Document:

CASPIAN SERVICES, INC.

 

WARRANT TO PURCHASE SHARES OF COMMON STOCK 

 

 

This certifies that, for the value received ____________________., the registered holder hereof or its assigns (the “Warrant Holder”) is entitled to purchase from Caspian Services, Inc., a Nevada corporation (the “Company”) at any time from July 31, 2007 to July 31, 2010, at the purchase price of $4.00 per share (the “Warrant Price”), __________ shares of Common Stock, par value $0.001, of the Company. The number of shares purchasable upon exercise of this Warrant and the Warrant Price per share shall be subject to adjustment from time to time as set forth in the Warrant Agency Agreement referred to below.

 

The Warrant may be exercised in whole or in part by presentation of this Warrant with the Purchase Form, duly executed and simultaneous payment of the Warrant Price (subject to adjustment) at the office of the Company at 257 East 200 South, Suite 340, Salt Lake City, Utah 84101. Payment of such price shall be made at the option of the Warrant Holder in cash or by certified funds. 

 

This Warrant evidences the right to purchase an aggregate of up to ___________ shares of Common Stock, $0.001 par value, of the Company and is issued under and in accordance with a Warrant Agency Agreement dated as of July 30, 2007 (the “Warrant Agency Agreement”), between the Company and Interwest Transfer Company, Inc., which is incorporated by reference, and is subject to the terms and provisions contained in the Warrant Agency Agreement, to all of which the Warrant Holder of this Warrant by acceptance hereof consents.

 

The Warrant Holder shall be required to give written notice of intent to exercise all or any portion of the Warrant within eighteen months after the closing of the private offer by the Company in which the Warrant Holder is acting as the placement agent. The Warrant will expire without value to the Warrant Holder and without liability to the Company unless exercised and the Warrant Price paid on or thirteen months after the closing of the private placement.

 

Upon any partial exercise of this Warrant, there shall be signed and issued to the Warrant Holder hereof, a new Warrant in respect to the Shares as to which this Warrant shall not have been exercised. This Warrant may be exchanged at the office of the Company by surrender of this Warrant, properly endorsed, for one or more new Warrants to purchase the same aggregate number of shares represented by the Warrants exchanged. No fractional shares will be issued hereunder, but the Company shall pay the cash value of any fraction upon the exercise of one or more Warrants. This Warrant is transferable at the office of the Company in the manner and subject to the limitations set forth in the Warrant Agency Agreement.

 

In the event that the closing sales price of a share of Common Stock as traded on the most senior exchange or quotation medium where the shares are quoted equals or exceeds $8.00 

 

Caspian Warrant

 

(appropriately adjusted for any stock split, reverse stock split, stock dividend or other reclassification or combination of the Common Stock occurring after the date hereof) for at least five (5) consecutive trading days, the Company, upon thirty (30) days prior written notice (the “Notice Period”) given to the Warrantholder, may call all or any portion of this Warrant at a redemption price equal to $0.001 per share of Common Stock then purchasable pursuant to this Warrant. Notwithstanding any such notice by the Company, the Warrantholder shall have the right to exercise this Warrant prior to the end of the Notice Period.

 

This Warrant does not entitle any Warrant Holder to any of the rights of a stockholder of the Company.

 

Dated: August ___, 2007

 

	
             
 	
            CASPIAN SERVICES, INC.
 

 

 

	
             
 	
            By: ____________________________
 

	
             
 	
            Laird Garrard, President
 

 

 

2

Caspian Warrant

 

ASSIGNMENT

 

(Form of Assignment to be Executed if the Warrant Holder Desires 

to Transfer Warrants Evidenced Hereby)

 

FOR VALUE RECEIVED, ____________________________________________hereby sells, assigns and transfers to ___________________________________________________________

 

________________________________________________

(Please insert social security or other identifying number)

 

________________________________________________

 

________________________________________________

 

________________________________________________

(Please print name and address including zip code.)

 

________________________________________________________________________________

Warrants represented by this Warrant Certificate and does hereby irrevocably constitute and appoint

 

_______________________________________________________________________________

Attorney, to transfer said Warrants on the books of the Warrant Agent with full power of substitution in the premises.

 

Dated:____________________________

 

 

	
             
 	
            _____________________________________
 

	
             
 	
            Signature
 

 

(Signature must conform in all respects to name of holder as specified on the face of this Warrant Certificate)

 

Signature Guaranteed:

 

_________________________________

 

 

3

Caspian Warrant

 

PURCHASE FORM

 

(Form of Exercise to be Executed if the Warrant Holder Desires to Exercise Warrants Hereby)

 

Warrant Agent:

 

The Undersigned hereby irrevocably elects to exercise_______________________Warrants represented by this Warrant Certificate ant to purchase thereunder the full number of Share issuable upon exercise of such Warrants and encloses $______________________as the purchase price therefor, and requests that certificated for such Shares shall be issued in the name of, and cash for any fractional Shares shall be paid to,

 

_____________________________________________

(Please insert social security or other identifying number)

 

____________________________________

 

____________________________________

 

____________________________________

(Please print name and address including zip code.)

 

________________________________________________________________________________

and, if said number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the unexercised number of Warrants evidenced by this Warrant Certificate, be delivered to the Warrant Holder except as such unexercised number of Warrants may be assigned under the form of Assignment appearing hereon.

 

Dated:

 

	
             
 	
            _______________________________________
 

	
             
 	
            Signature
 

 

(Signature must conform in all respects to name of the Warrant Holder as specified on the face of this Warrant Certificate)

 

Signature Guaranteed:

 

____________________________________

 

NOTICE: Signature must be medallion signature guaranteed by a commercial bank or member firm of one of the following stock exchanges: New York Stock Exchange, Pacific Stock Exchange or American Stock Exchange.

 

 

4

Caspian WarrantREGISTRATION RIGHTS AGREEMENT

             

            
            This Agreement is made as of May 21, 2007, as amended July 31, 2007, by
            and among Caspian Services, Inc., a Nevada corporation (the “Company”), and
            Aton Securities, Inc. (“Managing Placement Agent” or “MPA”) for
            the benefit of those persons who shall become Holders and execute and deliver to the
            Company the Notice of Election to Register and Questionnaire attached hereto as Exhibit
            A.

