To: The holders of units (individually a “Unit Holder” and collectively the “Unit Holders”) consisting of shares (the “Shares”) of common stock, $.0001 par value (the “Common Stock”), and warrants (the “Warrants”) to purchase shares of Common Stock...
08
December 2006
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To:
|
The
holders of units (individually a “Unit
Holder”
and collectively the “Unit
Holders”)
consisting of shares (the “Shares”)
of common stock, $.0001 par value (the “Common
Stock”),
and warrants (the “Warrants”)
to purchase shares of Common Stock (the Shares and Warrants together
are
collectively the “Units”
and each a “Unit”)
of Rancher Energy Corp. (the “Company”)
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Dear
Unit
Holder:
This
letter agreement (the “Agreement”)
sets
forth the terms and conditions under which certain of the Unit Holders who
participated in the Company’s Regulation S offering from approximately 10 July
2006 through 02 November 2006 (the “Unit
Offering”)
agree
to (i) waive temporarily the ability to exercise Warrants received as part
of
the Unit Offering, and (ii) to modify the registration rights concerning the
Warrants and Shares received in the Unit Offering. Capitalized terms used herein
and not defined herein shall have the meanings set forth in the Warrant
Certificate (as defined below) or the Unit Purchase Agreement (as defined
below).
As
you
may be aware, the Company has entered into agreements to (i) acquire certain
property located in Big Muddy Field (located in the Powder River Basin in
Wyoming), and (ii) acquire working interests in ▇▇▇▇ Creek South Field and
South
Glenrock B Field (both of which are located in the Powder River Basin) and
is in
the process of obtaining funds through one or more financings (each a
“Financing”)
sufficient to consummate one or more acquisitions (the “Acquisitions”).
The
Company currently has 100,000,000 shares of Common Stock, $.0001 par value
(“Common
Stock”),
authorized under its Articles of Incorporation, as amended (the “Articles”),
and
such amount of authorized shares is insufficient to accomplish the Financing(s)
required to obtain funds sufficient to consummate the Acquisitions. The Company
intends to amend the Articles to increase its authorized shares of Common Stock
to 225,000,000 shares of Common Stock as promptly as practicable after the
closing of the Financing(s).
Each
of
the Unit Holders is a party to (i) a Warrant Certificate from the Company (the
“Warrant
Certificate”),
which
states that (A) the Unit Holder, pursuant to Section 2 thereof, may exercise
the
Warrants at any time prior to the Expiration Date, and (B) the Company, pursuant
to Section 4 of the Warrant Certificate, shall keep available out of its
authorized stock a sufficient number of shares as shall then be issuable upon
the exercise of all outstanding Warrants, and (ii) a Unit Purchase Agreement
with the Company (the “Unit
Purchase Agreement”)
which
provides for certain registration rights, pursuant to Section 3 thereof (the
“Registration
Rights”),
concerning certain securities (the “Securities”).
To
facilitate the Company’s ability to accomplish the Financing(s) and to raise
funds sufficient to consummate the Acquisitions, the undersigned Unit Holder
agrees to waive certain rights under the Warrant Certificate and Unit Purchase
Agreement and enter into certain other agreements as further described below.
Address
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In
consideration of the foregoing, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned
agrees as follows:
1.
Waiver
and Agreement.
Each of
the undersigned Unit Holders, severally and not jointly with the other Unit
Holders, hereby waives certain rights and makes certain agreements as described
as follows:
(a)
Warrant
Exercise.
Such
Unit Holder (i) hereby waives its right and ability to exercise its Warrants,
pursuant to Section 2 of the Warrant Certificate, until such time as the Company
has amended its Articles to increase its authorized shares of Common Stock
to at
least 225,000,000 shares; and (ii) hereby waives its rights under Section 4
of
the Warrant Certificate, which requires the Company to reserve and keep
available out of its authorized stock such number of shares of Common Stock
as
shall be issuable upon the exercise of all outstanding Warrants, until such
time
as the Company has amended its Articles to increase its authorized shares of
Common Stock to at least 225,000,000 shares.
(b)
Registration
Rights.
