Document:

BUCKINGHAM EXPLORATION INC. From 10-K

AMENDMENT TO MANAGEMENT AGREEMENT

This agreement (the “Amendment Agreement”) dated as of April 30, 2008 amends the Management Agreement dated May 7, 2007 (the “Management Agreement”), made by and between CHRISTOPHER ROBIN RELPH (the “Executive”) and BUCKINGHAM EXPLORATION INC. (the “Company”) (collectively, the “Parties”), in respect of the provision of management services and compensation for those services as specified in the Management Agreement.

WHEREAS:

A.     The Company is engaged in the acquisition of mining rights and the exploration of mining properties.

B.     The Company and the Executive entered into the Management Agreement for their mutual benefit.

C.     The Parties wish to increase the compensation payable by the Company to the Executive for services rendered under the Management Agreement.

THIS AGREEMENT WITNESSES that the Parties have agreed that the terms and conditions of the relationship as provided in the Management Agreement shall be amended as follows:

	1.      	Amendment. Section 3.1 of the Management Agreement shall read as follows: 
	 
	 	                     “The fixed remuneration of the Executive for his or her services shall be at the rate of US$20,000 per month commencing March 15, 2008, 

                       payable at the beginning of each month, or accruing as a debt owing by the Company to the Executive.” 
	 
	2.      	Agreement Affirmed. The Parties affirm the Management Agreement in all other respects. 
	 
	3.      	Counterparts. This Amendment Agreement may be executed in duplicate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. In the event that the document is signed by one party and faxed to another, the Parties agree that a faxed signature shall be binding upon the Parties to this Amendment Agreement as though the signature was an original. 
	 

Page 1 of 2

	4.      	Counsel. The Parties expressly acknowledge that each has been advised to seek separate counsel for advice in this matter and has been given a reasonable opportunity to do so. 
	 

IN WITNESS WHEREOF this Agreement has been executed by the Parties to it, the day, month and year first written.

BUCKINGHAM EXPLORATION INC.

by its authorized signatory

Per

/s/ Christopher Robin Relph

Christopher Robin Relph

President, Chief Executive Officer,

Chief Financial Officer

Executive:

/s/ Christopher Robin Relph

Christopher Robin Relph

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    Exhibit 10.1

    FORM
OF 

    SECURITIES
PURCHASE AGREEMENT

    This
Securities Purchase Agreement (this “Agreement”) is dated as of September __,
2008, by and among Manas Petroleum Corporation, a Nevada corporation (the
“Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively the
“Purchasers”).

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”),
and Rule 506 promulgated thereunder, the Company desires to issue and sell to
each Purchaser, and each Purchaser, severally and not jointly, desires to
purchase from the Company, the securities of the Company and the PSC Interest
(as defined below), as more fully described in this Agreement.

     

    NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as
follows:

    ARTICLE I.
DEFINITIONS

     

    1.1 Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings set forth in this Section
1.1:

     

    “Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 144 under the
Securities Act.  With respect to a Purchaser, any investment fund or
managed account that is managed on a discretionary basis by the same investment
manager as such Purchaser will be deemed to be an Affiliate of such
Purchaser.

     

    “Business
Day” means any day except Saturday, Sunday, any day which shall be a federal
legal holiday in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other governmental
action to close.

     

    “Closing”
means the closing of the purchase and sale of the Securities and the PSC
Interest pursuant to Section 2.1.

    

    “Closing
Date” means the Trading Day when all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and
(ii) the Company’s obligations to deliver the Securities and other instruments
have been satisfied or waived.

     

    “Commission”
means the Securities and Exchange Commission.

     

    “Common
Stock” means the common stock of the Company, par value $0.001 per share, and
any other class of securities into which such securities may hereafter be
reclassified or changed into.

     

    “Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which
would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, rights, options, warrants, stock
appreciation rights, restricted

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    stock
units or other instrument that is at any time convertible into or exercisable or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

     

    “Company
Counsel” means Michael J. Velletta, with offices located at Fourth Floor - 931
Fort Street  Victoria, British Columbia  V8V 3K3, Canada
Tel: 1.250.383.9104 Fax:  1.250.383.1922.

     

    “Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently
herewith.

     

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

     

    “Fully
Carry” means the Company shall provide any and all resources, financial and
otherwise, to fulfill the legal, financial and general obligations of the
Mongolia Concessions or as commonly referred herein as the PSC.

     

    “Liens”
means a lien, charge, security interest, encumbrance, right of first refusal,
preemptive right or other restriction.

     

    “Mongolian
Concession” or “PSC Interest” or “PSCs” shall mean the rights granted (or
granted in the future) to the Company or to any of the Company’s subsidiaries by
the Government of Mongolia with respect to certain production sharing contracts
with the Mineral Resources and Petroleum Authority of Mongolia for Mongolian
contract areas Sulinkheer 13 and Sulinkheer 14.

     

    “Per Unit
Purchase Price” equals USD$0.65 per unit.

     

    “Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

     

    “Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

     

    “Regulation
S” means Rules 901 through 905 (including the preliminary notes) promulgated by
the Commission pursuant to the Securities Act, as such rules may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such rules.

     

    “Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities
Act, as such rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such rule.

     

    “Securities”
means the Shares, the Warrants and the Warrant Shares.

     

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

     

    “Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant
to this Agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

     

    “Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under
the Exchange Act (but shall not be deemed to include the location and/or
reservation of borrowable shares of Common Stock).

     

    “Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares,
the Warrants and the PSC Interest purchased hereunder as specified below such
Purchaser’s name on the signature page of this Agreement and next to the heading
“Subscription Amount,” in United States dollars and in immediately available
funds.

     

    “PSC
Interests” or “PSC Interest” or “PSCs” shall mean the outstanding capital stock
of any and all subsidiaries of the Company holding or owning the Company’s
interest in the PSC.

     

    “Trading
Day” means a day on which the Common Stock is traded on a Trading
Market.

     

    “Trading
Market” means the following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the American Stock
Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global
Select Market, the OTC Bulletin Board or the New York Stock
Exchange.

     

    “Transaction
Documents” means this Agreement, the Warrants and any other documents or
agreements executed in connection with the transactions contemplated hereunder,
including the PSC Interest.

     

    “Warrants”
means collectively the Common Stock purchase warrants delivered to the
Purchasers at the Closing in accordance with Section 2.2(a) hereof, which
Warrants shall be exercisable immediately and have a term of exercise through
September 1, 2010, in the form of Exhibit A attached hereto.

     

    “Warrant
Shares” means the shares of Common Stock issuable upon exercise of the
Warrants.

    

    ARTICLE II. PURCHASE AND
SALE

    

    2.1 Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this Agreement by
the parties hereto, the Company agrees to sell, and each Purchaser, severally
and not jointly, agrees to purchase, at the Per Unit
Purchase Price, 4,000,000 Units, with each Unit consisting of:

     

    (a) One
share of Common Stock;

    (b) A
Warrant to Purchase One Share of Common Stock, pursuant to the terms of the form
of Warrant attached hereto as Exhibit A; and

    (c) A
0.000002% interest in the PSC Interest.

     

    Furthermore,
the Company agrees to Fully Carry the obligations of the Purchaser in the PSC
Interest through all phases (Phase1, Phase 2 and Phase 3) of the work
program.  At the option of the Purchaser, the PSC
Interest held by the Company in trust and for the benefit of the Purchaser shall
be transferred
directly to the Purchaser if permitted under contracts then in place and by
Mongolian Law.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

     

    Each
Purchaser shall deliver to the Company, via wire transfer, immediately available
funds equal to its Subscription Amount and the Company shall deliver to each
Purchaser its respective Shares, Warrants and PSC Interest as determined
pursuant to Section 2.2(a), and
the Company and each Purchaser
shall deliver the other items set forth in Section 2.2 deliverable at the
Closing.  Upon satisfaction of the conditions set forth in Sections
2.2 and 2.3, the Closing shall occur at the offices of the Company or such other
location as the parties shall mutually agree.

     

    2.2 Deliveries.  On
or prior to the Closing Date, the Company shall deliver or cause to be delivered
to each Purchaser the following:

     

    (i) this
Agreement duly executed by the Company;

    (ii) a
copy of the irrevocable instructions to the Transfer Agent instructing the
Transfer Agent to deliver, on an expedited basis, a certificate evidencing the
number of Shares contained in such Purchaser’s Units, registered in the name of
such Purchaser;

    (iii) a
Warrant registered in the name of such Purchaser to purchase up to a number of
Warrant Shares contained in such Purchaser’s Units (rounded down to the nearest
whole number of Warrant Shares), in the form attached hereto as Exhibit A;
and

    (iv) Legal
evidence of Purchaser’s rights to the PSC Interest.

