OPTION AGREEMENT
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The parties to this Option Agreement are Petrosearch Energy Corporation,
Petrosearch Operating Company, L.L.C., Buena Vista Petrosearch, L.L.C., Pursuit
Petrosearch, L.L.C., Rocky Mountain Petrosearch, L.L.C., Big Sky Petrosearch,
L.L.C., Great Buffalo Petrosearch, L.L.C., Xxxxxx Petrosearch, L.L.C., Rock
Energy Partners Operating, L.P. and Rock Energy Partners, L.P.
R E C I T A L S:
WHEREAS, Petrosearch Energy Corporation, Petrosearch Operating Company,
L.L.C., Buena Vista Petrosearch, L.L.C., Pursuit Petrosearch, L.L.C., Rocky
Mountain Petrosearch, L.L.C., Big Sky Petrosearch, L.L.C., Great Buffalo
Petrosearch, L.L.C., Rock Energy Partners Operating, L.P. and Rock Energy
Partners, L.P. are parties to an Agreement which was effective December 30, 2005
("Original Agreement");
WHEREAS, the Original Agreement was amended by an Amendment to Agreement
dated June 9, 2006. The Original Agreement as amended by the first amendment is
hereinafter referred to as the "First Amended Agreement";
WHEREAS, the parties have further amended the First Amended Agreement in
the manner set forth in the Second Amendment to Agreement by and between
Petrosearch Energy Corporation, Petrosearch Operating Company, L.L.C., Buena
Vista Petrosearch, L.L.C., Pursuit Petrosearch, L.L.C., Rocky Mountain
Petrosearch, L.L.C., Big Sky Petrosearch, L.L.C., Great Buffalo Petrosearch,
L.L.C., Xxxxxx Petrosearch, L.L.C., Rock Energy Partners Operating, L.P. and
Rock Energy Partners, L.P. ("Second Amendment");
WHEREAS, the Second Amendment provides for execution of this Option
Agreement; and
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
ARTICLE I
DEFINITIONS
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Unless otherwise defined in this Option Agreement, the defined terms will
have the same meaning as ascribed to them in the Second Amendment. The
following terms, as used in this Option Agreement, shall have the meanings
indicated below, unless the context otherwise requires:
1.01 "Castletop Deed of Trust" shall mean, collectively, that certain
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Mortgage, Deed of Trust, Security Agreement and Assignment of Production dated
March 31, 2005, recorded in Volume 489, Page 137, Official Public Records,
Colorado County, as amended by that certain Amended Mortgage, Deed of Trust,
Security Agreement, and Assignment of Production dated June 24, 2005, recorded
in Volume 498, Page 280, Official Public Records, Colorado County, from Rock
Energy Partners Operating, L.P., as Grantor, to Xxxxxxx X. Xxxxxx, Trustee for
Castletop Capital Properties, L.P. and Xxxx Xxxxx.
1.02 "Xxxxxxx South Leases" shall have the meaning set forth in the
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Original Agreement and shall include the area marked on Exhibit 1.
1.03 "Xxxxxxx 46 #1 Well" shall mean that certain well drilled in
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Section 46 by Petrosearch Operating Company, L.L.C.
1.04 "Option Exercise Date" shall mean the date on which the
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Petrosearch Parties timely exercise either Option I or Option II by
payment/tender of the Option Exercise Price to Rock.
1.05 "Option Exercise Price" shall mean the assignment, releases, note
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reduction, indemnification and undertakings set forth in Article III, taken as a
whole. Failure to satisfy each and every component of Article III shall
constitute a failure to exercise the Option.
1.06 "Option I" shall mean the Option to acquire the Option Property
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and Rights during the Option I Period.
1.07 "Option I Period" shall mean from the 16th day following the
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Amendment Effective Date through 5:00 p.m. on the four week anniversary of the
16th day following the Amendment Effective Date.
1.08 "Option II" shall mean the Option to acquire the Option Property
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and Rights during the Option II Period.
