Document:

EXHIBIT 10.3
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                                WARRANT AGREEMENT

            THIS WARRANT AGREEMENT is dated as of January 16, 2004, by and
between GMX Resources Inc., an Oklahoma corporation (the "Company"), and the
persons named on the signature page hereof (collectively, the "Holders and
individually a "Holder").

            Contemporaneously with the execution and delivery of this Agreement,
the Holders have made a subordinated loan to the Company in the aggregate
principal amount of $1,000,000 pursuant to the terms and provisions of that
certain Subordinated Note Purchase Agreement, dated as of the date hereof, by
and among the Company and the Holders (the "Note Purchase Agreement"). As
additional consideration for Holders' advance of funds to the Company under the
Note Purchase Agreement, the Company has agreed to issue and deliver the
Warrants (as defined herein) to the Holders pro-rata based on the amount of Each
Holder's advance.

            NOW, THEREFORE, for and in consideration of the mutual promises,
representations, covenants and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

            1. Defined Terms. As used in this Agreement, the following terms
shall have the meanings indicated below, unless the context clearly indicates to
the contrary:

            "Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such Person. For purposes of this definition, a Person shall be deemed to
"control" another Person if such first Person possesses directly or indirectly
the power to (i) vote 50% or more of the securities having ordinary voting power
for the selection of directors of such Person, or (ii) direct, or cause the
direction of, the management and policies of the second Person, whether through
the ownership of voting securities, by contract or otherwise.

            "Agreement" means this Warrant Agreement, as amended, supplemented
or modified from time to time.

            "Board of Directors" means the board of directors of the Company.

            "Business Day" means any day other than Saturday, Sunday or a legal
holiday in the State of New York.

            "Closing Date" means January 16, 2004, the date of the closing of
the transactions contemplated by the Note Purchase Agreement.

            "Commission" means the Securities and Exchange Commission or any
entity succeeding to any or all of its functions under the Securities Act and
the Exchange Act.

            "Common Stock" means the common stock, par value $0.001 per share,
of the Company.

            "Company" has the meaning given to such term in the first paragraph
hereof.
<PAGE>

            "Composite Transaction Tape" means a security price reporting
service that includes all transactions in a security on each of the exchanges
and in the over-the-counter market.

            "Current Market Price Per Share" means, with respect to any share of
Common Stock, as of any particular date of determination:

                        (i) If the Common Stock is then reported on a Composite
            Transaction Tape, the average of the daily closing prices for the 30
            consecutive trading days immediately prior to such date, as reported
            on the Composite Transaction Tape (as adjusted for any stock
            dividend, split, combination or reclassification that occurred
            during such 30-day period);

                        (ii) If the Common Stock is not then reported on a
            Composite Transaction Tape but is then listed or admitted to trading
            on a national securities exchange, the average of the daily last
            sale prices regular way of the Common Stock for the 30 consecutive
            trading days immediately prior to such date (as adjusted for any
            stock dividend, split, combination or reclassification that occurred
            during such 30-day period), on the principal national securities
            exchange on which the Common Stock is traded or, in case no such
            sale takes place on any such day, the average of the closing bid and
            asked prices regular way, in either case on such national securities
            exchange;

                        (iii) If the Common Stock is not then reported on a
            Composite Transaction Tape but is then traded in the
            over-the-counter market, the average of the daily closing sales
            prices, or, if there is no closing sales price, the average of the
            closing bid and asked prices, in the over-the-counter market, for
            the 30 consecutive trading days immediately prior to such date (as
            adjusted for any stock dividend, split, combination or
            reclassification that occurred during such 30-day period), as
            reported by the National Association of Securities Dealers'
            Automated Quotation System, or, if not so reported, as reported by
            the National Quotation Bureau, Incorporated or any successor
            thereof, or, if not so reported the average of the closing bid and
            asked prices as furnished by any member of the National Association
            of Securities Dealers, Inc. selected from time to time by the Board
            of Directors and agreed to by the holders of a majority of the
            Warrants for that purpose; or

                        (iv) If no such prices are then furnished, the fair
            market value of a share of the Common Stock as determined by the
            Board of Directors in good faith.

            "Exchange Act" means 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 may be in effect from time to time.

            "Exercise Price" means $1.50 per share, subject to adjustment as may
be required by Section 11.

            "Expiration Date" means 5:00, p.m. New York time on the fifth
anniversary of the date hereof, or such earlier date as is permitted pursuant to
Section 11(j).

                                      -2-
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            "Non-Public Warrant Shares" means Warrant Shares that have not been
sold to the public and bear the legend set forth in Section 13(b).

             "Note Purchase Agreement" has the meaning given to such term in the
second paragraph hereof.

            "Person" means any person, firm or entity.

            "Securities Act" means 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 may be in effect from time to time.

            "Subsidiary" means, as to any Person, a corporation of which shares
of stock having ordinary voting power (other than stock having such power only
by reason of the occurrence of a contingency) to elect a majority of the board
of directors or other managers of such corporation are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.

            "Warrant Certificate" means a certificate evidencing one or more
Warrants, substantially in the form of Exhibit A attached hereto, with such
changes therein as may be required to reflect any adjustments made pursuant to
Section 11.

            "Warrant Holders" means the Holders and such other Persons to whom
any Holder transfers Warrants in compliance with the terms of this Agreement.

            "Warrant Office" means the office or agency of the Company at which
the Warrant Register shall be maintained and where the Warrants may be presented
for exercise, exchange, substitution and transfer, which office or agency will
be the office of the Company located at 9400 North Broadway, Suite 600, Oklahoma
City, Oklahoma 73114, which office or agency may be changed by the Company
pursuant to notice in writing to the Persons named in the Warrant Register as
the holders of the Warrants.

            "Warrant Register" means the register, substantially in the form of
Exhibit B attached hereto, maintained by the Company at the Warrant Office.

            "Warrant Shares" means the shares of Common Stock issued or issuable
upon exercise of the Warrants, as the number of such shares may be adjusted from
time to time pursuant to Section 11 and the provisions of the Company's
Certificate of Incorporation.

            "Warrants" means the stock purchase warrants issued pursuant to the
Note Purchase Agreement and this Agreement entitling the Holders to purchase,
subject to Section 5, from the Company at the Warrant Office an aggregate of
175,000 shares of Common Stock (subject to adjustment as provided in Section 11)
at the Exercise Price;

                                      -3-
<PAGE>

            2. Issuance of Warrants. The Company hereby agrees to issue and
deliver to each Holder, on the Closing Date, the Warrants and one or more
Warrant Certificates evidencing the Warrants to which it is entitled. No
consideration other than Holder's advance of funds under the Note Purchase
Agreement shall be required from the Holder in consideration of the receipt of
the Warrants.

            3. Registration, Transfer and Exchange of Certificates.

               (a) The Company shall maintain, at the Warrant Office, the
Warrant Register for registration of the Warrants and Warrant Certificates and
transfers thereof. On the Closing Date, the Company shall register the Warrants
and Warrant Certificates in the Warrant Register in the name of the Holder. The
Company may deem and treat the registered holders of the Warrant Certificates as
the absolute owners thereof and the Warrants represented thereby
(notwithstanding any notation of ownership or other writing on the Warrant
Certificates made by any Person) for the purpose of any exercise thereof or any
distribution to the holders thereof, and for all other purposes, and the Company
shall not be affected by any notice to the contrary.

               (b) Subject to Section 13, the Company shall register the
transfer of any outstanding Warrants in the Warrant Register upon surrender of
the Warrant Certificates evidencing such Warrants to the Company at the Warrant
Office, accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company, duly executed by the registered holder or holders
thereof or by the duly appointed legal representative thereof. Upon any such
registration of transfer, new Warrant Certificates evidencing such transferred
Warrants shall be issued to the transferee, and the surrendered Warrant
Certificates shall be canceled. If less than all the Warrants evidenced by
Warrant Certificates surrendered for transfer are to be transferred, new Warrant
Certificates shall be issued to the holder surrendering such Warrant
Certificates evidencing such remaining number of Warrants.

               (c) Warrant Certificates may be exchanged at the option of the
holders thereof, when surrendered to the Company at the Warrant Office, for
another Warrant Certificate or other Warrant Certificates of like tenor and
representing, in the aggregate, a like number of Warrants. Warrant Certificates
surrendered for exchange shall be canceled.

               (d) No charge shall be made for any such transfer or exchange,
except for any tax or other governmental charge imposed in connection therewith.
Except as provided in Section 13(b), each Warrant Certificate issued upon
transfer or exchange shall bear the legend set forth in Section 13(b) if the
Warrant Certificate presented for transfer or exchange bore such legend.

            4. Mutilated or Missing Warrant Certificates. If any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company shall
issue, in exchange and substitution for and upon cancellation of the mutilated
Warrant Certificate, or in lieu of and substitution for the Warrant Certificate
lost, stolen or destroyed, a new Warrant Certificate of like tenor and
representing an equivalent number of Warrants, but only upon receipt of evidence
satisfactory to the Company of such loss, theft or destruction of such Warrant
Certificate and, if requested, indemnity satisfactory to it. The Company
acknowledges that a written indemnity by a Holder

                                      -4-
<PAGE>

or, if an Affiliate of a Holder is the holder of such lost, stolen or destroyed
Warrant Certificate, by such Holder or such Affiliate shall be satisfactory to
the Company for such purpose. No service charge shall be made for any such
substitution; however, all expenses and reasonable charges associated with
procuring such indemnity and all stamp, tax and other governmental duties that
may be imposed in relation thereto shall be borne by the holder of such Warrant
Certificate. Each Warrant Certificate issued in any such substitution shall bear
the legend set forth in Section 13(b) if the Warrant Certificate for which such
substitution was made bore such legend.

