AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

      AMENDED AND RESTATED  REGISTRATION  RIGHTS  AGREEMENT (this  "Agreement"),
dated as of January __, 2006, by and among  NATURAL GAS SYSTEMS,  INC., a Nevada
corporation (the "Company"),  and Rubicon Master Fund, a company organized under
the laws of the Cayman Islands (the "Buyer").

      WHEREAS:

      A. Pursuant to a Securities Purchase  Agreement,  by and among the parties
hereto  (the  "Original  Securities  Purchase  Agreement"),  on May 6,  2005 the
Company issued and sold to the Buyer 1.2 million shares of common stock,  $0.001
par value (the "Common  Stock"),  of the Company  (collectively,  the  "Original
Securities").

      B. Concurrently with the Buyer's purchase of the Original Securities,  the
Buyer and the Company entered into a Registration Rights Agreement,  dated as of
May 6, 2005 (the "Original Registration Rights Agreement"),  whereby the Company
agreed to provide certain  registration rights under the Securities Act of 1933,
as amended, and the rules and regulations  thereunder,  or any similar successor
statute (collectively, the "1933 Act"), and applicable state securities laws.

      C. In connection with the Securities Purchase  Agreement,  dated as of the
date hereof,  by and among the parties hereto (the "Second  Securities  Purchase
Agreement",  and together with the Original Securities  Purchase Agreement,  the
"Securities  Purchase  Agreements"),  the Company has agreed, upon the terms and
subject to the conditions set forth in the Second Securities Purchase Agreement,
to issue and sell to the Buyer One Hundred and Sixty Thousand  (160,000)  shares
of Common  Stock of the  Company  (collectively,  the "Second  Securities",  and
together with the Original Securities, the "Securities").

      D. As a condition to the consummation of the transactions  contemplated by
the Second Securities Purchase Agreement,  the Company and the Buyer have agreed
to amend and restate in its entirety the Original  Registration Rights Agreement
as set forth herein.

      NOW, THEREFORE,  in consideration of the premises and the mutual covenants
contained  herein and other good and  valuable  consideration,  the  receipt and
sufficiency of which are hereby  acknowledged,  the Company and the Buyer hereby
agree as follows:

      1. Definitions.

      Capitalized  terms used herein and not otherwise defined herein shall have
the respective  meanings set forth in the Second Securities  Purchase Agreement.
As used in  this  Agreement,  the  following  terms  shall  have  the  following
meanings:

            a. "Business  Day" means any day other than Saturday,  Sunday or any
other day on which  commercial  banks in The City of New York are  authorized or
required by law to remain closed.

<PAGE>

            b.  "Closing  Date"  shall have the  meaning set forth in the Second
Securities Purchase Agreement.

            c. "Effective  Date" means the date the  Registration  Statement has
been declared effective by the SEC.

            d. "Effectiveness Deadline" means the date which is (i) in the event
that the  Registration  Statement  is not  subject  to a review by the SEC,  120
calendar days after the Closing Date or (ii) in the event that the  Registration
Statement is subject to a review by the SEC, 210 calendar days after the Closing
Date.

            e. "Filing Deadline" means 60 calendar days after the Closing Date.

            f. "Investor"  means the Buyer or any transferee or assignee thereof
to whom the Buyer  assigns  its rights  under this  Agreement  and who agrees to
become bound by the  provisions of this  Agreement in accordance  with Section 9
and any transferee or assignee  thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9.

            g. "Person"  means an individual,  a limited  liability  company,  a
partnership,  a  joint  venture,  a  corporation,  a  trust,  an  unincorporated
organization and a government or any department or agency thereof.

            h.  "register,"   "registered,"  and   "registration"   refer  to  a
registration   effected  by  preparing  and  filing  one  or  more  Registration
Statements  (as defined  below) in compliance  with the 1933 Act and pursuant to
Rule 415 and the declaration or ordering of effectiveness  of such  Registration
Statement(s) by the SEC.

            i. "Registrable  Securities" means the Securities and, to the extent
allowable  under the 1933 Act and the rules  promulgated  thereunder  (including
Rule 416),  any share capital of the Company  issued or issuable with respect to
the Securities as a result of any split, dividend, recapitalization, exchange or
similar event or otherwise.

            j.  "Registration  Statement"  means  a  registration  statement  or
registration  statements  of the Company  filed under the 1933 Act  covering the
Registrable Securities.

            k.  "Required  Holders"  means the holders of at least a majority of
the Registrable Securities.

            l.  "Required   Registration   Amount"  means  100%  of  the  number
Registrable Securities.

            m. "Rule  415"  means  Rule 415 under the 1933 Act or any  successor
rule providing for offering securities on a continuous or delayed basis.

            n. "SEC" means the United States Securities and Exchange Commission.



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<PAGE>

      2. Registration.

            a. Mandatory  Registration.  The Company has previously prepared and
filed with the SEC a Registration Statement on Form SB-2 covering the resale of,
among other  shares,  all of the  Registrable  Securities  acquired by the Buyer
pursuant  to the  Original  Securities  Purchase  Agreement.  Such  Registration
Statement is being reviewed by the SEC and has not yet been declared  effective.
The Company agrees to prepare and, as soon as practicable  but in no event later
than the Filing  Deadline  file with the SEC, an amendment  to the  Registration
Statement such that the  Registration  Statement also cover the resale of all of
the Registrable  Securities.  The Registration  Statement ,as so amended,  shall
register  for resale at least the number of shares of Common  Stock equal to the
Required  Registration  Amount as of date such amendment is initially filed with
the SEC. The  Registration  Statement,  as so amended,  shall contain (except if
otherwise   reasonably   directed  by  the   Required   Holders)   the  "Selling
Stockholders"  and "Plan of  Distribution"  sections in  substantially  the form
attached  hereto as Exhibit B. The  Company  shall use  commercially  reasonable
efforts to have the Registration  Statement, as so amended declared effective by
the SEC as soon as  practicable,  but in no event  later than the  Effectiveness
Deadline.

            b.  Allocation  of  Registrable  Securities.  The initial  number of
Registrable  Securities included in any Registration  Statement and any increase
in the number of Registrable  Securities included therein shall be allocated pro
rata among the Investors  based on the number of Registrable  Securities held by
each  Investor at the time the  Registration  Statement  covering  such  initial
number of Registrable  Securities or increase  thereof is declared  effective by
the SEC. In the event that an Investor sells or otherwise  transfers any of such
Investor's Registrable Securities, each transferee shall be allocated a pro rata
portion of the then remaining number of Registrable  Securities included in such
Registration Statement for such transferor.  Any Shares of Common Stock included
in a  Registration  Statement  and which  remain  allocated  to any Person which
ceases to hold any Registrable Securities covered by such Registration Statement
shall be allocated to the remaining  Investors,  pro rata based on the number of
Registrable  Securities  then held by such  Investors  which are covered by such
Registration  Statement.  The Company shall have the right to include securities
other than Registrable  Securities on the Registration Statement in its sole and
absolute discretion, including shares held by other investors and primary shares
being offered by the Company.

            c. Legal Counsel.  Subject to Section 5 hereof, the Required Holders
shall  have the right to select one legal  counsel  to review  any  registration
pursuant to this  Section 2 ("Legal  Counsel"),  which  shall be Schulte  Roth &
Zabel  LLP or such  other  counsel  as  thereafter  designated  by the  Required
Holders.  The Company and Legal Counsel  shall  reasonably  cooperate  with each
other in performing the Company's obligations under this Agreement.

            d.  Ineligibility  for Form S-3. The Company  undertakes to register
the  Registrable  Securities  on Form  S-3 as soon  as such  form is  available,
provided  that,  subject to the last sentence of Section 3(a), the Company shall
maintain the  effectiveness of the  Registration  Statement then in effect until
such time as a  Registration  Statement  on Form S-3  covering  the  Registrable
Securities  has been declared  effective by the SEC. The  Investors  acknowledge
that Form S-3 is not currently available to the Company and that accordingly the
Registration Statement will be filed on a Form SB-2.



