Recitals

   

The particulars relating to TF set out in the recitals and the Schedules to this
Agreement are true and accurate.

    1.5

Incorporation

  a)

TF is a corporation validly existing under the laws of Switzerland with full
power and authority to conduct its business as presently conducted.

  b)

PS is a corporation validly existing under the laws of Tajikistan with full
power and authority to conduct its business as presently conducted.

  c)

The books (including all registers and minute books) of TF and PS are up to date
and have been properly kept and no notice or allegation that any of them is
incorrect or should be rectified has been received.

1.6

Ownership of Shares

  a)

The shares described in the Schedule 1 constitute 100% of the issued and
allotted share capital of TF and are fully paid up and TF has not exercised or
purported to exercise or claimed any lien over them.

  d)

There is no option, right to acquire, conversion right, mortgage, charge,
pledge, lien or other form of security or encumbrance on, over or affecting any
of the Shares and there is no agreement or commitment to give or create any of
the foregoing.

  e)

The Seller is entitled to transfer or procure the transfer of the full legal and
beneficial ownership in the Shares to the Purchaser on the terms set out in this
Agreement.

  f)

TF has not issued or agreed to issue any loan capital.

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1.7

Subsidiaries and associates

   

As of the Completion Date: TF will be the beneficial owner of 100% of the issued
share capital of PS; Other than PS, TF will not have any interests and will not
hold or beneficially own, control, nor agree to acquire, any shares of any other
corporation.

   

PS will not have any subsidiary and will not hold or beneficially own, control,
nor agree to acquire, any shares of any other corporation.

    1.8

Assets

  a)

Particulars of each fixed asset with a value in excess of USD 10,000.00 acquired
or agreed to be acquired by TF or PS since the Accounts Date are set out in the
Disclosure Letter.

  b)

Except for assets offered for sale or sold in the ordinary course of business,
neither EPA, PS nor TF has since the Accounts Date disposed or agreed to dispose
of any of the assets included in the Accounts or any asset acquired or agreed to
be acquired since the Accounts Date, in each case with a book value in excess of
USD 10,000.00.

  c)

All material records and information belonging to TF, EPA, Liquidated PS and PS
(whether or not held in written form) are in its exclusive possession and/or
under its control, and all such records and information are subject to access by
it; provided, however, that all Excluded Records shall become the property, and
be in the sole possession, of the Seller.

  d)

The assets included in the Accounts or acquired by TF or PS since the Accounts
Date (other than trading stock disposed of since that date in the ordinary
course of business) are the property of TF or, as the case may be, PS, free from
any Encumbrance and are not the subject of any leasing, hiring or hire-purchase
agreement, and all such assets are in the possession or under the control of TF
or, as the case may be, PS.

  e)

Seller warrant validity of LICENSING AGREEMENTS, land entitlements, royalty
agreements, tax rates, etc as of the date of signing this Agreement as well as
the Completion Date.

  f)

Seller warrants to be responsible for any claim arising from its past
relationship with Vivalo in the Liquidated PS.

  g)

Seller warrants that it does not have knowledge of any liabilities and
contingent liabilities other than those identified during Audit and Due
Diligence and disclosed in the Disclosure Letter and Annexure 2. Seller further
warrants that any liability not disclosed in the aforementioned Annexure,
including environment and tax liabilities will be handled by Seller at Seller’s
expense (via downward adjustment of Seller`s shareholding in TF.

1.9

Economic Date Accounts

  a)

The Economic Date Accounts will be prepared in accordance with applicable laws
and GAAP.

  b)

fairly present the state of affairs, the assets and the liabilities of TF and PS
as at the Economic Date and of the profit or loss of TF and PS for the period
ended on said date;

  c)

will be prepared on a proper and consistent basis in accordance with the basis
employed in TF's and PS’ audited accounts for each of the three preceding
financial periods and all accounts required by law to be delivered or made to
any authority have been duly and correctly delivered or made;

  d)

will be audited or reviewed as outlined in Article 4.1.6 of this Agreement.

  e)

contain such provisions and deferred tax assets as are required by GAAP to cover
all taxation and other liabilities of TF and PS as at the Economics Date;

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  f)

The tax book value of the assets and liabilities of TF under Swiss law and the
tax book value of the assets and liabilities of PS under Tajikistani law
provided by Seller pursuant to Article 3.1.5 of this Agreement is accurate.

1.10

Position since Accounts Date

  a)

TF, EPA and PS have carried on their business in the normal course and there has
been no material and adverse change in the financial position of TF, EPA or PS;

  b)

except for any dividends provided for in the Accounts and Article 4.2.11 of this
Agreement, no dividend, repayment of share premium, or other distribution or
repayment has been declared, paid or made by TF, EPA or PS;

  c)

no share or loan capital has been issued or agreed to be issued by TF, EPA or
PS;

  d)

no capital commitment has been entered into by TF, EPA or PS to spend monies
other than in accordance with the capital expenditure budget set out in the
Disclosure Letter; and

  e)

TF, EPA or PS have not entered into any Major Contract.

