Document:

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement is dated as of December 7, 2001, by and among Stage Stores, Inc., a Nevada corporation ("Company"), and the holders listed on the signature pages of this Agreement (collectively, the "Holders").

W I T N E S S E T H :

WHEREAS, the Company and certain of its affiliates were recently debtors in certain cases under chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court"); and

WHEREAS, pursuant to the Third Amended Plan of Reorganization dated June 6, 2001, and filed in the Bankruptcy Court (the "Plan"), on the Effective Date (as defined in the Plan), each of the Holders received shares of Common Stock, par value $.01 per share, of Company (the "Shares");

WHEREAS, the Company anticipates that on or before November 1, 2001, it will (i) file a Form 10 with the Commission in order to register the Shares pursuant to Section 12(g) of the Exchange Act (the "Exchange Act Registration Agreement"), and (ii) file a Nasdaq National Market Listing Agreement with the NASD.

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, it is agreed as follows:

	Definitions.  Unless otherwise defined herein, terms defined in the Plan are used herein as therein defined, and the following shall have (unless otherwise provided elsewhere in this Registration Rights Agreement) the following respective meanings (such meanings being equally applicable to both the singular and plural form of the terms defined):

"Action" shall have the meaning set forth in Section 6(e).

"Affiliate", with respect to a Person, means any other Person which directly or indirectly, through one or more intermediaries controls, is controlled by, or is under common control with, such Person.

"Agreement" shall mean this Registration Rights Agreement, including all amendments, modifications and supplements and any exhibits or schedules to any of the foregoing, and shall refer to the Agreement as the same may be in effect at the time such reference becomes operative.

"Business Day" shall mean any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York or the State of Texas.

"Commission" shall mean the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws.

"Demanding Security Holders" shall have the meaning set forth in Section 3.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, or any successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

"Holder" shall have the meaning set forth in the introductory paragraph of this Agreement.

"Indemnified Party" shall have the meaning set forth in Section 6(e).

"Indemnifying Party" shall have the meaning set forth in Section 6(e).

"NASD" shall mean the National Association of Securities Dealers, Inc., or any successor corporation thereto.

"Person" shall mean any individual, partnership (general, limited or limited liability), corporation, limited liability company, trust, unincorporated organization or other legal entity, and a government or agency or political subdivision thereof.

"Registrable Securities" shall mean Shares beneficially owned by the Holders at the Effective Date or at any time thereafter.  As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such Registration Statement, (ii) such securities shall have been sold pursuant to Rule 144 under the Securities Act, or (iii) such securities shall have ceased to be outstanding.  For purposes of this Agreement, references to "beneficially owned" or "beneficial ownership" mean such ownership within the meaning of Rule 13d-3 under the Exchange Act.

"Registration Statement" shall mean a registration statement of Company under the Securities Act as it may be amended or supplemented from time to time, including without limitation, all exhibits, financial statements, schedules and attachments thereto.

"Securities Act" shall mean the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

"Short Form Registration Statement" shall have the meaning set forth in Section 2.

	Required Registration.  After the Exchange Act Registration Statement becomes effective and after receipt of a written request from one or more Holders or any Affiliate thereof requesting that Company effect the registration under the Securities Act of Registrable Securities representing at least an aggregate of 10% of the total of all Registrable Securities then held by the Holders and their Affiliates, and specifying the intended method or methods of disposition thereof, Company shall promptly, but in no event later than fifteen (15) Business Days following receipt of such request, notify all Holders in writing of the receipt of such request and each such Holder, in lieu of exercising its rights under Section 3, may elect (by written notice sent to Company within ten (10) Business Days from the date of such Holder's receipt of the aforementioned Company's notice) to have Registrable Securities belonging to such Holder included in such registration thereof pursuant to this Section 2 (subject to the penultimate sentence of the second paragraph of Section 3).  Thereupon Company shall, as expeditiously as is possible, use its best efforts to effect the registration under the Securities Act of all Registrable Securities which Company has been so requested to register by such Holders for sale, all to the extent required to permit the disposition (in accordance with the intended method or methods thereof, as aforesaid) of the Registrable Securities so registered; provided, however, that Company shall not be required to effect more than two (2), with a maximum of one (1) registration during any six month period, registrations of any Registrable Securities for the Holders pursuant to this Section 2, unless Company shall be eligible to file a Registration Statement on Form S-3 (or other comparable short form) under the Securities Act (a "Short Form Registration Statement"), in which event there shall be no limit on the number of such registrations pursuant to this Section 2.  All expenses of any registration filed pursuant to this Section 2 shall be borne by the Holders requesting registration, pro rata based on the number of Shares being registered.

	Incidental Registration.  If Company at any time proposes to file on its behalf and/or on behalf of any of its security holders, including without limitation, the Holders (collectively, the "Demanding Security Holders"), a Registration Statement under the Securities Act on any form (other than a Registration Statement on Form S-4 or S-8 or any successor form for securities to be offered in a transaction of the type referred to in Rule 145 under the Securities Act or to employees of Company pursuant to any employee benefit plan, respectively) for the general registration of Shares or other equity securities of Company, or securities convertible into or exchangeable or exercisable for Shares or such other equity securities, it will give written notice of such proposed filing to all Holders (other than those Holders, if any, who are Demanding Security Holders) at least thirty (30) days before the initial filing with the Commission of such Registration Statement, which notice shall set forth the number and type of securities proposed to be offered and a description of the intended method of disposition of such securities.  The notice shall offer to include in such filing such number of Registrable Securities as such Holders may request.

Each Holder desiring to have Registrable Securities registered under this Section 3 shall advise Company in writing within ten (10) Business Days after the date of receipt of such offer from Company, setting forth the amount of such Registrable Securities for which registration is requested.  Company shall thereupon include in such filing the number of shares of Registrable Securities for which registration is so requested, subject to the next sentence, and shall use its best efforts to effect registration under the Securities Act of such Registrable Securities.  If the managing underwriter of a proposed public offering shall advise Company in writing that, in its opinion, the distribution of the Registrable Securities requested to be included in the registration concurrently with the securities being registered by Company or such Demanding Security Holder would materially and adversely affect the distribution of such securities by Company or such Demanding Security Holder, then each Holder participating in such registration shall reduce the amount of securities it intended to distribute through such offering, pro rata on the basis of the number of shares of Registrable Securities to be offered for the account of such Holder.  Except as otherwise provided in Section 5, all expenses of such registration shall be borne by Company.

Notwithstanding anything to the contrary in this Section 3, (a) the Company shall have the right to include all or any part of the Registrable Securities in any Registration Statement filed by the Company, (b) while Holders of Registrable Securities may have their Registrable Securities to be included in the Registration Statement reduced pro rata, the Company shall not be limited as to the number of shares of Common Stock it intends to distribute through the offering, and (c) the Company shall have the right to offer Holders of in excess of five percent (5%) of the Common Stock who are not parties to this Agreement the opportunity to have their Common  Stock included in any Registration Statement filed by the Company pursuant to this Section 3 subject to pro rata reduction as set forth in this Section 3.

