CONVERSION AGREEMENT


            
            This Conversion Agreement (this
            “Agreement”) is made
            this 5th day of November 2007, between Mountains West Exploration, Inc., a
            New Mexico corporation (the
            “Corporation”), and each
            of the other signatories hereto, (each a “Note
            Holder” and collectively, the
            “Note
            Holders”).


            
            RECITALS


            
            A.    
            The Corporation issued a certain promissory note to each Note Holder
            (the “Note” and
            collectively, the
            “Notes”) pursuant to the
            certain Note Purchase Agreement between the Corporation and the Note Holders
            (“Note Purchase
            Agreement”). The terms not defined herein shall have
            the meaning ascribed to them in the Note Purchase Agreement.


            
            B.        The outstanding
            principal and accrued interest as of the Closing Date (as defined below) on each Note
            is set forth opposite the respective Note Holder’s name on Schedule 1 attached
            hereto (the “Debt” and
            collectively, the “Common
            Debt”).


            
            C.        All of the parties
            hereto desire to convert the Common Debt into shares of Common Stock of the
            Corporation.


            
            NOW, THEREFORE, in consideration of the mutual promises and of the
            representations, warranties and covenants hereinafter made, the parties hereto agree as
            follows:


            
            AGREEMENT


            
            1.         
            Incorporation of the Recitals. Each of the
            above recitals is incorporated in this Agreement and deemed to be a part of this
            Agreement.


            
            2.         
            Conversion of Common Debt. On the terms and
            subject to the conditions herein set forth, on the Closing Date, each Note Holder
            hereby agrees to convert the Common Debt owned by such Note Holder into the number of
            shares of Common Stock of the Corporation as set forth opposite such Note
            Holder’s name on Schedule 1 attached hereto, at a conversion price of $0.51 per
            share upon each respect Note shall be deemed cancelled.


            
            3.         
            Waiver and Release. Upon the conversion of
            the Common Debt as provided in Section 2 above, each Note Holder hereby:


            
                	
                             

                        	
                            
                            A.

                        	
                            
                            waives all of the obligations of the Corporation under
                            the Notes; and

                        


            


            
            B.        releases and forever
            discharges the Corporation, its parents, subsidiaries, affiliates, past and present, as
            well as their trustees, directors, officers, agents, attorneys, insurers, employees,
            members, stockholders, representatives, assigns and successors, past and present
            (collectively, the “Released
            Parties”), with respect to and from any and every right
            and all manner of action and actions, cause or causes of action, damages, liabilities,
            losses, sums owing, claims or demands of whatever kind, nature or description (whether
            known or unknown as of the date of this Agreement), at law or in equity, or created by
            statute or regulation, which have arisen before the date of this Agreement in
            connection with the Notes; provided, however, that this release shall not in any way
            release or


            
             

            
            


            

            

            
            otherwise affect the rights of each Note Holder under the terms of this
            Agreement. Each Note Holder shall not bring any action, claim or proceeding of any kind
            (whether judicial, arbitration or otherwise) against any Released Party, as applicable,
            for any action, cause or causes of action, damages, liabilities, losses, sums owing,
            claims or demands released by each Note Holder pursuant to this Agreement.


            
            4.         
            Representations and Warranties of the Note
            Holders. Each Note Holder represents and warrants to the
            Corporation that:


            
            A.        Each Note Holder has
            full power, authority and legal right to enter into this Agreement.


            
            B.        This Agreement
            constitutes the valid and legally binding obligation of each Note Holder, enforceable
            in accordance with its terms and conditions except as the enforceability thereof may be
            limited by the availability of equitable principals or by bankruptcy, insolvency,
            reorganizations, moratorium or other similar laws effecting creditors’ rights
            generally.


            
            C.        Each Note Holder is
            the absolute owner of its respective Debt and has good and marketable title thereto,
            free and clear of any pledges, liens, claims, security interests, charges, options,
            encumbrances or other restrictions.


            
            D.        Each Note Holder has
            full right, power and authority to convert its respective Debt as provided
            herein.


            
            5.         
            Representations and Warranties of the
            Corporation. The Corporation represents and warrants to each
            Note Holder that:


            
            A.        The Corporation has
            full power, authority and legal right to enter into this Agreement.


            
            B.        This Agreement
            constitutes the valid and legally binding obligation of the Corporation, enforceable in
            accordance with its terms and conditions except as the enforceability thereof may be
            limited by the availability of equitable principals or by bankruptcy, insolvency,
            reorganizations, moratorium or other similar laws effecting creditors’ rights
            generally.