1.11

Licences and Compliance

  a)

TF, EPA and PS have conducted their businesses in accordance with all applicable
laws, regulations and other requirements of authorities having jurisdiction over
the Companies or the Interest and TF, EPA, and PS directly or through the
Operator have obtained all material licences, permissions, authorisations and
consents required for the carrying on of the business now carried on by them in
the places and in the manner in which that business is now carried on and such
licences, permissions, authorisations and consents are in full force and effect.

  b)

Neither PS or Liquidated PS nor to the knowledge of the Seller, the Operator has
received notice that it is in default under any material licence, permission,
authorisation or consent.

  c)

Neither PS nor Liquidated PS has received notice that it is in violation of, or
in default with respect to, any statute, regulation, order, decree or judgment
of any court or any governmental agency of the jurisdiction in which it is
incorporated.

1.12

Environment

  a)

Notwithstanding any other term of this Agreement, the only Warranties that are
given in relation to the environment are those contained in this paragraph.

  b)

In view of section 4.1.4 of the Audit Report, Seller and Purchaser shall agree
on an Environment baseline in respect of all PS sites and wells– and Seller
shall take responsibility for status of sites and wells as of the Completion
Date. In this Environment baseline, all abandoned wells are to be identified.

  c)

Liquidated PS and PS, to the Seller’s knowledge, have complied with all
Environmental Law or Environmental Licence and neither PS nor Liquidated PS has
received any written notice or communication from which it appears that it is or
may be in violation of any Environmental Law or Environmental Licence.

  d)

Neither EPA, PS, Liquidated PS nor TF, to the Seller’s knowledge, is engaged in
any disputes, proceedings, litigation or arbitration proceedings concerning
Environmental Laws or Dangerous Substances nor have the Companies nor to the
Seller’s knowledge the Operator received any communication that there has been a
material incident of pollution in relation to the Interest.

  e)

No payments have been made, are currently to be made, by PS or Liquidated PS in
respect of the Interest for any future abandonment or decommissioning
obligations.

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1.13

Intellectual Property Rights

  a)

No notice has been received by EPA, PS, Liquidated PS or TF claiming that it
infringes any right in confidential information or other intellectual property
right of any third party.

  b)

So far as the Seller is aware, there is no outstanding infringement of any
intellectual property rights referred to in sub-para (a) above by EPA, PS,
Liquidated PS or TF.

1.14

Contracts

  a)

Neither EPA, PS, Liquidated PS nor TF has received notice that it is in default
under any agreement, mortgage, charge, lien or pledge, nor has it received
notice that it is in breach or default of the LICENSING AGREEMENTs.

  b)

PS is the legal and beneficial owner of the Interest, free from Encumbrances.
The LICENSING AGREEMENTs are in full force and effect, and no act or omission of
EPA, PS, Liquidated PS or TF has occurred which would or might reasonably
entitle any competent authority to revoke, vary or terminate the LICENSING
AGREEMENTs. The LICENSING AGREEMENTs are not in the course of being surrendered.
No sole risk or non-consent proposals are proposed or existent under the
LICENSING AGREEMENTs. All compulsory work obligations have been fulfilled and no
notice have been given by the Government of any intention to require any further
work of a material nature to be performed under the LICENSING AGREEMENTs.

  c)

There are no subsisting contracts to which PS or TF is a party and in which any
member of the Seller’s Group has an interest (other than, in the case of the
Seller, its interest in the Shares).

  d)

Other than in relation to the LICENSING AGREEMENTs, neither PS nor TF are a
party to any other Major Contract, nor have they agreed to become, a member of
any partnership or other unincorporated association, joint venture or consortium
(other than recognised trade associations).

1.15

Indebtedness

  a)

Neither EPA, PS, Liquidated PS nor TF has received any notice to repay any
borrowings or indebtedness under any agreements relating to any borrowing (or
indebtedness in the nature of borrowing) which are repayable on demand; and no
event of default has occurred and is outstanding under any agreement relating to
any other borrowing or indebtedness in the nature of borrowing or other credit
facility of EPA, PS, Liquidated PS or TF.

  b)

Neither EPA, PS, Liquidated PS nor TF has any outstanding Group Loans,
borrowings, debts loan capital or any money borrowed or raised (other than under
its bank facilities or normal trade credits).

  c)

Neither EPA, PS, Liquidated PS nor TF has lent any money which is due to be
repaid and, as at the date of this Agreement, has not been repaid or owns the
benefit of any debt other than debts accrued in the ordinary course of its
business.

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1.16      Litigation

Except as set out in the disclosure letter, neither EPA, PS, Liquidated PS nor
TF is a party to any litigation, arbitration or administrative proceedings.
Disclosure letter includes mention of an arbitration proceeding by owner of
Vivalo against government of Tajikistan concerning liquidated PS which appears
to be closed matter.

