Document:

Exhibit 4.2

    
      

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    

    This
      Registration Rights Agreement (the "Agreement")
      is
      made and entered into as of April 28, 2006 (the "Effective
      Date")
      among
      Houston American Energy Corp., a Delaware corporation (the "Company"),
      and
      Sanders Morris Harris Inc., a Texas corporation (“SMH”),
      individually and as agent and attorney in fact for the purchasers set forth
      on
Exhibit A
      attached
      hereto (each a “Purchaser”
      and
      collectively the “Purchasers”).

    

    R
      E C I T A L S:

    

    A.   The
      Purchasers have purchased shares of common stock (the "Shares")
      from
      the Company pursuant to Subscription Agreements (each, a "Subscription
      Agreement"
      and
      collectively, the "Subscription
      Agreements")
      by and
      between the Company and each Purchaser.

    

    B.    The
      Company has issued a warrant (the "Placement
      Agent Warrant")
      to
      purchase shares of the Company's Common Stock to SMH.

    

    C.    The
      Company, the Purchasers, and SMH desire to set forth the registration rights
      to
      be granted by the Company to the Purchasers and SMH.

    

    NOW,
      THEREFORE,
      in
      consideration of the mutual promises, representations, warranties, covenants,
      and conditions set forth herein, in the Subscription Agreements, or otherwise,
      the parties mutually agree as follows: 

    

    A
      G R E E M E N T:

    

    1.    Certain
      Definitions.
      As used
      in this Agreement, the following terms shall have the following respective
      meanings:

    

    "Approved
      Market"
      means
      the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock
      Exchange, Inc., the American Stock Exchange, Inc., or the OTC Bulletin
      Board.

    

    "Blackout
      Period"
      means,
      with respect to a registration, a period in each case commencing on the day
      immediately after the Company notifies the Purchasers and SMH that they are
      required, pursuant to Section 3(f), to suspend offers and sales of Registrable
      Securities during which the Company, in the good faith judgment of its Board
      of
      Directors, determines (because of the existence of, or in anticipation of,
      any
      acquisition, financing activity, or other transaction involving the Company,
      or
      the unavailability for reasons beyond the Company's control of any required
      financial statements, disclosure of information which is in its best interest
      not to publicly disclose, or any other event or condition of similar
      significance to the Company) that the registration and distribution of the
      Registrable Securities to be covered by such registration statement, if any,
      would be seriously detrimental to the Company and its shareholders and ending
      on
      the earlier of (1) the date upon which the material non-public information
      commencing the Blackout Period is disclosed to the public or ceases to be
      material and (2) such time as the Company notifies the selling Holders that
      the
      Company will no longer delay such filing of the Registration Statement,
      recommence taking steps to make such Registration Statement effective, or allow
      sales pursuant to such Registration Statement to resume; provided,
      however,
      that (a)
      the Company shall limit its use of Blackout Periods, in the aggregate, to 60
      Trading Days in any 12-month period and (b) no Blackout Period may commence
      sooner than 60 days after the end of a prior Blackout Period.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    "Business
      Day"
      means
      any day of the year, other than a Saturday, Sunday, or other day on which the
      Commission is required or authorized to close.

    

    "Closing
      Date"
      means
      April 28, 2006, or such other time as is mutually agreed between the
      Company and the Purchasers for the closing of the sale referred to in Recital
      A
      above.

    

    "Commission"
      means
      the Securities and Exchange Commission or any other federal agency at the time
      administering the Securities Act.

    

    "Common
      Stock"
      means
      the common stock, $.001 par value per share, of the Company and any and all
      shares of capital stock or other equity securities of: (i) the Company which
      are
      added to or exchanged or substituted for the Common Stock by reason of the
      declaration of any stock dividend or stock split, the issuance of any
      distribution or the reclassification, readjustment, recapitalization, or other
      such modification of the capital structure of the Company; and (ii) any other
      corporation, now or hereafter organized under the laws of any state or other
      governmental authority, with which the Company is merged, which results from
      any
      consolidation or reorganization to which the Company is a party, or to which
      is
      sold all or substantially all of the shares or assets of the Company, if
      immediately after such merger, consolidation, reorganization, or sale, the
      Company or the stockholders of the Company own equity securities having in
      the
      aggregate more than 50% of the total voting power of such other
      corporation.

    

    "Equity
      securities"
      means
      (i) any Common Stock, (ii) any security convertible, with or without
      consideration, into any Common Stock (including any option to purchase such
      a
      convertible security), (iii) any security carrying any warrant or right to
      subscribe to or purchase any Common Stock, or (iv) any such warrant or
      right.

    

    "Exchange
      Act"
      means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      of the Commission promulgated thereunder.

    

    "Family
      Member"
      means
      (a) with respect to any individual, such individual's spouse, any descendants
      (whether natural or adopted), any trust all of the beneficial interests of
      which
      are owned by any of such individuals or by any of such individuals together
      with
      any organization described in Section 501(c)(3) of the Internal Revenue Code
      of
      1986, as amended, the estate of any such individual, and any corporation,
      association, partnership, or limited liability company all of the equity
      interests of which are owned by those above described individuals, trusts,
      or
      organizations and (b) with respect to any trust, the owners of the beneficial
      interests of such trust.

    

    "Form
      S-1,"
      “Form
      SB-2”
and
      "Form
      S-3"
      mean
      such forms under the Securities Act as in effect on the date hereof.

     

    "Holder"
      means
      each Purchaser, SMH, or any successor or Permitted Assignee of a Purchaser,
      or
      SMH who acquire rights in accordance with this Agreement with respect to the
      Registrable Securities directly or indirectly from a Purchaser or SMH, including
      from any Permitted Assignee.

    

    "Inspector"
      means
      any attorney, accountant, or other agent retained by a Purchaser for the
      purposes provided in Section 3(j).

    

    "Offering
      Price"
      means
      the price per share at which the Shares have been sold to the Purchasers
      pursuant to the Subscription Agreements.

    

    "Permitted
      Assignee"
      means
      (a) with respect to a partnership, its partners or former partners in
      accordance with their partnership interests, (b) with respect to a
      corporation, its shareholders in accordance with their interest in the
      corporation, (c) with respect to a limited liability company, its members
      or former members in accordance with their interest in the limited liability
      company, (d) with respect to an individual party, any Family Member of such
      party, (e) an entity that is controlled by, controls, or is under common control
      with a transferor, or (f) a party to this Agreement.

    
      
        
        

      

      
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    The
      terms
      "register,"
      "registered,"
      and
      "registration"
      refers
      to a registration effected by preparing and filing a registration statement
      in
      compliance with the Securities Act, and the declaration or ordering of the
      effectiveness of such registration statement.

    

    "Registrable
      Securities"
      means
      (i) shares of Common Stock issued to each Purchaser pursuant to the Subscription
      Agreements, and (ii) shares of Common Stock issued or issuable to SMH pursuant
      to the Placement Agent Warrant, but
      in
      each case excluding
      (A) any
      Registrable Securities that have been publicly sold or may be publicly sold
      immediately without registration under the Securities Act either pursuant to
      Rule 144(k) of the Securities Act or otherwise; (B) any Registrable Securities
      sold by a person in a transaction pursuant to a registration statement filed
      under the Securities Act; or (C) any Registrable Securities that are at the
      time
      subject to an effective registration statement under the Securities Act.

    

    "Registration
      Statement"
      means
      the registration statement required to be filed by the Company pursuant to
      Section 3(a).

    

    "Securities
      Act"
      means
      the Securities Act of 1933, as amended, or any similar federal statute
      promulgated in replacement thereof, and the rules and regulations of the
      Commission thereunder, all as the same shall be in effect at the
      time.

    

    "SEC
      Effective Date"
      means
      the date the Registration Statement is declared effective by the
      Commission.

