exv4w2



 






Exhibit 4.2




EXECUTION COPY




BANC OF AMERICA SECURITIES LLC




16,000,000 SHARES




RIATA ENERGY, INC.




COMMON STOCK




Resale Registration Rights Agreement




dated December 21, 2005




 









 





          RESALE REGISTRATION RIGHTS AGREEMENT, dated as of December 21, 2005, between Riata
Energy, Inc., a Texas corporation (together with any successor entity, herein referred to as the
"Company”), and Banc of America Securities LLC, as representative (the “Representative”) of the
several initial purchasers (the “Initial Purchasers”) under the Purchase Agreement (as defined
below).




          Pursuant to the Purchase Agreement, dated as of December 15, 2005, between the Company, the
Selling Shareholders and Banc of America Securities LLC, as representative of the Initial
Purchasers (the “Purchase Agreement”), relating to the initial placement (the “Initial Placement”)
of the Common Stock (as defined below), the Initial Purchasers have agreed to purchase from the
Company and the Selling Shareholders an aggregate of 16,000,000 shares (18,400,000 shares if the
Initial Purchasers exercise their option to purchase additional shares in full) of common stock,
par value $0.001 per share, of the Company (the “Common Stock”). To induce the Initial Purchasers
to purchase the Common Stock, the Company has agreed to provide the registration rights set forth
in this Agreement pursuant to Section 5(j) of the Purchase Agreement.




          The parties hereby agree as follows:




          1. Definitions. Capitalized terms used in this Agreement without definition shall have their
respective meanings set forth in the Purchase Agreement. As used in this Agreement, the following
capitalized terms shall have the following meanings:




          "Affiliate” of any specified person means any other person which, directly or indirectly, is
in control of, is controlled by, or is under common control with, such specified person. For
purposes of this definition, control of a person means the power, direct or indirect, to direct or
cause the direction of the management and policies of such person whether by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the foregoing.




          "Agreement”: This Resale Registration Rights Agreement.




          "Amended Effectiveness Deadline Date”: has the meaning set forth in Section 2(f) hereof.




          "Blue Sky Application”: As defined in Section 7(a)(i) hereof.




          "Business Day”: A day, other than a Saturday or Sunday, that in the City of New York, is not
a day on which banking institutions are authorized or required by law, regulation or executive
order to close.




          "Closing Date”: The date of the first issuance of the Common Stock.




          "Commission”: Securities and Exchange Commission.




 









 





          “Common Stock”: As defined in the preamble hereto.




          “Company”: As defined in the preamble hereto.




          “Effectiveness Period”: As defined in Section 2(a)(iii) hereof.




          “Effectiveness Target Date”: As defined in Section 2(a)(ii) hereof.




          “Exchange Act”: Securities Exchange Act of 1934, as amended.




          “Holder”: A Person who owns, beneficially or otherwise, Transfer Restricted Securities.




          “Indemnified Holder”: As defined in Section 7(a) hereof.




          “Initial Placement”: As defined in the preamble hereto.




          “Initial Purchasers”: As defined in the preamble hereto.




          “Liquidated Damages”: As defined in Section 4(a) hereof.




          “Liquidated Damages Payment Date”: The date on which a Registration Default occurs and then
each March 31, June 30, September 30 and December 31 until all Registration Defaults have been
cured.




          “Losses”: As defined in Section 7(e) hereof.




          “Majority of Holders”: Holders holding over 50% of the Transfer Restricted Securities
outstanding.




          “Managing Underwriter”: The investment banker or investment bankers and manager or managers
that administer an underwritten offering, if any, conducted pursuant to Section 9 hereof.




          “NASD”: National Association of Securities Dealers, Inc.




          “Notice and Questionnaire” means a written notice executed by the respective Holder and
delivered to the Company containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex III to the Offering Memorandum of the
Company relating to the Common Stock.




          “Notice Holder”: On any date, any Holder of Transfer Restricted Securities that has delivered
a Notice and Questionnaire to the Company on or prior to such date.




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          “Person”: An individual, partnership, corporation, company, unincorporated organization,
trust, joint venture or a government or agency or political subdivision thereof.




          “Piggyback Registration Statement”: As defined in Section 3(a) hereof.




          “Purchase Agreement”: As defined in the preamble hereto.




          “Prospectus”: The prospectus included in a Shelf Registration Statement, as amended or
supplemented by any prospectus supplement and by all other amendments thereto, including
post-effective amendments, and all material incorporated by reference into such prospectus.




          “Record Holder”: With respect to any Liquidated Damages Payment Date, each Person who is a
Holder on the 15th day preceding the relevant Liquidated Damages Payment Date.




          “Registration Default”: As defined in Section 4(a) hereof.




          “Representative”: As defined in the preamble hereto.




          “Securities Act”: Securities Act of 1933, as amended.




          “Shelf Filing Deadline”: As defined in Section 2(a)(i) hereof.




          “Shelf Registration Statement”: As defined in Section 2(a)(i) hereof.




          “Subsequent Shelf Registration Statement” has the meaning set forth in Section 2(c) hereof.




          “Suspension Notice”: As defined in Section 5(c) hereof.




          “Suspension Period”: As defined in Section 5(b)(i) hereof.




          “Transfer Agent”: American Stock Transfer & Trust Company.




          “Transfer Restricted Securities”: Each share of Common Stock until the earlier of:





          (a) the date on which such share of Common Stock has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf Registration
Statement;




          (b) the date on which such share of Common Stock is transferred in compliance with
Rule 144 under the Securities Act or may be sold or transferred by a person who is not an
affiliate of the Company pursuant to Rule 144 under the Securities Act (or any other
similar provision then in force) without any volume or manner of sale restrictions
thereunder; or



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          (c) the date on which such share of Common Stock ceases to be outstanding (whether as
a result of repurchase and cancellation or otherwise).



          “underwriter”: Any underwriter of Common Stock in connection with an offering thereof under
the Shelf Registration Statement.




          “Underwritten Registration”: A registration in which Common Stock of the Company is sold to
an underwriter or underwriters for reoffering to the public.




          Unless the context otherwise requires, the singular includes the plural, and words in the
plural include the singular.





