Document:

ex10-1.htm

    
      

    

    Exhibit
10.1

    AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

    

    This
Agreement is made as of 27 January 2009.

     

    Between

     

    
      	
              (1)  

            	
              Pacific Asia
      Petroleum, Inc., a Delaware company headquartered at 250
      East Hartsdale Ave., Suite 47, Hartsdale, New York 10530,
      U.S.A. (the
      “Employer”);

            

    

    

    And

    

    (2) Richard Grigg, an
individual of Unit 10 E, 10/F, Kaiser Est. 1, 41 Man Yue Street, Hung Hom,
Kowloon, Hong Kong (the
“Employee”).

    

    

    Whereas
it is agreed as follows:

    

    
      	
              A.  

            	
              AMENDMENT AND
      RESTATEMENT OF PRIOR EMPLOYMENT
  AGREEMENT.

            

    

    
 

    This
Amended and Restated Employment Agreement (this “Agreement”) amends
and restates in full that certain Employment Agreement, dated August 1, 2008,
entered by and between the Employer and the Employee.

    

    
      	
                 
      1.

            	
              Appointment

            
	 
      	 
      
	
              1.1

            	
              With
      this Agreement, the Employer shall employ the Employee and the Employee
      shall serve the Employer in the capacity of Managing Director of the
      Employer on the terms and conditions hereinafter
      appearing.  

            

    

    

    
      	
                
      1.2  

            	
              The
      Employee’s term of employment under this Agreement (the “Term”) shall
      commence on the date of this Agreement and shall continue for a period
      ending on the third anniversary of such date, unless sooner terminated in
      accordance with the terms of Section
8.1.

            

    

    

    
      	
                  2.  

            	
              Working
      Location

            

    

    

    
      	
                   2.1

            	
              The
      Employee shall provide his services to the Employer based out of the
      Employer’s Beijing offices located at Yi, No. 118, Jian Guo Road, Suite
      1809, Jing Hui Da Sha (The Exchange Building), Chao Yang District,
      Beijing, 100022, PRC, and such other locations where the Employer or its
      subsidiaries or affiliates may conduct its operations.  The
      Employee further agrees that, in connection with the services he is
      required to provide under this Agreement, that he will be required to
      travel frequently at the request of the Employer.  This
      Agreement shall govern the terms of the employment of the Employee
      wherever he provides the services he is required to provide under this
      Agreement.

            

    

    

    
      	
                  
      3. 

            	
              Power and
      Duties

            

    

    

    
      	
              3.1

            	
              The
      Employer agrees to employ the Employee as the Managing Director of the
      Employer.  In his position as Managing Director, the Employee
      will have responsibility for managing the Employer’s activities as
      appropriate and as required under the guidance of the Employer’s Chief
      Executive Officer, and he shall have such duties, responsibilities and
      authority as shall be consistent with that position. The Employee shall
      report to the Chief Executive Officer of the Employer, and follow his
      instructions and also instructions from the Employer’s Board of Directors.
      During the continuance of his employment hereunder, the Employee shall
      devote his full time, attention, knowledge and skills, and to the best of
      his ability, in furtherance of the business of the Employer, and shall
      faithfully and diligently perform such duties and exercise such powers as
      may from time to time be assigned to or vested in him by the
      Employer.

            

    

     

     

    
      
        
        

      

      
        Page 1
of  7

        
          

        

      

      
        
        

      

    

    
 

    
      	
              3.2

            	
              The
      Employee shall devote his full-time services exclusively for the Employer
      unless otherwise agreed in writing, and shall not during the continuance
      of his employment, either directly or indirectly, and whether as
      principal, servant, agent or otherwise be engaged, concerned or interested
      in any other commercial work unless such other commercial work shall have
      been specifically disclosed to, and approved in writing by the Employer,
      and a written arrangement concerning such other commercial activity has
      been arrived at with the Chief Executive
  Officer.

            

    

    

    
      	
              3.3

            	
              The
      Employee agrees not to bring with him to the Employer, or use or disclose
      to any person associated with the Employer, any confidential or
      proprietary information belonging to any former employer or other person
      or entity with respect to which the Employee owes an obligation of
      confidentiality under any agreement or otherwise.  The Employer
      does not need and will not use such information and the Employer will
      assist the Employee in any way possible to preserve and protect the
      confidentiality of proprietary information belonging to third
      parties.

            

    

    

    
      	
              3.4

            	
              The
      Employee shall hold and keep confidential for the benefit of the Employer
      all secret or confidential information, files, documents and other media
      in which confidential information is contained, know­ledge or data
      relating to the Employer, or any of its subsidiaries or affi­liated
      companies, and their respective businesses, which shall have been obtained
      by the Employee during his employment by, or consulting engagement with,
      the Employer (“Confidential
      Information”). Confidential Information does not include
      information that is already public knowledge at the time of disclosure
      (other than by acts by the Employee or his representatives in violation of
      this Agree­ment) or that is provided to the Employee by a third party
      without an obligation with the Employer to maintain the confidentiality of
      such information.  After termination of the Employee's
      employment with the Employer, he shall not, without the prior written
      consent of the Employer, or as may otherwise be required by law or legal
      process, communicate or divulge any Confidential Information to anyone
      other than the Employer and those designated by it.  The
      Employee shall not either during or after termination of his employment
      hereunder use to the detriment or prejudice of the Employer or divulge or
      communicate to any person or persons any trade secrets of the Employer or
      any other Confidential Information which he may receive or obtain in
      relation to the affairs of the
Employer.