    

    "Trading
      Day"
      means a
      day on whichever (a) the national securities exchange, (b) the Nasdaq Stock
      Market, or (c) such other securities market, in any such case which at the
      time
      constitutes the principal securities market for the Common Stock, is open for
      general trading of securities.

    

    2.    Registration.

    

    (a)   Registration
      on Form S-1, Form SB-2 or Form S-3.
      As
      promptly as reasonably practicable after the date hereof, and within 60 days
      following the Closing Date, the Company shall file with the Commission a shelf
      registration statement on Form S-1, Form SB-2 or, if available, Form S-3
      relating to the resale by the Holders of all of the Registrable Securities
      on a
      continuous basis pursuant to Rule 415 (except if the Company is not then
      eligible to register for resale the Registrable Securities on such forms, in
      which case such registration shall be on another appropriate form); provided,
      however,
      that
      the Company shall not be obligated to effect any such registration,
      qualification, or compliance pursuant to this Section 2(a), or keep such
      registration effective pursuant to Section 3: (i) in any particular jurisdiction
      in which the Company would be required to qualify to do business as a foreign
      corporation or as a dealer in securities under the securities or blue sky laws
      of such jurisdiction or to execute a general consent to service of process
      in
      effecting such registration, qualification, or compliance, in each case where
      it
      has not already done so; or (ii) during any Blackout Period.

    

    (b)    Intentionally
      Omitted.

    

    3.     
      Registration
      Procedures.
      In the
      case of each registration, qualification, or compliance effected by the Company
      pursuant to Section 2 hereof, the Company will keep each Holder including
      securities therein reasonably advised in writing (which may include e-mail)
      as
      to the initiation of each registration, qualification, and compliance and as
      to
      the completion thereof. With respect to any registration statement filed
      pursuant to Section 2, the Company will use its best efforts
      to:

    
      
        
        

      

      
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    (a)    prepare
      and file with the Commission with respect to such Registrable Securities, a
      registration statement on Form S-1, or any other form for which the Company
      then
      qualifies or which counsel for the Company shall deem appropriate, and which
      form shall be available for the sale of the Registrable Securities in accordance
      with the intended method(s) of distribution thereof, and use its best efforts
      to
      cause such registration statement to become effective as soon as possible and
      remain effective at least for a period ending with the first to occur of (i)
      the
      sale of all Registrable Securities covered by the registration statement in
      accordance with the registration statement, (ii) the availability under Rule
      144
      for the Holder to immediately, freely resell without restriction all Registrable
      Securities covered by the registration statement, or (iii) one year after
      expiration of the term of the Warrants (in each case, the
      "Effectiveness Period");
      provided,
      however,
      if at
      the end of the one-year period referred to in clause (iii), any Holder is not
      able to immediately, freely resell all Registrable Securities that it owns,
      the
      Effectiveness Period shall continue until terminated pursuant to clause (i)
      or
      (ii); and provided
      that no
      later than two business days before filing with the Commission a registration
      statement or prospectus or any amendments or supplements thereto, the Company
      shall (i) furnish to (A) one special counsel ("Holders
      Counsel")
      selected by the Company for the benefit of the Holders, copies of all such
      documents proposed to be filed (excluding any exhibits other than applicable
      underwriting documents), in substantially the form proposed to be filed, which
      documents shall be subject to the review of such Holders Counsel, and (ii)
      notify each Holder of Registrable Securities covered by such registration
      statement of any stop order issued or threatened by the Commission and take
      all
      reasonable actions required to prevent the entry of such stop order or to remove
      it if entered;

    

    (b)    if
      a
      registration statement is subject to review by the Commission, promptly respond
      to all comments and diligently pursue resolution of any comments to the
      satisfaction of the Commission;

    

    (c)    prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      necessary to keep such registration statement effective during the Effectiveness
      Period (but in any event at least until expiration of the 90-day period referred
      to in Section 4(3) of the Securities Act and Rule 174, or any successor thereto,
      thereunder, if applicable), and comply with the provisions of the Securities
      Act
      with respect to the disposition of all securities covered by such registration
      statement during such period in accordance with the intended method(s) of
      disposition by the sellers thereof set forth in such registration
      statement;

    

    (d)    furnish,
      without charge, to each Holder of Registrable Securities covered by such
      registration statement (i) a reasonable number of copies of such registration
      statement (including any exhibits thereto other than exhibits incorporated
      by
      reference), each amendment and supplement thereto as such Holder may request,
      (ii) such number of copies of the prospectus included in such registration
      statement (including each preliminary prospectus and any other prospectus filed
      under Rule 424 under the Securities Act) as such Holders may request, in
      conformity with the requirements of the Securities Act, and (iii) such other
      documents as such Holder may reasonably request in order to facilitate the
      disposition of the Registrable Securities owned by such Holder, but only during
      the Effectiveness Period;

    

    (e)    use
      its
      best efforts to register or qualify such Registrable Securities under such
      other
      applicable securities or blue sky laws of such jurisdictions as any Holder
      of
      Registrable Securities covered by such registration statement reasonably
      requests as may be necessary for the marketability of the Registrable Securities
      (such request to be made by the time the applicable registration statement
      is
      deemed effective by the Commission) and do any and all other acts and things
      which may be reasonably necessary or advisable to enable such Holder to
      consummate the disposition in such jurisdictions of the Registrable Securities
      owned by such Holder; provided
      that the
      Company shall not be required to (i) qualify generally to do business in any
      jurisdiction where it would not otherwise be required to qualify but for this
      paragraph (e), (ii) subject itself to taxation in any such jurisdiction, or
      (iii) consent to general service of process in any such
      jurisdiction;

    
      
        
        

      

      
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    (f)    as
      promptly as practicable after becoming aware of such event, notify each Holder
      of such Registrable Securities at any time when a prospectus relating thereto
      is
      required to be delivered under the Securities Act of the happening of any event
      which comes to the Company's attention if as a result of such event the
      prospectus included in such registration statement contains 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 and the
      Company shall promptly prepare and furnish to such Holder a supplement or
      amendment to such prospectus (or prepare and file appropriate reports under
      the
      Exchange Act) so that, as thereafter delivered to the purchasers of such
      Registrable Securities, such prospectus shall not contain an untrue statement
      of
      a material fact or omit to state any material fact required to be stated therein
      or necessary to make the statements therein not misleading, unless suspension
      of
      the use of such prospectus otherwise is authorized herein or in the event of
      a
      Blackout Period, in which case no supplement or amendment need be furnished
      (or
      Exchange Act filing made) until the termination of such suspension or Blackout
      Period; 

    

    (g)    comply,
      and continue to comply during the period that such registration statement is
      effective under the Securities Act, in all material respects with the Securities
      Act and the Exchange Act and with all applicable rules and regulations of the
      Commission with respect to the disposition of all securities covered by such
      registration statement, and make available to its security holders, as soon
      as
      reasonably practicable, an earnings statement covering the period of at least
      12
      months, but not more than 18 months, beginning with the first full calendar
      month after the SEC Effective Date, which earnings statement shall satisfy
      the
      provisions of Section 11(a) of the Securities Act.

