REGISTRATION RIGHTS AGREEMENT
Exhibit
10.4
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
as of November 9, 2007, by and among Petrosearch Energy Corporation, a Nevada
Corporation (the “Company”), and the purchasers listed on the signature
page hereto (the “Purchasers”).
WHEREAS,
this Agreement is made in connection with the closing of the issuance and
sale
of the Notes pursuant to the Note and Warrant Purchase Agreement, dated as
of
even date herewith, by and between the Company and the Purchasers (the
“Purchase Agreement”);
WHEREAS,
the Company has agreed to provide the registration and other rights set forth
in
this Agreement for the benefit of the Purchasers pursuant to the Purchase
Agreement; and
WHEREAS,
it is a condition to the obligations of the Purchasers under the Purchase
Agreement that this Agreement be executed and delivered.
NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged by each party hereto, the parties hereby agree
as
follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Definitions. Capitalized
terms used herein without definition shall have the meanings given to them
in
the Purchase Agreement. The terms set forth below are used herein as
so defined:
“Agreement”
has the meaning specified therefor in the introductory paragraph.
“Business
Day” means any day other than a Saturday, Sunday, or a legal holiday for
commercial banks in New York, New York.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the Company’s common stock, par value $.001.
“Company”
has the meaning specified therefor in the introductory paragraph of this
Agreement.
“Effectiveness
Period” has the meaning specified therefor in Section 2.01(a) of this
Agreement.
“Failure
Date” has the meaning specified therefor in Section
2.02(b).
“Holder”
means the record holder of any Registrable Securities.
“Registration
Statement” means the registration statement on Form SB-2 registering the
Note Shares, Interest Shares and the Warrant Shares.
“Registration
Statement Filing Date” has the meaning specified therefor in Section
2.01(a).
“Included
Registrable Securities” has the meaning specified therefor in
Section 2.03 of this Agreement.
“Interest
Shares” means the number of shares of Common Stock that could be paid as
interest pursuant to Section 2(a) of the Notes at a rate of 8.5% under the
Notes
during the term of the Notes.
“Liquidated
Damages” has the meaning specified therefor in Section 2.01(b) of
this Agreement.
“Liquidated
Damages Multiplier” means the product of $1.05 times the number of the
Registrable Securities, as applicable to the Registration Statement, held
by the
Holder.
“Losses”
has the meaning specified therefor in Section 2.07(a) of this
Agreement.
“Managing
Underwriter” means, with respect to any Underwritten Offering, the
book-running lead manager of such Underwritten Offering.
“Notes”
means the 8% Senior Secured Convertible Notes in the aggregate original
principal amount of $8,100,000, convertible into shares of Common Stock,
purchased by the Purchasers, and in the respective amounts listed on Schedule
“A” to the Purchase Agreement.
“Note
Shares” means the shares of Common Stock (i) to which a Holder is
entitled upon conversion of any portion of the Notes and (ii) that have been
issued in lieu of cash interest payments under the Notes at the time of filing
the Registration Statement or Piggyback Registration Statement.
“Piggyback
Registration Statement” has the meaning specified therefor in Section
2.03(a).
“Purchase
Agreement” has the meaning specified therefor in the recitals of this
Agreement.
“Purchasers”
has the meaning specified therefor in the introductory paragraph of this
Agreement.
“Registrable
Securities” means the: (i) Note Shares, (ii) Interest Shares and (iii)
Warrant Shares, all of which Registrable Securities are subject to the rights
provided herein until such rights terminate pursuant to the provisions hereof;
provided, however, that in the event that the Commission objects to the
inclusion of the Interest Shares in the Registration Statement (following
the
Company’s best efforts to convince the Commission otherwise), then the Interest
Shares shall be withdrawn from the Registration Statement and shall not be
deemed Registrable Securities except for purposes of Section 2.03 if then
issued
and outstanding.
“Registration
Expenses” has the meaning specified therefor in Section 2.06(b) of
this Agreement.
“Selling
Expenses” has the meaning specified therefor in Section 2.06(b) of
this Agreement.
“Selling
Holder” means a Holder who is selling Registrable Securities pursuant to
any registration statement.
“Underwritten
Offering” means an offering in which shares of Common Stock are sold to an
underwriter on a firm commitment basis for reoffering to the public or an
offering that is a “bought deal” with one or more investment banks.
“Warrants”
means warrants to purchase an aggregate of 1,904,762 shares of Common Stock,
as
further described in the Purchase Agreement, to the Purchasers in the respective
amounts listed on Schedule “A” to the Purchase Agreement.
“Warrant
Shares” means the shares of Common Stock underlying the
Warrant.
Section
1.02 Registrable
Securities. Any Registrable Security will cease to be a
Registrable Security when (a) a registration statement covering such Registrable
Security has been declared effective by the Commission and such Registrable
Security has been sold or disposed of pursuant to such effective registration
statement; (b) such Registrable Security has been disposed of pursuant to
any
section of Rule 144 (or any similar provision then in force under the Securities
Act); (c) such Registrable Security can be disposed of pursuant to Rule 144(k)
(or any similar provision then in force under the Securities Act), or (d)
such
Registrable Security is held by the Company or one of its
subsidiaries.
ARTICLE
II
REGISTRATION
RIGHTS
Section
2.01 Initial
Registration.
