Document:

Exhibit 10.10

 

VOTING
AGREEMENT

 

BY AND
AMONG

 

ROCK
ENERGY RESOURCES, INC.,

 

PERM
ENERGY ADVISORS, INC.

 

AND

 

THE
STOCKHOLDERS PARTY HERETO

 

 

VOTING
AGREEMENT

 

This Voting Agreement
(this “Agreement”) is made and entered into as of the 31 day of March, 2008
by and among ROCK ENERGY RESOURCES, INC., a Delaware corporation (the “Company”),
PERM ENERGY ADVISORS, INC. (“PERM”) and the stockholders of the Company
that are signatories to this Agreement (the “Stockholders”).

 

RECITALS

 

WHEREAS, the Company
proposes to sell shares of common stock (the “Common Stock”), par value
$0.0001, of the Company to PERM pursuant to the terms of that certain Stock
Purchase Agreement (the “Purchase Agreement”) dated March 31, 2008
between the Company and PERM; 

 

WHEREAS, it is a
condition to the consummation of the transactions contemplated by the Purchase
Agreement that the parties execute and deliver this Agreement; 

 

WHEREAS, this Agreement
is the first such voting agreement entered into by the Company with respect to
its Common Stock; and

 

WHEREAS, the signatories
to this Agreement include (i) the Company, (ii) PERM, and (ii) the holders of
at least a majority of Common Stock;

 

NOW, THEREFORE, the
parties hereto agree as follows:

 

1.             Shares.  The Stockholders each agree to hold all
shares of the capital stock of the Company now owned or hereafter acquired by
them registered in their respective names or beneficially owned by them as of
the date hereof (“Shares”) subject to, and to vote the Shares in
accordance with, the provisions of this Agreement.

 

2.             Voting
Agreement.

 

(a)           The parties hereto
agree that immediately prior to the closing of the Second Tranche (as such term
is defined in the Purchase Agreement) they will do all things necessary
including, without limitation, the voting of all shares of the Common Stock of
the Company held respectively by each Stockholder, the execution of written
consents, the calling of special meetings, the removal of directors, the
filling of vacancies in directorships on the Board, the waiving of notice, the
attendance of meetings and the amendment of the Company’s Certificate of
Incorporation or bylaws then in effect, so as to cause 

 

(i)            the Board of Directors
of the Company (the “Board”) to consist of 10 directors;

 

(ii)           for so long as PERM
together with its affiliates, hold at least 10% of the issued and outstanding
Common Stock (as adjusted for stock splits, stock dividends, recapitalizations
or the like), election to the Board of one representative designated by an
authorized representative of PERM;

 

 

(iii)          the removal from the
Board (with or without cause) of the representative designated by PERM
hereunder at the written request of PERM (but only upon such written request
and under no other circumstances);

 

(iv)          in the event that any representative
designated by PERM hereunder for any reason ceases to serve as a member of the
Board during his term of office, the resulting vacancy on the Board to be
filled by a representative designated by an authorized representative of PERM;
and

 

(v)           the Board to consist of
a majority of “independent directors” as that term is defined in NASDAQ Rule
4200 or the American Stock Exchange Rules.

 

(b)           This Section 2 shall
not be construed as giving any person not a holder of the Shares the right to
vote for any director.

 

3.             Observer
Rights.  One representative
designated by an authorized representative of PERM shall be entitled to attend
as an observer at all meetings of the Board and shall be entitled to receive
notice of such meetings along with a copy of any board materials to the same
extent and in the same manner as the members of the Board.  

 

4.             Expenses.  The Company will pay all reasonable
out-of-pocket expenses incurred by the members of the Board and observers of
the Board in connection with their participation in meetings of the Board and
any committees of the Board.

 

5.             Insurance.  So long as PERM has a Board representative in
accordance with Section 2, the Company covenants and agrees that it will obtain
and continue in full force and effect director and officer insurance in a
coverage amount no less than $50,000,000 in the aggregate. 

 

6.             Representations
and Warranties.  Each
Stockholder hereby represents and warrants with respect to itself, on and as of
the date of this Agreement, as follows:

 

(a)           It has full right,
power and authority to vote the Common Stock, held of record by it.

 

(b)           It has all requisite
power and authority to enter into and perform its obligations under this
Agreement.  The execution, delivery and
performance of this Agreement has been duly authorized by all necessary action
on the part of such party.  This
Agreement has been duly executed and delivered by such party.

 

(c)           The execution, delivery
and performance of this Agreement will not, with or without the giving of
notice or the passage of time, (i) violate any judgment, injunction, order or
decree of any court, arbitrator or governmental agency applicable to such
party, or (ii) conflict with, result in the breach of any provision of,
constitute a default under, or require the consent of any third party under,
any agreement or instrument to which such party is a party or by which such
party is bound.

 

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7.             Legend.

