EXECUTION VERSION
NOTE AND WARRANT PURCHASE AGREEMENT
This NOTE AND WARRANT PURCHASE AGREEMENT, dated as of February 1, 2007
(this "Agreement") is entered into by and among Petrosearch Energy Corporation,
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a Nevada corporation (the "Company"), and RCH Petro Investors, LP, a Delaware
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limited partnership (the "Purchaser").
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WHEREAS, the Company desires to raise an aggregate of $10 million through
the sale of an 8% Senior Secured Convertible Promissory Note and a Warrant to
purchase 5,000,000 shares of Common Stock; and
WHEREAS, it is a condition to the Purchaser's purchase of the Note and
Warrant that the Purchaser be provided with certain registration rights with
respect to the shares of Common Stock into which the Note is convertible and the
shares of Common Stock underlying the Warrant.
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, the Company and the Purchaser
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. As used in this Agreement, and unless the
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context requires a different meaning, the following terms have the meanings
indicated:
" "Action" against a Person means any lawsuit, action, proceeding
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or complaint before any Governmental Authority, mediator or arbitrator.
"Acts" means the Securities Act and the Exchange Act.
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"Affiliate" means, with respect to a specified Person, any other Person,
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whether now in existence or hereafter created, directly or indirectly
controlling, controlled by or under direct or indirect common control with such
specified Person. For purposes of this definition, "control" (including, with
correlative meanings, "controlling," "controlled by," and "under common control
with") means the power to direct or cause the direction of the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise.
"Agreement" shall have the meaning specified in the introductory paragraph.
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"Business Day" means any day other than a Saturday, Sunday, or a legal
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holiday for commercial banks in New York, New York.
"Closing" shall have the meaning specified in Section 2.03.
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"Closing Date" shall have the meaning specified in Section 2.03.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Commission" means the United States Securities and Exchange Commission.
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"Common Stock" means the Company's common stock, par value $0.001.
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"Company Material Adverse Effect" means a material and adverse effect on
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(i) the assets, liabilities, financial condition, business, or affairs of the
Company or (ii) the ability of the Company to consummate the transactions under
any Transaction Document.
"Company Related Parties" shall have the meaning specified in Section 7.02.
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"Company SEC Documents" shall have the meaning specified in Section 3.06.
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"Conversion Price" shall have the meaning specified in the Note.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended from
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time to time, and the rules and regulations of the Commission promulgated
there under.
"GAAP" means generally accepted accounting principles in the United States
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of America in effect from time to time.
"Governmental Authority" shall include the country, state, county, city and
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political subdivisions in which any Person or such Person's Property is located
or which exercises valid jurisdiction over any such Person or such Person's
Property, and any court, agency, department, commission, board, bureau or
instrumentality of any of them and any monetary authorities that exercise valid
jurisdiction over any such Person or such Person's Property. Unless otherwise
specified, all references to Governmental Authority herein shall mean a
Governmental Authority having jurisdiction over, where applicable, the Company
or any of its Property or the Purchaser.
"Holder" means the record holder of the Note, Warrant, Note Shares or
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Warrant Shares.
"Indemnified Party" shall have the meaning specified in Section 7.03.
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"Indemnifying Party" shall have the meaning specified in Section 7.03.
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"Law" means any federal, state, local or foreign order, writ, injunction,
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judgment, settlement, award, decree, statute, law, rule or regulation.
"Lien" means any interest in Property securing an obligation owed to, or a
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claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. For the purpose of this Agreement, a Person shall be
deemed to be the owner of any Property that it has acquired or holds subject to
a conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person in a transaction intended to create a financing.
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"Note" shall have the meaning specified in Section 2.01.
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"Note Shares" means the shares of Common Stock (i) to which the Holder is
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entitled upon conversion of the Note and (ii) that are issued in lieu of cash
interest payments under the Note.
"Offering Notice" shall have the meaning specified in Section 5.04.
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"OTC BB" shall mean the OTC Bulletin Board, on which the Company's Common
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Stock is traded.
"Party" or "Parties" means the Company and the Purchaser party to this
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Agreement, individually or collectively, as the case may be.
"Person" means any individual, corporation, company, voluntary association,
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partnership, joint venture, trust, limited liability company, unincorporated
organization or government or any agency, instrumentality or political
subdivision thereof, or any other form of entity.
"Pledge and Security Agreement" means the pledge and security agreement
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between the Company and the Purchaser in substantially the form attached hereto
as Exhibit C pursuant to which the Company agrees to pledge as collateral
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securing the Note 25% of its 100% interest in Exploration Holding Co., L.L.C.
"Preferred Stock" means, collectively, the Series A 8% convertible
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preferred stock and the Series B convertible preferred stock of the Company.
"Property" means any interest in any kind of property or asset, whether
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real, personal or mixed, or tangible or intangible.
"Proposed Financing" shall have the meaning specified in Section 5.04.
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"Purchase Price" means $10 million.
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"Purchased Securities" means, collectively, the Note and the Warrant.
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"Purchaser" shall have the meaning specified in the introductory paragraph.
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"Purchaser Material Adverse Effect" means any material and adverse effect
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on (i) the ability of a Purchaser to meet its obligations under the Transaction
Documents on a timely basis or (ii) the ability of a Purchaser to consummate the
transactions under any Transaction Document.
"Purchaser Related Parties" shall have the meaning specified in Section
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7.01.
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"Registration Rights Agreement" means the Registration Rights Agreement,
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substantially in the form attached to this Agreement as Exhibit D, to be entered
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into at the Closing, between the Company and the Purchaser.
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"Representatives" of any Person means the Affiliates, control persons,
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officers, directors, employees, agents, counsel, investment bankers and other
representatives of such Person.
"Securities Act" means the Securities Act of 1933, as amended from time to
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time, and the rules and regulations of the Commission promulgated thereunder.
"Terminating Breach" shall have the meaning specified in Section
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8.09(a)(ii).
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"Transaction Documents" means, collectively, this Agreement, the
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Registration Rights Agreement, the Pledge and Security Agreement, the Note and
the Warrant and any and all other agreements or instruments executed and
delivered by the Parties on even date herewith or at Closing, or any amendments,
supplements, continuations or modifications thereto.
"Transfer" shall have the meaning specified in Section 5.08(b).
