MAVERICK OIL AND GAS, INC.

 

 

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Securities Purchase Agreement

 

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Common Stock and

Warrants

 

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CONFIDENTIAL

 

 

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CONFIDENTIAL

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of the date set
forth on the signature page hereof, by and between MAVERICK OIL AND GAS, INC., a
Nevada corporation (the "Company"), and the purchaser identified on the
signature page hereof ("Purchaser").

R E C I T A L S:

 

WHEREAS, Purchaser desires to purchase and the Company desires to sell shares of
common stock and warrants to acquire shares of common stock on the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the premises hereof and the agreements set
forth herein below, the parties hereto hereby agree as follows:

1.

Sale and Purchase of Securities.

(a)        Sale and Purchase of Securities. Subject to the terms and conditions
hereof, the Company agrees to sell, and Purchaser agrees to purchase, the number
of shares of common stock, $0.001 par value (the "Common Stock"), of the Company
set forth opposite Purchaser's name in the attached Schedule of Purchasers
attached hereto as Exhibit A (the "Shares"), along with warrants (the
"Warrants") to acquire the number of shares of Common Stock set forth opposite
Purchaser's name in the Schedule of Purchasers. The purchase price for each
Share and associated Warrant (the "Purchase Price") shall be $.20.

(b)        Closing. The closing of the purchase and sale of the Common Stock and
Warrants (the "Closing") shall occur at the offices of Buchanan Ingersoll &
Rooney, PC, 1835 Market Street, Philadelphia, Pennsylvania 19103. The date and
time of the Closing (the "Closing Date") shall be 10:00 a.m, Philadelphia time,
on the date hereof. As a condition of the Closing, the Company shall have
received for surrender and cancellation that number of outstanding common stock
purchase warrants equal to the number of shares of Common Stock covered by this
Agreement. At the Closing, (i) Purchaser shall pay the aggregate Purchase Price
by check or wire transfer of immediately available funds and by the surrender of
a warrant certificate or certificates for the warrants being surrendered, and
(ii) the Company shall deliver to Purchaser a certificate for the Shares and a
certificate for the Warrants Purchaser is purchasing in the form

 

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attached to this Agreement as Exhibit B, in each case duly executed on behalf of
the Company and registered in the name of Purchaser or its designee.

2. Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Company and with respect to subsection (o), covenants to the
Company as follows:

 

(a)

Organization and Qualification.  

 

 

(i)         Purchaser is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, with the corporate or other
entity power and authority to own and operate its business as presently
conducted, except where the failure to be or have any of the foregoing would not
have a material adverse effect on Purchaser, and Purchaser is duly qualified as
a foreign corporation or other entity to do business and is in good standing in
each jurisdiction where the character of its properties owned or held under
lease or the nature of their activities makes such qualification necessary,
except for such failures to be so qualified or in good standing as would not
have a material adverse effect on it.

 

(ii)         The address of Purchaser's principal place of business is set forth
on the signature page of this Agreement.

 

(iii)       If Purchaser is a Non-U.S. person, Purchaser does not maintain a
place of business in the United States and is not beneficially owned by a U.S.
Person (as that term is defined in Rule 902(k) of Regulation S adopted pursuant
to the Securities Act of 1933, as amended (the "Securities Act")).

 

(b)

Authority; Validity and Effect of Agreement.

 

(i)         Purchaser has the requisite corporate or other entity power and
authority to execute and deliver this Agreement and perform its obligations
under this Agreement. The execution and delivery of this Agreement by Purchaser,
the performance by Purchaser of Purchaser's obligations hereunder and all other
necessary corporate or other entity action on the part of Purchaser have been
duly authorized by its board of directors or similar governing body, and no
other corporate or other entity proceedings on the part of Purchaser is
necessary for Purchaser to execute and deliver this Agreement and perform its
obligations hereunder.

(ii)         This Agreement has been duly and validly authorized, executed and
delivered by Purchaser and, assuming it has been duly and validly executed and
delivered by the Company, constitutes a legal, valid and binding obligation of
Purchaser, enforceable in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.

 

(c)        No Conflict; Required Filings and Consents. Neither the execution and
delivery of this Agreement by Purchaser nor the performance by Purchaser of
Purchaser's obligations hereunder will: (i) conflict with Purchaser’s articles
or certificate of incorporation or bylaws, or

 

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other similar organizational documents; (ii) violate any statute, law,
ordinance, rule or regulation, applicable to Purchaser or any of the properties
or assets of Purchaser; or (iii) violate, breach, be in conflict with or
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or permit the termination of any provision
of, or result in the termination of, the acceleration of the maturity of, or the
acceleration of the performance of any obligation of Purchaser under, or result
in the creation or imposition of any lien upon any properties, assets or
business of Purchaser under, any material contract or any order, judgment or
decree to which Purchaser is a party or by which it or any of its assets or
properties is bound or encumbered except, in the case of clauses (ii) and (iii),
for such violations, breaches, conflicts, defaults or other occurrences which,
individually or in the aggregate, would not have a material adverse effect on
its obligation to perform its covenants under this Agreement.

 

(d)        Accredited Investor.    Purchaser is an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D under the Securities Act.
Purchaser was not formed for the specific purpose of acquiring the Securities,
and, if it was, all of Purchaser’s equity owners are “accredited investors” as
defined above.

 

(e)        No Government Review. Purchaser understands that neither the United
States Securities and Exchange Commission (“SEC”) nor any securities commission
or other governmental authority of any state, country or other jurisdiction has
approved the issuance of the Shares and Warrants (collectively, the
"Securities") or passed upon or endorsed the merits of the Securities or this
Agreement.

 

(f)         Investment Intent. The Securities are being acquired for the
Purchaser’s own account for investment purposes only, not as a nominee or agent
and not with a view to the resale or distribution of any part thereof, and
Purchaser has no present intention of selling, granting any participation in or
otherwise distributing the same. By executing this Agreement, Purchaser further
represents that Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to such
person or third person with respect to any of the Securities.

 

(g)        Restrictions on Transfer. Purchaser understands that the Securities
are “restricted securities” as such term is defined in Rule 144 under the
Securities Act and have not been registered under the Securities Act or
registered or qualified under any state securities law, and may not be, directly
or indirectly, sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of without registration under the Securities Act and
registration or qualification under applicable state securities laws or the
availability of an exemption therefrom. In any case where such an exemption is
relied upon by Purchaser from the registration requirements of the Securities
Act and the registration or qualification requirements of such state securities
laws, Purchaser shall furnish the Company with an opinion of counsel stating
that the proposed sale or other disposition of such securities may be effected
without registration under the Securities Act and will not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and opinion to be
satisfactory to the Company. Purchaser acknowledges that Purchaser is able to
bear the economic risks of an investment in the Securities for an indefinite
period of time, and that

 

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Purchaser's overall commitment to investments that are not readily marketable is
not disproportionate to its net worth.

 

(h)        Investment Experience. Purchaser has such knowledge, sophistication
and experience in financial, tax and business matters in general, and
investments in securities in particular, that Purchaser is capable of evaluating
the merits and risks of this investment in the Securities, and Purchaser has
made such investigations in connection herewith as Purchaser deemed necessary or
desirable so as to make an informed investment decision without relying upon the
Company for legal or tax advice related to this investment. In making a decision
toacquire the Securities, Purchaser has not relied upon any information other
than information provided to Purchaser by the Company or its representatives and
information contained herein.

(i)         Access to Information. Purchaser acknowledges that Purchaser has had
access to and has reviewed all documents and records relating to the Company,
including, but not limited to, the reports, schedules, and registration
statements filed with the SEC pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and the Securities Act (collectively, the
"Company SEC Documents") that Purchaser has deemed necessary in order to make an
informed investment decision with respect to an investment in the Securities,
including without limitation, the following (all of which are incorporated by
reference into this Agreement):

•

Current Reports on Form 8-K filed on or after January 4, 2006;

•

Quarterly Reports on Form 10-Q for the fiscal quarters ended November 30, 2005,
February 28, 2006, and May 31, 2006;

•

Annual Report on Form 10-KSB for the fiscal year ended August 31, 2005;

•

Registration Statement on Form S-1 filed on July 21, 2006; and

•

Current Report on Form 8-K filed on November 20, 2006.

•

Annual Report on Form 10-K for the year ended August 31, 2006.

 

Purchaser has had the opportunity to ask representatives of the Company certain
questions and request certain additional information regarding the terms and
conditions of such investment and the finances, operations, business and
prospects of the Company and has had any and all such questions and requests
answered to Purchaser's satisfaction; and that Purchaser's understands the risks
and other considerations relating to such investment.

