Document:

EXHIBIT 10.07

      THIS WARRANT AND THE SHARES ISSUABLE UPON THE EXERCISE OF THIS WARRANT
      HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
      EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN A SECURITIES PURCHASE AGREEMENT
      DATED AS OF JUNE 29, 2006, NEITHER THIS WARRANT NOR ANY OF SUCH SHARES MAY
      BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER SAID ACT OR, AN OPINION
      OF COUNSEL, IN FORM, SUBSTANCE AND SCOPE, CUSTOMARY FOR OPINIONS OF
      COUNSEL IN COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED
      UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 OR REGULATION S UNDER
      SUCH ACT.

                                                                        Right to
                                                                    Purchase [ ]
                                                                Shares of Common
                                                                Stock, par value
                                                                 $.001 per share

                             STOCK PURCHASE WARRANT

      THIS CERTIFIES THAT, for value received, [ ] or its registered assigns, is
entitled to purchase from KIWA BIO-TECH PRODUCTS GROUP CORPORATION, a Delaware
corporation (the "Company"), at any time or from time to time during the period
specified in Paragraph 2 hereof, [ ] fully paid and nonassessable shares of the
Company's Common Stock, par value $.001 per share (the "Common Stock"), at an
exercise price per share equal to $.45 (the "Exercise Price"). The term "Warrant
Shares," as used herein, refers to the shares of Common Stock purchasable
hereunder. The Warrant Shares and the Exercise Price are subject to adjustment
as provided in Paragraph 4 hereof. The term "Warrants" means this Warrant and
the other warrants issued pursuant to that certain Securities Purchase
Agreement, dated June 29, 2006, by and among the Company and the Buyers listed
on the execution page thereof (the "Securities Purchase Agreement").

      This Warrant is subject to the following terms, provisions, and
conditions:

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      1. MANNER OF EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES.
Subject to the provisions hereof, this Warrant may be exercised by the holder
hereof, in whole or in part, by the surrender of this Warrant, together with a
completed exercise agreement in the form attached hereto (the "Exercise
Agreement"), to the Company during normal business hours on any business day at
the Company's principal executive offices (or such other office or agency of the
Company as it may designate by notice to the holder hereof), and upon (i)
payment to the Company in cash, by certified or official bank check or by wire
transfer for the account of the Company of the Exercise Price for the Warrant
Shares specified in the Exercise Agreement or (ii) if the resale of the Warrant
Shares by the holder is not then registered pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), delivery to the Company of a written notice of an election to
effect a "Cashless Exercise" (as defined in Section 11(c) below) for the Warrant
Shares specified in the Exercise Agreement. The Warrant Shares so purchased
shall be deemed to be issued to the holder hereof or such holder's designee, as
the record owner of such shares, as of the close of business on the date on
which this Warrant shall have been surrendered, the completed Exercise Agreement
shall have been delivered, and payment shall have been made for such shares as
set forth above. Certificates for the Warrant Shares so purchased, representing
the aggregate number of shares specified in the Exercise Agreement, shall be
delivered to the holder hereof within a reasonable time, not exceeding five (5)
business days, after this Warrant shall have been so exercised. The certificates
so delivered shall be in such denominations as may be requested by the holder
hereof and shall be registered in the name of such holder or such other name as
shall be designated by such holder. If this Warrant shall have been exercised
only in part, then, unless this Warrant has expired, the Company shall, at its
expense, at the time of delivery of such certificates, deliver to the holder a
new Warrant representing the number of shares with respect to which this Warrant
shall not then have been exercised. In addition to all other available remedies
at law or in equity, if the Company fails to deliver certificates for the
Warrant Shares within ten (10) business days after this Warrant is exercised,
then the Company shall pay to the holder in cash a penalty (the "Penalty") equal
to 2% of the number of Warrant Shares that the holder is entitled to multiplied
by the Market Price (as hereinafter defined) for each day that the Company fails
to deliver certificates for the Warrant Shares. For example, if the holder is
entitled to 100,000 Warrant Shares and the Market Price is $2.00, then the
Company shall pay to the holder $4,000 for each day that the Company fails to
deliver certificates for the Warrant Shares. The Penalty shall be paid to the
holder by the fifth day of the month following the month in which it has
accrued. The Company shall not be liable for any penalty under this Section 1 if
the failure to deliver is solely as a result of the circumstances governed by
Section 4(h) of the Securities Purchase Agreement and the Company is using its
best efforts to authorize a sufficient number of shares of Common Stock as soon
as possible.

            Notwithstanding anything in this Warrant to the contrary, in no
event shall the holder of this Warrant be entitled to exercise a number of
Warrants (or portions thereof) in excess of the number of Warrants (or portions
thereof) upon exercise of which the sum of (i) the number of shares of Common
Stock beneficially owned by the holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unexercised Warrants and the unexercised or unconverted portion of any other
securities of the Company (including the Notes (as defined in the Securities
Purchase Agreement)) subject to a limitation on conversion or exercise analogous

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to the limitation contained herein) and (ii) the number of shares of Common
Stock issuable upon exercise of the Warrants (or portions thereof) with respect
to which the determination described herein is being made, would result in
beneficial ownership by the holder and its affiliates of more than 4.9% of the
outstanding shares of Common Stock. For purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13D-G
thereunder, except as otherwise provided in clause (i) of the preceding
sentence. Notwithstanding anything to the contrary contained herein, the
limitation on exercise of this Warrant set forth herein may not be amended
without (i) the written consent of the holder hereof and the Company and (ii)
the approval of a majority of shareholders of the Company.

      2. PERIOD OF EXERCISE. This Warrant is exercisable at any time or from
time to time on or after the date on which this Warrant is issued and delivered
pursuant to the terms of the Securities Purchase Agreement and before 6:00 p.m.,
New York, New York time on the seventh (7th) anniversary of the date of issuance
(the "Exercise Period").

      3. CERTAIN AGREEMENTS OF THE COMPANY. The Company hereby covenants and
agrees as follows:

            (A) SHARES TO BE FULLY PAID. Subject to Stockholder Approval (as
such term is defined in Section 4(n) of the Securities Purchase Agreement), all
Warrant Shares will, upon issuance in accordance with the terms of this Warrant,
be validly issued, fully paid, and nonassessable and free from all taxes, liens,
and charges with respect to the issue thereof.

            (B) RESERVATION OF SHARES. Subject to Stockholder Approval (as such
term is defined in Section 4(n) of the Securities Purchase Agreement), during
the Exercise Period, the Company shall at all times have authorized, and
reserved for the purpose of issuance upon exercise of this Warrant, a sufficient
number of shares of Common Stock to provide for the exercise of this Warrant.

            (C) CERTAIN ACTIONS PROHIBITED. The Company will not, by amendment
of its charter or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Exercise Price then in effect, and (ii)
will take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant.

            (D) SUCCESSORS AND ASSIGNS. This Warrant will be binding upon any
entity succeeding to the Company by merger, consolidation, or acquisition of all
or substantially all the Company's assets.

      4. ANTIDILUTION PROVISIONS. During the Exercise Period, the Exercise Price
and the number of Warrant Shares shall be subject to adjustment from time to
time as provided in this Paragraph 4.

      In the event that any adjustment of the Exercise Price as required herein
results in a fraction of a cent, such Exercise Price shall be rounded up to the
nearest cent.

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<PAGE>

ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES UPON ISSUANCE OF COMMON STOCK.
Except as otherwise provided in Paragraphs 4(c) and 4(e) hereof, if and whenever
on or after the date of issuance of this Warrant, the Company issues or sells,
or in accordance with Paragraph 4(b) hereof is deemed to have issued or sold,
any shares of Common Stock for no consideration or for a consideration per share
(before deduction of reasonable expenses or commissions or underwriting
discounts or allowances in connection therewith) less than the Market Price on
the date of issuance (a "Dilutive Issuance"), then immediately upon the Dilutive
Issuance, the Exercise Price will be adjusted in accordance with the following
formula:

      AEP = (CEP)(O+P/M)/(OS)

      where:

           AEP =     the adjusted Exercise Price;
           CEP  =    the then current Exercise Price;
           M  =      the Market Price on the date of issuance;
           O  =      the number of shares of Common Stock issued and outstanding
                     immediately prior to the Dilutive Issuance;
           P  =      the aggregate consideration, calculated as set forth in
                     Section 4(b), received by the Company upon such Dilutive
                     Issuance; and
           OS        = the total number of Common Stock Deemed
                     Outstanding (as defined below) immediately after
                     the Dilutive Issuance.

            (A) EFFECT ON EXERCISE PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Exercise Price under Paragraph 4(a) hereof, the
following will be applicable:

                  (I) ISSUANCE OF RIGHTS OR OPTIONS. If the Company in any
manner issues or grants any warrants, rights or options, whether or not
immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("Convertible
Securities") (such warrants, rights and options to purchase Common Stock or
Convertible Securities are hereinafter referred to as "Options") and the price
per share for which Common Stock is issuable upon the exercise of such Options
is less than the Market Price on the date of issuance or grant of such Options,
then the maximum total number of shares of Common Stock issuable upon the
exercise of all such Options will, as of the date of the issuance or grant of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share. For purposes of the preceding sentence,
the "price per share for which Common Stock is issuable upon the exercise of
such Options" is determined by dividing (i) the total amount, if any, received
or receivable by the Company as consideration for the issuance or granting of
all such Options, plus the minimum aggregate amount of additional consideration,
if any, payable to the Company upon the exercise of all such Options, plus, in
the case of Convertible Securities issuable upon the exercise of such Options,
the minimum aggregate amount of additional consideration payable upon the
conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by (ii) the maximum total number of shares
of Common Stock issuable upon the exercise of all such Options (assuming full
conversion of Convertible Securities, if applicable). No further adjustment to
the Exercise Price will be made upon the actual issuance of such Common Stock
upon the exercise of such Options or upon the conversion or exchange of
Convertible Securities issuable upon exercise of such Options.

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<PAGE>

                  (II) ISSUANCE OF CONVERTIBLE SECURITIES. If the Company in any
manner issues or sells any Convertible Securities, whether or not immediately
convertible (other than where the same are issuable upon the exercise of
Options) and the price per share for which Common Stock is issuable upon such
conversion or exchange is less than the Market Price on the date of issuance,
then the maximum total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities will, as of the date
of the issuance of such Convertible Securities, be deemed to be outstanding and
to have been issued and sold by the Company for such price per share. For the
purposes of the preceding sentence, the "price per share for which Common Stock
is issuable upon such conversion or exchange" is determined by dividing (i) the
total amount, if any, received or receivable by the Company as consideration for
the issuance or sale of all such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the conversion or exchange thereof at the time such Convertible Securities
first become convertible or exchangeable, by (ii) the maximum total number of
shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities. No further adjustment to the Exercise Price will be made
upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.

                  (III) CHANGE IN OPTION PRICE OR CONVERSION RATE. If there is a
change at any time in (i) the amount of additional consideration payable to the
Company upon the exercise of any Options; (ii) the amount of additional
consideration, if any, payable to the Company upon the conversion or exchange of
any Convertible Securities; or (iii) the rate at which any Convertible
Securities are convertible into or exchangeable for Common Stock (other than
under or by reason of provisions designed to protect against dilution), the
Exercise Price in effect at the time of such change will be readjusted to the
Exercise Price which would have been in effect at such time had such Options or
Convertible Securities still outstanding provided for such changed additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold.

                  (IV) TREATMENT OF EXPIRED OPTIONS AND UNEXERCISED CONVERTIBLE
SECURITIES. If, in any case, the total number of shares of Common Stock issuable
upon exercise of any Option or upon conversion or exchange of any Convertible
Securities is not, in fact, issued and the rights to exercise such Option or to
convert or exchange such Convertible Securities shall have expired or
terminated, the Exercise Price then in effect will be readjusted to the Exercise
Price which would have been in effect at the time of such expiration or
termination had such Option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination (other than in respect of
the actual number of shares of Common Stock issued upon exercise or conversion
thereof), never been issued.

                  (V) CALCULATION OF CONSIDERATION RECEIVED. If any Common
Stock, Options or Convertible Securities are issued, granted or sold for cash,
the consideration received therefor for purposes of this Warrant will be the
amount received by the Company therefor, before deduction of reasonable
commissions, underwriting discounts or allowances or other reasonable expenses
paid or incurred by the Company in connection with such issuance, grant or sale.
In case any Common Stock, Options or Convertible Securities are issued or sold
for a consideration part or all of which shall be other than cash, the amount of
the consideration other than cash received by the Company will be the fair value
of such consideration, except where such consideration consists of securities,
in which case the amount of consideration received by the Company will be the
Market Price thereof as of the date of receipt. In case any Common Stock,
Options or Convertible Securities are issued in connection with any acquisition,
merger or consolidation in which the Company is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined in good faith by the Board of Directors of the Company.

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                  (VI) EXCEPTIONS TO ADJUSTMENT OF EXERCISE PRICE. No adjustment
to the Exercise Price will be made (i) upon the exercise of any warrants,
options or convertible securities granted, or rights to purchase or receive
shares outstanding on the date of issuance of this Warrant; (ii) upon the grant
or exercise of any stock or options which may hereafter be granted or exercised
under any employee benefit plan, stock option plan or restricted stock plan of
the Company now existing or to be implemented in the future, so long as the
issuance of such stock or options is approved by a majority of the members of
the Board of Directors of the Company or a majority of the members of a
committee of directors established for such purpose; (iii) for rights to
purchase shares of Common Stock or Preferred Stock issued to financial
institutions or equipment lessors in connection with transactions approved by
the Board; (iv) for shares or rights to purchase shares of Common Stock or
Preferred Stock issued to strategic or joint venture partners, vendors or
customers of the corporation for reasons that, in the good faith judgment of the
Board are in substantial part other than to raise capital and should provide
value-added services, relationships or other benefits to the corporation's
business; or (v) upon issuance of the Warrant Shares or the Conversion Shares
(as defined in the Securities Purchase Agreement).

            (B) SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at
any time subdivides (by any stock split, stock dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Common Stock
acquirable hereunder into a greater number of shares, then, after the date of
record for effecting such subdivision, the Exercise Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time combines (by reverse stock split, recapitalization, reorganization,
reclassification or otherwise) the shares of Common Stock acquirable hereunder
into a smaller number of shares, then, after the date of record for effecting
such combination, the Exercise Price in effect immediately prior to such
combination will be proportionately increased.

            (C) CONSOLIDATION, MERGER OR SALE. In case of any consolidation of
the Company with, or merger of the Company into any other corporation, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company other than in connection with a plan of complete liquidation of the
Company, then as a condition of such consolidation, merger or sale or
conveyance, adequate provision will be made whereby the holder of this Warrant
will have the right to acquire and receive upon exercise of this Warrant in lieu
of the shares of Common Stock immediately theretofore acquirable upon the
exercise of this Warrant, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for the number of shares of
Common Stock immediately theretofore acquirable and receivable upon exercise of
this Warrant had such consolidation, merger or sale or conveyance not taken
place. In any such case, the Company will make appropriate provision to insure
that the provisions of this Paragraph 4 hereof will thereafter be applicable as
nearly as may be in relation to any shares of stock or securities thereafter
deliverable upon the exercise of this Warrant. The Company will not effect any
consolidation, merger or sale or conveyance unless prior to the consummation
thereof, the successor corporation (if other than the Company) assumes by
written instrument the obligations under this Paragraph 4 and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.