             

            
            PREAMBLE

             

            
            The Company and the Managing Placement Agent desire to extend
            registration rights to the prospective Holders of the Company’s common stock
            purchased the private placement made by the Managing Placement Agent to its clients
            (the “Private Placement”).

             

            
            AGREEMENT

             

            
            NOW, THEREFORE, in consideration of the premises and mutual agreements
            set forth herein, the Company and the Managing Placement Agent agree as
            follows:

             

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

             

            
                	
                            
                             

                        	
                            
                            (a)

                        	
                            
                            “Commission” shall mean the Securities and
                            Exchange Commission or any other federal agency at the time
                            administering the Securities Act.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                            “Exchange Act” shall mean the Securities
                            Exchange Act of 1934, as amended, or any similar federal statute and
                            the rules and regulations thereunder, all as the same shall be in
                            effect at the time.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (c)

                        	
                            
                            “Holder” shall mean a holder of restricted
                            common shares of Caspian Services, Inc. purchased in the Private
                            Placement or anyone to whom the registration rights conferred by this
                            Agreement have been transferred in compliance with this
                            Agreement.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (d)

                        	
                            
                            “Initiating Holders” shall mean any Holder
                            or Holders of at least fifty-one percent (51%) of the Registrable
                            Securities then outstanding.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (e)

                        	
                            
                            “Partnership” and “Partner”
                            shall include, as the context may require, a limited liability company
                            and the member of members thereof.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (f)

                        	
                            
                            “Private Placement” shall mean the Private
                            Placement sale of a minimum of 2,800,000 and a maximum of up to
                            5,560,000 units, each unit shall be comprised of three common shares of
                            restricted common stock of the Company with one redeemable warrant for
                            one common share exercisable at any time within three years of purchase
                            at a price of $4.00 per share issued pursuant to the Confidential
                            Private Placement Memorandum, dated May 21, 2007, as amended Jul 6,
                            2007 together with

                        

            

            
             

            
            

            

            

            
            any shares issued in the Private Placement pursuant to the
            over-allotment option and/or pursuant to the warrants issued to the Managing Placement
            Agent.

            
             

            
                	
                            
                             

                        	
                            
                            (g)

                        	
                            
                            “Register,” “registered” and
                            “registration” shall refer to a registration effected by
                            preparing and filing a registration statement in compliance with the
                            Securities Act, and the declaration or ordering of the effectiveness of
                            such registration statement, and compliance with applicable state
                            securities laws of such states in which Holders notify the Company of
                            their intention to offer Registrable Securities.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (h)

                        	
                            
                            “Registrable Securities” shall mean the
                            following to the extent the same have not been sold to the public (i)
                            any and all shares of restricted common stock of the Company issued or
                            issuable pursuant to the Private Placement. Notwithstanding the
                            foregoing, Registrable Securities shall not include otherwise
                            Registrable Securities (i) sold by a person in a transaction in which
                            his rights under this Agreement are not properly assigned; or (ii) (A)
                            sold in a transaction exempt from the registration and prospectus
                            delivery requirements of the Securities Act under Section 4(1) thereof
                            so that all transfer restrictions, and restrictive legends with respect
                            thereto, if any, are removed upon the consummation of such sale or (B)
                            the registration rights associated with such securities have been
                            terminated pursuant to Section 12 of this Agreement.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (i)

                        	
                            
                            “Rule 144” shall mean Rule 144 under the
                            Securities Act or any successor or similar rule as may be enacted by
                            the Commission from time to time, but shall not include Rule
                            144A.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (j)

                        	
                            
                            “Rule 144A” shall mean Rule 144A under the
                            Securities Act or any successor or similar rule as may be enacted by
                            the Commission from time to time, but shall not include Rule
                            144.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (k)

                        	
                            
                            “Securities Act” shall mean the Securities
                            Act of 1933, as amended, or any similar federal statute and the rules
                            and regulations thereunder, all as the same shall be in effect at the
                            time.

                        

            

            
             

            
            2. Restrictions on
            Transferability. The Registrable Securities shall not be
            sold, assigned, transferred or pledged except upon the conditions specified in this
            Agreement, which conditions are intended to ensure compliance with the provisions of
            the Securities Act. Each Holder will cause any proposed purchaser, assignee,
            transferee, or pledgee of the Registrable Securities held by a Holder to agree to take
            and hold such securities subject to the provisions and upon the conditions specified in
            this Agreement.

             

            
            3. Notice of Proposed
            Transfer. The Holder of each certificate representing
            Registrable Securities agrees to comply in all respects with the provisions of this
            Section 3. Each such Holder agrees not to make any disposition of all or any portion of
            any Registrable Securities unless and until:

             

            
            2

             

            
            

            

            

            
                	
                            
                             

                        	
                            
                            (a)

                        	
                            
                            There is in effect a registration statement under the
                            Securities Act covering such proposed disposition and such disposition
                            is made in accordance with such registration statement; or;

                        

            

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                             

                            
                             

                        

            

            
                	
                            
                             

                        	
                            
                            (i)

                        	
                            
                            Such Holder shall have notified the Company of the
                            proposed disposition and shall have furnished the Company with a
                            detailed statement of the circumstances surrounding the proposed
                            disposition, and

                        

            

            
                	
                            
                             

                        	
                            
                            (ii)

                        	
                            
                            If reasonably requested by the Company, such Holder
                            shall furnish the Company with an opinion of counsel, reasonably
                            satisfactory to the Company that such disposition shall not require
                            registration of such shares under the Securities Act. It is agreed,
                            however, that no such opinion will be required for Rule 144 or Rule
                            144A transactions, except in unusual circumstances.

                        

            

            
                	
                            
                             

                        	
                            
                            (c)

                        	
                            
                            Notwithstanding the provisions of paragraphs (a) and (b)
                            above, no such registration statement or opinion of counsel shall be
                            necessary for a transfer by a Holder which is a partnership, to a
                            partner of such partnership or a retired partner of such partnership
                            who retires after the date hereof, or to the estate of any such partner
                            or retired partner or the transfer by gift, will, or intestate
                            succession of any partner to his spouse or siblings, lineal descendants
                            or ancestors of such partner or spouse, provided that such transferee
                            agrees in writing to be subject to all of the terms hereof to the same
                            extent as if he were an original Holder hereunder.

