Pacific Asia Petroleum Inc (Form: 8-K, Received: 04/13/2010 17:16:55)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pursuant to Section 13 or 15(d) of the

Securities and Exchange Act of 1934

Date of report: April 13, 2010

Date of earliest event reported: April 7, 2010

PACIFIC ASIA PETROLEUM, INC.

(Exact name of registrant as specified in its charter)

(State or other jurisdiction of incorporation)


001-34525		30-0349798
(Commission File Number)		(IRS Employer Identification Number)

250 East Hartsdale Ave., Hartsdale, New York 10530

(Address of principal executive offices)

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

The disclosures under Item 2.01 below are responsive to this Item 1.01 and are incorporated into this Item 1.01 by reference.

Item 2.01 Completion of Acquisition or Disposition of Assets.

Closing of the CAMAC Transaction

On April 7, 2010, Pacific Asia Petroleum, Inc. (the “Company”) announced that it had closed its previously announced acquisition of all of the interests held by CAMAC Energy Holdings Limited (“CEHL”) and certain of its affiliates (“CAMAC”) in a Production Sharing Contract (the “PSC”) with respect to an oilfield asset known as the Oyo Field (the “Contract Rights”). Following consummation of the transaction, Pacific Asia Petroleum, Inc. changed its name to CAMAC Energy Inc. The Company’s shares are traded on the NYSE-Amex under the symbol “CAK.”

As consideration for the Contract Rights, the Company paid CAMAC $32 million in cash consideration (the “Cash Consideration”) and issued to CAMAC 89,467,120 shares of Company Common Stock, par value $0.001, representing approximately 62.74% of the Company’s issued and outstanding Common Stock at closing (the “Consideration Shares”). In addition, if certain issued and outstanding warrants and options exercisable for an aggregate of 7,991,948 shares of Company Common Stock are exercised following the closing, then the Company is obligated to issue up to an additional 13,457,188 Consideration Shares to CAMAC to maintain its 62.74% interest in the Company. As additional Cash Consideration, the Company agreed to pay CAMAC $6.84 million on the earlier of sufficient receipt of oil proceeds from the Oyo Field or six months from the closing date.

In connection with the closing on April 7, 2010, the Company, CAMAC and certain of their respective affiliates entered into a number of ancillary documents to consummate the transaction.

The Novation Agreement

On April 7, 2010, the Contract Rights were assigned and assumed pursuant to an Agreement Novating Production Sharing Contract (the “Novation Agreement”) by and among Allied Energy PLC, a wholly-owned subsidiary of CEHL (“Allied”), CAMAC International (Nigeria) Limited, a wholly-owned subsidiary of CEHL (“CINL”), Nigerian AGIP Exploration Limited (“NAE”), and CAMAC Petroleum Limited (“CPL”). The Novation Agreement provides for the novation of the Contract Rights from CAMAC to CPL, a wholly-owned subsidiary of the Company, and consent to the novation by NAE, the operator under the PSC.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Novation Agreement, a copy of which is attached hereto as Exhibit 10.1 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 2.01.

The Oyo Field Supplemental Agreement

On April 7, 2010, Allied, CEHL and CPL entered into the Oyo Field Agreement (the “Supplemental Agreement”) to provide certain management rights as it relates to the Contract Rights. In addition, the parties agreed that if any non-Oyo Field operating costs incurred prior to the date of the Supplemental Agreement exceed $80,000,000, then Allied shall indemnify CPL for any decrease in CPL’s allocation of “profit oil” and “cost oil” from the Oyo Field from what would have otherwise been allocated to CPL in the absence of such prior non-Oyo Field operating costs in excess of $80,000,000. The Supplemental Agreement also provides that CAMAC will indemnify CPL for any negative effect on CPL’s share of “profit oil” in certain circumstances. The Supplemental Agreement expires when the Oyo Field has been abandoned and all applicable filing and reporting requirements relating to CPL’s interest in the Oyo Field have been satisfied or are no longer applicable.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Oyo Field Supplemental Agreement, a copy of which is attached hereto as Exhibit 10.2 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 2.01.

The Right of First Refusal Agreement

On April 7, 2010, the Company and CAMAC entered into a Right of First Refusal Agreement, pursuant to which, for a period of five years following the closing, CAMAC has granted to the Company a right of first refusal with respect to any and all licenses, leases and other contract rights for the exploration or production of oil or natural gas currently held by or hereafter acquired by or arising and inuring to CAMAC that CAMAC offers for sale, transfer, license or other disposition, other than such sales that occur in the ordinary course of business, subject to certain terms and conditions as set forth therein.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Right of First Refusal, a copy of which is attached hereto as Exhibit 10.3 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 2.01.

The Registration Rights Agreement

On April 7, 2010, the Company and CAMAC entered into a Registration Rights Agreement, pursuant to which the Company shall prepare and file with the SEC a registration statement on Form S-3 covering the resale of the Consideration Shares, in addition to providing unlimited “piggyback” registration rights to CAMAC with respect to the Consideration Shares, in each case, subject to certain limitations and conditions. If any Consideration Shares are not covered by a registration statement within 18 months following the closing date, then the Company shall pay liquidated damages to CAMAC.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement, a copy of which is attached hereto as Exhibit 4.1 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 2.01.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As consideration for the Contract Rights, on April 7, 2010, the Company paid the Cash Consideration to CAMAC and issued the Consideration Shares to CAMAC. As additional Cash Consideration, the Company agreed to pay CAMAC $6.84 million on the earlier of sufficient receipt of oil proceeds from the Oyo Field or six months from the closing date. No interest on the additional Cash Consideration will be paid to CAMAC when the obligation is due.

The information pertaining to the additional Cash Consideration in Item 2.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities.

On April 7, 2010, the Company issued to CAMAC 89,467,120 Consideration Shares, representing approximately 62.74% of the Company’s issued and outstanding Common Stock at closing, as partial consideration for the Contract Rights. Upon the issuance of the Consideration Shares, the Company had an aggregate of 143,093,494 shares of Common Stock issued and outstanding. In addition, if certain issued and outstanding warrants and options exercisable for an aggregate of 7,991,948 shares of Company Common Stock are exercised following the closing, then the Company is obligated to issue up to an additional 13,457,188 Consideration Shares to CAMAC.

No underwriters were used in connection with the issuance of the Consideration Shares. The Consideration Shares are not registered under the Securities Act of 1933, as amended (the “Securities Act”), and were issued by the Company in reliance upon the exemption from registration available under Section 4(2) of the Securities Act, as the transaction did not involve a public offering. The information pertaining to the Consideration Shares in Item 2.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 3.02.

Item 5.01 Changes in Control of Registrant.

In connection with the acquisition of the Contract Rights on April 7, 2010, a change of control of the Company occurred upon the issuance to CAMAC of Consideration Shares representing approximately 62.74% of the Company’s issued and outstanding Common Stock. As a result of its controlling interest in the Company, CAMAC will have the ability to approve any matter submitted to the Company’s stockholders where a simple majority vote is required to obtain stockholder approval, whether such action is sought through a special or annual meeting or through written consent. Additionally, CAMAC currently owns and controls enough shares to elect the Company’s directors at annual meetings.

The information in Items 2.01 and 5.02 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 5.01.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with the closing on April 7, 2010, the Company’s Board of Directors was expanded from five members to seven members, with CAMAC having the right initially designate four of the seven members. CAMAC has agreed, for a one-year period following the closing date, to vote its Consideration Shares in favor of electing or removing the remaining three directors nominated by the Company, provided that any persons nominated by the Company must be reasonably acceptable to a majority of the Board of Directors or a majority of the members of the nominating and corporate governance committee.

On April 7, 2010, Mr. Robert Stempel and Ms. Elizabeth Smith have resigned from the Company’s Board of Directors. Neither Mr. Stempel nor Ms. Smith resigned as a result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. The four vacancies created by these resignations and expansion of the Board of Directors have been filled by the appointment of the following individuals as nominated by CAMAC:

Dr. Kase Lukman Lawal. As Chairman and Chief Executive Officer of CAMAC International Corporation, Dr. Kase Lawal, age 55, leads a diverse group of affiliated companies that comprise the second largest African-American owned corporation in the United States. He is also chairman of CAMAC’s Allied Energy Corporation. Committed to public service, he contributes valuable leadership as a commissioner on the Port of Houston Authority and as vice chairman of the Houston Airport Development System Corporation. He is also a member of the National Urban League’s Board of Directors and the Fisk University Board of Trustees. Dr. Lawal is a member of the board of directors and a majority shareholder in Unity National Bank, the only federally insured and licensed African American-owned bank in Texas. Dr. Lawal earned a bachelor’s degree in chemistry from Texas Southern University and an MBA in finance and marketing from Prairie View A&M University in Prairie View, Texas. He was awarded an honorary doctorate in philosophy from Fort Valley (Georgia) State University and an honorary doctorate in humane letters from Texas Southern University.

John Hofmeister . Upon retirement from Shell Oil Company in July 2008, John Hofmeister, age 61, founded the not-for-profit (501(c)(3)), nationwide membership association, Citizens for Affordable Energy, which he currently heads. This Washington D.C.-registered, public policy education firm exists to promote sound U.S. energy security solutions for the nation, including a range of affordable energy supplies, efficiency improvements, essential infrastructure, sustainable environmental policies and public education on energy issues.

Mr. Hofmeister was named President of Houston-based Shell Oil Company in March 2005, heading the U.S. Country Leadership Team, which included the leaders of all Shell businesses operating in the United States. He became President after serving as Group Human Resource Director of the Shell Group, based in The Hague, The Netherlands.

A business leader who has participated in the inner workings of multiple industries for over 35 years Mr. Hofmeister also has held key leadership positions in General Electric, Nortel and AlliedSignal (now Honeywell International). Mr. Hofmeister serves as Chairman of the National Urban League and is a member of the U.S. Department of Energy’s Hydrogen and Fuel Cell Technical Advisory Committee, and the Sodexo Business Advisory Board. He also serves as a non-executive director of Hunting PLC. He serves on the boards of the Foreign Policy Association, Strategic Partners, LLC, the Gas Technology Institute and the Center for Houston’s Future. Mr. Hofmeister is a Fellow of the National Academy of Human Resources. He also is a past Chairman and serves as a Director of the Greater Houston Partnership.

