Document:

Unassociated Document

    
      

    

    Exhibit
      10.3

    

    PLEDGE
      AND SECURITY AGREEMENT

    (LLC
      Membership Interests)

    

    This
      Pledge and Security Agreement
      (this “Agreement") is made effective as of November 9, 2007 ("Effective Date"),
      by and between PETROSEARCH ENERGY CORPORATION, a Nevada
      corporation (“Pledgor”), and the Purchasers identified on
      the signature pages hereto (each, a “Purchaser” and collectively, the
“Purchasers”) and IRONMAN PI FUND (QP), LP (“Ironman”),
      as agent for the Purchasers (in such capacity, together with its successors
      in
      such capacity, the “Agent”).

    

    

    RECITALS:

    

    A.           Pledgor
      is a Nevada corporation in the business of acquiring, developing and operating
      oil and gas properties in several states, including, Texas, Oklahoma, North
      Dakota, and Mississippi.  Pledgor owns 100% of the membership
      interests of Exploration Holding Co., L.L.C. (“Exploration
      Holding”).  Exploration Holding owns 100% of the membership interests
      of Barnett Petrosearch, L.L.C. (“Barnett Petrosearch”).  Each of
      Exploration Holding and Barnett Petrosearch is a Texas limited liability
      company.

    

    B.           
      Barnett Petrosearch owns a 5.54455% limited partnership interest in DDJET,
      Limited, LLP, a Texas limited liability limited partnership (“DDJET” or “the
      Partnership”), organized on December 15, 2006, by Metroplex Barnett Shale, LLC,
      a Delaware limited liability company, (“Metroplex”) as General
      Partner.  Metroplex is a direct subsidiary of Exxon Mobil
      Corporation.  Cinco County Barnett Shale, LLC, a Texas limited
      liability company (“Cinco”) is a Limited Partner of the Partnership and Cinco is
      a direct subsidiary of Harding Company, a private Fort Worth based exploration
      company.  Barnett Petrosearch is also a Limited Partner of the
      Partnership.  The Partnership was formed for the purpose of acquiring,
      exploring, developing, owning and operating oil and gas leases and other mineral
      interests in portions of Collin, Dallas, Denton, Ellis, Hill, Johnson, Navarro
      and Tarrant Counties, Texas and to acquire, construct, own and operate pipeline
      assets for the evacuation of hydrocarbons produced from these
      properties.  The area and interests covered by the Partnership are
      situated in a geologic region generally known as the Barnett Shale.

    

    C.           Pledgor
      and each of the Purchasers are parties to Note and Warrant Purchase Agreements
      dated as of November 9, 2007 (as modified and supplemented and in effect from
      time to time, the “Purchase Agreement”), that provides, subject to the
      terms and conditions thereof, for the issuance and sale by Pledgor to each
      of
      the Purchasers, severally and not jointly, of certain 8% Senior Secured
      Convertible Notes in the aggregate principal amount of $8,100,000 Due November
      9, 2010 (as such Convertible Notes may be hereafter amended, modified, renewed
      or extended, the “Convertible Notes”) and Warrants as more fully described in
      the Purchase Agreement.

    

    D.           To
      induce each of the Purchasers to enter into the Purchase Agreement, and for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, Pledgor has agreed to pledge and grant a security interest
      in the Collateral (as hereinafter defined) as security for the Obligations
      (as
      hereinafter defined).

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    E.           It
      is a condition precedent to the effectiveness of the Purchase Agreement that
      this Agreement shall have been executed and delivered by Pledgor and shall
      be in
      full force and effect; and

    

    F.           Pledgor
      has determined that Pledgor's execution, delivery and performance of this
      Agreement may reasonably be expected to provide substantial benefit to Pledgor,
      directly or indirectly, and to be in the best interests of Pledgor.

    

    NOW,
      THEREFORE, FOR VALUE RECEIVED, the sufficiency of which is acknowledged by
      the
      parties, the parties hereto agree as follows:

    

    ARTICLE
      I

    Security
      Interest and Pledge

    

    Section
      1.01.   Defined Terms
      and Related Matters.

    

    (a)           Capitalized
      terms used and not otherwise defined herein that are defined in the Convertible
      Notes shall have the meanings specified therein.  Capitalized terms
      used and not otherwise defined herein or in the Convertible Notes that are
      defined in the Purchase Agreement shall have the meanings specified
      therein.  Terms defined in the singular include the plural and terms
      defined in the plural include the singular.

    

    (b)           The
      words "hereof", "herein" and "hereunder" and words of similar import when used
      in this Agreement shall refer to this Agreement as a whole and not to any
      particular provision of this Agreement.

    

    (c)           Unless
      otherwise defined herein or in the Purchase Agreement, the terms defined in
      Articles 8 and 9 of the Uniform Commercial Code as enacted in the State of
      Texas
      as in effect from time to time (the "Code"), are used herein as therein
      defined.

    

    (d)           "Pledged
      Securities" means any and all limited liability company interests and other
      capital securities (including, without limitation, any warrants, options or
      other rights to purchase limited liability company interests of Exploration
      Holding) constituting, but not exceeding, a five percent (5.00%) ownership
      interest in Exploration Holding, whether now owned or hereafter acquired by
      Pledgor, including the limited liability company interests identified on
Schedule A hereto as Pledged Securities, as such Schedule A may be
      updated and supplemented from time to time in accordance with Section 3.04(b)
      hereof.

    
      
        Pledge
          and Security Agreement

         

      

      
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    Section
      1.02.   Security
      Interest and Pledge.  Subject to the
      terms of this Agreement, Pledgor hereby pledges and delivers to the Purchasers,
      and hereby grants to the Purchasers, pro rata  as listed in Schedule
“A” to the Purchase Agreement, a lien on and security interest in and to all of
      Pledgor's rights, titles, interests and privileges in and with respect to the
      Pledged Securities, whether now owned or hereafter acquired, including, without
      limitation: (a) all limited liability company interests of Exploration Holding
      and all securities convertible or exchangeable into, and all warrants, options
      or other rights to purchase limited liability company interests of Exploration
      Holding (but not exceeding the five percent (5%) amount of all membership
      interests contemplated by the definition of Pledged Securities; which 5%
      interest shall not be diluted); (b) all certificates or instruments representing
      Pledged Securities and all proceeds, income and profits thereon, and all
      interest, dividends and other payments, property, revenues, and distributions
      with respect thereto; (c) all proceeds received or receivable by Pledgor in
      cash, stock or otherwise, from any recapitalization, reclassification, merger,
      dissolution, liquidation or other termination of the existence of Exploration
      Holding relating to the Pledged Securities; and (d) all other proceeds or assets
      received or receivable by Pledgor in respect of its status as a member of
      Exploration Holding with respect to the Pledged Securities (all such property,
      collectively, the "Collateral"); provided, that the inclusion of proceeds in
      this Agreement does not authorize Pledgor to sell, dispose of or otherwise
      use
      the Collateral in any manner not specifically authorized hereby.

    

    Section
      1.03.   Obligations
      Secured.  This Agreement secures: (a)
      all obligations under the Convertible Notes, including the full and prompt
      payment of the principal of, interest on, and all other amounts due with respect
      to the Convertible Notes from time to time outstanding, as and when such amounts
      shall become due and payable, whether by lapse of time, upon redemption,
      prepayment or purchase, by extension or by acceleration or declaration or
      otherwise (including, without limitation, interest due at the Default Rate
      on
      overdue payments of principal, interest or any other amount due hereunder,
      under
      the Convertible Notes, the Purchase Agreement or under any of the other
      Transaction Documents (as such term is defined in the Purchase Agreement));
      (b)
      the full and prompt payment, performance and observance by Pledgor of all
      obligations, covenants, conditions and agreements contained in any of the
      Transaction Documents; (c) the full and prompt payment, performance and
      observance by Pledgor of all obligations, covenants, conditions and agreements
      contained in this Agreement; and (d) the full and prompt payment, upon demand
      by
      the Agent, of all costs and expenses (including, without limitation, reasonable
      attorneys' fees), if any, as shall have been expended or incurred by the Agent
      in the protection or enforcement of any right or privilege under the Convertible
      Notes, the Purchase Agreement, this Agreement or any of the other Transaction
      Documents, or in the protection or enforcement of any rights, privileges or
      liabilities thereunder or in any consultation or action in connection therewith
      (all such obligations, covenants, conditions and agreements described in the
      foregoing clauses (a), (b) (c) and (d) being hereinafter collectively referred
      to as the "Obligations”.

    

    Section
      1.04.   Formalities.

    

    (a)          All
      certificates and instruments representing the Pledged Securities have been,
      or,
      in the case of all Pledged Securities hereafter acquired, immediately upon
      acquisition shall be, delivered to and shall be held by the Agent on behalf
      of
      the Purchasers pursuant hereto in suitable form for transfer by delivery, or
      accompanied by undated stock powers or other instruments of transfer or
      assignment, duly executed in blank, all in form and substance satisfactory
      to
      the Agent.

    

    (b)          Notwithstanding
      anything to the contrary contained in clause (a) above, if any Pledged
      Securities (whether now owned or hereafter acquired) are uncertificated
      securities, Pledgor shall promptly notify the Agent, and shall promptly, without
      the need for any request from the Agent, take all actions required to perfect
      the security interest of the Purchasers under applicable law (including, in
      any
      event, under the provisions of Article 8 or 9 of the Code, if
      applicable).  Pledgor further agrees to take such actions as the Agent
      deems necessary or desirable to effect the foregoing and to permit the Agent
      to
      exercise any rights and remedies on behalf of the Purchasers hereunder, and
      agrees, promptly upon the request of the Agent, to provide an opinion of
      counsel, in form and substance satisfactory to the Agent, as to the validity
      and
      enforceability of the security interest created by this Agreement with respect
      to such uncertificated securities, the perfection of the Purchasers’ security
      interest therein and such other matters as may be reasonably requested by the
      Agent.

    
      
        Pledge
          and Security Agreement

         

      

      
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    (c)           The
      Agent shall have the right, at any time in its reasonable discretion and without
      notice to any Pledgor, to (i) transfer to any of its nominees any or all of
      the
      Collateral, subject only to the revocable rights set forth in Section 4.01
      hereof and applicable law, and (ii) so long as an Event of Default shall have
      occurred and be continuing, to register any or all of the Collateral in Agent’s
      or Purchasers’ own names.  In addition, the Agent shall have the right
      at any time to exchange certificates or instruments representing or evidencing
      Collateral for certificates or instruments of smaller or larger
      denominations.

    

    (d)           Pledgor
      hereby authorizes the Agent, at the expense of Pledgor (including the fees
      and
      expenses of counsel to the Agent on behalf of the Purchasers), to file one
      or
      more financing or continuation statements, and amendments thereto, relating
      to
      all or any part of the Collateral without the signature of Agent where permitted
      by law.  A photocopy or other reproduction of this Agreement or any
      financing statement covering the Collateral or any part thereof shall be
      sufficient as a financing statement where permitted by law.  Pledgor
      understands and agrees that even though the Agent has no obligation to do so,
      with respect to any financing statement, the Agent intends to file (at the
      expense of Pledgor, including the fees and expenses of counsel to the Agent
      on
      behalf of the Purchasers) any continuation statement or amendment where failure
      to so file could reasonably be expected to result in the potential lapse of
      such
      financing statement at any time within three months of any such proposed
      filing.

    

    (e)           Each
      Purchaser hereby agrees to appoint Ironman as its Agent for purposes of this
      Agreement.  The Agent may employ agents and attorneys-in-fact in
      connection herewith and shall not be responsible for the negligence or
      misconduct of any such agents or attorneys-in-fact selected by it in good
      faith.

    

    (f)           Each
      of the Purchasers hereby, severally and not jointly, covenants and agrees to
      reimburse, INDEMNIFY and hold the Agent harmless from and
      against any and all claims, actions, judgments, damages, losses, liabilities,
      costs, transfer or other taxes, and expenses (including, without limitation,
      reasonable attorneys’ fees and expenses) incurred or suffered without any bad
      faith, gross negligence or willful misconduct by the Agent, arising out of
      or
      incident to this Agreement or the administration of the Agent’s duties
      hereunder, or resulting from its actions or inactions as Agent.
THISINDEMNITY INCLUDES, BUT IS NOT LIMITED TO, ANY AND
      ALL CLAIMS, ACTIONS, JUDGMENT, DAMAGES, LOSSES, LIABILILITIES, COSTS, TRANSFER
      OR OTHER TAXES, AND EXPENSES (INCLUDING ATTORNEYS’ FEES) WHICH MAY RESULT FROM
      OR ALLEGEDLY RESULT FROM THE NEGLIGENCE, STATUTORY, OR STRICT LIABILITY OF
      AGENT
WITHOUT ANY BAD FAITH, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT BY THE
      AGENT.

    
      
        Pledge
          and Security Agreement

         

      

      
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    ARTICLE
      II

    Representations
      and Warranties

    

    Section
      2.01.   Representations
      and Warranties. Pledgor represents, warrants, and covenants to
      Purchasers as follows:

    

    (a)           The
      Pledged Securities outstanding on the date hereof: (i) are described in
Schedule A hereto; (ii) have been duly and validly issued and all
      contributions required to be made by Pledgor under the limited liability company
      agreement of Exploration Holding have been made; and (iii) are subject to no
      options, warrants, calls, liens, pledges, or commitments of any character
      whatsoever relating thereto.

    

    (b)           Any
      instruments of transfer or assignment relating to certificates representing
      or
      evidencing the Pledged Securities, executed in blank and delivered by Pledgor
      to
      the Agent herewith, have been duly executed by Pledgor and vest in the
      Purchasers the authority that they purport to confer.