	 	2.	 	Shelf Registration.






	 	(a)	 	The Company shall:






          (i) as promptly as practicable (but in no event more than 90 days after the
Closing Date) (the “Shelf Filing Deadline”), cause to be filed a registration
statement pursuant to Rule 415 under the Securities Act or any similar rule that may
be adopted by the Commission (the “Shelf Registration Statement”), which Shelf
Registration Statement shall provide for the registration and resales, on a
continuous or delayed basis, of all Transfer Restricted Securities, plus any
additional shares of Common Stock issued in respect thereof whether by stock
dividend, stock split or otherwise, held by Holders that have provided the
information required pursuant to the terms of Section 2(b) hereof;




          (ii) use its commercially reasonable efforts to cause the Shelf Registration
Statement to be declared effective under the Securities Act by the Commission not
later than 210 days after the Closing Date (the “Effectiveness Target Date”); and




          (iii) use its commercially reasonable efforts to keep the Shelf Registration
Statement continuously effective, supplemented and amended as required by the
Securities Act and by the provisions of Section 5(b) hereof to the extent necessary
to ensure that (A) it is available for resales by the Holders of Transfer Restricted
Securities entitled, subject to Section 2(b), to the benefit of this Agreement and
(B) conforms with the requirements of this Agreement and the Securities Act and the
rules and regulations of the Commission promulgated thereunder as announced from
time to time, for a period (the “Effectiveness Period”) from the date the Shelf
Registration Statement is declared effective by the Commission until the earliest
of:



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          (1) the sale of all of the shares of Common Stock covered by
the Shelf Registration Statement pursuant to the registration
statement or Rule 144 under the Securities Act or any similar
provision then in effect;




          (2) such time as all of the shares of Common Stock sold in the
Initial Placement and covered by the Shelf Registration Statement
and not held by Affiliates of the Company are, in the opinion of
counsel for the Company, eligible for sale pursuant to Rule 144(k)
(or any successor or analogous rule) under the Securities Act; or




          (3) the second anniversary of the issuance of shares of Common
Stock pursuant to the Purchase Agreement with the Initial
Purchasers.



          The Company shall be deemed not to have used its commercially reasonable efforts to keep the
Shelf Registration Statement effective during the Effectiveness Period if it voluntarily takes any
action that would result in Holders of Transfer Restricted Securities not being able to offer and
sell such Securities at any time during the Effectiveness Period, unless such action is (x)
required by applicable law or otherwise undertaken by the Company in good faith and for valid
business reasons (not including avoidance of the Company’s obligations hereunder), including the
acquisition or divestiture of assets, and (y) permitted by Section 5(b)(ii) hereof.





          (b) At the time the Shelf Registration Statement is declared effective, each Holder
that became a Notice Holder on or prior to the date ten (10) Business Days prior to such
time of effectiveness shall be named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of Transfer Restricted Securities in accordance with
applicable law. None of the Company’s securityholders (other than the Holders of Transfer
Restricted Securities) shall have the right to include any of the Company’s securities in
the Shelf Registration Statement.




          (c) If the Shelf Registration Statement or any Subsequent Shelf Registration
Statement ceases to be effective for any reason at any time during the Effectiveness
Period (other than because all Transfer Restricted Securities registered thereunder shall
have been resold pursuant thereto or shall have otherwise ceased to be Transfer Restricted
Securities), the Company shall use its commercially reasonable efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof or file an additional
Shelf Registration Statement covering all of the



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securities that as of the date of such filing are Transfer Restricted Securities ( a
“Subsequent Shelf Registration Statement”). If a Subsequent Shelf Registration Statement
is filed, the Company shall use its commercially reasonable efforts to cause the
Subsequent Shelf Registration Statement to become effective as promptly as is practicable
after such filing and to keep such Registration Statement (or subsequent Shelf
Registration Statement) continuously effective until the end of the Effectiveness Period.




          (d) The Company shall supplement and amend the Shelf Registration Statement if
required by the rules, regulations or instructions applicable to the registration form
used by the Company for such Shelf Registration Statement, if required by the Securities
Act or as reasonably requested by the Initial Purchasers or by the Holders of the Transfer
Restricted Securities covered by such Shelf Registration Statement.




          (e) The Company shall cause the Shelf Registration Statement and the related
Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf
Registration Statement or such amendment or supplement, (i) to comply in all material
respects with the applicable requirements of the Securities Act, and (ii) not to contain
any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not misleading.




          (f) Each Holder agrees that if such Holder wishes to sell Transfer Restricted
Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do
so only in accordance with this Section 2(f) and Section 5(b). Each Holder wishing to
sell Transfer Restricted Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least ten (10)
Business Days prior to any intended distribution of Transfer Restricted Securities under
the Shelf Registration Statement. From and after the date the Shelf Registration
Statement is declared effective the Company shall, as promptly as practicable after the
date a Notice and Questionnaire is delivered to it, and in any event upon the later of (x)
ten (10) Business Days after such date (but no earlier than ten (10) Business Days after
effectiveness) or (y) ten (10) Business Days after the expiration of any Suspension Period
in effect when the Notice and Questionnaire is delivered or put into effect within ten
(10) Business Days of such delivery date:




          (i) if required by applicable law, file with the SEC a post-effective amendment
to the Shelf Registration Statement or prepare and, if required by applicable law,
file a supplement to the related Prospectus or a supplement or amendment to any
document



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incorporated therein by reference or file any other required document so that
the Holder delivering such Notice and Questionnaire is named as a selling
securityholder in the Shelf Registration Statement and the related Prospectus in
such a manner as to permit such Holder to deliver such Prospectus to purchasers of
the Transfer Restricted Securities in accordance with applicable law and, if the
Company shall file a post-effective amendment to the Shelf Registration Statement,
use its best effort to cause such post-effective amendment to be declared effective
under the Securities Act as promptly as is practicable, but in any event by the date
(the “Amendment Effectiveness Deadline Date”) that is forty-five (45) days after the
date such post effective amendment is required by this clause to be filed;




          (ii) provide such Holder copies of the any documents filed pursuant to Section
2(f)(i); and




          (iii) notify such Holder as promptly as practicable after the effectiveness
under the Securities Act of any post-effective amendment filed pursuant to Section
2(f)(i);


provided that if such Notice and Questionnaire is delivered during a Suspension Period, the Company
shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set
forth in clauses (i), (ii) and (iii) above upon expiration of the Suspension Period in accordance
with Section 5(b). Notwithstanding anything contained herein to the contrary, (i) the Company
shall be under no obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Shelf Registration Statement or related Prospectus and (ii) the Amendment
Effectiveness Deadline Date shall be extended by up to ten (10) Business Days from the Expiration
of a Suspension Period (and the Company shall incur no obligation to pay Liquidated Damages during
such extension) if such Suspension Period shall be in effect on the Amendment Effectiveness
Deadline Date.