                        

            

             

            
            4. Requested
            Registration.

             

            
                	
                            
                             

                        	
                            
                            (a)

                        	
                            
                            If the Company shall receive from Initiating Holders a
                            written request that the Company effect any registration with respect
                            to all or at least 51% of the outstanding Registrable Securities, the
                            Company shall:

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (i)

                        	
                            
                            promptly give written notice of the proposed
                            registration to all other Holders; and

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (ii)

                        	
                            
                            as soon as practicable use its best efforts to register
                            (including, without limitation, the execution of an undertaking to file
                            post-effective amendments and any other governmental requirements) all
                            Registrable Securities that the Holders request to be registered within
                            thirty (30) days after receipt of such written notice from the Company;
                            provided that the Company shall not be obligated to file a registration
                            statement pursuant to this Section 4:

                        

            

            
             

            
            (A) prior to 120 days after the closing of the Private
            Placement;

            
             

            
            (B) in any particular state in which the Company would be required
            to

            
            execute a general consent to service of process in effecting such
            registration; or

            
             

            
            3

             

            
            

            

            

            
            (C) after the Company has effected one such registration pursuant to
            this Section 4 and such registration has been declared or ordered effective.

            
             

            
            Subject to the foregoing clauses (A) through (C), the Company shall file
            a registration statement covering the Registrable Securities so requested to be
            registered as soon as practical, but in any event within ninety (90) days after receipt
            of the request or requests of the Initiating Holders and shall use reasonable best
            efforts to have such registration statement promptly declared effective by the
            Commission whether or not all Registrable Securities requested to be registered can be
            included; provided, however, that if the Company shall furnish to such Holders a
            certificate signed by the President of the Company stating that in the good faith
            judgment of the Board of Directors it would be seriously detrimental to the Company and
            its shareholders for such registration statement to be filed within such ninety (90)
            days period and it is therefore essential to defer the filing of such registration
            statement, the Company shall have an additional period of not more than ninety (90)
            days after the expiration of the initial ninety-day (90-day) period within which to
            file such registration statement; provided, that during such time the Company may not
            file a registration statement for securities to be issued and sold for its own
            account.

            
             

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                            If the Initiating Holders intend to distribute the
                            Registrable Securities covered by their request by means of an
                            underwriting, they shall so advise the Company as a part of their
                            request. In such event, the Company shall include such information in
                            the written notice referred to in subsection 4(a)(i). In such
                            event, if so requested in writing by the Company, the Initiating
                            Holders shall negotiate with an underwriter selected by the Company
                            with regard to the underwriting of such requested registration;
                            provided, however, that if a majority in interest of the Initiating
                            Holders have not agreed with such underwriter as to the terms and
                            conditions of such underwriting within twenty (20) days following
                            commencement of such negotiations, a majority in interest of the
                            Initiating Holders may select an underwriter of their choice. The right
                            of any Holder to registration pursuant to Section 4 shall be
                            conditioned upon such Holder’s participation in such underwriting
                            and the inclusion of such Holder’s Registrable Securities in the
                            underwriting (unless otherwise mutually agreed by a majority in
                            interest of the Initiating Holders and such Holder) to the extent
                            provided herein. The Company shall (together with all Holders proposing
                            to distribute their securities through such underwriting) enter into an
                            underwriting agreement in customary form with the underwriter or
                            underwriters selected for such underwriting. Notwithstanding any other
                            provisions of this Section 4, if the managing underwriter advises the
                            Initiating Holders in writing that marketing factors require a
                            limitation of the number of shares to be underwritten, the Company
                            shall so advise all Holders, and the number of shares of Registrable
                            Securities that may be included in the registration and underwriting
                            shall be allocated among Holders thereof in proportion, as nearly as
                            practicable, to the respective amounts of Registrable Securities held
                            by such Holders; provided, however, that securities to be included in
                            such registration statement to be offered by the Company, its officers
                            and employees shall be excluded from the registration statement prior
                            to the exclusion of any Registrable Securities held by the

                        

            

            
             

            
            4

             

            
            

            

            

            
            Holders. If any Holder disapproves of the terms of the underwriting, he
            may elect to withdraw therefrom by written notice to the Company, the managing
            underwriter and the Initiating Holders. If, by the withdrawal of such Registrable
            Securities, a greater number of Registrable Securities held by other Holders may be
            included in such registration (up to the limit imposed by the underwriters), the
            Company shall offer to all holders who have included Registrable Securities in the
            registration the right to include additional Registrable Securities in the same
            proportion used in determining the limitation as set forth above. Any Registrable
            Securities which are excluded from the underwriting by reason of the
            underwriter’s marketing limitation or withdrawn from such underwriting shall be
            withdrawn from such registration.

             

            
            5. Expenses of
            Registration. In addition to
            the fees and expenses contemplated by Section 6 hereof, all expenses incurred in
            connection with registration pursuant to Section 4 hereof, including without limitation
            all registration, filing and qualification fees, printing expenses, fees and
            disbursements of counsel for the Company, and expenses of any special audits of the
            Company’s financial statements incidental to or required by such registration,
            shall be borne by the Company, except that the Company shall not be required to pay
            underwriters’ fees, discounts or commissions relating to Registrable Securities
            or fees of separate legal counsel of Holders.

             

            
            6. Registration
            Procedures. In the case of
            registration effected by the Company pursuant to this Agreement, the Company will keep
            each Holder participating therein advised in writing as to the initiation of each
            registration and as to the completion thereof. At its expense the Company
            will:

             

            
                	
                            
                             

                        	
                            
                            (a)

                        	
                            
                            keep such registration pursuant to Section 4
                            continuously effective for a period of one hundred twenty (120) days or
                            such reasonable period necessary to permit the Holder or Holders to
                            complete the distribution described in registration statement relating
                            thereto, or until the expiration of one year from the date the shares
                            were issued, whichever first occurs;

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                            promptly prepare and file with the Commission such
                            amendments and supplements to such registration statement and the
                            prospectus used in connection therewith as may be necessary to comply
                            with the provisions of the Securities Act, and to keep such
                            registration statement effective for that period of time specified in
                            Section 6(a) above;

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (c)

                        	
                            
                            furnish such number of prospectuses and other documents
                            incident thereto as a Holder from time to time may reasonably
                            request;