     

    (b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be
delivered to the Company the following:

    (i) this
Agreement duly executed by such Purchaser;

    (ii) such
Purchaser’s Subscription Amount by wire transfer to the account as specified in
writing by the Company; and

     

    2.3 Closing
Conditions.

    (a) The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

    (i) the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Purchasers contained herein;

    (ii) all
obligations, covenants and agreements of the Purchasers required to be performed
at or prior to the Closing Date shall have been performed; and

    (iii) the
delivery by the Purchasers of the items set forth in Section 2.2(b) of this
Agreement.

    (b) The
respective obligations of each Purchaser hereunder in connection with the
Closing are subject to the following conditions being met:

    (i) the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein;

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    (ii) all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;

    (iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;

    (iv) there
shall have been no Material Adverse Effect with respect to the Company since the
date hereof; and

     

    ARTICLE III. REPRESENTATIONS,
WARRANTIES AND COVENANTS

     

    3.1 Representations
and Warranties of the Company.  Except as set forth in the Disclosure
Schedules, which Disclosure Schedules shall be deemed a part hereof and shall
qualify any representation or otherwise made herein to the extent of the
disclosure contained in the corresponding section of the Disclosure Schedules,
the Company hereby makes the following representations and warranties to each
Purchaser:

     

    (a) Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are set forth on Schedule
3.1(a),which Schedule includes DWM Petroleum AG.  The Company owns,
directly or indirectly, the capital stock or other equity interests of each
Subsidiary as set out in Schedule 3.1(a) free and clear of any Liens, and all of
the issued and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of preemptive and
similar rights to subscribe for or purchase securities with exception to those
items disclosed in Exhibit E attached hereto.

     

    (b) Organization
and Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
(as applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation or
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter

    documents.  Each
of the Company and the Subsidiaries is duly qualified to conduct business and is
in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or 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 have or reasonably be expected to
result in (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect on
the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) a material adverse effect on the Company’s ability to perform in any
material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
Proceeding has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

     

    (c) Authorization;
Enforcement.  The Company and its subsidiaries each have the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder.  The execution and delivery of
each of the Transaction Documents by the Company and its subsidiaries and the
consummation by it of the transactions contemplated

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    hereby
and thereby have been duly authorized by all necessary action on the part of the
Company and its subsidiaries and no further action is required by the Company or
its subsidiaries, their respective board of directors or their stockholders in
connection therewith other than in connection with the Required Approvals (as
defined below).  Each Transaction Document has been (or upon delivery
will have been) duly executed by the Company and its subsidiaries and, when
delivered in accordance with the terms hereof and thereof, will constitute the
valid and binding obligations of the Company and its subsidiaries enforceable
against the Company and its subsidiaries in accordance with its terms except (i)
as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

     

    (d) No
Conflicts.  The execution, delivery and performance of the Transaction
Documents by the Company and its subsidiaries, the issuance and sale of the
Securities and the PSC Interest and the consummation by the Company and its
subsidiaries of the other transactions contemplated hereby and thereby do not
and will not (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any
property or asset of the Company or any Subsidiary is bound or affected, or
(iii) subject to the Required Approvals, conflict with or result in a violation
of any law, rule, regulation, order, judgment, injunction, decree or other
restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and
regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as would not have or reasonably be expected to result in a Material
Adverse Effect.

     

    (e) Filings,
Consents and Approvals.  The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
(i) filings required pursuant to this Agreement, (ii) application(s) and
notification(s) to each applicable Trading Market for the listing of the
Securities for trading thereon in the time and manner required thereby, and
(iii) the filing of Form D with the Commission and such filings as are required
to be made under applicable state securities laws (collectively, the “Required
Approvals”).

     

    (f) Issuance
of the Securities.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents.  The Warrant Shares, when
issued in accordance with the terms of the Transaction Documents, will be
validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer 

    provided
for in the Transaction Documents.  The Company has reserved from its
duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to this Agreement and the Warrants.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (g) Capitalization.  The
capitalization of the Company  is as set forth on Schedule 3.1(g),
which Schedule 3.1(g) shall also include the number of shares of Common Stock
owned beneficially, and of record,
by
Affiliates of the Company as of the date hereof. No Person has any right of
first refusal, preemptive
right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents.  Except as set
forth on Schedule 3.1(g) or as a result of the purchase and sale of the
Securities, there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to
issue additional shares of Common Stock or Common Stock
Equivalents.  The issuance and sale of the Securities will not
obligate the Company to issue 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 any of such securities. All of the outstanding shares of capital
stock of the Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities.  Except for
the Required Approvals, no further approval or authorization of any stockholder,
the Board of Directors of the Company or others is required for the issuance and
sale of the Securities.  There are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s stockholders.

     

    (h) SEC
Reports; Financial Statements.  Except as set forth in the Disclosure
Schedule, the Company has filed all reports, schedules, forms, statements and
other documents required to be filed by the Company under the Securities Act and
the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
12 months preceding the date hereof (or such shorter period as the Company was
required by law or regulation to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely basis or
has received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.  As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable, and none
of the SEC Reports, 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 the light of the
circumstances under which they were made, not misleading.  The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time
of filing.  Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis during the periods involved (“GAAP”), except as may be
otherwise specified in such financial statements or the notes thereto and except
that unaudited financial statements may not contain all footnotes required by
GAAP, and fairly present in all material respects the financial position of the
Company and its consolidated 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. 

     

    (i) Material
Changes; Undisclosed Events, Liabilities or Developments.  Except as
set forth on Schedule 3.1(i) AND in EXHIBIT F attached hereto (EXHIBIT F:
MATERIAL CHANGES DISCLOSURE STATEMENT), since the date of the latest audited
financial

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    statements
included within the SEC Reports, except as specifically disclosed in a
subsequent SEC Report filed prior to the date hereof, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has not
issued any equity securities to any executive officer, director or Affiliate,
except pursuant to the Equity Incentive Plan.  The Company does not
have pending before the Commission any request for confidential treatment of
information.  Except for the issuance of the Securities and the PSC
Interest contemplated by this Agreement or as set forth on Schedule 3.1(i), no
event, liability or development has occurred or exists with respect to the
Company or its Subsidiaries or their respective business, properties, operations
or financial condition, that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is made that
has not been publicly disclosed at least 1 Trading Day prior to the date that
this representation is made.

     

    (j) Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, any Subsidiary or any of their
respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Securities or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse
Effect.  Neither the Company nor any Subsidiary, nor any director or
executive officer thereof, is or has been the subject of any Action involving a
claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.  There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or executive officer of the Company.  The Commission has not
issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.

     

    (k) Compliance.  Except
as set forth on Schedule 3.1(l), neither the Company nor any Subsidiary (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 Subsidiary under), nor has the Company or any Subsidiary
received 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 is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws applicable to its business and all such laws that affect the
environment, except in each case as would not have or reasonably be expected to
result in a Material Adverse Effect.

     

    (l) Regulatory
Permits.  The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or
foreign regulatory authorities necessary to conduct their respective businesses
as described in the SEC Reports, except where the failure to possess such
permits could not have or reasonably be expected to

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    result in
a Material Adverse Effect (“Material Permits”), and neither the Company nor any
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.

     

    (m) Title
to Assets.  The Company and the Subsidiaries have good and marketable
title in all personal property owned by them that is material to the business of
the Company and the Subsidiaries, in each case free and clear of all Liens,
except for Liens (i) securing payment under the obligations set forth on
Schedule 3.1(m), (ii) that do not materially affect the value of such property
and (iii) that do not materially interfere with the use made and proposed to be
made of such property by the Company and the Subsidiaries and Liens for the
payment of federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties.  Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under
valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance in all material respects.  The Company
does not own any real property.

     

    (n) Patents
and Trademarks.  The Company and the Subsidiaries have, or have rights
to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and
other intellectual property rights and similar rights necessary or material for
use in connection with their respective businesses as described in the SEC
Reports and which the failure to so would not have or reasonably be expected to
have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”).  To the Company’s knowledge, the conduct of the Company’s
and any Subsidiary’s businesses will not conflict in any material respects with
any Intellectual Property Rights of others.  Neither the Company nor
any Subsidiary has received a notice (written or otherwise) that the
Intellectual Property Rights used by the Company or any Subsidiary violates or
infringes upon the rights of any Person.  To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and valid and
there is no existing infringement by another Person of any of the Intellectual
Property Rights.  The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their intellectual properties, except where failure to do so could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect

     

    (o) 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
customary in the businesses in which the Company and the Subsidiaries are
engaged.  Except as set forth on Schedule 3.1(o), the Company carries
directors and officers insurance coverage at least equal to an aggregate amount
of FIFTEEN MILLION U.S. DOLLARS. Neither the Company nor
any Subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business without a significant increase in cost.