	Registration Procedures.  If Company is required by the provisions of Section 2 or 3 to use its best efforts to effect the registration of any Registrable Securities under the Securities Act, Company will, as expeditiously as possible:

	prepare and file with the Commission a Registration Statement with respect to such securities and use its best efforts to cause such Registration Statement to become and remain effective for a period of time required for the disposition of such securities by the holders thereof, but not to exceed one hundred eighty (180) days;
	prepare and file with the Commission such amendments and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all securities covered by such Registration Statement until the earlier of such time as all of such securities have been disposed of in a public offering or the expiration of one hundred eighty (180) days;
	furnish to any Holders participating in such registration one (1) copy of the Registration Statement as initially filed with the Commission and of each pre-effective and post-effective amendment or supplement thereto (in each case including at least one copy of all exhibits thereto and all documents incorporated by reference therein) and of the prospectus included therein, including the preliminary prospectus and any summary prospectus, and any other prospectus filed under Rule 424 under the Securities Act in connection with the disposition of any Registrable Securities covered by such Registration Statement, and such other documents related to the Registration Statement as such Holders may reasonably request;
	if required by law, use its best efforts to register or qualify the Registrable Securities covered by such Registration Statement under such other securities or blue sky laws of such jurisdictions within the United States and Puerto Rico as each Holder owning such Registrable Securities shall request (provided, however, that Company shall not be obligated to qualify as a foreign corporation to do business under the laws of any jurisdiction in which it is not then qualified or to file any general consent to service of process to effect such registration), and do such other reasonable acts and things as may be required of it to enable such Holder to consummate the disposition in such jurisdiction of the Registrable Securities covered by such Registration Statement;
	furnish, at the request of any Holder requesting registration of Registrable Securities pursuant to Section 2, on the date that such shares of Registrable Securities are delivered to the underwriters for sale pursuant to such registration or, if such Registrable Securities are not being sold through underwriters, on the date that the Registration Statement with respect to such Registrable Securities becomes effective, (1) an opinion, dated such date, of the independent counsel representing Company for the purposes of such registration, addressed to the underwriters, if any, and if such Registrable Securities are not being sold through underwriters, then to the Holders making such request, in customary form and covering matters of the type customarily covered in such legal opinions; and (2) a comfort letter dated such date, from the independent certified public accountants who have issued an audit report on Company's financial statements included or incorporated by reference in the Registration Statement, addressed to the underwriters, if any, and if such Registrable Securities are not being sold through underwriters, then to the Holder making such request and, if such accountants refuse to deliver such letter to such Holder, then to Company in a customary form and covering matters of the type customarily covered by such comfort letters and as the underwriters or such Holder shall reasonably request.  The opinion of counsel shall additionally cover such other legal matters with respect to the registration in respect of which such opinion is being given as such Holders may reasonably request.  Such letter from the independent certified public accountants shall additionally cover such other financial matters (including information as to the period ending not more than five (5) Business Days prior to the date of such letter) with respect to the registration in respect of which such letter is being given as the Holders of a majority of the Registrable Securities being so registered may reasonably request;
	enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities; 
	use its commercially reasonable efforts to cause its senior management to attend and make presentations regarding Company at all meetings with prospective purchasers of Registrable Securities that are arranged by any underwriter (provided that senior management has been given two (2) weeks advance notice of the first of such meetings) in connection with any widely distributed, underwritten offering of such Registrable Securities;
	use its best efforts to cause the Registrable Securities covered by a Registration Statement to be listed on each national securities exchange or the NASDAQ Stock Market, as applicable, on which Company's equity securities are then listed at the time of the sale of such Registrable Securities pursuant to such Registration Statement;
	notify the Holders participating in such registration, at any time when a prospectus is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, such prospectus (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and as promptly as practicable prepare and furnish to the Holders such number of copies of a supplement to or an amendment of such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and
	otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and unless otherwise contained in a filing made by the Company with the Commission, make available to its security holders, as soon as reasonably practicable, but not later than eighteen (18) months after the effective date of the Registration Statement, an earnings statement covering the period of at least twelve (12) months beginning with the first full month after the effective date of such Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.

It shall be a condition precedent to the obligation of Company to take any action pursuant to this Agreement in respect of the Registrable Securities which are to be registered at the request of any Holder that such Holder shall furnish to Company such information regarding the Registrable Securities held by such Holder and the intended method of disposition thereof as Company shall reasonably request and as shall be required in connection with the action taken by Company.

	Expenses.  Unless otherwise set forth in this Registration Rights Agreement, all expenses incurred in complying with this Agreement, including, without limitation, all Commission or stock exchange registration and filing fees (including all expenses incident to filing with the NASD), stock exchange listing fees, printing expenses, fees and disbursements of counsel for Company, the reasonable fees and expenses of one counsel for the selling Holders (selected by those holding a majority of the Shares being registered), fees of the Company's independent public accountants and the expenses of any special audits incident to or required by any such registration, and the expenses of complying with the securities or blue sky laws of any jurisdiction pursuant to Section 4(d), shall be paid by Company, except that:

	all such expenses in connection with any amendment or supplement to the Registration Statement or prospectus filed more than one hundred eighty (180) days after the effective date of such Registration Statement because any Holder has not effected the disposition of the securities requested to be registered shall be paid by such Holder; and
	Company shall not be liable for any fees, discounts or commissions to any underwriter or any fees or disbursements of counsel for any underwriter in respect of the Registrable Securities sold by a Holder owning such Registrable Securities.

	Indemnification and Contribution.

	In the event of any registration of any Registrable Securities under the Securities Act pursuant to this Agreement, Company shall indemnify and hold harmless the Holder owning such Registrable Securities, such Holder's Affiliates, directors, officers and agents, and each other Person (including each underwriter) who participated in the offering of such Registrable Securities and each other Person, if any, who controls such Holder or such participating person within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such Holder or any such Affiliate, director, officer, agent or participating person or controlling person may become subject under the Securities Act or any other statute or at common law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any Registration Statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse such Holder or such Affiliate, director, officer, agent or participating person or controlling person for any legal or any other expenses reasonably incurred by such Holder or such Affiliate, director, officer, agent or participating person or controlling person in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any actual or alleged untrue statement or actual or alleged omission made in such Registration Statement, preliminary prospectus, prospectus or amendment or supplement in reliance upon and in conformity with written information furnished to Company by such Holder specifically for use therein.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder or such Affiliate, director, officer, agent or participating person or controlling person, and shall survive the transfer of such Registrable Securities by such Holder.
	Each Holder, by acceptance hereof, agrees to indemnify and hold harmless Company, its directors and officers and each other Person, if any, who controls Company within the meaning of the Securities Act against any losses, claims, damages or liabilities, joint or several, to which Company or any such director or officer or any such Person may become subject under the Securities Act or any other statute or at common law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained, on the effective date thereof, in any Registration Statement under which Registrable Securities were registered under the Securities Act, any preliminary prospectus or final prospectus contained therein, or any amendment or supplement thereto or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, if in any such case such statement or alleged statement or omission or alleged omission was made in reliance on and in conformity with information in writing provided to Company by such Holder specifically for use in such Registration Statement, preliminary prospectus or final prospectus or any amendment or supplement thereto.  
	If the indemnification provided for in this Section 6 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations.  The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified parties, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action.  The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(c) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  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.

If indemnification is available under this Section 6, the indemnifying party shall indemnify the indemnified party to the full extent provided in Section 6(a) or 6(b) hereof, as applicable, without regard to the relative fault of the indemnifying party or the indemnified party or any other equitable consideration provided for in this Section 6(c). 