            

    

    

    
      	
              3.5

            	
              The
      Employee expressly acknowledges that any industrial and intellectual
      property rights in the works invented, created or developed pursuant to
      the performance of his duties at the request of the Employer are invented,
      created or developed on behalf and for the exclusive benefit of the
      Employer and that all industrial and intellectual property rights in such
      works are therefore the sole and exclusive property of the
      Employer.  The Employee hereby assigns to the Employer
      absolutely all such industrial and intellectual property rights in such
      works together will all modifications and amendments thereto which have
      been or will at any time in the future invested, created or
      developed.

            

    

    

    
      	
              3.6

            	
              The
      Employee undertakes at the request and expense of the Employer to do all
      acts and execute all documents which may be necessary to confirm the title
      of the Employer to the industrial and intellectual property rights in the
      work as provided in clause 3.5 above whether in connection with
      registration of such title or
otherwise.

            

    

     

     

    
      
        
        

      

      
        Page 2
of  7

        
          

        

      

      
        
        

      

    

    

    
      	
                  
      4. 

            	
              Working
      Hours

            

    

    

    
      	
              4.1

            	
              The
      Employee shall devote himself exclusively and diligently to the business
      and interests of the Employer at all times during usual business hours and
      during such other times as the Employer may reasonably require except in
      case of incapacity through illness or accident or any other reasonable
      cause.

            

    

    

    
      	
              4.2

            	
              In
      general terms the Employee will allocate his work time as
      follows:

            

    

    

    
      	
              a)

            	
              10%
      undertaking his duties and responsibilities as the Chief Representative of
      Pacific Asia Petroleum Ltd’s Beijing Representative Office in
      China.

            

    

    

    
      	
              b)

            	
              55%
      undertaking his duties and responsibilities as the Responsible Person
      related to the various Production Sharing Contracts entered into by
      Pacific Asia Petroleum Ltd within China.

            
	
              c)

            	
              35%
      undertaking his duties and responsibilities as required to manage the
      Chinese interests of Inner Mongolia Petroleum Company Ltd including the
      Inner Mongolia Sunrise Petroleum
JV.

            

    

    

    
      	
              4.3

            	
              The
      Employee shall be entitled to all holidays he is entitled under the
      applicable laws and regulations and as established by the
      Employer.

            

    

    

    
      	
                  
      5. 

            	
              Remuneration

            

    

     

        
As remuneration for his services hereunder, the Employee shall be entitled to
receive for so long as his employment hereunder shall continue:

    

    
      	
              5.1

            	
              a
      fixed salary at the rate of nine hundred ninety thousand RMB (990,000 RMB)
      per full year of employment, such salary to be payable pro rata monthly in
      arrears in accordance with the Employer’s normal payroll policies, and to
      be deposited into such bank account as specified by the Employee in
      writing (“Base
      Salary”). Such Base Salary will be paid to the Employee without
      deduction of tax (except as provided in clause 9.3 or where tax
      regulations require the Employer to withhold tax and pay it to relevant
      tax authorities on behalf of the Employee) or other deductions and in such
      currency as the Employee may request from time to time based on the
      average exchange rate for the month for which the salary is
      due.

            

    

    

    
      	
              5.2

            	
               The
      Employee shall be reimbursed a maximum of 30,000 RMB per month for
      accommodation expenses in Beijing, China upon the production of
      appropriate receipts and documentation
thereof.

            

    

    

    
      	
              5.3

            	
              The
      Employee shall be entitled, as a performance incentive and at the sole
      discretion of the Employer’s Board of Directors, to participate in the
      Employer’s 2007 Stock Plan.

            

    

    

    
      	
              5.4

            	
              The
      Employer agrees that the Employee shall be entitled to be reimbursed
      out-of-pocket expenses exclusively incurred in the performance of this
      Agreement in accordance with the Employer’s expense policies, and provided
      further that the Employee shall fly in business class travel for all
      international flights, except flights between Beijing and Hong
      Kong.

            
	 	 
	            
      5.5	
              The
      Employee shall be entitled to reimbursement for all of his taxi and
      similar local transportation costs.

            

    

     

     

    
      
        
        

      

      
        Page 3
of  7

        
          

        

      

      
        
        

      

    

    
 

    
      	
                  
      6. 

            	
               Annual
      Leave /Vacation

            

    

    

    
      	
              6.1

            	
              The
      Employee shall be entitled hereunder to a paid annual leave totaling 30
      working days during each calendar year, to be taken from time to time as
      mutually agreed with the
Employer.  

            

    

    

    
      	
                  
      6.2

            	
                 
      All annual leave must be taken within 12 months following the calendar
      year in which it is earned, otherwise, it shall be forfeited unless
      mutually agreed otherwise between the Employer and the
      Employee.

               

            
	
                                  
      6.3

            	
                 The
      outstanding annual leave cannot be used as deduction of the termination
      notice period.