1.17      Insurances

PS has taken out insurances on the basis and in respect of the risks referred to
in the list of insurance cover contained in Schedule 6 hereto and:

  (a)

no policies shall be in force and effect at and after Completion;

  (b)

such policies will be in full force and effect up to (but not including)
Completion in accordance with their respective terms.

  (c)

All the assets and undertakings of TF and PS of an insurable nature are and have
at all times been insured in amounts representing their full replacement or
reinstatement value against all risks normally insured by companies on the same
classes of businesses as TF’s or PS’s business.

1.18      Employees

List of employees of PS and TF provided pursuant to Article 3.2.5 of this
Agreement shall be accurate as of the Completion Date.

1.19      Liquidation

  a)

No administrator, receiver or administrative receiver or local equivalent has
been appointed in respect of the whole or any part of the assets of PS or TF.

  b)

No petition has been presented, no order has been made and no resolution has
been passed for the winding-up of TF or PS.

  c)

Neither PS nor TF is insolvent or unable to pay its debts and neither PS nor TF
has stopped paying its debts as they fall due.

  d)

No voluntary arrangement or compromise or other arrangement with creditors has
been proposed, agreed or sanctioned under any applicable law in respect of TF or
PS.

2.

Tax Warranties

    2.1

General

  a)

All Taxation of any nature whatsoever for which TF, EPA and PS is liable until
the Completion Date has within the time limits prescribed by the relevant
legislation been or will be duly and correctly paid or provided for.

  b)

To Seller’s knowledge, all notices, computations and returns which ought to have
been given or made, have been properly and duly submitted by TF, EPA and/or PS
to the relevant Taxation authorities and all information, notices, computations
and returns submitted to such authorities are true, accurate and complete and
are not the subject of any dispute nor, to the knowledge of EPA, PS or TF, are
they likely to become the subject of any dispute with such authorities. All
records which EPA, TF and/or PS are required to keep for Taxation purposes or
which would be needed to substantiate any claim made or position taken in
relation to Taxation by EPA, TF and/or PS, have been properly and duly kept and
are available for inspection at the premises of TF and/or PS respectively.

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  c)

All claims or other requests for any particular treatment relating to Taxation
that have been taken into account in computing any amount in the Economic Date
Accounts have been duly made. All tax liabilities which are not already paid are
duly provided for.

  d)

The amount of Taxation chargeable on EPA, TF or PS during any accounting period
ending on or within ten years before the Economic Date has not been affected to
any material extent by any concession, arrangements, agreement or other formal
or informal arrangement with any Taxation authority (other than such LICENSING
AGREEMENTs, agreements or arrangements available to companies generally).

  e)

Neither EPA, Liquidated PS, PS nor TF are liable to pay, nor to their knowledge
are there any circumstances by reason of which either is likely to become liable
to pay any interest, penalty, surcharge or fine relating to Taxation.

  f)

Neither EPA, Liquidated PS, PS nor TF have been subject to or is currently
subject to any investigation, audit or visit by any Taxation or excise
authority, and neither the Seller, TF nor PS are aware of any such
investigation, audit or visit planned for the next twelve months.

  g)

Neither EPA, Liquidated PS, PS nor TF have any liability in respect of Taxation
arising in any part of the world in respect of income, profits or gains arising
or deemed to arise before the Economic Accounts Date or in respect of any event
occurring or deemed to occur before the Economic Accounts Date that is not
provided for in full in the Accounts.

  h)

EPA, Liquidated PS, PS and TF have not been involved in any transaction outside
the ordinary course of business which has given or may give rise to a liability
to Taxation on TF or PS.

  i)

It has complied with Tajik tax requirements with respect to the contemplated
transaction, and that any taxes imposed on PS as a result of EPA transferring
shares of PS into Seller, and Seller transferring shares of PS into TF, are to
be paid by Seller.

2.2

Deductions and Withholdings

      a)

EPA, Liquidated PS, PS and TF have made all deductions in respect, or in
account, of any Taxation from any payments made by it which it is obliged or
entitled to make and has accounted in full to the appropriate authority for all
amounts so deducted.

b)

Neither EPA, Liquidated PS, PS nor TF have received any notice from any Taxation
authority which required or will require any of them to withhold Taxation from
any payment made since the Economic Date (in respect of which such withheld
Taxation has not been accounted for in full to the appropriate authority).

2.3

Tax Residence

  A)

TF is not treated for any taxation purpose as resident in a country other than
the country of its incorporation and TF does not have, nor has had a branch,
agency or permanent establishment in a country other than the country of its
incorporation.

  b)

PS is resident in Tajikista.n, the country of its incorporation and does not
have, nor has had a branch, agency or permanent establishment in a country other
than Tajikistan.

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2.4      Transfer Pricing

No transactions or arrangements involving EPA, PS nor TF have taken place within
the past two years or are in existence which are such that any provision
relating to transfer pricing might be invoked by a taxation or excise authority.