 

Concurrently with the
execution of this Agreement, there shall be imprinted or otherwise placed, on
certificates representing the Shares the following restrictive legend:

 

THESE SHARES ARE SUBJECT
TO THE PROVISIONS OF A VOTING AGREEMENT RELATING TO THE ELECTION OF DIRECTORS
AND OTHER MATTERS.  COPIES OF SUCH AGREEMENT
MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.

 

8.             Other Rights.  Except as provided by this Agreement, each
Stockholder shall exercise the full rights of a stockholder with respect to the
Shares.

 

9.             Manner of
Voting.  The voting of shares
pursuant to this Agreement may be effected in person, by proxy, by written
consent or in any other manner permitted by applicable law.

 

10.           Grant of
Proxy.  Should the provisions
of this Agreement be construed to constitute the granting of proxies, such
proxies shall be deemed coupled with an interest and, to the extent permitted
by law, are irrevocable for the term of this Agreement.

 

11.           Joinder.  The spouses, if any, of each Stockholder that
is an individual join in the execution and delivery of this Agreement for the
express purpose of binding his or her community property interests, if any, in
the Shares.

 

12.           No Liability
for Election of Recommended Directors.  Neither the Company, nor any Stockholder, nor
any officer, director, stockholder, partner, employee or agent of such party,
makes any representation or warranty as to the fitness or competence of the
nominee of any party hereunder to serve on the Company’s Board by virtue of
such party’s execution of this Agreement or by the act of such party in voting
for such nominee pursuant to this Agreement.

 

13.           Specific
Performance.  The parties
hereto hereby declare that it is impossible to measure in money the damages
which will accrue to a party hereto or to such party’s heirs, personal representatives
or assigns by reason of a failure to perform any of the obligations under this
Agreement and agree that the terms of this Agreement shall be specifically
enforceable.  If any party hereto or such
party’s heirs, personal representatives or assigns institutes any action or
proceeding to specifically enforce the provisions hereof, any party against
whom such action or proceeding is brought hereby waives the claim or defense
therein that such party or such personal representative has an adequate remedy
at law, and such party shall not offer in any such action or proceeding the
claim or defense that such remedy at law exists.

 

14.           Governing
Law.  THIS AGREEMENT, AND THE
RIGHTS OF THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS AS SUCH LAWS APPLY TO AGREEMENTS AMONG
TEXAS RESIDENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF TEXAS.

 

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15.           After-Acquired
Shares.  In the event that
subsequent to the date of this Agreement, the Stockholders purchase or
otherwise acquire any shares of Common Stock or other voting securities in the
open market, from the Company, or as a result of any stock dividend, stock
split, consolidation of shares, reclassification or consolidation involving the
Company, such shares or securities shall be deemed to be Shares for purposes of
this Agreement.

 

16.           Issuance of
Additional Shares;  Transfers and Assignments.  In connection with the issuance of any
additional shares of voting stock (included voting preferred stock) of the
Company or the transfer of securities of the Company permitted hereunder, the
Company shall require such new holder or permitted transferee to become a party
to this Agreement and succeed to all of the rights and obligations of a
Stockholder under this Agreement by executing and delivering an agreement to be
bound.  Upon the execution and delivery
of an agreement to be bound by any new holder or permitted transferee, such new
holder or transferee shall be deemed to be a party hereto as if such new holder
or transferee were the original signatory hereto and such new holder or
transferee’s signature appeared on the signature pages of this Agreement and
shall be deemed to be a Stockholder.  The
Company shall not permit the issuance of any additional shares of voting stock
(including voting preferred stock) or the transfer of the Shares subject to
this Agreement on its books or issue a new certificate representing any such
Shares unless and until such new holder or permitted transferee shall have
complied with the terms of this Section. 

 

17.           Amendment.  This Agreement may be amended only by an
instrument in writing signed by the Company, the holders of a majority of the
Common Stock then outstanding, voting together as a single class, and PERM;
provided, however, that no such amendment or modification that would adversely
affect the rights of any Stockholder hereunder in any disproportionate and
material respect as compared to any other Stockholder shall be binding on such
affected Stockholder unless contained in a written instrument duly executed by
such affected Stockholder. 
Notwithstanding the foregoing, additional parties may be added as
“Stockholders” under this Agreement as provided in Section 12(c) above with the
written consent of the Company but without requiring the separate written
consent of the Stockholders.  Any
additional parties so added shall deliver a counterpart signature page to this
Agreement and shall have the rights and obligations of a “Stockholder.”  

 

18.           Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.

 

19.           Successors.  This Agreement shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, successors,
assigns, administrators, executors and other legal representatives.

 

20.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which
together shall constitute one and the same agreement.

 

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21.           Waiver.  No waivers of any breach of this Agreement
extended by any party hereto to any other party shall be construed as a waiver
of any rights or remedies of any other party hereto or with respect to any
subsequent breach.

 

22.           Attorneys’
Fees.  In the event that any suit or
action is instituted to enforce any provision in this Agreement, the prevailing
party shall be entitled to all costs and expenses of maintaining such suit or
action, including reasonable attorneys’ fees.

