**REGISTRATION RIGHTS AGREEMENT**
**THIS REGISTRATION RIGHTS AGREEMENT** ("Agreement") is made and entered into as of the 11th dayof February, 2002, by and among**Republic Resources, Inc.**, a Nevada corporation ("Republic"), and theholders of Republic common stock identified on Exhibit A attached hereto ("Holders").
**RECITALS:**A.Reference is hereby made to that certain Exchange Agreement and Irrevocable Proxy dated as ofthe date hereof (the "Exchange Agreement" of which this Registration Right Agreement is Exhibit C)by and among Republic and Holders pursuant to which Holders will upon Closing, receive a certainnumber of Shares of Republic Common Stock, which Shares are the subject of this Agreement.
B.Pursuant to the terms of the Agreement, Republic has agreed to provide Holders and the holders ofthe Registrable Securities (as defined herein) with the registration rights set forth herein.
**AGREEMENT:**
NOW, THEREFORE, for and in consideration of the foregoing Recitals and the mutual agreementscontained herein, the sufficiency of which is hereby acknowledged and confirmed, the parties hereto,intending to be legally bound, agree as follows:
Section 1. Definitions and References.(1) When used in this Agreement, the following terms shall have the respective meanings assignedto them in this Section 1 or in the Sections referred to below:
"Agreement" shall mean this Registration Rights Agreement, as hereafter amended ormodified in accordance with the terms hereof.
"Commission" shall mean the Securities and Exchange Commission (or any successorbody thereto).
"Common Stock" shall mean the common stock, par value $0.01 per share, of Republic.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and allrules and regulations promulgated under such Act.
"Holder" shall mean any Person that holds Registrable Securities.
"Holder Indemnified Parties" shall have the meaning assigned to it in Section 5(a).
"Person" shall mean any individual, corporation, partnership, joint venture, limitedpartnership, limited liability company, trust, unincorporated organization, government or
"Prospectus" shall mean the prospectus included in any Registration Statement (including,without limitation, a prospectus that discloses information previously omitted from aprospectus filed as part of an effective registration statement in reliance upon Rule 430Apromulgated pursuant to the Securities Act), as amended or supplemented by anyprospectus supplement, with respect to the terms of the offering of any portion of theRegistrable Securities covered by such Registration Statement, and all other amendmentsand supplements to any such prospectus, including post-effective amendments, and allmaterial incorporated by reference or deemed to be incorporated by reference, if any, insuch prospectus.
"Registrable Securities" shall mean the Republic common stock issued to Holders underthe Exchange Agreement.
"Registration Expenses" shall mean all fees and expenses incident to Republic'sperformance of or compliance with the registration rights granted hereunder, including(without limitation) all registration and filing fees, fees and expenses of compliance withsecurities and blue sky laws, printing and engraving expenses, messenger, telephone anddelivery expenses, fees and disbursements of counsel for Republic, and fees anddisbursements of all independent certified public accountants and underwriters (excludingdiscounts and commissions); provided, however, that Registration Expenses shall notinclude any Selling Expenses.
"Registration Statement" shall mean any registration statement of Republic that covers anyof the Registrable Securities pursuant to this Agreement, including the Prospectus,amendments and supplements to such registration statement or Prospectus, includingpre- and post-effective amendments, all exhibits thereto, and all material incorporated byreference or deemed to be incorporated by reference, if any, in such registrationstatement.
"Republic" shall have the meaning assigned to it in the preamble to this Agreement.
"Republic Indemnified Parties" shall have the meaning assigned to it in Section 5(b).
"Securities Act" shall mean the Securities Act of 1933, as amended, and all rules andregulations promulgated under such Act.
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"Selling Expenses" shall mean underwriting discounts or commissions, any sellingcommissions and stock transfer taxes attributable to sales of Registrable Securities andthe fees and expenses of counsel for any Holder.
(2) All references in this Agreement to sections, subsections and other subdivisions refer tocorresponding sections, subsections and other subdivisions of this Agreement unless expresslyprovided otherwise. Titles appearing at the beginning of any such subdivisions are forconvenience only and shall not constitute part of such subdivisions and shall be disregarded inconstruing the language contained herein. The words "this Agreement", "this instrument","herein", "hereof", "hereby", "hereunder" and words of similar import refer to this Agreement asa whole and not to any particular subdivision unless expressly so limited. Words in the singularform shall be construed to include the plural and vice versa, unless the context otherwiserequires.
Section 2. Registration Shares.
Upon the written demand of Holders of at least 40% of the shares of common stock of Republic issuedunder the Exchange Agreement, Republic shall file, at Republic's expense, a registration statement onForm S-3 or other applicable form if that Form is not available to Republic, to register for resale by Holdersunder the Securities Act of 1933, as amended, all the shares of Republic common stock to be issued toHolders under the Exchange Agreement. Such registration statement shall be filed within 30 days ofreceipt of the written demand, but not earlier than June 30, 2002. Republic shall use its reasonable bestefforts to have such registration declared effective by the Securities and Exchange Commission as soonas reasonably practicable after the filing thereof and to keep each such Registration Statement effectivefor no less than 365 days.
Section 3. Registration Procedures.(a) In connection with Republic's registration obligations hereunder, Republic will use itsreasonable best efforts to effect the registration of the Registrable Securities in accordance withthe intended methods of disposition thereof as quickly as practicable, and pursuant theretoRepublic will as expeditiously as possible:
(1)prepare and file with the Commission not later than the time specified in thisAgreement, a Registration Statement on the appropriate form with respect to theRegistrable Securities and use its reasonable best efforts to cause such RegistrationStatement to become effective as soon as reasonably practicable after the filingthereof (provided, that before filing a Registration Statement or Prospectus or anyamendments or supplements thereto, Republic will furnish copies of all suchdocuments proposed to be filed to all Holders of Registrable Securities covered bysuch Registration Statement);

