[FORM OF]
SUBSCRIPTION AGREEMENT
PETROSEARCH ENERGY CORPORATION
February ___, 2006
Petrosearch Energy Corporation
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
The undersigned, ________________________________ (the "SUBSCRIBER"),
understands that Petrosearch Energy Corporation, a Nevada Corporation (the
"COMPANY"), is offering for sale shares of the Company's common stock (the
"COMMON STOCK") at a purchase price of $1.40 per share and warrants to purchase
shares of Common Stock exercisable at a price of $2.00 per share (the
"WARRANTS"). A copy of the form of Warrant Agreement is attached hereto as
Exhibit A. The Subscriber acknowledges and understands that the offering of the
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Common Stock and the Warrants (the "OFFERING") is being made without
registration of the Common Stock or the Warrants under the Securities Act of
1933, as amended (the "ACT"), or any securities "blue sky" or other similar laws
of any state ("STATE SECURITIES LAWS"). The shares of Common Stock are being
offered by the Company through Arabella Securities, LLC as the Company's
placement agent (the "PLACEMENT AGENT").
1. SUBSCRIPTION. Subject to the terms and conditions of this Subscription
Agreement (the "SUBSCRIPTION AGREEMENT"), the Subscriber hereby subscribes for
and agrees to purchase _____________________ shares of Common Stock and
____________ Warrants for the aggregate purchase price of $_____________________
upon acceptance of this Subscription Agreement.
2. PAYMENT FOR THE COMMON STOCK AND WARRANTS. The undersigned encloses
herewith $_________________ required to purchase the Common Stock and the
Warrants subscribed for hereunder. If this subscription is not accepted by the
Company for any reason, all documents and the purchase price will be returned to
the Subscriber.
3. ACCEPTANCE OF SUBSCRIPTION. The subscription for the shares of Common
Stock and the Warrants shall be deemed to be accepted only when this
Subscription Agreement has been signed by an authorized executive officer of the
Company, on behalf of the Company.
4. PLACEMENT AGENT FEES. In consideration of the Placement Agent's services
rendered to the Company as its placement agent in connection with the Offering,
the Company will pay the Placement Agent a fee equal to five percent (5%) of the
gross proceeds received by the Company in connection with the sale of the Common
Stock in the Offering. The Placement Agent will also receive warrants to
purchase up to five percent (5%) of the total number of shares of Common Stock
issued in the Offering at an exercise price of $2.00 per share. The Subscriber
understands that the Company will also pay up to $5,000.00 of the Placement
Agent's legal expenses in connection with the Offering as previously agreed upon
by the Company and the Placement Agent.
5. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER. The Subscriber hereby
represents and warrants to and covenants with the Company as follows:
(a) General.
(i) The Subscriber has all requisite authority to enter into this
Subscription Agreement and to perform all the obligations required to be
performed by the Subscriber hereunder.
(ii) The Subscriber is the sole party in interest and is not acquiring
the Common Stock or the Warrants as an agent or otherwise for any other
person. The Subscriber is a resident of the state set forth opposite its
name on the signature page hereto and (a) if a corporation, partnership,
trust or other form of business organization, it has its principal office
within such state; (b) if an individual, he or she has his or her principal
residence in such state; and (c) if a corporation, partnership, trust or
other form of business organization which was organized for the specific
purpose or acquiring the Common Stock and the Warrants, all of the
beneficial owners are residents of such state.
(iii) The Subscriber recognizes that the total amount of funds
tendered to purchase the Common Stock and the Warrants is placed at the
risk of the business and may be completely lost. The purchase of the Common
Stock and the Warrants as an investment involves extreme risk.
(iv) The Subscriber realizes that neither the Common Stock nor the
Warrants can readily be sold as the shares of Common Stock and the Warrants
(as well as the shares of Common Stock underlying the Warrants) are
restricted securities, that it may not be possible to sell or dispose of
the Common Stock or the Warrants and therefore the Common Stock and the
Warrants must not be purchased unless the Subscriber has liquid assets
sufficient to assure that such purchase will cause no undue financial
difficulties and the Subscriber can provide for [his/its] current needs and
personal contingencies.