 

23.           Notices.  All notices and other communications required
or permitted hereunder shall be in writing and may be delivered in person or by
facsimile, electronic mail, courier or U.S. mail, in which event it may be
mailed by first-class, certified or registered mail, postage prepaid, addressed
(i) if to a Stockholder, at such address as such Stockholder shall have furnished
the Company in writing, or (ii) if to the Company, at its principle place of
business as designated in its most recently filed report with the Securities
and Exchange Commission.  All such
notices and other communications shall be deemed given upon personal delivery,
upon confirmation of facsimile transfer, upon confirmation of electronic mail
transmission, upon delivery by courier or three business days after deposit in
the United States mail.  Notwithstanding
the foregoing, all notices and communications to addresses outside the United
States shall be given by facsimile and confirmed in writing sent by overnight
or two-day courier service.

 

24.           Entire
Agreement.  This Agreement is
intended to be the sole agreement of the parties as it relates to this subject
matter and does hereby supersede all other agreements of the parties relating
to the subject matter hereof.

 

The
Remainder of page intentionally left blank.

 

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IN WITNESS WHEREOF, the
parties have executed this Voting Agreement on the day, month and year first
set forth above.

 

 

	
   

  	
  ROCK ENERGY RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Rocky V. Emery

  
	
   

  	
  Name:

  	
   Rocky V. Emery

  
	
   

  	
  Title:

  	
   Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PERM ENERGY ADVISORS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Paul A. Caldwell

  
	
   

  	
  Name:

  	
   Paul A. Caldwell

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                              ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Shares of Common Stock:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                              ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Shares of Common Stock:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                              ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Shares of Common Stock:

  	
   

  
																	

 

 

SIGNATURE PAGE TO
VOTING AGREEMENTExhibit 10.11

 

THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE 1933 ACT, OR AN OPINION OF
COUNSEL, SATISFACTORY TO THE ISSUER HEREOF, TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED UNDER THE 1933 ACT AS SOME OTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND APPLICABLE LAWS IS AVAILABLE.

 

WARRANT TO PURCHASE

 

COMMON STOCK OF

 

ROCK ENERGY RESOURCES, INC.

 

	
  Date of
  Issuance: March 31, 2008

  	
   

  	
  Warrant
  No.  [    ]

  

 

This certifies that, for value
received, ROCK ENERGY RESOURCES, INC., a Delaware corporation (the “Company”),
grants PERM ENERGY ADVISORS, INC., a Delaware corporation, or its registered
assigns (the “Registered Holder”), the right to subscribe for and
purchase from the Company, at the Exercise Price (as defined herein), from and
after 9:00 a.m. Texas time on September 30, 2008 (the “Exercise
Date”) and to and including 5:00 p.m., Texas time on the fifth
anniversary of the Exercise Date (the “Expiration Date”), Four Million
Seven Hundred Sixty-One Thousand Nine Hundred Five (4,761,905) shares, as such
number of shares may be adjusted from time to time as described herein (the “Warrant
Shares”), of the Company’s common stock, par value $.0001 per share (the “Common
Stock”), subject to the provisions and upon the terms and conditions herein
set forth.  The “Exercise Price”
per share of Common Stock shall be $1.68 per share.

 

This Warrant is issued in
connection with the transactions described in that certain Stock Purchase
Agreement between the Company and PERM Energy Advisors, Inc. dated as of March 31,
2007 (the “Purchase Agreement”). 
The holder of this Warrant is subject to certain restrictions set forth
in the Purchase Agreement and shall be entitled to certain rights and
privileges set forth in the Purchase Agreement.

 

Section 1.                                            Registration.  The Company shall
register this Warrant, upon records to be maintained by the Company for that
purpose (the “Warrant Records”), in the name of the Registered
Holder.  The Company may deem and treat
the Registered Holder as the absolute owner of this Warrant for the purpose of
any exercise hereof or any distribution to the Registered Holder.

 

Section 2.                                            Registration
of Transfers and Exchanges.

 

(a)                                  Subject to Section 9
hereof, the Company shall register the transfer of this Warrant, in whole or in
part, upon records to be maintained by the Company for that purpose, upon
surrender of this Warrant, with the Form of Assignment attached hereto
completed and duly endorsed

 

 

by the Registered Holder, to
the Company at the office specified in or pursuant to Section 3(b).  Upon any such registration of transfer, a new
Warrant, in substantially the form of this Warrant, evidencing the Common Stock
purchase rights so transferred shall be issued to the transferee and a new
Warrant, in similar form, evidencing the remaining Common Stock purchase rights
not so transferred, if any, shall be issued to the Registered Holder.

 

(b)                                 This Warrant is
exchangeable, upon the surrender hereof by the Registered Holder at the office
of the Company specified in or pursuant to Section 3(b) hereof, for
new Warrants, in substantially the form of this Warrant evidencing, in the
aggregate, the right to purchase the number of Warrant Shares which may then be
purchased hereunder, each of such new Warrants to be dated the date of such
exchange and to represent the right to purchase such number of Warrant Shares
as shall be designated by the Registered Holder at the time of such surrender.

