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YORKVILLE ADVISORS, LLC
101 HUDSON STREET, SUITE
3700
JERSEY CITY, NEW JERSEY
07302
August 5, 2009
Conquest
Petroleum Incorporated
24900 Pitkin
Road. Suite 308
On the terms
and subject to the conditions set forth below, Yorkville
Advisors, LLC ("Yorkville") as the investment manager of YA Global
Master SPV, LTD (the "Investor") proposes to purchase up to
4,620,000 shares of common stock of Conquest Petroleum Incorporated
(the " Issuer ") on the principal terms set forth below
under a Standby Equity Distribution Agreement ("SEDA"). Except for
the Confidentiality and the Due Diligence and Structuring Fee
Provisions, this letter is non-binding and subject to the parties
entering into formal agreements setting forth their respective
rights and obligations. Such agreements will contain customary
representations, warranties and indemnifications. The material
terms of the offering are set forth below:
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Issuer
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Conquest Petroleum incorporated (OTCBB:
CQPT)
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Investor
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YA Global Master SPV, LTD
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Closing and Effective Data
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The Closing Date shall be the day on which
definitive contracts are executed by the Issuer and the
Investor.
The Effective Date shall be the first day
following the effectiveness of a registration statement the Issuer
files with the U.S. Securities and Exchange Commission for shares
underlying the Commitment Amount.
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Commitment Amount
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The Investor shall commit to purchase up to
4,620,000 shares of Common Stock of the Issuer over the course of
24 months following the Effective Date. The Issuer shall have the
right, but not the obligation, to sell Common Stock to the
Investor. Each right to sell Common Stock is called an "
Advance ." Each Advance may be up to twenty percent (20%) of
the aggregate value of the prior 5 days trading volume (the
"Advance Amman").
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Advance Notice
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In order to request an Advance, the Issuer will
submit a written notice (an " Advance Notice ") to the
Investor. The Advance Notice will specify the amount of the
Advance. Advance Notices may be delivered to the
Investor every 5 trading days. The date the Advance Notice is
delivered to the Investor is called an " Advance Notice Date
."
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Affiliate Status
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The Issuer and the Investor acknowledge neither
the Investor, nor the Issuer, by way of Advances may cause the
Investor to become an Affiliate of the Issuer (as defined by any
amounts greater than 4.99% of the Issuer's outstanding Common
Stock).
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Purchase Price
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The Issuer will sell to the Investor the Common
Stock at a purchase price equal to 93.5% of the Market
Price.
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