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"Warrant" shall have the meaning specified in Section 2.02.
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"Warrant Shares" means the shares of Common Stock underlying the Warrant.
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Section 1.02 Accounting Procedures and Interpretation. Unless
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otherwise specified in this Agreement, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters under this
Agreement shall be made, and all financial statements and certificates and
reports as to financial matters required to be furnished to the Purchaser under
this Agreement shall be prepared, in accordance with GAAP applied on a
consistent basis during the periods involved (except, in the case of unaudited
statements, as permitted by Form 10-QSB promulgated by the Commission) and in
compliance as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the Commission with
respect thereto.
ARTICLE II
SALE AND PURCHASE
Section 2.01 Sale and Issuance of the Note. Subject to the terms and
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conditions of this Agreement, the Purchaser agrees to purchase and the Company
agrees to sell the 8% Senior Secured Convertible Promissory Note in
substantially the form attached hereto as Exhibit A (the "Note") for the
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Purchase Price.
Section 2.02 Issuance of Warrants. As additional consideration for the
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Purchaser's agreement to the terms and conditions of this Agreement and other
valuable consideration, the Company shall issue to the Purchaser a warrant to
purchase5,000,000 shares of Common Stock, with the exercise price and other
additional terms and conditions set forth in the form of Warrant attached hereto
as Exhibit B (the "Warrant").
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Section 2.03 Closing. The execution and delivery of the Transaction
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Documents (other than this Agreement) and execution and delivery of all other
instruments, agreements, and other documents required by this Agreement (the
"Closing") shall take place on or before February 9, 2007 (the "Closing
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Date");provided, however, the Parties agree to use commercially reasonable
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efforts to close the transaction on February 7, 2007. The Closing shall take
place at the offices of Xxxxx Xxxxx L.L.P., 00 Xxx Xxxxxxx, Xxxxx 0000, Xxxxxx,
XX 00000.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser, on and as of the date
of this Agreement and on and as of the Closing Date, as follows:
Section 3.01 Valid Existence. Each of the Company and its
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subsidiaries is duly organized, validly existing and in good standing under the
laws of its state of incorporation or formation, and is duly qualified to do
business in all jurisdictions in which the failure to be so qualified would
result in a Company Material Adverse Effect. Each of the Company and its
subsidiaries has all requisite power and authority (i) to own and lease the
properties and assets it currently owns and leases and it contemplates owning
and leasing and (ii) to conduct its activities as such activities are currently
conducted and as currently contemplated to be conducted.
Section 3.02 Ownership of Exploration Holding Co. L.L.C. The Company
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owns 100% of the issued and outstanding membership interests in Exploration
Holding Co. L.L.C., a Texas limited liability company ("Exploration Holding");
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such membership interests are duly authorized and validly issued in accordance
with the Company Agreement of Exploration Holding (the Exploration Holding LLC
Agreement) and fully paid (to the extent required under the Exploration Holding
LLC Agreement) and non-assessable (except as such nonassessability may be
affected by the Texas Business Organizations Code (the "TBOC")); and the Company
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owns such membership interests free and clear of all Liens.
Section 3.03 Ownership of Xxxxxxx Petrosearch, L.L.C. Exploration
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Holding owns 100% of the issued and outstanding membership interests in Xxxxxxx
Petrosearch, L.L.C., a Texas limited liability company ("Xxxxxxx"); such
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membership interests are duly authorized and validly issued in accordance with
Xxxxxxx'x limited liability company agreement (the "Xxxxxxx LLC Agreement") and
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fully paid (to the extent required under the Xxxxxxx LLC Agreement) and
non-assessable (except as such nonassessability may be affected by the TBOC);
and Exploration Holding owns such membership interests free and clear of all
Liens.
Section 3.04 Ownership of DDJET. Xxxxxxx owns a 5.54455% limited
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partnership interest in DDJET Limited, LLP, a Texas limited liability limited
partnership ("DDJET"); such partnership interest is duly authorized and validly
issued in accordance with DDJET's partnership agreement (the "DDJET Partnership
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Agreement") and fully paid (to the extent required under the DDJET Partnership
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Agreement) and non-assessable (except as such nonassessability may be affected
By the TBOC); and Barnet towns such partnership interest free and clear of all
Liens.
Section 3.05 Capitalization and Valid Issuance.
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(a) As of the date of this Agreement, the issued and outstanding equity
of the Company consists of37,952,070shares of Common Stock, 483,416 shares of
Series A 8% convertible preferred stock and 43,000 shares of Series B
convertible preferred stock. All of the outstanding Common Stock and Preferred
Stock have been duly authorized and validly issued and are fully paid and
nonassessable. The rights, privileges and preferences of the Preferred Stock are
as stated in the Company's Articles of Incorporation (the "Articles").
(b) Except for (i) the conversion privileges of the Preferred Stock,
(ii) the conversion privileges of the Note to be issued under this Agreement,
(iii) the warrant being issued in connection with this Agreement, (iv) warrants
issued in February 2006 to certain investors, (v) the shares of Common Stock
issuable upon exercise of warrants granted pursuant to the Company's incentive
plan, and (vi) all warrants disclosed in the Company's SEC Documents, there are
no outstanding options, warrants, rights (including conversion, preemptive
rights or similar rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. The Company is not a party or
subject to any agreement or understanding, and, to the Company's knowledge,
there is no agreement or understanding between any persons and/or entities,
which affects or relates to the voting or giving of written consents with
respect to any security or by a director of the Company, except as provided for
in the Articles.
(c) The issuance, offer and sale of the Note and the issuance of the
Warrant have been duly authorized by the Company and, when issued and delivered
to the Purchaser against payment therefor in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable and will be free
of any and all Liens and restrictions on transfer, other than under applicable
state and federal securities Laws and other than such Liens as are created by
the Purchaser.
(d) The Company's currently outstanding Common Stock is quoted on the
OTC BB.
(e) The Company has reserved the Note Shares and the Warrant Shares for
issuance and has adequate authorized capital under its Articles to issue such
shares when the Note is converted or the Warrant is exercised.