 

(j)         Reliance on Representations.    Purchaser understands that the
Securities are being offered and sold to Purchaser in reliance on specific
exemptions from the registration requirements of the federal and state
securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Purchaser’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of such Purchaser set
forth herein in order to determine the

 

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availability of such exemptions and the eligibility of such Purchaser to acquire
the Securities. Purchaser represents and warrants to the Company that any
information that Purchaser has heretofore furnished or furnishes herewith to the
Company is complete and accurate, and further represents and warrants that
Purchaser will notify and supply corrective information to the Company
immediately upon the occurrence of any change therein occurring prior to the
Company's issuance of the Securities. Within five (5) days after receipt of a
request from the Company, Purchaser will provide such information and deliver
such documents as may reasonably be necessary to comply with any and all laws
and regulations to which the Company is subject.

(k)        No General Solicitation. Purchaser is unaware of, and in deciding to
purchase the Securities is in no way relying upon, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media, or broadcast over television or radio or the
internet.

 

(l)         Placement and Finder’s Fees.     No agent, broker, investment
banker, finder, financial advisor or other person acting on behalf of Purchaser
or under Purchaser's authority is or will be entitled to any broker’s or
finder’s fee or any other commission or similar fee, directly or indirectly, in
connection with its purchase of the Securities, and no person is entitled to any
fee or commission or like payment in respect thereof based in any way on
agreements, arrangements or understanding made by or on behalf of Purchaser.

 

(m)       Investment Risks. Purchaser understands that purchasing the Securities
will subject Purchaser to certain risks, including, but not limited to, those
set forth under the caption “Risk Factors” and elsewhere in the Company SEC
Documents, as well as each of the following:

 

(i)         We have spent all of the proceeds from our sale of Secured
Convertible Debentures in January and June of 2006 and have allocated all of the
proceeds from our November 16, 2006 sale of Secured Convertible Debentures. Even
after having completed our November 16, 2006 sale of Secured Convertible
Debentures, our current capital resources are not sufficient to sustain our
operations or to fund all development and drilling of our existing projects.
While the proceeds from our recent sale of secured Convertible Debentures has
contributed towards a material reduction in some of our approximately $10
million of outstanding trade payables, we will not be able to satisfy all of our
trade payables and otherwise achieve a positive working capital absent
additional financing proceeds. The Company's inability to satisfy its
outstanding trade payables has an adverse effect on the Company's ability to
remain in operation as a going concern.

 

(ii)         We have accumulated a material working capital deficit consisting
of approximately $10 million of outstanding trade payables, the majority of
which were aged beyond 60 days, offset by approximately $5.2 million of
receivables due from our project partners. Of those receivables, approximately
$4.2 million is due from our Fayetteville Shale partner, an early stage public
company which has experienced liquidity concerns. Until it is able to secure
additional funding, if at all, this partner will not have sufficient capital
resources to fund its portion of our Fayetteville project costs. Until this
partner is able to fund its past due payments, we will not be able to continue
development of the Fayetteville Shale project. If this

 

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continues for more than the short-term, it may result in the loss of leases and
financial penalties for not timely drilling wells.

 

(iii)        In the course of the wind-down of our activity in the Fayetteville
Shale, we have became aware of certain items that could have an adverse effect
on us if not addressed, including: (1) a commitment for the continued use of the
drilling rig previously deployed in Woodruff County, through January 2008, (2)
drilling commitments associated with certain acreage within the Fayetteville
Shale Project that impose financial penalties upon the Company if wells are not
drilled by the end of 2007, and (3) commitments to acquire additional leasehold
acreage within Woodruff and surrounding counties of Arkansas.

(iv)       The terms of our outstanding Secured Convertible Debentures require
us to secure a bona fide offer to purchase by December 31, 2006, and ultimately,
complete the sale of our Barnett Shale project by February 28, 2006. If the cash
consideration to be received in any such sale is less than $35 million, will
need to obtain the consent of the holders of a majority of the outstanding
principal amount of the Secured Convertible Debentures for the sale. If we have
not received an offer to sell, or sold the Barnett Shale Property prior to the
applicable deadlines set forth above, the holders of the Secured Convertible
Debentures will have the right to require us to make certain redemptions of the
Secured Convertible Debentures. It is not likely that we would be able to fund
any such redemptions in the absence of such a sale. In addition, the obligation
to sell our Barnett Shale Property by the applicable deadline may result in a
lower sales price than could be obtained in the absence of that deadline.

(v)       To preserve the value of our Barnett Shale Property for such a sale,
we need to continue spending on operations in the field, including, drilling,
workovers, pipelines and facilities. To provide the funding for that program,
including the payment of past due accounts receivable, we recently issued an
additional $6.75 million of Secured Convertible Debentures and warrants for
gross proceeds of $6 million. The terms of those Debentures and warrants were
described in the Current Report on Form 8-K filed by us with the SEC on November
20, 2006. While the proceeds from the sale of the Secured Convertible
Debentures, the Shares and Warrants, and the additional shares of Common Stock
and warrants set forth in the Schedule of Purchasers (such additional shares of
Common Stock and Warants, the "Additional Securities") will permit us to
continue the operations on our Barnett Shale project, they will not be
sufficient to fund the development of our other projects or to fund our future
growth and exploration activities. We will need to obtain the additional funding
we need for our other projects and future growth and exploration activities
through the debt and equity markets. However, the terms of our Secured
Convertible Debentures place limitations on the timing and pricing of any
subsequent rounds of equity financing. These limitations could impair our
ability to secure the full amount of capital required, absent the consent of the
holders of our Secured Convertible Debentures. There is no assurance that such
additional financing will be available to us or, if it is, whether we will be
able to complete such financing in light of the restrictions of the Secured
Convertible Debentures.

 

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(vi)       The exercise or conversion of our outstanding convertible securities,
options and warrants, will result in the dilution of the ownership interests of
our existing shareholders and may create downward pressure on the trading price
of our common stock. We may issue over 160 million additional shares of Common
Stock upon exercise or conversion of existing convertible securities, options,
and warrants as of the date of this Agreement, prior to giving effect to the
issuance of the Shares, Warrants, and Additional Securities.

(vii)      We do not have a sufficient number of shares of authorized Common
Stock to issue upon exercise of the Warrants covered by this Agreement. We will
be required to amend our Articles of Incorporation to increase the number of
shares of Common Stock we are authorized to issue and the Warrants are not
exercisable until that amendmentbecomes effective. To become effective: (i) an
Information Statement containing the details of the amendment must be filed
with, and declared effective by, the SEC; and (ii) the amendment must be
approved by our stockholders and a certificate of amendment must be filed with
the Secretary of State of Nevada. In this regard, we have received the written
consent of a majority of the outstanding shares of our Common Stock authorizing
such an amendment.

 

(n)

Legends.

(i)        The certificates and agreements evidencing the Securities (other than
Securities sold in reliance upon the exemption set forth in Regulation S
promulgated pursuant to the Securities Act) shall have endorsed thereon the
following legend (and appropriate notations thereof will be made in the
Company's stock transfer books), and stop transfer instructions reflecting these
restrictions on transfer will be placed with the transfer agent of the
Securities:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND
WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF
1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
SECURITIES LAWS.

 

(ii)         The certificates and agreements evidencing the Securities sold in
reliance upon the exemption set forth in Regulation S promulgated pursuant to
the Securities Act shall have endorsed thereon the following legend (and
appropriate notations thereof will be made in the Company's stock transfer
books), and stop transfer instructions reflecting these restrictions on transfer
will be placed with the transfer agent of the Securities:

 

 

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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933 (THE "ACT") AND HAVE BEEN ISSUED IN RELIANCE ON AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S
PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE REOFFERED FOR SALE OR
RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

 

(o)        Resale of the Securities under Regulation S. With respect to
Securities issued in reliance upon the exemption from registration provided by
Regulation S promulgated under the Securities Act, Purchaser agrees and
covenants:

 

(i) to resell the Securities only in accordance with Regulation S, the
registration requirements of the Securities Act, or pursuant to an available
exemption from the registration requirements of the Securities Act;

 

(ii)         to not engage in hedging transactions with regard to the Securities
unless in compliance with the Securities Act. With respect to; and

 

(iii)      the Company may refuse to register any transfer of Securities not
made in accordance with the provisions of Regulation S promulgated under the
Act.  

 

3.        Representations and Warranties of the Company. Subject to the
exceptions contained in any Disclosure Letter delivered to Purchaser
contemporaneously with the execution of this Agreement, the Company represents
and warrants to Purchaser and, with respect to subsection (f), covenants to
Purchaser as follows:

 

(a)        Organization and Qualification. The Company is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, with the corporate power and authority to own and operate its
business as presently conducted, except where the failure to be or have any of
the foregoing would not have a material adverse effect on the Company. The
Company is duly qualified as a foreign corporation or other entity to do
business and is in good standing in each jurisdiction where the character of its
properties owned or held under lease or the nature of their activities makes
such qualification necessary, except for such failures to be so qualified or in
good standing as would not have a material adverse effect on the Company.