    

    (c)           Upon
      (i) the pledge, assignment and delivery to the Agent by Pledgor of the
      Collateral pursuant to this Agreement and (ii) the filing of UCC 1 financing
      statements and other necessary or appropriate registrations and recordings
      in
      the Office of the Secretary of State of the State of Texas and elsewhere, all
      filings, registrations and recordings necessary or appropriate to create,
      preserve, protect and perfect the security interest granted by Pledgor to the
      Purchasers hereby in respect of the Collateral will have been accomplished,
      and
      the security interest granted by Pledgor to the Purchasers pursuant to this
      Agreement in and to the Collateral will constitute a perfected security interest
      therein superior and prior to the rights of all other Persons therein and
      subject to no other liens and security interests (other than the liens and
      security interests created hereunder), and will be entitled to all the rights,
      priorities and benefits afforded by the Code or other relevant law as enacted
      in
      any relevant jurisdiction to perfected security interests.

    

    (d)           The
      principal place of business and chief executive office of Pledgor and the sole
      location where the records of Pledgor with respect to the Collateral are kept
      are located at the address set forth on Schedule B attached
      hereto.  Pledgor shall not move its chief executive office, principal
      place of business, or such location of records unless (i) it shall have given
      to
      the Agent not less than 60 days' prior written notice of its intention so to
      do,
      clearly describing such new location and providing such other information in
      connection therewith as the Agent may reasonably request and (ii) with respect
      to such new location, it shall have taken all action required by Sections 1.04,
      2.01, and 3.04 with respect to such new jurisdiction and all other action,
      reasonably satisfactory to the Agent, to maintain the security interest of
      the
      Purchasers in the Collateral intended to be granted hereby at all times fully
      perfected, superior to all other interests, and in full force and effect.
      Pledgor shall, promptly and routinely, without necessity of any request from
      Agent, provide Agent with copies of all documents pertaining to the Collateral,
      financing statements regarding the Collateral, and other information regarding
      the Collateral which would normally be of interest to a prudent person in the
      position of the Agent or the Purchasers.

    
      
        Pledge
          and Security Agreement

         

      

      
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    (e)           The
      jurisdiction of organization and organizational number of Pledgor is as set
      forth on Schedule B attached hereto.  As of the date hereof,
      Pledgor does not have or operate under, nor has it had or operated under, in
      any
      jurisdiction at any time prior to the date hereof, any name except its legal
      name as set forth on the signature pages hereto, nor has Pledgor ever been
      organized under the laws of any jurisdiction other than the jurisdiction
      specified on Schedule B attached hereto.  Pledgor shall not change its
      legal name, assume or operate in any jurisdiction under any trade, fictitious
      or
      other name or change its jurisdiction of organization unless (i) it shall have
      given to the Agent not less than 60 days' prior written notice of its commencing
      to do so, clearly describing such new name and the jurisdictions in which such
      new name shall be used or such new jurisdiction of organization and providing
      such other information in connection therewith as the Agent may reasonably
      request and (ii) with respect to such new name or jurisdiction of organization,
      Pledgor shall have taken all reasonable action, reasonably satisfactory to
      the
      Agent, to maintain the security interest of the Purchasers in the Collateral
      intended to be granted hereby at all times fully perfected and in full force
      and
      effect.  As of the date hereof, Pledgor has no trade
      names.

    

    (f)           Pledgor
      is the legal and beneficial owner of the Collateral free and clear of any lien
      or security interest (except the liens and security interests created herein),
      and Pledgor has not sold, granted any option with respect to, assigned,
      transferred or otherwise disposed of any of its rights or interests in or to
      such Collateral.

    

    (g)           No
      effective financing statement or other document similar in effect covering
      all
      or any part of Pledgor's portion of the Collateral is on file in any recording
      office, except such as may have been filed in favor of the Purchasers relating
      to this Agreement, and Pledgor has not authorized the filing of any such
      financing statement or other document.  Pledgor will not, without the
      prior written consent of the Agent, authorize or authenticate any such financing
      statements after the date hereof, and there will not ever be on file in any
      public office, any enforceable financing statement or statements covering any
      or
      all of the Collateral, except financing statements filed or to be filed in
      favor
      of the Purchasers.

    

    (h)           Except
      for consents and authorizations previously obtained by the Pledgor, no consent,
      authorization, approval or other action by, and no notice to or filing with,
      any
      governmental authority or any other Person is required: (i) for the valid
      execution, delivery and performance by Pledgor of this Agreement; (ii) for
      the
      pledge by Pledgor of a security interest in the Collateral or for the granting,
      perfection and maintenance of the liens and security interests created hereby
      and the first priority nature of such liens and security interests (other than
      the timely and proper filing of financing statements and continuation statements
      related thereto); or (iii) for the exercise by the Agent of the voting or other
      rights provided for in this Agreement or the remedies in respect of Pledgor's
      portion of the Collateral pursuant to this Agreement (except as may be required
      in connection with such disposition by laws affecting the offering and sale
      of
      securities generally).

    

    (i)           This
      Agreement has been duly authorized, executed and delivered by Pledgor and
      constitutes a legal, valid and binding obligation of Pledgor, enforceable
      against Pledgor in accordance with its terms, except to the extent that the
      enforceability hereof may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or other similar laws affecting creditors' rights
      generally and by equitable principles (regardless of whether enforcement is
      sought in equity or at law). Pledgor warrants and represents, however, that
      no
      equitable interests in the Collateral exist now, or will ever exist, in any
      Person other than Pledgor.

    

    (j)           Except
      for any conflicts which have been previously waived in writing, the execution,
      delivery and performance of this Agreement is not in conflict with and does
      not
      violate any instrument or agreement to which Pledgor is a party or by which
      Pledgor is bound, including without limitation, the organizational agreements
      of
      Exploration Holdings.

    
      
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          and Security Agreement

         

      

      
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    (k)           Pledgor
      covenants and agrees that it will defend at Pledgor’s own expense, with counsel
      of the Purchasers’ choosing, the Purchasers’ right, title and security interest
      in and to the Collateral and the proceeds thereof against the claims and demands
      of all persons whomsoever, and Pledgor covenants and agrees that it will have
      like title to and right to pledge any other property at any time hereafter
      pledged by Pledgor to the Purchasers as Collateral hereunder and will likewise
      defend the right thereto and the security interest therein of the
      Purchasers.

    

    (l)           Pledgor
      is not currently, and at no time in the past has been, in default or violation
      of any provisions of Exploration Holding's limited liability company agreement
      or otherwise in default or violation thereunder.  None of the Pledged
      Securities is subject to any defense, offset or counterclaim, nor have any
      of
      the foregoing been asserted or alleged against Pledgor by any Person with
      respect thereto.

    

    (m)           Except
      as permitted by the Agent, Pledgor will not sell, assign, or otherwise dispose
      of, grant any option with respect to, or pledge, grant a security interest
      in or
      otherwise encumber any of the Collateral or any interest therein, or suffer
      any
      of the same to exist, and any sale, assignment, option, pledge, security
      interest or other encumbrance or disposition of any nature whatsoever made
      in
      violation of this covenant shall be a nullity and of no force and effect, and
      upon demand of the Agent, shall forthwith be canceled or satisfied by an
      appropriate instrument in writing binding on all adverse claimants.

    

    (n)           Pledgor
      shall give the Agent prompt notice of any claim relating to Pledgor's portion
      of
      the Collateral.  Pledgor shall deliver to the Agent a copy of each
      written demand, notice or document received by it which may adversely affect
      the
      Purchasers’ interest in Pledgor's portion of the Collateral promptly upon, but
      in any event within five days after, Pledgor's receipt thereof.

    

    (o)           Pledgor
      has received all consents and approvals, if any, required by the terms of any
      of
      Pledgor's portion of the Collateral to the sale or transfer hereunder of such
      Collateral, or Pledgor's interest and rights therein, to the Purchasers (except
      as may be required in connection with such disposition by laws affecting the
      offering and sale of securities generally).

    

    (p)           The
      Pledgor shall not withdraw as a member of Exploration Holding, or file or pursue
      or take any action which may, directly or indirectly, cause a dissolution or
      liquidation of or with respect to Exploration Holding or seek a partition of
      any
      property of Exploration Holding, except as permitted by the Note
      Agreement.

    

    The
      representations and warranties set forth in this Section 2.01 shall survive
      the
      execution and delivery of this Agreement.

    

    ARTICLE
      III

    Affirmative
      and Negative Covenants

    

    Pledgor
      covenants and agrees with Purchasers that until the Obligations are satisfied
      and performed in full:

    
      
        Pledge
          and Security Agreement

         

      

      
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    Section
      3.01 [Intentionally Left Blank].

    

    Section
      3.02.   Encumbrances.  Pledgor
      shall not create, permit, or suffer to exist, and shall defend the Collateral
      against, any lien, security interest, or other encumbrance on the Collateral
      except the pledge and security interest of Purchasers hereunder and the pledge
      and security interests referenced in Section 1.02 above, and shall defend
      Pledgor's rights in the Collat­eral and Purchasers’ security interest in the
      Collater­al against the claims of all persons or entities
      whatsoever.

    

    Section
      3.03.   Sale of
      Collateral.  Pledgor shall not sell,
      assign, or otherwise dispose of the Collateral or any part thereof, or attempt
      to sell, assign, or otherwise dispose of the Collateral or any part thereof,
      without the prior written consent of the Agent.

    

    Section
      3.04.   Further
      Assurances.

    

    (a)           At
      any time and from time to time, upon the request of the Agent, and at the sole
      expense of Pledgor, Pledgor shall promptly execute and deliver all such further
      instruments and documents and take such further action as the Agent may deem
      necessary or desirable to preserve and perfect its security interest in the
      Collateral and carry out the provisions and purposes of this Agreement,
      including, without limitation, the execution and/or filing of such financing
      statements as the Agent may require (and any such filing is hereby authorized
      by
      Pledgor).  A carbon, photographic, or other reproduction of this
      Agreement or of any financing statement covering the Collateral or any part
      thereof shall be sufficient as a financing statement and may be filed as a
      financing statement.

    

    (b)           In
      addition to performing its obligations under Section 3.04 (a) above, Pledgor
      will, upon acquiring any additional Pledged Securities, promptly (and in any
      event within ten days) deliver to the Agent a Supplement to Pledge Agreement,
      duly executed by such Pledgor, in substantially the form of Annex A
      hereto (each, a "Supplement to Pledge Agreement"), identifying such additional
      Pledged Securities.  Pledgor hereby authorizes the Agent to attach
      each Supplement to Pledge Agreement to this Agreement and agrees that all
      additional Pledged Securities listed on any Supplement to Pledge Agreement
      (including any schedules(s) thereto) delivered to the Agent shall for all
      purposes hereunder constitute Collateral.  Pledgor will, at the
      request of the Agent, deliver an opinion of counsel, in form and substance
      reasonably satisfactory to the Agent, as to the validity and perfection of
      the
      security interest granted in the Collateral identified in any Supplement to
      Pledge Agreement (including any schedule(s) thereto) and the proceeds
      thereof.

    

    Section
      3.05.   Obligations.  Pledgor
      shall duly and punc­tually pay and perform the Obligations, including
      without limita­tion, the obligations of Pledgor under this
      Agreement.

    

    Section
      3.06.   Notification.  Pledgor
      shall promptly notify the Agent of (i) any lien, security interest,
      encumbrance or claim made or threatened against the Collateral, (ii) any
      materi­al change in the Collateral, including, without limitation, any
      material decrease in the value of the Collateral, (iii) any material information
      that a prudent person in the position of the Agent or the Purchasers would
      want
      to know, and (iv) the occurrence or existence of any Event of Default
      (hereinafter defined) or the occurrence or existence of any condition or event
      that, with the giving of notice or lapse of time or both, would be an Event
      of
      Default.

    
      
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          and Security Agreement

         

      

      
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    Section
      3.07.   Compliance
      with
      Laws.  Pledgor shall comply with all
      applicable laws, rules, regulations, and orders of any court or governmental
      authority.

    

    ARTICLE
      IV

    Rights
      of Purchasers and Pledgor

    

    Section
      4.01.   Voting
      Rights. So long as no Event of Default (as
      hereinafter defined) shall have occurred and be continuing and this Agreement
      is
      in force and effect, Pledgor shall be entitled to exercise any voting and other
      consensual rights relating or pertaining to the Collateral or any part
      thereof  provided, however, that no vote shall be cast or consent,
      waiver or ratification given or action taken that would be inconsistent with
      or
      violate any provision of this Agreement or any other Transaction Document,
      nor
      will any vote be cast or consent, waiver or ratification given or action taken
      that would, at the time of the vote, knowingly have the probability of reducing
      the value of the Collateral or the proceeds from the Collateral.  Upon
      the occurrence and during the continuance of an Event of Default, at the sole
      option of the Agent, all voting rights shall thereupon become vested in the
      Purchasers or their assignee, who shall thereupon have the sole right to
      exercise or to assign the right to exercise such voting and other consensual
      rights.

    

    Section
      4.02.   Dividends;
      Distributions. Until an Event of Default occurs and is continuing,
      Pledgor shall be entitled to receive, retain and use any and all dividends,
      distributions and other payments paid in respect of the Collateral to the extent
      not otherwise prohibited hereby or by the Purchase Agreement or the other
      Transaction Documents; provided, however, that any and all

    

    (A)           dividends,
      distributions and other amounts paid or payable other than in cash in respect
      of, and instruments and other property (including, without limitation, limited
      liability company interests in Exploration Holdings) received, receivable or
      otherwise distributed in respect of, or in exchange for, any of the
      Collateral;

    

    (B)           dividends
      or distributions hereafter paid or payable in cash in respect of any of the
      Collateral in connection with a partial or total liquidation or dissolution;
      and

    

    (C)           cash
      paid, payable or otherwise distributed in redemption of, or in exchange for,
      any
      Pledgor's portion of the Collateral;

    

    shall
      be,
      and shall be forthwith delivered to the Agent to hold as, Collateral and shall,
      if received by Pledgor, be received in trust for the benefit of the Purchasers,
      be segregated from the other property or funds of Pledgor and be forthwith
      delivered to the Agent as Collateral in the same form as so received (with
      any
      necessary endorsement).

