Exhibit 4.24


 


WARRANT


 


THE SECURITIES REPRESENTED BY THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE ISSUER THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS
OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONE FIDE MARGIN
ACCOUNT.


 


WENTWORTH ENERGY, INC.


 


Amended and Restated Warrant To Purchase
Common Stock


 


	
  Warrant No.: CCP-

  	
   

  	
  Number of Shares: 500,000

  



 


Date of Issuance: October 31, 2007


Original Issue Date: January 12, 2006


 


The Company and the Holder hereby agree that this Warrant is issued in
exchange for and does hereby amend and restate, and completely replace, that
certain Warrant, dated as of January 12, 2006, by and between the Company and
the Holder, which shall have no further force or effect.


 


Wentworth Energy, Inc., an Oklahoma corporation (the “Company”),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, YA
Global Investments, L.P., a Cayman Islands exempt limited partnership
(the “Holder”), the registered holder hereof or its permitted assigns,
is entitled, subject to the terms set forth below, to purchase from the Company
upon surrender of this Warrant, at any time or times on or after the date
hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as
defined herein) Five Hundred Thousand (500,000) fully paid and non-assessable
shares of Common Stock (as defined herein) of the Company (the “Warrant
Shares”) at the exercise price per share provided in Section 1(b) below or
as subsequently adjusted; provided, however, that in no event shall the holder
be entitled to exercise this Warrant for a number of Warrant Shares in excess
of that number of Warrant Shares which, upon giving effect to such exercise,
would cause the aggregate number of shares of Common Stock beneficially owned
by the holder and its affiliates to exceed 4.99% of the outstanding shares of
the Common Stock following such exercise. For purposes of the foregoing
proviso, the aggregate number of shares of Common Stock beneficially owned by
the holder and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the
determination of such 


 

















 


proviso is being made, but shall exclude shares of Common Stock which
would be issuable upon (i) exercise of the remaining, unexercised Warrants
beneficially owned by the holder and its affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company beneficially owned by the holder and its affiliates (including,
without limitation, any convertible notes or preferred stock) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes of this
paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this
Warrant, in determining the number of outstanding shares of Common Stock a
holder may rely on the number of outstanding shares of Common Stock as
reflected in (1) the Company’s most recent Form l0-QSB or Form 10-KSB, as the
case may be, (2) a more recent public announcement by the Company or (3) any
other notice by the Company or its transfer agent setting forth the number of
shares of Common Stock outstanding. Upon the written request of any holder, the
Company shall promptly, but in no event later than one (1) Business Day
following the receipt of such notice, confirm in writing to any such holder the
number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to
the exercise of Warrants (as defined below) by such holder and its affiliates
since the date as of which such number of outstanding shares of Common Stock
was reported.


 


Section 1.


 


(a)           This Warrant is the
common stock purchase warrant (this “Warrant”) issued pursuant to that
certain Securities Purchase Agreement, dated as of January 12, 2006, by and
between the Company and the Holder, as amended by that certain Amendment and
Exchange Agreement, dated as of October 31, 2007 (“A&E Agreement”),
by and between the Company and the Holder (as the same may be further amended,
modified or supplemented from time to time, the “Securities Purchase
Agreement”).


 


(b)           Definitions.
The following words and terms as used in this Warrant shall have the following
meanings:


 


(i)            “Approved Stock Plan”
means any employee benefit plan, arrangement or other agreement which has been
approved by the Board of Directors of the Company, pursuant to which the
Company’s securities may be issued to any employee, consultant, officer or
director for services provided to the Company.


 


(ii)           “Business Day”
means any day other than Saturday, Sunday or other day on which commercial
banks in the City of New York are authorized or required by law to remain
closed.


 


(iii)          “Closing Bid Price”
means the price per share in the last reported trade of the Common Stock on the
OTC Bulletin Board (“OTC”) or on the exchange which the Common Stock is
then listed as quoted by Bloomberg, LP.


 

















 


(iv)          “Common Stock”
means the common stock, par value $.001, of the Obligor and stock of any other
class into which such shares may hereafter be changed or reclassified.


 


(v)           “Convertible
Securities” means any stock or securities (other than Options) directly or
indirectly convertible into or exercisable or exchangeable for Common Stock.


 


(vi)          “Event of Default”
means an “Event of Default” as defined in the Convertible Debentures issued pursuant
to the Securities Purchase Agreement.


 


(vii)         “Excluded
Securities” means any Common Stock issued or issuable: (i) in connection
with any Approved Stock Plan; (ii) upon exercise of this Warrant or the other
Amended and Restated Warrants (as defined in the Securities Purchase Agreement)
or the Warrants (as defined in the Other Securities Purchase Agreement) or
conversion of the Amended and Restated Debentures (as defined in the Securities
Purchase Agreement) or the Senior Secured Convertible Notes or; (iii) upon
exercise of any Options or Convertible Securities which are outstanding, or
that are subject to a written agreement as to their issuance that is listed on
a schedule to the Other Securities Purchase Agreement; (iv) in an amount not to
exceed 250,000 shares of Common Stock in the aggregate pursuant to a judgment
or settlement in connection with (a) the PIN Financial Matter or (b) the UOS
Energy Matter including, without limitation, Common Stock issuable pursuant to
Options granted or Convertible Securities issued pursuant to such judgment or
settlement; and (v) otherwise pursuant to a written agreement that is listed on
a schedule to the Other Securities Purchase Agreement, provided that the terms
of conversion price, exchange price, exercise or other purchase price therein
are not amended, modified or otherwise changed after the date hereof to reduce
the conversion price, exchange price, exercise or other purchase price below
that in effect on the date hereof, and the terms of the number of shares of
Common Stock issued or issuable therein are not amended, modified or changed
after the date hereof to increase the number of shares of Common Stock issued
or issuable above that in effect on the date hereof, by virtue of any
amendment, modification or change to such Options or Convertible Securities or
written agreements after the date hereof.