Section 3.06 Company SEC Documents. The Company has timely filed with
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the Commission all reports, schedules and statements required to be filed by it
under the Exchange Act since the filing of its Form 8-A12G on August 10, 2005
(all such documents filed on or prior to the date of this Agreement,
collectively, the "the Company SEC Documents"). The Company SEC Documents,
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including any audited or unaudited financial statements and any notes thereto or
schedules included therein, at the time filed (except to the extent corrected
by a subsequently filed the Company SEC Document filed prior to the date of this
Agreement) (i) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, (ii) complied in all material respects with the applicable
requirements of the Exchange Act, (iii) complied as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the
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Commission with respect thereto, (iv) were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-QSBof the Commission) and (v) fairly present (subject in
the case of unaudited statements to normal, recurring and year-end audit
adjustments) in all material respects the consolidated financial position and
the consolidated results of its operations and cash flows for the periods then
ended. Xxx, Xxxxxxxx & Xxxxxxx, L.L.P. is an independent registered public
accounting firm with respect to the Company and has not resigned or been
dismissed as independent registered public accountants of the Company as a
result of or in connection with any disagreement with the Company on any matter
of accounting principles or practices, financial statement disclosure or
auditing scope or procedures.
Section 3.07 No Material Adverse Change. Except as set forth in or
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contemplated by the Company SEC Documents, since September 30, 2006, the Company
has conducted its business in the ordinary course, consistent with past
practice, and there has been no (i) change that has had or would reasonably be
expected to have a Company Material Adverse Effect, (ii) acquisition or
disposition of any material asset by the Company or any contract or arrangement
therefor, otherwise than for fair value in the ordinary course of business,
(iii) material change in the Company's accounting principles, practices or
methods or (iv) incurrence of material indebtedness.
Section 3.08 Litigation. Except as set forth in the Company SEC
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Documents, there is no Action pending or, to the knowledge of the Company,
contemplated or threatened against the Company or any of its officers (in their
capacity as such), directors (in their capacity as such), Properties, which
(individually or in the aggregate) reasonably would be expected to have a
Company Material Adverse Effect or which challenges the validity of this
Agreement or which would reasonably be expected to adversely affect or restrict
the Company's ability to consummate the transactions contemplated by the
Transaction Documents.
Section 3.09 No Conflict. The execution, delivery and performance by
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the Company of the Transaction Documents to which it is a party and all other
agreements and instruments to be executed and delivered by the Company pursuant
hereto or thereto or in connection herewith and therewith, and compliance by the
Company with the terms and provisions hereof and thereof, do not and will not
(a) violate any provision of any Law, governmental permit, determination or
award having applicability to the Company or any of its Properties, (b) conflict
with or result in a violation of any provision of the articles of incorporation
or bylaws of the Company (c) require any consent, approval or notice under or
result in a violation or breach of or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under (i) any note, bond, mortgage, license, or
loan or credit agreement to which the Company is a party or by which the Company
or any of its Properties may be bound or (ii) any other agreement, instrument or
obligation, or (d) result in or require the creation or imposition of any Lien
upon or with respect to any of the Properties now owned or hereafter acquired by
the Company, except in the cases of clauses (a), (c) and (d) where such
violation, default, breach, termination, cancellation, failure to receive
consent or approval, or acceleration with respect to the foregoing provisions of
this Section 3.09 would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect.
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Section 3.10 Authority. The execution and delivery of, and the
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performance by the Company of its obligations under the Transaction Documents
have been duly and validly authorized by the Company, and the Transaction
Documents have been duly executed and delivered by the Company and constitute
the valid and legally binding agreements of the Company, enforceable against the
Company in accordance with their terms, except as rights to indemnity and
contribution hereunder and there under may be limited by federal or state
securities laws or principles of public policy and subject to the qualification
that the enforceability of the Company's obligations hereunder and there under
may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and by general equitable principles, regardless whether enforcement is
considered in a proceeding in equity or at law.
Section 3.11 Compliance with Laws. The Company is not in violation of
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any judgment, decree or order or any Law applicable to the Company, except as
would not, individually or in the aggregate, have a Company Material Adverse
Effect. The Company possess all certificates, authorizations and permits issued
by the appropriate regulatory authorities necessary to conduct its business,
except where the failure to possess such certificates, authorizations or permits
would not have, individually or in the aggregate, a Company Material Adverse
Effect, and the Company has not received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or permit,
except where such potential revocation or modification would not have,
individually in the aggregate, a Company Material Adverse Effect.
Section 3.12 Preemptive Rights or Registration Rights. Except for as
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set forth on Exhibit 3.12, there are no preemptive rights or other rights to
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subscribe for or to purchase, nor any restriction upon the voting or transfer
of, any capital stock of the Company pursuant to any agreement or instrument to
which the Company is a party and is bound. Neither the execution of this
Agreement nor the issuance of the Note and Warrant as contemplated by this
Agreement gives rise to any rights for or relating to the registration of any
Common Stock, other than as set forth on Exhibit 3.12.
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Section 3.13 Approvals. Except as required by the Commission in
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connection with the Company's obligations under the Registration Rights
Agreement, no authorization, consent, approval, waiver, license, qualification
or written exemption from, nor any filing, declaration, qualification or
registration with, any Governmental Authority or any other Person is required in
connection with the execution, delivery or performance by the Company of any of
the Transaction Documents to which it is a party, except (i) as may be required
under the state securities or "Blue Sky" Laws, (or (ii) where the failure to
receive such authorization, consent, approval, waiver, license, qualification or
written exemption or to make such filing, declaration, qualification or
registration would not, individually or in the aggregate, reasonably be expected
to have a Company Material Adverse Effect.
Section 3.14 Offering. Assuming the accuracy of the representations
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and warranties of the Purchaser contained in this Agreement, the sale and
issuance of the Purchased Securities pursuant to this Agreement is exempt from
the registration requirements of the Securities Act, and neither the Company
nor, to the Company's knowledge, any authorized Representative
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acting on its behalf has taken or will take any action hereafter that would
cause the loss of such exemption.
Section 3.15 Certain Fees. Except for fees payable to Scarsdale
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Equities, LLC in its capacity as placement agent, no fees or commissions will be
payable by the Company to brokers, finders, or investment bankers with respect
to the sale of any of the Purchased Securities or the consummation of the
transactions contemplated by this Agreement. The Company agrees that it will
indemnify and hold harmless the Purchaser from and against any and all claims,
demands, or liabilities for broker's, finder's, placement, or other similar fees
or commissions incurred by the Company or alleged to have been incurred by the
Company in connection with the sale of Purchased Securities or the consummation
of the transactions contemplated by this Agreement.