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (d)

                        	
                            
                            use reasonable best efforts to obtain the withdrawal of
                            any order suspending the effectiveness of a registration statement, or
                            the lifting of any suspension of the qualification of any of the
                            Registrable Securities for sale in any jurisdiction, at the earliest
                            practicable date;

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (e)

                        	
                            
                            subject to Section 4(a)(ii)(B), register or qualify such
                            Registrable Securities for offer and sale under the securities or blue
                            sky laws of such jurisdictions as a Holder or underwriter shall
                            reasonably request in writing to the Company, and

                        

            

            
             

            
            5

             

            
            

            

            

            
            keep such registration or qualification effective during the period set
            forth in Section 6(a) above;

            
             

            
                	
                            
                             

                        	
                            
                            (f)

                        	
                            
                            enter into such customer agreements (including
                            underwriting agreements in customary form) and take all such other
                            actions as the holders of a majority of the Registrable Securities
                            being sold or the underwriters, if any, reasonably, request in order to
                            expedite or facilitate the disposition of such Registrable
                            Securities);

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (g)

                        	
                            
                            make available for inspection by any seller of
                            Registrable Securities, any underwriter participating in any
                            disposition pursuant to such registration statement, and any attorney,
                            accountant or other agent retained by any such seller or underwriter,
                            all financial and other records, pertinent corporate documents and
                            properties of the Company, and cause the Company’s officers,
                            directors, employees and independent accountants to supply all
                            information reasonably requested by any such seller, underwriter,
                            attorney, accountant or agent in connection with such registration
                            statement;

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (h)

                        	
                            
                            if the offering is underwritten, at the request of any
                            Holder of Registrable Securities to furnish on the date that
                            Registrable Securities are delivered to the underwriters for sale
                            pursuant to such registration: (i) an opinion dated as of such date of
                            counsel representing the Company for the purposes of such registration,
                            addressed to the underwriters and to such Holder, stating that such
                            registration statement has become effective under the Securities Act
                            and that (A) to the best knowledge of such counsel, no stop order
                            suspending the effectiveness thereof has been issued and no proceedings
                            for that purpose have been instituted or are pending or contemplated
                            under the Securities Act, (B), the registration statement, the related
                            prospectus and each amendment or supplement thereof comply as to form
                            in all material respects with the requirements of the Securities Act
                            (except that such counsel need not express any opinion as to financial
                            statements or other financial data contained therein) and (C) to such
                            other effects as reasonably may be requested by counsel for the
                            underwriters or by such Holder or its counsel and (ii) a letter dated
                            such date from the independent public accountants retained by the
                            Company, addressed to the underwriters and to such seller, stating that
                            they are independent public accountants within the meaning of the
                            Securities Act and that, in the opinion of such accountants, the
                            financial statements of the Company included in the registration
                            statement or the prospectus, or any amendment or supplement thereof,
                            comply as to form in all material respects with the applicable
                            accounting requirements of the Securities Act, and such letter shall
                            additionally cover such other financial matters (including information
                            as to the period ending no more than five business days prior to the
                            date of such letter) with respect to such registration as such
                            underwriters reasonably may request; and

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (i)

                        	
                            
                            notify each Holder, at any time a prospectus covered by
                            such registration statement is required to be delivered under the
                            Securities Act, of the happening of any event of which it has knowledge
                            as a result of which the prospectus included in such registration
                            statement, as then in effect, includes an untrue statement of
                            a

                        

            

            
             

            
            6

             

            
            

            

            

            
            material fact or omits to state a material fact required to be stated
            therein or necessary to make the statements therein not misleading in the light of the
            circumstances then existing; and

            
             

            
            7.
            Indemnification.

             

            
                	
                            
                             

                        	
                            
                            (a)

                        	
                            
                            In the event of a registration of any of the Registrable
                            Securities under the Securities Act pursuant to Section 4, the Company
                            will indemnify and hold harmless each Holder of such Registrable
                            Securities thereunder, each underwriter of such Registrable Securities
                            thereunder and each other person, if any, who controls such Holder or
                            underwriter within the meaning of the Securities Act, against any
                            losses, claims, damages or liabilities, joint or several, to which such
                            Holder, underwriter or controlling person may become subject under the
                            Securities Act or otherwise, insofar as such losses, claims, damages or
                            liabilities (or actions in respect thereof) arise out of or are based
                            upon any untrue statement or alleged untrue statement of any material
                            fact contained in any registration under the Securities Act, any
                            preliminary prospectus or final prospectus contained therein, or any
                            amendment or supplement thereof, or arise out of or are based upon the
                            omission or alleged omission to state therein a material fact required
                            to be stated therein or necessary to make the statements therein not
                            misleading, or any violating by the Company of any rule or regulation
                            promulgated under the Securities Act or any state securities law
                            applicable to the Company and relating to action or inaction required
                            of the Company in connection with any such registration, and will
                            reimburse each such Holder, each of its officers, directors and
                            partners, and each person controlling such Holder, each such
                            underwriter and each person who controls any such underwriter, for the
                            reasonable legal and any other reasonable expenses incurred in
                            connection with investigating, defending or settling any such claim,
                            loss, damage, liability or action, provided that the Company will not
                            be liable in any such case to the extent that any such claim, loss,
                            damage or liability arises out of or is based on any untrue statement
                            or omission based upon written information furnished to the Company by
                            an instrument duly executed by such Holder or underwriter specifically
                            for use therein.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                            Each Holder will, if Registrable Securities held by or
                            issuable to such Holder are included in the securities as to which such
                            registration is being effected, indemnify and hold harmless the
                            Company, each of its directors and officers, each underwriter, if any,
                            of the Company’s securities covered by such a registration
                            statement, each person who controls the Company and each underwriter
                            within the meaning of the Securities Act, and each other such Holder,
                            each of its officers, directors and partners and each person
                            controlling such Holder, against all claims, losses, expenses, damages
                            and liabilities (or actions in respect thereof) arising out of or based
                            on any untrue statement (or alleged untrue statement) of a material
                            fact contained in any such registration statement, prospectus, offering
                            circular or other documents, or any omission (or alleged omission) to
                            state therein a material fact required to be stated therein or
                            necessary to make the statements therein not misleading, and will
                            reimburse the Company, such Holders, such directors, officers,
                            partners, persons or underwriters for any reasonable legal or any other
                            expenses incurred in connection

                        

            

            
             

            
            7

             

            
            

            

            

            
            with investigating, defending or settling any such claim, loss, damage,
            liability or action, in each case to the extent, but only to the extent, that such
            untrue statement (or alleged untrue statement) or omission (or allege omission) is made
            in such registration statement, prospectus, offering, circular or other document in
            reliance upon and in conformity with written information furnished to the Company by an
            instrument duly executed by such Holder specifically for use therein; provided,
            however, the total amount for which any Holder, its officers, directors and partners,
            and any person controlling such Holder, shall be liable under this Section 7(b) shall
            not in any event exceed the aggregate proceeds received by such Holder from the sale of
            Registrable Securities sold by such Holder in such registration.