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1.09 "Option II Period" shall mean from 5:01 p.m. the expiration of
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the Option I Period through the earlier of (i) 5:00 p.m. on the four week
anniversary of the expiration of the Option I Period, and (ii) payment by Rock
of its share of costs with respect to operations performed on the Xxxxxxx 46 #1
Well through the Second Amendment Effective Date.
1.10 "Option Property and Rights" shall mean the assignments, releases,
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indemnifications and undertakings set forth in Sections 2.01, 2.02, 2.03, 2.04,
2.05, 2.06 and 2.07.
1.11 "Petrosearch Parties" shall mean Petrosearch Operating Company,
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L.L.C., Petrosearch Corporation n/k/a Petrosearch Energy Corporation, Pursuit
Petrosearch, L.L.C. and Xxxxxx Petrosearch, L.L.C.
1.12 "Pursuit Parties" shall mean Pursuit Exploration Company, L.P.,
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Xxxxxx Oil & Gas Company and Pathway II Energy, L.L.C.
1.13 "Rock" shall mean Rock Energy Partners Operating, L.P. and Rock
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Energy Partners, L.P.
1.14 "Second Amendment/Second Amended Agreement" shall mean the
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Original Agreement as amended by the First Amended Agreement and as further
amended by the Second Amendment to Agreement.
1.15 "Section 45" shall mean I. & G. N. R. R. Co. Survey 45, A-288,
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comprised of 640 acres, more or less.
1.16 "Section 46" shall mean 438.16 acres of land, more or less, out of
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the I.&G.N.R.R. Co. Survey No. 46, Abstract 323, Colorado County, Texas and
being the same land described in Correction Deed from H. Xxxxxx Xxxxxxx et al.
to Xxxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxxx dated September 20, 1967, recorded
in Volume 263, Page707 of the Colorado County Deed Records.
1.17 "Section 47" shall mean I. & G. N. R. R. Co. Survey 47, A-322,
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comprised of 640 acres, more or less.
1.18 "Settlement Agreement" shall mean the Settlement Agreement dated
---------------------
effective June 8, 2006 by and between Pursuit Exploration Company, L.P., Xxxxxx
Oil & Gas Company, Pathway II Energy, L.L.C., Petrosearch Operating Company,
L.L.C., Petrosearch Corporation n/k/a Petrosearch Energy Corporation, Pursuit
Petrosearch, L.L.C., Rock Energy Partners Operating, L.P. and Rock Energy
Partners, L.P.
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ARTICLE II
GRANT OF OPTION TO ACQUIRE OPTION PROPERTY AND RIGHTS
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2.01 Grant of Option I. Subject to strict adherence to the terms and
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conditions contained in this Agreement, Rock hereby grants to the Petrosearch
Parties Option I to acquire the Option Properties and Rights. To exercise
Option I, the Petrosearch Parties must pay/tender the Option Exercise Price
within the Option I Period.
2.02 Grant of Option II. Subject to strict adherence to the terms and
------------------
conditions contained in this Agreement, Rock hereby grants to the Petrosearch
Parties Option II to acquire the Option Properties and Rights. To exercise
Option II, the Petrosearch Parties must pay/tender the Option Exercise Price
within the Option II Period.
2.03 Section 46 Assignment. On the Option Exercise Date, Rock shall
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notify the Escrow Agent to deliver to Xxxxxx Petrosearch, L.L.C. an assignment
in the form of Exhibit 2 of Rock's interest in Section 46, including the Xxxxxxx
46 #1 Well. The assignment by Rock will be subject to (i) the rights and
interests of the parties under the Settlement Agreement, and (ii) any lien claim
or encumbrance resulting from or attributable to any operations performed on
Section 46, including in connection with the Xxxxxxx 46 #1 Well, but not the
Castletop Deed of Trust. It is the intention of the parties that as a result of
the assignment and the exercise of the Option under this Option Agreement Rock,
after the Option Exercise Date, shall have no rights or interests or liabilities
of any type (other than the right to data as provided in Article IV) with
respect to Section 46. Effective as of the Option Exercise Date, the
Petrosearch Parties assume all liabilities and obligations with respect to
Section 46 and all operations performed thereon, including with respect to the
Xxxxxxx 46 #1 Well. Due to the uniqueness of the interests to be covered by the
assignment under this Section 2.03, Rock agrees that Xxxxxx Petrosearch, L.L.C.