2.5      Deemed Income and Profits

Except as provided in the accounts, TF and PS do not have a liability to
taxation on income or profits except in respect of and to the extent of income
and profits actually received, nor do any arrangements exist which might give
rise to such a liability.

2.6      Value Added Tax

  a)

For the purposes of this paragraph, VAT means value added tax.

  b)

TF is duly registered for the purposes of VAT in its country of incorporation.

  c)

TF has complied with all statutory provisions, rules, regulations, orders and
directions concerning VAT, including the making on time of accurate returns and
payments and the maintenance of records.

2.1      Stamp Duty

All stamp duty and similar taxes or duties have been correctly and duly paid in
respect of all transactions executed prior to the date of completion.

3          ACCURACY AND COMPELETENESS OF INFORMATION

All facts material to the condition of the Interest, the business, TF and PS
have been disclosed to the Purchaser in writing and the information contained in
this Agreement or made available to the purchaser is true, correct and complete
in all material aspects. The Seller is not aware of any fact or matter,
including any omission, which would render any such information incorrect or
misleading in any material aspect.

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SCHEDULE 4

Limits on Warranty Claims

1.

Acknowledgement

     

The Purchaser acknowledges and agrees that:

      (a)

the Warranties are the only representations, warranties or other assurances of
any kind given by or on behalf of the Seller or any member of the Seller’s Group
and on which the Purchaser may rely in entering into this Agreement;

      (b)

no other statement, promise or forecast made by or on behalf of the Seller or
any member of the Seller’s Group may form the basis of, or be pleaded in
connection with, any claim by the Purchaser under or in connection with this
Agreement; and

      (c)

at the time of entering into this Agreement the Purchaser is not aware of a
breach of the Warranties.

2.

Conduct of third party claims

    2.1

Subject to paragraph 2.2 below, if a Warranty Claim arises as a result of, or in
connection with, a liability or alleged liability to a third party (a Third
Party Claim), then the Seller may elect to assume the conduct of any appeal,
dispute, compromise or defence of the Third Party Claim and of any incidental
negotiations using legal counsel of the Seller’s choice and on the following
terms:

  (a)

the Seller shall first agree to indemnify the Purchaser, TF and PS against all
liabilities, charges, costs and expenses which they may incur in taking any such
action as the Seller may reasonably require;

        (b)

the Purchaser shall procure TF and PS to make available to the Seller such
persons and all such information as the Seller may reasonably require for
assessing, contesting, appealing or compromising the Third Party Claim;

        (c)

the Purchaser shall procure that TF and PS take such action to contest, appeal
or compromise the Third Party Claim as may reasonably be requested by the Seller
and does not make any admission of liability, agreement, settlement or
compromise in relation to the Third Party Claim without the approval of the
Seller; and

        (d)

the Seller shall on an ongoing basis consult with and keep the Purchaser fully
and promptly informed of the progress of the Third Party Claim and promptly
provide the Purchaser with copies of all relevant documents and such other
information in its possession as may be requested by the Purchaser.

2.2

If a Warranty Claim arises as a result of, or in connection with a Third Party
Claim in respect of which the Purchaser wishes to retain conduct of any appeal,
dispute, compromise or defence and of any incidental negotiations, then the
Purchaser shall notify the Seller of its intention to do so and paragraph 2.1
above shall not apply, provided in all such cases that the Seller shall not be
liable to Purchaser or the third party under any circumstances whatsoever in
respect of such Warranty Claim.

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3.        Mitigation

Nothing in this Agreement shall be deemed to relieve the Purchaser from any duty
to mitigate any loss or damage incurred by it as a result of any breach of the
Warranties.

4.        Recovery from third parties

This paragraph applies if:

  (a)

the Seller makes a payment (excluding any interest on a late payment) in respect
of a Warranty Claim (the Damages Payment); and

        (b)

TF, PS or the Purchaser receives any sum which would not have been received but
for the circumstance which gave rise to that Warranty Claim (the Third Party
Sum); and

        (c)

the receipt of the Third Party Sum was not taken into account in calculating the
Damages Payment; and

        (d)

the aggregate of the Third Party Sum and the Damages Payment exceeds the amount
required to compensate the Purchaser in full for the loss or liability which
gave rise to the Warranty Claim in question, such excess being the Excess
Recovery.

        (e)

If this paragraph applies, the Purchaser shall, promptly on receipt of the Third
Party Sum by it, PS, or TF, repay to the Seller an amount equal to the lower of
(i) the Excess Recovery and (ii) the Damages Payment, after deducting (in either
case) all costs incurred by the Purchaser, PS, or TF in recovering the Third
Party Sum and any taxation payable by the Purchaser, PS, or TF by virtue of its
receipt.