                                      -6-
<PAGE>

            (D) DISTRIBUTION OF ASSETS. In case the Company shall declare or
make any distribution of its assets (including cash) to holders of Common Stock
as a partial liquidating dividend, by way of return of capital or otherwise,
then, after the date of record for determining shareholders entitled to such
distribution, but prior to the date of distribution, the holder of this Warrant
shall be entitled upon exercise of this Warrant for the purchase of any or all
of the shares of Common Stock subject hereto, to receive the amount of such
assets which would have been payable to the holder had such holder been the
holder of such shares of Common Stock on the record date for the determination
of shareholders entitled to such distribution.

            (E) NOTICE OF ADJUSTMENT. Upon the occurrence of any event which
requires any adjustment of the Exercise Price, then, and in each such case, the
Company shall give notice thereof to the holder of this Warrant, which notice
shall state the Exercise Price resulting from such adjustment and the increase
or decrease in the number of Warrant Shares purchasable at such price upon
exercise, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based. Such calculation shall be certified
by the Chief Financial Officer of the Company.

            (F) MINIMUM ADJUSTMENT OF EXERCISE PRICE. No adjustment of the
Exercise Price shall be made in an amount of less than 1% of the Exercise Price
in effect at the time such adjustment is otherwise required to be made, but any
such lesser adjustment shall be carried forward and shall be made at the time
and together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.

            (G) NO FRACTIONAL SHARES. No fractional shares of Common Stock are
to be issued upon the exercise of this Warrant, but the Company shall pay a cash
adjustment in respect of any fractional share which would otherwise be issuable
in an amount equal to the same fraction of the Market Price of a share of Common
Stock on the date of such exercise.

            (H) OTHER NOTICES. In case at any time:

                  (I) the Company shall declare any dividend upon the Common
Stock payable in shares of stock of any class or make any other distribution
(including dividends or distributions payable in cash out of retained earnings)
to the holders of the Common Stock;

                  (II) the Company shall offer for subscription pro rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;

                  (III) there shall be any capital reorganization of the
Company, or reclassification of the Common Stock, or consolidation or merger of
the Company with or into, or sale of all or substantially all its assets to,
another corporation or entity; or

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<PAGE>

                  (IV) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

then, in each such case, the Company shall give to the holder of this Warrant
(a) notice of the date on which the books of the Company shall close or a record
shall be taken for determining the holders of Common Stock entitled to receive
any such dividend, distribution, or subscription rights or for determining the
holders of Common Stock entitled to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, notice of
the date (or, if not then known, a reasonable approximation thereof by the
Company) when the same shall take place. Such notice shall also specify the date
on which the holders of Common Stock shall be entitled to receive such dividend,
distribution, or subscription rights or to exchange their Common Stock for stock
or other securities or property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, or
winding-up, as the case may be. Such notice shall be given at least 30 days
prior to the record date or the date on which the Company's books are closed in
respect thereto. Failure to give any such notice or any defect therein shall not
affect the validity of the proceedings referred to in clauses (i), (ii), (iii)
and (iv) above.

            (I) CERTAIN EVENTS. If any event occurs of the type contemplated by
the adjustment provisions of this Paragraph 4 but not expressly provided for by
such provisions, the Company will give notice of such event as provided in
Paragraph 4(g) hereof, and the Company's Board of Directors will make an
appropriate adjustment in the Exercise Price and the number of shares of Common
Stock acquirable upon exercise of this Warrant so that the rights of the holder
shall be neither enhanced nor diminished by such event.

            (J) CERTAIN DEFINITIONS.

                  (I) "COMMON STOCK DEEMED OUTSTANDING" shall mean the number of
shares of Common Stock actually outstanding (not including shares of Common
Stock held in the treasury of the Company), plus (x) pursuant to Paragraph
4(b)(i) hereof, the maximum total number of shares of Common Stock issuable upon
the exercise of Options (other than Options for Convertible Securities), as of
the date of such issuance or grant of such Options, if any, and (y) pursuant to
Paragraph 4(b)(ii) hereof, the maximum total number of shares of Common Stock
issuable upon conversion or exchange of Convertible Securities, as of the date
of issuance of such Convertible Securities, if any.

                  (II) "MARKET PRICE," as of any date, (i) means the average of
the last reported sale prices for the shares of Common Stock on the OTCBB for
the five (5) Trading Days immediately preceding such date as reported by
Bloomberg, or (ii) if the OTCBB is not the principal trading market for the
shares of Common Stock, the average of the last reported sale prices on the
principal trading market for the Common Stock during the same period as reported
by Bloomberg, or (iii) if market value cannot be calculated as of such date on
any of the foregoing bases, the Market Price shall be the fair market value as
reasonably determined in good faith by (a) the Board of Directors of the Company
or, at the option of a majority-in-interest of the holders of the outstanding
Warrants by (b) an independent investment bank of nationally recognized standing
in the valuation of businesses similar to the business of the corporation. The
manner of determining the Market Price of the Common Stock set forth in the
foregoing definition shall apply with respect to any other security in respect
of which a determination as to market value must be made hereunder.

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                  (III) "COMMON STOCK," for purposes of this Paragraph 4,
includes the Common Stock, par value $.001 per share, and any additional class
of stock of the Company having no preference as to dividends or distributions on
liquidation, provided that the shares purchasable pursuant to this Warrant shall
include only shares of Common Stock, par value $.001 per share, in respect of
which this Warrant is exercisable, or shares resulting from any subdivision or
combination of such Common Stock, or in the case of any reorganization,
reclassification, consolidation, merger, or sale of the character referred to in
Paragraph 4(e) hereof, the stock or other securities or property provided for in
such Paragraph.

      5. ISSUE TAX. The issuance of certificates for Warrant Shares upon the
exercise of this Warrant shall be made without charge to the holder of this
Warrant or such shares for any issuance tax or other costs in respect thereof,
provided that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the holder of this Warrant.

      6. NO RIGHTS OR LIABILITIES AS A SHAREHOLDER. This Warrant shall not
entitle the holder hereof to any voting rights or other rights as a shareholder
of the Company. No provision of this Warrant, in the absence of affirmative
action by the holder hereof to purchase Warrant Shares, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Exercise Price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

      7. TRANSFER, EXCHANGE, AND REPLACEMENT OF WARRANT.

            (A) RESTRICTION ON TRANSFER. This Warrant and the rights granted to
the holder hereof are transferable, in whole or in part, upon surrender of this
Warrant, together with a properly executed assignment in the form attached
hereto, at the office or agency of the Company referred to in Paragraph 7(e)
below, provided, however, that any transfer or assignment shall be subject to
the conditions set forth in Paragraph 7(f) hereof and to the applicable
provisions of the Securities Purchase Agreement. Until due presentment for
registration of transfer on the books of the Company, the Company may treat the
registered holder hereof as the owner and holder hereof for all purposes, and
the Company shall not be affected by any notice to the contrary. June 29, 2006

            (B) WARRANT EXCHANGEABLE FOR DIFFERENT DENOMINATIONS. This Warrant
is exchangeable, upon the surrender hereof by the holder hereof at the office or
agency of the Company referred to in Paragraph 7(e) below, for new Warrants of
like tenor representing in the aggregate the right to purchase the number of
shares of Common Stock which may be purchased hereunder, each of such new
Warrants to represent the right to purchase such number of shares as shall be
designated by the holder hereof at the time of such surrender.

            (C) REPLACEMENT OF WARRANT. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
delivery of an indemnity agreement reasonably satisfactory in form and amount to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Warrant, the Company, at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

                                      -9-
<PAGE>

            (D) CANCELLATION; PAYMENT OF EXPENSES. Upon the surrender of this
Warrant in connection with any transfer, exchange, or replacement as provided in
this Paragraph 7, this Warrant shall be promptly canceled by the Company. The
Company shall pay all taxes (other than securities transfer taxes) and all other
expenses (other than legal expenses, if any, incurred by the holder or
transferees) and charges payable in connection with the preparation, execution,
and delivery of Warrants pursuant to this Paragraph 7.

            (E) REGISTER. The Company shall maintain, at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to the holder hereof), a register for this Warrant, in which the Company
shall record the name and address of the person in whose name this Warrant has
been issued, as well as the name and address of each transferee and each prior
owner of this Warrant.

            (F) EXERCISE OR TRANSFER WITHOUT REGISTRATION. If, at the time of
the surrender of this Warrant in connection with any exercise, transfer, or
exchange of this Warrant, this Warrant (or, in the case of any exercise, the
Warrant Shares issuable hereunder), shall not be registered under the Securities
Act of 1933, as amended (the "Securities Act") and under applicable state
securities or blue sky laws, the Company may require, as a condition of allowing
such exercise, transfer, or exchange, (i) that the holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of
counsel, which opinion and counsel are acceptable to the Company, to the effect
that such exercise, transfer, or exchange may be made without registration under
said Act and under applicable state securities or blue sky laws, (ii) that the
holder or transferee execute and deliver to the Company an investment letter in
form and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act; provided that no such opinion, letter or status as an "accredited investor"
shall be required in connection with a transfer pursuant to Rule 144 under the
Securities Act. The first holder of this Warrant, by taking and holding the
same, represents to the Company that such holder is acquiring this Warrant for
investment and not with a view to the distribution thereof.

      8. NOTICES. All notices, requests, and other communications required or
permitted to be given or delivered hereunder to the holder of this Warrant shall
be in writing, and shall be personally delivered, or shall be sent by certified
or registered mail or by recognized overnight mail courier, postage prepaid and
addressed, to such holder at the address shown for such holder on the books of
the Company, or at such other address as shall have been furnished to the
Company by notice from such holder. All notices, requests, and other
communications required or permitted to be given or delivered hereunder to the
Company shall be in writing, and shall be personally delivered, or shall be sent
by certified or registered mail or by recognized overnight mail courier, postage
prepaid and addressed, to the office of the Company at 415 West Foothill Blvd,
Suite 206, Claremont, CA 91711, Attention: Chief Executive Officer, or at such
other address as shall have been furnished to the holder of this Warrant by
notice from the Company. Any such notice, request, or other communication may be
sent by facsimile, but shall in such case be subsequently confirmed by a writing
personally delivered or sent by certified or registered mail or by recognized
overnight mail courier as provided above. All notices, requests, and other
communications shall be deemed to have been given either at the time of the
receipt thereof by the person entitled to receive such notice at the address of
such person for purposes of this Paragraph 8, or, if mailed by registered or
certified mail or with a recognized overnight mail courier upon deposit with the
United States Post Office or such overnight mail courier, if postage is prepaid
and the mailing is properly addressed, as the case may be.

                                      -10-
<PAGE>

      9. GOVERNING LAW. THIS WARRANT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES HERETO HEREBY SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE UNITED STATES FEDERAL COURTS LOCATED IN NEW YORK,
NEW YORK WITH RESPECT TO ANY DISPUTE ARISING UNDER THIS WARRANT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE DEFENSE OF AN INCONVENIENT FORUM TO
THE MAINTENANCE OF SUCH SUIT OR PROCEEDING. BOTH PARTIES FURTHER AGREE THAT
SERVICE OF PROCESS UPON A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN
EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY'S RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES AGREE THAT A FINAL
NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER
LAWFUL MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING UNDER
THIS WARRANT SHALL BE RESPONSIBLE FOR ALL FEES AND EXPENSES, INCLUDING
REASONABLE ATTORNEYS' FEES, INCURRED BY THE PREVAILING PARTY IN CONNECTION WITH
SUCH DISPUTE.

      10. MISCELLANEOUS.

            (A) AMENDMENTS. This Warrant and any provision hereof may only be
amended by an instrument in writing signed by the Company and the holder hereof.

            (B) DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Warrant are inserted for purposes of reference only, and
shall not affect the meaning or construction of any of the provisions hereof.

            (C) CASHLESS EXERCISE. Notwithstanding anything to the contrary
contained in this Warrant, if the resale of the Warrant Shares by the holder is
not then registered pursuant to an effective registration statement under the
Securities Act, this Warrant may be exercised by presentation and surrender of
this Warrant to the Company at its principal executive offices with a written
notice of the holder's intention to effect a cashless exercise, including a
calculation of the number of shares of Common Stock to be issued upon such
exercise in accordance with the terms hereof (a "Cashless Exercise"). In the
event of a Cashless Exercise, in lieu of paying the Exercise Price in cash, the
holder shall surrender this Warrant for that number of shares of Common Stock
determined by multiplying the number of Warrant Shares to which it would
otherwise be entitled by a fraction, the numerator of which shall be the
difference between the then current Market Price per share of the Common Stock
and the Exercise Price, and the denominator of which shall be the then current
Market Price per share of Common Stock. For example, if the holder is exercising
100,000 Warrants with a per Warrant exercise price of $0.75 per share through a
cashless exercise when the Common Stock's current Market Price per share is
$2.00 per share, then upon such Cashless Exercise the holder will receive 62,500
shares of Common Stock.

                                      -11-
<PAGE>

            (D) REMEDIES. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the holder, by vitiating
the intent and purpose of the transaction contemplated hereby. Accordingly, the
Company acknowledges that the remedy at law for a breach of its obligations
under this Warrant will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Warrant, that the
holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction
or injunctions restraining, preventing or curing any breach of this Warrant and
to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                      -12-
<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                       KIWA BIO-TECH PRODUCTS GROUP CORPORATION

                                       By: ____________________________________
                                            Wei Li
                                            Chief Executive Officer

Dated as of June 29, 2006

<PAGE>

                           FORM OF EXERCISE AGREEMENT

                                                        Dated: ________ __, 200_

To: ______________________

      The undersigned, pursuant to the provisions set forth in the within
Warrant, hereby agrees to purchase ________ shares of Common Stock covered by
such Warrant, and makes payment herewith in full therefor at the price per share
provided by such Warrant in cash or by certified or official bank check in the
amount of, or, if the resale of such Common Stock by the undersigned is not
currently registered pursuant to an effective registration statement under the
Securities Act of 1933, as amended, by surrender of securities issued by the
Company (including a portion of the Warrant) having a market value (in the case
of a portion of this Warrant, determined in accordance with Section 11(c) of the
Warrant) equal to $_________. Please issue a certificate or certificates for
such shares of Common Stock in the name of and pay any cash for any fractional
share to:

                                        Name:    ______________________________

                                        Signature:_____________________________
                                        Address:_______________________________
                                                _______________________________

                                        Note: The above signature should
                                              correspond exactly with the name
                                              on the face of the within Warrant,
                                              if applicable.

and, if said number of shares of Common Stock shall not be all the shares
purchasable under the within Warrant, a new Warrant is to be issued in the name
of said undersigned covering the balance of the shares purchasable thereunder
less any fraction of a share paid in cash.

<PAGE>

                               FORM OF ASSIGNMENT

      FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
all the rights of the undersigned under the within Warrant, with respect to the
number of shares of Common Stock covered thereby set forth hereinbelow, to:

Name of Assignee                    Address                   No of Shares
----------------                    -------                   ------------

, and hereby irrevocably constitutes and appoints ______________________ as
agent and attorney-in-fact to transfer said Warrant on the books of the
within-named corporation, with full power of substitution in the premises.