(v) The Subscriber confirms and represents that [he/it] is able (a) to
bear the economic risk of [his/its] investment, (b) to hold the securities
for an indefinite period of time, and (c) to afford a complete loss of
[his/its] investment. The Subscriber also represents that [he/it] has (x)
adequate means of providing for [his/its] current needs and personal
contingencies, and (y) has no need for liquidity in this particular
investment.
(vi) The Subscriber has not become aware of the offering of Common
Stock and the Warrants by any form of general solicitation or advertising,
including, but not limited to advertisements, articles, notices or other
communications published in any newspaper, magazine or other similar media
or broadcast over television or radio or any seminar or meeting where those
individuals that have attended have been invited by any such or similar
means of general solicitation or advertising.
(b) Information Concerning the Company.
(i) The Subscriber acknowledges that [he/it] has received all current
information about the Company including the Company's (A) Form SB-2
Registration Statement filed
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with the Commission which became effective on September 7, 2005, (B) Form
10-QSB for the Company's quarter ended December 31, 2005; and (C) Form
8-K's of the Company filed on October 4, 2005, November 2, 2005, November
17, 2005, November 30, 2005, December 12, 2005, January 18, 2006 and
February 3, 2006 (the "FILED DOCUMENTS").
(ii) The Subscriber or [his/its] representative is familiar with the
business and financial condition, properties, operations and prospects of
the Company, and, at a reasonable time prior to the execution of this
Subscription Agreement, that [he/it] and [his/its] representative have been
afforded the opportunity to ask questions of and receive satisfactory
answers from the Company's officers and directors, or other persons acting
on the Company's behalf, concerning the business and financial condition,
properties, operations and prospects of the Company and concerning the
terms and conditions of the Offering and has asked such questions as
[he/it] or [his/its] representative desires to ask and all such questions
have been answered to the full satisfaction of the Subscriber.
(iii) The Subscriber has been furnished, has carefully read, and has
relied solely (except for information obtained pursuant to (iv) below) on
the information contained in the Filed Documents, and Subscriber has not
received any other offering literature or prospectus, and no verbal or
written representations or warranties have been made to Subscriber by the
Company, or its employees or agents, other than the representations of the
Company set forth herein and in the Filed Documents.
(iv) The Subscriber has had an unrestricted opportunity to: (i) obtain
additional information concerning the Offering, the Common Stock and the
Warrants, the Company and any other matters relating directly or indirectly
to Subscriber's purchase of the Common Stock and the Warrants; and (ii) ask
questions of, and receive answers from the Company concerning the terms and
conditions of the Offering and to obtain such additional information as may
have been necessary to verify the accuracy of the information contained in
the Filed Documents.
(v) The Subscriber understands that, unless the Subscriber notifies
the Company in writing to the contrary, all the representations and
warranties contained in this Subscription Agreement will be deemed to have
been reaffirmed and confirmed, taking into account all information received
by the Subscriber.
(vi) The Subscriber understands that the purchase of the Common Stock
and the Warrants involves various risks, including, but not limited to,
those outlined in this Subscription Agreement.
(vii) The Subscriber acknowledges that no representations or
warranties have been made to the Subscriber by the Company as to the tax
consequences of this investment, or as to profits, losses or cash flow
which may be received or sustained as a result of this investment.
(viii) All documents, records and books pertaining to a proposed
investment in the Common Stock and the Warrants which the Subscriber or
[his/its] representative has requested have been made available to the
Subscriber.
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(ix) The Subscriber or [his/its] representative has been provided
access to all information requested in evaluating the purchase of the
Common Stock and the Warrants.
(c) Status of the Subscriber.
(i) The Subscriber represents that the Subscriber is an Accredited
Investor as that term is defined in the Act as that term is defined in the
Act (check each category of "Accredited Investor" below which is applicable
to the Subscriber):
( ) (A) a natural person whose individual net worth, or joint
net worth with that person's spouse, at the time of his purchase
exceeds $1,000,000;
( ) (B) a natural person who had an individual income in excess
of $200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years and
has a reasonable expectation of reaching the same income level in the
current year;
( ) (C) The undersigned is a corporation, partnership or
non-profit organization within the meaning of Section 501(c)(3) of the
Internal Revenue Code, in each case not formed for the specific
purpose of acquiring the securities offered by the Company and with
total assets in excess of $5,000,000; or
( ) (D) The undersigned is an entity in which all of the equity
owners are accredited investors.