    

    Section
      4.03.   Exercise of
      Rights.  Upon the occurrence and during the continuance
      of an Event of Default:

    
      
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    (i)           the
      Agent shall, without notice to Pledgor, transfer or register in the name of
      the
      Purchasers or any of their nominees any or all certificates, if any, of the
      Collateral held by the Agent on behalf of the Purchasers hereunder, and the
      Agent may thereafter, after delivery of notice to Pledgor, exercise all voting
      and limited liability company rights with respect to the Collateral (in each
      such case whether exercisable at any meeting of the issuer of that Collateral
      or
      by written consent or otherwise) and any and all rights of conversion, exchange,
      subscription or any other rights, privileges or options pertaining to any of
      the
      Collateral, as if it were the absolute owner thereof, including, without
      limitation, the right to exchange at its discretion any and all of the
      Collateral upon the merger, consolidation, reorganization, recapitalization
      or
      other readjustment of the issuer of that Collateral or upon the exercise by
      the
      applicable Pledgor or the Agent of any right, privilege or option pertaining
      to
      any certificates of the Collateral, and in connection therewith, to deposit
      and
      deliver any and all of the Collateral with any committee, depositary, transfer
      agent, registrar or other designated agency upon such terms and conditions
      as it
      may determine, all without liability except to account for property actually
      received by it, but the Agent shall have no duty to exercise any of the
      aforesaid rights, privileges or options, and the Agent shall not be responsible
      for any failure to do so or delay in so doing.

    

    (ii)           All
      rights of each Pledgor to exercise the voting and other consensual rights which
      it would otherwise be entitled to exercise pursuant to Section 4.01 hereof
      and
      to receive the dividends, distributions and other payments which it would
      otherwise be authorized to receive and retain pursuant to Section 4.02 hereof
      shall cease, and all such rights shall thereupon become vested in the Agent
      which shall thereupon have the sole right to exercise such voting and other
      consensual rights and to receive and hold as Collateral such dividends,
      distributions and other payments on behalf of the Purchasers.

    

    (iii)           All
      dividends, distributions or other payments which are received by Pledgor
      contrary to the provisions of this Article shall be received in trust by the
      Agent for the benefit of the Purchasers, shall be segregated from other funds
      of
      Pledgor, and shall be forthwith paid over to the Agent for the benefit of the
      Purchasers as Collateral in the same form as so received (with any necessary
      endorsement).

    

    (iv)           Pledgor
      shall execute and deliver (or cause to be executed and delivered) to the Agent
      all such instruments as the Agent may reasonably request for the purpose of
      enabling the Agent to exercise the voting and other rights to which it is
      entitled to exercise on behalf of the Purchasers pursuant to this Article and
      to
      receive the dividends, distributions or other payments which it is entitled
      to
      receive and retain on behalf of the Purchasers pursuant to this
      Article.

    

    Section
      4.04.   Agent Appointed
      Attorney-in-Fact.  Pledgor hereby irrevocably designates,
      makes, constitutes and appoints the Agent as Pledgor's attorney-in-fact, with
      full authority in the place and stead of Pledgor and in the name of Pledgor
      or
      otherwise, from time to time in the Agent's discretion, to take any action
      and
      to execute any agreement, document or instrument which the Agent may deem
      necessary or advisable to accomplish the purposes of this Agreement, including,
      without limitation:

    

    (a)           upon
      the occurrence and during the continuance of an Event of Default, to ask,
      demand, collect, sue for, recover, compromise, receive and give acquittance
      and
      receipts for monies due and to become due under or in connection with the
      Collateral;

    
      
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    (b)           upon
      the occurrence and during the continuance of an Event of Default, to receive,
      indorse and collect any drafts or other instruments, documents and chattel
      paper, in connection therewith; and

    

    (c)           upon
      the occurrence and during the continuance of an Event of Default, to file any
      claims or take any action or institute any proceedings that the Agent may deem
      necessary or desirable for the collection of any of the Collateral or otherwise
      to enforce the rights of the Purchasers with respect to any of the
      Collateral.

    

    Section
      4.05.   Performance
      by
      Agent of Pledgor's Obligations.  If
      Pledgor fails to perform or comply with any of the agreements contained herein
      and Agent shall cause performance of or compliance with such agreement, the
      expenses of Agent, together with interest thereon at the Default Rate (as
      defined in the Convertible Notes) shall be payable by Pledgor to Agent on demand
      and shall consti­tute Obligations secured by this Agreement.

    

    Section
      4.06.   Possession;
      Reasonable Care.  The powers conferred on the Agent
      hereunder are solely to protect its interest in the Collateral and shall not
      impose any duty upon Agent to exercise any such powers.  Except for
      the safe custody of any Collateral in its possession and the accounting for
      monies actually received by it hereunder, the Agent have no duty as to any
      Collateral or as to the taking of any necessary steps to preserve rights against
      prior parties or any other rights pertaining to any Collateral.  The
      Agent shall hold in its possession all Collateral pledged, assigned or
      transferred hereunder, except as from time to time any documents or instruments
      may be required for recordation or for the purpose of enforcing or realizing
      upon any right or value thereby represented.  The Agent may, from time
      to time, in its sole discretion, appoint one or more agents (which in no case
      shall be a Pledgor or an affiliate of a Pledgor) to hold physical custody,
      for
      the account of the Purchasers, of any or all of the Collateral.  The
      Agent shall be deemed to have exercised reasonable care in the custody and
      preservation of any Collateral in its possession if such Collateral is accorded
      treatment substantially equal to that which the Agent accords its own property,
      it being understood that the Agent shall not have any responsibility for (a)
      ascertaining or taking action with respect to calls, conversions, warrants,
      exchanges, maturities, tenders or other matters relative to any Collateral,
      whether or not the Agent has or is deemed to have knowledge of such matters,
      or
      (b) taking any necessary steps to preserve rights against any parties with
      respect to any Collateral.

    

    Section
      4.07.   Release of
      Collateral. The Agent shall release the
      Collateral upon the terms and conditions set forth in the Convertible Notes
      and
      the Purchase Agreement.

    

    ARTICLE
      V

    Default

    

    Section
      5.01.   Events of
      Default.  Each of the following shall be
      deemed an "Event of Default":

    

    (a)           an
      Event of Default occurs under terms of the Convertible Notes;

    
      
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    (b)           Any
      representation or warranty made or deemed made by Pledgor in this Agreement
      or
      in any certificate, report, notice, or statement furnished at any time in
      connection with this Agreement or the Convertible Notes is false, misleading,
      or
      erroneous in any material respect on the date when made or deemed to have been
      made.

    

    (c)           Pledgor
      shall fail to perform, observe, or comply with any covenant, agreement or term
      contained in this Agreement and such failure continues, without cure, for twenty
      (20) days after written notice to Pledgor.

    

    (d)           Pledgor
      or Exploration Holding (or any of same) shall commence a voluntary proceeding
      seeking liquidation, reorga­nization, or other relief with respect to itself
      or its debts under any bankruptcy, insolvency or other similar law now or
      hereafter in effect or seeking the appointment of a trustee, receiver,
      liquidator, custodian, or other similar official of it or a substantial part
      of
      its property or shall consent to any such relief or to the appointment of or
      taking possession by any such official in an involuntary case or other
      proceeding commenced against it or shall make a general assignment for the
      benefit of creditors or shall generally fail to pay its debts as they become
      due
      or shall take any corporate action to authorize any of the
      foregoing.

    

    (e)           An
      involuntary proceeding shall be commenced against Pledgor or Exploration Holding
      seeking liquidation, reorganization, or other relief with respect to it or
      its
      debts under any bankruptcy, insolvency or other similar law now or hereafter
      in
      effect or seeking the appointment of a trustee, receiver, liquidator,
      custodi­an or other similar official of it or a substantial part of its
      property, and such involuntary proceeding shall remain undismissed and unstayed
      for a period of thirty (30) days.

    

    Section
      5.02.   Rights and
      Remedies.  Upon the occurrence of an
      Event of Default, and subject to the notice and opportunity to cure (if any)
      required by the Convertible Notes, the Agent shall have all of the rights and
      remedies set forth in this Agreement, the Convertible Notes, the Purchase
      Agreement and any other Transaction Document and additionally shall have
      following rights and remedies:

    

    (i)           The
      Agent may declare the Obligations or any part thereof immediately due and
      payable, without demand, presentment, notice of dishonor, notice of
      acceleration, notice of intent to accelerate, notice of intent to demand,
      protest, or any other notice whatsoever, all of which are hereby expressly
      waived by Pledgor; provided, however, that upon the occurrence of an Event
      of
      Default under Section 5.01(d) or Section 5.01(e) of this Agreement, the
      Obligations shall become immediately due and payable without demand,
      presentment, notice of dishonor, notice of accel­eration, notice of intent
      to accelerate, notice of intent to demand, protest, or any other notice
      whatsoever, all of which are hereby expressly waived by
      Pledgor;

    
      
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    (ii)           In
      addition to all other rights and remedies granted to the Purchasers in this
      Agreement and in any other instrument or agreement securing, evidencing, or
      relating to the Obligations, the Agent shall have all of the rights and remedies
      of a secured party under the Uniform Commercial Code in force in the State
      of
      Texas as of the date of this Agreement.  Without limiting the
      generality of the foregoing, the Agent may (A) without demand or notice to
      Pledgor, collect, receive, or take possession of the Collateral or any part
      thereof, (B) sell or otherwise dispose of the Collateral, or any part
      thereof, in one or more parcels at public or private sale or sales, at the
      Agent’s offices or elsewhere, for cash or on credit, and/or (C) bid and
      become a purchaser at any sale free of any right or equity of redemption in
      Pledgor, which right or equity is hereby expressly waived and released by
      Pledgor.  Upon the request of the Agent, Pledgor shall assemble the
      Collat­eral and make it available to the Agent at any place designated by
      the Agent.  Pledgor agrees that the Agent shall not be obligated to
      give more than five (5) days written notice of the time and place of any public
      sale or of the time after which any private sale may take place and that such
      notice shall constitute reasonable notice of such matters.  The Agent
      shall not be obligated to make any sale of the Collateral regardless of notice
      of sale having been given.  The Agent may adjourn any public or
      private sale from time to time by announcement at the time and place fixed
      therefor, and such sale may, without further notice, be made at the time and
      place to which it was so adjourned.  Any cash held by the Agent as
      Collateral and all cash proceeds received by the Agent in respect of any sale
      of, collection from, or other realization upon all or any part of the Collateral
      may, in the discretion of the Agent, be held by the Agent as collateral for,
      and/or be applied then or at any time thereafter to the Obligations in the
      order
      and manner as Agent may elect.  Any surplus of such cash or cash
      proceeds held by the Agent and remaining after payment in full of all the
      Obligations shall be paid over to Pledgor or to whomever may be lawfully
      entitled to receive such surplus.  Pledgor shall be liable for all
      expenses of retaking, holding, preparing for sale, or the like, and all
      attorneys' fees and other expenses incurred by Agent in connection with the
      collection of the Obligations and the enforcement of Purchasers’ rights under
      this Agreement, all of which expenses and fees shall constitute additional
      Obligations secured by this Agreement.  Pledgor shall remain liable
      for any deficiency if the proceeds of any sale or disposition of the Collateral
      are insufficient to pay the Obligations;

    

    (iii)           The
      Agent may cause any or all of the Collat­eral held by it to be transferred
      into the name of the Purchasers or the name or names of the Purchasers’ nominee
      or nominees;

    

    (iv)           The
      Agent shall be entitled to receive all cash and non-cash dividends payable
      in
      respect of the Collateral on behalf of the Purchasers;

    

    (v)           The
      Agent shall have the right, but shall not be obligated to, exercise or cause
      to
      be exercised all voting rights and corporate powers in respect of the
      Collat­eral on behalf of the Purchasers, and Pledgor shall deliver to the
      Agent, if re­quested by the Agent, irrevocable proxies with respect to the
      Collateral in form satisfactory to the Agent;

    
      
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    (vi)           Pledgor
      hereby acknowledges and confirms that the Agent may be unable to effect a public
      sale of any or all of the Collateral by reason of certain prohibitions contained
      in the Securities Act of 1933, as amended, and applicable state securities
      laws
      and may be compelled to resort to one or more private sales thereof to a
      restricted group of purchasers who will be obligated to agree, among other
      things, to acquire any shares of the Collateral for their own respective
      accounts for investment and not with a view to distribution or resale
      thereof.  Pledgor further acknowledges and confirms that any such
      private sale may result in prices or other terms less favorable to Pledgor
      or
      other seller than if such sale were a public sale and, notwithstanding such
      circumstances, agree that any such private sale shall be deemed to have been
      made in a commercially reasonable manner, and the Agent shall be under no
      obligation to take any steps in order to permit the Collateral to be sold at
      a
      public sale.  The Agent shall be under no obligation to delay a sale
      of any of the Collateral for any period of time necessary to permit any issuer
      thereof to register such Collateral for public sale under the Secu­rities
      Act of 1933, as amended, or under applicable state securities laws, or to delay
      a sale of any of the Collateral for any other reason.  Pledgor hereby
      waives any claims against the Agent or Purchasers arising by reason of the
      fact
      that the price at which the Collateral may have been sold at such private sale
      was less than the price which might have been obtained at a public sale or
      was
      less than the Obligations even if the Agent accepts the first offer received
      and
      does not offer the Collateral to more than one offeree (and the Agent, the
      Purchasers or any affiliates of the Purchasers may be the only offeree and
      the
      purchaser of the Collateral); and

    

    (vii)           On
      any sale of the Collateral, the Agent is hereby authorized to comply with any
      limitation or re­striction compliance with which is necessary, in the view
      of the Agent's counsel, in order to avoid any violation of applicable law or
      in
      order to obtain any required approval of the purchaser or purchasers by any
      applicable govern­mental authority.