Section 3.16 No Side Agreements. There are no other agreements by,
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among or between the Company or its Affiliates, on the one hand, and the
Purchaser, on the other hand, with respect to the transactions contemplated
hereby nor promises or inducements for future transactions between or among any
of such parties.
Section 3.17 Investment Company Status. U.S. Shipping is not an
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"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Company, on and as of the date
of this Agreement and on and as of the Closing Date, as follows:
Section 4.01 Valid Existence. The Purchaser (i) is duly organized,
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validly existing and in good standing under the Laws of its jurisdiction of
organization and (ii) has all requisite power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its Properties
and carry on its business as its business is now being conducted, except where
the failure to obtain such licenses, authorizations, consents and approvals
would not reasonably be expected to have a Purchaser Material Adverse Effect.
Section 4.02 No Conflicts. The execution, delivery and performance by
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the Purchaser of the Transaction Documents to which it is a party and all other
agreements and instruments to be executed and delivered by the Purchaser
pursuant hereto or thereto or in connection herewith or therewith, compliance by
the Purchaser with the terms and provisions hereof and thereof, and the purchase
of the Purchased Securities by the Purchaser do not and will not (a) violate any
provision of any Law, governmental permit, determination or award having
applicability to the Purchaser or any of its Properties, (b) conflict with or
result in a violation of any provision of the organizational documents of the
Purchaser, or (c) require any consent (other than standard internal consents),
approval or notice under or result in a violation or breach of or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under (i) any note,
bond, mortgage, license, or loan or credit agreement to which the Purchaser is a
party or by which the Purchaser or any of its Properties may be bound or (ii)
any other such agreement, instrument or obligation, except in the case of
clauses (a) and (c), where such violation, default, breach, termination,
cancellation, failure to receive consent or approval, or acceleration with
respect to the foregoing provisions of
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this Section 4.02 would not, individually or in the aggregate, reasonably be
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expected to have a Purchaser Material Adverse Effect.
Section 4.03 Authority. The execution and delivery of, and the
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performance by the Purchaser of its obligations under the Transaction Documents
have been duly and validly authorized by the Purchaser, and the Transaction
Documents have been duly executed and delivered by the Purchaser and constitute
the valid and legally binding agreements of the Purchaser, enforceable against
the Purchaser in accordance with their terms, except as rights to indemnity and
contribution hereunder and there under may be limited by federal or state
securities laws or principles of public policy and subject to the qualification
that the enforceability of the Purchaser's obligations hereunder and there under
may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and by general equitable principles, regardless whether enforcement is
considered in a proceeding in equity or at law.
Section 4.04 Investment. The Purchased Securities are being acquired
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for the Purchaser's own account, or the accounts of clients for whom the
Purchaser exercises discretionary investment authority, not as a nominee or
agent, and with no present intention of distributing the Purchased Securities or
any part thereof, and that the Purchaser has no present intention of selling or
granting any participation in or otherwise distributing the same in any
transaction in violation of the securities Laws of the United States of America
or any state, without prejudice, however, to the Purchaser's right at all times
(subject to the Purchaser's agreement contained in Section 4.07 to sell or
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otherwise dispose of all or any part of the Purchased Securities under a
registration statement under the Acts and applicable state securities Laws or
under an exemption from such registration available there under (including,
without limitation, if available, Rule 144 promulgated there under). If the
Purchaser should in the future decide to dispose of any of the Purchased
Securities, the Purchaser understands and agrees (a) that it may do so only (i)
in compliance with the Acts and applicable state securities law, as then in
effect, or (ii) in the manner contemplated by any registration statement
pursuant to which such securities are being offered, and (b) that stop-transfer
instructions to that effect will be in effect with respect to such securities.
Section 4.05 Nature of Purchaser. The Purchaser represents and
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warrants to, and covenants and agrees with, the Company that, (a) it is an
"accredited investor" within the meaning of Rule 501 of Regulation D promulgated
by the Commission pursuant to the Securities Act and (b) by reason of its
business and financial experience it has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Purchased Securities,
is able to bear the economic risk of such investment and, at the present time,
would be able to afford a complete loss of such investment.
Section 4.06 Receipt of Information; Authorization. The Purchaser
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acknowledges that it (a) has access to the Company SEC Documents and (b) has
been provided a reasonable opportunity to ask questions of and receive answers
from Representatives of the Company regarding such matters.
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Section 4.07 Restricted Securities. The Purchaser understands that the
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Purchased Securities it is purchasing are characterized as "restricted
securities" under the federal securities Laws inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under such Laws and applicable regulations such securities may be resold
without registration under the Securities Act only in certain limited
circumstances. In this connection, Purchaser represents that it is knowledgeable
with respect to Rule 144 of the Commission promulgated under the Securities Act.
Purchaser further understands that a restrictive legend will be placed on the
Purchased Securities, the Note Shares and the Warrant Shares.
Section 4.08 Certain Fees. No fees or commissions will be payable by
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the Purchaser to brokers, finders, or investment bankers with respect to the
sale of any of the Purchased Securities or the consummation of the transactions
contemplated by this Agreement. The Purchaser agrees that it will indemnify and
hold harmless the Company from and against any and all claims, demands, or
liabilities for broker's, finder's, placement, or other similar fees or
commissions incurred by the Purchaser or alleged to have been incurred by the
Purchaser in connection with the purchase of Purchased Securities or the
consummation of the transactions contemplated by this Agreement.
Section 4.09 Related Parties. The Purchaser is not an officer or
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director of the Company and, on the date hereof and as of the date of Closing
(before giving effect to the purchase of Purchased Securities pursuant to this
Agreement), the Purchaser and its Affiliates (a) hold less than five percent of
the Common Stock of the Company outstanding on the date hereof and (b) hold less
than five percent of the outstanding voting power of the Company.
Section 4.10 Short Sales. The Purchaser has not engaged in short sales
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of the Company's Common Stock during the three months preceding the Closing
Date.
ARTICLE V
COVENANTS
Section 5.01 Notice of Default. So long as any amounts remain
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outstanding under the Note, the Company covenants that it shall give the Holder
written notice of the occurrence of any Event of Default (as defined in Section
8 of the Note) promptly upon the occurrence thereof.