	 	3.	 	Piggyback Registration.






          (a) If, after the date hereof, the Company proposes to file a registration statement
under the Securities Act providing for an initial public offering of the Company’s equity
securities, other than the Shelf Registration Statement, or a registration statement on
Form S-8 or Form S-4 or any similar form hereafter adopted by the Commission as a
replacement therefor (including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be incorporated
by reference, if any, in such registration statement, the “Piggyback Registration
Statement”), the Company will notify each Holder of the proposed filing



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if clause (i) or (ii) of the following sentence applies, or only those affected
Holders if clause (iii) of the following sentence applies. If (i) the Piggyback
Registration Statement relates to an Underwritten Registration, (ii) the Shelf
Registration Statement is not then effective or (iii) Transfer Restricted Securities
eligible for inclusion on the Shelf Registration Statement when initially declared
effective were not included in the Shelf Registration Statement (unless such securities
can and will be added to the Shelf Registration Statement at such time), then each Holder
in the case of clause (i) and (ii), and each such affected Holder in the case of clause
(iii), shall be given an opportunity to include in such Piggyback Registration Statement
all or any part of such Holder’s Transfer Restricted Securities. Each such Holder
desiring to include in any such Piggyback Registration Statement all or part of such
Holder’s Transfer Restricted Securities shall, within ten (10) days after delivery of the
above-described notice by the Company, so notify the Company in writing, and in such
notice shall inform the Company of the number of Transfer Restricted Securities such
Holder wishes to include in such Piggyback Registration Statement and provide, as a
condition to such inclusion, such information regarding itself, its Transfer Restricted
Securities and the intended method of disposition of such securities as is required
pursuant to Regulation S-K promulgated under the Securities Act to effect the registration
of the Transfer Restricted Securities. Any election by any Holder to include any Transfer
Restricted Securities in such Piggyback Registration Statement will not affect the
inclusion of such Transfer Restricted Securities in the Shelf Registration Statement until
such Transfer Restricted Securities have been sold under the Piggyback Registration
Statement; provided, however, that at such time, the Company may remove
from the Shelf Registration Statement the Transfer Restricted Securities sold pursuant to
the Piggyback Registration Statement.




          (b) At any time, the Company may terminate or withdraw any Piggyback Registration
Statement referred to in this Section 3, and without any obligation to any such Holder
whether or not any Holder has elected to include Transfer Restricted Securities in such
registration. The Company may suspend the effectiveness and use of any Piggyback
Registration Statement at any time for an unlimited amount of time whether or not any
Holder has elected to include Transfer Restricted Securities in such registration.




          (c) The Company shall advise the Holders of the managing underwriters for any
Underwritten Registration proposed under the Piggyback Registration Statement. The right
of any such Holder’s Transfer Restricted Securities to be included in any such Piggyback
Registration Statement pursuant to this Section 3 shall be condition upon such Holder’s
participation in such Underwritten Registration and the inclusion of such Holder’s
Transfer Restricted Securities in the



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Underwritten Registration to the extend provided herein. All Holders proposing to
distribute their Transfer Restricted Securities through such Underwritten Registration
shall enter into an underwriting agreement in customary form with the managing
underwriters selected for such underwriting and complete and execute any questionnaires,
powers of attorney, indemnities, securities escrow agreements and other documents
reasonably required under the terms of such underwriting, and furnish to the Company such
information in writing as the Company may reasonably request for inclusion in the
Piggyback Registration Statement; provided, however, that no Holder shall
be required to make any representations or warranties to or agreements with the Company or
the underwriters other than representations, warranties or agreements as are customary and
reasonably requested by the underwriters. Notwithstanding any other provision of this
Agreement, if the managing underwriters determine in good faith that marketing factors
require a limitation on the number of securities to be included, then the managing
underwriters may exclude securities (including Transfer Restricted Securities) from the
Piggyback Registration Statement and the Underwritten Registration, and any securities
included in the Piggyback Registration Statement and the Underwritten Registration shall
be allocated, first, to the Company, and second, to each of the Holders
requesting inclusion of their Transfer Restricted Securities in such Piggyback
Registration Statement on a pro rata basis based on the total number of
such securities requested to be included. If any Holder disapproves of the terms of any
Underwritten Registration, such Holder may elect to withdraw therefrom by written notice
to the Company and the underwriter, delivered at least ten (10) Business Days prior to the
effective date of the Piggyback Registration Statement. Any Transfer Restricted
Securities excluded or withdrawn from such Underwritten Registration shall be excluded and
withdrawn from the Piggyback Registration Statement.




          (d) By electing to include Transfer Restricted Securities in the Piggyback
Registration Statement, if any, the Holder shall be deemed to have agreed not to effect
any sale or distribution of securities of the Company of the same or similar class or
classes of the securities included in the Piggyback Registration Statement or any
securities convertible into or exchangeable or exercisable for such securities, including
a sale pursuant to Rule 144 under the Securities Act, during such periods as reasonably
requested (but in no event for a period longer than sixty (60) days following the
effective date of the Piggyback Registration Statement, provided each of the executive
officers and directors of the Company that hold shares of Common Stock of the Company or
securities convertible into or exchangeable or exercisable for shares of Common Stock of
the Company are subject to the same restriction for the entire time period required of the
Holders hereunder) by the representatives of the underwriters, if an Underwritten
Registration.



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          (e) Upon an initial public offering of the Company’s equity securities, Holders that
are beneficiaries of this Agreement, whether or not they sell in the initial public
offering, will not be able to sell any remaining Transfer Restricted Securities not
included in the Piggyback Registration Statement for a period of 60 days following the
effective date of such Piggyback Registration Statement.




          (f) The Company’s obligation to file the Shelf Registration Statement shall not be
affected by the filing or effectiveness of the Piggyback Registration Statement.




	 	4.	 	Liquidated Damages.






	 	(a)	 	If:






          (i) the Shelf Registration Statement is not filed with the Commission prior to
or on the Shelf Filing Deadline; or




          (ii) the Shelf Registration Statement has not been declared effective by the
Commission prior to or on the Effectiveness Target Date;


(each such event referred to in foregoing clauses (i) and (ii), a (“Registration Default”)), the
Company hereby agrees to pay damages (“Liquidated Damages”) with respect to the Transfer Restricted
Securities at the close of business on the date of such Registration Default in an amount per share
of Common Stock equal to 0.5% of the offering price per share set forth on the cover page of the
Offering Memorandum. In addition, additional liquidated damages will accrue daily commencing on
the date of such Registration Default at an annual rate per share equal to 0.5% of such offering
price of the Common Stock with respect to the first 90-day period following the occurrence of such
Registration Default and will increase by an additional 0.5% per annum with respect to each
subsequent 90-day period until all Registration Defaults have been cured up to a maximum rate of
2.0% per annum with respect to all Registration Defaults.