 

(b)

Authority; Validity and Effect of Agreement.

 

(i)         The Company has the requisite corporate power and authority to
execute and deliver this Agreement, and perform its obligations under this
Agreement. The

 

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execution and delivery of this Agreement by the Company, the performance by the
Company of its obligations hereunder, and all other necessary corporate action
on the part of the Company have been duly authorized by its board of directors,
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or the sale of the Securities. This Agreement has been
duly and validly executed and delivered by the Company and, assuming that it has
been duly authorized, executed and delivered by Purchaser, constitutes a legal,
valid and binding obligation of the Company, enforceable in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.

 

(ii)         The Shares have been duly authorized and, when issued and paid for
in accordance with this Agreement, will be validly issued, fully paid and
non-assessable shares of Common Stock with no personal liability resulting
solely from the ownership of such shares and will be free and clear of all
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company. The shares of Common Stock issuable upon exercise of the Warrants, when
issued and paid for in accordance with the Warrants, will be duly authorized,
validly issued, fully paid and non-assessable shares of Common Stock with no
personal liability resulting solely from the ownership of such shares and will
be free and clear of all liens, charges, restrictions, claims and in
encumbrances imposed by or through the Company.

 

(c)        No Conflict; Required Filings and Consents. Neither the execution and
delivery of this Agreement by the Company nor the performance by the Company of
its obligations hereunder will: (i) conflict with the Company’s articles of
incorporation or bylaws; (ii) violate any statute, law, ordinance, rule or
regulation, applicable to the Company or any of the properties or assets of the
Company; or (iii) violate, breach, be in conflict with or constitute a default
(or an event which, with notice or lapse of time or both, would constitute a
default) under, or permit the termination of any provision of, or result in the
termination of, the acceleration of the maturity of, or the acceleration of the
performance of any obligation of the Company, or result in the creation or
imposition of any lien upon any properties, assets or business of the Company
under, any material contract or any order, judgment or decree to which the
Company is a party or by which it or any of its assets or properties is bound or
encumbered except, in the case of clauses (ii) and (iii), for such violations,
breaches, conflicts, defaults or other occurrences which, individually or in the
aggregate, would not have a material adverse effect on its obligation to perform
its covenants under this Agreement.

 

(d)        SEC Reports and Financial Statements. The Company has filed with the
SEC, and has heretofore made available to Purchaser, true and complete copies of
the Company SEC Documents. As of their respective dates or, if amended, as of
the date of the last such amendment, the Company SEC Documents, including any
financial statements or schedules included therein: (i) did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not misleading; and (ii)
complied in all material respects with the applicable requirements of the
Exchange Act and the

 

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Securities Act, as the case may be, and the applicable rules and regulations of
the SEC thereunder. Each of the financial statements included in the Company SEC
Documents have been prepared from, and are in accordance with, the books and
records of the Company, comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto) and fairly present the
financial position and the results of operations and cash flows of the Company
as of the dates thereof or for the periods presented therein (subject, in the
case of unaudited statements, to normal year-end audit adjustments not material
in amount).

 

(e)        Placement and Finder’s Fees. Neither the Company nor any of its
respective officers, directors, employees or managers, has employed any broker,
dealer, finder, advisor or consultant, or incurred any liability for any
investment banking fees, brokerage fees, commissions or finders’ fees, advisory
fees or consulting fees in connection with the sale of the Securities for which
the Company has or could have any liability.

 

(f)         Transfer of Securities under Regulation S. With respect to any
Securities issued in reliance upon the exemption from registration provided by
Regulation S promulgated under the Securities Act, the Company agrees and
covenants to refuse to register any transfer of Securities that is not made in
accordance with the provisions of Regulation S promulgated under the Act,
pursuant to registration under the Securities Act, or pursuant to an available
exemption from registration.

 

4.          Indemnification. Purchaser agrees to indemnify, defend and hold
harmless the Company and its respective affiliates and agents from and against
any and all demands, claims, actions or causes of action, judgments,
assessments, losses, liabilities, damages or penalties and reasonable attorneys'
fees and related disbursements incurred by the Company that arise out of or
result from a breach of any representations or warranties made by Purchaser
herein, and Purchaser agrees that in the event of any breach of any
representations or warranties made by Purchaser herein, the Company may, at its
option, forthwith rescind the sale of the Securities to Purchaser.

 

5.          Registration Rights. The Company covenants and agrees as follows:

 

(a)

For the purpose of this Section 5, the following definitions shall apply:

(i)        “Blackout Period” shall mean, with respect to a registration, a
period, in each case commencing on the day immediately after the Company
notifies the Selling Shareholders that, in the good faith judgment of a majority
of the members of its Board of Directors, after the advice of counsel, (because
of (i) the existence of, or in anticipation of, any material acquisition,
financing activity or other fundamental transaction involving the Company, (ii)
the unavailability, for reasons beyond the Company’s reasonable control, of any
required financial statements or other required disclosure or (iii) any other
event or condition of similar significance to the Company) the registration and
distribution of the Restricted Stock to be

 

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covered, or which is covered, by a registration statement, if any, would be
seriously detrimental to the Company and its stockholders; provided, however,
that such period shall end on the earlier of (1) the date upon which the
circumstance giving rise to the commencement of the period would no longer cause
the registration and distribution of the Restricted Stock to be seriously
detrimental to the Company and its stockholders (e.g., the material acquisition,
financing or other fundamental transaction is consummated or the unavailable
financial statements or other required disclosure is publicly disclosed) and (2)
such time as the Company (A) notifies the Selling Shareholders that the Company
will no longer delay such filing of the registration statement, (B) recommences
steps to make such registration statement effective or (C) allows sales pursuant
to such registration statement to resume; provided, further that (a) the Company
shall limit its use of Blackout Periods, in the aggregate, to 30 Trading Days in
any rolling 12-month period and (b) no Blackout Period may commence sooner than
60 days after the end of a prior Blackout Period.

 

(ii)         "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC thereunder, all as the same
shall be in effect at the time.

 

(iii)        “Permitted Assignee” shall mean an assignee of a Selling
Stockholder's rights under this Agreement in accordance with the provisions of
Section 11.

 

(iv)        "Person" shall mean an individual, partnership (general or limited),
corporation, limited liability company, joint venture, business trust,
cooperative, association or other form of business organization, whether or not
regarded as a legal entity under applicable law, a trust (inter vivos or
testamentary), an estate of a deceased, insane or incompetent person, a
quasi-governmental entity, a government or any agency, authority, political
subdivision or other instrumentality thereof, or any other entity.

 

(v)        “Register,” “registered,” and “registration” shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or order of
effectiveness of such registration statement or document by the SEC.

 

(vi)        "Registration Statement" shall mean any registration statement of
the Company filed with the SEC pursuant to the provisions of Section 5(b) of
this Agreement, which covers the resale of the Restricted Stock on an
appropriate form then permitted by the SEC to be used for such registration and
the sales contemplated to be made thereby under the Securities Act, or any
similar rule that may be adopted by the SEC, and all amendments and supplements
to such registration statement, including any pre- and post- effective
amendments thereto, in each case including the prospectus contained therein, all
exhibits thereto and all materials incorporated by reference therein.

 

(vii)       "Restricted Stock" shall mean (i) the Shares; (ii) the shares of
Common Stock issuable upon exercise of the Warrants; and (iii) any additional
shares of Common Stock of the Company issued or issuable after the date hereof
in respect of any of the foregoing securities, by way of a stock dividend or
stock split; provided, however, that as to any particular shares of Restricted
Stock, such securities shall cease to constitute Restricted Stock when (x) a

 

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Registration Statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of thereunder, (y) such securities are permitted to be transferred
pursuant to Rule 144(k) (or any successor provision to such rule) under the
Securities Act or (z) such securities are otherwise freely transferable to the
public without further registration under the Securities Act.

 

(viii)      “SEC Effective Date” shall mean the date the Initial Shelf
Registration Statement is declared effective by the Commission.

 

(ix)        “Trading Day” shall mean a day on which (a) a national securities
exchange, (b) the Nasdaq Stock Market or (c) any other securities market
(including, without limitation, the OTC Bulletin Board), in any such case which
at the time constitutes the principal securities market or quotation system for
the Common Stock, is open for general trading or quotation of securities.

 

(b)

Registration of the Shares.  