	The indemnification and contribution required by this Section 6 shall be made by periodic payment of the amount thereof during the course of the investigation or defense, as and when bills are received or expenses are incurred. 
	The party seeking indemnification pursuant to this Section 6 is referred to as the "Indemnified Party" and the party from whom indemnification is sought under this Section 6 is referred to as the "Indemnifying Party."  The Indemnified Party shall give prompt written notice to the Indemnifying Party of the commencement of any action or proceeding involving a matter referred to in Section 6(a) or 6(b) (an "Action"), if an indemnification claim in respect thereof is to be made against the Indemnifying Party; provided, however, that the failure to give such prompt notice shall not relieve the Indemnifying Party of its indemnity obligations hereunder with respect to such Action, except to the extent that the Indemnifying Party is materially prejudiced by such failure.  The Indemnifying Party shall be entitled to participate in and to assume the defense of such Action, with counsel selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party; provided, however, that (i) the Indemnifying Party, within a reasonable period of time after the giving of notice of such indemnification claim by the Indemnified Party, (x) notifies the Indemnified Party of its intention to assume such defense and (y) appoints such counsel, and (ii) the Indemnifying Party may not, without the consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such Action.  If the Indemnifying Party so assumes the defense of any such Action, (A) the Indemnifying Party shall pay all costs associated with, any damages awarded in, and all expenses arising from the defense or settlement of such Action, and (B) the Indemnified Party shall have the right to employ separate counsel and to participate in (but not control) the defense, compromise or settlement of such Action, but the fees and expenses of such counsel shall be at the expense of the Indemnified Party unless (x) the Indemnifying Party has agreed to pay such fees and expenses, (y) the Indemnified Party has been advised by its counsel that there are likely to be one or more defenses available to it which are different from or additional to those available to the Indemnifying Party, and in any such case that portion of the reasonable fees and expenses of such separate counsel that are reasonably related to matters covered by the indemnity provided in this Section 6 shall be paid by the Indemnifying Party, or (z) such counsel has been selected by the Indemnified Party solely due to a conflict of interest which exists between counsel selected by the Indemnifying Party and the Indemnified Party.  If the Indemnifying Party does not so assume the defense of such Action, the Indemnified Party shall be entitled to exercise control of the defense, compromise or settlement of such Action.  No Indemnified Party shall settle or compromise any Action for which it is entitled to indemnification under this Agreement without the prior written consent of the Indemnifying Party (which consent may not be unreasonably withheld or delayed).  The other party shall cooperate with the party assuming the defense, compromise or settlement of any Action in accordance with this Agreement in any manner that such party reasonably may request and the party assuming the defense, compromise or settlement of any Action shall keep the other party fully informed in the defense of such Action.

	Certain Limitations on Registration Rights.  Notwithstanding the other provisions of this Agreement:

	Company shall not be obligated to register the Registrable Securities of any Holder if, in the opinion of counsel to Company reasonably satisfactory to the Holder and its counsel (or, if the Holder has engaged an investment banking firm, to such investment banking firm and its counsel), the sale or other disposition of such Holder's Registrable Securities, in the manner proposed by such Holder (or by such investment banking firm), may be effected without registering such Registrable Securities under the Securities Act; and
	Company shall not be obligated to register the Registrable Securities of any Holder pursuant to Section 2 if Company has had a Registration Statement, under which such Holder had a right to have its Registrable Securities included pursuant to Section 2 or 3, declared effective within six months prior to the date of the request pursuant to Section 2.
	Company shall have the right to delay the filing or effectiveness of a Registration Statement required pursuant to Section 2 hereof during one or more periods aggregating not more than ninety (90) days in any twelve-month period in the event that (i) Company would, in accordance with the advice of its counsel, be required to disclose in the prospectus information not otherwise then required by law to be publicly disclosed and (ii) in the judgment of Company's Board of Directors, there is a reasonable likelihood that such disclosure, or any other action to be taken in connection with the prospectus, would materially and adversely affect any existing or prospective material business situation, transaction or negotiation or otherwise materially and adversely affect Company.

	Underwriters.  The managing underwriter or underwriters for any offering of Registrable Securities to be registered pursuant to Section 2 shall be selected by the Holders holding a majority of the Registrable Securities being so registered and shall be reasonably acceptable to Company.  If requested by the underwriters for any underwritten registration pursuant to Section 2, Company shall enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in form and substance to Company, the Holders participating in such registration and the underwriters and to contain such representations and warranties by Company and such other terms as are customarily contained in agreements of that type, including without limitation, covenants to keep the Registration Statement current, indemnities and contribution to the effect and to the extent provided in Section 6 hereof and the provision of opinions of counsel and accountants' letters to the effect and to the extent provided in Section 4(e) hereof.  The Holders shall cooperate with Company in the negotiation of the underwriting agreement and shall be parties to such underwriting agreement.

	Restrictions on Sale After Public Offering.  Except for transfers made in transactions exempt from the registration requirements under the Securities Act (other than Rule 144 thereunder), Company and each Holder hereby agree not to offer, sell, contract to sell or otherwise dispose of any Shares or other equity securities of Company, or securities convertible into or exchangeable or exercisable for Shares or such other equity securities, including without limitation, any sale pursuant to a brokerage transaction under Rule 144 under the Securities Act, within one hundred eighty (180) days after the date of any final prospectus relating to the initial public offering of Shares after the date hereof, if underwritten, whether by Company or by any Holders, except pursuant to such prospectus or with the written consent of the managing underwriter or underwriters for such offering.

	Rule 144.  So long as Company has securities registered under the Exchange Act, it shall take all actions reasonably necessary to enable the Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemptions provided by (i) Rule 144 under the Securities Act or (ii) any similar rule or regulation hereafter adopted by the Commission, including, without limiting the generality of the foregoing, filing on a timely basis all reports required to be filed by the Exchange Act.  Upon request of any Holder, Company shall deliver to such Holder a written statement as to whether it has complied with such requirements.

	Miscellaneous.

	No Inconsistent Agreements.  Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders in this Agreement.  Company has not previously entered into any agreement with respect to any of its securities granting any registration rights to any person.

	Remedies.  Each Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.  Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate.  In any action or proceeding brought to enforce any provision of this Agreement or where any provision hereof is validly asserted as a defense, the successful party shall be entitled to recover reasonable attorneys' fees in addition to any other available remedy.

	Amendments and Waivers.  Except as otherwise provided herein, the provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departure from the provisions hereof may not be given unless Company has obtained the written consent of each Holder affected thereby.  To the extent permitted by law, no failure to exercise, and no delay on the part of any Holder in exercising, any power or right in connection with this Agreement, or available at law or in equity, shall operate as a waiver thereof, and no single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, shall preclude any other or further exercise thereof or the exercise of any other rights or powers.  No course of dealing among any Holder, Company or any other Person shall operate as a waiver of any right of any Holder.  Any written  modification or waiver of any provision of this Agreement shall be effective only in the specific instance and for the purpose for which it is given.

	Notice Generally.  Any notice, demand, request, consent, approval, declaration, delivery or other communication hereunder to be made pursuant to the provisions of this Agreement shall be in writing and personally delivered, sent by registered or certified mail, return receipt requested, or sent by telecopy.  Notices shall be addressed as follows:

	If to any Holder at its address appearing on the books of Company, and in the case of the initial Holders:

c/o Oak Hill Advisors, L.P.

65 East 55th Street 

New York, New York 10022

Attention:  Glenn August

Telecopier:  212-593-3596

	If to Company at

Stage Stores, Inc.

10201 Main Street

Houston, Texas 77025-5229

Attention:  Michael McCreery, Executive Vice President

Telecopier:  713-669-2709

or at such other address as may be substituted by notice given as herein provided.  The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice.  Every notice, demand, request, consent, approval, declaration, delivery or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered, with receipt acknowledged, telecopied and confirmed by telecopy answerback or five (5) Business Days after the same shall have been deposited in the United States mail.

	Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto including any Person to whom Registrable Securities are transferred.

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

	Governing Law; Jurisdiction; Jury Waiver.  This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Texas without giving effect to the conflict of laws provisions thereof.  Each of the parties hereby submits to personal jurisdiction and waives any objection as to venue in Harris County, State of Texas.  Service of process on the parties in any action arising out of or relating to this Agreement shall be effective if mailed to the parties in accordance with Section 11(d) hereof.  The parties hereto waive all right to trial by jury in any action or proceeding to enforce or defend any rights hereunder. 

	Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

	Entire Agreement.  This Agreement represents the complete agreement and understanding of the parties hereto with respect to the subject matter hereof.  This Agreement supersedes all prior agreements and understandings between the parties hereto with respect to the subject matter hereof.

	Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement.

IN WITNESS WHEREOF, Company and Holders have executed this Agreement as of the date first above written.
STAGE STORES, INC.

By:  /s/ Michael McCreery
Name:  Michael McCreery

Title:  Executive Vice President

HOLDERS:

OAK HILL SECURITIES FUND, L.P.

By:Oak Hill Securities GenPar, L.P.

 its General Partner

By:Oak Hill Securities MGP, Inc.

 its General Partner

By:/s/ Glenn R. August

Name:  Glenn R. August

Title:    President

OAK HILL SECURITIES FUND-II, L.P.

By:Oak Hill Securities GenPar II, L.P.

 its General Partner

By: Oak Hill Securities MGP II, Inc.

 its General Partner

By:/s/ Glenn R. August

Name:  Glenn R. August

Title:    President

LERNER ENTERPRISES, LP

By:Oak Hill Asset Management, Inc.

 As advisor and attorney-in-fact 

By:/s/ Glenn R. August

Name:  Glenn R. August

Title:    Vice President 

P&PK FAMILY LTD. PARTNERSHIP

By:Oak Hill Asset Management, Inc.

 As advisor and attorney-in-fact 

By:/s/ Glenn R. August

Name:  Glenn R. August

Title:    Vice President 

/s/ Glenn R. August

GLENN R. AUGUST

31150-132/456053_1.DOCEXHIBIT 4.3
                                                      -----------

                 CERTIFICATE OF DESIGNATIONS OF
                   SERIES E-2 PREFERRED STOCK
                               OF
                           CADIZ INC.

                 Pursuant to Section 151 of the
        General Corporation Law of the State of Delaware

     CADIZ INC., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the
"Corporation"), hereby certifies that, pursuant to (i) the
authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Corporation, (ii) the
provisions of Section 151 of said General Corporation Law, and
(iii) the resolutions unanimously adopted by the Board of
Directors of the Corporation by action taken at a meeting on
October 15, 2001, the Board of Directors duly adopted resolutions
providing for authorization for issuance of 3,750 shares of the
Corporation's Preferred Stock, par value $.01 per share,
designated Series E-2 Preferred Stock, which resolutions are as
follows:

          RESOLVED, that pursuant to the authority vested in the
     Board of Directors of the Corporation by the Certificate of
     Incorporation, the Board of Directors does authorize for
     issuance Three Thousand Seven Hundred Fifty (3,750) shares
     of Preferred Stock, par value $.01 per share, of the
     Corporation, to be designated "Series E-2 Preferred Stock"
     of the presently authorized shares of Preferred Stock.  The
     voting powers, designations, preferences, and other rights
     of the Series E-2 Preferred Stock authorized hereunder and
     the qualifications, limitations and restrictions of such
     preferences and rights are as follows:

          1.   RANKING.  The Series E-2 Preferred Stock shall,
     with respect to the payment of dividends and upon
     liquidation, dissolution, or winding up, rank (1) senior and
     prior to the Corporation's Common Stock, $0.01 par value per
     share (the "Common Stock"), and all other capital stock
     issued by the Corporation and designated as junior to the
     Series E-2 Preferred Stock (collectively herein called the
     "Junior Securities"), and (2) on a parity with any other
     class or series of Preferred Stock of the Corporation (the
     "Parity Securities").

          2.   DIVIDENDS.

               (a)  The holders of outstanding shares of Series E-
     2 Preferred Stock shall be entitled to receive cumulative
     dividends.  Such dividends shall be payable at the option of
     the Corporation in the form of either (i) cash at an annual
     rate, commencing immediately following issuance, equal to
     seven percent (7%) of the Liquidation Preference (as defined
     in Section 3 hereof), or (ii) fully paid and nonassessable
     shares of Common Stock (valued, for purposes of this Section
     2 only, at the average Fair Market Value (as defined in
     Section 5(g) below) of the Common Stock during the ten (10)
     consecutive trading day period ending one day prior to the
     applicable Dividend Payment Date, as defined below) at an
     annual rate, commencing immediately following issuance,
     equal to nine percent (9%) of the Liquidation Preference.
     If dividends are paid in Common Stock pursuant to clause
     (ii) above, the Corporation shall provide holders of the
     Series E-2 Preferred Stock with not less than five (5) days
     written notice prior to the applicable Dividend Payment
     Date.  Such dividends shall be payable semi-annually on
     January 15 and July 15 of each year (each of such dates
     being a "Dividend Payment Date" and each period between such
     dates (or the date of issue, if earlier) being a "Dividend
     Period") commencing on January 15, 2002, to stockholders of
     record of Series E-2 Preferred Stock on the respective date,
     not exceeding 15 days preceding such Dividend Payment Date,
     as shall be fixed for this purpose by the Board or an
     authorized committee of the Board ("Authorized Board
     Committee") in advance of payment of each particular
     dividend.  Dividends payable on the Series E-2 Preferred
     Stock for the initial Dividend Period and for any period
     less than a full period shall be computed on the basis of
     the actual number of days elapsed in a year of 365 days.
     All dividends paid in Common Stock pursuant to this
     subparagraph (a) shall be deemed issued on the applicable
     Dividend Payment Date and paid pro rata to the holders
     entitled thereto.  All Common Stock which may be issued as a
     dividend with respect to the Series E-2 Preferred Stock will
     thereupon be duly authorized, validly issued, fully paid and
     nonassessable and free of all liens and charges.

               (b)  Dividends on Series E-2 Preferred Stock shall
     be fully cumulative and shall accrue (whether or not accrued
     or declared) from the date of issuance.  All dividends on
     the Series E-2 Preferred Stock shall be declared by the
     Board and paid by the Corporation to the fullest extent
     permitted by law.  Accumulated unpaid dividends for any past
     Dividend Periods may be declared by the Board (or an
     Authorized Board Committee) and paid on any date fixed by
     the Board (or an Authorized Board Committee).  The
     Corporation may deduct and withhold from dividends on Series
     E-2 Preferred Stock any amounts required to be deducted or
     withheld by the Corporation under applicable law.  Except as
     provided above, no interest or sum of money in lieu of
     interest shall be payable in respect of any accumulated
     unpaid dividends.

               (c)  In no event, so long as any shares of Series
     E-2 Preferred Stock are outstanding, shall any dividend
     whatsoever be paid or declared, nor shall any other
     distribution be made (either in cash or property) on or in
     respect of, nor shall any moneys or property be expended for
     the redemption, retirement, purchase or other acquisition
     of, outstanding shares of Junior Securities by the
     Corporation, nor shall any moneys or property be paid into
     or set apart, or made available for a sinking fund for the
     purchase or redemption of any shares of Junior Securities
     unless all dividends on all outstanding shares of Series E-2
     Preferred Stock for all past Dividend Periods shall have
     been paid in full and the full dividends thereon for the
     then current Dividend Period shall have been declared and
     shares set apart sufficient for the payment thereof.  The
     provisions of the preceding sentence shall not apply to a
     dividend payable in shares of stock ranking junior to shares
     of Series E-2 Preferred Stock both in respect of the payment
     of dividends and in respect of all payments upon
     liquidation, dissolution or winding up of the Corporation.

               (d)  If, after dividends on all outstanding shares
     of Series E-2 Preferred Stock for all past Dividend Periods
     shall have been paid in full and the full dividends thereon
     for the then current Dividend Period shall have been
     declared and shares set apart sufficient for the payment
     thereof, in accordance with Section (c), the Board of
     Directors shall declare any dividend outside the ordinary
     course of business ("extraordinary dividend") out of funds
     legally available therefor, then such extraordinary dividend
     shall be declared pro rata on the Common Stock and the
     Series E-2 Preferred Stock treating the Series E-2 Preferred
     Stock as the greatest whole number of shares of Common Stock
     then issuable upon conversion of such Series E-2 Preferred
     Stock pursuant to Section 5.