    

    (h)    as
      promptly as practicable after becoming aware of such event, notify each Holder
      of Registrable Securities being offered or sold pursuant to the Registration
      Statement of the issuance by the Commission of any stop order or other
      suspension of effectiveness of the Registration Statement at the earliest
      possible time;

    

    (i)    permit
      the Holders of Registrable Securities being included in the Registration
      Statement and their legal counsel, at such Holders' sole cost and expense
      (except as otherwise specifically provided in Section 5) to review and have
      a
      reasonable opportunity to comment on the Registration Statement and all
      amendments and supplements thereto at least two Business Days prior to their
      filing with the Commission;

    

    (j)     make
      available for inspection by any Holder and any Inspector retained by such
      Holder, at such Holder's sole expense, all records as shall be reasonably
      necessary to enable such Holder to exercise its due diligence responsibility,
      and cause the Company's officers, directors, and employees to supply all
      information which such Holder or any Inspector may reasonably request for
      purposes of such due diligence; provided,
      however, that
      such
      Holder shall hold in confidence and shall not make any disclosure of any record
      or other information which the Company determines in good faith to be
      confidential, and of which determination such Holder is so notified at the
      time
      such Holder receives such information, unless (i) the disclosure of such record
      is necessary to avoid or correct a misstatement or omission in the Registration
      Statement and a reasonable time prior to such disclosure the Holder shall have
      informed the Company of the need to so correct such misstatement or omission
      and
      the Company shall have failed to correct such misstatement of omission, (ii)
      the
      release of such record is ordered pursuant to a subpoena or other order from
      a
      court or governmental body of competent jurisdiction, or (iii) the information
      in such record has been made generally available to the public other than by
      disclosure in violation of this or any other agreement. The Company shall not
      be
      required to disclose any confidential information in such records to any
      Inspector until and unless such Inspector shall have entered into a
      confidentiality agreement with the Company with respect thereto, substantially
      in the form of this Section 3(j), which agreement shall permit such Inspector
      to
      disclose records to the Holder who has retained such Inspector. Each Holder
      agrees that it shall, upon learning that disclosure of such records is sought
      in
      or by a court or governmental body of competent jurisdiction or through other
      means, give prompt notice to the Company and allow the Company, at the Company's
      expense, to undertake appropriate action to prevent disclosure of, or to obtain
      a protective order for, the records deemed confidential. The Company shall
      hold
      in confidence and shall not make any disclosure of information concerning a
      Holder provided to the Company pursuant to this Agreement unless (i) disclosure
      of such information is necessary to comply with federal or state securities
      laws, (ii) disclosure of such information to the Staff of the Division of
      Corporation Finance is necessary to respond to comments raised by the Staff
      in
      its review of the Registration Statement, (iii) disclosure of such information
      is necessary to avoid or correct a misstatement or omission in the Registration
      Statement, (iv) release of such information is ordered pursuant to a subpoena
      or
      other order from a court or governmental body of competent jurisdiction, or
      (v)
      such information has been made generally available to the public other than
      by
      disclosure in violation of this or any other agreement. The Company agrees
      that
      it shall, upon learning that disclosure of such information concerning a Holder
      is sought in or by a court or governmental body of competent jurisdiction or
      through other means, give prompt notice to such Holder and allow such Holder,
      at
      such Holder's expense, to undertake appropriate action to prevent disclosure
      of,
      or to obtain a protective order for, such information;

    
      
        
        

      

      
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    (k)    use
      its
      best efforts to cause all the Registrable Securities covered by the Registration
      Statement to be listed or quoted on the principal securities market on which
      securities of the same class or series issued by the Company are then listed
      or
      traded;

    

    (l)    
provide
      a
      transfer agent and registrar, which may be a single entity, for the Registrable
      Securities at all times;

    

    (m)   cooperate
      with the Holders of Registrable Securities being offered pursuant to the
      Registration Statement to facilitate the timely preparation and delivery of
      certificates (not bearing any restrictive legends) representing Registrable
      Securities to be offered pursuant to the Registration Statement and enable
      such
      certificates to be in such denominations or amounts as the Holders may
      reasonably request and registered in such names as the Holders may request;
      and

    

    (n)    take
      all
      other reasonable actions necessary to expedite and facilitate disposition by
      the
      Holders of the Registrable Securities pursuant to the Registration
      Statement.

    

    4.    
Suspension
      of Offers and Sales.
      Each
      Holder of Registrable Securities agrees that, upon receipt of any notice from
      the Company of the happening of any event of the kind described in Section
      3(f)
      hereof or of the commencement of an Blackout Period, such Holder shall
      discontinue disposition of Registrable Securities pursuant to the registration
      statement covering such Registrable Securities until such Holder's receipt
      of
      the copies of the supplemented or amended prospectus contemplated by Section
      3(f) hereof or notice of the end of the Blackout Period, and, if so directed
      by
      the Company, such Holder shall deliver to the Company (at the Company's expense)
      all copies (including, without limitation, any and all drafts), other than
      permanent file copies, then in such Holder's possession, of the prospectus
      covering such Registrable Securities current at the time of receipt of such
      notice. In the event the Company shall give any such notice, the period
      mentioned in Section 3(a)(iii) hereof shall be extended by the greater of (i)
      ten business days or (ii) the number of days during the period from and
      including the date of the giving of such notice pursuant to Section 3(f) hereof
      to and including the date when each Holder of Registrable Securities covered
      by
      such registration statement shall have received the copies of the supplemented
      or amended prospectus contemplated by Section 3(f) hereof.

    

    5.    
Registration
      Expenses.
      The
      Company shall pay all expenses in connection with any registration, including,
      without limitation, all registration, filing, stock exchange and NASD fees,
      printing expenses, all fees and expenses of complying with securities or blue
      sky laws, the fees and disbursements of counsel for the Company and of its
      independent accountants, and the reasonable fees and disbursements of a Holders
      Counsel; provided that each Holder shall pay for its own underwriting discounts
      and commissions and transfer taxes. Except as provided above in this Section
      5
      and in Section 9, the Company shall not be responsible for the expenses of
      any
      attorney or other advisor employed by a Holder of Registrable
      Securities.

    
      
        
        

      

      
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    6.    Assignment
      of Rights.
      No
      Holder may assign its rights under this Agreement to any party without the
      prior
      written consent of the Company; provided,
      however,
      that a
      Holder may assign its rights under this Agreement without such restrictions
      to a
      Permitted Assignee as long as (a) such transfer or assignment is effected in
      accordance with applicable securities laws; (b) such transferee or assignee
      agrees in writing to become subject to the terms of this Agreement; and (c)
      the
      Company is given written notice by such Holder of such transfer or assignment,
      stating the name and address of the transferee or assignee and identifying
      the
      Registrable Securities with respect to which such rights are being transferred
      or assigned.

    

    7.    
Information
      by Holder.
      The
      Holder or Holders of Registrable Securities included in any registration shall
      furnish to the Company such information regarding such Holder or Holders and
      the
      distribution proposed by such Holder or Holders as the Company may request
      in
      writing.

    

    8.    
Delay
      of Registration.
      No
      Holder shall have any right to obtain or seek an injunction restraining or
      otherwise delaying any registration pursuant to this Agreement as the result
      of
      any controversy that might arise with respect to the interpretation or
      implementation of this Agreement.

    

    9.    
Indemnification.

    