               

            
	 	 
	
                   
      7. 

            	
               Sick
  Leave

            

    

    

    
      	
                
      7.1

            	
              The
      Employer currently has no sick leave policy, however the Employee shall be
      entitled to a minimum paid sick leave of 10 days per calendar year or such
      greater number of days as maybe mutually agreed between the Employer and
      the Employee from time to time

            

    

    

    
      	
               
      7.2

            	
              Any
      untaken sick leave will accrue from year to
  year.

            

    

    

    
      	
                8.

            	
                Termination

            

    

    

    
      	
               
      8.1

            	
              Termination
      and Payments Upon Termination.

            

    

    

    
      	
                                 (a)

            	
                Employee
      or the Employer may terminate this Agreement for any reason or for no
      reason at all at any time, with or without Cause (as defined below),
      during or after the Term, by providing the other party with notice of
      termination as provided in Section 8.1(c).  The Employer
      shall pay Employee his Base Salary and all other amounts, in each such
      case, actually earned, accrued or owing as of the date of termination but
      not yet paid to Employee through the date of termination; provided that if
      the Employee is terminated by the Employer without Cause (as defined
      below) after the date of this Agreement, then, in addition to the payments
      described in this Section 8.1(a), the Employer shall pay Employee a
      lump sum payment in an amount equal to fifty percent (50%) of
      Employee’s then-current annual Base Salary at the time he is terminated.
      The payment of the lump sum amount under this Section 8.1(a) shall be
      made on the earlier of the date ending on the expiration of thirty days
      following the earlier of the date of termination of Employee’s employment
      or the death of the Employee; provided that notwithstanding the foregoing,
      to the extent any payment under this Section 8.1(a) is “nonqualified
      deferred compensation” and/or the Employee is considered a “key employee”
      of the Employer within the meaning of Section 409A of the Internal
      Revenue Code and the Treasury Regulations promulgated thereunder, then
      such payment shall be made on the date ending on the expiration of the
      sixth month following the earlier of the date of termination of Employee’s
      employment or the Employee’s death.

            

    

    

    
      	
              (b) 

            	
              For
      purposes of this Agreement, “Cause” shall mean (i) Employee’s gross
      and willful misappropriation or theft of the Employer’s or its
      subsidiary’s or affiliate’s funds or property, (ii) Employee’s
      commission of any fraud, misappropriation, embezzlement or similar act,
      whether or not a punishable criminal offense, or Employee’s conviction of
      or entering of a plea of nolo contendere to a charge of any felony or
      crime involving dishonesty or moral turpitude, (iii) Employee’s
      engagement in any willful conduct that is injurious to the Employer or its
      subsidiaries or affiliates, (iv) Employee’s material breach of this
      Agreement or failure to perform any of his material duties owed to the
      Employer or its subsidiaries or affiliates, or (v) Employee’s
      commission of any act involving willful malfeasance or gross negligence or
      Employee’s failure to act involving material
  nonfeasance.

            

    

     

    
      	
              (c) 

            	
               Any
      termination of this Agreement by the Employer or by Employee shall be
      communicated in writing to the other party before the date on which such
      termination is proposed to take effect and, unless otherwise agreed to by
      the Employer and the Employee, shall be effective sixty (60) days
      after such notice, except that there shall be no 60 day notice period in
      the event of Employee’s termination for “Cause” by the
      Employer

            
	 	 
	                     (d)	 From
      and after the termination of this Agreement by the Employer or by the
      Employee, the Employee agrees to do or cause to be done all other things
      and acts, to execute, deliver, file and perform or cause to be executed,
      delivered, filed and performed all other instruments, documents and
      certificates as may be reasonably requested by the Employer or are
      necessary, proper or advisable in order to effect the removal, transition,
      substitution or modification of the Employee as an officer, agent,
      affiliate, director, manager or authorized representative of the Employer
      or any other positions that the Employee holds with the Employer or its
      subsidiaries or affiliates providing the cost of doing such things is paid
      for by the Employer.

    

     

    
      	
              8.2

            	
              Termination
      of the Employee’s employment and appointment hereunder shall be without
      prejudice to any rights which have accrued to the Employer at the time of
      termination pursuant to Sections 3.4 through 3.6, Section 14 and this
      Section 8 (which shall remain in full force and
  effect).

            

    

     

     

    
      
        
        

      

      
        Page 4 of
 7

        
          

        

      

      
        
        

      

    

    
 

    
      	            
      9. 	
               Miscellaneous

            
	 
      	 
      

    

    

    
      	
              9.1

            	
              During
      the continuance of his employment hereunder, the Employee shall not accept
      or solicit any commission or gift of any kind from contractors, suppliers
      or clients of the Employer.

            

    

    

    
      	
              9.2

            	
              The
      Employee shall indemnify and hold the Employer harmless from any
      actions,    claims or assessments of any nature
      relating to any of his/her business or personal affairs unrelated to his
      employment hereunder.

            

    

    

    
      	
              9.3

            	
              The
      Employee is responsible for any personal tax obligations arising in China
      or elsewhere during the continuance of his employment. Where requested by
      the Employee, the Employer will make agreed deductions of tax and pay it
      on the Employees behalf to the relevant Chinese tax authorities and
      provide suitable certificates to substantiate such
    payments.