 


(viii)        “Expiration Date”
means the date five (5) years from January 12, 2006 or, if such date falls on a
Saturday, Sunday or other day on which banks are required or authorized to be
closed in the City of New York or the State of New York or on which trading
does not take place on the Principal Exchange or automated quotation system on
which the Common Stock is traded (a “Holiday”), the next date that is
not a Holiday.


 


(ix)           “Issuance Date”
means the date hereof.


 


(xi)           “Options” means
any rights, warrants or options to subscribe for or purchase Common Stock or
Convertible Securities.


 


(xiii)         “Other
Securities Purchase Agreement” means that certain Securities Purchase
Agreement dated as of July 24, 2006, by and among the Company and each of the
buyers party thereto, as the same may be amended, modified or supplemented from
time to 


 

















 


time including, without
limitation, by those certain Amendment Agreements, each dated as of October 31,
2007, by and between the Company and the buyer party thereto.


 


(xiv)        “Person” means
an individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.


 


(xv)         “PIN Financial
Matter”  means the matter
pending in the US District Court, Southern District of New York (06 CV 2779)
against the Company by PIN Financial LLC claiming a commission for introduction
to Cornell Capital Partners, LP, which has been aggressively denied and
disputed by both the Company and Cornell Capital Partners, LP.


 


(xvi)        “Securities Act”
means the Securities Act of 1933, as amended.


 


(xvii)       “Senior Secured
Convertible Notes” means those certain Amended and Restated Notes and New Note
as defined in and issued by the Company pursuant to the Other Securities
Purchase Agreement.


 


(xviii)      “Senior Secured
Financing Documents” means the Other Securities Purchase Agreement and each
other agreement entered into by the parties thereto in connection with the
transactions contemplated thereby, including without limitation the Amended and
Restated Notes, the New Notes, the Amended and Restated Warrants, the New
Warrants, the Amended and Restated Registration Rights Agreement, the Amended
and Restated Pledge Agreement, the Amended and Restated Security Agreement, the
Amended and Restated Barnico Guaranty, and the Amended and Restated Deeds of
Trust as each such term is defined therein.


 


(xix)         “Trading Day”
means a day on which the shares of Common Stock are quoted on the OTC or quoted
or traded on Nasdaq Capital Market, New York Stock Exchange, American Stock
Exchange or the Nasdaq National Market on which the shares of Common Stock are
then quoted or listed; provided, that in the event that the shares of Common
Stock are not listed or quoted, then Trading Day shall mean a Business Day.


 


(xx)          “UOS Energy
Matter” means, the matter pending in the Superior Court of California,
County of Los Angeles, West District (SC09064) against the Company and others
by UOS Energy, LLC relating to the Company’s refusal to purchase certain tar
sands leases in Utah in consideration of 1,000,000 shares of Common Stock.


 


(xxi)         “Warrant”
means this Warrant and all Warrants issued in exchange, transfer or replacement
thereof.


 


(xxii)        “Warrant Exercise
Price” shall be $0.001 or as subsequently adjusted as provided in Section 8
hereof.


 


(xxiii)       “Warrant Shares”
means the shares of Common Stock issuable at any time upon exercise of this
Warrant.


 

















 


(c)           Other Definitional
Provisions.


 


(i)            Except as otherwise
specified herein, all references herein (A) to the Company shall be deemed to
include the Company’s successors and (B) to any applicable law defined or
referred to herein shall be deemed references to such applicable law as the
same may have been or may be amended or supplemented from time to time.


 


(ii)           When used in this
Warrant, the words “herein”, “hereof”, and “hereunder” and
words of similar import, shall refer to this Warrant as a whole and not to any
provision of this Warrant, and the words “Section”, “Schedule”
and “Exhibit” shall refer to Sections of, and Schedules and Exhibits to,
this Warrant unless otherwise specified.


 


(iii)          Whenever the
context so requires, the neuter gender includes the masculine or feminine, and
the singular number includes the plural, and vice versa.