(a) Deadline
To Go Effective. On or before February 1, 2008 (the
“Registration Statement Filing Date”), the Company shall prepare and file
the Registration Statement. The Company shall use its commercially
reasonable efforts to register the Registrable Securities on the Registration
Statement and to cause the Registration Statement to become effective no
later
than 150 days after the Registration Statement Filing Date; provided, however,
that the Company will use its best efforts to have the Registration Statement
declared effective by the Commission as soon as practicable, but in no event
later than five (5) business days following notification by the Commission
that
the Registration Statement will not be subject to review or that the Commission
has no further comments on the Registration Statement. The Company
will use its commercially reasonable efforts to cause the Registration Statement
filed pursuant to this Section 2.01 to be continuously effective under
the Securities Act until the earliest of (i) when all such Registrable
Securities registered thereon are sold by the Holder and (ii) when all of
the
Registrable Securities registered thereon become eligible for resale under
Rule
144(k) (or any successor provision then in force under the Securities Act)
(the
“Effectiveness Period”). The Registration Statement
when declared effective (including the documents incorporated therein by
reference) will comply as to form in all material respects with all applicable
requirements of the Securities Act and the Exchange Act and will not contain
an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein not
misleading.
(b) Failure
To File. If the Registration Statement required by Section
2.01(a) is not filed before the Registration Statement Filing Date,
then the Holders, in the aggregate, shall be entitled to a pro rata payment,
as
liquidated damages and not as a penalty, with respect to the Registrable
Securities held by the Holder and not then included in an effective Piggyback
Registration Statement, for the period beginning on the day after Registration
Statement Filing Date and lasting to but excluding the day the Registration
Statement is filed, of 0.25% of the Liquidated Damages Multiplier per 30-day
period for the first 60 days of the period, increasing by an additional 0.25%
of
the Liquidated Damages Multiplier per 30-day period for each subsequent 60
days,
up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-day
period
(the “Liquidated Damages”).
(c) Notwithstanding
anything to the contrary contained in this Agreement, in the event the
Commission seeks to characterize any offering pursuant to a Registration
Statement filed pursuant to this Agreement as constituting an offering of
securities by or on behalf of the Company, or in any other manner, such
that the Commission does not permit such Registration Statement to
become effective and used for resales in a manner that does not constitute
such
an offering and that permits the continuous resale at the market by the Holders
participating therein (or as otherwise may be acceptable to each
Holder) without being named therein as an “underwriter,” then the Company shall
reduce the number of shares to be included in such Registration Statement
by all
persons seeking to register shares thereon until such time as the Commission
shall so permit such Registration Statement to become effective as
aforesaid. In making such reduction, the Company shall reduce the number
of shares to be included in such Registration Statement pro rata among (i)
the
holders of registrable securities received pursuant to a Registration Rights
Agreement dated February 7, 2007, between RCH Petro Investors, LP and the
Company and (ii) the Holders hereof based, for each such holder, on
the fraction derived by dividing (x) the number of Common Stock proposed
to be
included by such holder in such Registration Statement by (y) the aggregate
number of Common Stock proposed to be included by all such holders in such
Registration Statement. In addition, in the event that the Commission
requires any Holder seeking to sell securities under a Registration
Statement filed pursuant to this Agreement to be specifically identified as
an “underwriter” in order to permit such Registration Statement to
become effective, and such Holder does not consent to being so named as an
underwriter in such Registration Statement, then, in each such case, the
Company shall reduce the total number of Registrable Securities to be
registered on behalf of such Holder, until such time as the
Commission does not require such identification or until such Holder accepts
such identification and the manner thereof. In the event of
any reduction in Registrable Securities pursuant to this paragraph, an
affected Holder shall have the right to require, upon delivery of a written
request to the Company signed by such Holder, the Company to file a registration
statement within 30 days of such request (subject to any restrictions imposed
by
Rule 415 or required by the Commission as mutually agreed upon by
Holders holding a majority of the Registrable Securities, on the one hand,
and
the Company, on the other hand, after consultation with the Commission) for
resale by such Holder in a manner acceptable to such Holder, and the Company
shall following such request cause to be and keep effective such
registration statement in the same manner as otherwise contemplated in this
Agreement for a Registration Statement hereunder, in each case until such
time as: (i) all Registrable Securities held by such Holder have been
registered pursuant to an effective Registration Statement in a manner
acceptable to such Holder and disposed of thereunder or (ii) the
Registrable Securities may be resold by such Holder without restriction
(including volume limitations) pursuant to Rule 144(k) of the Securities
Act
(taking account of any Commission position with respect to “affiliate” status)
or (iii) such Holder agrees to be named as an underwriter in any such
Registration Statement in a manner acceptable to such Holder as to all
Registrable Securities held by such Holder and that have not theretofore
been
included in a Registration Statement under this Agreement and have been disposed
of thereunder (it being understood that the special demand right under this
sentence may be exercised by a Holder one time and with respect to limited
amounts of Registrable Securities in order to permit the resale thereof by
such
Holder as contemplated above).