Mr. Hofmeister earned Bachelor’s and Master’s Degrees in Political Science from Kansas State University.

Dr. Lee Patrick Brown. Capping a career of public service dedicated to law enforcement, Dr. Lee P. Brown, age 72, was elected Mayor of the City of Houston on December 6, 1997, sworn in on January 2, 1998; and reelected in 1999 and again in 2001, serving the maximum of three terms in office. Prior to his election as Mayor of the Nation's fourth-largest city, Dr. Brown served in President Bill Clinton's Cabinet as Director of the White House Office of National Drug Control Policy from 1993 to 1996. Dr. Brown rose through the law enforcement ranks - first as a patrolman with the San Jose, California Police Department; then as a Sheriff of Multnomah County, Oregon; followed by Commissioner of Public Safety in Atlanta Georgia; Chief of Police in Houston, Texas and Police Commissioner for New York City, New York.

Dr. Brown has an undergraduate degree in criminology from Fresno State University, a master's degree in sociology from San Jose State University and holds a master's degree and doctorate degree in criminology from the University California at Berkeley, where he also is an UC-Berkeley Fellow. He was selected as UC-Berkeley's 2004 Alumnus of the Year. He also holds honorary doctorate degrees from Florida International University, Portland State University, State University of New York, Fresno State University, John Jay College of Criminal Justice, Paul Quinn College and Howard University. He is an honorary visiting professor at four universities in China.

Dr. Brown also has been a part time Professor at San Jose State University; Professor and Chairman of the Department of Administration of Justice at Portland State University; Associate Director of the Institute for Urban Affairs and Research and Professor of Public Administration at Howard University; University Professor at Texas Southern University and a Senior Scholar at the James A. Baker III Institute for Public Policy and Professor of Sociology at Rice University. After leaving the Office of the Mayor, he served as a Visiting Scholar in the School of Social Sciences at Rice University.

Dr. Brown is currently the Chairman and CEO of Brown Group International, member of the Board of CAMAC International Corporation and Chairman of the Board of Unity National Bank.

Hazel O’Leary. Since 2004, Ms. O'Leary, age 72, has served as the President of Fisk University in Nashville, Tennessee. She also currently serves on the boards of directors of the ITC Holdings, Corp., Nashville Alliance for Public Education, Nashville Business Community for the Arts, World Wildlife Fund and Arms Control Association. Ms. O'Leary served as an assistant attorney general and assistant prosecutor in the state of New Jersey and was appointed to the Federal Energy Administration under President Gerald Ford and to the Department of Energy under President Jimmy Carter. Ms. O'Leary worked in the private sector as a principal at the independent public accounting firm of Coopers and Lybrand from 1977 to 1979. In 1981 she was named vice president and general counsel of O'Leary and Associates, a company focused on international economics as related to energy issues. She served in that capacity until 1989 and then returned as president from 1997 to 2001. In 1989, she became executive vice president for environmental and public affairs for the Minnesota Northern States Power Company and, in 1992, was promoted to president of the holding company's gas distribution subsidiary. Ms. O'Leary served as the Secretary of Energy from 1993 to 1997 and as president and chief operating officer for the investment banking firm Blaylock and Partners in New York from 2000 to 2002. Ms. O'Leary also served on the board of directors of AES Corporation from 1991 to 1993 and from 1997 to 2002. After earning a bachelor's degree at Fisk University, Ms. O'Leary earned her law degree from Rutgers School of Law.

Except for CAMAC’s rights to initially designate four of the seven directors to the Company’s Board of Directors, there are no arrangements or understandings between Dr. Lawal, Mr. Hofmeister, Dr. Brown or Ms. O’Leary (together, the “New Directors”), and any other persons, pursuant to which the New Directors were selected as directors, none of the New Directors have been appointed to any committees of the Board of Directors at this time, and there are currently no material compensatory plans, contracts or arrangements entered into between the Company and any New Directors.

Related Party Transactions

On April 7, 2010, the Company also entered into a number of agreements with CAMAC in connection with the Company’s acquisition of the Contract Rights. Dr. Lawal, a new member of the Company’s Board of Directors, is the Chairman and Chief Executive Officer of CAMAC. Dr. Lawal also owns 27.7% of CAMAC International Limited, which indirectly owns 100% of CEHL. As a result, Dr. Lawal may be deemed to have an indirect material interest in the following agreements:

Technical Services Agreement . On April 7, 2010, CAMAC entered into a technical services agreement with the Company to provide the Company with certain technical services with respect to the Oyo Field. In consideration for these services, the Company will pay CAMAC (i) an initial monthly service fee of $400,000 per month for the initial three months, plus out-of-pocket expenses, commencing immediately following the closing, with the monthly service fee to be negotiated after the initial three months, and (ii) $1.6 million for service-related expenses incurred by CAMAC prior to the closing, due and payable from proceeds received by the Company under the PSC following the closing. The technical service agreement has an initial term of five years, but is terminable upon 30 days’ prior written notice by the Company.

Right of First Refusal Agreement . On April 7, 2010, CAMAC entered into the Right of First Refusal Agreement with the Company, as more fully described in Item 2.01 above.

The Oyo Field Supplemental Agreement . On April 7, 2010, CAMAC entered into the Oyo Field Supplement Agreement with the Company, as more fully described in Item 2.01 above.

The Registration Rights Agreement. On April 7, 2010, CAMAC entered into the Registration Rights Agreement with the Company, as more fully described in Item 2.01 above.

The information in Items 2.01, 2.03, 3.02 and 5.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 5.02.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Effective April 7, 2010, and pursuant to the CAMAC Agreement, the Company changed its name to “CAMAC Energy Inc.” through the filing and effectiveness of a Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company. The Company’s stockholders approved the change of the Company’s name at its Special Meeting of Stockholders held on April 5, 2010. The Certificate of Amendment is attached hereto as Exhibit 3.1 and incorporated by reference in this Item 5.03.

Item 9.01. Financial Statements and Exhibits.

Exhibit

Description

3.1	Certificate of Amendment to Amended and Restated Certificate of Incorporation, filed April 7, 2010.

4.1	Registration Rights Agreement, by and between the Company and CAMAC Energy Holdings Limited, dated April 7, 2010.

10.1	Agreement Novating Production Sharing Contract, by and among Allied Energy PLC, CAMAC International (Nigeria) Limited, Nigerian AGIP Exploration Limited, and CAMAC Petroleum Limited, dated April 7, 2010.

10.2	The Oyo Field Supplemental Agreement, by and among Allied Energy PLC, CAMAC Energy Holdings Limited and CAMAC Petroleum Limited, dated April 7, 2010.

10.3	The Right of First Refusal Agreement, by and among the Company, CAMAC Energy Holdings Limited, CAMAC International (Nigeria) Limited, and Allied Energy PLC, dated April 7, 2010.

Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: April 13, 2010


CAMAC Energy Inc.

	By:	/s/ Frank C. Ingriselli
		Frank C. Ingriselli
		Chief Executive Officer

Exhibit

Description

3.1	Certificate of Amendment to Amended and Restated Certificate of Incorporation, filed April 7, 2010.

4.1	Registration Rights Agreement, by and between the Company and CAMAC Energy Holdings Limited, dated April 7, 2010.

10.1	Agreement Novating Production Sharing Contract, by and among Allied Energy PLC, CAMAC International (Nigeria) Limited, Nigerian AGIP Exploration Limited, and CAMAC Petroleum Limited, dated April 7, 2010.

10.2	The Oyo Field Supplemental Agreement, by and among Allied Energy PLC, CAMAC Energy Holdings Limited and CAMAC Petroleum Limited, dated April 7, 2010.

10.3	The Right of First Refusal Agreement, by and among the Company, CAMAC Energy Holdings Limited, CAMAC International (Nigeria) Limited, and Allied Energy PLC, dated April 7, 2010.

CERTIFICATE OF AMENDMENT

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

PACIFIC ASIA PETROLEUM, INC.

(Pursuant to Section 242 of the Delaware General Corporation Law)

Pacific Asia Petroleum, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

FIRST: The name of the corporation is Pacific Asia Petroleum, Inc. (the “ Corporation ”).

SECOND: The Amended and Restated Certificate of Incorporation of the Corporation was filed in the office of the Secretary of State of Delaware on May 3, 2007.

THIRD: The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by deleting Article FIRST in its entirety and substituting the following in lieu thereof:

“FIRST: The name of this corporation is CAMAC Energy Inc.”

FOURTH: This Certificate of Amendment has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware by the vote of the majority of the directors of the Corporation that were present at a meeting at which a majority of the total number of directors of the Corporation were present and by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, in person or represented by proxy, pursuant to Section 141(b) of the General Corporation Law of the State of Delaware, and ARTICLE XI of the Amended and Restated Certificate of Incorporation of the Corporation and Section 216 of the General Corporation Law of the State of Delaware, respectively.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed this 7 th day of April, 2010.

/s/ Frank C. Ingriselli

Name: Frank C. Ingriselli

Title: President and Chief Executive Officer

Exhibit 4.1

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REGISTRATION RIGHTS AGREEMENT

BY AND AMONG

PACIFIC ASIA PETROLEUM, INC.

AND

CAMAC ENERGY HOLDINGS LIMITED

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Table of Contents

ARTICLE I DEFINITIONS	Page
Section 1.01 Definitions	1
Section 1.02 Registrable Securities	3
ARTICLE II REGISTRATION RIGHTS
Section 2.01 Registration	3
Section 2.02 Piggyback Rights	6
Section 2.03 Underwritten Offering	7
Section 2.04 Sale Procedures	8
Section 2.05 Cooperation by Holders	12
Section 2.06 Restrictions on Public Sale by Holders of Registrable Securities	12
Section 2.07 Expenses	12
Section 2.08 Indemnification	13
Section 2.09 Rule 144 Reporting	15
Section 2.10 Transfer or Assignment of Registration Rights	15
Section 2.11 Limitation on Subsequent Registration Rights	16
ARTICLE III MISCELLANEOUS
Section 3.01 Communications	16
Section 3.02 Successor and Assigns	16
Section 3.03 Aggregation of Purchased Common Stock	16
Section 3.04 Recapitalization, Exchanges, Etc. Affecting the Common Stock	16
Section 3.05 Specific Performance	17
Section 3.06 Counterparts	17
Section 3.07 Headings	17
Section 3.08 Governing Law	17
Section 3.09 Severability of Provisions	17
Section 3.10 Entire Agreement	17
Section 3.11 Amendment	17
Section 3.12 No Presumption	17
Section 3.13 Obligations Limited to Parties to Agreement	18
Section 3.14 Interpretation	18

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REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”) is made and entered into as of April 7, 2010 by and between Pacific Asia Petroleum, Inc., a Delaware corporation (“ PAPI ”), and CAMAC Energy Holdings Limited, a Cayman Islands company (“ CEHL ”).