(i) The Company shall notify Purchaser at least ten (10) days prior to the
filing of any registration statement under the Securities Act for purposes of
registering securities of the Company, excluding the existing registration
statements on file with the SEC (or any continuations or amendments thereof) and
excluding any registration statements on SEC Forms S-4, S-8 or any similar or
successor forms, and will afford Purchaser an opportunity to include in such
registration statement all or part of Purchaser's Restricted Stock. If Purchaser
desires to include in any such registration statement all or any part of the
Restricted Stock held by it shall, within five (5) days after the
above-described notice from the Company, so notify the Company in writing. Such
notice shall state the intended method of disposition of the Restricted Stock by
Purchaser. If Purchaser decides not to include all of its Restricted Stock in
any registration statement thereafter filed by the Company, Purchaser shall
nevertheless continue to have the right to include any Restricted Stock in any
subsequent registration statement or registration statements as may be filed by
the Company with respect to offerings of its securities, all upon the terms and
conditions set forth herein. The Company may, without the consent of Purchaser,
withdraw such registration statement prior to its becoming effective if the
proposal to register the securities proposed to be registered thereby is
abandoned.

(ii)        In the event that any registration pursuant to Section 5(b) shall
be, in whole or in part, an underwritten public offering of Common Stock on
behalf of the Company, all Purchasers proposing to distribute their Restricted
Stock through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by the Company. If the managing underwriter thereof advises the
Company in writing that in its opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in an orderly
manner in such offering within a price range acceptable to the Company, the
Company shall include in such registration (i) first, the securities the Company
proposes to sell, and (ii) second, the Restricted Stock and any other
registrable securities eligible and requested to be included in such
registration to the extent that the number of shares to be registered under this
clause (ii) will not, in the opinion of the managing underwriter, adversely
affect the offering of the securities pursuant to clause (i). In

 

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such a case, shares shall be registered pro rata among the holders of such
Restricted Stock and registrable securities on the basis of the number of shares
eligible for registration that are owned by all such holders and requested to be
included in such registration.

(iii)        Notwithstanding anything to the contrary contained herein, the
Company's obligation in Sections 5(b) shall extend only to the inclusion of the
Restricted Stock in a Registration Statement. The Company shall have no
obligation to assure the terms and conditions of distribution, to obtain a
commitment from an underwriter relative to the sale of the Restricted Stock or
to otherwise assume any responsibility for the manner, price or terms of the
distribution of the Restricted Stock.

(iv)        The Company shall have the right to terminate or withdraw any
registration initiated by it under this Section 5 prior to the effectiveness of
such registration without thereby incurring liability to the holders of the
Restricted Stock, regardless of whether any holder has elected to include
securities in such registration. The Registration Expenses (as defined in
Section 5(e) of such withdrawn registration shall be borne by the Company in
accordance with Section 5(e) hereof.

(v)        The Company has not filed a registration statement in which Purchaser
has been afforded an opportunity to include Purchaser's Restricted Shares
pursuant to Section 5(b)(i) hereof on or before March 31, 2007, Purchaser shall
thereafter have the right, exercisable by written notice to the Company, to
require the Company to use its best efforts to file with the SEC a shelf
registration statement on an appropriate form (including, without limitation,
Form S-1, Form S-3, Form SB-1, Form SB-2, or any other appropriate form for
which the Company then qualifies in the opinion of counsel for the Company) to
permit a public offering and resale by Purchaser of all of the Restricted Stock
held by Purchaser on a continuous basis under Rule 415; provided, however, that
the Company shall not be obligated to effect any such registration,
qualification, or compliance pursuant to this Section 5(b) or to keep such
registration effective pursuant to this Section or Section 5(c), during any
Blackout Period.. The Company shall use commercially reasonable efforts to cause
such registration statement to be declared effective by the SEC under the
Securities Act as promptly as is practicable, subject to the imposition of any
Blackout Period.

 

(c)        Registration Procedures. Whenever it is obligated to register any
Restricted Stock pursuant to this Agreement, the Company shall:

(i)         subject to the imposition of any Blackout Periods, use commercially
reasonable best efforts to cause such Registration Statement to remain effective
until the earlier of: (i) the sale of all shares of Restricted Stock covered
thereby, (ii) the availability under Rule 144(k) for Purchaser to immediately,
freely resell without restriction all Restricted Stock covered thereby, or (iii)
two (2) years from the date of this Agreement. The Company may include in the
Registration Statement any other securities sold by the Company;

(ii)         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 for

 

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the period specified in Section 5(c)(i) above and to comply with the provisions
of the Securities Act with respect to the disposition of all Restricted Stock
covered by such Registration Statement in accordance with the intended method of
disposition set forth in such Registration Statement for such period;

(iii)        furnish to Purchaser such number of copies of the Registration
Statement and the prospectus included therein (including each preliminary
prospectus) as Purchaser may reasonably request in order to facilitate the
public sale or other disposition of the Restricted Stock covered by such
Registration Statement;

(iv)        use commercially reasonable efforts to register or qualify the
Restricted Stock covered by such Registration Statement under the state
securities laws of such jurisdictions as Purchaser shall reasonably request;
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;

(v)        in the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter(s) of such offering. If Purchaser is
participating in the underwritten offering, it shall also enter into and perform
its obligations under such an agreement;

(vi)        immediately notify Purchaser at any time when a prospectus relating
thereto is required to be delivered under the Act, of the happening of any event
as a result of which the prospectus contained in such Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required or necessary to be stated therein in order to
make the statements contained therein not misleading in light of the
circumstances under which they were made. The Company will use reasonable
efforts to amend or supplement such prospectus in order to cause such prospectus
not to include any 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 under which they were
made;

(vii)        prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection with such
Registration Statements as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement;

(viii)      use commercially reasonable efforts to list the Restricted Stock
covered by such Registration Statement on each exchange or automated quotation
system on which similar securities issued by the Company are then listed (with
the listing application being made at the time of the filing of such
Registration Statement or as soon thereafter as is reasonably practicable);

(ix)        notify Purchaser of any threat by the SEC or state securities
commission to undertake a stop order with respect to sales under the
Registration Statement; and

 

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(x)        cooperate in the timely removal of any restrictive legends from the
shares of Restricted Stock in connection with the resale of such shares covered
by an effective Registration Statement.

(d)        Delay of Registration.   Purchaser shall not have any right to obtain
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 5.

(e)

Expenses.

(i)         For the purposes of this Section 5(e), the term "Registration
Expenses" shall mean: all expenses incurred by the Company in complying with
Section 5(b) of this Agreement, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees under state securities
laws, fees of the National Association of Securities Dealers, Inc. ("NASD"),
fees and expenses of listing shares of Restricted Stock on any securities
exchange or automated quotation system on which the Company's shares are listed
and fees of transfer agents and registrars. The term "Selling Expenses" shall
mean: all underwriting discounts and selling commissions applicable to the sale
of Restricted Stock, all accountable or non-accountable expenses paid to any
underwriter in respect of such sale, and fees and disbursements of counsel for
Purchaser.

(ii)         Except as otherwise provided herein, the Company will pay all
Registration Expenses in connection with the Registration Statements filed
pursuant to Section 5(b) of this Agreement. All Selling Expenses in connection
with any Registration Statements filed pursuant to Section 5(b) of this
Agreement shall be borne by the Purchaser pro rata on the basis of the number of
shares registered by each Person selling securities under such Registration
Statement, or by such Persons other than the Company (except to the extent the
Company may be a seller) as they may agree.

(f)

Obligations of Purchaser.

(i)         Purchaser will furnish to the Company in writing such information
with respect to Purchaser and the securities held by Purchaser and the proposed
distribution by Purchaser, as shall be reasonably requested by the Company in
order to assure compliance with applicable federal and state securities laws as
a condition precedent to including the Purchaser's Restricted Stock in the
Registration Statement. Purchaser shall also promptly notify the Company of any
changes in such information included in the Registration Statement or prospectus
as a result of which there is an untrue statement of material fact or an
omission to state any material fact required or necessary to be stated therein
in order to make the statements contained therein not misleading in light of the
circumstances under which they were made.

(ii)         In connection with the filing of the Registration Statement,
Purchaser shall furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with such
Registration Statement or prospectus.

 

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(iii)        In connection with each registration pursuant to this Agreement,
each Purchaser agrees that it will not effect sales of any Restricted Stock
until notified by the Company of the effectiveness of the Registration
Statement, and thereafter will suspend such sales after receipt of telegraphic
or written notice from the Company to suspend sales to permit the Company to
correct or update a Registration Statement or prospectus. At the end of any
period during which the Company is obligated to keep a Registration Statement
current, Purchaser shall discontinue sales of Restricted Stock pursuant to such
Registration Statement upon receipt of notice from the Company of its intention
to remove from registration the Restricted Stock covered by such Registration
Statement that remains unsold, and Purchaser shall notify the Company of the
number of shares registered which remain unsold immediately upon receipt of such
notice from the Company.