Section
2.02 Additional
Provisions related to Liquidated Damages
(a) Delay
Rights. Notwithstanding anything to the contrary contained
herein, the Company may, upon written notice to any Holder whose Registrable
Securities are included in a Registration Statement, suspend such Holder’s use
of any prospectus which is a part of the Registration Statement (in which
event
the Holder shall discontinue sales of the Registrable Securities pursuant
to the
Registration Statement), for a period not to exceed an aggregate of 90 days
in
any 365-day period, if (i) the Company is pursuing a material acquisition,
merger, reorganization, disposition or other similar transaction and the
Company
determines in good faith that its ability to pursue or consummate such a
transaction would be materially adversely affected by any required disclosure
of
such transaction in such Registration Statement or (ii) the Company has
experienced some other material non-public event, the disclosure of which
at
such time, in the good faith judgment of the Company, would materially adversely
affect the Company. Upon disclosure of such information or the
termination of the condition described above, the Company shall provide prompt
written notice to the Holders whose Registrable Securities are included in
the
Registration Statement, and shall promptly terminate any suspension of sales
it
has put into effect and shall take such other actions to permit registered
sales
of Registrable Securities as contemplated in this Agreement.
(b) Cessation
of Effectiveness. If the Registration Statement is filed and
declared effective but shall thereafter cease to be effective or fail to
be
usable for the resale of the applicable Registrable Securities (the “Failure
Date”) for any reason other than as provided in 2.02(a) above, then the
Holders, in the aggregate, will be entitled to their pro rata portion of
Liquidated Damages for the Registrable Securities held by the Holders subject
to
such Registration Statement for a period beginning on the Failure Date and
lasting to but excluding the day a post-effective amendment to the Registration
Statement is declared effective by the Commission or supplement or report
is
filed with the Commission and the applicable Registration Statement is useable
for the resale of Registrable Securities registered thereon.
(c) Limits
on Liquidated Damages. The amount of Liquidated Damages payable
by the Company under this Agreement to all of the Holders, on a pro rata
basis,
as a result of events in (i) Section 2.01(b) shall not exceed $375,000 and
(ii)
Section 2.02(b) shall not exceed $375,000; accordingly, the aggregate amount
of
the Liquidated Damages payable to the Holders as a result of events in Sections
2.01 and 2.02 shall not exceed $750,000. Further, the Liquidated
Damages shall be automatically eliminated without any action by the parties
to
the extent the Commission or the then published statements of the Fair
Accounting Standards Board provides that (A) any portion of the Liquidated
Damages shall be accounted for as a derivative instrument rather than a
contingent payment obligation under generally accepted accounting principles
and
the rules and regulations of the Commission or (B) any of the Registrable
Securities (whether or not deemed to include the Liquidated Damages payment
obligation) must be accounted for as interests other than equity interests
under
generally accepted accounting principles and the rules and regulations of
the
Commission.
(d) Payment
of Liquidated Damages. Any Liquidated Damages shall be paid to
the Holder in immediately available funds within ten Business Days
after the end of the applicable 30-day period. Liquidated Damages for
any period of less than 30 days shall be prorated by multiplying the amount
of
Liquidated Damages to be paid in a full 30-day period by a fraction, the
numerator of which is the number of days for which such Liquidated Damages
are
owed, and the denominator of which is 30. The calculation of Liquidated Damages
hereunder is subject to appropriate adjustments for any subdivision or
combination of shares of Common Stock after the date hereof. The
payment of the Liquidated Damages to a Holder shall cease at such time as
the
Registrable Securities become eligible for resale under Rule 144(k) under
the
Securities Act.
Section
2.03 Piggyback
Rights.
(a) General. If
at any time the Company proposes to file a registration statement (other
than a
registration related to an employee benefit plan, a registration on Form
S-4 or
a registration on any form that does not permit secondary sales) for the
sale of
Common Stock in an Underwritten Offering for its own account and/or another
Person (such registration statement referred to as the “Piggyback
Registration Statement”), then as soon as practicable but not less than
three Business Days prior to the filing of (x) any preliminary prospectus
supplement relating to such Underwritten Offering pursuant to Rule 424(b)
under
the Securities Act, (y) the prospectus supplement relating to such Underwritten
Offering pursuant to Rule 424(b) under the Securities Act (if no preliminary
prospectus supplement is used) or (z) such registration statement, as the
case
may be, then, the Company shall give notice of such proposed Underwritten
Offering to the Holders and such notice shall offer the Holder the opportunity
to include in such Underwritten Offering such number of Registrable Securities
(the “Included Registrable Securities”) as each such Holder may request
in writing; provided, however, that if the Company has been advised by
the Managing Underwriter that the inclusion of Registrable Securities for
sale
for the benefit of the Holders will have a material adverse effect on the
price,
timing or distribution of the Common Stock in the Underwritten Offering,
then
the amount of Registrable Securities to be offered for the accounts of Holders
shall be determined based on the provisions of (c). The notice
required to be provided in this Section 2.03 to Holders shall be provided
on a Business Day pursuant to Section 3.01 hereof. Each
such Holder shall then have three Business Days after receiving such notice
to
request inclusion of Registrable Securities in the Underwritten Offering,
except
that such Holder shall have one Business Day after such Holder confirms receipt
of the notice to request inclusion of Registrable Securities in the Underwritten
Offering in the case of a “bought deal” or “overnight transaction” where no
preliminary prospectus is used. If no request for inclusion from a
Holder is received within the specified time, each such Holder shall have
no
further right to participate in such Underwritten Offering. If, at
any time after giving written notice of its intention to undertake an
Underwritten Offering and prior to the closing of such Underwritten Offering,
the Company shall determine for any reason not to undertake or to delay such
Underwritten Offering, the Company may, at its election, give written notice
of
such determination to the Selling Holders and, (x) in the case of a
determination not to undertake such Underwritten Offering, shall be relieved
of
its obligation to sell any Included Registrable Securities in connection
with
such terminated Underwritten Offering, and (y) in the case of a determination
to
delay such Underwritten Offering, shall be permitted to delay offering any
Included Registrable Securities for the same period as the delay in the
Underwritten Offering. Any Selling Holder shall have the right to withdraw
such
Selling Holder’s request for inclusion of such Selling Holder’s Registrable
Securities in such offering by giving written notice to the Company of such
withdrawal up to and including the time of pricing of such offering.