                                       3
<PAGE>

            e. Sufficient Number of Shares  Registered.  In the event the number
of shares  available  under a Registration  Statement  filed pursuant to Section
2(a) is insufficient to cover all of the Registrable  Securities  required to be
covered by such Registration Statement or an Investor's allocated portion of the
Registrable  Securities  pursuant to Section  2(b),  the Company shall amend the
applicable  Registration Statement, or file a new Registration Statement (on the
short form available therefor, if applicable),  or both, so as to cover at least
the Required Registration Amount as of the trading day immediately preceding the
date of the filing of such  amendment  or new  Registration  Statement,  in each
case, as soon as practicable,  but in any event not later than fifteen (15) days
after  the  necessity  therefor  arises.  The  Company  shall  use  commercially
reasonable efforts to cause such amendment and/or new Registration  Statement to
become  effective  as soon as  practicable  following  the filing  thereof.  For
purposes of the  foregoing  provision,  the number of shares  available  under a
Registration  Statement  shall  be  deemed  "insufficient  to  cover  all of the
Registrable  Securities"  if at any time the  number of  shares of Common  Stock
available for resale under the  Registration  Statement is less than the product
determined by multiplying (i) the Required  Registration  Amount as of such time
by (ii) 0.90.

            f. Effect of Failure to File or Obtain and Maintain Effectiveness of
the Registration Statement or Other Breach. If the Company shall breach any term
or condition of this Agreement, including but not limited to (i) an amendment to
the Registration  Statement covering all of the Registrable  Securities required
to be covered  thereby and required to be filed by the Company  pursuant to this
Agreement  (A) not being filed with the SEC on or before the Filing  Deadline (a
"Filing  Failure") or (B) not being  declared  effective by the SEC on or before
the Effectiveness Deadline (an "Effectiveness Failure") or (ii) on any day after
the Effective  Date sales of all of the  Registrable  Securities  required to be
included  on such  Registration  Statement  cannot be made (other than during an
Allowable   Grace  Period  (as  defined  in  Section  3(r))   pursuant  to  such
Registration Statement (including,  without limitation,  because of a failure to
keep such Registration  Statement effective,  to disclose such information as is
necessary  for sales to be made  pursuant  to such  Registration  Statement,  to
register  a  sufficient  number of shares of  Common  Stock or to  maintain  the
listing of the Common Stock) (a "Maintenance  Failure"),  then Buyer agrees that
its sole and exclusive remedy for such breach shall be to seek equitable relief,
and that in no event will Buyer be entitled to monetary  damages  (regardless of
whether it is able to obtain such specific performance); provided, however, that
with respect to any such future breach referenced above, the foregoing  sentence
limiting the Buyer's  sole and  exclusive  remedy to equitable  relief shall not
apply in the event of the Company's  willful,  intentional and deliberate breach
of Sections 2(a), 2(d) or 2(e) hereof.

            g.  General  Release.  Except as  provided  in this  Agreement  with
reference to the Registrable Securities, it is the intention of the parties that
by  entering  into this  Agreement,  Buyer is forever  relinquishing  any claims
whatsoever that it may now or in the future have against the Company as a result
of the failure of the Company to have a Registration  Statement  covering all of
the Registrable  Securities listed in the Registration Rights Agreement required
to be covered thereby be declared  effective by the SEC or, if and when declared
effective,  remain  effective for any  particular  length of time.  Accordingly,
Buyer  hereby  releases  and forever  discharges  Company and its  predecessors,

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<PAGE>

successors,  partners,  assigns,  employees,   shareholders,  owners,  officers,
directors, agents, attorneys, subsidiaries,  divisions, and affiliates, (jointly
referred to as "Released Parties") from any and all claims,  demands,  causes of
action,  obligations,  damages,  attorneys'  fees,  costs and liabilities of any
nature  whatsoever,  including but not limited to  Registration  Delay Payments,
whether or not now known,  suspected or asserted,  which Buyer may have or claim
to have against the Released  Parties relating in any manner to claims under the
Sections 2 or 3 hereof,  and hereby covenants not to assert such claims,  now or
in the future, through a lawsuit, an administrative proceeding or otherwise (the
"General  Release");  provided,  however,  that with  respect to any such future
breach of the Registration Rights Agreement under Sections 2(a), 2(d), 2(e), and
Section 3 of the Registration Rights Agreement,  in the event said breach occurs
after May 1, 2007,  the  parties  to this  Agreement  agree that Buyer  shall be
entitled to seek to equitable  relief,  as its sole and exclusive remedy, of the
obligations  of the Company in accordance  with the terms and conditions of this
Agreement,  as hereby  amended  in any court  specified  in  Section  11 hereof;
provided  further,  however,  that  with  respect  to  any  such  future  breach
referenced above, the foregoing sentence limiting the Buyer's sole and exclusive
remedy  to  equitable  relief  shall  not  apply in the  event of the  Company's
willful,  intentional  and  deliberate  breach of  Sections  2(a),  2(d) or 2(e)
hereof.

            h. Waiver.  With regards  specifically to the General Release above,
Buyer waives all rights under Section 1542 of the Civil Code of California. That
section reads as follows:

      "A general  release does not extend to claims which the creditor  does not
      know or  suspect  to exist  in his  favor  at the  time of  executing  the
      release,  which  if  known  by  him  must  have  materially  affected  his
      settlement with the debtor."

            Notwithstanding the provisions of Section 1542 or any similar law of
any other state, and to provide a full and complete release of Released Parties,
Buyer expressly  acknowledges that this Agreement and the General Release above,
in each case relating  solely to claims under Sections 2 and 3 of this Agreement
is intended to include, without limitation, all claims which Buyer does not know
or suspect to exist in his favor at the time of execution of this Agreement, and
that the issuance of the Second Securities, under the Second Securities Purchase
Agreement,  completely  extinguishes  all legal  claims  under  Sections 2 and 3
hereof.

      3. Related Obligations.

      At such time as the Company is obligated to file a Registration  Statement
with the SEC  pursuant  to Section  2(a),  2(d) or 2(e),  the  Company  will use
commercially  reasonable  efforts to effect the  registration of the Registrable
Securities in accordance  with the intended  method of disposition  thereof and,
pursuant thereto, the Company shall have the following obligations:

            a. The Company shall submit to the SEC, within two (2) Business Days
after the Company learns that no review of a particular  Registration  Statement
will be made by the staff of the SEC or that the staff has no  further  comments
on a  particular  Registration  Statement,  as the case may be,  a  request  for
acceleration of effectiveness of such Registration  Statement to a time and date
not later than 48 hours after the submission of such request.  The Company shall
keep each  Registration  Statement  effective  pursuant to Rule 415 at all times
until the earlier of (i) the date as of which the  Investors  may  commence  the
sale of Registrable  Securities covered by such Registration  Statement pursuant
to Rule 144 (or any successor  thereto)  promulgated  under the 1933 Act or (ii)
the  date  on  which  the  Investors  shall  have  sold  all of the  Registrable
Securities covered by such Registration  Statement (the "Registration  Period").
The  Company  shall  ensure  that each  Registration  Statement  (including  any
amendments or supplements thereto and prospectuses  contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein,  or necessary to make the statements  therein (in
the case of prospectuses,  in the light of the  circumstances in which they were
made) not misleading.