            5. Duration and Exercise of Warrants.

                        (a) The Warrants issued hereto evidenced by a Warrant
Certificate shall be exercisable in whole or in part by the
registered holder thereof on any Business Day after the Closing Date and prior
to the Expiration Date.

               (b) Subject to the provisions of this Agreement, the Warrants
evidenced by a Warrant Certificate may be exercised at any time by the
registered holder thereof by either (i) the surrender of the Warrant Certificate
evidencing the Warrants to be exercised, with the form of election to purchase
on the reverse thereof or attached thereto duly completed and signed, to the
Company at the Warrant Office, and upon payment of the aggregate Exercise Price
for the number of Warrant Shares in respect of which such Warrants are being
exercised in lawful money of the United States of America and/or by surrender to
the Company of shares of Common Stock then owned by the Warrant Holder and
valued for purposes hereof at their Current Market Price Per Share at the time
of exercise; or (ii) if the Current Market Price Per Share is greater than the
Exercise Price (at the date of calculation, as set forth below), in lieu of
exercising the Warrants as permitted in Section 5 (b) (i) hereinabove, the
holder of a Warrant Certificate may elect to receive shares of Common Stock
equal to the value (as determined below) of the Warrants (or the portion thereof
being canceled) by surrender of the Warrant Certificate, together with the
election to purchase (a form of which is attached to each Warrant Certificate)
attached thereto duly executed, to the Company at the Warrant Office referred to
herein, in which event the Company shall issue to the holder of the Warrant
Certificate that number of shares of Common Stock computed using the following
formula:

                            CS = WCS x (CMPPS - EP)
                                 ------------------
                                     CMPPS

 Where                     CS equals the number of shares of Common Stock to be
                           issued to the holder of the Warrant Certificate

                           WCS equals the number of shares of Common Stock
                           purchasable under the Warrants being exercised (at
                           the date of such calculation)

                                      -5-
<PAGE>

                           CMPPS equals the Current Market Price Per Share (at
                           the date of such calculation)

                           EP equals the Exercise Price (as adjusted to the date
                           of such calculation).

For purposes of Rule 144 under the Securities Act, 17 C.F.R. ss. 230.144, the
parties hereto agree that the exercise of any Warrants in accordance with this
Section 2.2 shall be deemed to be a conversion of such Warrants, pursuant to the
terms of this Agreement and the Warrants, into Common Stock.

               (c) Upon exercise of any Warrants hereunder, the Company shall
issue and cause to be delivered to or upon the written order of the registered
holders of such Warrants and in such name or names as such registered holders
may designate, a certificate for the Warrant Shares issued upon such exercise of
such Warrants. Any Persons so designated to be named therein shall be deemed to
have become holders of record of such Warrant Shares as of the date of exercise
of such Warrants.

               (d) Warrants shall be deemed to have been exercised or converted
immediately prior to the close of business on the date of its surrender for
exercise or conversion as provided herein, and the Person entitled to receive
the Warrant Shares issuable upon such exercise shall be treated for all purposes
as the holder of record of such shares as of the close of business on such date.

               (e) If less than all of the Warrants evidenced by a Warrant
Certificate are exercised at any time, a new Warrant Certificate or Certificates
shall be issued for the remaining number of Warrants evidenced by such Warrant
Certificate. Each new Warrant Certificate so issued shall bear the legend set
forth in Section 13(b) if the Warrant Certificate presented in connection with
partial exercise thereof bore such legend, unless the transfer restrictions
referred to in such legend are no longer applicable pursuant to Section 13(d).
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled.

            6. No Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock upon exercise of any Warrants, but shall pay
for any such fraction of a share an amount in cash equal to the then Current
Market Price Per Share of one such share of Common Stock multiplied by such
fraction.

            7. Payment of Taxes. The Company shall pay all taxes (other than
income taxes) attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; provided, however, that the Company shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance of any Warrant Certificate or any certificate for Warrant Shares in a
name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such certificate unless or until the person or
persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.

                                      -6-
<PAGE>

            8. Stockholder Rights. Nothing contained in this Agreement or in any
of the Warrant Certificates shall be construed as conferring upon the holders
thereof the right to vote or to consent or to receive notice as a stockholder in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter, or any rights whatsoever as a stockholder of the
Company. Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as imposing any obligation on the registered
holders thereof to purchase any securities or as imposing any liabilities on
such holders as stockholders of the Company, whether such obligation or
liabilities are asserted by the Company or by creditors of the Company.

            9. Reservation and Issuance of Warrant Shares; Certain Corporate
Actions.

               (a) The Company will at all times reserve and keep available,
free from preemptive rights, or any other actual contingent purchase rights of
persons other than the Holders out of the aggregate of its authorized but
unissued Common Stock, for the purpose of enabling it to satisfy any obligation
to issue Warrant Shares upon exercise of Warrants, the maximum number of shares
of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.

               (b) Before taking any action which would cause an adjustment
pursuant to Section 11 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company will take all corporate action
necessary, in the opinion of its counsel (which may be in-house counsel employed
by the Company), in order that the Company may validly and legally issue fully
paid and nonassessable Warrant Shares at the Exercise Price as so adjusted.

               (c) The Company covenants that all Warrant Shares which may be
issued upon exercise of Warrants will be, upon payment of the Exercise Price and
issuance thereof, fully paid, nonassessable, free of preemptive rights and free
from all taxes, liens, charges and security interests with respect to the issue
thereof.

            10. Registration Rights. The Warrant Shares shall have the
registration rights provided for in the Registration Rights Agreement, dated as
of the Closing Date, by and among the Company, the Holder and the noteholders
listed on Schedule I to the Note Purchase Agreement.

            11. Adjustment of Exercise Price and Number of Warrant Shares
Issuable. The Exercise Price and the number of Warrant Shares issuable upon the
exercise of each Warrant are subject to adjustment from time to time upon the
occurrence of the events enumerated in this Section 11.

               (a) Adjustment for Change in Common Stock.

                                      -7-
<PAGE>

               If the Company :

               (1) pays a dividend or makes a distribution on its outstanding
Common Stock in shares of its capital stock or any other class of capital stock
exchangeable for or convertible into Common Stock;

               (2) splits or subdivides its outstanding Common Stock into a
greater number of shares;

               (3) combines its outstanding Common Stock into a smaller number
of shares; or

               (4) issues by reclassification of its Common Stock any shares of
any class of its capital stock,

               then the Exercise Price and the number and kind of shares of
capital stock of the Company issuable upon the exercise of a Warrant (as in
effect immediately prior to such action) shall be proportionately adjusted so
that the Holder may receive the aggregate number and kind of shares of capital
stock of the Company which he would have owned immediately following such action
if such Warrant had been exercised immediately prior to such action.

               Such adjustment shall be made successively whenever any event
listed above shall occur and shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or reclassification.

               (b) Adjustment for Rights Issue.

               If the Company shall issue any rights, options or warrants
entitling all of the holders of Common Shares to subscribe for or purchase
Common Stock at a price per share less than the Exercise Price as of the record
date in respect of such issuance, then, and in such event, the Exercise Price
shall be reduced to such lower price.

               The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective at the opening
of business on the day next following the record date for the determination of
shareholders entitled to receive the rights, options or warrants. If at the end
of the period during which such rights, options or warrants are exercisable,
none of the rights, options or warrants shall have been exercised, the Exercise
Price shall be immediately readjusted to what it would have been if the
adjustment provided for in this paragraph had not been made.

               In determining whether any rights, options or warrants entitle
the holders to subscribe for or purchase Common Stock at a price per share less
than the applicable Exercise Price, there shall be taken into account any cash
or other consideration received by the Company upon exercise of such rights,
options or warrants. The value of such consideration, if other than cash, shall
be determined by the good faith business judgment of the Company's Board of
Directors, whose determination shall be conclusive.

                                      -8-
<PAGE>

               (c) Adjustment for Other Distributions.

               If the Company distributes to all holders of its Common Stock any
of its assets or debt securities or any rights or warrants to purchase debt
securities, assets or other securities of the Company (other than distributions
referred to in subsection 11(a) or rights, options or warrants referred to in
subsection 11(b)), the Exercise Price shall be adjusted (but only downward) in
accordance with the following formula:

                           E'      =      E x M - F
                                          ---------
                                              M
where:

     E'   =    the adjusted Exercise Price.

     E    =    the current Exercise Price.

     M    =    the Current Market Price Per Share of Common Stock on the record
               date of the distributions mentioned in subsection 11(c).

     F    =    the fair market value on the record date of the assets,
               securities, rights or warrants distributed by the Company
               applicable to one share of Common Stock. The fair market value
               shall be determined by the good faith judgment of the Company's
               Board of Directors, whose determination shall be conclusive.

               The adjustment shall be made successively whenever any such
distribution is made and shall become effective at the opening of business on
the day next following the record date for the determination of shareholders
entitled to receive such dividend or distribution.

               (d) Adjustment for Common Stock Issue.

               If the Company issues Common Stock (other than in any of the
transactions described in subsections 11(a), (b) and (c) or upon exercise of any
securities issued pursuant to such transactions) for consideration per share
which is less than the Exercise Price as of the date (the "Pricing Date") the
Company fixes the offering price of such additional Common Stock, then and in
such event, the Exercise Price shall be adjusted to such lower price.