WHEREAS, this Agreement is made pursuant to that certain Purchase and Sale Agreement, dated as of November 18, 2009, as amended, by and among the Company, CEHL, CAMAC International (Nigeria) Limited, a company incorporated in the Federal Republic of Nigeria and a wholly-owned subsidiary of CEHL; and Allied Energy PLC (formerly, Allied Energy Resources Nigeria Limited, a company incorporated in the Federal Republic of Nigeria and a wholly-owned subsidiary of CEHL (the “ Purchase Agreement ”);

WHEREAS, PAPI has agreed to provide the registration and other rights set forth in this Agreement for the benefit of CEHL pursuant to the Purchase Agreement; and

WHEREAS, it is a condition to the obligations of CEHL under the Purchase Agreement that this Agreement be executed and delivered.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each party hereto, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . Capitalized terms used herein without definition shall have the meanings given to them in the Purchase Agreement. The terms set forth below are used herein as so defined:

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

“ Agreement ” has the meaning specified therefor in the introductory paragraph.

“ CEHL ” has the meaning specified therefor in the introductory paragraph of this Agreement.

“ Commission ” means the United States Securities and Exchange Commission.

“ Common Stock ” means the common stock of the Company, $0.001 par value per share.

“ Consideration Shares ” means the shares of Common Stock issued or issuable to CEHL pursuant to the Purchase Agreement, plus any shares of Common Stock issued as Liquidated Damages pursuant to this Agreement.

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“ Effectiveness Period ” has the meaning specified therefor in Section 2.01(a)(i) of this Agreement.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Holder ” or “ Holders ” means the holder or holders, as the case may be, from time to time of Registrable Securities.

“ Holder Underwriter Registration Statement ” has the meaning specified therefor in Section 2.04(o) of this Agreement.

“ Included Registrable Securities ” has the meaning specified therefor in Section 2.02(a) of this Agreement.

“ Liquidated Damages ” has the meaning specified therefor in Section 2.01(a)(ii) of this Agreement.

“ Liquidated Damages Date ” has the meaning specified therefore in Section 2.01(a)(ii) of this Agreement.

“ Liquidated Damages Multiplier ” means the product of $2.25 times the number of Consideration Shares outstanding on the date that Liquidated Damages first begin to accrue.

“ Losses ” has the meaning specified therefor in Section 2.08(a) of this Agreement.

“ Managing Underwriter ” means, with respect to any Underwritten Offering, the book-running lead manager of such Underwritten Offering.

“ Opt Out Notice ” has the meaning specified therefor in Section 2.02(a) of this Agreement.

“ PAPI ” has the meaning specified therefor in the introductory paragraph.

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

“ Purchase Agreement ” has the meaning specified therefor in the Recitals of this Agreement.

“ Registrable Securities ” means the Consideration Shares (and any shares of Common Stock issued as Liquidated Damages pursuant to this Agreement), and any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event, or any exercise price adjustment with respect to any of the securities referenced herein.

“ Registration Expenses ” has the meaning specified therefor in Section 2.07(a) of this Agreement.

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“ Registration Statement ” has the meaning specified therefor in Section 2.01(a)(i) of this Agreement.

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

“ Rule 158 ” means Rule 158 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Rule 415 ” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Selling Expenses ” has the meaning specified therefor in Section 2.07(a) of this Agreement.

“ Selling Holder ” means a Holder who is selling Registrable Securities pursuant to a registration statement.

“ Underwritten Offering ” means an offering (including an offering pursuant to a Registration Statement) in which Common Stock is sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

Section 1.02 Registrable Securities . Any Registrable Security will cease to be a Registrable Security when: (a) a registration statement covering such Registrable Security has been declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such effective registration statement; (b) such Registrable Security has been disposed of pursuant to any section of Rule 144 (or any similar provision then in force) under the Securities Act; (c) such Registrable Security can be disposed of without restriction (including, but not limited to, volume limitations) pursuant to Rule 144(k) (or any similar provision then in force) under the Securities Act; or (d) such Registrable Security has been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01 Registration .

(a) Registration .

(i) Deadline To Go Effective . As soon as practicable following the Closing, but in any event within 45 days of the Closing Date, PAPI shall prepare and file a registration statement under the Securities Act to permit the resale of the Registrable Securities from

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time to time, including as permitted by Rule 415 under the Securities Act (or any similar provision then in force under the Securities Act) with respect to all of the Registrable Securities (the “ Registration Statement ”). PAPI shall use its commercially reasonable efforts to cause the Registration Statement to become effective no later than 135 days following the Closing Date. A Registration Statement filed pursuant to this Section 2.01 shall be on Form S-3 (except if PAPI is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate form in accordance herewith). PAPI will use its commercially reasonable efforts to cause the Registration Statement filed pursuant to this Section 2.01 to be continuously effective under the Securities Act until the earlier of (i) the date as of which all such Registrable Securities are sold by the Purchasers or (ii) the date when such Registrable Securities become eligible for resale without restriction (including, but not limited to, volume limitations) under Rule 144(k) (or any similar provision then in force) under the Securities Act (the “ Effectiveness Period ”). The Registration Statement when declared effective (including the documents incorporated therein by reference) shall comply as to form with all applicable requirements of the Securities Act and the Exchange Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As provided in Section 2.01(d) of this Agreement, PAPI shall be required to file and maintain the effectiveness of as many registration statements as are necessary to register all of the Consideration Shares.

(ii) Liquidated Damages . If any Consideration Shares are not covered by the Registration Statement contemplated by Section 2.01(a) of this Agreement within 18 months of the Closing Date (the “ Liquidated Damages Date ”), then CEHL shall be entitled to a payment with respect to the Consideration Shares that are not covered by such Registration Statement, as liquidated damages and not as a penalty, of 0.25% of the Liquidated Damages Multiplier per 30-day period for the first 90 days following the Liquidated Damages Date, increasing by an additional 0.25% of the Liquidated Damages Multiplier per 30-day period for each subsequent 30 days, up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-day period (the “ Liquidated Damages ”). There shall be no limitation on the aggregate amount of the Liquidated Damages payable by PAPI to CEHL under this Agreement. The Liquidated Damages payable pursuant to the immediately preceding sentence shall be payable within ten (10) Business Days of the end of each such 30-day period. Any Liquidated Damages shall be paid at CEHL’s election: (i) in cash or immediately available funds; or (ii) in kind in the form of the issuance of additional Common Stock. Upon any issuance of Common Stock as Liquidated Damages, PAPI shall promptly prepare and file an amendment to the Registration Statement prior to its effectiveness adding such Common Stock to such Registration Statement as additional Registrable Securities. The determination of the number of shares of Common Stock to be issued as Liquidated Damages shall be equal to the amount of Liquidated Damages divided by the volume weighted average closing price of the Common Stock (as reported by NYSE Amex) for the ten (10) trading days immediately preceding the date on which the Liquidated Damages payment is due. As soon as practicable following the date that the Registration Statement becomes effective, but in any event within two Business Days of such date, PAPI shall provide the Purchasers with written notice of the effectiveness of the Registration Statement.

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(b) Delay Rights . Notwithstanding anything to the contrary contained herein, PAPI may, upon written notice to any Selling Holder whose Registrable Securities are included in the Registration Statement, suspend such Selling Holder’s use of any prospectus which is a part of the Registration Statement (in which event the Selling Holder shall discontinue sales of the Registrable Securities pursuant to the Registration Statement, but such Selling Holder may settle any such sales of Registrable Securities) if (i) PAPI is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and PAPI determines in good faith that PAPI’s ability to pursue or consummate such a transaction would be materially adversely affected by any required disclosure of such transaction in the Registration Statement or (ii) PAPI has experienced some other material non-public event the disclosure of which at such time, in the good faith judgment of PAPI, would materially adversely affect PAPI; provided , however , in no event shall a Holder be suspended for a period that exceeds an aggregate of 30 days in any 90-day period or 90 days in any 365-day period. No additional registration rights may be granted to any other Person that would be superior to the Purchasers’ registration rights. Upon disclosure of such information or the termination of the condition described above, PAPI shall provide prompt notice to the Selling Holders whose Registrable Securities are included in the Registration Statement, shall promptly terminate any suspension of sales it has put into effect and shall take such other actions to permit registered sales of Registrable Securities as contemplated in this Agreement.

(c) Additional Rights to Liquidated Damages . If (i) the Holders shall be prohibited from selling their Registrable Securities under the Registration Statement as a result of a suspension pursuant to Section 2.01(b) of this Agreement in excess of the periods permitted therein or (ii) the Registration Statement is filed and declared effective but, during the Effectiveness Period, shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded by a post-effective amendment to the Registration Statement, a supplement to the prospectus or a report filed with the Commission pursuant to Section 13(a), 13(c), 14 or l5(d) of the Exchange Act, then, until the suspension is lifted or a post-effective amendment, supplement or report is filed with the Commission, but not including any day on which a suspension is lifted or such amendment, supplement or report is filed and declared effective, if applicable, PAPI shall owe the Holders an amount equal to the Liquidated Damages, following (x) the date on which the suspension period exceeded the permitted period under Section 2.01(b) of this Agreement or (y) the day after the Registration Statement ceased to be effective or failed to be useable for its intended purposes, as liquidated damages and not as a penalty; provided , however , and subject to Section 2.01(a)(ii) of this Agreement, PAPI shall not be required to pay Liquidated Damages with respect to Consideration Shares not covered by a Registration Statement. For purposes of this Section 2.01(c), a suspension shall be deemed lifted on the date that notice that the suspension has been lifted is delivered to the Holders pursuant to Section 3.01 of this Agreement.