    

    Section
      5.03.   Security
      Interest Absolute. All rights of the
      Purchasers hereunder and in and to the Collateral, and all obligations of
      Pledgor hereunder, shall be absolute and unconditional irrespective
      of:

    

    (a)           any
      lack of validity or enforceability of the Convertible Notes, any agreement
      with
      respect to any of the Obligations or any other agreement or instrument relating
      to any of the foregoing;

    

    (b)           any
      change in the time, manner or place of payment of, or in any other term of,
      all
      or any of the Obligations or any other amendment or waiver of or any consent
      to
      any departure from this Agreement or any other agreement or instrument;
      or

    

    (c)           any
      sale, exchange, release or nonperfection of any other collateral, or any release
      of any guarantor or any person liable in any manner for the collection of any
      of
      the Obligations or any amendment or waiver of or consent to or departure from
      the Convertible Notes or any guaranty for all or any of the
      Obligations.

    

    Section
      5.04.   Waiver and
      Consent.

    

    (a)           Pledgor
      consents and agrees that the Agent may in its absolute and sole discretion,
      at
      any time and from time to time, without notice or demand, and without affecting
      the enforceability or security hereof:  (i) create new Obligations or
      supplement, modify, amend, extend, increase, decrease, renew, accelerate or
      otherwise change the Obligations or any of their terms; (ii) supplement, modify,
      amend, or waive any provision of, or enter into or give any agreement, approval
      or consent with respect to the Convertible Notes; (iii) accept new or additional
      instruments, documents or agreements in exchange for or relative to any of
      the
      Obligations or any part thereof or for the Convertible Notes; (iv) accept
      payments on the Obligations; (v) receive and hold additional security or
      guaranties for the Obligations or any part thereof; (vi) release, reconvey,
      terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute,
      transfer or enforce any security or guarantees and apply any security and direct
      the order or manner of sale thereof; (vii) release any person from any personal
      liability with respect to the Obligations or any part thereof; and (viii)
      settle, release on terms satisfactory to the Agent or by operation of applicable
      laws or otherwise liquidate or enforce any Obligations and any security or
      guaranty in any manner, and consent to the transfer of any
      security.

    
      
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    (b)           Upon
      the occurrence and during the continuance of an Event of Default, and subject
      to
      the notice and opportunity to cure (if any) required by the Convertible Notes,
      the Agent may enforce this Agreement independently from any other document
      and
      independently of any other remedy, security or guaranty the Purchasers at any
      time may have or hold in connection with the Obligations, and it shall not
      be
      necessary for the Agent to marshal assets in favor of Pledgor or any other
      person or to proceed upon or against and/or exhaust my other security or remedy
      before proceeding to enforce this Agreement.  Pledgor expressly agrees
      that the Agent may proceed against any or all of the Collateral or guaranties
      for the Obligations in such order and in such manner as Agent shall determine
      in
      Agent’s sole and absolute discretion.  The Agent may file a separate
      action or actions against Pledgor, whether action is brought or prosecuted
      with
      respect to any other security or against any other person, or whether any other
      person is joined in any such action or actions. Pledgor agrees that the Agent
      and other guarantor, if any, of the Obligations ("Other Guarantor") may deal
      with each other in connection with the Obligations or otherwise, or alter any
      contracts or agreements now or hereafter existing between or among any of them,
      in any manner whatsoever, all without in any way altering or affecting the
      security of this Agreement.  Pledgor expressly waives the benefit of
      any statute(s) of limitations affecting its liability hereunder or the
      enforcement of the Obligations or the lien or security interest created or
      granted herein.  The Purchasers’ rights hereunder shall be reinstated
      and revived, and the enforceability of this Agreement shall continue, with
      respect to any amount at any time paid on account of the Obligations that
      thereafter shall be required to be restored or returned by the Purchasers upon
      the bankruptcy, insolvency or reorganization of Pledgor, or Exploration Holding,
      or other any other Person, all as though such amount had not been
      paid.

    

    (c)           Pledgor
      expressly waives any and all defenses now or hereafter arising or asserted
      by
      reason of (i) any disability or other defense of any Other Guarantor with
      respect to the Obligations (ii) the failure of priority of any security for
      the
      Obligations (iii) the cessation from any cause whatsoever of the liability
      of
      any Other Guarantor (other than by reason of the full payment and performance
      of
      all Obligations, (iv) any failure of the Agent to give notice of sale or other
      disposition of any property securing the Obligations to Pledgor or any other
      person or any defect in any notice that may be given in connection with any
      sale
      or disposition of any property securing the Obligations, (v) any failure of
      the
      Agent to comply with applicable laws in connection with the sale or other
      disposition of any property securing the Obligations, including, without
      limitation, any failure of the Agent to conduct a commercially reasonable sale
      or other disposition of any property securing the Obligations, (vi) any act
      or
      omission of the Agent or others that directly or indirectly results in or aids
      the discharge or release of any Other Guarantor or the Obligations or any other
      security or guaranty therefor by operation of law or otherwise, (vii) any law
      that provides that the obligation of a surety or guarantor must neither be
      larger in amount nor in other respects more burdensome than that of the
      principal or that reduces a surety's or guarantor's obligation in proportion
      to
      the principal's obligation, (viii) any failure of the Agent to file or enforce
      a
      claim in any bankruptcy or other proceeding with respect to any person, (xi)
      the
      election by the Agent, in any bankruptcy proceeding of any person, of the
      application or nonapplication of Section 1111(b)(2) of the United States
      Bankruptcy Code, (x) any extension of credit or the grant of any lien under
      Section 364 of the United States Bankruptcy Code, (xi) any use of cash
      collateral under Section 363 of the United States Bankruptcy Code, (xii) any
      agreement or stipulation with respect to the provision of adequate protection
      in
      any bankruptcy proceeding of any person, (xiii) the avoidance of any bankruptcy,
      insolvency, reorganization, arrangement, readjustment of debt, liquidation
      or
      dissolution proceeding of any Person, including any discharge of, or bar or
      stay
      against collecting, all or any of the Obligations in or as a result of any
      such
      proceeding, or (xiv) any action taken by the Agent that is authorized by this
      Section, this Agreement, or any other provision of the Convertible
      Notes.

    
      
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    ARTICLE
      VI

    Miscellaneous

    

    Section
      6.01.   Expenses;
      Indemnification.  Pledgor agrees to pay
      on demand all costs and expenses incurred by the Agent in connection with the
      preparation, negotiation, and execution of this Agreement and any and all
      amendments, modifications, and supplements hereto.  Pledgor agrees to
      pay and to hold Purchasers and Agent harmless from and against all excise,
      sales, stamp, or other taxes and all fees payable in connection with this
      Agreement or the transactions contemplated hereby, and agree to hold the
      Purchasers and Agent harmless from and against any and all present or future
      claims or liabilities with respect to or resulting from Pledgor performing
      or
      delaying in performing their obligations under this Agreement.

    

    Section
      6.02.   No Waiver;
      Cumulative Remedies.  No failure on the
      part of the Agent to exercise and no delay in exercis­ing, and no course of
      dealing with respect to, any right, power, or privilege under this Agreement
      shall operate as a waiver thereof, nor shall any single or partial exercise
      of
      any right, power, or privilege under this Agreement preclude any other or
      further exercise thereof or the exercise of any other right, power, or
      privilege.  The rights and remedies provided for in this Agreement are
      cumulative and not exclusive of any rights and remedies provided by
      law.

    

    Section
      6.03.   Successors
      and
      Assigns.  This Agreement shall be
      binding upon and inure to the benefit of Pledgor and Purchasers and their
      respective heirs, successors, and assigns, except that Pledgor may not assign
      any of its rights or obligations under this Agreement without the prior written
      consent of the Agent in which may be given or withheld in the Agent’s sole
      discretion.  The Agent may not assign this Agreement to any assignee
      or transferee.  Each Purchaser, however, may assign its rights and
      obligations under this  Agreement to any assignee or transferee to
      which its Convertible Note is assigned or transferred in compliance with the
      terms of such Convertible Note.

    

    Section
      6.04.   Amendment;
      Entire Agreement.  This Agreement
      embodies the entire agreement among the parties hereto and supersedes all prior
      agreements and understandings, if any, relating to the subject matter
      hereof.  The provisions of this Agreement may be amended or waived
      only by an instrument in writing signed by the parties hereto.

    
      
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    Section
      6.05.   Notices.  Any
      notice, consent, or other communication required or permitted to be given under
      this Agreement to the Agent or Purchasers or Pledgor must be in writing and
      delivered in person, or mailed by registered or certified mail, return receipt
      requested, postage prepaid, or sent by facsimile transmission with evidence
      of
      receipt if also sent by registered or certified mail, return receipt requested,
      postage prepaid as follows:

    

    
      	
              To
                Agent:

            	
              Ironman
                PI Fund (QP), LP

            
	
               

            	
              Attn:  Bryan
                Dutt

            
	 	
              4545
                Bissonnet, Suite 291

            
	 	
              Bellaire,
                TX   77401

            
	 	
              713-218-6945

            
	 	
              FAX:
                (713) 218-6946

            
	 	 
	
              To
                Pledgor:

            	
              Petrosearch
                Energy Corporation

            
	 	
              675
                Bering Drive, Suite 200

            
	 	
              Houston,
                Texas 77057

            
	 	
              FAX:  (713)
                961-9338

            

    

    

    Any
      such
      notice, consent, or other communication shall be deemed given when delivered
      in
      person, or if sent by facsimile transmission as provided above, on the day
      the
      transmission was received if before 5:00 p.m. local time that day (or on the
      next day, if received after 5:00 p.m. local time) or, if mailed, when duly
      deposited in the mails. It shall be a violation of this Agreement for Pledgor
      to
      refuse to sign for and receive any registered or certified mail.

    

    Section
      6.06.   Choice
      of Law.  This Agreement shall be governed by, and
      construed in accordance with, the laws of the State of Texas, without regard
      to
      principles of conflict of laws.  In any action between or among any of
      the parties, whether arising out of this Agreement or otherwise, each of the
      parties irrevocably consents to the exclusive jurisdiction and venue of the
      federal and state courts located in  Harris County,
      Texas.

    

    Section
      6.07.   Headings.  The
      headings, captions, and arrangements used in this Agreement are for convenience
      only and shall not affect the interpretation of this Agreement.

    

    Section
      6.08.   Survival of
      Representations and Warranties.  All
      representations and warranties made in this Agreement or in any certificate
      delivered pursuant hereto shall survive the execution and delivery of this
      Agreement, and no inves­tigation by the Agent shall affect the
      representations and warranties made by Pledgor or the right of Agent to rely
      upon them.

    

    Section
      6.09.   Execution.
      This Agreement may be executed in two or more counterparts, all of which when
      taken together shall be considered one and the same agreement and shall become
      effective when counterparts have been signed by each party and delivered to
      the
      other party, it being understood that both parties need not sign the same
      counterpart.  In the event that any signature is delivered by
      facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
      signature shall create a valid and binding obligation of the party executing
      (or
      on whose behalf such signature is executed) with the same force and effect
      as if
      such facsimile or “.pdf” signature page were an original
      thereof.

    
      
        Pledge
          and Security Agreement

         

      

      
        Page
          17

        
          

        

      

      
         

      

    

    Section
      6.10.   Severability.  Any
      provision of this Agreement which is prohibited or unenforceable in any
      jurisdic­tion shall, as to such jurisdiction, be ineffective to the extent
      of such prohibition or unenforceability without invalidating the remaining
      provisions of this Agreement, and any such prohibition or unenforceability
      in
      any jurisdiction shall not invalidate or render unenforceable such provision
      in
      any other jurisdiction.

    

    

    [SIGNATURES
      APPEAR ON THE FOLLOWING PAGE.]

    
      
        Pledge
          and Security Agreement

         

      

      
        Page
          18

        
          

        

      

      
         

      

    

    Executed
      as of the Effective Date above written.

    

    
      	
              PLEDGOR

            	
              PETROSEARCH
                ENERGY CORPORATION

            	 
	 	 	 	 
	 	
              By:  
                

            	
              /s/
                Richard Dole

            	 
	 	 	
              Richard
                Dole, President and CEO

            	 
	 	 	 	 
	 	 	 	 
	
              AGENT

            	
              IRONMAN
                PI FUND (QP), LP

            	 
	 	 	 	 
	 	
              By:

            	
              Ironman
                Energy Partners, LP,

            	 
	 	 	 	 
	 	
              By:

            	
              Ironman
                Capital Management, LLC,

            	 
	 	 	
              its
                General Partner

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
              /s/
                G. Bryan Dutt

            	 
	 	 	
              G.
                Bryan Dutt, President

            	 
	 	 	 	 
	 	 	 	 
	
              PURCHASERS

            	
              IRONMAN
                PI FUND (QP), LP

            	 
	 	 	 	 
	 	
              By:

            	
              Ironman
                Energy Partners, LP,

            	 
	 	 	 	 
	 	
              By:

            	
              Ironman
                Capital Management, LLC,

            	 
	 	 	
              its
                General Partner

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
              /s/
                G. Bryan Dutt

            	 
	 	 	
              G.
                Bryan Dutt, President

            	 

    

    

    
      	 	
              WELLINGTON
                TRUST COMPANY, N.A.

              ON
                BEHALF OF MULTIPLE COLLECTIVE INVESTMENT FUNDS TRUST,
                

              MICRO
                CAP EQUITY PORTFOLIO

            
	 	 	 
	 	
              By:
                Wellington Management Company, LLP as investment
                adviser

            
	 	 	 
	 	
              By:

            	
              /s/  Steve
                Hoffman

            
	 	
              Name:

            	
              Steve
                Hoffman

            
	 	
              Title:

            	
              Vice
                President and Counsel

            
	 	
              Address:  
                

            	
              75
                State Street

            
	 	 	
              Boston,
                MA  02109

            

    

    

      
        
          Signature
            Page to Pledge and Security Agreement

           

        

        
           

          
            

          

        

        
           

        

      

    

     

    
      	 	
              WELLINGTON
                TRUST COMPANY, N.A.