                                       5
<PAGE>

            b. The Company shall  prepare and file with the SEC such  amendments
(including   post-effective   amendments)  and  supplements  to  a  Registration
Statement  and  the  prospectus  used  in  connection  with  such   Registration
Statement,  which  prospectus  is to be filed  pursuant to Rule 424  promulgated
under the 1933 Act,  as may be  necessary  to keep such  Registration  Statement
effective at all times during the Registration  Period, and, during such period,
comply with the  provisions of the 1933 Act with respect to the  disposition  of
all Registrable Securities of the Company covered by such Registration Statement
until such time as all of such  Registrable  Securities shall have been disposed
of in  accordance  with the  intended  methods of  disposition  by the seller or
sellers  thereof  as set forth in such  Registration  Statement.  In the case of
amendments and supplements to a Registration  Statement which are required to be
filed  pursuant to this Agreement  (including  pursuant to this Section 3(b)) by
reason of the Company  filing a report on Form 10-Q,  Form 10-K or any analogous
report under the  Securities  Exchange Act of 1934, as amended (the "1934 Act"),
the  Company  shall  have  incorporated  such  report  by  reference  into  such
Registration  Statement,  if  applicable,  or  shall  file  such  amendments  or
supplements  with the SEC on the same day on which the 1934 Act  report is filed
which  created  the  requirement  for the  Company to amend or  supplement  such
Registration  Statement.  The  determination  as  to  whether  the  filing  of a
post-effective  amendment is required (as opposed to a supplement) shall be made
by the Company in consultation with its legal counsel.

            c. The Company  shall (A) permit Legal Counsel to review and comment
upon (i) a  Registration  Statement at least five (5) Business Days prior to its
filing with the SEC and (ii) all amendments and supplements to all  Registration
Statements  (except  for  Annual  Reports  on Form  10-K,  Reports on Form 10-Q,
Current  Reports on Form 8K,  and any  similar or  successor  reports)  within a
reasonable  number of days prior to their  filing with the SEC, and (B) not file
any Registration Statement or amendment or supplement thereto in a form to which
Legal  Counsel  reasonably  objects.  The Company shall not submit a request for
acceleration of the  effectiveness of a Registration  Statement or any amendment
or supplement thereto without the prior approval of Legal Counsel, which consent
shall not be unreasonably  withheld. The Company shall furnish to Legal Counsel,
without charge,  (i) copies of any  correspondence  from the SEC or the staff of
the SEC to the  Company  or its  representatives  relating  to any  Registration
Statement,  (ii) promptly after the same is prepared and filed with the SEC, one
copy of any  Registration  Statement  and any  amendment(s)  thereto,  including
financial  statements  and  schedules,  all  documents  incorporated  therein by
reference,  if  requested  by an  Investor,  and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration  Statement and all amendments and supplements  thereto. The
Company  shall  reasonably  cooperate  with  Legal  Counsel  in  performing  the
Company's obligations pursuant to this Section 3.



                                       6
<PAGE>

            d. The Company  shall  furnish to each  Investor  whose  Registrable
Securities  are included in any  Registration  Statement,  without  charge,  (i)
promptly after the same is prepared and filed with the SEC, at least one copy of
such Registration  Statement and any amendment(s)  thereto,  including financial
statements and schedules,  all documents  incorporated therein by reference,  if
requested by an Investor,  all exhibits and each  preliminary  prospectus,  (ii)
upon the  effectiveness  of any Registration  Statement,  ten (10) copies of the
prospectus  included  in such  Registration  Statement  and all  amendments  and
supplements  thereto  (or such  other  number  of copies  as such  Investor  may
reasonably  request)  and (iii) such other  documents,  including  copies of any
preliminary or final  prospectus,  as such Investor may reasonably  request from
time  to  time  in  order  to  facilitate  the  disposition  of the  Registrable
Securities owned by such Investor.

            e. The  Company  shall use  commercially  reasonable  efforts to (i)
register and qualify,  unless an exemption from  registration and  qualification
applies,  the resale by Investors  of the  Registrable  Securities  covered by a
Registration  Statement  under such other  securities  or "blue sky" laws of all
applicable  jurisdictions  in the United States,  (ii) prepare and file in those
jurisdictions,   such  amendments  (including  post-effective   amendments)  and
supplements  to such  registrations  and  qualifications  as may be necessary to
maintain the effectiveness  thereof during the Registration  Period,  (iii) take
such other  actions as may be  necessary  to  maintain  such  registrations  and
qualifications in effect at all times during the Registration  Period,  and (iv)
take all  other  actions  reasonably  necessary  or  advisable  to  qualify  the
Registrable Securities for sale in such jurisdictions;  provided,  however, that
the  Company  shall not be required in  connection  therewith  or as a condition
thereto to (x)  qualify to do business  in any  jurisdiction  where it would not
otherwise be required to qualify but for this Section 3(e),  (y) subject  itself
to general taxation in any such  jurisdiction,  or (z) file a general consent to
service of process in any such  jurisdiction.  The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable  Securities of the receipt
by the  Company  of any  notification  with  respect  to the  suspension  of the
registration  or  qualification  of any of the  Registrable  Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United States
or its receipt of notice of the  initiation or threatening of any proceeding for
such purpose.

            f. The Company  shall  notify  Legal  Counsel  and each  Investor in
writing of the happening of any event, as promptly as practicable after becoming
aware  of such  event,  as a  result  of  which  the  prospectus  included  in a
Registration  Statement,  as then in effect,  includes an untrue  statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements  therein,  in the light of the circumstances
under which they were made, not misleading (provided that in no event shall such
notice contain any material,  nonpublic  information),  and,  subject to Section
3(q), promptly prepare a supplement or amendment to such Registration  Statement
to correct such untrue  statement  or  omission,  and deliver ten (10) copies of
such  supplement  or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel or such Investor may reasonably request).  The
Company  shall also  promptly  notify Legal Counsel and each Investor in writing
(i) when a prospectus or any prospectus  supplement or post-effective  amendment
has  been  filed,  and  when a  Registration  Statement  or  any  post-effective
amendment has become  effective  (notification  of such  effectiveness  shall be
delivered  to Legal  Counsel and each  Investor by  facsimile on the same day of
such  effectiveness  and by overnight mail),  (ii) of any request by the SEC for
amendments or supplements to a Registration  Statement or related  prospectus or
related information,  and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.



                                       7
<PAGE>

            g. The Company shall use commercially  reasonable efforts to prevent
the  issuance  of any stop  order  or other  suspension  of  effectiveness  of a
Registration  Statement,  or the suspension of the  qualification  of any of the
Registrable  Securities  for sale in any  jurisdiction  and, if such an order or
suspension  is issued,  to obtain the  withdrawal of such order or suspension at
the earliest  possible  moment and to notify Legal Counsel and each Investor who
holds  Registrable  Securities  being sold of the issuance of such order and the
resolution  thereof or its receipt of notice of the  initiation or threat of any
proceeding for such purpose.

            h. At the reasonable request of any Investor,  in the event that the
Registrable  Securities are being sold pursuant to an underwritten offering, the
Company shall furnish to such Investor,  on the date of the effectiveness of the
Registration  Statement  and  thereafter  from time to time on such  dates as an
Investor  may  reasonably  request  (i) a  letter,  dated  such  date,  from the
Company's  independent  certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters in
an  underwritten  public  offering,  addressed  to the  Investors,  and  (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of such Registration  Statement,  in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the Investors.

            i. The  Company  shall  make  available  for  inspection  by (i) any
Investor,  (ii) Legal Counsel and (iii) one firm of  accountants or other agents
retained  by the  Investors  (collectively,  the  "Inspectors"),  all  pertinent
financial and other records, and pertinent corporate documents and properties of
the  Company  (collectively,  the  "Records"),  as  shall be  reasonably  deemed
necessary by each  Inspector,  and cause the Company's  officers,  directors and
employees to supply all information which any Inspector may reasonably  request;
provided,  however, that each Inspector shall agree to hold in strict confidence
and shall not make any  disclosure  (except to an Investor) or use of any Record
or  other  information  which  the  Company  determines  in  good  faith  to  be
confidential,  and of which determination the Inspectors are so notified, unless
(a) the  disclosure of such Records is  determined  by the Company  necessary to
avoid or correct a misstatement or omission in any Registration  Statement or is
otherwise  required  under the 1933 Act,  (b) the  release  of such  Records  is
ordered  pursuant to a final,  non-appealable  subpoena or order from a court or
government  body  of  competent  jurisdiction,  or (c) the  information  in such
Records has been made generally available to the public other than by disclosure
in  violation  of this  Agreement.  Each  Investor  agrees  that it shall,  upon
learning  that  disclosure  of  such  Records  is  sought  in or by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
notice to the  Company  and allow the  Company,  at its  expense,  to  undertake
appropriate  action to prevent  disclosure  of, or to obtain a protective  order
for,  the  Records  deemed  confidential.   Nothing  herein  (or  in  any  other
confidentiality  agreement between the Company and any Investor) shall be deemed
to limit the Investors' ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.



