Document:

EXECUTION
      COPY

     

     

      
        

      

    

     

    SHAREHOLDERS
      AGREEMENT

     

    among

     

    Riata
      Energy, Inc. 

     

    and
      

     

    Certain
      Shareholders of Riata Energy, Inc.

     

    

     

    Dated
      as of November 21, 2006

     

    
      
 

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF
      CONTENTS

    

      
        	 	
                Page

              
	 	 
	
                RECITALS

              	
                1

              
	 	 
	
                ARTICLE
                  I DEFINITIONS

              	
                1

              
	
                SECTION
                  1.1.  
                  Certain Defined Terms

              	
                1

              
	
                SECTION
                  1.2.  
                  Other Definitional Provisions

              	
                6

              
	 	 
	
                ARTICLE
                  II TRANSFERS

              	
                6

              
	
                SECTION
                  2.1.  
                  Transfer Restrictions

              	
                6

              
	
                SECTION
                  2.2.  
                  Tag-Along Rights

              	
                7

              
	
                SECTION
                  2.3.  
                  Rights and Obligations of Transferees.

              	
                8

              
	
                SECTION
                  2.4.  
                  Number of Securities

              	
                9

              
	
                SECTION
                  2.5.  
                  Void Transfers

              	
                9

              
	 	 
	
                ARTICLE
                  III SPECIAL LIMITED PREEMPTIVE RIGHTS

              	
                9

              
	
                SECTION
                  3.1.  
                  Special Limited Preemptive Rights

              	
                9

              
	 	 
	
                ARTICLE
                  IV REGISTRATION RIGHTS

              	
                11

              
	
                SECTION
                  4.1.  
                  Initial Public Offering of the Company

              	
                11

              
	
                SECTION
                  4.2.  
                  Registration on Request

              	
                11

              
	
                SECTION
                  4.3.  
                  Incidental Registrations

              	
                13

              
	
                SECTION
                  4.4.  
                  Registration Procedures

              	
                14

              
	
                SECTION
                  4.5.  
                  Indemnification

              	
                18

              
	
                SECTION
                  4.6.  
                  Rules 144 and 144A

              	
                20

              
	
                SECTION
                  4.7.  
                  Selection of Counsel

              	
                21

              
	
                SECTION
                  4.8.  
                  Holdback Agreement

              	
                21

              
	
                SECTION
                  4.9.  
                  Existing 144A Registration Rights Agreement

              	
                22

              
	 	 
	
                ARTICLE
                  V MISCELLANEOUS

              	
                22

              
	
                SECTION
                  5.1.  
                  Amendments and Waivers

              	
                22

              
	
                SECTION
                  5.2.  
                  Successors, Assigns and Transferees

              	
                22

              
	
                SECTION
                  5.3.  
                  Legend

              	
                22

              
	
                SECTION
                  5.4.  
                  Notices

              	
                23

              
	
                SECTION
                  5.5.  
                  Further Assurances

              	
                24

              
	
                SECTION
                  5.6.  
                  Entire Agreement

              	
                24

              
	
                SECTION
                  5.7.  
                  Conflicting Agreements

              	
                24

              
	
                SECTION
                  5.8.  
                  Delays or Omissions

              	
                24

              
	
                SECTION
                  5.9.  
                  Governing Law; Consent to Jurisdiction; Venue

              	
                24

              
	
                SECTION
                  5.10.  
                  Severability

              	
                25

              
	
                SECTION
                  5.11.  
                  Enforcement

              	
                25

              
	
                SECTION
                  5.12.  
                  Agents for Shareholders

              	
                25

              
	
                SECTION
                  5.13.  
                  Titles and Subtitles

              	
                26

              
	
                SECTION
                  5.14.  
                  Counterparts; Facsimile Signatures

              	
                26

              

      

    

     

    
      
        
        

      

      
        -
          i -

        
          

        

      

      
        
        

      

    

    

    THIS
      SHAREHOLDERS AGREEMENT (this “Agreement”)
      is
      entered as of November 21, 2006, among Riata Energy, Inc., a Texas corporation
      (the “Company”),
      and
      the other parties listed on the signature pages hereto. 

     

    RECITALS

     

    WHEREAS,
      pursuant to the Purchase and Sale Agreement, dated as of November 21, 2006
      (the
“Purchase
      Agreement”),
      by
      and among the Company, SandRidge Holdings, Inc., American Real Estate Partners,
      L.P., American Real Estate Holdings Limited Partnership, AREP Oil & Gas
      Holdings LLC, AREP O & G Holdings LLC (“AREP
      O&G”),
      and
      NEG Oil & Gas, LLC, AREP O&G received 12,842,000 shares of Common Stock
      (as defined herein);

     

    WHEREAS,
      the number of shares of Common Stock and any other Riata Equity Securities
      (as
      defined herein) owned by Tom Ward, Malone Mitchell and their respective
      Permitted Transferees on the date hereof is identified on Schedule
      A
      hereto;
      and

     

    WHEREAS,
      each of the parties hereto desires to promote the interests of the Company
      and
      the mutual interests of the parties hereto by establishing herein certain terms
      and conditions upon which the shares of Common Stock and any other Riata Equity
      Securities will be held.

     

    NOW,
      THEREFORE, in consideration of the foregoing recitals and of the mutual promises
      hereinafter set forth, the parties hereto hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    SECTION
      1.1.    Certain
      Defined Terms.
      As used
      herein, the following terms shall have the following meanings:

     

    “Affiliate”
means,
      with respect to any Person, any Person directly or indirectly controlling,
      controlled by or under common control with such Person.

     

    “Agreement”
has
      the
      meaning assigned to such term in the Preamble. 

     

    “AREP”
means
      AREP O&G and its Permitted Transferees.

     

    “AREP
      Agent”
has
      the
      meaning assigned to such term in Section
      5.12(c).

     

    “AREP
      O&G”
has
      the
      meaning assigned to such term in the Recitals. 

     

    “AREP
      Portion”
means
      for the purposes of Section
      2.2,
      at any
      time (a) with respect to any proposed Transfer of Shares prior to the QPO,
      all
      Shares beneficially owned at such time by the Tagging Shareholder and its
      Affiliates which were acquired pursuant to the Purchase Agreement, and (b)
      with
      respect to any proposed Transfer of Shares after the QPO, on the applicable
      Transfer date, the number of Shares equal to the product of (i) the total number
      of Shares to be Transferred to the proposed Transferee and (ii) the fraction
      determined by dividing (A) the number of Shares beneficially owned at such
      time
      by the Tagging Shareholder and its Permitted Transferees which were acquired
      pursuant to the Purchase Agreement by (B) the total number of Shares
      beneficially owned at such time by (1) the Tagging Shareholder and its Permitted
      Transferees which were acquired pursuant to the Purchase Agreement and (2)
      the
      Riata Principals and their Permitted Transferees.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “beneficial
      owner”
or
      “beneficially
      own”
has
      the
      meaning given such term in Rule 13d-3 under the Exchange Act and a Person’s
      beneficial ownership of Shares shall be calculated in accordance with the
      provisions of such Rule; provided,
      however,
      that
      for purposes of determining beneficial ownership, no Person shall be deemed
      to
      beneficially own any security solely as a result of such Person’s execution of
      this Agreement.

     

    “Block
      Trade”
means
      a
“block trade” as such term is commonly understood in the securities
      industry.

     

    “Board”
means
      the board of directors of the Company.

     

    “Business
      Day”
means
      any day that is not a Saturday, a Sunday or other day on which banks are
      required or authorized by law to be closed in the City of New York.

     

    “Chosen
      Courts”
has
      the
      meaning assigned to such term in Section
      5.9.

     

    “Closing
      Date”
means
      November 21, 2006.

     

    “Common
      Stock”
means
      the common stock of the Company.

     

    “Company”
has
      the
      meaning assigned to such term in the Preamble.

     

    “control”
      (including the terms “controlled
      by”
and
      “under
      common control with”),
      with
      respect to the relationship between or among two or more Persons, means the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the affairs or management of a Person, whether through the
      ownership of voting securities, as trustee or executor, by contract or
      otherwise.

     

    “Demand
      Party”
means
      Tom Ward, Malone Mitchell or AREP (including any Transferee of AREP’s rights
      pursuant to Section
      2.3(b)).
      

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Existing
      144A Registration Rights Agreement”
means
      the Resale Registration Rights Agreement dated December 21, 2005 between the
      Company and Banc of America Securities LLC.

     

    “Fair
      Market Value”
means,
      as of any date, (i) with respect to shares of Common Stock from and after the
      consummation of an initial public offering of Common Stock, the average closing
      sale price of shares on the stock exchange (including Nasdaq) on which the
      shares are principally trading for the twenty trading days immediately prior
      to
      such date, or (ii) with respect to shares of Common Stock or any other
      securities prior to the consummation of an initial public offering of Common
      Stock or any other securities, the average price of the PORTAL trades for such
      Common Stock or other securities, as the case may be, during the twenty Business
      Days immediately prior to such date; provided,
      that in
      the case of clause (i) or (ii), if the Company consummates a financing on such
      date involving third party purchasers of Common Stock or such other securities,
      (x) Fair Market Value as of such date shall be the purchase price paid by such
      third parties if the Company has received a fairness opinion or valuation or
      appraisal report from an independent nationally recognized investment bank
      or
      valuation or appraisal firm which provides that such purchase price is fair
      from
      a financial point of view or within a range of fair market value or (y) Fair
      Market Value as of such date shall be the initial public offering price if
      such
      financing is an initial public offering or the Qualified Public
      Offering.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    “Holdback
      Period"
      has the
      meaning assigned to such term in Section
      4.8(b).

     

    “Holder”
means
      each of the Shareholders and any other holder of Registrable Securities
      (including any direct or indirect transferee of a Shareholder who has acquired
      Registrable Securities from a Shareholder not in violation of this Agreement
      and
      agrees in writing to be bound by the provisions of this Agreement).

     

    “Indemnified
      Parties"
      has the
      meaning assigned such term in Section
      4.5(a).

     

    “MM
      Agent"
      has the
      meaning assigned to such term in Section
      5.12(b).

     

    “NASD”
has
      the
      meaning assigned to such term in the definition of Registration Expenses in
      this
Section
      1.1.

     

    “Permitted
      Transferee”
shall
      mean (i) with respect to any Riata Principal (and the Permitted Transferees
      thereof), Tom Ward, Malone Mitchell, their wives, children and grandchildren
      and
      any entities, trusts and other Affiliates, whether or not controlled, the sole
      beneficiaries or beneficial owners of which are such Riata Principals, their
      wives, children and grandchildren (and such entities, trusts or Affiliates
      of
      which such Riata Principals, their wives, children and grandchildren are the
      sole direct or indirect beneficiaries or beneficial owners), or (ii) with
      respect to any Shareholder (other than the Riata Principals), an Affiliate
      of
      such Shareholder; provided,
      however,
      that in
      each case such Transferee shall agree in a writing in the form attached as
      Exhibit A hereto to be bound by and to comply with all applicable provisions
      of
      this Agreement; provided,
      further,
      however,
      that in
      no event shall a “Permitted Transferee” be the Company or any of its
      Subsidiaries.