               The adjustment shall be made successively whenever any such
issuance is made, and shall become effective on the day next following the date
of issuance of such additional shares.

               (e) Adjustment for Convertible Securities Issue.

               If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in transactions
described in subsections (a), (b) and (c) of this Section 11) or securities
entitling the recipient to subscribe for or purchase Common Stock or securities
convertible into Common Stock (collectively, "Convertible Securities") at a

                                      -9-
<PAGE>

price per share of Common Stock (assuming immediate conversion) less than the
Exercise Price as of the date (the "Pricing Date") the Company fixes the
offering price of such securities, then, and in such event, the Exercise Price
shall be reduced to such lower price.

               The adjustment shall be made successively whenever any such
issuance is made, and shall become effective at the opening of business on the
day following the date of issuance of such Convertible Securities.

               If none of the shares of Common Stock deliverable upon conversion
or exchange of such securities have been issued when such securities are no
longer outstanding, then the Exercise Price shall promptly be readjusted to what
it would have been if the adjustment provided for in this paragraph had not been
made.

               In determining whether any Convertible Securities entitle the
holders to subscribe for or purchase Common Stock at a price per share less than
the applicable Exercise Price, there shall be taken into account any cash or
other consideration received by the Company upon conversion of such convertible
securities. The value of such consideration, if other than cash, shall be
determined by the good faith business judgment of the Company's Board of
Directors, whose determination shall be conclusive.

               (f) Events pursuant to which this Section 11 does not apply.

               (1) Subsections 11(b), (d) and (e) do not apply to:

                  (i) the issuance of Common Stock pursuant to employee share
purchase plans approved by the Company's Board of Directors, or

                  (ii) the issuance of Common Stock issuable upon exercise of
warrants or options outstanding as of the date hereof or upon exercise of the
Warrants, or

                  (iii) options (or shares of Common Stock underlying such
options) issued pursuant to employee stock options plans approved by the
Company's Board of Directors or otherwise to employees pursuant to individually
negotiated employment agreements approved by the Company's board of directors;
or

                  (iv) options to purchase up to 500,000 shares of Common Stock
(or such underlying shares of Common Stock) issued after the date hereof to
independent contractors pursuant to individually negotiated independent
contractor agreements.

               (g) When De Minimis Adjustment May Be Deferred.

               No adjustment in the Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Exercise
Price. Any adjustments that are not made shall be carried forward and taken into
account in any subsequent adjustment.

               All calculations under this Section 11 shall be made to the
nearest cent or to the nearest 1/100th of a share, as the case may be.

                                      -10-
<PAGE>

               (h) When No Adjustment Required.

               No adjustment need be made for a change in the par value, or from
par value to no par value, or from no par value to par value, of the Common
Stock.

               (i) Notice of Adjustment.

               Whenever the Exercise Price is adjusted, the Company shall
provide the notices required by Section 12 hereof.

               (j) Reorganization of the Company.

               (1) If the Company consolidates or merges with or into, or
transfers or leases all or substantially all of its assets to, any person or
reclassifies its Common Stock, upon consummation of such event (a
"Reorganization Event"), the Warrants shall automatically become exercisable for
the kind and amount of securities, cash or other assets which the Holder would
have owned immediately after such Reorganization Event if the Holder had
exercised the Warrants immediately before the effective date of the
Reorganization Event. In connection with any such Reorganization Event, the
Company may, upon at least fifteen (15) business days' prior written notice to
the Holders, accelerate the Expiration Date to a date which is no earlier than
five (5) business days after the effective date of such Reorganization Event;
provided, however, that in the event of such acceleration:

                     (A) the Company shall be deemed, immediately prior to the
effectiveness of such Reorganization Event, to have issued to each Holder
additional Warrants exercisable for such number of shares of Common Stock as is
equal to ten percent (10%) of the Warrant Shares issuable under such Holder's
existing Warrants; and

                     (B) in the event that any Warrants have not been exercised
immediately prior to the Expiration Date and the Current Market Price Per Share
immediately prior to the effectiveness of such Reorganization Event is greater
than the Exercise Price, then such Warrants shall be deemed to have been
automatically exercised by the Holders thereof immediately prior to the
Expiration Date pursuant to Section 5(b)(ii) hereof, but without regard to any
requirement in such Section 5(b)(ii) of such Holders to surrender such Warrants
or to deliver an election to purchase under such Warrants.

                  (2) If, and at the time that, this subsection (j) applies,
then subsections (a), (b), (c) (d) and (e) of this Section 11 and the adjustment
events thereunder do not apply with respect to the Reorganization Event
specified in this subsection (j); provided, however, that all prior downward
adjustments to the Exercise Price shall be effective.

                  (k) Company Determination Final.

                  Any determination that the Company or the Company's Board of
Directors must make pursuant to this Section 11 shall to the extent made in the
exercise of its good faith and reasonable judgment be conclusive to the extent
provided in this Section 11.

                                      -11-
<PAGE>

               12. Notices to Warrant Holders; Notices of Issuances and
Dividends.

               Whenever there is an adjustment in the number of Warrant Shares
or other securities or assets to which each Warrant Holder is entitled, the
Company shall promptly mail to all Warrant Holders a notice of adjustment. Such
notice shall be accompanied by (i) a certificate briefly stating the facts
requiring the adjustment and the manner of computing the adjustment and (ii) a
certificate from the Chief Financial Officer of the Company that the adjustment
is correct.

               13. Restrictions on Transfer.

               (a) The Holder (i) represents that it is an "accredited investor"
within the meaning of the Securities Act and the rules and regulations
promulgated thereunder, (ii) represents that it has received adequate
information about the Company to determine the advisability of a purchase of the
Company's securities, (iii) represents that it is acquiring the Warrants and
will acquire any Warrant Shares for its own account for investment and not with
a view to any distribution or public offering within the meaning of the
Securities Act, except with respect to Warrant Shares, pursuant to the
registration of the offer and sale thereof under the Securities Act, (iv)
acknowledges that the Warrants and any Warrant Shares issuable upon exercise
thereof have not been registered under the Securities Act and (v) agrees that it
will not sell or otherwise transfer any of its Warrants or Warrant Shares except
pursuant to the terms and conditions specified herein and that it will cause any
permitted transferee thereof to agree to take and hold the same subject to the
terms and conditions specified herein (including, without limitation, Section
13(c)).

               (b) Except as provided in Section 13(d), each Warrant Certificate
and each certificate for the Warrant Shares issued to the Holder or to a
subsequent transferee thereof pursuant to Section 13(c) shall include a legend
in substantially the following form (with such changes therein as may be
appropriate to reflect whether such legend refers to Warrants or Warrant
Shares); provided, however, that such legend shall not be required if such
transfer is being made in connection with a sale which is exempt from
registration pursuant to Rule 144 under the Securities Act or other applicable
exemption from registration or if the opinion of counsel referred to in Section
13(c) is to the further effect that neither such legend nor the restrictions on
transfer in this Section 13 are required in order to ensure compliance with the
Securities Act:

                        THE WARRANTS AND SHARES REPRESENTED BY THIS CERTIFICATE
            HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
            AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW AND MAY NOT BE SOLD
            OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
            THEREFROM UNDER SUCH ACT OR LAW. SUCH WARRANTS AND SHARES MAY BE
            TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN AND
            ARE SUBJECT TO OTHER PROVISIONS OF THE WARRANT AGREEMENT, DATED AS
            OF MAY 3, 2000, BETWEEN THE COMPANY AND CERTAIN HOLDERS (AS SUCH
            AGREEMENT MAY BE SUPPLEMENTED, MODIFIED, AMENDED OR RESTATED FROM
            TIME TO TIME), A COMPLETE AND CORRECT COPY OF WHICH IS AVAILABLE FOR
            INSPECTION AT THE PRINCIPAL OFFICE OF THE COMPANY AND WILL BE

                                      -12-
<PAGE>

            FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT
            CHARGE.

               (c) Prior to any assignment, transfer or sale of any Warrant or
any Warrant Shares , the holder thereof shall give written notice to the Company
of such holder's intention to effect such assignment, transfer or sale, which
notice shall set forth the date of such proposed assignment, transfer or sale
and the identity of the proposed transferee. Each holder wishing to effect such
a transfer of any Warrant or Warrant Shares shall also furnish to the Company an
agreement by the transferee thereof that it is taking and holding the same
subject to the terms and conditions specified herein and a written opinion of
such holder's counsel, in form reasonably satisfactory to the Company, to the
effect that the proposed transfer may be effected without registration under the
Securities Act.

               (d) The restrictions set forth in this Section 13 shall terminate
and cease to be effective with respect to any Warrants or Warrant Shares when
the offer and sale of which are registered under the Securities Act or upon
receipt by the Company of an opinion of counsel knowledgeable as to securities
matters, in form reasonably satisfactory to the Company, to the effect that
compliance with such restrictions is not necessary in order to comply with the
Securities Act with respect to the transfer of the Warrants and the Warrant
Shares; provided, however, that after two years from the date of issuance of any
Warrants (or such shorter period as may be provided by Rule 144(k) promulgated
under the Securities Act), such restrictions shall automatically terminate with
respect to the Holder if not an Affiliate of the Company(without the necessity
of any opinion of counsel) as to such Warrants and as to any Warrant Shares
issued in respect of such Warrants upon exercise of the Conversion Right set
forth in Section 5(b). Whenever such restrictions shall so terminate the holder
of such Warrants and/or Warrant Shares shall be entitled to receive from the
Company, without expense (other than transfer taxes, if any), Warrant
Certificates or certificates for such Warrant Shares not bearing the legend set
forth in Section 13(b), at which time the Company will rescind any transfer
restrictions relating thereto.