                                       8
<PAGE>

            j. The Company shall hold in confidence  and not make any disclosure
of  information  concerning  an  Investor  provided  to the  Company  unless (i)
disclosure  of such  information  is  necessary  to comply with federal or state
securities  laws, (ii) the disclosure of such  information is necessary to avoid
or correct a misstatement or omission in any Registration  Statement,  (iii) the
release of such  information  is ordered  pursuant to a subpoena or other final,
non-appealable   order  from  a  court  or   governmental   body  of   competent
jurisdiction,  or (iv) such information has been made generally available to the
public other than by  disclosure  in  violation  of this  Agreement or any other
agreement.  The Company agrees that it shall,  upon learning that  disclosure of
such  information  concerning  an  Investor  is  sought  in  or  by a  court  or
governmental body of competent  jurisdiction or through other means, give prompt
written  notice to such  Investor  and allow such  Investor,  at the  Investor's
expense, to undertake  appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

            k. The Company shall use commercially  reasonable  efforts either to
secure the inclusion for quotation of all of the  Registrable  Securities on the
NASD's OTC  Bulletin  Board.  The  Company  shall pay all fees and  expenses  in
connection with satisfying its obligation under this Section 3(k).

            l.  The  Company  shall   cooperate  with  the  Investors  who  hold
Registrable  Securities being offered and, to the extent applicable,  facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend)  representing  the  Registrable  Securities to be offered  pursuant to a
Registration  Statement and enable such certificates to be in such denominations
or amounts,  as the case may be, as the  Investors  may  reasonably  request and
registered in such names as the Investors may request.

            m. If  requested by an  Investor,  the Company  shall (i) as soon as
reasonably practicable  incorporate in a prospectus supplement or post-effective
amendment  such  information as an Investor  reasonably  requests to be included
therein  relating  to the  sale  and  distribution  of  Registrable  Securities,
including,  without  limitation,  information  with  respect  to the  number  of
Registrable  Securities  being  offered or sold,  the purchase  price being paid
therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering;  (ii) as soon as reasonably practicable make all required
filings of such prospectus  supplement or  post-effective  amendment after being
notified of the matters to be  incorporated  in such  prospectus  supplement  or
post-effective   amendment;   and  (iii)  as  soon  as  reasonably  practicable,
supplement  or make  amendments  to any  Registration  Statement  if  reasonably
requested by an Investor holding any Registrable Securities.

            n. The  Company  shall  make  generally  available  to its  security
holders  as soon as  practical,  but not later than  ninety  (90) days after the
close of the period covered  thereby,  an earnings  statement (in form complying
with,  and in the manner  provided by, the provisions of Rule 158 under the 1933
Act) covering a  twelve-month  period  beginning not later than the first day of
the Company's fiscal quarter next following the effective date of a Registration
Statement.

            o. The Company shall otherwise use commercially  reasonable  efforts
to comply with all  applicable  rules and  regulations  of the SEC in connection
with any registration hereunder.



                                       9
<PAGE>

            p. As soon as  practicable  after  a  Registration  Statement  which
covers Registrable Securities is ordered effective by the SEC, the Company shall
deliver,  and shall  cause legal  counsel  for the  Company to  deliver,  to the
transfer  agent for such  Registrable  Securities  (with copies to the Investors
whose  Registrable  Securities  are  included  in such  Registration  Statement)
confirmation that such Registration Statement has been declared effective by the
SEC substantially in the form attached hereto as Exhibit A.

            q.  Notwithstanding  anything to the  contrary  herein,  at any time
after the  Effective  Date,  the Company may delay the  disclosure  of material,
non-public  information  concerning  the Company the  disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of the Company,
in the best interest of the Company and otherwise  required (a "Grace  Period");
provided, that the Company shall promptly (i) notify the Investors in writing of
the existence of material,  non-public information giving rise to a Grace Period
(provided  that in each notice the Company will not disclose the content of such
material,  non-public  information  to the  Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the date on
which the Grace Period ends; and, provided  further,  that no Grace Period shall
exceed 15  consecutive  days and during any three  hundred  sixty five (365) day
period such Grace Periods shall not exceed an aggregate of 45 days and the first
day of any Grace Period must be at least two (2) trading days after the last day
of any prior Grace Period (each, an "Allowable  Grace Period").  Notwithstanding
the  foregoing,  the  Allowable  Grace  Period  shall be  extended  by up to one
additional 30 day period during any three hundred sixty five (365) day period in
the event that a  post-effective  amendment  to the  Registration  Statement  is
required to be filed and such  amendment is reviewed by the SEC. For purposes of
determining the length of a Grace Period above,  the Grace Period shall begin on
and include the date the Investors  receive the notice referred to in clause (i)
and shall end on and  include  the later of the date the  Investors  receive the
notice  referred to in clause (ii) and the date referred to in such notice.  The
provisions of Section 3(g) hereof shall not be  applicable  during the period of
any Allowable  Grace Period.  Upon  expiration of the Grace Period,  the Company
shall again be bound by the first  sentence of Section  3(f) with respect to the
information giving rise thereto unless such material,  non-public information is
no longer  applicable.  Notwithstanding  anything to the  contrary,  the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee  of an  Investor  in  accordance  with the  terms  of the  Securities
Purchase  Agreements in connection with any sale of Registrable  Securities with
respect to which an Investor  has entered  into a contract for sale prior to the
Investor's  receipt of the notice of a Grace  Period and for which the  Investor
has not yet settled.

            r. The Company shall use commercially  reasonable  efforts to become
eligible to use a registration statement on Form S-3 for the registration of the
resale of Registrable Securities.

      4. Obligations of the Investors.

            a. At least five Business Days prior to the first anticipated filing
date of a  Registration  Statement,  the Company  shall notify each  Investor in
writing of the information the Company  requires from each such Investor if such
Investor elects to have any of such Investor's  Registrable  Securities included
in such  Registration  Statement.  It  shall  be a  condition  precedent  to the
obligations  of the  Company  to  complete  the  registration  pursuant  to this
Agreement with respect to the  Registrable  Securities of a particular  Investor
that such  Investor  shall  furnish to the Company  such  information  regarding
itself,  the  Registrable  Securities  held by it and  the  intended  method  of
disposition  of the  Registrable  Securities  held by it as shall be  reasonably
required to effect the  effectiveness  of the  registration of such  Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.

                                       10
<PAGE>

            b. Each Investor,  by such Investor's  acceptance of the Registrable
Securities,  agrees to cooperate with the Company as reasonably requested by the
Company  in  connection  with the  preparation  and  filing of any  Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such  Investor's  election  to  exclude  all  of  such  Investor's   Registrable
Securities from such Registration Statement.

            c. Each  Investor  agrees that,  upon receipt of any notice from the
Company of the  happening of any event of the kind  described in Section 3(g) or
the  first  sentence  of  3(f),  such  Investor  will  immediately   discontinue
disposition of Registrable Securities pursuant to any Registration  Statement(s)
covering such Registrable Securities until such Investor's receipt of the copies
of the  supplemented or amended  prospectus  contemplated by Section 3(g) or the
first  sentence of 3(f) or receipt of notice that no  supplement or amendment is
required.  Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver  unlegended  shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities  Purchase  Agreements
in connection  with any sale of Registrable  Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor's receipt of
a notice from the Company of the happening of any event of the kind described in
Section  3(g) or the first  sentence of 3(f) and for which the  Investor has not
yet settled.

            d. Each  Investor  covenants and agrees that it will comply with the
prospectus  delivery  requirements  of  the  1933  Act  as  applicable  to it in
connection  with sales of Registrable  Securities  pursuant to the  Registration
Statement.

      5. Expenses of Registration.

      All   reasonable   expenses,   other  than   underwriting   discounts  and
commissions,   incurred   in   connection   with   registrations,   filings   or
qualifications pursuant to Sections 2 and 3, including,  without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.