Section 5.02 Observation and Information Rights. So long as any
-------------------------------------
amounts remain outstanding under the Note, the Company covenants that it shall
(i) provide the Holder, on a quarterly basis, evidence that it is in compliance
with the debt covenants contained the Note and(ii) in the event that the Company
has not timely filed the Company SEC Documents provide the Holder quarterly
financial information, quarterly updates regarding the Company's business, and
other information which would have otherwise been filed with the Commission.
Section 5.03 Price Protection. Without limiting the Holder's right
-----------------
set forth in Section 5.04,if the Company issues and sells capital in the Company
any time during the six months following the Closing Date with an equity price
less than the Conversion Price, the Holder may, in its sole discretion, (i)
participate up to $10 million in the transaction in which the Company issues and
sells such capital or (ii) demand that the Company redeem 100% of the then
11
outstanding principal amount of the Note, plus any accrued and unpaid interest.
The Company agrees that in the event the Holder acts pursuant to (i) or (ii),
the Company shall take or cause to take all necessary action to effect the
Holder's participation in such a transaction or the redemption of the Notes. In
the event the Notes are redeemed, the Company agrees that payment will be due to
the Holder in immediately available cash within ten days of receipt of the
Holder's demand for redemption.
Section 5.04 Future Participation Rights. The Company agrees that the
---------------------------
Holder has the right to participate in the next financing of the Company up to
an aggregate amount of up to50%of the total amount raised by the Company in such
financing on terms and conditions set by the Company. In the event that the
Company elects to seek such financing, it will give written notice (the
"Offering Notice") of such offering to the Holder. The Offering Notice shall(i)
----------------
set forth the terms, the amount of and conditions of the proposed financing,
which shall be identical in all material respects to the to the terms and
conditions being offered by the Company to other prospective investors (the
"Proposed Financing") and (ii)specify a date for the closing of the Proposed
-------------------
Financing which shall be not less than 15 days after the date of the Offering
Notice. The Holder shall have ten days after the date of the Offering Notice to
provide written notice to the Company of its intent to participate, pro rata,
with all other prospective investors in the Proposed Financing. If such written
notice is not received within such time period, then the Holder's right to
participate in the Proposed Financing shall terminate.
Section 5.05 Integration. The Company shall not sell, offer for sale
-----------
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Purchased Securities in a manner that would require the
registration under the Securities Act of the sale of the Purchased Securities.
Section 5.06 Short Sales. The Holder agrees that it will not engage in
-----------
short sales of the Company's Common Stock while any amount is outstanding under
the Note.
Section 5.07 Taking of Necessary Action. Each of the Parties hereto
----------------------------
shall use its commercially reasonable efforts promptly to take or cause to be
taken all action and promptly to do or cause to be done all things necessary,
proper or advisable under applicable Law and regulations to consummate and make
effective the transactions contemplated by this Agreement. Without limiting the
foregoing, the Company and the Holder will use its commercially reasonable
efforts to make all filings and obtain all consents of Governmental Authorities
that may be necessary or, in the reasonable opinion of the Holder or the
Company, as the case may be, advisable for the consummation of the transactions
contemplated by the Transaction Documents.
ARTICLE VI
CLOSING CONDITIONS
Section 6.01 Conditions to the Closing
----------------------------
(a) Mutual Conditions. The respective obligation of each Party to
-----------------
consummate the purchase and issuance and sale of the Purchased Securities shall
be subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any
12
or all of which may be waived by a particular Party on behalf of itself in
writing, in whole or in part, to the extent permitted by applicable Law):
(i) no Law shall have been enacted or promulgated, and no
action shall have been taken, by any Governmental Authority of
competent jurisdiction which temporarily, preliminarily or permanently
restrains, precludes, enjoins or otherwise prohibits the consummation of
the transactions contemplated by this Agreement or makes the transactions
contemplated by this Agreement illegal; and
(ii) there shall not be pending any Action by any
Governmental Authority seeking to restrain, preclude, enjoin or
prohibit the transactions contemplated by this Agreement.
(b) Purchaser's Conditions. The obligation of the Purchaser to
-----------------------
consummate the purchase of the Purchased Securities shall be subject to the
satisfaction on or prior to the Closing Date of each of the following conditions
(any or all of which may be waived by a particular Purchaser on behalf of itself
in writing, in whole or in part, to the extent permitted by applicable Law):
(i) The Company shall have performed and complied in all
material respects with the covenants and agreements contained in this
Agreement that are required to be performed and complied with by the
Company on or prior to the Closing Date;
(ii) (the representations and warranties of the Company
contained in this Agreement that are qualified by materiality or
Company Material Adverse Effect shall be true and correct when made and as
of the Closing Date and all other representations and warranties shall be
true and correct in all material respects when made and as of the Closing
Date, in each case as though made at and as of the Closing Date (except
that representations made as of a specific date shall be required to be
true and correct as of such date only);
(iii) since the date of this Agreement, no Company Material
Adverse Effect shall have occurred and be continuing;
(iv) the Company shall have delivered, or caused to be
delivered, to the Purchaser at the Closing, the Company's closing
deliveries described in Section 6.02.
-------------
(c) The Company's Conditions. The obligation of the Company to
------------------------
consummate the sale of the Purchased Securities to the Purchaser shall be
subject to the satisfaction on or prior to the Closing Date of each of the
following conditions (any or all of which may be waived by the Company in
writing, in whole or in part, to the extent permitted by applicable Law):
(i) the Purchaser shall have performed and complied with
in all material respects the covenants and agreements contained in
this Agreement
13
that are required to be performed and complied with by that Purchaser
on or prior to the Closing Date;
(ii) the representations and warranties of the Purchaser
contained in this Agreement that are qualified by materiality or
Purchaser Material Adverse Effect shall be true and correct when made and
as of the Closing Date and all other representations and warranties shall
be true and correct in all material respects when made and as of the
Closing Date, in each case as though made at and as of the Closing Date
(except that representations made as of a specific date shall be required
to be true and correct as of such date only);
(iii) since the date of this Agreement, no Purchaser Material
Adverse Effect shall have occurred and be continuing; and
(iv) the Purchaser shall have delivered, or caused to be
delivered, to the Company at the Closing, the Purchaser's closing
deliveries described in Section 6.03.