     

    “Person”
means
      any individual, corporation, limited liability company, limited or general
      partnership, joint venture, association, joint-stock company, trust,
      unincorporated organization, government or any agency or political subdivisions
      thereof.

     

    “Preemptive
      Notice”
has
      the
      meaning assigned to such term in Section
      3.1(b).

     

    “Preemptive
      Right Period”
has
      the
      meaning assigned to such term in Section
      3.1(a).

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    “Preemptive
      Right Proportionate Number”
has
      the
      meaning assigned to such term in Section
      3.1(a).

     

    “Prescribed
      Time Period”
has
      the
      meaning assigned to such term in Section
      2.2(a).

     

    “Purchase
      Agreement”
has
      the
      meaning assigned to such term in the Recitals. 

     

    “Qualified
      Public Offering”
or
      “QPO”
means
      an underwritten, broad based public offering in excess of $100 million of Common
      Stock (which results in gross proceeds to the sellers of at least $100 million)
      and results in not less than 20 million shares of Common Stock (including Common
      Stock covered by the Existing 144A Registration Rights Agreement and any other
      registration rights agreement and any shares sold pursuant to any previous
      public offerings) being listed for trading on a national securities exchange
      (including Nasdaq).

     

    “Registrable
      Securities”
means
      any Common Stock held at any time by the Holders. Any particular Registrable
      Securities that are issued shall cease to be Registrable Securities when (i)
      a
      registration statement with respect to the sale by the Holder of such securities
      shall have become effective under the Securities Act and such securities shall
      have been disposed of in accordance with such registration statement, (ii)
      such
      securities shall have been distributed to the public pursuant to Rule 144 (or
      any successor provision) under the Securities Act or (iii) such securities
      shall
      have ceased to be outstanding.

     

    “Registration
      Expenses”
means
      any and all expenses incident to performance of or compliance with Article
      IV
      of this
      Agreement, including, without limitation, (i) all SEC and stock exchange or
      National Association of Securities Dealers, Inc. (the “NASD”)
      registration and filing fees (including, if applicable, the fees and expenses
      of
      any “qualified independent underwriter,” as such term is defined in NASD conduct
      rule 2720, and of its counsel), (ii) all fees and expenses of complying with
      securities or blue sky laws (including fees and disbursements of counsel for
      the
      underwriters in connection with blue sky qualifications of the Registrable
      Securities), (iii) all printing, messenger and delivery expenses, (iv) all
      fees
      and expenses incurred in connection with the listing of the Registrable
      Securities on any national securities exchange and all rating agency fees,
      (v)
      the fees and disbursements of counsel for the Company and of its independent
      public accountants and independent engineers, including the expenses of any
      special audits, reserve reports and/or “cold comfort” letters required by or
      incident to such performance and compliance, (vi) the reasonable fees and
      disbursements of counsel selected pursuant to Section
      4.7
      hereof
      by the Holders of the Registrable Securities being registered to represent
      such
      Holders in connection with each such registration, and (vii) any fees and
      disbursements of underwriters customarily paid by the issuers or sellers of
      securities, including liability insurance if the Company so desires or if the
      underwriters so require, and the reasonable fees and expenses of any special
      experts retained in connection with the requested registration, but, in the
      cases of clauses (i) through (vii), excluding underwriting discounts and
      commissions and transfer taxes, if any.

     

    “Release
      Event"
      has the
      meaning assigned to such term in Section
      4.8(a).

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    “Riata
      Equity Securities”
means
      (i) Common Stock and (ii) other Equity Interests and Equity Interest Equivalents
      (in each case as defined in the Purchase Agreement) of the Company; provided,
      that
      with respect to any provisions of this Agreement which requires the calculation
      of the number or percentage of Riata Equity Securities, Riata Equity Securities
      shall be calculated on a fully diluted basis.

     

    “Riata
      Principals”
means
      Tom Ward, Malone Mitchell and their Permitted Transferees.

     

    “SEC”
means
      the Securities and Exchange Commission or any other federal agency at the time
      administering the Securities Act or the Exchange Act. 

     

    “Sale”
(and
      “Sell”
shall
      have correlative meaning) means, with respect to any Shares, the sale, transfer,
      assignment or similar disposition (excluding pledge, encumbrance or
      hypothecation) of such Shares in which cash, securities or other property is
      received as consideration.

     

    “Sale
      Notice”
has
      the
      meaning assigned to such term in Section
      2.2(a).

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    “Selling
      Shareholder”
has
      the
      meaning assigned to such term in Section
      2.2(a).

     

    “Shares”
means,
      as of any date, (i) with respect to the Riata Principals and their Permitted
      Transferees, the shares of Common Stock and any other Riata Equity Securities
      held by such Persons as of such date, and (ii) with respect to AREP and its
      Permitted Transferees, the shares of Common Stock which were acquired by AREP
      pursuant to the Purchase Agreement and held by AREP and its Permitted
      Transferees as of such date; provided,
      that
      with respect to any provisions of this Agreement which requires the calculation
      of the number or percentage of Shares, any Riata Equity Securities shall be
      calculated on a fully diluted basis.

     

    “Shareholder”
means
      any holder of Common Stock which is a party to this Agreement. 

     

    “Subsidiary”
means
      (i) any corporation of which a majority of the securities entitled to vote
      generally in the election of directors thereof, at the time as of which any
      determination is being made, are owned by another entity, either directly or
      indirectly, and (ii) any joint venture, general or limited partnership,
      limited liability company or other legal entity in which an entity is the record
      or beneficial owner, directly or indirectly, of a majority of the voting
      interests or the general partner.

     

    “Substantial
      Block”
means,
      with respect to any Transfer, Shares in excess of 3% of the outstanding Common
      Stock on a fully diluted basis.

     

    “Taggable
      Shares”
has
      the
      meaning assigned to such term in Section
      2.2(a).

     

    “Tagging
      Shareholder”
has
      the
      meaning assigned to such term in Section
      2.2(a).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    “Target
      Date”
means
      the date which is one year after the Closing Date.

     

    “Third
      Party Holder”
has
      the
      meaning assigned to such term in Section
      4.3(a).

     

    “Transfer”
(and
      “Transferor”,
      “Transferee”
and
      “Transferring”
shall
      have correlative meanings) means, directly or indirectly, to Sell, transfer,
      assign, pledge, encumber, hypothecate or similarly dispose of, either
      voluntarily or involuntarily, or to enter into any contract, option or other
      arrangement or understanding with respect to the Sale, transfer, assignment,
      pledge, encumbrance, hypothecation or similar disposition of, any Shares
      beneficially owned by a Person or any interest in any Shares beneficially owned
      by a Person.

     

    “TW
      Agent"
      has the
      meaning assigned to such term in Section
      5.12(a).

     

    SECTION
      1.2.    Other
      Definitional Provisions.
      (a)  The
      words
“hereof,” “herein” and “hereunder” and words of similar import when used in this
      Agreement shall refer to this Agreement as a whole and not to any particular
      provision of this Agreement, and Article and Section references are to this
      Agreement unless otherwise specified. 

     

    (b)    The
      meanings given to terms defined herein shall be equally applicable to both
      the
      singular and plural forms of such terms.

     

    (c)    All
      references in this Agreement to “Common Stock”, “Riata Equity Securities” and
“Shares” shall include any securities of the Company issued in respect thereof,
      or in substitution therefor, in connection with any stock split, dividend or
      combination, or any reclassification, recapitalization, merger, consolidation,
      exchange or other similar reorganization

     

    (d)    For
      the
      avoidance of doubt, with respect to the provisions of this Agreement requires
      the calculation of the number or percentage of Common Stock, Riata Equity
      Securities or Shares on a fully diluted basis, such
      calculation shall assume the conversion or exercise of any convertible
      securities, options, warrants or similar securities.

     

    ARTICLE
      II

     

    TRANSFERS

     

    SECTION
      2.1.    Transfer
      Restrictions.
      (a)  No
      Shareholder may Transfer its Shares except (i) Transfers to its Permitted
      Transferees, (ii) Transfers in compliance with Section
      2.2,
      (iii)
      Transfers made with the prior written consent of the Company (provided that,
      if
      any such consent is given to any Shareholder, all other Shareholders shall
      be
      permitted to Transfer the same percentage of their Shares in the same manner
      of
      Transfer to any Transferee) and (iv) Transfers permitted by Section
      2.1(b),
      2.1(c)
      or
2.1(d).

     

    (b)    After
      the
      earlier of (i) the 180th day after the consummation of the QPO (or earlier
      upon
      the occurrence of a Release Event under Section
      4.8)
      and
      (ii) March 1, 2008, each Shareholder may Transfer its Shares.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (c)    After
      the
      Target Date, AREP may make Sales of its Shares pursuant to PORTAL or Rule 144A
      under the Securities Act. 

     

    (d)    (1)
      Each
      of AREP and the Riata Principals may make bona fide pledges, hypothecations
      or
      encumbrances of their Shares to lenders or other financing sources or other
      entities generally engaged in the business of making loans or acquiring or
      investing in debt (which shall include, without limitation, any trustee or
      other
      agent acting for the benefit thereof) pursuant to bona fide borrowing
      arrangements (provided that, if, at the time such pledge or hypothecation is
      made or encumbrance is incurred, the pledged Shares (including previously
      pledged Shares) represent more than 25% of the Shares held by AREP or the Riata
      Principals (as the case may be), with respect to the Shares in excess of such
      25%, such financial institution or such other entity shall agree to be bound
      by
      the restrictions set forth in this Agreement upon foreclosing on such Shares
      unless such financial institution would be so bound by operation of law).

     

    (2)
      In
      addition, AREP and its Subsidiaries (including any Subsidiaries of Permitted
      Transferees) may directly or indirectly make pledges, hypothecations or
      encumbrances of the Equity Interests (as defined in the Purchase Agreement)
      of
      any Subsidiary which holds the Shares (or that owns, directly or indirectly,
      through one or more Subsidiaries, Equity Interests of a Subsidiary that holds
      the Shares) to lenders or other financing sources or other entities generally
      engaged in the business of making loans or acquiring or investing in debt (which
      shall include, without limitation, any trustee or other agent acting for the
      benefit thereof) pursuant to financing arrangements so long as such Subsidiary
      which holds the Shares continues to be bound by this Agreement; provided,
      that in
      connection with making such pledge, hypothecation or encumbrance, AREP shall
      provide to the Company a certificate in the form attached hereto as Exhibit
      B.