Dated: ________ __, 200_

In the presence of:
                                     __________________________________

                                Name:__________________________________

                                Signature:_________________________
                                Title of Signing Officer or Agent (if any):
                                         ______________________________
                                Address: ______________________________
                                         ______________________________

                                Note:   The above signature should correspond
                                        exactly with the name on the face of the
                                        within Warrant, if applicable.Unassociated Document

    EXHIBIT
      10.28

    

    FORM
      OF SECURITIES PURCHASE AGREEMENT

    

    GRAN
      TIERRA ENERGY INC.

    SECURITIES
      PURCHASE AGREEMENT

    

    This
      SECURITIES PURCHASE AGREEMENT (this “Agreement”)
      is
      dated as of June 30, 2006 and is by and among GRAN TIERRA ENERGY INC., a Nevada
      corporation, with its principal office at 300, 611-10th Avenue S.W. Floor,
      610-8th Avenue S.W., Calgary, Alberta CANADA (the “Company”),
      and
      each investor listed on Schedule
      1
      hereto
      (each such investor individually, a “Purchaser”
and,
      collectively, the “Purchasers”).
      

    

    WHEREAS,
      the Company desires to issue and sell to the Purchasers, and the Purchasers
      desire to purchase from the Company, units of its securities at a purchase
      price
      of $1.50 per Unit, each “Unit”
      comprising one share of its authorized but unissued shares of common stock,
      $0.001 par value per share, of the Company (including any securities into which
      or for which such shares may be exchanged for, or converted into, pursuant
      to
      any stock dividend, stock split, stock combination, recapitalization,
      reclassification, reorganization or other similar event the “Common
      Stock”),
      and a
      warrant (“Warrants”)
      to
      purchase one-half of a share of Common Stock at an exercise price equal to
      $0.875, in the form attached hereto as Exhibit
      A,
      in each
      case as are set forth on the signature page(s) attached hereto and executed
      by
      each such Purchaser, for an aggregate purchase price of up to $75,000,000 (the
      “Aggregate
      Proceeds”)
      on the
      terms and subject to the conditions set forth in this Agreement;
      and

    

    WHEREAS,
      simultaneously with or prior to entering into this Agreement, the Company,
      the
      Placement Agent (as defined below) and Sterling Bank, as Escrow Agent (the
      “Escrow
      Agent”),
      are
      entering into an Escrow Agreement dated the date hereof and attached as
Exhibit
      B
      (the
“Escrow
      Agreement”),
      pursuant to which the Company will deposit the Aggregate Proceeds paid into
      an
      escrow account (the “Escrow
      Account”)
      for
      release to the Company subject to the closing of the Argosy Acquisition;
      and

    

    WHEREAS,
      simultaneously with entering into this Agreement, the Company and the Purchasers
      are entering into that certain Registration Rights Agreement, dated as of the
      date hereof and attached as Exhibit
      C
      hereto
      (the “Registration
      Rights Agreement”),
      pursuant to which the Company shall register for resale the Shares (as defined
      below) on the terms set forth therein; 

    

    NOW
      THEREFORE, in consideration of the mutual agreements, representations,
      warranties and covenants herein contained, the parties hereto agree as follows:
      

    

    1. Definitions.
      As used
      in this Agreement, the following terms shall have the following respective
      meanings: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (a)  “Acquisitions”
means
      the Argosy Acquisition and the acquisition of oil and gas interests and related
      assets from Golden Oil Corporation pursuant to the Farm In Agreement dated
      as of
      May 15, 2006.

    

    (b)  “Affiliate”
means
      any Person that, directly or indirectly, through one or more intermediaries,
      controls, is controlled by, or is under common control with, a Person, as such
      terms are used and construed under Rule 144 (as defined below). 

    

    (c)  “Argosy
      Acquisition”
means
      the acquisition of (i) all of the limited partnership interests of Argosy Energy
      International, a Utah limited partnership (“Argosy”), (ii) all of the
      outstanding capital stock of Argosy Energy Corp., a Delaware corporation (“AEC”)
      and (iii) all of Crosby’s rights with respect to Crosby’s original purchase of
      interests in Argosy (collectively the “Argosy Interests”) pursuant to the
      Securities Purchase Agreement dated as of May 25, 2006 by and among the Company
      and Crosby Capital, L.L.C., a Texas limited liability company.

    

    (d)  “Board”
means
      the board of directors of the Company. 

    

    (e)  “Closing
      Date”
means
      the date hereof. 

    

    (f)  “Engineer”
has
      the
      meaning set forth in Section 3.17.

    

    (g)  “Environmental
      Laws”
has
      the
      meaning set forth in Section 3.14.

    

    (h)  “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and all of the rules and
      regulations promulgated thereunder. 

    

    (i)  “Exchangeable
      Shares”
means
      the shares of Gran Tierra Goldstrike Inc., a subsidiary of the Company, which
      are exchangeable into shares of Common Stock of the Company.

    

    (j)  “GAAP” means
      generally accepted accounting principles as in effect from time to time in
      the
      United States of America.

    

    (k)  “Majority
      Purchasers”
has
      the
      meaning set forth in Section 8.11. 

    

    (l)  “Mandatory
      Effective Date”
means
      the earlier of (i) the date that is one hundred twenty (120) days after the
      Closing Date or (ii) the date that the registration statement required to be
      filed by the Company under the Securities Act pursuant to the terms of the
      Registration Rights Agreement becomes effective.

    

    (m)  “Material
      Adverse Effect”
means
      any event, occurrence or development that has had, or that could reasonably
      be
      expected to have, individually or in the aggregate with other events,
      occurrences or developments, a material adverse effect on the assets,
      liabilities (contingent or otherwise), business, affairs, operations, prospects
      or condition (financial or otherwise) of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (n)  “Other
      Offerings”
has
      the
      meaning set forth in Section 2.1.

    

    (o)  “Person”
      (whether or not capitalized) means an individual, entity, partnership, limited
      liability company, corporation, association, trust, joint venture,
      unincorporated organization, and any government, governmental department or
      agency or political subdivision thereof. 

    

    (p)  “Placement
      Agent”
means
      Canaccord Capital Corporation

    

    (q)  “Reserve
      Reports”
has
      the
      meaning set forth in Section 3.17.

    

    (r)  “Rule
      144”
means
      Rule 144 promulgated under the Securities Act and any successor or substitute
      rule, law or provision. 

    

    (s)  “SEC”
means
      the Securities and Exchange Commission.

    

    (t)  “SEC
      Documents”
has
      the
      meaning set forth in Section 3.7.

    

    (u)  “Securities”
means
      the Shares, the Warrants and Warrant Shares.

    

    (v)  “Securities
      Act”
means
      the Securities Act of 1933, as amended, and all of the rules and regulations
      promulgated thereunder. 

    

    (w)  “Shares”
means
      the shares of Common Stock issued and sold by the Company to the Purchasers
      hereunder.

    

    (x)  “Trading
      Market”
means
      whichever of the New York Stock Exchange, the American Stock Exchange, the
      NASDAQ SmallCap Market or the NASD OTC Bulletin Board on which the Common Stock
      is or will be listed or quoted for trading on the date in question.

    

    (y)  “Transaction
      Documents”
means,
      collectively, this Agreement, the Registration Rights Agreement and the Warrant.
      

    

    (z)  “Transfer
      Agent Instructions”
means
      the Irrevocable Transfer Agent Instructions, in substantially the form of
      Exhibit E, executed by the Company and delivered to and acknowledged in writing
      by the Company’s transfer agent

    

    (aa)  “Unit”
has
      the
      meaning set forth in the recitals to this Agreement.

    

    (bb)  “Unit
      Price”
means
      $1.50 per Unit.

    

    (cc)  “Warrants”
shall
      have meaning set forth in the recitals to this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (dd)  “Warrant
      Shares”
means
      the shares of Common Stock issuable upon exercise of or otherwise pursuant
      to
      the Warrants.

     

    2. Purchase
      and Sale of Shares and Warrants.
      

    

    2.1 Purchase
      and Sale of Shares and Warrants.
      Subject
      to and upon the terms and conditions set forth in this Agreement, the Company
      agrees to issue and sell to each Purchaser, and each Purchaser hereby agrees,
      severally and not jointly, (i) to purchase from the Company, at the Closing,
      the
      number of Units representing the number of Shares and Warrants to acquire
      Warrant Shares set forth opposite such Purchaser’s name on Schedule
      1
      hereto,
      at the Unit Price and (ii) to pay the purchase price set forth opposite such
      Purchaser’s name on Schedule 1
      hereto.
      The Purchasers and the Company agree that the Company may sell to other
      investors Units at the Unit Price in offerings (the “Other
      Offerings”)
      concurrent with the sale by the Company to the Purchasers hereunder; provided,
      however, that the terms and agreements provided to such other investors (or
      any
      other investor) relating to the Other Offerings shall not be more favorable
      than
      the terms and agreements provided to the Purchasers in the Transaction
      Documents. The aggregate purchase price payable, severally and not jointly,
      by
      the Purchasers under this Agreement and all the other investors under the Other
      Offerings, to the Company, whether directly or through release of funds pursuant
      to the terms of the Escrow Agreement, for all of the Units shall be a minimum
      of
      $65,000,000 and a maximum of $75,000,000.

    

    2.2 Closing.
      Subject
      to and upon the terms and conditions set forth in this Agreement, the closing
      of
      the transactions contemplated under this Agreement (the “Closing”)
      shall
      take place at 10:00 am (Eastern Time) at the offices of Andrews Kurth LLP,
      450
      Lexington Avenue, New York, NY 10017, on the Closing Date, or on such other
      date
      and at such time as may be agreed upon between the Purchasers, on the one hand,
      and the Company, on the other hand. At the Closing, the Company shall deliver
      to
      the Escrow Agent on behalf of each Purchaser, or at the direction of any
      Purchaser, to such Purchaser directly, a single stock certificate and a Warrant
      (or more, if reasonably requested by the Purchaser), registered in the name
      of
      such Purchaser or such Purchaser’s designee, representing the number of Shares
      and Warrants, respectively, purchased by such Purchaser against payment of
      the
      purchase price by wire transfer of immediately available funds to the Escrow
      Account designated by the Escrow Agent, or with the Company’s consent, directly
      to the Company.

    

    2.3 Placement
      Agent’s Fee.
      Upon
      the release of funds from the Escrow Account in accordance with the Escrow
      Agreement, the Company shall pay to the Placement Agent placement agent fees
      in
      connection with the transactions contemplated hereunder in the amount of seven
      percent (7%) Aggregate Proceeds, by wire transfer in accordance with the
      engagement letter by and among the Company and the Placement Agent.

    

    3. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to each Purchaser, as of the date hereof
      and as of the Closing Date as follows: 

    

    3.1 Incorporation.
      Each of
      the Company and the Subsidiaries (as defined in Section 3.20 below) is a
      corporation or other entity duly organized, validly existing and in good
      standing under the laws of the State of Nevada (or such other applicable
      jurisdiction of incorporation or formation as is indicated on Schedule 3.20),
      and is in good standing as a foreign corporation or other entity in each
      jurisdiction in which the nature of the business conducted or the character
      of
      the property owned by it makes such qualification necessary, except where the
      failure to be so qualified or in good standing, as the case may be, would not
      result in a Material Adverse Effect. Each of the Company and the Subsidiaries
      has all requisite corporate power and authority to own its properties, to carry
      on its business as now conducted, to enter into the Transaction Documents to
      which it is a party and to carry out the transactions contemplated hereby and
      thereby. Neither the Company nor any of the Subsidiaries is in violation of
      any
      of the provisions of its Certificate of Incorporation (or other charter
      document) or By-laws. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.2 Capitalization.
      Immediately prior to the consummation of the transactions to be effected at
      the
      Closing, the authorized capital stock of the Company consists of (a) 300,000,000
      shares of Common Stock, of which 27,600,985 shares were issued and outstanding
      as of the date hereof and 16,984,124 shares of Common Stock are reserved for
      issuance upon the exercise of Exchangeable Shares, and (b) 1 share of special
      voting stock through which the holders of Exchangeable Shares may exercise
      their
      voting rights through a trustee and (c) 25,000,000 shares of Preferred Stock,
      of
      which no shares are issued and outstanding as of the date hereof. Immediately
      after the consummation of the transactions contemplated hereby, the authorized
      and outstanding capital stock of the Company shall be as set forth in the
      preceding sentence except that there shall be 77,600,985 shares of Common Stock
      issued and outstanding (assuming an aggregate $75,000,000 of Units issued to
      the
      Purchasers and all other investors as described in Section 2.1 and assuming
      there is no exercise of outstanding Exchangeable Shares or the Warrants issued
      to the Purchasers and all the other investors described in Section 2.1). After
      giving effect to the transactions contemplated hereby, all shares of the
      Company’s issued and outstanding capital stock have been duly authorized, are
      validly issued and outstanding, are fully paid and nonassessable, have been
      issued in compliance with all applicable securities laws, were not issued in
      violation of or subject to any preemptive rights or other rights to subscribe
      for or purchase securities, and conform in all material respects to the
      description thereof contained in the SEC Documents (as defined in Section 3.7).
      Except as set forth in Schedule
      3.2
      to the
      Disclosure Schedule, there are no existing options, warrants, calls, puts,
      preemptive (or similar) rights, subscriptions or other rights, agreements,
      arrangements or commitments of any character obligating the Company to issue,
      transfer or sell, or cause to be issued, transferred or sold, any shares of
      the
      capital stock of the Company or other equity interests in the Company or any
      securities convertible into or exchangeable for such shares of capital stock
      or
      other equity interests, including the Securities, and there are no outstanding
      contractual obligations of the Company to repurchase, redeem or otherwise
      acquire any shares of its capital stock or other equity interests. The issue
      and
      sale of the Securities will not obligate the Company to issue or sell, pursuant
      to any pre-emptive right or otherwise, shares of Common Stock or other
      securities to any Person (other than the Purchasers) and will not result in
      a
      right of any holder of Company securities to adjust the exercise, conversion,
      exchange or reset price under such securities. With respect to each subsidiary,
      (i) all of the issued and outstanding shares of the Subsidiary’s capital stock
      have been duly authorized, are validly issued and outstanding, are fully paid
      and nonassessable, have been issued in compliance with applicable securities
      laws, were not issued in violation of or subject to any preemptive rights or
      other rights to subscribe for or purchase securities, and (ii) there are no
      outstanding options to purchase, or any preemptive rights or other rights to
      subscribe for or to purchase, any securities or obligations convertible into,
      or
      any contracts or commitments to issue or sell, shares of the Subsidiary’s
      capital stock or any such options, rights, convertible securities or
      obligations. There are no agreements of which the Company is aware, other than
      the Transaction Documents, relating to the voting of the Company’s voting
      securities or restrictions on the transfer of the Company’s capital
      stock.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.3 Registration
      Rights.
      Except
      as set forth on Schedule
      3.3
      to the
      Disclosure Schedule, the Company has not granted or agreed to grant to any
      Person any right (including “piggy-back” and demand registration rights) to have
      any capital stock or other securities of the Company registered with the SEC
      or
      any other government authority. 

