Exhibit 4.22


 


AMENDMENT AND EXCHANGE AGREEMENT


 


AMENDMENT AND EXCHANGE AGREEMENT (this “Agreement”),
dated as of October 31, 2007, by and between Wentworth Energy, Inc., an
Oklahoma corporation (the “Company”),
with headquarters located at 112 E. Oak Street, Suite 200, Palestine, Texas
75801, and YA Global Investments, L.P. (f/k/a Cornell Capital Partners, L.P.),
a Cayman Islands exempt limited partnership (the “Buyer”), with headquarters located at 101 Hudson Street, Suite
3700, Jersey City, New Jersey 07303.


 


A.            The Company and the Buyer are
parties to that certain Securities Purchase Agreement, dated as of January 12,
2006 (the “Existing Securities Purchase
Agreement”), pursuant to which, among other things, the Buyer
purchased from the Company an aggregate principal amount of $1,500,000 of
secured convertible debentures, of which $1,055,000 in principal amount and
$363,573 in accrued interest and other charges of the secured convertible
debentures remains outstanding as of the date prior hereto (the “Existing Debentures”), which are
convertible into shares of the Company’s common stock, par value $0.001 per
share (the “Common Stock”) (the
Existing Debentures as converted, the “Existing
Conversion Shares”).


 


B.            Contemporaneously with the
consummation of the transactions contemplated by the Existing Securities
Purchase Agreement, (i) the Company and the Buyer, entered into those certain
Warrants, dated as of January 12, 2006 (the “Existing
Warrants”), which are exercisable, in the aggregate, into 1,500,000
shares of Common Stock (the “Existing Warrant
Shares”), (ii) the Company, the Buyer and David Gonzalez, Esq.
entered into a Pledge and Escrow Agreement, dated as of January 12, 2006, in
favor of the Buyer (the “Existing  Pledge and Escrow Agreement”), (iii) the
Company, the Buyer and David Gonzalez, Esq. entered into an Escrow Agreement,
dated as of January 12, 2006, in favor of the Buyer (the “Escrow Agreement”), (iv) the Company and
the Buyer entered into a Security Agreement, dated as of January 12, 2006, in
favor of the Buyer (the “Existing Security
Agreement”), and (v) Wentworth Oil and Gas, Inc., a Nevada
corporation and subsidiary of the Company (“Wentworth
Oil”), and the Buyer entered into a Security Agreement, dated as of
January 12, 2006, in favor of the Buyer (the “Subsidiary
Security Agreement”).


 


C.            In connection with the execution and
delivery of the Existing Securities Purchase Agreement, the Company and the
Buyer entered into that certain Investor Registration Rights Agreement, dated
as of January 12, 2006 (the “Registration
Rights Agreement”), pursuant to which the Company agreed to provide
certain registration rights with respect to the Registrable Securities (as
defined in the Registration Rights Agreement) under the Securities Act of 1933,
as amended (the “1933 Act”), and
the rules and regulations promulgated thereunder, and applicable state
securities laws.


 


D.            In connection with the execution and
delivery of the Existing Securities Purchase Agreement, the Company issued
those certain Irrevocable Transfer Agent Instructions, dated January 12, 2006
(the “Existing Irrevocable Transfer Agent
Instructions”), to Empire Stock Transfer, Inc. (the “Transfer Agent”) pursuant to which the
Company irrevocably authorized and directed the Transfer Agent to take certain
actions with respect to, inter alia, the Existing Conversion Shares and the
Existing Warrant Shares.


 

















 


E.             In connection with the execution
and delivery of a letter agreement, dated as of July 20, 2006 (the “July 20 Side Letter”), by and between the
Company and the Buyer, certain rights and obligations of the Company and the
Buyer with respect to the Existing Securities Purchase Agreement, the Existing
Debentures, the Registration Rights Agreement, the Existing Security Agreement,
the Subsidiary Security Agreement and documents entered into in connection
therewith were modified.


 


F.             On July 24, 2006, the Company
entered into a certain Securities Purchase Agreement (as amended, modified or
supplemented prior to the date hereof, the “Existing
Note Securities Purchase Agreement”) with the Buyer and the other
buyers party thereto (the “Buyers”)
pursuant to which the Company issued its 9.15% Senior Secured Convertible Notes
(the “Existing Notes”) and its
Series A and Series B Warrants (the “Existing
Investor Warrants”) to the Buyers.


 


G.            Contemporaneously with the execution
and delivery of the Note Securities Purchase Agreement, the Buyer and the other
Buyers and the Collateral Agent (as defined in the Existing Note Securities
Purchase Agreement) entered into that certain Intercreditor and Subordination
Agreement dated as of July 24, 2006 (the “Existing
Intercreditor Agreement”),
pursuant to which the Buyer, as Subordinated Lender, the Collateral Agent, as
Senior Agent, and the Buyers, as Senior Lenders (as those terms are defined in
the Existing Intercreditor Agreement) agreed, inter alia, with respect to the
priority of the repayment of their respective claims and their respective liens
upon and security interests in the Collateral (as defined in the Existing
Intercreditor Agreement).