4
shall have the remedy of specific performance should Rock fail or refuse to
deliver the assignment upon satisfaction of the conditions precedent described
in this Agreement. On the Closing Date as defined in the Second Amendment, Rock
shall execute, notarize and deliver to the named escrow agent in that certain
Escrow Agreement of even date executed among the Petrosearch Parties and Rock,
the assignment described in this Section which shall be held in accordance with
its terms.
2.04 Section 46 Payout Deficit Account. On the Option Exercise Date,
-----------------------------------
Rock shall assign its interest in Tract 46 Payout account deficit to Xxxxxx
Petrosearch, L.L.C.
2.05 Release by Rock. Effective as of the Option Exercise Date, Rock
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hereby presently, generally, fully, finally and forever releases, acquits and
discharges the Petrosearch Parties, together with their assigns, officers,
directors, shareholders, representatives and attorneys, from any and all Claims,
known or unknown, which (i) have accrued or which may accrue in the future (but
which arise out of events which occurred prior to the Option Exercise Date)
whether or not now known or asserted, and (ii) relate to or arise as a
consequence of any breach by a Petrosearch Party of any of the following
agreements: (a) the First Amended Agreement, (b) any operating agreement,
except obligations under an existing operating agreement on properties other
than Section 46 which accrue between the date of this Agreement and the Option
Exercise Date, (c) any contract entered into by Rock with a Petrosearch Party
other than the Second Amended Agreement subsequent to December 30, 2005, or (d)
contracts relating to oilfield operations performed subsequent to December 30,
2005. It is expressly agreed that the Claims released hereby exclude those
arising from the rights and obligations under this Option Agreement and the
instruments executed in connection therewith and the representations and
warranties made in this Option Agreement.
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2.06 Release of Castletop Deed of Trust. On the Option Exercise Date,
-----------------------------------
Rock shall notify the Escrow Agent to deliver to Xxxxxx Petrosearch, L.L.C. a
recordable Partial Release of Lien in the form of Exhibit 3. The scope of the
Partial Release of Lien shall be limited to the interests in the property
conveyed pursuant to the assignment referenced in Section 2.03. On the Closing
Date as defined in the Second Amendment, Rock shall execute, notarize and
deliver to the named escrow agent in that certain Escrow Agreement of even date
executed among the Petrosearch Parties and Rock, the partial release of lien
described in this Section which shall be held in accordance with its terms.
2.07 Indemnity by Rock. Effective as of the Option Exercise Date, Rock
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hereby indemnifies and holds the Petrosearch Parties harmless from and against
any and all Claims relating to, arising under, resulting from, or incidental to
(a) any operations performed by Rock on the Xxxxxxx South Leases, (b) all third
party contracts relating to oilfield operations performed on the Xxxxxxx South
Leases, and (c) any obligation with respect to the Xxxxxxx South Leases.
