SECURITIES
      PURCHASE AGREEMENT

     

    THIS SECURITIES
      PURCHASE AGREEMENT
      (this
“Agreement”),
      dated
      as of September ___, 2008, by and among Vortex Resources Corp. a Delaware
      corporation, with headquarters located at 9107 Wilshire Blvd., Suite 450,
      Beverly Hills, CA 90210, (the “Company”),
      and
      Trafalgar Capital Specialized Investment Fund, Luxembourg   ( “Buyer”).

     

    WITNESSETH:

     

    WHEREAS,
      the
      Company and the Buyer are executing and delivering this Agreement in reliance
      upon an exemption from securities registration pursuant to Section 4(2) and/or
      Rule 506 of Regulation D (“Regulation
      D”)
      as
      promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
      under
      the Securities Act of 1933, as amended (the “1933
      Act”);

     

    WHEREAS,
      the
      parties desire that, upon the terms and subject to the conditions contained
      herein, the Company shall issue and sell to the Buyer, as provided herein,
      and
      the Buyer shall purchase up to Two Million Seven Hundred Fifty Thousand Dollars
      ($2,750,000) of a secured promissory note that is convertible to shares of
      the
      Company’s common stock in accordance with its terms (the “Note”),
      which
      shall be convertible into shares of the Company’s common stock, par value $.001
      (the “Common Stock”) (as converted, the “Conversion
      Shares”)
      of
      which One Million Six Hundred Thousand Dollars ($1,600,000) shall be funded
      on
      the date hereof (the “First Closing” or “Tranche A”), Four Hundred Thousand
      Dollars ($400,000) shall be funded on September 30, 2008 upon the Buyer’s
      consent based on its evaluation of the progress made in the drilling at the
      Davy
      Crockett gas field and other factors (the “Second Closing” or “ Tranche B”) and
      the balance of Seven Hundred Fifty Thousand Dollars ($750,000) shall be
      disbursed upon satisfaction of certain conditions precedent described herein(the
      “Third Closing” or “Tranche C”)(each individually referred to as a “Closing”
      collectively referred to as the “Closings”),
      for a
      total purchase price of up to Two Million Seven Hundred Fifty Thousand Dollars
      ($2,750,000), (the “Purchase
      Price”)
      Buyer;
      and

     

    WHEREAS,
      the
      proceeds of the sale of the Note contemplated hereby shall be held in escrow
      pursuant to the terms of an escrow agreement substantially in the form of the
      Escrow Agreement attached hereto as Exhibit
      A
      (the
“Escrow
      Agreement”);
      and

     

     WHEREAS,
      contemporaneously with the execution and delivery of this Agreement, the parties
      hereto are executing and delivering a Security Agreement substantially in the
      form attached hereto as Exhibit
      B (the
      “Security
      Agreement”)
      pursuant to which the Company has agreed to provide the Buyer a security
      interest in Pledged Collateral (as this term is defined in the Security
      Agreement dated the date hereof) to secure Company’s obligations under this
      Agreement, the Note and the Security Agreement (collectively, the “Transaction
      Documents”)
      or any
      other obligations of the Company to the Buyer; and

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and other agreements contained in this
      Agreement the Company and the Buyer hereby agree as follows:


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    1. PURCHASE
      AND SALE OF NOTE.

     

    (a) Purchase
      of Note.
      Subject
      to the satisfaction (or waiver) of the terms and conditions of this Agreement,
      Buyer agrees to purchase at the Closings (as defined herein below) and the
      Company agrees to sell and issue to Buyer, at such Closings, Notes in
an
      aggregate amount of up to Two Million Seven Hundred Fifty Thousand Dollars
      ($2,750,000.00) (the “Purchase
      Price”),
      as
      follows: (i) One Million Six Hundred Thousand Dollars ($1,600,000.00)
shall
      be
      funded at the First Closing (ii) Four Hundred Thousand Dollars ($400,000) shall
      be funded at the Second Closing and (iii) the balance to be funded at the Third
      Closing. Prior to execution hereof by the Buyer, the Buyer shall wire transfer
      the portion of the Purchase Price required for the First Closing to Robin Ann
      Gorelick as Escrow Agent for Vortex Resources Corp./Trafalgar Capital Investment
      Fund”, which amount shall be held in escrow pursuant to the terms of the Escrow
      Agreement (as hereinafter defined) and disbursed in accordance therewith. Buyer
      shall wire transfer the portion of the Purchase Price required for each of
      the
      Second and Third Closing prior to the occurrence of such Closing

     

    (b) Closing
      Date.
      The
      First Closing of the purchase and sale of the Note shall take place at 10:00
      a.m. Eastern Standard Time on the date hereof, subject to notification of
      satisfaction of the conditions to the Closing set forth herein and in Sections
      6
      and 7 below (or such later date as is mutually agreed to by the Company and
      the
      Buyer) (the “First Closing
      Date”),
      and
      the Second and Third Closing of the purchase and sale of the Note shall take
      place at Buyer’s consent, subject to notification of satisfaction of the
      conditions to those Closings as set forth herein and in Sections 6 and 7
      below (or such later date as is mutually agreed to by the Company and the
      Buyer(s)) (the “Second
      Closing Date”
and
      the
“Third Closing Date”) (collectively referred to as the “Closing
      Dates”).
      The
      Closings shall occur on the Closing Dates at the offices of Robin Ann Gorelick
      or such other place as is mutually agreed to by the Company and the Buyer).
      

     

    (c) Escrow
      Arrangements; Form of Payment. The
      full
      amount of the portion of the Purchase Price
      for the
      interests in the Note to be purchased in the First Closing
      shall be
      deposited in an escrow account with Robin Ann Gorelick, as escrow agent (the
      “Escrow
      Agent”)
      prior
      to the execution hereof.
      Such
      portion of the Purchase Price for the interests in the Note to be purchased
      in
      the other Closings shall be deposited into the Escrow Account prior to such
      applicable Closing Date. Subject to the satisfaction of the terms and conditions
      of this Agreement, on the Closing Dates, (i) the Escrow Agent shall deliver
      to
      the Company in accordance with the terms of the Escrow Agreement that
      portion of the Escrow Funds (as that term is defined in the Escrow Agreement)
      equal to the gross amount of
      the Note
being
      purchased by
      such
Buyer
      as set
      forth on Schedule I (minus
      the
      fees and expenses as set forth herein which shall be paid directly from the
      Escrow
      Funds
      at
the
      Closing)
      by wire
      transfer of immediately available funds and (ii) the Company shall deliver
      to Buyer, the Note as applicable which such Buyer is purchasing in amounts
      indicated opposite such Buyer’s name on Schedule I, duly executed on behalf of
      the Company. 

     

    (d) The
      Debentures shall contain provisions that provide that in the event the Euro
      strengthens against the U.S. Dollar during the life of the Debenture, the Buyer
      shall be afforded an adjustment to compensate for any such movement in either
      conversions or redemptions. 


    
      
        
        

      

      
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    2. BUYER’S
      REPRESENTATIONS AND WARRANTIES.

     

    Buyer
      represents and warrants, severally and not jointly, that:

     

    (a) Investment
      Purpose.
      Buyer
      is acquiring their interest in the Note and, upon conversion of such interest
      in
      the Note, the Buyer will acquire the Conversion Shares then issuable, for its
      own account for investment only and not with a view towards, or for resale
      in
      connection with, the public sale or distribution thereof, except pursuant to
      sales registered or exempted under the 1933 Act; provided, however, that by
      making the representations herein, such Buyer reserves the right to dispose
      of
      the Conversion Shares at any time in accordance with or pursuant to an effective
      registration statement covering such Conversion Shares or an available exemption
      under the 1933 Act.

     

    (b) Accredited
      Investor Status.
      Buyer
      is an “Accredited
      Investor”
as
      that
      term is defined in Rule 501(a)(3) of Regulation D.

     

    (c) Reliance
      on Exemptions.
      Buyer
      understands that the interests in the Note are being offered and sold to it
      in
      reliance on specific exemptions from the registration requirements of United
      States federal and state securities laws and that the Company is relying in
      part
      upon the truth and accuracy of, and such Buyer’s compliance with, the
      representations, warranties, agreements, acknowledgments and understandings
      of
      such Buyer set forth herein in order to determine the availability of such
      exemptions and the eligibility of such Buyer to acquire such
      securities.