5         Insurance

Without prejudice to the Purchaser's duty to mitigate any loss in respect of any
breach of the Warranties, if in respect of any matter which would otherwise give
rise to a breach of the Warranties TF or PS are entitled to claim under any
policy of insurance, the amount of insurance monies to which TF or PS are
entitled (after deduction of any costs) shall reduce pro tanto or extinguish the
claim for breach of the Warranties.

6         Basis of damages

No party hereunder shall be liable to another under any circumstances for
punitive, indirect, or consequential damages, or for loss of profit or
opportunity.

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SCHEDULE 5

Completion

 

PART 1 - SELLER'S OBLIGATIONS

At Completion the Seller shall procure, with regard to TF, the delivery to the
Purchaser of:

(a)

Notarized English translation of an official document showing that 100% of
shares in PS is owned by TF.

    (b)

a duly executed deed of transfer in favour of the Purchaser or its nominee(s) of
all the Shares;

    (c)

the articles of association, certificate confirming the tax registration, the
board minutes and the shareholders’ register relating to the Shares;

    (d)

a board resolution of TF and Seller in which (i) the transfer referred to in
paragraph (a) above is approved, and (ii) the amendment of all mandates to
bankers terminating the authority of current TF/PS authorised persons and giving
authority to operate the bank accounts of TF/PS to persons nominated by the
Purchaser.

PART 2 - PURCHASER'S OBLIGATIONS

AT COMPLETION THE PURCHASER SHALL:

    (a)

pay USD 3,900,000, subject to any necessary downward adjustment in accordance
with this Agreement, being remaining part of Consideration together with
interest on such amount pursuant to the Agreement to the Seller; and

    (b)

deliver to the Seller a certified copy of an extract of the resolutions of the
board of directors (or a duly constituted committee of the board) of the
Purchaser authorising the execution of this Agreement and any other agreements
to be executed by the Purchaser at Completion.

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SCHEDULE 6

Insurance Policies

Insurance policies are attached:

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SCHEDULE 7

DEAL STRUCTURE

graphic1 [exhibit10-1x2x15x1.jpg]

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graphic2 [exhibit10-1x2x16x1.jpg]

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SCHEDULE 8

Interpretation

1.

In this Agreement:

   

Accounts means the audited financial statements for the period ending
30.09.2012;

   

Accounts Date means 30.09.2012;

   

Actions shall have meaning ascribed thereto in Recital F of this Agreement.

   

Affiliate means any company(ies) or legal entity(ies) that (i) controls either
directly or indirectly a party; or (ii) is controlled directly or indirectly by
a party; or (iii) is directly or indirectly controlled by a company or entity
that directly or indirectly control a party. ‘Control’ means the ownership
directly or indirectly of more than fifty percent (50%) of the voting rights in
a company or legal entity;

   

Appointment Day means the date on which the Independent Accountants confirms in
writing to the Purchaser and the Seller that it has accepted the instructions to
act pursuant to clause 6 of this Agreement;

   

Audit shall have meaning ascribed thereto in Recital C of this Agreement.

   

Business Day means a day (other than a Saturday or Sunday) on which banks are
generally open in Dushanbe for normal business;

   

Companies means TF and PS;

   

Completion means completion of the sale and purchase of the Shares in accordance
with this Agreement;

   

Completion Date means the date set forth in Article 3.2 of the Agreement;

   

Conditions Precedent means the conditions precedent to Completion set out in
Article 3.2;

   

Dangerous Substance means any natural or artificial substance likely to cause
harm to persons or any other living organism, or likely to cause damage to the
environment or public health or welfare.

   

Disclosure Letter means the letter of the same date as this Agreement from the
Seller to the Purchaser essentially confirming results of legal due diligence
and Audit arranged by the Purchaser;

   

Due Diligence shall have meaning ascribed thereto in Recital E of this
Agreement.

   

Economic Date means 31.12.2012;

   

Economic Date Accounts means the audited balance sheets as at the Economic Date
and audited profit and loss accounts of both TF and PS for the year ended on
that date;

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Encumbrance means any mortgage, charge (fixed or floating), pledge, lien,
option, right to acquire, assignment by way of security, trust arrangement for
the purpose of providing security or any other security interest of any kind,
including retention arrangements and any agreement to create any of the
foregoing;

Environmental Laws means all statutes, notifications, regulations, Guidelines
and binding court decisions applicable in Tajikistan concerning the protection
of human health or the environment or the generation, transportation, storage,
control of Waste and Pollutants, treatment or disposal of a Hazardous Waste,
Dangerous Substance and capable of enforcement by legal process in the
jurisdiction of operation of TF or PS;

Environmental Licence means any permit, licence, authorisation, consent or other
approval required under or in relation to any Environmental Law;

EPA shall have the meaning ascribed thereto in Recital A of this Agreement.

ESCROW shall have the meaning ascribed thereto in Article 3.1.6 of this
Agreement.

Excluded Records means all originals and copies of agreements, documents, books,
records, files, computer software and data reasonably considered by the Seller
to be proprietary to the Seller or a member of the Seller’s Group (other than
EPA-AT and TF) and accepted as such by the Purchaser.