ARTICLE III
OPTION EXERCISE PRICE
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3.01 Xxxxxxx South Assignment. On the Option Exercise Date, the
--------------------------
Petrosearch Parties shall notify the Escrow Agent to deliver to Rock an
assignment in the form of Exhibit 4 of any and all of the Petrosearch Parties
rights, title and interests (including back-in interests and any right to
interests pursuant to Section 8.03 of the First Amended Agreement) in the
Xxxxxxx South Leases. On the Amendment Effective Date, Section 9.06 of the
First Amended Agreement shall be deemed to be expressly limited to Section 47
and Section 45. It is the intention of the parties that as a result of the
assignment and the exercise of the Option under this Option
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Agreement the Petrosearch Parties, after the Option Exercise Date, shall have no
rights or interests of any type (other than the right to data as provided in
Article IV) with respect to the Xxxxxxx South Leases. Due to the uniqueness of
the interests to be covered by the assignment under this Section 3.01, the
Petrosearch Parties agree that Rock shall have the remedy of specific
performance should the Petrosearch Parties fail or refuse to deliver the
assignment upon satisfaction of the conditions precedent described in this
Agreement. On the Closing Date as defined in the Second Amendment, the
Petrosearch Parties shall execute, notarize and deliver to the named escrow
agent in that certain Escrow Agreement of even date executed among the
Petrosearch Parties and Rock, the assignment described in this Section which
shall be held in accordance with its terms.
3.02 Rock Note. By Promissory Note (the "Rock Note") dated as of
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December 30, 2005, as subsequently amended by the maker and payee, Rock agreed
to pay to Petrosearch Energy Corporation the principal balance of $616,448.85,
plus interest thereon at the annual rate of six percent (6%) per annum accruing
from August 1, 2006. Rock paid one installment of $154,112.00 principal under
the Rock Note on or about August 1, 2006, leaving a principal balance as of
August 1, 2006 equal to $462,336.64. Effective as of the Option Exercise Date,
the outstanding principal and interest indebtedness evidenced by the Rock Note
shall be reduced by the sum of $277,846.11 which shall be applied first to
accrued, unpaid interest, and then to principal to achieve an adjusted balance.
The adjusted balance, plus any interest on the principal portion thereof which
accrues after the Option Exercise Date, shall be paid in a single payment which
shall be due on November 30, 2006. Effective as of the Option Exercise Date,
the Rock Note is hereby deemed amended to accord with this section.
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3.03 Release by Petrosearch Parties. Effective as of the Option
---------------------------------
Exercise Date, the Petrosearch Parties hereby presently, generally, fully,
finally and forever release, acquit and discharge Rock, together with its
assigns, officers, directors, shareholders, representatives, attorneys, partners
and lenders from any and all Claims, known or unknown, which (i) have accrued or
which may accrue in the future (but which arise out of events which occurred
prior to the Option Exercise Date) whether or not now known or asserted, and
(ii) relate to or arise as a consequence of any breach by Rock of any of the
following agreements as they pertain to Section 46 and the Xxxxxxx 46#1 Well:
(a) the First Amended Agreement, (b) the Settlement Agreement, (c) any operating
agreement, except obligations under an existing operating agreement on
properties other than Section 46 which accrue between the date of this Agreement
and the Option Exercise Date, (d) any election to participate in the Xxxxxxx 46
#1 Well, (e) any contract entered into by Rock with a Petrosearch Party other
than the Second Amended Agreement subsequent to December 30, 2005, and (f) any
contracts relating to oilfield operations performed subsequent to December 30,
2005. It is expressly agreed that the Claims released hereby exclude those
arising from the rights and obligations under this Option Agreement and the
instruments executed in connection therewith including the representations and
warranties made in this Option Agreement.
3.04 Release of Lien by Petrosearch Parties. On the Option Exercise
-----------------------------------------
Date, the Petrosearch Parties shall notify the Escrow Agent to deliver to Rock a
release of any lien asserted on the interests of Rock on the Xxxxxxx North
Leases and the Xxxxxxx South Leases for unpaid invoices which relate to the
drilling of the Xxxxxxx 46#1 Well. On the Closing Date as defined in the Second
Amendment, the Petrosearch Parties shall execute, notarize and deliver to the
named escrow agent in that certain Escrow Agreement of even date executed among
the Petrosearch
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Parties and Rock, the release of lien described in this Section which shall be
held in accordance with its terms.