              ON
                BEHALF OF MULTIPLE COLLECTIVE INVESTMENT FUNDS TRUST,
                

              MICRO
                CAP EQUITY PORTFOLIO

            
	 	 	 
	 	 	 
	 	
              By:
                Wellington Management Company, LLP as investment
                adviser

            
	 	 	 
	 	
              By:

            	
              /s/  Steve
                Hoffman

            
	 	
              Name:

            	
              Steve
                Hoffman

            
	 	
              Title:

            	
              Vice
                President and Counsel

            
	 	
              Address:  
                

            	
              75
                State Street

            
	 	 	
              Boston,
                MA  02109

            

    

    

    

    
      	 	
              CROSSCAP
                PARTNERS, LP

            
	 	 	 	 
	 	 	 	 
	 	
              By:  
                

            	
              /s/
                Mark Crosswell

            
	 	 	 	
              Mark
                Crosswell

            
	 	
              Address:  
                

            	
              5851
                San Felipe, Suite 230

            
	 	 	 	
              Houston,
                Texas  77057

            
	 	 	 	 
	 	 	 	 
	 	
              CROSSCAP
                PARTNERS ENHANCED, LP

            
	 	 	 	 
	 	 	 	 
	 	
              By:

            	
              /s/
                Mark Crosswell

            
	 	 	 	
              Mark
                Crosswell

            
	 	
              Address:

            	
              5851
                San Felipe, Suite 230

            
	 	 	 	
              Houston,
                Texas  77057

            

    

    

    

    
      	 	
              WILLIAM
                C. O’MALLEY

            
	 	 	 
	 	
              /s/
                William C. O’Malley

            
	 	
              William
                C. O’Malley, Individually

            
	 	
              Address:

            	
              4646
                Carlton Dunes Drive

            
	 	 	
              #12,
                Unit 5602

            
	 	 	
              Amelia
                Island, Florida  32034

            

    

     

    
      
        Signature
          Page to Pledge and Security Agreement

         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              J.
                BURKE O’MALLEY

            
	 	 	 
	 	
              /s/
                J. Burke O’Malley

            
	 	
              J.
                Burke O’Malley, Individually

            
	 	
              Address:  
                

            	
              2013
                Spring Branch Drive

            
	 	 	
              Vienna,
                Virginia  22181

            
	 	 	 
	 	
              LEO
                E. STEC

            
	 	 	 
	 	
              /s/
                Leo E. Stec

            
	 	
              Leo
                E. Stec, Individually

            
	 	
              Address:  
                

            	
              3527
                Vantage Lane

            
	 	 	
              Glenview,
                Illinois  60026

            
	 	 	 
	 	
              VAN
                G. BOHN

            
	 	 	 
	 	
              /s/
                Van G. Bohn

            
	 	
              Van
                G. Bohn, Individually

            
	 	
              Address:  
                

            	
              426
                Arlington Drive

            
	 	 	
              Metairie,
                Louisiana  70001

            

    

    

    
      	 	
              JOHN
                W. KOONS III AND KATRINA P. KOONS  

            
	 	 	 	 
	 	
              By:

            	
               /s/
                John W. Koons, III 

            
	 	 	
              John
                W. Koons III, Individually, and on behalf of Katrina P.
                Koons, his Wife 

            
	 	
              Address:  
                

            	
              5348
                Chandley Farm Circle

            
	 	 	 	
              Centreville,
                Virginia  20120

            

    

    

    
      	 	
              GUTIERREZ
                HOLDINGS, LP

            
	 	 	 	 
	 	
              /s/
                Joe M. Gutierrez, Jr.

            
	 	
              By:

            	
              Joe
                M. Gutierrez, Jr.

            
	 	
              Title:  
                

            	 
	 	
              Address: 

            	
              5847
                San Felipe Street, Suite 1910

            
	 	 	 	
              Houston,
                Texas  77057

            

    

    

    
      	 	
              JERRY
                C. DEARING

            
	 	 	 
	 	
              /s/
                Jerry C. Dearing

            
	 	
              Jerry
                C. Dearing, Individually

            
	 	
              Address:

            	
              5300
                Doliver Drive

            
	 	 	
              Houston,
                Texas  77056

            

    

    

      
        
          Signature
            Page to Pledge and Security Agreement

           

        

        
           

          
            

          

        

        
           

        

      

    

     

    ACCEPTANCE
      AND ACKNOWLEDGMENT

    

    Exploration
      Holding Co., L.L.C. hereby
      accepts and acknowledges the Agent, on behalf of and for the benefit of the
      Purchasers, as the assignee, pursuant to this Agreement, of the 5.00% membership
      interests in Exploration Holding Co., L.L.C. owned by Pledgor, and Exploration
      Holding Co., L.L.C. agrees that the interests of the Agent, on behalf of and
      for
      the benefit of the Purchasers, shall be promptly and duly registered in the
      books and records of Exploration Holding Co., L.L.C.

    

    
      	 	
              EXPLORATION
                HOLDING CO., L.L.C.

            
	 	 	 
	 	 	 
	 	
              By:  
                

            	
              /s/
                Richard Dole

            
	 	 	
              Richard
                Dole, President

            

    

     

     

    Signature
      Page to Pledge and Security
      Agreementex10_4.htm

    
      
        

      

    

    
      Exhibit
        10.4

      

      REGISTRATION
        RIGHTS AGREEMENT

      

      THIS
        REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into
        as of November 9, 2007, by and among Petrosearch Energy Corporation, a Nevada
        Corporation (the “Company”), and the purchasers listed on the signature
        page hereto (the “Purchasers”).

      

      WHEREAS,
        this Agreement is made in connection with the closing of the issuance and
        sale
        of the Notes pursuant to the Note and Warrant Purchase Agreement, dated as
        of
        even date herewith, by and between the Company and the Purchasers (the
“Purchase Agreement”);

      

      WHEREAS,
        the Company has agreed to provide the registration and other rights set forth
        in
        this Agreement for the benefit of the Purchasers pursuant to the Purchase
        Agreement; and

      

      WHEREAS,
        it is a condition to the obligations of the Purchasers under the Purchase
        Agreement that this Agreement be executed and delivered.

      

      NOW
        THEREFORE, in consideration of the mutual covenants and agreements set forth
        herein and for good and valuable consideration, the receipt and sufficiency
        of
        which is hereby acknowledged by each party hereto, the parties hereby agree
        as
        follows:

      

      ARTICLE
        I

      DEFINITIONS

      

      Section
        1.01    Definitions.  Capitalized
        terms used herein without definition shall have the meanings given to them
        in
        the Purchase Agreement.  The terms set forth below are used herein as
        so defined:

      

      “Agreement”
        has the meaning specified therefor in the introductory paragraph.

      

      “Business
        Day” means any day other than a Saturday, Sunday, or a legal holiday for
        commercial banks in New York, New York.

      

      “Commission”
        means the United States Securities and Exchange Commission.

      

      “Common
        Stock” means the Company’s common stock, par value $.001.

      

      “Company”
        has the meaning specified therefor in the introductory paragraph of this
        Agreement.

      

      “Effectiveness
        Period” has the meaning specified therefor in Section 2.01(a) of this
        Agreement.

      

      “Failure
        Date” has the meaning specified therefor in Section
        2.02(b).

      

      “Holder”
        means the record holder of any Registrable Securities.

      

      “Registration
        Statement” means the registration statement on Form SB-2 registering the
        Note Shares, Interest Shares and the Warrant Shares.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Registration
        Statement Filing Date” has the meaning specified therefor in Section
        2.01(a).

      

      “Included
        Registrable Securities” has the meaning specified therefor in
Section 2.03 of this Agreement.

      

      “Interest
        Shares” means the number of shares of Common Stock that could be paid as
        interest pursuant to Section 2(a) of the Notes at a rate of 8.5% under the
        Notes
        during the term of the Notes.

      

      “Liquidated
        Damages” has the meaning specified therefor in Section 2.01(b) of
        this Agreement.

      

      “Liquidated
        Damages Multiplier” means the product of $1.05 times the number of the
        Registrable Securities, as applicable to the Registration Statement, held
        by the
        Holder.

      

      “Losses”
        has the meaning specified therefor in Section 2.07(a) of this
        Agreement.

      

      “Managing
        Underwriter” means, with respect to any Underwritten Offering, the
        book-running lead manager of such Underwritten Offering.

      

      “Notes”
        means the 8% Senior Secured Convertible Notes in the aggregate original
        principal amount of $8,100,000, convertible into shares of Common Stock,
        purchased by the Purchasers, and in the respective amounts listed on Schedule
        “A” to the Purchase Agreement.

      

      “Note
        Shares” means the shares of Common Stock (i) to which a Holder is
        entitled upon conversion of any portion of the Notes and (ii) that have been
        issued in lieu of cash interest payments under the Notes at the time of filing
        the Registration Statement or Piggyback Registration Statement.

      

      “Piggyback
        Registration Statement” has the meaning specified therefor in Section
        2.03(a).

      

      “Purchase
        Agreement” has the meaning specified therefor in the recitals of this
        Agreement.

      

      “Purchasers”
        has the meaning specified therefor in the introductory paragraph of this
        Agreement.

      

      “Registrable
        Securities” means the: (i) Note Shares, (ii) Interest Shares and (iii)
        Warrant Shares, all of which Registrable Securities are subject to the rights
        provided herein until such rights terminate pursuant to the provisions hereof;
        provided, however, that in the event that the Commission objects to the
        inclusion of the Interest Shares in the Registration Statement (following
        the
        Company’s best efforts to convince the Commission otherwise), then the Interest
        Shares shall be withdrawn from the Registration Statement and shall not be
        deemed Registrable Securities except for purposes of Section 2.03 if then
        issued
        and outstanding.

      

      “Registration
        Expenses” has the meaning specified therefor in Section 2.06(b) of
        this Agreement.

      
        
          Registration
            Rights Agreement

          
          

        

        
          Page
            2

          
            

          

        

        
          
          

        

      

      “Selling
        Expenses” has the meaning specified therefor in Section 2.06(b) of
        this Agreement.

      

      “Selling
        Holder” means a Holder who is selling Registrable Securities pursuant to
        any registration statement.

      

      “Underwritten
        Offering” means an offering in which shares of Common Stock are sold to an
        underwriter on a firm commitment basis for reoffering to the public or an
        offering that is a “bought deal” with one or more investment banks.

      

      “Warrants”
        means warrants to purchase an aggregate of 1,904,762 shares of Common Stock,
        as
        further described in the Purchase Agreement, to the Purchasers in the respective
        amounts listed on Schedule “A” to the Purchase Agreement.

      

      “Warrant
        Shares” means the shares of Common Stock underlying the
        Warrant.

      

      Section
        1.02    Registrable
        Securities.  Any Registrable Security will cease to be a
        Registrable Security when (a) a registration statement covering such Registrable
        Security has been declared effective by the Commission and such Registrable
        Security has been sold or disposed of pursuant to such effective registration
        statement; (b) such Registrable Security has been disposed of pursuant to
        any
        section of Rule 144 (or any similar provision then in force under the Securities
        Act); (c) such Registrable Security can be disposed of pursuant to Rule 144(k)
        (or any similar provision then in force under the Securities Act), or (d)
        such
        Registrable Security is held by the Company or one of its
        subsidiaries.

      

      ARTICLE
        II

      REGISTRATION
        RIGHTS

      

      Section
        2.01    Initial
        Registration.

      

      (a)           Deadline
        To Go Effective.  On or before February 1, 2008 (the
“Registration Statement Filing Date”), the Company shall prepare and file
        the Registration Statement.  The Company shall use its commercially
        reasonable efforts to register the Registrable Securities on the Registration
        Statement and to cause the Registration Statement to become effective no
        later
        than 150 days after the Registration Statement Filing Date; provided, however,
        that the Company will use its best efforts to have the Registration Statement
        declared effective by the Commission as soon as practicable, but in no event
        later than five (5) business days following notification by the Commission
        that
        the Registration Statement will not be subject to review or that the Commission
        has no further comments on the Registration Statement.  The Company
        will use its commercially reasonable efforts to cause the Registration Statement
        filed pursuant to this Section 2.01 to be continuously effective under
        the Securities Act until the earliest of (i) when all such Registrable
        Securities registered thereon are sold by the Holder and (ii) when all of
        the
        Registrable Securities registered thereon become eligible for resale under
        Rule
        144(k) (or any successor provision then in force under the Securities Act)
        (the
“Effectiveness Period”).  The  Registration Statement
        when declared effective (including the documents incorporated therein by
        reference) will comply as to form in all material respects with all applicable
        requirements of the Securities Act and the Exchange Act and will not contain
        an
        untrue statement of a material fact or omit to state a material fact required
        to
        be stated therein or necessary to make the statements therein not
        misleading.

      
        
          Registration
            Rights Agreement

          
          

        

        
          Page
            3

          
            

          

        

        
          
          

        

      

      (b)           Failure
        To File.  If the Registration Statement required by Section
        2.01(a) is not filed before the Registration Statement Filing Date,
        then the Holders, in the aggregate, shall be entitled to a pro rata payment,
        as
        liquidated damages and not as a penalty, with respect to the Registrable
        Securities held by the Holder and not then included in an effective Piggyback
        Registration Statement, for the period beginning on the day after Registration
        Statement Filing Date and lasting to but excluding the day the Registration
        Statement is filed, of 0.25% of the Liquidated Damages Multiplier per 30-day
        period for the first 60 days of the period, increasing by an additional 0.25%
        of
        the Liquidated Damages Multiplier per 30-day period for each subsequent 60
        days,
        up to a maximum of 1.00% of the Liquidated Damages Multiplier per 30-day
        period
        (the “Liquidated Damages”).