(b) Procedures. In
connection with any Underwritten Offering under this Agreement, the Company
shall be entitled to select the Managing Underwriter or
Underwriters. In connection with an Underwritten Offering
contemplated by (a) in which a Selling Holder participates, each Selling
Holder
and the Company shall be obligated to enter into an underwriting agreement
that
contains such representations, covenants, indemnities and other rights and
obligations as are customary in underwriting agreements for firm commitment
offerings of securities. No Selling Holder may participate in such
Underwritten Offering unless such Selling Holder agrees to sell its Registrable
Securities on the basis provided in such underwriting agreement and completes
and executes all questionnaires, powers of attorney, indemnities and other
documents reasonably required under the terms of such underwriting
agreement. Each Selling Holder may, at its option, require that any
or all of the representations and warranties by, and the other agreements
on the
part of, the Company to and for the benefit of such underwriters also be
made to
and for such Selling Holder’s benefit and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement also be conditions precedent to its obligations. No Selling
Holder shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Selling Holder, its authority to
enter
into such underwriting agreement and to sell, and its ownership of, the
securities being registered on its behalf, its intended method of distribution
and any other representation required by Law. If any Selling Holder
disapproves of the terms of an underwriting, such Selling Holder may elect
to
withdraw therefrom by notice to the Company and the Managing Underwriter;
provided, however, that such withdrawal must be made up to and
including the time of pricing of such Underwritten Offering. No such
withdrawal or abandonment shall affect the Company’s obligation to pay
Registration Expenses.
(c) Priority
of Rights. If the Managing Underwriter or Underwriters of any
proposed Underwritten Offering of Common Stock included in an Underwritten
Offering involving Included Registrable Securities advises that the total
amount
of Common Stock that the Selling Holder and any other Persons intend to include
in such offering exceeds the number that can be sold in such offering without
being likely to have a material adverse effect on the price, timing or
distribution of the Common Stock offered or the market for the Common Stock,
then the Common Stock to be included in such Underwritten Offering shall
include
the number of Registrable Securities that such Managing Underwriter or
Underwriters advises can be sold without having such adverse effect, with
such
number to be allocated (i) first, to the Company, (ii) second, pro rata among
(x) the holders of registrable securities received pursuant to a Registration
Rights Agreement dated February 7, 2007, between RCH Petro Investors, LP
and the
Company and (y) the Selling Holders hereof based, for each such holder, on
the
fraction derived by dividing (A) the number of shares of Common Stock proposed
to be sold by such holders in such Underwritten Offering by (B) the aggregate
number of shares of Common Stock proposed to be included by the holders set
forth in this subsection (ii) in such Underwritten
Offering.
Section
2.04 Sale
Procedures. In connection with its obligations under this
Article II, the Company will, as expeditiously as possible:
(a) prepare
and file with the Commission such amendments and supplements to a Registration
Statement and the prospectus used in connection therewith as may be necessary
to
keep the Registration Statement effective for the Effectiveness Period and
as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Registration
Statement;
(b) if
a prospectus supplement will be used in connection with the marketing of
an
Underwritten Offering and the Managing Underwriter at any time shall notify
the
Company in writing that, in the sole judgment of such Managing Underwriter,
inclusion of detailed information to be used in such prospectus supplement
is of
material importance to the success of the Underwritten Offering of such
Registrable Securities, the Company shall use its commercially reasonable
efforts to include such information in such prospectus supplement;
(c) furnish
to each Selling Holder (i) as far in advance as reasonably practicable before
filing a Registration Statement or any other registration statement contemplated
by this Agreement or any supplement or amendment thereto, upon request, copies
of reasonably complete drafts of all such documents proposed to be filed
(including exhibits and each document incorporated by reference therein to
the
extent then required by the rules and regulations of the Commission), and
provide each such Selling Holder the opportunity to object to any information
pertaining to such Selling Holder and its plan of distribution that is contained
therein and make the corrections reasonably requested by such Selling Holder
with respect to such information prior to filing a Registration Statement
or
such other registration statement or supplement or amendment thereto, and
(ii)
such number of copies of the Registration Statement or such other registration
statement and the prospectus included therein and any supplements and amendments
thereto as such Persons may reasonably request in order to facilitate the
public
sale or other disposition of the Registrable Securities covered by such
Registration Statement or other registration statement;
(d) if
applicable, use its commercially reasonable efforts to register or qualify
the
Registrable Securities covered by the Registration Statement or any other
registration statement contemplated by this Agreement under the securities
or
blue sky laws of such jurisdictions as the Selling Holders or, in the case
of an
Underwritten Offering, the Managing Underwriter, shall reasonably request;
provided, however, that the Company will not be required to qualify
generally to transact business in any jurisdiction where it is not then required
to so qualify or to take any action which would subject it to general service
of
process in any such jurisdiction where it is not then so subject;
(e) promptly
notify each Selling Holder and each underwriter, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of
(i)
the filing of a Registration Statement or any other registration statement
contemplated by this Agreement or any prospectus or prospectus supplement
to be
used in connection therewith, or any amendment or supplement thereto, and,
with
respect to such Registration Statement or any other registration statement