(d) Claw-Back of Registrable Securities . PAPI may exclude Registrable Securities from the Registration Statement if required by the Commission in order for the Commission to declare the Registration Statement effective; provided, however , that PAPI will use its commercially reasonable efforts to file a subsequent Registration Statement that includes the Registrable Securities excluded from the initial Registration Statement at such time as it may do so in accordance with the Securities Act as interpreted by the Commission, but in any event within six months of the effective date of the preceding Registration Statement, and PAPI will

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use its commercially reasonable efforts to have such Registration Statement declared effective within a reasonable period of time after such filing. With respect to any Registrable Securities that are not included in the initial Registration Statement or a subsequent Registration Statement within 18 months following the Closing Date, PAPI shall be required to pay the Purchasers the Liquidated Damages in accordance with Section 2.01(a)(ii) of this Agreement.

(e) No Obligation For Primary Offering By Holders . If the Commission deems the registration of any Registrable Securities to be a primary offering by PAPI or the Holders, and the Commission prohibits the use of Rule 415 under the Securities Act (or any similar provision then in force) to sell Registrable Securities on a delayed or continuous basis, then the Purchasers shall not be obligated to commit to any such primary offering to allow the Registration Statement to be declared effective by the Commission.

Section 2.02 Piggyback Rights .

(a) Participation . If at any time PAPI proposes to file (i) a prospectus supplement to an effective shelf registration statement, other than the Registration Statement contemplated by Section 2.01 of this Agreement, or (ii) a registration statement, other than a shelf registration statement, in either case, for the sale of Common Stock in an Underwritten Offering for its own account and/or another Person, then as soon as practicable but not less than three Business Days prior to the filing of (x) any preliminary prospectus supplement relating to such Underwritten Offering pursuant to Rule 424(b) under the Securities Act, (y) the prospectus supplement relating to such Underwritten Offering pursuant to Rule 424(b) under the Securities Act (if no preliminary prospectus supplement is used) or (z) such registration statement, as the case may be, then PAPI shall give notice (including, but not limited to, notification by electronic mail) of such proposed Underwritten Offering to the Holders and such notice shall offer the Holders the opportunity to include in such Underwritten Offering such number of Registrable Securities (the “ Included Registrable Securities ”) as each such Holder may request in writing; provided , however , that if PAPI has been advised by the Managing Underwriter that the inclusion of Registrable Securities for sale for the benefit of the Holders will have a material adverse effect on the price, timing or distribution of the Common Stock in the Underwritten Offering, then the amount of Registrable Securities to be offered for the accounts of Holders shall be determined based on the provisions of Section 2.02(b) of this Agreement. The notice required to be provided in this Section 2.02(a) to Holders shall be provided on a Business Day pursuant to Section 3.01 hereof and receipt of such notice shall be confirmed by such Holder. Each such Holder shall then have three Business Days after receiving such notice to request inclusion of Registrable Securities in the Underwritten Offering, except that such Holder shall have one Business Day after such Holder confirms receipt of the notice to request inclusion of Registrable Securities in the Underwritten Offering in the case of a “bought deal”, “registered direct offering” or “overnight transaction” where no preliminary prospectus is used. If no request for inclusion from a Holder is received within the specified time, such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, PAPI shall determine for any reason not to undertake or to delay such Underwritten Offering, PAPI may, at its election, give written notice of such determination to the Selling Holders and, (x) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in

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connection with such terminated Underwritten Offering, and (y) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such offering by giving written notice to PAPI of such withdrawal up to and including the time of pricing of such offering. No Holder shall be entitled to participate in any such Underwritten Offering under this Section 2.02(a) unless such Holder (together with any Affiliate of such Holder) participating therein held at least $10,000,000 of Purchased Common Stock as of the Closing Date. Notwithstanding the foregoing, any Holder may deliver written notice (an “ Opt Out Notice ”) to PAPI requesting that such Holder not receive notice from PAPI of any proposed Underwritten Offering; provided , that such Holder may later revoke any such notice.

(b) Priority of Rights . If the Managing Underwriter or Underwriters of any proposed Underwritten Offering of Common Stock included in an Underwritten Offering involving Included Registrable Securities advises PAPI, or PAPI reasonably determines, that the total amount of Common Stock that the Selling Holders and any other Persons intend to include in such offering exceeds the number that can be sold in such offering without being likely to have a material adverse effect on the price, timing or distribution of the Common Stock offered or the market for the Common Stock, then the Common Stock to be included in such Underwritten Offering shall include the number of Registrable Securities that such Managing Underwriter or Underwriters advises PAPI, or PAPI reasonably determines, can be sold without having such adverse effect, with such number to be allocated (i) first, to PAPI and (ii) second, to the Selling Holders who have requested participation in such Underwritten Offering. The pro rata allocations for each such Selling Holder shall be the product of (a) the aggregate number of Common Stock proposed to be sold by all Selling Holders in such Underwritten Offering multiplied by (b) the fraction derived by dividing (x) the number of shares of Common Stock owned on the Closing Date by such Selling Holder by (y) the aggregate number of shares of Common Stock owned on the Closing Date by all Selling Holders participating in the Underwritten Offering. All participating Selling Holders shall have the opportunity to share pro rata that portion of such priority allocable to any Selling Holder(s) not so participating. As of the date of execution of this Agreement, there are no other Persons with Registration Rights relating to Common Stock other than as described in this Section 2.02(b).

Section 2.03 Underwritten Offering .

(a) Request for Underwritten Offering . Any one or more Holders that collectively hold greater than $20,000,000 of Registrable Securities, based on a valuation price of $2.25 per share of Common Stock, may deliver written notice to PAPI that such Holders wish to dispose of an aggregate of at least $20,000,000 of Registrable Securities, based on the purchase price per unit under the Purchase Agreement, in an Underwritten Offering. Upon receipt of any such written request, PAPI shall retain underwriters designated by the Holders, effect such sale through an Underwritten Offering, including entering into an underwriting agreement in customary form with the Managing Underwriter or Underwriters, which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08, and take all reasonable actions as are requested by the Managing Underwriter or Underwriters to expedite or facilitate the disposition of such Registrable Securities, including

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management’s participation in any roadshow or similar marketing effort on behalf of any such Holder. Holders requesting an Underwritten Offering shall be responsible for all Selling Expenses. The parties acknowledge that PAPI shall not be required to prepay any Selling Expenses on behalf of the requesting Holders and may discontinue any actions required to be taken hereby and shall not incur any penalty hereunder for such discontinuation if such Selling Expenses are not promptly paid when due by the requesting Holders. The parties further agree that PAPI shall be entitled to obtain written agreement from the requesting Holders to pay any and all such Selling Expenses from the proceeds of the sales of such securities ( i.e. , from the flow of funds at the closing of such offering) prior to initiating any such Underwritten Offering.

(b) General Procedures . In connection with any Underwritten Offering under this Agreement, the Holders shall be entitled to select the Managing Underwriter or Underwriters with the consent of PAPI, which consent shall not be unreasonably withheld. In connection with an Underwritten Offering contemplated by this Agreement in which a Selling Holder participates, PAPI shall be obligated to enter into an underwriting agreement that contains such representations, covenants, indemnities and other rights and obligations as are customary in underwriting agreements for firm commitment offerings of securities. No Selling Holder may participate in such Underwritten Offering unless such Selling Holder agrees to sell its Registrable Securities on the basis provided in such underwriting agreement and completes and executes all questionnaires, powers of attorney, indemnities and other documents reasonably required under the terms of such underwriting agreement. Each Selling Holder may, at its option, require that any or all of the representations and warranties by, and the other agreements on the part of, PAPI to and for the benefit of such underwriters also be made to and for such Selling Holder’s benefit and that any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also be conditions precedent to its obligations. No Selling Holder shall be required to make any representations or warranties to or agreements with PAPI or the underwriters other than representations, warranties or agreements regarding such Selling Holder and its ownership of the securities being registered on its behalf, its intended method of distribution and any other representation required by Law. If any Selling Holder disapproves of the terms of an underwriting, such Selling Holder may elect to withdraw therefrom by notice to PAPI and the Managing Underwriter; provided , however , that such withdrawal must be made up to and including the time of pricing of such Underwritten Offering.

Section 2.04 Sale Procedures . In connection with its obligations under this Article II, PAPI will, as expeditiously as possible:

(a) prepare and file with the Commission such amendments and supplements to the Registration Statement and the prospectus used in connection therewith as may be necessary to keep the Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Registration Statement;

(b) if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering from the Registration Statement and the Managing Underwriter at any time shall notify PAPI in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is of material

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importance to the success of the Underwritten Offering of such Registrable Securities, use its commercially reasonable efforts to include such information in such prospectus supplement;

(c) furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing the Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the Commission), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and make the corrections reasonably requested by such Selling Holder with respect to such information prior to filing the Registration Statement or such other registration statement or supplement or amendment thereto, and (ii) such number of copies of the Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Persons may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;

(d) if applicable, use its commercially reasonable efforts to register or qualify the Registrable Securities covered by the Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request; provided , however , that PAPI will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action which would subject it to general service of process in any such jurisdiction where it is not then so subject;

(e) promptly notify each Selling Holder and each underwriter of Registrable Securities, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of the Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective; and (ii) any written comments from the Commission with respect to any filing referred to in clause (i) and any written request by the Commission for amendments or supplements to the Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto;

(f) immediately notify each Selling Holder and each underwriter of Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in the Registration Statement or any other registration statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; (ii) the issuance or threat of issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any other registration statement contemplated by this

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Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by PAPI of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, PAPI agrees to as promptly as practicable amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit 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 to take such other action as is necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

(g) upon request and subject to appropriate confidentiality obligations, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the Commission or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities;

(h) in the case of an Underwritten Offering, furnish upon request, (i) an opinion of counsel for PAPI dated the effective date of the applicable registration statement or the date of any amendment or supplement thereto, and a letter of like kind dated the date of the closing under the underwriting agreement, and (ii) a “cold comfort” letter, dated the date of the applicable registration statement or the date of any amendment or supplement thereto and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have certified PAPI’s financial statements included or incorporated by reference into the applicable registration statement, and each of the opinion and the “cold comfort” letter shall be in customary form and covering substantially the same matters with respect to such registration statement (and the prospectus and any prospectus supplement included therein) as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in Underwritten Offerings of securities and such other matters as such underwriters or Selling Holders may reasonably request;