 

Section 3.                                            Duration
and Exercise of this Warrant.

 

(a)                                  This Warrant
shall be exercisable by the Registered Holder as to the Warrant Shares at any
time during the period commencing on the Exercise Date and ending on the
Expiration Date. At 5:00 p.m., Texas time, on the Expiration Date, this
Warrant, to the extent not previously exercised, shall become void and of no
further force or effect.  Subject to
Sections 4, and 7 hereof, upon exercise or surrender of this Warrant, with the Form of
Election to Purchase attached hereto completed and duly endorsed by the Registered
Holder, to the Company at 10375 Richmond, Suite 2100, Houston, Texas
77042, Attention:  Rocky Emery, or at
such other address as the Company may specify in writing to the Registered
Holder, and upon payment of the Exercise Price multiplied by up to the number
of Warrant Shares then issuable upon exercise of this Warrant in lawful money
of the United States of America, all as specified by the Registered Holder in
the Form of Election to Purchase, the Company shall promptly issue and
cause to be delivered to or upon the written order of the Registered Holder,
and in such name or names as the Registered Holder may designate, a certificate
for the Warrant Shares issued upon such exercise.  Any person so designated in the Form of
Election to Purchase, duly endorsed by the Registered Holder, as the person to
be named on the certificates for the Warrant Shares, shall be deemed to have
become holder of record of such Warrant Shares, evidenced by such certificates,
as of the Date of Exercise (as hereinafter defined) of such Warrant.

 

(b)                                 The Registered
Holder may pay the applicable Exercise Price pursuant to Section 3(b), at
the option of the Registered Holder, either (i) in cash or by cashier’s or
certified bank check payable to the Company, (ii) by wire transfer of
immediately available funds to the account which shall be indicated in writing
by the Company to the Registered Holder, (iii) by net issue election as
provided below, or (iv) by any combination of items (i), (ii) and
(iii), in any case, in an amount equal to the product of the Exercise Price
multiplied by the number of Warrant Shares being purchased upon such exercise
(the “Aggregate Exercise Price”).

 

(c)                                  The “Date of
Exercise” of any Warrant means the date on which the Company shall have
received (i) this Warrant, with the Form of Election to Purchase
attached hereto appropriately completed and duly endorsed, and (ii) payment
of the Aggregate Exercise Price as provided herein.

 

(d)                                 The Registered
Holder may elect to receive, without payment by the Registered Holder of any
additional consideration, shares of Common Stock equal to the value of the
Common Stock or any portion thereof by the surrender of a duly completed Net
Issue Election Notice, in the form attached hereto, at the office of the Company.  Thereupon, the Company shall issue to the
Registered 

 

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Holder such number of fully paid and
nonassessable shares of Common Stock as is computed using the following
formula:

 

	
  X
  =

  	
  Y
  (A-B)

  
	
   

  	
  A

  

 

	
  Where X

  	
   

  	
  =

  	
   

  	
  the number
  of shares of Common Stock to be issued to the Registered Holder.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Y

  	
   

  	
  =

  	
   

  	
  the
  number of shares of Warrant Shares requested to be exercised under this
  Warrant.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A

  	
   

  	
  =

  	
   

  	
  the
  fair market value of one (1) share of Common Stock as of the time that
  the net issue election is made

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B

  	
   

  	
  =

  	
   

  	
  the Warrant Exercise Price

  

 

(e)                                  For purposes of
this Section 3, fair market value of a share of Common Stock at the time
that the net issue election is made shall mean:

 

(i)                                     if traded on a
stock exchange, the fair market value of the Common Stock shall be deemed to be
the average of the closing selling prices of the Common Stock on the stock
exchange determined by the Board of Directors of the Company to be the primary
market for the Common Stock over the ten (10) trading day period ending on
the date prior to the date that the net issue election is made, as such prices
are officially quoted in the composite tape of transactions on such exchange;

 

(ii)                                  if traded
over-the-counter, the fair market value of the Common Stock shall be deemed to
be the average of the closing bid prices (or, if such information is available,
the closing selling prices) of the Common Stock over the ten (10) trading
day period ending on the date prior to the date that the net issue election is
made, as such prices are reported by The OTC Bulletin Board, any successor
system or any exchange on which it is listed, whichever is applicable; or

 

(iii)                               if, at the time
of exercise, there is no public market for the Common Stock, then the fair
market value shall be determined by the Board of Directors of the Company in
good faith.

 

(f)                                    This Warrant
shall not be exercisable until the Exercise Date (the “Exercise Restriction
Period”).  Subject to the Exercise
Restriction Period, this Warrant shall be exercisable either in its entirety
or, from time to time, for part only of the number of Warrant Shares which are
issuable hereunder.  If this Warrant
shall have been exercised only in part, the Company shall, at the time of
delivery of the certificates for the Warrant Shares issued pursuant to such
exercise, deliver to the Registered Holder a new Warrant evidencing the rights
to purchase the remaining Warrant Shares, which Warrant shall be substantially
in the form of this Warrant.