          3.   LIQUIDATION PREFERENCE.  In the event of any
     voluntary or involuntary liquidation, dissolution, or
     winding up of the affairs of the Corporation, then, before
     any distribution or payment shall be made to the holders of
     any Junior Securities, and subject to the rights of
     creditors, the holders of Series E-2 Preferred Stock shall
     be entitled to be paid out of the assets of the Corporation
     in an amount in cash equal to $1,000.00 for each share
     outstanding plus any accrued but unpaid dividends thereon
     (which amount is hereinafter referred to as the "Liquidation
     Preference").  If the assets of the Corporation are not
     sufficient to pay in full the Liquidation Preference as well
     as any liquidation preference to holders of Parity
     Securities, then the holders of the Series E-2 Preferred
     Stock and Parity Securities shall share ratably in such
     distribution of assets in accordance with the amount which
     would have been payable on such distribution if the amounts
     to which such holders were entitled were paid in full.
     Except as provided in this paragraph 3, holders of Series E-
     2 Preferred Stock shall not be entitled to any distribution
     in the event of liquidation, dissolution, or winding up of
     the affairs of the Corporation.  For purposes of this
     Section 3 only, a "liquidation" shall include:  (i) a merger
     or consolidation involving the Corporation as a result of
     which the holders of the Corporation's equity securities do
     not continue to hold, associated with or in exchange for
     their equity securities in the Corporation, a majority of
     the outstanding voting securities of the surviving entity in
     such merger or consolidation; (ii) a transaction or series
     of related transactions as a result of which the holders of
     a majority of the Corporation's outstanding equity
     securities prior to such transactions do not continue to
     hold a majority of the Corporation's outstanding equity
     securities; (iii) a sale of all or substantially all of the
     assets of the Corporation; (iv) a merger or consolidation
     involving Sun World International Inc., a Delaware
     corporation and a wholly-owned subsidiary of the Corporation
     ("Sun World"), as a result of which the Corporation does not
     continue to hold, associated with or in exchange for its
     equity securities in Sun World, a majority of the
     outstanding voting securities of the surviving entity in
     such merger or consolidation; (v) a transaction or series of
     related transactions as a result of which the Corporation
     does not continue to hold a majority of Sun World's equity
     securities; and (vi) a sale of all or substantially all of
     the assets of Sun World.

          4.   VOTING.  In all meetings of shareholders, the
     holders of shares of Series E-2 Preferred Stock shall be
     entitled to that number of votes equal to the number of
     shares of Common Stock issuable upon conversion of their
     Series E-2 Preferred Stock at the time the shares are voted,
     and shall be entitled to vote with the Common Stock (except
     where a separate class vote is required by law or by terms
     of this instrument).  So long as any shares of Series E-2
     Preferred Stock remain outstanding, the Corporation shall
     not, without the approval of the holders of at least a
     majority of the outstanding shares of Series E-2 Preferred
     Stock, voting together as a single class, authorize any
     other stock having rights or preferences senior to or on a
     parity with the Series E-2 Preferred Stock.

          5.   CONVERSION.  Each share of Series E-2 Preferred
     Stock shall be convertible into shares of Common Stock at
     the rate of one (1) share of Common Stock for every $7.50
     (the "Conversion Price") in Liquidation Preference of the
     shares of Series E-2 Preferred Stock so converted both (i)
     at the option of the holder thereof at any time following
     issuance; and (ii) at the option of the Corporation provided
     that: (A) the Corporation converts all shares of Series E-2
     Preferred Stock then outstanding and that (B) the closing
     bid price for the Corporation's Common Stock for any thirty
     consecutive trading day period ending not more than five (5)
     trading days prior to submission of notice of conversion has
     exceeded $10.50 (the "Mandatory Conversion Minimum").  The
     following provisions shall apply after the Series E-2
     Preferred Stock becomes convertible:

               (a)  Any holder of shares of Series E-2 Preferred
     Stock electing to convert such shares into Common Stock
     shall surrender the certificate or certificates for such
     shares at the office of the Corporation (or at such other
     place as the Corporation may designate by notice to the
     holders of shares of Series E-2 Preferred Stock) during
     regular business hours, duly endorsed to the Corporation in
     blank, or accompanied by instruments of transfer to the
     Corporation in blank, in form reasonably satisfactory to the
     Corporation and shall give written notice to the Corporation
     at such office that such holder elects to convert such
     shares of Series E-2 Preferred Stock.  Such written notice
     shall also instruct the Corporation where to deliver the
     certificate or certificates representing the Common Stock
     issuable upon such conversion.  The Corporation shall, as
     soon as reasonably practicable after such deposit of
     certificates for shares of Series E-2 Preferred Stock,
     accompanied by the written notice above prescribed, issue to
     the holder for whose account such shares were surrendered,
     or to his nominee, a certificate or certificates
     representing the number of shares of Common Stock to which
     such holder is entitled upon such conversion, and shall
     deliver such certificate or certificates in accordance with
     the instructions of the holder.  Conversion shall be deemed
     to have been made as of the date of surrender of
     certificates for the shares of Series E-2 Preferred Stock to
     be converted and the delivery of written notice as
     hereinabove provided; and the person entitled to receive the
     Common Stock issuable upon such conversion shall be treated
     for all purposes as the record holder of such Common Stock
     on such date.

               (b)  In the event of an election by the
     Corporation to convert Series E-2 Preferred Stock into
     shares into Common Stock, all, and not less than all, of the
     outstanding shares of Series E-2 Preferred Stock shall be
     converted automatically on the date of such election (the
     "Mandatory Conversion Date") without any further action by
     the holders of such shares and whether or not the
     certificates representing outstanding shares are surrendered
     to the Corporation or its transfer agent.  The Corporation
     shall not be obligated to issue certificates evidencing the
     shares of Common Stock issuable upon such conversion unless
     the certificates evidencing such shares of Series E-2
     Preferred Stock are either delivered to the Corporation or
     its transfer agent as provided below, or the holder notifies
     the Corporation or its transfer agent that such certificates
     have been lost, stolen or destroyed and executes an
     agreement satisfactory to the Corporation to indemnify the
     Corporation from any loss incurred by it in connection with
     such certificates.  The Corporation shall cause to be mailed
     to each holder of Series E-2 Preferred Stock, by overnight
     courier service or by first class mail, postage prepaid,
     mailed not more than ten (10) business days following the
     Mandatory Conversion Date, at such holder's address as the
     same appears on the records of the Corporation (the
     "Mandatory Conversion Notice").  Each such notice shall
     specify (i) the Mandatory Conversion Date, (ii) the number
     of shares to be converted, and (iii) the place or places
     where certificates for such shares are to be surrendered for
     conversion.  Promptly following receipt of the Mandatory
     Conversion Notice, each holder of Series E-2 Preferred Stock
     shall surrender the certificate or certificates for such
     shares at the office of the Corporation (or at such other
     place as the Corporation may designate by notice to the
     holders of shares of Series E-2 Preferred Stock) during
     regular business hours, duly endorsed to the Corporation in
     blank, or accompanied by instruments of transfer to the
     Corporation in blank, in form reasonably satisfactory to the
     Corporation.  Such written notice shall instruct the
     Corporation where to deliver the certificate or certificates
     representing the Common Stock issuable upon such conversion.
     The Corporation shall, as soon as reasonably practicable
     following the Mandatory Conversion Date and after such
     deposit of certificates for shares of Series E-2 Preferred
     Stock, accompanied by the written notice above prescribed,
     issue to the holder for whose account such shares were
     surrendered, or to his nominee, a certificate or
     certificates representing the number of shares of Common
     Stock to which such holder is entitled upon such conversion,
     and shall deliver such certificate or certificates in
     accordance with the instructions of the holder.  Conversion
     shall be deemed to have been made as of the Mandatory
     Conversion Date irrespective of the date of surrender of
     certificates for the shares of Series E-2 Preferred Stock to
     be converted and the delivery of written notice as
     hereinabove provided; and the person entitled to receive the
     Common Stock issuable upon such conversion shall be treated
     for all purposes as the record holder of such Common Stock
     effective as of the Mandatory Conversion Date.  Following
     the Mandatory Conversion Date, all authorized shares of
     Series E-2 Preferred Stock shall resume the status of
     authorized but unissued shares of Preferred Stock, without
     designation as to series, until such shares are once more
     designated as part of a particular series by the Board of
     Directors.