            
             

            
                	
                            
                             

                        	
                            
                            (c)

                        	
                            
                            Each party entitled to indemnification under this
                            Section 7 (the “Indemnified Party”) shall give notice to
                            the party required to provide indemnification (the “Indemnifying
                            Party”) promptly after such Indemnified Party has actual
                            knowledge of any claims as to which indemnity may be sought, and shall
                            permit the Indemnifying Party to assume the defense of any such claim
                            or any litigation resulting therefrom, provided that counsel for the
                            Indemnifying Party, who shall conduct the defense of such claim or
                            litigation, shall be approved by the Indemnified Party (whose approval
                            shall not be unreasonably withheld), and the Indemnified Party may
                            participate in such defense at such party’s expense, and provided
                            further that the failure of any Indemnified Party to give notice as
                            provided herein shall not relieve the Indemnifying Party of its
                            obligations hereunder, unless such failure resulted in actual detriment
                            to the Indemnifying Party. No Indemnifying Party, in the defense of any
                            such claim or litigation, shall, except with the consent of each
                            Indemnified Party, consent to entry of any judgment or enter into any
                            settlement which does not include as an unconditional term thereof the
                            giving by the claimant or plaintiff to such Indemnified Party of a
                            release from all liability in respect of such claim or
                            litigation.

                        

            

             

            
                	
                            
                             

                        	
                            
                            (d)

                        	
                            
                            Notwithstanding the foregoing, to the extent that the
                            provisions on indemnification contained in the underwriting agreements
                            entered into among the selling Holders, if any, the Company and the
                            underwriters in connection with the underwritten public offering are in
                            conflict with the foregoing provisions, the provisions in the
                            underwriting agreement shall be controlling as to the Registrable
                            Securities included in the public offering; provided, however, that if,
                            as a result of this Section 7(d), any Holder, its officers, directors,
                            and partners and any person controlling such Holder is held liable for
                            an amount which exceeds the aggregate proceeds received by such Holder
                            from the sale of Registrable Securities included in a registration, as
                            provided in Section 7(b) above, pursuant to such underwriting agreement
                            (the “Excess Liability”), the Company shall reimburse any
                            such Holder for such Excess Liability.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (e)

                        	
                            
                            If the indemnification provided for in this Section 7 is
                            held by a court of competent jurisdiction to be unavailable to an
                            indemnified party with respect to any loss, liability, claim, damage or
                            expense referred to therein, then the indemnifying party, in lieu of
                            indemnifying such indemnified party thereunder, shall contribute to the
                            amount paid or payable by such indemnified party as a result of such
                            loss, liability, claim, damage or expense in such proportion as is
                            appropriate to reflect the relative

                        

            

            
             

            
            8

             

            
            

            

            

            
            fault of the indemnifying party on the one hand and of the indemnified
            party on the other hand in connection with the statements or omissions which resulted
            in such loss, liability, claim, damage or expense as well as any other relevant
            equitable considerations. The relevant fault of the indemnifying party and the
            indemnified party shall be determined by reference to, among other things, whether the
            untrue or alleged untrue statement of a material fact or the omission to state a
            material fact relates to information supplied by the indemnifying party or by the
            indemnified party and the parties’ relative intent, knowledge, access to
            information and opportunity to correct or prevent such statement or omission.
            Notwithstanding the foregoing, the amount any Holder shall be obligated to contribute
            pursuant to this Section 7(e) shall be limited to an amount equal to the proceeds to
            such Holder of the Restricted Securities sold pursuant to the registration statement
            which gives rise to such obligation to contribute (less the aggregate amount of any
            damages which the Holder has otherwise been required to pay in respect of such loss,
            claim, damage, liability or action or any substantially similar loss, claim, damage,
            liability or action arising from the sale of such Restricted Securities).

            
             

            
                	
                            
                             

                        	
                            
                            (f)

                        	
                            
                            Survival of Indemnity. The indemnification provided by
                            this Section 7 shall be a continuing right to indemnification and shall
                            survive the registration and sale of any securities by any Person
                            entitled to indemnification hereunder and the expiration or termination
                            of this Agreement.

                        

            

             

            
            8. Lock Up
            Agreement. In consideration
            for the Company agreeing to is obligations under this Agreement, each Holder agrees in
            connection with any registration of the Company’s securities (whether or not such
            Holder is participating in such registration) upon the request of the Company and the
            underwriters managing any underwritten offering of the Company’s securities, not
            to sell, make any short sale of, loan, grant any option for the purchase of, or
            otherwise dispose of any Registrable Securities (other than those included in the
            registration) without the prior written consent of the Company or such underwriters, as
            the case may be, for such period of time (not to exceed 180 days) from the effective
            date of such registration as the Company and the underwriters may specify, so long as
            all Holders or stockholders holding more than one percent (1%) of the outstanding
            common stock and all officers and directors of the Company are bound by a comparable
            obligation provided, however, that nothing herein shall prevent any Holder that is a
            partnership or corporation from making a distribution of Registrable Securities to the
            partners or shareholders thereof that is otherwise in compliance with applicable
            securities laws, so long as such distributees agree to be so bound.

             

            
            9. Information by
            Holder. The Holder or Holders of Registrable Securities
            included in any registration shall promptly furnish to the Company such information
            regarding such Holder or Holders and the distribution proposed by such Holders or
            Holders as the Company may request in writing and as shall be required in connection
            with any registration referred to herein.