    (a)    In
      the
      event of the offer and sale of Registrable Securities held by Holders under
      the
      Securities Act, the Company shall, and hereby does, indemnify and hold harmless,
      to the fullest extent permitted by law, each Holder, its directors, officers,
      partners, each other person who participates as an underwriter in the offering
      or sale of such securities, and each other person, if any, who controls or
      is
      under common control with such Holder or any such underwriter within the meaning
      of Section 15 of the Securities Act, against any losses, claims, damages, or
      liabilities, joint or several, and expenses to which the Holder or any such
      director, officer, partner, or underwriter or controlling person may become
      subject under the Securities Act or otherwise, insofar as such losses, claims,
      damages, liabilities, or expenses (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 any
      registration statement under which such shares were registered under the
      Securities Act, any preliminary prospectus, final prospectus, or summary
      prospectus contained therein, or any amendment or supplement thereto, or any
      omission or alleged omission to state therein a material fact required to be
      stated therein or necessary to make the statements therein in light of the
      circumstances in which they were made not misleading, and the Company shall
      reimburse the Holder, and each such director, officer, partner, underwriter,
      and
      controlling person for any legal or any other expenses reasonably incurred
      by
      them in connection with investigating, defending, or settling any such loss,
      claim, damage, liability, action, or proceeding; provided that the foregoing
      shall not apply to, and the Company shall not be liable, in any such case (i)
      to
      the extent that any such loss, claim, damage, liability (or action or proceeding
      in respect thereof), or expense arises out of or is based upon an untrue
      statement or alleged untrue statement in or omission or alleged omission from
      such registration statement, any such preliminary prospectus, final prospectus,
      summary prospectus, amendment, or supplement in reliance upon and in conformity
      with written information furnished to the Company through an instrument duly
      executed by or on behalf of such Holder specifically stating that it is for
      use
      in the preparation thereof, (ii) provided that the Company has complied with
      its
      obligations hereunder to furnish such Holder with copies of the applicable
      prospectus, if the person asserting any such loss, claim, damage, or liability
      (or action or proceeding in respect thereof) who purchased the Registrable
      Securities that are the subject thereof did not receive a copy of an amended
      preliminary prospectus or the final prospectus (or the final prospectus as
      amended or supplemented) at or prior to the written confirmation of the sale
      of
      such Registrable Securities to such person because of the failure of such Holder
      or underwriter to so provide such amended preliminary or final prospectus and
      the untrue statement or alleged untrue statement or omission or alleged omission
      of a material fact made in such preliminary prospectus was corrected in the
      amended preliminary or final prospectus (or the final prospectus as amended
      or
      supplemented), or (iii) provided that the plan of distribution mechanics
      described in the applicable prospectus are, in form and substance, reasonable
      and customary for transactions of this type, to the extent that the Holders
      failed to comply with the terms of such plan of distribution mechanics. Such
      indemnity shall remain in full force and effect regardless of any investigation
      made by or on behalf of the Holders, or any such director, officer, partner,
      underwriter, or controlling person and shall survive the transfer of such shares
      by the Holder.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (b)    As
      a
      condition to including any Registrable Securities to be offered by a Holder
      in
      any registration statement filed pursuant to this Agreement, each such Holder
      agrees, acting severally and not jointly and severally, to be bound by the
      terms
      of this Section 9 and to indemnify and hold harmless, to the fullest extent
      permitted by law, the Company, its directors and officers, and each other
      person, if any, who controls the Company within the meaning of Section 15 of
      the
      Securities Act, legal counsel and accountants for the Company, any underwriter,
      any other Holder selling securities in such registration statement, and any
      controlling person within the meaning of the Securities Act of any such
      underwriter or other Holder, against any losses, claims, damages, or
      liabilities, joint or several, to which the Company or any such director or
      officer or controlling person may become subject under the Securities Act or
      otherwise, insofar as such losses, claims, damages, or liabilities (or actions
      or proceedings, whether commenced or threatened, in respect thereof) arise
      out
      of or are based upon (i) an untrue statement or alleged untrue statement in
      or
      omission or alleged omission from such registration statement, any preliminary
      prospectus, final prospectus, or summary prospectus contained therein, or any
      amendment or supplement thereto, if such statement or alleged statement or
      omission or alleged omission was made in reliance upon and in conformity with
      written information about such Holder as a Holder of the Company furnished
      to
      the Company, (ii) provided that the Company has complied with its obligations
      hereunder to furnish such Holder with copies of the applicable prospectus,
      if
      the person asserting any such loss, claim, damage, or liability (or action
      or
      proceeding in respect thereof) who purchased the Registrable Securities that
      are
      the subject thereof did not receive a copy of an amended preliminary prospectus
      or the final prospectus (or the final prospectus as amended or supplemented)
      at
      or prior to the written confirmation of the sale of such Registrable Securities
      to such person because of the failure of such Holder or underwriter to so
      provide such amended preliminary or final prospectus and the untrue statement
      or
      alleged untrue statement or omission or alleged omission of a material fact
      made
      in such preliminary prospectus was corrected in the amended preliminary or
      final
      prospectus (or the final prospectus as amended or supplemented), or (iii)
      provided that the plan of distribution mechanics described in the applicable
      prospectus are, in form and substance, reasonable and customary for transactions
      of this type, to the extent that the Holders failed to comply with the terms
      of
      such plan of distribution mechanics. Such indemnity shall remain in full force
      and effect regardless of any investigation made by or on behalf of the Holders,
      or any such director, officer, partner, underwriter, or controlling person
      and
      shall survive the transfer of such shares by the Holder, and such Holder shall
      reimburse the Company, and each such director, officer, legal counsel and
      accountants, underwriter, other Holder, and controlling person for any legal
      or
      other expenses reasonably incurred by them in connection with investigating,
      defending, or settling and such loss, claim, damage, liability, action, or
      proceeding; provided,
      however,
      that
      such indemnity agreement found in this Section 9(b) shall in no event exceed
      the
      gross proceeds from the offering received by such Holder. Such indemnity shall
      remain in full force and effect, regardless of any investigation made by or
      on
      behalf of the Company or any such director, officer, or controlling person
      and
      shall survive the transfer by any Holder of such shares.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (c)    Promptly
      after receipt by an indemnified party of notice of the commencement of any
      action or proceeding involving a claim referred to in Section 9(a) or (b) hereof
      (including any governmental action), such indemnified party shall, if a claim
      in
      respect thereof is to be made against an indemnifying party, give written notice
      to the indemnifying party of the commencement of such action; provided that
      the
      failure of any indemnified party to give notice as provided herein shall not
      relieve the indemnifying party of its obligations under Section 9(a) or (b)
      hereof, except to the extent that the indemnifying party is materially and
      actually prejudiced by such failure to give notice. In case any such action
      is
      brought against an indemnified party, unless in the reasonable judgment of
      counsel to such indemnified party a conflict of interest between such
      indemnified and indemnifying parties may exist or the indemnified party may
      have
      defenses not available to the indemnifying party in respect of such claim,
      the
      indemnifying party shall be entitled to participate in and to assume 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 the defense thereof, the indemnifying party shall not
      be
      liable to such indemnified party for any legal or other expenses subsequently
      incurred by the latter in connection with the defense thereof, unless in such
      indemnified party's reasonable judgment a conflict of interest between such
      indemnified and indemnifying parties arises in respect of such claim after
      the
      assumption of the defenses thereof or the indemnifying party fails to defend
      such claim in a diligent manner, other than reasonable costs of investigation.
      Neither an indemnified nor an indemnifying party shall be liable for any
      settlement of any action or proceeding effected without its written consent.
      No
      indemnifying party shall, without the written consent of the indemnified party,
      consent to entry of any judgment or enter into any settlement, which does not
      include as an unconditional term thereof the giving by the claimant or plaintiff
      to such indemnified party of a release from all liability in respect of such
      claim or litigation. Notwithstanding anything to the contrary set forth herein,
      and without limiting any of the rights set forth above, in any event any party
      shall have the right to retain, at its own expense, counsel with respect to
      the
      defense of a claim.

    

    (d)    In
      the
      event that an indemnifying party does or is not permitted to assume the defense
      of an action pursuant to Section 9(c) or in the case of the expense
      reimbursement obligation set forth in Section 9(a) and (b), the indemnification
      required by Section 9(a) and (b) hereof shall be made by periodic payments
      of
      the amount thereof during the course of the investigation or defense, as and
      when bills received or expenses, losses, damages, or liabilities are
      incurred.