 


H.            In connection with the execution and
delivery of a letter agreement, dated as of July 25, 2006 (the “July 25 Side Letter”), by and between the
Company and the Buyer, (i) both of the Pledge and Escrow Agreement and Escrow
Agreement were terminated and (ii) certain rights and obligations of the
Company and the Buyer with respect to the Existing Securities Purchase
Agreement, the Existing Debentures, the Registration Rights Agreement, the
Existing Security Agreement, the Subsidiary Security Agreement and documents
entered into in connection therewith were modified.


 


I.              The Company and the Buyer desire
to enter into this Agreement, pursuant to which, among other things, (i) the
Company and the Buyer shall amend and restate all of the Buyer’s Existing
Debentures for debentures in the form attached hereto as Exhibit A in
the aggregate principal amount set forth opposite the Buyer’s name in column
(3) on the Securities Schedule attached hereto (the “Amended and Restated Debentures”), which shall be convertible
into Common Stock (the “Amended and Restated
Conversion Shares”), (ii) the Company and the Buyer shall amend and
restate the Buyer’s Existing Warrants for warrants in the form attached hereto
as Exhibit B (the “Amended and
Restated Warrants”) which shall be exercisable to acquire in the
aggregate that number of shares of Common Stock set forth opposite the Buyer’s
name in column (4) on the Securities Schedule attached hereto (the “Amended and Restated Warrant Shares”) and (iii)
the Company and the Buyer shall amend the Existing Securities Purchase
Agreement (as so amended and as further amended, modified or supplemented from
time to time the “Securities Purchase
Agreement”) and the Existing Security Agreement (as so amended and
as further amended, modified or supplemented from time to time, the “Security Agreement”).


 


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J.             Contemporaneously with the
execution and delivery of this Agreement, the Company, the Buyer and the other
Buyers are entering into those certain Amendment Agreements, dated as of the
date hereof (the “Amendment Agreements”),
which amend the Existing Note Securities Purchase Agreement (as so amended, and
as amended, restated or otherwise modified from time to time, the “Note Securities Purchase Agreement”) to
provide for the Company to exchange the Existing Notes and the Existing
Investor Warrants for the Amended and Restated Notes and Amended and Restated
Warrants and to issue to one of the Buyers a New Note and New Warrants (as
those terms are defined in the Note Securities Purchase Agreement), such
Amended and Restated Notes and New Notes being collectively referred to herein
as, the “Notes”).


 


K.            The amendment and restatement of the
Existing Debentures for the Amended and Restated Debentures and the amendment
and restatement of the Existing Warrants for the Amended and Restated Warrants
are being made in reliance upon the exemption from registration provided by
Section 3(a)(9) of the 1933 Act.


 


L.             Capitalized terms used herein and
not otherwise defined herein shall have the respective meanings ascribed to
them in the Existing Securities Purchase Agreement.


 


NOW, THEREFORE, in consideration of the foregoing recitals
and the mutual promises hereinafter set forth, the Company and the Buyer hereby
agree as follows:


 


1.                                       AMENDMENT AND RESTATEMENT OF EXISTING
DEBENTURES AND EXISTING WARRANTS.


 


(a)           Amendment and Restatement of
Existing Debentures and Existing Warrants. Subject to satisfaction (or
waiver) of the conditions set forth in Sections 5 and 6 below, at the closing
contemplated by this Agreement (the “Closing”),
the Buyer shall surrender to the Company its Existing Debentures and its
Existing Warrants and the Company shall issue and deliver to the Buyer (i) the
Amended and Restated Debentures in the aggregate principal amount set forth
opposite the Buyer’s name in column (3) on the Securities Schedule and (ii) the
Amended and Restated Warrants to acquire that aggregate number of Amended and
Restated Warrant Shares as is set forth opposite the Buyer’s name in column (4)
on the Securities Schedule attached hereto.


 


(b)           Closing Date. The date and
time of the Closing (the “Closing Date”)
shall be 10:00 a.m., Eastern Standard Time, on October 31, 2007, subject to notification
of satisfaction (or waiver) of the conditions to the Closing set forth in
Sections 5 and 6 below (or such other time and date as is mutually agreed to by
the Company and the Buyer). The Closing shall occur on the Closing Date at the
offices of Troutman Sanders LLP, 401 Ninth Street N.W., Suite 1000, Washington
DC, 20004 (or at such other location as is mutually agreed to by the Company
and the Buyer).