               (c)  The Conversion Price shall be adjusted from
     time to time as follows:

                    (i)  In case the Corporation shall (A) pay a
     dividend or make a distribution on its shares of Common
     Stock in shares of Common Stock, (B) subdivide or reclassify
     its outstanding Common Stock in shares of Common Stock into
     a greater number of shares, or (C) combine or reclassify its
     outstanding Common Stock into a smaller number of shares or,
     (D) issue by capital reorganization or reclassification of
     its shares of Common Stock or otherwise (other than a
     subdivision or combination of its shares provided for above,
     or a reorganization, merger, consolidation or sale of assets
     provided for elsewhere in this Section 5) any shares of
     capital stock of the Corporation, then the conversion right
     and the Conversion Price in effect immediately prior to such
     action shall be adjusted so that the holder of any shares of
     the Series E-2 Preferred Stock thereafter surrendered for
     conversion shall be entitled to receive the number of shares
     of capital stock of the Corporation which such holder would
     have owned immediately following such action had such shares
     of the Series E-2 Preferred Stock been converted immediately
     prior thereto.  An adjustment made pursuant to this
     subparagraph shall become effective retroactively
     immediately after the record date in the case of a dividend
     or distribution and shall become effective immediately after
     the effective date in the case of a subdivision, combination
     or reclassification.  If, as a result of an adjustment made
     pursuant to this subparagraph, the holder of any shares of
     the Series E-2 Preferred Stock thereafter surrendered for
     conversion shall become entitled to receive shares of two or
     more classes of capital stock of the Corporation, the Board
     of Directors shall determine in good faith the allocation of
     the adjusted Conversion Price between or among shares of
     such classes of capital stock, which allocation must be
     reasonably acceptable to the holders of a majority of the
     shares of the Series E-2 Preferred Stock.

                    (ii) In case the Corporation shall hereafter
     issue rights or warrants to all holders of its Common Stock
     entitling them to subscribe for or purchase shares of Common
     Stock (or securities convertible into Common Stock) at a
     price (or having a conversion price per share) less than the
     Conversion Price on the record date mentioned below, then
     the Conversion Price shall be adjusted so that the same
     shall equal the price determined by multiplying the
     Conversion Price in effect immediately prior to the record
     date mentioned below by a fraction, the numerator of which
     shall be the sum of the number of shares of Common Stock
     outstanding on the record date mentioned below and the
     number of additional shares of Common Stock which the
     aggregate offering price of the total number of shares of
     Common Stock so offered (or the aggregate conversion price
     of the convertible securities so offered) would purchase at
     such Conversion Price, and the denominator of which shall be
     the sum of the number of shares of Common Stock outstanding
     on such record date and the number of additional shares of
     Common Stock offered for subscription or purchase (or into
     which the convertible securities so offered are
     convertible).  Such adjustment shall be made successively
     whenever such rights or warrants are issued and shall become
     effective immediately after the record date for the
     determination of stockholders entitled to receive such
     rights or warrants; and to the extent that shares of Common
     Stock are not delivered (or securities convertible into
     Common Stock are not delivered) after the expiration of such
     rights or warrants the Conversion Price shall be readjusted
     to the Conversion Price which would then be in effect had
     the adjustments made upon the issuance of such rights or
     warrants been made upon the basis of delivery of only the
     number of shares of Common Stock (or securities convertible
     into Common Stock) actually delivered.

                    (iii)     In case the Corporation shall issue
     shares of its Common Stock (excluding shares issued (A) in
     any of the transactions described in Subsection (i) above,
     (B) to the Corporation's employees, including, without
     limitation, pursuant to exercise or conversion of options or
     other equity securities, under a plan or plans adopted by
     the Corporation's Board of Directors and approved by its
     shareholders (if required), if such shares would otherwise
     be included in this Subsection (iii) (but only to the extent
     that the aggregate number of shares excluded by this clause
     (B) and issued after the date hereof shall not exceed in the
     aggregate 13% of the Company's Common Stock outstanding as
     of the date of this Certificate), (C) upon exercise of
     convertible securities outstanding as of the date of initial
     issuance of Series E-2 Preferred Stock (including the Series
     E-2 Preferred Stock), or any convertible securities issued
     subsequent to the date hereof which are convertible into
     Common Stock at an exercise price equal or greater than the
     Conversion Price as of the date upon which the conversion or
     exercise price for such securities is fixed (notwithstanding
     any subsequent adjustment of such exercise price as may be
     provided under the terms of such convertible security), (D)
     upon the exercise of any convertible security as to which
     the Conversion Price has already been adjusted pursuant to
     Subsection (iv) below, and (E) to shareholders of any
     corporation which merges into the Corporation in proportion
     to their stock holdings of such corporation immediately
     prior to such merger, upon such merger, but only if no
     adjustment is required pursuant to any other specific
     subsection of this Section (c) (without regard to Subsection
     (vi) below) with respect to the transaction giving rise to
     such rights) for a consideration per share less than the
     Conversion Price, then on the date the Corporation fixes the
     offering price of such additional shares, the Conversion
     Price shall be adjusted immediately thereafter so that it
     shall equal the price determined by multiplying the
     Conversion Price in effect immediately prior thereto by a
     fraction, the numerator of which shall be the sum of the
     number of shares of Common Stock outstanding immediately
     prior to the issuance of such additional shares and the
     number of shares of Common Stock which the aggregate
     consideration received (determined as provided in Subsection
     (v) below) for the issuance of such additional shares would
     purchase at such Conversion Price, and the denominator of
     which shall be the number of shares of Common Stock
     outstanding immediately after the issuance of such
     additional shares.

                         Such adjustment shall be made
     successively whenever such an issuance is made.

                    (iv) In case the Corporation shall issue any
     securities convertible into or exchangeable for its Common
     Stock (excluding securities issued in transactions described
     in Subsection (ii) above) for a consideration per share of
     Common Stock initially deliverable upon conversion or
     exchange of such securities (determined as provided in
     Subsection (v) below) less than the Conversion Price in
     effect as of the date upon which the conversion or exercise
     price for such securities is fixed, then the Conversion
     Price shall be adjusted immediately thereafter so that it
     shall equal the price determined by multiplying the
     Conversion Price in effect immediately prior thereto by a
     fraction, the numerator of which shall be the sum of the
     number of shares of Common Stock outstanding immediately
     prior to the issuance of such securities and the number of
     shares of Common Stock which the aggregate consideration
     received (determined as provided in Subsection (v) below)
     for such securities would purchase at such Conversion Price,
     and the denominator of which shall be the sum of the number
     of shares of Common Stock outstanding immediately prior to
     such issuance and the maximum number of shares of Common
     Stock of the Corporation deliverable upon conversion of or
     in exchange for such securities at the initial conversion or
     exchange price or rate.

                         Such adjustment shall be made
     successively whenever such an issuance is made.