          (b) All accrued Liquidated Damages shall be paid in arrears to Record Holders by the
Company on each Liquidated Damages Payment Date. Upon the cure of all Registration
Defaults relating to any particular share of Common Stock, the accrual of Liquidated
Damages with respect to such share of Common Stock will cease.



          All obligations of the Company set forth in this Section 4 that are outstanding with respect
to any Transfer Restricted Security at the time such security ceases to be a Transfer Restricted
Security shall survive until such time as all such obligations with respect to such Transfer
Restricted Security shall have been satisfied in full.




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          The Liquidated Damages set forth above shall be the exclusive monetary remedy available to the
Holders of Transfer Restricted Securities for each Registration Default.





	 	5.	 	Registration Procedures.






          (a) In connection with the Shelf Registration Statement, the Company shall comply
with all the provisions of Section 5(b) hereof and shall use its commercially reasonable
efforts to effect such registration to permit the sale of the Transfer Restricted
Securities, and pursuant thereto, shall as expeditiously as possible prepare and file with
the Commission a Shelf Registration Statement relating to the registration on any
appropriate form under the Securities Act.




          (b) In connection with the Shelf Registration Statement and any Prospectus required
by this Agreement to permit the sale or resale of Transfer Restricted Securities, the
Company shall:




          (i) Subject to any notice by the Company in accordance with this Section
5(b) of the existence of any fact or event of the kind described in Section
5(b)(iv)(D), use its commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective during the Effectiveness Period;
upon the occurrence of any event that would cause the Shelf Registration
Statement or the Prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the Effectiveness Period, the Company shall
file promptly an appropriate amendment to the Shelf Registration Statement, a
supplement to the Prospectus or a report filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the case of clause (A),
correcting any such misstatement or omission, and, in the case of either clause
(A) or (B), use its commercially reasonable efforts to cause such amendment to be
declared effective and the Shelf Registration Statement and the related
Prospectus to become usable for their intended purposes as soon as practicable
thereafter.




          (ii) Notwithstanding Section 5(b)(i) hereof, the Company may suspend the
effectiveness of the Shelf Registration Statement (each such period, a
“Suspension Period”):




               (x) if the representative of the underwriters of an underwritten offering
of primary shares by the Company has advised the Company that the sale of shares
of Common Stock under the Shelf Registration Statement would have a material
adverse effect on the Company’s initial public offering;



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               (y) if a majority of the Company’s board of directors, in good faith,
determines that (1) the offer or sale of any shares of Common Stock would
materially impede, delay or interfere with any proposed financing, offer or sale
of securities, acquisition, merger, tender offer, business combination,
corporate reorganization, consolidation or other significant transaction
involving the Company; (2) after the advice of counsel, the sale of the shares
of Common Stock covered by the Shelf Registration Statement would require
disclosure of non-public material information not otherwise required to be
disclosed under applicable law; or (3) either (A) the Company has a bona fide
business purpose for preserving the confidentiality of the proposed transaction,
(B) disclosure would have a material adverse effect on the Company or the
Company’s ability to consummate the proposed transaction, or (C) the proposed
transaction renders the Company unable to comply with requirements of the
Commission; or




               (z) if a majority of the Company’s board of directors, in good faith,
determines that the Company is required by law, rule or regulation to supplement
the Shelf Registration Statement or file a post-effective amendment to the Shelf
Registration Statement in order to incorporate information into the Shelf
Registration Statement for the purpose of (1) including in the Shelf
Registration Statement any Prospectus required under Section 10(a)(3) of the
Securities Act; (2) reflecting in the Prospectus included in the Shelf
Registration Statement any facts or events arising after the Effective Date of
the Shelf Registration Statement (or the most recent post-effective amendment)
that, individually or in the aggregate, represents a fundamental change in the
information set forth in the Prospectus; or (3) including in the Prospectus
included in the Shelf Registration Statement any material information with
respect to the plan of distribution not disclosed in the Shelf Registration
Statement or any material change to such information.


Upon the occurrence of any event described in clauses (x), (y) and (z) of this Section
5(b)(ii), the Company shall give notice to the Holders that the availability of the Shelf
Registration is suspended and, upon actual receipt of any such notice, each Holder agrees
not to sell any Transfer Restricted Securities pursuant to the Shelf Registration until
such Holder’s receipt of copies of the supplemented or amended Prospectus provided for in
Section 5(b) hereof. The period during which the availability of the Shelf Registration
and any Prospectus is suspended (the “Suspension Period”) shall not exceed 60 days in any
ninety-day period (except as a result of a review of any post-effective amendment by the
Commission prior to


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 declaring any post-effective amendment to the Shelf Registration Statement effective
provided the Company has used all commercially reasonable efforts to cause such
post-effective amendment to be declared effective); provided, that Suspension Periods
shall not exceed an aggregate of 90 days in any 360-day period. The Company shall not be
required to specify in the written notice to the Holders the nature of the event giving
rise to the Suspension Period.





          (iii) Prepare and file with the Commission such amendments and
post-effective amendments to the Shelf Registration Statement as may be necessary
to keep the Shelf Registration Statement effective during the Effectiveness
Period; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 under the
Securities Act, and to comply fully with the applicable provisions of Rules 424
under the Securities Act in a timely manner; and comply with the provisions of
the Securities Act with respect to the disposition of all Common Stock covered by
the Shelf Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or supplement to the Prospectus.




          (iv) Advise the selling Holders and any Initial Purchaser that has provided
in writing to the Company a telephone or facsimile number and address for
notices, promptly and, if requested by such selling Holders, to confirm such
advice in writing (which notice pursuant to clauses (B) through (D) below shall
be accompanied by an instruction to suspend the use of the Prospectus until the
Company shall have remedied the basis for such suspension):




     (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to the Shelf
Registration Statement or any post-effective amendment thereto, when the
same has become effective,




     (B) of any request by the Commission for amendments to the Shelf
Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto,




     (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Shelf Registration Statement under the
Securities Act or of the suspension by any state securities commission
of the qualification of the



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Transfer Restricted Securities for offering or sale in any
jurisdiction, or the threatening or initiation of any proceeding for any
of the preceding purposes, or




     (D) of the existence of any fact or the happening of any event,
during the Effectiveness Period, that makes any statement of a material
fact made in the Shelf Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by
reference therein untrue, or that requires the making of any additions
to or changes in the Shelf Registration Statement or the Prospectus in
order to make the statements therein (in the case of the Prospectus, in
the light of the circumstances under which they were made) not
misleading.