    

    3.4 Authorization.
      All
      corporate action on the part of the Company, its officers and directors and
      its
      stockholders necessary for the authorization, execution, delivery and
      performance of the Transaction Documents and the consummation of the
      transactions (including, without limitation, the sale and delivery of the Shares
      and Warrants and upon exercise of the Warrants, the issuance of the Warrant
      Shares) contemplated herein and therein has been taken. When executed and
      delivered by the Company, each of the Transaction Documents shall constitute
      a
      legal, valid and binding obligation of the Company, enforceable against the
      Company in accordance with its terms, except as such may be limited by
      bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
      generally and by general equitable principles. The Company has all requisite
      corporate power and authority to enter into the Transaction Documents and to
      carry out and perform its obligations under their respective terms.

    

    3.5 Valid
      Issuance of the Shares and the Warrant Shares.
      The
      Shares and Warrants have been duly authorized and will be validly issued, fully
      paid and nonassessable and not subject to any encumbrances, preemptive rights
      or
      any other similar contractual rights of the stockholders of the Company or
      any
      other Person. The Warrant Shares have been duly authorized and when issued
      and
      paid for in accordance with its terms will be validly issued, fully-paid and
      non-assessable and not subject to any encumbrances, preemptive rights or any
      other similar contractual rights of the stockholders of the Company or any
      other
      Person. The Company has reserved from its duly authorized capital stock the
      number of shares of Common Stock issuable upon execution of this Agreement
      and
      upon proper exercise of the Warrants.

    

    3.6 Financial
      Statements.
      The
      Company has made available to the Purchasers true and complete copies of the
      audited consolidated balance sheet of the Company and the Subsidiaries as of
      December 31, 2005 (the “Balance
      Sheet”)
      and
      the related consolidated income statement, consolidated statement of cash flows
      and consolidated statement of stockholders’ equity of the Company for the twelve
      (12) months then ended. All of the financial statements described above are
      hereinafter referred to, collectively, as the “Financial
      Statements”.
      The
      Financial Statements have been prepared in accordance with United States
      generally accepted accounting principles applied on a consistent basis during
      the periods covered thereby, subject, to normal year-end adjustments (which
      individually and in the aggregate are not material) and to the absence of
      footnotes thereto, and present fairly, in all material respects, the financial
      position of the Company and the Subsidiaries and the results of operations
      and
      cash flows as of the date and for the periods indicated therein. The firm of
      Deloitte & Touche LLP, which has expressed its opinion with respect to the
      consolidated financial statements included in the Company’s Annual Report on
      Form 10-KSB/A for the fiscal year ended December 31, 2005, is an independent
      accountant as required by the Securities Act and the rules and regulations
      promulgated thereunder. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.7 SEC
      Documents.
      

    

    (a) The
      Company has filed all reports (the “SEC
      Documents”)
      required to be filed by it under the Securities Act and the Exchange Act,
      including pursuant to Section 13(a) or 15(d) thereof and the Form 10-KSB, as
      amended, for the year ended December 31, 2005 and the Form 10-QSB for the three
      months ended March 31, 2006 on a timely basis or has timely filed for a valid
      extension of such time of filing and has filed any such SEC Documents prior
      to
      the expiration of any such extension. As of their respective dates, the SEC
      Documents complied in all material respects with the requirements of the
      Securities Act and the Exchange Act and the rules and regulations of the SEC
      promulgated thereunder, and none of the SEC Documents, when filed, contained
      any
      untrue statement of a material fact or omitted to state a material fact required
      to be stated therein or necessary in order to make the statements therein,
      in
      light of the circumstances under which they were made, not misleading; provided,
      the Company has not received a final determination with respect to comments
      from
      the SEC to the Company’s 10-KSB/A for the year ended December 31, 2005 relating
      to the extent of financial disclosure required by Item 310(a) of Regulation
      S-B
      regarding the Company’s predecessor financial statements, but the Company and
      its independent auditor believe in good faith that the disclosure provided
      to
      date conforms with the requirements of the Exchange Act. The financial
      statements of the Company included in the SEC Documents comply in all material
      respects with applicable accounting requirements and the rules and regulations
      of the SEC with thereto as in effect at the time of filing. Such financial
      statements have been prepared in accordance with GAAP applied on a consistent
      basis during the periods involved, except as may be otherwise specified in
      such
      financial statements or the notes thereto, and fairly present in all material
      respects the financial position of the Company and its Subsidiaries as of and
      for the dates thereof and the results of operations and cash flows for the
      periods then ended, subject, in the case of unaudited statements, to normal,
      immaterial, year-end audit adjustments. All material agreements to which the
      Company is a party or to which the property or assets of the Company are subject
      are included as part of or specifically identified in the SEC Documents to
      the
      extent required by the rules and regulations of the SEC as in effect at the
      time
      of filing. The Company has prepared and filed with the SEC all filings and
      reports required by the Securities Act and the Exchange Act to make the
      Company’s filings and reports current in all respects. 

    

    3.8 Consents.
      Except
      for (a) the filing and effectiveness of any registration statement required
      to
      be filed by the Company under the Securities Act pursuant to the terms of the
      Registration Rights Agreement and (b) any required state “blue sky” law filings
      in connection with the transactions contemplated under the Transaction
      Documents, all consents, approvals, orders and authorizations required on the
      part of the Company in connection with the execution or delivery of, or the
      performance of the obligations under the Transaction Documents, and the
      consummation of the transactions contemplated herein and therein, have been
      obtained and will be effective as of the date hereof. The execution and delivery
      by the Company of the Transaction Documents, the consummation of the
      transactions contemplated herein and therein, and the issuance of the
      Securities, do not require the consent or approval of the stockholders of,
      or
      any lender to, the Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.9 No
      Conflict; Compliance With Laws.
      

    

    (a) The
      execution, delivery and performance by the Company of the Transaction Documents,
      and the consummation of the transactions contemplated hereby and thereby,
      including the issuance of the Securities do not and will not (i) conflict with
      or violate any provision of the Certificate of Incorporation (or other charter
      documents) or By-laws of the Company or any of the Subsidiaries, (ii) breach,
      conflict with or result in any violation of or default (or an event that with
      notice or lapse of time or both would become a default) or cause the creation
      of
      any lien or encumbrance upon any assets of the Company under, or give rise
      to a
      right of termination, amendment, acceleration or cancellation (with or without
      notice or lapse of time, or both) of any obligation, contract, commitment,
      lease, agreement, mortgage, note, bond, indenture or other instrument or
      obligation to which the Company or any of the Subsidiaries is a party or by
      which they or any of their properties or assets are bound, except in each case
      to the extent such breach, conflict, violation, default, termination, amendment,
      acceleration or cancellation does not, and could not reasonably be expected
      to
      have, individually or in the aggregate, a Material Adverse Effect, (iii) breach,
      conflict with or result in any violation of or default (or an event that with
      notice or lapse of time or both could become a default) of any statute, law,
      rule, regulation, order, ordinance or restriction applicable to the Company,
      the
      Subsidiaries or any of their properties or assets, or any judgment, writ,
      injunction or decree of any court, judicial or quasi-judicial tribunal
      applicable to the Company, the Subsidiaries or any of their properties or
      assets, or (iv) require from the Company any notice to, declaration or filing
      with, or consent or approval of any governmental authority or other third party
      other than pursuant to federal or state securities or blue sky
      laws.

    

    (b) Neither
      the Company nor any of the Subsidiaries (i) is in default under or in violation
      of (and no event has occurred that has not been waived that, with notice or
      lapse of time or both, would result in a default by the Company or any of the
      Subsidiaries), nor has the Company or any of the Subsidiaries received written
      notice of a claim that it is in default under or that it is in violation of,
      any
      indenture, loan or credit agreement or any other agreement or instrument to
      which it is a party or by which it or any of its properties or assets is bound
      (whether or not such default or violation has been waived), or (ii) is in
      violation of any statute, rule or regulation of any governmental authority,
      including without limitation all foreign, federal, state and local laws relating
      to taxes, environmental protection, occupational health and safety, product
      quality and safety and employment and labor matters, except in each case as
      does
      not, and could not, reasonably be expected to have, individually or in the
      aggregate, a Material Adverse Effect.

    

    (c) Neither
      the Company nor its Subsidiaries is conducting its business in violation of
      any
      applicable law, rule or regulation of the jurisdictions in which it is
      conducting its business, including, without limitation, any applicable
      Environmental Laws or regulations, except any violations which would not have
      a
      Material Adverse Effect. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.10 Brokers
      or Finders.
      Except
      as provided in Section 2.3, neither the Company nor any of the Subsidiaries
      owes
      any fee to any broker or finder in connection with the transactions contemplated
      by the Transaction Documents, and neither the Company nor any of the
      Subsidiaries has incurred, or shall incur, directly or indirectly, any liability
      for any brokerage or finders’ fees or agents’ commissions or any similar charges
      in connection with the Transaction Documents, or any transaction contemplated
      hereby or thereby. 

    

    3.11 OTC
      Bulletin Board.
      The
      Company’s Common Stock is currently quoted on the OTC Bulletin Board.

    

    3.12 No
      Actions.
      Except
      as described in the SEC Documents, there are no legal or governmental actions,
      suits or proceedings pending and, to the Company’s knowledge, there are no
      governmental or regulatory inquiries or investigations, nor are there any legal
      or governmental threatened actions, suits, claims, proceedings or investigations
      against or involving the Company or any of the Subsidiaries. 

    

    3.13 No
      Undisclosed Liabilities; Indebtedness.
      Since
      the date of the Balance Sheet, the Company and the Subsidiaries have incurred
      no
      liabilities or obligations, whether known or unknown, asserted or unasserted,
      fixed or contingent, accrued or unaccrued, matured or unmatured, liquidated
      or
      unliquidated, or otherwise, except for liabilities or obligations that,
      individually or in the aggregate, do not or would not reasonably be expected
      to
      have a Material Adverse Effect and other than liabilities and obligations
      arising in the ordinary course of business. Except for indebtedness reflected
      in
      the Balance Sheet, the Company has no indebtedness outstanding as of the date
      hereof. The Company is not in default with respect to any outstanding
      indebtedness or any instrument relating thereto. 

    

    3.14 Environmental.
      Except
      as disclosed in Schedule
      3.14
      of the
      Disclosure Schedule, neither the Company nor any of its Subsidiaries is in
      violation of any statute, rule, regulation, decision or order of any
      governmental agency or body or any court, domestic or foreign, relating to
      the
      use, disposal or release of hazardous or toxic substances or relating to the
      protection or restoration of the environment or human exposure to hazardous
      or
      toxic substances (collectively, “Environmental
      Laws”),
      owns
      or operates any real property contaminated with any substance that is subject
      to
      any Environmental Laws, is liable for any off-site disposal or contamination
      pursuant to any Environmental Laws, or is subject to any claim relating to
      any
      Environmental Laws, which violation, contamination, liability or claim would
      individually or in the aggregate have a Material Adverse Effect; and the Company
      is not aware of any pending investigation which might lead to such a
      claim.

    

    3.15 Contracts.
      There
      is no material contract or agreement required by the Exchange Act and the rules
      or regulations promulgated thereunder to be described in or filed as an exhibit
      to the SEC Documents that the Company was required to file with the SEC pursuant
      to the reporting requirements which is not described or filed therein as
      required. All contracts, agreements, instruments and other documents filed
      as an
      exhibit to the SEC Documents are legal, valid, and binding obligations and
      in
      full force and effect and are enforceable by the Company in accordance with
      their respective terms as of the date hereof, except as such may be limited
      by
      bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
      generally and by general equitable principles. To the Company’s knowledge, as of
      the date hereof, neither the Company nor any other party is in breach of or
      default under any of such contracts, agreements, instruments or documents,
      except for such failures to be in full force and effect and such breaches or
      defaults that would not reasonably be expected to have a Material Adverse
      Effect.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.16 Title
      to Assets.
      The
      Company and its Subsidiaries have (1) good and indefeasible title to all of
      their owned interests in the oil and gas properties described in the SEC
      Documents, (2) good and indefeasible title in fee simple to all other real
      property owned by the Company or any of its Subsidiaries and (3) good title
      to
      all personal property owned by the Company or any of its Subsidiaries, in each
      case, free and clear of all liens, encumbrances and defects, except (i) as
      described in Schedule
      3.16
      to the
      Disclosure Schedule, (ii) liens securing taxes and other governmental charges
      not at the time delinquent or thereafter payable without penalty or being
      diligently contested in good faith by appropriate proceedings and for which
      adequate reserves in accordance with GAAP shall have been set aside on its
      books, or inchoate and unperfected liens securing claims of materialmen,
      mechanics and similar persons, arising in the ordinary course of business for
      amounts not overdue or being diligently contested in good faith by appropriate
      proceedings, (iii) liens and encumbrances under oil and gas leases, options
      to
      lease, operating agreements, utilization and pooling agreements, participation
      and drilling concessions agreements and gas sales contracts, securing payment
      of
      amounts not yet due and payable and of a scope and nature customary in the
      oil
      and gas industry, (iv) liens, encumbrances and defects that do not, individually
      or in the aggregate, materially affect the value of such properties, taken
      as a
      whole, or materially interfere with the use made or proposed to be made of
      such
      properties, taken as a whole, by the Company or its Subsidiaries; except as
      described in Schedule
      3.16
      in the
      Disclosure Schedule, the leases, options to lease, drilling concessions or
      other
      arrangements held by the Company and its Subsidiaries reflect in all material
      respects the right of the Company and its Subsidiaries to explore the unexplored
      and undeveloped acreage described in the SEC Documents, and the care taken
      by
      the Company and its Subsidiaries with respect to acquiring or otherwise
      procuring such leases, options to lease, drilling concessions and other
      arrangements was generally consistent with standard industry practices for
      acquiring or procuring leases to explore acreage for hydrocarbons; and any
      real
      property and buildings 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 or proposed to be
      made of such real property and buildings by the Company or its Subsidiaries
      with
      which the Company and the Subsidiaries are in compliance in all material
      respects.

    

    3.17 Reserves.
      Gaffney, Cline and Associates (the “Engineer”),
      whose
      reserve evaluations are referenced or appear, as the case may be, in the SEC
      Documents were, as of December 31, 2005, and are, as of the date hereof,
      independent engineers with respect to the Company and its Subsidiaries; and
      the
      historical information underlying the estimates of the reserves of the Company
      and its Subsidiaries supplied by the Company to the Engineer for the purposes
      of
      preparing the reserve reports of the Company referenced in the SEC Documents
      (the “Reserve
      Reports”),
      including, without limitation, production volumes, sales prices for production,
      contractual pricing provisions under oil or gas sales or marketing contracts
      or
      under hedging arrangements, costs of operations and development, and working
      interest and net revenue information relating to the Company’s ownership
      interests in properties, was true and correct on the date that each such Reserve
      Reports was prepared in all material respects in accordance with customary
      industry practices.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.18 Labor
      Relations.
      No
      labor or employment dispute exists or, to the knowledge of the Company, is
      imminent or threatened, with respect to any of the employees or consultants
      of
      the Company that has, or could reasonably be expected to have, individually
      or
      in the aggregate, a Material Adverse Effect. 