     

    (e)    Each
      Shareholder shall as promptly as practicable provide the Company with written
      notice of any Transfer of Shares.

     

    (f)    For
      the
      avoidance of doubt, a merger or consolidation of the Company with any other
      Person shall not be deemed a violation of this Section
      2.1.
      

     

    SECTION
      2.2.    Tag-Along
      Rights.
      Whereas
      the Letter of Intent (as defined in the Purchase Agreement) contemplates that,
      among other matters, prior to the QPO, without AREP’s consent, the Riata
      Principals shall not sell Shares unless AREP has previously sold all of its
      Shares or is provided an opportunity to sell all of such Shares in such Sale
      on
      the same terms and conditions as the Riata Principals and in order to, among
      other things, implement the foregoing, the parties agree as
      follows:

     

    (a)  
      In the
      event of a proposed Sale (including Sales permitted under Section
      2.1(a)(iii)
      and
2.1(b))
      of
      Shares by any of the Riata Principals (a “Selling
      Shareholder”),
      AREP
      (the “Tagging
      Shareholder”)
      shall
      have the right to participate in such Sale in the manner set forth in this
      Section
      2.2.
      Prior
      to any such Sale, the Selling Shareholder shall deliver to the Tagging
      Shareholder written notice (the “Sale
      Notice”),
      which
      notice shall state (i) the name of the proposed Transferee, (ii) the number
      of
      Shares proposed to be sold (the “Taggable
      Shares”),
      (iii)
      the proposed purchase price therefor, including a description of any non-cash
      consideration (along with any report and other material document (and summary
      of
      any other material oral information) relevant to the valuation of such non-cash
      consideration which the Selling Shareholder has, so long as the Tagging
      Shareholder agrees to keep such reports, documents and information
      confidential), and (iv) the other material terms and conditions of the proposed
      Sale, including the proposed closing date (which date may not be less than
      fifteen (15) Business Days after delivery of the Sale Notice). The Selling
      Shareholder shall not consummate the Sale unless the Tagging Shareholder has
      been provided the right from the proposed Transferee to sell to the proposed
      Transferee identified in the Sale Notice the AREP Portion of the Taggable Shares
      on the terms and conditions set forth in the Sale Notice by giving written
      notice to the Selling Shareholder within the fifteen (15) Business Day period
      (the “Prescribed
      Time Period”)
      after
      the delivery of the Sale Notice, which notice shall state that such Tagging
      Shareholder elects to exercise its tag-along rights under this Section
      2.2
      and
      shall state the maximum number of Shares sought to be sold. The Tagging
      Shareholder shall be deemed to have waived its tag-along rights under this
      Section
      2.2
      if it
      fails to give notice within the Prescribed Time Period. 

     

    
      
        
        

      

      
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    (b)    The
      Tagging Shareholder, if it has elected to exercise its tag-along rights provided
      under this Section
      2.2,
      shall
      participate in the Sale by delivering to the Selling Shareholder at the closing
      of the Sale of the Selling Shareholder’s Shares to the Transferee the Shares to
      be sold by the Tagging Shareholder, duly endorsed for transfer, against payment
      of the aggregate purchase price therefor.

     

    (c)    The
      following Transfers by the Riata Principals shall not be subject to the
      tag-along rights provided under this Section
      2.2:
      (i)
      Transfers at any time to Permitted Transferees of such Shareholder in compliance
      with the terms of this Agreement, and (ii) following a QPO, (A) any Transfer
      by
      the Riata Principals of less than a Substantial Block
      (in one
      transaction or a series of related transactions) and (B) Transfers pursuant
      to
      (x) Rule 144 under the Securities Act or (y) pursuant to an effective
      registration statement under the Securities Act (other than a Block Trade (in
      one transaction or a series of related transactions) of a Substantial Block),
      in
      each case in compliance with Article
      IV
      hereof.

     

    (d)    Notwithstanding
      the other provisions of this Section
      2.2,
      with
      respect to any Block Trade of a Substantial Block under a registration statement
      pursuant to Article
      IV,
      (i) the
      fifteen (15) Business Day period referred to in Section
      2.2(a)
      shall be
      reduced to a three (3) Business Day period and (ii) the Sale Notice may omit
      the
      name of the proposed Transferee and may specify the proposed minimum purchase
      price (in lieu of the purchase price). 

     

    (e)    This
      Section
      2.2
      and the
      tag-along rights provided herein shall expire upon the earlier of (i) two (2)
      years after a Qualified Public Offering and (ii) such time when the remaining
      Shares acquired by AREP pursuant to the Purchase Agreement and still
      beneficially owned by AREP and its Affiliates, taken together, represent in
      the
      aggregate less than 5% of the outstanding Common Stock on a fully diluted basis
      (it being understood that in no event shall AREP and its Affiliates be deemed
      to
      beneficially own less than 5% of the outstanding Common Stock on a fully diluted
      basis as a result of the financing of the transactions contemplated by the
      Purchase Agreement).

     

    SECTION
      2.3.    Rights
      and Obligations of Transferees. (a)  
      No
      Transferee of any Shareholder (except a Permitted Transferee) shall be entitled
      to any rights under this Agreement except as provided in Section
      2.3(b).
      A
      Permitted Transferee shall be permitted to exercise all rights of the
      Transferring Shareholder under this Agreement, and shall be required to assume
      all of the obligations of the Transferring Shareholder under this Agreement,
      with respect to the Shares Transferred.

     

    
      
        
        

      

      
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    (b)    AREP
      may
      assign its registration rights provided in Article
      IV
      in
      connection with one or more Sales of at least 2,000,000 Shares (appropriately
      adjusted for stock splits, dividends, combinations, recapitalizations and other
      similar events); provided,
      that
      (i) the Transferees (including Transferees of such Transferees) of such
      registration rights do not exceed two Persons (excluding for this purpose
      Permitted Transferees), (ii) the aggregate rights of AREP and such Transferees
      under Article
      IV
      after
      such Transfer do not exceed the rights of AREP under Article
      IV
      prior to
      such Transfer, (iii) such Transferees shall not have any rights under
Section
      4.1
      if the
      QPO has not occurred and (iv) AREP and such Transferees shall exercise the
      registration rights acting collectively by a vote of the majority of the Shares
      held by them. 

     

    SECTION
      2.4.    Number
      of Securities.
      Each
      Riata Principal hereby represents and warrants as of the date hereof that:
      (i)
      set forth on Schedule
      A
      is the
      number of Shares and any other Riata Equity Securities beneficially owned by
      such Riata Principal and his Permitted Transferees as of the date of this
      Agreement; (ii) he, she or it has no registration rights with respect to Riata
      Equity Securities other than as set forth herein and in the Registration Rights
      Agreement dated November 21, 2006 entered into in connection with the financing
      of the transactions contemplated in the Purchase Agreement, and (iii) he, she
      or
      it has not received any awards or grants under the “Stock Plan” referred to in
      the Private Placement Memorandum (as defined in the Purchase Agreement). If
      any
      provision of this Agreement which requires the calculation of the number of
      Shares and any other Riata Equity Securities beneficially owned by any
      Shareholder and its Permitted Transferees becomes applicable after the date
      hereof, such Shareholder shall provide to the other Shareholders the number
      of
      Shares and any other Riata Equity Securities beneficially owned by such
      Shareholder and its Permitted Transferees.

     

    SECTION
      2.5.    Void
      Transfers.
      Any
      Transfer or attempted Transfer of Shares in violation of any provision of this
      Agreement shall be void.

     

     

    ARTICLE
      III

     

    SPECIAL
      LIMITED PREEMPTIVE RIGHTS

     

    SECTION
      3.1.    Special
      Limited Preemptive Rights.
      (a)  During
      the Preemptive Right Period, if the Company proposes to Sell, issue or otherwise
      Transfer to any of the Riata Principals any Riata Equity Securities and the
      purchase price therefor is less than Fair Market Value (but, in the event such
      Sale, issuance or Transfer is pursuant to a public offering or occurs
      concurrently with a public offering, less the underwriters’ discount or
      commissions for such public offering), then AREP shall have the right to
      purchase the Preemptive Right Proportionate Number of Riata Equity Securities
      at
      the same price and terms as such Riata Principals; provided,
      that
      the preemptive right provided under this Section
      3.1
      shall
      not be applicable to Sales, issuances or Transfers of Riata Equity Securities
      to
      the Riata Principals in connection with their participation in management or
      employee compensation arrangements (so long as the aggregate Sales, issuances
      or
      Transfers under such arrangements with respect to all management and employees
      of the Company in any 12 month period commencing the date hereof or any
      anniversary of the date hereof does not exceed 2% of the outstanding Common
      Stock on a fully diluted basis). The “Preemptive
      Right Proportionate Number”
shall
      be, at any given time, a number equal to (i) the number of Riata Equity
      Securities beneficially owned by AREP at such time which were acquired pursuant
      to the Purchase Agreement multiplied by (ii) a fraction, the numerator of which
      is the total number of Riata Equity Securities proposed to be issued, sold or
      otherwise Transferred to the Riata Principals at such time and the denominator
      of which is the total number of Riata Equity Securities beneficially owned
      by
      the Riata Principals at such time. The “Preemptive
      Right Period”
shall
      mean the period between the date hereof and the expiration of the lock-up period
      applicable to AREP with respect to the Qualified Public Offering under
Section
      4.8.
      The
      Company hereby represents and warrants that, between September 1, 2006 and
      the
      date hereof, the Company has not issued, sold or otherwise Transferred any
      Riata
      Equity Securities which would have entitled AREP to acquire Riata Equity
      Securities pursuant to this Section
      3.1
      if this
Section
      3.1
      were in
      effect during such period. For the avoidance of doubt, this Section
      3.1
      shall
      not be applicable to (i) the conversion or exercise of any convertible
      securities, warrants, options or similar securities so long as the Sale,
      issuance or Transfer of such securities was made in accordance with this
Section
      3.1
      or (ii)
      the financing of the transactions contemplated by the Purchase
      Agreement.