               14. Amendments and Waivers. Any provision of this Agreement may
be amended, supplemented, waived, discharged or terminated by a written
instrument signed by the Company and the holders of not less than a majority of
the outstanding Warrants (or in the case of Section 13, the holders of a
majority of the aggregate outstanding Warrants and Non-Public Warrant Shares,
voting as a single group); provided, however, that (i) this Agreement may not be
amended, supplemented or waived so as to increase the Exercise Price, reduce the
number of Warrant Shares issuable upon exercise of any Warrants, or alter the
period during which any Warrants may be exercised (except to provide for a later
Expiration Date), in each case without the consent of the Holder, and (ii) this
Section 14 may not be amended or supplemented without the consent of the Holder.

               15. Specific Performance. The parties agree that irreparable
damage will result in the event that the obligations of each party under this
Agreement are not specifically enforced, and that any damages available at law
for a breach of any such obligations would be inadequate. Therefore, the holders
of the Warrants and/or Non-Public Warrant Shares and the Company shall have the
right to seek specific performance by the Company and the holders of the
Warrants

                                      -13-
<PAGE>

and/or Non-Public Warrant Shares, respectively, of the provisions of this
Agreement, and appropriate injunctive relief may be applied for and granted in
connection therewith. The Company and the holders of the Warrants and/or
Non-Public Warrant Shares hereby irrevocably waive, to the extent that each of
them may do so under applicable law, any defense based on the adequacy of a
remedy at law which may be asserted as a bar to the remedy of specific
performance in any action brought against such party for specific performance of
this Agreement. Such remedies and all other remedies provided for in this
Agreement shall, however, be cumulative and not exclusive and shall be in
addition to any other remedies which may be available under this Agreement.

               16. Notices. Any notice, request, instruction or other document
to be given under this Agreement after the date hereof by any party hereto to
any other party shall be in writing and shall be deemed to have been duly given
on the date of service if delivered personally or by telecopier with confirmed
receipt, or on the third day after mailing if sent by certified mail, postage
prepaid, at the addresses set forth below:

                        If to or on the Company, addressed to the Company at the
            Warrant Office.

                        If to or on a Warrant Holder or holder of Warrant
            Shares, addressed to such holder as such holder's name and address
            shall appear on the Warrant Register or the Common Stock registry of
            the Company, as the case may be.

               17. Binding Effect. This Agreement shall be binding upon and
inure to the sole and exclusive benefit of the Company, its successors and
assigns, the Holders, Affiliates of the Holders and the registered holders from
time to time of the Warrants and the Warrant Shares.

               18. Continued Validity. A holder of Warrant Shares shall continue
to be entitled with respect to such Warrant Shares to all rights and subject to
all obligations to which it would have been entitled or subject as a Warrant
Holder under Sections 13 through 25 of this Agreement. Such rights and
obligations shall terminate as to any such holder upon the sale of the Warrant
Shares held by such holder. The Company will, at the time of each exercise of
any Warrant, in whole or in part, upon the request of the holder of the Warrant
Shares issued upon such exercise thereof, acknowledge in writing, in form
reasonably satisfactory to such holder, its continuing obligation to afford to
such holder all such rights; provided, however, that if such holder shall fail
to make any such request, such failure shall not affect the continuing
obligation of the Company to afford to such holder all such rights.

               19. GOVERNING LAW. THIS AGREEMENT AND EACH WARRANT CERTIFICATE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS, OTHER THAN
CHOICE OF LAW RULES, OF THE STATE OF OKLAHOMA. THE FEDERAL AND STATE COURTS OF
COMPETENT JURISDICTION LOCATED IN OKLAHOMA COUNTY, OKLAHOMA, SHALL HAVE PERSONAL
JURISDICTION OVER THE PARTIES TO THIS AGREEMENT, AND NO ACTION TO INTERPRET OR
ENFORCE THIS AGREEMENT SHALL BE INSTITUTED IN ANY OTHER JURISDICTION. EACH PARTY
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO ANY

                                      -14-
<PAGE>

SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT BEING
BROUGHT IN THE FEDERAL OR STATE COURTS OF COMPETENT JURISDICTION LOCATED IN
OKLAHOMA COUNTY, OKLAHOMA, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.

               20. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company and the registered
holders of the Warrants and the Warrant Shares any legal or equitable right,
remedy or claim under this Agreement.

               21. Voting and Consents to be on an As-Converted Basis. Wherever
this Agreement calls for the written consent or vote of any combinations of the
holders of the Warrants or any of the Warrant Shares, voting as a single group,
the Warrants shall be counted as if they had been exercised for Common Stock.

               22. Multiple Counterparts. This Agreement may be executed in one
or more counterparts for the convenience of the parties hereto, all of which
together shall constitute one and the same instrument.

               23. Entire Agreement. This Agreement contains the entire
understanding of the parties relating to the subject matter contained herein and
supersedes all prior agreements and understandings, written or oral, relating to
the subject matter hereof.

               24. Headings; Pronouns. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural,
as the identity of the entities or persons referred may require. The headings of
the sections of this Agreement are inserted for convenience only and shall not
constitute a part hereof nor affect in any way the meaning or interpretation of
this Agreement. "Herein," "hereof" and "hereunder" and other words of similar
import refer to this Agreement as a whole and not to any particular section or
other subdivision. All references herein to any action(s) which are to be taken
(or which are prohibited from being taken) by any Person, the Company or any
Subsidiary shall apply to such Person, the Company or such Subsidiary, as the
case may be, whether such action is taken directly or indirectly. All references
herein to actions by the Company or any Subsidiary (including, without
limitation, actions denoted by terms such as "create," "sell," "transfer" or
"dispose of") mean such action whether voluntary or involuntary, by operation of
law or otherwise.

               25. Exhibits. All exhibits attached hereto are incorporated
herein by reference.

               26. Severability. In the event that any provision contained
herein shall be held to be invalid, illegal or unenforceable for any reason,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.

                      [the next page is the execution page]

                                      -15-
<PAGE>

               IN WITNESS WHEREOF the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers,
as of the date first above written.

                                   COMPANY:

                                   GMX RESOURCES INC.

                                   By: /s/ Ken L. Kenworthy, Sr.
                                       -----------------------------------------
                                       Name: Ken L. Kenworthy, Sr.
                                       Title:  Chief  Financial Officer

                                       Address:   9400 N. Broadway, Suite 600
                                                  Oklahoma City, Oklahoma  73114
                                       Telephone: (405) 600-0711
                                       Fax:       (___) ________
                                       Attn:      Chief Executive Officer

                                   /s/ Doug Moreland
                                   ---------------------------------------------
                                   DOUG MORELAND

                                   /s/ Patrick Parker
                                   ---------------------------------------------
                                   PATRICK PARKER

                                   /s/ Edwin J. Hagerty
                                   ---------------------------------------------
                                   EDWIN J. HAGERTY

                                   X-MEN, LLC

                                   By: /s/ Gregg Schneider
                                      ------------------------------------------
                                   Name: Gregg Schneider
                                   Title: Member

                                   /s/ Wilburn Coston Perryman
                                   ---------------------------------------------
                                   WILBURN COSTON PERRYMAN

                                      -16-
<PAGE>

                                    EXHIBIT A

                                       TO

                                WARRANT AGREEMENT
                                -----------------

            THE WARRANTS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE
SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT OR LAW. SUCH WARRANTS MAY
BE TRANSFERRED ONLY IN COMPLIANCE WITH THE CONDITIONS SPECIFIED IN AND ARE
SUBJECT TO OTHER PROVISIONS OF THE WARRANT AGREEMENT, DATED AS OF JANUARY 16,
2004, BETWEEN THE COMPANY AND CERTAIN HOLDERS (AS SUCH AGREEMENT MAY BE
SUPPLEMENTED, MODIFIED, AMENDED OR RESTATED FROM TIME TO TIME), A COMPLETE AND
CORRECT COPY OF WHICH IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL OFFICE OF THE
COMPANY AND WILL BE FURNISHED TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND
WITHOUT CHARGE.

                               WARRANT CERTIFICATE

January 16, 2004                                          Certificate No.: ____

            This Warrant Certificate certifies that _________________________
(the "Holder"), or registered assigns, is the registered holder of __________
Warrants (the "Warrants") to purchase shares of common stock, par value $0.001
per share ("Common Stock"), of GMX Resources, Inc., an Oklahoma corporation (the
"Company"). Each Warrant entitles the holder, but only subject to the conditions
set forth herein and in the Warrant Agreement referred to below, to purchase
from the Company before the "Expiration Date" as defined in the Warrant
Agreement, one fully paid and nonassessable share of Common Stock (the "Warrant
Shares") to the extent set forth in the Warrant Agreement, at a price equal to
the Exercise Price (as defined in the Warrant Agreement), payable in the manner
specified in the Warrant Agreement, upon surrender of this Warrant Certificate,
execution of the annexed Form of Election to Purchase and payment of the
Exercise Price at the office of the Company at 9400 North Broadway, Suite 600,
Oklahoma City, Oklahoma 73114, or such other address as the Company may specify
in writing to the registered holder of the Warrants evidenced hereby (the
"Warrant Office"). The Exercise Price and number of Warrant Shares purchasable
upon exercise of the Warrants are subject to adjustment prior to the Expiration
Date as set forth in the Warrant Agreement.