            

    

    

    
      	
              9.4

            	
              This
      Agreement shall not be determined or affected by any change in the
      composition of the Employer and the Employee as long as the Employer shall
      continue in business unless and until terminated as herein
      provided.

            

    

    

    
      	
              9.5

            	
              In
      conformity with the United States Foreign Corrupt Practices Act and the
      Employer’s guidelines related thereto, the Employee represents and
      warrants that he shall not directly or indirectly make an offer, payment,
      promise to pay, or authorize payment, or offer a gift, promise to give, or
      authorize the giving of anything of value for the purpose of influencing
      an act or decision of an official of any government or the United States
      government (including a decision not to act) or inducing such a person to
      use his influence to affect any such governmental act or decision in order
      to assist the Employer, or any subsidiary or affiliate thereof, in
      obtaining, retaining or directing any such
  business.

            

    

    

    
      	           10.  	
                Entire
      Agreement

            

    

    

    
      	
              10.1

            	
              This
      Agreement is intended to be the final, complete, and exclusive statement
      of the terms of Employee’s employment by the Employer.  Except
      for any stock option, restricted stock purchase or confidentiality
      agreements that have been entered, or may be entered into in the future,
      by and between the Employer and the Employee, this Agreement supersedes
      all other prior and contemporaneous agreements and statements pertaining
      in any manner to the employment of Employee and it may not be contradicted
      by evidence of any prior or contemporaneous statements or
      agreements.  To the extent that the practices, policies, or
      procedures of the Employer, now or in the future, apply to Employee and
      are inconsistent with the terms of this Agreement, the provisions of such
      practices, policies or procedures shall control. The Employee and the
      Employer explicitly agree that this is a new employment agreement between
      them, and that all agreements that may have existed between them before
      the employment of, or consulting engagement with, the Employee have been
      terminated and fully satisfied.

            

    

    

    
      	
              10.2

            	
               If
      at any time any provision hereof is or becomes illegal, invalid or
      unenforceable in any respect, neither the legality, validity nor
      enforceability of the remaining provisions hereof shall be in any way
      affected or impaired hereby.

            

    

    

    
      	
              10.3

            	
              This
      Agreement may not be modified or amended except by a written agreement,
      signed by an officer of the Employer and by the
  Employee.

            

    

    

    
      	           11.  	
               Government and
      Arbitration

            

    

    

    
      	
              11.1

            	
              Governing
      Law.  This Agreement shall be governed by the laws of England and
      Wales. If one or more provisions of this Agreement are held to be
      unenforceable under applicable law, the parties agree to renegotiate such
      provision in good faith.  In the event that the parties cannot
      reach a mutually agreeable and enforceable replacement for such provision,
      then (i) such provision shall be excluded from this Agreement,
      (ii) the balance of the Agreement shall be interpreted as if such
      provision were so excluded and (iii) the balance of the Agreement
      shall be enforceable in accordance with its
  terms.

            

    

    

    
      	
              11.2

            	
              Arbitration.   Any
      dispute or claim arising out of or in connection with any provision of
      this Agreement will be finally settled by binding arbitration in London,
      England, in accordance with the rules of the International Chamber of
      Commerce ("ICC") by one arbitrator appointed in accordance with said
      rules.  The arbitrator shall apply English law, without
      reference to rules of conflicts of law or rules of statutory arbitration,
      to the resolution of any dispute.  Judgment on the award
      rendered by the arbitrator may be entered in any court having jurisdiction
      thereof.  Notwithstanding the foregoing, the parties may apply
      to any court of competent jurisdiction for preliminary or interim
      equitable relief, or to compel arbitration in accordance with this
      paragraph, without breach of this arbitration
  provision.

            

    

     

     

    
      
        
        

      

      
        Page 5
of  7

        
          

        

      

      
        
        

      

    

    
 

    
      	
                  12.

            	
               Advice of
      Counsel

               

              EACH
      PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD
      THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS
      READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS
      AGREEMENT.  THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY
      PARTY BY REASON OF THE DRAFTING OR PREPARATION
  HEREOF.

            

    

    

    
      	
                  13.

            	
               Notices 

               

              Any
      notice, request, or other communication required or permitted pursuant to
      this Agreement shall be in writing and shall be deemed duly given when
      received by the party to whom it shall be given or three days after being
      mailed by certified, registered, or express mail, postage prepaid,
      addressed as follows:

            

    

     

    If to
Employer:

    Pacific
Asia Petroleum, Inc.

    250 East
Hartsdale Ave

    Suite
47

    Hartsdale,
New York 10530 USA

    Attention:
Chief Executive Officer

     

    If to
Employee:

    Richard
Grigg

    Unit 10
E, 10/F,

    Kaiser
Est.

    1, 41 Man
Yue Street,

    Hung
Hom,

    Kowloon,

    Hong
Kong

    
      
         

      

      
        Page 6
of  7

        
          

        

      

      
         

      

    

    

        or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.