     

    (p) Transactions
With Affiliates and Employees.  Except as set forth in the SEC
Reports, none of the executive 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 with the Company or any Subsidiary (other than for
services as employees, executive officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any executive 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, in each case in excess of
$120,000

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    other
than for (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company and (iii) other
employee benefits, including stock option agreements and restricted stock unit
agreements under any Equity Incentive Plan.

     

    (q) Certain
Fees.  Except as set forth on Schedule 3.1(q), no brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents.  The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction
Documents.

     

    (r) Private
Placement. Assuming the accuracy of the Purchasers representations and
warranties set forth in Section 3.2, no registration under the Securities Act is
required for the offer and sale of the Securities and the PSC Interest by the
Company to the Purchasers as contemplated hereby. The issuance and sale of the
Securities and the PSC Interest hereunder does not contravene the rules and
regulations of the Trading Market.

     

    (s) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after
receipt of payment for the Securities and the PSC Interests, will not be or be
an Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

     

    (t) Disclosure.  Except
with regard to the Purchasers set forth on Schedule 3.1(t) and except respect to
the material terms and conditions of the transactions contemplated by the
Transaction Documents, the Company confirms that neither it nor any other Person
acting on its behalf has provided any of the Purchasers or their agents or
counsel with any information that it believes constitutes or might constitute
material, non-public information.  The Company understands and
confirms that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company.  All disclosure
furnished by or on behalf of the Company to the Purchasers regarding
the Company, its business and the transactions contemplated hereby,
including the Disclosure Schedules to this Agreement, is true and correct and
does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading. The press
releases disseminated by the Company during the twenty months preceding the date
of this Agreement taken as a whole do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements, in light of the circumstances under
which they were made and when made, not misleading.  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 3.2
hereof.

     

    (u) Solvency.  Based
on the financial condition of the Company as of the Closing Date, after giving
effect to the receipt by the Company of the proceeds from the sale of the
Securities hereunder, (i) the Company reasonably expects to have sufficient cash
on hand to pay all of its currently foreseeable expenses for at least the next 4
months, (ii) 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 contingent liabilities) as they
mature; (iii) the Company’s assets do not constitute unreasonably small capital
to carry on its business 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, and

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    projected
capital requirements and capital availability thereof; and (iv) 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
liabilities when such amounts are required to be paid.  The Company
does not intend 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).  The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or
liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date.  Schedule 3.1(u) sets forth as
of the dates thereof all outstanding secured and unsecured Indebtedness of the
Company or any Subsidiary, or for which the Company or any Subsidiary has
commitments.  For the purposes of this Agreement, “Indebtedness” means
(a) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business),
(b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value of
any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

     

    (v) Tax
Status.  Except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary federal, state
and foreign income and franchise tax returns and has paid or accrued all taxes
shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any
Subsidiary

     

    (w) No
General Solicitation.  Neither the Company nor any person acting on
behalf of the Company has offered or sold any of the Securities by any form of
general solicitation or general advertising.  The Company has offered
the Securities for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.

     

    (x) Foreign
Corrupt Practices.  Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i)
directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is  in violation of law, or (iv)
violated in any material respect any provision of the Foreign Corrupt Practices
Act of 1977, as amended.

     

    (y) Accountants.  The
Company’s accounting firm is set forth on Schedule 3.1(y) of the Disclosure
Schedule.  To the knowledge of the Company, such accounting firm (i)
is a registered public accounting firm as required by the Exchange Act and (ii)
shall express its opinion with respect to the financial statements to be
included in the Company’s Annual Report on Form 10-K for the year ending
December 31, 2007.

     

    (z) No
Disagreements with Accountants and Lawyers.  There are no
disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company and the Company is current with respect to
any fees owed to its accountants and lawyers.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (aa) 
Acknowledgment Regarding Purchasers’ Purchase of Securities.  The
Company acknowledges and agrees that, except as set forth on Schedule 3.1(a),
each of the Purchasers is acting solely in the capacity of an arm’s length
purchaser with respect to the Transaction Documents and the transactions
contemplated thereby.  The Company further acknowledges that no
Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any
of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the
Purchasers’ purchase of the Securities.  The Company further
represents to each Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the
independent evaluation of the transactions contemplated hereby by the Company
and its representatives.

     

    (bb) Regulation
M Compliance.  The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to
cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company.

     

    (cc) Stock
Options.  With respect to stock options issued pursuant to the
Company’s Equity Incentive Plan(s) (i) each stock option designated by the
Company at the time of grant as an “incentive stock option” under Section 422 of
the Code so qualifies, (ii) each grant of a stock option was duly authorized no
later than the date on which the grant of such stock option was by its terms to
be effective (the “Grant Date”) by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company (or a duly
constituted and authorized committee thereof) and any required stockholder
approval by the necessary number of votes or written consents, (iii) each such
grant was made in accordance with the material terms of an Equity Incentive
Plan, the Securities Act and all other applicable laws and regulatory rules or
requirements, including the rules of any  exchange on which Company
securities are traded and (iv) each such grant was or has now been properly
accounted for in accordance with GAAP in the financial statements (including the
related notes) of the Company and disclosed in the Company’s filings with the
Commission in accordance with the Exchange Act and all other applicable laws,
except, in the cases of clauses (i), (ii), (iii) and (iv), for any such failure,
violation or default that would not be material to the Company and its
subsidiaries taken as a whole.

     

    3.2 Representations
and Warranties of the Purchasers.  Each Purchaser, for itself and for
no other Purchaser, hereby represents and warrants as of the date hereof and as
of the Closing Date to the Company as follows:

     

    (a) Organization;
Authority.  Such Purchaser is an entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution, delivery and performance by such Purchaser of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate or similar action on the part of such
Purchaser.  Each Transaction Document to which it is a party has been
duly executed by such Purchaser, and when delivered by such Purchaser in
accordance with the terms hereof, will constitute the valid and legally binding
obligation of such Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws
of

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    general
application affecting enforcement of creditors’ rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.

     

    (b) Own
Account.  Such Purchaser understands that the Securities and the PSC
Interests are “restricted securities” and have not been registered under the
Securities Act or any applicable state or other securities law and is acquiring
the Securities and the PSC Interests as principal for its own account and not
with a view to or for distributing or reselling such Securities or PSC Interests
or any part thereof in violation of the Securities Act or any applicable state
or other securities law, has no present intention of distributing any of such
Securities or PSC Interests in violation of the Securities Act or any applicable
state or other securities law and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of such Securities (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws) in violation of the Securities Act or any applicable state or
other securities law.  Such Purchaser is acquiring the Securities and
the PSC Interests hereunder in the ordinary course of its business.

     

    (c) Purchaser
Status.  At the time such Purchaser was offered the Securities and the
PSC Interests, it was, and at the date hereof it is, and on each date on which
it exercises any Warrants, it will be either: (i) an “accredited investor” as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under
the Securities Act.  No Purchaser is required to be registered as a
broker-dealer under Section 15 of the Exchange Act.

     

    (d) Experience
of Such Purchaser.  Such Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities and the

    PSC
Interests, and has so evaluated the merits and risks of such
investment.  Such Purchaser is able to bear the economic risk of
an investment in the Securities and, at the present time, is able to afford a
complete loss of such investment.

     

    (e) General
Solicitation.  Such Purchaser is not purchasing the Securities or the
PSC Interests as a result of any advertisement, article, notice or other
communication regarding the Securities or the PSC Interests published in any
newspaper, magazine or similar media or broadcast over television or radio or
presented at any seminar or any other general solicitation or general
advertisement.

     

    (f) Affiliate
Status.  If such Purchaser is domiciled or was formed outside of the
U.S., such Purchaser is not an “affiliate” (as defined in Rule 144) of the
Company or acting on behalf of the Company and, at the time the commitment to
purchase the Securities was originated, was outside the U.S. and was not a U.S.
person (and was not acquiring for the account or benefit of a U.S. person)
within the meaning of Regulation S.

     

    (g) Certain
Fees.  No brokerage or finder’s fees or commissions are or will be
payable by such Purchaser to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents.

     

    (h) Residency;
Foreign Securities Laws.  Unless such Purchaser resides, in the case
of individuals, or is headquartered or formed, in the case of entities, in the
United States, such

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Purchaser
acknowledges that the Company will not issue any Securities or the PSC Interests
in compliance with the laws of any jurisdiction outside of the United States and
the Company makes no representation or warranty that any Securities or PSC
Interests issued outside of the United States have been offered or sold in
compliance with the laws of the jurisdiction into which such Securities or PSC
Interests were issued. Any Purchaser not a resident of  or formed in
the United States warrants to the Company that no filing is required by the
Company with any governmental authority in such Purchaser’s jurisdiction in
connection with the transactions contemplated hereby. If such Purchaser is
domiciled or was formed outside of the U.S., such Purchaser has satisfied itself
as to the full observance of the laws of its jurisdiction in connection with the
acquisition of the Securities, the PSC Interests or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the purchase of
the Securities or the PSC Interests, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that may
need to be obtained and (iv) the income tax and other tax consequences, if any,
that may be relevant to the purchase, holding, redemption, sale or transfer of
the Securities or the PSC Interests.  If such Purchaser is
domiciled or was formed outside the U.S., such Purchaser’s acquisition of and
payment for, and its continued ownership of the Securities or the PSC Interests,
will not violate any applicable securities or other laws of his, her or its
jurisdiction.