 

Section 4.                                            Payment
of Taxes and Expenses.

 

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(a)                                  The Company
will pay all expenses and taxes (other than any federal or state income tax or
similar obligations of the Registered Holder) and other governmental charges attributable
to the preparation, execution, issuance and delivery of this Warrant, any new
Warrant and the Warrant Shares; provided, however,
that the Company shall not be required to pay any tax in respect of the
transfer of this Warrant or the Warrant Shares, or the issuance or delivery of
certificates for Warrant Shares upon the exercise of this Warrant, to a person
or entity other than a Registered Holder or an Affiliate (as hereinafter
defined) of such Registered Holder.

 

(b)                                 An “Affiliate”
of any person or entity means any other person or entity directly or indirectly
controlling, controlled by or under direct or indirect common control with such
person or entity.

 

Section 5.                                            Mutilated
or Missing Warrant Certificate. 
If this Warrant shall be mutilated, lost, stolen or destroyed, upon
request by the Registered Holder, the Company will issue, in exchange for and
upon cancellation of the mutilated Warrant, or in substitution for the lost,
stolen or destroyed Warrant, a substitute Warrant, in substantially the form of
this Warrant, of like tenor, but, in the case of loss, theft or destruction,
only upon receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of this Warrant and, if requested by the Company,
indemnity also reasonably satisfactory to it.

 

Section 6.                                            Reservation,
Listing and Issuance of Warrant Shares.

 

(a)                                  The Company
will at all times have authorized, and reserve and keep available, free from
preemptive rights, for the purpose of enabling it to satisfy any obligation to
issue Warrant Shares upon the exercise of the rights represented by this
Warrant, the number of Warrant Shares deliverable upon exercise of this
Warrant.  The Company will, at its
expense, use it best efforts to cause such shares to be included in or listed
on (subject to issuance or notice of issuance of Warrant Shares) all markets or
stock exchanges in or on which the Common Stock is included or listed not later
than the date on which the Common Stock is first included or listed on any such
market or exchange and will thereafter maintain such inclusion or listing of
all shares of Common Stock from time to time issuable upon exercise of this
Warrant.

 

(b)                                 Before taking
any action which could cause an adjustment pursuant to Section 7 hereof reducing
the Exercise Price below the par value of the Warrant Shares, the Company will
take any corporate action which may be necessary in order that the Company may
validly and legally issue at the Exercise Price, as so adjusted, Warrant Shares
that are fully paid and non-assessable.

 

(c)                                  The Company
covenants that all Warrant Shares will, upon issuance in accordance with the
terms of this Warrant, be (i) duly authorized, fully paid and
nonassessable, and (ii) free from all taxes with respect to the issuance
thereof and from all liens, charges and security interests.

 

Section 7.                                            Adjustment
of Number of Warrant Shares.

 

(a)                                  The number of
Warrant Shares to be purchased upon exercise hereof is subject to change or
adjustment from time to time as hereinafter provided:

 

(i)                                     Stock
Dividends; Stock Splits; Reverse Stock Splits; Reclassifications.  In case the Company shall (a) pay a
dividend with respect to its Common Stock in shares of capital stock, (b) subdivide
its outstanding shares 

 

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of Common Stock, (c) combine its
outstanding shares of Common Stock into a smaller number of shares of any class
of Common Stock or (d) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing corporation), other than elimination of par value, a change in par
value, or a change from par value to no par value (any one of which actions is
herein referred to as an “Adjustment Event”), the number of Warrant
Shares  purchasable upon exercise of the
Warrant immediately prior to the record date for such Adjustment Event shall be
adjusted so that the Registered Holder shall thereafter be entitled to receive
the number of shares of Common Stock or other securities of the Company (such
other securities thereafter enjoying the rights of shares of Common Stock under
this Warrant) that such Registered Holder would have owned or have been
entitled to receive after the happening of such Adjustment Event, had such
Warrant been exercised immediately prior to the happening of such Adjustment
Event or any record date with respect thereto. 
An adjustment made pursuant to this Section 7(a)(i) shall
become effective immediately after the effective date of such Adjustment Event
retroactive to the record date, if any, for such Adjustment Event.

 

(ii)                                  Adjustment
of Exercise Price.  Whenever
the number of Warrant Shares purchasable upon the exercise of each Warrant is adjusted
pursuant to Section 7(a)(i), the Exercise Price for each Warrant Share
payable upon exercise of each Warrant shall be adjusted by multiplying such
Exercise Price immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise of each Warrant immediately prior to such adjustment, and the
denominator of which shall be the number of shares of Common Stock so
purchasable immediately thereafter.