GAAP means generally accepted accounting principles and practices of each
respective country;

Government means the Government of Tajikistan;

Group Loans means the outstanding loan capital or monies borrowed by TF or PS
from the Seller or a member of the Seller’s Group, by way of unsecured loans,
repayable on demand including, without limitation, any advances described in
Article 7.1(b);

Independent Accountants means such firm of chartered accountants as may be
appointed under the clause headed "Independent Accountants";

Interest means the working interest of PS in and under the LICENSING AGREEMENTs;

Interim Period means the period of time from the Economic Date to but excluding
Completion;

LIBOR means in relation to the amount and the currency of the sum in question,
the rate per annum at which a deposit for one month would have been offered by
the National Westminster Bank plc to prime banks in the London Interbank Market
at such bank’s request at or about 11.00 am (London time) on the first Business
Day of the period specified hereunder in respect of which interest is to be
calculated.

LICENSING AGREEMENTs shall have the meaning ascribed thereto in Recital B of
this Agreement.

Liquidated PS shall have the meaning ascribed thereto in Recital B of this
Agreement.

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Major Contract means a written contract to which TF, EPA, Liquidated PS or PS is
or was a party, including without limitation, service agreements with a member
of the Seller’s Group, in each case with a value in excess of USD 10,000 (or its
equivalent in foreign currency);

NEXT ADVANCE shall have the meaning ascribed thereto in Article 2.4 of this
Agreement.

Operator means the party designated as the Operator under the Licensing
Agreements;

OPTION shall have the meaning ascribed thereto in Recital C of this Agreement.

OPTION AGREEMENT shall have the meaning ascribed thereto in Recital C of this
Agreement.

Parties means the Seller or the Purchaser.

Purchaser’s Advance in respect of TF shall have the meaning ascribed thereto in
Recital D of this Agreement.

Purchaser's Group means the Purchaser and its Affiliates (other than TF or PS)
from time to time;

PS shall have the meaning ascribed thereto in Recital A of this Agreement.

Real Estate Properties shall have the meaning ascribed thereto in Article 3.1.3
of this Agreement. "Properties" and Property means any of them and includes
every part of each of them;

Seller’s Group means Seller, or EPA and any undertaking or company other than
the Companies that is, at the relevant time, directly or indirectly affiliated
with the two first mentioned companies or either of them;

For the purpose of this definition a particular company or undertaking is:

  (i)

directly affiliated with another company or companies if the latter beneficially
hold/holds shares carrying 50% (fifty percent) or more of the votes exercisable
at a general meeting of shareholders (or its equivalent) of the particular
company; and

        (ii)

indirectly affiliated with a company or companies (in this definition referred
to as "the parent company or companies") if a series of companies can be
specified, beginning with the parent company or companies and ending with the
particular company, so related that each company of the series, except the
parent company or companies, is directly affiliated with one or more companies
earlier in the series.

Security Deposit shall have the meaning ascribed thereto in Recital C of this
Agreement.

Shares shall have the meaning ascribed thereto in Recital C of this Agreement;

SHA shall have the meaning ascribed thereto in clause 5.4 of this Agreement;

SNG shall have the meaning ascribed thereto in Recital A of this Agreement;

19

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Taxation means all forms of taxes, duties, imposts, octrois and levies, whether
of Tajikistan, the UAE, Switzerland or elsewhere, including income tax
(including income tax or amounts equivalent to or in respect of income tax
required to be deducted or withheld from or accounted for in respect of any
payment), corporation tax, advance corporation tax, sales tax, petroleum income
tax, value added tax, specific business tax, royalties, house and land tax,
local development tax, customs and other import or export duties, excise duties,
stamp duty, social security or other similar contributions, and any interest,
penalty, surcharge or fine relating thereto, including a payment which TF or PS
is liable to make as a result of having claimed a credit in relation to any
Taxation in excess of the amount properly claimable, and, in a case where
Taxation for which TF or PS is liable is discharged by another person, the
amount corresponding to that Taxation for which TF or PS is, after that
discharge, liable;

TF shall have the meaning ascribed thereto in Recital D of this Agreement;

Third Party Claim shall have the meaning ascribed thereto in Schedule 4, clause
2.1 of this Agreement;

USD or $ means United States Dollars;

Vivalo shall have the meaning ascribed thereto in Recital B of this Agreement;

Warranties means the warranties on the part of the Seller contained in the
clause headed "The Seller's Warranties";

Warranty Claim means any claim by the Purchaser arising out of or in connection
with this Agreement, including for any breach or alleged breach of any of the
Warranties; and

Where any statement in the Schedule 3 or in the Disclosure Letter is qualified
by the expression "so far as the Seller is aware" or "to the best of the
Seller's knowledge, information and belief" or any similar expression, that
statement shall be deemed to be made only on the actual knowledge of the Seller
after due diligent and careful enquiry of the following individuals: Khurshed
Nozimov

In this Agreement any reference, express or implied, to an enactment (which
includes any legislation in any jurisdiction) includes references to:

that enactment as amended, extended or applied by or under any other enactment
(before or after signature of this agreement);

In this Agreement:

  (a)

words denoting persons shall include bodies corporate and unincorporated
associations of persons;

        (b)

references to an individual/a natural person include his estate and personal
representatives;

        (c)

subject to the Article headed "Assignments", references to a party are to a
party to this Agreement and include references to the successors or assigns
(immediate or otherwise) of that party; and

        (d)

references to time are to London time.