                    (v)  For purposes of any computation
     respecting consideration received pursuant to Subsections
     (iii) and (iv) above, the following shall apply:

                         (A)  in the case of the issuance of
     shares of Common Stock for cash, the consideration shall be
     the amount of such cash, provided that in no case shall any
     deduction be made for any commissions, discounts or other
     expenses incurred by the Corporation for any underwriting of
     the issue or otherwise in connection therewith:

                         (B)  in the case of the issuance of
     shares of Common Stock for a consideration in whole or in
     part other than cash, the consideration other than cash
     shall be deemed to be the fair market value thereof as
     determined in good faith by the Board of Directors of the
     Corporation (irrespective of the accounting treatment
     thereof) and reasonably acceptable to the holders of a
     majority Series E-2 Preferred Stock; and

                         (C)  in the case of the issuance of
     securities convertible into or exchangeable for shares of
     Common Stock, the aggregate consideration received therefor
     shall be deemed to be the consideration received by the
     Corporation for the issuance of such securities plus the
     additional minimum consideration, if any, to be received by
     the Corporation upon the conversion or exchange thereof (the
     consideration in each case to be determined in the same
     manner as provided in clauses (A) and (B) of this Subsection
     (v)).

                    (vi) No adjustment in the Conversion Price
     shall be required unless such adjustment would require an
     increase or decrease of at least one cent ($0.01) in such
     price; provided, however, that any adjustments which by
     reason of this Subsection (vi) are not required to be made
     shall be carried forward and taken into account in any
     subsequent adjustment required to be made hereunder.  All
     calculations under this Section (c) shall be made to the
     nearest cent.  Anything in this Section (c) to the contrary
     notwithstanding, the Corporation shall be entitled, but
     shall not be required, to reduce the Conversion Price, in
     addition to those changes required by this Section (c), as
     it, in its sole discretion, shall determine to be advisable
     in order that any dividend or distribution in shares of
     Common Stock, subdivision, reclassification or combination
     of Common Stock, issuance of warrants to purchase Common
     Stock or distribution or evidences of indebtedness or other
     assets (excluding cash dividends) referred to hereinabove in
     this Section (c) hereafter made by the Corporation to the
     holders of its Common Stock shall not result in any tax to
     such holders of its Common Stock or securities convertible
     into Common Stock.

                    (vii)     In the event that at any time, as a
     result of an adjustment made pursuant to Subsection (i)
     above, the holder of Series E-2 Preferred Stock thereafter
     shall become entitled to receive any shares of the
     Corporation, other than Common Stock, thereafter the number
     of such other shares so receivable upon conversion of the
     holder's of Series E-2 Preferred Stock shall be subject to
     adjustment from time to time in a manner and on terms as
     nearly equivalent as practicable to the provisions with
     respect to the Common Stock contained in Subsections (i) to
     (vi), inclusive above. The Corporation may retain a firm of
     independent certified public accountants selected by the
     Board of Directors (who may be the regular accountants
     employed by the Corporation) to make any computation
     required by Section (c), and a certificate signed by such
     firm shall be conclusive evidence of the correctness of such
     adjustment absent manifest error or negligence.

                    (viii) Whenever an adjustment in the
     Conversion Price is required, the Corporation shall
     forthwith place on file with its Secretary a statement
     signed by its Secretary or Treasurer or one of its Assistant
     Secretaries or Assistant Treasurers, stating the adjusted
     Conversion Price determined as provided herein.  Such
     statement shall set forth in reasonable detail such facts as
     shall be necessary to show the reason and the manner of
     computing such adjustment.  Such statement shall be made
     available at all reasonable times for inspection by any
     holder of shares of Series E-2 Preferred Stock. Promptly
     after the adjustment of the Conversion Price, the
     Corporation shall mail a notice and copy of such statement
     to each holder of shares of Series E-2 Preferred Stock.

                    (ix) In case of any reclassification, capital
     reorganization or other change of outstanding shares of
     Common Stock of the Corporation, or in case of any
     consolidation or merger of the Corporation with or into
     another entity (other than a merger with a subsidiary in
     which merger the Corporation is the continuing corporation
     and which does not result in any reclassification, capital
     reorganization or other change of outstanding shares of
     Common Stock of the class issuable upon conversion of the
     Series E-2 Preferred Stock) or in case of any sale, lease,
     or conveyance to another entity of all or substantially all
     of the property and assets of the Corporation, the
     Corporation shall, as a condition precedent to such
     transaction, cause effective provisions to be made so that
     the holder of each share of Series E-2 Preferred Stock then
     outstanding shall have the right to convert such shares of
     Series E-2 Preferred Stock into the kind and amount of
     shares of stock or other securities and property receivable
     upon such reclassification, capital reorganization and other
     change, consolidation, merger, sale, lease or conveyance by
     a holder of the number of shares of Common Stock into which
     such shares of Series E-2 Preferred Stock might have been
     converted immediately prior to such reclassification,
     change, consolidation, merger, sale, lease or conveyance,
     subject to adjustments which shall be as nearly equivalent
     as may be reasonably practicable to the adjustments provided
     for hereunder.  The Corporation shall not effect any such
     reorganization, consolidation, merger, sale or conveyance
     (i) unless prior to or simultaneously with the consummation
     thereof the survivor or successor corporation (if other than
     the Corporation) resulting from such reorganization,
     consolidation or merger or the corporation purchasing such
     assets shall assume by written instrument executed and sent
     to each holder of Series E-2 Preferred Stock, the obligation
     to deliver to such holder of Series E-2 Preferred Stock such
     shares of stock, securities or assets as, in accordance with
     the foregoing provisions, such holder of Series E-2
     Preferred Stock may be entitled to receive, and containing
     the express assumption by such successor corporation of the
     due and punctual performance and observance of every
     provision herein to be performed and observed by the
     Corporation and of all liabilities and obligations of the
     Corporation hereunder, and (ii) in which the Corporation, as
     opposed to another party to the reorganization,
     consolidation, merger, sale or conveyance, shall be required
     under any circumstances to make a cash payment at any time
     to the holders of the Series E-2 Preferred Stock.  The
     provisions of this subparagraph shall similarly apply to
     successive reclassifications, capital reorganizations, and
     changes of Common Stock and to successive reorganizations,
     consolidations, mergers, sales, leases or conveyances.

               (d)  Any shares of Series E-2 Preferred Stock
     which shall at any time have been converted shall resume the
     status of authorized but unissued shares of Preferred Stock,
     without designation as to series, until such shares are once
     more designated as part of a particular series by the Board
     of Directors.  The Corporation shall reserve and keep
     available out of its authorized but unissued stock, for the
     purpose of effecting the conversion of the shares of the
     Series E-2 Preferred Stock, such number of its duly
     authorized shares of Common Stock as shall from time to time
     be sufficient to effect the conversion of all outstanding
     shares of the Series E-2 Preferred Stock.

               (e)  The Corporation shall pay any and all issue
     or transfer (but not income) taxes that may be payable in
     respect of any issuance or delivery of shares of Common
     Stock on conversion of shares of Series E-2 Preferred Stock
     pursuant hereto.

               (f)  Before taking any action that would result in
     the effective price of the shares of Common Stock issuable
     upon conversion of Series E-2 Preferred Stock being less
     than the then par value of the Common Stock, the Corporation
     shall take any corporate action which may, in the opinion of
     its counsel, be necessary in order that the Corporation may
     validly and legally issue fully paid and nonassessable
     shares of Common Stock.