    

    (e)    If
      the
      indemnification provided for in this Section 9 is held by a court of competent
      jurisdiction to be unavailable to an indemnified party with respect to any
      loss,
      liability, claim, damage, or expense referred to herein, the indemnifying party,
      in lieu of indemnifying such indemnified party hereunder, shall (i) contribute
      to the amount paid or payable by such indemnified party as a result of such
      loss, liability, claim, damage, or expense as is appropriate to reflect the
      proportionate relative fault of the indemnifying party on the one hand and
      the
      indemnified party on the other (determined by reference to, among other things,
      whether the untrue or alleged untrue statement of a material fact or omission
      relates to information supplied by the indemnifying party or the indemnified
      party and the parties' relative intent, knowledge, access to information, and
      opportunity to correct or prevent such untrue statement or omission), or (ii)
      if
      the allocation provided by clause (i) above is not permitted by applicable
      law
      or provides a lesser sum to the indemnified party than the amount hereinafter
      calculated, not only the proportionate relative fault of the indemnifying party
      and the indemnified party, but also the relative benefits received by the
      indemnifying party on the one hand and the indemnified party on the other,
      as
      well as any other relevant equitable considerations. No indemnified party guilty
      of fraudulent misrepresentation (within the meaning of Section 11(f) of the
      Securities Act) shall be entitled to contribution from any indemnifying party
      who was not guilty of such fraudulent misrepresentation.

    

    (f)    Other
      Indemnification.
      Indemnification similar to that specified in the preceding subsections of this
      Section 9 (with appropriate modifications) shall be given by the Company and
      each Holder of Registrable Securities with respect to any required registration
      or other qualification of securities under any federal or state law or
      regulation or governmental authority other than the Securities Act.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    10.    Miscellaneous.

    

    (a)    Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Texas and the United States of America, both substantive and remedial.
      Any
      judicial proceeding brought against either of the parties to this agreement
      or
      any dispute arising out of this Agreement or any matter related hereto shall
      be
      brought in the courts of the State of Texas, Harris County, or in the United
      States District Court for the Southern District of Texas and, by its execution
      and delivery of this agreement, each party to this Agreement accepts the
      jurisdiction of such courts. The foregoing consent to jurisdiction shall not
      be
      deemed to confer rights on any person other than the parties to this
      Agreement.

    

    (b)    Successors
      and Assigns.
      Except
      as otherwise provided herein, the provisions hereof shall inure to the benefit
      of, and be binding upon, the successors, Permitted Assigns, executors, and
      administrators of the parties hereto. In the event the Company merges with,
      or
      is otherwise acquired by, a direct or indirect subsidiary of a publicly traded
      company, the Company shall condition the merger or acquisition on the assumption
      by such parent company of the Company's obligations under this Agreement.

    

    (c)    
Entire
      Agreement.
      This
      Agreement constitutes the full and entire understanding and agreement between
      the parties with regard to the subjects hereof.

    

    (d)    Notices,
      etc.
      All
      notices or other communications which are required or permitted under this
      Agreement shall be in writing and sufficient if delivered by hand, by facsimile
      transmission, by registered or certified mail, postage pre-paid, by electronic
      mail, or by courier or overnight carrier, to the persons at the addresses set
      forth below (or at such other address as may be provided hereunder), and shall
      be deemed to have been delivered as of the date so delivered: 

    

    
      	 	
              If
                to the Company:

            	
              Houston
                American Energy Corp.

            

    

    
      	 	 	
              801
                Travis, Suite 2020

            

    

    
      	 	 	
              Houston,
                Texas 77002

            

    

    
      	 	 	
              Facsimile:
                (713) 222-6440

            

    

    
      	 	 	
              e-mail:
                jft@houstonamericanenergy.com

            

    

    

    
      	 	
              If
                to the Purchasers:

            	
              To
                each Purchaser at the address

            

    

    
      	 	 	
              set
                forth on Exhibit A

            

    

    

    
      	 	
              with
                a copy to:

            	
              Sanders
                Morris Harris Inc.

            

    

    
      	 	 	
              600
                Travis, Suite 3100

            

    

    
      	 	 	
              Houston,
                Texas 77002

            

    

    
      	 	 	
              Attention:
                John H. Malanga

            

    

    
      	 	 	
              Facsimile:
                (713) 250-4294

            

    

    
      	 	 	
              e-mail:
                john.malanga@smhgroup.com

            

    

     

    or
      at
      such other address as any party shall have furnished to the other parties in
      writing.

    

    (e)    Delays
      or Omissions.
      No
      delay or omission to exercise any right, power, or remedy accruing to any Holder
      of any Registrable Securities, upon any breach or default of the Company under
      this Agreement, shall impair any such right, power, or remedy of such Holder
      nor
      shall it be construed to be a waiver of any such breach or default, or an
      acquiescence therein, or of or in any similar breach or default thereunder
      occurring; nor shall any waiver of any single breach or default be deemed a
      waiver of any other breach or default theretofore or thereafter occurring.
      Any
      waiver, permit, consent, or approval of any kind or character on the part of
      any
      Holder of any breach or default under this Agreement, or any waiver on the
      part
      of any Holder of any provisions or conditions of this Agreement, must be in
      writing and shall be effective only to the extent specifically set forth in
      such
      writing. All remedies, either under this Agreement, or by law or otherwise
      afforded to any holder, shall be cumulative and not
      alternative.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    (f)    Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

    

    (g)   Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      enforceable against the parties actually executing such counterparts, and all
      of
      which together shall constitute one instrument.

    

    (h)   Severability.
      In the
      case any provision of this Agreement shall be invalid, illegal, or
      unenforceable, the validity, legality, and enforceability of the remaining
      provisions shall not in any way be affected or impaired thereby.

    

    (i)    Amendments.
      The
      provisions of this Agreement may be amended at any time and from time to time,
      and particular provisions of this Agreement may be waived, with and only with
      an
      agreement or consent in writing signed by the Company and by the holders of
      a
      majority of the number of shares of Registrable Securities outstanding as of
      the
      date of such amendment or waiver. The Purchasers acknowledge that by the
      operation of this Section 10(i), the holders of a majority of the outstanding
      Registrable Securities may have the right and power to diminish or eliminate
      all
      rights of the Purchasers under this Agreement.

    

    (j)    Limitation
      on Subsequent Registration Rights.
      After
      the date of this Agreement, the Company shall not, without the prior written
      consent of the Holders of at least a majority of the Registrable Shares then
      outstanding, enter into any agreement with any holder or prospective holder
      of
      any securities of the Company that would grant such holder registration rights
      senior to those granted to the Holder hereunder.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    This
      Registration Rights Agreement is hereby executed as of the date first above
      written.

    

    
      	 	
              COMPANY:

            	 
	 	 	 	 
	 	
              HOUSTON
                AMERICAN ENERGY CORP.

            	 
	 	 	 	 
	 	 	 	 
	 	
              By:

            	 
	  
	 
	 	
              Name:
                

            	  
	
            	 
	 	
              Title:
                

            	  
	
            	 
	 	 	 	 
	 	 	 	 
	 	
              Sanders
                Morris Harris Inc., Individually
                and as Agent and Attorney in Fact for the Purchasers listed on Exhibit
                A
                attached hereto

            	 
	 	 	 	 
	 	
              By:

            	 
	  
	 
	 	
              Name:
                

            	  
	
            	 
	 	
              Title:
                

            	  
	
            	 

    

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    

    Purchaser
      Information

     

     

     

    13Exhibit 10.1

    
      
        

      

      THE
        COMMON STOCK OF HOUSTON AMERICAN ENERGY CORP. ("HUSA") CONSTITUTES SECURITIES
        THAT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
        OR
        THE APPLICABLE SECURITIES LAWS OF ANY STATE. THE COMMON STOCK MAY NOT, AT
        ANY
        TIME, BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION
        UNDER THE ACT AND STATE LAWS, OR DELIVERY TO HUSA OF AN OPINION OF LEGAL
        COUNSEL
        SATISFACTORY TO HUSA THAT SUCH REGISTRATION IS NOT REQUIRED. RESTRICTIONS
        ON
        TRANSFER WILL BE IMPRINTED ON THE DOCUMENTS EVIDENCING THE COMMON STOCK TO
        THE
        FOREGOING EFFECTS.