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(2)prepare and file with the Commission such amendments and supplements to suchRegistration Statement and the Prospectus used in connection therewith as may benecessary to keep such Registration Statement effective for a period of not less thanthe period set forth in this Agreement or such shorter period which will terminatewhen all Registrable Securities covered by such Registration Statement have beensold (but not before the expiration of the applicable Prospectus delivery period) andcomply with the provisions of the Securities Act with respect to the disposition of allRegistrable Securities covered by such Registration Statement during such period inaccordance with the intended methods of disposition by the Holders thereof set forthin such Registration Statement:
(3)furnish to each Holder of Registrable Securities such number of copies of suchRegistration Statement, each amendment and supplement thereto, the Prospectusincluded in such Registration Statement (including, without limitation, eachpreliminary prospectus) and such other documents as such Holder may reasonablyrequest in order to facilitate the disposition of the Registrable Securities owned bysuch Holder.
(4)use its reasonable best efforts to register or qualify such Registrable Securitiesunder such other securities or blue sky laws of such jurisdictions within the UnitedStates as any Holder reasonably requests and do any and all other acts and thingswhich may be reasonably necessary or advisable to enable such Holder toconsummate the disposition in such jurisdictions of the Registrable Securities ownedby such Holder (provided that Republic will not be required to qualify generally to dobusiness or subject itself to any general service of process in any jurisdiction where itis otherwise not then so subject);
(5)notify each Holder of such Registrable Securities, at any time when a Prospectusrelating thereto is required to be delivered under the Securities Act, of the happeningof any event which requires the making of any change in the Prospectus included insuch Registration Statement so that such document will not contain an untruestatement of a material fact or omit to state any material fact required to be statedtherein or necessary to make the statements therein not misleading, and, at therequest of any such Holder, Republic will prepare a supplement or amendment tosuch Prospectus so that such Prospectus will not contain an untrue statement of amaterial fact or omit to state any material fact required to be stated therein ornecessary to make the statements therein not misleading;
(6)use its reasonable best efforts to cause all such Registrable Securities to be listed oneach securities exchange or exchanges, automated quotation system or over-the-counter market upon which securities of Republic of the same class are then listed;

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(7)enter into such customary agreements (including, without limitation, underwritingagreements in customary form, substance and scope) and take all such otheractions as the Holders of a majority of the Registrable Securities being sold or theunderwriters, if any, reasonably request in order to expedite or facilitate thedisposition of such Registrable Securities;
(8)otherwise use its reasonable best efforts to comply with all applicable rules andregulations of the Commission, and make generally available to its security holdersan earnings statement no later than ninety (90) days after the end of the 12-monthperiod beginning with the first day of Republic's first full calendar quarter after theeffective date of the Registration Statement, which earnings statement shall satisfythe provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(9)in the event of the issuance or threatened issuance of any stop order suspending theeffectiveness of a Registration Statement, or any order suspending or preventing theuse of any related Prospectus or suspending the qualification of any RegistrableSecurities included in such Registration Statement for sale in any jurisdiction,promptly notify each Holder of Registrable Securities of the issuance or threatenedissuance of such order and use its reasonable best efforts promptly to prevent theentry of such order or obtain the withdrawal of such order if issued;
(10)use its reasonable best efforts to cause such Registrable Securities covered by suchRegistration Statement to be registered with or approved by such othergovernmental agencies or authorities as may be necessary to enable the Holdersthereof to consummate the disposition of such Registrable Securities;
(11)make available at all reasonable times and in a reasonable manner for inspection byany Holder of Registrable Securities, any underwriter participating in any dispositionpursuant to such Registration Statement, and any attorney, accountant or otheragent retained by any such Holder or underwriter (collectively, the "Inspectors"), allfinancial and other records, corporate documents and properties of Republic(collectively, the "Records"), and cause the officers, directors and employees ofRepublic to supply all information reasonably requested by any such Inspector inconnection with such Registration Statement prior to its effectiveness, in each caseto the extent that such Records and information are pertinent to the informationdisclosed in the Registration Statement; provided, that each such Inspector shallexecute and deliver to Republic a confidentiality agreement mutually agreeable to theparties. Records which Republic determines, in good faith, to be confidential andwhich Republic notifies the Inspectors are confidential shall not be disclosed by theInspectors unless (i) the disclosure of such Records is necessary to avoid or correcta misstatement or omission in the Registration Statement or (ii) the release of suchRecords is ordered pursuant to a subpoena or other order from a court of competentjurisdiction; each Holder of Registrable Securities agrees that it will, upon learningthat disclosure of such Records is sought in a court of competent jurisdiction, givenotice to Republic and allow Republic, at Republic's expense, to undertakeappropriate action to prevent disclosure of the Records deemed confidential; and