(g).

Information Blackout and Holdbacks.

(i)         At any time after Purchaser receives notice of a Blackout Period
from the Company, Purchaser shall suspend sales of Restricted Stock pursuant to
such Registration Statement until such time as the Company notifies Purchaser
that the Blackout Period has ended or that sales pursuant to such Registration
Statement may otherwise be resumed.

(ii)         Notwithstanding any other provision of this Agreement, in the event
the Company proposes to undertake a primary offering of shares of its unissued
Common Stock ("Primary Offering"), the Company shall have the right, upon
delivery of written notice to Purchaser, to have Purchaser not effect any public
sale or distribution (including sales pursuant to Rule 144 under the Securities
Act), if and when available, of equity securities of the Company, or any
securities convertible into or exchangeable or exercisable for such securities,
during the one hundred fifty (150) day period commencing with Purchaser’s
receipt of such notice, unless the Company, in the case of a non-underwritten
Primary Offering, or the managing underwriter, in the case of an underwritten
Primary Offering, otherwise agree.

(h).

Indemnification.

(i)         The Company agrees to indemnify, to the extent permitted by law,
Purchaser, Purchaser’s partners, officers, directors, underwriters and each
Person who controls Purchaser (within the meaning of the Securities Act) against
all losses, claims, damages, liabilities, actions and expenses caused by (i) any
untrue statement of or alleged untrue statement of material fact contained in
the Registration Statement, prospectus or preliminary prospectus or any
amendment or supplement thereto, (ii) any omission of or alleged omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or (iii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act, any state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law in connection with the offering covered by such
Registration Statement (“Violations”); provided, however, that the indemnity
agreement contained in this Section 5(h)(i) shall not apply to (i) amounts paid
in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, (ii) any loss, claim, damage, liability or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in

 

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conformity with information furnished to the Company by Purchaser or any other
Person selling securities under the Registration Statement, or any partner,
officer, director, underwriter or controlling person of Purchaser or such other
Person, (iii) if the Person asserting any such loss, claim, damage, liability or
action purchased the Restricted Stock that are the subject thereof did not
receive a copy of an amended preliminary prospectus or the final prospectus (or
the final prospectus as amended or supplemented) at or prior to the written
confirmation of the sale of such Restricted Stock to such person because of the
failure of Purchaser, such other Person selling securities under the
Registration Statement. or underwriter to so provide such amended preliminary or
final prospectus (or final prospectus as amended or supplemented) and the untrue
statement or alleged untrue statement or omission or alleged omission of a
material fact made in such preliminary prospectus or final prospectus was
corrected in the amended preliminary or final prospectus (or the final
prospectus as amended or supplemented) or (iii) to the extent that Purchaser or
any other Person selling securities under the Registration Statement failed to
comply with the terms of the plan of distribution mechanics described in the
applicable prospectus.

(ii)         To the extent permitted by law, Purchaser shall indemnify and hold
harmless the Company, each of its directors, its officers and each person, if
any, who controls the Company within the meaning of the Securities Act, any
underwriter and any other Person selling securities under such Registration
Statement or any of such other Person’s partners, directors or officers or any
person who controls such Selling Stockholder, against any losses, claims,
damages, liabilities, actions and expenses to which the Company or any such
director, officer, controlling person, underwriter or other such Selling
Stockholder, or partner, director, officer or controlling person of such other
Selling Stockholder, may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages,
liabilities, actions, or expenses arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that (i) such Violation
occurs in reliance upon and in conformity with information furnished by such
Selling Stockholder to the Company, (ii) a copy of an amended preliminary
prospectus or the final prospectus (or the final prospectus as amended or
supplemented) at or prior to the written confirmation of the sale of Restricted
Stock was not provided to a Person because of the failure of a Selling
Stockholder or underwriter to so provide such amended preliminary or final
prospectus (or final prospectus as amended or supplemented) to such Person and
Violation was corrected in the amended preliminary or final prospectus (or the
final prospectus as amended or supplemented) or (iii) to the extent that the
Selling Stockholders failed to comply with the terms of the plan of distribution
mechanics described in the applicable prospectus.

(iii)        Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification (provided that the failure to give prompt notice
shall not impair any Person's right to indemnification hereunder to the extent
such failure has not prejudiced the indemnifying party), and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim,
permit such indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is assumed,
the indemnifying party shall not be subject to any liability for any settlement
made by the indemnified party without its consent (but such consent shall not be
unreasonably withheld). An indemnifying party who is

 

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not entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, 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.

(iv)        If the indemnification provided for in this Section 5(h) is held by
a court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party with respect
to such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by a court of law by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information supplied by
the indemnifying party or by the indemnified party and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission; provided, however, that in no event shall any
contribution by a Selling Stockholder hereunder exceed the net proceeds received
or receivable from the offering by such Selling Stockholder.

 

(v)        The indemnification provided for under this 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. The Company also
agrees to make such provisions as are reasonably requested by any indemnified
party for contribution to such party in the event the Company's indemnification
is unavailable for any reason.

6.

Confidentiality. Purchaser acknowledges and agrees that:

 

 

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(a)        All of the information contained herein is of a confidential nature
and may be regarded as material non-public information under Regulation FD of
the Securities Act.

 

(b)        This Agreement has been furnished to Purchaser by the Company for the
sole purpose of enabling Purchaser to consider and evaluate an investment in the
Company, and will be kept confidential by Purchaser and not used for any other
purpose.

 

(c)       The existence of this Agreement and the information contained herein
shall not, without the prior written consent of the Company, be disclosed by
Purchaser to any person or entity, other than Purchaser’s personal financial and
legal advisors for the sole purpose of evaluating an investment in the Company,
and Purchaser will not, directly or indirectly, disclose or permit Purchaser’s
personal financial and legal advisors to disclose, any of such information
without the prior written consent of the Company.

 

(d)        Purchaser shall make Purchaser's representatives aware of the terms
of this Section and shall be responsible for any breach of this Agreement by
such representatives.

Purchaser shall not, without the prior written consent of the Company, directly
or indirectly, make any statements, public announcements or release to trade
publications or the press with respect to the subject matter of this Agreement.

 

7.          Non-Public Information.           Purchaser acknowledges that
information concerning the matters that are the subject matter of this Agreement
may constitute material non-public information under United States federal
securities laws, and that United States federal securities laws prohibit any
person who has received material non-public information relating to the Company
from purchasing or selling securities of the Company, or from communicating such
information to any person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell securities of the
Company. Accordingly, until such time as any such non-public information has
been adequately disseminated to the public, Purchaser shall not purchase or sell
any securities of the Company, or communicate such information to any other
person.

 

8.          Entire Agreement. This Agreement contains the entire agreement
between the parties and supercedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereto,
and no party shall be liable or bound to any other party in any manner by any
warranties, representations, guarantees or covenants except as specifically set
forth in this Agreement. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and

assigns any rights, remedies, obligations or liabilities under or by reason of
this Agreement, except as expressly provided in this Agreement.

 

9.          Amendment and Modification. This Agreement may not be amended,
modified or supplemented except by an instrument or instruments in writing
signed by the party against whom enforcement of any such amendment, modification
or supplement is sought.

 

10.

Extensions and Waivers. The parties hereto entitled to the benefits of a term or

 

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provision may (a) extend the time for the performance of any of the obligations
or other acts of the parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document, certificate
or writing delivered pursuant hereto, or (c) waive compliance with any
obligation, covenant, agreement or condition contained herein. Any agreement on
the part of a party to any such extension or waiver shall be valid only if set
forth in an instrument or instruments in writing signed by the party against
whom enforcement of any such extension or waiver is sought. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement.

 

11.        Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided, however, that no party hereto may assign its rights or
delegate its obligations under this Agreement without the express prior written
consent of the other party hereto. Any attempt to assign any rights or delegate
any obligations under this Agreement without the consent of the other party
shall be null and void. Except as provided in Sections 4 and 5, nothing in this
Agreement is intended to confer upon any person not a party hereto (and their
successors and assigns) any rights, remedies, obligations or liabilities under
or by reason of this Agreement.

 

12.        Survival of Representations, Warranties and Covenants. The
representations and warranties contained herein shall survive the Closing and
shall thereupon terminate 18 months thereafter, except that the representations
contained in Sections 2(a), 2(b), 3(a), and 3(b) shall survive indefinitely. All
covenants and agreements contained herein which by their terms contemplate
actions following the Closing shall survive the Closing and remain in full force
and effect in accordance with their terms. All other covenants and agreements
contained herein shall not survive the Closing and shall thereupon terminate.