     

    (i) Acknowledgement.  Each
Purchaser acknowledges that the Company has relied upon the representations and
warranties of the Purchasers set forth in Section 3.2 in its determination that
no registration under the Securities Act is required for the offer and sale of
the Securities by the Company to the Purchasers as contemplated by this
Agreement.

     

    ARTICLE IV. OTHER AGREEMENTS OF
THE PARTIES

     

    4.1 Transfer
Restrictions.  The Securities may only be disposed of in compliance
with state and federal securities laws (including, in the case of Purchasers
domiciled or formed outside the U.S., Regulation S).  In connection
with any transfer of Securities or PSC Interests other than pursuant to an
effective registration statement, Rule 144, or Regulation S, to the Company or
to an Affiliate of a Purchaser or in connection with a pledge as contemplated in
Section 4.1(b), the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor and reasonably
acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does
not require registration of such transferred Securities or PSC Interests under
the Securities Act.  As a condition of transfer, any such transferee
shall agree in writing to be bound by the terms of this Agreement and shall have
the rights of a Purchaser under this Agreement and the Registration Rights
Agreement.

     

    (b) The
Purchasers that reside, are domiciled or are formed, within the U.S. agree to
the imprinting, so long as is required by this Section 4.1, of a legend on any
of the Securities or the PSC Interests in the form attached hereto as Exhibit
B.

     

    (c) The
Purchasers that are domiciled or are formed outside of the U.S. agree to the
imprinting, so long as is required by this Section 4.1, of a legend on any of
the Securities or the PSC Interests in the form attached hereto as Exhibit
C.\

     

    (d) Certificates
evidencing the Shares and the Warrant Shares shall not contain any legend
(including the legend set forth in Section 4.1(b) or 4.1(c)), (i) while a
registration statement (including the Registration Statement) covering the
resale of such security is effective under the Securities Act, or (ii) following
any sale of such Shares and/or the Warrant Shares

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    pursuant
to Rule 144, or (iii)the date as of which the Purchasers may sell all of the
Securities without restriction pursuant to Rule 144 (or successor thereto), 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).  The Company shall cause its counsel to
issue a legal opinion to the Transfer Agent promptly after the Effective Date if
required by the Transfer Agent to effect the removal of the legend hereunder and
the Purchasers will provide to the Company’s counsel with any reasonably
required documentation.  If all or any portion of a Warrant is
exercised at a time when there is an effective registration statement to cover
the resale of the Warrant Shares, such Warrant Shares shall be issued free of
all legends.  The Company agrees that following the Effective Date or
at such time as such legend is no longer required under this Section 4.1(d), and
the Purchasers have provided counsel with all reasonably required documentation,
it will, no later than three (3) Trading Days following the delivery by a
Purchaser to the Company or the Transfer Agent of a certificate
representing Shares and/or the Warrant Shares, as the case may be, issued with a
restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver
or cause to be delivered to such Purchaser a certificate representing such
shares that is free from all restrictive and other
legends.  Notwithstanding the foregoing, the Company shall not be
required to remove any legends until all Securities represented by a single
certificate are no longer subject to restrictions.  If only a portion
of the Securities represented by any single certificate are subject to
restrictions, the holder of the certificate may request, or the Company may
require, that such certificate be cancelled and two new certificates be
issued.  One certificate shall represent, and be in the amount of,
Securities not subject to restrictions and shall bear no legend and the second
certificate shall represent, and be in the amount of, Securities subject to
restrictions and shall bear an appropriate legend.  The Company may
not make any notation on its records or give instructions to the Transfer Agent
that enlarge the restrictions on transfer set forth in this
Section.  Certificates for Securities subject to legend removal
hereunder shall be transmitted by the Transfer Agent to the Purchasers by
crediting the account of the Purchaser’s prime broker with the Depository Trust
Company System.

     

    (e) Each
Purchaser, severally and not jointly with the other Purchasers, agrees that the
removal of the restrictive legend from certificates representing Securities as
set forth in this Section 4.1 is predicated upon the Company’s reliance that the
Purchaser will sell any Securities pursuant to either the registration
requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein. As a condition of the foregoing, the
Company may require that a selling shareholder provide it with a customary
written undertaking agreeing to comply with the plan of distribution set forth
in the registration statement.

     

    (f) Each
Purchaser that is domiciled or was formed outside of the U.S. agrees, and each
subsequent permitted transferee of the Securitiesalso agrees in writing, that
all subsequent offers and sales of Securities shall be made only (1) to the
Company or a subsidiary thereof, (2) pursuant to a registration statement which
has been declared effective under the Securities Act, (3) pursuant to offers and
sales to non-U.S. persons that occur outside the United States within the
meaning of Regulation S and in compliance with Rules 904 and 905 thereunder, or
(4) pursuant to any other available exemption from the registration requirements
of the Securities Act.

     

    (g) Each
Purchaser that is not a US person(as defined by regulation S) represents and
agrees on his, her or its behalf and on behalf of any investor account for which
it is acquiring the Securities, and each subsequent permitted transferee of the
Securities, by its acceptance thereof, will be deemed to have agreed, that (i)
no subscription, resale or other transfer of the Securities

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    has been
arranged, or at Closing will have been arranged, to return the Securities to the
U.S. securities markets or to a U.S. citizen or resident, and (ii) any hedging
transaction involving the Securities will be conducted only in compliance with
the requirements of the Securities Act.

     

    4.2 Furnishing
of Information.  As long as any Purchaser owns Securities that cannot
be sold without restriction under Rule 144 and the Company remains subject to
the requirements of the Exchange Act, 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 after the date hereof
pursuant to the Exchange Act.  As long as any Purchaser owns
Securities, if the Company is not required to file reports pursuant to the
Exchange Act, it will prepare and furnish to the Purchasers and make publicly
available in accordance with Rule 144(c) 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 Securities may
reasonably request, to the extent required from time to time to enable such
Person to sell such Securities without registration under the Securities Act
within the requirements of the exemption provided by Rule 144.

     

    4.3 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 or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any
Trading Market such that it would require shareholder approval prior to the
closing of such other transaction unless shareholder approval is obtained before
the closing of such subsequent transaction.

     

    4.4 Use
of Proceeds.  The Company shall use the proceeds received from
Purchaser to meet and satisfy the present legal and financial obligations, and
make available the difference for any future legal and financial obligations,
according to the official government grant of Mongolia Concession Blocks 13 and
14 as referred to herein as the PSC Interest.  Evidence of the PSCs
government grant (without the approval of the security council) is attached
hereto as Exhibit D. The Company has a beneficial 90% interest in the Mongolian
Concession.  The Government of Mongolia has granted approval of the
Mongolian Concession and the only additional approval required for the Mongolian
is that of the Security Council of Mongolia, which approval the Company
reasonably expects to be granted no later than October 30, 2008.  The
Company or a subsidiary will acquire and hold 100% of the Company’s interest in
the Mongolian Concession (i.e. 82% of the total Mongolian
Concession).

     

    4.5 Reimbursement.  If
any Purchaser becomes involved in any capacity in any Proceeding by or against
any Person who is a stockholder of the Company (except as a result of sales,
pledges, margin sales transactions by such Purchaser to or with any other
stockholder), solely as a result of such Purchaser’s acquisition of the
Securities or the Bonus Interest under this Agreement, the Company will
reimburse such Purchaser for its reasonable legal and other expenses (including
the cost of any investigation preparation and travel in connection therewith)
incurred in connection therewith, as such expenses are incurred.  The
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have, shall extend
upon the same terms and conditions to any Affiliates of the Purchasers who are
actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may
be, of the Purchasers and any such Affiliate, and shall be binding upon and
inure to the benefit of any successors, assigns, heirs and personal
representatives of the Company, the Purchasers and any such Affiliate and any
such Person.  The Company also agrees that neither the Purchasers nor
any such Affiliates, partners, directors, agents, employees or controlling
persons shall have any liability to the Company or any Person asserting
claims on behalf of or in right of the Company solely as a result of acquiring
the Securities or the Bonus Interest under this Agreement, except if such claim
arises primarily

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    from a
breach of such Purchaser’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such Purchaser may
have with any such stockholder or any violations by the Purchaser of state or
federal securities laws or any conduct by such Purchaser which constitutes
fraud, gross negligence, willful misconduct or malfeasance.