                                      A-1
<PAGE>

            No Warrant may be exercised after the Expiration Date and (except as
otherwise provided in the Warrant Agreement) all rights of the registered
holders of the Warrants shall cease after the Expiration Date.

            The Company may deem and treat the registered holder of the Warrants
evidenced hereby as the absolute owner thereof (notwithstanding any notation of
ownership or other writing hereon made by any person), for the purpose of any
exercise hereof and of any distribution to the holder hereof and for all other
purposes, and the Company shall not be affected by any notice to the contrary.

            Warrant Certificates, when surrendered at the office of the Company
at the above-mentioned address by the registered holder hereof in person or by a
legal representative duly authorized in writing, may be exchanged, in the manner
and subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing, in the aggregate, a like number of
Warrants.

            Upon due presentment for registration of transfer of this Warrant
Certificate at the office of the Company at the above-mentioned address, a new
Warrant Certificate or Warrant Certificates of like tenor and evidencing in the
aggregate a like number of Warrants shall be issued in exchange for this Warrant
Certificate to the transferee(s) and, if less than all the Warrants evidenced
hereby are to be transferred, to the registered holder hereof, subject to the
limitations provided in the Warrant Agreement, without charge except for any tax
or other governmental charge imposed in connection therewith.

            This Warrant Certificate is one of the Warrant Certificates referred
to in the Warrant Agreement, dated as of January 16, 2004, between the Company
and the Holder (as such Warrant Agreement may be supplemented, modified, amended
or restated from time to time, the "Warrant Agreement"). The Warrant Agreement
is hereby incorporated by reference in and made a part of this instrument and is
hereby referred to for a description of the rights, limitation of rights,
obligations, duties and immunities thereunder of the Company and the holders.

            IN WITNESS WHEREOF the Company has caused this Warrant Certificate
to be signed by its duly authorized officer.

                                   GMX RESOURCES INC.

                                   By:
                                      ------------------------------------------

                                   Name:
                                        ----------------------------------------

                                   Title:
                                         ---------------------------------------

                                      A-2
<PAGE>

                          FORM OF ELECTION TO PURCHASE

                   (To be executed upon exercise of Warrants)

               The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase ______________ Warrant
Shares and herewith (i) tenders payment for such Warrant Shares to the order of
the Company in the amount of $ in accordance with Section 5(b)(i) of the
Agreement, or (ii) receives Warrant Shares in accordance with the terms of
Section 5(b)(ii) of the Agreement. The undersigned requests that a certificate
for such Warrant Shares be registered in the name of
_______________________________ whose address is _______________________________
and that such certificate be delivered to _______________________________ whose
address is ________________________________. If such number of Warrant Shares is
less than all of the Warrant Shares purchasable hereunder, the undersigned
requests that a new Warrant Certificate representing the remaining balance of
the Warrant Shares be registered in the name of ______________________________
whose address is ________________________________ and that such Warrant
Certificate be delivered to _______________________________ whose address is
______________________________.

            Signature:

            ----------------------------------------------
            (Signature must conform in all respects to name of holder
            as specified on the face of the Warrant Certificate)

            ----------------------------------------------
            (Printed Name)

            Date: _________________________

                                      A-3
<PAGE>

                                    EXHIBIT B
                                       TO
                                WARRANT AGREEMENT
                                -----------------

                                WARRANT REGISTER
                                ----------------

 Warrant           Original Number      Number of        Names and
 Certificate      of Warrants and      Warrants         Addresses of
 Number            Warrant Shares       Expired          Warrant Holders
 ------            --------------       -------          ---------------

     1                 55,000                            Doug Moreland
                                                         1655 East Layton Dr.
                                                         Englewood, CO 80113

     2                 41,250                            Patrick Parker
                                                         101 W. 6th Street
                                                         Suite 612
                                                         Austin, TX 78701

     3                 20,625                            Edwin J. Hagerty
                                                         13355 Noel Road
                                                         Suite 1400
                                                         Dallas, TX 75240

     4                 20,625                            X-Men LLC
                                                         c/o Charter Holdings
                                                         1845 Woodall Rodgers
                                                         Suite 1700
                                                         Dallas, TX 75201

                                      B-1
<PAGE>

 Warrant           Original Number      Number of        Names and
 Certificate      of Warrants and      Warrants         Addresses of
 Number            Warrant Shares       Expired          Warrant Holders
 ------            --------------       -------          ---------------

    5                 37,500                             Wilburn C. Perryman
                                                         1845 Woodall Rodgers
                                                         Suite 1700
                                                         Dallas, TX 75201

                                      B-2EXHIBIT 10.4
                                                                    ------------

                          REGISTRATION RIGHTS AGREEMENT

            REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
January 16, 2004, by and among GMX RESOURCES INC., an Oklahoma corporation (the
"Company"), and the Warrant Holders set forth in Schedule I attached hereto
(together with their permitted successors and assigns, collectively the
"Security Holders" or "Holders", whether one or more).

            1. INTRODUCTION.

                        (A) NOTE PURCHASE AGREEMENT. The Company and the
Security Holders have today executed that certain Note Purchase Agreement
(the "Note Purchase Agreement"), pursuant to which the Security Holders has made
a loan to the Company in the aggregate principal amount of $1,000,000. In
addition, pursuant to the terms of the Note Purchase Agreement and the
transactions contemplated thereby, the Company has entered into an agreement
(the "Warrant Agreement") whereby the Company has issued to the Security Holders
warrants (the "Warrants") exercisable for an aggregate of 175,000 shares of
Common Stock (the "Warrant Shares"). The number of Warrant Shares is subject to
adjustment upon the occurrence of stock splits, recapitalizations and similar
events occurring after the date hereof, as set forth in the Warrant Agreement.

                        (B) DEFINITION OF SECURITIES. The Warrants and the
Warrant Shares (whether the Warrant Shares have been exercised and
issued or are currently exercisable by the holder of the Warrants pursuant to
the terms and conditions of the Warrant Agreement) are herein collectively
referred to as the "Securities."

                        (C) NATIONAL MARKET REPRESENTATION. The Company
represents and warrants that the Company's Common Stock is currently
eligible for trading on the Nasdaq National Market ("National Market") under the
symbol "GMXR." Certain capitalized terms used in this Agreement are defined in
Section 3 hereof; references to sections shall be to sections of this Agreement.

            2. REGISTRATION UNDER SECURITIES ACT, ETC.

            2.1 REQUIRED REGISTRATION.

                        (A) REGISTRATION OF REGISTRABLE SECURITIES. As soon as
practicable after the Company is eligible for use of Form S-3, the
Company shall prepare and file a registration statement to effect the
registration under the Securities Act of all, but not less than all, of the
Registrable Securities, all to the extent requisite to permit the public
disposition of all such Registrable Securities so to be registered. The Company
shall use its best efforts to cause the registration statement which is the
subject of this Section 2.1(a) (the "Registration Statement") to be declared
effective by the Commission upon the earlier to occur of (i) June 30, 2004, (ii)
90 days following the filing of the Registration Statement contemplated by this
Section 2.1, or (iii) ten (10) business days after receipt of a "no review" or
similar letter from the Commission (the "Required Effectiveness Date"). In the
event that (a) the Registration Statement is not declared effective by the
Commission on the Required Effectiveness Date, or (b) the Registration Statement
fails to remain effective for the duration of the Registration Maintenance
Period for any reason, including, without limitation, because the Company
becomes ineligible for use of Form S-3 at any time after the Required
Effectiveness Date, then on the first Business Day (as defined in the Note
Purchase Agreement) of each month (or partial month) thereafter, commencing on
July 1, 2004, in the case of clause (a) above, or on the first day of the
calendar month immediately following the month in

--------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT - PAGE 1
<PAGE>

which the Registration Statement ceases to remain effective under clause (b)
above, in accordance with the terms and provisions of the Warrant Agreement, the
Company shall issue Warrants for an additional 10,000 Warrant Shares each month
to the Warrant Holders (pro rata based on the number of Warrants held by each)
until such time as the Registration Statement is declared effective by the
Commission. The issuance of such Warrants shall be the sole and exclusive remedy
of the Holders for any failure of the Company to register the Registrable
Securities by the Required Effectiveness Date or to maintain its eligibility for
Form S-3. Nothing contained herein shall be deemed to limit the number of
Registrable Securities to be registered by the Company hereunder.

                        (B) REGISTRATION STATEMENT FORM. Registrations under
this Section 2.1 shall be on Form S-3 so long as the Company remains eligible
for such Form and its Common Stock is listed on the National Market System or a
national securities exchange, and if the Company is not eligible for Form S-3,
the Company shall have no obligation to register the Registrable Securities
until the Company becomes eligible for Form S-3. Any registration effected
pursuant to this Section 2.1 shall permit the disposition of all such
Registrable Securities in accordance with the intended method or methods of
disposition specified by the Security Holders; provided, however, such intended
method of disposition shall not include an underwritten offering of the
Registrable Securities.

                        (C) EXPENSES. The Company will pay all Registration
Expenses in connection with any registration required by this Section
2.1.