          (v) If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company shall use its commercially
reasonable efforts to obtain the withdrawal or lifting of such order at the earliest
possible time and will provide to each Holder who is named in the Shelf Registration
Statement prompt notice of the withdrawal of any such order.




          (vi) Make available at reasonable times for inspection by one or more
representatives of the selling Holders, designated in writing by a Majority of
Holders whose Transfer Restricted Securities are included in the Shelf Registration
Statement, and any attorney or accountant retained by such selling Holders and any
Initial Purchaser participating in any disposition pursuant to the Shelf
Registration Statement, all financial and other records, pertinent corporate
documents and properties of the Company as shall be reasonably necessary to enable
them to conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act, and cause the Company’s officers, directors, managers and employees
to supply all information reasonably requested by any such representative or
representatives of the selling Holders, attorney or accountant in connection
therewith.




          (vii) If requested by any selling Holders or the Representative, promptly
incorporate in the Shelf Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as such
selling Holders may reasonably request to have included therein,



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including, without limitation, information relating to the “Plan of
Distribution” of the Transfer Restricted Securities.




          (viii) Deliver to each selling Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; subject to any notice
by the Company in accordance with this Section 5(b) of the existence of any fact
or event of the kind described in Section 5(b)(iii)(D), the Company hereby
consents to the use of the Prospectus and any amendment or supplement thereto by
each of the selling Holders in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment or
supplement thereto.




          (ix) Before any public offering of Transfer Restricted Securities, cooperate
with the selling Holders and their counsel in connection with the registration
and qualification of the Transfer Restricted Securities under the securities or
Blue Sky laws of such jurisdictions in the United States as the selling Holders
may reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer
Restricted Securities covered by the Shelf Registration Statement; provided,
however, that the Company shall not be required (A) to register or qualify as a
foreign corporation or a dealer of securities where it is not now so qualified or
to take any action that would subject it to the service of process in any
jurisdiction where it is not now so subject, other than service of process for
suits arising out of the Initial Placement or any offering pursuant to the Shelf
Registration Statement, or (B) to subject itself to general or unlimited service
of process or to taxation in any such jurisdiction if they are not now so
subject.




          (x) Unless any Transfer Restricted Securities shall be in book-entry form
only, cooperate with the selling Holders to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to be sold
and not bearing any restrictive legends (unless required by applicable securities
laws); and enable such Transfer Restricted Securities to be in such denominations
and registered in such names as the Holders may request at least two Business
Days before any sale of Transfer Restricted Securities.




          (xi) Use its commercially reasonable efforts to cause the Transfer
Restricted Securities covered by the Shelf Registration Statement to be
registered with or approved by such other U.S. governmental agencies or
authorities as may be necessary to



15









 







enable the seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities.




          (xii) Subject to Section 5(b)(ii) hereof, if any fact or event contemplated
by Section 5(b)(iv)(B) through (D) hereof shall exist or have occurred, use its
commercially reasonable efforts to prepare a supplement or post-effective
amendment to the Shelf Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of Transfer Restricted
Securities, the Prospectus will 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, in light of the circumstances in which
they are made, not misleading.




          (xiii) Provide CUSIP numbers for all Transfer Restricted Securities not
later than the effective date of the Shelf Registration Statement and provide the
Transfer Agent with certificates for Common Stock that are in a form eligible for
deposit with The Depository Trust Company.




          (xiv) Cooperate and assist in any filings required to be made with the NASD
and in the performance of any due diligence investigation by any underwriter that
is required to be undertaken in accordance with the rules and regulations of the
NASD.




          (xv) Otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission and all reporting requirements
under the rules and regulations of the Exchange Act.




          (xvi) Make generally available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act as soon as
practicable after the effective date of the Shelf Registration Statement and in
any event no later than 45 days after the end of a 12-month period (or 90 days,
if such period is a fiscal year) beginning with the first month of the Company’s
first fiscal quarter commencing after the effective date of the Shelf
Registration Statement.




          (xvii) Use its commercially reasonable efforts to satisfy the criteria for
listing and list or include (if the Company meets the criteria for listing on
such exchange or market) the Common Stock on the New York Stock Exchange,
American Stock Exchange or The Nasdaq National Market (as soon as practicable,
including seeking to cure in its listing or inclusion application any



16









 







deficiencies cited by the exchange or market), and thereafter maintain the
listing on such exchange.




          (xviii) Provide to each Holder upon written request each document filed with
the Commission pursuant to the requirements of Section 13 and Section 15 of the
Exchange Act after the effective date of the Shelf Registration Statement, unless
such document is available through the Commission’s EDGAR system.




          (xix) In connection with any underwritten offering conducted pursuant to
Section 9 hereof, make such representations and warranties to the Holders of
Securities registered thereunder and the underwriters, in form, substance and
scope as are customarily made by issuers to underwriters in primary underwritten
offerings and covering matters including, but not limited to, those set forth in
the Purchase Agreement;




          (xx) In connection with any underwritten offering conducted pursuant to Section
9 hereof, obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably satisfactory
to the Managing Underwriters) addressed to each selling Holder and the underwriters,
if any, covering such matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by such
Holders and underwriters;




          (xxi) In connection with any underwritten offering conducted pursuant to
Section 9, hereof, obtain “comfort” letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary, any other
independent certified public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and financial data
are, or are required to be, included in the Shelf Registration Statement), addressed
to each selling Holder of Securities registered thereunder and the underwriters, in
customary form and covering matters of the type customarily covered in “comfort”
letters in connection with primary underwritten offerings; and




          (xxii) In connection with any underwritten offering conducted pursuant to
Section 9 hereof, deliver such documents and certificates as may be reasonably
requested by the Majority Holders and the Managing Underwriters, including those to
evidence compliance with Section 5(b)(ii) and 5(b)(xii) hereof and with any
customary conditions contained in the Purchase Agreement or other agreement entered
into by the Company.



17









 






          (xxiii) In connection with underwritten offering conducted pursuant to Section
9 hereof, the Company shall, if requested, promptly include or incorporate in a
Prospectus supplement or post-effective amendment to the Shelf Registration
Statement such information as the Managing Underwriters reasonably agree should be
included therein and to which the Company does not reasonably object and shall make
all required filings of such Prospectus supplement or post-effective amendment as
soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment.




          (xxiv) Use its commercially reasonable efforts to take all other steps
necessary to effect the registration of the Common Stock covered by the Shelf
Registration Statement.