 


(c)           Delivery. On the Closing Date,
the Company shall deliver to the Buyer (i) the Amended and Restated Debentures
and (ii) the Amended and Restated Warrants. All of the foregoing securities
shall be delivered in each case duly executed on behalf of the Company and
registered in the name of the Buyer or its designee (so long as any such
designee is


 


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an
“accredited investor” as that term is defined in Rule 501(d) of Regulation D as
promulgated by the SEC under the 1933 Act (“Regulation
D”)).


 


2.                                       AMENDMENTS TO TRANSACTION DOCUMENTS.


 


(a)           Full Force and Effect. Except
as otherwise expressly provided herein, effective as of the Closing Date, the
Existing Securities Purchase Agreement and the Existing Security Agreement are,
and shall continue to be, in full force and effect, except that on and after
the Closing Date the Existing Securities Purchase Agreement and the Existing
Security Agreement shall be as amended as follows:


 


(i)            all references in the Existing
Securities Purchase Agreement to “this Agreement”, “hereto”, “hereof”,
“hereunder” or words of like import referring to the Securities Purchase
Agreement shall be amended to mean the Existing Securities Purchase Agreement
as amended by this Agreement;


 


(ii)           all references in the Existing
Securities Purchase Agreement to the “Security Agreement”, “thereto”,
“thereof”, “thereunder” or words of like import referring to the Security
Agreement shall be amended to mean the Existing Security Agreement as amended
by this Agreement;


 


(iii)          all references in the Existing
Security Agreement to “this Agreement”, “hereto”, “hereof”, “hereunder” or
words of like import referring to the Security Agreement shall be amended to
mean the Existing Security Agreement as amended by this Agreement;


 


(iv)          all references in the Existing
Security Agreement to the “Securities Purchase Agreement”, “thereto”,
“thereof”, “thereunder” or words of like import referring to the Securities
Purchase Agreement shall be amended to mean the Existing Securities Purchase
Agreement as amended by this Agreement;


 


(v)           All references to “Convertible Debentures”
therein shall be amended to mean the Amended and Restated Debentures as defined
in this Agreement;


 


(vi)          All references to “Warrants therein
shall be amended to mean the Amended and Restated Warrants as defined in this
Agreement;


 


(vii)         All references to “Conversion Shares”
therein shall be amended to mean the Amended and Restated Conversion Shares as
defined in this Agreement;


 


(viii)        All references to “Irrevocable Transfer
Agent Instructions” therein shall be amended to mean the Amended and Restated
Transfer Agent Instructions as defined in this Agreement;


 


(ix)           All references to “Transaction
Documents” therein shall be amended to mean “this Agreement, the Amended and
Restated Convertible Debentures,


 


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the Amended and Restated
Warrants, the Securities Purchase Agreement, the Security Agreement, the
Irrevocable Transfer Agent Instructions, and any related agreements”;


 


(x)            All references to “Closing Date”
therein shall be amended to mean the Closing Date as defined in this Agreement.


 


(b)           Effective as of the Closing Date, the
Existing Securities Purchase Agreement is amended as follows:


 


(i)            Sections 1, 2, 3, 6 and 7 shall be
of no further force or effect.


 


(ii)           Section 5 shall be amended as follows:



 


(A)          The phrase “and all Liquidated Damages
(as this term is defined in the Investor Rights Agreement)” shall be deleted
from the first sentence of Section 5.


 


(B)           The phrase “and the Investor
Registration Rights Agreement” shall be deleted from the fifth sentence of
Section 5.


 


(iii)          Section 9 shall be amended to add a
new Section 9(n) as follows:


 


“(n) Effectiveness
of Certain Covenants. Notwithstanding any provision to the contrary contained
in this Agreement or any other Transaction Document, none of the provisions in
Sections 4(c), 4(g)(iv), 4(h), 4(i), 4(k), 4(m) and 4(n) shall be effective or
otherwise apply to the Company or any of its subsidiaries or affiliates until
such time as all of the Senior Secured Convertible Notes (as such term is defined
in Convertible Debentures) have been fully paid and satisfied in accordance
with their terms.”


 


(c)           Effective as of the Closing Date, the
Subsidiary Security Agreement shall be terminated in its entirety and of no
further force or effect, and the Buyer expressly releases Wentworth Oil from
any pledges, security interests or liens granted by Wentworth Oil thereunder or
under any other Transaction Document (as defined in the Existing Securities
Purchase Agreement) and from past or future obligations or liabilities
thereunder and authorizes the Company to file UCC-3 termination statements with
respect to the UCC-1 financing statements filed by the Buyer against Wentworth
Oil in Texas and Oklahoma and any other jurisdiction or office.


 


(d)           Effective as of the Closing Date, the
Registration Rights Agreement shall be terminated in its entirety and of no
further force or effect, and the Buyer expressly releases the Company from any
past or future obligations or liabilities thereunder.


 


(e)           Effective as of the Closing Date,
each of the July 20 Side Letter and the July 25 Side Letter shall be terminated
in its entirety and of no further force or effect.