     

    4.6 Indemnification
of Purchasers.   Subject to the provisions of this Section 4.6,
the Company will indemnify and hold each Purchaser and its directors, officers,
trustees, shareholders, members, partners, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls such Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a
Purchaser, or any of them or their respective Affiliates, by any stockholder of
the Company who is not an Affiliate of such Purchaser, with respect to any of
the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser’s representations, warranties or
covenants under the Transaction Documents or any agreements or understandings
such Purchaser may have with any such stockholder or any violations by the
Purchaser of state or federal securities laws or any conduct by such Purchaser
which constitutes fraud, gross negligence, willful misconduct or
malfeasance).  If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company
in writing, (ii) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (iii) in such action there is,
in the reasonable opinion of such separate counsel, a material conflict on any
material issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for the
reasonable fees and expenses of no more than one such separate
counsel.  The Company will not be liable to any Purchaser Party under
this Agreement (i) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld or
delayed; or (ii) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to (A) any Purchaser Party’s breach of any
of the representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction Documents, (B) any
violations by the Purchaser of state or federal securities laws or (C) any
conduct by such Purchaser which constitutes fraud, gross negligence, willful
misconduct or malfeasance.

     

    4.7 Reservation
of Common Stock. As of the date hereof, the Company has reserved and the Company
shall continue to reserve and keep available at all times, free of preemptive
rights, a sufficient number of shares of Common Stock for the purpose of
enabling the Company to issue Shares pursuant to this Agreement and Warrant
Shares pursuant to any exercise of the Warrants.

     

    4.8 Listing
of Common Stock.  The Company hereby agrees to use best efforts to
maintain the listing of the Common Stock on a Trading Market, and as soon as
reasonably practicable following the Closing (but not later than the Effective
Date ) to list all of the Shares and Warrant Shares on such

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Trading
Market. The Company further agrees, if the Company applies to have the Common
Stock traded on any other Trading Market, it will include in such application
all of the Shares and Warrant Shares, and will take such other action as is
necessary to cause all of the Shares and Warrant Shares to be listed on such
other Trading Market as promptly as possible.  The Company will take
all action reasonably necessary to continue the listing and trading of its
Common Stock on a Trading Market and will comply in all respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of
the Trading Market.

     

    4.9 Delivery
of Securities After Closing.  The Company shall deliver, or cause to
be delivered, the respective Securities and Warrants  purchased by
each Purchaser to such Purchaser within Eight (8) Trading Days of the Closing
Date.  The Company shall use its best efforts to legally perfect,
execute, transfer and deliver the said Bonus Interest with six (6) months of the
Closing Date.

     

    4.10 Form
D; Blue Sky Filings.  The Company agrees to timely file a Form D with
respect to the Securities and the PSC Interests as required under Regulation D
and to provide a copy thereof, promptly upon request of any Purchaser. The
Company shall take such action as the Company shall reasonably determine is
necessary in order to obtain an exemption for, or to qualify the Securities and
the PSC Interests for, sale to the Purchasers at the Closing under applicable
securities or “Blue Sky” laws of the states of the United States, and shall
provide evidence of such actions promptly upon request of any
Purchaser.  Each Purchaser shall take all commercially reasonable
actions that are reasonably requested by the Company related to, or to
effectuate, the filing of a Form D or any filing required pursuant to the “Blue
Sky” laws of the states of the United States which, for purposes of
clarity, shall not include the payment of any fees by such
Purchaser.

     

    4.11 Investment
Company.  The Company shall conduct its business in a manner so that
it will not become subject to the Investment Company Act of 1940, as
amended.

     

    4.12 Registration.

     (a)
At any time that (i) Company determines to register any of its Common Stock, or
to amend any filed registration which is not yet effective, either for its own
account or for the account of a holder of Common Stock or as a result of a
holder of Common Stock exercising demand registration rights, other than a
registration relating solely to Common Stock registered on Form S-4 or Form S-8
(or any successor forms), and (ii) Common Stock issued pursuant to this
Agreement and held by one or more Purchaser are not then the subject of a filed
registration statement or salable under Rule 144 of the SEC without restriction,
then Company shall:

     

    (i) at
least 15 days prior to the filing of a registration statement, other than as set
forth in (a)(i) above, promptly give each Purchaser holding such Common Stock
(each, an “Eligible Stockholder”) written notice thereof by registered or
certified mail, courier or personal delivery; provided that no such notice shall
be required in a non-underwritten registration, and all of such stock shall be
registered thereon; and

     

    (ii)
include in such registration (and any related qualification under blue sky laws
or other compliance), and in any underwriting involved therein, all of the
Registrable Securities held by such Eligible Stockholder specified in a written
request or requests, made within ten (10) days after receipt of such written
notice from Company by any Eligible.

     

    (b) If
the Company does not complete a financing transaction within four (4) months of
the Closing Date in which it allows Purchaser to register its shares as set
froth in Section 4.12(a) above, the Company shall use its best efforts to
prepare and, not later than four (4) months after the Closing Date,

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    file with
the SEC a Registration Statement covering the resale of all the Common Stock and
Warrant Shares issued or issuable pursuant hereto (the “Registrable
Securities”).  The Company shall use its commercially reasonable
efforts to have the Registration Statement declared effective by the SEC as soon
as practicable.  The Company shall submit to the SEC, within three (3)
business days after Company learns that no review of such Registration Statement
will be made by the staff of the SEC or that the staff of the SEC has no further
comments on such Registration Statement, as the case may be, a request for
acceleration of effectiveness of such Registration Statement to a time and date
not later than three (3) business days after the submission of such
request.  The Company shall keep such Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (i) the date as of which
the Purchasers may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144 (or successor
thereto) promulgated under the 1933 Act or (ii) the date on which the Purchasers
have sold all the Registrable Securities covered by such Registration
Statement.  To the extent that the registration statement or the
prospectus which is a part thereof requires amendment or supplement under the
Securities Act of 1933 and the rules adopted thereunder, the Company shall
exercise best efforts to expeditiously amend or supplement such registration
statement, including the prospectus which is a part thereof.

     

    (c) The
Company shall bear the expenses associated with the registration of Registrable
Securities pursuant to this Section 4.12 exclusive of underwriters’ and brokers’
discounts and commissions and expenses of the Purchasers’ legal
counsel.

     

    (d)
Company will, and hereby does, indemnify, hold harmless and defend each of the
Purchasers (each an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amount paid in settlement or expenses, joint or several (collectively,
“Claims”), incurred investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by
or before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is nor may be a party thereto (“Indemnified Damages”), to which any of
them may become subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise out of or are based
upon:  (i) any untrue statement or alleged untrue statement or a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue Sky Filing”), or the
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
Company files any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which
the statements therein were made, not misleading, or (iii) any violation or
alleged violation by Company of the 1933 Act, the 1934 Act, or any other
law, including, without limitation, any state securities law, or any rule or
regulation therein relating to the offer or sale of the Registrable Securities
pursuant to a Registration Statement (the matters in the foregoing clauses (i)
through (iii) being, collectively, “Violations”).  Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such
Claim.  Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 5.2(c)(vii):  (i)
shall not apply to a Claim by an Indemnified Person arising out of or
based upon a Violation which occurs as a result of the Company’s reliance
upon information furnished in writing to Company by such Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto; and (ii) shall
not be

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    available
to the extent such claim is based upon a failure of the Purchaser to deliver or
to cause to be delivered the prospectus made available by Company.

     

    (e) With
a view to making available to the Purchasers the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Purchaser to sell securities of Company to
the public without registration (“Rule 144”) and for so long as the require3ment
to do so is imposed on the Company by the terms of Rule 144, the Company agrees
to use reasonable commercial efforts to:

     

    (i) make
and keep public information available, as those terms are understood and defined
in Rule 144; and

     

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

     

    (iii)
Furnish to any Purchaser, so as long as the Purchaser owns any Registrable
Securities, forthwith upon request (i) a written statement by Company that it
has complied with the reporting requirements of SEC Rule 144, (ii) a copy of the
most recent annual or quarterly report of Company and such other reports and
documents as may be so filed by Company, and (iii) such other information as may
be reasonably requested in availing any Purchaser of any rule or regulation of
the SEC which permits the selling of any Registrable Securities without
registration.

     

    ARTICLE V.
MISCELLANEOUS

     

    5.1 Fees
and Expenses.  The Company shall immediately upon written request for
reimbursement, reimburse the Purchaser(s) for fees and expenses of its legal
advisors and counsel incurred by Purchaser(s)
in the preparation, negotiation, due diligence execution, delivery and
performance of this Agreement.  However,
in any case, said reimbursement shall not exceed a total of
$25,000.  With exception to the aforementioned legal
reimbursement(s) in Section 5.1, each party shall pay the fees and expenses of
its advisers, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement.  The Company shall pay all
Transfer Agent fees, stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities and the PSC Interests to the
Purchasers.