     

    (d) Information.
      Buyer
      and its advisors and counsel, if any, have been furnished with all materials
      relating to the business, finances and operations of the Company and information
      deemed by such Buyer to be material to making an informed investment decision
      regarding the purchase of their interest in the Note and the Conversion Shares,
      which have been requested by such Buyer. Buyer and its advisors, if any, have
      been afforded the opportunity to ask questions of the Company and its
      management. Neither such inquiries nor any other due diligence investigations
      conducted by such Buyer or its advisors, if any, or its representatives shall
      modify, amend or affect such Buyer’s right to rely on the Company’s
      representations and warranties contained in Section 3 below. Buyer understands
      that its investment in the Note and the Conversion Shares involves a high degree
      of risk. Buyer is in a position regarding the Company, which, based upon
      employment, family relationship or economic bargaining power, enabled and
      enables such Buyer to obtain information from the Company in order to evaluate
      the merits and risks of this investment. Buyer has sought such accounting,
      legal
      and tax advice, as it has considered necessary to make an informed investment
      decision with respect to its acquisition of the Note and the Conversion
      Shares.

     

    (e) No
      Governmental Review.
      Buyer
      understands that no United States federal or state agency or any other
      government or governmental agency has passed on or made any recommendation
      or
      endorsement of the Note or the Conversion Shares, or the fairness or suitability
      of the investment in the Note or the Conversion Shares, nor have such
      authorities passed upon or endorsed the merits of the offering of the Note
      or
      the Conversion Shares.


    
      
        
        

      

      
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    (f) Transfer
      or Resale.
      Buyer
      understands that: (i) the interests in the Note have not been and are not being
      registered under the 1933 Act or any state securities laws, and may not be
      offered for sale, sold, assigned or transferred unless (A) subsequently
      registered thereunder, or (B) such Buyer shall have delivered to the Company
      an
      opinion of counsel selected by Buyer, in a generally acceptable form, to the
      effect that such securities to be sold, assigned or transferred may be sold,
      assigned or transferred pursuant to an exemption from such registration
      requirements; (ii) any sale of such securities made in reliance on Rule 144
      under the 1933 Act (or a successor rule thereto) (“Rule 144”)
      may be
      made only in accordance with the terms of Rule 144 and further, if Rule 144
      is
      not applicable, any resale of such securities under circumstances in which
      the
      seller (or the person through whom the sale is made) may be deemed to be an
      underwriter (as that term is defined in the 1933 Act) may require compliance
      with some other exemption under the 1933 Act or the rules and regulations of
      the
      SEC thereunder; and (iii) neither the Company nor any other person is under
      any
      obligation to register such securities under the 1933 Act or any state
      securities laws or to comply with the terms and conditions of any exemption
      thereunder. The Company reserves the right to place stop transfer instructions
      against the shares and certificates for the Conversion Shares.

     

    (g) Legends.
      Buyer
      understands that the certificates or other instruments representing the
      interests in the Note and or the Conversion Shares shall bear a restrictive
      legend in substantially the following form (and a stop transfer order may be
      placed against transfer of such stock certificates):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A
      VIEW
      TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
      IN
      THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR
      AN
      OPINION OF COUNSEL, IN FORM AND SUBSTANCE REASONABLY ACCEPTABLE TO THE COMPANY,
      THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
      LAWS. 

     

    The
      legend set forth above shall be removed and the Company within two (2) business
      days shall issue a certificate without such legend to the holder of the
      Conversion Shares upon which it is stamped, if, unless otherwise required by
      state securities laws, (i) in connection with a sale transaction, provided
      the
      Conversion Shares are registered under the 1933 Act or (ii) in connection with
      a
      sale transaction, after such holder provides the Company with an opinion of
      counsel, which opinion shall be in form, substance and scope reasonably
      acceptable to counsel for the Company, to the effect that a public sale,
      assignment or transfer of the Conversion Shares may be made without registration
      under the 1933 Act. 


    
      
        
        

      

      
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    (h) Authorization,
      Enforcement.
      This
      Agreement has been duly and validly authorized, executed and delivered on behalf
      of such Buyer and is a valid and binding agreement of such Buyer enforceable
      in
      accordance with its terms, except as such enforceability may be limited by
      general principles of equity or applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation and other similar laws relating to,
      or
      affecting generally, the enforcement of applicable creditors’ rights and
      remedies.

     

    (i) Receipt
      of Documents.
      Buyer
      and his or its counsel has received and read in their entirety: (i) this
      Agreement and each representation, warranty and covenant set forth herein,
      the
      Security Agreement and the Escrow Agreement; (ii) all due diligence and other
      information necessary to verify the accuracy and completeness of such
      representations, warranties and covenants; and (iii) answers to all questions
      Buyer submitted to the Company regarding an investment in the Company; and
      Buyer
      has relied on the information contained therein and has not been furnished
      any
      other documents, literature, memorandum or prospectus.

     

    (j) Due
      Formation of Corporate and Other Buyer.
      If the
      Buyer is a corporation, trust, partnership or other entity that is not an
      individual person, it has been formed and validly exists and has not been
      organized for the specific purpose of purchasing the Note and is not prohibited
      from doing so.

     

    (k) No
      Legal Advice From the Company.
      Buyer
      acknowledges, that it had the opportunity to review this Agreement and the
      transactions contemplated by this Agreement with his or its own legal counsel
      and investment and tax advisors. Buyer is relying solely on such counsel and
      advisors and not on any statements or representations of the Company or any
      of
      its representatives or agents for legal, tax or investment advice with respect
      to this investment, the transactions contemplated by this Agreement or the
      securities laws of any jurisdiction. 

     

    3.
      REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     

    The
      Company represents and warrants as of the date hereof and as of the Closing
      Date
      to each of the Buyer that:

     

    (a) Organization
      and Qualification.
      The
      Company and its subsidiaries are corporations duly organized and validly
      existing in good standing under the laws of the jurisdiction in which they
      are
      incorporated, and have the requisite corporate power to own their properties
      and
      to carry on their business as now being conducted. Each of the Company and
      its
      subsidiaries is duly qualified as a foreign corporation to do business and
      is in
      good standing in every jurisdiction in which the nature of the business
      conducted by it makes such qualification necessary, except to the extent that
      the failure to be so qualified or be in good standing would not have a material
      adverse effect on the Company and its subsidiaries taken as a
      whole.

     

    (b) Authorization,
      Enforcement, Compliance with Other Instruments.
      (i) The Company has the requisite corporate power and authority to enter
      into and perform the Transaction Documents, and any related agreements, and
      to
      issue the Note and the Conversion Shares in accordance with the terms hereof
      and
      thereof, (ii) the execution and delivery of the Transaction Documents and any
      related agreements by the Company and the consummation by it of the transactions
      contemplated hereby and thereby, including, without limitation, the issuance
      of
      the Note, the Conversion Shares and the reservation for issuance and the
      issuance of the Conversion Shares issuable upon conversion or exercise thereof,
      have been duly authorized by the Company’s Board of Directors and no further
      consent or authorization is required by the Company, its Board of Directors
      or
      its stockholders, (iii) the Transaction Documents and any related agreements
      have been duly executed and delivered by the Company, (iv) the Transaction
      Documents and any related agreements constitute the valid and binding
      obligations of the Company enforceable against the Company in accordance with
      their terms, except as such enforceability may be limited by general principles
      of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
      liquidation or similar laws relating to, or affecting generally, the enforcement
      of creditors’ rights and remedies. The Company knows of no reason why the
      Company cannot file the registration statement as required under the Investor
      Registration Rights Agreement or perform any of the Company’s other obligations
      to the Buyer. 