     

     

    
      
        
        

      

      
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    (b)
      In
      the event the Company proposes to undertake a Sale, issuance or other Transfer
      of Riata Equity Securities to which this Section
      3.1
      applies,
      it shall provide AREP written notice (the “Preemptive
      Notice”)
      of its
      intention to do so (attaching copies of the most current drafts of any term
      sheets, agreements or other documents relating thereto), specifying the proposed
      price (it being understood that the form of consideration shall be cash or
      tangible assets only), the identity of the purchaser and the material terms
      upon
      which the Company proposes to sell or issue the same. AREP shall have ten (10)
      Business Days from the delivery date of any Preemptive Notice to agree to
      purchase (if the form of consideration is tangible assets, at AREP’s option, for
      cash and/or the same type of tangible assets of equal value), on the same
      closing date as the Riata Principal(s), an amount of Riata Equity Securities
      up
      to the Preemptive Right Proportionate Number (in each case calculated prior
      to
      the issuance) for the price and upon the terms specified in the Preemptive
      Notice by giving written notice to the Company and stating therein the amount
      of
      Riata Equity Securities to be purchased. If a definitive agreement for the
      purchase of such Riata Equity Securities is not provided along with the
      Preemptive Notice, AREP’s election to purchase Riata Equity Securities pursuant
      to such Preemptive Notice shall not be binding until a definitive agreement
      is
      executed (but, subject to Section
      3.1(c),
      an
      election to not purchase shall be binding).

     

    (c)
      In
      the event AREP does not purchase all of the Preemptive Right Proportionate
      Number of Riata Equity Securities pursuant to this Section
      3.1,
      the
      Company shall have 180 days after the date of the Preemptive Notice to
      consummate the Sale of the Riata Equity Securities with respect to which AREP’s
      preemptive right was not exercised, at or above the price and upon terms not
      more favorable in any material respect (it being understood and agreed that
      any
      increase in the number of Riata Equity Securities or any decrease in the price
      thereof shall be deemed material for this purpose) to the Riata Principals
      than
      the terms specified in the initial Preemptive Notice given in connection with
      such Sale, issuance or other Transfer.

     

    
      
        
        

      

      
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    ARTICLE
      IV

     

    REGISTRATION
      RIGHTS

     

    SECTION
      4.1.    Initial
      Public Offering of the Company.
      The
      Company shall use its reasonable best efforts to complete a Qualified Public
      Offering on or before the Target Date.

     

    SECTION
      4.2.    Registration
      on Request.
      (a)  Request
      by the Demand Party.
      Upon
      the written request of any Demand Party requesting that the Company effect
      the
      registration under the Securities Act of all or part of such Demand Party’s
      Registrable Securities and specifying the amount and intended method of
      disposition thereof, the Company will promptly give written notice of such
      requested registration to all other Holders, and thereupon will, as
      expeditiously as possible, use its reasonable best efforts to effect the
      registration under the Securities Act of:

     

    (i)  such
      Registrable Securities which the Company has been so requested to register
      by
      the Demand Party; and

     

    (ii)  all
      other
      Registrable Securities which the Company has been requested to register by
      any
      other Holder thereof by written request given to the Company within fifteen
      (15)
      Business Days after the giving of such written notice by the Company (which
      request shall specify the amount and intended method of disposition of such
      Registrable Securities),

     

    all
      to
      the extent necessary to permit the disposition (in accordance with the intended
      method thereof as aforesaid) of the Registrable Securities so to be registered
      (including by means of a shelf registration under Rule 415 under the Securities
      Act if so requested by the Demand Party and if the Company is then eligible
      to
      use such a registration); provided,
      that
      the Company shall not be obligated to file a registration statement relating
      to
      any registration request under this Section
      4.2(a)
      within a
      period of 120 days after the effective date of any other registration statement
      relating to any registration request under this Section
      4.2(a)
      or
      relating to any registration effected under Section
      4.3.
      

     

    (b)    Expenses.
      The
      Company will pay all Registration Expenses in connection with registrations
      of
      Registrable Securities pursuant to this Section
      4.2.
      

     

    (c)    Effective
      Registration Statement.
      A
      registration requested pursuant to this Section
      4.2
      will not
      be deemed to have been effected unless it has become effective and remains
      effective for the period provided in Section
      4.4(ii);
      provided,
      that
      if, within 180 days after it has become effective, the offering of Registrable
      Securities pursuant to such registration is interfered with by any stop order,
      injunction or other order or requirement of the SEC or other governmental agency
      or court, such registration will be deemed not to have been
      effected.

     

    (d)    Selection
      of Underwriters.
      If a
      requested registration pursuant to this Section
      4.2
      involves
      an underwritten offering, the Demand Party shall have the right to select the
      investment banker or bankers and managers to administer the offering;
provided,
      however,
      that
      such investment banker or bankers and managers shall be reasonably satisfactory
      to the Company. 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (e)    Priority
      in Requested Registrations.
      If a
      requested registration pursuant to this Section
      4.2
      involves
      an underwritten offering and the managing underwriter advises the Company in
      writing that, in its opinion, the number of securities requested to be included
      in such registration (including securities of the Company which are not
      Registrable Securities) exceeds the number which can be sold in such offering,
      the Company will include in such registration only the Registrable Securities
      of
      the Demand Party and other Holders requested to be included in such
      registration. In the event that the number of Registrable Securities of the
      Holders requested to be included in such registration exceeds the number which,
      in the opinion of such managing underwriter, can be sold, the number of such
      Registrable Securities to be included in such registration shall be allocated
      (i) first, 100% of the securities the Demand Party who requested the
      registration (and such Demand Party’s Permitted Transferees) propose to sell and
      (ii) second, pro rata among all such other requesting Holders on the basis
      of
      the relative number of shares of Registrable Securities then held by each such
      Holder (provided that any shares thereby allocated to any such Holder that
      exceed such Holder’s request shall be reallocated among the remaining requesting
      Holders in like manner). In the event that the number of Registrable Securities
      requested to be included in such registration is less than the number which,
      in
      the opinion of the managing underwriter, can be sold, the Company may include
      in
      such registration the securities the Company proposes to sell up to the number
      of securities that, in the opinion of the underwriter, can be sold.

     

    (f)    Limitation
      on Registration on Request.
      Notwithstanding anything in this Section
      4.2
      to the
      contrary, the Company shall not be obligated to and shall not take any action
      to
      effect any registration pursuant to this Section
      4.2,

     

    (i)  (A)
      in
      the event AREP is the Demanding Party, at any time prior to the Target Date
      and
      (B) in the event any Riata Principal is the Demanding Party, at any time prior
      to the date which is 201 days after the consummation of the Qualified Public
      Offering; or 

     

    (ii)  if
      the
      Company has previously effected a number of registrations pursuant to this
      Section
      4.2
      equaling
      or exceeding, in accordance with Section
      4.2(c)
      above,
      (A) in the event Tom Ward is the Demand Party, three (3) previous registrations
      in the aggregate, in which Tom Ward was the Demand Party, (B) in the event
      Malone Mitchell is the Demand Party, three (3) previous registrations in the
      aggregate, in which Malone Mitchell was the Demand Party and (C) in the event
      AREP (or any Transferee of AREP’s rights under Section
      2.3(b))
      is the
      Demand Party, three (3) previous registrations in the aggregate, in which AREP
      (or any Transferee of AREP’s rights under Section
      2.3(b))
      was the
      Demand Party.

     

    (g)    Postponements
      in Requested Registrations.
      (i) If
      the Company shall at any time furnish to the Holders a certificate signed by
      its
      chairman of the Board, chief executive officer, president or any other of its
      authorized officers stating that the filing of a registration statement would,
      in the good faith judgment of the Company, materially impede, delay or interfere
      with, or require premature disclosure of, any material financing, acquisition,
      corporate reorganization or other significant transaction involving the Company
      or require the disclosure of material information the disclosure of which would
      have a material adverse effect on the business, operations or prospects of
      the
      Company, the Company may postpone the filing (but not the preparation) of a
      registration statement required by this Section
      4.2
      for up
      to 60 days in any 90 day period and up to 90 days in any 360 day period and
      (ii)
      if the Company determines in its good faith judgment, that the registration
      and
      offering otherwise required by this Section
      4.2
      would
      have an adverse effect on a then contemplated public offering of the Company’s
      securities, the Company may postpone the filing (but not the preparation) of
      a
      registration statement required by this Section
      4.2,
      during
      the period starting with the 30th day immediately preceding the date of the
      anticipated filing of, and ending on a date 90 days (or such shorter period
      as
      the managing underwriter may permit) following the effective date of, the
      registration statement relating to such other public offering; provided,
      that
      the Company shall at all times in good faith use its reasonable best efforts
      to
      cause any registration statement required by this Section
      4.2
      to be
      filed as soon as possible. The Company shall promptly give the Holders
      requesting registration thereof pursuant to this Section
      4.2
      written
      notice of any postponement made in accordance with the preceding sentence.
      If
      the Company gives the Holders such a notice, the Holders shall have the right,
      within 15 Business Days after receipt thereof, to withdraw their request in
      which case, such request will not be counted for purposes of Section
      4.2(f)
      (provided that, notwithstanding such withdrawal, the Company shall pay the
      Registration Expenses in connection therewith)

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    SECTION
      4.3.    Incidental
      Registrations.
      (a)  Right
      to Include Registrable Securities.
      If the
      Company at any time proposes to register its Common Stock under the Securities
      Act (other than a registration statement on Form S-4 or S-8, or any successor
      or
      other forms promulgated for similar purposes), whether or not for sale for
      its
      own account (including in a registration pursuant to registration rights held
      by
      any Person other than the parties hereto (each a “Third
      Party Holder”)
      but
      excluding in a registration under Section
      4.2
      hereof),
      in a manner which would permit registration of Registrable Securities for sale
      to the public under the Securities Act, it will, at each such time, give prompt
      written notice to all Holders of Registrable Securities of its intention to
      do
      so and of such Holders’ rights under this Section
      4.3.
      Upon
      the written request of any such Holder made within 15 Business Days after the
      receipt of any such notice (which request shall specify the Registrable
      Securities intended to be disposed of by such Holder), the Company will use
      its
      reasonable best efforts to effect the registration under the Securities Act
      of
      all Registrable Securities which the Company has been so requested to register
      by the Holders thereof, to the extent requisite to permit the disposition of
      the
      Registrable Securities so to be registered; provided,
      that
      (i) 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
      not to proceed with the proposed registration of the securities to be sold
      by
      it, the Company may, at its election, give written notice of such determination
      to each Holder of Registrable Securities and, thereupon, 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) and (ii) if such registration involves an underwritten
      offering, all Holders of Registrable Securities requesting to be included in
      the
      Company’s registration must sell their Registrable Securities to the
      underwriters selected by the Company on the same terms and conditions as apply
      to the Company (with such differences, including any with respect to
      indemnification and liability insurance, as may be customary or appropriate
      in
      combined primary and secondary offerings) or to the Third Party Holder. If
      a
      registration requested pursuant to this Section
      4.3(a)
      involves
      an underwritten public offering, any Holder of Registrable Securities requesting
      to be included in such registration may elect, in writing prior to the effective
      date of the registration statement filed in connection with such registration,
      not to register such securities in connection with such registration.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (b)    Expenses.
      The
      Company will pay all Registration Expenses in connection with each registration
      of Registrable Securities pursuant to this Section
      4.3.

