[NAGP Letterhead]

PLACEMENT AGENT AGREEMENT

 

___________________, 2012

 

__________________________

To be referred to hereafter as the “Placement Agent”

Attn: _______________, President

Address: _____________________________

 _____________________________

 

Dear Sir or Madam:

 

Native American Energy Group, Inc., a Delaware corporation (the “Company”)
proposes to offer, issue and sell in a private offering up to $5,000,000 of
Units comprised of (i) one share of Series B Callable Preferred Stock, par value
$0.0001 per share, and (ii) one share of Common Stock, par value $0.001 per
share at a price of $1.00 per Unit, and with a minimum investment of 25,000
Units (the “Offering”) to accredited investors only. The Placement Agent hereby
confirms its agreement with the Company whereby the Placement Agent will act as
a non-exclusive Placement Agent for the Offering on a best efforts basis and in
accordance with the basic terms and conditions set forth herein (the
“Agreement”). The Company and the Placement Agent may be referred to herein each
individually as a “Party” and collectively as the “Parties.”

 

1.Private Placement

 

The Offering will be made pursuant to Regulation D under the Securities Act of
1933, as amended (the “Securities Act”). The Offering will be made solely
through the use of the Private Placement Memorandum prepared for the Offering
(the “Memorandum”).

 

2.Appointment as Non-Exclusive Placement Agent

 

The Company hereby appoints the Placement Agent as a non-exclusive Placement
Agent for the Offering. The Company’s management will also be making offers and
sales of the Units and such sales will not be subject to the Placement Agent Fee
(as defined below). The Company may also engage other broker/dealers registered
with the United States Securities and Exchange Commission (the “SEC”) which are
members of the Financial Industry Regulatory Authority (“FINRA”) to make offers
and sales of the Units on the Company’s behalf and may pay such other placement
agents compensation solely within the Company’s exclusive discretion.

 

3.Procedure of Identifying Investors

 

Placement Agent will identify and introduce institutional and other accredited
investors (collectively, “Accredited Investors”) to the Company. Only Accredited
Investors will be permitted to purchase the Units.

 

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4.Information Available

 

It is understood and agreed between the Company and Placement Agent that all
documents and other information relating to the Company’s affairs will be made
available upon request to Placement Agent and its counsel, and copies of any
such documents will be furnished upon request to Placement Agent or its counsel.
The Company’s SEC filings, including its Annual Report on Form 10-K for the year
ended December 31, 2011, are available on the SEC’s website (www.sec.gov).

 

5.Certain Representations by the Company

 

The Company will not utilize any nonlicensed or nonregistered finder in
connection with the Offering. The Company will indemnify Placement Agent with
respect to any claim for finder’s or similar fees in connection with the
Offering.

 

6.Proceedings

 

Placement Agent and the Company will advise each other immediately and confirm
in writing the receipt of any threat of or the initiation of any steps or
proceedings which would impair or prevent the right to offer the Units, or the
issuance of any orders or other prohibitions preventing or impairing the
proposed offering by the SEC or any other regulatory authority. In the case of
the happening of any such event, the Company will not acquiesce to such steps,
proceedings or suspension orders, but will actively defend any such actions or
orders unless the Company determines in good faith after consultation with
Placement Agent to acquiesce to such actions or orders.

 

7.Compensation

 

The Company will pay to Placement Agent a percentage of the total gross proceeds
raised in the Offering as a fee for its services under this agreement, payable
in cash within five business days of each closing of the Offering which contains
proceeds raised by the Placement Agent:

 

Sales Commission   10% Non-accountable Expense Allowance   3%

 

In addition, the Company will issue to the Placement Agent a five-year warrant
(the “Warrant”) to purchase that certain number of shares of Common Stock of the
Company equal to 10% of the Units sold in the Offering by the Placement Agent at
an exercise price of $1.00 per share. The number of shares of common stock
covered by the Warrant shall be subject to standard and customary adjustments to
be more fully set forth in the Warrant.