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(12)use its reasonable best efforts to obtain, if required by said underwriters inconnection with an underwritten offering, a comfort letter from Republic'sindependent public accountants in customary form and covering such matters of thetype customarily covered by comfort letters with respect to offerings of the type beingmade pursuant to the Registration Statement as the Holders of the RegistrableSecurities reasonably request.
(b) In connection with each Registration Statement, Republic agrees and each Holder ofRegistrable Securities (including Registrable Securities in any Registration Statement filedpursuant to this Agreement) will be deemed to have agreed, as follows:
(1)upon receipt of any notice from Republic of the happening of any event of the kinddescribed in Section 3(a)(5) or the issuance of any order of the kind described inSection 3(a)(9), the Holders of Registrable Securities covered by such RegistrationStatement will forthwith discontinue disposition of such Registrable Securities untilthe Holders of Registrable Securities receive copies of the supplemented oramended Prospectus contemplated by Section 3(a)(5), or until they are advised inwriting by Republic that the use of the applicable Prospectus may be resumed, andthey have received copies of any additional or supplemental filings that areincorporated or deemed to be incorporated by reference in such Prospectus (it beingthe agreement of the parties hereto, however, that the obligation of Republic withrespect to maintaining the subject Registration Statement current and effective withrespect to such Registrable Securities, shall be extended by a number of tradingdays equal to the period the Holders of Registrable Securities are required by thisSection 3(b)(1) to discontinue disposition of such Registrable Securities); and
(2)furnish to Republic such information regarding each Holder, the RegistrableSecurities held by such Holder and the intended method of disposition thereof asRepublic shall reasonably request and as shall be reasonably required in connectionwith the preparation of the applicable Registration Statement and other actions takenby Republic under this Agreement, and it shall be a condition precedent to theobligation of Republic to take any action pursuant to this Agreement in respect of theRegistrable Securities that such information has been furnished to Republic by theHolders of Registrable Securities.
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Section 4. Expenses. Republic shall pay all Registration Expenses whether or not any RegistrationStatement is filed or becomes effective and whether or not any securities are sold pursuant to anyRegistration Statement and, in any event, shall pay its internal expenses (including, without limitation, allsalaries and expenses of its officers and employees performing legal and accounting duties), the expenseof any annual audit and the fees and expenses incurred in connection with the listing of the securities tobe registered on each securities exchange on which similar securities of Republic are then listed. AllSelling Expenses incurred in connection with a registration effected pursuant to the terms hereof shall beborne by the seller or sellers of Registrable Securities pro rata based upon the number of RegistrableSecurities included in such registration.
Section 5. Indemnification.(a) Republic shall indemnify and hold harmless, with respect to any and all RegistrationStatements, each Holder of Registrable Securities covered by such Registration Statement,and each other Person, if any, who controls such Holder within the meaning of Section 15 of theSecurities Act (collectively, "Holder Indemnified Parties"), against all losses, claims, damages,liabilities and expenses, joint or several, to which any such Holder Indemnified Party maybecome subject under the Securities Act, the Exchange Act, at common law or otherwise,insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings,whether commenced or threatened, in respect thereof) arise out of or are based upon (i) anyuntrue statement or alleged untrue statement of a material fact contained in any RegistrationStatement in which such Registrable Securities were included or any omission or allegedomission to state therein a material fact required to be stated therein or necessary to make thestatements therein not misleading, (ii) any untrue statement or alleged untrue statement of amaterial fact contained in any preliminary, final or summary Prospectus, together with thedocuments incorporated by reference therein (as amended or supplemented if Republic shallhave filed with the Commission any amendment thereof or supplement thereto), or anyomission or alleged omission to state therein a material fact required to be stated therein ornecessary in order to make the statements therein, in the light of the circumstances underwhich they were made, not misleading, or (iii) any violation by Republic of any federal, state orcommon law rule or regulation applicable to Republic and relating to action of or inaction byRepublic in connection with any such registration; and in each such case, Republic shallreimburse each such Holder Indemnified Party for any reasonable legal or other expensesincurred by any of them in connection with investigating or defending any such loss, claim,damage, liability, expense, action or proceeding; provided, however, that Republic shall not beliable to any such Holder Indemnified Party in any such case to the extent that any such loss,claim, damage, liability or expense (or action or proceeding, whether commenced orthreatened, in respect thereof) arises out of or is based upon any untrue statement or allegeduntrue statement or omission or alleged omission made in such Registration Statement oramendment thereof or supplement thereto or in any such preliminary, final or summaryProspectus in reliance upon and in conformity with written information furnished to Republic byor on behalf of any such Holder Indemnified Party for use in the preparation thereof. Suchindemnity and reimbursement of expenses and other obligations shall remain in full force andeffect regardless of any investigation made by or on behalf of the Holder Indemnified Partiesand shall survive the transfer of such securities by such Holder Indemnified Parties.(b) Each Holder of Registrable Securities participating in any registration hereunder shall severally(and not jointly or jointly and severally) indemnify and hold harmless Republic, its directors,officers, employees and agents, and each Person who controls Republic (within the meaning ofSection 15 of the Securities Act) (collectively, "Republic Indemnified Parties") against all losses,claims, damages, liabilities and expenses to which any Republic Indemnified Party maybecome subject under the Securities Act, the Exchange Act, at common law or otherwise,insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings,whether commenced or threatened, in respect thereof) arise out of or are based upon (i) anyuntrue statement or alleged untrue statement of a material fact contained in any RegistrationStatement in which such Holder's Registrable Securities were included or the omission oralleged omission to state therein a material fact required to be stated therein or necessary tomake the statements therein not misleading, (ii) any untrue statement or alleged untruestatement of a material fact contained in any preliminary, final or summary Prospectus, togetherwith the documents incorporated by reference therein ( as amended or supplemented ifRepublic shall have filed with the Commission any amendment thereof or supplement thereto),or the omission or alleged omission to state therein a material fact required to be stated thereinor necessary in order to make the statements therein, in the light of the circumstances underwhich they were made, not misleading, to the extent, in the cases described in clauses (i) and(ii), that such untrue statement or omission was furnished in writing by such Holder for use inthe preparation thereof, or (iii) any violation by such Holder of any federal, state or common lawrule or regulation applicable to such Holder and relating to action of or inaction by such Holderin connection with any such registration. Such indemnity obligation shall remain in full force andeffect regardless of any investigation made by or on behalf of the Republic Indemnified Parties(except as provided above) and shall survive the transfer of such securities by such Holder.
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 (c) Promptly after receipt by an indemnified party under subsection 5(a) or (b) of written notice ofthe commencement of any action, suit, proceeding, investigation or threat thereof made inwriting with respect to which a claim for indemnification may be made pursuant to this Section5, such indemnified party shall, if a claim in respect thereof is to be made against anindemnifying party, give written notice to the indemnifying party of the threat or commencementthereof; provided, however, that the failure to so notify the indemnifying party shall not relieve itfrom any liability which it may have to any indemnified party except to the extent that theindemnifying party is actually prejudiced by such failure to give notice. If any such claim oraction referred to under subsection (a) or (b) is brought against any indemnified party and itthen notifies the indemnifying party of the threat or commencement thereof, the indemnifyingparty shall be entitled to participate therein and, to the extent that it wishes, jointly with anyother indemnifying party similarly notified, to assume the defense thereof with counselreasonably satisfactory to such indemnified party. After notice from the indemnifying party tosuch indemnified party of its election so to assume the defense of any such claim or action, theindemnifying party shall not be liable to such indemnified party under this Section 5 for any legalexpenses of counsel or any other expenses subsequently incurred by such indemnified party inconnection with the defense thereof other than reasonable costs of investigation unless theindemnifying party has failed to assume the defense of such claim or action or to employcounsel reasonably satisfactory to such indemnified party. Under no circumstances will theindemnifying party be obligated to pay the fees and expenses of more than one law firm for allindemnified parties. The indemnifying party shall not be required to indemnify the indemnifiedparty with respect to any amounts paid in settlement of any action, proceeding or investigationentered into without the written consent of the indemnifying party, which consent shall not beunreasonably withheld. No indemnifying party shall consent to the entry of any judgment orenter into any settlement without the consent of the indemnified party unless (i) such judgmentor settlement does not impose any obligation or liability upon the indemnified party other thanthe execution, delivery or approval thereof, and (ii) such judgment or settlement includes as anunconditional term thereof the giving by the claimant or plaintiff to such indemnified party of afull release and discharge from all liability in respect of such claim for all persons that may beentitled to or obligated to provide indemnification or contribution under this Section 5.