 

(iii)                               Adjustments
for Consolidation, Merger, Sale of Assets, Reorganization, etc..  In case the Company (a) consolidates
with or merges into any other corporation and is not the continuing or
surviving corporation of such consolidation of merger, or (b) permits any
other corporation to consolidate with or merge into the Company and the Company
is the continuing or surviving corporation but, in connection with such
consolidation or merger, the Common Stock is changed into or exchanged for
stock or other securities of any other corporation or cash or any other assets,
or (c) transfers all or substantially all of its properties and assets to
any other corporation, or (d) effects a capital reorganization or
reclassification of the capital stock of the Company in such a way that holders
of Common Stock shall be entitled to receive stock, securities, cash and/or
assets with respect to or in exchange for Common Stock, then, and in each such
case, proper provision shall be made so that, upon the basis and upon the terms
and in the manner provided in this subsection 7(a)(iii), the Registered Holder,
upon the exercise of this Warrant at any time after the consummation of such
consolidation, merger, transfer, reorganization or reclassification, shall be
entitled to receive (at the aggregate Exercise Price in effect for all shares
of Common Stock issuable upon such exercise immediately prior to such
consummation as adjusted to the time of such transaction), in lieu of shares of
Common Stock issuable upon such exercise prior to such consummation, the stock
and other securities, cash and/or assets to which such holder would have been
entitled upon such consummation if the Registered Holder had so exercised this
Warrant immediately prior thereto (subject to adjustments subsequent to such
corporate action as nearly equivalent as possible to the adjustments provided
for in this Section).

 

(iv)                              De
Minimis Adjustments.  No
adjustment in the Exercise Price and number of Warrant Shares purchasable
hereunder shall be required unless such adjustment would require 

 

5

 

an increase or decrease of at least $0.02 in
the Exercise Price; provided, however, that any adjustments which by reason of
this Section 7(a)(iv) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.  All calculations shall be made to the nearest
full share.

 

(b)                                 Notice
of Adjustment.  Whenever
the number of Warrant Shares purchasable upon the exercise of each Warrant or
the Exercise Price is adjusted, as herein provided, the Company shall promptly
notify the Registered Holder in writing (such writing referred to as an “Adjustment
Notice”) of such adjustment or adjustments and shall deliver to such
Registered Holder a statement setting forth the number of shares of Common
Stock purchasable upon the exercise of each Warrant and the Exercise Price
after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was
made.

 

(c)                                  Other
Notices.  In case at any time:

 

(i)                                     the Company
shall declare any cash dividend on its Common Stock;

 

(ii)                                  the Company
shall pay any dividend payable in stock upon its Common Stock or make any
distribution (other than regular cash dividends) to the holders of its Common
Stock;

 

(iii)                               the Company
shall offer for subscription pro rata to all
of the holders of its Common Stock any additional shares of stock of any class
or other rights;

 

(iv)                              the Company
shall authorize the distribution to all holders of its Common Stock of
evidences of its indebtedness or assets (other than cash dividends or cash
distributions payable out of earnings or earned surplus or dividends payable in
Common Stock);

 

(v)                                 there shall be
any capital reorganization, or reclassification of the capital stock of the
Company, or consolidation or merger of the Company with another corporation
(other than a subsidiary of the Company in which the Company is the surviving
or continuing corporation and no change occurs in the Company’s Common Stock),
or sale of all or substantially all of its assets to another corporation; or

 

(vi)                              there shall be
a voluntary or involuntary dissolution, liquidation, bankruptcy, assignment for
the benefit of creditors, or winding up of the Company;

 

then, in any one or more of
said cases the Company shall give written notice, addressed to the Registered
Holder at the address of such Registered Holder as shown on the books of the
Company, of (1) the date on which the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights,
or (2) the date (or, if not then known, a reasonable approximation thereof
by the Company) on which such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, bankruptcy, assignment for the benefit
of creditors, winding up or other action, as the case may be, shall take
place.  Such notice shall also specify
(or, if not then known, reasonably approximate) the date as of which the
holders of Common Stock of record shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, bankruptcy, assignment for the benefit of creditors, winding up,
or other action, as the case may be. 
Such written notice shall be given (except as to any bankruptcy
proceeding) at least 

 

6

 

five (5) business days
prior to the action in question and not less than five (5) business days
prior to the record date or the date on which the Company’s transfer books are
closed in respect thereto.  Such notice
shall also state that the action in question or the record date is subject to
the effectiveness of a registration statement under the 1933 Act, or to a
favorable vote of stockholders, if either is required.

 

(d)                                 Statement
on Warrants.  The form of
this Warrant need not be changed because of any change in the Exercise Price or
in the number or kind of shares purchasable upon the exercise of a
Warrant.  However, the Company may at any
time in its sole discretion make any change in the form of the Warrant that it
may deem appropriate and that does not affect the substance thereof and any
Warrant thereafter issued, whether in exchange or substitution for any
outstanding Warrant or otherwise, may be in the form so changed.