(ii) The Subscriber agrees to furnish any additional information
requested to assure compliance with applicable Federal and State Securities
Laws in connection with the purchase and sale of the Common Stock and the
Warrants.
(d) Restrictions on Transfer or Sale of the Common Stock and the
Warrants.
(i) The Subscriber is acquiring the Common Stock and the Warrants
subscribed for solely for the Subscriber's own beneficial account, for
investment purposes, and not with view to, or for resale in connection
with, any distribution of the Common Stock or the Warrants. The Subscriber
understands that the offer and the sale of the Common Stock, the Warrants,
and the shares of Common Stock underlying the Warrants have not been
registered under the Act or any State Securities Laws by reason of specific
exemptions under the provisions thereof which depend in part upon the
investment intent of the Subscriber and of the other representations made
by the Subscriber in this Subscription Agreement. The Subscriber
understands that the Company and the Placement Agent and their respective
counsel and the Company's transfer agent are relying upon the
representations, covenants and agreements contained in this Subscription
Agreement (and any supplemental information) for the purposes of
determining whether this transaction meets the requirements for such
exemptions.
(ii) The Subscriber understands that the shares of Common Stock, the
Warrants, and the shares of Common Stock underlying the Warrants are
"restricted securities" under
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applicable federal securities laws and that the Act and the rules of the
Securities and Exchange Commission (the "COMMISSION") provide in substance
that the Subscriber may dispose of the Common Stock and the Warrants only
pursuant to an effective registration statement under the Act or an
exemption therefrom. While the Company has agreed to grant "piggy-back"
registration rights to the Subscriber pursuant to Section 9 for the Common
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Stock and the shares of Common Stock underlying the Warrants, the
Subscriber acknowledges that the Company may not file a registration
statement with the Commission and that if filed, no representation is made
as to when such registration statement would be declared effective by the
Commission. The certificates evidencing the shares of Common Stock, the
Warrants, and the shares of Common Stock underlying the Warrants offered
hereby will bear a legend which clearly sets forth this restriction. The
Subscriber understands that the Subscriber may not at any time demand the
purchase by the Company of the Subscriber's Common Stock or the Warrants.
(iii) The Subscriber agrees: (A) that the Subscriber will not sell,
assign, pledge, give, transfer or otherwise dispose of the Common Stock or
the Warrants or any interest therein, or make any offer or attempt to do
any of the foregoing, except pursuant to a registration of the Common Stock
and the Warrants under the Act and all applicable State Securities Laws or
in a transaction which is exempt from the registration provisions of the
Act and all applicable State Securities Laws; (B) that the Company and any
transfer agent for the Common Stock shall not be required to give effect to
any purported transfer of any of the Common Stock or the Warrants except
upon compliance with the foregoing restrictions; and (C) that a restrictive
legend will be placed on the certificates representing the Common Stock,
the Warrants, and any shares of Common Stock issued pursuant to exercise of
the Warrants.
(iv) The Subscriber has not offered or sold any portion of the
subscribed for Common Stock or the Warrants and has no present intention of
dividing such Common Stock or the Warrants with others or of reselling or
otherwise disposing of any portion of such Common Stock or the Warrants
either currently or after the passage of a fixed or determinable period of
time or upon the occurrence or nonoccurrence of any predetermined event or
circumstance.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Subscriber as follows:
(a) Each of the Company and its subsidiaries is duly incorporated,
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 materially and
adversely affect the business or financial condition, properties or
operations of the Company. Each of the Company and its subsidiaries has all
requisite corporate 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.
(b) The Company has duly authorized the issuance and sale of the
shares of Common Stock and the Warrants and the shares of Common Stock
underlying the Warrants in
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accordance with the terms of this Subscription Agreement and the Warrant
Agreement by all requisite corporate action, and the execution, delivery
and performance of any other agreements and instruments executed in
connection herewith including the Warrant Agreement. This Subscription
Agreement constitutes a valid and legally binding obligation of the
Company, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies, and (iii) to
the extent the indemnification provisions contained herein may be limited
by applicable federal or state securities laws.