(i) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

(j) make available to the appropriate representatives of the Managing Underwriter and Selling Holders access to such information and PAPI personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided , however , that PAPI need not disclose any such information to any such representative unless and until such representative has entered into or is otherwise subject to a confidentiality agreement with PAPI satisfactory to PAPI (including any confidentiality agreement referenced in Section 8.06 of the Purchase Agreement);

(k) cause all such Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by PAPI are then listed;

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(l) use its commercially reasonable efforts to cause the Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of PAPI to enable the Selling Holders to consummate the disposition of such Registrable Securities;

(m) provide a transfer agent and registrar for all Registrable Securities covered by such registration statement not later than the effective date of such registration statement;

(n) enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of such Registrable Securities; and

(o) if any Holder could reasonably be deemed to be an “underwriter”, as defined in Section 2(a)(11) of the Securities Act, in connection with the registration statement in respect of any registration of PAPI’s securities of any Holder pursuant to this Agreement, and any amendment or supplement thereof (any such registration statement or amendment or supplement a “ Holder Underwriter Registration Statement ”), cooperate with such Holder in allowing such Holder to conduct customary “underwriter’s due diligence” with respect to PAPI and satisfy its obligations in respect thereof. In addition, at any Holder's request, PAPI will furnish to such Holder, on the date of the effectiveness of any Holder Underwriter Registration Statement and thereafter from time to time on such dates as such Holder may reasonably request, (i) a letter, dated such date, from PAPI’s independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to such Holder, and (ii) an opinion, dated as of such date, of counsel representing PAPI for purposes of such Holder Underwriter Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, including a standard “10b-5” opinion for such offering, addressed to such Holder. PAPI will also permit legal counsel to such Holder to review and comment upon any such Holder Underwriter Registration Statement at least five Business Days prior to its filing with the Commission and all amendments and supplements to any such Holder Underwriter Registration Statement within a reasonable number of days prior to their filing with the Commission and not file any Holder Underwriter Registration Statement or amendment or supplement thereto in a form to which such Holder's legal counsel reasonably objects.

Each Selling Holder, upon receipt of notice from PAPI of the happening of any event of the kind described in Section 2.04(f) of this Agreement, shall forthwith discontinue disposition of the Registrable Securities until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 2.04(f) of this Agreement or until it is advised in writing by PAPI that the use of the prospectus may be resumed, and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by PAPI, such Selling Holder will, or will request the managing underwriter or underwriters, if any, to deliver to PAPI (at PAPI’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

If requested by a Purchaser, PAPI shall: (i) as soon as practicable incorporate in a prospectus supplement or post-effective amendment such information as such Holder reasonably

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requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; (ii) as soon as practicable make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) as soon as practicable, supplement or make amendments to any Registration Statement.

Section 2.05 Cooperation by Holders . PAPI shall have no obligation to include in the Registration Statement Common Stock of a Holder, or in an Underwritten Offering pursuant to Section 2.02 of this Agreement Common Stock of a Selling Holder, who has failed to timely furnish such information that, in the opinion of counsel to PAPI, is reasonably required in order for the registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.06 Restrictions on Public Sale by Holders of Registrable Securities . For a period of 365 days from the Closing Date, each Holder of Registrable Securities who is included in the Registration Statement agrees not to effect any public sale or distribution of the Registrable Securities during the 30-day period following completion of an Underwritten Offering of equity securities by PAPI (except as provided in this Section 2.06); provided , however , that the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the officers or directors or any other Unitholder of PAPI on whom a restriction is imposed in connection with such public offering. In addition, the provisions of this Section 2.06 shall not apply with respect to a Holder that (A) owns less than $10,000,000 of Common Stock, based on a valuation price of $2.25 per share of Common Stock, (B) has delivered an Opt Out Notice to PAPI pursuant to Section 2.02 hereof or (C) has submitted a notice requesting the inclusion of Registrable Securities in an Underwritten Offering pursuant to Section 2.02 or Section 2.03(a) hereof but is unable to do so as a result of the priority provisions contained in Section 2.02(b) hereof.

Section 2.07 Expenses .

(a) Certain Definitions . “ Registration Expenses ” means all expenses incident to PAPI’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on the Registration Statement pursuant to Section 2.01 hereof or an Underwritten Offering covered under this Agreement, and the disposition of such securities, including, without limitation, all registration, filing, securities exchange listing and NYSE Amex fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority (FINRA), transfer taxes and fees of transfer agents and registrars and all word processing fees, and the fees and disbursements of counsel and independent public accountants for PAPI in connection with PAPI’s obligations under Section 2.01 of this Agreement. “ Selling Expenses ” means all underwriting fees, discounts and selling commissions allocable to the sale of the Registrable Securities, and, in the case of an Underwritten Offering, duplicating and printing expenses and the fees and disbursements of counsel and independent public accountants for PAPI, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance with Sections 2.03 and 2.04 of this Agreement.

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(b) Expenses . PAPI will pay all reasonable Registration Expenses as determined in good faith, including, in the case of an Underwritten Offering, whether or not any sale is made pursuant to such Underwritten Offering. In addition, except as otherwise provided in Section 2.08 hereof, PAPI shall not be responsible for legal fees incurred by Holders in connection with the exercise of such Holders’ rights hereunder. Each Selling Holder shall pay all Selling Expenses in connection with any sale of its Registrable Securities hereunder.

Section 2.08 Indemnification .

(a) By PAPI . In the event of an offering of any Registrable Securities under the Securities Act pursuant to this Agreement, PAPI will indemnify and hold harmless each Selling Holder thereunder, its directors and officers, and each underwriter, pursuant to the applicable underwriting agreement with such underwriter, of Registrable Securities thereunder and each Person, if any, who controls such Selling Holder or underwriter within the meaning of the Securities Act and the Exchange Act, and its directors and officers, against any losses, claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”), joint or several, to which such Selling Holder, director, officer, underwriter or controlling Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, free writing 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 (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse each such Selling Holder, its directors and officers, each such underwriter and each such controlling Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Loss or actions or proceedings; provided , however , that PAPI will not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in strict conformity with information furnished by such Selling Holder, its directors or officers or any underwriter or controlling Person in writing specifically for use in the Registration Statement or such other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder or any such Selling Holder, its directors or officers or any underwriter or controlling Person, and shall survive the transfer of such securities by such Selling Holder.

(b) By Each Selling Holder . Each Selling Holder agrees severally and not jointly to indemnify and hold harmless PAPI, its directors and officers, and each Person, if any, who controls PAPI within the meaning of the Securities Act or of the Exchange Act, and its directors and officers, to the same extent as the foregoing indemnity from PAPI to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in the Registration Statement or any preliminary prospectus or final prospectus included therein, or any amendment or supplement thereto; provided , however , that the liability of each Selling Holder shall not be

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greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

(c) Notice . Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party other than under this Section 2.08. In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided , however , that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably acceptable to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnifying party shall settle any action brought against an indemnified party with respect to which it is entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnified party. Notwithstanding any other provision of this Agreement, no indemnified party shall settle any action brought against it with respect to which it is entitled to indemnification hereunder without the consent of the indemnifying party, unless the settlement thereof imposes no liability or obligation on, and includes a complete and unconditional release from all liability of, the indemnifying party.

(d) Contribution . If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each such indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Loss in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of such indemnified party on the other in connection with the statements or omissions which resulted in such Losses, as well as any other relevant equitable considerations; provided , however , that in no event shall such Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the

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sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party on the one hand and the indemnified party on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating or defending any Loss which is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

(e) Other Indemnification . The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution which an indemnified party may have pursuant to law, equity, contract or otherwise.

Section 2.09 Rule 144 Reporting . With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, PAPI agrees to use its commercially reasonable efforts to:

(a) make and keep public information regarding PAPI available, as those terms are understood and defined in Rule 144 under the Securities Act, at all times from and after the date hereof;

(b) file with the Commission in a timely manner all reports and other documents required of PAPI under the Securities Act and the Exchange Act at all times from and after the date hereof; and

(c) so long as a Holder owns any Registrable Securities, furnish, unless otherwise not available at no charge by access electronically to the Commission’s EDGAR filing system, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of PAPI, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration.

Section 2.10 Transfer or Assignment of Registration Rights . The rights to cause PAPI to register Registrable Securities granted to CEHL by PAPI under this Article II may be transferred or assigned by CEHL to one or more transferee(s) or assignee(s) of such Registrable Securities; provided , however , that, (a) unless such transferee is an Affiliate of CEHL, each such transferee or assignee holds Registrable Securities representing at least $10,000,000 of the Registrable Securities, based on a valuation price of $2.25 per share of Common Stock, (b) PAPI is given written notice prior to any said transfer or assignment, stating the name and address of

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each such transferee and identifying the securities with respect to which such registration rights are being transferred or assigned, and (c) each such transferee assumes in writing responsibility for its portion of the obligations of CEHL under this Agreement.

Section 2.11 Limitation on Subsequent Registration Rights . From and after the date hereof, PAPI shall not, without the prior written consent of the Holders of a majority of the outstanding Registrable Securities, (i) enter into any agreement with any current or future holder of any securities of PAPI that would allow such current or future holder to require PAPI to include securities in any registration statement filed by PAPI on a basis that is superior in any way to the piggyback rights granted to the Purchasers hereunder or (ii) grant registration rights to any other Person that would be superior to the Purchasers’ registration rights hereunder.

ARTICLE III

MISCELLANEOUS

Section 3.01 Communications . All notices and other communications provided for or permitted hereunder shall be made in writing by facsimile, electronic mail, courier service or personal delivery:

(a) if to CEHL, to the address set forth in Section 12.1 of the Purchase Agreement in accordance with the provisions of this Section 3.01;

(b) if to a transferee of CEHL, to such Holder at the address provided pursuant to Section 2.10 hereof; and

(c) if to PAPI at 250 East Hartsdale Ave., Suite 47, Hartsdale, New York 10530, (facsimile: 914.472.6793), notice of which is given in accordance with the provisions of this Section 3.01.

All such notices and communications shall be deemed to have been received: at the time delivered by hand, if personally delivered; when receipt acknowledged, if sent via facsimile or electronic mail; and when actually received, if sent by courier service or any other means.

Section 3.02 Successor and Assigns . This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties, including subsequent Holders of Registrable Securities to the extent permitted herein.