          (xxv) Enter into customary agreements (including, if requested, an underwriting
agreement in customary form) and take all other appropriate actions in order to
expedite or facilitate the registration or the disposition of the Common Stock, and
in connection therewith, if an underwriting agreement is entered into, cause the
same to contain indemnification provisions and procedures no less favorable than
those set forth in Section 7 hereof.



          The actions set forth in clauses (xx), (xxi), (xxii) and (xxiii) of this Section 5(b) shall be
performed at (A) the effectiveness of the Shelf Registration Statement and each post-effective
amendment thereto; and (b) each closing under any underwriting or similar agreement as and to the
extent required thereunder.





          (c) Each Holder agrees by acquisition of a Transfer Restricted Security that, upon
receipt of any notice (a “Suspension Notice”) from the Company of the existence of any
fact of the kind described in Section 5(b)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the Shelf
Registration Statement until:




          (i) such Holder has received copies of the supplemented or amended Prospectus
contemplated by Section 5(b)(xi) hereof; or




          (ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or supplemental
filings that are incorporated by reference in the Prospectus.


If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense)
all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of receipt of such notice
of suspension.




18









 








          (d) Each Holder agrees by acquisition of a Transfer Restricted Security, that no
Holder shall be entitled to sell any of such Transfer Restricted Securities pursuant to a
Shelf Registration Statement, or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as required pursuant to
Section 2(e) hereof (including the information required to be included in such Notice and
Questionnaire) and the information set forth in the next sentence. The Company may
require each Notice Holder of Common Stock to be sold pursuant to the Shelf Registration
Statement to furnish to the Company such information regarding the Holder and the
distribution of such Common Stock as the Company may from time to time reasonably require
for inclusion in such Shelf Registration Statement. Each Notice Holder agrees promptly to
furnish to the Company all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not misleading and
any other information regarding such Notice Holder and the distribution of such Transfer
Restricted Securities as the Company may from time to time reasonably request in writing.
Any sale of any Transfer Restricted Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to such Holder
and its plan of distribution is as set forth in the Prospectus delivered by such Holder in
connection with such disposition, that such Prospectus does not as of the time of such
sale contain any untrue statement of a material fact relating to or provided by such
Holder or its plan of distribution and that such Prospectus does not as of the time of
such sale omit to state any material fact relating to or provided by such Holder or its
plan of distribution necessary to make the statements in such Prospectus, in the light of
the circumstances under which they were made not misleading. The Company may exclude from
such Shelf Registration Statement the Common Stock of any Holder that unreasonably fails
to furnish such information within a reasonable time after receiving such request.





	6.	 	Registration Expenses.





          All expenses incident to the Company’s performance of or compliance with this
Agreement shall be borne by the Company regardless of whether a Shelf Registration
Statement becomes effective, including, without limitation:




          (a) all registration and filing fees and expenses (including filings made with the
NASD);




          (b) all fees and expenses of compliance with federal securities and state Blue Sky or
securities laws;




19









 






          (c) all expenses of printing (including printing of Prospectuses and, if applicable,
certificates for the Common Stock) and the Company’s expenses for messenger and delivery
services and telephone;




          (d) all fees and disbursements of counsel to the Company;




          (e) all application and filing fees in connection with listing (or authorizing for
quotation) the Common Stock on a national securities exchange or automated quotation
system pursuant to the requirements hereof; and




          (f) all fees and disbursements of independent certified public accountants of the
Company.



          The Company shall bear its internal expenses (including, without limitation, all salaries and
expenses of their officers and employees performing legal, accounting or other duties), the
expenses of any annual audit and the fees and expenses of any Person, including special experts,
retained by the Company. The Company shall pay all expenses customarily borne by issuers in an
underwritten offering as set forth in Section 9(c) hereof.





	 	7.	 	Indemnification And Contribution.






          (a) The Company agrees to indemnify and hold harmless each Holder of Transfer
Restricted Securities (including each Initial Purchaser), its directors, officers, and
employees, Affiliates and agents and each person, if any, who controls any such Holder
within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified
Holder”), against any loss, claim, damage, liability or expense, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to resales of the Transfer Restricted Securities), to which
such Indemnified Holder may become subject, insofar as any such loss, claim, damage,
liability or action arises out of, or is based upon:




          (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Shelf Registration Statement as originally filed or in any
amendment thereof, in any Prospectus, or in any amendment or supplement thereto, or
(B) any blue sky application or other document or any amendment or supplement
thereto prepared or executed by the Company (or based upon written information
furnished by or on behalf of the Company expressly for use in such blue sky
application or other document or amendment or supplement) filed in any jurisdiction
specifically for the purpose of qualifying any or all of the Transfer Restricted
Securities under the securities law of any state or other jurisdiction (such
application or document being hereinafter called a “Blue Sky Application”); or



20









 






          (ii) the omission or alleged omission to state therein any material fact
required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading,


and agrees to reimburse each Indemnified Holder promptly upon demand for any legal or other
expenses reasonably incurred by such Indemnified Holder in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company shall not be liable in any such case to the extent that
any such loss, claim, damage, liability or expense arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of such Holder (or its
related Indemnified Holder) specifically for use therein. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have.



          The Company also agrees to indemnify as provided in this Section 7(a) or contribute as
provided in Section 7(e) hereof to Losses (as defined below) of each underwriter, if any, of Common
Stock registered under a Shelf Registration Statement, their directors, officers, employees,
Affiliates or agents and each person who controls such underwriter on substantially the same basis
as that of the indemnification of the Initial Purchasers and the selling Holders provided in this
Section 7(a) and shall, if requested by any Holder, enter into an underwriting agreement reflecting
such agreement, as provided in Section 5(b)(xxiv) hereof.





          (b) Each Holder, severally and not jointly, agrees to indemnify and hold harmless the
Company, its directors, officers and employees and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act to the same extent as
the foregoing indemnity from the Company to each such Holder, but only with reference to
written information relating to such Holder furnished to the Company by or on behalf of
such Holder specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement set forth in this Section shall be in addition to any
liabilities which any such Holder may otherwise have. In no event shall any Holder, its
directors, officers or any person who controls such Holder be liable or responsible for
any amount in excess of the amount by which the total amount received by such Holder with
respect to its sale of Transfer Restricted Securities pursuant to a Shelf Registration
Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Holder, its directors, officers or
any person who controls such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.