(c) The shares of Common Stock and the shares of Common Stock
underlying the Warrants, when issued and paid for in accordance with the
terms of this Subscription Agreement and the Warrant Agreement, will
represent validly authorized, duly issued and fully paid and nonassessable
shares of Common Stock of the Company, and the issuance thereof will not
conflict with the Articles of Incorporation or Bylaws of the Company and
will be in compliance in all material respects with all federal and state
securities laws applicable to such issuance and sale.
(d) The execution and delivery of this Subscription Agreement and the
Warrant Agreement, the fulfillment of the terms set forth herein and
therein and the consummation of the transactions contemplated hereby and
thereby will not conflict with, or constitute a breach of or default under,
any agreement, indenture or instrument by which the Company is bound or any
law, administrative rule, regulation or decree of any court or any
governmental body or administrative agency applicable to the Company.
(e) The Filed Documents that have been filed with the Commission, at
the time they were filed with the Commission, complied in all material
respects with the requirements of the Exchange Act, and, at the time filed
with the Commission and as of the date hereof, when read together and with
the other information in the Filed Documents, do not contain an 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
the light of the circumstances under which they were made, not misleading.
7. SURVIVAL AND INDEMNIFICATION. All representations, warranties and
covenants contained in this Subscription Agreement and the indemnification
contained in this Section7 shall survive (i) the acceptance of the Subscription
Agreement by the Company and (ii) the death or disability of the Subscriber. The
Subscriber hereby agrees to indemnify, defend and hold harmless the Company, and
its officers, directors, employees, agents and controlling persons, from and
against any and all losses, claims, damages, liabilities, expenses (including
attorneys' fees and disbursements), judgment or amounts paid in settlement of
actions arising out of or resulting from the untruth of any representation
herein or the breach of any warranty or covenant herein up to the amount of such
Subscriber's investment. Notwithstanding the foregoing, however, no
representation, warranty, covenant or acknowledgment made herein by the
Subscriber shall in any manner be deemed to constitute a waiver of any rights
granted to it under the Securities or State Securities laws.
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8. ADJUSTMENT UPON MORE FAVORABLE PLACEMENT. If at any time during the
period from the execution of this Subscription Agreement until six (6) months
thereafter the Company shall issue shares of Common Stock (or rights, warrants
or other securities convertible into or exchangeable for shares of Common
Stock), other than issuances pursuant to the Company's existing stock option
plan at a price per share (or having an exercise, conversion or exchange price
per share) less than $1.40, then the purchase price of the shares of Common
Stock purchased under this Subscription Agreement shall be automatically
adjusted to the lower price made available to the third party. Upon the
adjustment, such additional shares of Common Stock shall be issued to Subscriber
and delivered to Subscriber as are necessary to make the purchase price per
share paid by the Subscriber equal the lower price.
9. PIGGYBACK REGISTRATION RIGHTS.
The Company covenants and agrees as follows:
(a) Definitions. For purposes of this Section 9:
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(i) The term "1934 Act" means the Securities Exchange Act of
1934, as amended.
(ii) The term "Holder" means each of the persons who at the time
holds Registrable Securities or a warrant or warrants (including this Warrant)
to purchase Registrable Securities.
(iii) The terms "register," "registered" and "registration" refer
to a registration effected by preparing and filing a registration statement or
similar document in compliance with the 1933 Act, and such registration
statement or document becoming effective.
(iv) The term "Registrable Securities" means (i) the Common Stock
and the shares of Common Stock issuable upon the exercise of the Warrants issued
in this Offering, and (ii) any Common Stock issued as (or issuable upon the
conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in
replacement of, the Common Stock or shares issuable upon the exercise of the
Warrants; provided, however, that any such securities shall cease to be
Registrable Securities when (i) one or more registration statements with respect
to the sale of such securities shall have become effective under the 1933 Act
and all such securities shall have been disposed of in accordance with the plan
of distribution set forth therein; (ii) such securities shall have been disposed
of in accordance with SEC Rule 144 promulgated under the 1933 Act, or any
successor rule or regulation thereto, or any statute hereafter adopted to
replace or to establish the exemption that is now covered by said Rule 144
("Rule 144"); (iii) such securities may be sold by a Holder in a transaction
pursuant to the provisions of Rule 144 provided that such rule shall be at such
time available for the sale of all such securities which the Holder at such time
desires to sell; or (iv) such securities may otherwise be sold to the public in
a transaction not requiring registration under the 1933 Act.