Section 3.03 Aggregation of Purchased Common Stock . All Common Stock held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

Section 3.04 Recapitalization, Exchanges, Etc. Affecting the Common Stock . The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all units of PAPI or any successor or assign of PAPI (whether by merger, consolidation, sale or acquisition of assets or otherwise) which may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, unit splits, recapitalizations and the like occurring after the date of this Agreement.

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Section 3.05 Specific Performance . Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity which such Person may have.

Section 3.06 Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same Agreement.

Section 3.07 Headings . The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

Section 3.08 Governing Law . The Laws of the State of New York shall govern this Agreement without regard to principles of conflict of Laws.

Section 3.09 Severability of Provisions . Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting or impairing the validity or enforceability of such provision in any other jurisdiction.

Section 3.10 Entire Agreement . This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the rights granted by PAPI set forth herein. This Agreement and the Purchase Agreement supersede all prior agreements and understandings between the parties with respect to such subject matter.

Section 3.11 Amendment . No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and Holders holding a majority in interest of the Registrable Securities. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

Section 3.12 No Presumption . If any claim is made by a party relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular party or its counsel.

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Section 3.13 Obligations Limited to Parties to Agreement . Each of the Parties hereto covenants, agrees and acknowledges that no Person other than CEHL and PAPI shall have any obligation hereunder and that no recourse under this Agreement or the Purchase Agreement or under any documents or instruments delivered in connection herewith or therewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any Holder or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any Holder or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of CEHL under this Agreement or the Purchase Agreement or any documents or instruments delivered in connection herewith or therewith or for any claim based on, in respect of or by reason of such obligation or its creation.

Section 3.14 Interpretation . Article, Section, Schedule and Exhibit references are to this Agreement, unless otherwise specified. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to”. Whenever any determination, consent or approval is to be made or given by a Purchaser under this Agreement, such action shall be in such Purchaser’s sole discretion unless otherwise specified.

[ The remainder of this page is intentionally left blank ]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

PACIFIC ASIA PETROLEUM, INC.

By: /s/ Frank C. Ingriselli

Frank C. Ingriselli

Chief Executive Officer

Signature Page to Registration Rights Agreement

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

CAMAC ENERGY HOLDINGS LIMITED

By: /s/ Kamoru Lawal

Kamoru Lawal

Director

Signature Page to Registration Rights Agreement

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ANNEX B

PACIFIC ASIA PETROLEUM, INC.

Selling Stockholder Notice and Questionnaire

The undersigned beneficial owner of common stock (the “Common Stock” ), of Pacific Asia Petroleum, Inc., a Delaware corporation (the “Company” ), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission” ) a Registration Statement for the registration and resale of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement, dated as of April __, 2010 (the “Registration Rights Agreement” ), among the Company, CEHL and the other parties named therein. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

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

QUESTIONNAIRE

Name.

(a)

Full Legal Name of Selling Stockholder

(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:

(c)

Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by the questionnaire):

Annex B - 1

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	2. Address for Notices to Selling Stockholder:



	Telephone:
	Fax:
	Contact Person:

3. Beneficial Ownership of Registrable Securities:

Type and Number of Registrable Securities beneficially owned:

4. Broker-Dealer Status:

(a)

Are you a broker-dealer?

Yes ¨ No ¨

Note:

If yes, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

(b)

Are you an affiliate of a broker-dealer?

Yes ¨ No ¨

(c)

If you are an affiliate of a broker-dealer, do you certify that you bought the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

Yes ¨ No ¨

Note:

If no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

5. Beneficial Ownership of Other Securities of the Company Owned by the Selling Stockholder.

Except as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than the Registrable Securities listed above in Item 3.

Type and Amount of Other Securities beneficially owned by the Selling Stockholder:

Annex B - 2

6. Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) 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:

7. The Company has advised each Selling Stockholder that it may not use shares registered on the Registration Statement to cover short sales of Common Stock made prior to the date on which the Registration Statement is declared effective by the Commission, in accordance with 1997 Securities and Exchange Commission Manual of Publicly Available Telephone Interpretations Section A.65. If a Selling Stockholder uses the prospectus for any sale of the Common Stock, it will be subject to the prospectus delivery requirements of the Securities Act. The Selling Stockholders will be responsible to comply with the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without limitation, Regulation M, as applicable to such Selling Stockholders in connection with resales of their respective shares under the 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 and prior to the Effective Date for the Registration Statement.

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and the inclusion of such information in the Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.

Annex B - 3

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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.

Dated: Beneficial Owner:

By:

Name:

Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

Pillsbury Winthrop Shaw Pittman LLP

50 Fremont Street

San Francisco, CA 94105-2228

Facsimile: (415) 983-1200

Attention: Scott C. Kline, Esq.

US 282358v.6

Annex B - 4

	ALLIED ENERGY PLC		(1)
	and
	CAMAC INTERNATIONAL (NIGERIA) LIMITED		(2)
	and
	NIGERIAN AGIP EXPLORATION LIMITED		(3)
	and
	CAMAC PETROLEUM LIMITED		(4)


	AGREEMENT NOVATING PRODUCTION SHARING CONTRACT

1. Definitions and interpretation	2
2. Novation	3
2. Confirmation of Terms	4
4. Representations and Warranties	4
5. Miscellaneous……………………………………………………………………………………………...	4
Schedule 1 Oyo Field

This Agreement is dated 2010 and is made BETWEEN:

(1)	ALLIED ENERGY PLC (formerly, Allied Energy Resources Nigeria Limited) a company incorporated under the laws of the Federal Republic of Nigeria and having its registered office at Plot 1649 Olosa Street, Camac House, Victoria Island, Lagos ( Allied Energy );

(2)	CAMAC INTERNATIONAL (NIGERIA) LIMITED a company incorporated under the laws of the Federal Republic of Nigeria and having its registered office at Plot 1649 Olosa Street, Camac House, Victoria Island, Lagos ( Camac Nigeria );

and together with Allied Energy, Allied

(3)	NIGERIAN AGIP EXPLORATION LIMITED a company incorporated under the laws of the Federal Republic of Nigeria and having its registered office at Plot PC 23 Engineering Close, Victoria Island, Lagos ( NAE ); and

(4)	CAMAC PETROLEUM LIMITED a company incorporated under the laws of the Federal Republic of Nigeria and having its registered office at [ · ] ( CPL )

(together the “ Parties ”, and each a “ Party ”).

(A).	On 3 June 1992, Allied Energy was awarded an oil prospecting licence to block 210 ( OPL 210 ) an interest of 2.5% in which Allied subsequently assigned to Camac Nigeria on 30 September 1992.

(B).	On 28 August 2002, Allied were granted oil mining leases 120 and 121 ( OMLs ) with respect to the OPL 210, for a term of 20 years commencing from 27 February 2001.

(C).	Pursuant to a Deed of Assignment dated 22 July 2005 Allied assigned to NAE a 40% interest in the OMLs, with remaining 60% being retained by Allied.

(D).	On 22 July 2005 Allied and NAE entered into a Production Sharing Contract ( PSC ) setting out the terms of agreement in relation to petroleum operations on the territory of the OMLs.

(E).	Each of Allied Energy and Camac Nigeria wishes to novate to CPL the beneficial ownership of their respective interests in and all rights and obligations under the PSC in relation to the Oyo Field, further details of which are set out in Schedule 1.

NOW IT IS HEREBY AGREED as follows:

1	Definitions and interpretation

1.1	In this Agreement, unless the context otherwise requires:

1.2	In this Agreement, unless the context otherwise requires, all words and expressions defined in the PSC shall have the same respective meanings in this Agreement.

1.2.1

references to clauses and schedules are to Clauses of, and Schedules to, this Agreement;

1.2.2

headings do not affect the interpretation of this Agreement, the singular shall include the plural and vice versa, and references to one gender include all genders;

1.2.3

references to any English legal term or concept shall, in respect of any jurisdiction other than England, be construed as references to the term or concept which most nearly corresponds to it in that jurisdiction;

1.2.4

a reference to any other document referred to in this Agreement is a reference to that other document as amended, revised, varied, novated or supplemented at any time; and

1.2.5

any phrase introduced by the terms including , include , in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.

2.1

Subject to Clause 3.3 and with effect from and including the Novation Date , Allied Energy and Camac Nigeria assign to CPL all their respective rights, liabilities, duties, covenants, undertakings, warranties and other obligations contained in the PSC in respect of the Oyo Field only, including all claims and demands in respect of the Oyo Field arising in connection with the PSC.

2.2

Subject to Clause 3.3 and with effect from and including the Novation Date, CPL accepts all respective rights and liabilities of Allied Energy and Camac Energy under the PSC and agrees to perform all the duties and to discharge all the covenants, undertakings, warranties and other obligations of Allied Energy and Camac Energy respectively and to be bound by all the terms and conditions of the PSC in respect of the Oyo Field only in every way.

2.3	This Agreement shall become effective on the date ( Novation Date ) on which all the Parties hereto have signed this Agreement.

Allied Energy shall indemnify and hold each of NAE and CPL harmless against all losses, damages, injuries, expenses, and actions of whatever kind and nature suffered by each of them respectively where such losses, damages, injuries, expenses, and/or actions are as the result of the failure of Allied Energy to notify the Department of Petroleum Resources (“DPR”) of the transaction described in this Agreement.

2.4	Subject to Article 2.3, NAE acknowledges and agrees to the novation of the PSC contemplated under this Agreement and agrees to be bound by the terms of this Agreement.

2.5	Unless the context otherwise requires, with effect from and including the Novation Date, references to Allied Energy and/or Camac Nigeria and/or Allied in the PSC as far as the Oyo Field is concerned, in accordance with this Agreement, shall be deemed to be references to CPL.

3	Confirmation of Terms

3.1	Subject to Clause 3.3 of this Agreement and except where inconsistent with the provisions of this Agreement, the terms of the PSC are confirmed and shall remain in full force and effect.