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SIGNATORIES

Seller                 Signed by )   KAVSAR GENERAL TRADING FZE ) /s/ Nozimov
K.H.                   DWM PETROLEUM AG           Signed by )   for ) /s/ Dr.
Werner Ladwein

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ANNEXURE 1 – OPTION AGREEMENT

1

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Effective May 5, 2012

 

 

OPTION AGREEMENT

BETWEEN

KAVSAR GENERAL TRADING FZE

and

DWM PETROLEUM AG

 

 

 

Relating to the Option for the sale and purchase of
80% of the issued share capital
of a Company that would hold 100% shares in Petroleum Sugd

2

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THIS OPTION AGREEMENT(“Option Agreement”) is made effective as of May 5, 2012

BETWEEN:

(1)

KAVSAR GENERAL TRADING FZE a company organised under the laws of The UAE whose
registered office is at Hamriyah Free Zone, P.O. Box No 51393, Sharjah, UAE (the
“Kavsar”); and

    (2)

DWM PETROLEUM AG, a company registered in Switzerland, having its registered
office at Bahnofstrasse 9, Baar, Switzerland (referred to herein as the “DWM”).

   

BACKGROUND:

  A.

Kavsar owns 100% of the issued share capital of Energy Partners Austria GmbH, a
company registered in Austria (hereinafter “EPA-AT”).

        B.

EPA-AT is the legal and beneficial owner of 57.42% shares in Petroleum Sugd, a
joint venture with limited liability incorporated under the laws of Tajikistan
(hereinafter “PS-2”), and the remaining 42.58% shares in PS-2 are held by
Sugdneftugas, state oil company of Tajikistan (hereinafter “SNG”).

        C.

A Tajik joint venture with limited liability also known as Petroleum Sugd which
is already liquidated (hereinafter “PS-1”), is legal owner of rights in
production licences for the fields identified in the Schedule A hereof
(hereinafter “Licenses”), and, Seller, EP-AT and PS-2 are taking necessary steps
to ensure that Licences are formally registered under the name of PS-2.

        D.

DWM desires to purchase 80% shares in a Swiss company that owns 100% shares in
PS-2, and has therefore requested Kavsar to purchase remaining shares of SNG in
such a manner that PS-2 is owned 100% by a new company.

        E.

Kavsar is willing to incorporate a new company in Switzerland (hereinafter
“Newco”) and take actions necessary for transferring 100% shares of PS-2 in
NewCo.

        F.

Kavsar is also willing to give DWM an option to purchase 80% shares in NewCo
which would own 100% shares in PS-2.

        G.

Kavsar is also willing to allow DWM to conduct legal due diligence and audit of
EPA-AT, PS-1 and PS-2, respectively, to facilitate DWM’s decision regarding
exercise of such option.

       

NOW THEREFORE, KAVSAR AND DWM AGREE as follows:

  1.

Kavsar and DWM shall take following actions:

          a.

Kavsar shall incorporate NewCo in Switzerland.

          b.

DWM shall pay to Kavsar, a refundable security deposit of USD 10 million
(“Security Deposit”), via wire transfer in Kavsar’s bank account, in three (3)
instalments on or before following dates, for an option to purchase 80% shares
in Newco (“Option”):

  i.

US$ 5 million on or before May 31, 2012

        ii.

US$ 2 million on or before July 15, 2012.

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  iii.

US$ 3 million on or before August 24, 2012

  c.

DWM shall engage a reputable local law firm to conduct legal due diligence
(hereinafter “Due Diligence”) regarding EPA-AT, PS-1 and PS-2.

        d.

Once Due Diligence is completed, DWM shall engage reputable international
accounting firm to conduct an independent audit (hereinafter “Audit”) of all
books and accounts of EPA-AT, PS-1 and PS-2 to follow-up on the concerns raised
in the Due Diligence.

        e.

DWM may exercise the Option, within one (1) month of the completion of Audit.

        f.

If DWM exercises the Option, Kavsar and DWM shall negotiate a Share Purchase
Agreement (hereinafter “SPA”) pursuant to which Kavsar shall sell and DWM shall
purchase 80% shares in NewCo, for a purchase price to be agreed between Kavsar
and DWM based on the findings of the Audit (hereinafter “Purchase Price”). Once
the SPA is signed, Security Deposit shall be construed as the first payment made
under the SPA, and the remaining payment shall be due within thirty (30) days
thereafter.

        g.