(i)
Each
of the undersigned Unit Holders, severally and not jointly with the other Unit
Holders, hereby waives, any claims against the Company for failing to register
such Unit Holder’s Securities within the 90 day period specified in Section 3 of
the Unit Purchase Agreement.
(ii)
Each
of the undersigned Unit Holders hereby agrees, severally and not jointly with
the other Unit Holders, with the Company that the Registration Rights set forth
in the Unit Purchase Agreement are hereby terminated and superseded by the
registration rights set forth in this subsection 1(b)(ii). The Company shall
register (A) the shares of Common Stock issued to the Unit Holder as part of
the
Unit, and (B) the shares of Common Stock issued or issuable upon exercise of
the
Warrants issued to the Unit Holder as part of the Unit (collectively, the
“Registrable
Securities”)
by
filing (unless at such time the Registrable Securities may be resold pursuant
to
Rule 144(k) of the Securities Act of 1933, as amended, or
any
other rule of similar effect) with the Securities and Exchange Commission (the
“SEC”)
and
using the Company’s best efforts to cause to become effective one or more
registration statements beginning 12 months following the closing of the
Financing. If the SEC requires that the Company reduce the number of shares
so
registered, then the Registrable Securities shall be decreased pro rata with
the
other shares included in any such registration, based on the number of
Registrable Securities held by the Unit Holders and the number of other
registrable securities held by the other participants in such registration.
Each
of the Unit Holders acknowledges that the foregoing registration rights may
be
amended, or compliance by the Company with the terms thereof waived, with the
written consent of two-thirds in interest of the undersigned Unit
Holders.
2.
Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS
AND DECISIONS OF THE STATE OF COLORADO, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS THEREOF.
3.
Captions.
Section
captions and headings used in this Agreement are for convenience only, and
shall
not affect the construction of this Agreement.
4.
Severability.
Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of
this
Agreement shall be prohibited by or invalid under such law, such provision
shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this
Agreement.
Address
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Fax
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5.
Counterparts
& Execution of Agreement.
This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same agreement. The exchange of copies of this Agreement and of
signature pages by facsimile transmission shall constitute effective execution
and delivery of this Agreement as to the parties and may be used in lieu of
the
original Agreement for all purposes. Signatures of the parties transmitted
by
facsimile shall be deemed to be their original signatures of all
purposes.
6.
Successors
& Assigns.
This
Agreement shall be binding upon the parties hereto and their respective
successors and assigns, and shall inure to the benefit of such parties and
their
respective successors and assigns.
7.
Enforceability.
The
parties further acknowledge and agree that the enforceability of this Agreement
as it pertains to the undersigned Unit Holder shall not be dependent upon
obtaining an executed Agreement from any other Unit Holder or any other holder
of the Company’s securities.
8.
Full
Force & Effect.
Except
as specifically stated in this Agreement (i) this Agreement shall not
limit, diminish or waive the obligations of the parties under the Warrant
Certificate or Unit Purchase Agreement, and (ii) the parties reaffirm their
obligations under the Warrant Certificate and Unit Purchase Agreement to which
they are a party and agree that the Warrant Certificate and Unit Purchase
Agreement remain in full force.
9.
Information.
The
Unit Holder acknowledges that it has all information needed to enter into the
agreements and make the waivers contemplated by this Agreement and if it has
requested any information from the Company it acknowledges receiving the
same.
[Remainder
of Page Intentionally Left Blank]
Address
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Fax
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If
you
accept the foregoing terms, please execute in the space provided below and
return one copy to the Company at the above fax number.
Sincerely,
| By: | |||
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Name: ▇▇▇▇ Works |
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Title:
President & Chief Executive Officer
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AGREED
& ACCEPTED effective as of the date set forth above:
UNIT
HOLDER:
Signature
of Individual Unit Holder: ________________________________________
Printed
Name of Individual Unit Holder:
_____________________________________
______________________________________
Printed
Name of Entity (if applicable)
By
(Signature): _____________________________________
Name
(printed) _____________________________________
Title:
_______________________________
__________________________________________________
Address
__________________________________________________
City,
State, Postal or Zip Code, Country
[Signature
Page to Unit Holder Letter Agreement]
Address
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Fax
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