THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN
REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), OR
APPLICABLE STATE
SECURITIES
LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION
STATEMENT FOR
SUCH SECURITIES UNDER THE 1933 ACT, OR AN OPINION OF
COUNSEL,
SATISFACTORY TO
THE ISSUER HEREOF, TO THE EFFECT THAT REGISTRATION IS
NOT
REQUIRED UNDER
THE 1933 ACT AS SOME OTHER EXEMPTION FROM THE
REGISTRATION
REQUIREMENTS OF
THE 1933 ACT AND APPLICABLE LAWS IS AVAILABLE.
WARRANT TO PURCHASE
COMMON STOCK OF
PETROSEARCH ENERGY CORPORATION
Date of Issuance: February __, 2007
Warrant No.
________
This certifies
that, for value received, PETROSEARCH ENERGY
CORPORATION, a
Nevada corporation
(the "Company"), grants RCH Petro Investors,
LP, a Delaware limited partnership or its
registered assigns (the "Registered
Holder"), the
right to subscribe for and purchase from the Company, at
the
Exercise Price
(as defined herein), from and after 9:00 a.m. Texas time
on
_______________, 2008
(the "Exercise Date") and to and including 5:00
p.m.,
Texas time
on the third anniversary of the Exercise Date (the
"Expiration
Date"), five
million (5,000,000) shares, as such number of shares may be
adjusted from
time to time as described herein (the
"Warrant Shares"), of the
Company's common
stock, par value $.001 per share (the "Common Stock"), subject
to the provisions and upon the terms and conditions herein set
forth. The
"Exercise Price"
per share of Common Stock shall be $1.40 per share.
This Warrant is issued
in connection with the transactions described
in that certain Note
and Warrant Purchase Agreement between the Company and RCH
Petro Investors, LP dated as of February 1, 2007 (the "Purchase
Agreement"). The
holder of this Warrant is subject to certain restrictions set forth
in the
Purchase Agreement
and shall be entitled to certain
rights and privileges set
forth in the Purchase Agreement.
SECTION 1. REGISTRATION.
The Company shall
register this Warrant,
upon records
to be maintained by the Company for that purpose
(the "Warrant
Records"), in the name
of the Registered Holder. The Company may deem and treat
the Registered
Holder as the absolute
owner of this Warrant for the purpose of
any exercise
hereof or any distribution to the Registered Holder.
SECTION 2.
REGISTRATION OF
TRANSFERS AND EXCHANGES.
(a)
Subject to
Section 9 hereof, the Company shall
register the
transfer of this
Warrant, in whole or in part, upon records to be maintained by
the Company
for that purpose, upon
surrender of this Warrant, with the Form of
Assignment attached hereto completed and duly endorsed by the
Registered Holder,
to the Company at the office specified in or pursuant to
<PAGE>
Section 3(b).
Upon any such registration of transfer, a new Warrant, in
substantially the
form of this Warrant, evidencing the
Common Stock purchase
rights so transferred shall be issued to the transferee
and a new Warrant, in
similar form,
evidencing
the remaining Common Stock purchase rights not so
transferred, if
any, shall be issued to the Registered Holder.
(b)
This Warrant is exchangeable, upon the surrender hereof by the
Registered Holder
at the office of the Company specified in or
pursuant to
Section 3(b) hereof, for new Warrants, in substantially the form of
this Warrant
evidencing, in the aggregate, the right to purchase the number of
Warrant Shares
which may then be purchased hereunder, each of such new Warrants to
be dated the
date of such exchange and to represent the right to purchase
such number of
Warrant Shares
as shall be designated by the
Registered Holder at the time of
such surrender.
SECTION 3.
DURATION AND EXERCISE OF THIS WARRANT.
(a)
This Warrant shall be exercisable by the Registered Holder as
to the Warrant Shares at any time during
the period commencing on the Exercise
Date and ending on the Expiration Date. At 5:00 p.m., Texas time, on the
Expiration Date,
this Warrant, to the extent not previously
exercised, shall
become void
and of no further force or effect.
(b)
Subject to
Sections 4, and 7 hereof, upon exercise or
surrender of this Warrant, with the Form of Election to Purchase
attached hereto
completed and
duly endorsed by the Registered Holder, to the
Company at 675
Bering Drive, Suite
200, Houston, Texas 77057, Attention: President, or at such
other address
as the Company may specify in writing
to the Registered Holder,
and upon payment of the Exercise Price multiplied by up to the
number of Warrant
Shares then issuable upon exercise of this Warrant in lawful money
of the United
States of America, all as specified by the Registered Holder
in the Form of
Election to Purchase, the Company shall promptly issue and cause to
be delivered
to or upon the written order of the Registered Holder, and in such
name or names
as the Registered Holder may designate, a certificate for
the Warrant Shares
issued upon
such exercise. Any
person so designated in the Form of Election to
Purchase, duly
endorsed by the
Registered Holder, as the person to be named on
the certificates
for the Warrant
Shares, shall be deemed to have become holder
of record of such Warrant Shares, evidenced by such certificates,
as of the Date
of Exercise
(as hereinafter defined) of such Warrant.
(c)
The Registered
Holder may pay the applicable Exercise
Price
pursuant to Section
3(b), at the option of the Registered Holder, either (i) in
cash or by cashier's
or certified bank check payable to the Company, or (ii) by
wire transfer
of immediately available funds to the account which shall be
indicated in writing by the Company to the Registered Holder, in
either case, in
an amount equal to the product of the Exercise Price multiplied by
the number of
Warrant Shares
being purchased upon such exercise (the "Aggregate
Exercise
Price").