    
      
        
        

      

      
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    (c) Capitalization.
      The
      authorized capital stock of the Company consists of 400,000,000 shares of Common
      Stock, par value $.001per share and 5,000,000 shares of Preferred Stock, no
      par
      value per share. As of the date hereof, the Company has 81,975,213 shares of
      Common Stock and no shares of Preferred Stock issued and outstanding. All of
      such outstanding shares have been validly issued and are fully paid and
      nonassessable. No shares of Common Stock are subject to preemptive rights or
      any
      other similar rights or any liens or encumbrances suffered or permitted by
      the
      Company. As of the date of this Agreement, (i) except as set forth on
Schedule
      II
      attached
      hereto,., there are no outstanding options, warrants, scrip, rights to subscribe
      to, calls or commitments of any character whatsoever relating to, or securities
      or rights convertible into, any shares of capital stock of the Company or any
      of
      its subsidiaries, or contracts, commitments, understandings or arrangements
      by
      which the Company or any of its subsidiaries is or may become bound to issue
      additional shares of capital stock of the Company or any of its subsidiaries
      or
      options, warrants, scrip, rights to subscribe to, calls or commitments of any
      character whatsoever relating to, or securities or rights convertible into,
      any
      shares of capital stock of the Company or any of its subsidiaries, (ii) except
      as set forth on Schedule II attached hereto, there are no outstanding debt
      securities and (iii) there are no agreements or arrangements under which the
      Company or any of its subsidiaries is obligated to register the sale of any
      of
      their securities under the 1933 Act (except pursuant to the Registration Rights
      Agreement) and (iv) there are no outstanding registration statements and there
      are no outstanding comment letters from the SEC or any other regulatory agency.
      There are no securities or instruments containing anti-dilution or similar
      provisions that will be triggered by the issuance of the Note as described
      in
      this Agreement. The Company has furnished to the Buyer true and correct copies
      of the Company’s Certificate of Incorporation, as amended and as in effect on
      the date hereof (the “Certificate
      of Incorporation”),
      and
      the Company’s Amended and Restated By-laws, as in effect on the date hereof (the
“By-laws”),
      and
      the terms of all securities convertible into or exercisable for Common Stock
      and
      the material rights of the holders thereof in respect thereto other than stock
      options issued to employees and consultants. 

     

    (d) Issuance
      of Securities.
      The
      Note is duly authorized and, when issued and paid for in accordance with the
      terms hereof, shall be duly issued, fully paid and nonassessable, are free
      from
      all taxes, liens and charges with respect to the issue thereof. The Conversion
      Shares issuable upon conversion of the Note have been duly authorized and
      reserved for issuance. Upon conversion or exercise in accordance with the Note
      the Conversion Shares will be duly issued, fully paid and
      nonassessable.


    
      
        
        

      

      
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    (e) No
      Conflicts.
      The
      execution, delivery and performance of this Agreement and the Transaction
      Documents by the Company and the consummation by the Company of the transactions
      contemplated hereby will not (i) result in a violation of the Articles of
      Incorporation or the By-laws or (ii), to the knowledge of the Company, conflict
      with or constitute a default (or an event which with notice or lapse of time
      or
      both would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, any agreement, indenture or
      instrument to which the Company or any of its subsidiaries is a party, or result
      in a violation of any law, rule, regulation, order, judgment or decree
      (including United States federal and state securities laws and regulations
      and
      the rules and regulations of The National Association of Securities Dealers
      Inc.’s OTC Bulletin Board on which the Common Shares may be quoted) applicable
      to the Company or any of its subsidiaries or by which any property or asset
      of
      the Company or any of its subsidiaries is bound or affected. To the best
      knowledge of the Company, neither the Company nor its subsidiaries is in
      violation of any term of or in default under its Articles of Incorporation
      or
      By-laws or their organizational charter or by-laws, respectively,
      or, any
      material contract, agreement, mortgage, indebtedness, indenture, instrument,
      judgment, decree or order or any statute, rule or regulation applicable to
      the
      Company or its subsidiaries. The business of the Company and its subsidiaries
      is
      not being conducted, and shall not be conducted in violation of any material
      law, ordinance, or regulation of any governmental entity. Except as specifically
      contemplated by this Agreement and as required under the 1933 Act and any
      applicable state securities laws, the Company is not required to obtain any
      consent, authorization or order of, or make any filing or registration with,
      any
      court or governmental agency in order for it to execute, deliver or perform
      any
      of its obligations under or contemplated by this Agreement in accordance with
      the terms hereof. All consents, authorizations, orders, filings and
      registrations which the Company is required to obtain pursuant to the preceding
      sentence have been obtained or effected on or prior to the date hereof, except
      for any required post-Closing notice filings under applicable United States
      federal or state securities laws, if any.

     

    (f) SEC
      Documents: Financial Statements.
      The
      Company has filed or furnished, as applicable, all reports, schedules, forms,
      statements and other documents required to be filed by it with the SEC under
      of
      the Securities Exchange Act of 1934, as amended (the “1934
      Act”)
      (all
      of the foregoing filed prior to the date hereof or amended after the date hereof
      and all exhibits and schedules included therein and financial statements and
      schedules thereto and documents incorporated by reference therein, being
      hereinafter referred to as the “SEC
      Documents”).
      The
      Company has delivered to the Buyer or their representatives, or made available
      through the SEC’s website at http://www.sec.gov, true and complete copies of the
      SEC Documents. As of their respective dates, the financial statements of the
      Company included in the SEC Documents (the “Financial
      Statements”)
      complied as to form in all material respects with applicable accounting
      requirements and the published rules and regulations of the SEC with respect
      thereto as in effect at the time of filing. Such financial statements have
      been
      prepared in accordance with U.S. generally accepted accounting principles,
      consistently applied, during the periods involved (except (i) as may be
      otherwise indicated in such Financial Statements or the notes thereto, or (ii)
      in the case of unaudited interim statements, to the extent they may exclude
      footnotes or may be condensed or summary statements) and, fairly present in
      all
      material respects the financial position of the Company as of the dates thereof
      and the results of its operations and cash flows for the periods then ended
      (subject, in the case of unaudited statements, to normal year-end audit
      adjustments). 


    
      
        
        

      

      
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    (g) 
      No
      Material Misstatement or Omission.
      None of
      the Company’s SEC Documents at the time of filing and none of the representation
      and warranties made in this Agreement or any of the other Transaction Documents
      include any untrue statements of material fact, nor do the Company’s SEC
      Documents at the time of filing and none of the representations and warranties
      made in this Agreement or any of the other Transaction Documents omit to state
      any material fact required to be stated therein necessary to make the statements
      made, in light of the circumstances under which they were made, not
      misleading.

     

    (h) Absence
      of Litigation.
      Except
      as set forth on schedule 3(h), there is no action, suit, proceeding, inquiry
      or
      investigation before or by any court, public board, government agency,
      self-regulatory organization or body pending against or affecting the Company,
      the Common Stock or any of the Company’s subsidiaries, wherein an unfavorable
      decision, ruling or finding would (i) have a material adverse effect on the
      transactions contemplated hereby (ii) adversely affect the validity or
      enforceability of, or the authority or ability of the Company to perform its
      obligations under, this Agreement or any of the documents contemplated herein,
      or (iii) except as expressly disclosed in the SEC Documents, have a material
      adverse effect on the business, operations, properties, financial condition
      or
      results of operations of the Company and its subsidiaries taken as a
      whole.

     

    (i) Acknowledgment
      Regarding Buyer’s Purchase of the Interest in the Note.
      The
      Company acknowledges and agrees that the Buyer is acting solely in the capacity
      of an arm’s length purchaser with respect to this Agreement and the transactions
      contemplated hereby. The Company further acknowledges that the Buyer is not
      acting as a financial advisor or fiduciary of the Company (or in any similar
      capacity) with respect to this Agreement and the transactions contemplated
      hereby and any advice given by the Buyer or any of their respective
      representatives or agents in connection with this Agreement and the transactions
      contemplated hereby is merely incidental to such Buyer’s purchase of its
      interest in the Note or the Conversion Shares. The Company further represents
      to
      the Buyer that the Company’s decision to enter into this Agreement has been
      based solely on the independent evaluation by the Company and its
      representatives.

     

    (j) No
      General Solicitation.
      Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf, has engaged in any form of general solicitation or general advertising
      (within the meaning of Regulation D under the 1933 Act) in connection with
      the
      offer or sale of the Note or the Conversion Shares.

     

    (k) No
      Integrated Offering.
      Neither
      the Company, nor any of its affiliates, nor any person acting on its or their
      behalf has, directly or indirectly, made any offers or sales of any security
      or
      solicited any offers to buy any security, under circumstances that would require
      registration of the Note or the Conversion Shares under the 1933 Act or cause
      this offering of the Note or the Conversion Shares to be integrated with prior
      offerings by the Company for purposes of the 1933 Act.


    
      
        
        

      

      
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    (l) Employee
      Relations.
      Neither
      the Company nor any of its subsidiaries is involved in any labor dispute nor,
      to
      the knowledge of the Company or any of its subsidiaries, is any such dispute
      threatened. None of the Company’s or its subsidiaries’ employees is a member of
      a union and the Company and its subsidiaries believe that their relations with
      their employees are good.