 

(e)                                  Fractional
Interest.  The Company
shall not be required to issue fractional Warrant Shares on the exercise of the
Warrants.  The number of full Warrant
Shares which shall be issuable upon such exercise shall be computed on the
basis of the aggregate number of whole shares of Common Stock purchasable on
the exercise of the Warrants so presented. 
If any fraction of a share of Common Stock would, except for the
provisions of this Section 7(e) be issuable on the exercise of the
Warrants (or specified proportion thereof), the Company shall pay an amount in
cash calculated by it to be equal to the then fair value of one share of Common
Stock, as determined by the Board of Directors of the Company in good faith,
multiplied by such fraction computed to the nearest whole cent.

 

Section 8.                                            No
Rights or Liabilities as a Stockholder.  The Registered Holder shall not be entitled
to vote or be deemed the holder of Common Stock or any other securities of the
Company which may at any time be issuable on the exercise hereof, nor shall
anything contained herein be construed to confer upon the holder of this
Warrant, as such, the rights of a stockholder of the Company or the right to
vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, or give or withhold consent to any corporate action or
to receive notice of meetings or other actions affecting stockholders (except
as provided herein), or to receive dividends or subscription rights or
otherwise, until the Date of Exercise shall have occurred.  No provision of this Warrant, in the absence
of affirmative action by the Registered Holder hereof to purchase shares of
Common Stock, and no mere enumeration herein of the rights and privileges of
the Registered Holder, shall give rise to any liability of such holder for the
Exercise Price or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

 

Section 9.                                            Transfer
Restrictions; Registration of the Warrant and Warrant Shares.

 

(a)                                  Neither the
Warrant nor the Warrant Shares have been registered under the 1933 Act.  The Registered Holder, by acceptance hereof,
represents that it is acquiring this Warrant to be issued to it for its own
account and not with a view to the distribution thereof, and agrees not to
sell, transfer, pledge or hypothecate this Warrant, any purchase rights
evidenced hereby or any Warrant Shares unless a registration statement is
effective for this Warrant or the Warrant Shares under the 1933 Act, or in the
opinion of such Registered Holder’s counsel reasonably satisfactory to the
Company, a copy of which opinion shall be delivered to the Company, such
registration is not required as some other exemption from the registration
requirement of the 1933 Act and applicable laws is available.

 

(b)                                 Subject to the
provisions of the following paragraph of this Section 9, each Certificate
for Warrant Shares shall be stamped or otherwise imprinted with a legend in
substantially the following form:

 

7

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED (EXCEPT IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THESE SECURITIES) OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER AND, IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS
SOLD PURSUANT TO RULE 144 UNDER SUCH ACT OR THE ISSUER HAS RECEIVED
DOCUMENTATION REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT
REQUIRE REGISTRATION UNDER SUCH ACT.

 

(c)                                  The
restrictions and requirements set forth in the foregoing paragraph shall apply
with respect to Warrant Shares unless and until such Warrant Shares are sold or
otherwise transferred pursuant to an effective registration statement under the
1933 Act or are otherwise no longer subject to the restrictions of the 1933
Act, at which time the Company agrees to promptly cause such restrictive
legends to be removed and stop transfer restrictions applicable to such Warrant
Shares to be rescinded.

 

(d)                                 The Company
will use its best efforts to comply with the reporting requirements of Section 13
and 15(d) of the Securities Exchange Act of 1934, as amended (the “1934
Act”) (whether or not it shall be required to do so pursuant to such
Sections) and will use its best efforts to comply with all other public
information reporting requirements of the Securities and Exchange Commission (“SEC”)
including, without limitation, Rule 144 promulgated under the 1933 Act)
from time to time in effect and relating to the availability of an exemption
from the 1933 Act for sale of restricted securities.  The Company also will cooperate with the Registered
Holder and with each holder of any Warrant Shares in supplying such information
as may be necessary for any such holders to complete and file any information
reporting forms presently or hereafter required by the SEC as a condition to
the availability of an exemption from the 1933 Act for the sale of restricted
securities.

 

Section 10.                                      Registration
Rights.  The Holder shall have and be
entitled to exercise the rights of registration granted under the Registration
Rights Agreement filed pursuant to the Purchase Agreement between the Company
and PERM Energy Advisors, Inc.

 

Section 11.                                      Notices.  All notices, requests, demands and other
communications relating to this Warrant shall be in writing and shall be deemed
to have been duly given if delivered personally or sent by United States
certified or registered first-class mail, postage prepaid, return receipt
requested, to the parties hereto at the following addresses or at such other
address as any party hereto shall hereafter specify by notice to the other
party hereto:

 

(a)                                  If to the
Registered Holder of this Warrant or the holder of the Warrant Shares,
addressed to the address of such Registered Holder or holder as set forth on
books of the Company or otherwise furnished by the Registered Holder or holder
to the Company.

 

(b)                                 If to the
Company, addressed to:

 

8

 

	
  Rock Energy
  Resources, Inc.

  
	
   

  
	
  10375 Richmond,
  Suite 2100

  
	
  Houston, Texas 77042

  
	
  Attention: Rocky Emery

  
	
  Facsimile: 713.954.3611

  

 

Binding
Effect.  This
Warrant shall be binding upon and inure to the sole and exclusive benefit of
the Company, its successors and assigns, and the holder or holders from time to
time of this Warrant and the Warrant Shares.