     

    
      	           
      14.	
              Non-Competition

            

    

        

    
      	
              14.1

            	
              In
      consideration of the Employer’s willingness to enter into this Agreement,
      the Employee agrees that while this Agreement is in effect and for 12
      months after its termination, the Employee will not accept any employment
      or engage in any activity, without the written consent of the Board, if
      the loyal and complete fulfillment of the Employee’s duties in such
      employment would inevitably require him to reveal or utilize Confidential
      Information, as reasonably determined by the
  Board.

            

    

    

    
      	
              14.2

            	
              By
      agreement between the parties at any time the terms of this clause may be
      varied, reviewed or modified so long as any such variation, review or
      modification is in writing and signed by both
  parties.

            

    

    

    

    IN WITNESS WHEREOF this
Agreement has been entered into the day and year first above
written.

    

     
 

    

    
      	
              For
      and On behalf of

            	 
      	 
	
              Pacific Asia Petroleum,
      Inc. 

            	
              /s/
      Frank C. Ingriselli

            	 
	 
      	
              Frank
      C. Ingriselli

            	 
	 
      	 
      	 
	
              Signed
      by

              Richard
      Grigg 

            	
               

              /s/
      Richard Grigg

            	 
	 
      	 
      	 
	 
      	 
      	 

    

    

     

    
      
         

      

      
        Page 7
of  7ex10-2.htm

    
      
        

      

    

    
      Exhibit 10.2

      CONTRACT OF
ENGAGEMENT

       

      

    

    

     

    This
Agreement is made as of 27 January 2009 between:

     

    
      	
              (1)

            	
              KKSH Holdings Ltd.,
      registered in the British Virgin Islands (the “Service
      Provider”); and

            

    

     

    
      	
              (2)

            	
              Pacific Asia Petroleum,
      Inc., a Delaware corporation (the “Company”).

            

    

     

    

     

    Whereas:

     

    
      	
              (A)  

            	
              The
      Company wishes to engage the Service Provider to provide the services of
      the Consultant including as Senior Vice President of the Company, for a
      period of three years. The Service Provider has agreed to make the
      services of the Consultant available to the
  Company.

            

    

     

    
      	
              (B)  

            	
              This
      Agreement identifies the terms on which the Service Provider will provide
      consultancy services to the
Company.

            

    

     

    

     

    
      	
                     
      1  

            	
              Interpretation

            

    

     

    
      	
              1.1  

            	
              In
      this Agreement (and any schedules to
it):

            

    

     

    “Confidential Information”
means any and all confidential and/or proprietary knowledge, data or information
of the Group, any of their portfolio companies, investors, clients and partners,
including but not limited to, information relating to financial matters,
investments (and potential investments), budgets, business plans, marketing
plans, personal matters, business contacts, products, processes, know-how, trade
secrets and other works of authorship excluding in any case any information that
is or becomes (i) available to the public through no fault of Service Provider,
or (ii) independently developed from third parties;

     

    “Consultant” means Richard
Grigg;

     

    “Engagement” means the
engagement of the Service Provider by the Company to provide the services of the
Consultant under this Agreement;

     

     “Group” means the Company, its
ultimate holding company for the time being and the subsidiary companies of the
Company and its holding company for the time being;

     

    “Group Company” means a member
of the Group and “Group
Companies” will be interpreted accordingly;

     

    “RMB” shall mean the Renminbi,
being the currency of the Peoples Republic of China; and

     

    “Services” means the services
set out in Clause 2.1.

     

    
      	
              1.2  

            	
              References
      to any statutory provisions include any modifications or re-enactments of
      those provisions.

            

    

     

    
      	
              1.3  

            	
              Headings
      are for convenience only and do not affect the interpretation of this
      Agreement.

            

    

     

    
      
        
                                                                     

        

         

      

      
        Page 1
of  7

        
          

        

      

      
         

      

    

    
      	
                      
      2  

            	
              The Service
      Provider’s
      Services

            

    

     

    
      	
              2.1  

            	
              The
      Company agrees to engage the Service Provider and the Service Provider
      agrees to make the Consultant available to the Company to perform the
      following services:

            

    

     

    
      	
              (a)  

            	
              to
      perform the duties and undertake the responsibilities of Senior Vice
      President (“SVP”)
      of the Company, including:

            

    

     

    
      	
              (i)  

            	
              to
      report to the Company’s Chief Executive Officer (“CEO”) and the Company’s
      Board of Directors (“Board”) as required by
      the Company;

            

    

     

    
      	
              (ii)  

            	
              for
      carrying out the business of the Company in accordance with the Company’s
      governing documents, and developing and managing business opportunities
      for the Company, but specifically, and for the avoidance of doubt, the
      duties and obligations required by this agreement will not be related to
      any of the Company’s business activities in the Peoples Republic of
      China;

            

    

     

    
      	
              (b)  

            	
              to
      serve as an Executive Officer of the Company in the role of Senior Vice
      President.

            

    

     

    
      	
              2.2  

            	
              The
      Company agrees that it shall grant full authorisation to the Consultant to
      perform the Services in accordance with the scope of authority given to
      the position of SVP pursuant to the Company’s governing
      documents.