 


Section 2.               Exercise
of Warrant


 


(a)           Subject to the terms
and conditions hereof, this Warrant may be exercised by the holder hereof then
registered on the books of the Company, pro rata as hereinafter provided, at
any time on any Business Day on or after the opening of business on such
Business Day, commencing with the first day after the date hereof, and prior to
11:59 P.M. Eastern Time on the Expiration Date (i) by delivery of a written
notice, in the form of the subscription notice attached as Exhibit A
hereto (the “Exercise Notice”), of such holder’s election to exercise
this Warrant, which notice shall specify the number of Warrant Shares to be
purchased, payment to the Company of an amount equal to the Warrant Exercise
Price(s) applicable to the Warrant Shares being purchased, multiplied by the
number of Warrant Shares (at the applicable Warrant Exercise Price) as to which
this Warrant is being exercised (plus any applicable issue or transfer taxes)
(the “Aggregate Exercise Price”) in cash or wire transfer of immediately
available funds and the surrender of this Warrant (or an indemnification
undertaking with respect to this Warrant in the case of its loss, theft or
destruction) to a common carrier for overnight delivery to the Company as soon
as practicable following such date (“Cash Basis”) or (ii) by delivering
an Exercise Notice and in lieu of making payment of the Aggregate Exercise
Price in cash or wire transfer, elect instead to receive upon such exercise the
“Net Number” of shares of Common Stock determined according to the following
formula (the “Cashless Exercise”):


 


	
  Net Number =

  	
  (A x B) – (A x C)

  	
   

  
	
   

  	
  B

  	
   

  



 


For purposes of the foregoing formula:


 


A = the total number of Warrant Shares with respect to which this
Warrant is then being exercised.


 


B = the Closing Bid Price of the Common Stock on the date of exercise
of the Warrant.


 

















 


C = the Warrant Exercise Price then in effect for the applicable
Warrant Shares at the time of such exercise.


 


In the event of any exercise of the rights represented by this Warrant
in compliance with this Section 2, the Company shall on or before the fifth (5th)
Business Day following the date of receipt of the Exercise Notice, the
Aggregate Exercise Price and this Warrant (or an indemnification undertaking
with respect to this Warrant in the case of its loss, theft or destruction) and
the receipt of the representations of the holder specified in Section 6 hereof,
if requested by the Company (the “Exercise Delivery Documents”), and if
the Common Stock is DTC eligible, credit such aggregate number of shares of
Common Stock to which the holder shall be entitled to the holder’s or its
designee’s balance account with The Depository Trust Company; provided,
however, if the holder who submitted the Exercise Notice requested physical
delivery of any or all of the Warrant Shares, or, if the Common Stock is not
DTC eligible then the Company shall, on or before the fifth (5th)
Business Day following receipt of the Exercise Delivery Documents, issue and
surrender to a common carrier for overnight delivery to the address specified
in the Exercise Notice, a certificate, registered in the name of the holder,
for the number of shares of Common Stock to which the holder shall be entitled
pursuant to such request. Upon delivery of the Exercise Notice and Aggregate
Exercise Price referred to in clause (i) or (ii) above the holder of this
Warrant shall be deemed for all corporate purposes to have become the holder of
record of the Warrant Shares with respect to which this Warrant has been
exercised. In the case of a dispute as to the determination of the Warrant
Exercise Price, the Closing Bid Price or the arithmetic calculation of the
Warrant Shares, the Company shall promptly issue to the holder the number of
Warrant Shares that is not disputed and shall submit the disputed
determinations or arithmetic calculations to the holder via facsimile within
one (1) Business Day of receipt of the holder’s Exercise Notice.


 


(b)           If the holder and
the Company are unable to agree upon the determination of the Warrant Exercise
Price or arithmetic calculation of the Warrant Shares within one (1) day of
such disputed determination or arithmetic calculation being submitted to the
holder, then the Company shall immediately submit via facsimile (i) the
disputed determination of the Warrant Exercise Price or the Closing Bid Price
to an independent, reputable investment banking firm or (ii) the disputed
arithmetic calculation of the Warrant Shares to its independent, outside
accountant. The Company shall cause the investment banking firm or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the holder of the results no later than forty-eight
(48) hours from the time it receives the disputed determinations or
calculations. Such investment banking firm’s or accountant’s determination or
calculation, as the case may be, shall be deemed conclusive absent manifest
error.


 


(c)           Unless the rights
represented by this Warrant shall have expired or shall have been fully
exercised, the Company shall, as soon as practicable and in no event later than
five (5) Business Days after any exercise and at its own expense, issue a new
Warrant identical in all respects to this Warrant exercised except it shall
represent rights to purchase the number of Warrant Shares purchasable immediately
prior to such exercise under this Warrant exercised, less the number of Warrant
Shares with respect to which such Warrant is exercised.


 

















 


(d)           No fractional
Warrant Shares are to be issued upon any pro rata exercise of this Warrant, but
rather the number of Warrant Shares issued upon such exercise of this Warrant
shall be rounded up or down to the nearest whole number.


 


(e)           If the Company or
its Transfer Agent shall fail for any reason or for no reason to issue to the
holder within ten (10) days of receipt of the Exercise Delivery Documents, a
certificate for the number of Warrant Shares to which the holder is entitled or
to credit the holder’s balance account with The Depository Trust Company for
such number of Warrant Shares to which the holder is entitled upon the holder’s
exercise of this Warrant, the Company shall, in addition to any other remedies
under this Warrant or otherwise available to such holder, pay as additional
damages in cash to such holder on each day the issuance of such certificate for
Warrant Shares is not timely effected an amount equal to 0.025% of the product of
(A) the sum of the number of Warrant Shares not issued to the holder on a
timely basis and to which the holder is entitled, and (B) the Closing Bid Price
of the Common Stock for the Trading Day immediately preceding the last possible
date which the Company could have issued such Common Stock to the holder
without violating this Section 2.