3.05 Rock, Castletop Capital Properties, LP and Xxxx Xxxxx Indemnities.
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Effective as of the Option Exercise Date, the Petrosearch Parties hereby
indemnify and hold Rock, Castletop Capital Properties, LP and Xxxx Xxxxx
harmless from and against any and all (i) Claims of the Pursuit Parties relating
to Section 46, including any obligation with respect thereto arising under the
Settlement Agreement, and (ii) Claims relating to, arising under, resulting
from, or incidental to (a) any operations performed by a Petrosearch Party on
Section 46, (b) all third party contracts relating to oilfield operations
performed on Section 46, and (c) any obligation with respect to Section 46.
This indemnity and hold harmless shall exclude the obligation to deliver a
recordable partial release of the Castletop Deed of Trust in the event the
Option is timely exercised pursuant to Section 2.04 hereinabove.
ARTICLE IV
DATA
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4.01 Data Exchange. After the Option Exercise Date, the Petrosearch
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Parties and Rock mutually agree to allow inspection and review and upon written
request to provide copies to one another of all current and future geological
and geophysical information pertaining to Sections 45, 46 and 47 and the Xxxxxxx
South Leases except results of internal or third party interpretations of
technical data. Data which is available to the public shall be excluded from
the copying requirement and the party seeking the publicly available data shall
obtain its copies from the public depository of the data. Otherwise, the
information covered by this provision includes, but is not limited to, the
following:
- Drilling reports showing all formations encountered and the
depths at which encountered during the immediately preceding day
and showing the
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well operations conducted during the immediately preceding day in
any well.
- Written reports on all cuttings and cores taken in any well,
along with representative samples thereof if requested.
- Reasonable advance notice of any production tests, pressure
tests, cores and logs to be run in the well so that the parties
may witness such operations, and a written report of such
operations when they are completed.
- Copies of all reports and other forms filed with any
federal, state or local governmental authority concerning any
well.
- A complete copy of any driller's log and a complete copy of
the electrical survey long from the bottom of the surface casing
to the total depth of the well.
- Copies of all fluid analysis and other reports or
information obtained with respect to any well.
4.02 Confidentiality: Section 46 Information Provided Post Option
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Exercise Date. All information, data and reports of whatsoever kind including
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reports, manuals, designs, sketches, maps, surveys, or any information furnished
to Rock by Petrosearch subsequent to the Option Exercise Date pursuant to
Section 4.01 is hereinafter referred to as the "Section 46 Confidential
Information". The Section 46 Confidential Information shall be for the sole and
exclusive benefit of the parties and no part of the same shall be disclosed by
Rock to any third party, except: (a) any of such Section 46 Confidential
Information that at the time of disclosure by Rock was in the public domain,
except by breach of this contract, (b) any of such Section 46 Confidential
Information that is published or otherwise becomes part of the public domain
after disclosure (except that which enters the public domain by action of
Petrosearch) or (c) any of such Section 46 Confidential Information that is
required to be disclosed by Petrosearch by law, rule or regulation of any
government asserting jurisdiction.
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4.03 Confidentiality: Xxxxxxx South Information Provided Post Option
------------------------------------------------------------------
Exercise Date. All information, data and reports of whatsoever kind including
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reports, manuals, designs, sketches, maps, surveys, or any information furnished
to a Petrosearch Party by Rock subsequent to the Option Exercise Date pursuant
to Section 4.01 is hereinafter referred to as the "Xxxxxxx South Confidential
Information". The Xxxxxxx South Confidential Information shall be for the sole
and exclusive benefit of the parties and no part of the same shall be disclosed
by a Petrosearch Party to any third party, except: (a) any of such Xxxxxxx South
Confidential Information that at the time of disclosure by a Petrosearch Party
was in the public domain, except by breach of this contract, (b) any of such
Xxxxxxx South Confidential Information that is published or otherwise becomes
part of the public domain after disclosure (except that which enters the public
domain by action of Rock) or (c) any of such Xxxxxxx South Confidential
Information that is required to be disclosed by Rock by law, rule or regulation
of any government asserting jurisdiction.