            

    

     

    
      	
              2.3  

            	
              Notwithstanding
      anything to the contrary herein, Consultant shall serve as an executive
      officer of the Company at the pleasure of the Company, and may be removed
      at any time and for any or no reason from the position as an Executive
      Officer with the Company or any Group Company.  In the event the
      Company removes Consultant as an Executive Officer, the terms of this
      Agreement shall otherwise remain in full force and effect in accordance
      with its terms.

            

    

     

    

     

    
      	
                       3  

            	
              Terms of
      Engagement

            

    

     

    
      	
              3.1  

            	
              Subject
      to clause 3.2, the Service Provider’s Engagement by the Company will
      commence on  27 January 2009 or such other date
      that is notified to the Service Provider by the Company (the “Start
      Date”).

            

    

     

    
      	
              3.2  

            	
              The
      term of the Engagement will be for 3 years (“Term”)
      commencing on the Start Date and ending three years after the Start Date
      (“End
      Date”) unless terminated earlier in accordance with Clause 10 of
      this Agreement.

            

    

     

    

     

    
      	
                       4  

            	
              The Service
      Provider’s
      Fee

            

    

     

    
      	
              4.1  

            	
              The
      Company will pay to the Service Provider the Fee for providing the
      Services which shall be a total of the payments set out in this Clause
      4.

            

    

     

    
      	
              4.2  

            	
              The
      basic fee for the Services will be RMB 919,000 per annum (“Fee”) to be
      prorated and paid monthly. Such Fee will be reviewed thirty (30) days
      before each anniversary of this agreement and may be increased by mutual
      consent with such increase to be effective on the anniversary of this
      Agreement.

            

    

     

    
      
         

      

      
        Page 2
of  7

        
          

        

      

      
         

      

    

    
      	
              4.3  

            	
              In
      addition to the Fee, the Company shall provide the following benefits to
      the Consultant and his domestic partner (“Benefits”):

            

    

     

     

    
      	
              a)  

            	
              Medical
      Benefits and Life Assurance: the costs associated with provision of
      coverage under a medical insurance policy for the Consultant and his
      partner, providing for comprehensive private medical insurance and
      emergency evacuation coverage, as well as coverage for the Consultant
      under a life assurance scheme,

            

    

     

    
      	
              b)  

            	
              International
      SOS Membership: the cost of membership which will include emergency
      medical support and other associated medical
  services,

            

    

     

     

     

    
      	
              4.4  

            	
              In
      addition to the Fee and the Benefits, the Service Provider will be
      entitled to an annual performance-based bonus (“Bonus”) award
      targeted at between 54% and 72% of the Fee, awardable in the discretion of
      the Company’s Board of Directors.

            

    

     

    

     

    
      	
              4.5  

            	
              The
      Company shall pay the Fee to the Service Provider throughout the Term of
      this Agreement pursuant to this clause 4, notwithstanding that the
      Consultant has been absent from performing the Services for any day or
      days throughout the Term which fall within the following agreed periods of
      absences:

            

    

     

    
      	
              (a)  

            	
              In
      each year, up to 30 working days vacation which entitlement may be carried
      forward to a subsequent year by mutual written agreement between the
      Company and the Service Provider;

            

    

     

    
      	
              (b)  

            	
              In
      each year, up to 10 days per year (or such greater number of days as maybe
      mutually agreed between the Company and the Service Provider from time to
      time) for absence due to incapacity, which shall include sickness,
      accident or other similar circumstances which prevent the Consultant from
      attending work which can be carried forward into subsequent years, without
      limitation.

            

    

     

    
      	
              4.6  

            	
              The
      Service Provider’s reasonable out-of-pocket expenses incurred by the
      Consultant in the provision of the Services may be reimbursed, subject to
      obtaining prior written approval from the CEO of the Company. The Service
      Provider shall not be obligated to incur any unreimbursed out-of-pocket
      expenses to perform any Services.

            

    

     

    
      	
              4.7  

            	
              The
      Service Provider will submit monthly invoices to the Company for the Fee
      for each month, one week before the last day of the calendar month to
      which such invoice relates.

            

    

     

    
      	
              4.8  

            	
              The
      Service Provider will submit an invoice to the Company for any Bonus that
      may be awarded subject to clause 4.4
above.

            

    

     

    
      	
              4.9  

            	
              Invoices
      may be submitted in any currency. The conversion exchange rate from
      Chinese Renminbi to the currency of the invoice will be the average
      exchange rate for the 30 days prior to the date of the invoice as defined
      at www.oanda.com. The Company will pay the Service Provider within 14 days
      of receiving an invoice in the currency of the
  invoice.

            

    

     

    
      
         

      

      
        Page 3
of  7

        
          

        

      

      
         

      

    

    
      	
                       5  

            	
              Grant of Shares and
      Options

            

    

     

    
      	
              5.1  

            	
              In
      addition to the Fee, the Company may also issue to the Service Provider an
      amount of shares and/or options in the Company from time to time as it may
      deem appropriate and at the sole discretion of Company’s Board of
      Directors.

            

    

     

    

     

    
      	
                       6  

            	
              The Service
      Provider’s and
      Consultant’s
      Responsibilities

            

    

     

    
      	
              6.1  

            	
              The
      Service Provider shall cause the Consultant to, and the Consultant shall,
      devote whatever time, attention and skill is needed to perform the
      Services to the reasonable satisfaction of the Company unless prevented
      from doing so by ill health or
injury.