               (g)  The Corporation shall not be required to
     issue any fractional shares of Common Stock upon conversion
     of any Series E-2 Preferred Stock, but in lieu thereof the
     Corporation may pay a cash amount determined by multiplying
     the fraction of a share otherwise issuable by the Fair
     Market Value of one share of Common Stock on the date such
     conversion is deemed to have been made hereunder.  The "Fair
     Market Value" of the Common Stock as of a particular date
     shall mean:

                    (i)  If the Common Stock is listed or
     admitted to the unlisted trading privileges on any national
     or regional securities exchange on such date, then the
     average of the last reported sale prices on such exchange
     for the 30 consecutive business day period ending on the
     last business day prior to such date;

                    (ii) If the Common Stock is not listed or
     admitted to unlisted trading privileges as provided in
     subparagraph i) and sales prices therefor in the over-the-
     counter market are reported by the Nasdaq National Market
     System on such date, then the last reported sales price so
     reported on the last business day prior to such date;

                    (iii)     If the Common Stock is not listed
     or admitted to unlisted trading privileges as provided in
     subparagraph i) and sales prices therefor are not reported
     by the Nasdaq National Market System as provided in
     subparagraph ii), and bid and asked prices therefor in the
     over-the-counter market are reported by Nasdaq (or, if not
     so reported, by the National Quotation Bureau Incorporated)
     on such date, then the average of the closing bid and asked
     prices on the last business day prior to such date; or

                    (iv) If the Common Stock is not listed or
     admitted to unlisted trading privileges as provided in
     subparagraph i) and sales prices or bid and asked prices
     therefor are not reported by Nasdaq (or the National
     Quotation Bureau Incorporated) as provided in subparagraphs
     ii) and iii) on such date, then the value as determined in
     good faith by the Board.

               (h)  Whenever an adjustment in the Conversion
     Price is required pursuant to the terms of this Section 5,
     the Mandatory Conversion Minimum as in effect immediately
     prior to such action shall automatically and concurrently be
     adjusted in proportion to the adjustment in the Conversion
     Price.

          6.   FRACTIONAL SHARES.  The Series E-2 Preferred Stock
     may be issued as fractional shares in increments of 1/1,000
     of a share (subject to adjustment on the same basis as the
     Conversion Price under Section 5(c)).  Each fractional share
     of Series E-2 Preferred Stock shall be entitled to the same
     rights and powers on a pro rata basis as a whole share of
     Series E-2 Preferred Stock.

          7.   MANDATORY REDEMPTION.

               (a)  The Corporation shall redeem on July 16,
     2004, and not prior to said date (the "Redemption Date") all
     shares of Series E-2 Preferred Stock outstanding as of such
     date from any source of funds legally available therefor.

               (b)  The price per share ("Redemption Price") for
     any redemption of Series E-2 Preferred Stock made pursuant
     to this Section 7 shall be an amount equal to the
     Liquidation Preference for the shares so redeemed. If
     insufficient funds are legally available as of the
     Redemption Date to redeem all the shares of Series E-2
     Preferred Stock then due to be redeemed, but sufficient
     funds are legally available as of the Redemption Date to
     redeem a portion of the Preferred Stock then due to be
     redeemed,  then the Corporation shall effect such redemption
     pro rata among all holders of Preferred Stock on an equal
     priority, pari passu basis, based on the Redemption Price of
     such shares.

               (c)  On or before the Redemption Date, written
     notice (the "Redemption Notice") shall be mailed by
     overnight courier service or by first-class mail, postage
     prepaid, to each holder of record (at the close of business
     on the business day next preceding the date on which notice
     is given) of the Series E-2 Preferred Stock to be redeemed,
     at the address last shown on the records of the Corporation
     for such holder or given by the holder to the Corporation
     for the purpose of notice or, if no such address appears or
     is given, at the place where the principal executive office
     of the Corporation is then located, notifying such holder of
     the redemption to be effected, specifying the Redemption
     Date, the Redemption Price, the place at which payment may
     be obtained and the date on which such holder's conversion
     rights set forth in Section 5 as to such shares terminate
     and calling upon such holder to surrender to the
     Corporation, in the manner and at the place designated, such
     holder's certificate or certificates representing the shares
     to be redeemed.  Each holder of Preferred Stock to be
     redeemed shall surrender to the Corporation the certificate
     or certificates representing such shares of Preferred Stock,
     in the manner and at the place designated in the Redemption
     Notice, and thereupon the Redemption Price of such shares
     shall be payable to the order of the person whose name
     appears on such certificate or certificates as the owner
     thereof, and each surrendered certificate shall be canceled.
     If less than all the shares represented by any such
     certificate are redeemed, a new certificate shall be issued
     representing the unredeemed shares.

               (d)  From and after the Redemption Date, unless
     there shall have been a default in payment of the Redemption
     Price, all rights of the holders of such shares as holders
     of Series E-2 Preferred Stock (except the right to receive
     the Redemption Price without interest upon surrender of
     their certificate or certificates) shall cease with respect
     to such shares, and such shares shall not thereafter be
     transferred on the books of the Corporation or be deemed to
     be outstanding for any purpose whatsoever.  Shares of Series
     E-2 Preferred Stock which are subject to redemption
     hereunder but which are not redeemable on the Redemption
     Date due to insufficient legally available funds shall
     continue to be entitled to dividends, liquidation,
     conversion and all other rights, preferences, privileges and
     restrictions of the Preferred Stock until such shares have
     been converted or redeemed.

               (e)  All shares of Series E-2 Preferred Stock that
     are redeemed pursuant to this Section 7 shall resume the
     status of authorized but unissued shares of Preferred Stock,
     without designation as to series, until such shares are once
     more designated as part of a particular series by the Board
     of Directors.

          8.   NOTICES TO HOLDERS.  So long as any shares of the
     Series E-2 Preferred Stock shall be outstanding, (i) if the
     Corporation shall pay any dividend or make any distribution
     upon the Common Stock or (ii) if the Corporation shall offer
     to the holders of Common Stock for subscription or purchase
     by them any share of or class of its capital stock or any
     other rights or (iii) if any capital reorganization of the
     Corporation, reclassification of the capital stock of the
     Corporation, consolidation or merger of the Corporation with
     or into another entity, sale, lease, or transfer of all or
     substantially all of the property and assets of the
     Corporation to another entity, or voluntary or involuntary
     dissolution, liquidation or winding up of the Corporation
     shall be effected, then in any such case, the Corporation
     shall cause to be mailed by certified mail to all holders of
     the Series E-2 Preferred Stock, at least fifteen days prior
     the record date specified in (x) or (y) below, as the case
     may be, a notice containing a brief description of the
     proposed action and stating the date on which (x) a record
     is to be taken for the purpose of such dividend,
     distribution or offer of rights, or (y) such
     reclassification, reorganization, consolidation, merger,
     conveyance, lease, transfer, sale dissolution, liquidation
     or winding up is to take place and the date, if any is to be
     fixed, as of which the holders of Common Stock or other
     securities shall be entitled to receive cash or other
     property deliverable upon such reclassification,
     reorganization, consolidation, merger, conveyance, lease,
     transfer, sale, dissolution, liquidation or winding up.

          RESOLVED, FURTHER, that the appropriate officers of the
     Corporation are hereby authorized to execute and acknowledge
     the Certificate of Designations setting forth these
     resolutions and to cause such certificate to be filed and
     recorded, all in accordance with the requirements of Section
     151 of the Delaware General Corporation Law.

     IN WITNESS WHEREOF, CADIZ INC., has caused this Certificate
to be signed by Keith Brackpool, its Chief Executive Officer, and
attested by Stanley E. Speer, its Secretary, this 28th day of
November 2001.

                           CADIZ INC.

                                   By: /s/ Keith Brackpool
		                       ______________________________
                                     Keith Brackpool
                                     Chief Executive Officer

ATTEST:

By:  /s/ Stanley E. Speer
_____________________________
   Stanley E. Speer
   Secretary

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