      

      THE
        PURCHASE OF COMMON STOCK INVOLVES A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED
        ONLY BY PERSONS WHO CAN BEAR THE RISK OF LOSING THEIR ENTIRE
        INVESTMENT.

      

      HOUSTON
        AMERICAN ENERGY CORP.

      

      Common
        Stock, par value $.001 per share

      

      SUBSCRIPTION
        AGREEMENT

      

      Houston
        American Energy Corp.

      c/o
        Sanders Morris Harris Inc.

      600
        Travis, Suite 3100

      Houston,
        Texas 77002

      

      Ladies
        and Gentlemen:

      

      This
        will
        confirm my agreement to become a stockholder of Houston American Energy Corp.
        ("HUSA" or the “Company”) and to purchase shares of common stock, par value
        $.001 per share, in HUSA (the "Common Stock"). I/we hereby acknowledge receipt
        of the Preliminary Confidential Private Placement Memorandum dated
        April 11, 2006 and the Final Confidential Private Placement Memorandum
        dated April 24, 2006, each with the exhibits thereto (collectively, the
        "Memorandum"), with respect to HUSA. The Memorandum describes the terms under
        which the Common Stock is being offered to subscribers.

      

      1.    
Subscription
        and Sale.

      

      1.1    Subscription.
        Subject
        to the terms and conditions of this Agreement and the provisions of the
        Memorandum, I/we irrevocably subscribe for, and agree to purchase the number
        of
        shares of Common Stock of HUSA for the subscription price indicated on the
        Signature Page. I am/we are tendering to HUSA (a) a completed, signed, and
        dated
        copy of this Agreement, (b) a completed, signed, and dated Purchaser's
        Questionnaire, and (c) a certified check or bank check in the amount of the
        subscription price (or I am/we are concurrently wire transferring such amount
        to
        the Escrow Agent or authorizing the payment of such amount from my account
        at
        Sanders Morris Harris Inc.).

      

      1.2    Acceptance
        or Rejection of Subscription.
        All
        funds tendered by me/us will be held in a segregated subscription account
        pending acceptance or rejection of this Agreement and the closing of my/our
        purchase of the Common Stock. This Agreement will either be accepted, in
        whole
        or in part, subject to the prior sale of the Common Stock, or rejected, by
        HUSA
        as promptly as practicable. If this Agreement is accepted only in part, I/we
        agree to purchase such smaller number of shares of Common Stock as HUSA
        determines to sell to me/us. If this Agreement is rejected for any reason
        or no
        reason, including, the termination of the offering of the Common Stock by
        HUSA,
        this Agreement and all funds tendered with it will be promptly returned to
        me/us, without deduction of any kind, and this Agreement will be void and
        of no
        further force or effect. Deposit and collection of the check tendered, or
        receipt of funds wired or delivered from my/our account at Sanders Morris
        Harris
        Inc., with this Agreement will not constitute acceptance of this
        Agreement.

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      1.3    Closing.
        Subscriptions will be accepted at one or more closings, as described in the
        Memorandum. On closing, the subscription evidenced hereby, if not previously
        rejected, will, in reliance on my/our representations and warranties, be
        accepted, in whole or in part, and HUSA will execute a copy of this Agreement
        and return it to me/us. If my/our subscription is accepted only in part,
        this
        Agreement will be marked to indicate such fact, and HUSA will return to me/us
        the portion of the funds tendered by me/us representing the unaccepted portion
        of my/our subscription, without deduction of any kind. The Common Stock
        subscribed for will not be deemed to be issued to, or owned by, me/us until
        HUSA
        has accepted this Agreement.

      

      2.     
        Representations,
        Warranties, and Covenants of the Purchaser.
        I/we
        represent, warrant, and covenant to HUSA that:

      

      2.1    General:

      

      (a)    If
        I am a
        natural person, I have the legal capacity and all requisite authority to
        enter
        into, execute, and deliver the Transaction Documents, to purchase the Common
        Stock, and to perform all the obligations required to be performed by me
        thereunder. If we are a corporation, partnership, limited liability company,
        trust, estate, or other entity, we are authorized to purchase the Common
        Stock
        and otherwise to comply with our obligations under the Transaction Documents.
        The person signing this Agreement on behalf of such entity is duly authorized
        by
        such entity to do so. The Transaction Documents are my/our valid and binding
        agreements and enforceable against me/us in accordance with their
        terms.

      

      (b)    My/our
        principal residence is in the jurisdiction indicated herein, or if we are
        a
        corporation, partnership, limited liability company, trust, estate, or other
        entity, we are organized and qualified under the law of the state indicated
        below and I/we have no intention of becoming a resident or domiciliary of
        any
        jurisdiction other than the one indicated by our address.

      

      (c)    I
        am/we
        are subscribing to purchase the Common Stock solely for my/our own account,
        for
        investment, and not with a view to, or for resale in connection with, any
        distribution. I am/we are not acquiring the Common Stock as an agent or
        otherwise for any other person.

      

      2.2    Information
        Concerning the Offering:

      

      (a)    I/we
        have
        received, carefully read, and understood the Memorandum. I/we have not been
        furnished any offering literature other than the Memorandum and the Exhibits
        attached thereto and have relied only on the information contained therein
        and
        my/our own due diligence efforts and inquiries with respect to the Offering.
        The
        Common Stock was not offered to me/us by any means of general solicitation
        or
        general advertising. 

      

      (b)    I/we
        understand that the offering of the Common Stock is being made without
        registration of the Common Stock under the Securities Act of 1933, as amended
        (the "Act"), or any state securities or blue sky laws in reliance on exemptions
        from such registration, and that such reliance is based in part on my
        representations and warranties set forth in this Section 2 and on the
        information set forth in the Purchaser's Questionnaire tendered by me/us
        to HUSA
        with this Agreement.

      

      (c)    In
        formulating a decision to invest in the Common Stock, I/we (and my/our Purchaser
        Representative (as defined in Rule 501(h) of Regulation D under the Act),
        if
        any) have been given the opportunity to ask questions of, and to obtain any
        information necessary to permit me to verify the accuracy of the information
        set
        forth in the Memorandum from, representatives of HUSA and have been furnished
        all such information so requested. I/we have not relied or acted on the basis
        of
        any representations or other information purported to be given on behalf
        of HUSA
        except as set forth in the Memorandum (it being understood that no person
        has
        been authorized by HUSA to furnish any representations or other information
        except as set forth in the Memorandum).

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      (d)    I/we
        understand that the purchase of the shares of Common Stock involves various
        risks and that an investment in HUSA should be regarded as speculative and
        involving a high degree of risk. I am/we are fully aware of the nature of
        my
        investment in HUSA and the lack of liquidity of an investment in the shares
        of
        Common Stock being offered pursuant to the Offering, because the shares may
        not
        be sold, transferred, or otherwise disposed of except pursuant to an effective
        registration statement under the Act or an exemption from such registration,
        and
        that in the absence of such registration or exemption, the shares of Common
        Stock must be held indefinitely.

      

      (e)    I/we
        understand that no federal or state agency has passed upon the Common Stock
        of
        HUSA or made any finding or determination concerning the fairness or
        advisability of an investment in HUSA.

      

      2.3   Status
        of Subscriber, Additional Information:

      

      (a)    If
        we are
        a corporation, partnership, limited liability company, trust, estate, or
        other
        entity, we are an "accredited investor," as that term is defined in Rule
        501(a)
        of Regulation D under the Act (see the Purchaser's Questionnaire for a list
        of
        the types of accredited investors) and meet the experience standards set
        forth
        in Section 2.3(b) below. If I am a natural person, I am at least 21 years
        of age
        and am an "accredited investor" and meet the experience standards set forth
        in
        Section 2.3(b) below.  