                        (D) EFFECTIVE REGISTRATION STATEMENT. A registration
pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect thereto has become effective within
the time period specified herein, provided that a registration which does not
become effective after the Company has filed a registration statement with
respect thereto solely by reason of the refusal to proceed of any holder of
Registrable Securities (other than a refusal to proceed based upon the advice of
counsel in the form of a letter signed by such counsel and provided to the
Company relating to a disclosure matter unrelated to such holder) shall be
deemed to have been effected by the Company unless the holders of the
Registrable Securities shall have elected to pay all Registration Expenses in
connection with such registration, (ii) if, after it has become effective, such
registration becomes subject to any stop order, injunction or other order or
extraordinary requirement of the Commission or other governmental agency or
court for any reason or (iii) if, after it has become effective, such
registration ceases to be effective for more than an aggregate of ninety (90)
days.

                        (E) PLAN OF DISTRIBUTION. The Company hereby agrees that
the Registration Statement shall include a plan of distribution
section reasonably acceptable to the Security Holders; provided, however, that
such plan of distribution shall not include an underwritten offering of the
Registrable Securities.

            2.2 INCIDENTAL REGISTRATION. (A) RIGHT TO INCLUDE REGISTRABLE
SECURITIES. If at any time after the date hereof, the Company proposes to
register its Common Stock or any of its securities for which the Warrants are
then exercisable under the Securities Act (other than by a registration in
connection with an acquisition in a manner which would not permit registration
of Registrable Securities for sale to the public, on Form S-8, or any successor
form thereto, on Form S-4, or any successor form thereto and other than pursuant
to Section 2.1), on an underwritten basis (either best-efforts or
firm-commitment), then, the Company will each such time give prompt written
notice to all Holders of its intention to do so and of such Holders' rights
under this Section 2.2. Upon the written request of any such Holder made within
ten (10) days after the receipt of any such notice who agrees to exercise the

--------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT - PAGE 2
<PAGE>

Warrants for the Registrable Securities immediately upon the effectiveness of
any registration statement , the Company will, subject to the terms of this
Agreement, effect the registration under the Securities Act of the Registrable
Securities, to the extent requisite to permit the disposition as a part of the
same underwritten offering of such Registrable Securities so to be registered,
by inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register, provided that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
either not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each Holder
and, thereupon, (i) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
any holder or holders of Registrable Securities entitled to do so to request
that such registration be effected as a registration under Section 2.1, and (ii)
in the case of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities, for the same period as the delay in
registering such other securities. No registration effected under this Section
2.2 shall relieve the Company of its obligation to effect any registration upon
a Registration Request under Section 2.1, nor shall any such registration
hereunder be deemed to have been effected pursuant to Section 2.1. The Company
will pay all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to this Section 2.2. The right
provided the holders of the Registrable Securities pursuant to this Section
shall be exercisable at their sole discretion.

                        (B) PRIORITY IN INCIDENTAL REGISTRATIONS. If the
managing underwriter of the underwritten offering contemplated by this
Section 2.2 shall inform the Company and holders of the Registrable Securities
requesting such registration by letter of its belief that the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, then the Company will include in such
registration, to the extent of the number which the Company is so advised can be
sold in such offering, (i) first securities proposed by the Company to be sold
for its own account, and (ii) second Registrable Securities and securities of
other selling Security Holders requested to be included in such registration pro
rata on the basis of the number of shares of such securities so proposed to be
sold and so requested to be included; provided, however, the holders of
Registrable Securities shall have priority to all shares sought to be included
by officers and directors of the Company as well as holders of ten percent (10%)
or more of the Company's Common Stock unless the holders of such shares are
exercising their own registration rights.

            2.3 REGISTRATION PROCEDURES. Whenever the Company is required to
effect the registration of any Registrable Securities under the Securities Act
as provided in Section 2.1 and, as applicable, 2.2, the Company shall, as
expeditiously as possible:

               (a)  prepare and file with the Commission the Registration
                    Statement to effect such registration (including such
                    audited financial statements as may be required by the
                    Securities Act or the rules and regulations promulgated
                    thereunder) and thereafter use its best efforts to cause
                    such registration statement to be declared effective by the
                    Commission, as soon as practicable, but in any event no
                    later than the Required Effectiveness Date (with respect to
                    a registration pursuant to Section 2.1); provided, however,
                    that before filing such registration statement or any
                    amendments thereto, the Company will furnish to the counsel
                    selected by the holders of Registrable Securities which are
                    to be included in such registration, copies of all such
                    documents proposed to be filed;

--------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT - PAGE 3
<PAGE>

               (b)  with respect to any Registration Statement pursuant to
                    Section 2.1, so long as the disposition of the Registrable
                    Securities may be made on Form S-3 and the Company's Common
                    Stock is a "covered security" as defined in Section 18 of
                    the Securities Act, 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 in order to permit the disposition of all
                    Registrable Securities covered by such registration
                    statement, until the earlier to occur of five (5) years
                    after the date of this Agreement (subject to the right of
                    the Company to suspend the effectiveness thereof for not
                    more than 30 consecutive days or an aggregate of 90 days in
                    such five (5) year period) or such time as all of the
                    Securities which are the subject of such registration
                    statement cease to be Registrable Securities (such period,
                    in each case, the "Registration Maintenance Period");

               (c)  furnish to each holder of Registrable Securities covered by
                    such registration statement such number of conformed copies
                    of such registration statement and of each such amendment
                    and supplement thereto (in each case including all
                    exhibits), such number of copies of the prospectus contained
                    in such registration statement (including each preliminary
                    prospectus and any summary prospectus) and any other
                    prospectus filed under Rule 424 under the Securities Act, in
                    conformity with the requirements of the Securities Act, and
                    such other documents, as such holder and underwriter, if
                    any, may reasonably request in order to facilitate the
                    public sale or other disposition of the Registrable
                    Securities owned by such holder;

               (d)  use its best efforts to register or qualify all Registrable
                    Securities and other securities covered by such registration
                    statement under such other securities laws or blue sky laws
                    as any holder thereof shall reasonably request, to keep such
                    registrations or qualifications in effect for so long as
                    such registration statement remains in effect, and take any
                    other action which may be reasonably necessary to enable
                    such holder to consummate the disposition in such
                    jurisdictions of the securities owned by such holder, except
                    that the Company shall not for any such purpose be required
                    to qualify generally to do business as a foreign corporation
                    in any jurisdiction wherein it would not but for the
                    requirements of this subdivision (d) be obligated to be so
                    qualified or to consent to general service of process in any
                    such jurisdiction;

               (e)  use its best efforts to cause all Registrable Securities
                    covered by such registration statement to be registered with
                    or approved by such other governmental agencies or
                    authorities as may be necessary to enable the holder or
                    holders thereof to consummate the disposition of such
                    Registrable Securities;

               (f)  in connection with an underwritten offering, furnish to each
                    holder of Registrable Securities a signed counterpart,
                    addressed to such holder, and the underwriters of:

                    (i)  an opinion of counsel for the Company, dated the
                         effective date of such registration statement (or, if
                         such registration includes an underwritten public
                         offering, an opinion dated the date of the closing
                         under the underwriting agreement), reasonably
                         satisfactory in form and substance to such holder)
                         including that the prospectus and any prospectus
                         supplement forming a part of the Registration Statement
                         does not contain an untrue statement of a material fact
                         or omits a material fact required to be stated therein
                         or necessary in order to make the statements therein,
                         in light of the circumstances under which they were
                         made, not misleading, and

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REGISTRATION RIGHTS AGREEMENT - PAGE 4

                    (ii) a "comfort" letter (or, in the case of any such Person
                         which does not satisfy the conditions for receipt of a
                         "comfort" letter specified in Statement on Auditing
                         Standards No. 72, an "agreed upon procedures" letter),
                         dated the effective date of such registration statement
                         (or, if such registration includes an underwritten
                         public offering, a "comfort" letter dated the date of
                         the closing under the underwriting agreement), signed
                         by the independent public accountants who have
                         certified the Company's financial statements included
                         in such registration statement, covering substantially
                         the same matters with respect to such registration
                         statement (and the prospectus included therein) and, in
                         the case of the accountants' letter, with respect to
                         events subsequent to the date of such financial
                         statements, as are customarily covered in accountants'
                         letters delivered to the underwriters in underwritten
                         public offerings of securities (with, in the case of an
                         "agreed upon procedures" letter, such modifications or
                         deletions as may be required under Statement on
                         Auditing Standards No. 35) and, in the case of the
                         accountants' letter, such other financial matters, and,
                         in the case of the legal opinion, such other legal
                         matters, as such holder (or the underwriters) may
                         reasonably request;

               (g)  notify holders of the Registrable Securities and their
                    respective counsel promptly and confirm such advice in
                    writing promptly after the Company has knowledge thereof:

                    (i)  when the Registration Statement, the prospectus or any
                         prospectus supplement related thereto or post-effective
                         amendment to the Registration Statement has been filed,
                         and, with respect to the Registration Statement or any
                         post-effective amendment thereto, when the same has
                         become effective;

                    (ii) of any request by the Commission for amendments or
                         supplements to the Registration Statement or the
                         prospectus or for additional information;

                    (iii) of the issuance by the Commission of any stop order
                         suspending the effectiveness of the Registration
                         Statement or the initiation of any proceedings by any
                         Person for that purpose; and

                    (iv) of the receipt by the Company of any notification with
                         respect to the suspension of the qualification of any
                         Registrable Securities for sale under the securities or
                         blue sky laws of any jurisdiction or the initiation or
                         threat of any proceeding for such purpose;