 

13.        Headings; Definitions. The Section headings contained in this
Agreement are inserted for convenience of reference only and will not affect the
meaning or interpretation of this Agreement. All references to Sections
contained herein mean Sections of this Agreement unless otherwise stated. All
capitalized terms defined herein are equally applicable to both the singular and
plural forms of such terms     

 

14.        Severability. If any provision of this Agreement or the application
thereof to any person or circumstance is held to be invalid or unenforceable to
any extent, the remainder of this Agreement shall remain in full force and
effect and shall be reformed to render the Agreement valid and enforceable while
reflecting to the greatest extent permissible the intent of the parties.

 

 

 

 

 

 

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15.        Notices. All notices hereunder shall be sufficiently given for all
purposes hereunder if in writing and delivered personally, sent by documented
overnight delivery service or, to the extent receipt is confirmed, telecopy,
telefax or other electronic transmission service to the appropriate address or
number as set forth below:

 

If to the Company:

Maverick Oil and Gas, Inc.

 

16415 Addison Road, Suite 850

 

Addison, TX 75001-5332

 

Attention: Chief Executive Officer

 

with a copy to:

Stephen M. Cohen, Director of Legal Affairs/Corporate Counsel

Two Logan Square

 

18th & Arch, Suite 1101

 

Philadelphia, PA 19103

 

 

If to Purchaser:

To that address indicated on the signature page hereof.

 

16.        Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof, except to the extent that the General Corporation Law of the State of
Nevada shall apply to the internal corporate governance of the Company.

 

17.        Arbitration.      If a dispute arises as to the interpretation of
this Agreement, it shall be decided in an arbitration proceeding conforming to
the Rules of the American Arbitration Association applicable to commercial
arbitration then in effect at the time of the dispute. The arbitration shall
take place in Dallas, Texas. The decision of the arbitrators shall be
conclusively binding upon the parties and final, and such decision shall be
enforceable as a judgment in any court of competent jurisdiction. The parties
shall share equally the costs of the arbitration.

 

18.        Counterparts. This Agreement may be executed and delivered by
facsimile in two or more counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
agreement.     

 

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IN WITNESS WHEREOF, intending to be legally bound, the parties hereto have
caused this Agreement to be executed as of the date set forth below.

 

 

 

 

 

Date: ____________________

 

PURCHASER

 

 

 

_____________________________________

 

 

 

By:___________________________________

Name:

Title:

Address:  

 

 

 

 

 

 

 

 

 

MAVERICK OIL AND GAS, INC.

 

 

 

By:___________________________________

James A. Watt

Chief Executive Officer

 

 

 

 

 

 

Date:____________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit B

 

WARRANT NO.: [_________]

 

FORM OF WARRANT

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
REPRESENTED HEREBY HAVE BEEN TAKEN BY THE REGISTERED OWNER FOR INVESTMENT, AND
WITHOUT A VIEW TO RESALE OR DISTRIBUTION THEREOF, AND MAY NOT BE SOLD,
TRANSFERRED OR DISPOSED OF WITHOUT AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH TRANSFER OR DISPOSITION DOES NOT VIOLATE THE SECURITIES ACT OF
1933, AS AMENDED, THE RULES AND REGULATIONS THEREUNDER OR OTHER APPLICABLE
SECURITIES LAWS.

 

WARRANT TO PURCHASE

COMMON STOCK OF

MAVERICK OIL AND GAS, INC.

 

This warrant (“Warrant”) is to verify that, FOR VALUE RECEIVED,
[_____________________________] ("Holder") is entitled to purchase, subject to
the terms and conditions hereof, from MAVERICK OIL AND GAS, INC., a Nevada
corporation (the "Company"), [_____________] shares of common stock, $.001 par
value per share, of the Company (the "Common Stock"), at any time during the
period commencing at 9:00 a.m., Eastern Standard Time on the business day
immediately following the day on which an amendment to the Company's articles of
incorporation becomes effective increasing the number of shares of Common Stock
the Company is authorized to issue in an amount sufficient for issuance under
this Warrant (the "Commencement Date") and, unless this Warrant is earlier
terminated pursuant to Section 8 hereof, ending at 5:00 p.m. Eastern Standard
Time on the third anniversary of the Commencement Date (the "Termination Date"),
at an exercise price (the "Exercise Price") of $.20 per share of Common Stock.
The number of shares of Common Stock purchasable upon exercise of this Warrant
and the Exercise Price per share shall be subject to adjustment from time to
time upon the occurrence of certain events as set forth below.

The shares of Common Stock or any other shares or other units of stock or other
securities or property, or any combination thereof, then receivable upon
exercise of this Warrant, as adjusted from time to time, are sometimes referred
to hereinafter as "Exercise Shares." The exercise price per share as from time
to time in effect is referred to hereinafter as the "Exercise Price."

1.

Exercise of Warrant; Issuance of Exercise Shares.

 

 

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(a)        Exercise of Warrant. Subject to the terms hereof, the purchase rights
represented by this Warrant are exercisable by the Holder in whole or in part,
at any time, or from time to time, by the surrender of this Warrant and the
Notice of Exercise annexed hereto duly completed and executed on behalf of the
Holder, at the office of the Company (or such other office or agency of the
Company as it may designate by notice in writing to the Holder at the address of
the Holder appearing on the books of the Company) accompanied by payment of the
Exercise Price in full in cash or by bank or certified check for the Exercise
Shares with respect to which this Warrant is exercised.

 

In the event that this Warrant shall be duly exercised in part prior to the
Termination Date, the Company shall issue a new Warrant or Warrants of like
tenor evidencing the rights of the Holder thereof to purchase the balance of the
Exercise Shares purchasable under the Warrant so surrendered that shall not have
been purchased.

(b)        Issuance of Exercise Shares: Delivery of Warrant Certificate. The
Company shall, within ten (10) business days or as soon thereafter as is
practicable of the exercise of this Warrant, issue in the name of and cause to
be delivered to the Holder one or more certificates representing the Exercise
Shares to which the Holder shall be entitled upon such exercise under the terms
hereof. Such certificate or certificates shall be deemed to have been issued and
the Holder shall be deemed to have become the record holder of the Exercise
Shares as of the date of the due exercise of this Warrant.

(c)        Exercise Shares Fully Paid and Non-assessable. The Company agrees and
covenants that all Exercise Shares issuable upon the due exercise of this
Warrant represented by this Warrant certificate (“Warrant Certificate”) will,
upon issuance and payment therefor in accordance with the terms hereof, be duly
authorized, validly issued, fully paid and non-assessable and free and clear of
all taxes (other than taxes which, pursuant to Section 2 hereof, the Company
shall not be obligated to pay) or liens, charges, and security interests created
by the Company with respect to the issuance thereof.

(d)        Reservation of Exercise Shares. The Company covenants that on and
after the Commencement Date and during the term that this Warrant is
exercisable, the Company will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Exercise
Shares upon the exercise of this Warrant, and from time to time will take all
steps necessary to amend its articles of incorporation to provide sufficient
reserves of shares of Common Stock issuable upon the exercise of this Warrant.

(e)        Fractional Shares. The Company shall not be required to issue
fractional shares of capital stock upon the exercise of this Warrant or to
deliver Warrant Certificates that evidence fractional shares of capital stock.
In the event that any fraction of an Exercise Share would, except for the
provisions of this subsection (e), be issuable upon the exercise of this
Warrant, the Company shall pay to the Holder exercising the Warrant an amount in
cash equal to such fraction multiplied by the Current Market Value of the
Exercise Share on the last business day prior to the date on which this Warrant
is exercised. The "Current Market Value" for any day shall be determined as
follows:

 

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(i)         if the Exercise Shares are traded in the over-the-counter market and
not on any national securities exchange and not on the NASDAQ National Market
System or NASDAQ Small Cap Market (together, the “NASDAQ Reporting System”), the
average of the mean between the last bid and asked prices per share, as reported
by the National Quotation Bureau, Inc., or an equivalent generally accepted
reporting service, or if not so reported, the average of the closing bid and
asked prices for an Exercise Share as furnished to the Company by any member of
the National Association of Securities Dealers, Inc., selected by the Company
for that purpose; or

(ii)         if the Exercise Shares are listed or traded on a national
securities exchange or the NASDAQ Reporting System, the closing price on the
principal national securities exchange on which they are so listed or traded, on
the NASDAQ Reporting System, as the case may be, on the last business day prior
to the date of the exercise of this Warrant. The closing price referred to in
this clause (ii) shall be the last reported sales price or, in case no such
reported sale takes place on such day, the average of the reported closing bid
and asked prices, in either case on the national securities exchange on which
the Exercise Shares are then listed or in the NASDAQ Reporting System; or

(iii)        if no such closing price or closing bid and asked prices are
available, as determined in any reasonable manner as may be prescribed by the
Board of Directors of the Company.