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(d) Indemnification similar to that specified in the preceding subsections of this Section 5 (withappropriate modifications) is hereby given by Republic and each Holder of RegistrableSecurities with respect to any required registration or qualification of securities under any statesecurities or blue sky laws.
(e) If the indemnification provided for in this Section 5 is unavailable to or insufficient to holdharmless an indemnified party under subsection (a) or (b), then each indemnifying party shallcontribute to the amount paid or payable by such indemnified party as a result of the losses,claims, damages, liabilities or expenses (or actions or proceedings in respect thereof) referredto in subsection (a) or (b) in such proportion as is appropriate to reflect the relative fault of theindemnifying party on the one hand and the indemnified party on the other in connection withthe statements, omissions, actions or inactions which resulted in such losses, claims, damages,liabilities or expenses as well as any other relevant equitable considerations. The relative faultof the indemnifying party and the indemnified party shall be determined by reference to, amongother things, whether the untrue or alleged untrue statement of a material fact or the omissionor alleged omission to state a material fact relates to information supplied by the indemnifyingparty or the indemnified party, any action or inaction by any such party, and the parties' relativeintent, knowledge, access to information and opportunity to correct or prevent such statement,omission, action or inaction. The amount paid or payable by an indemnified party as a result ofthe losses, claims, damages, liabilities or expenses (or actions or proceedings in respectthereof) pursuant to this subsection (e) shall be deemed to include, without limitation, anyreasonable legal or other expenses incurred by such indemnified party in connection withinvestigating or defending any such action or claim (which shall be limited as provided insubsection (c) if the indemnifying party has assumed the defense of any such action inaccordance with the provisions thereof) which is the subject of this subsection (e). No personguilty 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 fraudulentmisrepresentation. Promptly after receipt by an indemnified party under this subsection (e) ofwritten notice of the commencement of any action, suit, proceeding, investigation or threatthereof made in writing with respect to which a claim for contribution may be made against anindemnifying party under this subsection (e), such indemnified party shall, if a claim forcontribution in respect thereof is to be made against an indemnifying party, give written noticeto the indemnifying party in writing of the commencement thereof (if the notice specified insubsection (c) has not been given with respect to such action); provided, however, that thefailure to so notify the indemnifying party shall not relieve it from any obligation to providecontribution which it may have to any indemnified party under this subsection (e) except to theextent that the indemnifying party is actually prejudiced by the failure to give notice.