 

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8.Expenses

 

The Company shall bear all costs and expenses incident to the issuance, offer,
sale and delivery of the Units. However, any expenses over $500 must be
pre-approved in writing by the Company.

 

9.Securities Filings

 

The Company’s legal counsel shall make all filings and/or notices necessary to
comply with all securities law requirements for the Offering. Placement Agent
shall provide written notice to the Company as to the states in which Placement
Agent proposes to offer the Units for sale on behalf of the Company; and the
Company’s counsel shall provide written notice to Placement Agent’s counsel
confirming those states in which a notice of the sale of Units has been filed.

 

10.Conflict with the Law

 

It is understood that if any provision of this Agreement conflicts with the
Securities Act, any rule or regulation under such Securities Act, the blue sky
laws of any state in which the proposed offering is to be qualified, FINRA rules
or regulations, or the rules, regulations, or laws of any other governmental
authority, either federal or state, possessing jurisdiction over the sale and
issuance of the Units, the Company and the Placement Agent shall amend this
Agreement to comply with the applicable requirements.

 

11.Accurate Information

 

The Company represents and warrants to the Placement Agent that the Memorandum
contains all material information concerning the Company and its business,
affairs, prospects and financial condition, and that all written information
provided to the Placement Agent with respect to the business, affairs, prospects
and financial condition of the Company for use in connection with the Offering
shall be true, correct and complete in all material respects.

 

12.Due Diligence Investigation

 

a.          The Company shall supply and deliver to Placement Agent or its legal
counsel at their offices, within a reasonable period of time, all information
required to enable them to make a due diligence investigation of the Company and
its business prospects as they shall reasonably request and shall make available
to them such persons as they deem necessary or appropriate in order to verify or
substantiate any information regarding the Company.

 

b.          It is expressly understood and agreed that Placement Agent will be
undertaking a thorough review of all of the Company’s practices and in the event
that these do not meet with the approval of Placement Agent, Placement Agent may
terminate its engagement as non-exclusive Placement Agent for the Offering.

 

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13.New Releases and Publicity

 

Prior to the completion or termination of the Offering, no news release or other
publicity about the Company with respect to this Offering will be permitted
without approval of the Company’s legal counsel and of the Placement Agent and
its legal counsel. However, the foregoing shall not prohibit discussions,
releases or other publicity which is in the Company’s normal course of business
or as required by law.

 

14.Indemnification

 

Each Party (the “Indemnifying Party”) agrees to indemnify, defend, and hold
harmless the other Party (the “Indemnified Party”) from and against any and all
claims, damages, and liabilities, including any and all expense and costs, legal
or otherwise, arising out of the act or omission of the Indemnifying Party, its
subcontractors, agents, or employees, incurred by the Indemnified Party in the
investigation and defense of any claim, demand, or action arising out of the
services performed under this Agreement; including breach of the Indemnifying
Party of this Agreement. The Indemnifying Party shall not be liable for any
claims, damages, or liabilities caused by the sole negligence of the Indemnified
Party, its subcontractors, agents, or employees.

 

The Indemnified Party shall notify promptly the Indemnifying Party of the
existence of any claim, demand, or other matter to which the Indemnifying
Party’s indemnification obligations would apply, and shall give them a
reasonable opportunity to settle or defend the same at their own expense and
with counsel of their own selection, provided that the Indemnified Party shall
at all times also have the right to fully participate in the defense. If the
Indemnifying Party, within a reasonable time after this notice, fails to take
appropriate steps to settle or defend the claim, demand, or the matter, the
Indemnified Party shall, upon written notice, have the right, but not the
obligation, to undertake such settlement or defense and to compromise or settle
the claim, demand, or other matter on behalf, for the account, and at the risk,
of the Indemnifying Party.

 

The rights and obligations of the Parties under this section shall be binding
upon and inure to the benefit of any successors, assigns, and heirs of the
Parties.

 

15.Representations and Warranties of the Placement Agent.