     

    5.2 Entire
Agreement.  The Transaction Documents and all of the confidentiality
agreements by and between the Company and the Purchasers, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and
schedules.

     

    5.3 Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number set forth on
the signature pages attached hereto prior to 5:30 p.m. (New York time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number set
forth on the signature pages attached hereto on a day that is not a Trading Day
or later than 5:30 p.m. (New York time) on any Trading Day, (c) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service, or (d) upon

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    actual
receipt by the party to whom such notice is required to be given.  The
address for such notices and communications shall be as set forth on the
signature pages attached hereto.

     

    5.4 Amendments;
Waivers.  No provision of this Agreement may be waived or amended
except in a written instrument signed, in the case of an amendment, by the
Company and Purchasers holding a majority of the then outstanding Securities or,
in the case of a waiver, by the party against whom enforcement of any such
waived provision is sought.  No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any subsequent default or
a waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right.

     

    5.5 Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    5.6 Successors
and Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of Purchasers holding a
majority of the then outstanding Securities (other than by
merger).  Any Purchaser may assign any or all of its rights under this
Agreement to any Person to whom such Purchaser assigns or transfers any
Securities or PSC Interests, provided such transferee agrees in writing to be
bound, with

    respect
to the transferred Securities or PSC Interests, by the provisions of the
Transaction Documents that apply to the “Purchasers.”

     

    5.7 No
Third-Party Beneficiaries.  This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and
is not for the benefit of, nor may any provision hereof be enforced by, any
other Person, except as otherwise set forth in Section 4.9.

     

    5.8 Governing
Law.  All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Nevada, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of Las Vegas. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the
City of Las Vegas, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by
law.  The parties hereby waive all rights to a trial by
jury.  If either party shall commence an action or proceeding to
enforce any provisions of the Transaction Documents, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such action or
proceeding.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    5.9 Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Shares,  the Warrant Shares and the PSC Interests
until the 3 year anniversary of the Closing Date.

     

    5.10 Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original
thereof.

     

    5.11 Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

    5.12 Rescission
and Withdrawal Right.  Notwithstanding anything to the contrary
contained in (and without limiting any similar provisions of) any of the other
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights; provided,
however, in the case of a rescission of an exercise of a Warrant, the Purchaser
shall be required to return any shares of Common Stock delivered in connection
with any such rescinded exercise notice.

     

    5.13 Replacement
of Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

     

    5.14 Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agrees to waive
and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.

     

    5.15 Payment
Set Aside.  To the extent that the Company makes a payment or payments
to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or
exercises its rights thereunder, and such payment or payments or the proceeds of
such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee,

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    receiver
or any other person under any law (including, without limitation, any bankruptcy
law, state or federal law, common law or equitable cause of action), then to the
extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and
effect as if such payment had not been made or such enforcement or setoff had
not occurred.

     

    5.16 Independent
Nature of Purchasers’ Obligations and Rights.  The obligations of each
Purchaser under any Transaction Document are several and not joint with the
obligations of any other Purchaser, and no Purchaser shall be responsible in any
way for the performance or non-performance of the obligations of any other
Purchaser under any Transaction Document.  Nothing contained herein or
in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, 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.  Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents,
and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose.  Each Purchaser
has been represented by its own separate legal counsel in their review and
negotiation of the Transaction Documents.  The Company has elected to
provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to
do so by the Purchasers.

     

    5.17 Further
Assurances.

     

    (a)
Subject to the terms and conditions of this Agreement, each Purchaser and the
Company will use commercially reasonable efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary under
applicable laws and regulations to consummate the transactions contemplated by
this Agreement, including Purchasers’ legal rights to the PSC
Interest.  Purchasers and the Company agree to execute
and deliver such other documents, certificates, agreements and other
writings (including any financing statement filings requested by Purchasers) and
to take such other actions as may be reasonably necessary in order to consummate
or implement expeditiously the transactions contemplated by this
Agreement.

     

    (b)
Purchasers and the Company shall execute and deliver such additional documents,
certificates and instruments, and to perform such additional acts, as may be
reasonably requested and necessary or appropriate to carry out and effectuate
all of the provisions of this Agreement and to consummate all of the
transactions contemplated by this Agreement.

     

    (c)
Purchasers and the Company shall cooperate and provide assistance as reasonably
requested by the other respective party in connection with any litigation,
arbitration or other proceeding (whether threatened, existing, initiated, or
contemplated prior to, on or after the date hereof) to which any party hereto or
any of its officers, directors, shareholders, agents or employees is or may
become a party or is or may become otherwise directly or indirectly affected or
as to which any such Persons have a direct or indirect interests, in each case
relating to this Agreement or the transactions described herein.

     

    5.18 Construction.
The parties agree that each of them and/or their respective counsel has reviewed
and had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto.

    (Signature
Pages Follow)

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

    

    
      	
            
	
              MANAS
      PETROLEUM CORPORATION.

               

               

            	
              Address
      for Notice:

            
	
              By:__________________________________________

                   Name:

               

                  Title:

               

               

            	
              ______________________

               

              ______________________

               

              ______________________

               

              Facsimile:
      _____________

               

              Attention:
      _____________

            
	
               

              With
      a copy to (which shall not constitute notice):

               

               

               

               

               

               

            	 
      

    

    
    

    
      	
              MANAS
      PETROLEUM CORPORATION.

               

               

            	
              Address
      for Notice:

            
	
              By:__________________________________________

                   Name:

               

                  Title:

               

               

            	
              ______________________

               

              ______________________

               

              ______________________

               

              Facsimile:
      _____________

               

              Attention:
      _____________

            
	
               

              With
      a copy to (which shall not constitute notice):

               

               

               

               

               

               

            	 
      

    

    
    

    

    

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

    SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    PURCHASER
SIGNATURE PAGES TO MANAS PETROLEUM CORPORATION SECURITIES PURCHASE
AGREEMENT

    

    IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

    Name of Purchaser: 

    Signature of Authorized Signatory of
Purchaser: __________________________________

    Name of
Authorized Signatory:
____________________________________________________

    Title of
Authorized Signatory:
_____________________________________________________

    Email
Address of Purchaser:
________________________________________________

    Fax
Number of Purchaser:
________________________________________________

    Address
for Notice of Purchaser:

    

    
      

    

    Address
for Delivery of Securities for Purchaser (if not same as address for
notice):

    

     

     

    

    

    

    

    Subscription Amount:USD
$______

    

    Units:
____________

    

    Shares:
____________

    

    Warrant
Shares: _______

    

    EIN
Number:  __________

    

    

    [SIGNATURE
PAGES CONTINUE]

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    PURCHASER
SIGNATURE PAGES TO MANAS PETROLEUM CORPORATION SECURITIES PURCHASE
AGREEMENT

    

    IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement
to be duly executed by their respective authorized signatories as of the date
first indicated above.

    Name of
Purchaser: 

    Signature of Authorized Signatory of
Purchaser: __________________________________

    Name of
Authorized Signatory: _________________________________________

    Title of
Authorized Signatory: _______________________________________

    Email
Address of Purchaser:
________________________________________________

    Fax
Number of Purchaser:
________________________________________________

    Address
for Notice of Purchaser:

    

    
      

    

    

    

    Address
for Delivery of Securities for Purchaser (if not same as address for
notice):

    

    
      

    

    

    

    Subscription Amount:USD
$______

    

    Units:
_________

    

    Shares:
_____________

    

    Warrant
Shares: ____________

    

    EIN
Number:  _________________________

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
A FORM OF WARRANT

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

    COMMON
STOCK PURCHASE WARRANT

    MANAS
PETROLEUM CORPORATION

     

    Warrant
Shares: _________Initial Exercise Date: September
____,  2008

    

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value
received, _________, an Illinois Trust (the “Holder”) is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, at any time on or after the date hereof (the “Initial Exercise Date”)
and on or prior to the close of business on September 1, 2010 (the “Termination
Date”) but not thereafter, to subscribe for and purchase from Manas Petroleum
Corporation, a Nevada corporation (the “Company”), up to 2,000,000 shares (the
“Warrant Shares”) of common stock, par value $.001 per share (the “Common
Stock”), of the Company.  The purchase price of one share of Common
Stock under this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).

     

    Section
1. Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement, dated September 03, 2008 (the
“Purchase Agreement”), by and among the Company and the purchasers signatory
thereto.

     

    Section
2. Exercise.