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The parties hereto agree that it would not be just and equitable if contribution pursuant to thisparagraph were determined by pro rata allocation or by any other method of allocation whichdoes not take account the equitable considerations referred to in the immediately precedingparagraph.
If indemnification is available under Section 5, the indemnifying parties shall indemnify eachindemnified party to the fullest extent provided in subsections (a) or (b), without regard to therelative fault of said indemnifying party or any other equitable consideration provided for in thisparagraph. The provisions of this paragraph shall be in addition to any other rights toindemnification or contribution which any indemnified party may have pursuant to law orcontract, shall remain in full force and effect regardless of any investigation made by or onbehalf of any indemnified party, and shall survive the transfer of securities by any such party.
(f) In connection with any underwritten offering contemplated by this Agreement which includesRegistrable Securities, Republic and all Holders of Registrable Securities included in anyRegistration Statement shall agree to customary provisions for indemnification and contribution(consistent with the other provisions of this Section 5) in respect of losses, claims, damages,liabilities and expenses of the underwriters of such offering.
(g) The indemnification obligations hereunder with respect to any Registration Statement shallterminate three (3) years after the termination of the offering of Registrable Securities coveredby such Registration Statement.
Section 6. Selection of Underwriters. The Holders of Registrable Securities shall have the right to electthat the offering of Registrable Securities pursuant to a Registration Statement filed under this Agreementbe in the form of an underwritten offering or a best efforts offering. If any registration hereunder is anunderwritten offering or a best efforts offering, the investment banker or investment bankers and manageror managers that will administer the offering shall be selected by Republic; provided, that such investmentbankers and managers must be reasonably satisfactory to the Holders of a majority of the RegistrableSecurities to be registered in such registration.

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Section 7. Rule 144. Republic covenants to each Holder that, to the extent that Republic shall be requiredto do so under the Exchange Act, Republic shall (a) timely file the reports required to be filed by it underthe Exchange Act or the Securities Act (including, but not limited to, the reports under Sections 13 and15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commissionunder the Securities Act) and the rules and regulations adopted by the Commission thereunder, and (b)take such further action as any Holder may reasonably request, all to the extent required from time to timeto enable such Holder to sell Registrable Securities without registration under the Securities Act within thelimitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amendedfrom time to time, or any similar rule or regulation hereafter adopted by the Commission. Upon the requestof any Holder, Republic shall deliver to such Holder a written statement as to whether it has complied withsuch requirements.
Section 8. Miscellaneous.(1)From and after the date of this Agreement, Republic will not, without the priorwritten consent of the Holders of a two-thirds majority of the Registrable Securitiesthen outstanding, enter into any agreement with respect to its securities which isinconsistent with or violates the rights granted to the Holders of RegistrableSecurities in this Agreement.
(2)Holders agree, and each other Holder of Registrable Securities (includingRegistrable Securities in any Registration Statement filed pursuant to thisAgreement) will be deemed to have agreed, as follows:
(1)if any Registrable Securities are being registered in any registration pursuant tothis Agreement, the Holder thereof will comply with all anti-stabilization,manipulation and similar provisions of Section 10 of the Exchange Act, and anyrules promulgated thereunder by the Commission, and, at the request ofRepublic, will execute and deliver to Republic and to any underwriterparticipating in such offering, an appropriate agreement to such effect; and
(2)at the end of any period during which Republic is obligated to keep aRegistration Statement current and effective as described herein, the Holdersof Registrable Securities included in this Registration Statement shalldiscontinue sales thereof pursuant to such Registration Statement.
(3)All questions concerning the construction, validity and interpretation of thisAgreement and all actions, proceedings and matters arising out of this Agreementshall be governed by the internal law, and not the law of conflicts, of the state ofColorado.

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(4)All covenants and agreements in this Agreement by or on behalf of any of the partieshereto will bind and inure to the benefit of the respective successors and assigns ofthe parties hereto whether expressed or not.
(5)This Agreement is intended by the parties as a final expression of their agreementand intended to be a complete and exclusive statement of the agreement andunderstanding of the parties hereto in respect of the subject matter herein contained.There are no restrictions, promises, warranties or undertakings, other than those setforth or referred to herein, with respect to the registration rights granted by Republicto the Holders of the Registrable Securities. This Agreement supersedes all prioragreements and understandings between the parties with respect to such subjectmatter.
(6)All notices, demands or other communications to be given or delivered under or byreason of the provisions of this Agreement shall be in writing and shall be deemed tohave been given when delivered personally or sent by reputable express courierservice (charges prepaid), or mailed to the recipient by certified or registered mail,return receipt requested and potage prepaid, or sent by telefax, to the parties at thefollowing address (or to such other address or to the attention of such other personas the recipient party has specified by prior like notice to the sending party):
If to Republic:                                  Republic Resources, Inc.                                  743 Horizon Ct., Suite 333                                  Grand Junction, Colorado 81506-8715                                  Tel: (970) 245-5917                                  Telecopier No.: (970) 243-8840                                  Attention: Patrick J. Duncan, PresidentWith a copy to:                                  Alan W. Peryam, Esq.                                  1120 Lincoln Street, Suite 1000                                  Denver, Colorado 80203                                  Tel: (303) 866-0900                                  Telecopier No.: (303) 866-0999If to Holders:
                                   To the addresses set forth on Exhibit A

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(7)If any provision of this Agreement is held to be unenforceable, this Agreement shallbe considered divisible and such provision shall be deemed inoperative to the extentit is deemed unenforceable, and in all other respects of this Agreement shall remainin full force and effect; provided, however, that if any such provision may be madeenforceable by limitation thereof, then such provision shall be deemed to be solimited and shall be enforceable to the maximum extent permitted by applicable law.
(8)This Agreement may be executed by the parties hereto in any number ofcounterparts, each of which shall be deemed an original, but all of which shallconstitute one and the same agreement. Each counterpart may consist of a numberof copies hereof each signed by less than all, but together signed by all, the partieshereto.
(9)Each Holder of Registrable Securities, in addition to being entitled to exercise allrights granted by law, including recovery of damages, will be entitled to specificperformance of its rights under this Agreement. Republic agrees that monetarydamages would not be adequate compensation for any loss incurred by reason ofbreach by it of the provisions of this Agreement and hereby agree to waive (to theextent permitted by law) the defense in any action for specific performance that aremedy of law would be adequate.
(10)In any action or proceeding brought to enforce any provision of this Agreement, orwhere any provision hereof is validly asserted as a defense, the successful partyshall be entitled to recover reasonable attorney's fees in addition to any otheravailable remedy.
(11)Republic agrees to remove any legends on certificates representing RegistrableSecurities describing transfer restrictions applicable to such securities upon the saleof such securities (i) pursuant to an effective Registration Statement under theSecurities Act or (ii) in accordance with the provisions of Rule 144 under theSecurities Act.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
**                                                                               REPUBLIC RESOURCES, INC.                                                                               **By: /s/ Patrick J.Duncan                                                                                                 Name: Patrick J. Duncan                                                                               Title: President
                                                                               **Holders:   **                                                                                                                    As set forth on **Exhibit A.