or
any post-effective amendment thereto, when the same has become effective;
and
(ii) any written comments from the Commission with respect to any filing
referred to in clause (i) and any written request by the Commission for
amendments or supplements to the Registration Statement or any other
registration statement or any prospectus or prospectus supplement thereto;
and
the Company will use its best efforts to respond to any such comments or
any
such request as soon as practicable after receiving such comments or request,
as
applicable;
Registration
Rights Agreement
Page
8
(f) immediately
notify each Selling Holder and each underwriter, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of
(i)
the happening of any event as a result of which the prospectus or prospectus
supplement contained in the Registration Statement or any other registration
statement contemplated by this Agreement, as then in effect, includes an
untrue
statement of a material fact or omits to state any material fact required
to be
stated therein or necessary to make the statements therein not misleading
in the
light of the circumstances then existing; (ii) the issuance or threat of
issuance by the Commission of any stop order suspending the effectiveness
of the
Registration Statement or any other registration statement contemplated by
this
Agreement, or the initiation of any proceedings for that purpose; or (iii)
the
receipt by the Company of any notification with respect to the suspension
of the
qualification of any Registrable Securities for sale under the applicable
securities or blue sky laws of any jurisdiction. Following the
provision of such notice, the Company agrees to as promptly as practicable
amend
or supplement the prospectus or prospectus supplement or take other appropriate
action so that the prospectus or prospectus supplement does not include an
untrue statement of a material fact or omit to state a material fact required
to
be stated therein or necessary to make the statements therein not misleading
in
the light of the circumstances then existing and to take such other action
as is
necessary to remove a stop order, suspension, threat thereof or proceedings
related thereto;
(g) upon
request and subject to appropriate confidentiality obligations, furnish to
each
Selling Holder copies of any and all transmittal letters or other correspondence
with the Commission or any other governmental agency or self-regulatory body
or
other body having jurisdiction (including any domestic or foreign securities
exchange) relating to such offering of Registrable Securities;
(h) in
the case of an Underwritten Offering, furnish upon request, (i) an opinion
of
counsel for the Company, dated the effective date of the applicable registration
statement or the date of any amendment or supplement thereto, and a letter
of
like kind dated the date of the closing under the underwriting agreement,
and
(ii) a “cold comfort” letter, dated the effective date of the applicable
registration statement or the date of any amendment or supplement thereto
and a
letter of like kind dated the date of the closing under the underwriting
agreement, in each case, signed by the independent public accountants who
have
certified the Company’s financial statements included or incorporated by
reference into the applicable registration statement, and each of the opinion
and the “cold comfort” letter shall be in customary form and covering
substantially the same matters with respect to such registration statement
(and
the prospectus and any prospectus supplement included therein) as are
customarily covered in opinions of issuer’s counsel and in accountants’ letters
delivered to the underwriters in Underwritten Offerings of securities and
such
other matters as such underwriters may reasonably request;
(i) otherwise
use its commercially reasonable efforts to comply with all applicable rules
and
regulations of the Commission, and make available to its security holders,
as
soon as reasonably practicable, an earnings statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule
158
promulgated thereunder;
Registration
Rights Agreement
Page
9
(j) make
available to the appropriate representatives of the Managing Underwriter
and
Selling Holders access to such information and the Company personnel as is
reasonable and customary to enable such parties to establish a due diligence
defense under the Securities Act;
(k) cause
all such Registrable Securities registered pursuant to this Agreement to
be
listed on each securities exchange or nationally recognized quotation system
on
which similar securities issued by the Company are then listed;
(l) use
its commercially reasonable efforts to cause the Registrable Securities to
be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Company
to
enable the Selling Holders to consummate the disposition of such Registrable
Securities;
(m) provide
a transfer agent and registrar for all Registrable Securities covered by
such
registration statement not later than the effective date of such registration
statement; and
(n) enter
into customary agreements and take such other actions as are reasonably
requested by the Selling Holders or the underwriters, if any, in order to
expedite or facilitate the disposition of such Registrable
Securities.
Each
Selling Holder, upon receipt of notice from the Company of the happening
of any
event of the kind described in subsection (f) of this Section 2.04, shall
forthwith discontinue disposition of the Registrable Securities until such
Selling Holder’s receipt of the copies of the supplemented or amended prospectus
contemplated by subsection (f) of this Section 2.04 or until it is
advised in writing by the Company that the use of the prospectus may be resumed,
and has received copies of any additional or supplemental filings incorporated
by reference in the prospectus, and, if so directed by the Company, such
Selling
Holder will, or will request the Managing Underwriter or underwriters, if
any,
to deliver to the Company (at the Company’s expense) all copies in their
possession or control, other than permanent file copies then in such Selling
Holder’s possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.
Section
2.05 Cooperation by
Holders. The Company shall have no obligation to include in a
Registration Statement units of a Holder, or in an Underwritten Offering
pursuant to Section 2.03 Registrable Securities of the Selling Holder,
who has failed to timely furnish such information that, in the opinion of
counsel to the Company, is reasonably required in order for the registration
statement or prospectus supplement, as applicable, to comply with the Securities
Act.