    

    3.19 Intellectual
      Property.
      The
      Company is the sole and exclusive owner of, or has the exclusive right to use,
      all right, title and interest in and to all material foreign and domestic
      patents, patent rights, trademarks, service marks, trade names, brands,
      copyrights (whether or not registered and, if applicable, including pending
      applications for registration) and other proprietary rights or information,
      owned or used by the Company (collectively, the “Rights”),
      and
      in and to each material invention, software, trade secret, and technology used
      by the Company or any of the Subsidiaries (the Rights and such other items,
      the
“Intellectual
      Property”),
      and
      the Company owns and has the right to use the same, free and clear of any claim
      or conflict with the rights of others (subject to the provisions of any
      applicable license agreement). Except as set forth on Schedule
      3.19
      to the
      Disclosure Schedule, there have been no written claims made against the Company
      or any of the Subsidiaries asserting the invalidity, abuse, misuse, or
      unenforceability of any of the Intellectual Property, and, to the Company’s
      knowledge, there are no reasonable grounds for any such claims. 

    

    3.20 Subsidiaries;
      Joint Ventures.
      Except
      for the subsidiaries listed on Schedule
      3.20
      to the
      Disclosure Schedule (the “Subsidiaries”),
      the
      Company has no subsidiaries and (i) does not otherwise own or control, directly
      or indirectly, any other Person and (ii) does not hold equity interests,
      directly or indirectly, in any other Person. Except as described in the SEC
      Documents or on Schedule
      3.20,
      the
      Company is not a participant in any joint venture, partnership, or similar
      arrangement material to its business. 

    

    3.21 Taxes.
      The
      Company and each of the Subsidiaries has filed (or has had filed on its behalf),
      will timely file or will cause to be timely filed, or has timely filed for
      an
      extension of the time to file, all material Tax Returns (as defined below)
      required by applicable law to be filed by it or them prior to or as of the
      date
      hereof, and such Tax Returns are, or will be at the time of filing, true,
      correct and complete in all material respects. Each of the Company and the
      Subsidiaries has paid (or has had paid on its behalf) or, where payment is
      not
      yet due, has established (or has had established on its behalf and for its
      sole
      benefit and recourse) or will establish or cause to be established in accordance
      with United States generally accepted accounting principles on or before the
      date hereof an adequate accrual for the payment of, all material Taxes (as
      defined below) due with respect to any period ending prior to or as of the
      date
      hereof. “Taxes”
shall
      mean any and all taxes, charges, fees, levies or other assessments, including
      income, gross receipts, excise, real or personal property, sales, withholding,
      social security, retirement, unemployment, occupation, use, goods and services,
      license, value added, capital, net worth, payroll, profits, franchise, transfer
      and recording taxes, fees and charges, and any other taxes, assessment or
      similar charges imposed by the Internal Revenue Service or any taxing authority
      (whether state, county, local or foreign) (each, a “Taxing
      Authority”),
      including any interest, fines, penalties or additional amounts attributable
      to
      or imposed upon any such taxes or other assessments. “Tax
      Return”
shall
      mean any report, return, document, declaration or other information or filing
      required to be supplied to any Taxing Authority, including information returns,
      any documents with respect to accompanying payments of estimated Taxes, or
      with
      respect to or accompanying requests for extensions of time in which to file
      any
      such return, report, document, declaration or other information. There are
      no
      claims or assessments pending against the Company or any of the Subsidiaries
      for
      any material alleged deficiency in any Tax, and neither the Company nor any
      of
      the Subsidiaries has been notified of any material proposed Tax claims or
      assessments against the Company or any of the Subsidiaries. No Tax Return of
      the
      Company or any of the Subsidiaries is or has been the subject of an examination
      by a Taxing Authority. Each of the Company and the Subsidiaries has withheld
      from each payment made to any of its past or present employees, officers and
      directors, and any other person, the amount of all material Taxes and other
      deductions required to be withheld therefrom and paid the same to the proper
      Taxing Authority within the time required by law. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.22 Transfer
      Taxes.
      On the
      Closing Date, all stock transfer or other Taxes (other than income taxes) which
      are required to be paid in connection with the sale and transfer of the Shares
      to the Purchasers hereunder, will be, or will have been, fully paid or provided
      for by the Company and all laws imposing such taxes will be or will have been
      complied with.

    

    3.23 Pensions
      and Benefits.
      

    

    (a) Schedule
      3.23(a)
      to the
      Disclosure Schedule contains a true and complete list of each “employee benefit
      plan” within the meaning of Section 3(3) of the United States Employee
      Retirement Income Security Act of 1974, as amended (“ERISA”),
      including, without limitation, multiemployer plans within the meaning of Section
      3(37) of ERISA, and all retirement, profit sharing, stock option, stock bonus,
      stock purchase, severance, fringe benefit, deferred compensation, and other
      employee benefit programs, plans, or arrangements, whether or not subject to
      ERISA, under which (i) any current or former directors, officers, employees
      or
      consultants of the Company has any present or future right to benefits and
      which
      are contributed to, sponsored by or maintained by the Company or any of the
      Subsidiaries, or (ii) the Company or any of the Subsidiaries has any present
      or
      future liability. All such programs, plans, or arrangements shall be
      collectively referred to as the “Company
      Plans.”
Each
      Company Plan is included as part of or specifically identified in the SEC
      Documents to the extent required by the rules and regulations of the SEC as
      in
      effect at the time of filing. 

    

    (b) (i)
      Each
      Company Plan has been established and administered in all material respects
      in
      accordance with its terms and in compliance with the applicable provisions
      of
      ERISA, the Internal Revenue Code of 1986, as amended (the “Code”),
      and
      other applicable laws, rules and regulations; (ii) each Company Plan which
      is
      intended to be qualified within the meaning of Section 401(a) of the Code is
      so
      qualified and has received a favorable determination letter as to its
      qualification (or if maintained pursuant to a prototype form of instrument
      the
      sponsor thereof has received a favorable opinion letter as to its
      qualification), and to the Company’s knowledge nothing has occurred, whether by
      action or failure to act, that could reasonably be expected to cause the loss
      of
      such qualification; and (iii) no Company Plan provides retiree health or life
      insurance benefits (whether or not insured), and neither the Company nor the
      Subsidiaries have any obligations to provide any such retiree benefits other
      than as required pursuant to Section 4980B of the Code or other applicable
      law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (c) No
      Company Plan is a “multiemployer plan” as defined in Section 4001(a)(3) of
      ERISA) or a plan subject to the minimum funding requirements of Section 302
      or
      ERISA or Section 412 of the Code or Title IV of ERISA, and neither the Company,
      the Subsidiaries, nor any member of their Controlled Group has any liability
      or
      obligation in respect of, any such multiemployer plan or plan. With respect
      to
      any Company Plan and to the Company’s knowledge, (i) no actions, suits or claims
      (other than routine claims for benefits in the ordinary course) are pending
      or
      threatened, and (ii) no administrative investigation, audit or other
      administrative proceeding by the Department of Labor, the Pension Benefit
      Guaranty Corporation, the Internal Revenue Service or other governmental
      agencies are pending, threatened or in progress. 

    

    3.24 Private
      Placement; Communications with Purchasers; Press Releases.
      

    

    (a) Assuming
      the correctness of the representations and warranties of the Purchasers set
      forth in Section 4 hereof, the offer, issuance, sale and delivery of the
      Securities to the Purchasers as contemplated hereby is exempt from the
      registration requirements of the Securities Act and the qualification or
      registration provisions of applicable state securities laws.

    

    (b) Neither
      the Company nor any person acting on the Company’s behalf has sold or offered to
      sell or solicited any offer to buy the Securities by means of any form of
      general solicitation or advertising. Neither the Company nor any of its
      Affiliates nor any person acting on the Company’s behalf has taken, directly or
      indirectly, at any time within the past six (6) months, and will not hereafter
      take, any action independent of the Placement Agent, to sell, offer for sale
      or
      solicit any offers to buy any security under circumstances that would
      (i) eliminate the availability of the exemption from registration under
      Regulation D under the Securities Act in connection with the sale or issuance
      of
      the Securities, as contemplated hereby or (ii) cause the offering or issuance
      of
      the Securities pursuant to any of the Transaction Documents to be integrated
      with prior offerings by the Company for purposes of any applicable law,
      regulation or stockholder approval provisions. None of the Company or any of
      the
      Subsidiaries is a United States real property holding corporation within the
      meaning of the Foreign Investment in Real Property Tax Act of 1980. No consent,
      license, permit, waiver, approval or authorization of, or designation,
      declaration, registration or filing with, the SEC or any state securities
      regulatory authority is required in connection with the offer, sale, issuance
      or
      delivery of the Securities other than the possible filing of Form D with the
      SEC. The Company does not have any agreement or understanding with any Purchaser
      with respect to the transactions contemplated by this Agreement, the
      Registration Rights Agreement and the Escrow Agreement, other than as specified
      in this Agreement, the Registration Rights Agreement or the Escrow
      Agreement.

    

    (c) The
      press
      releases disseminated by the Company during the twelve months preceding the
      date
      of this Agreement taken as a whole do not contain any untrue statement of
      material fact or omit to state a material fact required to be stated therein
      or
      necessary in order to make the statements therein, in light of the circumstances
      under which they were made and when made, not misleading. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.25 Material
      Changes.
      Except
      as set forth on Schedule
      3.25
      to the
      Disclosure Schedule, since the date of the Balance Sheet, the Company has
      conducted its business only in the ordinary course, consistent with past
      practice, and since such date there has not occurred: (i) a Material Adverse
      Effect; (ii) any amendments or changes in the charter documents or by-laws
      of
      the Company or the Subsidiaries; (iii) any: (A) incurrence, assumption or
      guarantee by the Company or the Subsidiaries of any debt for borrowed money
      other than (1) equipment leases made in the ordinary course of business,
      consistent with past practice and (2) any such incurrence, assumption or
      guarantee with respect to an amount of $50,000 or more that has not been
      disclosed in the SEC Documents; (B) issuance or sale of any securities
      convertible into or exchangeable for securities of the Company other than to
      directors, employees and consultants pursuant to existing equity compensation
      or
      stock purchase plans of the Company; (C) issuance or sale of options or other
      rights to acquire from the Company or the Subsidiaries, directly or indirectly,
      securities of the Company or any securities convertible into or exchangeable
      for
      any such securities, other than options issued to directors, employees and
      consultants in the ordinary course of business, consistent with past practice;
      (D) issuance or sale of any stock, bond or other corporate security other than
      to directors, employees and consultants pursuant to existing equity compensation
      or stock purchase plans of the Company; (E) acquisition of any assets, or sale,
      assignment or transfer of any of its intangible assets, except in the ordinary
      course of business, consistent with past practice, or cancellation of any debt
      or claim except in the ordinary course of business, consistent with past
      practice; (F) waiver of any right of substantial value whether or not in the
      ordinary course of business; (G) material change in officer compensation, except
      in the ordinary course of business and consistent with past practice; or (H)
      other commitment (contingent or otherwise) to do any of the foregoing; (iv)
      loss, destruction or damage to any property of the Company, whether or not
      insured; (v) any creation, sufferance or assumption by the Company or any of
      the
      Subsidiaries of any lien on any asset or any making of any loan, advance or
      capital contribution to or investment in any Person, in an aggregate amount
      which exceeds $50,000 outstanding at any time; (vi) any entry into, amendment
      of, relinquishment, termination or non-renewal by the Company or the
      Subsidiaries of any material contract, license, lease, transaction, commitment
      or other right or obligation, other than in the ordinary course of business,
      consistent with past practice; (vii) any transfer or grant of a right with
      respect to the Intellectual Property Rights owned or licensed by the Company
      or
      the Subsidiaries, except as among the Company and the Subsidiaries; or (viii)
      any commitment (contingent or otherwise) to do any of the
      foregoing.

    

    3.26 Regulatory
      Permits.
      The
      Company and the Subsidiaries possess all certificates, approvals, authorizations
      and permits issued by the appropriate federal, state, local or foreign
      governmental or regulatory authorities necessary to conduct their businesses
      as
      described in the SEC Documents, except where the failure to possess such permits
      does not, and could not have, individually or in the aggregate, a Material
      Adverse Effect (the “Material
      Permits”),
      and
      all such permits, licenses, orders, franchises and other rights and privileges
      are in full force and effect and, to the knowledge of the Company, no suspension
      or cancellation of any of them is threatened, and none of such permits,
      licenses, orders, franchises or other rights and privileges will be affected
      by
      the consummation of the transactions contemplated by the Transaction Documents,
      and the Company has not received any written notice of proceedings relating
      to
      the revocation or modification of any Material Permits except as described
      in
      the SEC Documents. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.27 Transactions
      with Affiliates and Employees.
      Except
      as set forth in the SEC Documents, none of the officers or directors of the
      Company and, to the knowledge of the Company, none of the employees of the
      Company, is presently a party to any transaction or agreement with the Company
      (other than for services as employees, officers and directors) exceeding
      $60,000, 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 entity in
      which any officer, director, or any such employee has a substantial interest
      or
      is an officer, director, trustee or partner. There is no transaction,
      arrangement, or other relationship between the Company and an unconsolidated or
      other off balance sheet entity that is required to be disclosed by the Company
      in its Exchange Act filings and is not so disclosed. 

    

    3.28 Insurance.
      The
      Company and the Subsidiaries are insured by insurers of recognized financial
      responsibility against such losses and risks and in such amounts as are prudent
      and customary for the business in which the Company and the Subsidiaries are
      engaged. The Company has no reason to believe that it will not be able to renew
      existing insurance coverage for itself and the Subsidiaries as and when such
      coverage expires or to obtain similar coverage from similar insurers as may
      be
      necessary or appropriate to continue business. 

    

    3.29 Solvency.
      Based
      on the consolidated financial condition of the Company and the Subsidiaries
      as
      of the date hereof, (i) the fair saleable value of the Company’s assets exceeds
      the amount that will be required to be paid on or in respect of the Company’s
      existing debts and other liabilities (including known and contingent
      liabilities) as they mature; (ii) the Company’s assets do not constitute
      unreasonably small capital to carry on its business for the current fiscal
      year
      as now conducted and as proposed to be conducted, including its capital needs
      taking into account the particular capital requirements of the business
      conducted by the Company, projected capital requirements and capital
      availability thereof; and (iii) the current cash flow of the Company, together
      with the proceeds the Company would receive were it to liquidate all of its
      assets, after taking into account all anticipated uses of the cash, would be
      sufficient to pay all amounts on or in respect of its debts when such amounts
      are required to be paid. The Company has no present intention to incur debts
      beyond its ability to pay such debts as they mature (taking into account the
      timing and amounts of cash to be payable on or in respect of its debt).

    

    3.30 Sarbanes-Oxley
      Act.
      The
      Company is, and at the Closing Date will be, in compliance in all material
      respects with all provisions of the Sarbanes-Oxley Act of 2002 which are
      applicable to it at such time. 