          (c) Promptly after receipt by an indemnified party under this Section 7 of notice of
any claim or the commencement of any action, the



21









 







indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to notify
the indemnifying party (i) shall not relieve it from any liability which it may have under
paragraphs (a) or (b) of this Section unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses, and (ii) shall not, in any event, relieve it from any
liability which it may have to an indemnified party otherwise than under paragraphs (a) or
(b) of this Section 7. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the indemnifying party
to the indemnified party of its election to assume the defense of such claim or action,
the indemnifying party shall not be liable to the indemnified party under this Section 7
for any legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of investigation;
provided, however, that the Holders shall have the right to employ a single counsel to
represent jointly the Holders and their officers, employees and controlling persons who
may be subject to liability arising out of any claim in respect of which indemnity may be
sought by the Holders against the Company under this Section 7 if the Holders seeking
indemnification shall have been advised by legal counsel that there may be one or more
legal defenses available to such Holders and their respective officers, employees and
controlling persons that are different from or additional to those available to the
Company, and in that event, the fees and expenses of such separate counsel shall be paid
by the Company.




          (d) The indemnifying party under this Section shall not be liable for any settlement
of any proceeding effected without its written consent, which shall not be withheld
unreasonably, but if settled with such consent or if there is a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 7(c) hereof, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request prior to the date of
such settlement. No indemnifying party



22









 







shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could have been
a party and indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (x) includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter of such
action, suit or proceeding and (y) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.




          (e) If the indemnification provided for in this Section 7 shall for any reason be
unavailable or insufficient to hold harmless an indemnified party under Section 7(a) or
7(b) in respect of any loss, claim, damage or liability (or action in respect thereof)
referred to therein, each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the aggregate amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability (including legal or other
expenses reasonably incurred in connection with investigating or defending any loss,
claim, liability, damage or action) (collectively “Losses”) (or action in respect
thereof):




          (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company from the offering and sale of the Transfer Restricted
Securities on the one hand and a Holder with respect to the sale by such Holder of
the Transfer Restricted Securities on the other, or




          (ii) if the allocation provided by Section 7(d)(i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in Section 7(d)(i) but also the relative fault of the
Company on the one hand and the Holders on the other in connection with the
statements or omissions or alleged statements or alleged omissions that resulted in
such loss, claim, damage or liability (or action in respect thereof), as well as any
other relevant equitable considerations.


The relative benefits received by the Company on the one hand and a Holder on the other with
respect to such offering and such sale shall be deemed to be in the same proportion as the total
net proceeds from the offering of the Common Stock purchased under the Purchase Agreement (before
deducting expenses) received by the Company, on the one hand, bear to the total proceeds received
by such Holder with respect to its sale of Transfer Restricted Securities on the other. The
relative fault of the parties shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Holders on the other, the
intent of the parties and their relative


23









 






knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and each Holder agree that it would not be just and equitable if the amount of
contribution pursuant to this Section 7(e) were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable considerations referred to in
the first sentence of this paragraph (e).




          The amount paid or payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section 7 shall be deemed to
include, for purposes of this Section 7, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to defend any such
action or claim.




          No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. The Holders’ obligations to contribute as provided in this Section
7(d) are several and not joint.





          (f) The provisions of this Section 7 shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the Company or any
of the officers, directors or controlling persons referred to in Section 7 hereof, and
will survive the sale by a Holder of Transfer Restricted Securities.



          8. Rule 144A and Rule 144. The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which the Company (i) is not
subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder,
to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and (ii) is
subject to Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby in a
timely manner in order to permit resales of such Transfer Restricted Securities pursuant to Rule
144.





	 	9.	 	Underwritten Registrations.






          (a) Any Holder of Transfer Restricted Securities who desires to do so may sell
Transfer Restricted Securities (in whole or in part) in an underwritten offering; provided
that (i) the Electing Holders of at least 33-1/3% in aggregate amount of the Transfer
Restricted Securities then covered by the Shelf Registration Statement shall request such
an offering and (ii) at least such aggregate amount of such Transfer Restricted Securities
shall be included in such offering; and provided further that the Company shall not be
obligated to participate in more than one



24









 







underwritten offering during the Effectiveness Period. Upon receipt of such a
request, the Company shall provide all Holders of Transfer Restricted Securities written
notice of the request, which notice shall inform such Holders that they have the
opportunity to participate in the offering. If any of the Transfer Restricted Securities
covered by the Shelf Registration Statement are to be sold in an underwritten offering,
the Managing Underwriters shall be selected by the Majority Holders.




          (b) No person may participate in any underwritten offering pursuant to the Shelf
Registration Statement unless such person (i) agrees to sell such person’s Common Stock on
the basis reasonably provided in any underwriting arrangements approved by the persons
entitled hereunder to approve such arrangements; (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting arrangements; and (iii)
if such Holder is not then a Notice Holder, such Holder returns a completed and signed
Notice and Questionnaire to the Company in accordance with Section 2(f) hereof within a
reasonable amount of time before such underwritten offering.




          (c) The Holders participating in any underwritten offering shall be responsible for
any underwriting discounts and commissions and fees and, subject to Section 6 hereof,
expenses of their own counsel. The Company shall pay all expenses customarily borne by
issuers in an underwritten offering, including but not limited to filing fees, the fees
and disbursements of its counsel and independent public accountants and any printing
expenses incurred in connection with such underwritten offering. Notwithstanding the
foregoing or the provisions of Section 5(b)(xxii) hereof, upon receipt of a request from
the Managing Underwriter or a representative of holders of a majority of the Transfer
Restricted Securities to be included in an underwritten offering to prepare and file an
amendment or supplement to the Shelf Registration Statement and Prospectus in connection
with an underwritten offering, the Company may delay the filing of any such amendment or
supplement for up to 90 days if the Board of Directors of the Company shall have
determined in good faith that the Company has a bona fide business reason for such delay.




	 	10.	 	Miscellaneous.






          (a) Remedies. The Company acknowledges and agrees that any failure by the Company to
comply with its obligations under Section 2 hereof may result in material irreparable
injury to the Initial Purchasers or the Holders for which there is no adequate remedy at
law, that it will not be possible to measure damages for such injuries precisely, and
that, in the event of any such failure, in addition to being entitled to exercise all
rights provided to it herein, in the Indenture or in the Purchase Agreement or granted by
law, including recovery of liquidated or other damages, the



25









 







Initial Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company’s obligations under Section 2 hereof. The Company
further agrees to waive the defense in any action for specific performance that a remedy
at law would be adequate.




          (b) Actions Affecting Transfer Restricted Securities. The Company shall not,
directly or indirectly, take any action with respect to the Transfer Restricted Securities
as a class that would adversely affect the ability of the Holders of Transfer Restricted
Securities to include such Transfer Restricted Securities in a registration undertaken
pursuant to this Agreement.