(v) The term "Registration Expenses" means all registration,
qualification and filing fees, printing expenses, escrow fees and blue sky fees,
fees and disbursements of counsel for the Company and of the Company's
independent certified public accountants, in each case incident
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to or required by the registration under this Subscription Agreement, and any
other fees and expenses of the registration under this Subscription Agreement
which are not Selling Expenses.
(vi) The term "Selling Expenses" means all underwriting
discounts, selling commissions and stock transfer taxes applicable to the
securities registered by the Holders and all fees and disbursements of counsel
for any Holder.
(vii) All other capitalized terms used in this Section that are
not defined herein shall have the meaning otherwise given in this Subscription
Agreement.
(b) Reserved.
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(c) Piggyback Registration Rights.
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(i) If, at any time or from time to time, the Company shall
determine to register any shares of its Common Stock, either for its own
account or for the account of a security holder or holders, other than (A)
a registration relating solely to stock option or employee benefit plans or
(B) a registration relating solely to a transaction covered by Rule 145
under the 1933 Act, the Company will (X) promptly give the Holders written
notice thereof, and (Y) include in such registration (and any related
qualification under blue sky or other state securities laws), and in any
underwriting involved therein, all of the Registrable Securities specified
in a written request or requests made by a Holder or Holders within twenty
(20) days after receipt of such written notice from the Company.
(ii) If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company
shall so advise the Holder as part of the written notice given pursuant to
Section 9(c)(i). In such event, the right of each Holder to registration
pursuant to this Section 9(c) shall be conditioned upon such Holder's
participation in such underwriting and the inclusion of the Registrable
Securities owned by such Holder in the underwriting to the extent provided
under this Section 9(c). If a Holder proposes to distribute its Registrable
Securities through such underwriting it shall (together with the Company
and any other holders of securities of the Company distributing their
securities through such underwriting) enter into an underwriting agreement
with the managing or lead managing underwriter selected by the Company in
the form customarily used by such underwriter with such changes thereto as
the parties thereto shall agree. Notwithstanding any other provision of
this Section 9(c), if the managing or lead managing underwriter determines
that market factors require that the number of Registrable Securities and
other securities requested to be included in the registration be limited,
the managing or lead managing underwriter may reduce the number of
Registrable Securities and securities of any other holders of securities to
be included in the registration. If the registration includes an
underwritten primary registration on behalf of the Company, the reduction
shall be taken (i) first from and to the extent of the securities requested
to be included in the such registration by the Holders and the holders of
any other securities pro rata according to the number of securities
requested by the Holders and such holders to be included in the
registration, and (ii) thereafter from the securities to be registered on
behalf of the Company. If the registration consists only of any
underwritten secondary registration on behalf of holders of securities of
the Company, the reduction shall be taken (i) first from and to the extent
of the securities requested to be included in the such registration by the
Holders and any other holders of securities included in the registration
other than pursuant to demand registration rights pro rata according to the
number of securities requested by the Holders and such other holders to be
included in the registration and (ii) thereafter from securities, if any,
to be
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registered on behalf of holders of securities included in the registration
pursuant to demand registration rights. The Company shall advise any
Holders and other holders participating in such underwriting as to any such
limitation and the number of shares that may be included in the
registration and underwriting. If a Holder disapproves of the terms of such
underwriting, such Holder may elect to withdraw therefrom by written notice
to the Company and the managing or lead underwriter. Any Registrable
Securities excluded or withdrawn from such underwriting shall be withdrawn
from the registration.
(iii) The Company may withdraw a registration for which
registration rights have been exercised pursuant to this Section 9(c) at
any time prior to the time it becomes effective.
