AMENDED AND RESTATED REVOLVING CREDIT NOTE
------------------------------------------
$10,000,000.00
Houston, Texas
September___, 2005
PETROSEARCH
ENERGY CORPORATION, A
NEVADA CORPORATION, ("Maker"), for value
received, agrees to pay to the order of FORTUNA ENERGY, L.P.
(herein called
"Lender" which term shall herein in every
instance refer to the owner or holder
of this Note), at P.O. Box 9109, Newport Beach,
California 92658, or at such
other place as Lender may hereafter
designate in writing, in lawful money of the
United States of America, the principal sum of TEN
MILLION AND NO/100 DOLLARS
($10,000,000.00), or so much thereof as may be advanced
and/or readvanced from
time to time by Lender to Maker under the
terms and limitations of the Amended
and Restated Revolving Credit Agreement of even date between Lender,
Maker,
Anadarko Petrosearch, L.L.C. and Guidance Petrosearch, L.L.C. (the
"Amended
RCA"), together with interest accruing during the
term hereof on the principal
balance from time to time outstanding
until paid, at an annual rate of interest
equal to the prime rate of interest
published by The Wall Street Journal, as the
same may change from time to time ("Wall
Street Journal Prime Rate"), plus three
percent (3%). Interest shall be calculated on the average daily
outstanding
principal balance. Upon Maturity (defined hereinbelow) or upon an Event of
Default (defined hereinbelow) by Maker, the principal balance
hereof and all
accrued but unpaid interest shall bear interest at the rate of Wall
Street
Journal Prime Rate, as the same may change
from time to time, plus nine percent
(9.0%) per annum.
This
Note is intended as a revolving credit loan more particularly
described in a certain Amended and Restated
Revolving Credit Agreement of even
date (the "Amended RCA") under which the principal may be repaid prior
to
Maturity (defined herein) without penalty in minimum principal amounts of
$100,000.00 or more each in accordance with and subject to the terms and
conditions set forth in the Amended RCA.
For purposes
hereof, "Maturity" shall mean the earlier to occur of April 1,
2008, or the date on which the entire outstanding balance under
this Note
becomes due and payable by acceleration of
Lender, at the election of Lender, as
a result of an Event of Default (defined
below) subject to the applicable cure
period for such event giving rise to the Event of Default.
The principal to be advanced under this Note may be
drawn by Maker until
October 1, 2007 in accordance with the
Schedule of Advances attached hereto and
made a part hereof, subject to the Minimum Collateral Coverage
Requirements
described in Section 1.6 of the Amended
RCA. Principal repaid
may be readvanced
subject to the Minimum Collateral Coverage Requirement limitations. Each
Advance requested by Maker other than the
initial Advance shall be preceded by a
20-day written request (accompanied by a statement of the proposed use of
proceeds) to Lender and shall be funded by
Lender on the twenty-first (21st) day
following the request. If the 21st day falls on a Saturday,
Sunday or public
holiday, the said funding shall occur on the next business day of
Lender.
Unless otherwise agreed by Lender, draw requests shall be funded no more
frequently than monthly.
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<PAGE>
The principal
and interest under this Note shall be paid by Maker to Lender
as follows:
1) As to each specific principal Advance
drawn by Maker hereunder, Maker
shall pay interest-only installments monthly
to Lender commencing on
the first day of the calendar month following the date of the
specific
Advance and
continuing
on the same calendar day of each
succeeding
month thereafter
for a total of six (6)
monthly interest payments if
the
specific Advance by Lender is made between the first
(1st) and
fifteenth (15th) calendar day of a month, and for a total of seven
(7)
monthly interest
payments if the specific Advance is made
after the
fifteenth (15th)
calendar day of a month and prior to the first (1st)
calendar day
of the following month.
2) As to each specific principal Advance drawn
by Maker, commencing on
the first day of the calendar month following the last
scheduled
interest-only payment
(whether the interest only period is six
(6)
months or seven (7) months as set forth above and unless
Maturity
occurs on or prior to such date) and
continuing on the same calendar
day of each succeeding month thereafter until Maturity
(as defined
above), Maker shall pay monthly installments of principal based
upon a
30-month amortization
of that specific Advance (i.e. 1/30th of
the
specific principal
Advance shall be paid
monthly), together with the
monthly accrued
interest on that specific Advance as of the
installment due
date for that specific Advance for
twenty-four (24)
months or until Maturity (as defined above),
whichever shall be the
earlier to
occur, at which time the entire balance of
the specific
Advance shall
become due and payable.
3) At Maturity (as defined above), all
outstanding and unpaid principal
and accrued
interest shall be paid by Maker to Lender.
If any payment on this Note shall become due on a
Saturday, Sunday, or
public holiday under the laws of the
State of California on which Lender is not
open for business, such payment shall be made on the
next succeeding business
day of Lender, unless the effect of such
extension would be to carry the payment
over to the next calendar month, in
which case such payment shall be due on the
preceding business day of Lender, and such
extension or reduction of time shall
in such case be included in computing
interest in connection with such payment.
All sums required to paid hereunder
shall be applied first to any sums expended
by Lender to preserve or protect the collateral
securing this Note (including
advances, if any, made to pay the taxes thereon),
then to any attorneys' fees
incurred by Lender in enforcing the provision of this Note or any
document
securing same, if any, then to accrued interest and
then to principal, except
that Maker may prepay principal as set forth hereinabove.
If an "Event of Default" (as defined
below) be made in the performance of
Maker under this Note, then the Lender may, at Lender's
option, declare the
entire unpaid principal of and accrued
interest on this Note immediately due and
payable without additional notice, demand or presentment, all of which are
hereby waived, and upon such declaration, the same shall
become and shall be
immediately due and payable, and the
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<PAGE>
Lender hereof shall have the right to foreclose
or otherwise enforce all liens
or security interests securing payment hereof, or any
part hereof, and offset
against this Note any sum or sums owed by the
Lender to Maker.
Failure of the
Lender to exercise this option shall not constitute a
waiver