Section
2.06 Expenses.
(a) Expenses. The
Company will pay all reasonable Registration Expenses as determined in good
faith, including, in the case of an Underwritten Offering, whether or not
any
sale is made pursuant to such Underwritten Offering. Each Selling Holder
shall
pay all Selling Expenses in connection with any sale of its Registrable
Securities hereunder. In addition, except as otherwise provided in Section
2.07 hereof, the Company shall not be responsible for legal fees incurred
by
Holders in connection with the exercise of such Holders’ rights
hereunder.
Registration
Rights Agreement
Page
10
(b) Certain
Definitions. “Registration Expenses” means all expenses
incident to the Company’s performance under or compliance with this Agreement to
effect the registration of Registrable Securities on the Registration Statement
pursuant to Section 2.01 or an Underwritten Offering covered under this
Agreement, and the disposition of such securities, including, without
limitation, all registration, filing, securities exchange listing and related
fees, all registration, filing, qualification and other fees and expenses
of
complying with securities or blue sky laws, fees of the National Association
of
Securities Dealers, Inc., fees of transfer agents and registrars, all word
processing, duplicating and printing expenses and the fees and disbursements
of
counsel and independent public accountants for the Company, including the
expenses of any special audits or “cold comfort” letters required by or incident
to such performance and compliance. “Selling Expenses” means
all underwriting fees, discounts and selling commissions allocable to, and
any
transfer taxes associated with, the sale of the Registrable
Securities.
Section
2.07 Indemnification.
(a) By
the Company. In the event of a registration of any
Registrable Securities under the Securities Act pursuant to this Agreement,
the
Company will indemnify and hold harmless each Selling Holder thereunder,
its
directors, officers, employees and agents, and each underwriter, pursuant
to the
applicable underwriting agreement with such underwriter, of Registrable
Securities thereunder and each Person, if any, who controls such Selling
Holder
within the meaning of the Securities Act and the Exchange Act, and its
directors, officers, employees or agents, against any losses, claims, damages,
expenses or liabilities (including reasonable attorneys’ fees and expenses)
(collectively, “Losses”), joint or several, to which such Selling Holder
or underwriter or controlling Person may become subject under the Securities
Act, the Exchange Act or otherwise, insofar as such Losses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement or any other registration
statement contemplated by this Agreement, any preliminary prospectus, free
writing prospectus or final prospectus contained therein, or any amendment
or
supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in
light
of the circumstances under which they were made) not misleading, and will
reimburse each such Selling Holder, its directors, officers, employee and
agents, each such underwriter and each such controlling Person for any legal
or
other expenses reasonably incurred by them in connection with investigating
or
defending any such Loss or actions or proceedings; provided, however,
that the Company will not be liable in any such case if and to the extent
that
any such Loss arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity with
information furnished by such Selling Holder, its directors, officers, employees
and agents or any underwriter or such controlling Person in writing specifically
for use in the Registration Statement or such other registration statement,
or
prospectus supplement, as applicable. Such indemnity shall remain in full
force
and effect regardless of any investigation made by or on behalf of such Selling
Holder or any such directors, officers, employees agents or any underwriter
or
controlling Person, and shall survive the transfer of such securities by
such
Selling Holder.
(b) By
Each Selling Holder. Each Selling Holder agrees severally and not
jointly to indemnify and hold harmless the Company, its directors, officers,
employees and agents and each Person, if any, who controls the Company within
the meaning of the Securities Act or of the Exchange Act, and its directors,
officers, employees and agents, to the same extent as the foregoing indemnity
from the Company to the Selling Holders, but only with respect to information
regarding such Selling Holder furnished in writing by or on behalf of such
Selling Holder expressly for inclusion in a Registration Statement or prospectus
supplement relating to the Registrable Securities, or any amendment or
supplement thereto; provided, however, that the liability of each
Selling Holder shall not be greater in amount than the dollar amount of the
proceeds (net of any Selling Expenses) received by such Selling Holder from
the
sale of the Registrable Securities giving rise to such
indemnification.
Registration
Rights Agreement
Page
11
(c) Notice. Promptly
after receipt by an indemnified party hereunder of notice of the commencement
of
any action, such indemnified party shall, if a claim in respect thereof is
to be
made against the indemnifying party hereunder, notify the indemnifying party
in
writing thereof, but the omission so to notify the indemnifying party shall
not
relieve it from any liability which it may have to any indemnified party
other
than under this Section 2.07. In any action brought against
any indemnified party, it shall notify the indemnifying party of the
commencement thereof. The indemnifying party shall be entitled to
participate in and, to the extent it shall wish, to assume and undertake
the
defense thereof with counsel reasonably satisfactory to such indemnified
party
and, after notice from the indemnifying party to such indemnified party of
its
election so to assume and undertake the defense thereof, the indemnifying
party
shall not be liable to such indemnified party under this Section 2.07 for
any legal expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation and
of
liaison with counsel so selected; provided, however, that, (i) if the
indemnifying party has failed to assume the defense or employ counsel reasonably
acceptable to the indemnified party or (ii) if the defendants in any such
action
include both the indemnified party and the indemnifying party and counsel
to the
indemnified party shall have concluded that there may be reasonable defenses
available to the indemnified party that are different from or additional
to
those available to the indemnifying party, or if the interests of the
indemnified party reasonably may be deemed to conflict with the interests
of the
indemnifying party, then the indemnified party shall have the right to select
a
separate counsel and to assume such legal defense and otherwise to participate
in the defense of such action, with the reasonable expenses and fees of such
separate counsel and other reasonable expenses related to such participation
to
be reimbursed by the indemnifying party as incurred. Notwithstanding
any other provision of this Agreement, no indemnified party shall settle
any
action brought against it with respect to which it is entitled to
indemnification hereunder without the consent of the indemnifying party,
unless
the settlement thereof imposes no liability or obligation on, and includes
a
complete and unconditional release from all liability of, the indemnifying
party.