               (h)  notify each holder of Registrable Securities covered by such
                    registration statement, at any time when a prospectus
                    relating thereto is required to be delivered under the
                    Securities Act, upon discovery that, or upon the happening
                    of any event as a result of which, the prospectus included
                    in such registration statement, as then in effect, includes
                    an untrue statement of a material fact or omits to state any
                    material fact required to be stated therein or necessary to
                    make the statements therein not misleading in the light of
                    the circumstances then existing, and at the request of any
                    such holder promptly prepare and furnish to such holder a

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REGISTRATION RIGHTS AGREEMENT - PAGE 5
<PAGE>

                    reasonable number of copies of a supplement to or an
                    amendment of such prospectus as may be necessary so that, as
                    thereafter delivered to the purchasers of such securities,
                    such prospectus shall not include an untrue statement of a
                    material fact or omit to state a material fact required to
                    be stated therein or necessary to make the statements
                    therein not misleading in the light of the circumstances
                    then existing;

               (i)  use its best efforts to obtain the withdrawal of any order
                    suspending the effectiveness of the Registration Statement
                    at the earliest possible moment;

               (j)  otherwise use its best efforts to comply with all applicable
                    rules and regulations of the Commission, and make available
                    to its Security Holders, as soon as reasonably practicable,
                    an earnings statement covering the period of at least twelve
                    months, but not more than eighteen months, beginning with
                    the first full calendar month after the effective date of
                    such registration statement, which earnings statement shall
                    satisfy the provisions of Section 11(a) of the Securities
                    Act and Rule 158 thereunder;

               (k)  enter into such agreements and take such other actions as
                    the Security Holders shall reasonably request in writing in
                    order to expedite or facilitate the disposition of such
                    Registrable Securities; and

               (l)  use its best efforts to list all Registrable Securities
                    covered by such registration statement on any securities
                    exchange on which any of the Registrable Securities are then
                    listed.

            The Company may require each holder of Registrable Securities as to
which any registration is being effected to furnish the Company such information
regarding such holder and the distribution of such securities as the Company may
from time to time reasonably request in writing.

            The Company will not file any registration statement pursuant to
Section 2.1, or amendment thereto or any prospectus or any supplement thereto
(including such documents incorporated by reference and proposed to be filed
after the initial filing of the Registration Statement) to which the Security
Holders shall reasonably object, provided that the Company may file such
document in a form required by law or upon the advice of its counsel.

            The Company represents and warrants to each holder of Registrable
Securities that it has obtained all necessary waivers, consents and
authorizations necessary to execute this Agreement and consummate the
transactions contemplated hereby other than such waivers, consents and/or
authorizations specifically contemplated by the Note Purchase Agreement.

            The Security Holders agree that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in subdivision (h)
of this Section 2.3, the Security Holders will forthwith discontinue its
disposition of Registrable Securities pursuant to the Registration Statement
relating to such Registrable Securities until its receipt of the copies of the
supplemented or amended prospectus contemplated by subdivision (h) of this
Section 2.3 and, if so directed by the Company, will deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in its
possession of the prospectus relating to such Registrable Securities current at
the time of receipt of such notice.

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REGISTRATION RIGHTS AGREEMENT - PAGE 6
<PAGE>

            2.4 UNDERWRITTEN OFFERINGS.

                        (A) INCIDENTAL UNDERWRITTEN OFFERINGS. If the Company at
any time proposes to register any of its securities under the
Securities Act as contemplated by Section 2.2 the Company will if requested by
the Security Holders as provided in Section 2.2 and subject to the provisions of
Section 2.2(a), use its reasonable efforts to arrange for such underwriters to
include all the Registrable Securities to be offered and sold by such holder
among the securities to be distributed by such underwriters.

                        (B) HOLDBACK AGREEMENTS. Subject to such other
reasonable requirements as may be imposed by the underwriter as a
condition of inclusion of a holder's Registrable Securities in the registration
statement, each such holder agrees by acquisition of Registrable Securities, if
so required by the managing underwriter, not to sell, make any short sale of,
loan, grant any option for the purchase of, effect any public sale or
distribution of or otherwise dispose of, except as part of such underwritten
registration, any equity securities of the Company, during such reasonable
period of time requested by the underwriter; provided however, such period shall
not exceed the 120 day period commencing 30 days prior to the commencement of
such underwritten offering and ending 90 days following the completion of such
underwritten offering.

                        (C) PARTICIPATION IN UNDERWRITTEN OFFERINGS. No holder
of Registrable Securities may participate in any underwritten
offering under Section 2.2 unless such holder of Registrable Securities (i)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved, subject to the terms and conditions hereof,
by the Company and the holders of a majority of Registrable Securities to be
included in such underwritten offering and (ii) completes and executes all
questionnaires, indemnities, underwriting agreements and other documents (other
than powers of attorney) required under the terms of such underwriting
arrangements. Notwithstanding the foregoing, no underwriting agreement (or other
agreement in connection with such offering) shall require any holder of
Registrable Securities to make any representations or warranties to or
agreements with the Company or the underwriters other than representations and
warranties contained in a writing furnished by such holder expressly for use in
the related registration statement or representations, warranties or agreements
regarding such holder, such holder's Registrable Securities and such holder's
intended method of distribution and any other representation required by law.

            2.5 PREPARATION; REASONABLE INVESTIGATION. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, and their respective
counsel and accountants, the opportunity to participate in the preparation of
such registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, and will give each
of them such access to its books and records and such opportunities to discuss
the business of the Company with its officers and the independent public
accountants who have certified its financial statements as shall be necessary,
in the reasonable opinion of such holders' and such underwriters' respective
counsel, to conduct a reasonable investigation within the meaning of the
Securities Act.

            2.6 INDEMNIFICATION. (A) INDEMNIFICATION BY THE COMPANY. In the
event of any registration of any securities of the Company under the Securities
Act, the Company will, and hereby does agree to, indemnify and hold harmless the
holder of any Registrable Securities covered by such registration statement, its
directors and officers, each other Person who participates as an underwriter in
the offering or sale of such securities and each other Person, if any, who
controls such holder or any such underwriter within the meaning of the

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REGISTRATION RIGHTS AGREEMENT - PAGE 7
<PAGE>

Securities Act against any losses, claims, damages or liabilities, joint or
several, to which such holder or any such director or officer or underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or 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 the Company will reimburse such holder and each such
director, officer, underwriter and controlling person for any legal or any other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, liability, action or proceeding, provided that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability (or action or proceeding in respect thereof) or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such holder or underwriter stating that it is for
use in the preparation thereof and, provided further that the Company shall not
be liable to any Person who participates as an underwriter in the offering or
sale of Registrable Securities or to any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
within the time required by the Securities Act to the Person asserting the
existence of an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus or an amendment or supplement thereto. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or any such director, officer, underwriter
or controlling person and shall survive the transfer of such securities by such
holder.

                        (B) INDEMNIFICATION BY THE HOLDERS. The Company may
require, as a condition to including any Registrable Securities in any
registration statement filed pursuant to this Agreement, that the Company shall
have received an undertaking satisfactory to it from the holder of such
Registrable Securities, to indemnify and hold harmless (in the same manner and
to the same extent as set forth in subdivision (a) of this Section 2.6) the
Company, each director of the Company, each officer of the Company and each
other Person, if any, who controls the Company within the meaning of the
Securities Act, with respect to any statement or alleged statement in or
omission or alleged omission from such registration statement, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, if such statement or alleged statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company through an instrument duly executed
by such holder specifically stating that it is for use in the preparation of
such registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Any such indemnity shall remain in full
force and effect, regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling person and shall survive
the transfer of such securities by such holder.

                        (C) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding

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REGISTRATION RIGHTS AGREEMENT - PAGE 8
<PAGE>

subdivisions of this Section 2.6, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written notice
to the latter of the commencement of such action, provided that the failure of
any indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subdivisions of this
Section 2.6, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, the indemnifying party shall be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified, to the extent that the indemnifying
party may wish, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement of any such action 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, or a covenant not to sue, in respect to such
claim or litigation. No indemnified party shall consent to entry of any judgment
or enter into any settlement of any such action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying party.

                        (D) OTHER INDEMNIFICATION. Indemnification similar to
that specified in the preceding subdivisions of this Section 2.6
(with appropriate modifications) shall be given by the Company and each holder
of Registrable Securities (but only if and to the extent required pursuant to
the terms of 2.6(b)) with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of any
governmental authority, other than the Securities Act.

                        (E) INDEMNIFICATION PAYMENTS. The indemnification
required by this Section 2.6 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.