(d) Expenses of Registration. All Registration Expenses incurred in
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connection with a registration pursuant to this Section 9 shall be borne by the
Company. All Selling Expenses relating to the Registrable Securities registered
on behalf of a Holder shall be borne by such Holder.
(e) Registration Procedures.
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(i) In connection with the registration of Registrable Securities
pursuant to this Section 9, the Company shall as expeditiously as is reasonable:
(A) prepare and file with the SEC on any appropriate form a
registration statement with respect to such Registrable Securities and use its
best efforts to cause such registration statement to become effective;
(B) prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the 1933
Act with respect to the disposition of all Registrable Securities and other
securities covered by such registration statement until the Holder or Holders
have completed the distribution described in such registration statement;
(C) furnish to each seller of such Registrable Securities
such number of conformed copies of such registration statement and of each such
amendment and supplement thereto (at least one of which shall include all
exhibits), such number of copies of the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus), in
conformity with the requirements of the 1933 Act, such documents incorporated by
reference in such registration statement or prospectus, and such other
documents, as such seller may reasonably request in order to facilitate the sale
or disposition of such Registrable Securities;
(D) use its best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other securities or "blue sky" laws of such jurisdictions
as the underwriter shall reasonably request, and do any and all other acts and
things as may be reasonably necessary to consummate the disposition in such
jurisdictions of the Registrable Securities covered by such registration
statement, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign corporation in any jurisdiction
wherein it is not so qualified, or to subject itself to taxation in respect of
doing business in any such jurisdiction, or to consent to general service of
process in any such jurisdiction.
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(E) immediately notify each seller of Registrable
Securities, at any time when a prospectus relating thereto is required to be
delivered under the 1933 Act, of the happening of any event as a result of which
the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing or if it is
necessary, in the opinion of counsel to the Company, to amend or supplement such
prospectus to comply with law, and at the request of any such seller prepare and
furnish to any such seller a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing and shall
otherwise comply in all material respects with law and so that such prospectus,
as amended or supplemented, will comply with law.
(F) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve (12) months, beginning with the first month of the
first fiscal quarter after the effective date of such registration statement,
which earnings statement shall satisfy the provisions of Section 11(a) of the
1933 Act;
(G) use its best efforts to list such securities on each
securities exchange or over-the-counter market on which shares of Common Stock
are then listed, if such securities are not already so listed and if such
listing is then permitted under the rules of such exchange and, if shares of
Common Stock are not then listed on a securities exchange or over- the-counter
market, to use is best efforts to cause such securities to be listed on such
securities exchange or over-the-counter market as the managing or lead managing
underwriter shall reasonably request;
(H) use its best efforts to provide a transfer agent and
registrar for such Registrable Securities not later than the effective date of
such registration statement; and
(I) issue to any underwriter to which any holder of
Registrable Securities may sell such Registrable Securities in connection with
any such registration (and to any direct or indirect transferee of any such
underwriter) certificates evidencing shares of Common Stock without restrictive
legends.
(ii) If requested by the managing or lead managing underwriter
for any underwritten offering of Registrable Securities on behalf of a Holder or
Holders of Registrable Securities, the Company will enter into an underwriting
agreement with the underwriters of such offering, such agreement to contain such
representations and warranties by the Company and each such Holder and such
other terms and conditions as are contained in underwriting agreements
customarily used by such managing or lead managing underwriter with such changes
as the parties thereto shall agree, including, without limitation, provisions
relating to indemnification and contribution in lieu thereof.
(iii) The Holder or Holders of Registrable Securities included in
any registration shall furnish to the Company such information regarding such
Holder or Holders, the Registrable Securities held by them and the distribution
proposed by such Holder or Holders as the Company may from time to time
reasonably request and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
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(iv) The Holder or Holders of Registrable Securities included in
any registration shall, upon request by the Company and the managing or lead
managing underwriter, execute and deliver custodian agreements and powers of
attorney in form and substance reasonably satisfactory to the Company and such
Holder or Holders and as shall be reasonably necessary to consummate the
offering.