     

    a) Exercise of
Warrant.  Exercise of the purchase rights represented by this Warrant
may be made, in whole or in part, at any time or times on or after the Initial
Exercise Date and on or before the Termination Date by delivery to the Company
of a duly executed facsimile copy of the Notice of Exercise Form
annexed  hereto (or such other office or agency of the Company as it
may designate by notice in writing to the registered Holder at the address of
such Holder appearing on the books of the Company); and, within 3 Trading Days
of the date said Notice of Exercise is delivered to the Company, the Company
shall have received  payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    drawn on
a United States bank reasonably acceptable to the
Company.  Notwithstanding anything herein to the contrary, the Holder
shall not be required to physically surrender this Warrant to the Company until
the Holder has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall surrender
this Warrant to the Company for cancellation within 3 Trading Days of the date
the final Notice of Exercise is delivered to the Company.  Partial
exercises of this Warrant resulting in purchases of a portion of the total
number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount
equal to the applicable number of Warrant Shares purchased.  The
Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases.  The Company shall
deliver any objection to any Notice of Exercise Form within 1 Business Day of
receipt of such notice.  The Holder and any assignee, by acceptance of
this Warrant, acknowledge and agree that, by reason of the provisions of this
paragraph, following the purchase of a portion of the Warrant Shares hereunder,
the number of Warrant Shares available for purchase hereunder at any given time
may be less than the amount stated on the face hereof.

     

    b) Exercise
Price.  The exercise price per share of the Common Stock under this
Warrant shall be USD$0.95 subject to adjustment
hereunder (the “Exercise Price”).

     

    c) Mechanics of
Exercise.

     

    (i) Authorization
of Warrant Shares.  The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue)

     

    (ii) Delivery of
Certificates Upon Exercise.  Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the Holder’s prime broker with the Depository
Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if
the Company is a participant in such system, and otherwise by physical delivery
to the address specified by the Holder in the Notice of Exercise within 3
Trading Days from the delivery to the Company of the Notice of Exercise Form,
surrender of this Warrant (if required) and payment of the aggregate Exercise
Price as set forth above (“Warrant Share Delivery Date”).  This
Warrant shall be deemed to have been exercised on the later of the date the
Company receives a)  payment of the Exercise Price and b) the notice
of exercise.  The Warrant Shares shall be deemed to have been issued,
and Holder or any other person so designated to be named therein shall be deemed
to have become a holder of record of such shares for all purposes, as of the
date the Warrant has been exercised by payment to the Company of the Exercise
Price and all taxes required to be paid by the Holder, if any, prior to the
issuance of such shares, have been paid. If the Company fails for any reason to
deliver to the Holder certificates evidencing the Warrant Shares subject to a
Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to
such Holder, in cash, as liquidated damages and not as a penalty, for each
$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the
Common Stock on the date of the applicable Notice of Exercise), $10
per

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Trading
Day (increasing to $20 per Trading Day on the 5th Trading Day after such
liquidated damages begin to accrue) for each Trading Day after such Warrant
Share Delivery Date until such certificates are delivered.

     

    (iii) Delivery of
New Warrants Upon Exercise.  If this Warrant shall have been exercised
in part, the Company shall, at the request of a Holder and upon surrender of
this Warrant, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    (iv) Rescission
Rights.  If the Company fails to cause its transfer agent to transmit
to the Holder a certificate or certificates representing the Warrant Shares
pursuant to Section 2(c)(ii) by the Warrant Share Delivery Date, then the Holder
will have the right to rescind such exercise.

     

    (v) Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon
Exercise.  In addition to any other rights available to the Holder, if
the Company fails to cause its transfer agent to transmit to the Holder a
certificate or certificates representing the Warrant Shares in accordance with
Section 2(c)(ii) pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker to purchase
(in an open market transaction or otherwise) or the Holder’s brokerage firm
otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale
by the Holder of the Warrant Shares which the Holder anticipated receiving upon
such exercise (a “Buy-In”), then the Company shall (1) pay in cash to the Holder
the amount by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the
amount obtained by multiplying (A) the number of Warrant Shares that the Company
was required to deliver to the Holder in connection with the exercise at issue
times (B) the price at which the sell order giving rise to such purchase
obligation was executed, and (2) at the option of the Holder, either reinstate
the portion of the Warrant and equivalent number of Warrant Shares for which
such exercise was not honored or deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company timely complied with
its exercise and delivery obligations hereunder.  For example, if the
Holder purchases Common Stock having a total purchase price of $11,000 to cover
a Buy-In with respect to an attempted exercise of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (1) of the immediately preceding sentence the Company shall be required
to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon
request of the Company, evidence of the amount of such loss.  Nothing
herein shall limit a Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Warrant as required pursuant to the terms hereof.

     

    (vi) No Fractional
Shares or Scrip.  No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this
Warrant.  As to any fraction of a share which Holder would otherwise
be entitled to purchase upon such exercise, the Company shall at

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    its
election, either pay a cash adjustment in respect of such final fraction in an
amount equal to such fraction multiplied by the Exercise Price or round up to
the next whole share.

     

    (vii) Charges,
Taxes and Expenses.  Issuance of certificates for Warrant Shares shall
be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the event certificates for Warrant Shares
are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto.

     

    (viii) Closing of
Books.  The Company will not close its stockholder books or records in
any manner which prevents the timely exercise of this Warrant, pursuant to the
terms hereof.

     

    Section
3. Certain
Adjustments.

     

    a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company upon
exercise of this Warrant), (B) subdivides outstanding shares of Common Stock
into a larger number of shares, (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or
(D) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding immediately before
such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event and the number of shares issuable
upon exercise of this Warrant shall be proportionately adjusted.  Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

     

    b) Pro Rata
Distributions.  If the Company, at any time prior to the Termination
Date, shall distribute to all holders of Common Stock (and not to Holders of the
Warrants) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than the Common Stock (which shall be subject to Section 3(a)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise Price
in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness so distributed applicable to one

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    outstanding
share of the Common Stock as determined by the Board of Directors in good
faith.  In either case the adjustments shall be described in a
statement provided to the Holder of the portion of assets or evidences of
indebtedness so distributed or such subscription rights applicable to one share
of Common Stock.  Such adjustment shall be made whenever any such
distribution is made and shall become effective immediately after the record
date mentioned above.

     

    c) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the Company
effects any merger or consolidation of the Company with or into another Person,
(B) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (each “Fundamental Transaction”), then, upon any
subsequent exercise of this Warrant, the Holder shall have the right to receive,
for each Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental Transaction, the number
of shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such merger,
consolidation, disposition of assets, tender offer or exchange offer,
reclassification or share exchange by a Holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such event. For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction.  To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder’s right to exercise such warrant
into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 3(e)
and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. Notwithstanding anything to the contrary, in the event of a
Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3
transaction” as defined in Rule 13e-3 under the Securities Exchange Act of 1934,
as amended, or (3) a Fundamental Transaction involving a Person or entity not
traded on a national securities exchange, the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market, the OTCBB, the Company or any
successor entity shall pay at the Holder’s option, exercisable at any time
concurrently with or within 30 days after the consummation of the Fundamental
Transaction, an amount of cash equal to the value of this Warrant as determined
in accordance with the Black-Scholes option pricing formula using
an

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    expected
volatility equal to the 100 day historical price volatility obtained from the
HVT function on Bloomberg L.P. as of the trading day immediately prior to the
public announcement of the Fundamental Transaction.

     

    d) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

     

    e) Notice to
Holder.

     

    (i) Adjustment to
Exercise Price. Whenever the Exercise Price is adjusted pursuant to any
provision of this Section 3, the Company shall promptly mail to the Holder a
notice setting forth the Exercise Price after such adjustment and setting forth
a brief statement of the facts requiring such adjustment. If the Company enters
into a Variable Rate Transaction (as defined in the Purchase Agreement), despite
the prohibition thereon in the Purchase Agreement, the Company shall be deemed
to have issued Common Stock or Common Stock Equivalents at the lowest possible
conversion or exercise price at which such securities may be converted or
exercised.

     

    (ii) Notice to
Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock; (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property, or any Fundamental Transaction; (E) the Company
shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Company; then, in each case, the Company shall cause to
be mailed to the Holder at its last address as it shall appear upon the Warrant
Register of the Company, at least 15 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice if Holder is
allowed to determine in its discretion that the Company must deem the Warrant
exercised immediately prior to and contingent upon the occurrence of the events
described in (A), (B), (C), (D) or (E) above.  The Holder is entitled
to exercise this

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Warrant
during the 20-day period commencing on the date of such notice of the record or
effective date of the event triggering such notice.

     

    Section
4. Transfer of
Warrant.

     

    a) Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase
Agreement, this Warrant and all rights hereunder (including, without limitation,
any registration rights) are transferable, in whole or in part, upon surrender
of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer.  Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees and in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled.  A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

     

    b) Warrant
Register. The Company shall register this Warrant, upon records to be maintained
by the Company for that purpose (the “Warrant Register”), in the name of the
record Holder hereof from time to time.  The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the
purpose of any exercise hereof or any distribution to the Holder, and for all
other purposes, absent actual notice to the contrary reasonably satisfactory to
the Company.