2.

Payment of Taxes.

 

(a)       Stamp Taxes. The Company will pay all documentary stamp taxes, if any,
attributable to the initial issuance of Exercise Shares upon the exercise of
this Warrant; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Exercise Shares in a
name other than that of the Holder of a Warrant Certificate surrendered upon the
exercise of a Warrant, and the Company shall not be required to issue or deliver
such certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.

 

(b)            Withholding. The Holder shall pay to the Company, or make
arrangements satisfactory to the Company regarding payment of, any federal,
state, local and/or payroll taxes of any kind required by law to be withheld
with respect to the grant of this Warrant or the issuance of the Exercise
Shares. The Company may, to the extent permitted by law, deduct any such taxes
from any payment of any kind otherwise due to the Holder whether or not pursuant
to this Warrant. The Holder may elect, with the consent of the Company, to have
such tax withholding obligation satisfied, in whole or in part, by: (i)
authorizing the Company to withhold from the Exercise Shares a number of shares
of Common Stock having an aggregate Fair Market Value that would satisfy the
minimum withholding amount due, or (ii) delivering to the Company a number of
shares of Common Stock of which the Holder is the record and beneficial owner
and that have been held by the Holder for at least six (6) months with an
aggregate Fair Market Value that would satisfy the minimum withholding amount
due. The Company may require that any fractional share amount be settled in
cash. For the purposes of this Section 2, the

 

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term "Fair Market Value" shall be an amount equal to the average of the Current
Market Value (as defined in Section 1(e)) for the ten (10) days preceding the
date on which the amount of tax to be withheld is determined.  

 

3.          Mutilated or Missing Warrant Certificates. In case any Warrant shall
be mutilated, lost, stolen or destroyed, the Company may in its discretion
issue, in exchange and substitution for and upon cancellation of the mutilated
Warrant, or in lieu of and in substitution for the Warrant lost, stolen or
destroyed, a new Warrant or Warrants of like tenor and in the same aggregate
denomination, but only (i) in the case of loss, theft or destruction, upon
receipt of evidence satisfactory to the Company of such loss, theft or
destruction of such Warrant and indemnity or bond, if requested, also
satisfactory to them and (ii) in the case of mutilation, upon surrender of the
mutilated Warrant. Applicants for such substitute Warrants shall also comply
with such other reasonable regulations and pay such other reasonable charges as
the Company or its counsel may prescribe.

 

4.          Rights of Holder. The Holder shall not, by virtue of anything
contained in this Warrant or otherwise, be entitled to any right whatsoever,
either in law or equity, of a stockholder of the Company, including without
limitation, the right to receive dividends or to vote or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
the election of directors of the Company or any other matter.

 

5.          Registration of Transfers and Exchanges. The Warrant shall be
transferable, subject to the provisions of Section 7 hereof, only upon the books
of the Company, if any, to be maintained by it for that purpose, upon surrender
of the Warrant Certificate to the Company at its principal office accompanied
(if so required by the Company) by a written instrument or instruments of
transfer in form satisfactory to the Company and duly executed by the Holder
thereof or by the duly appointed legal representative thereof or by a duly
authorized attorney and upon payment of any necessary transfer tax or other
governmental charge imposed upon such transfer. In all cases of transfer by an
attorney, the original letter of attorney, duly approved, or an official copy
thereof, duly certified, shall be deposited and remain with the Company. In case
of transfer by executors, administrators, guardians or other legal
representatives, duly authenticated evidence of their authority shall be
produced, and may be required to be deposited and remain with the Company in its
discretion. Upon any such registration of transfer, a new Warrant shall be
issued to the transferee named in such instrument of transfer, and the
surrendered Warrant shall be canceled by the Company.

 

Any Warrant may be exchanged, at the option of the Holder thereof and without
charge, when surrendered to the Company at its principal office, or at the
office of its transfer agent, if any, for another Warrant or other Warrants of
like tenor and representing in the aggregate the right to purchase from the
Company a like number and kind of Exercise Shares as the Warrant surrendered for
exchange or transfer, and the Warrant so surrendered shall be canceled by the
Company or transfer agent, as the case may be.

6.          Adjustment of Exercise Shares and Exercise Price. The Exercise Price
and the number and kind of Exercise Shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the happening of
certain events as hereinafter provided. The

 

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Exercise Price in effect at any time and the number and kind of securities
purchasable upon exercise of each Warrant shall be subject to adjustment as
follows:

 

(a)        In case of any consolidation or merger of the Company with another
corporation (other than a merger with another corporation in which the Company
is the surviving corporation and which does not result in any reclassification
or change -- other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination -- of outstanding Common Stock issuable upon such exercise), the
rights of the Holder of this Warrant shall be adjusted in the manner described
below:

(i)         In the event that the Company is the surviving corporation or is
merged into a wholly owned subsidiary for the purpose of incorporating the
Company in a different jurisdiction, this Warrant shall, without payment of
additional consideration therefor, be deemed modified so as to provide that the
Holder of this Warrant, upon the exercise thereof, shall procure, in lieu of
each share of Common Stock theretofore issuable upon such exercise, the kind and
amount of shares of stock, other securities, money and property receivable upon
such consolidation or merger by the holder of each share of Common Stock, had
exercise of this Warrant occurred immediately prior to such consolidation or
merger. This Warrant (as adjusted) shall be deemed to provide for further
adjustments that shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6. The provisions of this clause (i)
shall similarly apply to successive reclassifications, changes, consolidations
and mergers.

(ii)         In the event that the Company is not the surviving corporation
(except in the case of a merger of the Company into a wholly owned subsidiary
for the purpose of incorporating the Company in a different jurisdiction),
Holder shall be given at least fifteen (15) days prior written notice of such
transaction and shall be permitted to exercise this Warrant, to the extent it is
exercisable as of the date of such notice, during this fifteen (15) day period.
Upon expiration of such fifteen (15) day period, this Warrant and all of
Holder's rights hereunder shall terminate.

(b) If the Company, at any time while this Warrant, or any portion thereof,
remains outstanding and unexpired, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under
this Warrant exist into the same or a different number of securities of any
other class or classes, this Warrant shall thereafter represent the right to
acquire such number and kind of securities as would have been issuable as the
result of such change with respect to the securities that were subject to the
purchase rights under this Warrant immediately prior to such reclassification or
other change and the Exercise Price therefor shall be appropriately adjusted,
all subject to further adjustment as provided in this Section 6.

(c)       In case the Company shall (i) pay a dividend or make a distribution on
its shares of Common Stock in shares of Common Stock, (ii) subdivide or classify
its outstanding Common Stock into a greater number of shares, or (iii) combine
or reclassify its outstanding Common Stock into a smaller number of shares, the
Exercise Price in effect at the time of the record date for such dividend or
distribution or of the effective date of such subdivision, combination or
reclassification, shall be proportionally adjusted so that the Holder of this
Warrant exercised after such date shall be entitled to receive the aggregate
number and kind of shares that, if this Warrant had been exercised by such
Holder immediately prior to such date,

 

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such Holder would have been entitled to receive upon such dividend, subdivision,
combination or reclassification. For example, if the Company declares a 2 for 1
stock dividend or stock split and the Exercise Price immediately prior to such
event was $2.00 per share, the adjusted Exercise Price immediately after such
event would be $1.00 per share. Such adjustment shall be made successively
whenever any event listed above shall occur. Whenever the Exercise Price payable
upon exercise of each Warrant is adjusted pursuant to this subsection (c), the
number of Exercise Shares purchasable upon exercise of this Warrant shall
simultaneously be adjusted by multiplying the number of Exercise Shares
initially issuable upon exercise of this Warrant by the Exercise Price in effect
on the date hereof and dividing the product so obtained by the Exercise Price,
as adjusted.

(d)       In the event that at any time, as a result of an adjustment made
pursuant to subsection (a), (b) or (c) above, the Holder of this Warrant
thereafter shall become entitled to receive any Exercise Shares of the Company,
other than Common Stock, thereafter the number of such other shares so
receivable upon exercise of this Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in subsections (a), (b) or
(c) above.

(e) Irrespective of any adjustments in the Exercise Price or the number or kind
of Exercise Shares purchasable upon exercise of this Warrant, Warrants
theretofore or thereafter issued may continue to express the same price and
number and kind of shares as are stated in the similar Warrants initially
issuable pursuant to this Warrant.

(f)         Whenever the Exercise Price shall be adjusted as required by the
foregoing provisions of this Section 6, the Company shall forthwith file in the
custody of its Secretary or an Assistant Secretary at its principal office and
with its stock transfer agent, if any, an officer's certificate showing the
adjusted Exercise Price determined as herein provided, setting forth in
reasonable detail the facts requiring such adjustment, including a statement of
the number of additional shares of Common Stock, if any, and such other facts as
shall be necessary to show the reason for and the manner of computing such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the holder and the Company shall, forthwith
after each such adjustment, mail a copy by certified mail of such certificate to
the Holder.