     

    (c)    Priority
      in Incidental Registrations.
      If a
      registration pursuant to this Section
      4.3
      involves
      an underwritten offering and the managing underwriter advises the Company in
      writing that, in its opinion, the number of securities requested to be included
      in such registration exceeds the number which can be sold in such offering,
      so
      as to be likely to have an adverse effect on the price, timing or distribution
      of the securities offered in such offering as contemplated by the Company (other
      than the Registrable Securities), then the Company will include in such
      registration (i) first, 100% of the securities the Company (or the Third Party
      Holder) proposes to sell and (ii) second, to the extent of the number of
      Registrable Securities requested to be included in such registration pursuant
      to
      this Section
      4.3
      which,
      in the opinion of such managing underwriter, can be sold without having the
      adverse effect referred to above, the number of Registrable Securities which
      the
      Holders have requested to be included in such registration, such amount to
      be
      allocated pro rata among all requesting Holders on the basis of the relative
      number of shares of Registrable Securities then held by each such Holder;
provided,
      that
      any shares thereby allocated to any such Holder that exceed such Holder’s
      request will be reallocated among the remaining requesting Holders in like
      manner. 

     

    (d)    Registration
      Rights of Third Parties.
      After
      the date hereof and prior to the time at which AREP’s tag-along rights under
Section
      2.2
      expires,
      the Company shall not grant any Third Party Holder any piggyback or incidental
      registration rights which are senior in priority with the registration rights
      provided in this Section
      4.3
      or which
      are pari passu or senior in priority with the registration rights provided
      under
Section
      4.2.

     

    SECTION
      4.4.    Registration
      Procedures.
      If and
      whenever the Company is required to use its reasonable best efforts to effect
      or
      cause the registration of any Registrable Securities under the Securities Act
      as
      provided in this Agreement, the Company will:

     

    (i)  prepare
      and, in any event within 90 days after the end of the period within which a
      request for registration may be given by the Demand Party pursuant to
Section
      4.2,
      file
      with the SEC a registration statement with respect to such Registrable
      Securities and use its reasonable best efforts to cause such registration
      statement to become effective; provided,
      however,
      that
      the Company may discontinue any registration of its securities which is being
      effected pursuant to Section
      4.3
      at any
      time prior to the effective date of the registration statement relating
      thereto;

     

    (ii)  prepare
      and file with the SEC 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 for a period not in excess of 180
      days and to comply with the provisions of the Securities Act, the Exchange
      Act
      and the rules and regulations of the SEC thereunder with respect to the
      disposition of all securities covered by such registration statement during
      such
      period in accordance with the intended methods of disposition by the seller
      or
      sellers thereof set forth in such registration statement; 

     

    
      
        
        

      

      
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    (iii)  furnish
      to each seller of such Registrable Securities such number of copies of such
      registration statement and of each amendment and supplement thereto (in each
      case including all exhibits filed therewith, including any documents
      incorporated by reference), such number of copies of the prospectus included
      in
      such registration statement (including each preliminary prospectus and summary
      prospectus), in conformity with the requirements of the Securities Act, and
      such
      other documents as such seller may reasonably request in order to facilitate
      the
      disposition of the Registrable Securities by such seller;

     

    (iv)  use
      its
      reasonable best efforts to register or qualify such Registrable Securities
      covered by such registration under such other securities or blue sky laws in
      such jurisdictions as each seller shall reasonably request, and do any and
      all
      other acts and things which may be reasonably necessary or advisable to enable
      such seller to consummate the disposition in such jurisdictions of the
      Registrable Securities owned by such Seller, 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 where, but for the requirements of
      this
      clause (iv), it would not be obligated to be so qualified, to subject itself
      to
      taxation in any such jurisdiction or to consent to general service of process
      in
      any such jurisdiction;

     

    (v)  notify
      each seller of any such Registrable Securities covered by such registration
      statement, at any time when a prospectus relating thereto is required to be
      delivered under the Securities Act within the appropriate period mentioned
      in
      clause (ii) of this Section
      4.4,
      of the
      Company’s becoming aware that the prospectus included in such registration
      statement, as then in effect, includes an untrue statement of a material fact
      or
      omits 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
      under which they were made, and at the request of any such seller, prepare
      and
      furnish to such seller a reasonable number of copies of an amended or
      supplemental prospectus as may be necessary so that, as thereafter delivered
      to
      the purchasers of such Registrable 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 under which they were made;

     

    (vi)  use
      its
      reasonable best efforts to comply with all applicable rules and regulations
      of
      the SEC, and make available to its shareholders, as soon as reasonably
      practicable (but not more than eighteen months) after the effective date of
      the
      registration statement, an earnings statement which shall satisfy the provisions
      of Section 11(a) of the Securities Act and the rules and regulations promulgated
      thereunder;

     

    (vii)  (A)
      use
      its reasonable best efforts to list such Registrable Securities on any national
      securities exchange on which the Common Stock is then listed if such Registrable
      Securities are not already so listed and if such listing is then permitted
      under
      the rules of such exchange; and (B) use its reasonable best efforts to provide
      a
      transfer agent and registrar for such Registrable Securities covered by such
      registration statement not later than the effective date of such registration
      statement;

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (viii)  enter
      into such customary agreements (including an underwriting agreement in customary
      form), which may include indemnification provisions in favor of underwriters
      and
      other persons in addition to, or in substitution for the provisions of
Section
      4.5
      hereof,
      as the underwriters, if any, reasonably request in order to expedite or
      facilitate the disposition of such Registrable Securities (provided that the
      Holders on whose behalf the Registrable Securities are to be distributed by
      such
      underwriters shall be parties to any such underwriting agreement and the
      representations and warranties by, and the other agreements on the part of,
      the
      Company to and for the benefit of such underwriters, shall also be made to
      and
      for the benefit of such Holders);

     

    (ix)  make
      available for reasonable inspection by any seller of such Registrable Securities
      covered by such registration statement, by any underwriter participating in
      any
      disposition to be effected pursuant to such registration statement and by any
      attorney, accountant or other agent retained by any such seller or any such
      underwriter, in each case upon reasonable notice, pertinent financial and other
      records, pertinent corporate documents and properties of the Company, and cause
      the Company’s officers, directors and employees to supply all pertinent
      information reasonably requested by any such seller, underwriter, attorney,
      accountant or agent in connection with such registration statement, and use
      reasonable best efforts to provide reasonable opportunities to discuss the
      business of the Company with the independent public accountants who have
      certified or reviewed the Company’s financial statements;

     

    (x)  notify
      counsel (selected pursuant to Section
      4.7
      hereof)
      for the Holders of Registrable Securities included in such registration
      statement and the managing underwriter or agent, immediately, and confirm the
      notice in writing (A) when the registration statement, or any post-effective
      amendment to the registration statement, shall have become effective, or any
      supplement to the prospectus or any amendment prospectus shall have been filed,
      (B) of the receipt of any comments from the SEC, (C) of any request of the
      SEC
      to amend the registration statement or amend or supplement the prospectus or
      for
      additional information, and (D) of the issuance by the SEC of any stop order
      suspending the effectiveness of the registration statement or of any order
      preventing or suspending the use of any preliminary prospectus, or of the
      suspension of the qualification of the registration statement for offering
      or
      sale in any jurisdiction, or of the institution or threatening of any
      proceedings for any of such purposes;

     

    (xi)  make
      every reasonable effort to prevent the issuance of any stop order suspending
      the
      effectiveness of the registration statement or of any order preventing or
      suspending the use of any preliminary prospectus and, if any such order is
      issued, to obtain the withdrawal of any such order at the earliest possible
      moment;

     

    (xii)  if
      requested by the managing underwriter or agent or any Holder of Registrable
      Securities covered by the registration statement, promptly incorporate in a
      prospectus supplement or post-effective amendment such information as the
      managing underwriter or agent or such Holder reasonably requests to be included
      therein, including, without limitation, with respect to the number of
      Registrable Securities being sold by such Holder to such underwriter or agent,
      the purchase price being paid therefor by such underwriter or agent and with
      respect to any other terms of the underwritten offering of the Registrable
      Securities to be sold in such offering; and make all required filings of such
      prospectus supplement or post-effective amendment as soon as practicable after
      being notified of the matters incorporated in such prospectus supplement or
      post-effective amendment;

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (xiii)  cooperate
      with the Holders of Registrable Securities covered by the registration statement
      and the managing underwriter or agent, if any, to facilitate the timely
      preparation and delivery of certificates representing securities to be sold
      under the registration statement, and enable such securities to be in such
      denominations and registered in such names as the managing underwriter or agent,
      if any, or such Holders may request; 

     

    (xiv)  cooperate
      with each seller of Registrable Securities and each underwriter or agent
      participating in the disposition of such Registrable Securities and their
      respective counsel in connection with any filings required to be made with
      the
      NASD; 

     

    (xv)  cause
      management of the Company to participate in investor “road shows” and other
      investor efforts or meetings so long as such requested participation is
      reasonable and will not unduly interfere with the Company’s business and
      operations; and

     

    (xvi)  use
      its
      reasonable best efforts to furnish an opinion of counsel for the Company
      addressed to the underwriters dated the date of the closing under the
      underwriting agreement (if any) (or if such offering is not underwritten, dated
      the effective date of the registration statement), and (ii) use its reasonable
      best efforts to furnish a “cold comfort” letter addressed to the underwriters
      and each Holder of Registrable Securities included in such registration
      statement, if permissible under applicable accounting practices, and signed
      by
      the independent public accountants who have audited the Company’s financial
      statements included in such registration statement, in each such case covering
      substantially the same matters with respect to such registration statement
      (and
      the prospectus included therein) as are customarily covered in opinions of
      issuer’s counsel and in accountants’ letters delivered to underwriters in
      underwritten public offerings of securities.