       

      (b)    I
        (together with my Purchaser Representative, if any), or if we are a corporation,
        partnership, limited liability company, trust, estate, or other entity, we
        by
        and through our officers, directors, trustees, managers, partners, employees,
        or
        other advisors, (i) are experienced in evaluating companies such as HUSA,
        (ii)
        have determined that the shares of Common Stock are a suitable investment
        for
        me/us, and (iii) have such knowledge, skill, and experience in business,
        financial, and investment matters so that I am/we are capable of evaluating
        the
        merits and risks of an investment in the Common Stock. To the extent necessary,
        I/we have retained, at my/our expense, and relied upon, appropriate professional
        advice regarding the investment, tax, and legal merits and consequences of
        this
        Agreement and owning the Common Stock, and I/we and my/our advisers or
        representatives have investigated my/our investment in HUSA to the extent
        I/we
        and they have deemed advisable. I/we have the financial ability to bear the
        economic risks of our entire investment for an indefinite period and no need
        for
        liquidity with respect to our investment in HUSA, and, if I am a natural
        person,
        I have adequate means for providing for my current needs and personal
        contingencies.

      

      (c)    I/we
        agree to furnish any additional information requested to assure compliance
        with
        the Act and state securities laws in connection with the purchase and sale
        of
        the Common Stock. If there is any material change in the information I/we
        are
        furnishing hereunder prior to the date this Agreement is accepted, I/we will
        immediately furnish such revised or corrected information to HUSA.

      

      2.4   Restrictions
        on Transfer or Sale of the Common Stock:

      

      (a)    I
        /we
        will not sell, assign, pledge, give, transfer, or otherwise dispose of any
        the
        Common Stock or any interest therein, or make any offer or attempt to do
        any of
        the foregoing, except pursuant to a registration of the Common Stock under
        the
        Act and applicable state securities laws or in a transaction that is exempt
        from
        the registration provisions of the Act and any applicable state securities
        laws.
        I/we understand that HUSA will not be under any obligation to register the
        Common Stock under the Act or any state securities law (except as provided
        in
        the Registration Rights Agreement (as hereinafter defined)) or to comply
        with
        the terms of any exemption provided under the Act or any state securities
        law
        with respect to the Common Stock.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      (b)    I/we
        have
        not offered or sold any portion of my/our Common Stock and have no present
        intention of dividing my/our Common Stock with others or of reselling or
        otherwise disposing of any portion of my/our shares of Common Stock either
        currently or after the passage of a fixed or determinable period of time
        or upon
        the occurrence or nonoccurrence of any predetermined event or
        circumstance.

      

      2.5    Independent
        Nature of Investor's Obligations and Rights.
        My/our
        obligations under this Agreement, the Registration Rights Agreement, and
        any
        other documents delivered in connection herewith and therewith (collectively,
        the "Transaction Documents") are several and not joint with the obligations
        of
        any other purchaser of Common Stock, and I/we shall not be responsible in
        any
        way for the performance of the obligations of any other purchaser of Common
        Stock under any Transaction Document. My/our decision to purchase Common
        Stock
        pursuant to the Transaction Documents has been made by me/us independently
        of
        any other purchaser of Common Stock. Nothing contained herein or in any
        Transaction Document, and no action taken by any purchaser of Common Stock
        pursuant thereto, shall be deemed to constitute such purchasers as a
        partnership, an association, a joint venture, or any other kind of entity,
        or
        create a presumption that the purchasers of Common Stock are in any way acting
        in concert or as a group with respect to such obligations or the transactions
        contemplated by the Transaction Document. I/we acknowledge that no other
        purchaser of Common Stock has acted as agent for me/us in connection with
        making
        my/our investment hereunder and that no other purchaser of Common Stock will
        be
        acting as my/our agent in connection with monitoring my/our investment in
        the
        Common Stock or enforcing my/our rights under the Transaction Documents.
        I/we
        shall be entitled to independently protect and enforce my/our rights, including
        without limitation the rights arising out of this Agreement or out of the
        other
        Transaction Documents, and it shall not be necessary for any other purchaser
        of
        Common Stock to be joined as an additional party in any proceeding for such
        purpose.

      

      2.6    Due
        Authority, Etc.
        If we
        are a corporation, partnership, limited liability company, trust, estate,
        or
        other entity: (a) we are duly organized, validly existing, and in good standing
        under the laws of the jurisdiction of our formation and have all requisite
        power
        and authority to own our properties and assets and to carry on our business,
        and
        at HUSA's request, will furnish it with copies of our organizational documents,
        (b) we have the requisite power and authority to execute the Transaction
        Documents and to carry out the transactions contemplated hereby, (c) our
        execution and performance of the Transaction Documents do not and will not
        result in any violation of, or conflict with, any term of our charter, bylaws,
        partnership agreement, operating agreement or regulations, or indenture of
        trust, as the case may be, or any instrument to which we are a party or by
        which
        we are bound or any law or regulation applicable to us, (d) our execution
        and
        performance of the Transaction Documents has been duly authorized by all
        necessary corporate, partnership, or other action, (e) we were not specifically
        formed to invest in HUSA, and (f) the individual who has executed the
        Transaction Documents on our behalf was duly authorized to do so by all
        requisite corporate, partnership, or other action and, on request of HUSA,
        we
        will furnish appropriate evidence of the authority of such individual to
        act on
        our behalf.

      

      2.7    Valid
        Obligation.
        This
        Agreement has been duly executed and delivered me/us or on our behalf and,
        if
        and when accepted by HUSA, in whole or in part, will constitute my/our legal,
        valid, and binding obligation, enforceable in accordance with its terms (except
        as limited by principles of equity or bankruptcy, insolvency, or other similar
        laws affecting enforcement of creditors' rights generally).

      

      2.8    ERISA
        Matters.
        If we
        are an employee benefit plan within the meaning of the Employee Retirement
        Income Security Act of 1974, as amended ("ERISA"):

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (a)    We
        and
        our plan fiduciaries are not affiliated with, and are independent of HUSA,
        and
        are informed of and understand HUSA's investment objectives, policies, and
        strategies.

      

      (b)    We
        represent that the purchase of the Common Stock will not involve any transaction
        that is subject to the prohibition of Section 406 of ERISA or in connection
        with
        which a penalty could be imposed under Section 502(i) of ERISA or a tax could
        be
        imposed pursuant to Section 4975 of the Internal Revenue Code of 1986, as
        amended (the "Code").

      

      (c)    The
        trustee or other plan fiduciary directing the investment:

      

      (i)    in
        making
        the proposed investment, is aware of and has taken into consideration the
        diversification requirements of Section 404(a)(1)(C) of ERISA; and

      

      (ii)    has
        concluded that the proposed investment in HUSA is prudent and is consistent
        with
        the other applicable fiduciary responsibilities under ERISA.

      

      (d)    This
        Agreement has been duly executed on our behalf by a duly designated Named
        Fiduciary (within the meaning of Section 402(a)(2) of ERISA).

      

      (e)    If
        we are
        an individual retirement account (IRA) or employee benefit plan not subject
        to
        Title I of ERISA, such as a governmental or church plan, the owner of the
        individual retirement account or other fiduciary directing the investment
        of the
        plan has concluded that the proposed investment in Common Stock of Common
        Stock
        is prudent and consistent with its fiduciary responsibilities, if
        any.

      

      2.9    Fees
        and Commissions.
        No fees
        or commissions have been paid or are payable by me/us in connection with
        this
        Agreement and the issuance of shares of Common Stock to me/us.