 


 


 


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(f)            Effective as of the Closing, the
Existing Security Agreement shall be amended as follows:


 


(i)            Section 1.3 shall be amended by
adding the phrase “but excluding any such obligations of the Company incurred
to the Secured Party and any such amounts owed to the Secured Party by the
Company in connection with, arising out of or related to the Senior Secured
Financing Documents (as such term is defined in Convertible Debentures) and all
other agreements entered into by the Company in connection therewith”
immediately after the word “hereunder” therein.


 


(ii)           Section 4.2 shall be amended by
adding the phrase “and the security interests, pledges and liens of any kind
created by the Company and its subsidiaries pursuant to the Senior Secured
Financing Documents (as such term is defined in Convertible Debentures) or that
are permitted thereby” immediately prior to the period at the end of sentence
therein.


 


(iii)          Section 7.4 shall be deleted in its
entirety.


 


(iv)          Article 8 shall be amended to add a
new Section 8.10 as follows:


 


“8.10  Effectiveness of Affirmative and Negative
Covenants. Notwithstanding any provision to the contrary contained in this
Agreement or any other Transaction Document, none of the provisions in Articles
6 and 7 of this Agreement shall be effective or otherwise apply to the Company
or any of its subsidiaries or affiliates until such time as all of the Senior
Secured Convertible Notes (as such term is defined in Convertible Debentures)
have been fully paid and satisfied in accordance with their terms.”


 


3.                                       REPRESENTATIONS AND WARRANTIES


 


(a)           Buyer Representations and
Warranties. The Buyer represents and warrants as of the date hereof to the
Company that:


 


(i)            Investment Purpose. The Buyer
is acquiring the Amended and Restated Debentures and the Amended and Restated
Warrants and, upon conversion of the Amended and Restated Debentures or the
exercise of the Amended and Restated Warrants, the Buyer will acquire the
Amended and Restated Conversion Shares or the Amended and Restated Warrant
Shares then issuable, for its own account for investment only and not with a
view towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, the Buyer
reserves the right to dispose of the Amended and Restated Conversion Shares or
the Amended and Restated Warrant Shares at any time in accordance with or
pursuant to an effective registration statement covering such Amended and
Restated Conversion Shares or the Amended and Restated Warrant Shares or an
available exemption under the Securities Act.


 


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(ii)           Accredited Investor Status.
The Buyer is an “Accredited Investor”
as that term is defined in Rule 501(a)(3) of Regulation D.


 


(iii)          Reliance on Exemptions. The
Buyer understands that the Amended and Restated Debentures and the Amended and
Restated Warrants are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and
state securities law and that the Company is relying in part upon the truth and
accuracy of, and the Buyer’s compliance with, the representations, warranties,
agreements, acknowledgements, and understanding of the Buyer set forth herein
in order to determine the availability of such exemptions and the eligibility
of the Buyer to acquire such securities.


 


(iv)          Information. The Buyer and its
advisors have been furnished with all materials relating to the business,
finances and operations of the Company and information they deemed material to
making an informed investment decision regarding its purchase of the Amended
and Restated Debentures and the Amended and Restated Warrants, which have been
requested by the Buyer. The Buyer and its advisors have been afforded the
opportunity to ask questions of the Company and its management. The Buyer
understands that its investment in the Amended and Restated Debentures and the
Amended and Restated Warrants involves a high degree of risk. The Buyer is in a
position regarding the Company, which, based upon employment, family
relationship or economic bargaining power, enable and enables the Buyer to
obtain information from the Company in order to evaluate the merits and risks
of this investment. The Buyer has sought such accounting, legal and tax advice,
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Amended and Restated Debentures and the
Amended and Restated Warrants.


 


(v)           No Governmental Review. The
Buyer understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendations or
endorsement of the Amended and Restated Debentures and the Amended and Restated
Warrant, or the fairness or suitability of the investment in the Amended and
Restated Debentures and the Amended and Restated Warrant, nor have such
authorities passed upon or endorsed the merits of the offering of the Amended
and Restated Debentures and the Amended and Restated Warrants.


 


(vi)          Transfer or Resale. The Buyer
understands that: (A) the Amended and Restated Debentures and the Amended and
Restated Warrants have not been and are not being registered under the
Securities Act or any state securities laws, and may not be offered for sale,
sold, assigned, or transferred unless (1) subsequently registered thereunder,
or (2) the Buyer shall have delivered to the Company an opinion of counsel, in
an acceptable form, to the effect that such securities to be sold, assigned, or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration requirements; (B) any sale of such securities made in
reliance on Rule 144 under the Securities Act (or a successor rule thereto) (“Rule 144”) may be made only in accordance
with the terms of Rule 144 and further, if Rule 144 is not applicable, any


 


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resale of such securities
under circumstances in which the seller (or the person through whom the sale is
made) may be deemed to be an underwriter (as that term is defined in the
Securities Act) may require compliance with some other exemption under the
Securities Act or the rules and regulations of the Securities and Exchange
Commission (“SEC”) thereunder; and
(C) neither the Company nor any other person is under any obligation to
register such securities under the Securities Act or any state securities laws
or to comply with the terms and conditions of any exemption thereunder. The
Company reserves the right to place stop transfer instructions against the
shares and certificates for the Amended and Restated Conversion Shares and the
Amended and Restated Warrant Shares.