            
            6.         
            Condition Precedent. The conversion of the
            Common Debt as contemplated by this Agreement shall be subject to the consent of the
            board of directors of the Corporation.


            
            7.         
            Closing. The closing of the transactions
            contemplated hereunder (the
            “Closing”) shall take
            place at the offices of the Corporation on November 5, 2007 at 10:00 a.m. or on such
            other date or at such other place as the parties shall otherwise mutually agree orally
            or in writing (the “Closing
            Date”).


            
            8.         
            Deliveries of the Note Holders. On the
            Closing Date, in addition to execution of this Agreement, each Note Holder shall
            deliver to the Corporation the following:


             


            
            -2-


             

            
            


            

            

            
                	
                             

                        	
                            
                            A.

                        	
                            
                            The Note held by Note Holder for cancellation by the
                            Corporation.

                        


            


            
            B.        Any other documents
            required by this Agreement or reasonably requested by the Corporation.


            
            9.         
            Deliveries of the Corporation. On the
            Closing Date, in addition to execution of this Agreement, the Corporation shall
            deliver, or caused to be delivered, to each Note Holder the following:


            
            A.        Original certificates
            evidencing the issuance of the Common Stock of the Corporation to the respective Note
            Holder or a letter to the Corporation’s transfer agent authorizing the issuance
            of such shares.


            
            B.        Any other documents
            required by this Agreement or reasonably requested by the Note Holders.


            
            10.       
            Survival of Representations and Warranties.
            All representations, warranties, covenants and agreements made herein or in any
            certificates provided for herein shall survive this Agreement.


            
            11.       
            Entire Agreement. This Agreement, including
            Schedule 1 attached hereto, constitutes the entire agreement among the parties with
            respect to the subject matter thereof, and supersede all prior agreements,
            correspondence, conversations and negotiations with respect to the subject matter
            hereof. If any provision of this Agreement shall be declared by any court of competent
            jurisdiction illegal, void or unenforceable, the other provisions shall not be affected
            but shall remain in full force and effect. This Agreement may not be modified or
            changed except by an instrument in writing duly executed by the parties hereto, and no
            waiver of compliance of any provision or condition hereof and no consent provided for
            herein shall be effective unless evidenced by an instrument in writing duly executed by
            the party hereto seeking to be charged with such waiver or consent.


            
            12.       
            Successors and Assigns. This Agreement
            shall be binding upon and shall inure to the benefit of the parties hereto and their
            respective heirs, legal representatives, successors in interest and assigns.
            Notwithstanding the foregoing, the parties hereto each hereby acknowledge and agree
            that neither party may assign its rights or obligations hereunder, except as otherwise
            expressly permitted herein.


            
            13.       
            General. The parties agree that for the
            purpose of satisfying any conditions of this Agreement, time is of the essence of this
            Agreement. The section headings contained in this Agreement are for references purposes
            only and shall not affect the meaning or interpretation of this Agreement. This
            Agreement may be executed in any number of counterparts, each of which shall be deemed
            to be an original, and all of which when taken together shall be deemed to be one and
            the same instrument. This Agreement shall be governed by and construed according to the
            laws of the State of Illinois. 


            
            14.       
            Note Purchase Agreement and Warrants. The
            parties hereto acknowledge that this Agreement is not intended to terminate any
            existing Warrants issued pursuant to the Note Purchase Agreement or otherwise
            authorized in connection with this conversion. With regard to


             


            
            -3-


             

            
            


            

            

            
            such Warrants, the parties hereto acknowledge and agree that the
            exercise price for the purchase of Common Stock of the Corporation shall be equal to
            $0.51 per share of Common Stock and each holder affirms the representations and
            warranties set forth on Schedule 2.


            
            [Signature Page Follows]


            
            -4-


             

            
            


            

            

            
            IN WITNESS WHEREOF, the parties hereto have executed this Conversion
            Agreement as of the date first written above.


             


            
                	
                            
                             

                        	
                            
                             

                        	
                            
                            Mountains West Exploration, Inc.

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                            By: 

                        	
                            
                            /s/ Lee Wiskowski

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                            Its:

                        	
                            

                            
                            Co-Chief Executive
                            Officer

                        


            


             


             


            
            -5-


             

            
            


            

            

             


            
                	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            /s/ Richard Levy

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Richard Levy

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            /s/ Norm Siegel

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Norm Siegel

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            /s/ Albert Pick III

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Albert Pick III

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            /s/ David Beamish

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            David Beamish

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            /s/ Douglas Stukel

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Douglas Stukel

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Grander, L.L.C.