(f) Limitation on Subsequent Registration Rights. From and after the
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date hereof, the Company shall not, without the prior written consent of
the Subscriber, enter into any agreement with any current or future holder
of any securities of the Company that would allow such current or future
holder to require the Company to include securities in any registration
statement filed by the Company on a basis that is superior in any way to
the piggyback rights granted to Subscriber hereunder.
(g) Indemnification.
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(i) In the event of any registration of shares of Common Stock
pursuant to this Section 9, the Company will, to the maximum extent
---------
permitted by law, indemnify and hold harmless the Subscriber and each
person, if any, who controls the Subscriber within the meaning of Section
15 of the Act (collectively, the "INDEMNIFIED PARTIES") against any losses,
claims, damages, or liabilities, joint or several, to which any of such
Indemnified Parties may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect
thereof) are caused by any untrue statement of any material fact contained
in the registration statement, any prospectus contained therein, or any
amendment or supplement thereof, or arising out of or based upon the
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading and will reimburse
such Indemnified Parties for any reasonable legal or other expenses they
incur in connection with investigating or defending against any such loss,
claim, damage, liability or action; provided, however, that the Company
will not be liable to the extent that any such loss, claim, damage, expense
or liability arises out of, or is based upon, an untrue statement or
alleged untrue statement or omission or alleged omission so made in
conformance with information that has been furnished in writing by such
indemnified party. The indemnification provided for herein shall be
applicable, regardless of whether any such losses, claims, damages, or
liabilities result solely or in part from the active, passive or concurrent
negligence or strict liability of the indemnitee.
(ii) In the event of any registration of shares of Common Stock
pursuant to this Section 9, the Subscriber will, to the maximum extent
---------
permitted by law, indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement,
and each person, if any, who controls the Company, within the meaning of
the Act (collectively, the "INDEMNIFIED PERSONS"), against any loss, claim,
damage or liability of which the Company or any such Indemnified Person may
be or become subject under the Act or otherwise, insofar as such loss,
claim, damage or liability (or action in respect thereof) is caused by any
untrue statement of any material fact contained in the registration
statement, such prospectus, or amendment or supplement thereof, or arises
out of or is based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, or arises out of or is based on any failure by the
Subscriber to comply with the covenants or agreements contained in this
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Subscription Agreement with respect to the shares of Common Stock and the
shares of Common Stock underlying the Warrants, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission relates to the information that
has been furnished in writing by such Subscriber, and will reimburse the
Company and each such officer, director and controlling person for any
reasonable legal or other expenses they incur in connection with
investigating or defending against any such loss, claim, damage, liability
or action. The indemnification provided for herein shall be applicable,
regardless of whether any such losses, claims, damages, or liabilities
result solely or in part from the active, passive or concurrent negligence
or strict liability of the indemnitee.
(iii) Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party will, if a claim thereof
is to be made against the indemnifying party pursuant thereto, notify the
indemnifying party of the commencement thereof, but the omission to notify
the indemnifying party will not relieve it from any liability which it may
have to any indemnified party except to any extent to which the
indemnifying party is actually prejudiced thereby. In case such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate in, and, to the extent that it may wish, jointly with any
other indemnifying party, similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party. An
indemnified party shall not be liable for any settlement of an action or
claim effected without its written consent (which shall not be unreasonably
withheld or delayed). An indemnifying party who is entitled to, or elects
to, assume the defense of a claim shall have the right to employ its
counsel in such claim or action, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim
that makes the representation by such counsel inappropriate, in which case
the indemnifying party shall select separate counsel for such indemnified
party reasonably acceptable to such indemnified party; provided, however,
that the indemnifying party will not be obligated to pay the fees and
expenses of more than one counsel (other than local counsel as reasonably
required) for all parties indemnified by such indemnifying party with
respect to such claim.
(iv) Notwithstanding any other provision of this Subscription
Agreement, the liability of the Subscriber for indemnification or
contribution under this Subscription Agreement shall not exceed an amount
equal to the number of shares of Common Stock sold by the Subscriber under
the registration statement multiplied by the net amount per share of Common
Stock received in such sale(s). The indemnification and contribution
provided for under this Subscription Agreement shall remain in full force
and effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling person of such
indemnified party and shall survive the transfer of securities.