 


(f)            If within ten (10)
days after the Company’s receipt of the Exercise Delivery Documents, the
Company fails to deliver a new Warrant to the holder for the number of Warrant
Shares to which such holder is entitled pursuant to Section 2 hereof, then, in
addition to any other available remedies under this Warrant or the Placement
Agent Agreement, or otherwise available to such holder, the Company shall pay
as additional damages in cash to such holder on each day after such tenth (10th)
day that such delivery of such new Warrant is not timely effected in an amount
equal to 0.25% of the product of (A) the number of Warrant Shares represented
by the portion of this Warrant which is not being exercised and (B) the Closing
Bid Price of the Common Stock for the Trading Day immediately preceding the
last possible date which the Company could have issued such Warrant to the
holder without violating this Section 2.


 


Section 3.               Covenants
as to Common Stock. The Company hereby covenants and agrees as follows:


 


(a)           This Warrant is, and
any Warrants issued in substitution for or replacement of this Warrant will
upon issuance be, duly authorized and validly issued.


 


(b)           All Warrant Shares
which may be issued upon the exercise of the rights represented by this Warrant
will, upon issuance, be validly issued, fully paid and nonassessable and free
from all taxes, liens and charges with respect to the issue thereof.


 


(c)           During the period
within which the rights represented by this Warrant may be exercised, the
Company will at all times have authorized and reserved at least one hundred
percent (100%) of the number of shares of Common Stock needed to provide for
the exercise of the rights then represented by this Warrant and the par value
of said shares will at all times be less than or equal to the applicable
Warrant Exercise Price. If at any time the Company does not have a sufficient
number of shares of Common Stock authorized and available, then the 


 

















 


Company shall call and hold a
special meeting of its stockholders within sixty (60) days of that time for the
sole purpose of increasing the number of authorized shares of Common Stock.


 


(d)           The Company shall so
list on each national securities exchange or automated quotation system, as the
case may be, and shall maintain such listing of, and other shares of capital
stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national securities
exchange or automated quotation system.


 


(e)           The Company will
not, by amendment of its Articles of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or performed
by it hereunder, but will at all times in good faith assist in the carrying out
of all the provisions of this Warrant and in the taking of all such action as
may reasonably be requested by the holder of this Warrant in order to protect
the exercise privilege of the holder of this Warrant against dilution or other
impairment, consistent with the tenor and purpose of this Warrant. The Company
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Warrant Exercise Price then in effect,
and (ii) will take all such actions as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant.


 


(f)            This Warrant will
be binding upon any entity succeeding to the Company by merger, consolidation
or acquisition of all or substantially all of the Company’s assets.


 


(g)           The Company
represents that in no event shall any issuances of Common Stock under this
Warrant trigger any adjustments, ratchets, or resets on any securities issued pursuant
to the Senior Secured Financing Documents.


 


Section 4.               Taxes.
The Company shall pay any and all taxes, except any applicable withholding,
which may be payable with respect to the issuance and delivery of Warrant
Shares upon exercise of this Warrant.


 


Section 5.               Warrant
Holder Not Deemed a Stockholder. Except as otherwise specifically provided
herein, no holder, as such, of this Warrant shall be entitled to vote or
receive dividends or be deemed the holder of shares of capital stock of the
Company for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the holder of this Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of
this Warrant. In addition, nothing contained in this Warrant shall be construed
as imposing any liabilities on such holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the 


 

















 


Company or by creditors of the
Company. Notwithstanding this Section 5, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving
thereof to the stockholders.


 


Section 6.               Representations
of Holder. The holder of this Warrant, by the acceptance hereof, represents
that it is acquiring this Warrant and the Warrant Shares for its own account
for investment only and not with a view towards, or for resale in connection
with, the public sale or distribution of this Warrant or the Warrant Shares,
except pursuant to sales registered or exempted under the Securities Act;
provided, however, that by making the representations herein, the holder does
not agree to hold this Warrant or any of the Warrant Shares for any minimum or
other specific term and reserves the right to dispose of this Warrant and the
Warrant Shares at any time in accordance with or pursuant to a registration
statement or an exemption under the Securities Act. The holder of this Warrant
further represents, by acceptance hereof, that, as of this date, such holder is
an “accredited investor” as such term is defined in Rule 501(a)(1) of
Regulation D promulgated by the Securities and Exchange Commission under the
Securities Act (an “Accredited Investor”). Upon exercise of this Warrant
the holder shall, if requested by the Company, confirm in writing, in a form
satisfactory to the Company, that the Warrant Shares so purchased are being
acquired solely for the holder’s own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale and
that such holder is an Accredited Investor. If such holder cannot make such
representations because they would be factually incorrect, it shall be a
condition to such holder’s exercise of this Warrant that the Company receive
such other representations as the Company considers reasonably necessary to
assure the Company that the issuance of its securities upon exercise of this
Warrant shall not violate any United States or state securities laws.


 


Section 7.               Ownership
and Transfer.