      6. Indemnification.

      In the event any  Registrable  Securities  are included in a  Registration
Statement under this Agreement:

            a. To the fullest  extent  permitted by law, the Company  will,  and
hereby does, indemnify,  hold harmless and defend each Investor,  the directors,
officers,  members, partners,  employees,  agents,  representatives of, and each
Person,  if any, who controls any Investor within the meaning of the 1933 Act or
the 1934 Act (each,  an  "Indemnified  Person"),  against  any  losses,  claims,
damages,  liabilities,  judgments, fines, penalties,  charges, costs, reasonable


                                       11
<PAGE>

attorneys'  fees,  amounts paid in  settlement  or  expenses,  joint or several,
(collectively,  "Claims") incurred in investigating,  preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing  by or  before  any  court or  governmental,  administrative  or other
regulatory  agency,  body or the SEC, whether pending or threatened,  whether or
not an indemnified party is or may be a party thereto  ("Indemnified  Damages"),
to which any of them may become  subject  insofar as such  Claims (or actions or
proceedings,  whether commenced or threatened,  in respect thereof) arise out of
or are based upon:  (i) any untrue  statement or alleged  untrue  statement of a
material  fact  in a  Registration  Statement  or any  post-effective  amendment
thereto  or in any  filing  made in  connection  with the  qualification  of the
offering  under the securities or other "blue sky" laws of any  jurisdiction  in
which Registrable Securities are offered ("Blue Sky Filing"), or the omission or
alleged  omission  to state a material  fact  required  to be stated  therein or
necessary  to make the  statements  therein  not  misleading,  (ii)  any  untrue
statement  or alleged  untrue  statement  of a material  fact  contained  in any
preliminary  prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented,  if
the Company files any amendment  thereof or supplement  thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein,  in the light of the circumstances under which
the statements therein were made, not misleading, (iii) any violation or alleged
violation  by the  Company  of the  1933  Act,  the 1934  Act,  any  other  law,
including,  without  limitation,  any  state  securities  law,  or any  rule  or
regulation  thereunder  relating  to  the  offer  or  sale  of  the  Registrable
Securities  pursuant to a  Registration  Statement or (iv) any violation of this
Agreement  (the  matters  in the  foregoing  clauses  (i)  through  (iv)  being,
collectively,   "Violations").  Subject  to  Section  6(c),  the  Company  shall
reimburse the  Indemnified  Persons,  promptly as such expenses are incurred and
are due and payable,  for any reasonable legal fees or other reasonable expenses
incurred by them in connection with  investigating  or defending any such Claim.
Notwithstanding  anything to the contrary contained herein, the  indemnification
agreement  contained in this Section 6(a):  (i) shall not apply to a Claim by an
Indemnified  Person  arising  out of or based upon a Violation  which  occurs in
reliance upon and in  conformity  with  information  furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection  with the  preparation of the  Registration  Statement or any such
amendment  thereof or supplement  thereto,  if such  prospectus  was timely made
available  by the Company  pursuant to Section  3(d);  (ii) with  respect to any
preliminary  prospectus,  shall not inure to the benefit of any such Person from
whom the Person  asserting any such Claim purchased the  Registrable  Securities
that are the subject thereof (or to the benefit of any Person  controlling  such
Person) if the untrue  statement or omission of material  fact  contained in the
preliminary  prospectus  was  corrected  in the  prospectus,  as then amended or
supplemented,  if such  prospectus  was timely  made  available  by the  Company
pursuant to Section 3(d),  and the  Indemnified  Person was promptly  advised in
writing not to use the  incorrect  prospectus  prior to the use giving rise to a
violation and such Indemnified Person,  notwithstanding  such advice, used it or
failed to deliver  the correct  prospectus  as required by the 1933 Act and such
correct  prospectus  was timely made available  pursuant to Section 3(d);  (iii)
shall not be  available  to the  extent  such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company,  including a corrected prospectus,  if such prospectus or corrected
prospectus  was timely made  available by the Company  pursuant to Section 3(d);
and (iv)  shall not apply to  amounts  paid in  settlement  of any Claim if such
settlement is effected  without the prior written consent of the Company,  which
consent shall not be  unreasonably  withheld or delayed.  Such  indemnity  shall
remain in full force and effect  regardless of any  investigation  made by or on
behalf  of  the  Indemnified  Person  and  shall  survive  the  transfer  of the
Registrable Securities by the Investors pursuant to Section 9.



                                       12
<PAGE>

            b. In  connection  with  any  Registration  Statement  in  which  an
Investor  is  participating,  each such  Investor  agrees to  severally  and not
jointly indemnify,  hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the  Registration  Statement and each Person,  if any,
who  controls  the  Company  within the  meaning of the 1933 Act or the 1934 Act
(each,  an  "Indemnified  Party"),  against any Claim or Indemnified  Damages to
which  any of them may  become  subject,  under  the 1933  Act,  the 1934 Act or
otherwise,  insofar as such  Claim or  Indemnified  Damages  arise out of or are
based upon any  Violation,  in each case to the extent,  and only to the extent,
that such  Violation  occurs in reliance  upon and in  conformity  with  written
information  furnished  to the  Company by such  Investor  expressly  for use in
connection with such Registration Statement;  and, subject to Section 6(c), such
Investor will  reimburse any legal or other expenses  reasonably  incurred by an
Indemnified Party in connection with  investigating or defending any such Claim;
provided,  however,  that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution  contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such  settlement is effected
without the prior written  consent of such Investor,  which consent shall not be
unreasonably withheld or delayed; provided,  further, however, that the Investor
shall be liable  under  this  Section  6(b) for only  that  amount of a Claim or
Indemnified  Damages as does not exceed the net  proceeds to such  Investor as a
result  of the sale of  Registrable  Securities  pursuant  to such  Registration
Statement.  Such indemnity  shall remain in full force and effect  regardless of
any  investigation  made by or on  behalf  of such  Indemnified  Party and shall
survive the transfer of the Registrable  Securities by the Investors pursuant to
Section 9.  Notwithstanding  anything  to the  contrary  contained  herein,  the
indemnification  agreement  contained  in this  Section 6(b) with respect to any
preliminary  prospectus shall not inure to the benefit of any Indemnified  Party
if  the  untrue  statement  or  omission  of  material  fact  contained  in  the
preliminary  prospectus  was corrected on a timely basis in the  prospectus,  as
then amended or supplemented.

            c. Promptly  after receipt by an  Indemnified  Person or Indemnified
Party  under  this  Section  6 of notice of the  commencement  of any  action or
proceeding  (including any governmental action or proceeding) involving a Claim,
such  Indemnified  Person or  Indemnified  Party  shall,  if a Claim in  respect
thereof is to be made  against  any  indemnifying  party  under this  Section 6,
deliver to the indemnifying party a written notice of the commencement  thereof,
and the  indemnifying  party shall have the right to participate in, and, to the
extent the indemnifying  party so desires,  jointly with any other  indemnifying
party similarly  noticed,  to assume control of the defense thereof with counsel
mutually  satisfactory to the indemnifying  party and the Indemnified  Person or
the  Indemnified  Party,  as  the  case  may  be;  provided,  however,  that  an
Indemnified  Person or Indemnified  Party shall have the right to retain its own
counsel  with the fees  and  expenses  of not  more  than one  counsel  for such
Indemnified  Person or Indemnified  Party to be paid by the indemnifying  party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation  by such counsel of the Indemnified  Person or Indemnified  Party


                                       13
<PAGE>

and the  indemnifying  party would be  inappropriate  due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party  represented by such counsel in such  proceeding.  In the case of an
Indemnified  Person,  legal  counsel  referred to in the  immediately  preceding
sentence  shall be  selected  by the  Investors  holding at least a majority  in
interest of the Registrable Securities included in the Registration Statement to
which the Claim  relates.  The  Indemnified  Party or  Indemnified  Person shall
cooperate fully with the  indemnifying  party in connection with any negotiation
or  defense  of any such  action  or Claim by the  indemnifying  party and shall
furnish to the indemnifying  party all information  reasonably  available to the
Indemnified  Party or Indemnified  Person which relates to such action or Claim.
The indemnifying  party shall keep the Indemnified  Party or Indemnified  Person
reasonably  apprised  at all  times  as to the  status  of  the  defense  or any
settlement  negotiations  with respect thereto.  No indemnifying  party shall be
liable for any settlement of any action,  claim or proceeding  effected  without
its prior written consent, provided,  however, that the indemnifying party shall
not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified
Person,  consent to entry of any judgment or enter into any  settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified  Party or Indemnified  Person of a
release  from all  liability  in respect to such Claim or  litigation,  and such
settlement  shall  not  include  any  admission  as to  fault on the part of the
Indemnified  Party.  Following  indemnification  as provided for hereunder,  the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified  Person with  respect to all third  parties,  firms or  corporations
relating to the matter for which  indemnification  has been made. The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified  Person or Indemnified  Party under this Section 6,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action.

            d. The  indemnification  required by this Section 6 shall be made by
periodic  payments of the amount thereof during the course of the  investigation
or defense, as and when bills are received or Indemnified Damages are incurred.

            e. The indemnity agreements contained herein shall be in addition to
(i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the  indemnifying  party or others,  and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.