3.2	With effect from the Novation Date, this Agreement and the PSC shall be read and construed as one document.

3.3	For the avoidance of doubt the Parties hereby confirm that:

3.3.1

the terms and conditions of Articles 8.1(a), 8.1(c) and 8.3 of the PSC (relating to Royalty Oil, Tax Oil, and the Escrow Account) shall remain unaffected by this Agreement and Allied Energy shall retain its rights and obligations under those Articles;

3.3.2

the waiver by NAE of its rights in Article 8.1(e) of the PSC in favour of Allied Energy in respect of the Oyo field (“ NAE Waiver”) (a) is no longer applicable with effect from the Novation Date, and (b) will be reinstated by NAE, with effect from the Novation Date, upon receipt of a notice from Allied Energy that CPL has become an Affiliate of Allied Energy, to be served together with appropriate supporting documentation, reasonably satisfactory to NAE, evidencing that status of CPL as an Affiliate of Allied Energy. For purposes of the foregoing, reasonably satisfactory evidence shall include, without limitation, (i) any document filed (and available to the public) with the United States Securities and Exchange Commission disclosing that CPL is a subsidiary of Pacific Asia Petroleum, Inc. (“PAPI”) and that the same company that controls Allied Energy controls PAPI, and (ii) certificates signed by an officer or director of (a) PAPI, certifying that CAMAC Energy Holdings Limited (“CEHL”) owns more than 50% of the shares in PAPI and further certifying that PAPI owns more than 50% of the shares in CPL; and (b) CEHL, certifying that it owns more than 50% of the shares in Allied Energy. Notwithstanding the foregoing, if CPL becomes an Affiliate of Allied more than two (2) months after the Novation Date, then the reinstatement of the NAE Waiver will be effective from the date CPL has become an Affiliate of Allied, If and when the NAE Waiver is reinstated pursuant to Article 8.1 (e), such waiver will be deemed to extend to the interest of CPL in the Oyo Field. For the avoidance of doubt, if at any time CPL ceases to be an Affiliate of Allied, then the NAE Waiver shall no longer apply, in accordance with Article 8.1(e) of the PSC.

3.3.3

all terms and conditions of the Co-operation Agreement between NAE and Allied Energy dated 15 January 2006, as amended, remain in full force and effect and shall remain unaffected by this Agreement including without limitation, to procurement and engineering services provided by Allied Energy to NAE with respect to the Oyo Field.

3.3.4

notwithstanding anything to the contrary in this Agreement or the PSC, CPL shall not be entitled to appoint any representatives in the Management Committee, nor to exercise any right to vote therein in respect of any matters, including with respect to the Oyo field. It is understood that CPL’s interest in the Oyo field will be represented by Allied.

3.3.5

notwithstanding anything to the contrary in this Agreement or the PSC, but without prejudice to Clause 3.3.1, the following provisions of the PSC shall not apply to CPL, but will continue to apply to Allied or the First Party, as the case may be: Article 5, 7.2, 7.3, 8.6, 9, 11, 12, 13.3, 14.3. For the avoidance of doubt, the valuation procedures of Article 9 of the PSC shall be binding on CPL.

4	Representations and Warranties

4.1	Each Party severally represents and warrants on behalf of itself that:

4.1.1

it has full power and authority under its memorandum or articles of association or other governing documents and otherwise to enter into and perform its obligations pursuant to this Agreement; and

4.1.2

it has duly authorised, executed and delivered this Agreement and this Agreement constitutes valid and binding obligations enforceable against it in accordance with its terms.

5.1	The provisions of Articles 16 (Confidentiality and Public Announcements) and 20 (Laws and Language) of the PSC shall apply mutatis mutandis to this Agreement.

5.2	This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be an original, but all of which when taken together constitute a single instrument.

IN WITNESS WHEREOF the Parties have entered into this Agreement on the day and year first above written.

Signed for and on behalf of

Signature: /s/ Mickey A. Lawal

Name: Mickey A. Lawal

Designation: Director

Signed for and on behalf of

Signature: /s/ Mickey A. Lawal

Name: Mickey A. Lawal

Designation: Director

Signed for and on behalf of

NIGERIAN AGIP EXPLORATION LIMITED

Signature: /s/ Ciro A. Pagano

Name: Ciro A. Pagano

Designation: Vice Chairman/MD

Signed for and on behalf of

CAMAC PETROLEUM LIMITED

Signature: /s/ Frank C. Ingriselli

Name: Frank C. Ingriselli

Designation: Director

Oyo Field Description

THIS OYO FIELD AGREEMENT, dated as of April 7, 2010 (this “ Agreement ”), by and among CAMAC PETROLEUM LIMITED, a company incorporated in the Federal Republic of Nigeria, and a wholly owned subsidiary of Pacific Asia Petroleum, Inc. (“ Newco ”), CAMAC ENERGY HOLDINGS LIMITED, a Cayman Islands company (“ CEHL ”), and ALLIED ENERGY PLC (formerly, Allied Energy Resources Nigeria Limited), a company incorporated in the Federal Republic of Nigeria (“ Allied ”). Each of the parties to this Agreement is individually referred to herein as a “ Party ” and collectively as the “ Parties .”

WHEREAS, Newco, Allied, CAMAC International (Nigeria) Limited (“ CINL ”) and Nigerian Agip Exploration Limited (“ NAE ”) have entered into that certain Agreement Novating Production Sharing Contract (the “ Novation Agreement ”) of even date herewith, under which each of Allied and CINL novated to Newco their respective interests in and all rights and obligations in relation to the Oyo Field under the Production Sharing Contract dated July 22, 2005 by and among Allied, CINL and NAE (the “ PSC ”);

WHEREAS, the Parties desire to enter into arrangements to enable Newco, to the extent permitted under, and in accordance with the terms and conditions of, the PSC, to maintain orderly supervision, direction, and control of matters pertaining to the Petroleum Operations, Work Programme and Budget as it relates to Newco’s interest in the Oyo Field under the PSC; and

WHEREAS, the parties intend that Newco be indemnified and held harmless from and against any negative effect on Newco’s share of Cost Oil and Profit Oil from the Oyo Field that may result from future Operating Costs from areas on OML 120 and/or OML 121 that are outside of the Oyo Field, and in the event that the NAE Waiver (as defined in the Novation Agreement) ceases to apply as a result of Newco’s ceasing to be an Affiliate of Allied;

NOW, THEREFORE, in consideration of the premises, and the mutual covenants and agreements set forth herein, the Parties agree as follows:

Section 1.1 Capitalized Terms . Any capitalized term used herein that is not otherwise defined shall have the respective meaning ascribed to such term in the PSC.

Section 1.2 Interpretation . Unless the context requires otherwise: (a) the gender (or lack of gender) of all words used in this Agreement includes the masculine, feminine, and neuter; (b) references to an “Article,” and “Section” or “subsection” refer to an article, section or subsection of this Agreement, unless the context requires otherwise; (c) the word “includes” and its derivatives means “includes, but is not limited to” and corresponding derivative expressions; (d) the term “cost” includes expense, and the term “expense” includes cost; (e) the terms defined herein include the plural as well as the singular and vice versa; (f) references to

money refer to legal currency of the United States of America; (g) no construction shall be given to the fact or presumption that one party had a greater or lessor hand in drafting this Agreement; (h) examples shall not be construed to limit, expressly or by implication, the matter they illustrate; (i) a defined term has its defined meaning throughout this Agreement, regardless of whether it appears before or after the place where it is defined; (j) the headings and titles herein are for convenience only and shall have no significance in the interpretation hereof; (k) whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified; and (l) if a term is defined as one part of speech (such as a noun), it shall have a corresponding meaning when used as another part of speech (such as a verb).

MANAGEMENT, DOCUMENTATION AND PERFORMANCE UNDER THE PSC

Section 2.1 Management Committee .

(a) The Parties understand and acknowledge that, as currently structured, the PSC does not provide for a separate Management Committee for each field or development. The Parties agree that Allied will continue to appoint all of the representatives to the Management Committee to which it had heretofore been entitled to appoint. Allied agrees that, in all matters concerning Petroleum Operations, Work Programme and Budget as it relates to Newco’s interest in the Oyo Field under the PSC, Allied shall consult with Newco and represent Newco’s interests in relation thereto, including voting on matters accordingly, as expressly directed in advance in writing by Newco or as may be directed in person by a representative of Newco in attendance at the meeting of the Management Committee. To the extent permitted under the PSC or by other agreement by and between Allied and NAE, Newco shall have the right to attend any meeting of the Management Committee at which matters directly and materially relating to the Oyo Field may be addressed. Allied shall send to Newco written notice of the date, time and venue of each meeting of the Management Committee and an agenda for such meeting on a timely basis, but in no event later than five (5) days after Allied receives written notice of such meeting from the party convening the meeting in question. No Management Committee representative appointed by Allied shall vote at any meeting of the Management Committee on any matter not included in the agenda for such meeting and directly and materially related to the Oyo Field except as expressly directed in advance in writing by Newco or as may be directed in person by a representative of Newco in attendance at the meeting. The provisions of this paragraph shall apply, mutatis mutandis, with respect to any other committee that may be constituted under the PSC to which Allied may appoint representatives, including any finance committee and any technical committee.

(b) No Management Committee representative appointed by Allied shall vote in favor of the termination of the PSC, the unitisation of the Oyo Field or adoption or revision of a Development Plan for the Oyo Field without the prior written consent of Newco.

Section 2.2 Documentation . Each Party agrees to provide to the other Party, on a timely basis, copies of all documentation and written information that it may receive from NAE, the Government, or any other third party in relation to the Oyo Field and that may be material to the interests of Newco. Allied shall request all notices, documentation, data and reports that Allied and CINL are entitled to receive under the PSC be provided separately for the Oyo Field and upon Newco’s request, all of the audit rights of Allied and CINL described in the PSC, including Section 13.3 of the PSC as those relate to the Oyo Field. Allied shall send to Newco a copy of all default notices it sends or receives in connection with or arising out of the PSC, including any such default notice under Section 8.3.2 of the PSC, within five (5) days of such sending or receiving any such notice if the default addressed in such notice could result in an adverse impact on the Oyo Field or PAPI’s interest in the Oyo Field. In addition, Allied shall promptly send to Newco any receipts or acknowledgment letters, within five (5) days of its receipt thereof, that it receives pursuant to Section 14.5 of the PSC that relate to the Oyo Field.

Section 2.3 Performance Under the PSC and Novation Agreement .

(a) Allied shall: (i) perform and observe all of its material covenants and obligations contained in the PSC, (ii) take all reasonable and necessary actions to prevent the termination or cancellation of the PSC, and (iii) upon Newco’s written instruction and at Newco’s expense, enforce against each other party to the PSC each material covenant or obligation of such party in accordance with its terms to the extent that such enforcement is, in the reasonable opinion of Newco, necessary or beneficial to the preservation of Newco’s rights or interests in the Oyo Field.