      

      3.    
Registration
        Rights Agreement; Power of Attorney.
        I/we
        further agree to be bound by the terms of and hereby execute the Registration
        Rights Agreement among HUSA and the purchasers of the shares of Common Stock
        of
        HUSA being offered pursuant to the Offering (the "Registration Rights
        Agreement"). By signing below, I/we irrevocably constitute and appoint Sanders
        Morris Harris Inc., a Texas corporation ("SMH"), as my/our true and lawful
        agent
        and attorney-in-fact with full power of substitution and full power and
        authority in my/our name, place, and stead to execute and deliver the
        Registration Rights Agreement and to take such actions as may be necessary
        or
        appropriate to carry out the terms of the Registration Rights Agreement.
        The
        power of attorney hereby granted will be deemed coupled with an interest,
        will
        be irrevocable, and will survive and not be affected by my/our subsequent
        death,
        incapacity, dissolution, insolvency, or termination or any delivery by me/us
        of
        an assignment in whole or in part of my/our shares of Common Stock. The
        foregoing power of attorney may be exercised by SMH either by signing separately
        or jointly as attorney-in-fact for each or all of the subscribers for the
        Common
        Stock or by a single signature of SMH acting as attorney-in-fact for all
        of
        them. HUSA may rely and act upon any writing believed in good faith to be
        signed
        by SMH or any authorized representative of SMH, and may assume that all actions
        of SMH and any authorized representative of SMH have been duly authorized
        by
        me/us.

      

      4.    
Waiver,
        Amendment, Binding Effect.
        Neither
        this Agreement nor any provisions hereof shall be modified, changed, discharged,
        or terminated except by an instrument in writing, signed by the party against
        whom any waiver, change, discharge, or termination is sought. The provisions
        of
        this Agreement shall be binding upon and accrue to the benefit of the parties
        hereto and their respective heirs, legal representatives, successors, and
        assigns.

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      5.    Assignability.
        Neither
        this Agreement nor any right, remedy, obligation, or liability arising hereunder
        or by reason hereof shall be assignable by HUSA or me/us without the prior
        written consent of the other.

      

      6.    Applicable
        Law.
        THIS
        AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
        OF
        TEXAS, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
        THEREOF.

      

      7.    Counterparts.
        This
        Agreement may be executed in any number of counterparts and by facsimile,
        each
        of which when so executed and delivered shall be deemed to be an original
        and
        all of which together shall be deemed to be one and the same
        agreement.

      

      8.    Notices.
        All
        notices and other communications provided for herein shall be in writing
        and
        shall be deemed to have been duly given if delivered personally or sent by
        registered or certified mail, return receipt requested, postage
        prepaid:

      

      
        	 	
                (a)

              	
                If
                  to HUSA, to it at the following
                  address:

              

      

      

      
        	 	 	
                Houston
                  American Energy Corp.

              

      

      
        	 	 	
                801
                  Travis, Suite 2020

              

      

      
        	 	 	
                Houston,
                  Texas 77002

              

      

      
        	 	 	
                Attn:
                  John F. Terwilliger

              

      

      

      
        	 	
                (b)

              	
                If
                  to me/us at the address

              

      

      
        	 	 	
                set
                  forth on the signature page hereto;

              

      

      

      or
        at
        such other address as either party shall have specified by notice in writing
        to
        the other.

      

      9.    
Survival.
        All
        representations, warranties, and covenants contained in this Agreement shall
        survive (i) the acceptance of the Subscription by HUSA, (ii) changes in the
        transactions, documents and instruments described in the Memorandum, and
        (iii)
        my death or disability.

      

      10.    Notification
        of Changes.
        I/we
        hereby covenant and agree to notify HUSA upon the occurrence of any event
        prior
        to the closing of the purchase of the shares of Common Stock pursuant to
        this
        Agreement, which would cause any representation, warranty, or covenant by
        me/us
        contained in this Agreement to be false or incorrect.

      

      11.    Purchase
        Payment.
        The
        purchase price is being paid herewith by delivery of either a certified check
        or
        bank check payable to "HUSA
        -
        Escrow
        Account” or alternatively, by wire transfer or authorization of Sanders Morris
        Harris Inc. to pay from my account. All payments made as provided in this
        Paragraph 11 shall be deposited as soon as practicable and held in a segregated
        escrow account until the earlier to occur of (a) the sale of all of the
        securities in this Offering or (b) the termination of this
        Offering.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      HOUSTON
        AMERICAN ENERGY CORP.

      Subscription
        Agreement

      Signature
        Page

      

      IN
        WITNESS WHEREOF, the undersigned has executed this Subscription Agreement
        on
        _____________, 2006.

      

      
        	
                NUMBER
                  OF SHARES OF COMMON STOCK SUBSCRIBED FOR:

              	 	
                   
                  

              
	
                AMOUNT
                  OF SUBSCRIPTION ($3.00 PER SHARE): 

              	
                $

              	    

      

       

      

      
        	
                NAME
                  OF SUBSCRIBER(S):

              	 	 	 	 
	 	 	 	 	 	 
	
                (1)

              	  
	 	
                Signature:
                  

              	  
	  

	
                 

              	
                (Please
                  print name)

              	 	
                 Date:

              	  

	 	 	 	
                 Name:

              	
                 
                  

              
	 	 	 	
                 Title:

              	
                 
                  

              
	 	 	 	 	 	 
	 	
                Joint
                  Tenant/Tenant in Common (if applicable):

              	 	 	 	 
	 	 	 	 	 	 
	
                (2)

              	  
	 	
                Signature:

              	  
	  

	 	
                (Please
                  print name)

              	 	
                 Date:

              	  

	 	 	 	 	 	 
	
                ADDRESS
                  (including mailing address, if applicable):

              	 	 	 	 
	 	 	 	 	 	 
	 	  
	 	 	  
	  

	 	  
	 	 	  
	  

	 	  
	 	 	  
	  

	 	 	 	 	 	 
	
                TAXPAYER
                  I.D. NUMBER OR SOCIAL SECURITY NUMBER OF EACH SUBSCRIBER:

              	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

      

       

      TYPE
        OF
        OWNERSHIP:

      

      
        	 	
                (  
                  )

              	
                Individual

              

      

      
        	 	
                (  
                  )

              	
                Tenants
                  in common

              

      

      
        	 	
                (  
                  )

              	
                Joint
                  tenants with right of survivorship

              

      

      
        	 	
                (  
                  )

              	
                Community
                  property (check only if resident of community property
                  state)

              

      

      
        	 	
                (  
                  )

              	
                Partnership
                  (1)

              

      

      
        	 	
                (  
                  )

              	
                Corporation
                  (2)

              

      

      
        	 	
                (  
                  )

              	
                Trust
                  (3)

              

      

      
        	 	
                ( 
                   )

              	
                Limited
                  Liability Company (4)

              

      

      
        	 	
                (  
                  )

              	
                Employee
                  Benefit Plan under ERISA

              

      

      
        	 	
                (   
                  )

              	
                Other
                  (please
                  specify:____________________)

              

      

      ________________

      
        	
                1.

              	
                Please
                  enclose a copy of the partnership agreement and a current list
                  of all
                  partners.

              

      

      
        	
                2.

              	
                Please
                  enclose a copy of the articles or certificate of incorporation,
                  bylaws,
                  and a resolution authorizing this investment and indicating the
                  authority
                  of the signatory hereto.

              

      

      
        	
                3.

              	
                Please
                  enclose a copy of the trust
                  instrument.

              

      

      
        	
                4.

              	
                Please
                  enclose a copy of the articles of formation and members' agreement
                  or
                  regulations.

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      HOUSTON
        AMERICAN ENERGY CORP.

      Acceptance
        of Subscription

       

      
        Agreed
          and accepted as to $ ___________________  Dated:___________________

      

      

      

      
        	 	
                HOUSTON
                  AMERICAN ENERGY CORP.

              	 
	 	 	 	 
	 	 	 	 
	 	
                By:

              	 
	  
	 
	 	
                Name:

              	  
	 
	 	
                Its:

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