In case, DWM does not exercise the Option following completion of the Audit, DWM
shall request Kavsar in writing within one (1) month of the completion of the
Audit, to return Security Deposit to DWM, and Kavsar shall refund Security
Deposit via wire transfer in DWM’s bank account on or before December 31, 2012.

  2.

Once SPA is signed, in accordance with the SPA, Kavsar and DWM shall take
following actions:

  a.

Kavsar shall seek requisite approvals of the Government for following actions:

  i.

To transfer EPA’s entire shares in PS-2 (i.e. 57.42%), to NewCo.

        ii.

To purchase remaining 42.58% shares in PS-2 from SNG and thereafter transfer
such shares to NewCo.

  b.

Kavsar shall notify DWM as soon as the requisite approvals of the Government
stipulated in para 2 a i are obtained.

        c.

Kavsar shall transfer EPA’s entire shares in PS-2 (i.e.57.42%), to NewCo.

        d.

Within ten (10) days of Kavsar’s transfer of EPA’s entire shares in PS-2 (i.e.
57.42%), to NewCo, Kavsar and DWM shall take following simultaneous actions:

  i.

DWM shall make a payment of Purchase Price minus Security Deposit minus US$ 1
million

        ii.

Kavsar shall place 80% shares of NewCo in escrow with an escrow agent to be
mutually agreed.

  e.

Kavsar shall purchase remaining 42.58% shares in PS-2 from SNG and thereafter
transfer such shares to NewCo.

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  f.

Kavsar and DWM shall close the transaction envisaged under the SPA, which shall
inter alia include following simultaneous actions:

  i.

payment by DWM to Kavsar of Purchase Price minus payments already made i.e. US$
1 million, and

        ii.

transfer by the escrow agent to DWM of 80% of shares in NewCo.

  3.

Unless required by applicable laws or securities regulations, neither Kavsar nor
DWM shall make the existence or contents of this Option Agreement public.

        4.

This Option Agreement shall be governed by the laws of England & Wales, and any
dispute if not resolved amicably shall be resolved via international arbitration
under the arbitration rules of the International Chamber of Commerce. Venue of
arbitration shall be Vienna, Austria.

IN WITNESS WHEREOF this Option Agreement has been signed by the parties (or
their duly authorised representatives) effective as of May 5, 2012

KAVSAR GENERAL TRADING FZE DWM PETROLEUM AG     /s/ K.h. Nozimov /s/ Dr. Werner
Ladwein Name: K.h. Nozimov Name: Dr Werner Ladwein Title: Title: President

5

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SCHEDULE A

PS-2 owns 100% interests in several producing oilfields and acreage under
application onshore Tajikistan and related assets, including following existing
oil fields:

  1.

“Ayritan”;

  2.

“Kanibadam”and“NorthernKanibadam”;

  3.

“Makhram”;

  4.

“Ravat”;

  5.

“Madaniyat”

  6.

“Niyazbek”;

  7.

“Sel-rokhi”;

  8.

“Obi-Shifo”.

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ANNEXURE 3 – PURCHASER’S NOTICE FOR EXERCISE OF OPTION

1

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(printed on DWM letterhead)

Kavsar General Trading FZE   Hamriyah Free Trade Zone   P.O. Box No 51393 Baar,
October 23, 2012 Sharjah, UAE  

Attention: Mr. Khurshed Nozimov, General Manager    

Subject:

Notice for exercise of Option under the Option Agreement effective May 5, 2012
relating to the option for the sale and purchase of 80% of the issued share
capital of a Swiss company that would hold 100% shares in Petroleum Sugd, a
Tajik company (hereinafter “Option Agreement”).

Dear Mr. Kh.Nozimov,

Pursuant to Article 1 e of the Option Agreement, DWM Petroleum AG (“DWM”) is
pleased to exercise the Option (as defined in the Option Agreement), subject to
Kavsar taking certain actions as described in detail in Schedule A hereof
(hereinafter “Actions”), to bring Licences (as defined in the Option Agreement)
and related agreements in order.

Kindly let us know if you have any questions regarding the above notice.

Sincerely yours,

Dr. Werner Ladwein
President

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SCHEDULE A

Actions to be taken by Kavsar to re-issue all documents related to Licences
under the name of existing Petroleum Sugd (PS) from the name of the liquidated
company with the same name)

Now that all Licences have been re-issued under the name of Petroleum Sugd
(“PS”), Kavsar must also ensure that all documents related to the Licences are
re-issued under the name of PS. In particular following documents have to be
re-issued under the name of PS:

1)

Allotments (mining lease);

2)

Certificate of land usage;

3)

Ecological expertise; and

4)

Contract (for subsoil use) with the Government setting royalty and bonuses
rates.

These requirements are also stipulated in Appendix to the new Licenses (Section
“Content of Licenses”).

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