     

    (m) Intellectual
      Property Rights.
      The
      Company and its subsidiaries own or possess adequate rights or licenses to
      use
      all trademarks, trade names, service marks, service mark registrations, service
      names, patents, patent rights, copyrights, inventions, licenses, approvals,
      governmental authorizations, trade secrets and rights necessary to conduct
      their
      respective businesses as now conducted. The Company and its subsidiaries do
      not
      have any knowledge of any infringement by the Company or its subsidiaries of
      trademark, trade name rights, patents, patent rights, copyrights, inventions,
      licenses, service names, service marks, service mark registrations, trade secret
      or other similar rights of others, and, to the knowledge of the Company there
      is
      no claim, action or proceeding being made or brought against, or to the
      Company’s knowledge, being threatened against, the Company or its subsidiaries
      regarding trademark, trade name, patents, patent rights, invention, copyright,
      license, service names, service marks, service mark registrations, trade secret
      or other infringement; and the Company and its subsidiaries are unaware of
      any
      facts or circumstances which might give rise to any of the
      foregoing.

     

    (n) Environmental
      Laws.
      The
      Company and its subsidiaries are (i) in compliance with any and all applicable
      foreign, federal, state and local laws and regulations relating to the
      protection of human health and safety, the environment or hazardous or toxic
      substances or wastes, pollutants or contaminants (“Environmental
      Laws”),
      (ii)
      have received all permits, licenses or other approvals required of them under
      applicable Environmental Laws to conduct their respective businesses and (iii)
      are in compliance with all terms and conditions of any such permit, license
      or
      approval.

     

    (o) 
      Title.
      Any
      real property and facilities held under lease by the Company and its
      subsidiaries are held by them under valid, subsisting and enforceable leases
      with such exceptions as are not material and do not interfere with the use
      made
      and proposed to be made of such property and buildings by the Company and its
      subsidiaries.

     

    (p) 
      Insurance.
      The
      Company and each of its subsidiaries are insured by insurers of recognized
      financial responsibility against such losses and risks and in such amounts
      as
      management of the Company believes to be prudent and customary in the businesses
      in which the Company and its subsidiaries are engaged. Neither the Company
      nor
      any such subsidiary has been refused any insurance coverage sought or applied
      for and neither the Company nor any such subsidiary has any reason to believe
      that it will not be able to renew its existing insurance coverage as and when
      such coverage expires or to obtain similar coverage from similar insurers as
      may
      be necessary to continue its business at a cost that would not materially and
      adversely affect the condition, financial or otherwise, or the earnings,
      business or operations of the Company and its subsidiaries, taken as a
      whole.


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    (q) Regulatory
      Permits.
      The
      Company and its subsidiaries possess all material certificates, authorizations
      and permits issued by the appropriate federal, state or foreign regulatory
      authorities necessary to conduct their respective businesses, and neither the
      Company nor any such subsidiary has received any notice of proceedings relating
      to the revocation or modification of any such certificate, authorization or
      permit.

     

    (r) 
      Internal Accounting Controls.
      The
      Company and each of its subsidiaries maintain a system of internal accounting
      controls sufficient to provide reasonable assurance that (i) transactions are
      executed in accordance with management’s general or specific authorizations,
      (ii) transactions are recorded as necessary to permit preparation of financial
      statements in conformity with generally accepted accounting principles and
      to
      maintain asset accountability, and (iii) the recorded amounts for assets is
      compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

     

    (s) 
      No
      Material Adverse Breaches, etc.
      Neither
      the Company nor any of its subsidiaries is subject to any charter, corporate
      or
      other legal restriction, or any judgment, decree, order, rule or regulation
      which in the judgment of the Company’s officers has or is expected in the future
      to have a material adverse effect on the business, properties, operations,
      financial condition, results of operations or prospects of the Company or its
      subsidiaries. Neither the Company nor any of its subsidiaries is in breach
      of
      any contract or agreement which breach, in the judgment of the Company’s
      officers, has or is expected to have a material adverse effect on the business,
      properties, operations, financial condition, results of operations or prospects
      of the Company or its subsidiaries.

     

    (t) 
      Tax
      Status.
      The
      Company and each of its subsidiaries has made and filed all federal and state
      income and all other tax returns, reports and declarations required by any
      jurisdiction to which it is subject and (unless and only to the extent that
      the
      Company and each of its subsidiaries has set aside on its books provisions
      reasonably adequate for the payment of all unpaid and unreported taxes) has
      paid
      all taxes and other governmental assessments and charges that are material
      in
      amount, shown or determined to be due on such returns, reports and declarations,
      except those being contested in good faith and has set aside on its books
      provision reasonably adequate for the payment of all taxes for periods
      subsequent to the periods to which such returns, reports or declarations apply.
      There are no unpaid taxes in any material amount claimed to be due by the taxing
      authority of any jurisdiction, and the officers of the Company know of no basis
      for any such claim.

     

    (u) Certain
      Transactions.
      Except
      for arm’s length transactions pursuant to which the Company makes payments in
      the ordinary course of business for an amount less than fifty thousand dollars
      ($50,000) and which are upon terms no less favorable than the Company could
      obtain from third parties , none of the officers, directors, or employees of
      the
      Company is presently a party to any transaction with the Company (other than
      for
      services as employees, officers and directors), including any contract,
      agreement or other arrangement providing for the furnishing of services to
      or
      by, providing for rental of real or personal property to or from, or otherwise
      requiring payments to or from any officer, director or such employee or, to
      the
      knowledge of the Company, any corporation, partnership, trust or other entity
      in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner.


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    (v) 
      Fees
      and Rights of First Refusal.
      The
      Company is not obligated to offer the securities offered hereunder on a right
      of
      first refusal basis or otherwise to any third parties including, but not limited
      to, current or former shareholders of the Company, underwriters, brokers, agents
      or other third parties.

     

    (w) 
      Schedule of Indebtedness.
      The
      schedule of the Company’s debt and other liabilities included on Schedule 4(j)
      attached hereto is complete and accurate. 

     

    4, COVENANTS.

     

    (a) 
      Best
      Efforts.
      Each
      party shall use its best efforts timely to satisfy each of the conditions to
      be
      satisfied by it as provided in Sections 6 and 7 of this Agreement.

     

    (b) 
      Form
      D.
      The
      Company agrees to file a Form D with respect to the Conversion Shares as
      required under Regulation D and to provide a copy thereof to Buyer promptly
      after such filing. The Company shall, on or before the applicable Closing Date,
      take such action as the Company shall reasonably determine is necessary to
      qualify the Conversion Shares, or obtain an exemption for the Conversion Shares
      for sale to the Buyer at the Closing pursuant to this Agreement under applicable
      securities or “Blue Sky” laws of the states of the United States, and shall
      provide evidence of any such action so taken to the Buyer on or prior to the
      applicable Closing Date.

     

    (c) 
      Reporting Status.
      Until
      the earlier of (i) the date as of which the Buyer may sell all of the Conversion
      Shares without restriction pursuant to Rule 144(k) promulgated under the 1933
      Act (or successor thereto), or (ii) the date on which (A) the Buyer shall have
      sold all the Conversion Shares and (B) none of the Note are outstanding (the
      “Registration
      Period”),
      the
      Company shall file in a timely manner all reports required to be filed with
      the
      SEC pursuant to the 1934 Act and the regulations of the SEC thereunder, and
      the
      Company shall not terminate its status as an issuer required to file reports
      under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
      would otherwise permit such termination.

     

    (d) 
      Use
      of Proceeds.
      The
      Company will use the proceeds from the sale of the Note for working capital
      purposes and more specifically, the proceeds from the first close used to drill
      two wells in the Davy Crockett gas field. 

     

    (e) 
      Reservation of Shares.
      The
      Company shall take all action reasonably necessary to at all times have
      authorized, and reserved for the purpose of issuance, such number of shares
      of
      Common Stock as shall be necessary to effect the issuance of the Conversion
      Shares. If at any time the Company does not have available such shares of Common
      Stock as shall from time to time be sufficient to effect the conversion of
      all
      of the Conversion Shares of the Company, the Company, within ten (10) business
      days for the sole purpose of increasing the number of shares authorized shall
      either (i) obtain sufficient written consents from the Company’s shareholders
      and file an Information Statement with the Securities and Exchange Commission
      (the “SEC”) or (ii) file a preliminary proxy statement with the SEC and shall
      call and hold a special meeting of the shareholders as soon as practicable
      after
      such occurrence.. The Company’s management shall recommend to the shareholders
      to vote in favor of increasing the number of shares of Common Stock authorized.
      Management shall also vote all of its shares in favor of increasing the number
      of authorized shares of Common Stock. Notwithstanding the foregoing, the Buyer
      hereby acknowledge that the Company currently does not have sufficient shares
      of
      its Common Stock authorized as shall be necessary to effect the issuance of
      the
      Conversion Shares, but has obtained the written consent of a sufficient number
      of votes of its shareholders to authorize such increase and has filed an
      Information Statement with the SEC reflecting such approval.