 


(a)           The Company shall
maintain at its principal executive offices (or such other office or agency of
the Company as it may designate by notice to the holder hereof), a register for
this Warrant, in which the Company shall record the name and address of the
person in whose name this Warrant has been issued, as well as the name and
address of each transferee. The Company may treat the person in whose name any
Warrant is registered on the register as the owner and holder thereof for all
purposes, notwithstanding any notice to the contrary, but in all events
recognizing any transfers made in accordance with the terms of this Warrant.


 


Section 8.               Adjustment
of Warrant Exercise Price and Number of Shares. The Warrant Exercise Price
and the number of shares of Common Stock issuable upon exercise of this Warrant
shall be adjusted from time to time as follows:


 


(a)           Adjustment of
Warrant Exercise Price and Number of Shares upon Issuance of Common Stock. If
and whenever on or after the Issuance Date of this Warrant, the Company issues
or sells, or is deemed to have issued or sold, any shares of Common Stock for a
consideration per share less than a price (the “Applicable Price”) equal
to the Warrant Exercise Price in effect immediately prior to such issuance or
sale, then immediately after such issue or sale the Warrant Exercise Price then
in effect shall be reduced to an amount equal to such 


 

















 


consideration per share. Upon
each such adjustment of the Warrant Exercise Price hereunder, the number of
Warrant Shares issuable upon exercise of this Warrant shall be adjusted to the
number of shares determined by multiplying the Warrant Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares issuable
upon exercise of this Warrant immediately prior to such adjustment and dividing
the product thereof by the Warrant Exercise Price resulting from such
adjustment.


 


(b)           Effect on Warrant
Exercise of Certain Events. For purposes of determining the adjusted
Warrant Exercise Price under Section 8(a) above, the following shall be
applicable:


 


(i)            Issuance of Options.
If after the date hereof, the Company in any manner grants any Options and the
lowest price per share for which one share of Common Stock is issuable upon the
exercise of any such Option or upon conversion or exchange of any convertible
securities issuable upon exercise of any such Option is less than the
Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Option for such price per share. For purposes of this
Section 8(b)(i), the lowest price per share for which one share of Common Stock
is issuable upon exercise of such Options or upon conversion or exchange of
such Convertible Securities shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the granting or sale of the Option, upon
exercise of the Option or upon conversion or exchange of any convertible
security issuable upon exercise of such Option. No further adjustment of the
Warrant Exercise Price shall be made upon the actual issuance of such Common
Stock or of such convertible securities upon the exercise of such Options or
upon the actual issuance of such Common Stock upon conversion or exchange of
such convertible securities.


 


(ii)           Issuance of
Convertible Securities. If the Company in any manner issues or sells any
convertible securities and the lowest price per share for which one share of
Common Stock is issuable upon the conversion or exchange thereof is less than
the Applicable Price, then such share of Common Stock shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
issuance or sale of such convertible securities for such price per share. For
the purposes of this Section 8(b)(ii), the lowest price per share for which one
share of Common Stock is issuable upon such conversion or exchange shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to one share of Common Stock upon the
issuance or sale of the convertible security and upon conversion or exchange of
such convertible security. No further adjustment of the Warrant Exercise Price
shall be made upon the actual issuance of such Common Stock upon conversion or
exchange of such convertible securities, and if any such issue or sale of such
convertible securities is made upon exercise of any Options for which
adjustment of the Warrant Exercise Price had been or are to be made pursuant to
other provisions of this Section 8(b), no further adjustment of the Warrant
Exercise Price shall be made by reason of such issue or sale.


 

















 


(iii)          Change in Option
Price or Rate of Conversion. If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the issue,
conversion or exchange of any convertible securities, or the rate at which any
convertible securities are convertible into or exchangeable for Common Stock
changes at any time, the Warrant Exercise Price in effect at the time of such
change shall be adjusted to the Warrant Exercise Price which would have been in
effect at such time had such Options or convertible securities provided for
such changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold and the
number of Warrant Shares issuable upon exercise of this Warrant shall be
correspondingly readjusted. For purposes of this Section 8(b)(iii), if the
terms of any Option or convertible security that was outstanding as of the
issuance Date of this Warrant are changed in the manner described in the
immediately preceding sentence, then such Option or convertible security and
the Common Stock deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such change. No
adjustment pursuant to this Section 8(b) shall be made if such adjustment would
result in an increase of the Warrant Exercise Price then in effect.


 


(c)           Effect on Warrant
Exercise Price of Certain Events. For purposes of determining the adjusted
Warrant Exercise Price under Sections 8(a) and 8(b), the following shall be
applicable:


 


(i)            Calculation of
Consideration Received. If any Common Stock, Options or convertible
securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefore will be deemed to be the net amount
received by the Company therefore. If any Common Stock, Options or convertible
securities are issued or sold for a consideration other than cash, the amount
of such consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the market price of such securities on the date of receipt of such
securities. If any Common Stock, Options or convertible securities are issued
to the owners of the non-surviving entity in connection with any merger in
which the Company is the surviving entity, the amount of consideration
therefore will be deemed to be the fair value of such portion of the net assets
and business of the non-surviving entity as is attributable to such Common
Stock, Options or convertible securities, as the case may be. The fair value of
any consideration other than cash or securities will be determined jointly by
the Company and the holders of Warrants representing at least two-thirds (b) of
the Warrant Shares issuable upon exercise of the Warrants then outstanding. If
such parties are unable to reach agreement within ten (10) days after the
occurrence of an event requiring valuation (the “Valuation Event”), the
fair value of such consideration will be determined within five (5) Business
Days after the tenth (10th) day following the Valuation Event by an
independent, reputable appraiser jointly selected by the Company and the
holders of Warrants representing at least two-thirds (b) of the Warrant Shares
issuable upon exercise of the Warrants then outstanding. The determination of
such appraiser shall be final and binding upon all parties and the fees and
expenses of such appraiser shall be borne jointly by the Company and the
holders of Warrants.