     

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

     

    Each
      Holder of Registrable Securities agrees that, upon receipt of any notice from
      the Company of the happening of any event of the kind described in clause (v)
      of
      this Section
      4.4,
      such
      Holder will forthwith discontinue disposition of Registrable Securities pursuant
      to the registration statement covering such Registrable Securities until such
      Holder’s receipt of the copies of the supplemented or amended prospectus
      contemplated by clause (v) of this Section
      4.4,
      and, if
      so directed by the Company, such Holder will deliver to the Company (at the
      Company’s expense) all copies, other than permanent file copies then in such
      Holder’s possession, of the prospectus covering such Registrable Securities
      current at the time of receipt of such notice. In the event the Company shall
      give any such notice, the period mentioned in clause (ii) of this Section
      4.4
      shall be
      extended by the number of days during the period from and including the date
      of
      the giving of such notice pursuant to clause (v) of this Section
      4.4
      and
      including the date when each seller of Registrable Securities covered by such
      registration statement shall have received the copies of the supplemented or
      amended prospectus contemplated by clause (v) of this Section
      4.4.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    SECTION
      4.5.    Indemnification.
      (a)  Indemnification
      by the Company. In the event of any registration of any securities of the
      Company under the Securities Act pursuant to Section
      4.2
      or
4.3,
      the
      Company will, and it hereby does, indemnify and hold harmless, to the extent
      permitted by law, the seller of any Registrable Securities covered by such
      registration statement, each affiliate of such seller and their respective
      directors and officers, members or general and limited partners (including
      any
      director, officer, affiliate, employee, agent and controlling Person of any
      of
      the foregoing), 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 seller, each Affiliate thereof, or any such underwriter within the meaning
      of the Securities Act (collectively, the “Indemnified
      Parties”),
      against any and all losses, claims, damages or liabilities, joint or several,
      and expenses (including reasonable attorney’s fees and reasonable expenses of
      investigation) to which such Indemnified Party may become subject under the
      Securities Act, common law or otherwise, insofar as such losses, claims, damages
      or liabilities (or actions or proceedings in respect thereof, whether or not
      such Indemnified Party is a party thereto) arise out of or are based upon (a)
      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, final or summary prospectus contained
      therein, or any amendment or supplement thereto, or (b) any omission or alleged
      omission to state therein a material fact required to be stated therein or
      necessary to make the statements therein (in the case of a prospectus, in light
      of the circumstances under which they were made) not misleading, and the Company
      will reimburse such Indemnified Party for any legal or any other expenses
      reasonably incurred by it in connection with investigating or defending against
      any such loss, claim, liability, action or proceeding; provided,
      that
      the Company shall not be liable to any Indemnified Party 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 any untrue statement
      or alleged untrue statement or omission or alleged omission made in such
      registration statement or amendment or supplement thereto or in any such
      preliminary, final or summary prospectus in reliance upon and in conformity
      with
      written information furnished to the Company through an instrument duly executed
      by such Indemnified Party specifically stating that it is for use in the
      preparation thereof. Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of such seller or any
      Indemnified Party and shall survive the transfer of such securities by such
      seller.

     

    (b)    Indemnification
      by the Seller.
      The
      Company may require, as a condition to including any Registrable Securities
      in
      any registration statement filed in accordance with Section
      4.4
      herein,
      that the Company shall have received an undertaking reasonably satisfactory
      to
      it from the prospective seller of such Registrable Securities or any underwriter
      to indemnify and hold harmless (in the same manner and to the same extent as
      set
      forth in Section
      4.5(a))
      the
      Company and all other prospective sellers with respect to any untrue statement
      or alleged untrue statement in or omission or alleged omission from such
      registration statement, any preliminary, final or summary prospectus contained
      therein, or any amendment or supplement, if such untrue statement or alleged
      untrue 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 seller or underwriter specifically stating
      that
      it is for use in the preparation of such registration statement, preliminary,
      final or summary prospectus or amendment or supplement, or a document
      incorporated by reference into any of the foregoing. Such indemnity shall remain
      in full force and effect regardless of any investigation made by or on behalf
      of
      the Company or any of the prospective sellers, or any of their respective
      affiliates, directors, officers or controlling Persons and shall survive the
      transfer of such securities by such seller. In no event shall the liability
      of
      any selling Holder of Registrable Securities hereunder be greater in amount
      than
      the dollar amount of the net proceeds received by such Holder, or of any
      underwriter be greater than the dollar amount of the discount or commission
      received by such underwriter, in each case upon the sale of the Registrable
      Securities giving rise to such indemnification obligation.

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (c)    Notices
      of Claims, Etc.
      Promptly after receipt by an indemnified party hereunder of written notice
      of
      the commencement of any action or proceeding with respect to which a claim
      for
      indemnification may be made pursuant to this Section
      4.5,
      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 the indemnified party to give notice as provided herein shall
      not
      relieve the indemnifying party of its obligations under this Section
      4.5,
      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 party and indemnifying parties may exist in respect
      of
      such claim, or there are separate defenses available to such indemnified party,
      or the indemnifying party fails to timely assume the defense of such claim,
      the
      indemnifying party will be entitled to participate in and to assume the defense
      thereof, jointly with any other indemnifying party similarly notified to the
      extent that it 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 will 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 will consent to entry of any judgment or enter into any settlement which
      does not include, as an unconditional term thereof, the giving by the claimant
      or plaintiff to such indemnified party of a release from all liability in
      respect to such claim or litigation.

     

    (d)    Contribution.
      If for
      any reason the indemnity provided for in this Section
      4.5 is
      unavailable or is insufficient to hold harmless an indemnified party hereunder,
      then each indemnifying party shall contribute to the amount paid or payable
      by
      the indemnified party in respect of the losses, claims, damages or liabilities
      suffered by the indemnified party (i) as between the Company and the holders
      of
      Registrable Securities covered by a registration statement, on the one hand,
      and
      the underwriters, on the other, in such proportion as is appropriate to reflect
      the relative benefits received by the Company and such holders, on the one
      hand,
      and the underwriters, on the other, from the offering of the Registrable
      Securities, or if such allocation is not permitted by applicable law, in such
      proportion as is appropriate to reflect not only the relative benefits but
      also
      the relative fault of the Company and such holders, on the one hand, and of
      the
      underwriters, on the other, in connection with the statements or omissions
      that
      resulted in such losses, claims, damages or liabilities, as well as any other
      relevant equitable considerations, and (ii) as between the Company, on the
      one
      hand, and each holder of Registrable Securities covered by a registration
      statement, on the other, in such proportion as is appropriate to reflect the
      relative fault of the Company and of each such holder in connection with such
      statements or omissions, as well as any other relevant equitable considerations.
      The relative benefits received by the Company and such holders, on the one
      hand,
      and the underwriters, on the other, shall be deemed to be in the same proportion
      as the total proceeds from the offering (net of underwriting discounts and
      commissions but before deducting expenses) received by the Company and such
      holders bear to the total underwriting discounts and commissions received by
      the
      underwriters. The relative fault of the Company and such holders, on the one
      hand, and of the underwriters, on the other, shall be determined by reference
      to, among other things, whether the untrue or alleged untrue statement of a
      material fact or the omission or alleged omission to state a material fact
      relates to information supplied by the Company and such holders or by the
      underwriters. The relative fault of the Company, on the one hand, and of each
      such holder, on the other, shall be determined by reference to, among other
      things, whether the untrue or alleged untrue statement of a material fact
      relates to information supplied by the Company or by such holder, and the
      parties’ relative intent, knowledge, access to information and opportunity to
      correct or prevent such statement or omission.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section
      4.5(d)
      were
      determined by pro rata allocation or by any other method of allocation which
      does not take account of the equitable considerations referred to in the
      immediately preceding paragraph. No Person guilty of fraudulent
      misrepresentation (within the meaning of Section 11(f) of the Securities Act)
      shall be entitled to contribution from any Person who was not guilty of such
      fraudulent misrepresentation.

     

    (e)    Other
      Indemnification.
      Indemnification similar to that specified in the preceding provisions of this
      Section
      4.5
      (with
      appropriate modifications) shall be given by the Company and each seller of
      Registrable Securities with respect to any required registration or other
      qualification of securities under any federal or state law or regulation or
      governmental authority other than the Securities Act.

     

    (f)    Non-Exclusivity.
      The
      obligations of the parties under this Section
      4.5
      shall be
      in addition to any liability which any party may otherwise have to any other
      party.

     

    SECTION
      4.6.    Rules
      144 and 144A.
      The
      Company covenants that it will file the reports required to be filed by it
      under
      the Securities Act and the Exchange Act and the rules and regulations adopted
      by
      the SEC thereunder (or, if the Company is not required to file such reports,
      it
      will, upon the request of any Shareholder, make publicly available such
      information), and it will take such further action as any Holder of Registrable
      Securities (or, if the Company is not required to file reports as provided
      above, any Shareholder) may reasonably request, all to the extent required
      from
      time to time to enable such Holder to sell shares of Registrable Securities
      without registration under the Securities Act within the limitation of the
      exemptions provided by (i) Rules 144 or 144A under the Securities Act, as such
      Rules may be amended from time to time, or (ii) any similar rules or regulations
      hereafter adopted by the SEC. 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 such requirements. Notwithstanding anything
      contained in this Section
      4.6,
      the
      Company may deregister under Section 12 of the Exchange Act if it then is
      permitted to do so pursuant to the Exchange Act and the rules and regulations
      thereunder. 

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    SECTION
      4.7.    Selection
      of Counsel.
      In
      connection with any registration of Registrable Securities pursuant to
Section
      4.2 or
      4.3
      hereof,
      the Holders of a majority of the Registrable Securities covered by any such
      registration may select one counsel to represent all Holders of Registrable
      Securities covered by such registration; provided,
      however,
      that in
      the event that the counsel selected as provided above is also acting as counsel
      to the Company in connection with such registration, the remaining Holders
      shall
      be entitled to select one additional counsel to represent all such remaining
      Holders.

     

    SECTION
      4.8.    Holdback
      Agreement.
      (a) If
      any registration shall be in connection with an underwritten public offering
      (including the Qualified Public Offering), each Holder of Registrable Securities
      agrees (but only if such offering is the Qualified Public Offering or an
      offering in which such Holder is selling securities) not to effect any sale
      or
      distribution, including any sale pursuant to Rule 144 under the Securities
      Act,
      of any equity securities of the Company, or of any security convertible into
      or
      exchangeable or exercisable for any equity security of the Company (in each
      case, other than as part of such underwritten public offering), within seven
      days before, or such period not to exceed 90 days (or 180 days in the case
      of
      the Qualified Public Offering) as the underwriting agreement may require (or
      such lesser period as the managing underwriters may permit) after, the effective
      date of such registration. If Tom Ward, Malone Mitchell or any of their
      Permitted Transferees are released from the restrictions contemplated by this
      Section
      4.8
      (the
“Release
      Event”),
      AREP
      and its Permitted Transferees shall be released to the same extent from their
      obligations contemplated by this Section
      4.8.