            

    

     

    
      	
              6.2  

            	
              The
      Service Provider will procure that the Consultant will execute an
      agreement agreeing that while this Agreement is in effect and for 12
      months after its termination, neither the Service Provider nor the
      Consultant will accept any employment or engage in any activity, without
      the written consent of the Board, if the loyal and complete fulfillment of
      the Service Provider’s or Consultant’s duties in such employment or
      engagement would inevitably require him to reveal or utilize Confidential
      Information, as reasonably determined by the Board. By agreement between
      the parties at any time the terms of this clause 6.2 may be varied,
      reviewed or modified so long as any such variation, review or modification
      is in writing and signed by both
parties.

            

    

     

    

     

    
      	
                        7  

            	
              Office
      Facilities

            

    

     

    The
Company shall provide an office, secretarial and other office facilities and
services as are needed by the Service Provider as reasonably necessary for the
Consultant to provide the Services.

     

    
      	
                        8  

            	
              Independent Service
      Provider Status

            

    

     

    
      	
              8.1  

            	
              Nothing
      in this Agreement will make the Service Provider or the Consultant an
      employee, agent or partner of the Company or any Group Company with
      respect to the Services provided hereunder.  For the avoidance
      of doubt, the Service Provider agrees that it shall be the employer of the
      Consultant for all purposes
hereunder.

            

    

     

    
      	
              8.2  

            	
              The
      Service Provider confirms that the Service Provider shall be responsible
      for all income tax and other tax liabilities and all social security or
      similar contributions in respect of the Fees and other compensation paid
      hereunder.

            

    

     

    

     

    
      	
                        9  

            	
              Confidentiality

            

    

     

    
      	
              9.1  

            	
              Without
      prejudice to the common law duties which the Service Provider owes to the
      Company, or any Group Company, the Service Provider agrees, and agrees to
      procure that the Consultant agrees, that the Service Provider and the
      Consultant will not, except in the proper performance of the Services,
      either directly or indirectly, use or disclose to any person, firm,
      company or entity any Confidential Information. This restriction will
      continue to apply after the termination of the
      Engagement  without limit in time but will not apply to
      Confidential Information which
becomes

            

    

     

    
      
         

      

      
        Page 4 of
 7

        
          

        

      

      
         

      

    

    
      	
               

            	
              public
      other than through unauthorised disclosure by the Service Provider or the
      Consultant or where required to be disclosed by law.  The
      Service Provider shall procure that the Consultant will use the
      Consultant’s best endeavours to prevent the unauthorised use or disclosure
      of such information.

            

    

     

    
      	
              9.2  

            	
              In
      the course of the Engagement, the Service Provider is likely to obtain
      Confidential Information belonging or relating to Group Companies and
      other persons.  The Service Provider will treat such information
      as if it falls within the terms of Clause 9.1 and Clause 9.1 will
      apply with any necessary amendments to such
  information.

            

    

     

    

     

    
      	
                     10  

            	
              Termination of
      Engagement

            

    

     

    
      	
              10.1  

            	
              The
      Engagement will terminate on the End Date unless terminated in accordance
      with this Clause 10, except that the parties can agree to extend the
      contract by mutual agreement before the expiry of the
  Term.

            

    

     

    
      	
              10.2  

            	
              Service
      Provider or the Company may terminate this Agreement for any reason or for
      no reason at all at any time, with or without Cause (as defined below),
      during or after the Term, by providing the other party with notice of
      termination as provided in clause 10.4.  The Company shall pay
      the Service Provider all outstanding fees and all other amounts, in each
      such case, actually earned, accrued or owing as of the date of termination
      but not yet paid to the Service Provider through the date of termination;
      provided that if the this agreement is terminated by the Company without
      Cause (as defined below) then, in addition to the payments described in
      this Section 10.2, the Company shall pay the Service Provider a lump
      sum payment in an amount equal to two hundred and fifteen percent
      (215%) of the Fee. All payments defined in this clause 10.2 shall be
      made within 30 days of the date of
Termination.

            

    

     

    
      	
              10.3  

            	
              For
      the purposes of this agreement “Cause” shall
      mean (i) the Service Provider’s or Consultant’s gross and willful
      misappropriation or theft of the Company’s or its subsidiary’s or
      affiliate’s funds or property, (ii) the Service Provider’s or
      Consultant’s commission of any fraud, misappropriation, embezzlement or
      similar act, whether or not a punishable criminal offense, or the Service
      Provider’s or Consultant’s conviction of or entering of a plea of nolo
      contendere to a charge of any felony or crime involving dishonesty or
      moral turpitude, (iii) the Service Provider’s or Consultant’s
      engagement in any willful conduct that is injurious to the Company or its
      subsidiaries or affiliates, (iv) the Service Provider’s or
      Consultant’s material breach of this Agreement or failure to perform any
      of his material duties owed to the Company or its subsidiaries or
      affiliates, or (v) the Service Provider’s or Consultant’s commission
      of any act involving willful malfeasance or gross negligence or the
      Service Provider’s or Consultant’s failure to act involving material
      nonfeasance.