 


(ii)           Integrated
Transactions. In case any Option is issued in connection with the issue or
sale of other securities of the Company, together comprising one 


 

















 


integrated transaction in which
no specific consideration is allocated to such Options by the parties thereto,
the Options will be deemed to have been issued for a consideration of $.01.


 


(iii)          Treasury Shares.
The number of shares of Common Stock outstanding at any given time does not
include shares owned or held by or for the account of the Company, and the disposition
of any shares so owned or held will be considered an issue or sale of Common
Stock.


 


(iv)          Record Date.
If the Company takes a record of the holders of Common Stock for the purpose of
entitling them (1) to receive a dividend or other distribution payable in
Common Stock, Options or in convertible securities or (2) to subscribe for or
purchase Common Stock, Options or convertible securities, then such record date
will be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such
right of subscription or purchase, as the case may be.


 


(d)           Adjustment of
Warrant Exercise Price upon Subdivision or Combination of Common Stock. If
the Company at any time after the date of issuance of this Warrant subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Stock into a greater number of
shares, any Warrant Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of shares of Common
Stock obtainable upon exercise of this Warrant will be proportionately
increased. If the Company at any time after the date of issuance of this
Warrant combines (by combination, reverse stock split or otherwise) one or more
classes of its outstanding shares of Common Stock into a smaller number of
shares, any Warrant Exercise Price in effect immediately prior to such
combination will be proportionately increased and the number of Warrant Shares
issuable upon exercise of this Warrant will be proportionately decreased. Any
adjustment under this Section 8(d) shall become effective at the close of business
on the date the subdivision or combination becomes effective.


 


(e)           Distribution of
Assets. If the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of
Common Stock, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at any
time after the issuance of this Warrant, then, in each such case:


 


(i)            any Warrant
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of Common Stock entitled to
receive the Distribution shall be reduced, effective as of the close of
business on such record date, to a price determined by multiplying such Warrant
Exercise Price by a fraction of which (A) the numerator shall be the Closing Bid
Price of the Common Stock on the Trading Day immediately preceding such record
date minus the value of the Distribution (as determined in good faith by the
Company’s Board of Directors) applicable to one share of Common Stock, and (B)
the denominator shall be the Closing Bid Price of the Common Stock on the Trading
Day immediately preceding such record date; and


 

















 


(ii)           either (A) the
number of Warrant Shares obtainable upon exercise of this Warrant shall be
increased to a number of shares equal to the number of shares of Common Stock obtainable
immediately prior to the close of business on the record date fixed for the
determination of holders of Common Stock entitled to receive the Distribution
multiplied by the reciprocal of the fraction set forth in the immediately
preceding clause (i), or (B) in the event that the Distribution is of common
stock of a company whose common stock is traded on a national securities
exchange or a national automated quotation system, then the holder of this
Warrant shall receive an additional warrant to purchase Common Stock, the terms
of which shall be identical to those of this Warrant, except that such warrant
shall be exercisable into the amount of the assets that would have been payable
to the holder of this Warrant pursuant to the Distribution had the holder
exercised this Warrant immediately prior to such record date and with an
exercise price equal to the amount by which the exercise price of this Warrant
was decreased with respect to the Distribution pursuant to the terms of the
immediately preceding clause (i).


 


(f)            Certain Events.
If any event occurs of the type contemplated by the provisions of this Section
8 but not expressly provided for by such provisions (including, without
limitation, the granting of stock appreciation rights, phantom stock rights or
other rights with equity features), then the Company’s Board of Directors will
make an appropriate adjustment in the Warrant Exercise Price and the number of
shares of Common Stock obtainable upon exercise of this Warrant so as to
protect the rights of the holders of the Warrants; provided, except as set
forth in section 8(d), that no such adjustment pursuant to this Section 8(f)
will increase the Warrant Exercise Price or decrease the number of shares of
Common Stock obtainable as otherwise determined pursuant to this Section 8.


 


(g)           Notices.


 


(i)            Immediately upon
any adjustment of the Warrant Exercise Price, the Company will give written
notice thereof to the holder of this Warrant, setting forth in reasonable
detail, and certifying, the calculation of such adjustment.


 


(ii)           The Company will
give written notice to the holder of this Warrant at least ten (10) days prior
to the date on which the Company closes its books or takes a record (A) with
respect to any dividend or distribution upon the Common Stock, (B) with respect
to any pro rata subscription offer to holders of Common Stock or (C) for
determining rights to vote with respect to any Organic Change (as defined
below), dissolution or liquidation, provided that such information shall be
made known to the public prior to or in conjunction with such notice being
provided to such holder.