 

Placement Agent hereby represents and warrants to the Company that:

 

a.          The Placement Agent is duly registered pursuant to the provisions of
the Securities Exchange Act of 1934 as a dealer and is duly registered as a
broker-dealer in those states where required and the Placement Agent agrees to
comply with all statutes and other requirements applicable to the Placement
Agent as a broker-dealer pursuant to those registrations and is legally
authorized under all applicable laws to engage in the activities contemplated
hereby and receive compensation therefor as herein contemplated.

 

b.          The Placement Agent is a member in good standing of FINRA.

 

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c.            This Agreement, when accepted and approved by the Placement Agent,
will be duly authorized, executed and delivered by the Placement Agent and is a
valid and binding agreement on the Placement Agent’s part.

 

16.Covenants of the Placement Agent.

 

The Placement Agent hereby agrees to the following covenants:

 

a.            The Placement Agent will not use any documents to solicit
investors in the Offering other than the Memorandum.

 

b.            The Placement Agent will contact only potential investors with
whom it has a pre-existing, substantive relationship and whom the Placement
Agent believes are accredited investors as that term in defined in Regulation D
of the Securities Act.

 

c.            No later than noon of the next business day after receipt of any
Subscription Agreement, the Placement Agent shall forward such Subscription
Agreement and any funds received to the Escrow Agent listed in the Subscription
Agreement.

 

17.Term and Termination

 

a.            The length of the term of services to be provided by the Placement
Agent shall be the term of the Offering.

 

b.            This Agreement may be terminated by either the Company or the
Placement Agent for cause. For purposes of this Agreement, the term “cause”
shall include, but not be limited to, the following: a material breach of or
failure to perform any covenant or obligation in this Agreement, dishonesty,
neglect of duties, unprofessional conduct, acts of moral turpitude,
disappearance, felonious conduct, or fraud. Either Party may terminate this
Agreement for cause by giving written notice of termination to the other Party.
The notice of termination required by this section shall specify the ground for
termination and shall be supported by a statement of all relevant facts. Upon
such termination, the Placement Agent shall continue to have the right to
receive compensation hereunder for Units sold by the Placement Agent, for which
the Placement Agent has not yet been compensated, and all other compensation as
set forth in this Agreement.

 

c.            This Agreement may be terminated by the Placement Agent if any of
the following conditions occur:

 

i.          The Placement Agent shall not be reasonably satisfied with the
Company’s business affairs, contractual regulations, its pending and threatened
litigation and other matters affecting the Company’s prospects.

 

ii.         The Company shall have sustained a substantial loss by fire, flood,
accident or other calamity, whether or not covered by insurance.

 

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iii.        There shall have been any important and material adverse change in
market levels, or political, financial or economic conditions or other
circumstances, which, in the Placement Agent’s sole judgment, render it
undesirable, impractical or inadvisable to proceed with the Offering.

 

iv.       There shall have been a major catastrophe, national calamity, natural
disaster, or other event which, in the Placement Agent’s sole opinion, would
materially adversely disrupt the financial markets.

 

v.        The Placement Agent shall not be satisfied with the Company’s
financial condition and operating results.

 

vi.       Appropriate documents relating to the Offering shall not have been
reviewed and approved by mutual consent.

 

vii.      The matters referred to in this section shall not have been approved
by the Placement Agent counsel.

 

Upon such termination under this Section, the Placement Agent shall continue to
have the right to receive compensation hereunder for services provided by the
Placement Agent, for which the Placement Agent has not yet been compensated, and
all other compensation as set forth in this Agreement.

 

d.            Termination of the Offering shall automatically cause the
termination of this Agreement. Upon such termination, the Placement Agent shall
continue to have the right to receive compensation hereunder for services
provided by the Placement Agent for which the Placement Agent has not yet been
compensated, and all other compensation as set forth in this Agreement.

 

e.            Both parties may terminate this Agreement with mutual consent.
Upon such termination, Placement Agent shall continue to have the right to
receive compensation hereunder for services provided by Placement Agent, for
which Placement Agent has not yet been compensated, and all other compensation
as set forth in this Agreement.