            

    

     

    
      	
              10.4  

            	
              Any
      termination of this Agreement by the Company or by the Service Provider
      shall be communicated in writing to the other party before the date on
      which such termination is proposed to take effect and, unless otherwise
      agreed to by the Company and the Service Provider, shall be effective
      sixty (60) days after such notice, except that there shall be no 60 day
      notice period in the event of the Agreement being terminated for “Cause”
      by the Company

            

    

     

    
      
         

      

      
        Page 5
of  7

        
          

        

      

      
         

      

    

    
      	
                    
       10.5 

            	
              From
      and after the termination of this Agreement by the Company or by the
      Service Provider, the Service Provider will procure that the Consultant
      does or causes to be done all other things and acts, to execute, deliver,
      file and perform or cause to be executed, delivered, filed and performed
      all other instruments, documents and certificates as may be reasonably
      requested by the Company or are necessary, proper or advisable in order to
      effect the removal, transition, substitution or modification of the
      Consultant as an officer, agent, affiliate, director, manager or
      authorized representative of the Company or any other positions that the
      Consultant holds with the Company or its subsidiaries or affiliates
      providing the cost of doing such things is paid for by the
      Company.

            

    

    

    
      	
              10.6  

            	
              Notwithstanding
      anything to the contrary herein, in the event Richard Grigg no longer
      performs the Services required hereunder to the Company on behalf of the
      Service Provider as a result of his own action or the actions of the
      Service Provider, then the Company may terminate this Agreement for
      “Cause”.

            

    

     

    

     

    
      	
                     
      11  

            	
              Dispute
      Resolution

            

    

     

    Any
dispute or claim arising out of or in connection with any provision of this
Agreement will be finally settled by binding arbitration in London, England, in
accordance with the rules of the International Chamber of Commerce ("ICC") by
one arbitrator appointed in accordance with said rules.  The
arbitrator shall apply English law, without reference to rules of conflicts of
law or rules of statutory arbitration, to the resolution of any
dispute.  Judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.  Notwithstanding the
foregoing, the parties may apply to any court of competent jurisdiction for
preliminary or interim equitable relief, or to compel arbitration in accordance
with this paragraph, without breach of this arbitration provision.

     

    

     

    
      	
                     12  

            	
              Miscellaneous

            

    

     

    
      	
              12.1  

            	
              This
      Agreement may only be modified by the written agreement of the
      parties.

            

    

     

    
      	
              12.2  

            	
              No
      party can assign this Agreement to anyone
else.

            

    

     

    
      	
              12.3  

            	
              References
      in this Agreement to rules, regulations, policies, handbooks or other
      similar documents which supplement it, are referred to in it or describe
      any retirement or other benefits arrangement are references to the
      versions or forms of the relevant documents as amended or updated from
      time to time.

            

    

     

    
      	
              12.4  

            	
              This
      Agreement represents the entire agreement between the parties with respect
      to the engagement of the Service Provider by the Company and supersedes
      any previous written or oral agreement between the parties in relation to
      the matters dealt with in them.

            

    

     

    
      	
              12.5  

            	
              If
      any provision (or part of any provision) of this Agreement is invalid or
      unenforceable, the validity or enforceability of the remaining provisions
      (or parts of a provision) shall not be affected and the other provisions
      (or parts of a provision) shall remain in full force and effect as if the
      invalid or unenforceable parts had been
deleted.

            

    

     

    
      	
              12.6  

            	
              No
      party’s rights or powers under this Agreement will be affected
      if:

            

    

     

    
      
         

      

      
        Page 6
of  7

        
          

        

      

      
         

      

    

    (a)              one
party delays in enforcing any provision of this Agreement; or

     

    (b)              one
party grants time to the other party.

     

    
      	
              12.7  

            	
              If
      any party agrees to waive its rights under a provision of this Agreement,
      that waiver will only be effective if it is in writing and it is signed by
      the Service Provider. A party’s agreement to waive any breach of any term
      or condition of this Agreement will not be regarded as a waiver of any
      subsequent breach of the same term or condition or a different term or
      condition.

            

    

     

    

     

    
      	
              13 
        

            	
              Governing
      Law

            

    

     

    This
Agreement will be governed by and construed in accordance with the laws of
England and Wales.  The Service Provider and the Company submit to the
non-exclusive jurisdiction of the English courts in relation to any dispute
arising in connection with this Agreement.

     

    

    
      	
              Signed
      for and on behalf of

            	 
      
	
              KKSH Holdings
      Ltd

            	 
      
	 
      	 
      
	 
      	 
      
	
              /s/
      Richard Grigg

            	 
      
	
              Name
      and Title:  Richard Grigg, Director

            	 
      
	
              Date:  January
      27, 2009

            	 
      
	 
      	 
      
	
              Signed
      for and on behalf of

            	 
      
	
              Pacific Asia
      Petroleum, Inc.

            	 
      
	 
      	 
      
	 
      	 
      
	
              /s/
      Frank C. Ingriselli

            	 
      
	
              Name
      and Title:  Frank
      C. Ingriselli, Chief
      Executive Officer

            	 
      
	
              Date:  January
      28, 2009

            	 
      

    

    

    
      
         

      

      
        Page 7
of  7

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