 

Section 12.                                      Survival
of Rights and Duties.  This Warrant shall terminate and
be of no further force and effect on the earlier of (i) 5:00 p.m.,
Texas time, on the Expiration Date and (ii) the date on which this Warrant
and all purchase rights evidenced hereby have been exercised, except that the
provisions of Sections 4, 6(c), 10 and 11 hereof shall continue in full force
and effect after such termination date.

 

Section 13.                                      Governing
Law.  This Warrant shall be
construed in accordance with and governed by the laws of the State of Texas.

 

Section 14.                                      Holidays.  If the last or appointed day for the taking
of any action or the expiration of any right required or granted herein shall
be a Saturday or a Sunday or shall be a holiday on which The OTC Bulletin Board
(or any successor system or exchange on which Common Stock is subsequently
listed) is closed, then such action may be taken or such right may be exercised
on the next succeeding business day.

 

Section 15.                                      Section Headings.  The Section headings in this Warrant are
for purposes of convenience only and shall not constitute a part hereof.

 

The remainder of page intentionally left blank.

 

9

 

IN WITNESS WHEREOF, the
Company has caused this Warrant to be executed under its corporate seal by its
officers thereunto duly authorized as of the date hereof.

 

 

	
   

  	
  ROCK ENERGY RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Rocky
  V. Emery

  
	
   

  	
   

  	
  Name: Rocky V. Emery

  
	
   

  	
   

  	
  Title: Chairman and CEO

  

 

 

Signature
Page to

Common Stock Warrant

 

10

 

FORM OF ELECTION TO PURCHASE

 

(To Be Executed Upon Exercise of this Warrant)

 

To Rock Energy Resources, Inc.:

 

The undersigned, the record
holder of this Warrant (Warrant No.           ),
hereby irrevocably elects to exercise the right, represented by this Warrant,
to purchase                       
of the Warrant Shares and herewith and hereby tenders payment for such Warrant
Shares to the order of Rock Energy Resources, Inc. of $                  
representing the full purchase price for such shares at the price per share
provided for in such Warrant and the delivery of any applicable taxes payable
by the undersigned pursuant to such Warrant.

 

The undersigned requests
that certificates for such shares be issued in the name of:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Please print name and address)

  	
   

  	
  Social Security or Tax Identification No.

  

 

In the event that not all of
the purchase rights represented by the Warrant are exercised, a new Warrant,
substantially identical to the attached Warrant, representing the rights
formerly represented by the attached Warrant which have not been exercised,
shall be issued in the name of and delivered to:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Please print name and address)

  	
   

  	
  Social Security or Tax Identification No.

  

 

	
  Dated:

  	
   

  	
   

  	
  Name of Holder (Print):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  (Name):

  	
   

  
	
   

  	
   

  	
  (Title):

  	
   

  
							

 

 

Form of Election to purchase

 

 

FORM OF ASSIGNMENT

 

FOR VALUE RECEIVED,                                 
hereby sells, assigns and transfers to each assignee set forth below all of the
rights of the undersigned under the attached Warrant (Warrant No.       )
with respect to the number of shares of Common Stock covered thereby set forth
opposite the name of such assignee unto:

 

	
   

  	
   

  	
   

  	
   

  	
  Number of Shares of

  
	
  Name of Assignee

  	
   

  	
  Address

  	
   

  	
  Of Common Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

If the total of said purchase
rights represented by the Warrant shall not be assigned, the undersigned
requests that a new Warrant Certificate evidencing the purchase rights not so
assigned be issued in the name of and delivered to the undersigned.

 

 

	
  Dated:

  	
   

  	
   

  	
  Name of Holder (Print):

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
     (Signature of Holder)

  

 

 

Form of Assignment

 

 

FORM OF NET ISSUE ELECTION NOTICE

 

(To be signed only on net
issue exercise of the Warrant)

 

To Rock Energy Resources, Inc.:

 

The undersigned, the record
holder of this Warrant (Warrant No.           ),
hereby irrevocably elects to exercise this Warrant with respect to                     
shares of Common Stock, pursuant to the net issuance provisions set forth in
the Warrant and requests that the certificates for the number of shares of
Common Stock issuable after application of the net issuance formula to such                     
shares be issued.

 

The undersigned requests
that certificates for such shares be issued in the name of:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Please print name and address)

  	
   

  	
  Social Security or Tax Identification No.

  

 

In the event that not all of
the purchase rights represented by the Warrant are exercised, a new Warrant,
substantially identical to the attached Warrant, representing the rights
formerly represented by the attached Warrant which have not been exercised,
shall be issued in the name of and delivered to:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Please print name and address)

  	
   

  	
  Social Security or Tax Identification No.

  

 

	
  Dated:

  	
   

  	
   

  	
  Name of Holder (Print):

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  (Name):

  	
   

  
	
   

  	
  (Title):

  	
   

  
							

 

 

Form of Net Issue Election Notice

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