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    (f) Fees
      and Expenses.
      Other
      than as set forth herein, each of the Company and the Buyer shall pay all costs
      and expenses incurred by such party in connection with the negotiation,
      investigation, preparation, execution and delivery of the Transaction Documents
      and any other documents relating to this transaction. 

     

    (i) The
      Company shall pay the Buyer a facility commitment fee of four percent (4%)
      of
      the Purchase Price in stock at the time of each Close. The value of shares
      shall
      be based on the VWAP of the Company’s shares during the five days preceding such
      Close. 

     

    (ii) The
      Company has agreed to pay a structuring fee to Buyer of Fifteen Thousand Five
      Hundred Dollars ($15,000), Ten Thousand Dollars ($10,000) of which has been
      paid
      with the remaining amount paid directly from the proceeds of the First Closing
      or on the date on which the Company notifies the Investor that it does not
      intend to proceed with the financing

     

    (iii) The
      Company shall pay the Buyer a facility draw down fee of four percent (4%) of
      the
      Purchase Price, which shall be paid directly from the proceeds of and
      proportionally upon each Closing.

     

    (iv) The
      Company shall issue the Buyer 150,000 shares of the common stock of the Company
      at the First Close. 

     

    (v) The
      Company has agreed to pay a due diligence fee to Buyer of Fifteen Thousand
      Dollars ($15,000), Seven Thousand Five Hundred Dollars ($7,500.00) of which
      has
      been paid with the remaining amount paid directly from the proceeds of the
      First
      closing or on the date on which the Company notifies the Buyer that it does
      not
      intend to proceed with the financing. The Company shall pay an Advisory fee
      of
      $100,000 to T.A.S. Holdings Limited out of the First Close. 

     

    (g) Corporate
      Existence.
      So long
      as any of the interests in the Note remain outstanding, the Company shall not
      directly or indirectly consummate any merger, reorganization, restructuring,
      reverse stock split consolidation, sale of all or substantially all of the
      Company’s assets or any similar transaction or related transactions (each such
      transaction, an “Organizational
      Change”)
      unless, prior to the consummation an Organizational Change, the Company obtains
      the written consent of Buyer which consent shall not be unreasonably withheld
      or
      delayed. In any such case, the Company will make appropriate provision with
      respect to such holders’ rights and interests to insure that the provisions of
      this Section 4(g) will thereafter be applicable to the Note.


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    (h) Transactions
      With Affiliates.
      So long
      as any Notes are outstanding, the Company shall not, and shall cause each of
      its
      subsidiaries not to, enter into, amend, modify or supplement, or permit any
      subsidiary to enter into, amend, modify or supplement any agreement,
      transaction, commitment, or arrangement (an “Affiliate Transaction”) with any of
      its or any subsidiary’s officers or directors, or persons who were officers or
      directors of the Company at any time during the previous two (2) years,
      stockholders who beneficially own five percent (5%) or more of the Common Stock,
      or Affiliates (as defined below) or with any individual related by blood,
      marriage, or adoption to any such individual or with any entity in which any
      such entity or individual owns a five percent (5%) or more beneficial interest
      (each a “Related
      Party”)
      for an
      aggregate amount for all Affiliate Transactions with such Related Party in
      excess of fifty thousand dollars ($50,000), except for (a) customary employment
      arrangements and benefit programs on reasonable terms, (b) any investment in
      an
      Affiliate of the Company, (c) any Affiliate Transaction on an arms-length basis
      on terms no less favorable than terms which would have been obtainable from
      a
      person other than such Related Party, or (d) any Affiliate Transaction which
      is
      approved by a majority of the disinterested directors of the Company, for
      purposes hereof, any director who is also an officer of the Company or any
      subsidiary of the Company shall not be a disinterested director with respect
      to
      any such agreement, transaction, commitment, or arrangement. “Affiliate”
for
      purposes hereof means, with respect to any person or entity, another person
      or
      entity that, directly or indirectly, (i) has a ten percent (10%) or more equity
      interest in that person or entity, (ii) has ten percent (10%) or more common
      ownership with that person or entity, (iii) controls that person or entity,
      or
      (iv) shares common control with that person or entity. “Control”
or
      “controls”
for
      purposes hereof means that a person or entity has the power, direct or indirect,
      to conduct or govern the policies of another person or entity. In the event
      the
      Company wishes to engage in an Affiliate Transaction valued in excess of fifty
      thousand dollars ($50,000) the Buyer and the Company shall agree upon an
      independent third party who shall be engaged at the Company’s expense to
      determine whether such Affiliate Transaction is permissible pursuant to one
      or
      more of (a) through (d) of this paragraph.

     

    (i)Section
      Not In Use

     

    (j)Restriction
      on Issuance of the Capital Stock and Incurrence of Debt.
      Except
      for the Securities Purchase Agreement dated the date hereof between the Company
      and Trafalgar Capital Specialized Investment Fund, Luxembourg, , so long as
      any
      of the principal of or interest on the Note remains unpaid and unconverted,
      the
      Company shall not, without the prior consent of the Buyer:
      (i) issue
      or sell Common Stock or Preferred Stock issue or sell a warrant, option, right,
      contract, call, or other security or instrument granting the holder thereof
      the
      right to acquire Common Stock. (iii)
      enter into any security instrument granting the holder a security interest
      in
      any of the assets of the Company, (iv)
      file
      any registration statement on Form S-8 or (v) other than in the ordinary course
      of business consistent with past practice, directly or indirectly permit,
      create, incur assume, permit to exist, increase, renew or extend on or after
      the
      date hereof any additional debt or permit any subsidiary of the Company to
      do or
      allow any of the foregoing without the Buyer’s prior written consent beyond that
      which is set forth in Schedule
      4(j)
      attached
      hereto. In the event that Buyer does provide its consent hereunder to issue
      any
      such securities described under (i), (ii) or (iv) of this Section, the Fixed
      Price under the Note shall be adjusted to equal to the lesser of: (a) the Fixed
      Price as defined therein and (b) eighty-five percent (85%) of the lowest
      consideration paid per share for any such security issued by the Company.



    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    5. SECTION
      NOT IN USE

     

    6. CONDITIONS
      TO THE COMPANY’S OBLIGATION TO SELL.

     

    The
      obligation of the Company hereunder to issue and sell the Note to the Buyer
      at
      the Closings is subject to the satisfaction, at or before the Closing Dates,
      of
      each of the following conditions, provided that these conditions are for the
      Company’s sole benefit and may be waived by the Company at any time in its sole
      discretion:

     

    (a) Buyer
      shall have executed this Agreement, the Security Agreement, and the Escrow
      Agreement and delivered the same to the Company.

     

    (b) The
      Buyer
      shall have delivered to the Escrow Agent the Purchase Price for Note in
      respective amounts as set forth next to Buyer as outlined on Schedule I attached
      hereto and the Escrow Agent shall have delivered the net proceeds to the Company
      by wire transfer of immediately available U.S. funds pursuant to the wire
      instructions provided by the Company.

     

    (c) The
      representations and warranties of the Buyer shall be true and correct in all
      material respects as of the date when made and as of the Closing Dates as though
      made at that time (except for representations and warranties that speak as
      of a
      specific date), and the Buyer shall have performed, satisfied and complied
      in
      all material respects with the covenants, agreements and conditions required
      by
      this Agreement to be performed, satisfied or complied with by the Buyer at
      or
      prior to the Closing Dates.

     

    (d) The
      Company shall have filed a form UCC-1 with regard to the Pledged Property and
      Pledged Collateral as detailed in the Security Agreement dated the date hereof
      and provided proof of such filing to the Buyer. 