             

            
            10. Rule 144 and 144A
            Reporting. With a view to making available to Holders of
            Registrable Securities the benefits of certain rules and regulations of the SEC which
            may permit the sale of the Registrable Securities to the public without registration,
            the Company agrees to:

             

            
            9

             

            
            

            

            

            
                	
                            
                             

                        	
                            
                            (a)

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

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                            use its best efforts to file with the Commission in a
                            timely manner all reports and other documents required of the Company
                            under the Securities Act and the Exchange Act.

                        

            

            
             

            
            11. Subsequent Registration
            Rights. From and after the date this registration right
            is granted, the Company may, in its discretion, enter into any agreement with any
            holder or prospective holder of any securities of the Company which would allow such
            holder or prospective holder to include such securities in any registration filed under
            Section 4 hereof.

             

            
            12. Termination of
            Rights.

             

            
                	
                            
                             

                        	
                            
                            (a)

                        	
                            
                            The rights of any particular Holder to cause the Company
                            to register securities under Section 4 shall terminate with respect to
                            such Holder at such time as such Holder is able to dispose of all of
                            his Registrable Securities in one three-month period pursuant to the
                            provisions of Rule 144.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                            Notwithstanding the provisions of paragraph (a) of this
                            Section 12, all rights of any particular Holder under this Agreement,
                            other than rights under Section 7, shall terminate at 5:00 P.M. Eastern
                            time on the date one (1) year after the closing date of the Private
                            Offering.

                        

            

             

            
            13. Representations and Warranties of
            the Company.

             

            
                	
                            
                             

                        	
                            
                            The Company represents and warrants to the Holder as
                            follows:

                        

            

             

            
                	
                            
                             

                        	
                            
                            (a)

                        	
                            
                            The execution, delivery and performance of this
                            Agreement by the Company have been duly authorized by all requisite
                            corporate action and will not violate any provision of law, any order
                            of any court or other agency of government, the Articles of
                            Organization or Bylaws of the Company or any agreement or conflict
                            with, result in a breach of or constitute (with due notice or lapse of
                            time or both) a default under any such indenture, agreement or other
                            instrument or result in the creation or imposition of any lien, charge
                            or encumbrance of any nature whatsoever upon any of the properties or
                            assets of the Company.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                            This Agreement has been duly executed and delivered by
                            the Company and constitutes the legal, valid and binding obligation of
                            the Company, enforceable in accordance with its terms, subject to (i)
                            applicable bankruptcy, insolvency, reorganization, fraudulent
                            conveyance and moratorium laws and other laws of general application
                            affecting enforcement of creditors’ rights generally and (ii) the
                            availability of equitable remedies as such remedies may be limited by
                            equitable principles of general applicability (regardless of whether
                            enforcement is sought in a proceeding in equity or at law).

                        

            

             

            
            10

             

            
            

            

            

            
            14.
            Miscellaneous.

             

            
                	
                            
                             

                        	
                            
                            (a)

                        	
                            
                            Amendments. This Agreement
                            may be amended only by a writing signed by the Holders of at least
                            fifty-one percent (51%) of the Registrable Securities, as constituted
                            from time to time. The Holders hereby consent to future amendments to
                            this Agreement that permit future investors, other than employees,
                            officers or directors of the Company, to be made parties hereto and to
                            become Holders of Registrable Securities;
                            provided, however, that no
                            such future amendment may materially impair the rights of the Holders
                            hereunder without obtaining the requisite consent of the Holders, as
                            set forth above. For purposes of this Section, Registrable Securities
                            held by the Company or beneficially owned by any officer or employee of
                            the Company shall be disregarded and deemed not to be
                            outstanding.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (b)

                        	
                            
                            Counterparts. This
                            Agreement may be executed in any number of counter parts, all of which
                            shall constitute a single instrument.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (c)

                        	
                            
                            Notices, Etc. All notices
                            and other communications required or permitted hereunder shall be in
                            writing and may be sent initially by facsimile transmission and shall
                            be mailed by registered or certified mail, postage prepaid, or
                            otherwise delivered by hand or by messenger, addressed (a) if to a
                            Holder, at such Holder’s address set forth on the books of the
                            Company, or at such other address as such Holder shall be furnished to
                            the Company in writing, or (b) if to any other holder of any
                            Registrable Securities, at such address as such holder shall have
                            furnished the Company in writing, or, until any such holder so
                            furnished an address to the Company, then to and at the address of the
                            last holder of such securities who has so furnished an address to the
                            Company, or (c) if to the Company, one copy should be sent to the
                            Company’s current address, or at such other address as the
                            Company shall have furnished to the Holders. Each such notice or other
                            communication shall for all purposes of this Agreement be treated as
                            effective or having been given when delivered if delivered personally,
                            or, if sent by first class, postage prepaid mail, at the earlier of its
                            receipt or seventy-two (72) hours after the same has been deposited in
                            a regularly maintained receptacle for the deposit of the United States
                            mail, addressed and mailed as aforesaid.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (d)

                        	
                            
                            Nonpublic Information. Any
                            other provisions of this agreement to the contrary notwithstanding, the
                            Company’s obligation to file a registration statement, or cause
                            such registration statement to become and remain effective, shall be
                            suspended for a period not to exceed 45 days (and for periods not
                            exceeding, in the aggregate, 90 days during the term of this Agreement)
                            if there exists at the time material non-public information relating to
                            the Company which, in the reasonable opinion of the Company, should not
                            be disclosed.

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (e)

                        	
                            
                            Severability. If any
                            provision of this Agreement shall be held to be illegal, invalid or
                            unenforceable, such illegality, invalidity or unenforceability shall
                            attach only to such provision and shall not in any manner affect or
                            render illegal, invalid or unenforceable any other provision of this
                            Agreement, and this Agreement shall be

                        

            

            
             

            
            11

             

            
            

            

            

            
            carried out as if any such illegal, invalid or unenforceable provision
            were not contained herein.

            
             

            
                	
                            
                             

                        	
                            
                            (f)

                        	
                            
                            Dilution. If, and as often
                            as, there is any change in the common stock by way of a stock split,
                            stock dividend, combination or reclassification, or through a merger,
                            consolidation, reorganization or recapitalization, or by any means,
                            appropriate adjustment shall be made in the provisions hereof so that
                            the rights and privileges granted hereby shall continue with respect to
                            the Common Governing Law. This Agreement shall be governed by and
                            construed under the laws of the State of Utah without regard to
                            principles of conflict of law.