      7. Contribution.

      To the extent any  indemnification  by an indemnifying party is prohibited
or  limited  by  law,  the  indemnifying   party  agrees  to  make  the  maximum
contribution  with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no Person  involved in the sale of  Registrable  Securities  which Person is
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the 1933 Act) in  connection  with such sale shall be entitled  to  contribution
from any Person  involved  in such sale of  Registrable  Securities  who was not
guilty of fraudulent  misrepresentation;  and (ii) contribution by any seller of
Registrable  Securities shall be limited in amount to the net amount of proceeds
received by such seller from the sale of such Registrable Securities pursuant to
such Registration Statement.



                                       14
<PAGE>

      8. Reports Under the 1934 Act.

      With a view to making  available to the Investors the benefits of Rule 144
promulgated  under the 1933 Act or any other  similar rule or  regulation of the
SEC that may at any time permit the Investors to sell  securities of the Company
to the public  without  registration  ("Rule  144"),  the Company  agrees to use
commercially reasonable efforts to:

            a. make and keep public  information  available,  as those terms are
understood and defined in Rule 144;

            b. file with the SEC in a timely  manner  (taking  into  account any
permitted  extensions to file) all reports and other  documents  required of the
Company  under  the 1933 Act and the  1934  Act so long as the  Company  remains
subject to such  requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and

            c.  furnish  to  each   Investor  so  long  as  such  Investor  owns
Registrable  Securities,  promptly upon request,  (i) a written statement by the
Company,  if true, that it has complied with the reporting  requirements of Rule
144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual report
of the Company and such other reports and documents so filed by the Company, and
(iii)  such  other  information  as may be  reasonably  requested  to permit the
Investors to sell such securities pursuant to Rule 144 without registration.

      9. Assignment of Registration Rights.

      The rights under this Agreement shall be  automatically  assignable by the
Investors to any transferee of all or any portion of such Investor's Registrable
Securities  if:  (i) the  Investor  agrees in  writing  with the  transferee  or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company  within a reasonable  time after such  assignment;  (ii) the Company is,
within a  reasonable  time after such  transfer or  assignment,  furnished  with
written notice of (a) the name and address of such  transferee or assignee,  and
(b) the  securities  with  respect to which such  registration  rights are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further  disposition  of such  securities  by the  transferee or assignee is
restricted  under the 1933 Act or applicable  state  securities laws; (iv) at or
before the time the Company  receives the written notice  contemplated by clause
(ii) of this  sentence  the  transferee  or assignee  agrees in writing with the
Company  to be bound by all of the  provisions  contained  herein;  and (v) such
transfer shall have been made in accordance with the applicable  requirements of
the Securities Purchase Agreements.

      10. Amendment of Registration Rights.

      Provisions of this Agreement may be amended and the observance thereof may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and the Required
Holders.  Any amendment or waiver  effected in  accordance  with this Section 10
shall be binding upon each Investor and the Company.  No such amendment shall be
effective  to the extent  that it applies to less than all of the holders of the
Registrable Securities.  No consideration shall be offered or paid to any Person
to amend or consent to a waiver or  modification of any provision of any of this
Agreement unless the same consideration also is offered to all of the parties to
this Agreement.



                                       15
<PAGE>

      11. Miscellaneous.

            a. A Person  is  deemed  to be a holder  of  Registrable  Securities
whenever  such  Person  owns or is  deemed  to own of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or  more  Persons  with  respect  to the  same  Registrable
Securities,  the  Company  shall act upon the basis of  instructions,  notice or
election received from the such record owner of such Registrable Securities.

            b. Any notices,  consents,  waivers or other communications required
or  permitted to be given under the terms of this  Agreement  must be in writing
and will be deemed to have been  delivered:  (i) upon  receipt,  when  delivered
personally;  (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending  party);  or (iii) five  Business  Day after  deposit  with a nationally
recognized  overnight  delivery service,  in each case properly addressed to the
party to  receive  the  same.  The  addresses  and  facsimile  numbers  for such
communications shall be:

                  If to the Company:

                                    Natural Gas Systems, Inc.
                                    820 Gessner, Suite 1340
                                    Houston, Texas 77024
                                    Tel: 713-935-0122

Fax: 713-935-0199

Attention:        Robert S. Herlin, President
                  With a copy to:
                                    Troy & Gould Professional Corporation
                                    1801 Century Park East, 16th Floor
                                    Los Angeles, California 90067-2367
                                    Telephone:       (310) 789-1255
                                    Facsimile:       (310) 201-4746
                                    Attention:       Lawrence Schnapp, Esq.


                                       16
<PAGE>

                  If to Legal Counsel:

                  Schulte Roth & Zabel LLP
                  919 Third Avenue
                  New York, New York  10022
                  Telephone:        (212) 756-2000
                  Facsimile:        (212) 593-5955
                  Attention:        Peter Halasz, Esq.

If to the Buyer,  to its address and facsimile  number set forth on the Schedule
of Buyers attached  hereto,  with copies to the Buyer's  representatives  as set
forth on the  Schedule  of Buyers,  or to such other  address  and/or  facsimile
number and/or to the  attention of such other Person as the recipient  party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change.  Written  confirmation of receipt (A) given by the
recipient  of  such  notice,  consent,   waiver  or  other  communication,   (B)
mechanically  or  electronically  generated  by the sender's  facsimile  machine
containing the time, date,  recipient facsimile number and an image of the first
page of such  transmission  or (C)  provided by a courier or  overnight  courier
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

            c.  Failure of any party to exercise  any right or remedy under this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

            d. All questions concerning the construction,  validity, enforcement
and  interpretation  of this Agreement shall be governed by the internal laws of
the State of New York, without giving effect to any choice of law or conflict of
law  provision  or  rule  (whether  of the  State  of  New  York  or  any  other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. Each party hereby  irrevocably  submits to the
exclusive  jurisdiction  of the state and federal  courts sitting in The City of
New York, Borough of Manhattan, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction  contemplated hereby or discussed
herein,  and hereby  irrevocably  waives,  and agrees not to assert in any suit,
action  or  proceeding,  any  claim  that it is not  personally  subject  to the
jurisdiction of any such court,  that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby  irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve  process in any manner  permitted by law.
If any  provision of this  Agreement  shall be invalid or  unenforceable  in any
jurisdiction,  such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or  enforceability  of any  provision  of this  Agreement  in any other
jurisdiction.  EACH PARTY HEREBY  IRREVOCABLY  WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES  NOT TO  REQUEST,  A JURY  TRIAL  FOR  THE  ADJUDICATION  OF ANY  DISPUTE
HEREUNDER  OR IN  CONNECTION  HEREWITH OR ARISING OUT OF THIS  AGREEMENT  OR ANY
TRANSACTION CONTEMPLATED HEREBY.