(g)        All calculations under this Section 6 shall be made to the nearest
cent or to the nearest one one-hundredth (1/100th) of a share, as the case may
be.

7.          Restrictions on Transferability: Restrictive Legend. Neither this
Warrant nor the Exercise Shares shall be transferable except in accordance with
the provisions of this Section.

(a)        Restrictions on Transfer; Indemnification. Neither this Warrant nor
any Exercise Share may be offered for sale or sold, or otherwise transferred or
sold in any transaction which would constitute a sale thereof within the meaning
of the Securities Act of 1933, as amended (the "1933 Act"), unless (i) such
security has been registered for sale under the 1933 Act and registered or
qualified under applicable state securities laws relating to the offer and sale
of securities, or (ii) exemptions from the registration requirements of the 1933
Act and the registration or qualification requirements of all such state
securities laws are available and the Company shall have received an opinion of
counsel satisfactory to the Company that the

 

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proposed sale or other disposition of such securities may be effected without
registration under the 1933 Act and would not result in any violation of any
applicable state securities laws relating to the registration or qualification
of securities for sale, such counsel and such opinion to be satisfactory to the
Company.

The Holder agrees to indemnify and hold harmless the Company against any loss,
damage, claim or liability arising from the disposition of this Warrant or any
Exercise Share held by such holder or any interest therein in violation of the
provisions of this Section 7.

(b)        Restrictive Legends. Unless and until otherwise permitted by this
Section 7, this Warrant Certificate, each Warrant Certificate issued to the
Holder or to any transferee or assignee of this Warrant Certificate, and each
certificate representing Exercise Shares issued upon exercise of this Warrant or
to any transferee of the person to whom the Exercise Shares were issued, shall
bear a legend setting forth the requirements of subsection (a) of this Section
7, together with such other legend or legends as may otherwise be deemed
necessary or appropriate by counsel to the Company.

(c)        Removal of Legend. The Company shall, at the request of any
registered holder of a Warrant or Exercise Share, exchange the certificate
representing such security for a certificate representing the same security not
bearing the restrictive legend required by subsection (b) if, in the opinion of
counsel acceptable to the Company, such restrictive legend is no longer
necessary.

8.

Company's Right to Require Exercise of Warrant.

(a)       Exercise of Right. If the volume weighted average Closing Price (as
defined in Section 8(b)) for the shares of Common Stock has been equal to or
greater than 300% of the Exercise Price during 20 consecutive Trading Days (as
defined in Section 8(c)) during the period commencing on the first Trading Day
after the SEC declares effective a registration statement filed by the Company
with the SEC permitting the public sale of all of the shares of Common Stock
issuable upon exercise of this Warrant, the Company may require all or any
portion of this Warrant to be exercised or forfeited. In the event the Company
exercises such right hereunder, the Company shall provide Holder with written
notice of its election to require all or a portion of this Warrant to be
exercised or forfeited to the address of Holder referred to in Section 10.
Holder shall have 15 business days (the “Notice Period”) from the date such
notice is sent by the Company to Holder to exercise this Warrant in whole or in
part at the Exercise Price in accordance with the terms hereof. If this Warrant
(or any part thereof specified in the notice given by the Company pursuant to
this Section 8(a)) is not so exercised during the Notice Period, this Warrant
(or such part thereof) shall be terminate and no longer be exercisable on or
after the expiration of the Notice Period.

(b)

“Closing Price” for any day, means:

 

(i)         if the Common Stock is traded in the over-the-counter market and not
on any national securities exchange and not on the NASDAQ National Market System
or NASDAQ Small Cap Market (together, the “NASDAQ Reporting System”), the
average of the mean between the last bid and asked prices per share, as reported
by the National Quotation Bureau,

 

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Inc., or an equivalent generally accepted reporting service, or if not so
reported, the average of the closing bid and asked prices for the Common Stock
as furnished to the Company by any member of the National Association of
Securities Dealers, Inc., selected by the Company for that purpose; or

(ii)         if the Common Stock is listed or traded on a national securities
exchange or the NASDAQ Reporting System, the closing price on the principal
national securities exchange on which they are so listed or traded, on the
NASDAQ Reporting System, as the case may be, on the last business day prior to
the date of the exercise of this Warrant. The closing price referred to in this
clause (ii) shall be the last reported sales price or, in case no such reported
sale takes place on such day, the average of the reported closing bid and asked
prices, in either case on the national securities exchange on which the Common
Stock is then listed or in the NASDAQ Reporting System; or

(iii)        if no such closing price or closing bid and asked prices are
available, as determined in any reasonable manner as may be prescribed by the
Board of Directors of the Company.

(c)       “Trading Day” means a day on which the securities exchange,
association, or quotation system on which shares of Common Stock are listed or
quoted for trading shall be open for business or, if the shares of Common Stock
shall not be listed or quoted on such exchange, association, or quotation system
for such day, a day with respect to which trades in the United States domestic
over-the-counter market shall be reported.

 

9.          Registration Rights. The Holder shall be entitled to the rights and
subject to the obligations set forth in Section 5 of that certain Securities
Purchase Agreement dated on or about the date hereof by and between the Company
and the Holder.

10.        Notices. All notices or other communications under this Warrant shall
be in writing and shall be deemed to have been given on the day of delivery if
delivered by hand, on the fifth day after deposit in the mail if mailed by
certified mail, postage prepaid, return receipt requested, or on the next
business day after mailing if sent by a nationally recognized overnight courier
such as federal express, addressed as follows:

 

If to the Company:

Maverick Oil and Gas, Inc.

 

16415 Addison Road, Suite 850

 

Addison, TX 75001-5332

 

Attention: Chief Executive Officer

 

with a copy to:

Stephen M. Cohen, Director of Legal Affairs/Corporate Counsel

Two Logan Square

 

18th & Arch, Suite 1101

 

Philadelphia, PA 19103

 

 

 

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and to the Holder at the address of the Holder appearing on the books of the
Company or the Company's transfer agent, if any.

 

Either of the Company or the Holder may from time to time change the address to
which notices to it are to be mailed hereunder by notice in accordance with the
provisions of this Section 10.

11.        Supplements and Amendments. The Company may from time to time
supplement or amend this Warrant without the approval of any holders of Warrants
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision, or to make any other provisions in regard to matters or questions
herein arising hereunder which the Company may deem necessary or desirable and
which shall not materially adversely affect the interests of the Holder.

 

12.        Successors and Assigns. This Warrant shall inure to the benefit of
and be binding on the respective successors, assigns and legal representatives
of the Holder and the Company.

 

13.        Severability. If for any reason any provision, paragraph or terms of
this Warrant is held to be invalid or unenforceable, all other valid provisions
herein shall remain in full force and effect and all terms, provisions and
paragraphs of this Warrant shall be deemed to be severable.

 

14.        Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, without regard to the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.

 

15.        Headings. Section and subsection headings used herein are included
herein for convenience of reference only and shall not affect the construction
of this Warrant nor constitute a part of this Warrant for any other purpose.

 

[Remainder of page intentionally left blank]

 

IN WITNESS WHEREOF, the Company has caused these presents to be duly executed as
of the ___ day of ______________, 2006.

 

 

MAVERICK OIL AND GAS, INC.

 

 

 

By:__________________________________

Name:

Title:

 

 

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APPENDIX A

 

NOTICE OF EXERCISE

 

To:

Maverick Oil and Gas, Inc.

 

 

16415 Addison Road, Suite 850

 

 

Addison, TX 75001-5332

 

 

Attention: Chief Executive Officer

 

 

(1)        The undersigned hereby elects to purchase ____________ shares of
Common Stock of Maverick Oil and Gas, Inc., a Nevada corporation, pursuant to
the terms of the attached Warrant, and tenders herewith payment of the Exercise
Price for such shares in full in accordance with the terms of the Warrant in
full in cash or by bank or certified check.

(2)        In exercising this Warrant, the undersigned hereby confirms and
acknowledges that the shares of Common Stock to be issued upon conversion hereof
are being acquired solely for the account of the undersigned, not as a nominee
for any other party, and for investment purposes only (unless such shares are
subject to resale pursuant to an effective prospectus), and that the undersigned
will not offer, sell or otherwise dispose of any such shares of Common Stock
except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any state securities laws.

(3)        Terms not otherwise defined in this Notice of Exercise shall have the
meanings ascribed to such terms in the attached Warrant.

(4)        Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned.

 

 

HOLDER

 

 

__________________________

___________________________________

(Date)

(Signature)

 

 

 

 

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