                        

            

             

            
            (g) Governing Law. This Agreement shall be
            governed by and construed under the laws

            
                	
                            
                             

                        	
                            
                            of the State of Utah without regard to principles of
                            conflict of law.

                        

            

            
             

            
            Dated as of the date first above written.

            
             

            
            Caspian Services, Inc.

            
             

            
            _____________________

            
            Laird Garrard, President

            
             

            
             

            
            Aton Securities, Inc.

            
             

            
             

            
                   ________________      
                         

            
            Michael Jordan, President

             

            
            12

             

            
            

            

            

            
            Exhibit A

             

            
            NOTICE OF ELECTION TO REGISTER AND QUESTIONNAIRE

             

            
            The undersigned holder of shares of the common stock, par value $.001
            per share (the “common stock” or the “Registrable Securities”)
            of Caspian Services, Inc. (the “Company”) purchased in a private placement
            offering by the Company understands that the Company has filed or intends to file with
            the Securities and Exchange Commission a registration statement (the “Shelf
            Registration Statement”) for the registration and the resale under Rule 415 of
            the Securities Act of 1933, as amended (the “Securities Act”), of the
            common stock in accordance with the terms of the Registration Rights Agreement, dated
            as of May 21, 2007, as amended July 31, 2007 (the “Registration Rights
            Agreement”) among the Company and the managing placement agent of the Company on
            behalf of the prospective purchasers of the private placement offering. All capitalized
            terms not otherwise defined herein shall have the meanings ascribed thereto in the
            Registration Rights Agreement.

            
             

            
            In order to sell or otherwise dispose of any common stock pursuant to
            the Shelf Registration Statement, a holder of common stock generally will be required
            to be named as a selling securityholder in the related prospectus or a supplement
            thereto (as so supplemented, the “Prospectus”), deliver the Prospectus to
            purchasers of common stock and be bound by the provisions of the Registration Rights
            Agreement (including certain indemnification provisions, as described below).
            Shareholders of Registrable Securities must complete and deliver this Notice and
            Questionnaire in order to be named as selling securityholders in the Prospectus.
            Shareholders of Registrable Securities who do not complete, execute and return this
            Notice and Questionnaire (1) will not be named as selling securityholders in the Shelf
            Registration Statement or the Prospectus and (2) may not use the Prospectus for resales
            of Registrable Securities.

            
             

            
            Certain legal consequences arise from being named as a selling
            securityholder in the Shelf Registration Statement and the Prospectus. Holders of
            Registrable Securities are advised to consult their own securities law counsel
            regarding the consequences of being named or not named as a selling securityholder in
            the Shelf Registration Statement and the Prospectus.

            
             

            
            Notice

             

            
            The undersigned holder (the “Selling Securityholder”) of
            Registrable Securities hereby gives notice to the Company of its intention to sell or
            otherwise dispose of common stock owned by it and listed below in Item (3), unless
            otherwise specified in Item (3), pursuant to the Shelf Registration Statement. The
            undersigned, by signing and returning this Notice and Questionnaire, understands and
            agrees that it will be bound by the terms and conditions of this Notice and
            Questionnaire and the Registration Rights Agreement.

            
             

            
            Pursuant to the Registration Rights Agreement, the undersigned has
            agreed to indemnify and hold harmless the Company, the Company’s directors and
            the Company’s officers who sign the Shelf Registration Statement and each person,
            if any, who controls the Company within the

             

            
            

            

            

            meaning
            of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act
            of 1934, as amended (the “Exchange Act”), from and against certain losses
            arising in connection with certain statements concerning the undersigned made in the
            Shelf Registration Statement or the related prospectus in reliance upon the information
            provided in this Notice and Questionnaire.

             

            
            The undersigned hereby provides the following information to the Company
            and represents and warrants that such information is accurate and complete:

            
             

            
            Questionnaire

             

            
                	
                            
                            1.11.

                        	
                            
                              

                        	
                            
                            (a)

                        	
                            
                             

                        	
                            
                            Full Legal Name of Selling Securityholder:

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                            (b)

                        	
                            
                             

                        	
                            
                            Full Legal Name of Registered Holder (if not the same as
                            (a) above) through which Registrable Securities listed in Item (3)
                            below are held:

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            2.

                        	
                            
                              

                        	
                            
                            Address for Notices to Selling
                            Securityholder:

                        

            

             

            
                	
                            
                             

                        
	
                            
                            

                            

                        
	
                            
                             

                        
	
                            
                            

                            

                        

            

             

            
                	
                            
                             

                        	
                            
                             

                        
	
                            
                            Telephone:

                            
                            

                            

                        
	
                            
                            Fax:

                            

                        
	
                            
                            Contact Person:

                            
                            

                            

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                            3.

                        	
                            
                              

                        	
                            
                            Ownership of Registrable Securities:

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                            (a)

                        	
                            
                             

                        	
                            
                            Type and amount of Registrable Securities
                            owned:

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                            (b)

                        	
                            
                             

                        	
                            
                            Type and amount of Registrable Securities to be
                            registered:

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        

            

             

             

            
            2

             

            
            

            

            

             

            
                	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                              

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            

                            

                        

            

             

            
                	
                            
                            4.

                        	
                            
                             

                        	
                            
                            Ownership and Beneficial Ownership of Other Securities
                            of the Company owned by the Selling Securityholder:

                        

            

             

            
                	
                            
                              

                        	
                            
                             

                        	
                            
                            Except as set forth below in this Item (4), the
                            undersigned is not the beneficial or registered owner of any securities
                            of the Company other than the Regstrable Securities listed above in
                            Item (3).

                        

            

             

            
                	
                            
                              

                        	
                            
                             

                        	
                            
                            Type and Amount of Other Securities owned or
                            beneficially owned:

                        

            

             

            
                	
                            
                            

                            

                        
	
                            
                             

                        
	
                            
                            

                            

                        

            

             

            
                	
                            
                            5.

                        	
                            
                             

                        	
                            
                            Relationship with the Company:

                        

            

             

            
                	
                            
                              

                        	
                            
                             

                        	
                            
                            Except as set forth below, neither the undersigned
                            nor any of its affiliates, officers, directors or principal equity
                            holders (5% or more) has held any position or office or has had any
                            other material relationship with the Company (or its predecessors or
                            affiliates) during the past three years.