10. RECAPITALIZATION, EXCHANGES, ETC. AFFECTING THE COMMON STOCK. The
provisions of this Subscription Agreement, including, without limitation, the
registration rights provided for herein, shall apply to the full extent set
forth herein with respect to any and all shares of 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,
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the shares of Common Stock and the shares of Common Stock underlying the
Warrants, and shall be appropriately adjusted for combinations,
recapitalizations and the like occurring after the date of this Subscription
Agreement.
11. NOTICES. All notices and other communications provided for herein shall
be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid, or overnight air courier guaranteeing next day delivery:
(a) if to the Company, to it at the following address:
Petrosearch Energy Corporation.
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: President
(b) if to the Subscriber, at the address set forth on the last page hereof
or directly to the Subscriber at the address set forth on the
signature page hereto, or at such other address as either party shall
have specified by notice in writing to the other.
All notice and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; two days after being
deposited in the mail, postage prepaid, if mailed; and the next day after
timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee
receives it.
12. ASSIGNABILITY. This Subscription Agreement is not assignable by the
Subscriber, and may not be modified, waived or terminated except by an
instrument in writing signed by each of the parties hereto.
13. BINDING EFFECT. Except as otherwise provided herein, this Subscription
Agreement shall be binding upon and inure to the benefit of the parties and
their heirs, executors, administrators, successors, legal representatives and
assigns, and the agreements, representations, warranties and acknowledgments
contained herein shall be deemed to be made by and be binding upon such heirs,
executors, administrators, successors, legal representatives and assigns. If the
Subscriber is more than one person, the obligation of the Subscriber shall be
joint and several and the agreements, representations, warranties and
acknowledgments contained herein shall be deemed to be made by and be binding
upon each such person and his heirs, executors, administrators and successors.
14. ENTIRE AGREEMENT. This Subscription Agreement constitutes the entire
agreement of the Subscriber and the Company relating to the matters contained
herein, superseding all prior contracts or agreements, whether oral or written.
15. GOVERNING LAW. This Subscription Agreement shall be governed and
controlled as to the validity, enforcement, interpretations, construction and
effect and in all other aspects by the substantive laws of the State of Texas.
In any action between or among any of the parties, whether
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arising out of this Agreement or otherwise, each of the parties irrevocably
consents to the exclusive jurisdiction and venue of the federal and state courts
located in Xxxxxx County, Texas.
16. SEVERABILITY. If any provision of this Subscription Agreement or the
application thereof to any Subscriber or circumstance shall be held invalid or
unenforceable to any extent, the remainder of this Subscription Agreement and
the application of such provision to other subscriptions or circumstances shall
not be affected thereby and shall be enforced to the greatest extent permitted
by law.
17. HEADINGS. The headings in this Subscription Agreement are inserted for
convenience and identification only and are not intended to describe, interpret,
define, or limit the scope, extent or intent of this Subscription Agreement or
any provision hereof.
18. COUNTERPARTS AND FACSIMILES. This Subscription Agreement may be
executed in multiple counterparts and in any number of counterparts, each of
which shall be deemed an original but all of which taken together shall
constitute and be deemed to be one and the same instrument and each of which
shall be considered and deemed an original for all purposes. This Agreement
shall be effective with the facsimile signature of any of the parties set forth
below and the facsimile signature shall be deemed as an original signature for
all purposes and the Agreement shall be deemed as an original for all purposes.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the undersigned Subscriber has executed this
Subscription Agreement this _____ day of February, 2006.
--------------------------------------------
Signature of Investor
--------------------------------------------
Name (Please type or print)
Signature of Spouse or Co-Owner if funds are to be
invested as joint tenants by the entirety or
community property.
--------------------------------------------
Name (Please type or print)
--------------------------------------------------
Xxxxxx Xxxxxxx
--------------------------------------------------
Xxxx Xxxxx Zip
================================================================================
ACCEPTED by the Company this the _____ day of February, 2006.
PETROSEARCH ENERGY CORPORATION
By:
-------------------------------------------
Xxxxxxx X. Xxxx
President and Chief Executive Officer
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