      

      (c)           Notwithstanding
        anything to the contrary contained in this Agreement, in the event the
        Commission seeks to characterize any offering pursuant to a Registration
        Statement filed pursuant to this Agreement as constituting an offering of
        securities by or on behalf of the Company, or in any other manner, such
        that the Commission does not permit such Registration Statement to
        become effective and used for resales in a manner that does not constitute
        such
        an offering and that permits the continuous resale at the market by the Holders
        participating therein (or as otherwise may be acceptable to each
        Holder) without being named therein as an “underwriter,” then the Company shall
        reduce the number of shares to be included in such Registration Statement
        by all
        persons seeking to register shares thereon until such time as the Commission
        shall so permit such Registration Statement to become effective as
        aforesaid.  In making such reduction, the Company shall reduce the number
        of shares to be included in such Registration Statement pro rata among (i)
        the
        holders of registrable securities received pursuant to a Registration Rights
        Agreement dated February 7, 2007, between RCH Petro Investors, LP and the
        Company and (ii) the Holders hereof based, for each  such holder, on
        the fraction derived by dividing (x) the number of Common Stock proposed
        to be
        included by such holder in such Registration Statement by (y) the aggregate
        number of Common Stock proposed to be included by all such holders in such
        Registration Statement.   In addition, in the event that the Commission
        requires any Holder seeking to sell securities under a Registration
        Statement filed pursuant to this Agreement to be specifically identified as
        an “underwriter” in order to permit such Registration Statement to
        become effective, and such Holder does not consent to being so named as an
        underwriter in such Registration Statement, then, in each such case, the
        Company shall reduce the total number of Registrable Securities to be
        registered on behalf of such Holder, until such time as the
        Commission does not require such identification or until such Holder accepts
        such identification and the manner thereof.  In the event of
        any reduction in Registrable Securities pursuant to this paragraph, an
        affected Holder shall have the right to require, upon delivery of a written
        request to the Company signed by such Holder, the Company to file a registration
        statement within 30 days of such request (subject to any restrictions imposed
        by
        Rule 415 or required by the Commission as mutually agreed upon by
        Holders holding a majority of the Registrable Securities, on the one hand,
        and
        the Company, on the other hand, after consultation with the Commission) for
        resale by such Holder in a manner acceptable to such Holder, and the Company
        shall following such request cause to be and keep effective such
        registration statement in the same manner as otherwise contemplated in this
        Agreement for a Registration Statement hereunder, in each case until such
        time as: (i) all Registrable Securities held by such Holder have been
        registered pursuant to an effective Registration Statement in a manner
        acceptable to such Holder and disposed of thereunder or (ii) the
        Registrable Securities may be resold by such Holder without restriction
        (including volume limitations) pursuant to Rule 144(k) of the Securities
        Act
        (taking account of any Commission position with respect to “affiliate” status)
        or (iii) such Holder agrees to be named as an underwriter in any such
        Registration Statement in a manner acceptable to such Holder as to all
        Registrable Securities held by such Holder and that have not theretofore
        been
        included in a Registration Statement under this Agreement and have been disposed
        of thereunder (it being understood that the special demand right under this
        sentence may be exercised by a Holder one time and with respect to limited
        amounts of Registrable Securities in order to permit the resale thereof by
        such
        Holder as contemplated above).

      
        
          Registration
            Rights Agreement

          
          

        

        
          Page
            4

          
            

          

        

        
          
          

        

      

      Section
        2.02    Additional
        Provisions related to Liquidated Damages

      

      (a)           Delay
        Rights.  Notwithstanding anything to the contrary contained
        herein, the Company may, upon written notice to any Holder whose Registrable
        Securities are included in a Registration Statement, suspend such Holder’s use
        of any prospectus which is a part of the Registration Statement (in which
        event
        the Holder shall discontinue sales of the Registrable Securities pursuant
        to the
        Registration Statement), for a period not to exceed an aggregate of 90 days
        in
        any 365-day period, if (i) the Company is pursuing a material acquisition,
        merger, reorganization, disposition or other similar transaction and the
        Company
        determines in good faith that its ability to pursue or consummate such a
        transaction would be materially adversely affected by any required disclosure
        of
        such transaction in such Registration Statement or (ii) the Company has
        experienced some other material non-public event, the disclosure of which
        at
        such time, in the good faith judgment of the Company, would materially adversely
        affect the Company.  Upon disclosure of such information or the
        termination of the condition described above, the Company shall provide prompt
        written notice to the Holders whose Registrable Securities are included in
        the
        Registration Statement, and shall promptly terminate any suspension of sales
        it
        has put into effect and shall take such other actions to permit registered
        sales
        of Registrable Securities as contemplated in this Agreement.

      

      (b)           Cessation
        of Effectiveness.  If the Registration Statement is filed and
        declared effective but shall thereafter cease to be effective or fail to
        be
        usable for the resale of the applicable Registrable Securities (the “Failure
        Date”) for any reason other than as provided in 2.02(a) above, then the
        Holders, in the aggregate, will be entitled to their pro rata portion of
        Liquidated Damages for the Registrable Securities held by the Holders subject
        to
        such Registration Statement for a period beginning on the Failure Date and
        lasting to but excluding the day a post-effective amendment to the Registration
        Statement is declared effective by the Commission or supplement or report
        is
        filed with the Commission and the applicable Registration Statement is useable
        for the resale of Registrable Securities registered thereon.

      

      (c)           Limits
        on Liquidated Damages.  The amount of Liquidated Damages payable
        by the Company under this Agreement to all of the Holders, on a pro rata
        basis,
        as a result of events in (i) Section 2.01(b) shall not exceed $375,000 and
        (ii)
        Section 2.02(b) shall not exceed $375,000; accordingly, the aggregate amount
        of
        the Liquidated Damages payable to the Holders as a result of events in Sections
        2.01 and 2.02 shall not exceed $750,000.  Further, the Liquidated
        Damages shall be automatically eliminated without any action by the parties
        to
        the extent the Commission or the then published statements of the Fair
        Accounting Standards Board provides that (A) any portion of the Liquidated
        Damages shall be accounted for as a derivative instrument rather than a
        contingent payment obligation under generally accepted accounting principles
        and
        the rules and regulations of the Commission or (B) any of the Registrable
        Securities (whether or not deemed to include the Liquidated Damages payment
        obligation) must be accounted for as interests other than equity interests
        under
        generally accepted accounting principles and the rules and regulations of
        the
        Commission.

      
        
          Registration
            Rights Agreement

          
          

        

        
          Page
            5

          
            

          

        

        
          
          

        

      

      (d)           Payment
        of Liquidated Damages.  Any Liquidated Damages shall be paid to
        the  Holder in immediately available funds within ten Business Days
        after the end of the applicable 30-day period.  Liquidated Damages for
        any period of less than 30 days shall be prorated by multiplying the amount
        of
        Liquidated Damages to be paid in a full 30-day period by a fraction, the
        numerator of which is the number of days for which such Liquidated Damages
        are
        owed, and the denominator of which is 30. The calculation of Liquidated Damages
        hereunder is subject to appropriate adjustments for any subdivision or
        combination of shares of Common Stock after the date hereof.  The
        payment of the Liquidated Damages to a Holder shall cease at such time as
        the
        Registrable Securities become eligible for resale under Rule 144(k) under
        the
        Securities Act.

      

      Section
        2.03    Piggyback
        Rights.

      

      (a)           General.  If
        at any time the Company proposes to file a registration statement (other
        than a
        registration related to an employee benefit plan, a registration on Form
        S-4 or
        a registration on any form that does not permit secondary sales) for the
        sale of
        Common Stock in an Underwritten Offering for its own account and/or another
        Person (such registration statement referred to as the “Piggyback
        Registration Statement”), then as soon as practicable but not less than
        three Business Days prior to the filing of (x) any preliminary prospectus
        supplement relating to such Underwritten Offering pursuant to Rule 424(b)
        under
        the Securities Act, (y) the prospectus supplement relating to such Underwritten
        Offering pursuant to Rule 424(b) under the Securities Act (if no preliminary
        prospectus supplement is used) or (z) such registration statement, as the
        case
        may be, then, the Company shall give notice of such proposed Underwritten
        Offering to the Holders and such notice shall offer the Holder the opportunity
        to include in such Underwritten Offering such number of Registrable Securities
        (the “Included Registrable Securities”) as each such Holder may request
        in writing; provided, however, that if the Company has been advised by
        the Managing Underwriter that the inclusion of Registrable Securities for
        sale
        for the benefit of the Holders will have a material adverse effect on the
        price,
        timing or distribution of the Common Stock in the Underwritten Offering,
        then
        the amount of Registrable Securities to be offered for the accounts of Holders
        shall be determined based on the provisions of (c).  The notice
        required to be provided in this Section 2.03 to Holders shall be provided
        on a Business Day pursuant to Section 3.01 hereof.   Each
        such Holder shall then have three Business Days after receiving such notice
        to
        request inclusion of Registrable Securities in the Underwritten Offering,
        except
        that such Holder shall have one Business Day after such Holder confirms receipt
        of the notice to request inclusion of Registrable Securities in the Underwritten
        Offering in the case of a “bought deal” or “overnight transaction” where no
        preliminary prospectus is used.  If no request for inclusion from a
        Holder is received within the specified time, each such Holder shall have
        no
        further right to participate in such Underwritten Offering.  If, at
        any time after giving written notice of its intention to undertake an
        Underwritten Offering and prior to the closing of such Underwritten Offering,
        the Company shall determine for any reason not to undertake or to delay such
        Underwritten Offering, the Company may, at its election, give written notice
        of
        such determination to the Selling Holders and, (x) in the case of a
        determination not to undertake such Underwritten Offering, shall be relieved
        of
        its obligation to sell any Included Registrable Securities in connection
        with
        such terminated Underwritten Offering, and (y) in the case of a determination
        to
        delay such Underwritten Offering, shall be permitted to delay offering any
        Included Registrable Securities for the same period as the delay in the
        Underwritten Offering. Any Selling Holder shall have the right to withdraw
        such
        Selling Holder’s request for inclusion of such Selling Holder’s Registrable
        Securities in such offering by giving written notice to the Company of such
        withdrawal up to and including the time of pricing of such offering.

      
        
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      (b)           Procedures.  In
        connection with any Underwritten Offering under this Agreement, the Company
        shall be entitled to select the Managing Underwriter or
        Underwriters.  In connection with an Underwritten Offering
        contemplated by (a) in which a Selling Holder participates, each Selling
        Holder
        and the Company shall be obligated to enter into an underwriting agreement
        that
        contains such representations, covenants, indemnities and other rights and
        obligations as are customary in underwriting agreements for firm commitment
        offerings of securities.  No Selling Holder may participate in such
        Underwritten Offering unless such Selling Holder agrees to sell its Registrable
        Securities on the basis provided in such underwriting agreement and completes
        and executes all questionnaires, powers of attorney, indemnities and other
        documents reasonably required under the terms of such underwriting
        agreement.  Each Selling Holder may, at its option, require that any
        or all of the representations and warranties by, and the other agreements
        on the
        part of, the Company to and for the benefit of such underwriters also be
        made to
        and for such Selling Holder’s benefit and that any or all of the conditions
        precedent to the obligations of such underwriters under such underwriting
        agreement also be conditions precedent to its obligations.  No Selling
        Holder shall be required to make any representations or warranties to or
        agreements with the Company or the underwriters other than representations,
        warranties or agreements regarding such Selling Holder, its authority to
        enter
        into such underwriting agreement and to sell, and its ownership of, the
        securities being registered on its behalf, its intended method of distribution
        and any other representation required by Law.  If any Selling Holder
        disapproves of the terms of an underwriting, such Selling Holder may elect
        to
        withdraw therefrom by notice to the Company and the Managing Underwriter;
        provided, however, that such withdrawal must be made up to and
        including the time of pricing of such Underwritten Offering.  No such
        withdrawal or abandonment shall affect the Company’s obligation to pay
        Registration Expenses.

      

      (c)           Priority
        of Rights.  If the Managing Underwriter or Underwriters of any
        proposed Underwritten Offering of Common Stock included in an Underwritten
        Offering involving Included Registrable Securities advises that the total
        amount
        of Common Stock that the Selling Holder and any other Persons intend to include
        in such offering exceeds the number that can be sold in such offering without
        being likely to have a material adverse effect on the price, timing or
        distribution of the Common Stock offered or the market for the Common Stock,
        then the Common Stock to be included in such Underwritten Offering shall
        include
        the number of Registrable Securities that such Managing Underwriter or
        Underwriters advises can be sold without having such adverse effect, with
        such
        number to be allocated (i) first, to the Company, (ii) second, pro rata among
        (x) the holders of registrable securities received pursuant to a Registration
        Rights Agreement dated February 7, 2007, between RCH Petro Investors, LP
        and the
        Company and (y) the Selling Holders hereof based, for each such holder, on
        the
        fraction derived by dividing (A) the number of shares of Common Stock proposed
        to be sold by such holders in such Underwritten Offering by (B) the aggregate
        number of shares of Common Stock proposed to be included by the holders set
        forth in this subsection (ii)  in such Underwritten
        Offering.  