                        (F) CONTRIBUTION. If the indemnification provided for in
the preceding subdivisions of this Section 2.6 is unavailable to an indemnified
party in respect of any expense, loss, claim, damage or liability referred to
therein, then each 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 expense, loss, claim, damage or liability (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the holder or underwriter, as the case may be, on
the other from the distribution of the Registrable Securities or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the holder or underwriter, as the case may be, on the other
in connection with the statements or omissions which resulted in such expense,
loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the holder or underwriter, as the case may be, on the other in connection
with the distribution of the Registrable Securities shall be deemed to be in the
same proportion as the total net proceeds received by the Company from the
initial sale of the Registrable Securities by the Company to the purchasers bear
to the total net proceeds received by all selling holders participating in such
offering or the underwriting discounts and commissions received by the
underwriter, as the case may be. The relative fault of the Company on the one
hand and of the Holder or underwriter, as the case may be, on the other shall be

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REGISTRATION RIGHTS AGREEMENT - PAGE 9
<PAGE>

determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission to state a material fact relates
to information supplied by the Company, by the Holder or by the underwriter and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission, provided that the foregoing
contribution agreement shall not inure to the benefit of any indemnified party
if indemnification would be unavailable to such indemnified party by reason of
the provisions contained in the first sentence of subdivision (a) of this
Section 2.6, and in no event shall the obligation of any indemnifying party to
contribute under this subdivision (f) exceed the amount that such indemnifying
party would have been obligated to pay by way of indemnification if the
indemnification provided for under subdivisions (b) of this Section 2.6 had been
available under the circumstances.

            The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subdivision (f)
were determined by pro rata allocation (even if the holders and any underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in the preceding sentence and subdivision
(c) of this Section 2.6, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.

            Notwithstanding the provisions of this subdivision (f), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. 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.

            3. DEFINITIONS. As used herein, unless the context otherwise
requires, the following terms have the following respective meanings:

            "AGREEMENT":  As defined in Section 1.

            "COMMISSION":  The Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.

            "COMMON STOCK": As defined in Section 1.

            "COMPANY":  As defined in the introductory paragraph of this
Agreement.

            "EXCHANGE ACT":  The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.

            "HOLDER": As defined in Section 1.

            "NATIONAL MARKET":  As defined in Section 1.

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REGISTRATION RIGHTS AGREEMENT - PAGE 10
<PAGE>

            "PERSON": A corporation, association, partnership, organization,
business, individual, governmental or political subdivision thereof or a
governmental agency.

            "REGISTRABLE SECURITIES": The Securities and any securities issued
or issuable with respect to such Securities by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or any adjustment otherwise provided for
in the Note Purchase Agreement or the Warrant Agreement. Once issued such
securities shall cease to be Registrable Securities when (a) 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
distributed in accordance with such registration statement, (b) they shall be
have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (c) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
them shall not require registration or qualification of them under the
Securities Act or any similar state law then in force, (d) they shall have
ceased to be outstanding, (e) on the expiration of the applicable Registration
Maintenance Period or (f) any and all legends restricting transfer thereof have
been removed in accordance with the provisions of Rule 144(k) (or any successor
provision) under the Securities Act. The Securities shall constitute Registrable
Securities (subject to the immediately preceding sentence) while owned by (a)
the Purchaser or any Affiliate (as defined in the Note Purchase Agreement) or
(b) a transferee of at least 100,000 of the Warrant Shares.

            "REGISTRATION EXPENSES": All expenses incident to the Company's
performance of or compliance with this Agreement, including, without limitation,
all registration, filing and NASD fees; all stock exchange and National Market
listing fees; all fees and expenses of complying with securities or blue sky
laws; all word processing, duplicating and printing expenses, messenger and
delivery expenses; the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance; in connection with an underwritten offering, the reasonable fees and
disbursements of not more than one law firm (not to exceed $25,000) retained by
the holder or holders of more than 50% of the Registrable Securities; premiums
and other costs of policies of insurance of the Company against liabilities
arising out of the public offering of the Registrable Securities being
registered and any fees and disbursements of underwriters customarily paid by
issuers or sellers of securities, but excluding underwriting discounts and
commissions and transfer taxes, if any; provided that, in any case where
Registration Expenses are not to be borne by the Company, such expenses shall
not include salaries of Company personnel or general overhead expenses of the
Company, auditing fees, premiums or other expenses relating to liability
insurance required by underwriters of the Company or other expenses for the
preparation of financial statements or other data normally prepared by the
Company in the ordinary course of its business or which the Company would have
incurred in any event.

            "REGISTRATION MAINTENANCE PERIOD":  As defined in Section 2.3.

            "REGISTRATION STATEMENT":  As defined in Section 2.1.

            "REQUIRED EFFECTIVENESS DATE":  As defined in Section 2.1.

            "SECURITIES": As defined in Section 1(b).

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REGISTRATION RIGHTS AGREEMENT - PAGE 11
<PAGE>

            "SECURITIES ACT":  The Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder.

            "NOTE PURCHASE AGREEMENT":  As defined in Section 1.

            "SECURITY HOLDERS": As defined in the Introductory paragraph to this
Agreement.

            "WARRANT AGREEMENT": As defined in Section 1.

            "WARRANTS": As defined in Section 1.

            "WARRANT SHARES": As defined in Section 1.

            4. RULE 144. The Company shall timely file the reports required to
be filed by it under the Securities Act and the Exchange Act (including but not
limited to the reports under Sections 13 and 15(d) of the Exchange Act referred
to in subparagraph (c) of Rule 144 adopted by the Commission under the
Securities Act) and the rules and regulations adopted by the Commission
thereunder (or, if the Company is not required to file such reports, will, upon
the request of any holder of Registrable Securities, make publicly available
other information) and will take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with the requirements of this Section 4. The Company will use its best
efforts to maintain its Common Stock as a "covered security" as defined in
Section 18 of the Securities Act.

            5. AMENDMENTS AND WAIVERS. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of the sum of the 51% or more of the shares of (i) Registrable
Securities issued at such time, plus (ii) Registrable Securities issuable upon
exercise or conversion of the Securities then constituting derivative securities
(if such Securities were not fully exchanged or converted in full as of the date
such consent is sought). Each holder of any Registrable Securities at the time
or thereafter outstanding shall be bound by any consent authorized by this
Section 5, whether or not such Registrable Securities shall have been marked to
indicate such consent.

            6. NOMINEES FOR BENEFICIAL OWNERS. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.

            7. NOTICES. Except as otherwise provided in this Agreement, all
notices, requests and other communications to any Person provided for hereunder
shall be in writing and shall be given to such

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REGISTRATION RIGHTS AGREEMENT - PAGE 12
<PAGE>

Person (a) in the case of a party hereto other than the Company, addressed to
such party in the manner set forth in the Note Purchase Agreement or at such
other address as such party shall have furnished to the Company in writing, or
(b) in the case of any other holder of Registrable Securities, at the address
that such holder shall have furnished to the Company in writing, or, until any
such other holder so furnishes to the Company an address, then to and at the
address of the last holder of such Registrable Securities who has furnished an
address to the Company, or (c) in the case of the Company, at the address set
forth on the signature page hereto, to the attention of its Chief Executive
Officer, or at such other address, or to the attention of such other officer, as
the Company shall have furnished to each holder of Registrable Securities at the
time outstanding. Each such notice, request or other communication shall be
effective (i) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid or (ii) if
given by any other means (including, without limitation, by fax or air courier),
when delivered at the address specified above, provided that any such notice,
request or communication shall not be effective until received.

            8. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto. In addition, and whether or
not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of the parties hereto other than the Company
shall also be for the benefit of and enforceable by any subsequent holder of any
Registrable Securities. Each of the Holders of the Registrable Securities
agrees, by accepting any portion of the Registrable Securities after the date
hereof, to the provisions of this Agreement including, without limitation,
appointment of a representative to act on behalf of such Holder pursuant to the
terms hereof which such actions shall be made in the good faith discretion of
the Holder's representative and be binding on all persons for all purposes.

            9. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.

            10. OKLAHOMA LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL;
APPOINTMENT OF AGENT.

                        THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF OKLAHOMA. EACH PARTY HERETO HEREBY SUBMITS
TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT LOCATED IN
OKLAHOMA CITY, OKLAHOMA AND OF ANY OKLAHOMA STATE COURT SITTING IN OKLAHOMA CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

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REGISTRATION RIGHTS AGREEMENT - PAGE 13
<PAGE>

            11. COUNTERPARTS. This Agreement may be executed by facsimile and
may be signed simultaneously in any number of counterparts, each of which shall
be deemed an original, but all such counterparts shall together constitute one
and the same instrument.

            12. ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between the Company and each other party hereto relating to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.

            13. SEVERABILITY. If any provision of this Agreement, or the
application of such provisions to any Person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to Persons or circumstances other than those to which it is held invalid, shall
not be affected thereby.

                  [Remainder of Page Intentionally Left Blank]

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REGISTRATION RIGHTS AGREEMENT - PAGE 14
<PAGE>

                        IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed and delivered by their respective officers thereunto
duly authorized as of the date first above written.

                                      GMX RESOURCES INC.

                                      By: /s/ Ken L. Kenworthy, Sr.
                                          --------------------------------
                                      Name: Ken L. Kenworthy, Sr.
                                      Title: Chief Financial Officer

                                      Address:  9400 N. Broadway, Suite 600
                                                Oklahoma City, Oklahoma  73114
                                      Telephone:  (405) 600-0711
                                      Fax:  (___) ________
                                      Attn:  Chief Executive Officer

                                      /s/ Doug Moreland
                                      -----------------------------
                                      DOUG MORELAND

                                      /s/ Patrick Parker
                                      -----------------------------
                                      PATRICK PARKER

                                      /s/ Edwin J. Hagerty
                                      -----------------------------
                                      EDWIN J. HAGERTY

                                      X-MEN, LLC

                                      By: /s/ Gregg Schneider
                                          -------------------------
                                      Name: Gregg Schneider
                                      Title: Member

                                      /s/ Wilburn Coston Perryman
                                      -----------------------------
                                      WILBURN COSTON PERRYMAN

--------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT - PAGE 15

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