     

    (b)
      The
      Company agrees, if so required by the managing underwriter of any offering
      of
      Registrable Securities, 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 any of its equity securities during the 30 days prior
      to
      and the 90 days (or 180 days in the case of the Qualified Public Offering)
      after
      any underwritten registration pursuant to Section
      4.2
      or
4.3
      hereof
      has become effective (the "Holdback
      Period"),
      except as part of such underwritten registration. Notwithstanding the foregoing
      sentence, the Company shall be entitled to (i) issue shares of Common Stock
      or
      other securities upon the exercise of an option or warrant or the conversion
      or
      exchange of a security outstanding prior to the Holdback Period, (ii) grant
      options to purchase shares of Common Stock or issue restricted shares of Common
      Stock or other securities pursuant to employee benefit plans in effect prior
      to
      the Holdback Period and (iii) sell shares of Common Stock or other securities
      in
      a transaction in which the purchaser agrees to be bound by the restrictions
      contained in Section
      4.8(a).
      The
      Company shall use its reasonable best efforts to obtain and enforce similar
      agreements from any other Persons if requested by the managing underwriter
      of
      such offering. Neither the Company nor such Persons shall be subject to the
      restrictions set forth in this Section
      4.8(b)
      for
      longer than 120 days during any 12-month period (or 180 days in the case of
      the
      12-month period prior to the expiration of the Holdback Period for the Qualified
      Public Offering).

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    SECTION
      4.9.    Existing
      144A Registration Rights Agreement.
      Notwithstanding anything to the contrary in this Agreement, all of the rights
      and obligations of the parties hereto under this Agreement are subject to and
      qualified by the rights of the Company’s shareholders under the Existing 144A
      Registration Rights Agreement (including as to priority and timing of
      registrations), and the Company’s compliance with the Existing 144A Registration
      Rights Agreement shall not constitute a violation of this Agreement;
provided,
      that
      the Company shall not amend the Existing 144A Registration Rights Agreement
      in
      any manner detrimental in any material respect to AREP’s rights hereunder.

     

    ARTICLE
      V

     

    MISCELLANEOUS

     

    SECTION
      5.1.    Amendments
      and Waivers.
      Except
      as otherwise provided herein, no modification, amendment or waiver of any
      provision of this Agreement shall be effective without the approval of the
      Company and each Shareholder; provided,
      that
      the Company or any Shareholder may waive (in writing) the benefit of any
      provision of this Agreement with respect to itself for any purpose. The failure
      of any party to enforce any of the provisions of this Agreement shall in no
      way
      be construed as a waiver of such provisions and shall not affect the right
      of
      such party thereafter to enforce each and every provision of this Agreement
      in
      accordance with its terms.

     

    SECTION
      5.2.    Successors,
      Assigns and Transferees.
      This
      Agreement shall bind and inure to the benefit of and be enforceable by the
      parties hereto and their respective successors and permitted assigns.
      Shareholders may assign their respective rights and obligations hereunder to
      any
      Transferees only to the extent expressly provided herein; provided,
      however,
      that
      AREP may Transfer its Shares and all associated rights under this Agreement
      to
      any direct or indirect Subsidiary of American Real Estate Partners, L.P. or
      American Real Estate Holdings Limited Partnership in accordance with
Section
      2.3,
      or as
      otherwise set forth in this Agreement.

     

    SECTION
      5.3.    Legend.
      (a)  All
      certificates (if any) representing the Shares held by each Shareholder shall
      bear a legend substantially in the following form:

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A SHAREHOLDERS
      AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY). NO
      TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE MADE IN VIOLATION OF THE
      PROVISIONS OF SUCH SHAREHOLDERS AGREEMENT AND (A) PURSUANT TO A REGISTRATION
      STATEMENT EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
      PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER. THE HOLDER OF THIS
      CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY SUCH
      SHAREHOLDERS AGREEMENT.

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (b)    Upon
      (i)
      the Sale of any Shares pursuant to an effective registration statement under
      the
      Securities Act or pursuant to Rule 144 or Rule 144A under the Securities Act
      or
      another exemption from registration under the Securities Act (and such Shares
      cease to be subject to the provisions hereof), (ii) upon the Transfer of any
      Shares pursuant to Section
      2.1(c)
      hereof
      or (iii) the termination of this Agreement, the certificates representing such
      Shares shall be replaced, at the expense of the Company, with certificates
      or
      instruments not bearing the legends required by this Section
      5.3;
      provided,
      that
      the Company may condition such replacement of certificates upon the receipt
      of
      an opinion of securities counsel reasonably satisfactory to the
      Company.

     

    SECTION
      5.4.    Notices.
      All
      notices and other communications hereunder shall be in writing and delivered
      (i)
      personally, (ii) by overnight courier or (iii) facsimile (with a PDF or other
      copy by electronic mail), and shall be deemed duly given on the date of
      delivery. All notices hereunder shall be delivered as set forth below, or
      pursuant to such other instructions as may be designated in writing by the
      party
      to receive such notice.

     

    
      	
              If
                to the Company or Riata Principals

            	
              SandRidge
                Energy, Inc.

              1601
                Northwest Expressway, Suite 1600

              Oklahoma
                City, OK 73118

              Attention:
                General Counsel

              Facsimile
                No.: (405) 753- 5975

              Email:
                mmccann@sdrge.com

            
	 	 
	
              with
                a copy to:

              (which
                shall not constitute
                notice)

            	
              Simpson
                Thacher & Bartlett LLP

              425
                Lexington Avenue

              New
                York, New York 10017

              Attention:
                Robert E. Spatt, Esq. 

                                 Edward
                J. Chung, Esq.

              Facsimile
                No.: (212) 455-2502

              Email:
                rspatt@stblaw.com

              Email:
                echung@stblaw.com

            
	 	 
	
              If
                to AREP 

            	
              White
                Plains Plaza

              445
                Hamilton Avenue - Suite 1210

              White
                Plains, NY 10601

              Attention:
                Felicia Buebel, Esq.

              Facsimile
                No.: (914) 614-7001

              Email:
                fpb@areh.net

            
	 	 
	
              with
                a copy to:

              (which
                shall not constitute
                notice)

            	
              DLA
                Piper US LLP

              1251
                Avenue of the Americas

              New
                York, New York 10020

              Attention:
                Steven L. Wasserman, Esq.

              Facsimile
                No.: (212) 835-6001

              Email:
                steven.wasserman@dlapiper.com

            

    

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    SECTION
      5.5.    Further
      Assurances.
      At any
      time or from time to time after the date hereof, the parties agree to cooperate
      with each other, and at the request of any other party, to execute and deliver
      any further instruments or documents and to take all such further action as
      the
      other party may reasonably request in order to evidence or effectuate the
      consummation of the transactions contemplated hereby and to otherwise carry
      out
      the intent of the parties hereunder. 

     

    SECTION
      5.6.    Entire
      Agreement.
      Except
      as otherwise expressly set forth herein, this Agreement embodies the complete
      agreement and understanding among the parties hereto with respect to the subject
      matter hereof and supersedes and preempts any prior understandings, agreements
      or representations by or among the parties, written or oral, that may have
      related to the subject matter hereof in any way (including, without limitation,
      the Letter of Intent). 

     

    SECTION
      5.7.    Conflicting
      Agreements.
      Each
      party hereto represents to the other parties hereto that such party has not
      granted and is not a party to any proxy, voting trust or other agreement (other
      than the Existing 144A Registration Rights Agreement) which is inconsistent
      with
      or conflicts with any provision of this Agreement.

     

    SECTION
      5.8.    Delays
      or Omissions.
      It is
      agreed that no delay or omission to exercise any right, power or remedy accruing
      to any party, upon any breach, default or noncompliance by another party under
      this Agreement, shall impair any such right, power or remedy, nor shall it
      be
      construed to be a waiver of any such breach, default or noncompliance, or any
      acquiescence therein, or of or in any similar breach, default or noncompliance
      thereafter occurring. It is further agreed that any waiver, permit, consent
      or
      approval of any kind or character on the part of any party hereto of any breach,
      default or noncompliance under this Agreement or any waiver on such party’s part
      of any provisions or conditions of this Agreement, must be in writing and shall
      be effective only to the extent specifically set forth in such writing. All
      remedies, either under this Agreement, by law, or otherwise afforded to any
      party, shall be cumulative and not alternative.

     

    SECTION
      5.9.    Governing
      Law;
      Consent to Jurisdiction; Venue.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York. Each party hereto agrees that it will bring any action or
      proceeding in respect of any claim arising out of or related to this Agreement
      or the transactions contemplated hereby, whether in tort or contract or at
      law
      or in equity, exclusively in the federal or state courts located in New York,
      New York (the “Chosen
      Courts”).
      In
      addition, each party hereby (a) irrevocably submits to the exclusive
      jurisdiction of the Chosen Courts, (b) waives, to the fullest extent permitted
      by applicable Law, any objection to laying venue in the Chosen Court and agrees
      that it will not attempt to deny or defeat such personal jurisdiction by motion
      or other request for leave from any such court, and (c) waives any objection
      or
      defense that the Chosen Court is an inconvenient forum or does not have personal
      jurisdiction over any party hereto. Each party hereto further agrees that,
      to
      the fullest extent permitted by applicable Law, any final judgment in any such
      action or proceeding shall be conclusive and may be enforced in any other
      jurisdiction within or outside the United States by suit on the judgment.
      Further, each party hereto hereby waives all right to trial by jury in any
      claim, action, proceeding or counterclaim by any party hereto on any matters
      arising out of or in any way connected with this Agreement.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    SECTION
      5.10.    Severability.
      Whenever possible, each provision of this Agreement shall be interpreted in
      such
      manner as to be effective and valid under applicable law, but if any provision
      of this Agreement is held to be invalid, illegal or unenforceable in any respect
      under any applicable law or rule in any jurisdiction, such invalidity,
      illegality or unenforceability shall not affect any other provision or any
      other
      jurisdiction, but this Agreement shall be reformed, construed and enforced
      in
      such jurisdiction as if such invalid, illegal or unenforceable provision had
      never been contained herein. 

     

    SECTION
      5.11.    Enforcement.
      Each
      party hereto acknowledges that money damages would not be an adequate remedy
      in
      the event that any of the covenants or agreements in this Agreement are not
      performed in accordance with its terms, and it is therefore agreed that in
      addition to and without limiting any other remedy or right it may have, the
      non-breaching party will have the right to an injunction, temporary restraining
      order or other equitable relief in any court of competent jurisdiction enjoining
      any such breach and enforcing specifically the terms and provisions hereof.
      

     

    SECTION
      5.12.    Agents
      for Shareholders. (a)  Tom
      Ward
      or another Person named in any written notice to the other parties hereto after
      the date hereof and signed by Tom Ward and all of his Permitted Transferees
      (the
“TW
      Agent”)
      shall
      act as the sole agent for Tom Ward and each of his Permitted Transferees and
      shall be authorized to exercise all rights of Tom Ward and his Permitted
      Transferees hereunder. The TW Agent shall have sole power and authority to
      take
      any action on behalf of Tom Ward and his Permitted Transferees pursuant to
      this
      Agreement, including delivering any notice or granting any waiver or consent
      hereunder, and each party hereto shall be entitled to rely on any action taken
      by the TW Agent as being taken on behalf of Tom Ward or any of his Permitted
      Transferees. Any notice required to be delivered hereunder to Tom Ward or any
      of
      his Permitted Transferees shall be delivered to the TW Agent.