    

    3.31 Internal
      Accounting Controls.
      Except
      as disclosed in the SEC Documents, the Company maintains 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 United States generally
      accepted accounting principles and to maintain asset accountability, (iii)
      access to assets is permitted only in accordance with management’s general or
      specific authorizations, (iv) the recorded accountability for assets is compared
      with the existing assets at reasonable intervals and appropriate action is
      taken
      with respect to any differences, and (v) the Company is otherwise in compliance
      with the Securities Act, the Exchange Act and all other rules and regulations
      promulgated by the SEC and applicable to the Company, including such rules
      and
      regulations to implement the Sarbanes-Oxley Act of 2002, as amended.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.32 Investment
      Company.
      The
      Company is not an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for an investment company, within the
      meaning of the Investment Company Act of 1940, as amended. 

    

    3.33 Questionable
      Payments.
      Neither
      the Company nor, to the Company’s knowledge, any of its Subsidiaries or current
      or former stockholders, directors, officers, employees, agents or other persons
      acting on behalf of the Company, has on behalf of the Company or in connection
      with its businesses (a) used any corporate funds for unlawful contributions,
      gifts, entertainment or other unlawful expenses relating to political activity;
      (b) made any direct or indirect unlawful payments to any governmental officials
      or employees from corporate funds; (c) established or maintained any unlawful
      or
      unrecorded fund of corporate monies or other assets; (d) made any false or
      fictitious entries on the books and records of the Company; or (e) made any
      unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
      payment of any nature. 

    

    3.34 Changes
      in Governmental or Political Climates.
      To the
      Company’s knowledge, there have not been any changes
      in laws and regulations, including those related to taxes, royalty rates,
      permitted production rates, import, export and use of products, and
      environmental protection, expropriation or reduction of entitlements to produce
      oil and natural gas, or refusal to extend exploration, production or development
      contracts, or any proposals for the foregoing, which would have a Material
      Adverse Effect on the Company in any of the locations where the Company conducts
      its business or in which the assets relating to Acquisitions are located or
      the
      business of the Acquisitions is conducted. 

    

    3.35 Price
      of Common Stock.
      The
      Company has not taken, and will not take any action designed to cause or result
      in, or which has constituted or which might reasonably be expected to
      constitute, the stabilization or manipulation of the price of the shares of
      Common Stock to facilitate the sale or resale of the Securities.

    

    3.36 Acquisitions.
      The
      purchase agreements or other relevant transaction documents for each of the
      Acquisitions have
      been
      duly executed and are in full force and effect. No default has occurred or
      is
      continuing thereunder, and, to the best of the Company’s knowledge, all of the
      conditions precedent to the closing of the Acquisitions for each of the parties
      thereto can be satisfied promptly after the Closing Date with no material waiver
      granted. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    3.37 Certain
      Registration Matters.
      Assuming the accuracy of the Purchasers representations and warranties set
      forth
      in Section 4 of this Agreement, no registration under the Securities Act is
      required for the offer and sale of the Securities by the Company to the
      Purchasers under the Transaction Documents. The Company is eligible to register
      its Common Stock for resale by the Purchasers under Form SB-2 promulgated under
      the Securities Act. Except as specified in Section 3.3 and except with respect
      to the Purchasers and the investors in Other Offerings contemplated by Section
      2.1, the Company has not granted or agreed to grant to any Person any rights
      (including “piggy-back” registration rights) to have any securities of the
      Company registered with the SEC or any other governmental authority that have
      not been satisfied. 

    

    3.38 Listing
      Requirements.
      The
      Company is, and has no reason to believe that it will not in the foreseeable
      future continue to be, eligible for quotation of the Common Stock on a Trading
      Market. The issuance and sale of the Securities under the Transaction Documents
      does not contravene the rules and regulations of the Trading Market.

     

    3.39 Disclosure.
      Neither
      the Company nor, to the Company’s knowledge, any other Person acting on its
      behalf and at the direction of the Company, has provided to any Purchaser or
      its
      agents or counsel any information that in the Company’s reasonable judgment, at
      the time such information was furnished, constitutes material, non-public
      information, except such information as may have been disclosed to certain
      Board
      members, who are affiliated with certain Purchasers, in their capacity as
      directors of the Company. On or before 9:00 a.m., Eastern Standard Time, on
      the
      first business day after the date hereof, the Company shall issue a press
      release announcing the execution of the Transaction Documents, and on or before
      5:30 p.m., Eastern Standard Time, on the first business day after the date
      hereof, the Company shall file a Current Report on Form 8-K describing the
      material terms of the transactions contemplated by the Transaction Documents,
      and attaching as an exhibit to such Form 8-K a form of this Agreement. Other
      than with respect to certain Board members, who are affiliated with certain
      Purchasers, in their capacity as directors of the Company, or to Purchasers
      who
      have executed confidentiality agreements between such Purchaser and the Company,
      no Purchaser will to the Company’s knowledge be in possession of material,
      non-public information concerning the Company. The Company understands and
      confirms that each Purchaser will rely on the representations and covenants
      contained herein in effecting the transactions contemplated by the Transaction
      Documents, and in the securities of the Company after the Closing. All
      disclosure provided to the Purchasers regarding the Company, its business and
      the transactions contemplated hereby, including the Transaction Documents and
      the Schedules to this Agreement furnished by or on behalf of the Company, is
      true and correct and does not contain any untrue statement of material fact
      or
      omit to state any material fact necessary in order to make the statements made
      therein, in the light of the circumstances under which they were made, not
      misleading. No event or circumstance has occurred or information exists with
      respect to the Company or the Subsidiaries or its or their business, properties,
      prospects, operations or financial conditions, which, under applicable law,
      rule
      or regulation, requires public disclosure or announcement by the Company but
      which has not been so publicly announced or disclosed. The Company acknowledges
      and agrees that no Purchaser makes or has made any representations or warranties
      with respect to the transactions contemplated hereby other than those
      specifically set forth in Section 4. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4. Representations
      and Warranties of the Purchasers.
      Each
      Purchaser represents and warrants, severally (as to itself) and not jointly,
      to
      the Company as follows: 

    

    4.1 Authorization.
      All
      action on the part of such Purchaser and, if applicable, its officers,
      directors, managers, members, shareholders and/or partners necessary for the
      authorization, execution, delivery and performance of this Agreement, the
      Registration Rights Agreement and the Escrow Agreement, and the consummation
      of
      the transactions contemplated herein and therein, has been taken. When executed
      and delivered, each of the Transaction Documents will constitute the legal,
      valid and binding obligation of such Purchaser, enforceable against such
      Purchaser in accordance with its terms, except as such may be limited by
      bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights
      generally and by general equitable principles. Such Purchaser has all requisite
      corporate or limited partnership, as the case may be, power and authority to
      enter into each of the Transaction Documents, and to carry out and perform
      its
      obligations under the terms of hereof and thereof. 

    

    4.2 Purchase
      Entirely for Own Account.
      Such
      Purchaser certifies and represents to the Company that the Securities to be
      received by the Purchaser hereunder will be acquired for the Purchaser’s own
      account, not as nominee or agent, and not with a view to the resale or
      distribution of any part thereof in violation of the Securities Act, and the
      Purchaser has no present intention of selling, granting any participation in
      or
      otherwise distributing the same, in violation of the Securities Act. Such
      Purchaser is not a registered broker dealer or an entity engaged in the business
      of being a broker dealer. Such Purchaser and the Company acknowledge that
      nothing contained in this Section 4.2 shall be construed as a restriction or
      other limitation on such Purchaser’s ability to sell or hedge the Securities
      purchased hereunder at any time following the Closing Date other than for
      restrictions or limitations imposed by the Securities Act or applicable state
      securities laws. 

    

    4.3 Investor
      Status; Etc.
      Such
      Purchaser certifies and represents to the Company that it is an “accredited
      investor” as defined in Rule 501 of Regulation D promulgated under the
      Securities Act and was not organized for the purpose of acquiring any of the
      Shares. Such Purchaser’s financial condition is such that it is able to bear the
      risk of holding the Shares for an indefinite period of time and the risk of
      loss
      of its entire investment. Such Purchaser has sufficient knowledge and experience
      in investing in companies similar to the Company so as to be able to evaluate
      the risks and merits of its investment in the Company. 

    

    4.4 Securities
      Not Registered.
      Such
      Purchaser understands that the Securities have not been registered under the
      Securities Act, by reason of their issuance by the Company in a transaction
      exempt from the registration requirements of the Securities Act, and that the
      Securities must continue to be held by such Purchaser unless a subsequent
      disposition thereof is registered under the Securities Act or is exempt from
      such registration. Such Purchaser understands that the exemptions from
      registration afforded by Rule 144 (the provisions of which are known to it)
      promulgated under the Securities Act depend on the satisfaction of various
      conditions, and that, if applicable, Rule 144 may afford the basis for sales
      only in limited amounts. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    4.5 No
      Conflict.
      The
      execution and delivery of the Transaction Documents by such Purchaser, and
      the
      consummation of the transactions contemplated hereby and thereby, will not
      conflict with or result in any violation of or default by such Purchaser (with
      or without notice or lapse of time, or both) under, or give rise to a right
      of
      termination, cancellation or acceleration of any obligation or to a loss of
      a
      material benefit under (i) any provision of the organizational documents of
      such
      Purchaser or (ii) any agreement or instrument, permit, franchise, license,
      judgment, order, statute, law, ordinance, rule or regulations, applicable to
      such Purchaser. 

    

    4.6 Brokers.
      Such
      Purchaser has not retained, utilized or been represented by any broker or finder
      in connection with the transactions contemplated by this Agreement.

    

    4.7 Consents.
      All
      consents, approvals, orders and authorizations required on the part of such
      Purchaser in connection with the execution, delivery or performance of this
      Agreement and the consummation of the transactions contemplated herein by such
      Purchaser have been obtained and are effective as of the date hereof.

    

    4.8 Disclosure
      of Information.
      Such
      Purchaser believes it has received all the information it considers necessary
      or
      appropriate for deciding whether to purchase the Shares. Such Purchaser 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
      Shares and the business, properties, prospects and financial condition of the
      Company.

    

    4.9 Short
      Sale.
      Such
      Purchaser represents that after the date that such Purchaser learned of the
      terms of this transaction and prior to the date hereof, neither it nor any
      Person over which the Purchaser has direct control, have made any net short
      sales of, or granted any option for the purchase of or entered into any hedging
      or similar transaction with the same economic effect as a net short sale, in
      the
      Common Stock.

    

    5. Conditions
      Precedent.

    

    5.1. Conditions
      to the Obligation of the Purchasers to Consummate the Closing.
      The
      obligation of each Purchaser to consummate the Closing and to purchase and
      pay
      for the Shares and Warrants to be purchased by it is subject to the satisfaction
      (or waiver by such Purchaser) of the following conditions precedent:

    

    (a) The
      representations and warranties of the Company contained herein shall be true
      and
      correct on and as of the date hereof and as of the Closing Date. The Company
      shall have performed or complied with all obligations and conditions herein
      required to be performed or complied with by the Company on or prior to the
      Closing Date.

    

    (b) There
      shall have been no material adverse change (actual or threatened) in the assets,
      liabilities (contingent or otherwise), affairs, business, operations, prospects,
      or condition (financial or otherwise) of the Company prior to the Closing
      Date.

    

    (c) There
      shall have been sold to Purchasers and to other investors Units for an aggregate
      purchase price of at least $65,000,000 and no more than
      $75,000,000.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (d) No
      proceeding challenging the Transaction Documents, or the transactions
      contemplated hereby or thereby, or seeking to prohibit, alter, prevent or
      materially delay the Closing, shall have been instituted before any court,
      arbitrator or governmental body, agency or official or shall be pending against
      or involving the Company. 

    

    (e) The
      sale
      of the Securities to the Purchasers shall not be prohibited by any law, rule,
      governmental order or regulation. All necessary consents, approvals, licenses,
      permits, orders and authorizations of, or registrations, declarations and
      filings with, any governmental or administrative agency or of or with any other
      Person with respect to any of the transactions contemplated hereby or under
      any
      Transaction Document (including, without limitation, all filings and approvals,
      if any, required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
      as
      amended) shall have been duly obtained or made and shall be in full force and
      effect. 

    

    (f) All
      instruments and corporate proceedings of the Company in connection with the
      transactions contemplated by the Transaction Documents shall be satisfactory
      in
      form and substance to such Purchaser, and such Purchaser shall have received
      copies (executed or certified, as may be appropriate) of all documents which
      any
      Purchaser may have reasonably requested in connection with such transactions.
      

    

    (g) Such
      Purchaser shall have received from McGuireWoods LLP, outside counsel to the
      Company, an opinion addressed to such Purchaser, dated the Closing Date and
      substantially in the form of Exhibit
      D
      hereto.

    

    (h) The
      Registration Rights Agreement shall have been duly executed and delivered to
      such Purchaser by the Company. Unless otherwise waived by the Company and such
      Purchaser, the Escrow Agreement shall have been duly executed and delivered
      to
      such Purchaser by the Company and the Escrow Agent.

    

    (i) Such
      Purchaser shall have received from the Company an original stock certificate
      evidencing the purchase of the Shares for the number of Shares of Common Stock
      set forth opposite such Purchaser’s name on Schedule
      1
      hereto
      and an original warrant evidencing the number of Warrant Shares set forth
      opposite such Purchaser’s name on Schedule 1
      hereto.

    

    (j) The
      Company shall have delivered, in form and substance satisfactory to such
      Purchaser, a certificate dated the Closing Date and signed by the secretary
      or
      another appropriate executive officer of the Company, certifying (i) that
      attached copies of the Certificate of Incorporation, the By-Laws and resolutions
      of the Board approving the Transaction Documents and the transactions
      contemplated thereby, are all true, complete and correct and remain in full
      force and effect as of the date hereof and as of the Closing Date, and (ii)
      as
      to the incumbency and specimen signature of each officer of the Company
      executing the Transaction Documents and any other document delivered in
      connection herewith on behalf of the Company. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (k) The
      Company shall deliver to such Purchaser, a certificate in form and substance
      satisfactory to such Purchaser, dated the Closing Date and signed by the
      Company’s chief executive officer, certifying that (i) the representations and
      warranties of the Company contained in Section 3 hereof are true and correct
      in
      all respects on the Closing Date and (ii) the Company has performed and complied
      with all of the agreements and conditions set forth or contemplated herein
      that
      are required to be performed or complied with by the Company on or before the
      Closing Date. 

    

    (l) Such
      Purchaser shall have received duly executed Transfer Agent Instructions
      acknowledged by the Company’s transfer agent.

    

    (m) The
      purchase agreement for each of the Acquisitions shall
      have been duly executed and be in full force and effect as
      of the
      Closing Date,
      and no
      default shall have occurred and be continuing thereunder as
      of the
      Closing Date,
      and to
      the best of the Company’s knowledge, all of the conditions precedent to the
      Acquisitions for each of the parties thereto shall have been satisfied with
      no
      material waiver granted as
      of the
      Closing Date.

    

    (n) All
      Financial Statements of the Company and each of its Subsidiaries shall have
      been
      provided or made available to such Purchaser on or before the Closing
      Date.

    

    5.2. Conditions
      to the Obligation of the Company to Consummate the Closing.
      The
      obligation of the Company to consummate the Closing and to issue and sell the
      Shares and Warrants to each Purchaser at the Closing is subject to the
      satisfaction of the following conditions precedent: 

    

    (a) The
      representations and warranties of such Purchaser contained herein shall be
      true
      and correct in all respects on and as of the Closing Date. 