ARTICLE V
REPRESENTATIONS
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5.01 Representations by Rock to the Petrosearch Parties. Rock
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represents and warrants that the following statements are true and accurate as
to itself as of the Option Exercise Date.
a Existence and Power. Rock has been duly formed and is validly
---------------------
existing as a limited partnership under the laws of the State of
Texas, with full power and authority to enter into this Option Agreement,
to consummate the transactions contemplated hereby and to carry out the
terms of this Option Agreement.
b. Review and Approval. Rock represents that its representative
---------------------
has reviewed this Option Agreement together with all exhibits and it
(i) understands fully the terms of this Option Agreement and the
consequences of the issuance thereof, (ii) has been afforded an opportunity
to have this Option Agreement reviewed by legal counsel, and (iii) has
entered into this Option Agreement of its own free will and accord and
without threat or duress.
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c. Authority. Rock represents that the undersigned representative
---------
is fully authorized to execute this Option Agreement or any other
instrument required hereunder on its behalf.
d. Disclaimer. Rock represents, warrants and agrees that in
-----------
executing and entering into this Option Agreement, it is not relying
and has not relied upon any representation, promise or statement made by
anyone which is not recited, contained or embodied in this Option
Agreement. Rock understands and expressly assumes the risk that any fact
not recited, contained or embodied herein or therein may turn out hereafter
to be other than, different from, or contrary to the facts now known to it
or believed by it to be true.
e. Complete Agreement. The written terms of this Option Agreement
-------------------
reflect the full and complete terms of the agreement and understanding
between Rock and the Petrosearch Parties. There are no oral terms or
representations, other than those stated in this Option Agreement in
writing, and no party has relied upon any verbal representations from the
party or its counsel.
f. Validity of Obligation. This Option Agreement and all other
------------------------
transaction documents Rock is to execute and deliver on or before the
Option Exercise Date (i) have been duly executed by its authorized
representative, (ii) constitute its valid and legally binding obligations,
and (iii) are enforceable against Rock in accordance with their respective
terms.
g. No Violation of Contractual Restrictions. Rock's execution,
-------------------------------------------
delivery and performance of this Option Agreement does not conflict
with or violate any agreement or instrument to which it is a party or by
which it is bound.
h. Title. Rock represents that, as previously disclosed, it has
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not previously assigned any of its right, title or interest in (i)
Section 46, or (ii) any Claim against the Petrosearch Parties. The
Petrosearch Parties acknowledge that the Section 46 interest assigned by
Rock is subject to back-in rights, the Settlement Agreement, and potential
liens and claims resulting from operations performed on Section 46 and
other encumbrances of record. With the exception of the foregoing, Rock
represents that its right, title and interest in Section 46 conveyed
pursuant to this Option Agreement will be free and clear of all liens,
claims and encumbrances.
5.02 Representations by the Petrosearch Parties to Rock. Each
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Petrosearch Party represents and warrants to Rock that the following statements
are true and accurate as to itself as of the Option Exercise Date.
a Existence and Power. The Petrosearch Parties have been duly
---------------------
formed and are validly existing as corporations and/or limited
liability companies under the laws of the applicable state of incorporation
and/or formation, with full power and authority to
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enter into this Option Agreement, to consummate the transactions
contemplated hereby and to carry out the terms of this Option Agreement.
b. Review and Approval. The Petrosearch Parties represent that
---------------------
their representatives have reviewed this Option Agreement together
with all exhibits and they (i) understand fully the terms of this Option
Agreement and the consequences of the issuance thereof, (ii) have been
afforded an opportunity to have this Option Agreement reviewed by legal
counsel, and (iii) have entered into this Option Agreement of their own
free will and accord and without threat or duress.
c. Authority. The Petrosearch Parties represent that the
---------
undersigned representatives are fully authorized to execute this
Option Agreement or any other instrument required hereunder on their
behalf.