     

    7. CONDITIONS
      TO THE BUYER’S OBLIGATION TO PURCHASE.

     

    The
      obligation of the Buyer hereunder to purchase the Note at the Closing is subject
      to the satisfaction, at or before the Closing Date, of each of the following
      conditions:

     

    (a) The
      Company shall have executed this Agreement, the Security Agreement, the Note
      in
      such
      amounts as purchased by Buyer hereunder),
      the
      Escrow Agreement, and delivered the same to the Buyer. 

     

    (b) The
      trading in the Common Shares on the OTCBB shall not have been suspended for
      any
      reason.

     

    (c) The
      representations and warranties of the Company shall be true and correct in
      all
      material respects (except to the extent that any of such representations and
      warranties is already qualified as to materiality in Section 3 above, in which
      case, such representations and warranties shall be true and correct without
      further qualification) as of the date when made and as of the Closing Dates
      as
      though made at that time (except for representations and warranties that speak
      as of a specific date) and the Company shall have performed, satisfied and
      complied in all material respects with the covenants, agreements and conditions
      required by this Agreement to be performed, satisfied or complied with by the
      Company at or prior to the Closing Dates. If requested by the Buyer, the Buyer
      shall have received a certificate, executed by the President of the Company,
      dated as of the Closing Dates, to the foregoing effect and as to such other
      matters as may be reasonably requested by the Buyer including, without
      limitation an update as of the Closing Dates regarding the representation
      contained in Section 3(c) above.


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    


    (d) The
      Company shall have executed and delivered to the Buyer the Note in the
      respective amounts set forth opposite Buyer name on Schedule I attached
      hereto.

     

    (e) The
      Buyer
      shall have received an opinion of counsel from counsel to the Company in a
      form
      satisfactory to the Buyer.

     

    (f) The
      Company shall have provided to the Buyer a certificate of good standing from
      the
      secretary of state from the state in which the Company is
      incorporated.

     

    (g) As
      of the
      Closing Date, the Company shall have reserved out of its authorized and unissued
      Common Stock, solely for the purpose of effecting the conversion of the Note,
      shares of Common Stock to effect the conversion of all of the Conversion Shares
      then outstanding.

     

    (h) Not
      In
      Use

     

    (i) Not
      in
      Use

     

    (j) The
      Company shall have filed a form UCC-1 or such other forms as may be required
      to
      perfect the Buyer’(s’) interest in the Pledged Property and Pledged Collateral
      as detailed in the Security Agreement dated the date hereof and provided proof
      of such filing to the Buyer. 

     

    (k) Buyer’s
      due diligence shall have been completed to Buyer’s satisfaction.

     

    (l) Not
      in
      Use 

     

    (m) The
      Second and Third Closings shall be at the discretion of Buyer based on the
      performance of the gas drilling program at the Davy Crockett gas field and
      other
      factors deemed material and relevant to Buyer and would require identical
      repayment terms, adjusted pro-rata, as the funds disbursed in the First
      Closing.

     

    (n) In
      the
      event the Company closes a financing with cash proceeds in the amount of
      $4,000,000 or more, the Holder has the right to demand repayment of the total
      amount of principal and interest outstanding from the First and Second Closings
      plus a redemption premium. Should such financing be closed in several
      installments, then repayment would be made on a pro rata basis as set forth
      in
      the Convertible Note.


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    


    8. INDEMNIFICATION.

     

    (a) In
      consideration of the Buyer’s execution and delivery of this Agreement and
      acquiring the Note and the Conversion Shares hereunder, and in addition to
      all
      of the Company’s other obligations under this Agreement, the Company shall
      defend, protect, indemnify and hold harmless the Buyer and each other holder
      of
      the Note and the Conversion Shares, and all of their officers, directors,
      employees and agents (including, without limitation, those retained in
      connection with the transactions contemplated by this Agreement) (collectively,
      the “Buyer
      Indemnitees”)
      from
      and against any and all actions, causes of action, suits, claims, losses, costs,
      penalties, fees, liabilities and damages, and expenses in connection therewith
      (irrespective of whether any such Buyer Indemnitee is a party to the action
      for
      which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified
      Liabilities”),
      incurred by the Buyer Indemnitees or any of them as a result of, or arising
      out
      of, or relating to (a) any misrepresentation or breach of any representation
      or
      warranty made by the Company in this Agreement, the Note or the Investor
      Registration Rights Agreement or any other certificate, instrument or document
      contemplated hereby or thereby, (b) any breach of any covenant, agreement or
      obligation of the Company contained in this Agreement, or the Investor
      Registration Rights Agreement or any other certificate, instrument or document
      contemplated hereby or thereby, or (c) any cause of action, suit or claim
      brought or made against such Indemnitee by a third party and arising out of
      or
      resulting from the execution, delivery, performance or enforcement of this
      Agreement or any other instrument, document or agreement executed pursuant
      hereto by any of the Indemnities, any transaction financed or to be financed
      in
      whole or in part, directly or indirectly, with the proceeds of the issuance
      of
      the Note or the status of the Buyer or holder of the Note the Conversion Shares,
      as a Buyer of Note in the Company. To the extent that the foregoing undertaking
      by the Company may be unenforceable for any reason, the Company shall make
      the
      maximum contribution to the payment and satisfaction of each of the Indemnified
      Liabilities, which is permissible under applicable law.

     

    (b) In
      consideration of the Company’s execution and delivery of this Agreement, and in
      addition to all of the Buyer’s other obligations under this Agreement, the Buyer
      shall defend, protect, indemnify and hold harmless the Company and all of its
      officers, directors, employees and agents (including, without limitation, those
      retained in connection with the transactions contemplated by this Agreement)
      (collectively, the “Company
      Indemnitees”)
      from
      and against any and all Indemnified Liabilities incurred by the Indemnitees
      or
      any of them as a result of, or arising out of, or relating to (a) any
      misrepresentation or breach of any representation or warranty made by the Buyer
      in this Agreement, the Note or the Investor Registration Rights Agreement or
      any
      other certificate, instrument or document contemplated hereby or thereby
      executed by the Buyer, (b) any breach of any covenant, agreement or obligation
      of the Buyer contained in this Agreement, the Note, the Investor Registration
      Rights Agreement or any other certificate, instrument or document contemplated
      hereby or thereby executed by the Buyer, or (c) any cause of action, suit or
      claim brought or made against such Company Indemnitee based on material
      misrepresentations or due to a material breach and arising out of or resulting
      from the execution, delivery, performance or enforcement of this Agreement,
      the
      Note, the Investor Registration Rights Agreement or any other certificate
      instrument, document or agreement executed pursuant hereto by any of the Company
      Indemnities. To the extent that the foregoing undertaking by Buyer may be
      unenforceable for any reason, Buyer shall make the maximum contribution to
      the
      payment and satisfaction of each of the Indemnified Liabilities, which is
      permissible under applicable law.


    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    


    9. GOVERNING
      LAW: MISCELLANEOUS.

     

    (a) Governing
      Law.
      This
      Agreement shall be governed by and interpreted in accordance with the laws
      of
      the State of Florida without regard to the principles of conflict of laws.
      The
      parties further agree that any action between them shall be heard in Broward
      County, Florida and expressly consent to the jurisdiction and venue of the
      State
      Court sitting in Broward County, Florida and the United States District Court
      for the Southern District of Florida for the adjudication of any civil action
      asserted pursuant to this Paragraph.

     

    (b) Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party.
      In
      the event any signature page is delivered by facsimile transmission, the party
      using such means of delivery shall cause four (4) additional original executed
      signature pages to be physically delivered to the other party within five (5)
      days of the execution and delivery hereof.

     

    (c) Recitals
      and Headings.
      The recitals
      of this Agreement are an integral part of this Agreement and shall be
      incorporated herein as if made a part of this Agreement.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

     

    (d) Severability.
      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.

     

    (e) Entire
      Agreement, Amendments.
      This
      Agreement supersedes all other prior oral or written agreements between the
      Buyer, the Company, their affiliates and persons acting on their behalf with
      respect to the matters discussed herein, and this Agreement and the instruments
      referenced herein contain the entire understanding of the parties with respect
      to the matters covered herein and therein and, except as specifically set forth
      herein or therein, neither the Company nor any Buyer makes any representation,
      warranty, covenant or undertaking with respect to such matters. No provision
      of
      this Agreement may be waived or amended other than by an instrument in writing
      signed by the party to be charged with enforcement.