 


(iii)          The Company will
also give written notice to the holder of this Warrant at least ten (10) days
prior to the date on which any Organic Change, dissolution or liquidation will
take place, provided that such information shall be made known to the public
prior to or in conjunction with such notice being provided to such holder.


 

















 


(h)           Excluded
Securities. Notwithstanding any provision to the contrary contained in this
Warrant, no adjustment under this Section 8 shall be made to the Warrant
Exercise Price as a result of the issuance, sale, grant or exercise of the
Excluded Securities.


 


Section 9.               Purchase
Rights; Reorganization, Reclassification, Consolidation, Merger or Sale.


 


(a)           In addition to any
adjustments pursuant to Section 8 above, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property pro rata to the record holders of
any class of Common Stock (the “Purchase Rights”), then the holder of
this Warrant will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for the grant, issue or sale of such
Purchase Rights.


 


(b)           Any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially all of the Company’s assets to another Person or other
transaction in each case which is effected in such a way that holders of Common
Stock are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for Common Stock is
referred to herein as an “Organic Change.” Prior to the consummation of
any (i) sale of all or substantially all of the Company’s assets to an
acquiring Person or (ii) other Organic Change following which the Company is
not a surviving entity, the Company will secure from the Person purchasing such
assets or the successor resulting from such Organic Change (in each case, the “Acquiring
Entity”) a written agreement (in form and substance satisfactory to the
holders of Warrants representing at least two-thirds of the Warrant Shares
issuable upon exercise of the Warrants then outstanding) to deliver to each
holder of Warrants in exchange for such Warrants, a security of the Acquiring
Entity evidenced by a written instrument substantially similar in form and
substance to this Warrant and satisfactory to the holders of the Warrants
(including an adjusted warrant exercise price equal to the value for the Common
Stock reflected by the terms of such consolidation, merger or sale, and
exercisable for a corresponding number of shares of Common Stock acquirable and
receivable upon exercise of the Warrants without regard to any limitations on
exercise, if the value so reflected is less than any Applicable Warrant
Exercise Price immediately prior to such consolidation, merger or sale). Prior
to the consummation of any other Organic Change, the Company shall make
appropriate provision (in form and substance satisfactory to the holders of
Warrants representing a majority of the Warrant Shares issuable upon exercise
of the Warrants then outstanding) to insure that each of the holders of the
Warrants will thereafter have the right to acquire and receive in lieu of or in
addition to (as the case may be) the Warrant Shares immediately theretofore
issuable and receivable upon the exercise of such holder’s Warrants (without
regard to any limitations on exercise), such shares of stock, securities or
assets that would have been issued or payable in such Organic Change with
respect to or in exchange for the number of Warrant Shares which would have
been issuable and receivable upon the exercise of such holder’s Warrant as of
the date of such Organic Change (without taking into account any


 

















 


limitations or restrictions on
the exercisability of this Warrant). Notwithstanding any provision to the
contrary in this Warrant, in no event shall the provisions of this Section 9(b)
apply to any transaction, agreement or arrangement entered into by the Company
in connection with a Company Full Mandatory Redemption (as such term is defined
in the Senior Secured Convertible Notes), and any such transaction, agreement
or arrangement shall not be an “Organic Change” for purposes of this Warrant.


 


Section 10.             Lost,
Stolen. Mutilated or Destroyed Warrant. If this Warrant is lost, stolen,
mutilated or destroyed, the Company shall promptly, on receipt of an
indemnification undertaking (or, in the case of a mutilated Warrant, the
Warrant), issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.


 


Section 11.             Notice.
Any notices, consents, waivers or other communications required or permitted to
be given under the terms of this Warrant must be in writing and will be deemed
to have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of receipt is received
by the sending party transmission is mechanically or electronically generated
and kept on file by the sending party); or (iii) one Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:


 


	
  If to Holder:

  	
  YA Global Investments, L.P.

  
	
   

  	
  c/o Yorkville Advisors LLC

  
	
   

  	
  101 Hudson Street – Suite 3700

  
	
   

  	
  Jersey City, NJ 07302

  
	
   

  	
  Attention:

  	
  Mark A. Angelo

  
	
   

  	
  Telephone:

  	
  (201) 985-8300

  
	
   

  	
  Facsimile:

  	
  (201) 985-8266

  
	
   

  	
   

  	
   

  
	
  With Copy to:

  	
  David Gonzalez, Esq.

  
	
   

  	
  101 Hudson Street – Suite 3700

  
	
   

  	
  Jersey City, NJ 07302

  
	
   

  	
  Telephone:

  	
  (201) 985-8300

  
	
   

  	
  Facsimile:

  	
  (201) 985-8266

  
	
   

  	
   

  	
   

  
	
  If to the Company, to:

  	
  Wentworth Energy, Inc.

  
	
   

  	
  112 E. Oak Street, Suite 200

  
	
   

  	
  Palestine, Texas 75801

  
	
   

  	
  Attention:

  	
  Chief Executive Officer

  
	
   

  	
  Telephone:

  	
  (903) 723-0395

  
	
   

  	
  Facsimile:

  	
  (903) 723-5368

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Wentworth Energy, Inc.