(d) Contribution. If
the indemnification provided for in this Section 2.07 is held by a court
or government agency of competent jurisdiction to be unavailable to any
indemnified party or is insufficient to hold them harmless in respect of
any
Losses, then each such indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Loss in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and
of
such indemnified party on the other in connection with the statements or
omissions which resulted in such Losses, as well as any other relevant equitable
considerations; provided, however, that in no event shall such Selling
Holder be required to contribute an aggregate amount in excess of the dollar
amount of proceeds (net of Selling Expenses) received by such Selling Holder
from the sale of Registrable Securities giving rise to such
indemnification. The relative fault of the indemnifying party on the
one hand and the indemnified party on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of
a
material fact or the omission or alleged omission to state a material fact
has
been made by, or relates to, information supplied by such party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The parties hereto
agree that it would not be just and equitable if contributions pursuant to
this
paragraph were to be determined by pro rata allocation or by any other method
of
allocation which does not take account of the equitable considerations referred
to herein. The amount paid by an indemnified party as a result of the
Losses referred to in the first sentence of this paragraph shall be deemed
to
include any legal and other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any Loss which is the
subject of this paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to
contribution from any Person who is not guilty of such fraudulent
misrepresentation.
Registration
Rights Agreement
Page
12
(e) Other
Indemnification. The provisions of this Section 2.07 shall
be in addition to any other rights to indemnification or contribution which
an
indemnified party may have pursuant to law, equity, contract or
otherwise.
Section
2.08 Rule 144
Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale
of the
Registrable Securities to the public without registration, the Company agrees
to
use its commercially reasonable efforts to:
(a) Make
and keep public information regarding the Company available, as those terms
are
understood and defined in Rule 144 under the Securities Act, at all times
from
and after the date hereof;
(b) File
with the Commission in a timely manner all reports and other documents required
of the Company under the Securities Act and the Exchange Act at all times
from
and after the date hereof; and
(c) So
long as a Holder owns any Registrable Securities, furnish to such Holder
forthwith upon request a copy of the most recent annual or quarterly report
of
the Company, and such other reports and documents so filed as such Holder
may
reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any such securities without
registration.
Section
2.09 Transfer or
Assignment of Registration Rights. The rights to cause the
Company to register Registrable Securities granted to the Holder by the Company
under this Article II may be transferred or assigned by any Holder to one
or more transferee(s) or assignee(s) of such Registrable Securities;
provided, however, that the Holder must provide the Company written
notice prior to any said transfer or assignment, stating the name and address
of
each such transferee and identifying the securities with respect to which
such
registration rights are being transferred or assigned, and each such transferee
must assume in writing responsibility for its portion of the obligations
of the
Holder under this Agreement.
Registration
Rights Agreement
Page
13
ARTICLE
III
MISCELLANEOUS
Section
3.01 Communications. All
notices and other communications provided for or permitted hereunder shall
be
made in writing by facsimile, electronic mail, courier service or personal
delivery:
(a) if
to Purchasers, at the address listed on Schedule “A” to the Purchase
Agreement.,
(b) if
to a transferee of any Purchaser, to such Holder at the address provided
pursuant to Section 2.09 above, and
(c) if
to the Company at 675 Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000,
Xxtn: President (facsimile: (000) 000-0000).
All
such
notices and communications shall be deemed to have been received at the time
delivered by hand, if personally delivered; when receipt acknowledged, if
sent
via facsimile or sent via Internet electronic mail; and when actually received,
if sent by courier service or any other means.
Section
3.02 Successor and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including
subsequent Holders of Registrable Securities to the extent permitted
herein.
Section
3.03 Assignment of
Rights. All or any portion of the rights and obligations of any
Purchaser under this Agreement may be transferred or assigned by the Purchaser
in accordance with Section 2.09 hereof.
Section
3.04 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
3.05 Headings. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
Section
3.06 Governing
Law. The Laws of the State of Texas shall govern this Agreement
without regard to principles of conflict of Laws.
Section
3.07 Severability of
Provisions. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting or impairing the
validity or enforceability of such provision in any other
jurisdiction.
Registration
Rights Agreement
Page
14
Section
3.08 Entire
Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect
of
the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred
to
herein with respect to the rights granted by the Company set forth
herein. This Agreement and the Purchase Agreement supersede all prior
agreements and understandings between the parties with respect to such subject
matter.
Section
3.09 Amendment. This
Agreement may be amended only by means of a written amendment signed by the
Company and the Holders of a majority of the then outstanding Registrable
Securities; provided, however, that no such amendment shall materially
and adversely affect the rights of any Holder hereunder, relative to any
other
Holder, without the consent of such Holder.
Section
3.10 No
Presumption. If any claim is made by a party relating to any
conflict, omission, or ambiguity in this Agreement, no presumption or burden
of
proof or persuasion shall be implied by virtue of the fact that this Agreement
was prepared by or at the request of a particular party or its
counsel.