     

    (f) Notices.
      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
      confirmation of receipt, when sent by facsimile; (iii) three (3) days after
      being sent by U.S. certified mail, return receipt requested, or (iv) one (1)
      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:


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    


    
      	
              If
                to the Company, to:

            	
              Yossi
                Attia, CEO

            
	 	
              9107
                Wilshire Blvd., Suite 450

            
	 	
              Beverly
                Hills, CA 90210

            
	 	
              Fax:
                310-461-1901

            
	 	 
	
              With
                a Copy to:

            	
              Law
                Offices of Stephen M. Fleming LLC

            
	 	
              403
                Merrick Avenue, 2nd
                Floor

            
	 	
              East
                Meadow NY 11554

            
	 	
              Facsimile:
                516-977-1209

            
	 	 
	
              And
                if to the Buyer:

            	
              Trafalgar
                Capital Specialized 

              Investment
                Fund, Luxembourg

            
	 	
              18851
                NE 29th
                Avenue

            
	 	
              Attention:
                Bob Press

              Portfolio
                Manager

            
	 	
              Facsimile:
                1-786-323-1651

            


    

     

    If
      to the
      Buyer, to its address and facsimile number on Schedule I. Each party shall
      provide five (5) days’ prior written notice to the other party of any change in
      address or facsimile number.

     

    (g) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns. Neither the Company nor any Buyer
      shall
      assign this Agreement or any rights or obligations hereunder without the prior
      written consent of the other party hereto.

     

    (h) No
      Third Party Beneficiaries.
      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.

     

    (i) Survival.
      Unless
      this Agreement is terminated under Section 9(l), the representations and
      warranties of the Company and the Buyer contained in Sections 2 and 3, the
      agreements and covenants set forth in Sections 4, 5 and 9, and the
      indemnification provisions set forth in Section 8, shall survive the Closing
      for
      a period of two (2) years following the date on which the Note are converted
      in
      full. The Buyer shall be responsible only for its own representations,
      warranties, agreements and covenants hereunder.

     

    (j) Publicity.
      The
      Company and the Buyer shall have the right to approve, before issuance any
      press
      release or any other public statement with respect to the transactions
      contemplated hereby made by any party; provided, however, that the Company
      shall
      be entitled, without the prior approval of the Buyer, to issue any press release
      or other public disclosure with respect to such transactions required under
      applicable securities or other laws or regulations (the Company shall use its
      best efforts to consult the Buyer in connection with any such press release
      or
      other public disclosure prior to its release and Buyer shall be provided with
      a
      copy thereof upon release thereof).


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    


    (k) Further
      Assurances.
      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 the 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.

     

    (l) Termination.
      In the
      event that the Closing shall not have occurred with respect to the Buyer on
      or
      before five (5) business days from the date hereof due to the Company’s or the
      Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above
      (and the non-breaching party’s failure to waive such unsatisfied condition(s)),
      the non-breaching party shall have the option to terminate this Agreement with
      respect to such breaching party at the close of business on such date without
      liability of any party to any other party; provided, however, that if this
      Agreement is terminated by the Company pursuant to this Section 9(l), the
      Company shall remain obligated to pay the Buyer for the structuring fee
      described in Section 4(g) above.

     

    (m) No
      Strict Construction.
      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.

    


    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK]


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    


    IN
      WITNESS WHEREOF,
      the
      Buyer and the Company have caused this Securities Purchase Agreement to be
      duly
      executed as of the date first written above.

    


    
      	 	
              COMPANY:

            
	 	
              VORTEX
                RESOURCES CORP.

            
	 	 	 
	 	
              By:

            	  

	 	
              Name:
                Yossi Attia

            
	 	
              Title: Chief
                Executive Officer

            


    

    


    
      	 	
              BUYER:

            
	 	
              TRAFALGAR
                CAPITAL SPECIALIZED

            
	 	
              INVESTMENT
                FUND, LUXEMBOURG

            
	 	
              By:

            	
                 
                Trafalgar Capital Sarl

            
	 	
              Its:

            	
                 
                General Partner

            
	 	 	 
	 	
              By:

            	  

	 	
              Name: 
                Andrew
                Garai

            
	 	
              Title:    
                Chairman
                of the Board

            


    


    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      A

    


    FORM
      OF ESCROW AGREEMENT


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
      B

     

    FORM
      OF SECURITY AGREEMENT


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
      I

     

    SCHEDULE
      OF BUYER 

    


    
      	
              Name

            	 	
              Signature

            	 	
              Address/Facsimile 

              Number of Buyer

            	 	
              Amount of 

              Subscription

            
	 	 	 	 	 	
              8-10 Rue Mathias Hardt

            	 	 
	
              Trafalgar Capital Specialized 

            	 	
              By:

            	
              Trafalgar Capital Sarl

            	 	
              BP
                3023

            	 	
              $          
                2,750,000

            
	
              Investment Fund, Luxembourg

            	 	
              Its:

            	
              General
                Partner

            	 	
              L-1030
                Luxembourg

            	 	 
	 	 	 	 	 	
              Facsimile: 

            	 	 
	 	 	 	 	 	
              011-44-207-405-0161

            	 	 
	 	 	
              By:

            	  
	 	
              and

            	 	 
	 	 	
              Name:

            	
              Andrew
                Garai

            	 	
              001-786-323-1651

            	 	 
	 	 	
              Its: 

            	
              Chairman of the Board

            	 	 	 	 


    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    


    SCHEDULE
      3(H)

    


    LITIGATION

    


    The
      Company filed a complaint in the Superior Court for the County of Los Angeles,
      against a foreign attorney. The case was filed on February 14, 2007, and service
      of process has been done. In the complaint the Company is seeking judgment
      against this attorney in the amount of approximately 250,000 Euros
      (approximately $316,000 as of the date of actual transferring the funds), plus
      interest, costs and fees. Defendant has not yet appeared in the action. The
      Company believes that it has a meritorious claim for the return of monies
      deposited with defendant in a trust capacity, and, from the documents in the
      Company’s possession, there is no reason to doubt the validity of the claim.
      During April 2007 defendant returned $92,694 (70,000 Euros at the relevant
      time)
      which netted to $72,694 post legal expenses; the Company has granted him a
      15-day extension to file his defense. Post the extension and in lieu of not
      filing a defense, the Company filed for a default judgment. On October 25,
      2007
      the Company obtained a California Judgment by court after default against the
      attorney for the sum of $249,340.65. However, management does not have any
      information on the collectibility of said judgment that entered in
      court.

    


    On
      November 21, 2007 LM Construction filed a demand for arbitration proceeding
      against Verge in connection with amounts due for general contracting services
      provided by them during the construction of the Company Sales Center. The
      Company agreed to enter into arbitration, deny any wrong doing and counterclaim
      damages. Amount in dispute are approximately $67,585 and are included in other
      current liabilities on the balance sheet. 

    


    Navigator
      Acquisition - Registration Rights

    


    The
      Company entered into a registration rights agreement dated July 21, 2005,
      whereby it agreed to file a registration statement registering the 441,566
      shares of Company common stock issued in connection with the Navigator
      acquisition within 75 days of the closing of the transaction. The Company also
      agreed to have such registration statement declared effective within 150 days
      from the filing thereof. In the event that Company failed to meet its
      obligations to register the shares, it may have been required to pay a penalty
      equal to 1% of the value of the shares per month. The Company obtained a written
      waiver from the seller stating that the seller would not raise any claims in
      connection with the filing of registration statement through May 30, 2006.
      The
      Company since received another waiver extending the registration deadline
      through May 30, 2007 without penalty. As of today the Company is in default
      on
      said agreement and therefore made a provision for compensation represent
      $150,000 as agreed FINAL compensation. 

    


    Indemnities
      Provided Upon Sale of Subsidiaries

    


    On
      April
      15, 2005, the Company sold Euroweb Slovakia. According to the securities
      purchase contract (the “Contract”); the Company will indemnify the buyer for all
      damages incurred by the buyer as the result of seller’s breach of certain
      representations, warranties, or obligations as set in the Contract up to an
      aggregate amount of $540,000. The buyer shall not be entitled to make any claim
      under the Contract after the fourth anniversary of the date of the Contract.
      No
      claims have been made to-date. At September 30, 2007 the Company accrued $35,000
      as the estimated fair value of this indemnity.