Section 6.02 Company Deliveries. At the Closing, subject to the terms
------------------
and conditions of this Agreement, the Company will deliver, or cause to be
delivered, to the Purchaser:
(a) The Purchased Securities, free and clear of any Liens,
encumbrances or interests of any other party other than restrictions on transfer
imposed by federal and state securities Laws and those imposed by Purchaser;
(b) The Registration Rights Agreement in substantially the form
attached to this Agreement as Exhibit D, which shall have been duly executed by
---------
the Company;
(c) The Pledge and Security Agreement in substantially the form
attached to this Agreement as Exhibit C, which shall have been duly executed by
---------
the Company;
(d) The original certificate representing a 25% interest in
Exploration Holding Co., L.L.C. along with a unit power executed in blank;
(e) Copies of the UCC-1s evidencing that the same has been filed
as required by the Pledge and Security Agreement;
(f) The consent required pursuant to Section 3.03 of the Company
Agreement of Exploration Holding Co, L.L.C. permitting the pledge of the
interests under the Pledge and Security Agreement;
(g) Waiver of Fortuna Energy LP's right to participate in this
offering;
(h) Copies of the Articles of the Company, certified by the
Secretary of State of the State of Nevada, dated as of a recent date;
14
(i) A certificate of the Secretary of State of the State of
Nevada, dated as of a recent date, that the Company is in good standing;
(j) A cross-receipt, dated the Closing Date, executed by the
Company and delivered to the Purchaser certifying that it has received the
Purchase Price with respect to the Purchased Securities issued and sold to the
Purchaser;
(k) An officer's certificate of the Company substantially in the
form attached to this Agreement as Exhibit E; and
----------
(l) An opinion addressed to the Purchaser from Xxxxx Xxxxxx dated
the Closing Date, substantially similar in substance to the form of opinion
attached to this Agreement as Exhibit F.
----------
Section 6.03 Purchaser Deliveries. At the Closing, subject to the
---------------------
terms and conditions of this Agreement, the Purchaser will deliver, or cause to
be delivered to the Company:
(a) Payment to the Company of the Purchase Price by wire
transfer(s) of immediately available funds to an account designated by the
Company in writing at least one (1) Business Day prior to the Closing;
(b) the Registration Rights Agreement in substantially the form
attached to this Agreement as Exhibit D, which shall have been duly executed by
---------
the Purchaser;
(c) the Pledge and Security Agreement in substantially the form
attached to this Agreement as Exhibit C which shall have been duly executed by
---------
the Purchaser;
(d) a cross-receipt, dated the Closing Date, executed by the
Purchaser and delivered to the Company certifying that the Purchaser has
received the Purchased Securities; and
(e) an Officer's Certificate substantially in the form attached to
this Agreement as Exhibit G.
----------
ARTICLE VII
INDEMNIFICATION, COSTS AND EXPENSES
Section 7.01 Indemnification by the Company. The Company agrees to
---------------------------------
indemnify the Purchaser and its Representatives (collectively, "Purchaser
---------
Related Parties") from, and hold each of them harmless against any and all
----------------
actions, suits, proceedings (including any investigations, litigation or
inquiries), demands and causes of action, and, in connection therewith, and
promptly on demand, pay and reimburse each of them costs, losses, liabilities,
damages, or expenses of any kind or nature whatsoever, including the reasonable
fees and disbursements of counsel and all other reasonable expenses incurred in
connection with investigating, defending or preparing to defend any such matter
that may be incurred by them or asserted against or involve any of them as a
result of, arising out of, or in any way related to the breach of any of the
15
representations, warranties or covenants of the Company contained
herein;provided that such claim for indemnification relating to a breach of a
representation or warranty is made prior to the expiration of such
representation or warranty.
Section 7.02 Indemnification by Purchaser. The Purchaser agrees to
------------------------------
indemnify the Company and its Representatives (collectively, "the Company
-----------
Related Parties") from, and hold each of them harmless against, any and all
----------------
actions, suits, proceedings (including any investigations, litigation, or
inquiries), demands and causes of action and, in connection therewith, and
promptly upon demand, pay and reimburse each of them costs, losses, liabilities,
damages, or expenses of any kind or nature whatsoever, including, without
limitation, the reasonable fees and disbursements of counsel and all other
reasonable expenses incurred in connection with investigating, defending or
preparing to defend any such matter that may be incurred by them or asserted
against or involve any of them as a result of, arising out of, or in any way
related to the breach of any of the representations, warranties or covenants of
the Purchaser contained herein; provided that such claim for indemnification
relating to a breach of a representation or warranty is made prior to the
expiration of such representation or warranty.
Section 7.03 Indemnification Procedure. Promptly after any the Company
-------------------------
Related Party or Purchaser Related Party (hereinafter, the "Indemnified Party")
-----------------
has received notice of any indemnifiable claim hereunder, or the commencement of
any action or proceeding by a third party, which the Indemnified Party believes
in good faith is an indemnifiable claim under this Agreement, the Indemnified
Party shall give the indemnitor hereunder (the "Indemnifying Party") written
notice of such claim or the commencement of such action or proceeding, but
failure to so notify the Indemnifying Party will not relieve the Indemnifying
Party from any liability it may have to such Indemnified Party hereunder except
to the extent that the Indemnifying Party is materially prejudiced by such
failure. Such notice shall state the nature and the basis of such claim to the
extent then known. The Indemnifying Party shall have the right to defend and
settle, at its own expense and by its own counsel who shall be reasonably
acceptable to the Indemnified Party, any such matter as long as the Indemnifying
Party pursues the same diligently and in good faith. If the Indemnifying Party
undertakes to defend or settle, it shall promptly notify the Indemnified Party
of its intention to do so, and the Indemnified Party shall cooperate with the
Indemnifying Party and its counsel in all commercially reasonable respects in
the defense thereof and the settlement thereof. Such cooperation shall include
furnishing the Indemnifying Party with any books, records and other information
reasonably requested by the Indemnifying Party and in the Indemnified Party's
possession or control. Such cooperation of the Indemnified Party shall be at the
cost of the Indemnifying Party. After the Indemnifying Party has notified the
Indemnified Party of its intention to undertake to defend or settle any such
asserted liability, and for so long as the Indemnifying Party diligently pursues
such defense, the Indemnifying Party shall not be liable for any additional
legal expenses incurred by the Indemnified Party in connection with any defense
or settlement of such asserted liability; provided, however, that the
Indemnified Party shall be entitled (i) at its expense, to participate in the
defense of such asserted liability and the negotiations of the settlement
thereof and (ii) if (A) the Indemnifying Party has failed to assume the defense
or employ counsel reasonably acceptable to the Indemnified Party or (B) 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 in addition to those available to the Indemnifying Party
or if the
16
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 expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the Indemnifying Party as incurred. Notwithstanding any
other provision of this Agreement, the Indemnifying Party shall not settle any
indemnified claim without the consent of the Indemnified Party, unless the
settlement thereof imposes no liability or obligation on, involves no admission
of wrongdoing or malfeasance by, and includes a complete release from liability
of, the Indemnified Party.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 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 the
Company under the Transaction Documents, such action shall be in the Company's
sole discretion unless otherwise specified therein. Whenever the Company has an
obligation under the Transaction Documents, the expense of complying with such
obligation shall be an expense of the Company, as applicable, unless otherwise
specified therein. Whenever any determination, consent or approval is to be
made or given by the Purchaser under the Transaction Documents, such action
shall be in the Purchaser's sole discretion unless otherwise specified therein.