 


(vii)         Legends. The Buyer understands
that the certificates or other instruments representing the Amended and
Restated Conversion Shares and the Amended and Restated Warrant Shares shall
bear a restrictive legend in substantially the following form (and a stop
transfer order may be placed against transfer of such stock certificates):


 


THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD
RESALE 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 GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.


 


The legend set forth
above shall be removed and the Company within two (2) business days shall issue
a certificate without such legend to the holder of the Amended and Restated
Conversion Shares and the Amended and Restated Warrant Shares upon which it is
stamped, if, unless otherwise required by state securities laws, (A) in
connection with a sale transaction, provided the Amended and Restated
Conversion Shares and the Amended and Restated Warrant Shares are registered
under the Securities Act or (B) in connection with a sale transaction, after
such holder provides the Company with an opinion of counsel, which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale, assignment or
transfer of the Amended and Restated Conversion Shares and the Amended and
Restated Warrant Shares may be made without registration under the Securities Act.


 


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(viii)        Authorization, Enforcement. This
Agreement has been duly and validly authorized, executed and delivered by the
Buyer and is a valid and binding agreement of the Buyer enforceable in
accordance with its terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.


 


(ix)           Due Formation of Buyer. Buyer
has been duly formed and validly exists and has not been organized for the
specific purpose of purchasing the Amended and Restated Debentures and the
Amended and Restated Warrants and is not prohibited from doing so. Buyer
changed its name from Cornell Capital Partners, LP to YA Global Investments,
L.P. on or about July 30, 2007, under the laws of the Cayman Islands, but in
all other respects remains the same legal entity as prior to the change of
name.


 


(x)            No Legal Advice From the Company.
The Buyer acknowledges that it had the opportunity to review this Agreement and
the transactions contemplated by this Agreement with his or its own legal
counsel and investment and tax advisors. The Buyer is relying solely on such
counsel and advisors and not on any statements or representations of the
Company or any of its representatives or agents for legal, tax or investment
advice with respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.


 


(b)           Company Representations and
Warranties. The Company represents and warrants as of the date hereof to
the Buyer that:


 


(i)            Organization and Qualification.
The Company is a  corporation duly organized,
validly existing and in good standing under the laws of Oklahoma, and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted. The Company is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which the nature
of the business conducted by it makes such qualification necessary, except to
the extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company taken as a whole.


 


(ii)           Authorization, Enforcement,
Compliance with Other Instruments. (A) The Company has the requisite
corporate power and authority to enter into and perform this Agreement, the
Amended and Restated Debentures, the Amended and Restated Warrants and any
related agreements executed and delivered pursuant hereto or thereto and to
issue the Amended and Restated Conversion Shares and the Amended and Restated
Warrant Shares in accordance with the terms of the Amended and Restated Debentures
and the Amended and Restated Warrants, respectively, (B) the execution and
delivery of this Agreement by the Company and the consummation by it of the
transactions contemplated hereby, including, without limitation, the issuance
of the Amended and Restated Debentures and the Amended and Restated Warrants,
have been duly authorized by the Company’s Board of Direction and no further
consent or authorization is required by the Company, its Board of Directors or
its stockholders and


 


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(C) each of this
Agreement, the Amended and Restated Debentures and the Amended and Restated
Warrants constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies.


 


(iii)          Issuance of Securities. The
Amended and Restated Conversion Shares and the Amended and Restated Warrant
Shares issuable upon conversion of the Amended and Restated Debentures and
exercise of the Amended and Restated Warrants have been duly authorized and
reserved for issuance. Upon conversion or exercise in accordance with the
Amended and Restated Debentures and the Amended and Restated Warrants, the
Amended and Restated Conversion Shares and the Amended and Restated Warrant
Shares will be duly issued, fully paid and nonassessable.


 


(iv)          No Conflicts. After giving
effect to the terms of this Agreement and the transactions contemplated by the
Closing, including, without limitation, the waivers set forth in Section 4(b),
and the terms of the Amendment Agreements and the transactions contemplated by
the 2007 Closing (as defined in the Amendment Agreements), including, without
limitation, the waivers set forth in Section 3(e) thereof, the execution,
delivery and performance of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby will not (A) result in a
violation of the Company’s Articles of Incorporation or the By-laws or (B)
conflict with or constitute a default under (or an event which with notice or
lapse of time or both would become a default under), or give to others any
rights of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company is a party, or result
in a violation of any law, rule, regulation, order, judgment or decree
applicable to the Company. The business of the Company is not being conducted,
and shall not be conducted in violation of any material law, ordinance, or
regulation of any governmental entity. Except as specifically contemplated by
this Agreement, the Amended and Restated Debentures and the Amended and
Restated Warrants and as required under the Securities Act and any applicable
state securities laws, the Company is not required to obtain any consent,
authorization or order of, or make any filing or registration with, any court
or governmental agency in order for it to execute, deliver or perform any of
its obligations under or contemplated by this Agreement, the Amended and
Restated Debentures and the Amended and Restated Warrants. All consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof.


 


(v)           No General Solicitation. Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in connection
with the offer or sale of the Amended and Restated Debentures and the Amended
and Restated Warrants.


 


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4.                                       CERTAIN COVENANTS AND AGREEMENTS.


 


(a)           Best Efforts. Each party shall
use its best efforts timely to satisfy each of the conditions to be satisfied
by it as provided in Sections 5 and 6 of this Agreement.


 


(b)           Waiver. Notwithstanding any
provisions to the contrary contained in any Transaction Document (as in effect
prior to or after the Closing), including, without limitation, Section 8.4 of
the Existing Security Agreement, effective as of the Closing, the Buyer hereby
irrevocably waives: (i) any and all breaches, defaults or Events of Default by
the Company arising under the Transaction Documents (as in effect prior to the
Closing) prior to the Closing Date, (ii) any fees, charges and penalties
arising under the Transaction Documents (as in effect prior to the Closing)
prior to the Closing Date in connection with any such breaches, defaults or
Events of Default, and (iii) any and all breaches, defaults or Events of
Default by the Company arising under the Transaction Documents (as in effect
prior to and after the Closing) as a result of the debt, security and equity
documents entered into in connection with the Note Securities Purchase
Agreement, the Amendment Agreements and the Notes.


 


(c)           Effective as of the Closing Date, the
Buyer agrees that any “Holder” or its successors or assigns under the Amended
and Restated Convertible Debentures, and any “Holder” or its permitted assigns
with respect to the Amended and Restated Warrants or any holder of shares of
Common Stock acquired upon the conversion or exercise of the Amended and
Restated Convertible Debentures or the Amended and Restated Warrants, shall not
be entitled to the benefit of the indemnification provided for in Section
9(k)(c) of the Note Securities Purchase Agreement, to the extent such Holder,
holder, successor or assign becomes the beneficial owner (as determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934 and
the rules promulgated there under) of more than 4.9% of the then issued and
outstanding shares of Common Stock.


 


(d)           The Buyer acknowledges and agrees
that the Existing Pledge and Escrow Agreement and the Escrow Agreement have
been terminated and are of no further force or effect.


 


(e)           For the purposes of Rule 144, the
Company acknowledges that the holding period of (i) the Amended and Restated
Debentures (including the corresponding Amended and Restated Conversion Shares)
may be tacked onto the holding period of the Existing Debentures and (ii) the
Amended and Restated Warrants (including the corresponding Amended and Restated
Warrant Shares) may be tacked onto the holding period of the Existing Warrants
(in the case of Cashless Exercise (as defined in the Amended and Restated
Warrants)), and the Company agrees not to take a position contrary to this
Section 4(e). The Company’s acknowledgement and agreement set forth in this
Section 4(e) shall be subject in all respects to Rule 144 and other applicable
securities laws, as may be in effect from time to time.


 


5.                                       CONDITIONS TO COMPANY’S OBLIGATIONS
HEREUNDER. 


 


The
obligations of the Company to the Buyer hereunder are subject to the
satisfaction of each of the following conditions on the Closing Date, provided
that these


 


11

















 


conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by
providing the Buyer with prior written notice thereof:


 


(a)           The Buyer shall have delivered to the
Company the Buyer’s Existing Debentures and Existing Warrants for cancellation.


 


(b)           The representations and warranties of
the Buyer in Section 3(a) shall be true and correct in all material respects
(except to the extent that any of such representation and warranties is already
qualified as to materiality, in which case, such representations and warranties
shall be true and correct without further qualification) as of the Closing Date
as though made at that time (except for representations and warranties that
speak as of a specific date which shall be true and correct as of such
specified date but need not also be true and correct as of the Closing Date)
and the Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer as of the
Closing Date.


 


6.                                       CONDITIONS TO BUYER’S OBLIGATIONS
HEREUNDER.


 


The
obligations of the Buyer hereunder are subject to the satisfaction of each of
the following conditions on the Closing Date, provided that these conditions
are for the Buyer’s sole benefit and may be waived by the Buyer at any time in
its sole discretion by providing the Company with prior written notice thereof:


 


(a)           The Company shall have executed and
delivered to the Buyer the Amended and Restated Debentures and the Amended and
Restated Warrants.


 


(b)           The Amended and Restated Irrevocable
Transfer Agent Instructions, in the form attached hereto as Exhibit C,
shall have been delivered to and acknowledged in writing by the Company’s
Transfer Agent.


 


(c)           After giving effect to the terms of
this Agreement and the transactions contemplated by the Closing, including,
without limitation, the waivers set forth in Section 4(b), and the terms of the
Amendment Agreements and the transactions contemplated by the 2007 Closing (as
defined in the Amendment Agreements), including, without limitation, the
waivers set forth in Section 3(e) thereof, (i) the representations and
warranties of the Company in Section 3(b) shall be true and correct in all
material respects (except to the extent that any of such representation and
warranties is already qualified as to materiality, in which case, such representations
and warranties shall be true and correct without further qualification) as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date which shall be true and correct as
of such specified date but need not also be true and correct as of the Closing
Date) and (ii) the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions required by
this Agreement to be performed satisfied or complied with by the Company as
of  the Closing Date.


 


12

















 


7.                                       TERMINATION.


 


In
the event that the Closing does not occur by November 1, 2007, due to the
Company’s or the Buyer’s failure to satisfy the conditions set forth in
Sections 5 and 6 hereof (and the nonbreaching party’s failure to waive such
unsatisfied conditions(s)), the nonbreaching party shall have the option to
terminate this Agreement at the close of business on such date without liability
of a party to the other party. Upon such termination, the terms hereof shall be
null and void and the parties shall continue to comply with all terms and
conditions of the Transaction Documents (as defined in the Existing Securities
Agreement) in effect prior to the execution of this Agreement.


 


8.                                       MISCELLANEOUS.


 


(a)           Governing Law. This Agreement
shall be governed by and interpreted in accordance with the laws of the State
of New Jersey without regard to its principles of conflict of laws. The parties
further agree that any action between them shall be heard in Hudson County, New
Jersey, and expressly consent to the jurisdiction and venue of the Superior
Court of New Jersey, sitting in Hudson County and the United States District
Court for the District of New Jersey sitting in Newark, New Jersey for the
adjudication of any civil action asserted pursuant to this Section 8.


 


(b)           Counterparts. This Agreement
may be executed in two or more identical counterparts, each of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party.
In the event any signature page is delivered by facsimile transmission, the
party using such means of delivery shall cause four (4) additional original
executed signature pages to be physically delivered to the other party within
five (5) days of the execution and delivery thereof.


 


(c)           Headings. The headings of this
Agreement are for convenience of reference and shall not form part of, or
affect the interpretation of, this Agreement.


 


(d)           Severability. If any provision
of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.


 


(e)           No Third Party Beneficiaries.
This Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.


 


(f)            Further Assurances. Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.


 


13

















 


(g)           No Strict Construction. The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction
will be applied against any party.


 


(h)           Entire Agreement; Effect on Prior
Agreements; Amendments. This Agreement supersedes all other prior oral or
written agreements between the Buyer and the Company with respect to the
matters set forth herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and, except as specifically set forth herein, neither
the Company nor the Buyer makes any representation, warranty, covenant or
undertaking with respect to such matters. No provision of this Agreement may be
waived or amended other than by an instrument in writing signed by the party
charged with enforcement.


 


(i)            Notices. Any notices,
consents, waivers or other communications required or permitted to be given
under the terms of this Agreement 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 transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one (1) Business Day after deposit with an
overnight courier 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 the Company:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wentworth Energy, Inc.

  	
   

  	
   

  
	
  112 E. Oak Street, Suite 200

  	
   

  	
   

  
	
  Palestine, TX 75801

  	
   

  	
   

  
	
  Telephone:

  	
  (903)
  723-0395

  	
   

  	
   

  
	
  Facsimile:

  	
  (903)
  723-5368

  	
   

  	
   

  
	
  Attention:

  	
  Chief
  Executive Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wentworth Energy, Inc.

  	
   

  	
   

  
	
  Suite 306A, 15252 - 32nd Avenue

  	
   

  	
   

  
	
  Surrey, British Columbia, V3S 0R7

  	
   

  	
   

  
	
  Canada

  	
   

  	
   

  
	
  Telephone  (604) 536-6055

  	
   

  	
   

  
	
  Facsimile:  (604) 536-6077

  	
   

  	
   

  
	
  Attention:

  	
  Chief Financial Officer

  	
   

  	
   

  



 


14

















 


	
  With copies (for informational purposes only) to:

  
	
   

  	
   

  	
   

  
	
  Troutman
  Sanders LLP

  	
   

  	
   

  
	
  401
  9th St., N.W.