      
        
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      Section
        2.04    Sale
        Procedures.  In connection with its obligations under this
Article II, the Company will, as expeditiously as possible:

      

      (a)           prepare
        and file with the Commission such amendments and supplements to a Registration
        Statement and the prospectus used in connection therewith as may be necessary
        to
        keep the Registration Statement effective for the Effectiveness Period and
        as
        may be necessary to comply with the provisions of the Securities Act with
        respect to the disposition of all securities covered by the Registration
        Statement;

      

      (b)           if
        a prospectus supplement will be used in connection with the marketing of
        an
        Underwritten Offering and the Managing Underwriter at any time shall notify
        the
        Company in writing that, in the sole judgment of such Managing Underwriter,
        inclusion of detailed information to be used in such prospectus supplement
        is of
        material importance to the success of the Underwritten Offering of such
        Registrable Securities, the Company shall use its commercially reasonable
        efforts to include such information in such prospectus supplement;

      

      (c)           furnish
        to each Selling Holder (i) as far in advance as reasonably practicable before
        filing a Registration Statement or any other registration statement contemplated
        by this Agreement or any supplement or amendment thereto, upon request, copies
        of reasonably complete drafts of all such documents proposed to be filed
        (including exhibits and each document incorporated by reference therein to
        the
        extent then required by the rules and regulations of the Commission), and
        provide each such Selling Holder the opportunity to object to any information
        pertaining to such Selling Holder and its plan of distribution that is contained
        therein and make the corrections reasonably requested by such Selling Holder
        with respect to such information prior to filing a Registration Statement
        or
        such other registration statement or supplement or amendment thereto, and
        (ii)
        such number of copies of the Registration Statement or such other registration
        statement and the prospectus included therein and any supplements and amendments
        thereto as such Persons may reasonably request in order to facilitate the
        public
        sale or other disposition of the Registrable Securities covered by such
        Registration Statement or other registration statement;

      

      (d)           if
        applicable, use its commercially reasonable efforts to register or qualify
        the
        Registrable Securities covered by the Registration Statement or any other
        registration statement contemplated by this Agreement under the securities
        or
        blue sky laws of such jurisdictions as the Selling Holders or, in the case
        of an
        Underwritten Offering, the Managing Underwriter, shall reasonably request;
        provided, however, that the Company will not be required to qualify
        generally to transact business in any jurisdiction where it is not then required
        to so qualify or to take any action which would subject it to general service
        of
        process in any such jurisdiction where it is not then so subject;

      

      (e)           promptly
        notify each Selling Holder and each underwriter, at any time when a prospectus
        relating thereto is required to be delivered under the Securities Act, of
        (i)
        the filing of a Registration Statement or any other registration statement
        contemplated by this Agreement or any prospectus or prospectus supplement
        to be
        used in connection therewith, or any amendment or supplement thereto, and,
        with
        respect to such Registration Statement or any other registration statement
        or
        any post-effective amendment thereto, when the same has become effective;
        and
        (ii) any written comments from the Commission with respect to any filing
        referred to in clause (i) and any written request by the Commission for
        amendments or supplements to the Registration Statement or any other
        registration statement or any prospectus or prospectus supplement thereto;
        and
        the Company will use its best efforts to respond to any such comments or
        any
        such request as soon as practicable after receiving such comments or request,
        as
        applicable;

      
        
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      (f)           immediately
        notify each Selling Holder and each underwriter, at any time when a prospectus
        relating thereto is required to be delivered under the Securities Act, of
        (i)
        the happening of any event as a result of which the prospectus or prospectus
        supplement contained in the Registration Statement or any other registration
        statement contemplated by this Agreement, as then in effect, includes an
        untrue
        statement of a material fact or omits to state any material fact required
        to be
        stated therein or necessary to make the statements therein not misleading
        in the
        light of the circumstances then existing; (ii) the issuance or threat of
        issuance by the Commission of any stop order suspending the effectiveness
        of the
        Registration Statement or any other registration statement contemplated by
        this
        Agreement, or the initiation of any proceedings for that purpose; or (iii)
        the
        receipt by the Company of any notification with respect to the suspension
        of the
        qualification of any Registrable Securities for sale under the applicable
        securities or blue sky laws of any jurisdiction.  Following the
        provision of such notice, the Company agrees to as promptly as practicable
        amend
        or supplement the prospectus or prospectus supplement or take other appropriate
        action so that the prospectus or prospectus supplement does not include an
        untrue statement of a material fact or omit to state a material fact required
        to
        be stated therein or necessary to make the statements therein not misleading
        in
        the light of the circumstances then existing and to take such other action
        as is
        necessary to remove a stop order, suspension, threat thereof or proceedings
        related thereto;

      

      (g)           upon
        request and subject to appropriate confidentiality obligations, furnish to
        each
        Selling Holder copies of any and all transmittal letters or other correspondence
        with the Commission or any other governmental agency or self-regulatory body
        or
        other body having jurisdiction (including any domestic or foreign securities
        exchange) relating to such offering of Registrable Securities;

      

      (h)           in
        the case of an Underwritten Offering, furnish upon request, (i) an opinion
        of
        counsel for the Company, dated the effective date of the applicable registration
        statement or the date of any amendment or supplement thereto, and a letter
        of
        like kind dated the date of the closing under the underwriting agreement,
        and
        (ii) a “cold comfort” letter, dated the effective date of the applicable
        registration statement or the date of any amendment or supplement thereto
        and a
        letter of like kind dated the date of the closing under the underwriting
        agreement, in each case, signed by the independent public accountants who
        have
        certified the Company’s financial statements included or incorporated by
        reference into the applicable registration statement, and each of the opinion
        and the “cold comfort” letter shall be in customary form and covering
        substantially the same matters with respect to such registration statement
        (and
        the prospectus and any prospectus supplement included therein) as are
        customarily covered in opinions of issuer’s counsel and in accountants’ letters
        delivered to the underwriters in Underwritten Offerings of securities and
        such
        other matters as such underwriters may reasonably request;

      

      (i)           otherwise
        use its commercially reasonable efforts to comply with all applicable rules
        and
        regulations of the Commission, and make available to its security holders,
        as
        soon as reasonably practicable, an earnings statement, which earnings statement
        shall satisfy the provisions of Section 11(a) of the Securities Act and Rule
        158
        promulgated thereunder;

      
        
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      (j)           make
        available to the appropriate representatives of the Managing Underwriter
        and
        Selling Holders access to such information and the Company personnel as is
        reasonable and customary to enable such parties to establish a due diligence
        defense under the Securities Act;

      

      (k)           cause
        all such Registrable Securities registered pursuant to this Agreement to
        be
        listed on each securities exchange or nationally recognized quotation system
        on
        which similar securities issued by the Company are then listed;

      

      (l)           use
        its commercially reasonable efforts to cause the Registrable Securities to
        be
        registered with or approved by such other governmental agencies or authorities
        as may be necessary by virtue of the business and operations of the Company
        to
        enable the Selling Holders to consummate the disposition of such Registrable
        Securities;

      

      (m)           provide
        a transfer agent and registrar for all Registrable Securities covered by
        such
        registration statement not later than the effective date of such registration
        statement; and

      

      (n)           enter
        into customary agreements and take such other actions as are reasonably
        requested by the Selling Holders or the underwriters, if any, in order to
        expedite or facilitate the disposition of such Registrable
        Securities.

      

      Each
        Selling Holder, upon receipt of notice from the Company of the happening
        of any
        event of the kind described in subsection (f) of this Section 2.04, shall
        forthwith discontinue disposition of the Registrable Securities until such
        Selling Holder’s receipt of the copies of the supplemented or amended prospectus
        contemplated by subsection (f) of this Section 2.04 or until it is
        advised in writing by the Company that the use of the prospectus may be resumed,
        and has received copies of any additional or supplemental filings incorporated
        by reference in the prospectus, and, if so directed by the Company, such
        Selling
        Holder will, or will request the Managing Underwriter or underwriters, if
        any,
        to deliver to the Company (at the Company’s expense) all copies in their
        possession or control, other than permanent file copies then in such Selling
        Holder’s possession, of the prospectus covering such Registrable Securities
        current at the time of receipt of such notice.

      

      Section
        2.05    Cooperation by
        Holders.  The Company shall have no obligation to include in a
        Registration Statement units of a Holder, or in an Underwritten Offering
        pursuant to Section 2.03 Registrable Securities of the Selling Holder,
        who has failed to timely furnish such information that, in the opinion of
        counsel to the Company, is reasonably required in order for the registration
        statement or prospectus supplement, as applicable, to comply with the Securities
        Act.

      

      Section
        2.06    Expenses.

      

      (a)           Expenses.  The
        Company will pay all reasonable Registration Expenses as determined in good
        faith, including, in the case of an Underwritten Offering, whether or not
        any
        sale is made pursuant to such Underwritten Offering. Each Selling Holder
        shall
        pay all Selling Expenses in connection with any sale of its Registrable
        Securities hereunder. In addition, except as otherwise provided in Section
        2.07 hereof, the Company shall not be responsible for legal fees incurred
        by
        Holders in connection with the exercise of such Holders’ rights
        hereunder.

      
        
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      (b)           Certain
        Definitions.  “Registration Expenses” means all expenses
        incident to the Company’s performance under or compliance with this Agreement to
        effect the registration of Registrable Securities on the Registration Statement
        pursuant to Section 2.01 or an Underwritten Offering covered under this
        Agreement, and the disposition of such securities, including, without
        limitation, all registration, filing, securities exchange listing and related
        fees, all registration, filing, qualification and other fees and expenses
        of
        complying with securities or blue sky laws, fees of the National Association
        of
        Securities Dealers, Inc., fees of transfer agents and registrars, all word
        processing, duplicating and printing expenses and the fees and disbursements
        of
        counsel and independent public accountants for the Company, including the
        expenses of any special audits or “cold comfort” letters required by or incident
        to such performance and compliance.  “Selling Expenses” means
        all underwriting fees, discounts and selling commissions allocable to, and
        any
        transfer taxes associated with, the sale of the Registrable
        Securities.

      

      Section
        2.07    Indemnification.

      

      (a)           By
        the Company.  In the event of a registration of any
        Registrable Securities under the Securities Act pursuant to this Agreement,
        the
        Company will indemnify and hold harmless each Selling Holder thereunder,
        its
        directors, officers, employees and agents, and each underwriter, pursuant
        to the
        applicable underwriting agreement with such underwriter, of Registrable
        Securities thereunder and each Person, if any, who controls such Selling
        Holder
        within the meaning of the Securities Act and the Exchange Act, and its
        directors, officers, employees or agents, against any losses, claims, damages,
        expenses or liabilities (including reasonable attorneys’ fees and expenses)
        (collectively, “Losses”), joint or several, to which such Selling Holder
        or underwriter or controlling Person may become subject under the Securities
        Act, the Exchange Act or otherwise, insofar as such Losses (or actions or
        proceedings, whether commenced or threatened, in respect thereof) arise out
        of
        or are based upon any untrue statement or alleged untrue statement of any
        material fact contained in the Registration Statement or any other registration
        statement contemplated by this Agreement, any preliminary prospectus, free
        writing prospectus or final prospectus contained therein, or any amendment
        or
        supplement thereof, or arise out of or are based upon the omission or alleged
        omission to state therein a material fact required to be stated therein or
        necessary to make the statements therein (in the case of a prospectus, in
        light
        of the circumstances under which they were made) not misleading, and will
        reimburse each such Selling Holder, its directors, officers, employee and
        agents, each such underwriter and each such controlling Person for any legal
        or
        other expenses reasonably incurred by them in connection with investigating
        or
        defending any such Loss or actions or proceedings; provided, however,
        that the Company will not be liable in any such case if and to the extent
        that
        any such Loss arises out of or is based upon an untrue statement or alleged
        untrue statement or omission or alleged omission so made in conformity with
        information furnished by such Selling Holder, its directors, officers, employees
        and agents or any underwriter or such controlling Person in writing specifically
        for use in the Registration Statement or such other registration statement,
        or
        prospectus supplement, as applicable. Such indemnity shall remain in full
        force
        and effect regardless of any investigation made by or on behalf of such Selling
        Holder or any such directors, officers, employees agents or any underwriter
        or
        controlling Person, and shall survive the transfer of such securities by
        such
        Selling Holder.

      

      (b)           By
        Each Selling Holder.  Each Selling Holder agrees severally and not
        jointly to indemnify and hold harmless the Company, its directors, officers,
        employees and agents and each Person, if any, who controls the Company within
        the meaning of the Securities Act or of the Exchange Act, and its directors,
        officers, employees and agents, to the same extent as the foregoing indemnity
        from the Company to the Selling Holders, but only with respect to information
        regarding such Selling Holder furnished in writing by or on behalf of such
        Selling Holder expressly for inclusion in a Registration Statement or prospectus
        supplement relating to the Registrable Securities, or any amendment or
        supplement thereto; provided, however, that the liability of each
        Selling Holder shall not be greater in amount than the dollar amount of the
        proceeds (net of any Selling Expenses) received by such Selling Holder from
        the
        sale of the Registrable Securities giving rise to such
        indemnification.

      
        
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      (c)           Notice.  Promptly
        after receipt by an indemnified party hereunder of notice of the commencement
        of
        any action, such indemnified party shall, if a claim in respect thereof is
        to be
        made against the indemnifying party hereunder, notify the indemnifying party
        in
        writing thereof, but the omission so to notify the indemnifying party shall
        not
        relieve it from any liability which it may have to any indemnified party
        other
        than under this Section 2.07.  In any action brought against
        any indemnified party, it shall notify the indemnifying party of the
        commencement thereof.  The indemnifying party shall be entitled to
        participate in and, to the extent it shall wish, to assume and undertake
        the
        defense thereof with counsel reasonably satisfactory to such indemnified
        party
        and, after notice from the indemnifying party to such indemnified party of
        its
        election so to assume and undertake the defense thereof, the indemnifying
        party
        shall not be liable to such indemnified party under this Section 2.07 for
        any legal expenses subsequently incurred by such indemnified party in connection
        with the defense thereof other than reasonable costs of investigation and
        of
        liaison with counsel so selected; provided, however, that, (i) if the
        indemnifying party has failed to assume the defense or employ counsel reasonably
        acceptable to the indemnified party or (ii) if the defendants in any such
        action
        include both the indemnified party and the indemnifying party and counsel
        to the
        indemnified party shall have concluded that there may be reasonable defenses
        available to the indemnified party that are different from or additional
        to
        those available to the indemnifying party, or if the interests of the
        indemnified party reasonably may be deemed to conflict with the interests
        of the
        indemnifying party, then the indemnified party shall have the right to select
        a
        separate counsel and to assume such legal defense and otherwise to participate
        in the defense of such action, with the reasonable expenses and fees of such
        separate counsel and other reasonable expenses related to such participation
        to
        be reimbursed by the indemnifying party as incurred.  Notwithstanding
        any other provision of this Agreement, no indemnified party shall settle
        any
        action brought against it with respect to which it is entitled to
        indemnification hereunder without the consent of the indemnifying party,
        unless
        the settlement thereof imposes no liability or obligation on, and includes
        a
        complete and unconditional release from all liability of, the indemnifying
        party.