d. Disclaimer. The Petrosearch Parties represent, warrant and
-----------
agree that in executing and entering into this Option Agreement, they
are not relying and have not relied upon any representation, promise or
statement made by anyone which is not recited, contained or embodied in
this Option Agreement. The Petrosearch Parties understand and expressly
assume the risk that any fact not recited, contained or embodied herein or
therein may turn out hereafter to be other than, different from, or
contrary to the facts now known to them or believed by them to be true.
e. Complete Agreement. The written terms of this Option Agreement
-------------------
reflect the full and complete terms of the agreement and understanding
between the Petrosearch Parties and Rock. There are no oral terms or
representations, other than those stated in this Option Agreement in
writing, and no party has relied upon any verbal representations from the
party or its counsel.
f. Validity of Obligation. This Option Agreement and all other
------------------------
transaction documents the Petrosearch Parties are to execute and
deliver on or before the Option Exercise Date (i) have been duly executed
by their authorized representatives, (ii) constitute their valid and
legally binding obligations, and (iii) are enforceable against the
Petrosearch Parties in accordance with their respective terms.
g. No Violation of Contractual Restrictions. The Petrosearch
--------------------------------------------
Parties' execution, delivery and performance of this Option Agreement
do not conflict with or violate any agreement or instrument to which they
are a party or by which they are bound.
h. Title. The Petrosearch Parties represent that they have not
-----
previously assigned any of their right, title or interest in (i) the
Xxxxxxx South Leases to a third party, or (ii) any Claim against Rock. The
Petrosearch Parties represent that their right, title and interest in the
Xxxxxxx South Leases which are conveyed pursuant to this Option Agreement
will be free and clear of all liens, claims and encumbrances.
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i. No Knowledge of Other Defaults. With the exception of the
----------------------------------
failure to fund the drilling activities on the Xxxxxxx 46#1 Well,
failure to fund the recompletion activities on the Pintail Flats #1 Well,
and failure to pay the Rock Note in accordance with its terms, the
Petrosearch Parties do not have any actual knowledge of any other defaults
or alleged defaults by Rock under any existing operating agreement or
related document.
ARTICLE VI
MISCELLANEOUS
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6.01 Further Assurances. The Petrosearch Parties and Rock, as
-------------------
applicable, shall promptly cure any defects in the execution and delivery of
this Option Agreement, any exhibit to this Option Agreement and all other
documents contemplated by this Agreement and shall promptly execute and deliver
upon request all such other and further assurances, documents, agreements and
instruments in compliance with or accomplishment of the covenants and agreements
in this Option Agreement, or obtain any consents, all as may be necessary or
appropriate in connection therewith.
6.02 Confidentiality Regarding Terms of this Option Agreement. Other
----------------------------------------------------------
than as may be required under applicable securities laws relating to disclosure,
in the opinion of the disclosing party's legal counsel, the terms of this Option
Agreement and any and all negotiations and correspondence in connection with
this Option Agreement shall remain in all respects confidential hereafter,
except as to the fact of settlement and except as disclosure may be required by
applicable law or authority (including securities laws) or to each party's
professional service providers, including lawyers, bankers, and accountants.
Each party hereto agrees to utilize its reasonable best efforts to cause such
confidentiality to be maintained, except as may be required by applicable law or
authority.
6.03 Governing Law. This Option Agreement and all instruments executed
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in accordance with it shall be governed by and interpreted in accordance with
the laws of the state
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of Texas, without regard to conflict-of-law rules that would direct application
of the laws of another jurisdiction, except to the extent that it is mandatory
that the law of some other jurisdiction, wherein the assets are located, shall
apply.
6.04 Entire Agreement; Amendments. This Option Agreement, including
------------------------------
all exhibits attached hereto and made a part hereof constitute the entire
agreement between the Parties with respect to the transactions contemplated
hereby and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the Parties with respect to such
transactions. No amendment of this Option Agreement shall be binding unless
executed in writing by all Parties.
6.05 Waiver. No waiver by a party of any of the provisions of this
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Option Agreement (a) shall be binding unless executed in writing by such party,
(b) shall be deemed or shall constitute a waiver by such party of any other
provision hereof (whether or not similar), and (c) shall not constitute a
continuing waiver by such party.