**EXHIBIT A**

**                                                                                  Shares of                                                                              Common Stock                                                                             to be Issued and                                                                             Exchange for theName and Address** **   **                                        **Series C Preferred** **   **                     **Signatures**
Kayne Anderson Diversified                                                                                 By: Kayne Anderson    Capital Partners, L.P.                                                                                             Capital Advisors, L.P.1800 Avenue of the StarsFloor 2                                                                                                                By:/s/ Robert V. SinnottCentury City, CA 90067                                            666,400                                 Robert V. SinnottArbco Associates, L.P.                                                                                        By: Kayne Anderson1800 Avenue of the Stars                                                                                          Capital Advisors, L.P.Floor 2Century City, CA 90067                                                                                     By:/s/ Robert V. Sinnot                                                                                 546,720                                Robert V. Sinnott
Kayne Anderson Non-Traditional                                                                       By: Kayne AndersonInvestments, L.P.                                                                                                      Capital Advisors, L.P.1800 Avenue of the StarsFloor 2                                                                                                              By:/s/ Robert V. SinnotCentury City, CA 90067                                          615,060                              Robert V. Sinnott
Kayne Anderson Capital                                                                                   By: Kayne AndersonPartners, L.P.                                                                                                         Capital Advisors, L.P.1800 Avenue of the StarsFloor 2                                                                                                             By:/s/ Robert V. SinnotCentury City, CA 90067                                           205,020                              Robert V. Sinnott
Sandpiper & Co. fbo Metropolitan Life Ins  Co                                                By: State Street Research & Separate Acct EN                                                                                                  Management Company,c/o  State Street Research &                                                                                   as Adviser Management Company,                                                                                   By:/s/ James M.WeissOne Financial Center                                                                                            James M. Weiss,Boston, MA 02111                                                   888,420                             Executive Vice President
Marine Crew & Co. fbo                                                                                 By: State Street Research &Bellsouth Master Pension Trust                                                                             Management Company,c/o  State Street Research &                                                                                  as AdviserManagement Company,                                                                                  By:/s/ James M. Weissas Adviser                                                                                                          James M. Weiss,One Financial Center                                                                                          Executive Vice PresidentBoston, MA 02111                                                   478,380
                 		                                                                Total       3,400,000                                                                              =======

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**EXHIBIT C**
743 Horizon Court, Suite 333Grand Junction, Colorado 81506Phone (970) 245-5917 Fax (970) 243-8840
February 11, 2002
Each Holder of**Series C Redeemable Preferred Stock**
**Re: Exchange Agreement and Irrevocable ProxyGentlemen:**
This letter agreement ("Agreement") is intended to set forth the understandings, representationsand agreements by and among Republic Resources, Inc., a Nevada corporation ("Company" or"Republic"), and each undersigned holder (a "Holder") of the Company's Series C 5% RedeemablePreferred Stock ("Series C Preferred") and is made with reference to the following agreed facts.
**A.** Each Holder is the record and beneficial owner of the number of shares (the "Shares") of theCompany's Series C Preferred set forth on**Exhibit A attached hereto. There are 99,503 shares ofSeries C Preferred issued and outstanding. The Company has accrued but has not paid dividends on theSeries C Preferred since July 1, 2001.
B. The Company has entered into a Purchase and Sale Agreement dated January 31, 2002 (the "P&SAgreement"), pursuant to which the Company intends to sell, to Harken Energy Corporation ("Harken"), allof the Company's oil and natural gas properties in the states of Texas and Louisiana (the "Properties").These Properties will include all of the Company's proved reserves of oil and gas and all its revenueproducing assets. The Company will also sell to Harken the Company's interest in certain exploratoryprospects that have not been given any initial value in the contemplated transaction but will be evaluatedat the end of 2003 for payment of additional consideration in early 2004 using a "Lookback" formula asdefined in the P&S Agreement. These currently unvalued exploratory assets, hereafter referred to as the"Lookback Properties," are specifically identified as Exhibit D in the P&S Agreement, and consist of certainprospects targeting the Wilcox and Yegua formations in Jackson County, Texas.
C. As payment for the Company's properties, Harken will issue at closing, up to 2,645,500 shares of itscommon stock ("Harken Common Stock") and has agreed to a potential Contingent Payment that will bebased on an evaluation of the Lookback Properties at the end of 2003. This Contingent Payment would bemade in 2004 and will be equal to 50% of the Lookback Properties value, as described and calculated inExhibit D of the P&S Agreement (hereafter referred to as the "Contingent Payment"). A copy of theContingent Payment Agreement is attached hereto.
D. Republic intends to obtain the consent from the holders of at least 90% of principal balance of the$2,645,500 of outstanding 11% Convertible Debentures, due April 15, 2003 ("Debentures") to accept theHarken Common Stock and 1.0 million Republic common shares in exchange for cancellation of theDebentures at the time of Closing of the P&S Agreement. None of the Harken Common Stock to bedelivered at the Closing will be conveyed to the Holders of the Series C Preferred.