                                       17
<PAGE>

            e. This Agreement,  the other  Transaction  Documents (as defined in
the Second Securities Purchase Agreement) and the instruments  referenced herein
and  therein  constitute  the entire  agreement  among the  parties  hereto with
respect to the subject  matter  hereof and thereof.  There are no  restrictions,
promises, warranties or undertakings,  other than those set forth or referred to
herein and therein.  This  Agreement,  the other  Transaction  Documents and the
instruments  referenced  herein and therein  supersede all prior  agreements and
understandings  among the  parties  hereto with  respect to the  subject  matter
hereof and  thereof,  including  but not  limited to the  Original  Registration
Rights Agreement.

            f. Subject to the  requirements  of Section 9, this Agreement  shall
inure to the benefit of and be binding upon the permitted successors and assigns
of each of the parties hereto.

            g. The headings in this  Agreement are for  convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

            h. This Agreement may be executed in identical counterparts, each of
which shall be deemed an original but all of which shall  constitute one and the
same agreement.  This Agreement,  once executed by a party,  may be delivered to
the other party hereto by  facsimile  transmission  of a copy of this  Agreement
bearing the signature of the party so delivering this Agreement.

            i.  Each  party  shall  do and  perform,  or  cause  to be done  and
performed,  all such further acts and things,  and shall execute and deliver all
such other  agreements,  certificates,  instruments and documents,  as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

            j. All consents and other determinations  required to be made by the
Investors  pursuant to this Agreement shall be made, unless otherwise  specified
in this Agreement, by the Required Holders.

            k. The  language  used in this  Agreement  will be  deemed to be the
language  chosen by the parties to express  their mutual  intent and no rules of
strict construction will be applied against any party.

            l. This  Agreement is intended for the benefit of the parties hereto
and  their  respective  permitted  successors  and  assigns,  and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

            m. The  obligations  of each Investor  hereunder are several and not
joint with the  obligations  of any other  Investor,  and no  provision  of this
Agreement is intended to confer any  obligations  on any Investor  vis-a-vis any
other Investor.  Nothing contained  herein,  and no action taken by any Investor
pursuant  hereto,  shall be deemed to constitute the Investors as a partnership,
an  association,  a joint  venture  or any  other  kind of  entity,  or create a
presumption  that the  Investors  are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated herein.

             [The remainder of the page is intentionally left blank]


                                       18
<PAGE>

      IN WITNESS WHEREOF, the Buyer and the Company have caused their respective
signature page to this Amended and Restated  Registration Rights Agreement to be
duly executed as of the date first written above.

                                          NAME OF COMPANY

                                          NATURAL GAS SYSTEMS, INC.

                                          By: _________________________
                                              Name:
                                              Title:





<PAGE>



      IN WITNESS WHEREOF, the Buyer and the Company have caused their respective
signature page to this Amended and Restated  Registration Rights Agreement to be
duly executed as of the date first written above.

                                         BUYER:

                                         RUBICON MASTER FUND
                                         By: Rubicon Fund Management, LLP,
                                             its Investment Manager

                                         By: _________________________
                                             Name:
                                             Title:








<PAGE>



                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                                 Buyer's Address and          Buyer's Representative's Address
Buyer                              Facsimile Number                 and Facsimile Number
-------------------   ----------------------------------    -------------------------------------
<S>                   <C>                                   <C>
Rubicon Master Fund   c/o Rubicon Fund Management LLP       Schulte Roth & Zabel LLP
                      103 Mount St.                         919 Third Avenue
                      London W1K2TJ                         New York, New York  10022
                      United Kingdom                        Telephone: (212) 756-2000
                      Facsimile No.:    +44 207 074 4280    Facsimile: (212) 593-5955
                      Telephone No.:    +44 207 074 4299    Attention: Peter Halasz, Esq.
                      Attn:   William Callanan
</TABLE>




<PAGE>


                                    EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Transfer Agent]
[Address]
Attention:


      Re: NATURAL GAS SYSTEMS, INC.


Ladies and Gentlemen:

      We are counsel to NATURAL GAS  SYSTEMS,  INC., a Nevada  corporation  (the
"Company"),  and have  represented  the Company in connection  with that certain
Securities  Purchase Agreement (the "Original  Securities  Purchase  Agreement")
entered  into by and  among the  Company  and  Rubicon  Master  Fund,  a company
organized  under the laws of the Cayman  Islands (, the  "Holder")  pursuant  to
which the  Company  issued 1.2 million  shares of the  Company's  common  stock,
$0.001  par  value  per  share  (the  "Original  Securities")  and that  certain
Securities Purchase Agreement (the "Second Securities Purchase  Agreement",  and
together  with  the  Original  Securities  Purchase  Agreement,  the  Securities
Purchase  Agreements)  entered  into by and among  the  Company  and the  Holder
pursuant to which the Company  issued  _______  shares of the  Company's  common
stock,  $0.001 par value per share (the "Second  Securities",  and together with
the Original Securities, the "Securities").

      Pursuant to the  Securities  Purchase  Agreements,  the  Company  also has
entered  into an Amended and Restated  Registration  Rights  Agreement  with the
Holder  (the  "Registration  Rights  Agreement")  pursuant  to which the Company
agreed,  among other things, to register the Registrable  Securities (as defined
in the  Registration  Rights  Agreement),  including the  Securities,  under the
Securities  Act of 1933,  as amended (the "1933 Act").  In  connection  with the
Company's  obligations under the Registration Rights Agreement,  on ____________
___,  2005,  the Company filed a  Registration  Statement on Form SB-2 (File No.
333-_____________)  (the  "Registration  Statement")  with  the  Securities  and
Exchange  Commission (the "SEC") relating to the  Registrable  Securities  which
names the Holder as a selling stockholder thereunder.

      In connection with the foregoing, we advise you that a member of the SEC's
staff has advised us by  telephone  that the SEC has entered an order  declaring
the  Registration  Statement  effective  under  the 1933 Act at  [ENTER  TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,  after
telephonic  inquiry  of a  member  of the  SEC's  staff,  that  any  stop  order
suspending its  effectiveness  has been issued or that any  proceedings for that
purpose  are  pending  before,  or  threatened  by, the SEC and the  Registrable
Securities  are  available  for  resale  under  the  1933  Act  pursuant  to the
Registration Statement.



                                 EXHIBIT A - 1
<PAGE>

      Notwithstanding  anything to the contrary  contained  in this  letter,  we
neither  express nor imply any opinion as to  compliance by the Company with the
antifraud  provisions of the California Corporate Securities Law, the Securities
Act of 1933 or the Securities  Exchange Act of 1934, or the rules or regulations
under such law or any of such Acts

                                              Very truly yours,

                                              [ISSUER'S COUNSEL]

                                              By: ___________________________


cc:         Rubicon Master Fund


                                 EXHIBIT A - 2
<PAGE>

                                    EXHIBIT B

                              SELLING STOCKHOLDERS

      We are  registering  the  shares  of Common  Stock in order to permit  the
selling  stockholders  to offer the shares for resale from time to time.  Except
for the ownership of the Common Stock issued pursuant to the Securities Purchase
Agreements or as otherwise set forth below,  the selling  stockholders  have not
had any material relationship with us within the past three years.

      The table  below  lists the  selling  stockholders  and other  information
regarding the beneficial  ownership of the shares of Common Stock by each of the
selling  stockholders.  The second  column  lists the number of shares of Common
Stock beneficially owned by each selling stockholder as of ________, 2005.

      In  accordance  with the  terms of  registration  rights  agreements  with
certain of the selling stockholders, this prospectus generally covers the resale
of at least 100% of the Securities as of the trading day  immediately  preceding
the date the registration statement is initially filed with the SEC. The selling
stockholders  may sell all, some or none of their shares in this  offering.  See
"Plan of Distribution."