 

18.Representations and Indemnities to Survive Delivery

 

The indemnities, agreements, representations, warranties, and other statements
set forth in or made in writing pursuant to this Agreement will remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company, or any controlling person and will survive delivery of and payment for
the Units, and the Company, or any controlling person, as the case may be, shall
be entitled to the benefit of the indemnity agreements.

 

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19.Governing Law

 

This Agreement and the rights of the Parties hereunder shall be governed by and
construed in accordance with the laws of the State of California including all
matters of construction, validity, performance, and enforcement and without
giving effect to the principles of conflict of laws.

 

20.Exclusive Jurisdiction and Venue

 

The Parties agree that the Federal and California State courts sitting in the
County of Orange, State of California shall have sole and exclusive jurisdiction
and venue for the resolution of all disputes arising under the terms of this
Agreement and the transactions contemplated herein.

 

21.Notices

 

Any notice, request, instruction, or other document required by the terms of
this Agreement, or deemed by any of the Parties hereto to be desirable, to be
given to any other Party hereto shall be in writing and shall be given by
personal delivery, overnight delivery, mailed by registered or certified mail,
postage prepaid, with return receipt requested, or sent by facsimile
transmission to the addresses of the Parties as follows:

 

i. To:          “Placement Agent” At the address set forth next to the    
Placement Agent’s signature below       ii. To:          “Company” Native
American Energy Group, Inc.     108-18 Queens Blvd. Suite 901     Forest Hills,
NY 11375     Phone: (718) 408-2323     Fax: (718) 793-4034     Attn: Raj S.
Nanvaan       iii. With Copy To: Oswald & Yap     16148 Sand Canyon Avenue    
Irvine, CA  92618     Fax: (949) 788-8980     Attn: Lynne Bolduc, Esq.

 

The persons and addresses set forth above may be changed from time to time by a
notice sent as aforesaid. If notice is given by personal delivery or overnight
delivery in accordance with the provisions of this Section, such notice shall be
conclusively deemed given at the time of such delivery provided a receipt is
obtained from the recipient. If notice is given by mail in accordance with the
provisions of this Section, such notice shall be conclusively deemed given upon
receipt and delivery or refusal. If notice is given by facsimile transmission in
accordance with the provisions of this Section, such notice shall be
conclusively deemed given at the time of delivery if during business hours and
if not during business hours, at the next business day after delivery, provided
a confirmation is obtained by the sender.

 

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22.Modifications and Waivers

 

No modification or waiver of any term hereof shall be effective unless in
writing, signed by the Party to be charged.

 

23.Counterparts; Facsimile Signatures

 

This Agreement may be executed in several counterparts and it shall not be
necessary for each party to execute each of such counterparts, but when all of
the parties have executed and delivered one of such counterparts, the
counterparts, when taken together, shall be deemed to constitute one and the
same instrument, enforceable against each party in accordance with its terms.
The parties hereto agree that this Agreement may be executed by facsimile
signatures and such signatures shall be deemed originals.

 

24.Attorneys’ Fees

 

In the event any Party hereto shall commence legal proceedings against the other
to enforce the terms hereof, or to declare rights hereunder, as the result of a
breach of any covenant or condition of this Agreement, the prevailing Party in
any such proceeding shall be entitled to recover from the losing Party its costs
of suit, including reasonable attorneys’ fees, as may be fixed by the court.

 

25.          Assignability. This agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs and successors, but
any assignment of this Agreement without the express written consent of all
Parties hereto shall be void.

 

[Signature Page Follows]

 

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If the foregoing is in accordance with the Placement Agent’s understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement between us in accordance with its
terms.

 

Sincerely,       NATIVE AMERICAN ENERGY GROUP, INC., a Delaware corporation    
      By: Joseph G. D’Arrigo   Its: President, Chief Executive Officer and
Chairman

 

BROKER/DEALER NAME:    

BROKER/DEALER TAX I.D. NO.:    

 

    BY:     ITS:    

        Address:           Phone:     Fax:     Attn:     E-mail address:    

 

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