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E. By this agreement, the undersigned Holders of the Series C Preferred are agreeing to receive at thetime of closing of the P&S Agreement: (i) a total of 3,400,000 shares of newly issued Company commonstock, (ii) and assignment to the Holders of all rights to the Contingent Payment in exchange (the"Exchange") for (x) surrender of all outstanding shares of Series C Preferred to Republic for cancellation,and (y) termination of the obligation of Republic to pay accrued but unpaid dividends on the Series CPreferred.
F. Closing of the P&S Agreement is conditional, among other things, upon the holders of all outstandingSeries C Preferred agreeing to the terms of the P&S Agreement, and the Exchange described above.
G. The Company and each of the undersigned Holders, as set forth on Exhibit A, intend that thisAgreement shall establish the terms and conditions of the agreement to exchange all outstanding sharesof Series C Preferred.
**FOR CONSIDERATION**, the receipt and sufficiency of which is hereby acknowledged, the parties agreeas follows:
**1. P&S Agreement.** The Company shall diligently pursue the closing of the P&S Agreement andcompletion of the transactions described therein (the "Closing").
**2. Representations and Warranties to Holder.** The Representations and Warranties of Republic as setforth in Article 3 of the P&S Agreement, shall be extended to each Holder and each Holder shall beentitled to rely upon such representations and warranties to the same extent as if the Holder was a partyto the P&S Agreement. All such representations and warranties shall not survive the Closing except asprovided in the P&S Agreement.
**3.****Exchange of Series C Preferred.** At or before the Closing of the P&S Agreement, each Holder ofoutstanding Series C Preferred shall exchange all Series C Preferred then held, together with all otherdividend rights, conversion rights, voting rights or other rights which may be applicable to the Series CPreferred, for that number of shares of Company common stock set forth on Exhibit A attached hereto andincorporated herein by reference, and for an interest in the Contingent Payment as described below (the"Exchange"). At or before the Closing of the P&S Agreement, each Holder shall deliver to the Company,for surrender and exchange, each certificate held by the Holder representing Series C Preferred. At thetime of Exchange, and no later than the Closing of the P&S Agreement, the Company shall cause to beissued one certificate representing the appropriate number of shares of Company common stock for eachHolder's Series C Preferred and the Series C Preferred shall be canceled. The Company hereby agrees toassign to Holders the appropriate undivided percentage interest in the rights to the future ContingentPayment from Harken as set forth in Column C of Exhibit A.
**4. Effect if P&S Agreement Does Not Close.**
(A) This Agreement shall be effective as to each Holder at the earlier of the following: (a) TheClosing of the P&S Agreement, or (b) the date on which the Holder surrenders its Series CPreferred for the Exchange as described in this Agreement. If the P&S Agreement does not closefor any reason, then this Agreement shall be terminated as to any Holder which has notsurrendered its Series C Preferred by the date of termination of the P&S Agreement.
****
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****
(B) If any Holder has surrendered its Series C Preferred for Exchange under this Agreement andthe P&S Agreement is later terminated, this Agreement shall be effective as to such Holder. Insuch event, the Exchange shall be completed as to such Holder and the Company shall beobligated to pay to such Holder an amount equal to what the Holder would have received as aContingent Payment if the P&S Agreement had been completed. Within 30 days followingabandonment or termination of the P&S Agreement, the Company shall transfer or assign to eachsuch Holder an undivided interest (equal to that shown in Column C of Exhibit A) in the LookbackProperties which will entitle the Holder to receive from the Company in 2004 a payment equivalentin all material respects to what the Holder would have been entitled to receive from Harken underthe Contingent Payment Agreement (Exhibit B) had the P&S Agreement been completed.
5. Post-Transaction Limitations; Registration Obligations.
(A) Each Holder agrees not to effect any sales of the Company common stock to be issued inexchange for the Series C Preferred in a manner which does not comply with applicableregistration provisions of the Securities Act of 1933. An appropriate legend reflecting thisrestriction may be placed on certificates representing the Company common stock to be issued inexchange for the Series C Preferred.
(B) Upon the written demand of Holders of at least 40% of the shares of Common stock issued inthe Exchange, the Company shall file, at the Company's expense, a registration statement onForm S-3 or other applicable form if that Form is not available to the Company, to register forresale by Holders under the Securities Act of 1933, as amended, all the shares of Companycommon stock to be issued to Holders under this Agreement. Such registration statement shall befiled within 30 days of receipt of the written demand, but not earlier than June 30, 2002. TheCompany shall use its reasonable best efforts to have such registration declared effective by theSecurities and Exchange Commission. When a registration statement is filed under this section,the Company shall have obligations, and Holders shall have rights as described in theRegistration Rights Agreement which is attached as Exhibit C to this Agreement.
**6.****Termination of Certain Rights.** Upon the completion of the Exchange, the rights and privileges ofeach Holder as described in the Certificate of Designation of **Series C Redeemable 5% CumulativePreferred Stock**, as amended, as filed with the Secretary of State of Nevada on November 6, 2000,which designated a total of 99,503 shares of the Company's Series C Preferred and set forth the rightsand privileges applicable thereto and the Amendment to the Designation, filed with the Secretary of Stateof Nevada on or about November 5, 2001 (the "Series C Preferred Designation") shall be terminated.Following the Exchange described in this Agreement, Holders' rights as a security holder of the Companyshall be as the holder of common stock of the Company, the Company's Articles of Incorporation shall beamended to delete the Series C Preferred Designation and the Company shall have no obligation to payaccrued unpaid dividends on the Series C Preferred.
**7.****Irrevocable Proxy.** Each undersigned Holder of the number of shares of Series C Preferred set forthon Exhibit A, by signing this Agreement hereby makes, constitutes and appoints the President of RepublicResources, Inc., or his designee, as the true and lawful attorney and proxy of the undersigned Holder, for,and in its name, place and stead, to attend any and all meetings of the stockholders of RepublicResources, Inc. and to vote any and all shares of Series C 5% Redeemable Preferred Stock of theCompany standing in the name of the undersigned Holder, or any shares of common stock of RepublicResources, Inc. issued pursuant to the Exchange described in this Agreement, at any meeting ofstockholders or any adjournments thereof held on or before July 1, 2002, or to sign any written consent onbehalf of Holder, for the following purposes only:

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(1) To vote to approve the P&S Agreement dated effective January 31, 2002between Republic Resources, Inc. and Harken ("P&S Agreement");
(2) To approve the Amendment of the Articles of Incorporation of the Company toincrease the authorized number of shares of Company common stock from10,000,000 shares to 30,000,000 shares;
(3) To approve, ratify and adopt any and all actions heretofore or hereafter taken bythe Company and its management to implement the transactions contemplated bythe P&S Agreement and this Agreement other than any amendment to the P&SAgreement or this Agreement that could reasonably be expected to be materiallyadverse to the undersigned Holders.
The undersigned Holder confirms that this proxy is given in connection with a reorganization of RepublicResources, Inc. and that this proxy is coupled with an interest, is binding on the Holder and its successorsand assigns and is irrevocable, provided, however, that this proxy shall be deemed canceled if the partiesterminate the P&S Agreement before Closing. The undersigned Holder hereby represents and warrantsthat the execution, delivery and performance of this Agreement has been duly authorized and is a legallybinding obligation of the Holder enforceable in accordance with its terms. The Holder hereby representsand acknowledges that it is familiar with the business and financial condition of the Company and has hadaccess to such information as it has requested to enable it to make an informed decision to acquireCompany common stock in exchange for its shares of Series C Preferred Stock. The Holder herebyrepresents and warrants that it is an "accredited investor," as defined in Rule 501 under the Securities Actof 1933, as amended, and hereby ratifies and confirms all that the said proxy lawfully may do or cause tobe done by virtue of this authorization.
**8.****Other Series C Preferred Holders.** This Agreement shall be effective and binding upon each Holder ofSeries C Preferred only if holders of 100% of the outstanding Series C Preferred, as identified on **ExhibitA, enter into this Agreement with the Company.
**IN WITNESS WHEREOF,** the parties hereto have executed this Agreement effective as of February 11,2002.
**                                                                           REPUBLIC RESOURCES, INC.,**    **                                                                       **a Nevada corporation                                                                                                                                                       By:/s/ Patrick J.Duncan                                                                                              Patrick J. Duncan, President                                                                           **HOLDERS:   **                                                                                                                                                    (as identified and signed on Exhibit A)

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**EXHIBIT A**

**              A                                      B                          C                       D                                 E**
**                                                                                                          Shares of                                                                                   % of           Common Stock                                                                               (Series C)      to be Issued and                                          Number of Shares           and           Exchange for theName and Address         of Series C Preferred   LookBack   Series C Preferred         Signatures**
Kayne Anderson Diversified                                                                                                                                 By: Kayne AndersonCapital Partners, L.P.                                                                                                                                                      Capital Advisors, L.P.1800 Avenue of the StarsFloor 2                                                                                                                                                                      By:/s/ Robert SinnottCentury City, CA 90067                             19,503                             19.60%                      666,400                         Robert V. Sinnott
Arbco Associates, L.P.                                                                                                                                          By: Kayne Anderson1800 Avenue of the Stars                                                                                                                                             Capital Advisors, L.P.Floor 2Century City, CA 90067                                                                                                                                         By:/s/ Robert Sinnott                                                      16,000                             16.08%                    546,720                         Robert V. Sinnott
Kayne Anderson Non-Traditional                                                                                                                      By: Kayne AndersonInvestments, L.P.                                                                                                                                                          Capital Advisors, L.P.1800 Avenue of the StarsFloor 2                                                                                                                                                                     By:/s/ Robert SinnottCentury City, CA 90067                              18,000                            18.09%                    615,060                          Robert V. Sinnott
Kayne Anderson Capital                                                                                                                                    By: Kayne AndersonPartners, L.P.                                                                                                                                                                Capital Advisors, L.P.1800 Avenue of the StarsFloor 2                                                                                                                                                                    By:/s/ Robert SinnottCentury City, CA 90067                                6,000                              6.03%                    205,020                      Robert V. Sinnott
Sandpiper & Co. fbo                                                                                                                                            By: State Street ResearchMetropolitan Life Ins. Co                                                                                                                                           & Management Separate Acct EN                                                                                                                                                            Company,					          as Adviserc/o  State Street Research &Management Company,                                                                                                                                      By:/s/ James M. Weiss One Financial Center                                                                                                                                                James M. Weiss,Boston, MA 02111                                      26,000                            26.13%                    888,420                      Executive Vice President
Marine Crew & Co. fbo                                                                                                                                       By: State Street ResearchBellsouth Master Pension Trust                                                                                                                              & Managementc/o  State Street Research &                                                                                                                                       Company, as Adviser    Management Company,                                                                                                                                      as Adviser                                                                                                                                                          By:/s/James M. WeissOne Financial Center                                                                                                                                                 James M.WeissBoston, MA 02111                                     14,000                            14.07%                     478,380                       Executive Vice President                                    Total            99,503                         100.00%                   3,400,000                                                                      =====                                                           =======

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