          (c) No Inconsistent Agreements. The Company has not, as of the date hereof, entered
into, nor shall it, on or after the date hereof, enter into, any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof. In addition, the Company
shall not grant to any of its securityholders (other than the Holders of Transfer
Restricted Securities in such capacity) (i) the right to include any of its securities in
the Shelf Registration Statement or the Piggyback Registration Statement, if any, provided
for in this Agreement other than the Transfer Restricted Securities, unless pursuant to
such grant, such holder may include such securities on the Holders Shelf Registration
Statement or such Piggyback Registration Statement only to the extent that the inclusion
of such securities will not reduce the amount of Transfer Restricted Securities of the
Holders that is included on the Shelf Registration Statement or such Piggyback
Registration Statement or (ii) the right to have its Common Stock registered on a
registration statement that could be declared effective within one hundred eighty (180)
days of the effective date of any Shelf Registration Statement or Piggyback Registration
Statement filed pursuant to this Agreement.




          (d) Amendments and Waivers. This Agreement may not be amended, modified or
supplemented, and waivers or consents to or departures from the provisions hereof may not
be given, unless the Company has obtained the written consent of a Majority of Holders;
provided, however, that with respect to any matter that directly or indirectly adversely
affects the rights of any Initial Purchaser hereunder, the Company shall obtain the
written consent of each such Initial Purchaser against which such amendment,
qualification, supplement, waiver or consent is to be effective. Notwithstanding the
foregoing (except the foregoing proviso), a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Shelf Registration Statement and
does not directly or indirectly adversely affect the rights of other Holders, may be given
by the Majority Holders,



26









 







determined on the basis of Common Stock being sold rather than registered under such
Shelf Registration Statement.




          (e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first class mail (registered or
certified, return receipt requested), facsimile transmission, or air courier guaranteeing
overnight delivery:




          (i) if to a Holder, at the address set forth on the records of the transfer
agent of the Common Stock; and




          (ii) if to the Company, initially at its address set forth in the Purchase
Agreement,



	 	 	 
	 

	 	With a copy to:
	 
	 	 
	 

	 	Vinson & Elkins LLP
	 

	 	First City Tower
	 

	 	1001 Fannin Street, Suite 2300
	 

	 	Houston, TX 77002
	 

	 	Facsimile: 713-615-5531
	 

	 	Attention: T. Mark Kelly






          All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and on the next
Business Day, if timely delivered to an air courier guaranteeing overnight delivery.




          Any party hereto may change the address for receipt of communications by giving written notice
to the others.





          (f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including without
limitation and without the need for an express assignment, subsequent Holders of Transfer
Restricted Securities. The Company hereby agrees to extend the benefit of this Agreement
to any Holder and any such Holder may specifically enforce the provisions of this
Agreement as if an original party hereto.




          (g) Counterparts. This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
agreement.




          (h) Jurisdiction. The Company agrees that any suit, action or proceeding against the
Company brought by any Holder or Initial Purchaser, the directors, officers, employees,
Affiliates and agents of any



27









 







Holder or Initial Purchaser, or by any person who controls any Holder or Initial
Purchaser, arising out of or based upon this Agreement or the transactions contemplated
hereby may be instituted in any State or U.S. federal court in The City of New York and
County of New York, and waives any objection which it may now or hereafter have to the
laying of venue of any such proceeding, and irrevocably submits to the non-exclusive
jurisdiction of such courts in any suit, action or proceeding. The Company hereby
appoints CT Corporation as its authorized agent (the “Authorized Agent”) upon whom process
may be served in any suit, action or proceeding arising out of or based upon this
Agreement or the transactions contemplated herein which may be instituted in any State or
U.S. federal court in The City of New York and County of New York, by any Holder or
Initial Purchaser, the directors, officers, employees, Affiliates and agents of any Holder
or Initial Purchaser, or by any person who controls any Holder or Initial Purchaser, and
expressly accepts the non-exclusive jurisdiction of any such court in respect of any such
suit, action or proceeding. The Company hereby represents and warrants that the Authorized
Agent has accepted such appointment and has agreed to act as said agent for service of
process, and the Company agrees to take any and all action, including the filing of any
and all documents that may be necessary to continue such appointment in full force and
effect as aforesaid. Service of process upon the Authorized Agent shall be deemed, in
every respect, effective service of process upon the Company. The Company further agrees
to take any and all action, including the execution and filing of any and all such
documents and instruments, as may be necessary to continue such designation and
appointment in full force and effect so long as any of the Securities shall be
outstanding. To the extent that the Company may acquire any immunity from jurisdiction of
any court or from any legal process (whether through service of notice, attachment prior
to judgment, attachment in aid of execution, execution or otherwise) with respect to
itself or its property, it hereby irrevocably waives such immunity in respect of this
Agreement, to the fullest extent permitted by law. Notwithstanding the foregoing, any
action arising out of or based upon this Agreement may be instituted by any Holder or
Initial Purchaser, the directors, officers, employees, Affiliates and agents of any Holder
or Initial Purchaser, or by any person who controls any Holder or Initial Purchaser, in
any court of competent jurisdiction.




          (i) Common Stock Held by the Company or Their Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Transfer Restricted Securities is
required hereunder, Transfer Restricted Securities held by the Company or its Affiliates
(other than subsequent Holders if such subsequent Holders are deemed to be Affiliates
solely by reason of their holding of such Common Stock) shall not be counted in
determining whether such consent or approval was given by the Holders of such required
percentage.



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




          (k) Governing Law. This Agreement shall be governed by and construed in accordance
with the law of the State of New York.




          (l) Severability. If any one or more of the provisions contained herein, or the
application thereof in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired thereby, it
being intended that all of the rights and privileges of the parties shall be enforceable
to the fullest extent permitted by law.




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



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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.




	 	 	 	 	 
	 	 	RIATA ENERGY, INC.
	 
	 	 	 	 
	 

	 	By:		/s/ Malone Mitchell,
3rd 
	 

	 	 	 	 
	 

	 	 	 	Name: Malone Mitchell, 3rd
	 

	 	 	 	Title: 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	BANC OF AMERICA SECURITIES LLC
	 	 	Acting severally on behalf of themselves and the several Initial Purchasers
	 

	 	By:	 	/s/ M. Scott Van Bergh 
	 

	 	 	 	 
	 

	 	 	 	Name: Scott Van Bergh
	 

	 	 	 	Title: Managing Director