If any provision in the Transaction Documents is held to be illegal, invalid,
not binding, or unenforceable, such provision shall be fully severable and the
Transaction Documents shall be construed and enforced as if such illegal,
invalid, not binding, or unenforceable provision had never comprised a part of
the Transaction Documents, and the remaining provisions shall remain in full
force and effect. The Transaction Documents have been reviewed and negotiated by
sophisticated parties with access to legal counsel and shall not be construed
against the drafter.
Section 8.02 Survival of Provisions. The representations and
------------------------
warranties set forth in Sections 3.01, 3.02, 3.03, 3.04, 3.05, 3.10, 3.11, 3.13,
--------------------------------------------------------
3.18, 3.19, 4.01, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08 and 4.09 of this Agreement
----------------------------------------------------- ----
shall survive the execution and delivery of this Agreement indefinitely, and the
other representations and warranties set forth in this Agreement shall survive
for a period of twelve (12) months following the Closing Date regardless of any
investigation made by or on behalf of the Company, or the Purchaser. The
covenants made in this Agreement or any other Transaction Document shall survive
the closing of the transactions described herein and remain operative and in
full force and effect regardless of acceptance of any of the Purchased
Securities and payment therefor and repayment, conversion or repurchase thereof.
All indemnification obligations of the Company, and the Purchaser pursuant to
this Agreement shall remain operative and in full force and effect unless such
obligations are expressly terminated in a writing by the Parties, regardless of
any purported general termination of this Agreement.
Section 8.03 No Waiver; Modifications in Writing
---------------------------------------
17
(a) Delay. No failure or delay on the part of any Party in
-----
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of any
right, power, or remedy. The remedies provided for herein are cumulative and are
not exclusive of any remedies that may be available to a Party at Law or in
equity or otherwise.
(b) Specific Waiver. Except as otherwise provided herein, no
----------------
amendment, waiver, consent, modification, or termination of any provision of
this Agreement or any other Transaction Document shall be effective unless
signed by each of Parties or each of the original signatories thereto affected
by such amendment, waiver, consent, modification, or termination. Any amendment,
supplement or modification of or to any provision of this Agreement or any other
Transaction Document, any waiver of any provision of this Agreement or any other
Transaction Document, and any consent to any departure by the Company from the
terms of any provision of this Agreement or any other Transaction Document shall
be effective only in the specific instance and for the specific purpose for
which made or given. Except where notice is specifically required by this
Agreement, no notice to or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
Section 8.04 Binding Effect; Assignment
----------------------------
(a) Binding Effect. This Agreement shall be binding upon the
---------------
Company, the Purchaser, and their respective successors and permitted assigns.
Except as expressly provided in this Agreement, this Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
Parties to this Agreement and as provided in Article VII, and their respective
successors and permitted assigns.
(b) Assignment of Purchased Securities. All or any portion of the
-----------------------------------
Purchased Securities purchased pursuant to this Agreement may be sold, assigned
or pledged by the Purchaser, subject to compliance with applicable securities
Laws.
(c) Assignment of Rights. The Purchaser may assign all or any
----------------------
portion of its rights hereunder; provided the assignee shall be deemed to be a
Purchaser hereunder with respect to such assigned rights and shall agree to be
bound by the provisions of this Agreement.
Section 8.05 Communications. All notices and demands provided for
--------------
hereunder shall be in writing and shall be given by registered or certified
mail, return receipt requested, telecopy, air courier guaranteeing overnight
delivery, electronic mail or personal delivery to the addresses listed on the
signature pages hereto or to such other address as the Company or the Purchaser
may designate in writing. All notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; at the
time of transmittal, if sent via electronic mail; upon actual receipt if sent by
registered or certified mail, return receipt requested, or regular mail, if
mailed; when receipt acknowledged, if sent via telecopy; and upon actual receipt
when delivered to an air courier guaranteeing overnight delivery.
18
Section 8.06 Entire Agreement. This Agreement and the other
-----------------
Transaction Documents are 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 and thereto in respect of the subject
matter contained herein and therein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein with respect to the rights granted by the Company or the Purchaser set
forth herein and therein. This Agreement and the other Transaction Documents
supersede all prior agreements and understandings between the Parties with
respect to such subject matter.
Section 8.07 Governing Law. This Agreement will be construed in
--------------
accordance with and governed by the Laws of the State of Texas without regard to
principles of conflicts of Laws.
Section 8.08 Execution in Counterparts. This Agreement may be executed
-------------------------
in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the
event that any signature is delivered by facsimile transmission or by e-mail
delivery of a ".pdf" format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or ".pdf"
signature page were an original thereof.
Section 8.09 Termination.