<TABLE>
<CAPTION>
                                                                      Maximum Number of
                                                                      Shares to be Sold
                                      Number of Shares Owned           Pursuant to this           Number of Shares
Name of Selling Stockholder              Prior to Offering                Prospectus            Owned After Offering
----------------------------------   --------------------------    -------------------------    ----------------------
<S>                                  <C>                           <C>                          <C>
Rubicon Master Fund (1)
</TABLE>


      (1) Pursuant to  investment  agreements,  each of Rubicon Fund  Management
Ltd., a company  organized under the laws of the Cayman Islands,  which we refer
to in  this  prospectus  as  Rubicon  Fund  Management  Ltd,  and  Rubicon  Fund
Management LLP, a limited liability  partnership organized under the laws of the
United Kingdom,  which we refer to in this prospectus as Rubicon Fund Management
LLP, Mr. Paul Anthony Brewer, Mr. Jeffrey Eugene Brummette,  Mr. William Francis
Callanan,  Mr. Vilas  Gadkari,  Mr. Robert Michael  Greenshields  and Mr. Horace
Joseph  Leitch III share all  investment  and voting  power with  respect to the
securities held by Rubicon Master Fund. Mr. Brewer, Mr. Brummette, Mr. Callanan,
Mr.  Gadkari,  Mr.  Greenshields  and  Mr.  Leitch  control  both  Rubicon  Fund
Management Ltd and Rubicon Fund  Management LLP. Each of Rubicon Fund Management
Ltd, Rubicon Fund Management LLP, Mr. Brewer, Mr. Brummette,  Mr. Callanan,  Mr.
Gadkari,  Mr. Greenshields and Mr. Leitch disclaim beneficial ownership of these
securities.


                                 EXHIBIT B - 1
<PAGE>

                              PLAN OF DISTRIBUTION

      We are  registering  shares of Common  Stock to permit the resale of these
shares of Common  Stock by the holders of such shares of Common  Stock from time
to time  after  the  date of this  prospectus.  We will not  receive  any of the
proceeds  from the sale by the  selling  stockholders  of the  shares  of Common
Stock. We will bear all fees and expenses incident to our obligation to register
the shares of Common Stock.

      The selling stockholders may sell all or a portion of the shares of Common
Stock owned by them and offered hereby from time to time directly or through one
or more  underwriters,  broker-dealers  or agents. If the shares of Common Stock
are sold through  underwriters or broker-dealers,  the selling stockholders will
be responsible for underwriting discounts or commissions or agent's commissions.
The  shares of Common  Stock  may be sold in one or more  transactions  at fixed
prices,  at prevailing  market prices at the time of the sale, at varying prices
determined  at the time of sale,  or at  negotiated  prices.  These sales may be
effected in transactions, which may involve crosses or block transactions,

      o     on any national  securities  exchange or quotation  service on which
            the securities may be listed or quoted at the time of sale;

      o     in the over-the-counter market;

      o     in  transactions  otherwise than on these exchanges or systems or in
            the over-the-counter market;

      o     through the writing of options,  whether  such options are listed on
            an options exchange or otherwise;

      o     ordinary  brokerage  transactions  and  transactions  in  which  the
            broker-dealer solicits purchasers;

      o     block  trades in which the  broker-dealer  will  attempt to sell the
            shares as agent but may  position  and resell a portion of the block
            as principal to facilitate the transaction;

      o     purchases  by  a  broker-dealer  as  principal  and  resale  by  the
            broker-dealer for its account;

      o     an  exchange  distribution  in  accordance  with  the  rules  of the
            applicable exchange;

      o     privately negotiated transactions;

      o     short sales;

      o     sales pursuant to Rule 144;

<PAGE>

      o     broker-dealers may agree with the selling  securityholders to sell a
            specified number of such shares at a stipulated price per share;

      o     a combination of any such methods of sale; and

      o     any other method permitted pursuant to applicable law.

      If the selling  stockholders effect such transactions by selling shares of
Common  Stock  to  or  through  underwriters,  broker-dealers  or  agents,  such
underwriters,  broker-dealers  or agents may receive  commissions in the form of
discounts,   concessions  or  commissions  from  the  selling   stockholders  or
commissions  from purchasers of the shares of Common Stock for whom they may act
as agent or to whom they may sell as principal (which discounts,  concessions or
commissions as to particular  underwriters,  broker-dealers  or agents may be in
excess of those customary in the types of transactions  involved). In connection
with sales of the shares of Common Stock or otherwise,  the selling stockholders
may enter into hedging  transactions with broker-dealers or others, which may in
turn  engage  in short  sales of the  shares of  Common  Stock in the  course of
hedging in positions they assume. The selling  stockholders may also sell shares
of Common  Stock  short and  deliver  shares of  Common  Stock  covered  by this
prospectus  to close  out  short  positions  and to  return  borrowed  shares in
connection  with such short  sales.  The selling  stockholders  may also loan or
pledge shares of Common Stock to  broker-dealers or others that in turn may sell
such shares.

      The selling  stockholders may pledge or grant a security  interest in some
or all of the shares of Common  Stock owned by them and, if they  default in the
performance of their secured  obligations,  the pledgees or secured  parties may
offer and sell the  shares of Common  Stock from time to time  pursuant  to this
prospectus or any  amendment to this  prospectus  under Rule  424(b)(3) or other
applicable  provision of the  Securities Act of 1933, as amended,  amending,  if
necessary,  the list of selling stockholders to include the pledgee,  transferee
or other successors in interest as selling  stockholders  under this prospectus.
The selling stockholders also may transfer and donate the shares of Common Stock
in other circumstances in which case the transferees,  donees, pledgees or other
successors  in interest  will be the selling  beneficial  owners for purposes of
this prospectus,  including, without limitation, in accordance with Section 2(f)
of the Securities Purchase Agreements.

      The  selling  stockholders  and  any  broker-dealer  participating  in the
distribution  of the shares of Common  Stock may be deemed to be  "underwriters"
within the  meaning of the  Securities  Act,  and any  commission  paid,  or any
discounts or concessions  allowed to, any such broker-dealer may be deemed to be
underwriting  commissions or discounts  under the Securities  Act. At the time a
particular  offering  of the  shares  of  Common  Stock  is made,  a  prospectus
supplement,  if required, will be distributed which will set forth the aggregate
amount of shares of Common  Stock being  offered and the terms of the  offering,
including  the name or names of any  broker-dealers  or agents,  any  discounts,
commissions  and  other  terms   constituting   compensation  from  the  selling
stockholders and any discounts,  commissions or concessions allowed or reallowed
or paid to broker-dealers.


<PAGE>

      Under the securities  laws of some states,  the shares of Common Stock may
be sold in such states only through  registered or licensed  brokers or dealers.
In  addition,  in some states the shares of Common  Stock may not be sold unless
such  shares  have been  registered  or  qualified  for sale in such state or an
exemption from registration or qualification is available and is complied with.

      There can be no assurance  that any selling  stockholder  will sell any or
all of the shares of Common Stock registered  pursuant to the shelf registration
statement, of which this prospectus forms a part.

      The  selling  stockholders  and any  other  person  participating  in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended,  and the rules and regulations  thereunder,  including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of  purchases  and sales of any of the  shares of  Common  Stock by the  selling
stockholders and any other participating person.  Regulation M may also restrict
the ability of any person  engaged in the  distribution  of the shares of Common
Stock to engage in market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the shares of Common
Stock and the  ability  of any  person  or  entity  to  engage in  market-making
activities with respect to the shares of Common Stock.

      We will pay all expenses of the registration of the shares of Common Stock
pursuant to the registration  rights  agreement,  estimated to be $[ ] in total,
including,  without  limitation,  Securities and Exchange Commission filing fees
and expenses of compliance with state  securities or "blue sky" laws;  provided,
however,  that a selling  stockholder  will pay all  underwriting  discounts and
selling commissions,  if any. We will indemnify the selling stockholders against
liabilities,  including some liabilities under the Securities Act, in accordance
with the registration  rights  agreements,  or the selling  stockholders will be
entitled to  contribution.  We may be  indemnified  by the selling  stockholders
against civil liabilities,  including liabilities under the Securities Act, that
may  arise  from  any  written  information  furnished  to  us  by  the  selling
stockholder  specifically  for use in this  prospectus,  in accordance  with the
related registration rights agreements, or we may be entitled to contribution.

      Once sold under the shelf registration statement, of which this prospectus
forms a part, the shares of Common Stock will be freely tradable in the hands of
persons other than our affiliates.