(d)
The "Date of Exercise" of any Warrant means the date on which
the Company
shall have received
(i) this Warrant, with the Form of Election to
Purchase attached
hereto appropriately completed and duly endorsed, and
(ii)
payment of
the Aggregate Exercise Price as provided herein.
2
<PAGE>
(e)
This Warrant shall not be exercisable until the Exercise Date
(the "Exercise Restriction Period"). Subject to the Exercise
Restriction Period,
this Warrant shall be
exercisable either in its entirety or, from time to time,
for part only of the number of Warrant
Shares which are issuable hereunder. If
this Warrant
shall have been
exercised only in part, the Company shall, at the
time of delivery of the certificates for
the Warrant Shares issued pursuant to
such exercise,
deliver to the Registered Holder a new
Warrant evidencing the
rights to purchase the remaining Warrant Shares, which Warrant shall be
substantially in
the form of this Warrant.
SECTION 4.
PAYMENT OF
TAXES AND EXPENSES.
(a)
The Company will pay all expenses and taxes (other than any
federal or state income tax or similar obligations of the
Registered Holder) and
other governmental
charges attributable to the preparation, execution, issuance
and delivery of this
Warrant, any new Warrant and the Warrant Shares; provided,
however, that the Company shall not be required to pay any tax in
respect of the
transfer of
this Warrant or the
Warrant Shares, or the issuance or delivery of
certificates for
Warrant Shares upon
the exercise of this Warrant, to a person
or entity other than a Registered Holder or an Affiliate (as hereinafter
defined) of
such Registered Holder.
(b)
An "Affiliate"
of any person or entity means any other
person or entity directly or indirectly controlling, controlled
by or under
direct or indirect common control with such person or entity.
SECTION 5.
MUTILATED OR MISSING
WARRANT CERTIFICATE. If this
Warrant shall
be mutilated, lost, stolen or destroyed, upon request by
the
Registered Holder, the Company will issue, in exchange for and upon
cancellation
of the mutilated Warrant, or in
substitution for the lost, stolen or destroyed
Warrant, a
substitute
Warrant, in substantially the form of this
Warrant, of
like tenor, but, in the case of loss, theft or destruction, only
upon receipt of
evidence reasonably
satisfactory
to the Company of such loss, theft or
destruction of
this Warrant and, if requested by the Company,
indemnity also
reasonably
satisfactory to
it.
SECTION 6.
RESERVATION, LISTING
AND ISSUANCE OF
WARRANT SHARES.
(a)
The Company will at all times have authorized, and reserve and
keep available,
free from preemptive
rights, for the purpose of enabling it to
satisfy any
obligation to issue
Warrant Shares upon the exercise of the rights
represented by
this Warrant, the number of Warrant Shares deliverable
upon
exercise of this
Warrant. The Company will, at its expense, use it best efforts
to cause such shares to be included in or listed on
(subject to issuance or
notice of issuance of Warrant Shares) all markets or
stock exchanges in or on
which the Common Stock is included or listed not
later than the date on which
the Common Stock is
first included or listed on any such market or exchange and
will thereafter maintain such inclusion or listing of all shares of
Common Stock
from time to time issuable upon exercise of this Warrant.
(b)
Before taking
any action which
could cause an adjustment
pursuant to Section 7
hereof reducing the Exercise Price below the par value of
the Warrant
Shares, the Company will take any corporate action
which may be
necessary in
order that the Company may
3
<PAGE>
validly and legally
issue at the Exercise Price, as so adjusted, Warrant Shares
that are fully paid and non-assessable.
(c)
The Company
covenants that all
Warrant Shares will, upon
issuance in
accordance with the
terms of this Warrant, be (i) duly authorized,
fully paid
and nonassessable, and
(ii) free from all taxes with respect to the
issuance thereof
and from all liens, charges and security interests.
SECTION 7.
ADJUSTMENT OF
NUMBER OF WARRANT SHARES.
(a) The number of
Warrant Shares to be purchased upon exercise hereof
is subject
to change or adjustment from time to
time as hereinafter provided:
(i)
Stock Dividends;
Stock Splits; Reverse Stock Splits;
---------------------------------------------------------
Reclassifications. In
case the Company shall (a) pay a dividend with respect to
-----------------
its Common
Stock in shares of capital stock, (b) subdivide its
outstanding
shares of Common
Stock, (c) combine its outstanding shares of Common Stock into
a smaller number of
shares of any class of Common Stock or (d) issue any shares
of its capital stock in a reclassification of the
Common Stock (including any
such reclassification
in connection with a consolidation or merger in which the
Company is
the continuing
corporation), other than elimination of par value, a
change in par value, or a change from par value to no par
value (any one of
which actions
is herein referred to as an "Adjustment
Event"), the number of
Warrant Shares
purchasable
upon exercise of the Warrant
immediately prior to
the record
date for such Adjustment Event shall be adjusted so that the
Registered Holder
shall thereafter be
entitled to receive the number of shares
of Common Stock or other securities of the Company (such other
securities
thereafter enjoying
the rights of shares of Common Stock under
this Warrant)
that such Registered Holder would have owned or have
been entitled to receive
after the happening of such Adjustment Event, had such
Warrant been exercised
immediately prior
to the happening of
such Adjustment Event or any record date
with respect thereto.
An adjustment made pursuant to this Section 7(a)