  
	
   

  	
  Suite 306A, 15252 - 32nd Avenue

  
	
   

  	
  Surrey, British Columbia, V3S 0R7

  



 

















 


	
   

  	
  Canada

  	
   

  
	
   

  	
  Attention:

  	
  Chief Financial Officer

  
	
   

  	
  Telephone

  	
  (604) 536-6055

  
	
   

  	
  Facsimile:

  	
  (604) 536-6077

  
	
   

  	
   

  	
   

  
	
  With a copy (for informational

  	
   

  	
   

  
	
  purposes only) to:

  	
  Dieterich & Associates

  
	
   

  	
  11300 W. Olympic Blvd.

  
	
   

  	
  Los Angeles, CA 90064

  
	
   

  	
  Attention:

  	
  Chris Dieterich, Esq.

  
	
   

  	
  Telephone:

  	
  (310) 312-6888

  
	
   

  	
  Facsimile:

  	
  (310) 312-6680

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Troutman Sanders LLP

  
	
   

  	
  401 9th St., N.W.

  
	
   

  	
  Suite 1000

  
	
   

  	
  Washington, DC 20004-2134

  
	
   

  	
  Attention:

  	
  Todd R. Coles, Esq.

  
	
   

  	
  Telephone:

  	
  (202) 274-2810

  
	
   

  	
  Facsimile:

  	
  (202) 654-5649

  



 


Each party shall provide five days’ prior written notice to the other
party of any change in address or facsimile number. Written confirmation of
receipt (A) given by the recipient of such notice, consent, facsimile, waiver
or other communication, (or (B) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.


 


Section 12.             Date.
The date of this Warrant is set forth on page 1 hereof. This Warrant, in all
events, shall be wholly void and of no effect after the close of business on
the Expiration Date, except that notwithstanding any other provisions hereof,
the provisions of Section 8(b) shall continue in full force and effect after
such date as to any Warrant Shares or other securities issued upon the exercise
of this Warrant.


 


Section 13.             Amendment
and Waiver. Except as otherwise provided herein, the provisions of the
Warrants may be amended and the Company may take any action herein prohibited,
or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the holders of Warrants
representing at least two-thirds of the Warrant Shares issuable upon exercise
of the Warrants then outstanding; provided that, except for Section 8(d), no
such action may increase the Warrant Exercise Price or decrease the number of
shares or class of stock obtainable upon exercise of any Warrant without the
written consent of the holder of such Warrant.


 


Section 14.             Descriptive
Headings; Governing Law. The descriptive headings of the several sections
and paragraphs of this Warrant are inserted for convenience only and do not 


 

















 


constitute a part of this
Warrant. The corporate laws of the State of Nevada shall govern all issues
concerning the relative rights of the Company and its stockholders. All other
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by the internal laws of the State of New
Jersey, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New Jersey or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the
State of New Jersey. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Hudson County and the
United States District Court for the District of New Jersey, for the
adjudication of any dispute hereunder or in connection herewith or therewith,
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Warrant and
agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law.


 


Section 15.             Waiver
of Jury Trial. AS A MATERIAL INDUCEMENT
FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY
WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO
THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS
TRANSACTION.


 


Section 16.             Entire
Agreement. This Warrant reflects the entire understanding of the Company
and the Holder with respect to the transactions contemplated hereby and shall
not be contradicted or qualified by any other agreement, oral or written,
entered into before the date hereof.


 


REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


 

















 


IN WITNESS WHEREOF,
the Company has caused this Amended and Restated Warrant to be signed as of the
date first set forth above.


 


	
   

  	
   

  	
  WENTWORTH ENERGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John Punzo

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
						



 

















 


EXHIBIT A TO WARRANT


 


EXERCISE NOTICE


 


TO BE EXECUTED


BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT


 


WENTWORTH ENERGY, INC.


 


The undersigned holder hereby exercises the right to purchase
                
of the shares of Common Stock (“Warrant Shares”) of Wentworth Energy,
Inc. (the “Company”), evidenced by the attached Warrant (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.


 


Specify Method of exercise by check mark:


 


1.                  
Cash Exercise


 


(a)           Payment
of Warrant Exercise Price. The holder shall pay the Aggregate Exercise
Price of $              
to the Company in accordance with the terms of the Warrant.


 


(b)           Delivery
of Warrant Shares. The Company shall deliver to the holder           Warrant
Shares in accordance with the terms of the Warrant.


 


2.                  
Cashless Exercise


 


(a)           Payment
of Warrant Exercise Price. In lieu of making payment of the Aggregate
Exercise Price, the holder elects to receive upon such exercise the Net Number
of shares of Common Stock determined in accordance with the terms of the
Warrant.


 


(b)           Delivery
of Warrant Shares. The Company shall deliver to the holder        
Warrant Shares in accordance with the terms of the Warrant.


 


Date:                 
  ,     


 


Name of Registered Holder


 


	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					



 

















 


EXHIBIT B TO WARRANT


 


FORM OF WARRANT POWER


 


FOR VALUE RECEIVED,
the undersigned does hereby assign and transfer to                 ,
Federal Identification No.            ,
a warrant to purchase              
shares of the capital stock of Wentworth Energy, Inc. represented by warrant
certificate no.      , standing in the name of the
undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint                ,
attorney to transfer the warrants of said corporation, with full power of
substitution in the premises.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title: