Exhibit 10.40


 


	
  DATED

  	
   

  	
  July 14, 2008

  
	
   

  	
   

  	
   

  
	
  RESACA EXPLOITATION, INC.

  	
   

  	
  (1)

  
	
   

  	
   

  	
   

  
	
  THE DIRECTORS OF RESACA EXPLOITATION, INC.

  	
   

  	
  (2)

  
	
   

  	
   

  	
   

  
	
  NGP CAPITAL RESOURCES COMPANY AND OTHERS

  	
   

  	
  (3)

  
	
   

  	
   

  	
   

  
	
  SEYMOUR PIERCE LIMITED

  	
   

  	
  (4)

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ROYAL BANK OF CANADA EUROPE LIMITED

  	
   

  	
  (5)

  



 






 


PLACING AGREEMENT

relating to the
placing of shares in


RESACA EXPLOITATION, INC.


 






 


 


 

















 


CONTENTS


 


	
  1.

  	
  DEFINITIONS
  AND INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  CONDITIONS

  	
  8

  
	
   

  	
   

  	
   

  
	
  3.

  	
  APPLICATION
  FOR ADMISSION

  	
  9

  
	
   

  	
   

  	
   

  
	
  4.

  	
  THE
  PLACING

  	
  10

  
	
   

  	
   

  	
   

  
	
  5.

  	
  SUPPLEMENTARY
  ADMISSION DOCUMENT

  	
  14

  
	
   

  	
   

  	
   

  
	
  6.

  	
  WARRANTIES

  	
  15

  
	
   

  	
   

  	
   

  
	
  7.

  	
  INDEMNITY

  	
  17

  
	
   

  	
   

  	
   

  
	
  8.

  	
  SUPPLEMENTARY
  PROVISIONS - WARRANTIES AND INDEMNITIES

  	
  19

  
	
   

  	
   

  	
   

  
	
  9.

  	
  FEES,
  COMMISSIONS AND EXPENSES

  	
  20

  
	
   

  	
   

  	
   

  
	
  10.

  	
  ANNOUNCEMENTS

  	
  21

  
	
   

  	
   

  	
   

  
	
  11.

  	
  TERMINATION

  	
  22

  
	
   

  	
   

  	
   

  
	
  12.

  	
  WITHHOLDING
  AND GROSSING-UP

  	
  23

  
	
   

  	
   

  	
   

  
	
  13.

  	
  TIME
  OF THE ESSENCE

  	
  24

  
	
   

  	
   

  	
   

  
	
  14.

  	
  WAIVER

  	
  24

  
	
   

  	
   

  	
   

  
	
  15.

  	
  INVALIDITY
  AND SEVERABILITY

  	
  24

  
	
   

  	
   

  	
   

  
	
  16.

  	
  NOTICES

  	
  24

  
	
   

  	
   

  	
   

  
	
  17.

  	
  COUNTERPARTS

  	
  26

  
	
   

  	
   

  	
   

  
	
  18.

  	
  ENTIRE
  AGREEMENT

  	
  26

  
	
   

  	
   

  	
   

  
	
  19.

  	
  CONFIDENTIALITY

  	
  26

  
	
   

  	
   

  	
   

  
	
  20.

  	
  ASSIGNMENT

  	
  27

  
	
   

  	
   

  	
   

  
	
  21.

  	
  RIGHTS
  OF THIRD PARTIES

  	
  27

  
	
   

  	
   

  	
   

  
	
  22.

  	
  MISCELLANEOUS

  	
  28

  
	
   

  	
   

  	
   

  
	
  23.

  	
  GOVERNING
  LAW AND JURISDICTION

  	
  29

  
	
   

  	
   

  	
   

  
	
  SCHEDULE
  1 THE DIRECTORS

  	
  30

  
	
   

  	
   

  
	
  SCHEDULE
  2 THE SELLING SHAREHOLDERS

  	
  31

  
	
   

  	
   

  
	
  SCHEDULE
  3 DOCUMENTS

  	
  34

  



 


i

















 


	
  SCHEDULE
  4 THE WARRANTIES

  	
  36

  
	
   

  	
   

  
	
  SCHEDULE
  5 LIMITATIONS ON LIABILITY

  	
  47

  
	
   

  	
   

  
	
  SCHEDULE
  6 WARRANTIES CERTIFICATE

  	
  48

  
	
   

  	
   

  
	
  SCHEDULE
  7 FURTHER COVENANTS

  	
  49

  
	
   

  	
   

  
	
  SCHEDULE
  8 AGREED FORM DOCUMENTS

  	
  51

  



 


ii

















 


	
  THIS AGREEMENT is made on

  	
   

  	
  July 14, 2008

  



 


BETWEEN:


 


(1)           Resaca
Exploitation, Inc. (incorporated
in the State of Texas, USA under the Texas Business Organizations Code whose
principal place of business is at 1331 Lamar, Suite 1450, Houston, Texas
77010, USA (the “Company”);


 


(2)           The Directors of Resaca
Exploitation, Inc. whose
names and addresses are set out in Schedule 1 (each a “Director” and together the “Directors”);


 


(3)           NGP Capital Resources Company
and Others whose names and
addresses are set out in Schedule 2 (each a “Selling
Shareholder” and together the “Selling
Shareholders”);


 


(4)           Seymour Pierce Limited (incorporated in England and Wales with
registered number 02104188) whose registered office is at 20 Old Bailey, London
EC4M 7EN (“Seymour Pierce”); and


 


(5)           Royal Bank of Canada Europe
Limited (incorporated in
England and Wales with registered number 995939) whose registered office is at
71 Queen Victoria Street, London EC4V 4DE (“RBC”).


 


BACKGROUND:


 


(A)          The Company is proposing to apply to the London Stock Exchange for
Admission.


 


(B)           The Company proposes to issue the Subscription Shares at the Placing
Price by way of a placing with institutional investors to raise up to £53.3
million before expenses (or such other amount as the Company, Seymour Pierce
and RBC may agree) under the Placing.


 


(C)           The Selling Shareholders wish to sell the Sale Shares at the Placing
Price.


 


(D)          In reliance upon the representations, warranties, indemnities and
undertakings contained in this agreement, Seymour Pierce and RBC have agreed as
agents for the Company and the Selling Shareholders to use their reasonable
endeavours to procure Placees for the Placing Shares at the Placing Price on
the terms and subject to the conditions and provisions contained in the
Admission Document, the Placing Letters and this agreement.


 


THE PARTIES AGREE AS FOLLOWS:


 


1.             DEFINITIONS AND
INTERPRETATION


 


1.1           In this agreement the following words and expressions shall have the
following meanings, unless the context otherwise requires:


 


“Accounts” means the audited financial statements of Resaca LP for the financial
period from January 2007 to 31 December 2007;


 


“Accounts Date” means 31 December 2007; 


 


“Act” means
the Companies Act 2006;


 


1

















 


“Admission” means the admission to trading on AIM of the entire Enlarged Issued
Share Capital, in accordance with the AIM Rules, and any reference in this
agreement to Admission “becoming effective” is
to be construed  in accordance with rule 6 of the AIM
Rules For Companies;


 


“Admission Document” means the admission document in the agreed
form proposed to be published by the Company in connection with the Placing and
Admission as required by and in accordance with rule 3 of the AIM
Rules For Companies, including the Competent Person’s Report;


 


“AIM” means
the AIM
market operated by the London
Stock Exchange;


 


“AIM Application” means the application to be made to the London Stock Exchange for
Admission in the form specified by the AIM Rules;


 


“AIM Rules” means the AIM Rules For Companies and the AIM Rules For
Nominated Advisers;


 


“AIM Rules For Companies” means the rules for companies published
by the London Stock Exchange governing admission to AIM and the regulation of
AIM companies as amended or re-issued from time to time;


 


“AIM Rules For Nominated Advisers” means the rules for nominated advisers
published by the London Stock Exchange governing admission to AIM and the
regulation of nominated advisers as amended or re-issued from time to time;


 


“Assets” means the oil and gas assets owned by the Company, details of which are
set out in Part I of the Admission Document;


 


“Associate” means in relation to a company, each of that company’s respective
officers, directors, servants and employees;


 


“Board” means the board of directors of the Company or a duly authorised
committee of such board of directors;


 


“Board Resolutions” means the resolutions of the Board set out in the board minutes in the
agreed form approving, inter alia, the Placing Documents;


 


“Business Day” means a day (excluding Saturdays, Sundays and public holidays) on which
banks are open for business in the City of London;


 


“Claims” or “Claim” means any claim,
action, investigation, demand, judgement or award in any jurisdiction (whether
or not successful, compromised, settled or reversed) which may be brought or
threatened against any person in each case by reason of, or resulting directly
from, or attributable to or in connection with any breach or alleged breach of
any Warranty, representation or undertaking contained or referred to in this agreement
or any circumstances which constitute such a breach or any allegation of such
circumstances including, without prejudice to the generality of the above, all
such losses which any person may suffer or incur investigating, evaluating or
responding to or disputing or settling any claim and enforcing its rights under
this agreement;


 


“Common Shares” means shares of common stock of US$0.01 each in the capital of the
Company;


 


“Company’s Solicitors” means King & Spalding International
LLP, 25 Cannon Street, London EC4M 5SE and Haynes and Boone, LLP, One Houston
Center, 1211 McKinney Street, Suite 2100, Houston, Texas, 77010-2007, USA;


 


2

















 


“Competent Person’s Report” means the competent person’s reports, in the
agreed form, prepared in respect of the Company by Haas Petroleum Engineering
Services, Inc. and Williamson Petroleum Consultants, Inc. in each
case addressed to the Company and Seymour Pierce;


 


“CREST” means the computer based system and procedures which enable title to
securities to be evidenced and transferred without a written instrument and
which is operated by Euroclear;


 


“Dealing Code” means the code, in the agreed form, in relation to restrictions on
dealing in the Company’s securities, adopted by the Company;


 


“Directors’ Declarations” means the declarations of each of the
Directors in the agreed form;


 


“Directors’ Powers of Attorney” means the powers of attorney in the agreed
form to be granted by each of the Directors;


 


“Directors’ Responsibility Letters” means the responsibility letters in the agreed
form to be signed by each of the Directors;


 


“Encumbrances” means all liens, charges, mortgages, encumbrances, equities and other
third party rights of any nature whatsoever;


 


“Enlarged Issued Share Capital” means the Existing Shares together with the
Placing Shares; 


 


“Euroclear” means Euroclear UK & Ireland Limited;


 


“Existing Shares” means the 59,945,609 Common Shares in issue immediately prior to the
Placing;


 


“Finally Determined” means determined by a court or body which has
jurisdiction and from which there is no right of appeal or there is a right of
appeal but the right has expired or 3 months has elapsed from the date of
judgment (whichever is the earlier), or as agreed between the relevant parties
in writing;


 


“Financial Year” means a fiscal year of the Company;


 


“FSA” means
the Financial Services Authority registered in England and Wales (company
number 1920623) whose registered office is at 25 The North Colonnade, Canary
Wharf, London E14 5HS or such other organisation as shall take over the role
and responsibilities of the Financial Services Authority from time to time and
by which Seymour Pierce is regulated to undertake activities in its capacity as
nominated adviser and joint broker to the Company and by which RBC is regulated
to undertake activities in its capacity as joint broker to the Company;


 


“FSA Rules” means the FSA Handbook of Rules and Guidance and any other
rules established and guidance issued by the FSA from time to time in
force (as varied by any waivers or dispensations granted by the FSA and
applicable to Seymour Pierce);


 


“FSMA” means the Financial Services and Markets Act 2000;


 


“Full Warrantors” means the Company, John James Lendrum, III and James Perry Bryan, Jr;


 


“Indemnified Person” means Seymour Pierce, any other member of the
Seymour Pierce Group, RBC or any other member of the RBC Group and all persons
who are, on or at any time after the date of this agreement, Associates of
Seymour Pierce, any other member of the Seymour Pierce Group, RBC or any other
member of RBC Group, each of whom shall be an “Indemnified
Person” for the purposes of this agreement;


 


3

















 


“Indemnity” means the indemnity contained or referred to in clause 7;


 


“Intellectual Property” means patents, trade marks, service marks,
registered designs, drawings, utility models, design rights, copyrights,
(including copyright in computer software), semi-conductor topography rights,
database rights, inventions, trade secrets and other confidential information,
technical information, know how, business or trade names and all other
intellectual property and rights of a similar or corresponding nature in any
part of the world, whether registered or not or capable of registration or not
and including all applications and the right to apply for any of the foregoing
rights;


 


“Intellectual Property Rights” means all Intellectual Property owned or used
by the Company;


 


“Legal Due Diligence Report” means the legal due diligence report, in the
agreed form, prepared in respect of the Company by Haynes and Boone, LLP and
addressed to the Company, Seymour Pierce and RBC;


 


“Limited Warrantors” means John William Sharp Bentley, Judy Ley
Allen and Richard Kelly Plato;


 


“Lock-in and Orderly Marketing Agreements” means the agreements in the agreed form not to
dispose, subject to certain exceptions, of any interest in Common Shares to be
entered into on the date of this agreement between Seymour Pierce, RBC, the
Company and each of the Directors and certain shareholders in the Company;


 


“London Stock Exchange” means London Stock Exchange plc;


 


“Long Form Report” means the due diligence report, in the agreed
form, prepared in respect of the Company by the Reporting Accountants and addressed
to the Company and Seymour Pierce;


 


“Losses” has the meaning given in clause 7.1;


 


“Nomad and Joint Broker Agreement” means the agreement of even date herewith made
between the Company and Seymour Pierce in relation to Seymour Pierce’s
appointment as nominated adviser and joint broker to the Company;


 


“Placees” means persons with or to whom Placing Shares are to be placed on the
terms and subject to the conditions and provisions of this agreement, the
Admission Document and the Placing Letters;


 


“Placing” means the proposed placing. of the Placing Shares by Seymour Pierce and
RBC on the terms and subject to the conditions and provisions of this agreement
and the Placing Letters;


 


“Placing Documents” means the Presentation, the Press Announcement, the Placing Proof, the
Admission Document and the Placing Letters;


 


“Placing Letters” means the European and Canadian placing letters in the agreed forms to
be sent as applicable to proposed Placees by Seymour Pierce and RBC in
connection with the Placing, including the accompanying form of confirmation;


 


“Placing Price” means the price of £1.30 per Common Share at which the Placing Shares
are proposed to be placed in accordance with the arrangements described in this
agreement and the Admission Document;


 


4

















 


“Placing Proof” means the document in the agreed form which, save for the omission of
pricing information, is intended to be identical to the Admission Document in
all respects and which complies with the AIM Rules in all respects;


 


“Placing Shares” means the Subscription Shares and the Sale Shares;


 


“Presentation” means the presentation to potential Placees in the agreed form prepared
by the Company;


 


“Press Announcement” means the press announcement in the agreed
form containing details of the Placing to be released by Seymour Pierce to the
London Stock Exchange and to the press on behalf of the Company;


 


“Prospectus Rules” means the rules made for the purposes of Part VI of FSMA in
relation to, amongst other things, offers of securities to the public, as
revised from time to time;


 


“RBC Group” means RBC and any undertaking which is, on or after the date of this
agreement, a Related Person of RBC;


 


“RBC Engagement Letter” means the letter agreement dated 10 June 2008
made between RBC and the Company relating to RBC’s retention as the Company’s
joint broker in relation to Admission and the Placing;


 


“Registrars” means the Company’s registrars, Computershare Investor Services (Channel
Islands) Limited, Ordnance House, 31 Pier Road, St. Helier, Jersey;


 


“Registrars Agreement” means the agreement in the agreed form between
the Company and the Registrars


 


“Related Persons” means in relation to any party, its subsidiaries and subsidiary
undertakings, any parent undertaking and the subsidiaries and subsidiary
undertakings of any such parent undertaking;


 


“Relevant Territory” means the United States, Australia, Canada,
Japan, Republic of Ireland or South Africa;


 


“Reorganisation” means the conversion of Resaca LP into the Company, further details of
which are set out in the Admission Document;


 


“Reporting Accountants” means UHY LLP, 12 Greenway Plaza,
Suite 1202, Houston, Texas 77046, USA;


 


“Resaca LP” means Resaca Exploitation, LP, a limited partnership under the laws of the
State of Delaware;


 


“Sale Shares” means the 8,686,870 Common Shares held by the Selling Shareholders to be
sold by them pursuant to the Placing;


 


“Securities Act” means the United States Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder;


 


“Selling Shareholders’ Power of Attorney” means the power of attorney in the agreed form
to be granted by each of the Selling Shareholders in favour of any director of
Seymour Pierce authorising the


 


5

















 


execution
of form(s) of transfer and other documents in respect of the transfer of the
Sale Shares pursuant to the Placing;


 


“Seymour Pierce Engagement Letter” means the letter agreement dated 13
April 2007 made between Seymour Pierce and the Company relating to Seymour
Pierce’s retention as the Company’s nominated adviser and joint broker in
relation to Admission and the Placing;


 


“Seymour Pierce Group” means Seymour Pierce and any undertaking which
is, on or after the date of this agreement, a Related Person of Seymour Pierce;


 


“Short Form Report” means the report of the Reporting Accountants,
in the agreed form, reproduced in Part III of the Admission Document;


 


“Specified Event” means an event occurring or matter arising on or after the date of this
agreement and before Admission which, if it had occurred or arisen before the
date of this agreement, would have rendered any of the Warranties untrue,
inaccurate or misleading;


 


“Subscription Shares” means the 32,313,130 new Common Shares to be
allotted and  issued by the Company for cash pursuant to the
Placing;


 


“Supplementary Admission Document” means any supplementary Admission Document
published by the Company pursuant to clause 5;


 


“Systems” means the software, hardware and information and communication
technology used by the Company in connection with its business and all
components of them;


 


“Taxation” means all forms of tax, charge, duty, impost, withholding, deduction,
rate, levy and governmental charge (whether national or local) in the nature of
tax whatsoever and whenever created, enacted or imposed, and whether of the
United States of America or elsewhere, and any amount whatever payable to any
taxation authority or any other person as a result of any enactment relating to
taxation, together with all related fines, penalties, interest, costs, charges
and surcharges;


 


“VAT” means
United Kingdom value added tax;


 


“Verification Notes” means the verification notes in the agreed
form confirming the accuracy of information contained in the Admission Document
together with copies of the documents contained in the files comprising the
verification support documents as referred to in such verification notes;


 


“Warranties” means the representations, warranties and undertakings contained or referred
to in clause 6 and in Schedule 4;


 


“Warranties Certificate” means the certificate set out in Schedule 6;


 


“Warranties Claim Date” means the later of: (i) the day falling 3
months after publication of the Company’s first set of interim financial statements
after Admission; and (ii) 31 December 2008;


 


“Warrantors” means the Full Warrantors, the Limited Warrantors and each of the
Selling Shareholders; and


 


“Working Capital Report” means the consolidated cash flow and working
capital projections of the Company, in the agreed form, and the report, in the
agreed form, prepared by the Reporting Accountants in respect of such
projections and addressed to the Company, Seymour Pierce and RBC.


 


6

















 


1.2           In this agreement unless otherwise specified, reference to:


 


(a)           “includes” and “including”
shall mean including without limitation;


 


(b)           a “subsidiary undertaking” and
“parent undertaking” are to be
construed in accordance with section 1162 of the Act, a “subsidiary” or “holding company” is to be construed in accordance with
section 1159 of the Act and an “associated
company” is to be construed in accordance with section 416 et seq of
the Income and Corporation Taxes Act 1988;


 


(c)           a document in the “agreed form” is
a reference to that document in the form approved and for the purposes of
identification signed by or on behalf of each of Seymour Pierce, RBC and the
Company;


 


(d)           a party means a party to this agreement and includes its permitted
assignees and/or the successors in title to substantially the whole of its
undertaking which includes this agreement and, in the case of an individual, to
his or her estate and personal representatives;


 


(e)           a person includes any person, individual, company, firm, corporation, government,
state or agency of a state or any undertaking or organisation (whether or not
having separate legal personality and irrespective of the jurisdiction in or
under the law of which it was incorporated or exists);


 


(f)            a statute or statutory instrument or
accounting standard or any of their provisions is to be construed as a
reference to that statute or statutory instrument or accounting standard or
such provision as the same may have been or may from time to time hereafter be
amended or re-enacted, save to the extent that any such amendment, re-enactment
or replacement which takes effect after the date of this agreement would impose
any new or extended obligation or liability on, or otherwise adversely affect
the rights of, any party;


 


(g)           “recitals”, “clauses”,
“paragraphs” or “schedules” are to recitals, clauses and
paragraphs of and schedules to this agreement. The schedules form part of the
operative provisions of this agreement and references to this agreement shall,
unless the context otherwise requires, include references to the recitals and
the schedules;


 


(h)           writing shall include typewriting, printing, lithography, photography
and other modes of representing words in a legible form (other than writing on
an electronic or visual display screen) or other writing in non-transitory
form;


 


(i)            words denoting the singular shall include the
plural and vice versa and words denoting any gender shall include all genders;
and


 


(j)            the time of day is reference to time in
London, England.


 


1.3           The index to and the headings in this agreement are for information only
and are to be ignored in construing the same.


 


1.4           Any term, condition or provision of this
agreement which is expressed to bind more than one person shall, unless
expressly stated to the contrary, bind them jointly and each of them severally.


 


1.5           All commissions, fees and expenses payable
under or in connection with this agreement are stated exclusive of VAT (if
any).


 


7














 


1.6           In this agreement, the terms “material”, “materiality” and “materially” mean material to Seymour
Pierce and RBC in the context of the Placing or Admission.


 


2.            CONDITIONS


 


2.1           The obligations of Seymour Pierce and RBC
under this agreement shall be  conditional on:


 


(a)          the Company or the Selling Shareholders, as
applicable, delivering to Seymour Pierce and RBC each of the documents
specified in Schedule 3 (except as may otherwise be agreed in writing by
Seymour Pierce and RBC) by 5.00 pm on the day following the date of this
agreement (or such later time and/or date as Seymour Pierce and RBC may in
writing agree in relation to any particular document and provided that, where
original documents are required to be delivered, the Company or the Selling Shareholders,
as applicable, shall provide copies of such documents by 5.00 pm on the day
following the date of this agreement and the originals of such documents as
soon as reasonably practicable thereafter);


 


(b)         the Company providing Seymour Pierce with such
information and documents to enable Seymour Pierce to deliver an electronic
version of the Admission Document and a completed application form (in the form
specified by the AIM Rules) to the London Stock Exchange, together with the
applicable fees as required by rule 5 of the AIM Rules For Companies;


 


(c)          the passing of the Board Resolutions on or
before 5.00 pm on the date of this agreement (or such later time and/or date as
Seymour Pierce and RBC may in writing agree);


 


(d)         any Supplementary Admission Document which may
be required pursuant to clause 5 having been approved by Seymour Pierce and RBC
and published before Admission;


 


(e)          the release of the Press Announcement through
the Regulatory News Service by not later than 8.00 a.m. on 17 July 2008;


 


(f)          the delivery to Seymour Pierce and RBC by the
Company immediately prior to Admission of a duly executed certificate in the
same terms as the Warranties Certificate;


 


(g)         each of the Company and the Directors having
complied with their respective obligations under this agreement to the extent
that those obligations are required to be performed prior to Admission;


 


(h)         this agreement not having been terminated
prior to Admission pursuant to clause 11;


 


(i)           Seymour Pierce, RBC or the Company having
received from Placees duly executed Placing Letters for Placing Shares with an
aggregate Placing Price of not less than $60 million; and


 


(j)           Admission occurring by not later than 8.00 am
on 17 July 2008 (or such later time and/or date as the Company, Seymour
Pierce and RBC may in writing agree, being no later than 8.00 a.m. on 31
July 2008).


 


2.2           Each of the Company, the Selling Shareholders
(only to the extent such provisions are expressly applicable to the Selling
Shareholders) and the Directors undertake to use all reasonable endeavours to
procure the fulfilment of the conditions set out in clause 2.1 (other than the condition
set out in clause 2.1(i)) by the times and dates stated in clause 2.1 and in particular, but without limitation,
undertake to provide all information and documents, pay all fees, give all
necessary undertakings and execute and do all matters, acts, deeds, documents
and things in each case as may be reasonably required to


 


8

















 


enable
Admission to take place and in connection with the Placing including in
particular complying with the relevant provisions of the Act, FSMA and the AIM
Rules.


 


2.3           If any of the conditions set out in clause 2.1
is not fulfilled (or, other than the condition in clause 2.1(i), where
permitted, waived by Seymour Pierce, RBC and the Company or, in the case of the
condition in clause 2.1(i), waived by the Company) by the specified time and/or
date (or such later time and/or date as Seymour Pierce, RBC and the Company may
agree or, in the case of the condition in clause 2.1(i), the Company may
determine in accordance with clause 2.4 (but no later than 8.00 a.m. on 31
July 2008)) this agreement shall, subject to clause 2.4, terminate and no
party to this agreement shall have any claim against any other party to this
agreement for costs, damages, compensation or otherwise (except as regards any
breach of any provision of this agreement which accrued prior to its
termination and except as regards the fees, commissions and expenses set out
in, and subject to, clause 9) save to the extent that clause 11.5 provides
otherwise.


 


2.4           Seymour Pierce and RBC shall be entitled in
their absolute discretion (and on such terms, conditions and provisions as they
shall in their absolute discretion, after consultation with the Company, if
practicable, think fit) to waive fulfilment of all or any of the conditions set
out in-clause 2.1 (other than those contained in clauses 2.1(d), 2.1(i) and 2.1(j)
above, which shall require the prior written consent of the Company) or, with
the prior agreement of the Company, to extend the time and/or date provided for
performance of any of the conditions (provided to no later than 8.00 am on 31
July 2008). The Company shall be entitled in its absolute discretion to
waive fulfilment of the condition set out in clause 2.1(i).


 


3.             APPLICATION FOR ADMISSION


 


3.1           The Company and the Directors will use all
reasonable endeavours to obtain Admission including,without limitation, paying
all fees and executing and delivering all such documents and doing or procuring
the doing of all acts and things as shall be necessary in connection with such
application and, insofar as within its power, generally to do and procure to be
done all such things as may properly be required by the London Stock Exchange
and/or Seymour Pierce for the purposes of or in connection with Admission so as
to enable Admission to take place by 8.00 a.m. on 17 July 2008.


 


3.2           Seymour Pierce is hereby given all such
authorities and powers by the Company and the Directors as are reasonably
required for the purposes of obtaining Admission and Seymour Pierce shall, on
the terms and subject to the conditions in this agreement, provide all
reasonable assistance towards obtaining Admission, including (without limitation)
the submission, on behalf of the Company and at the Company’s expense, of the
AIM Application.


 


3.3           The Company and the Directors shall procure
that copies of the Admission Document are published by or on behalf of the
Company in accordance with Rule 3 of the AIM Rules For Companies.


 


3.4           The Directors confirm to Seymour Pierce and
RBC that they have had explained to them by the Company’s Solicitors and
Nominated Adviser and that they understand the nature of their responsibilities
and obligations under the AIM Rules For Companies as directors of a
company with a class of securities admitted for trading on AIM and their
responsibilities and obligations under, FSMA and their fiduciary duties as
directors.


 


3.5           The Company and the Directors confirm to
Seymour Pierce and RBC, after having made due and careful enquiry, that the
Directors have established procedures which provide a reasonable basis for them
to make proper judgments as to the financial position and prospects of the
Company and that such procedures are accurately described in the Long
Form Report in respect of the Company.


 


9

















 


3.6           Subject to Admission, the Company shall
procure, against production to the Registrars of a list containing the names of
each of the Placees, and subject to Seymour Pierce and RBC complying with their
obligations under Clause 4.4, that prompt registration of those persons,  as
holders of the Placing Shares or purchasers of the Sale Shares, as the case may
be, will be effected in accordance with the constitutional documents of the
Company from time to time in force.


 


3.7           The Company shall, in accordance with the
Admission Document, issue fully paid share certificates in respect of the
Placing Shares in favour of the persons entitled thereto and the Company shall
procure that such share certificates will bear a legend indicating that due to
restrictions on transfer under the securities laws of the United States, the
Placing Shares must be held in certificated form for a period of at least 12
months following the Placing, that the Placing Shares will not be eligible for
settlement through CREST during that time and that they have not been and will
not be registered in the United States.


 


3.8           Seymour Pierce and RBC shall procure that a
director of Seymour Pierce and/or RBC will, provided that the relevant Selling
Shareholder has not already done so, as agent and attorney for each of the
Selling Shareholders (appointed under the respective Selling Shareholders’
Power of Attorney), execute instruments of transfer in respect of the Sale
Shares in favour of such persons (if any) in accordance with such powers of
attorney and this agreement as Seymour Pierce and/or RBC may nominate or as
Seymour Pierce and/or RBC shall direct, provided that such instruments of
transfer shall be executed outside, and not brought into, the United Kingdom.


 


3.9           Subject to production to the Company or the
Registrars of the instruments of transfer referred to in clause 3.8 (duly
stamped if required) and the relevant share certificates the Company will
procure the delivery to Seymour Pierce and RBC of share certificates in respect
of the Sale Shares to those persons to whom Sale Shares have been transferred
pursuant to clause 3.8 and in each case the Company will procure that the
Registrars will enter the relevant persons on the register of members of the
Company in respect of those shares.


 


4.           THE PLACING


 


4.1           The Company and each of the Selling
Shareholders authorises and instructs each of Seymour Pierce and RBC to procure
subscribers at the Placing Price for the Placing Shares and purchasers at the
Placing Price for the Sale Shares on the terms of this agreement, the Admission
Document and the Placing Letters and for such purpose:


 


(a)           irrevocably appoints each of Seymour Pierce and
RBC as its agents for the purposes of the Placing and
confirms its authority to each of Seymour Pierce and RBC or their agents to
seek commitments to subscribe for the Placing Shares and to purchase the Sale
Shares at the Placing Price from Placees by the distribution of Placing Letters
and copies or proofs (including the Placing Proof) of the Admission Document;


 


(b)           confirms that the above appointment confers on
each of Seymour Pierce and RBC and their agents all powers, authorities and
discretions (including, without limitation, the power to appoint sub-agents or
to delegate the exercise of any of its powers, authorities or discretions to
such person or persons as Seymour Pierce and/or RBC may think fit) which are
within their powers and are necessary for, or incidental to (in Seymour
Pierce’s and/or RBC’s reasonable opinion), the implementation of the Placing
and Admission; and


 


(c)           agrees to ratify, confirm and approve all
documents, acts and things which Seymour Pierce, RBC and their agents shall
lawfully do or have done in the exercise of or in contemplation of such
appointment, powers, authorities and discretions,


 


10

















 


4.2           The Company and each of the Directors shall
give all such assistance and provide all such information as Seymour Pierce
and/or RBC may reasonably require for the making and implementation of the
Placing and will do (or procure to be done insofar as it or he is able) all
such acts and things and execute (or procure to be executed insofar as it or he
is able) all such documents as may be necessary or desirable to be done or
executed by it or on its behalf by its officers or employees or by him in
connection with the Placing including, in particular, fully complying with all
the relevant provisions of the AIM Rules, the Prospectus Rules and FSMA.


 


4.3           Pursuant to but without limiting the authority
in clause 4.1, subject to fulfilment of the conditions in clause 2.1 and the
Company, the Selling Shareholders and the Directors performing their respective
obligations under clause 4.1, Seymour Pierce and RBC agree as agents of the
Company and the Selling Shareholders and in reliance on the Warranties, to use
reasonable endeavours to procure persons to subscribe for the Subscription
Shares and to purchase the Sale Shares in each case at the Placing Price and
otherwise upon the terms of the Admission Document and the Placing Letters.


 


4.4           Seymour Pierce and RBC shall determine in
their absolute discretion:


 


(a)           the last time at which Placing Shares may be
offered and acceptances may be made amongst those who have applied for the
Placing Shares under the Placing;


 


(b)           the validity or otherwise of acceptances
received for Placing Shares under the Placing; and


 


(c)           the basis of allocation of Placing Shares
under the Placing (provided that, in the event of any disagreement as to allocation
between Seymour Pierce and RBC, they shall promptly refer the matter to
Mr. J. Lendrum (or, in the event of his unavailability, Mr. J.P.
Bryan) for his determination, which shall be final and binding on the parties),


 


and
shall supply to the Registrars a schedule of persons subscribing for
Subscription Shares and the number of Subscription Shares for which they are
subscribing and of persons acquiring Sale Shares, the persons they are
acquiring them from and the number of Sale Shares being acquired.


 


4.5           The Company shall procure that the Board
shall, prior to the delivery and execution of this agreement but prior to and
conditionally on Admission, allot the Subscription Shares (credited as fully
paid up) on the terms that such Subscription Shares shall rank pari passu in
all respects with all other Common Shares, including the right to receive all
dividends and other distributions declared, made or paid after the date of this
agreement. The Subscription Shares shall be issued, and the Sale Shares sold,
at the Placing Price free from all Encumbrances and, subject to the Bylaws of
the Company, and subject to the provisions of this agreement, to such persons
and in such denominations as may be notified to it by Seymour Pierce and RBC.


 


4.6           The subscription price for each of the
Subscription Shares and the sale price for the Sale Shares shall be the Placing
Price. Subject to clause 4.1, Seymour Pierce and RBC shall procure that the
proceeds of the Placing are paid in cleared funds (less the deductions made pursuant
to clause 9 in respect of fees, commissions and costs payable by the Company
together with any amount equal to VAT payable on those amounts and less any
stamp duty or stamp duty reserve tax payable on the transfer of the Sale
Shares) as soon as practicable following Admission but in any event by the
later of 5.00 pm on the fifth business day following Admission or the date upon
which Seymour Pierce and/or RBC receive cleared funds from Placees in respect
of Placing proceeds, by telegraphic transfer of an amount equal to the
aggregate value at the Placing Price of the Placing Shares to the Company’s
account as follows:


 


Pay To:                  Barclays
Bank plc


 


11

















 


Sort
Code: SC 203253


 


SWIFT
CODE: BARCGB22


 


Account
of:           Amegy Bank National Association


 


Houston,
Texas U.S.A.


 


SWIFT
Code: SWBKUS44


 


IBAN:
GB64BARC20325350030414


 


Reference:             Resaca Exploitation


 


Account
No.: 0051895680 


 


Contact
No.: 93240


 


4.7           Upon receipt of the Placing proceeds (and
following deduction of the amounts payable by the Company pursuant to clause
9), the Company shall pay to each Selling Shareholder an amount equal to the
number of Sale Shares held by such Selling Shareholder, multiplied by the
Placing Price, which amounts shall not be reduced by any amounts for which the
Company is responsible under clause 9, and the Company shall then retain the
balance for its own account.


 


4.8           The Subscription Shares shall be subscribed
and the Sale Shares sold free from all Encumbrances and with all rights
attaching or accruing to them on or after the date of this agreement.


 


4.9           If Admission does not become effective by 17
July 2008, or such later time and/or date as the Company, Seymour Pierce
and RBC may agree (being not later than 8.00 a.m. on 31 July 2008), monies
received from Placees will be returned without interest by Seymour Pierce and
RBC, at the Placees’ risk, to Placees through the post. Any interest accrued on
such monies (net of account charges) will be applied by Seymour Pierce and RBC
towards their fees and expenses payable pursuant to clause 9.


 


4.10         The
Company and the Directors acknowledge that Seymour Pierce and RBC may, in their
absolute discretion, require verification of the identity of any Placee.


 


4.11         Seymour
Pierce and RBC shall be under no obligation or liability under this agreement
should the cheque or other remittance accompanying any application under any
Placing Letters not be duly met or paid by the time of Admission or should
Seymour Pierce or RBC or the Registrars fail to receive evidence satisfactory
to them of the person lodging the relevant Placing Letters in order to ensure
compliance with the Money Laundering Regulations 2003 and 2007, the Terrorism
Act 2000, the Serious Organised Crime and Police Act 2005, the Anti-Terrorism
Crime and Security Act 2001 and the Proceeds of Crime Act 2002.


 


4.12         For the
avoidance of doubt, Seymour Pierce and RBC are acting for the Company and the
Selling Shareholders in relation to the Placing and Admission and shall not be
responsible to anyone other than the Company and the Selling Shareholders, for
providing the protections afforded to customers of Seymour Pierce and RBC or
for providing advice in relation to the Placing or Admission.


 


4.13         Each of
the Directors will do all acts and things and execute all documents necessary
on his part for the purpose of giving effect to the Placing, including, in
particular, complying with relevant provisions of the 


 


12

















 


AIM
Rules and FSMA and in particular (but without limitation) shall procure
that a meeting of the Board is held at which the issue of the Subscription
Shares, and the sale of the Sale Shares is approved.


 


4.14         Each of
the Selling Shareholders undertakes to sell the Sale Shares free from
Encumbrances to such Placees as Seymour Pierce and RBC may procure and to
provide Seymour Pierce and RBC with such documents as Seymour Pierce and RBC
may reasonably require to effect such sales.


 


4.15         The
Placing Shares and the Sale Shares have not been and will not be registered
under the Securities Act and may not be offered or sold within the United
States except pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act. The Company
accordingly confirms that it has not offered and will not offer any Placing
Shares for subscription or sale within the United States except pursuant to an
applicable exemption under the Securities Act.


 


4.16         The
Company confirms to Seymour Pierce and RBC that it has not:


 


(a)           offered any Placing Shares for subscription or
sale or issued any invitation to subscribe for or purchase any Placing Shares
and will not offer any Placing Shares or purchase for subscription or sale or
issue any invitation to subscribe for subscription or any Placing Shares; or


 


(b)           distributed, and will not distribute any
offering circular, admission document, advertisements, or other offering
material in relation to the Placing Shares;


 


in
each case whether directly or indirectly in a Relevant Territory or to any
person whom it knows to be a resident of a Relevant Territory (including
corporations and other entities organised under the laws of any Relevant
Territory but not including a permanent establishment of any such corporation
or entity located outside any Relevant Territory other than in another Relevant
Territory) otherwise than pursuant to any exemption or safe-harbour provided under
the securities laws of the Relevant Territory.


 


4.17         Seymour
Pierce and RBC each undertake to the Company that:


 


(a)           they shall not engage in any direct or
indirect selling efforts with respect to the Placing Shares in any Relevant
Territory or any jurisdiction other than the United Kingdom, Switzerland, the
United States and Canada unless they
have received prior written consent to  do so from the Company;


 


(b)           they will not, directly or indirectly, offer
for subscription or sale or solicit applications for any of the Placing Shares,
nor will they distribute or publish any documents in relation to the Placing,
in any country or jurisdiction except one in which such distribution or
publication is in compliance with any applicable laws or regulations and, where it is in doubt, Seymour Pierce and RBC
shall only proceed where it has received the prior consent of the Company
(after obtaining the appropriate legal advice);


 


(c)           they will not directly or indirectly offer for
subscription or sale or solicit applications for any of the Placing Shares, nor
will they distribute any documents in relation to the Placing to any persons if
by doing so it would cause the Placing to be
regarded as an offer to the public and/or which would require the Company to
issue a prospectus with regard to the same and/or which cause the Placing
Documents to be sent to a person who does not fall within an exemption in the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 from
the prohibition contained in section 21 of FSMA; and


 


(d)           they will ensure that each person acting on behalf of Seymour Pierce and
RBC and the Indemnified Persons complies with this clause 4.17.


 


13

















 


4.18         The
Company hereby confirms to Seymour Pierce and RBC that it has appointed (and
such appointment has been accepted) the Registrars to act as registrars and
receiving agents for the issue of the Subscription Shares and the transfer of
the Sale Shares upon and subject to the terms of the Registrars Agreement. The
Company undertakes to Seymour Pierce and RBC that it will provide the
Registrars with all authorisations and information which it is able to provide
so as to enable the Registrars to perform their duties in accordance with the
terms of the Registrars Agreement and will authorise the Registrars to act in
accordance with the terms of the Registrars Agreement, the Admission Document
and this Agreement. Subject to Admission, the Company shall procure that the
Registrars issue to Placees definitive share certificates by not later than the
date specified therefor in the timetable set out in the Admission Document.


 


4.19         The
Placing is not underwritten and to the extent that Placees are not obtained for
all of the Placing Shares Seymour Pierce and RBC shall not be liable to
subscribe for or purchase any Placing Shares for which Placees were not
obtained.


 


4.20         Each of
the Warrantors undertakes and covenants to Seymour Pierce and RBC that he has
not given and will not give any information, and has not made and wilt not make
any representation, warranty or statement, to potential Placees in connection
with the Placing which is not included in the Admission Document.


 


5.             SUPPLEMENTARY ADMISSION
DOCUMENT


 


5.1           If before Admission, it shall come to the
attention of the Company or any of the Directors that:


 


(a)           there is, or, in their reasonable opinion, is
likely to be, a “significant change” affecting any matter; or


 


(b)           there arises a “significant new factor”; or


 


(c)           there is a “material mistake or inaccuracy” in
the Admission Document,


 


(as
each of those expressions are defined in FSMA) or either the Company or any of
the Directors becomes aware of any other matter requiring the publication of a
Supplementary Admission Document if the Admission Document was an approved
prospectus within the meaning of s.85(7) of FSMA pursuant to S.87G FSMA, then:


 


(a)           such change or factor or mistake or inaccuracy
shall be dealt with in accordance with the Act, the AIM Rules and FSMA and
the Company or that Director shall immediately notify Seymour Pierce and RBC of
that change, factor or mistake or inaccuracy (with full details); and


 


(b)           without limitation to the rights of Seymour
Pierce and RBC to terminate the Agreement under clause 11.1, as soon as
practicable thereafter the Company will:


 


(i)            immediately
prepare in conjunction with Seymour Pierce and RBC a Supplementary Admission
Document containing particulars of the change or new factor or, in the case of
any mistake or inaccuracy, correcting it and following receipt of the same the
Company, Seymour Pierce and RBC shall consult regarding the form and contents
of such Supplementary Admission Document and the Company shall not publish the
same unless and until it is first approved by Seymour Pierce and RBC (such approval
not to be unreasonably withheld or delayed); and


 


14

















 


(ii)           procure
that a copy of the Supplementary Admission Document is distributed to each
Placee as soon as practicable.


 


5.2           If a Supplementary Admission Document is
published pursuant to clause 5.1, references in this agreement to the Admission
Document or to the Placing Letters shall be deemed to include the Supplementary
Admission Document and the Warranties referred to in clause 6 and set out in Schedule
4 shall be deemed to have been made and given in relation to the Admission
Document as updated by the Supplementary Admission Document without prejudice
to the Warranties given at the date of this agreement in relation to the
Admission Document (as originally published on such date or such later date as
the Company, Seymour Pierce and RBC may have agreed under clause 2).


 


6.             WARRANTIES


 


6.1           As an inducement to Seymour Pierce and RBC to
enter into this agreement and to
carry out the Placing:


 


(a)           the Limited Warrantors jointly and severally
represent, warrant and undertake to each of Seymour Pierce and RBC that each of
the Warranties in paragraphs 1 and 2 of Part A of Schedule 4;


 


(b)           the Full Warrantors jointly and severally
represent, warrant and undertake to each of Seymour Pierce and RBC that each of
the Warranties in Part A of Schedule 4; and


 


(c)           each Selling Shareholder for itself only and
severally but not jointly represent, warrant and undertake to each of Seymour
Pierce and RBC that each of the Warranties in Part B of Schedule 4 (only
as to such Selling Shareholder and not as to any other Selling Shareholder or
the Company),


 


are,
in each case, true and accurate in all respects and not misleading in any
respect and references to the “Warrantors” shall be construed accordingly.


 


6.2           Each of the Warrantors acknowledges that each
of Seymour Pierce and RBC is entering into this agreement in reliance on each
of the Warranties as given pursuant to Clause 6.1.


 


6.3           The Warranties given or referred to in this
clause 6 are given as at the date of this agreement and shall be deemed to be
repeated on Admission and shall remain in full force and effect notwithstanding
the completion of the subscription for the Placing Shares and the acquisition
of the Sale Shares, Admission or completion of all other matters and
arrangements referred to in or contemplated by this agreement.


 


6.4           Each of the Warrantors undertakes, in so far
as he is able, and in respect only of the Warranties given by such Warrantor,
to use all reasonable endeavours not to cause and not to permit any Specified
Event in relation to such Warranties to occur before the earlier of Admission
and the termination of this agreement.


 


6.5           Each of the Warrantors undertakes that he
shall notify each of Seymour Pierce and RBC promptly if, at any time prior to
Admission, he becomes aware that any of the Warranties is or has become untrue
or inaccurate or misleading in any respect, or would have been untrue or
inaccurate or misleading in any respect by reference to the facts and
circumstances then existing.


 


6.6           Without prejudice to the terms, conditions or
provisions of clause 5, if, at any time before Admission becomes effective,
Seymour Pierce or RBC receives notice pursuant to clause 6.5 or otherwise becomes
aware of any of the Warranties being untrue, inaccurate or misleading in any
respect or of any circumstances which would or is likely, in the reasonable
opinion of Seymour Pierce and/or RBC, to


 


15

















 


cause
any of the Warranties to become untrue, inaccurate or misleading in any respect
by reference to the facts then existing, Seymour Pierce and/or RBC may (without
prejudice to their right to terminate this agreement pursuant to clause 11)
require the Company, at its own expense, to make, or cause to be made, an
announcement and/or despatch a communication to potential subscribers for
Placing Shares or purchasers of Sale Shares, which announcement or
communication shall be approved by Seymour Pierce and RBC.


 


6.7           In this clause 6 and in Schedule 4 reference
to the knowledge, information, belief or awareness of the Company, any Director
or any Selling Shareholder shall, unless the context otherwise requires, be
deemed to include any knowledge, information, belief or awareness which such
person would have if he had made due and careful enquiries of the facts and
circumstances surrounding the relevant subject matter.


 


6.8           Each of the Warranties shall be construed
independently and (except where this agreement provides otherwise) shall not be
limited or restricted shall not be limited by reference to or inference from
the provisions of any other of the Warranties or any other provision of this
agreement.


 


6.9           The Company shall comply in all respects with
its respective obligations under the terms, conditions and provisions of
Schedule 7.


 


6.10         The
provisions of Schedule 5 shall apply in relation to the liability of the
Directors under this agreement, and of each of the Warrantors under the
Warranties.


 


6.11         If
Seymour Pierce or RBC becomes aware of any Claim:


 


(a)           they shall promptly notify the Warrantor or
Warrantors potentially liable under the Claim of such Claim and shall
thereafter (subject to being indemnified by the relevant Warrantors to their
reasonable satisfaction against all losses they may suffer or incur as a result
of so doing), subject to the requirements (if any) of their insurers, consult
with the relevant Warrantors regarding the conduct of the Claim, provide the
relevant Warrantors with such information and copies of such documents relating
to the Claim as such Warrantors may reasonably request and take into account
any reasonable requests of the relevant Warrantors in connection with conduct
but shall not be under any obligation to provide such Warrantors with a copy of
any document which is, or in the reasonable opinion of Seymour Pierce or RBC
is, likely to be privileged in the context of the Claim or to the extent that
it is subject to a bona fide duty of confidentiality or it would materially prejudice
any insurance cover to which Seymour Pierce or RBC may from time to time be
entitled; and


 


(b)           they agree that they will not without the
prior written consent of the relevant Warrantors (not to be unreasonably
withheld or delayed) settle or compromise or consent to the entry of any
judgement with respect to any pending or threatened claim save where:


 


(i)            such
settlement, compromise or consent includes an unconditional release of the
Company from all liability arising out of such Claim; or


 


(ii)           the defence
of the Claim recommended by the relevant Warrantors under clause 6.12(a) above
would, on the balance of probabilities, have no reasonable prospect of success;
or


 


(iii)          Seymour
Pierce and/or RBC, acting in good faith, reasonably determines that such claim
will, or is likely to, cause reputational damage to Seymour Pierce and/or RBC.


 


16

















 


7.             INDEMNITY


 


7.1           The Company, the Directors and the Selling
Shareholders shall not make any Claim, the Company and the Directors shall not
permit any other person to make any Claim and each of the Selling Shareholders
shall not permit any other person to make a claim on its behalf against any of
the Indemnified Persons to recover any loss, liability, demand, claim, cost,
charge, expenses (together “Losses” and
each a “Loss”) or damage suffered
or incurred by the Company, the Directors and the Selling Shareholders and/or
any of their Associates or any other person by reason of or arising out of the
performance by any Indemnified Person of its obligations or services under this
agreement unless the same shall arise from the negligence, wilful default or
fraud of any Indemnified Person which is Finally Determined, from a material
breach of the terms of this agreement by Seymour Pierce or RBC or from a
contravention by an Indemnified Person of the Prospectus Rules, the AIM Rules,
FSMA or any applicable law or regulation and, subject to clause 7.7, any
liability of an Indemnified Person is hereby limited accordingly.


 


7.2           Any liability which any Indemnified Person may
have to the Company, the Directors or the Selling Shareholders (but for this
clause 7.2) for any Loss suffered in connection with the provision of services
by such Indemnified Person under this agreement shall be reduced if such Loss
would be recoverable by the Company, the Directors or the Selling Shareholders
(as applicable) from another party but for an agreement which the Company, the
Directors or the Selling Shareholders had made or may make with that party which
limits its liability to the Company, the Directors or the Selling Shareholders,
provided that such reduction shall be limited to the extent that such agreement
has the effect of reducing the ability of the Indemnified Person to recover
under rights of contribution against that party which it would have had if such
agreement had not been entered into. If any Indemnified Person has paid to the
Company, the Directors or the Selling Shareholders an amount for which it is
not liable in accordance with this clause 7, such amount shall be repaid to the
Indemnified Person by the Company, the Directors or the Selling Shareholders
(as applicable).


 


7.3           Subject to clause 7.4 and 7.7, the Company
undertakes with each of Seymour Pierce and RBC (for themselves and as trustee
for each of the Indemnified Persons) promptly, fully and effectively to
indemnify, keep indemnified and hold harmless each of the Indemnified Persons
against all Losses, Claims and any other liability of whatsoever nature which
any of the Indemnified Persons may suffer or incur or which may be brought or
threatened against any of the Indemnified Persons by reason of or arising
directly or indirectly out of or attributable to or in connection with:


 


(a)           any failure by the Company or the Directors or
their agents, employees or professional advisers to comply with FSMA, the
Prospectus Rules, the AIM Rules or any other requirement of statute or
statutory regulation in relation to Admission or the Placing;


 


(b)           the Placing Documents not containing, or being
alleged not to contain, all information required to be stated in them FSMA, the
Prospectus Rules, the AIM Rules or any statement therein being, or being
alleged to be, or untrue, inaccurate, incomplete or misleading or not based on
reasonable grounds;


 


(c)           any misrepresentation or alleged
misrepresentation (by whomsoever made) contained in the Placing Documents or
any other document issued in connection with the Placing;


 


(d)           the carrying out or performance by Seymour
Pierce, RBC or an Indemnified Person of its duties, obligations and services
under or in connection with this agreement and otherwise in connection with the
Placing or Admission or the publication of the Admission Document, the Placing
Documents or any other document issued in connection with the Placing;


 


17














 


(e)                                  any breach or alleged breach of the laws or
regulations of any country resulting from the Placing or the distribution of
the Placing Documents in or to such country being a country in which such acts
would be illegal (which distribution Seymour Pierce and RBC confirm and
undertake to the Company that neither they nor any Indemnified Person shall
make or authorise); or


 


(f)                                    the sale of the Sale Shares,


 


including,
without prejudice to the generality of the above, all Losses which any
Indemnified Person may suffer or incur in investigating or disputing any Claim
and the costs and expenses incurred by any Indemnified Person in enforcing
their rights under this clause 7.


 


7.4                                 The indemnities contained in clause 7.3 shall
have effect so far as they are not prohibited under the AIM Rules or any
other applicable law, and shall not extend to any Claims or Losses to the
extent that the same are Finally Determined to arise from the fraud, negligence
or wilful default of any Indemnified Person (whether under this agreement or
otherwise) or any material breach by any Indemnified Person of, or failure in a
material respect by any Indemnified Person to comply with, the requirements of
this agreement (in the case of Seymour Pierce and RBC only) or (in the case of
any Indemnified Person) FSMA, the FSA Rules, the Prospectus Rules, the AIM Rules or
any provision of applicable law or regulation.


 


7.5                                 The indemnities contained in clause 7.3 shall
be in addition to any rights that any of the Indemnified Persons may have in
common law or otherwise and the provisions of this clause 7 shall remain in
full force and effect notwithstanding Admission or completion of the other
matters and arrangements referred to in or contemplated by this agreement.


 


7.6                                 The benefit of the indemnities contained in
this clause 7 are held by Seymour Pierce and RBC on trust for the Indemnified
Persons on the following basis:


 


(a)                                  Seymour Pierce and RBC may in their sole
discretion decide whether or not they enforce a right of an Indemnified Person
under the trust (and only they may decide the terms and conditions of that
enforcement) and investigate a matter, or give information to the relevant
Indemnified Person in connection with the trust; and


 


(b)                                 notwithstanding the trust, Seymour Pierce and
RBC may enter into an agreement, arrangement or transaction with the Company
(or any other party) without regard to the interests of the relevant
Indemnified Person and Seymour Pierce and RBC will not be liable to account to
the relevant Indemnified Person or any benefit realised by that agreement,
arrangement, transaction or dealing.


 


7.7                                 Nothing in this agreement shall operate to
limit or exclude any liability for or create an obligation to indemnify in
respect of any matter attributable to fraud, breach of any applicable laws
(including FSMA) relating to, or the rules or regulations of, or made
under or pursuant to, the regulatory system as defined in the FSA Rules or
in circumstances where the rules of the FSA or FSMA prohibit receipt by
such person of an indemnity.


 


7.8                                 Seymour Pierce and RBC shall, on becoming
aware of any action or claim or other matter in respect of which indemnity may
be sought by any Indemnified Persons pursuant to clause 7.3, give notice and
reasonable details thereof to the Company as soon as reasonably practicable
thereafter and thereafter keep the Company informed of all material matters
relating thereto.


 


18

















 


7.9                                 If Seymour Pierce, RBC or any other
Indemnified Person recovers from some other person any sum which compensates it
for any loss in respect of any matter giving rise to a Claim or any other claim
under this agreement, then either:


 


(a)                                  the amount payable by the Company or any other
Warrantor in respect of that Claim or claim shall be reduced by an amount equal
to the sum so recovered; or


 


(b)                                 if an amount shall already have been paid by
the Company or any other Warrantor in respect of that Claim or claim, there
shall be repaid to the Company or any other Warrantor an amount equal to the
amount so recovered or (if less) the amount of such payment.


 


7.10                           If Seymour Pierce or RBC become aware of any claim made or threatened
against it within the scope of the indemnity set out in this Clause 7, as
applicable, it shall promptly notify the Company thereof and shall thereafter
(subject to the Indemnified Person being indemnified and secured to their
reasonable satisfaction by the Company against all costs, charges, damages and
expenses the Indemnified Person may suffer or incur as the result of so doing),
subject to the requirements (if any) of the Indemnified Person’s insurers,
consult with the Company regarding the Indemnified Person’s conduct of the
claim and shall provide the Company with such information and copies of such
documents relating to the claim as the Company may reasonably require provided
that the Indemnified Person shall not be under any obligation to take into
account any requirements of the Company with a copy of any document which is,
or in the reasonable opinion of the Indemnified Person’s advisers, is likely to
be privileged in the context of the claim.


 


8.                                       SUPPLEMENTARY PROVISIONS -
WARRANTIES AND INDEMNITIES


 


8.1                                 Each of the Warranties and each of the
representations, warranties, undertakings and indemnities set out or referred
to in clause 7 shall remain in full force and effect notwithstanding the
completion of the subscription for the Subscription Shares, the transfer of the
Sale Shares, Admission or completion of all other matters and arrangements
referred to in or contemplated by this agreement and shall be in addition to,
and shall not be construed to limit, affect, or prejudice any other right or
remedy in common law or otherwise available to Seymour Pierce, RBC, any
Indemnified Person or any Placee.


 


8.2                                 Seymour Pierce, RBC or any Indemnified Person
or any Placee shall not be entitled to recover under any provision of this
agreement damages, reimbursement, compensation, restitution and/or indemnity
payments in respect of any loss or liabilities more than once in respect of the
same loss or liability.


 


8.3                                 Notwithstanding any rule of law or equity
to the contrary, any release, waiver or compromise or any other arrangement of
any kind whatsoever which Seymour Pierce and/or RBC may agree to or effect as
regards one of the Warrantors in connection with this agreement and/or any
agreement or document entered into pursuant to this agreement and, in
particular (but without limitation), the representations, warranties,
undertakings and the indemnities set out or referred to in this agreement shall
not limit, prejudice or affect its rights, powers or remedies as regards any
other person.


 


8.4                                 For the avoidance of doubt, the indemnities
contained in clause 7 are in addition to and not in substitution for any and
all indemnities to which the Indemnified Persons are entitled at law as agents
of the Company or which are contained in the Seymour Pierce Engagement Letter,
the RBC Engagement Letter or the Nomad and Joint Broker Agreement.


 


8.5                                 Nothing in this agreement, the Seymour Pierce
Engagement Letter, the RBC Engagement Letter or the Nomad and Joint Broker
Agreement shall operate to limit or exclude any liability for or create an obligation
to indemnify in respect of any matter attributable to either fraud or breach of
any applicable laws (including FSMA) relating to, or the rules or
regulations of, or made under or pursuant to, the


 


19

















 


regulatory
system as defined in the FSA Rules or in circumstances where the rules of
the FSA or FSMA prohibit receipt by such person of an indemnity.


 


9.                                       FEES, COMMISSIONS AND
EXPENSES


 


9.1                                 In consideration of Seymour Pierce’s services
under this agreement, the Company shall upon, and subject to, Admission pay to
Seymour Pierce:


 


(a)                                  a corporate finance fee of $500,000 (less any
amounts already paid by the Company to Seymour Pierce in fees under the Seymour
Pierce Engagement Letter) (the “Corporate
Finance Fee”) for its
corporate finance advice in connection with Admission and the Placing, billable
upon Admission and, subject to clause 9.4, payable out of the gross proceeds of
the Placing within 5 Business Days of Admission;


 


(b)                                 a broking commission of 2 per cent on the
aggregate subscription price of the Subscription Shares (at the Placing Price)
and the aggregate sale price of the Sale Shares (at the Placing Price) that it
and RBC procure Placees for billable upon Admission and, subject to clause 9.4,
payable out of the gross proceeds of the Placing within 5 Business Days of
Admission;


 


(c)                                  a sum equal to the amount of stamp duty and/or
stamp duty reserve tax and/or any other tax payable by the Placees which have
purchased Sale Shares; and


 


(d)                                 any applicable VAT arising in respect of any
supply made by Seymour Pierce to the Company or the Selling Shareholders
pursuant to this agreement,


 


provided
that no part of the Corporate Finance Fee shall be payable in the event that
either the Company or Seymour Pierce determines not to proceed with the Placing
as a result of:


 


(i)                                     Seymour Pierce terminating this agreement; or


 


(ii)                                  Seymour Pierce breaching any of its material
obligations under this agreement, or the Seymour Pierce Engagement Letter or
the Nomad and Joint Broker Agreement; or


 


(iii)                               Seymour Pierce and RBC together failing to
secure commitments under Placing Letters to raise at least $50 million,


 


and
provided that, in the event that the Company determines not to proceed with the
Placing other than as a result of (i), (ii) or (iii) above where
Seymour Pierce and RBC together have has secured commitments under Placing
Letters to raise at least $50 million but less than $100 million, the Corporate
Finance Fee shall be proportionately reduced.


 


9.2                                 In consideration of RBC’s services under this
agreement, the Company shall upon, and subject to, Admission pay to RBC:


 


(a)                                  a broking fee of £125,000 (less any amounts
already paid by the Company to RBC in fees under the RBC Engagement Letter)
(the “Broking Fee”) for its advice in connection with
Admission and the Placing, billable upon Admission and, subject to clause 9.4,
payable out of the gross proceeds of the Placing within 5 Business Days of
Admission;


 


(b)                                 a broking commission of 2 per cent on the
aggregate subscription price of the Subscription Shares (at the Placing Price)
and the aggregate sale price of the Sale Shares (at the Placing Price) that it
and Seymour Pierce procure Placees for, billable upon Admission and payable,


 


20

















 


subject
to clause 9.4, out of the gross proceeds of the Placing within 5 Business Days
of Admission;


 


(c)                                  a sum equal to the amount of stamp duty and/or
stamp duty reserve tax and/or any other tax payable by the Placees which have purchased
Sale Shares; and


 


(d)                                 any applicable VAT arising in respect of any
supply made by RBC to the Company or the Selling Shareholders pursuant to this
agreement,


 


provided
that no part of the Corporate Finance Fee shall be payable in the event that
either the Company or RBC determines not to proceed with the Placing as a
result of:


 


(i)                                     RBC terminating this agreement; or


 


(ii)                                  RBC breaching any of its material obligations
under this agreement or the RBC Engagement Letter; or


 


(iii)                               Seymour Pierce and RBC together failing to
secure commitments under Placing Letters to raise at least $50 million,


 


and
provided that, in the event that the Company determines not to proceed with the
Placing other than as a result of (i), (ii) or (iii) above where
Seymour Pierce and RBC together have secured commitments under Placing Letters
to raise at least $50 million but less than $100 million, the Corporate Finance
Fee shall be proportionately reduced.


 


9.3                                 The Company shall also pay all reasonable and
proper costs, charges and expenses of, or incidental to, the Placing, Admission
and arrangements referred to or contemplated by this agreement, including (but
without limitation) all reasonably and properly incurred fees and expenses
payable in connection with the Placing and Admission, expenses of the
Registrars, advertising expenses, postage, accountancy and other professional
fees and expenses, including the legal expenses of the solicitors to Seymour
Pierce and RBC (which have been capped at an aggregate amount of US$200,000 for
Hunton & Williams) and all printing costs incurred in connection with
the Placing and Admission and any VAT thereon provided that Seymour Pierce or
RBC shall have obtained the prior written consent of the Company in provided to
any single or related expense in excess of US$5,000.


 


9.4                                 The Company authorises Seymour Pierce and RBC
to retain out of the proceeds of the Placing sufficient monies to settle all
commissions, fees, costs, charges and expenses payable by it pursuant to
clauses 9.1, 9.2 and 9.3 and all stamp duty or stamp duty reserve tax or other
taxes payable by Placees in relation to the transfer of or agreement to
transfer any of the Sale Shares and to pay the same on its behalf. In any
event, the Company shall, within 5 Business Days of submission of copy
invoices, reimburse to Seymour Pierce and RBC the amount of any such costs, charges
and expenses as aforesaid which Seymour Pierce and RBC may properly and
reasonably have paid but not been reimbursed in respect thereof.


 


9.5                                 Notwithstanding that Seymour Pierce and RBC
are acting as agent for the Company and the Selling Shareholders in connection
with the Placing it may retain any commissions, fees or other amounts payable
to it as are referred to in this agreement for its own use and benefit.


 


10.                                          ANNOUNCEMENTS


 


10.1                           Save as provided in clause 10.2, other than
the Placing Documents, the Company, each of the Selling Shareholders and each
of the Directors undertakes with Seymour Pierce that no announcement or 


 


21

















 


communication
for general public release concerning the Company, which is or may be material
in the context of the Placing or Admission, may be made or despatched between
the date of this agreement and the date falling six months after the date of
Admission (inclusive) without prior consultation, to the extent reasonably
practicable, with Seymour Pierce.


 


10.2                         The provisions of clause 10.1 shall not apply to any public announcement
or communication if and to the extent that it is required by applicable law or
regulation or by the London Stock Exchange or under the AIM Rules, provided
that prior to the making or despatch of any public announcement or
communication under this clause 10.2 the Company shall (insofar as reasonably
practicable) consult with Seymour Pierce as to the content, timing and manner
of making or despatch of the public announcement or communication and the
Company shall take into account all reasonable requirements of Seymour Pierce
in relation to the public announcement or communication.


 


10.3                         The Company and the Directors shall use all reasonable endeavours to
procure (to the extent that they are reasonably able to) that Associates of the
Company observe the restrictions set out in clause 10.1 as if they were parties
to this agreement.


 


11.                                 TERMINATION


 


11.1                           If before Admission it shall come to the
notice of Seymour Pierce or RBC that:


 


(a)                                  any statement contained in the Placing
Documents has become or been discovered to be untrue, incorrect or misleading
in any respect which Seymour Pierce and/or RBC considers in its reasonable
opinion to be material; or


 


(b)                                 matters have arisen or have been discovered
which would, if the Placing Documents were to be issued at that time,
constitute in the reasonable opinion of Seymour Pierce and/or RBC a material
omission from them; or


 


(c)                                  there has been a breach (by any party other
than Seymour Pierce or RBC) of any of the Warranties or of any other term,
condition or provision of this agreement, the Seymour Pierce Engagement Letter,
the RBC Engagement Letter or the Nomad and Joint Broker Agreement which Seymour
Pierce and/or RBC considers to be material; or


 


(d)                                 a Specified Event has occurred; or


 


(e)                                  there are any facts or circumstances giving
rise to the entitlement on the part of Seymour Pierce, RBC or an Indemnified
Person to make a claim under any of the indemnities in clause 7 which Seymour
Pierce and/or RBC reasonably considers to be material; or


 


(f)                                    the Company will be required to produce a
Supplementary Admission Document pursuant to clause 5.1; or


 


(g)                                 the Company or any of the Directors shall have
failed to comply with their obligations under this agreement, the Seymour
Pierce Engagement Letter, the RBC Engagement Letter, the Nomad and Broker
Agreement, the Act, FSMA, the Prospectus Rules or the AIM Rules in
any respect which Seymour Pierce and/or RBC reasonably considers to be
material,


 


Seymour Pierce or RBC will immediately notify the
Company of that fact and clause 11.3 shall then apply.


 


11.2                           If following the date of this agreement but
before Admission:


 


22

















 


(a)                                  there shall have been, occurred, happened or
come into effect any event or omission which in the reasonable opinion of
Seymour Pierce and/or RBC is or will be or may be materially prejudicial to the
Company, to Admission or to the Placing; or


 


(b)                                 there shall have occurred any act of
terrorism, outbreak of hostilities, change in national or international
financial, monetary, economic, political or market conditions which in the
reasonable opinion of Seymour Pierce and/or RBC is or will or may be materially
prejudicial to the Company, to Admission or to the Placing,


 


then
Seymour Pierce and/or RBC, having first consulted with the Company may give, as
soon as practicable, notice of that matter to the Company, in which case clause
11.3 shall apply.


 


11.3                           Where this clause 11.3 applies, Seymour Pierce
and/or RBC may, in their absolute discretion:


 


(a)                                  allow the Placing to proceed on the basis of
the Placing Documents subject, if Seymour Pierce and/or RBC so requires, to the
publication of a Supplementary Admission Document and/or to any relevant
requirements of the London Stock Exchange, the Prospectus Rules and/or the
AIM Rules; or


 


(b)                                 give notice (which notice may be given orally
or in writing and clause 16 shall not apply to any notice given under this
clause 11.3) to the Company prior to Admission to terminate this agreement.


 


11.4                           If any notice is given by Seymour Pierce or
RBC to the Company pursuant to clause 11.3(b) Seymour Pierce shall, on behalf
of the Company, withdraw any application to the London Stock Exchange for
Admission.


 


11.5                           If this agreement terminates under clause 2.3
or is terminated under clause 11.3(b), no party to this agreement shall have
any claim against any other party for costs, damages, compensation or otherwise
except that:


 


(a)                                  termination of this agreement shall be without
prejudice to any accrued rights or obligations of any of the parties under this
agreement (including any breach of any provision of this agreement which
accrued prior to its termination);


 


(b)                                 the Company shall pay the costs and expenses
specified in, and subject to, clause 9;


 


(c)                                  the provisions of this clause 11 and clauses
1, 2, 6, 7, 8, 9, 12, 13, 14 and 16 to 23 shall remain in full force and effect
notwithstanding termination of this agreement.


 


12.                                 WITHHOLDING AND GROSSING-UP


 


12.1                           All sums payable to any Indemnified Person
under this agreement shall be paid free and clear of all deductions or
withholding unless the deduction or withholding is required by law, in which
event the relevant person shall pay such additional amount as shall be required
to ensure that the net amount received by the Indemnified Person (after taking
account of any tax credits or rebates available to such Indemnified Person
which result from a payment which includes any additional amount payable
pursuant to this clause 12.1) will equal the full amount which would have been
received by it had no such deduction or withholding been made.


 


12.2                           If HM Revenue & Customs or any other
taxing authority brings into charge to tax any sum payable to any Indemnified
Person by way of reimbursement or indemnity under the terms of this agreement
then


 


23

















 


the
amount so payable shall be grossed up by such amount as (after taking account
of any tax credits or rebates available to such Indemnified Person as a result
of the matter giving rise to the relevant payment) will ensure that after
deduction of the tax so chargeable there shall be left a sum equal to the
amount that would otherwise be payable under this agreement as a result of such
reimbursement or indemnity.


 


13.                                 TIME OF THE ESSENCE


 


Save
as otherwise expressly provided, time is of the essence to every obligation of
this agreement and any agreement amending or substituting its terms.


 


14.                                 WAIVER


 


14.1                           A waiver of any term, provision or condition
of, or consent granted under, this agreement shall be effective only if given
in writing and signed by the waiving or consenting party and then only in the
instance and for the purpose for which it is given.


 


14.2                           No failure or delay on the part of any party
in exercising any right, power or privilege under this agreement shall operate
as a waiver thereof, nor shall any single or partial exercise of any such
right, power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.


 


14.3                           No breach of any provision of this agreement
shall, be waived or discharged except with the express written consent of the
parties.


 


14.4                           The rights and remedies herein provided are
cumulative with and not exclusive of any rights or remedies provided by law.


 


15.                                 INVALIDITY AND SEVERABILITY


 


15.1                           If any provision of this agreement is or
becomes (whether or not pursuant to any judgment or otherwise) invalid, illegal
or unenforceable in any respect under the law of any jurisdiction:


 


(a)                                  the validity, legality and enforceability
under the law of that jurisdiction of any other provision; and


 


(b)                                 the validity, legality and enforceability
under the law of any other jurisdiction of that or any other provision,


 


shall
not be affected or impaired in any way thereby.


 


15.2                           If any provision of this agreement shall be
held to be void or illegal, invalid or unenforceable, in whole or in part, for
any reason whatsoever, such provision or part shall to that extent be deemed
not to form part of this agreement but the legality, validity and
enforceability of the remaining provisions of this agreement shall not be
affected.


 


16.                                 NOTICES


 


16.1                           Any notice, demand or other communication
given or made under or in connection with the matters contemplated by this
agreement shall be in writing and shall be delivered personally or sent by
facsimile or prepaid first class post (air mail if posted to or from a place
outside the United Kingdom):


 


In
the case of the Company and the Directors to:


 


24

















 


Address:                                               1331 Lamar, Suite 1450, Houston, Texas
77010, USA


 


Fax:                                                                           +1
713 650 1246


 


Attention:                                         Chief Financial Officer


 


In
the case of Seymour Pierce to:


 


Address:                                               20 Old Bailey, London EC4M 7EN


 


Fax:                                                                           +44 207 107 8100


 


Attention:                                         Jonathan Wright


 


In
the case of RBC to:


 


Address:                                               71 Queen Victoria Street, London, EC4V 4DE


 


Fax:                                                                           +44 207 029 7924


 


Attention:                                         Andrew Smith


 


In
the case of any Selling Shareholder, to such Selling Shareholder at the address
set forth below its name in Schedule 2 hereto;


 


and
shall be deemed to have been duly given or made as follows:


 


(a)                                  if personally delivered, upon delivery at the
address of the relevant party;


 


(b)                                 if sent by first class post, two Business Days
after the date of posting;


 


(c)                                  if sent by air mail, five Business Days after
the date of posting; and


 


(d)                                 if sent by facsimile, when confirmation of its
uninterrupted transmission has been recorded by the sender’s fax machine,


 


provided
that if, in accordance with the above provision, any such notice, demand or
other communication would otherwise be deemed to be given or made after 5.00
p.m. such notice, demand or other communication shall be deemed to be given or
made at 9.00 a.m. on the next Business Day.


 


16.2                           A party may notify the other party to this
agreement of a change to its name, relevant addressee, address or facsimile
number for the purposes of clause 16.1 provided that such notification shall
only be effective:


 


(a)                                  on the date specified in the notification as
the date on which the change is to take place; or


 


(b)                                 if no date is specified or the date specified
is less than five Business Days after the date on which notice is given, the
date falling five Business Days after notice of any such change has been given.


 


25

















 


17.                                 COUNTERPARTS


 


17.1                           This agreement may be executed in any number
of counterparts which together shall constitute one agreement. Any party may
enter into this agreement by executing a counterpart and this agreement shall
not take effect until it has been executed by all parties.


 


17.2                           Delivery of an executed counterpart of a
signature page by facsimile transmission shall take effect as delivery of
an executed counterpart of this agreement. If such method is adopted, without
prejudice to the validity of such agreement, each party shall provide the
others with the original of such page as soon as reasonably practicable
thereafter.


 


18.                                 ENTIRE AGREEMENT


 


18.1                           Each of the parties (on behalf of itself and
as agent for each of its Related Persons) acknowledges and agrees with the
other parties (each party acting on behalf of itself and as agent for each of
its Related Persons) that:


 


(a)                                  this agreement together with the Seymour
Pierce Engagement Letter, the RBC Engagement Letter, the Nomad and Joint Broker
Agreement and any other documents referred to in such agreements (together the “Transaction Documents”) constitute the entire and only agreement and
understanding between the
parties and their Related Persons in connection with Admission, the Placing and
the subject matter of the Transaction Documents; and


 


(b)                                 neither they nor any of their Related Persons
have been induced to enter into any Transaction Document in reliance upon, nor
have they been given, any warranty, representation, statement, assurance,
covenant, agreement, undertaking, indemnity or commitment of any nature
whatsoever other than as are expressly set out in the Transaction Documents
and, to the extent that any of them have been, they (acting on their behalf and
as agent for each of their Related Persons) unconditionally and irrevocably
waive any claims, rights or remedies which any of them might otherwise have had
in relation thereto,


 


PROVIDED
THAT the provisions of this clause 18.1 shall not exclude any liability which
any of the parties or, where appropriate, their Related Persons would otherwise
have to any other party or, where appropriate, to any other party’s Related
Persons or any right which any of them may have to rescind this agreement in
respect of any statements made fraudulently by any of them prior to the
execution of this agreement or any rights which any of them may have in respect
of fraudulent concealment by any of them.


 


18.2                         The terms and conditions set out in the Schedules to the Seymour Pierce
Engagement Letter and the RBC Engagement Letter shall apply to the appointment
of Seymour Pierce and RBC in relation to the Placing and Admission except to
the extent expressly provided otherwise in this agreement or to the extent
there is any conflict between such terms and conditions and the provisions of
this agreement, in which event the provisions of this agreement shall prevail.


 


18.3                           This agreement may be varied only by a document signed by all of the
parties and expressly incorporating the terms of this agreement as varied into
that document.


 


19.                                 CONFIDENTIALITY


 


19.1                           Seymour Pierce and RBC agree that they shall
not and shall procure that the Seymour Pierce Group and RBC Group shall not use
any information obtained from the Company for any unlawful purpose and


 


26

















 


that
they shall keep confidential and not to disclose any material non-public
information to any person, except that Seymour Pierce and RBC may disclose
information:


 


(a)                                  which becomes publicly available other than by
reason of wrongful disclosure by Seymour Pierce Group or RBC Group;


 


(b)                                 which its legal advisers conclude after
consultation, to the extent practicable, with the Company and its legal
advisers, is required to be disclosed by law or rule or regulation or
pursuant to any court or administrative order or ruling or in any pending legal
or administrative proceeding or investigation or the requirement of any
regulatory authority; and


 


(c)                                  to its employees, agents, legal and other
professional advisers and, with the consent of the Company, to any other person
that Seymour Pierce and RBC considers necessary or desirable in order to
perform any of the services contemplated herein and the Company acknowledges
that it will not unreasonably withhold or delay such consent.


 


20.                                 ASSIGNMENT


 


20.1                           Subject to clause 20.2, no party to this agreement may assign, transfer
or charge all or any of any other party’s obligations nor any of its rights or
benefits arising under this agreement without the prior written consent of all
the other parties.


 


20.2                           Seymour Pierce’s and RBC’s rights and
obligations under this agreement may be assigned or transferred to any member
of the Seymour Pierce Group or RBC Group duly authorised to carry out the
services provided by Seymour Pierce or RBC under this agreement so long as
Seymour Pierce or RBC gives written notice of such transfer or assignment to
the Company. If any such transfer or assignment takes place, and in
consideration of Seymour Pierce or RBC procuring an undertaking from such
transferee/assignee to be bound by the terms of this agreement, the Company
will re-execute this agreement if required to do so by Seymour Pierce or RBC
and the Company hereby irrevocably appoints Seymour Pierce or RBC as its agent
for such purpose.


 


21.                                      RIGHTS OF THIRD PARTIES


 


21.1                           Each Indemnified Person shall have the right
under the Contracts (Rights of Third Parties) Act 1999 to enforce its rights
against the Company under clause 7 provided that an Indemnified Person (other
than Seymour Pierce or RBC) must obtain the written consent of Seymour Pierce
and RBC before it may bring proceedings to enforce the terms of clause 7 and,
save to the extent notified in writing by Seymour Pierce and RBC to the
relevant Indemnified Person, Seymour Pierce and RBC (without obligation) shall
have the sole conduct of any such action on behalf of the Indemnified Person.


 


21.2                           Save as provided in clause 21.1, a person who
is not a party to this agreement shall have no rights under the Contracts
(Rights of Third Parties) Act 1999 to enforce any term of this agreement but
this does not affect any right or remedy of a third party which exists or is
available apart from that Act.


 


21.3                           Notwithstanding the provisions of clause 21.1,
any rights arising by virtue of the Contracts (Rights of Third Parties) Act
1999 may be rescinded, terminated or varied in any way or at any time by the
parties to this agreement without the consent of any Indemnified Person.


 


27














 


22.           MISCELLANEOUS


 


22.1         Storage of Information


 


Seymour
Pierce and RBC may process, store and retain by computer or otherwise any
information (including personal data) obtained about the Company as a
consequence of this and any other agreement which the Company, Seymour Pierce
and RBC may enter into. Seymour Pierce and RBC may share this information with
other divisions or subsidiaries within the Seymour Pierce Group or RBC Group
respectively to the extent that it reasonably believes that such dissemination
is necessary or suitable in connection with this agreement. All collated
information, including databases on which such information is stored, held by
Seymour Pierce, other members of the Seymour Pierce Group, RBC and other
members of the RBC Group is and shall remain the property of Seymour Pierce and
RBC provided that nothing in this clause 22.1 shall derogate from the right of
the Company to reasonably seek access to such materials.


 


22.2         Seymour Pierce and RBC acting
for the Company and Selling Shareholders


 


The
parties acknowledge that Seymour Pierce and RBC are acting solely for the
Company and the Selling Shareholders and no one else in respect of Admission,
the Placing and the matters contemplated under this agreement and accordingly
that Seymour Pierce and RBC will not be responsible to anyone other than the
Company and the Selling Shareholders for providing the protections afforded to
its clients or for providing advice in relation to or in connection with
Admission, the Placing and such matters.


 


22.3         Seymour Pierce and RBC not
providing legal advice


 


The
Company and each of the Directors acknowledges that Seymour Pierce and RBC are
not responsible for providing any legal advice to the Company, the Selling
Shareholders or any of the Directors in respect of any applicable laws and
regulations and the Company, the Selling Shareholders and each of the Directors
undertakes to obtain appropriate legal advice in respect of these matters.


 


22.4         Nominated Adviser’s services
subject to FSA Rules


 


The
Company acknowledges that all services provided by Seymour Pierce pursuant to
this agreement are subject to the FSA Rules. Seymour Pierce is authorised and
regulated by the FSA. In providing its services, Seymour Pierce has classified
the Company as a “Professional Client” within
the meaning of the FSA Rules.


 


22.5         Damages


 


The
parties agree that damages may not be an adequate remedy for a breach of this
agreement. Accordingly, subject to the discretion of the court, each of the
parties agrees that the remedies of injunction and specific performance may be
appropriate to deal with any actual or potential breach of this agreement (but
this does not limit the right of a person to take any other action in respect
of an actual or potential breach of this agreement).


 


22.6         Set off


 


All
sums payable to Seymour Pierce, RBC or any Indemnified Person under the terms
of this agreement shall be paid promptly without demand, deduction or set off.


 


28

















 


23.           GOVERNING LAW AND JURISDICTION


 


23.1         This
agreement (and any dispute, controversy, proceedings or claim of whatever
nature arising out of or in any way relating to this agreement or its
formation) shall be governed by and construed in accordance with English law.


 


23.2         Each of the Company, the Selling Shareholders and the Directors
irrevocably agrees for the exclusive benefit of Seymour Pierce and RBC that the
courts of England shall have exclusive jurisdiction to hear and decide any
suit, action or proceedings, and/or to settle any disputes which may arise out
of or in connection with this agreement or its formation (respectively,
“Proceedings” and “Disputes”) and, for these purposes, each party irrevocably
submits to the jurisdiction of the courts of England.


 


23.3         Nothing in this clause 23 shall (or shall be construed so as to) limit
the rights of Seymour Pierce and RBC to take Proceedings against any of the
Company, the Selling Shareholders or the Directors in the courts of any country
in which any of the Company or the Directors has assets or in any other court
of competent jurisdiction, nor shall the taking of Proceedings in any one or
more jurisdictions preclude the taking of proceedings in any other jurisdiction
(whether concurrently or not), if and to the extent permitted by applicable
law.


 


23.4         Without prejudice to any other permitted mode of service the parties
agree that service of any claim form, notice or other document (“Documents”)  for the purpose of any Proceedings begun in England shall be duly served
upon it if delivered personally or sent by registered post, in the case of:


 


(a)                                  the Company or the Selling Shareholders or any
of the Directors to King & Spalding International LLP (marked for the
attention of Jonathan Martin);


 


(b)                                 Seymour Pierce to 20 Old Bailey, London, EC4M
7EN (marked for the attention of Jonathan Wright); and


 


(c)                                  RBC to 71 Queen Victoria Street, London, EC4V
4DE (marked for the attention of Andrew Smith),


 


or
such other person and address in England and/or Wales as the Company (on behalf
of the Company and the Directors) or the Selling Shareholders shall notify
Seymour Pierce and RBC in writing or vice versa from time to time. Nothing
contained in this clause 23.4 affects the right to serve Documents in another
manner permitted by law.


 


IN WITNESS whereof this agreement has been executed and delivered as a deed on the
date first above written.


 


29

















 


SCHEDULE 1


 


The Directors


 


	
  Name and address (1)

  	
   

  	
  Residential Address (2)

  
	
   

  	
   

  	
   

  
	
  James
  Perry Bryan, Jr.

  	
   

  	
  2121
  Kirby Drive, #22 South

  
	
  1331
  Lamar

  	
   

  	
  Houston,
  Texas 77019

  
	
  Suite 1450

  	
   

  	
   

  
	
  Houston,
  Texas 77010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  John
  James Lendrum III

  	
   

  	
  534
  Ramblewood

  
	
  1331
  Lamar

  	
   

  	
  Houston,
  Texas 77079

  
	
  Suite 1450

  	
   

  	
   

  
	
  Houston,
  Texas 77010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  John
  William Sharp Bentley

  	
   

  	
  Denswood

  
	
  1331
  Lamar

  	
   

  	
  Brightling
  Road

  
	
  Suite 1450

  	
   

  	
  Robertsbridge

  
	
  Houston,
  Texas 77010

  	
   

  	
  East
  Sussex

  
	
   

  	
   

  	
  RN32
  SE4

  
	
   

  	
   

  	
   

  
	
  Judy
  Ley Allen

  	
   

  	
  3834
  Inwood Drive

  
	
  1331
  Lamar

  	
   

  	
  Houston,
  Texas 77019

  
	
  Suite 1450

  	
   

  	
   

  
	
  Houston,
  Texas 77010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Richard
  Kelly Plato

  	
   

  	
  4024
  Sul Ross Street

  
	
  1331
  Lamar

  	
   

  	
  Houston,
  Texas 77027

  
	
  Suite 1450

  	
   

  	
   

  
	
  Houston,
  Texas 77010

  	
   

  	
   

  



 


30

















 


SCHEDULE 2


 


The Selling Shareholders


 




	
  Name

  	
   

  	
  Number of Common Shares being sold

  
	
  NGP
  Capital Resources Company 

  1221
  McKinney, Suite 2975

  Houston,
  Texas 77010

   

  Attn:
  R. Kelly Plato

  	
   

  	
  1,554,002

  
	
   

  	
   

  	
   

  
	
  RTR,
  LLC

  c/o
  Reservoir Capital Group 

  650
  Madison Avenue, 24th Floor
  

  New
  York, New York 10022

   

  Attn:
  Adeel Qalbani/Gregg Zeitlin

  	
   

  	
  777,001

  
	
   

  	
   

  	
   

  
	
  Permian
  Basin Convert, L.L.C.

  c/o
  Farallon Capital Management, L.L.C.

  One
  Maritime Plaza, Suite 2100

  San
  Francisco

  California
  94111

   

  Attn:
  Michael Linn

  	
   

  	
  777,001

  
	
   

  	
   

  	
   

  
	
  D.B.
  Zwirn Special Opportunities Fund, L.P.

  c/o
  D.B. Zwirn Special Opportunities Fund, L.P.

  745
  Fifth Avenue, 18th Floor

  New
  York, New York 10151

   

  Attn:
  Damon Putman and Todd Dittmann

  	
   

  	
  777,001

  
	
   

  	
   

  	
   

  
	
  SDG
  Holdings, LLC

  1803
  E. Pavilion Place 

  Montrose,
  Colorado 81401

   

  Attn:
  Douglas H. Kiesewetter

  	
   

  	
  1,165,501

  
	
   

  	
   

  	
   

  
	
  HRB
  Oil & Gas, Ltd.

  6310
  Lemmon Ave., Suite 222 

  Dallas,
  Texas 75209

   

  Attn:
  Margaret B. Vonder Hoya

  	
   

  	
  777,001

  
	
   

  	
   

  	
   

  
	
  Michael
  DeGroote

  Westbury
  Bermuda, Ltd. 

  Victory
  Hall

  11
  Victoria Street

  P.
  O. Box HM1065

  Bermuda

   

  Attn:
  Bob Martyn

  	
   

  	
  777,001

  






 


31

















 




	
  Name

  	
   

  	
  Number of Common Shares being sold

  
	
  H.
  Wayne Huizenga, Jr. 

  Huizenga
  Holdings, Inc. 

  450
  East Las Olas Boulevard, Suite 1500

  Fort
  Lauderdale, Florida 33301

  	
   

  	
  194,250

  
	
   

  	
   

  	
   

  
	
  JVAH
  Limited Partnership 

  119
  N. 6th Street, Suite 203 

  Alpine,
  Texas 79830

   

  Attn:
  Jeff Haynes

  	
   

  	
  388,500

  
	
   

  	
   

  	
   

  
	
  Beeson
  Sirota Partnership 

  550
  Waugh Dr.

  Houston,
  Texas 77019

   

  Attn:
  John Beeson

  	
   

  	
  777,001

  
	
   

  	
   

  	
   

  
	
  Patricia
  Chambers

  Chambers
  Interests

  301
  Commerce Street Suite 3025

  Fort
  Worth, Texas 76102

   

  Attn:
  Tom Chambers

  	
   

  	
  97,125

  
	
   

  	
   

  	
   

  
	
  TDC
  Family, L.P.

  Chambers
  Interests

  301
  Commerce Street, Suite 3025 

  Fort
  Worth, Texas 76102

   

  Attn:
  Tom Chambers

  	
   

  	
  97,125

  
	
   

  	
   

  	
   

  
	
  Christopher
  Vonder Hoya 

  4401
  Bordeaux

  Dallas,
  Texas 75205

  	
   

  	
  194,250

  
	
   

  	
   

  	
   

  
	
  Harbor
  Hill Interests LP

  1331
  Lamar, Suite 1450 

  Houston,
  Texas 77010-3039

   

  Attn:
  William H. Hall, III

  	
   

  	
  38,850

  
	
   

  	
   

  	
   

  
	
  Kenneth
  P. Kramer

  Bonanza
  Creek Energy Resources LLC 

  1331
  Lamar,

  Suite 1135

  Houston,
  Texas 77010

  	
   

  	
  19,425

  
	
   

  	
   

  	
   

  
	
  G.
  Alan Rafte

  Bracewell &
  Giuliani

  711
  Louisiana, Suite 2900

  Houston,
  Texas 77002

  	
   

  	
  29,138

  






 


32

















 




	
  Name

  	
   

  	
  Number of Common Shares being sold

  
	
  Roland
  Sledge

  VAALCO
  Energy Inc.

  4600
  Post Oak Place, Suite 309

  Houston,
  Texas 77027

  	
   

  	
  29,138

  
	
   

  	
   

  	
   

  
	
  The
  Goff Foundation

  5318
  Braeburn Dr. 

  Bellaire,
  Texas 77401

   

  Attn:
  Tim Goff

  	
   

  	
  62,160

  
	
   

  	
   

  	
   

  
	
  Mary
  Jon Bryan

  670
  Dona Ana Road SW

  Deming,
  New Mexico 88030

   

  Attn:
  Sue Ann Craddock

  	
   

  	
  155,400

  






 


33

















 


SCHEDULE 3


 


Documents


 


1                                          A copy of the Admission Document and the Press
Announcement each signed by (or on behalf of) each of the Directors.


 


2                                          A copy of the Application Form signed by
(or on behalf of) each of the Directors.


 


3                                          A signed original of the Legal Due Diligence
Report.


 


4                                          A signed original of the Long Form Report.


 


5                                          A signed original of the Short Form Report.


 


6                                          A signed original of the Working Capital
Report.


 


7                                          A signed original of the written consent of
the Reporting Accountants to the inclusion in the Admission Document of the
Short Form Report in the form and context in which they are included in
the Admission Document.


 


8                                          Original signed copies of the letters
addressed to the Directors and, Seymour Pierce in such form as shall previously
have been approved by Seymour Pierce, from the Reporting Accountants:


 


(a)                                  confirming the accuracy of certain financial
information in the Admission Document;


 


(b)                                 commenting on the working capital projections
of the Company and giving comfort in relation to the working capital
projections of the Directors, together with an original signed copy of the
working capital projections of the Directors;


 


(c)                                  in respect of the matters to be confirmed
pursuant to rule 20 of, and Schedule Two to, the AIM Rules For
Nominated Advisers;


 


(d)                                 in
respect of the summary of taxation set
out in the Admission Document;


 


(e)                                  in respect of financial reporting procedures;
and


 


(f)                                    no significant change letters in respect of
the Company.


 


9                                          An original of the Verification Notes prepared
in connection with the Admission Document duly signed by each Director and the
Company.


 


10                                    An original signed Responsibility Letter and
Power of Attorney from each of the Directors.


 


11                                    For each Director, an original of his duly
signed Director’s Declaration.


 


12                                    A certified copy of the signed service
contracts and letters of appointment for each Director.


 


13                                    A certified copy of the Certificate of
Formation and the Bylaws of the Company.


 


14                                    A certified copy of each of the Board
Resolutions.


 


34

















 


15                                    Signed originals of the letters, in such form
as shall previously have been approved by Seymour Pierce:


 


(a)                                  written by the Company to Seymour Pierce in
respect of financial reporting procedures;


 


(b)                                 written by the Company to Seymour Pierce in
respect of the working capital forecast;


 


(c)                                  written by King & Spalding International
LLP to Seymour Pierce in respect of the matters to be confirmed pursuant to rule 20
of, and Schedule Two to, the AIM Rules For Nominated Advisers; and


 


(d)                                 written by the Company to Seymour Pierce in
respect of the matters to be confirmed pursuant to rule 20 of, and
Schedule Two to, the AIM Rules For Nominated Advisers.


 


16                                    A certified copy of the Registrars’
Agreements.


 


17                                    Signed originals of each of the Lock-in and
Orderly Marketing Agreements.


 


18                                    Signed originals of each of the Selling
Shareholders’ Power of Attorney.


 


19                                    Share certificates in respect of each of the
Sale Shares.


 


20                                    A certified copy of the Company’s share scheme
more particularly described in paragraph 9(a) of Part VI of the Admission
Document.


 


21                                    An original of the good standing opinion to be
issued by Haynes and Boone, LLP in respect of the Company.


 


35














 


SCHEDULE 4


 


The Warranties


 


Part A (Warranties of the Company and the
Directors)


 


1                                         ACCURACY OF DOCUMENTS


 


1.1                                 The Placing Documents contain all particulars
required to comply with the AIM Rules and FSMA. All statements of fact
contained in the Placing Documents are true and accurate in all respects and
are not misleading in any respect and all forecasts, expressions of opinion,
intention or expectation expressed in the Placing Documents made by or on
behalf of the Company or the Directors are made on reasonable grounds after due
and careful consideration and are honestly held and fairly based and all such
statements of fact and all such forecasts, expressions of opinion, intention or
expectation meet with the standards set out in the AIM Rules and FSMA.


 


1.2                                 There are no facts or information known, or
which could on reasonable and diligent enquiry have been known, to the Company
or the Directors which are not disclosed in the Placing Documents the omission
of which would make any statement in the Placing Documents incorrect or
misleading in any respect or which in the context of the Placing should be
disclosed to Seymour Pierce and RBC or to a Placee.


 


1.3                                 The Placing Documents contain all information
with regard to the Company which the Directors reasonably consider necessary to
enable a potential Placee to make an informed assessment of the assets and
liabilities, financial position, profits and losses and prospects of the
Company and of the rights attaching to the Common Shares.


 


1.4                                 All statements of fact contained in any
Supplementary Admission Document will be true and accurate in all respects and
not misleading in any respect and all forecasts, expressions of opinion,
intention or expectation expressed in any such Supplementary Admission Document
made by or on behalf of the Company or the Directors shall be made on
reasonable grounds after due and careful consideration and shall be honestly
held and fairly based and all such statements of fact and all such forecasts,
expressions of opinion, intention or expectation shall meet with the standards
set out in the AIM Rules and FSMA.


 


1.5                                 If any Supplementary Admission Document is
published, such Supplementary Admission Document will contain all such
information as investors and professional advisers will reasonably consider
necessary to enable a potential Placee to make an informed assessment of the
assets and liabilities, financial position, profits and losses and prospects of
the Company and the rights attaching to the Common Shares.


 


1.6                                 Each Director severally warrants that the
terms of his or her Directors’ Declaration are true and accurate and no further
information has been withheld which would make such terms misleading in any
respect.


 


2                                         VERIFICATION


 


The
replies to the Verification Notes:


 


(a)                                  have been given in good faith;


 


(b)                                 have been prepared or approved by persons having the appropriate
knowledge and responsibility to enable them properly to provide such replies;
and


 


36

















 


(c)                                  together with any information contained or
referred to in such replies are true and accurate in all material respects and
no material fact has been omitted from them.


 


3                                         CONTRACTS


 


3.1                                 The Admission Document contains details of all
material contracts and licences of the Company being contracts entered into
otherwise than in the ordinary course of business during the period of two
years ending on the date of this agreement which are or may be material and the
assessment of the materiality of all such contracts entered into during such
period is based on reasonable grounds.


 


3.2                                 There does not exist any contract, agreement,
commitment or arrangement to which any member of the Company is a party to
which, so far as the Full Warrantors are aware, any party to the same,
including the Company, is in material breach so as to render the same capable
of termination or give rise to any right to damages or other compensation.


 


3.3                                 Unless otherwise disclosed in the Admission
Document, the material contracts of the Company referred to in paragraph 10 of Part VI
of the Admission Document remain in full force and effect, the Company has not
received any notice to terminate any such agreement and save for this agreement
and agreements to be delivered hereunder, none of the agreements is terminable
on less than three months’ notice.


 


3.4                                 Except for the agreement referred to in
paragraph 10(1) of Part VI of the Admission Document, there are not in
existence any service agreements with directors, officers or employees of the
Company which cannot be terminated by twelve months’ notice or less without
giving rise to any claim for damages or compensation (other than a statutory
redundancy payment).


 


3A                                Legal Due Diligence Report


 


3 A.1                    Each of the Directors and the Full Warrantors
has read the Legal Due Diligence Report and does not disagree with any material
fact set out therein and is not aware of any material omission therefrom.


 


3 A.2                    All written information relating to the
Company supplied or to be supplied by the Company, any Director or any of their
respective employees or advisers in relation to the preparation of the Legal
Due Diligence Report is, or will be when supplied, true and accurate in all
material respects and is not by itself or by omission misleading in any
respect.


 


4                                         ACCOUNTS AND CURRENT
FINANCIAL POSITION


 


4.1                                 The Accounts:


 


(a)                                  comply with the provisions of applicable law;


 


(b)                                 were prepared in accordance with generally
accepted US accounting principles consistently applied including all Statements
of Standard Accounting Practice and Financial Reporting Standards (as
applicable); and


 


(c)                                  give a true and fair view of the state of
affairs of the Company at the date to which such statements were prepared and
the results and source and application of funds of the Company for the financial
period then ended.


 


4.2                                 Except as set out in the Admission Document,
the results of the Company shown by the Accounts were not materially affected
by:


 


37

















 


(a)                                  transactions of a nature not usually undertaken
by the Company; or


 


(b)                                 circumstances of an extraordinary, exceptional
or non-recurring nature or other matters which may have rendered the
profits/losses of the Company unusually high or low.


 


4.3                                 Since the Accounts Date:


 


(a)                                  the business of Company has been carried on in
the ordinary and usual course and there has been no material adverse change in
the financial, trading or commercial position of the Company taken as a whole;


 


(b)                                 the Company has not acquired or disposed of or
agreed to acquire or dispose of any business or any other asset material to the
Company or assumed or acquired any liabilities material to them (including
contingent liabilities) otherwise than in the ordinary course of business;


 


(c)                                  no debtor has been released by the Company to
an extent which is material in relation to them on terms that it pays less than
the book value of its debt and no debt of such material amount owing to the
Company has been deferred, subordinated or written off or has proven or so far
as the Full Warrantors are aware is likely to prove to any extent
irrecoverable;


 


(d)                                 the Company has not entered into or assumed or
incurred any contract, commitment, borrowing, indebtedness in the nature of
borrowing, guarantee, liability (including contingent liability) or other
obligation which, in any case, has not been discharged at the date of this
agreement or will not be discharged prior to Admission and the disclosure of
which is required in order to prevent the Admission Document being inaccurate
or misleading in any material respect;


 


(e)                                  as far as the Full Warrantors are aware, there
has been no material depletion in the net assets of the Company;


 


(f)                                    the business of the Company has not been
materially adversely affected by the loss of any important contract, customer
or source of supply and the Full Warrantors have not received notice or any
indication that any such contract, customer or source of supply may be lost or
withdrawn; and


 


(g)                                 no dividend or other distribution has been
declared, paid or made by the Company and no share capital has been created or
issued by the Company save in connection with the Reorganisation and the issue
of shares to Directors and others as referred to in the Admission Document.


 


4.4                                 Each of the Full Warrantors has read the Long Form Report
and does not disagree with any material fact stated therein and is not aware of
any material omission therefrom.


 


5                                         TAXATION


 


5.1                                 The Company is not and nor or will it be under
any liability in respect of any Taxation in relation to or in consequence of:


 


(a)                                  any actual or deemed income, profits or gains
earned, accrued or received on or before the date of this agreement but after
the Accounts Date or in respect of a period ending on or before the date of
this agreement but commencing on or after the Accounts Date; or


 


38

















 


(b)                                 any event occurring (or deemed to occur for
the purposes of any Taxation) on or before the date of this agreement but after
the Accounts Date, whether or not the Taxation is chargeable against or
attributable to another person,


 


other
than any such liabilities arising in the ordinary course of business the
Company since the Accounts Date; and in this paragraph the term “event” shall include, without limitation,
any action, transaction, arrangement, failure or omission (including the
execution and performance of this agreement) and any distribution, failure to
distribute, acquisition, disposal, transfer, payment, loan or advance, the
expiry of any time period, membership or ceasing to be a member of any group or
partnership, any change in residence of any person for Taxation purposes or the
death of any person.


 


5.2                                 Except for any liability for Taxation incurred
in the ordinary course of business since the Accounts Date, the Company has
either paid or accrued all Taxation which it has become liable to pay and is
under no liability to pay any penalty or interest in connection with any claim
for Taxation.


 


5.3                                 The Company has incurred any liability in
respect of any tax which is material in the context of the Company, other than
any such liabilities arising in the ordinary course of the business of the
Company since that date and any such liabilities arising since that date as a
result of any transactions entered into by or affecting the Company which are
disclosed in the Admission Document.


 


5.4                                 The Company has not paid or become liable to
pay or acted (directly or through an agent or other representative) in such
manner as to incur a liability (or potential liability) to pay any interest or
penalty in connection with any tax or otherwise paid any tax after its due date
for payment or become liable to pay any tax the due date for payment of which
will arise in the 30 days after the date of this agreement.


 


6                                         WORKING CAPITAL


 


6.1                                 The Full Warrantors have no reason to believe
that any of the assumptions made in the Working Capital Report are false or
otherwise incorrect and there are no other material assumptions omitted from
it.


 


6.2                                 None of the Full Warrantors disagrees with any
statement of opinion or expectation contained in the Working Capital Report.


 


6.3                                 So far as the Full Warrantors are aware:


 


(a)                                  every statement of fact contained in the
Working Capital Report is true and accurate;


 


(b)                                 no matter is omitted from it the omission of
which makes the Working Capital Report misleading; and


 


(c)                                  none of the forecasts and assumptions set out
in the Working Capital Report is unreasonable.


 


6.4                                 The Full Warrantors are satisfied that the
Company will have sufficient working capital available for use in its ordinary
business operations for its present and its reasonably foreseeable future
requirements (that is for at least the 12 month period from Admission) having
regard to existing bank balances and facilities available and the proceeds of
the Placing.


 


6.5                                 All information requested from the Company or
the Full Warrantors by:


 


(a)                                  the Reporting Accountants for the purpose of
their report on the working capital of the Company; and


 


39

















 


(b)                                 the Reporting Accountants for the purpose of
the Long Form Report and Short Form Report;


 


has
been produced and remains true and accurate and not misleading.


 


7                                         SHARES


 


7.1                                 The creation, allotment and issue of the
Subscription Shares and any transfer of the Sale Shares will comply, to the
extent applicable, with the Bylaws of the Company, the Act, FSMA, the
Prospectus Rules and the AIM Rules.


 


7.2                                 The Placing Shares will be allotted and issued
or sold (as the case may be) free from all claims, expenses. and Encumbrances.


 


7.3                                 Save as disclosed in the Admission Document,
no person has the right (whether exercisable now or in the future and whether
contingent or not) to call for the issue of any share or loan capital of the
Company under any option or other agreement (including without limitation
conversion rights).


 


7.4                                 The authorised and issued share capital of the
Company at the date of this agreement and upon Admission is or will be as
stated in the Admission Document and such issued share capital is or will upon
Admission be fully paid or credited as fully paid.


 


7.5                                 Neither the creation nor the issue of the
Placing Shares nor the performance of this agreement by the Company will
infringe or cause to be infringed any borrowing limits, powers or restrictions
of, or the terms of any contract, indenture, security, obligation, commitment
or arrangement by, the Company or any of its respective properties, revenues or
assets.


 


8                                         REORGANISATION


 


8.1                                 The Reorganisation:


 


(a)                                  has been carried out, to the extent
applicable, in accordance with the constitutional documents of both Resaca LP
and the Company and all applicable laws and the Company has made all necessary
filings with the relevant authorities; and


 


(b)                                 has not resulted in, and will not with the
lapse of time result in:


 


(i)                                     the Company or Resaca LP being, or having
been, in default under any agreement, arrangement or undertaking to which
either of them are or were a party or of any other obligations or restrictions
binding upon either of them;


 


(ii)                                  the invalidity, or grounds for rescission,
avoidance or termination, of any agreement or other transaction to which the
Company is, or Resaca LP was, a party; or


 


(iii)                               any Encumbrance over any asset of Resaca LP or
the Company crystallising or becoming enforceable or any present or future
indebtedness of the Company becoming due and payable prior to its stated
maturity.


 


9                                         COMPETENT PERSON’S REPORT


 


9.1                                 Each of Directors and the Full Warrantors has
read the Competent Persons Report and does not disagree with any material fact
set out therein and is not aware of any material omission therefrom.


 


40

















 


9.2                                 All information requested from the Company by
Haas Petroleum Engineering Services, Inc. and Williamson Petroleum
Consultants, Inc. for the purpose of preparing the Competent Person’s
Report was when supplied true, accurate and complete in all material respects
and not misleading.


 


10                                  LICENCES AND CONSENTS


 


10.1                           The Company holds all material licences,
permissions, authorisations and consents (“General Licences”) necessary to enable it to carry on its business and all the General
Licences are in full force and effect.


 


10.2                           The Company is not in breach of any of the terms or conditions of the
General Licences and there are no material circumstances of which the Company
is aware which indicate that any of the General Licences are likely to be
revoked, rescinded, avoided or repudiated or not renewed in whole, or in part,
in the ordinary course of events.


 


11                                  ASSETS


 


11.1                           The Company is the beneficial owner of and has
the legal right and authority to own, use, lease and operate (as the case may
be) the Assets.


 


11.2                         The Company has the right to conduct resource use operations with
respect to the Assets and the documents of title in relation to the Assets
constitute legal, valid and binding obligations of the Company (where
applicable) enforceable in accordance
with their terms and are not subject to any condition which has not been satisfied.


 


11.3                           As far as the Company is aware, the terms of
the documents of title in relation to the Assets conform in all material
respects with the laws of the United States of America and have been signed on
behalf of, and are enforceable against, the proper authorities and have been
renewed in accordance with their terms.


 


11.4                           The documents of title in relation to the
Assets are valid and in good standing and will be valid and in good standing as
at Admission.


 


11.5                           The Company does not hold any licences or
concessions in relation to oil or gas interests other than the those in respect
of the Assets.


 


11.6                           All rents payable in connection with the
Assets have been paid, are up to date and were paid within the requisite time
periods for payment.


 


12                                  LITIGATION


 


12.1                           The Company is not engaged in or has not within
the previous 12 months been engaged in any litigation, arbitration, prosecution
or similar proceedings which individually or collectively may have or have had
a material effect on the financial position of the Company or which is material
in the context of the Placing and, so far the Full Warrantors are aware, no
such proceedings are pending or threatened and there are no circumstances which
are likely to give rise to such litigation, arbitration, prosecution or similar
proceedings which in any such case may have a material effect on the financial
position of the Company in the context of the Placing or Admission.


 


12.2                           There is no outstanding judgment, order,
decree, arbitral award or decision of any court, tribunal, arbitrator or
governmental agency against the Company or any of the Directors.


 


41

















 


13                                  INSOLVENCY


 


13.1                           The Company is not insolvent or unable to pay
its debts and other liabilities and commitments as they mature and fall due in
the ordinary course of business.


 


13.2                           No administrator, receiver, liquidator or
similar officer of any member of the Company has been appointed by any person
over the whole or any part of the assets or undertaking of any member of the
Company. No proposals have been made to or approved by the creditors of the
Company for a company voluntary arrangement. So far as the Full Warrantors are
aware,. no petition has been presented, or order made, or resolution passed,
for the winding up of the Company, no petition has been presented for an
administration order and no administration order has been made in respect of
the Company and, so far as the
Full Warrantors are aware, no circumstances exist which would just or entitle
the appointment of any receiver or administrator, or the presentation of any
winding-up petition in respect of the Company.


 


13.3                         No event analogous to any event in paragraph 12 has occurred in or
outside England and Wales in relation to the Company.


 


14                                  INDEBTEDNESS


 


14.1                           So far as the Full Warrantors are aware, no
event or circumstance has occurred or arisen which does, or would with the
giving of notice and/or lapse of time and/or determination of materiality
and/or the satisfaction of any other condition, entitle any person to require
the repayment prior to its normal or stated maturity, or to take any step to
enforce security for, any borrowing or indebtedness in the nature of borrowing
of the Company and the Company has not received notice from any person to whom
any indebtedness which is repayable on demand is owed demanding repayment of
the same and the Full Warrantors are not
otherwise aware that any such person proposes to demand repayment of, or to
take any step to enforce security for, the same.


 


15                                  INSURANCE


 


15.1                           All assets of the Company are insured against
all risks which a person carrying on the same type of business as the Company
in a similar area of the world or having similar assets may reasonably be
expected to insure against for their full re-instatement value with an
insurance office of repute and all premiums have been paid up to date.


 


15.2                           Except as otherwise disclosed in the Legal Due
Diligence Report, so far as the Full Warrantors are aware, all insurance
policies of the Company, are valid and enforceable and are not void or voidable,
no material claims are outstanding under them, and so far as the Full
Warrantors are aware, no fact, matter or circumstance exists which might give
rise to a claim under any of them and all premiums due in respect of them are
paid up to date.


 


16                                  INTELLECTUAL PROPERTY


 


16.1                           The Admission Document gives full and accurate
details of:


 


(a)                                  all registrations and all applications for
registration or grant which are comprised in the Intellectual Property of the
Company, including the registered proprietor of or applicant for the same; and


 


(b)                                 all unregistered Intellectual Property which
is material to the business of the Company.


 


42

















 


16.2                           All of the Intellectual Property of the
Company is owned solely, legally and beneficially by the Company, free and
clear of all Encumbrances.


 


16.3                           The Company does not use and has not used any trading or business name
other than their corporate names for any purpose.


 


17                                  ASSETS


 


17.1                           There has been no exercise or purported exercise
of any mortgage charge, lien or other Encumbrance over any of the fixed or
other assets of the Company and there is no dispute, actual or pending, or so
far as the Full Warrantors are aware, threatened directly or indirectly
relating to any of those assets.


 


17.2                           None of the property, assets, undertaking,
goodwill or uncalled capital of the Company is subject to any Encumbrance or
any agreement or commitment to give or create any Encumbrance.


 


17.3                           All the plant, machinery and equipment used
in the conduct of the business of the Company:


 


(a)                                  are in a reasonable and safe state of repair
and condition, are in good working order (fair wear and tear accepted) and have
been regularly and properly maintained, in accordance with the manufacturers
guidelines; and


 


(b)                                 are capable of performing properly the
function for which they are currently used or intended.


 


18                                  LIABILITIES


 


18.1                           The Company is not under any legal liability to pay any pension
superannuation allowance benefit or the like to any person.


 


18.2                           The Company is not liable under any guarantee or indemnity or similar
obligation in favour of any third party nor has it agreed to give or enter into
any such guarantee or indemnity or similar obligation.


 


18.3                           There is not outstanding:


 


(a)                                  any loan made by the Company to, or debt
owing to the Company by, any of the Directors or any connected party of any of
them; or


 


(b)                                 any agreement or arrangement to which the
Company is a party and in which any of the Directors or any such connected
party is interested.


 


19                                  ENVIRONMENTAL


 


The
Company has not received prior written notification of any breach of
Environmental Law and there are no circumstances which are likely to give rise
to such a breach which in any such case may have an effect on the financial
position of the Company which is material in the context of the Placing or
Admission. For the purposes of this paragraph “Environmental Law” shall mean all laws, regulations, directives,
statutes, subordinate legislation, common law and other national and local laws,
all judgements, orders, instructions or awards of any court or competent
authority and all codes of practice and guidance notes to the extent
enforceable and legally binding on the Company which have as a purpose or
effect the protection of the Environment. For the purposes of this paragraph “Environment” shall mean any and all living organisms
(including man) and the ecosystems of which they form part and the media of
air, water and land.


 


43

















 


20           CAPACITY AND AUTHORISATIONS


 


20.1         The Company has been duly incorporated and has
full corporate power and authority to carry on its business as at the date of
this agreement and, to the knowledge of the Full Warrantors, has conducted its
business in all material respects in accordance with all applicable laws and
regulations of the United States of America or any appropriate foreign country
and, to the knowledge of the Full Warrantors, there has been no violation or
default with respect to any statute, regulation, order, decree or judgment of
any court or any governmental agency of the United States of America or any
appropriate foreign country which could have a material adverse effect upon the
assets or business of the Company.


 


20.2         The Company has power and authority, under its
Bylaws to enter into and perform this agreement and to create, allot and issue
the Placing Shares and give effect to the Placing and Admission without
requiring the consent of any other person, save for the conditions that would
be satisfied upon Admission becoming effective and there are no consents
required by the Company for it to enter into and comply with its obligations
under this agreement or for the allotment and issue of the Placing Shares which
have not been irrevocably and unconditionally obtained.


 


20.3         The Company has taken all necessary corporate
or other action to authorise the execution, delivery and performance of this
agreement and, when executed, this agreement will constitute lawful, valid and
binding obligations of the Company in accordance with its terms.


 


20.4         The entry into this agreement and the
performance of the Company’s obligations under it are within the power of the
Company without the need for any further sanction, approval, licence or consent
of members of the Company.


 


20.5         Subject to Seymour Pierce and RBC complying
with its own obligations under this agreement, neither the Company nor the Full
Warrantors are aware of any reason why Admission, the Placing or the issue of
the Placing Documents would result in the contravention of any applicable law
in England, the United States of America or any other jurisdiction.


 


21           DIRECTORS


 


21.1         Save as disclosed in the Admission Document,
the Legal Due Diligence Report or the Directors’ Declarations the Company has
not been a party to any transaction to which section 322 A of the Companies Act
1985 or sections 190, 197, 198, 201, 203 and 223 of the Act may apply or which
(if the Company were listed on the Official List of the UK Listing Authority)
would be treated as a “transaction with a related party” under the Listing Rules of
the UK Listing Authority.


 


21.2         Save as disclosed in the Admission Document or
the Directors’ Declarations none of the Directors, officers, employees, agents
or other persons acting on behalf of the Company has been party to:


 


(a)                                  the use of any assets of such company for
unlawful contributions, gifts, entertainment or other unlawful expenses
relating to the making of any direct or indirect unlawful payment to employees
or Directors from such asset; or


 


(b)                                 the establishment or maintenance of any
unlawful or unrecorded fund of monies or other assets; or


 


(c)                                  the making of any false or fictitious entries
in the books or records of such company; or


 


(d)                                 the making of any unlawful payment.


 


44

















 


21.3         There is no person in accordance with whose
instructions the Directors are accustomed to act (whether or not they may be
legally obliged so to do) and all promoters of the Company have been disclosed in  the Admission Document.


 


21.4         The Directors have established procedures
which provide a reasonable basis for them to make proper judgements as to the
financial position and prospects of the Company.


 


21.5         The Directors have had explained to them by
the Company’s Solicitors and understand the nature of their responsibilities
and obligations in relation to the Admission Document and the Placing and as
directors of a company whose securities are admitted to trading on AIM.


 


22                                  CONFIDENTIAL INFORMATION


 


The
Company has used all reasonable endeavours to keep confidential all trade
secrets and confidential information of the Company and has only disclosed the
same to third parties who are under binding obligations of confidence to the
Company. The Company has used all reasonable endeavours to keep confidential
all trade secrets and confidential information received from third parties.


 


23                                  INVESTIGATIONS/ENQUIRIES


 


Save
as disclosed in the Admission Document or the Directors’ Declarations, no
governmental, regulatory or official investigation or enquiry concerning the
Company, or any of their respective employees or any of the Directors is in
progress or pending and, to the knowledge of the Full Warrantors, there are no
facts, matters or circumstances which could give rise to any such investigation
or enquiry.


 


45














 


PART B (Warranties of the Selling Shareholders)


 


Each
Selling Shareholder for itself only and severally but not jointly warrants,
represents and undertakes (only as to such Selling Shareholder and not to any
other Selling Shareholder or the Company) that:


 


1            AUTHORITY


 


He
has the right, power and authority and has taken all action necessary to enter
into and perform his obligations under this agreement, the Selling
Shareholders’ Power of Attorney and the other documents to be executed by him
prior to Admission without the consent of any third party.


 


2            ENFORCEABLE OBLIGATIONS


 


His
obligations under this agreement, his Selling Shareholders’ Power of Attorney
and the other documents to be executed by him are, or when the relevant
document is executed will be, enforceable in accordance with their terms.


 


3            OWNERSHIP


 


He
is the beneficial owner and the registered holder of all of the Sale Shares set
opposite his name in column (2) of Schedule 2.


 


4            NO ENCUMBRANCE


 


Except
as expressly set forth in this agreement, there is no Encumbrance and there is
no agreement, arrangement or obligation to create or give an Encumbrance in
relation to the Sale Shares and no person has claimed to be entitled to an
Encumbrance or any benefit thereunder in relation to the Sale Shares.


 


46

















 


SCHEDULE 5


 


Limitations on Liability


 


1              Save in the case of fraud or wilful and
dishonest non-disclosure, (when there shall be no time limit on liability), the
liability of the Directors under the Warranties shall cease on the Warranties
Claim Date, except in respect of claims which have been properly notified
(giving reasonable details of the claim) before that date and proceedings in
respect of which are issued and served within six months of such notification.


 


2              Save in the case of fraud or wilful dishonest
non-disclosure (when there shall be no limit on the total liability of the
Director), the liability of each of the Directors under this agreement shall
not exceed the amount set opposite their respective names below:


 


	
  Name

  	
   

  	
  Total Liability:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  James Perry Bryan, Jr. (executive)

  	
   

  	
  $

  	
  150,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  John James Lendrum, III (executive)

  	
   

  	
  $

  	
  300,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  John William Sharp Bentley (non-executive) 

  	
   

  	
  $

  	
  50,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Judy Ley Allen (non-executive)

  	
   

  	
  $

  	
  50,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Richard Kelly Plato (non-executive)

  	
   

  	
  $

  	
  50,000

  	
   

  



 


3              The liability of the Company pursuant to this
agreement whether under the Warranties or the indemnity in clause 7 shall not
be subject to any financial liability cap.


 


4              Save in the case of fraud or wilful dishonest
non-disclosure (when there shall be no limit on the total liability of the
Selling Shareholder), the liability of each Selling Shareholder under this
agreement shall not exceed the proceeds received by such Selling Shareholder from
the sale of the Sale Shares under this agreement.


 


47

















 


SCHEDULE 6


 


Warranties Certificate


 


[To be typed on letterhead of the Company]


 


The
Directors


Royal
Bank of Canada Europe Limited


71
Queen Victoria Street


London


EC4V
4DE


 


The
Directors


Seymour
Pierce Limited


20
Old Bailey London


	
  EC4M
  7EN

  	
  July 14,
  2008

  



 


Dear
Sirs


 


Placing and Admission to AIM


 


This
letter is the Warranties Certificate as defined in the placing agreement (the “Placing Agreement”)  between the parties
thereto dated July 14, 2008. Words and expressions defined in the Placing
Agreement have the same meanings in this letter. We confirm to you that:


 


(a)                on receipt of this letter by you, each of the
conditions referred to in clause 2.1 of the Placing Agreement will have been
satisfied;


 


(b)                so far as we are aware, having made due and
careful enquiry, no Warranty would be breached nor would any Specified Event
occur if the Warranties were repeated at the date of this letter by reference
to the facts and circumstances now existing; and


 


(c)                there has been no breach by the Company or the
Directors of any of their respective obligations under the Placing Agreement
and, so far as we aware (after due and careful enquiry), there are no
circumstances which will prevent the Company or the Directors from complying
with any such obligation in full.


 


Yours faithfully


 


	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



 


48

















 


SCHEDULE 7

Further Covenants


 


1              USE OF PROCEEDS


 


1.1           The Company covenants and undertakes to
Seymour Pierce and RBC that the Company shall consult with Seymour Pierce and
RBC prior to (the extent reasonably practicable) applying the net proceeds of the subscriptions for the Placing
Shares pursuant to the Placing for purposes other than as set out in the
Admission Document


 


2              ENGAGEMENT LETTERS AND NOMAD
AND JOINT BROKER AGREEMENT


 


2.1           Each of the Directors undertakes:


 


(a)           to procure (insofar as he is reasonably able
to do so) that the Company complies with its obligations under the Seymour
Pierce Engagement Letter, the RBC Engagement Letter and the Nomad and Joint
Broker Agreement;


 


(b)           to give all such assistance and provide all
such information to the Company as he is reasonably able to in order that the
Company can comply with such obligations under the Seymour Pierce Engagement
Letter, the RBC Engagement Letter and the Nomad and Joint Broker Agreement; and


 


(c)           not to take any action or omit to take any
action which would inhibit the ability of the Company to comply with its
obligations under the Seymour Pierce Engagement Letter, the RBC Engagement
Letter and the Nomad and Joint Broker Agreement and shall procure (insofar as
he is reasonably able to do) that any new director of the Company appointed
after the date of which agreement shall do the same.


 


3              SECURITIES


 


3.1           The Company undertakes to Seymour Pierce and
RBC (and each of the Directors undertakes to procure insofar as he is
reasonably able to do so) that the Company shall maintain and enforce the
provisions of the Dealing Code.


 


3.2           Each of the Directors severally undertakes to
Seymour Pierce and RBC and, as a separate undertaking, to the Company that in
respect of any dealings in any of his Shares (for this purpose “Shares” shall
include any securities in the Company admitted to trading on AIM) whilst he is
a director of the Company he will at all times observe the provisions of the
Dealing Code and will use his reasonable endeavours to procure the observance
of the provisions of the Dealing Code by all applicable employees and that he
will and will use all reasonable endeavours to procure that any person who is a
connected person in relation to him will notify the Company, Seymour Pierce and
RBC immediately of any information notification which is required under Rule 17
of the AIM Rules For Companies.


 


3.3         The Company undertakes to procure that as at the date of the AIM
Application:


 


(a)           it will be duly incorporated as a corporation
under the laws of the State of Texas with a class of Common Shares and a class
of preferred shares in its share capital;


 


(b)           its traded securities will be freely
transferable; and


 


49

















 


(c)           no Common Shares or preferred shares will be
in issue which are not the subject of the AIM Application.


 


4                                         FINANCIAL REPORTING
PROCEDURES


 


4.1           The Company covenants with and irrevocably
undertakes to Seymour Pierce and RBC that it shall implement as soon as
reasonably practicable following Admission and at all times comply with the
recommendations in relation to financial reporting procedures and accounting
compliance controls referred to and/or set out in the Long Form Report.


 


50

















 


SCHEDULE 8


 


Agreed Form Documents


 


Admission
Document


Board
Resolutions


Dealing
Code


Directors’
Declarations


Directors’
Powers of Attorney


Directors’
Responsibility Letters


Legal
Due Diligence Report


Lock-in
and Orderly Marketing Agreements


Long
Form Report


Nomad
and Joint Broker Agreement


Placing
Letters


Placing
Proof


Presentation


Press
Announcement


Registrars
Agreement


Selling
Shareholders’ Power of Attorney


Short
Form Report


Verification
Notes


Working
Capital Report


 


51














 


	
  Executed as a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
  /s/ Mary Lou
  Fry

  
	
  RESACA
  EXPLOITATION, INC.

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook Cypress, TX 77433

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executed as a deed by

  	
  )

  	
   

  
	
  JAMES
  PERRY BRYAN, JR.

  	
  )

  	
  /s/ James Perry Bryan, Jr.

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ [ILLEGIBLE]

  
	
  Name

  	
  :

  	
   

  	
   

  	
  [ILLEGIBLE]

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Executive
  Asst.

  
	
  Address

  	
  :

  	
   

  	
   

  	
  1331 Lamar,
  Suite 1450, Houston, TX 77010

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executed as a deed by

  	
  )

  	
   

  
	
  JOHN JAMES
  LENDRUM, III

  	
  )

  	
  /s/
  John Lendrum, III

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook Cypress, TX 77433

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executed as
  a deed by

  	
  )

  	
   

  
	
  JOHN WILLIAM SHARP BENTLEY

  	
  )

  	
  /s/ John William Sharp Bentley

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/
  [ILLEGIBLE]

  
	
  Name

  	
  :

  	
   

  	
   

  	
  [ILLEGIBLE]

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  [ILLEGIBLE]

  
	
  Address

  	
  :

  	
   

  	
   

  	
  [ILLEGIBLE]

  



 


53














 


	
  Executed as
  a deed by

  	
  )

  	
   

  
	
  JUDY LEY ALLEN

  	
  )

  	
  /s/ Judy Ley
  Allen

  
	
  in the
  presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Nancy S
  Dunlap

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Nancy S
  Dunlap

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Investor

  
	
  Address

  	
  :

  	
   

  	
   

  	
  3711 San
  Felipe, 2D, Houston, Tx 77027 USA

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executed as a deed by

  	
  )

  	
   

  
	
  RICHARD
  KELLY PLATO

  	
  )

  	
  /s/ Richard
  Kelly Plato

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook Cypress, TX 77433

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on
  behalf of

  	
  )

  	
   

  
	
  SEYMOUR PIERCE LIMITED:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
  Director/Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [ILLEGIBLE]

  
	
   

  	
   

  	
  Director

  



 


54

















 


	
  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  ROYAL BANK OF CANADA EUROPE

  	
  )

  	
   

  
	
  LIMITED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
  /s/ Sarah
  Wharry

  	
   

  	
   

  
	
  Name

  	
  :

  	
  Sarah
  Wharry, Managing Director

  	
   

  	
   

  
	
  Occupation 

  	
  :

  	
  Investment
  Banker

  	
   

  	
   

  
	
  Address

  	
  :

  	
  [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
   

  	
  [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  NGP
  CAPITAL RESOURCES COMPANY:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorised Signatory

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  RTR, LLC:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorised Signatory

  



 


55

















 


	
  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  NGP
  CAPITAL RESOURCES

  	
  )

  	
   

  
	
  COMPANY:

  	
   

  	
   

  
	
   

  	
   

  	
  Illegible

  
	
   

  	
   

  	
  Authorised Signatory

  
	
   

  	
   

  	
   

  
	
  In
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness
  Signature:

  	
   

  	
  /s/ Nichole
  Dotson-Olajuwon

  
	
   

  	
   

  	
   

  
	
  Witness
  Name:

  	
   

  	
  Nichole
  Dotson-Olajuwon

  
	
   

  	
   

  	
   

  
	
  Witness
  Address:

  	
   

  	
  333 Clay Street, Suite
  3300, Houston, Texas
  77002

  
	
   

  	
   

  	
   

  
	
  Witness
  Occupation:

  	
   

  	
  Attorney

  



 


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  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  PERMIAN
  BASIN CONVERT, L.L.C.:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  Farallon Capital Management, LLC, 

  	
   

  	
  William F.
  Mellin

  	
   

  	
  William
  F. Mellin

  
	
  its Manager

  	
   

  	
  Authorised Signatory

  	
   

  	
  Managing
  Member

  
	
   

  	
   

  	
   

  
	
  In
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness
  Signature:

  	
   

  	
  /s/ Andrew JM Spokes

  
	
   

  	
   

  	
   

  
	
  Witness
  Name:

  	
   

  	
  Andrew JM
  Spokes

  Managing Member

  
	
   

  	
   

  	
   

  
	
  Witness
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness
  Occupation:

  	
   

  	
  Farallon
  Capital Management, LLC

  One Maritime Plaza, Suite 2100

  San Francisco, CA 94111

  



 


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  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  D.B. ZWIRN SPECIAL
  OPPORTUNITIES

  	
  )

  	
   

  
	
  FUND, L.P.:

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Illegible

  
	
   

  	
   

  	
  Illegible

  
	
   

  	
   

  	
  Authorised Signatory

  
	
   

  	
   

  	
   

  
	
  In
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness
  Signature:

  	
   

  	
  /s/ Steven
  Brogden

  
	
   

  	
   

  	
   

  
	
  Witness
  Name:

  	
   

  	
  Steven Brogden

  
	
   

  	
   

  	
   

  
	
  Witness
  Address:

  	
   

  	
  D.B. Zwirn & Co.

  745 Fifth Avenue 18th Floor

  New York, NY 10151

  
	
   

  	
   

  	
   

  
	
  Witness
  Occupation:

  	
   

  	
  Associate-Asset Management

  



 


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  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  RTR, LLC:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Celia A.
  Felsher

  
	
   

  	
   

  	
  Authorised Signatory Celia
  A. Felsher

  
	
   

  	
   

  	
   

  
	
  In
  the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness
  Signature:

  	
   

  	
  /s/ Rachael 
  L.M. Hodyno

  
	
   

  	
   

  	
   

  
	
  Witness
  Name:

  	
   

  	
  Rachael  L.M. Hodyno

  
	
   

  	
   

  	
   

  
	
  Witness
  Address:

  	
   

  	
  300 E. 57th St, 15F, NYC NY
  10022

  
	
   

  	
   

  	
   

  
	
  Witness
  Occupation:

  	
   

  	
  Investment Coordinator

  



 


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  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  SDG
  HOLDINGS, LLC:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: /s/ Mary
  Lou Fry, attorney in fact

  
	
   

  	
  Authorised Signatory

  



 


Signature Page To Placing Agreement


 

















 


	
  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  TDC
  FAMILY L.P.:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: /s/
  Illegible Attorney-in-fact

  
	
   

  	
  Authorised Signatory

  



 


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  Executed as
  a deed

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  THE GOFF
  FOUNDATION:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Tim Goff
  by [ILLEGIBLE]

  
	
   

  	
  Authorised Signatory

  



 


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  Executed as
  a deed by

  	
  )

  	
   

  
	
  G. ALAN
  RAFTE

  	
  )

  	
  by:
  Illegible

  
	
  in the presence of:

  	
  )

  	
  Attorney-in-fact

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook

  Cypress, TX 77433

  



 


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  Executed as
  a deed by

  	
  )

  	
   

  
	
  ROLAND SLEDGE

  	
  )

  	
  by:
  Illegible

  
	
  in the presence of:

  	
  )

  	
  Attorney-in-fact

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook

  Cypress, TX 77433

  



 


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  Executed as
  a deed by

  	
  )

  	
   

  
	
  CHRISTOPHER VONDER HOYA

  	
  )

  	
  by:
  Illegible

  
	
  in the presence of:

  	
  )

  	
  Attorney-in-fact

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook

  Cypress, TX 77433

  



 


Signature Page To Placing Agreement


 

















 


	
  Executed as
  a deed 

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  HRB OIL &
  GAS, LTD:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: /s/ Mary
  Lou Fry, attorney in fact

  
	
   

  	
  Authorised Signatory

  



 


Signature Page To Placing Agreement


 














 


	
  Executed as
  a deed by

  	
  )

  	
   

  
	
  MICHAEL
  DEGROOTE

  	
  )

  	
  By: /s/ Mary
  Lou Fry, attorney in fact

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook

  Cypress, TX 77433

  



 


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  Executed as
  a deed by

  	
  )

  	
   

  
	
  H. WAYNE
  HUIZENGA

  	
  )

  	
  By: /s/ Mary
  Lou Fry, attorney in fact

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook

  Cypress, TX 77433

  



 


Signature Page To Placing Agreement


 

















 


	
  Executed as
  a deed 

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
  By: /s/ Mary
  Lou Fry,

  
	
  JVAH LIMITED PARTNERSHIP:

  	
  )

  	
  Attorney in
  fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorised Signatory

  



 


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  Executed as
  a deed by

  	
  )

  	
   

  
	
  PATRICIA
  CHAMBERS

  	
  )

  	
  By: /s/ Mary
  Lou Fry, attorney in fact

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook

  Cypress, TX 77433

  



 


Signature Page To Placing Agreement


 

















 


	
  Executed as
  a deed 

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  HARBOR HILL INTERESTS, LP:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: /s/ Mary
  Lou Fry, attorney in fact

  
	
   

  	
   

  	
  Authorised Signatory

  



 


Signature Page To Placing Agreement


 

















 


	
  Executed as
  a deed by

  	
  )

  	
   

  
	
  KENNETH P.
  KRAMER

  	
  )

  	
  /s/ [Illegible]

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/
  Christina Ridings

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Christina
  Ridings

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Executive
  Manager

  
	
  Address

  	
  :

  	
   

  	
   

  	
  1331 Lamar,
  Suite 1135

  Houston, TX 77010

  



 


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  Executed as
  a deed by

  	
  )

  	
   

  
	
  MARY JON
  BRYAN

  	
  )

  	
  By: /s/ Mary
  Lou Fry Attorney in fact

  
	
  in the presence of:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
  :

  	
   

  	
   

  	
  /s/ Barbara
  Phillips

  
	
  Name

  	
  :

  	
   

  	
   

  	
  Barbara Phillips

  
	
  Occupation 

  	
  :

  	
   

  	
   

  	
  Legal
  Secretary

  
	
  Address

  	
  :

  	
   

  	
   

  	
  20235 Baron
  Brook

  Cypress, TX 77433

  



 


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  Executed as
  a deed 

  	
  )

  	
   

  
	
  for and on behalf of

  	
  )

  	
   

  
	
  BEESON SIROTA PARTNERSHIP:

  	
  )

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: Illegible
  Attorney in fact

  
	
   

  	
   

  	
  Authorised Signatory

  



 


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