      

      (d)           Contribution.  If
        the indemnification provided for in this Section 2.07 is held by a court
        or government agency of competent jurisdiction to be unavailable to any
        indemnified party or is insufficient to hold them harmless in respect of
        any
        Losses, then each such indemnifying party, in lieu of indemnifying such
        indemnified party, shall contribute to the amount paid or payable by such
        indemnified party as a result of such Loss in such proportion as is appropriate
        to reflect the relative fault of the indemnifying party on the one hand and
        of
        such indemnified party on the other in connection with the statements or
        omissions which resulted in such Losses, as well as any other relevant equitable
        considerations; provided, however, that in no event shall such Selling
        Holder be required to contribute an aggregate amount in excess of the dollar
        amount of proceeds (net of Selling Expenses) received by such Selling Holder
        from the sale of Registrable Securities giving rise to such
        indemnification.  The relative fault of the indemnifying party on the
        one hand and the indemnified party on the other shall be determined by reference
        to, among other things, whether the untrue or alleged untrue statement of
        a
        material fact or the omission or alleged omission to state a material fact
        has
        been made by, or relates to, information supplied by such party, and the
        parties’ relative intent, knowledge, access to information and opportunity to
        correct or prevent such statement or omission.  The parties hereto
        agree that it would not be just and equitable if contributions pursuant to
        this
        paragraph were to be determined by pro rata allocation or by any other method
        of
        allocation which does not take account of the equitable considerations referred
        to herein.  The amount paid by an indemnified party as a result of the
        Losses referred to in the first sentence of this paragraph shall be deemed
        to
        include any legal and other expenses reasonably incurred by such indemnified
        party in connection with investigating or defending any Loss which is the
        subject of this paragraph. No person guilty of fraudulent misrepresentation
        (within the meaning of Section 11(f) of the Securities Act) shall be entitled
        to
        contribution from any Person who is not guilty of such fraudulent
        misrepresentation.

      
        
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      (e)           Other
        Indemnification.  The provisions of this Section 2.07 shall
        be in addition to any other rights to indemnification or contribution which
        an
        indemnified party may have pursuant to law, equity, contract or
        otherwise.

      

      Section
        2.08    Rule 144
        Reporting.  With a view to making available the benefits of
        certain rules and regulations of the Commission that may permit the sale
        of the
        Registrable Securities to the public without registration, the Company agrees
        to
        use its commercially reasonable efforts to:

      

      (a)           Make
        and keep public information regarding the Company available, as those terms
        are
        understood and defined in Rule 144 under the Securities Act, at all times
        from
        and after the date hereof;

      

      (b)           File
        with the Commission in a timely manner all reports and other documents required
        of the Company under the Securities Act and the Exchange Act at all times
        from
        and after the date hereof; and

      

      (c)           So
        long as a Holder owns any Registrable Securities, furnish to such Holder
        forthwith upon request a copy of the most recent annual or quarterly report
        of
        the Company, and such other reports and documents so filed as such Holder
        may
        reasonably request in availing itself of any rule or regulation of the
        Commission allowing such Holder to sell any such securities without
        registration.

      

      Section
        2.09    Transfer or
        Assignment of Registration Rights.  The rights to cause the
        Company to register Registrable Securities granted to the Holder by the Company
        under this Article II may be transferred or assigned by any Holder to one
        or more transferee(s) or assignee(s) of such Registrable Securities;
provided, however, that the Holder must provide the Company written
        notice prior to any said transfer or assignment, stating the name and address
        of
        each such transferee and identifying the securities with respect to which
        such
        registration rights are being transferred or assigned, and each such transferee
        must assume in writing responsibility for its portion of the obligations
        of the
        Holder under this Agreement.

      
        
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      ARTICLE
        III

      MISCELLANEOUS

      

      Section
        3.01    Communications.  All
        notices and other communications provided for or permitted hereunder shall
        be
        made in writing by facsimile, electronic mail, courier service or personal
        delivery:

      

      (a)           if
        to Purchasers, at the address listed on Schedule “A” to the Purchase
        Agreement.,

      

      (b)           if
        to a transferee of any Purchaser, to such Holder at the address provided
        pursuant to Section 2.09 above, and

      

      (c)           if
        to the Company at 675 Bering Drive, Suite 200, Houston, TX  77057,
        Attn: President (facsimile: (713) 961-9338).

      

      All
        such
        notices and communications shall be deemed to have been received at the time
        delivered by hand, if personally delivered; when receipt acknowledged, if
        sent
        via facsimile or sent via Internet electronic mail; and when actually received,
        if sent by courier service or any other means.

      

      Section
        3.02    Successor and
        Assigns.  This Agreement shall inure to the benefit of and be
        binding upon the successors and assigns of each of the parties, including
        subsequent Holders of Registrable Securities to the extent permitted
        herein.

      

      Section
        3.03    Assignment of
        Rights.  All or any portion of the rights and obligations of any
        Purchaser under this Agreement may be transferred or assigned by the Purchaser
        in accordance with Section 2.09 hereof.

      

      Section
        3.04    Counterparts.  This
        Agreement may be executed in two or more counterparts, all of which when
        taken
        together shall be considered one and the same agreement and shall become
        effective when counterparts have been signed by each party and delivered
        to the
        other party, it being understood that both parties need not sign the same
        counterpart.  In the event that any signature is delivered by
        facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
        signature shall create a valid and binding obligation of the party executing
        (or
        on whose behalf such signature is executed) with the same force and effect
        as if
        such facsimile or “.pdf” signature page were an original thereof.

      

      Section
        3.05    Headings.  The
        headings in this Agreement are for convenience of reference only and shall
        not
        limit or otherwise affect the meaning hereof.

      

      Section
        3.06    Governing
        Law.  The Laws of the State of Texas shall govern this Agreement
        without regard to principles of conflict of Laws.

      

      Section
        3.07    Severability of
        Provisions.  Any provision of this Agreement which is prohibited
        or unenforceable in any jurisdiction shall, as to such jurisdiction, be
        ineffective to the extent of such prohibition or unenforceability without
        invalidating the remaining provisions hereof or affecting or impairing the
        validity or enforceability of such provision in any other
        jurisdiction.

      
        
          Registration
            Rights Agreement

          
          

        

        
          Page
            14

          
            

          

        

        
          
          

        

      

      Section
        3.08    Entire
        Agreement.  This Agreement is intended by the parties as a final
        expression of their agreement and intended to be a complete and exclusive
        statement of the agreement and understanding of the parties hereto in respect
        of
        the subject matter contained herein.  There are no restrictions,
        promises, warranties or undertakings, other than those set forth or referred
        to
        herein with respect to the rights granted by the Company set forth
        herein.  This Agreement and the Purchase Agreement supersede all prior
        agreements and understandings between the parties with respect to such subject
        matter.

      

      Section
        3.09    Amendment.  This
        Agreement may be amended only by means of a written amendment signed by the
        Company and the Holders of a majority of the then outstanding Registrable
        Securities; provided, however, that no such amendment shall materially
        and adversely affect the rights of any Holder hereunder, relative to any
        other
        Holder, without the consent of such Holder.

      

      Section
        3.10    No
        Presumption.  If any claim is made by a party relating to any
        conflict, omission, or ambiguity in this Agreement, no presumption or burden
        of
        proof or persuasion shall be implied by virtue of the fact that this Agreement
        was prepared by or at the request of a particular party or its
        counsel.

      

      

      [Signature
        pages to follow]

      
        
          Registration
            Rights Agreement

          
          

        

        
          Page
            15

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Parties hereto execute this Registration Rights Agreement,
        effective as of the date first above written.

       

    

    
      	
               

            	
              PETROSEARCH
                ENERGY CORPORATION

            	 
	 	 	 	 
	 	
              By:  
                

            	
              /s/
                Richard Dole

            	 
	 	Name:	
              Richard
                Dole, President and CEO

            	 
	 	 	 	 
	 	 	 	 
	 	PURCHASERS 	 
	 	 	 	 
	
               

            	
              IRONMAN
                PI FUND (QP), LP

            	 
	 	 	 	 
	 	
              By:

            	
              Ironman
                Energy Partners, LP,

            	 
	 	 	 	 
	 	
              By:

            	
              Ironman
                Capital Management, LLC,

            	 
	 	 	
              its
                General Partner

            	 
	 	 	 	 
	 	
              By:

            	
              /s/
                G. Bryan Dutt

            	 
	 	 	
              G.
                Bryan Dutt, President

            	 

    

    

    
      	 	
              WELLINGTON
                TRUST COMPANY, N.A.

              ON
                BEHALF OF MULTIPLE COLLECTIVE INVESTMENT FUNDS TRUST,
                

              MICRO
                CAP EQUITY PORTFOLIO

            
	 	 	 
	 	
              By:
                Wellington Management Company, LLP as investment
                adviser

            
	 	 	 
	 	
              By:

            	
              /s/  Steve
                Hoffman

            
	 	
              Name:

            	
              Steve
                Hoffman

            
	 	
              Title:

            	
              Vice
                President and Counsel

            
	 	
              Address:  
                

            	
              75
                State Street

            
	 	 	
              Boston,
                MA  02109

            

    

     

    
      	 	
              WELLINGTON
                TRUST COMPANY, N.A.

              ON
                BEHALF OF MULTIPLE COLLECTIVE INVESTMENT FUNDS TRUST,
                

              MICRO
                CAP EQUITY PORTFOLIO

            
	 	 	 
	 	 	 
	 	
              By:
                Wellington Management Company, LLP as investment
                adviser

            
	 	 	 
	 	
              By:

            	
              /s/  Steve
                Hoffman

            
	 	
              Name:

            	
              Steve
                Hoffman

            
	 	
              Title:

            	
              Vice
                President and Counsel

            
	 	
              Address:  
                

            	
              75
                State Street

            
	 	 	
              Boston,
                MA  02109

            

    

     

    
      
        Signature
          Page to Registration Rights Agreement

        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	 	
              CROSSCAP
                PARTNERS, LP

            
	 	 	 	 
	 	
              By:  
                

            	
              /s/
                Mark Crosswell

            
	 	 	 	
              Mark
                Crosswell

            
	 	
              Address:  
                

            	
              5851
                San Felipe, Suite 230

            
	 	 	 	
              Houston,
                Texas  77057

            
	 	 	 	 
	 	
              CROSSCAP
                PARTNERS ENHANCED, LP

            
	 	 	 	 
	 	
              By:

            	
              /s/
                Mark Crosswell

            
	 	 	 	
              Mark
                Crosswell

            
	 	
              Address:

            	
              5851
                San Felipe, Suite 230

            
	 	 	 	
              Houston,
                Texas  77057

            

    

     

    
      	 	
              WILLIAM
                C. O’MALLEY

            
	 	 	 
	 	
              /s/
                William C. O’Malley

            
	 	
              William
                C. O’Malley, Individually

            
	 	
              Address:

            	
              4646
                Carlton Dunes Drive

            
	 	 	
              #12,
                Unit 5602

            
	 	 	
              Amelia
                Island, Florida  32034

            

    

     

    
      	 	
              J.
                BURKE O’MALLEY

            
	 	 	 
	 	
              /s/
                J. Burke O’Malley

            
	 	
              J.
                Burke O’Malley, Individually

            
	 	
              Address:  
                

            	
              2013
                Spring Branch Drive

            
	 	 	
              Vienna,
                Virginia  22181

            
	 	 	 
	 	
              LEO
                E. STEC

            
	 	 	 
	 	
              /s/
                Leo E. Stec

            
	 	
              Leo
                E. Stec, Individually

            
	 	
              Address:  
                

            	
              3527
                Vantage Lane

            
	 	 	
              Glenview,
                Illinois  60026

            
	 	 	 
	 	
              VAN
                G. BOHN

            
	 	 	 
	 	
              /s/
                Van G. Bohn

            
	 	
              Van
                G. Bohn, Individually

            
	 	
              Address:  
                

            	
              426
                Arlington Drive

            
	 	 	
              Metairie,
                Louisiana  70001

            

    

     

    
      
        Signature
          Page to Registration Rights Agreement

        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	 	
              JOHN
                W. KOONS III AND KATRINA P. KOONS  

            
	 	 	 	 
	 	
              By:

            	
              /s/
                John W. Koons, III 

            
	 	 	
              John
                W. Koons III, Individually, and on behalf of Katrina P.
                Koons, his Wife 

            
	 	
              Address:  
                

            	
              5348
                Chandley Farm Circle

            
	 	 	 	
              Centreville,
                Virginia  20120

            

    

    

    
      	 	
              GUTIERREZ
                HOLDINGS, LP

            
	 	 	 	 
	 	
              /s/
                Joe M. Gutierrez, Jr.

            
	 	
              By:

            	
              Joe
                M. Gutierrez, Jr.

            
	 	
              Title:  
                

            	 
	 	
              Address: 

            	
              5847
                San Felipe Street, Suite 1910

            
	 	 	 	
              Houston,
                Texas  77057

            

    

    

    
      	 	
              JERRY
                C. DEARING

            
	 	 	 
	 	
              /s/
                Jerry C. Dearing

            
	 	
              Jerry
                C. Dearing, Individually

            
	 	
              Address:

            	
              5300
                Doliver Drive

            
	 	 	
              Houston,
                Texas  77057

            

    

     

     

    Signature
      Page to Registration Rights Agreement

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