  	
   

  	
   

  
	
  Suite
  1000

  	
   

  	
   

  
	
  Washington,
  DC 20004-2134

  	
   

  	
   

  
	
  Telephone:

  	
  (202)
  274-2810

  	
   

  	
   

  
	
  Facsimile:

  	
  (202)
  654-5649

  	
   

  	
   

  
	
  Attention:

  	
  Todd
  R. Coles, Esq.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dieterich
  & Associates

  	
   

  	
   

  
	
  11300
  W. Olympic, Suite 800

  	
   

  	
   

  
	
  Los
  Angeles, California 90064

  	
   

  	
   

  
	
  Telephone:
  (310) 312-6888

  	
   

  	
   

  
	
  Facsimile:
  (310) 312-6680

  	
   

  	
   

  
	
  Attention:
  Chris Dieterich

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If
  to the Buyer:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  YA
  Global Investments, L.P.

  	
   

  	
   

  
	
  101
  Hudson Street

  	
   

  	
   

  
	
  Suite
  3700

  	
   

  	
   

  
	
  Jersey
  City, NJ 07303

  	
   

  	
   

  
	
  Telephone:

  	
  (201)
  985-8300

  	
   

  	
   

  
	
  Facsimile:

  	
  (201)
  985-8266

  	
   

  	
   

  
	
  Attention:

  	
  Mark
  Angelo

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With
  a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Troy
  Rillo, Esq.

  	
   

  	
   

  
	
  101
  Hudson Street

  	
   

  	
   

  
	
  Suite
  3700

  	
   

  	
   

  
	
  Jersey
  City, NJ 07303

  	
   

  	
   

  
	
  Telephone:

  	
  (202) 985-8300

  	
   

  	
   

  



 


or
to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) Business Days prior to the effectiveness of such
change.


 


(j)            Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns.


 


15

















 


(k)           Survival. Unless this Agreement
is terminated under Section 7, the representations and warranties of the
Company and the Buyer contained herein and the agreements and covenants set
forth herein shall survive the Closing.


 


[Signature Page Follows]


 


16

















 


IN WITNESS WHEREOF, the Buyer and the Company have caused their
respective signature page to this Agreement to be duly executed as of the date
first written above.


 


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  WENTWORTH
  ENERGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Punzo

  	
   

  
	
   

  	
   

  	
  Name: John Punzo

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  



 


[Signature Page to Amendment and Exchange Agreement]


 

















 


IN WITNESS WHEREOF, the Buyer and the Company have caused their
respective signature page to this Agreement to be duly executed as of the date
first written above.


 


	
   

  	
  BUYER:

  
	
   

  	
   

  
	
   

  	
  YA GLOBAL
  INVESTMENTS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Yorkville
  Advisors, LLC, its
  Investment 

  Manager

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ David Gonzalez

  	
   

  
	
   

  	
   

  	
   Name: David Gonzalez

  
	
   

  	
   

  	
   Title:   Managing Member 

  



 


[Signature Page to Amendment and Exchange Agreement]


 

















 


SECURITIES SCHEDULE


 


	
  (1)

  	
   

  	
  (2)

  	
   

  	
  (3)

  	
   

  	
  (4)

  	
   

  	
  (5)

  	
   

  	
  (6)

  	
   

  	
  (6)

  
	
  Investor

  	
   

  	
  Address and

  Facsimile Number

  	
   

  	
  Aggregate

  Principal

  Amount,

  Interest, and

  Other Charges

  of Amended

  and Restated

  Debenture

  	
   

  	
  Aggregate

  Amount of

  Amended and

  Restated

  Debentures

  	
   

  	
  Aggregate

  Number of

  Existing

  Warrants

  	
   

  	
  Aggregate Number

  of Amended and

  Restated Warrant

  Shares

  	
   

  	
  Legal

  Representative's

  Address and

  Facsimile Number

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  YA Global 

  Investments, L.P.

  	
   

  	
  101 Hudson Street

  Suite 3700

  Jersey City, NJ 07303

  Fax: 201-985-8266

  Telephone: 201-985-8300

  Residence: New Jersey

  	
   

  	
  Debenture No.

  CCP-1:

  $774,159

  Debenture No.

  CCP-2:

  $644,414

  	
   

  	
  Debenture No.

  CCP-1:

  $774,159

  Debenture No.

  CCP-2:

  $644,414

  	
   

  	
  1,500,000

  	
   

  	
  1,500,000

  	
   

  	
  David Fine

  101 Hudson Street

  Suite 3700

  Jersey City, NJ 07303 

  Fax: 201-985-8266 

  Telephone: 201-985-8300

  Residence: New Jersey

  



 

















 


EXHIBITS


 


Exhibit A                Form
of Amended and Restated Debentures


Exhibit B                Form
of Amended and Restated Warrant


Exhibit C                Form
of Amended and Restated Irrevocable Transfer Agent Instructions