    


    On
      May
      23, 2006, the Company sold Euroweb Hungary and Euroweb Romania. According to
      the
      share purchase agreement (the “SPA”), the Company will indemnify the buyer for
      all damages incurred by the buyer as the result of seller’s breach of certain
      representations, warranties or obligations as provided for in the SPA. The
      Company shall not incur any liability with respect to any claim for breach
      of
      representation and warranty or indemnity, and any such claim shall be wholly
      barred and unenforceable unless notice of such claim is served upon Emvelco
      by
      buyer no later than 60 days after the buyer’s approval of Euroweb Hungary and
      Euroweb Romania’s statutory financial reports for the fiscal year 2006, but in
      any event no later than June 1, 2007. In the case of Clause 8.1.6 (Taxes) or
      Clause 9.2.4 of SPA, the time period is five years from the last day of the
      calendar year in which the closing date occurs. No claims have been made to
      date. At September 30, 2007, the Company has accrued $201,020 as the estimated
      fair value of this indemnity.


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    


    SCHEDULE
      4(j)

    


    SCHEDULE
      OF INDEBTEDNESS

    


    As
      of
      6/30/08:

    
      	
              1.
                

            	 	Yossi
              Attia- Insider: 	 	
              $

            	
              1,182,328

            	 
	
              2.

            	 	Greaton –
              Former Insider:	 	
              $

            	
              150,000

            	 
	
              3.
                

            	 	East
              West Bank:	 	 	 	 
	
            	 	[will
              be paid off on 10/5/08 by	 	 	 	 
	
            	 	escrow
              since it is sold]	
               

            	
              $

            	
              1,317,775

            	 
	
              4.

            	 	Altda –
              To be reversed due to sale	 	
              $

            	
              1,240,320

            	 
	
              5.
                

            	 	DCC
              Members – working capital contribution	 	
              $

            	
              580,822

            	 


    

    


    *
      To date
      number 3 and 4 are not due any more (were due in June).

    


    2008
      Incentive Stock Plan

    


    The
      Company is authorized to issue up to 5,000,000 shares of common stock to
      directors, employees and consultants. 

    


    Blackhawk

    


    On
      September 2, 2008, the Company entered into a Memorandum of Understanding (the
      “MOU”) to enter into a definitive asset purchase agreement with Blackhawk
      Investments Limited, a Turks & Caicos company (“Blackhawk”) based in London,
      England. Blackhawk exercised its exclusive option to acquire all of the issued
      and allotted share capital in Sandhaven Securities Limited (“SSL”), and its
      underlying oil and gas assets in NT Energy. SSL owns approximately 62% of the
      outstanding securities of NT Energy, Inc., a Delaware company (“NT Energy”). NT
      energy holds rights to mineral leases covering approximately 12,972 acres in
      the
      Barnett Shale, Fort Worth area of Texas containing proved and probable
      undeveloped natural gas reserves. SSL was a wholly owned subsidiary of Sandhaven
      Resources plc (“Sandhaven”), a public company registered in Ireland, and listed
      on the Plus exchange in London. 

    


    In
      consideration of Blackhawk exercising its option to acquire the leases and
      transferring such leases to the Company, the Company will pay $180,000,000
      by
      issuing Blackhawk or its designees shares of common stock of the Company, based
      upon the average share price of the Company on the Over the Counter Bulletin
      Board during the 30 days preceding the execution of the MOU, which was $1.50
      per
      share, representing 120,000,000 shares as the total consideration, under said
      MOU. However, the number of shares to be delivered shall be adjusted on the
      six
      month anniversary of the closing of the asset acquisition (the “Closing”), using
      the volume weighted average price for the six months following the Closing.
      Blackhawk, SSL, NT Energy, Sandhaven and the advisors described below as well
      as
      each of the officers, directors and affiliates of the aforementioned will agree
      to not engage in any activities in the stock of the Company. 

    


    In
      addition, the Company will be required to pay fees to two advisors of $6,000,000
      payable with the Company shares, and, therefore, issue an additional 3,947,368
      of the Company shares of common stock, along with 300% warrant coverage,
      representing warrants to purchase an aggregate of 11,842,106 shares of common
      stock on a cashless basis for a period of two years with an exercise price
      of
      $2.00 per share, if the transaction closes. Although both parties have agreed
      to
      obtain shareholder approval prior to the Closing, the Company is not required
      by
      any statute to do so. 


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    


    Unlu

    


    On
      August
      20, 2008, the Company entered into that certain term sheet with Ahmet Sahap
      Unlu
      (“Unlu”) pursuant to which the Company and Unlu agreed to enter into a joint
      venture to develop certain specific identified chromium opportunities located
      in
      the Gaziantep Province of southern Turkey (the “Gaziantep Property”). The
      parties will establish a Turkey limited liability company which will be 80%
      owned by the Company and 20% owned by Unlu. Unlu will contribute a lease on
      the
      Gaziantep Property and the Company shall serve as the manager and will develop
      a
      work program to exploit the Gaziantep Property as well as fund all operations.
      The Company will issue Unlu 10,000,000 shares of common stock, which will have
      piggyback registration rights in the event of a fully registered underwritten
      offering, as well as warrants to purchase 10,000,000 shares of common stock
      in
      consideration for contributing the lease to the join venture. The warrant shall
      be exercisable for a period of four years at an exercise price of $1.80 per
      share. The Company will also reimburse Unlu $25,000 for legal expenses and
      expenses associated with updating a report on the property.

    


    Acquisitions

    


    The
      Company is presently evaluating several acquisition candidates in which it
      may
      acquire for shares of common stock of the Company. 

    


    Warrants

    


    The
      Company has issued common stock purchase warrants to purchase 1,100,000 shares
      of common stock with exercise prices varying from $1.50 to $2.00.

    


    Mustafoglu

    


    Effective
      July 16, 2008, the Board of Directors of the Company approved that certain
      Mergers and Acquisitions Consulting Agreement (the "M&A Agreement") between
      the Company and TransGlobal Financial LLC, a California limited liability
      company ("TransGlobal"). Pursuant to the M&A Agreement, TransGlobal agreed
      to assist the Company in the identification, evaluation, structuring,
      negotiation and closing of business acquisitions for a term of five years.
      As
      compensation for entering into the M&A Agreement, TransGlobal shall receive
      a 20% carried interest in any transaction introduced by TransGlobal to the
      Company that is closed by the Company. At TransGlobal's election, such
      compensation may be paid in restricted shares of common stock of the Company
      equal to 20% of the transaction value. Mike Mustafoglu, who is the Chairman
      of
      Transglobal Financial, was elected on July 28, 2008 at a special shareholder
      meeting as the Company’s Chairman of the Board of Directors.

    


    On
      August
      19, 2008, the Company entered into that certain Employment Agreement with Mike
      Mustafoglu, effective July 1, 2008, pursuant to which Mr. Mustafoglu agreed
      to
      serve as the Chairman of the Board of Directors of the Company for a period
      of
      five years. Mr. Mustafoglu will receive (i) a salary of $240,000; (ii) a
      performance bonus of 10% of net income before taxes, which will be allocated
      by
      Mr. Mustafoglu and other key executives at the sole discretion of Mr.
      Mustafoglu; and (iii) a warrant to purchase 10 million shares of common stock
      of
      the Company at an exercise price equal to the lesser of $.50 or 50% of the
      average market price of the Company’s common stock during the 20 day period
      prior to exercise on a cashless basis (the “Mustafoglu Warrant”). The Mustafoglu
      Warrant shall be released from escrow on an equal basis over the employment
      period of five years. As a result, 2,000,000 shares of the Mustafoglu Warrant
      will vest per year.


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    


    SCHEDULE
      II

    


    CURRENT
      OUTSTANDING RIGHTS TO ACQUIRE COMPANY

    SECURITIES
      AND OUTSTANDING DEBT SECURITIES

    


    
      	
              Investor

            	 	
              Warrants

            	 	
              Exercise
                Price

            	 
	
              Greenwood

            	 	 	
              200,000

            	 	
              $

            	
              1.50

            	 
	
              Greenwood

            	 	 	
              100,000

            	 	
              $

            	
              2.00

            	 
	
              Cohen

            	 	 	
              300,000

            	 	
              $

            	
              1.50

            	 
	
              Cohen

            	 	 	
              300,000

            	 	
              $

            	
              2.00

            	 
	
              Vortex
                Ocean

            	 	 	
              200,000

            	 	
              $

            	
              0.50

            	* 


    

    


    *
      Per
      Employment Agreement 2 Million Shares for each full year of employment at $0.50
      on cashless basis.


    
      
        
        

      

      
        6