     

    (b)    Malone
      Mitchell or another Person named in any written notice to the other parties
      hereto after the date hereof and signed by Malone Mitchell and all of his
      Permitted Transferees (the “MM Agent”) shall act as the sole agent for Malone
      Mitchell and each of his Permitted Transferees and shall be authorized to
      exercise all rights of Malone Mitchell and his Permitted Transferees hereunder.
      The MM Agent shall have sole power and authority to take any action on behalf
      of
      Malone Mitchell and his Permitted Transferees pursuant to this Agreement,
      including delivering any notice or granting any waiver or consent hereunder,
      and
      each party hereto shall be entitled to rely on any action taken by the MM Agent
      as being taken on behalf of Malone Mitchell or any of his Permitted Transferees.
      Any notice required to be delivered hereunder to Malone Mitchell or any of
      his
      Permitted Transferees shall be delivered to the MM Agent.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (c)    AREP
      O&G or another Person named in any written notice to the other parties
      hereto after the date hereof and signed by AREP O&G and its Permitted
      Transferees (the “AREP Agent”) shall act as the sole agent for AREP O&G and
      each of its Permitted Transferees and shall be authorized to exercise all rights
      of AREP O&G and its Permitted Transferees hereunder. The AREP Agent shall
      have sole power and authority to take any action on behalf of AREP O&G and
      its Permitted Transferees pursuant to this Agreement, including delivering
      any
      notice or granting any waiver or consent hereunder, and each party hereto shall
      be entitled to rely on any action taken by the AREP Agent as being taken on
      behalf of AREP O&G or any of its Permitted Transferees. Any notice required
      to be delivered hereunder to AREP O&G or any of its Permitted Transferees
      shall be delivered to the AREP Agent.

     

    SECTION
      5.13.    Titles
      and Subtitles.
      The
      titles of the sections and subsections of this Agreement are for convenience
      of
      reference only and are not to be considered in construing this
      Agreement.

     

    SECTION
      5.14.    Counterparts;
      Facsimile Signatures.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which together shall constitute one instrument. This
      Agreement may be executed by facsimile signature(s).

     

     

    [Remainder
      of page intentionally left blank]

     

    

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    

    IN
      WITNESS WHEREOF, the parties hereto have executed this Shareholders Agreement
      as
      of the date set forth in the first paragraph hereof.

    

    
      	 	 	 
	 	RIATA
              ENERGY,
              INC.
	 
 	 
 	 
 
	 	By:  	/s/
              Tom L. Ward
	 	
              

              Name:
                Tom L. Ward.

              Title:
                Chief Executive Officer

            

    

     

    
      	 	 	 
	 	AREP
              O & G HOLDINGS LLC
	 
 	 
 	 
 
	 	By:  	
              AREP
                Oil & Gas Holdings LLC,

              its
                sole member

            
	
               

            	
              By: 

            	American Real Estate Holdings Limited Partnership,
              
              its
                sole member

            
	 	By:	American Property Investors, Inc.,
              its
                general partner

            
	 	 	 
	 	 	 
	 	By:	/s/
              Hillel Moerman 
	 	
              

              Name:
                Hillel Moerman 

              Title:
                Chief Financial Officer

            

    

    

    

    

    [Shareholders
      Agreement Signature Page]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	/s/
              Tom L. Ward
	 	 	
              
TOM
              L. WARD
	 	 	 
	 	 	192 INVESTMENTS, LLC
	 
 	 
 	 
 
	 	By:  	/s/
              William R. Blaik
	 	
              

              Name:
                William R. Blaik

              Title:
                Manager

            

    

    

     

    

    [Shareholders
      Agreement Signature
      Page]

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
       

      
        	 	 	/s/
                N. Malone
                Mitchell , 3RD
	 	 	
                
N.
                MALONE MITCHELL, 3RD
	 	 	 
	 	 	 
	 	 	/s/
                Amy
                Mitchell
	 	
                

                AMY
                  MITCHELL

              

      

      
 

       

      [Shareholders
        Agreement Signature Page]

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          	 	 	 
	 	 	/s/
                  Alexandria
                  Nicole Mitchell
	 	
                  
ALEXANDRIA
                  NICOLE MITCHELL
	 	 
	 	 
	 	/s/
                  N. Malone
                  Mitchell , 3RD
	 	
                  

                  N.
                    MALONE MITCHELL 3RD,
                    as custodian for Noah Malone Mitchell 4th,
                    under the Texas Uniform Transfer to Minors Act

                
	 	 
	 	 
	 	/s/
                  N. Malone
                  Mitchell , 3RD
	 	
                  
N.
                  MALONE MITCHELL 3RD,
                  as custodian for Stevenson Briggs Mitchell under the Texas Uniform
                  transfer to Minors Act
	 	 
	 	 
	 	/s/
                  N. Malone
                  Mitchell , 3RD
	 	
                  
N.
                  MALONE MITCHELL 3RD
                  as
                  custodian for Elizabeth Lee Mitchell
	 	 
	 	 
	 	/s/
                  Barbara
                  Pope
	 	
                  
BARBARA
                  POPE, as Trustee for the Malone Mitchell, 3rd GRAT
                  #2005 for Alexandria Nicole Mitchell 
	 	 
	 	 
	 	/s/
                  Barbara Pope
	 	
                  
BARBARA
                  POPE, as Trustee for the Amy E. Mitchell GRAT #2005
                  for Alexandria Nicole Mitchell
	 	
                
	 	 
	 	/s/
                  Barbara Pope
	 	
                  
BARBARA
                  POPE, as Trustee for the Malone Mitchell, 3rd GRAT
                  #2005 for Noah Malone Mitchell, 4th
	 	 

        

      

    

     

     

    [Shareholders
      Agreement Signature Page]

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
        
          
            	 	 	 
	 	 	/s/
                    Barbara Pope
	 	
                    
BARBARA
                    POPE, as Trustee for the Amy E. Mitchell GRAT #2005
                    for Noah Malone Mitchell, 4th
	 	 
	 	 
	 	/s/
                    Barbara Pope
	 	
                    
BARBARA
                    POPE, as Trustee for the Malone Mitchell, 3rd GRAT
                    #2005 for Stevenson Briggs Mitchell
	 	 
	 	 
	 	/s/
                    Barbara Pope
	 	
                    

                    BARBARA POPE, as Trustee for the Amy E. Mitchell GRAT #2005 for
                    Stevenson
                    Briggs Mitchell
	 	 
	 	 
	 	/s/
                    Barbara Pope
	 	
                    
BARBARA
                    POPE, as Trustee for the Malone Mitchell, 3rd GRAT
                    #2005 for Elizabeth Lee Mitchell 
	 	 
	 	 
	 	/s/
                    Barbara Pope
	 	
                    
BARBARA
                    POPE, as Trustee for the Amy E. Mitchell GRAT #2005
                    for Elizabeth Lee Mitchell

          

        

      

      
 

      [Shareholders
        Agreement Signature
        Page]

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    ASSIGNMENT
      AND ASSUMPTION AGREEMENT

     

    Pursuant
      to the Shareholders Agreement, dated as of ________ __, ____ and (the
“Shareholders
      Agreement”),
      among
      Riata Energy, Inc., a Texas corporation (the “Company”),
      and
      each of the Shareholders of the Company whose name appears on the signature
      pages listed therein (each, a “Shareholder”
and
      collectively, the “Shareholders”),
      _________, (the “Transferor”)
      hereby assigns to the undersigned the rights that may be assigned thereunder
      with respect to the Shares so Transferred, and the undersigned hereby agrees
      that, having acquired Shares as permitted by the terms of the Shareholders
      Agreement, the undersigned shall assume the obligations of the Transferor under
      the Shareholders Agreement with respect to the Shares so Transferred.
      Capitalized terms used but not defined herein shall have the meanings assigned
      to them in the Shareholders Agreement.

     

    Listed
      below is information regarding the Shares:

     

     

      Number
        of
        shares of

       Common
        Stock

       

      ____________________________________

    

    

     

    IN
      WITNESS WHEREOF, the undersigned has executed this Assumption Agreement as
      of
      __________ ___, 20__.

     

    

    
      	 	 	 
	 	
              [NAME
                OF TRANSFEREE]

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

              Title:

            

    

    

    
      	 	Acknowledged by:	 	 	 
	 	 	 	 	 
	 	RIATA ENERGY, INC	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
	 	
              

              Name:

              Title

            	 	 	
            

    

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Exhibit
      B

    

    CERTIFICATE

    

    

    American
      Real Estate Partners, L.P. (“AREP”)
      and
      American Real Estate Holdings Limited Partnership (“AREH”)
      hereby
      certify, represent, warrant and agree, pursuant to Section
      2.1(d)(2)
      of the
      Shareholders Agreement dated as of November 21, 2006 (the “Agreement”),
      among
      Riata Energy, Inc. and the Shareholders party thereto, as follows:

    

    (1) AREP
      and/or AREH and/or one or more affiliates of the foregoing (collectively, the
      “Borrower”)
      are
      contemplating entering into a financing transaction as generally described
      on
Schedule
      I
      attached
      hereto (the “Financing”).

    

    (2) In
      connection with the Financing, the Borrower intends to make pledges,
      hypothecations or encumbrances (collectively, the “Pledges”)
      as
      contemplated in Section
      2.1(d)(2)
      of the
      Agreement. 

    

    (3) The
      Financing and the Pledges are bona fide.

    

    (4) This
      certificate constitutes a legal, valid and binding obligation of AREP and
      AREH.

    

    
       

      
        
          	AMERICAN REAL ESTATE
                  PARTNERS,
                  L.P.
	By:
                  American Property Investors, Inc., its general partner
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	By:	 	 	 	 
	 	 	
                  

                  Name:

                  Title

                	 	 	
                

        

         

        
           

          
            
              	AMERICAN REAL ESTATE
                      HOLDINGS
                      LIMITED PARTNERSHIP
	By:
                      American Property Investors, Inc., its general partner
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	By:	 	 	 	 
	 	 	
                      

                      Name:

                      TitleExhibit
      10.44

    

    In
      July
      2006, Xethanol BioFuels LLC (“BioFuels”), a wholly-owned subsidiary of
      Xethanol Corporation, and Aventine Renewable Energy Holdings, Inc. (“Aventine”)
      agreed to amend their ethanol marketing agreement dated as of May 20, 2005.
      Under the amended marketing agreement, Aventine will purchase all 41 million
      gallons of ethanol that BioFuels will be capable of producing after completion
      of the expansion of BioFuels production facility in 2007 on the same terms
      and
      subject to the same conditions as Aventine is obligated under the original
      marketing agreement to purchase all 6 million gallons that BioFuels is currently
      capable of producing.

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