6.06 Notices. Any notice, request, consent, approval, waiver or other
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communication provided or permitted to be given under this Option Agreement
shall be in writing and shall be delivered in person or sent by U.S. mail,
overnight courier or fax to the appropriate addresses set forth below. Any such
communication shall be effective upon actual receipt; provided, however, that in
the case of delivery by fax after the normal business hours of the recipient,
such communication shall be effective on the next business day following the
transmission of such fax. For purposes of notice, the addresses of the Parties
shall be as follows:
If to the Petrosearch Parties:
Petrosearch Energy Corporation
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxx, President
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Fax: (000) 000-0000
If to Rock:
Rock Energy Partners Operating, L.P.
00000 Xxxxxxxx Xxx., Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
Fax: (000) 000-0000
with copies to:
Snow Xxxxx Xxxxxx LLP
0000 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxx
Fax No.: (000) 000-0000
Xxxx Xxxxxx
Castletop Capital Properties, L.P.
5000 Plaza on the Lakes, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: _______________________
Xxxx Xxxxxx
DuBois, Bryant, Xxxxxxxx & Xxxxxxxx
000 Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Each party shall have the right, upon giving ten (10) days' prior notice to the
other party in the manner provided in this section, to change its address for
purposes of notice.
6.07 Expenses. The Parties, jointly and severally, shall be solely
--------
responsible for all costs and expenses incurred by them in connection with the
transactions contemplated hereby.
6.08 Severability. If any term or other provision of this Option
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Option Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
16
adverse manner with respect to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
Parties shall negotiate in good faith to modify this Option Agreement so as to
effect the original intent of the Parties as closely as possible. The
obligations of the Parties hereunder are severable and not joint.
6.09 Time of the Essence. Time is of the essence with respect to the
---------------------
satisfaction of the obligations, conditions and requirements of this Agreement.
The Options granted herein may only be exercised if the requirements for
complete and timely tender and performance are fully satisfied. The Options
created hereunder expire and terminate immediately upon the occurrence of a
default by a Petrosearch Party under this Agreement or the Second Amended
Agreement. Under no circumstances can a Petrosearch Party exercise an Option
created hereunder after the occurrence of a default by a Petrosearch Party under
this Agreement or the Second Amended Agreement.
6.10 Counterparts. This Option Agreement may be executed in
------------
counterparts (including faxed counterparts). Each such counterpart shall be
deemed an original, but all such counterparts together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Option Agreement.
PETROSEARCH CORPORATION N/K/A
PETROSEARCH ENERGY CORPORATION
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxx Xxxx
-------------------------------------
Date: 9/21/2006 Title: President
----------------------- ------------------------------------
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PETROSEARCH OPERATING COMPANY, L.L.C.
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxx Xxxx
-------------------------------------
Date: 9/21/2006 Title: Manager
----------------------- ------------------------------------
PURSUIT PETROSEARCH, L.L.C.
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxx Xxxx
-------------------------------------
Date: 9/21/2006 Title: Manager
----------------------- ------------------------------------
XXXXXX PETROSEARCH, L.L.C.
By: /s/ Xxxxxxx Xxxx
---------------------------------------
Name: Xxxxxxx Xxxx
-------------------------------------
Date: 9/21/2006 Title: Manager
----------------------- ------------------------------------
ROCK ENERGY PARTNERS OPERATING, L.P.
By: /s/ Xxxxx X. Energy
---------------------------------------
Name: Xxxxx X. Xxxxx
-------------------------------------
Date: 9/20/2006 Title: CEO
----------------------- ------------------------------------
ROCK ENERGY PARTNERS, L.P.
By: /s/ Xxxxx X. Energy
---------------------------------------
Name: Xxxxx X. Xxxxx
-------------------------------------
Date: 9/20/2006 Title: CEO
----------------------- ------------------------------------
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