[Signature
pages to follow]
Registration
Rights Agreement
Page
15
IN
WITNESS WHEREOF, the Parties hereto execute this Registration Rights Agreement,
effective as of the date first above written.
|
|
PETROSEARCH
ENERGY CORPORATION
|
||
|
By:
|
/s/
Xxxxxxx Xxxx
|
||
| Name: |
Xxxxxxx
Xxxx, President and CEO
|
||
| PURCHASERS | |||
|
|
IRONMAN
PI FUND (QP), LP
|
||
|
By:
|
Ironman
Energy Partners, LP,
|
||
|
By:
|
Ironman
Capital Management, LLC,
|
||
|
its
General Partner
|
|||
|
By:
|
/s/
G. Xxxxx Xxxx
|
||
|
G.
Xxxxx Xxxx, President
|
|||
|
WELLINGTON
TRUST COMPANY, N.A.
ON
BEHALF OF MULTIPLE COLLECTIVE INVESTMENT FUNDS TRUST,
MICRO
CAP EQUITY PORTFOLIO
|
||
|
By:
Wellington Management Company, LLP as investment
adviser
|
||
|
By:
|
/s/ Xxxxx
Xxxxxxx
|
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
|
Title:
|
Vice
President and Counsel
|
|
|
Address:
|
75
Sxxxx Xxxxxx
|
|
|
Xxxxxx,
XX 00000
|
||
|
WELLINGTON
TRUST COMPANY, N.A.
ON
BEHALF OF MULTIPLE COLLECTIVE INVESTMENT FUNDS TRUST,
MICRO
CAP EQUITY PORTFOLIO
|
||
|
By:
Wellington Management Company, LLP as investment
adviser
|
||
|
By:
|
/s/ Xxxxx
Xxxxxxx
|
|
|
Name:
|
Xxxxx
Xxxxxxx
|
|
|
Title:
|
Vice
President and Counsel
|
|
|
Address:
|
75
Sxxxx Xxxxxx
|
|
|
Xxxxxx,
XX 00000
|
||
Signature
Page to Registration Rights Agreement
|
CROSSCAP
PARTNERS, LP
|
|||
|
By:
|
/s/
Xxxx Xxxxxxxxx
|
||
|
Xxxx
Xxxxxxxxx
|
|||
|
Address:
|
5851
Xxx Xxxxxx, Xxxxx 000
|
||
|
Xxxxxxx,
Xxxxx 00000
|
|||
|
CROSSCAP
PARTNERS ENHANCED, LP
|
|||
|
By:
|
/s/
Xxxx Xxxxxxxxx
|
||
|
Xxxx
Xxxxxxxxx
|
|||
|
Address:
|
5851
Xxx Xxxxxx, Xxxxx 000
|
||
|
Xxxxxxx,
Xxxxx 00000
|
|||
|
XXXXXXX
X. X’XXXXXX
|
||
|
/s/
Xxxxxxx X. X’Xxxxxx
|
||
|
Xxxxxxx
X. X’Xxxxxx, Individually
|
||
|
Address:
|
4646
Xxxxxxx Xxxxx Xxxxx
|
|
|
#00,
Xxxx 0000
|
||
|
Amelxx
Xxxxxx, Xxxxxxx 00000
|
||
|
X.
XXXXX X’XXXXXX
|
||
|
/s/
X. Xxxxx X’Xxxxxx
|
||
|
X.
Xxxxx X’Xxxxxx, Individually
|
||
|
Address:
|
2013
Xxxxxx Xxxxxx Xxxxx
|
|
|
Xxxxxx,
Xxxxxxxx 00000
|
||
|
XXX
X. XXXX
|
||
|
/s/
Xxx X. Xxxx
|
||
|
Xxx
X. Xxxx, Individually
|
||
|
Address:
|
3527
Xxxxxxx Xxxx
|
|
|
Xxxxxxxx,
Xxxxxxxx 00000
|
||
|
VAN
X. XXXX
|
||
|
/x/
Xxx X. Xxxx
|
||
|
Xxx
X. Xxxx, Individually
|
||
|
Address:
|
426
Xxxxxxxxx Xxxxx
|
|
|
Xxxxxxxx,
Xxxxxxxxx 00000
|
||
Signature
Page to Registration Rights Agreement
|
XXXX
X. XXXXX III AND XXXXXXX X. XXXXX
|
|||
|
By:
|
/s/
Xxxx X. Xxxxx, III
|
||
|
Xxxx
X. Xxxxx III, Individually, and on behalf of Xxxxxxx X.
Xxxxx, his Wife
|
|||
|
Address:
|
5348
Xxxxxxxx Xxxx Xxxxxx
|
||
|
Xxxxxxxxxxx,
Xxxxxxxx 00000
|
|||
|
XXXXXXXXX
HOLDINGS, LP
|
|||
|
/s/
Xxx X. Xxxxxxxxx, Xx.
|
|||
|
By:
|
Xxx
X. Xxxxxxxxx, Xx.
|
||
|
Title:
|
|||
|
Address:
|
5847
Xxx Xxxxxx Xxxxxx, Xxxxx 0000
|
||
|
Xxxxxxx,
Xxxxx 00000
|
|||
|
XXXXX
X. XXXXXXX
|
||
|
/s/
Xxxxx X. Xxxxxxx
|
||
|
Xxxxx
X. Xxxxxxx, Individually
|
||
|
Address:
|
5300
Xxxxxxx Xxxxx
|
|
|
Xxxxxxx,
Xxxxx 00000
|
||
Signature
Page to Registration Rights Agreement