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            /s/ Lee Wiskowski

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Lee Wiskowski, Member

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            One-Seven LLC

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            /s/ Douglas Stukel

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Douglas Stukel, Member

                        


            


             


             


            
            -6-


             

            
            


            

            

            
            SCHEDULE 1


             


             


             


            
                	
                            
                            Note Holder

                        	
                            
                            Shares of Common Stock

                        
	
                            
                             

                        	
                            
                             

                        
	
                            
                            Richard Levy

                        	
                            
                            206,871

                        
	
                            
                            Norman F. Siegel Living Trust, dated July 26,
                            2005

                        	
                            
                            206,871

                        
	
                            
                            Albert Pick III

                        	
                            
                            206,683

                        
	
                            
                            Grander, L.L.C.

                        	
                            
                            259,163

                        
	
                            
                            One-Seven LLC

                        	
                            
                            259,163

                        
	
                            
                            David Beamish

                        	
                            
                            30,833

                        
	
                            
                            Douglas Stukel

                        	
                            
                            30,720

                        


            


             


             


            
            -7-


             

            
            


            

            

            
            SCHEDULE 2


             


            
            REPRESENTATIONS AND WARRANTIES OF THE
            LENDERS. IN CONNECTION WITH THE TRANSACTIONS PROVIDED FOR
            HEREIN, EACH NOTE HOLDER HEREBY REPRESENTS AND WARRANTS TO THE COMPANY
            THAT:


            
            Purchase Entirely for Own Account. Each
            Lender acknowledges that this Agreement is made with Lender in reliance upon such
            Lender’s representation to the Corporation that the shares of Common Stock issued
            upon conversion of the Note, the Warrants, and any Common Stock issuable upon exercise
            of the Warrants (collectively, the “Securities”) will be acquired for
            investment for Note Holder’s own account, as principal and not as a nominee or
            agent, and not with a view to the resale or distribution of any part thereof, and that
            such Note Holder has no present intention of selling, granting any participation in, or
            otherwise distributing the same. By executing this Agreement, each Note Holder further
            represents that such Note Holder does not have any contract, undertaking, agreement or
            arrangement with any person to sell, transfer or grant participations to such person or
            to any third person, with respect to the Securities.


            
            Disclosure of Information. Each Note
            Holder acknowledges that it has received all the information, documents and materials
            it considers necessary or appropriate for deciding whether to acquire the Securities.
            Each Note Holder confirms that it has made such further investigation of the Company as
            was deemed appropriate to evaluate the merits and risks of this investment. Each Note
            Holder further represents that it has had an opportunity to ask questions and receive
            answers from the Company regarding the terms and conditions of the offering of the
            Securities.


            
            Investment Experience. Each Note Holder
            is an investor in securities of companies in the development stage and acknowledges
            that it is able to fend for itself, can bear the economic risk of its investment and
            has such knowledge and experience in financial or business matters that it is capable
            of evaluating the merits and risks of the investment in the Securities. If other than
            an individual, each Note Holder also represents it has not been organized solely for
            the purpose of acquiring the Securities.


            
            Accredited Investor. Each Note Holder is
            an “accredited investor” within the meaning of Rule 501 of Regulation D of
            the Securities Act of 1933, as presently in effect (the “Securities
            Act”).


            
            Restricted Securities. Each Note Holder
            understands that the Securities are characterized as “restricted
            securities” under the federal securities laws inasmuch as they are being acquired
            from the Company in a transaction not involving a public offering and that under such
            laws and applicable regulations such securities may not be resold except through a
            valid registration statement or pursuant to a valid exemption from the registration
            requirements under the Securities Act and applicable state securities laws. Each Note
            Holder represents that it is familiar with Rule 144 of the Securities Act, and
            understands the resale limitations imposed thereby and by the Securities Act and
            applicable state securities laws.


            
            Legends. It is understood that the
            certificates evidencing the Securities, or any other securities issued in respect of
            the Securities upon any stock split, stock dividend, recapitalization, merger,
            consolidation or similar event, shall bear the legends required by applicable law as
            well as such agreements to which such Securities may be subject, including, without
            limitation, legends relating to restrictions on transfer under federal and state
            securities laws and legends required under applicable state securities laws, as well as
            the following legend:


            
            “THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
            ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR REGISTERED UNDER ANY
            STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED,
            OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO (A) AN EFFECTIVE REGISTRATION STATEMENT
            UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (B) AN OPINION OF COUNSEL SATISFACTORY TO
            THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT, OR (C) AN
            EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
            (IF AVAILABLE), IN EACH OF CASES (A) THROUGH (C) IN ACCORDANCE WITH ANY APPLICABLE
            STATE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.”


             


             


            
            -8-