                        

            

             

            
                	
                            
                              

                        	
                            
                             

                        	
                            
                            State any exceptions here:

                        

            

             

            
                	
                            
                            

                            

                        
	
                            
                             

                        
	
                            
                            

                            

                        
	
                            
                             

                        
	
                            
                            

                            

                        

            

             

            
                	
                            
                            6.

                        	
                            
                             

                        	
                            
                            Plan of Distribution:

                        

            

             

             

            
            3

             

            
            

            

            

             

            
                	
                            
                              

                        	
                            
                             

                        	
                            
                            Except as set forth below, the undersigned (including
                            its donees or pledgees) intends to distribute the common stock listed
                            above in Item (3) pursuant to the Shelf Registration Statement only as
                            follows (if at all): Such common stock may be sold directly to
                            purchasers or through underwriters, broker-dealers or agents, who may
                            receive compensation in the form of discounts, concessions or
                            commissions from the Selling Securityholder or the purchaser. These
                            discounts, concessions or commissions as to any particular underwriter,
                            broker-dealer or agent may be in excess of those customary in the types
                            of transactions involved. The common stock may be sold in one or more
                            transactions at fixed prices, prevailing market prices at the time of
                            sale, prices related to the prevailing market prices, varying prices
                            determined at the time of sale, or negotiated prices. These sales may
                            be effected in transactions on any quotation service on which common
                            stock may be listed or quoted at the time of sale, including the in the
                            over-the-counter market, otherwise than on an exchange or services or
                            in the over-the-counter market, or through the settlement of short
                            sales. These transactions may include block transactions or crosses.
                            Crosses are transactions in which the same broker acts as agent on both
                            sides of the trade. In connection with the sale of common stock or
                            otherwise, the Selling Securityholders

                        
	
                            
                              

                        	
                            
                             

                        	
                            
                            may enter into hedging transactions with
                            broker-dealers or other financial institutions. These broker-dealers or
                            financial institutions may in turn engage in short sales of the common
                            stock in the course of hedging the positions they assume with Selling
                            Securityholders. The Selling Securityholders may also sell common stock
                            short and deliver common stock to close out such short positions, or
                            loan or pledge common stock to broker-dealers that in turn may sell
                            these securities.

                        

            

             

            
                	
                            
                              

                        	
                            
                             

                        	
                            
                            State any exceptions here:

                        

            

             

            
                	
                            
                            

                            

                        
	
                            
                             

                        
	
                            
                            

                            

                        
	
                            
                             

                        
	
                            
                            

                            

                        

            

             

            
                	
                            
                              

                        	
                            
                             

                        	
                            
                            Note: In no event will such method(s) of distribution
                            take the form of an underwritten offering of the Registrable Securities
                            without the prior agreement of the Company.

                        

            

             

            
            The undersigned acknowledges that it understands its obligation to
            comply with the provisions of the Exchange Act and the rules thereunder relating to
            stock manipulation, particularly Regulation M thereunder (or any successor rules or
            regulations), in connection with any offering of common stock pursuant to the Shelf
            Registration Statement. The undersigned agrees that neither it nor any person acting on
            its behalf will engage in any transaction in violation of such provisions.

            
             

            
            The Selling Securityholder hereby acknowledges its obligations under the
            Registration Rights Agreement to indemnify and hold harmless certain persons as set
            forth therein. Pursuant to the Registration Rights Agreement, the Company has agreed
            under certain circumstances to indemnify the Selling Securityholder against certain
            liabilities.

            
             

            
            In accordance with the undersigned’s obligation under the
            Registration Rights Agreement to provide such information as may be required by law for
            inclusion in the Shelf Registration Statement, the undersigned agrees to promptly
            notify the Company of any inaccuracies or changes in the information provided herein
            that may occur subsequent to the date hereof at any time while the Shelf Registration
            Statement remains effective. All notices hereunder and

             

            
            4

             

            
            

            

            

            
            pursuant to the Registration Rights Agreement shall be made in writing,
            by hand delivery, first-class mail or air courier guaranteeing overnight delivery at
            the address set forth below. In the absence of any such notification, the Company shall
            be entitled to continue to rely on the accuracy of the information in this Notice and
            Questionnaire.

             

            
            By signing below, the undersigned consents to the disclosure of the
            information contained herein in its answers to items (1) through (6) above and the
            inclusion of such information in the Shelf Registration Statement and the Prospectus.
            The undersigned understands that such information will be relied upon by the Company in
            connection with the preparation, amendment or supplementation of the Shelf Registration
            Statement and the Prospectus.

            
             

            
            The terms of this Notice and Questionnaire, and the representations and
            warranties contained herein, shall be binding upon, shall inure to the benefit of and
            shall be enforceable by the respective successors, heirs, personal representatives, and
            assigns of the Company and the Selling Securityholder with respect to the common stock
            owned by the Selling Securityholder and listed in Item (3) above. This agreement shall
            be governed by, and construed and enforced in accordance with, the laws of the State of
            Nevada applicable to contracts made in the State of Nevada.

            
             

            
            IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused
            this Notice and Questionnaire to be executed and delivered either in person or by its
            duly authorized agent.

             

            
                	
                            
                             

                        	
                            
                             

                        
	
                            
                            Date:

                        	
                            
                             

                        	
                            
                            

                            

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Selling Securityholder (Print
                            or type full legal name of holder of Registrable
                            Securities)

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            By:

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Name:

                        	
                            
                             

                        	
                            
                            

                            

                        
	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                             

                        	
                            
                            Title:

                        	
                            
                             

                        	
                            
                            

                            

                        

            

             

            PLEASE
            RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:

             

            
            Company’s U.S. address:

            
            Caspian Services, Inc.

            
            257 East 200 South, Suite 340

            
            Salt Lake City, Utah 84111

            
            Attn: Corporate Secretary

            
             

            
            with a copy to:

            
             

            
            Company counsel

            
            Poulton & Yordan

            
            324 South 400 West, Suite 250

            
            Salt Lake City, Utah 84101

            
            Attn: Richard Ludlow, Esq.

             

            
            5

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