     

    c) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer, that (i) the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws, and (ii) the Holder or
transferee execute and deliver to the Company an investment letter in form and
substance acceptable to the Company, and (iii) the transferee be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
promulgated under the Securities Act or a “qualified institutional buyer” as
defined in Rule 144A(a) promulgated under the Securities Act.

     

    Section
5. Miscellaneous.

     

    a) No Rights as
Shareholder Until Exercise.  This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company prior to
the exercise hereof as set forth in Section 2(e)(ii).

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    b) Loss, Theft,
Destruction or Mutilation of Warrant. The Company covenants that upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     

    c) Saturdays,
Sundays, Holidays, etc.  If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding Business Day.

     

    d) Authorized
Shares.

     

    The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant, including as the Warrant is adjusted
pursuant to Section 3 above  The Company further covenants that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to execute and issue the
necessary certificates for the Warrant Shares upon the exercise of the purchase
rights under this Warrant.  The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as
provided herein without violation of any applicable law or regulation, or of any
requirements of the Trading Market upon which the Common Stock may be
listed.

    

    Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation 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 of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment.  Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.

     

    Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    e) Jurisdiction.
All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the
provisions of the Purchase Agreement.

     

    f) Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

     

    g) Nonwaiver and
Expenses.  No course of dealing or any delay or failure to exercise
any right hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

     

    h) Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement.

     

    i) Limitation of
Liability.  No provision hereof, in the absence of any affirmative
action by Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of Holder, shall give rise to any
liability of Holder for the purchase price of any Common Stock or as a
stockholder of the Company, whether such liability is asserted by the Company or
by creditors of the Company.

     

    j) Remedies.  Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.

     

    k) Successors
and Assigns.  Subject to applicable securities laws, this Warrant and
the rights and obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors of the Company and the successors and permitted
assigns of Holder.  The provisions of this Warrant are intended to be
for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.

     

    l) Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

     

    m) Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.

     

    n) Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

    ********************

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

    
      	
            
	
              MANAS
      PETROLEUM CORPORATION.

               

               

            
	
              By:__________________________________________

              Name:

              Title:

               

            

    

    
    

    
      	
              MANAS
      PETROLEUM CORPORATION.

               

               

            
	
              By:__________________________________________

              Name:

              Title:

               

            

    

    
    

    

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    NOTICE OF EXERCISE TO: MANAS
PETROLEUM CORPORATION (1) The
undersigned hereby elects to purchase _____________Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any. (2) Payment shall take the form of (check
applicable box): [  ] in lawful money of the United States; or [ ] [if
permitted] the cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 2(c), to exercise this
Warrant with respect to the maximum number of Warrant Shares purchasable
pursuant to the cashless exercise procedure set forth in subsection 2(c). (3)
Please issue a certificate or certificates representing said Warrant Shares in
the name of the undersigned or in such other name as is specified below:
_______________________________  The Warrant Shares shall be
delivered to the following DWAC Account Number or by physical delivery of a
certificate to: _______________________________  _______________________________  _______________________________
(4)  Accredited Investor.  The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the Securities Act of
1933, as amended. [SIGNATURE OF HOLDER]  Name of Investing Entity:
____________________________________________________________________ Signature
of Authorized Signatory of Investing Entity:
______________________________________________ Name of Authorized Signatory:
___________________________________________________________________ Title of
Authorized Signatory:
___________________________________________________________________

    Date:
_______________________________________________________________

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    ASSIGNMENT FORM
(To assign the foregoing
warrant, execute this form and supply required information.  Do not
use this form to exercise the warrant.)  FOR VALUE RECEIVED,
[______] all of or [_________] shares of the foregoing Warrant and all rights
evidenced thereby are hereby assigned to _______________________________________________
whose address is
_______________________________________________________________.
_______________________________________________________________
Dated:  ______________, _______ Holder’s Signature:
_____________________________ Holder’s Address:
_____________________________  _____________________________ Signature
Guaranteed:  ___________________________________________
NOTE:  The signature to this Assignment Form must correspond with the
name as it appears on the face of the Warrant, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant. 

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT B FORM OF DOMESTIC PURCHASER
LEGEND 

    

    THIS
SECURITY HAS NOT BEEN  REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN
WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT C FORM OF FOREIGN PURCHASER
LEGEND   

    THE SECURITIES EVIDENCED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR ANY STATE OR OTHER SECURITIES LAWS, AND MAY NOT BE
OFFERED, REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, WITHIN THE UNITED
STATES OR TO OR FOR THE ACCOUNT OF U.S. PERSONS UNLESS THE TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT. THE
HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES THAT IT WILL NOT OFFER,
REOFFER, SELL, ASSIGN, TRANSFER, PLEDGE, ENCUMBER OR OTHERWISE DISPOSE OF OR
DISTRIBUTE DIRECTLY OR INDIRECTLY THESE SECURITIES IN THE UNITED STATES, ITS
TERRITORIES, POSSESSIONS, OR AREAS SUBJECT TO ITS JURISDICTION, OR TO OR FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON EXCEPT (A) TO THE COMPANY OR A SUBSIDIARY OF
THE COMPANY, (B) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT, (C) IN COMPLIANCE WITH AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OR (D) IN ACCORDANCE WITH THE PROVISIONS
OF REGULATION S, INCLUDING RULES 904 AND 905 THEREOF. THE HOLDER OF THIS
SECURITY BY ITS ACCEPTANCE HEREOF FURTHER AGREES THAT ANY HEDGING TRANSACTIONS
INVOLVING THE SECURITIES WILL BE CONDUCTED IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT AND AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT THE COMPANY, THE TRANSFER AGENT, AND THE REGISTRAR SHALL HAVE THE
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER, IN EACH OF THE FOREGOING CASES,
TO REQUIRE DELIVERY OF A CERTIFICATION OF TRANSFER AND OPINION OF COUNSEL IN
FORM SATISFACTORY TO THEM. AS USED HEREIN, THE TERMS “UNITED STATES” AND “U.S.
PERSON” HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT D EVIDENCE
OF MONGOLIAN CONCESSION GRANT [without official Security Council approval]

    [ATTACHED
HERETO]   FROM  FAX NO.
:70110296  Sep.
02 2008 04:49AM Pi  Dear Alexander Becker,  As a
result of our joint efforts, the Government of Mongolia is about to confer
'MANAS Petroleum' Corp. and 'DWM Petroleum' Company, in the near future, a
lawful license, which will pennit us to conduct geological
explorations at the territory of Mongolia.  As you are well aware of,
'MANAS Petroleum' Corp. and 'DWM Petroleum' Company have gone through tough
challenges and obstacles to win the bid, which lasted for a long time to
select foreign and domestic companies and businesses to conduct
geological explorations at Tsagaan Els-XllI and Zuunbayan-XIV
blocks.  The Government of Mongolia, its ministries, and agencies have
strongly emphasized the efforts and interest of 'MANAS Petroleum' Corp. and 'DWM
Petroleum' Company to conduct goological explorations at the
territory of Mongolia and to make investment to contribute to the development of
the geological and mining
sector of the country.  Though the vast territory of Mongolia has
barely been explored geologically, the geologists of the country have discovered
more than 700
deposits of over 40
lypes ofmineraJs resources so far and more deposits are expected to be
discovered.  I
have been continuously making efforts to
provide the Government of Mongolia, its ministries and agencies, other
competent authorities, and the general public of the country with more accurate infonnation
regarding the business operations of 'MANAS Petroleum' Corp. and 'DWM Petroleum'
Company and I will continue to do so.  1imagine that you, Mr. Heinz 1.
Scholz, will
establish a subsidiary company in Mongolia soon after the Government of
Mongolia confers the license to conduct geological explorations at Tsagaan
Els-XIII and Zuunbayan-XIV blocks to 'MANAS Petroleum' Corp. and 'DWM Petroleum'
Company.  During our discussion earlier, you mentioned about your
interest to cooperate with me.
Therefore, 1
hope that you will
trust me and appoint me as the person responsible for the operation ofthe
subsidiary company.  I
am
fully affinnative that we can successfully conduct explorations at
Tsagaan Els-Xm and Zuunbayan-XIV blocks and discover enough riches and resources
to proceed into oil extraction and refining processesthrough our combined efforts and hard
work.  

    Sincerely
yours,  

    T.Baljinnyam  

    Advisor,
'DWM
Petroleum' Company

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT E COMPANY
& SUBSIDIARY LIENS & ENCUMBRANCES EXCEPTIONS  See Schedule 3.1
(m)  

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    EXHIBIT
F

    5.19 MATERIAL CHANGES DISCLOSURE
STATEMENT

      See Schedules 3.1
(g) and 3.1 (i)

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