-----------
(a) Notwithstanding anything herein to the contrary, this
Agreement may be terminated at any time at or prior to the Closing:
(i) by the mutual written consent of the Purchaser and the
Company;
(ii) by the written consent of the Purchaser or by the Company
, (A) if any representation or warranty of the other party set forth
in this Agreement shall be untrue in any material respect when made, or (B)
upon a breach in any material respect of any covenant or agreement on the
part of the other party set forth in this Agreement (either clause (A) or
---------
(B) above being a "Terminating Breach"); provided, that, each
--- -------------------
Terminating Breach would cause the conditions to the non-terminating
party's obligations not to be satisfied and such Terminating Breach is not
cured within 30 days after written notice from the non-breaching party; or
(b) Notwithstanding anything herein to the contrary, this
Agreement shall automatically terminate at any time at or prior to the Closing:
(i) if a statute, rule, order, decree or regulation shall
have been enacted or promulgated, or if any action shall have been
taken by any Governmental Authority of competent jurisdiction which
permanently restrains, precludes, enjoins or otherwise prohibits the
consummation of the transactions contemplated by this Agreement or makes
the transactions contemplated by this Agreement illegal; or
19
(ii) if the Closing shall not have occurred on or before
February 9,2007.
(c) In the event of the termination of this Agreement as provided
in Section 8.09(a) or Section 8.09(b), this Agreement shall forthwith become
---------------- ---------------
null and void. In the event of such termination, there shall be no liability on
the part of any party hereto, except as set forth in Article VII of this
Agreement and except with respect to the requirement to comply with any
confidentiality agreement in favor of the Company; provided that nothing herein
shall relieve any party from any liability or obligation with respect to any
willful breach of this Agreement.
Section 8.10 Expenses. If any action at law or equity is necessary to
--------
enforce or interpret the terms of the Transaction Documents, the prevailing
party shall be entitled to reasonable attorney's fees, out-of-pocket costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
Section 8.11 Change of Control. The provisions of this Agreement shall
-----------------
apply to the full extent set forth herein with respect to any and all common
stock of the Company or any successor or assign of the Company (whether by
merger, consolidation, sale of assets or otherwise) which may be issued in
respect of, in exchange for or in substitution of, the Purchased Securities, the
Note Shares or the Warrant Shares.
Section 8.12 Recapitalization Affecting the Purchased Securities. The
---------------------------------------------------
Purchased Securities, the Note Shares and the Warrant Shares shall be
appropriately adjusted for combinations, recapitalizations and the like
occurring after the date of this Agreement.
[SIGNATURE PAGES TO FOLLOW]
20
IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as
of the date first above written.
PETROSEARCH ENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
----------------------------------
Title: Chief Executive Officer
and President
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
RCH PETRO INVESTORS, LP
By: RR Advisors, LLC,
its general partner
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Name: Xxxxxx Xxxxxxx
------------------------------
Title: Sole Member
------------------------------
Address:
----------------------------
----------------------------
----------------------------
Signature Page to
Note and Warrent Purchase Agreement
EXHIBIT 3.12
------------
Preemptive and Registration Rights
----------------------------------
EXHIBIT 3.12
Exhibit A
---------
Note
----
Attached Hereto
Exhibit A
Exhibit B
---------
Warrant
-------
Attached Hereto
Exhibit B
Exhibit C
---------
PLEDGE AND SECURITY AGREEMENT
-----------------------------
Attached Hereto
Exhibit C
EXHIBIT D
---------
FORM OF REGISTRATION RIGHTS AGREEMENT
-------------------------------------
Attached hereto
EXHIBIT D
Exhibit E
---------
PETROSEARCH ENERGY CORPORATION
OFFICER'S CERTIFICATE
Pursuant to Section 6.02 of the Note and Warrant Purchase Agreement,
dated as of February 1, 2007 (the "Purchase Agreement"), by and among
------------------
Petrosearch Energy Corporation, a Nevada corporation ("the Company"), and RCH
-----------
Petro Investors, LP, a Delaware limited partnership relating to the issuance and
sale by the Company to the Purchaser of Note of the Company, the undersigned
hereby certifies on behalf of the Company, as follows:
(A) The Company has performed and complied in all material respects
with the covenants and agreements contained in the Purchase Agreement that
are required to be performed and complied with by the Company on or prior
to the date hereof.
(B) The representations and warranties of the Company contained in
the Purchase Agreement that are qualified by materiality or Company
Material Adverse Effect (as defined in the Purchase Agreement) are true and
correct as of the date of the Purchase Agreement and as of the date hereof
and all other representations and warranties are true and correct in all
material respects as of the date of the Purchase Agreement and as of the
date hereof, except that representations made as of a specific date are
true and correct as of such date only.
(C) Since the date of the Purchase Agreement, no Company Material
Adverse Effect (as defined in the Purchase Agreement) has occurred and is
continuing.
DATED: FEBRUARY __, 2007 PETROSEARCH ENERGY CORPORATION
By: /s/ Xxxxxxx X. Xxxx
----------------------------------
Name: Xxxxxxx X. Xxxx
----------------------------------
Title: Chief Executive Officer
and President
----------------------------------
Exhibit E
EXHIBIT F
---------
Opinion of Company Counsel
-------------------------
[To Come]
EXHIBIT F
EXHIBIT G
---------
RCH PETRO INVESTORS, LP
OFFICER'S CERTIFICATE
Pursuant to Section 6.03 of the Note and Warrant Purchase Agreement,
dated as of February 1, 2007 (the "Purchase Agreement") by and among Petrosearch
------------------
Energy Corporation, a Nevada corporation, and RCH Petro Investors, LP, a
Delaware limited partnership (the "Purchaser") relating to the issuance and sale
by the Company to the Purchaser of Note of the Company, the undersigned hereby
certifies on behalf of the Company, as follows
(A) The Purchaser has performed and complied in all material respects
with the covenants and agreements contained in the Purchase Agreement that
are required to be performed and complied with by the Purchaser on or prior
to the date hereof.
(B) The representations and warranties of the Purchaser contained in
the Purchase Agreement that are qualified by materiality or Purchaser
Material Adverse Effect (as defined in the Purchase Agreement) are true and
correct as of the date of the Purchase Agreement and as of the date hereof
and all other representations and warranties are true and correct in all
material respects as of the date of the Purchase Agreement and as of the
date hereof, except that representations made as of a specific date are
true and correct as of such date only.
(C) Since the date of the Purchase Agreement, no Purchaser Material
Adverse Effect (as defined in the Purchase Agreement) has occurred and is
continuing.
DATED: FEBRUARY __, 2007 RCH PETRO INVESTORS, LP
By: RR Advisors, LLC,
its general partner
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx, Sole Member
EXHIBIT G