(b) Newco shall have the right to participate in any meeting held pursuant to Section 9.1 or Section 9.2 of the PSC to determine a valuation formula for the Realizable Price of any Crude Oil attributable to the Oyo Field, and Newco shall have the right to instruct Allied and direct Allied’s actions, and Allied shall follow and comply with such instructions and directions, with respect to the valuation of such Crude Oil. In addition, Newco shall have the right, by written request, to cause Allied to propose a modification to the valuation method for the Realizable Price of any Crude Oil attributable to the Oyo Field in accordance with Section 9.2 of the PSC.

(c) Allied shall send to Newco any demand for arbitration directly relating to Oyo that Allied receives pursuant to Section 23.2 of the PSC within five (5) days of receipt thereof. Newco shall have the right by written request to cause Allied to submit a demand for arbitration with respect to any issue directly relating to the Oyo Field, which submission shall be made by Allied with ten (10) days of its receipt from Newco of a demand in a form appropriate for

submission. Newco shall have the right to participate in any arbitration directly relating to the Oyo Field conducted pursuant to Article 23 of the PSC.

(d) Newco shall be entitled to participate in any meetings or consultations regarding the impact of any change in legislation on the PSC conducted pursuant to Section 26.3 of the PSC.

Section 2.4 Further Assurances . It is the intent of the Parties that Newco be entitled to all rights and have the ability to enforce all such rights under the PSC directly relating to the Oyo Field as if it were a party to the PSC. Allied shall (and, to the extent reasonably within its power, shall cause CINL and NAE to) take all reasonable action and afford all cooperation necessary or requested by Newco to ensure Newco enjoys all rights and has the ability to enforce all such rights under the PSC directly relating to the Oyo Field as if Newco were a party to the PSC.

Section 3.1 Indemnity .

(a) To the extent that, after the date of this Agreement, there are Petroleum Operations on OML 120 and/or OML 121 that are outside of the Oyo Field and such Petroleum Operations result in Operating Costs (“ Non-Oyo Operating Costs ”) that result in Cost Oil that is allocated to NAE or Allied under the terms of the PSC against Available Crude Oil from the Oyo Field, Allied shall indemnify and hold Newco harmless from and against any diminution in the sum of Newco’s allocation of Profit Oil and Cost Oil from the Oyo Field from what would have otherwise been allocated to Newco in the absence of such Non-Oyo Operating Costs (taking into account all relevant factors, including the resulting increase in Profit Oil, if any, resulting from the decrease in Petroleum Profits Tax resulting from the deductibility of the Non-Oyo Costs), in accordance with the provisions of this Article III.

(b) In the event that Allied fails to vote at any meeting of the Management Committee on any matters concerning Petroleum Operations, Work Programme or Budget relating to Newco’s interest in the Oyo Field under the PSC as directed in advance in writing by Newco, or as may be directed in person by a representative of Newco in attendance at the meeting of the Management Committee, Allied shall indemnify and hold harmless Newco from and against any Damages arising out of any claims, liabilities or obligations under the PSC resulting from Allied’s failure to so vote in accordance with the provisions of this Article III. For purposes of this Section 3.1(b), “Damages” shall mean any and all liabilities, losses, claims, damages, fines, penalties and expenses (including costs of investigation and defense and reasonable attorneys’ fees and court costs).

(c) To the extent that any Non-Oyo Operating Costs incurred after the date of the PSC and prior to the date of this Agreement exceed Eighty Million United States Dollars (US$80,000,000), Allied shall indemnify and hold Newco harmless from and against any

diminution in the sum of Newco’s allocation of Profit Oil and Cost Oil from the Oyo Field from what would have otherwise been allocated to Newco in the absence of such prior Non-Oyo Operating Costs in excess of US$80,000,000 (taking into account all relevant factors, including the resulting increase in Profit Oil, if any, resulting from the decrease in Petroleum Profits Tax resulting from the deductibility of the Non-Oyo Costs), in accordance with the provisions of this Article III. For the avoidance of doubt, amounts paid by NAE as consideration for its 40% Participating Interest in OMLs 120 and 121 shall not be considered to be Non-Oyo Operating Costs.

(d) In the event that, pursuant to the provisions of Clause 3.3.2 of the Novation Agreement, the NAE Waiver (as defined therein) ceases to apply as a result of Newco’s ceasing to be an Affiliate of Allied, Allied and CEHL (together, the “ CAMAC Parties ”) shall jointly and severally indemnify and hold Newco harmless from and against any diminution in the sum of Newco’s allocation of Profit Oil from the Oyo Field from what would have otherwise been allocated to Newco in the absence of such cessation of the NAE Waiver (such diminution for which indemnity is to be provided hereunder shall hereinafter be referred to as the “ Waiver Damages ”), in accordance with the provisions of this Article III. Notwithstanding anything to the contrary in Section 3.2 herein, the amount of any and all Waiver Damages suffered by Newco shall be paid in cash, or, at the option of the CAMAC Parties, may be paid in the return of a specified number of shares of CAMAC Energy Inc. (formerly known as Pacific Asia Petroleum, Inc.). If the CAMAC Parties opt to pay shares in lieu of cash for any Waiver Damages, then the CAMAC Parties shall notify Newco in writing of their intent to exercise such option. The number of shares to be paid to Newco shall have a fair market value equal to the aggregate amount of the Waiver Damages to be paid by the CAMAC Parties. The fair market value of such shares shall be determined by calculating the average closing price of the common stock of CAMAC Energy Inc. (formerly known as Pacific Asia Petroleum, Inc.) over a period of 30 days, counting back from the first business day immediately prior to the determination of Waiver Damages pursuant to Section 3.2 herein.

(e) Any amounts that Allied or the CAMAC Parties are required to pay Newco pursuant to this Section 3.1 shall be referred to herein collectively as the “ Adjustment Amount ”.

Section 3.2 Determination of Adjustment Amount . On or before the later of (i) March 31 of every Calendar Year, or (ii) the date that is thirty (30) days after Newco has received all information and documentation from Allied, NAE and the Government, if and as applicable, necessary to calculate the Adjustment Amount for the previous Calendar Year, Newco shall deliver to Allied or, with respect to Waiver Damages, the CAMAC Parties, written notice setting forth the actual Adjustment Amount, if any, for the previous Calendar Year and reasonable supporting calculations and documentation. If Allied or, with respect to Waiver Damages, the CAMAC Parties, dispute the Adjustment Amount as set forth in such written notice, then Allied or, with respect to Waiver Damages, the CAMAC Parties, may, within 10 days following receipt of such notice, object thereto by providing Newco written notice of such objection, setting forth in reasonable detail the substance of such dispute (a “ Dispute Notice ”). Newco shall respond to

the Dispute Notice within 10 days following receipt or as extended by mutual agreement (the “ Dispute Notice Period ”). If Newco and Allied or, with respect to Waiver Damages, the CAMAC Parties, have not agreed to an Adjustment Amount by the end of the Dispute Notice Period, the Parties shall submit such matter to Grant Thornton LLP , located in Houston, Texas, or if such firm no longer exists, then to PricewaterhouseCoopers LLP, located in Houston, Texas (the selected firm is referred to herein as the “ Independent Arbitrator ”), for review and resolution in accordance with the provisions of this Article III.

(a) The Independent Arbitrator shall make a final and binding determination as to the Adjustment Amount. The Independent Arbitrator’s determination shall be in the form of an opinion as is appropriate under the circumstances and shall confirm that it was rendered in accordance with this Article III.

(b) If the Adjustment Amount as set forth in Newco’s written notice (or if disputed by Allied or the CAMAC Parties, as ultimately determined by the Independent Arbitrator or otherwise) is positive (i.e., if the sum of Newco’s share of Profit Oil and Cost Oil has been reduced as a result of Non-Oyo Operating Costs or Waiver Damages are due to Newco from the CAMAC Parties), then Allied or, with respect to Waiver Damages, the CAMAC Parties, shall, within thirty (30) days of such written notice or determination, as appropriate, pay Newco by wire transfer of immediately available funds, the amount of such Adjustment Amount.

(c) Allied, the CAMAC Parties and Newco agree that judgment may be entered upon the determination of the Independent Arbitrator in any court of competent jurisdiction.

Each Party acknowledges that in connection with its performance under this Agreement, it may gain access to confidential material and information which is identified by the other Parties as confidential and proprietary to the other Parties. Each Party agrees to maintain the confidentiality of all such information as provided in the PSC.

This Agreement shall commence upon the date first written above and shall expire at such time as the Oyo Field has been abandoned and all applicable filing and reporting requirements of the Government relating to Newco’s interest in the Oyo Field have been satisfied or are no longer applicable.

NEITHER ALLIED NOR CEHL SHALL NOT BE LIABLE TO NEWCO FOR ANY INDIRECT, SPECIAL, EXEMPLARY, INCIDENTAL OR CONSEQUENTIAL DAMAGES RESULTING FROM THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR FROM THE BREACH OF THIS AGREEMENT.

Section 7.1 Excused Performance . The Parties shall not be subject to any liability, including, but not limited to, any liability of a Party to the other Parties, imposed by virtue of the provisions herein, for failure to comply with any of the terms and provisions of this Agreement, excluding any term or condition relating to the payment of money, during the time and to the extent that such failure shall be due to (a) provisions of Law, or the operation or effect of rules, regulations or orders promulgated by any Governmental Authority having jurisdiction over the Parties; (b) any demand or requisition of any government having jurisdiction over the Parties; (c) the action, judgment or decree of any court; (d) floods, storms, lightening, earthquakes, washouts, high water, fires, acts of God or public enemies, wars (declared or undeclared), blockades, epidemics, riots, insurrections, strikes, labor disputes (it is understood that nothing herein shall be required to force any Party to settle any strike or labor dispute referred to in this Section 7.1), explosions, breakdown or failure of plant machinery, failure of suppliers to deliver material or of carriers to transport the same; or (e) any other cause (except financial), whether similar or dissimilar, over which the Parties, respectively, have no reasonable control, and, in the case of each of clauses (a) through (e) above, which forbid or prevent the performance of all or any part of the conditions or obligations of this Agreement (such causes being herein referred to as “ Force Majeure ”).