    

    (b) The
      Registration Rights Agreement shall have been executed and delivered by the
      Purchasers. 

    

    (c) Such
      Purchaser shall have performed all obligations and conditions herein required
      to
      be performed or complied with by such Purchaser on or prior to the Closing
      Date.

    

    (d) No
      proceeding challenging the Transaction Documents, or the transactions
      contemplated hereby or thereby, or seeking to prohibit, alter, prevent or
      materially delay the Closing, shall have been instituted before any court,
      arbitrator or governmental body, agency or official or shall be pending against
      or involving such Purchaser. 

    

    (e) The
      sale
      of the Securities by the Company shall not be prohibited by any law, rule,
      governmental order or regulation. All necessary consents, approvals, licenses,
      permits, orders and authorizations of, or registrations, declarations and
      filings with, any governmental or administrative agency or of any other Person
      with respect to any of the transactions contemplated hereby by such Purchaser
      shall have been duly obtained or made and shall be in full force and effect.
      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (f) All
      instruments and corporate proceedings in connection with the transactions
      contemplated by this Agreement to be consummated by such Purchaser at the
      Closing shall be satisfactory in form and substance to the Company, and the
      Company shall have received counterpart originals, or certified or other copies
      of all documents, including without limitation records of corporate or other
      proceedings, with respect to such Purchaser, which it may have reasonably
      requested in connection therewith. 

    

    6.
       Certain
      Covenants and Agreements.
      

    

    6.1. Transfer
      of Securities.

    

    (a) Other
      than as set forth in Section 6.1(b) below, each Purchaser agrees severally
      (as
      to itself only) and not jointly that it shall not sell, assign, pledge, transfer
      or otherwise dispose of or encumber any of the Shares or the Warrant Shares,
      except (i) pursuant to an effective registration statement under the Securities
      Act, (ii) to an Affiliate (so long as such Affiliate agrees to be bound by
      the
      terms and provisions of this Agreement as if, and to the fullest extent as,
      such
      Purchaser), or (iii) pursuant to an available exemption from registration under
      the Securities Act (including sales permitted pursuant to Rule 144) and
      applicable state securities laws and, if requested by the Company, upon delivery
      by such Purchaser of either an opinion of counsel of such Purchaser reasonably
      satisfactory to the Company to the effect that the proposed transfer is exempt
      from or does not require registration under the Securities Act and applicable
      state securities laws or a representation letter of such Purchaser reasonably
      satisfactory to the Company setting forth a factual basis for concluding that
      such proposed transfer is exempt from or does not require registration under
      the
      Securities Act and applicable state securities laws. Any transfer or purported
      transfer of the Shares or the Warrant Shares in violation of this Section 6.1
      shall be void. The Company shall not register any transfer of the Shares in
      violation of this Section 6.1. The Company may, and may instruct any transfer
      agent for the Company, to place such stop transfer orders as may be required
      on
      the transfer books of the Company in order to ensure compliance with the
      provisions of this Section 6.1.

    

    (b) The
      Company acknowledges and agrees that a Purchaser may from time to time pledge
      pursuant to a bona fide margin agreement with a registered broker-dealer or
      grant a security interest in some or all of the Securities to a financial
      institution that is an “accredited investor” as defined in Rule 501(a) under the
      Securities Act and who agrees to be bound by the provisions of this Agreement
      and the Registration Rights Agreement and, if required under the terms of such
      arrangement, such Purchaser may transfer pledged or secured Securities to the
      pledgees or secured parties. Such a pledge or transfer would not be subject
      to
      approval of the Company and no legal opinion of legal counsel of the pledgee,
      secured party or pledgor shall be required in connection therewith. Further,
      no
      notice shall be required of such pledge. At the appropriate Purchaser’s expense,
      the Company will execute and deliver such reasonable documentation as a pledgee
      or secured party of Securities may reasonably request in connection with a
      pledge or transfer of the Securities, including, if the Securities are subject
      to registration pursuant to the Registration Rights Agreement, the preparation
      and filing of any required prospectus supplement under Rule 424(b)(3) under
      the
      Securities Act or other applicable provision of the Securities Act to
      appropriately amend the list of Selling Stockholders thereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    6.2. Legends.
      

    

    (a) To
      the
      extent applicable, each certificate or other document evidencing the Shares
      and
      the Warrant Shares shall be endorsed with the legend set forth below, and each
      Purchaser covenants that, except to the extent such restrictions are waived
      by
      the Company, it shall not transfer the shares represented by any such
      certificate without complying with the restrictions on transfer described in
      this Agreement and the legends endorsed on such certificate (and a stop-transfer
      order may be placed against the Warrants): 

    

    “THE
      SHARES REPRESENTED BY HIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THE ISSUANCE TO THE HOLDER OF
      SHARES REPRESENTED BY HIS CERTIFICATE IS NOT COVERED BY A REGISTRATION STATEMENT
      UNDER THE ACT. THE SHARES REPRESENTED BY HIS CERTIFICATE HAVE BEEN ACQUIRED,
      AND
      SUCH SHARES MUST BE ACQUIRED, FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED
      OR
      ASSIGNED UNLESS (1) THEIR RESALE IS REGISTERED UNDER THE ACT, OR (2) THE COMPANY
      HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND
      SUBSTANCE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.” 

    

    The
      Purchaser further acknowledges and agrees that the Warrants shall bear a
      restrictive legend in substantially the following form (and a stop-transfer
      order may be placed against the Warrants):

    

    “THIS
      WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE “ACT”), AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED UNLESS (1) THE RESALE
      HEREOF IS REGISTERED UNDER THE ACT, OR (2) THE COMPANY HAS RECEIVED AN OPINION
      OF COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY
      THAT SUCH REGISTRATION IS NOT REQUIRED.”

    

    (b) The
      legends set forth in Section 6.2(a) shall be removed from the certificates
      evidencing the Securities, (i) while a registration statement covering the
      resale of such Securities is effective under the Securities Act, (ii) following
      any sale of such Securities pursuant to Rule 144, (iii) if such Securities
      are
      eligible for sale under Rule 144(k) (and the holder of such Securities has
      submitted a written request for removal of the legend indicating that the holder
      has complied with the applicable provisions of Rule 144 or such judicial
      interpretation or pronouncement), or (iv) if such legend is not required under
      applicable requirements of the Securities Act (including judicial
      interpretations and pronouncements issued by the Staff of the Commission) (and
      the holder of such Securities has submitted a written request for removal of
      the
      legend indicating that such legend is not required under applicable requirements
      of the Securities Act (including such judicial interpretations and
      pronouncements). The Company shall cause its counsel to issue a legal opinion
      to
      the Company’s transfer agent promptly upon the occurrence of any of the events
      in clauses (i), (ii), (iii) or (iv) above to effect the removal of the legend
      on
      certificates evidencing the Securities and shall also cause its counsel to
      issue
      a “blanket” legal opinion to the Company’s transfer agent promptly after the
      effective date of any registration statement covering the resale of the
      Securities, if required by the Company’s transfer agent, to allow sales without
      restriction pursuant to an effective registration statement. The Company agrees
      that at such time as such legend is no longer required under this Section
      6.2(b), it will, no later than three (3) business days following the delivery
      by
      a Purchaser to the Company or the Company’s transfer agent of a certificate
      representing the Securities issued with a restrictive legend, deliver or cause
      to be delivered to such Purchaser a certificate representing such Securities
      that is free from all restrictive and other legends; provided that in the case
      of removal of the legend for reasons set forth in clause (iii) above, the holder
      of such Securities has submitted a written request for removal of the legend
      indicating that the holder has complied with the applicable provisions of Rule
      144. The Company may not make any notation on its records or give instructions
      to any transfer agent of the Company that enlarge the restrictions on transfer
      set forth in this Section.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    (c) If
      the
      Company shall fail for any reason or for no reason to remove the legends set
      forth in this Section 6.2 within three (3) Business Days following the delivery
      by a holder to the Company or the Company’s transfer agent of a certificate
      representing the Securities issued with a restrictive legend, and if on or
      after
      such Business Day the holder purchases (in an open market transaction or
      otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
      holder of shares of Common Stock issuable upon such exercise that the holder
      anticipated receiving from the Company (a “Buy-In”), then the Company shall,
      within three (3) Business Days after the holder’s request and in the holder’s
      discretion, either (i) pay cash to the holder in an amount equal to the holder’s
      total purchase price (including brokerage commissions, if any) for the shares
      of
      Common Stock so purchased (the “Buy-In Price”), at which point the Company’s
      obligation to deliver such certificate (and to issue such shares of Common
      Stock) shall terminate, or (ii) promptly honor its obligation to deliver to
      the
      holder a certificate or certificates representing such shares of Common Stock
      and pay cash to the holder in an amount equal to the excess (if any) of the
      Buy-In Price over the product of (A) such number of shares of Common Stock,
      times (B) the Closing bid price of the Common Stock on the date of
      exercise.

    

    6.3 Publicity.
      Except
      to the extent required by applicable laws, rules, regulations or stock exchange
      requirements or this Agreement, neither (i) the Company, the Subsidiaries or
      any
      of their Affiliates nor (ii) any Purchaser or any of its Affiliates shall,
      without the written consent of the other, make any public announcement or issue
      any press release with respect to the transactions contemplated by this
      Agreement. Other than as provided in this Agreement, in no event will either
      (i)
      the Company, the Subsidiaries or any of their Affiliates or (ii) any Purchaser
      or any of its Affiliates make any public announcement or issue any press release
      with respect to the transactions contemplated by this Agreement without
      consulting with the other party, to the extent feasible, as to the content
      of
      such public announcement or press release. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    6.4 Material,
      Nonpublic Information.
      Except
      as required by law or pursuant to an effective confidentiality agreement between
      the Company and a Purchaser, the Company and its directors, officers, employees
      and agents shall not provide any such Purchaser with any material non-public
      information regarding the Company or any of the Subsidiaries at any time after
      the Closing, except such information as may be required to be disclosed to
      certain Board members, who are affiliated with certain Purchasers, in their
      capacity as directors of the Company. In the event of a breach of the foregoing
      covenant following the Mandatory Effective Date, or in the event that Company
      is
      legally required to make certain disclosures to any Purchaser (and does so)
      following the Mandatory Effective Date, then in addition to any other remedy
      provided in the Transaction Documents or in equity or at law, each Purchaser
      to
      whom information has been disclosed (whether as a result of breach or as
      required by law) may request, in writing, that the Company promptly (but in
      no
      event more than five (5) business days after the date of such writing) publicly
      disclose, by press release, SEC filing, or otherwise, an appropriate summary
      of
      the information that, in such Purchaser’s reasonable judgment, constitutes the
      then material non-public information. After such five (5) business-day period,
      the Purchaser(s) who was or were in receipt of such material non-public
      information shall be automatically authorized to make all of the information,
      or
      any portion thereof, available to the public generally, without incurring any
      liability to the Company for such disclosure. 

    

    6.5 Filing
      of Information.
      The
      Company covenants to timely file (or obtain extensions in respect thereof and
      file within the applicable grace period) all reports required to be filed by
      the
      Company pursuant to all applicable securities laws, including the Exchange
      Act
      for the two (2) year period following the Closing Date. At any time if the
      Company is not required to file reports pursuant to such laws, it will prepare
      and furnish to the Purchasers and make publicly available in accordance with
      paragraph (c) of Rule 144 such information as is required for the Purchasers
      to
      sell the Securities under Rule 144. The Company further covenants that it will
      take such further action as any holder of Shares may reasonably request to
      satisfy the provisions of Rule 144 applicable to the issuer of securities
      relating to transactions for the sale of securities pursuant to Rule 144.

    

    6.6 Additional
      Issuance.
      The
      Company shall not issue any capital stock or other securities in connection
      with
      the raising of additional financing or capital until all of the Shares and
      the
      Warrant Shares have been registered for resale pursuant to an effective
      registration statement and otherwise in accordance with the terms set forth
      in
      the Registration Rights Agreement; provided; however, that the foregoing shall
      not prohibit the Company from issuing shares of Common Stock or securities
      convertible into or exercisable for Common Stock: (i) Units at the Unit Price
      to
      investors as contemplated by and in accordance with Section 2.1 in concurrent
      private placements (for the avoidance of doubt, the aggregate purchase price
      of
      any and all issuances pursuant to this Section 6.6(i) and Section 2.1 shall
      not
      exceed $75,000,000); (ii) upon conversion of the Warrants or other
      securities issuable upon conversion of securities outstanding on the date
      hereof, (iii) to employees, consultants, officers or directors of the Company
      pursuant to stock option, stock purchase or stock bonus plans or agreements
      or
      other stock incentive plans or arrangements approved by the Board, which are
      in
      existence as of the date hereof, (iv) pursuant to the acquisitions
      currently contemplated by the Company as of the date of this Agreement, of
      the
      business entities or properties of Argosy Energy International, Companía General
      de Combustibles and Golden Oil Corporation, provided that any and all such
      issuances shall not exceed 3,000,000 shares of capital stock or other
      securities, (v) pursuant to other acquisitions of other business entities
      or business segment of any such entities by the Company by merger, purchase
      of
      substantially all the assets or other reorganization or corporate partnering
      agreement if such issuance is approved by the Board and by the prior written
      consent of the Majority Purchasers, (vi) in connection with any stock
      split, stock dividend or recapitalization of the Company, and (vii) in
      connection with lease lines, bank loans, corporate partnering or other similar
      transactions, provided such issuances described in this clause (vii) are
      not primarily for the purpose of equity financing and are approved by the
      Board.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    6.7 Use
      of
      Proceeds.
      The
      Company covenants and agrees that all of the proceeds from the sale of the
      Shares and Warrants, which shall initially be delivered into the Escrow Account
      in accordance with the Escrow Agreement, or otherwise delivered by a Purchaser
      to the Company, on the Closing Date shall be used by the Company to (i) fund
      each of the Acquisitions, including the Argosy Acquisition the closing of which
      shall be a condition to release of funds under the Escrow Agreement, (ii)
      potential acquisitions and (iii) for general working capital purposes.

    

    6.8 Integration.
      The
      Company shall not sell, offer for sale or solicit offers to buy or otherwise
      negotiate in respect of any security (as defined in Section 2 of the Securities
      Act) that would be integrated with the offer or sale of the Securities in a
      manner that would require the registration under the Securities Act of the
      sale
      of the Securities to the Purchasers.

    

    6.9 Reservation
      of Common Stock for Issuance; Listing of Shares.
      The
      Company agrees to reserve from its duly authorized capital stock the total
      number of shares of Common Stock issuable upon execution of this Agreement
      and
      upon the exercise of the Warrants. The Company agrees that at any time, if
      and
      when its shares of Common Stock are listed on The American Stock Exchange,
      that
      it will use reasonable efforts to promptly list and qualify the Shares and
      the
      Warrant Shares for trading on The American Stock Exchange.

    

    6.10 Required
      Approvals.
      As
      promptly as practicable after the date of this Agreement, the Company shall
      make, or cause to be made, all filings with any governmental or administrative
      agency or any other Person necessary to consummate the transactions contemplated
      hereby.

    

    7. Indemnification.
      

    

    7.1 By
      the
      Company.
      The
      Company agrees to indemnify, defend and hold harmless each Purchaser and its
      Affiliates and their respective officers, directors, agents, employees,
      subsidiaries, partners, members and controlling persons (collectively, the
      “Purchaser
      Indemnitees”)
      to the
      fullest extent permitted by law from and against any and all claims, losses,
      liabilities, damages, deficiencies, judgments, assessments, fines, settlements,
      costs or expenses (including interest, penalties and reasonable fees,
      disbursements and other charges of counsel) (collectively, “Losses”)
      based
      upon, arising out of or otherwise in respect of any breach by the Company of
      any
      representation, warranty, covenant or agreement of the Company contained in
      the
      Transaction Documents, or for any Losses claimed by the Company’s stockholders,
      the Placement Agent or any other broker or placement agent. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    7.2 Claims.
      All
      claims for indemnification by a Purchaser Indemnitee pursuant to this Section
      7
      shall be made as follows: 

    

    (a) If
      a
      Purchaser Indemnitee has incurred or suffered Losses for which it is entitled
      to
      indemnification under this Section 7, then such Purchaser Indemnitee shall
      give
      prompt written notice of such claim (a “Claim
      Notice”)
      to the
      Company. Each Claim Notice shall state the amount of claimed Losses (the
“Claimed
      Amount”),
      if
      known, and the basis for such claim. 

    

    (b) Within
      30
      days after delivery of a Claim Notice, the Company (the “Indemnifying
      Party”)
      shall
      provide to each Purchaser Indemnitee (the “Indemnified
      Party”),
      a
      written response (the “Response
      Notice”)
      in
      which the Indemnifying Party shall: (i) agree that all of the Claimed Amount
      is
      owed to the Indemnified Party, (ii) agree that part, but not all, of the Claimed
      Amount (the “Agreed
      Amount”)
      is
      owed to the Indemnified Party, or (iii) contest that any of the Claimed Amount
      is owed to the Indemnified Party. The Indemnifying Party may contest the payment
      of all or a portion of the Claimed Amount only based upon a good faith belief
      that all or such portion of the Claimed Amount does not constitute Losses for
      which the Indemnified Party is entitled to indemnification under this Section
      7.
      If no Response Notice is delivered by the Indemnifying Party within such 30-day
      period, then the Indemnifying Party shall be deemed to have agreed that all
      of
      the Claimed Amount is owed to the Indemnified Party. 

    

    (c) If
      the
      Indemnifying Party in the Response Notice agrees (or is deemed to have agreed)
      that all of the Claimed Amount is owed to the Indemnified Party, then the
      Indemnifying Party shall owe to the Indemnified Party an amount equal to the
      Claimed Amount to be paid in the manner set forth in this Section 8. If the
      Indemnifying Party in the Response Notice agrees that part, but not all, of
      the
      Claimed Amount is owed to the Indemnified Party, then the Indemnifying Party
      shall owe to the Indemnified Party an amount equal to the agreed amount set
      forth in such Response Notice to be paid in the manner set forth in this Section
      8. The parties agree that the foregoing shall not be deemed to provide that
      the
      Indemnifying Party is entitled to make a binding determination regarding any
      disputed amounts owed to an Indemnified Party, unless such Indemnified Party
      accepts and agrees to such determination, and both the Indemnified Party and
      Indemnifying Party shall retain all rights and remedies available to such party
      hereunder.

    

    (d) No
      delay
      on the part of the Indemnified Party in notifying the Indemnifying Party shall
      relieve the Indemnifying Party of any liability or obligation hereunder except
      to the extent of any actual prejudice caused by or arising out of such delay.
      

    

    7.3. Payment
      of Claims.
      An
      Indemnifying Party shall make payment of any portion of any Claimed Amount
      that
      such Indemnifying Party has agreed in a Response Notice that it owes to an
      Indemnified Party, or that such Indemnifying Party is deemed to have agreed
      it
      owes to such Indemnifying Party, said payment to be made within thirty (30)
      days
      after such Response Notice is delivered by such Indemnifying Party or should
      have been delivered by such Indemnifying Party, as the case may be.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    7.4. Limitations.
      

    

    (a) Time
      for Claims.
      No
      Indemnifying Party will be liable for any Losses hereunder arising out of a
      breach of representation or warranty unless a written claim for indemnification
      is given by the Indemnified Party to the Indemnifying Party on or prior to
      the
      third anniversary of the date on which the registration statement covering
      the
      resale of the Shares initially became effective. 

    

    (b) Maximum
      Amount.
      Notwithstanding anything contained herein to the contrary, no Indemnifying
      Party
      will be liable for any Losses to any Purchaser Indemnitee hereunder in excess
      of
      the portion of the aggregate purchase price hereunder actually paid by the
      related Purchaser. 

    

    7.5 Applicability;
      Exclusivity.
      Notwithstanding any term to the contrary in this Section 7, the indemnification
      and contribution provisions of the Registration Rights Agreement shall govern
      any claim made with respect to registration statements filed pursuant thereto
      or
      sales made thereunder. The parties hereby acknowledge and agree that in addition
      to remedies of the parties hereto in respect of any and all claims relating
      to
      any breach or purported breach of any representation, warranty, covenant or
      agreement that is contained in this Agreement pursuant to the indemnification
      provisions of this Section 8, all parties shall always retain the right to
      pursue and obtain injunctive relief in addition to any other rights or remedies
      hereunder. 

    

    8. Miscellaneous
      Provisions.
      

    

    8.1 Rights
      Cumulative.
      Each
      and all of the various rights, powers and remedies of the parties shall be
      considered to be cumulative with and in addition to any other rights, powers
      and
      remedies which such parties may have at law or in equity in the event of the
      breach of any of the terms of this Agreement. The exercise or partial exercise
      of any right, power or remedy shall neither constitute the exclusive election
      thereof nor the waiver of any other right, power or remedy available to such
      party. 

    

    8.2 Pronouns.
      All
      pronouns or any variation thereof shall be deemed to refer to the masculine,
      feminine or neuter, singular or plural, as the identity of the person, persons,
      entity or entities may require. 

    

    8.3 Notices.
      

    

    (a) Any
      notices, reports or other correspondence (hereinafter collectively referred
      to
      as “correspondence”) required or permitted to be given hereunder shall be given
      in writing and shall be deemed given if sent by certified or registered mail
      (return receipt requested), overnight courier or telecopy (with confirmation
      of
      receipt), or delivered by hand to the party to whom such correspondence is
      required or permitted to be given hereunder. An electronic communication
      (“Electronic
      Notice”)
      shall
      be deemed written notice for purposes of this Section 8.3 if sent with return
      receipt requested to the electronic mail address specified by the receiving
      party either in this Section 8.3 or on Schedule 1 hereto. Electronic Notice
      shall be deemed received at the time the party sending Electronic Notice
      receives verification of receipt by the receiving party.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b) All
      correspondence to the Company shall be addressed as follows: 

    

    Gran
      Tierra Energy Inc.

    300,
      611-10th Avenue S.W. Floor,

    610-8th
      Avenue S.W.

    Calgary,
      Alberta

    CANADA

    Attention:
      James Hart, Chief Financial Officer

    Facsimile:
      (403) 265-3242

    jameshart@grantierra.com

    

    with
      copies to:

    

    McGuireWoods
      LLP 

    3145
      Avenue of the Americas 

    New
      York,
      NY 10105

    Attention:
      Louis W. Zehil, Esq. 

    Telecopier:
      (212) 548-2175

    lzehil@mcguirewoods.com

    

    (c) All
      correspondence to the Purchasers shall be addressed pursuant to the contact
      information set forth on Schedule
      1
      attached
      hereto.

    

    (d) Any
      entity may change the address to which correspondence to it is to be addressed
      by notification as provided for herein. 

    

    8.4 Captions.
      The
      captions and paragraph headings of this Agreement are solely for the convenience
      of reference and shall not affect its interpretation. 

    

    8.5 Severability.
      Should
      any part or provision of this Agreement be held unenforceable or in conflict
      with the applicable laws or regulations of any jurisdiction, the invalid or
      unenforceable part or provisions shall be replaced with a provision which
      accomplishes, to the extent possible, the original business purpose of such
      part
      or provision in a valid and enforceable manner, and the remainder of this
      Agreement shall remain binding upon the parties hereto. 

    

    8.6 Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the internal
      and
      substantive laws of the State of New York and without regard to any conflicts
      of
      laws concepts which would apply the substantive law of some other jurisdiction.
      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.7 Consent
      to Jurisdiction; Venue.
      Each
      party
      hereby irrevocably and unconditionally (i) agrees that any suit, action or
      other
      legal proceeding arising out of this Agreement shall be brought in a state
      court
      located in New York, New York; (ii) consents to the jurisdiction of any such
      court in any suit, action or proceeding; and (iii) waives any objection which
      such party may have to the laying of venue of any such suit, action or
      proceeding in any such court.

    

    8.8 Agent
      for Service.
      Each
      of
      the parties hereto irrevocably consents to the appointment of CT Corporation
      for
      the service of process, pleading, notices or other papers with respect to the
      Company.

    

    8.9 Waiver.
      No
      waiver of any term, provision or condition of this Agreement, whether by conduct
      or otherwise, in any one or more instances, shall be deemed to be, or be
      construed as, a further or continuing waiver of any such term, provision or
      condition or as a waiver of any other term, provision or condition of this
      Agreement. 

    

    8.10 Expenses.
      The
      Company and the Purchasers shall be responsible for their respective expenses
      (including, without limitation, their respective fees and expenses of their
      counsel) incurred by them in connection with the negotiation and execution
      of,
      and closing under, this Agreement except that the Company shall be obligated
      to
      pay or reimburse the legal fees and expenses of one counsel to the lead
      Purchasers, not in excess of $25,000. 

    

    8.11 Assignment.
      The
      rights and obligations of any party hereto shall inure to the benefit of and
      shall be binding upon the successors and permitted assigns of such party. The
      Company may not assign this Agreement or any rights or obligations hereunder
      without the prior written consent of Purchasers who hold a majority of the
      outstanding Shares (the “Majority
      Purchasers”).
      Each
      Purchaser may assign or transfer any or all of its rights under this Agreement
      to any Person provided that such assignee or transferee agrees in writing to
      be
      bound, with respect to the transferred Shares, Warrants or Warrant Shares,
      by
      the provisions hereof that apply to such assigning or transferring Purchaser;
      whereupon such assignee or transferee shall be deemed to be a “Purchaser”
for
      all
      purposes of this Agreement. 

    

    8.12 Survival.
      The
      respective representations and warranties given by the parties hereto shall
      survive the Closing Date and the consummation of the transactions contemplated
      herein, without regard to any investigation made by any party. The respective
      covenants and agreements agreed to by a party hereto shall survive the Closing
      Date and the consummation of the transactions contemplated herein in accordance
      with their respective terms and conditions. 

    

    8.13 Entire
      Agreement.
      This
      Agreement constitutes the entire agreement between the parties hereto respecting
      the subject matter hereof and supersedes all prior agreements, negotiations,
      understandings, representations and statements respecting the subject matter
      hereof, whether written or oral. 

    

    8.14 Amendments.
      Any
      amendment, supplement or modification of or to any provision of this Agreement,
      any waiver of any provisions of this Agreement shall be effective only if made
      or given in writing and signed by the Company and the Majority Purchasers;
      provided that any amendment, supplement, modification or waiver that is
      materially and disproportionately adverse to any particular Purchaser (as
      compared to all Purchasers as a group) shall require the consent of such
      Purchaser. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    8.15 No
      Third Party Rights.
      This
      Agreement is intended solely for the benefit of the parties hereto and is not
      intended to confer any benefits upon, or create any rights in favor of, any
      Person (including, without limitation, any stockholder or debt holder of the
      Company) other than the parties hereto; provided, that each of the Purchaser
      Indemnitees that are not Purchasers are entitled to all rights and benefits
      as
      third party beneficiaries of Article 7 of this Agreement. 

    

    8.16 Independent
      Nature of Purchaser’s Obligations and Rights.
      The
      obligations of the Purchasers under this Agreement are several and not joint
      with the obligations of any other Purchaser, and no Purchaser shall be
      responsible in any way for the performance of the obligations of any other
      Purchaser under the Transaction Documents. Nothing contained herein, and no
      action taken by any Purchaser pursuant hereto, shall be deemed to constitute
      the
      Purchasers as a partnership, an association, a joint venture or any other kind
      of entity, or create a presumption that the Purchasers are in any way acting
      in
      concert or as a group with respect to such obligations or the transactions
      contemplated by the Transaction Documents, including a "group" (as that term
      is
      used in Section 13(d) of the 1934 Act) in negotiating and entering into this
      Agreement or purchasing the Common Stock and the Warrants or acquiring,
      disposing of or voting any of the Common Stock or the shares of Common Stock
      issuable upon the exercise of the Warrants.  The Company hereby confirms
      that it understands and agrees that the Purchasers are not acting as part of
      any
      such group. Each Purchaser confirms that it has independently participated
      in
      the negotiation of the transaction contemplated hereby with the advice of its
      own counsel and advisors. Each Purchaser shall be entitled to independently
      protect and enforce its rights, including without limitation, the rights arising
      out of this Agreement, and it shall be necessary for any other Purchaser to
      be
      joined as an additional party to any proceeding for such purpose. 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.   

    

    8.17 Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute one and the
      same
      document. The parties hereto confirm that any facsimile copy of another party’s
      executed counterpart of this Agreement (or its signature page thereof) will
      be
      deemed to be an executed original thereof. 

    

    8.18 Waiver
      of Jury Trial.
      Each of
      the Company and the Purchasers hereby waives any right to a trial by jury in
      any
      action, lawsuit or proceeding to enforce or defend any right under this
      Agreement or any amendment, instrument, document or agreement delivered or
      to be
      delivered in connection with this Agreement and agrees that any action, lawsuit
      or proceeding will be tried before a court and not before a jury.

    

    [Signature
      Pages Follow]

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Securities Purchase
      Agreement under seal as of the day and year first above written. 

    
      	 	 	 
	 	GRAN
              TIERRA ENERGY
              INC.
	 
 	 
 	 
 
	 	By:  	___________________________
	 	
              Dana
                Coffield

            
	 	Chief
              Executive Officer

     

    

    

    [SIGNATURE
      PAGE TO SECURITIES PURCHASE AGREEMENT]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
 

    
      	 	 	PURCHASERS: 
	 	 	 
	 	 	Name of Purchaser: 
	 	 	 
	 	 	____________________ 
	 	 	 
	 	
               

            	
              By: __________________

            
	 	 	
              Name: 

            
	 	 	
              Title:

            

    

     

    

    

     

    

    [SIGNATURE
      PAGE TO SECURITIES PURCHASE
      AGREEMENT]

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Schedule
      1

    

    Schedule
      of Purchasers

    

    
      	
              Name
                and Address

            	
              Purchase
                Price

            	
              No.
                of Units

            	
              No.
                of Shares

            	
              No.
                of Warrants

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	
              Total
                Units:

            	 	 	 

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      2

    

    Disclosure
      Schedule

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    Form
      of Warrant

    

    

    
 

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      B

    Escrow
      Agreement

    
 

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      C

    

    Registration
      Rights Agreement

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
      D

    

    Form
      of McGuireWoods LLP Legal Opinion

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      E

    

    Transfer
      Agent Instructions

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]