Document:

Exhibit
4.1

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
by and among Cano Petroleum, Inc., a Delaware corporation (the “Company”),
and Miles O’Loughlin (the “Purchaser”).

 

In connection with the Stock Purchase Agreement by
and among the Company, W.O. Energy of Nevada, Inc., the Purchaser and
Scott White (the “Stock Purchase Agreement”), the Company has agreed (i) to
issue to Purchaser 895,660 shares (the “Shares”) of the Company’s common stock
(the “Common Stock”) and (ii) to provide certain registration
rights under the Securities Act of 1933, as amended (the “Securities Act”),
and under applicable state securities laws.

 

In consideration of Purchaser receiving the Shares
pursuant to the Stock Purchase Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

 

1.            DEFINITIONS.

 

For purposes of this Agreement, the following
terms shall have the meanings specified:

 

(a)           “Anniversary
Date” means November 29, 2006.

 

(b)           “Blackout
Period” means such day or days, not to exceed an aggregate of thirty (30)
days during any period of twelve (12) consecutive months, with respect to which
the Board of Directors of the Company determines in good faith (A) that an
amendment or supplement to a Registration Statement or Prospectus contained
therein is necessary, in light of subsequent events, in order to correct a
material misstatement made therein or to include information the absence of
which would render such Registration Statement or such Prospectus materially
misleading and (B) that the filing of such amendment or supplement would
result in the disclosure of information which the Company has a bona  fide
business purpose for preserving as confidential; provided that the Company
shall be entitled to impose no more than three (3) Blackout Periods during
any period of twelve (12) consecutive months.

 

(c)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(d)           “Prospectus”
means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that disclosed information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 415 promulgated under the Securities Act), as amended or
supplemented by any amendment or prospectus supplement, including
post-effective amendments and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

 

(e)           “Registrable
Securities” means the Shares, and any other shares of Common Stock
issuable, whether as a dividend or otherwise, and any shares of capital stock
issued or issuable from time to time (with any adjustments) in replacement of,
in exchange for or otherwise in respect of the Shares.

 

(f)            “Registration
Statement” means the registration statement of the Company that covers any
of the Registrable Securities pursuant to the provisions of this Agreement
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such registration statement.

 

 

(g)           “Securities
Act” means the Securities Act of 1933, as amended.

 

(h)           “SEC”
means the Securities and Exchange Commission

 

2.            REGISTRATION.

 

(a)           The
Company shall prepare and file with the SEC a Registration Statement for an
offering to be made on a delayed or continuous basis pursuant to Rule 415
of the Securities Act registering the resale from time to time by Purchaser of
all the Registrable Securities.  The
Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act by the Anniversary
Date, and to use its commercially reasonable efforts to keep the Registration
Statement in effect until registration is no longer required because the
Registrable Securities are eligible for resale pursuant to the provisions of Rule 144(k)
of the Securities Act (the “Registration Period”).

 

(b)           If
the Registration Statement is not declared effective by the Anniversary Date,
beginning the day after the Anniversary Date, the Purchaser shall have the
right to cause the Shares to be purchased by the Company for the closing price
on November 29, 2005 (the “Purchase Option”).  If the Registration Statement is not declared
effective by the Anniversary Date, until the Purchaser elects to have the
Purchase Option exercised, the Company shall continue to use it commercially
reasonable efforts to cause the Registration Statement to be declared effective
under the Securities Act.  If the
Purchase Option is not exercised prior to the Registration Statement being
declared effective, it shall terminate upon the Registration Statement being
declared effective under the Securities Act.

 

3.            OBLIGATIONS OF THE COMPANY.

 

In addition to performing its obligations
hereunder, including those pursuant to Section 2(a) and (b) above,
the Company shall:

 

(a)           prepare
and file with the SEC such amendments and supplements to the Registration
Statement and the Prospectus used in connection with such Registration
Statement as may be necessary to comply with the provisions of the Securities
Act or to maintain the effectiveness of such Registration Statement during the
Registration Period, or as may be reasonably requested by the Purchaser in
order to incorporate information concerning the Purchaser’s intended method of
distribution;

 

(b)           furnish
to the Purchaser such number of copies of the Prospectus included in such
Registration Statement, including a preliminary prospectus, in conformity with
the requirements of the Securities Act, and such other documents as the
Purchaser may reasonably request in order to facilitate the disposition of the
Purchaser’s Registrable Securities;

 

(c)           use
all commercially reasonable efforts to register or qualify the Registrable
Securities under the securities or “blue sky” laws of such jurisdictions within
the United States as shall be reasonably requested from time to time by
Purchaser, and do any and all other acts or things which may be necessary or
advisable to enable Purchaser to consummate the public sale or other
disposition of the Registrable Securities in such jurisdictions; provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such jurisdiction;

 

(d)           notify
Purchaser immediately upon the occurrence of any event as a result of which the
Prospectus included in such Registration Statement, as then in effect, contains
an untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and (except during a

 

2

 

Blackout Period) as promptly as practicable,
prepare, file and furnish to Purchaser a reasonable number of copies of a
supplement or an amendment to such Prospectus as may be necessary so that such
Prospectus does not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;

 

(e)           use
all commercially reasonable efforts to prevent the issuance of any stop order
or other order suspending the effectiveness of any Registration Statement and,
if such an order is issued, to obtain the withdrawal thereof at the earliest
possible time and to notify Purchaser of the issuance of such order and the
resolution thereof;

 

(f)            provide
Purchaser and its representatives the opportunity to conduct a reasonable
inquiry of the Company’s financial and other records during normal business
hours and make available its officers, directors and employees for questions
regarding information which Purchaser may reasonably request in order to
fulfill any due diligence obligation on its part; and

 

(g)           permit
counsel for Purchaser (at Purchaser’s expense) to review the Registration
Statement and all amendments and supplements thereto a reasonable period of
time prior to the filing thereof with the Commission.

 

4.            OBLIGATIONS OF PURCHASER.

 

In connection with the registration of the
Registrable Securities pursuant to the Registration Statement, Purchaser shall:

 

(a)           furnish
to the Company such information regarding itself and the intended method of
disposition of Registrable Securities as the Company shall reasonably request
in order to effect the registration thereof;

 

(b)           upon
receipt of any notice from the Company of the happening of any event of the
kind described in Sections 3(d) or 3(e), immediately discontinue
disposition of Registrable Securities pursuant to the Registration Statement
until the filing of an amendment or supplement as described in Section 3(d) or
withdrawal of the stop order referred to in Section 3(e);

 

(c)           to
the extent required by applicable law, deliver a Prospectus to each purchaser
of Registrable Securities; and

 

(d)           notify
the Company when it has sold all of the Registrable Securities theretofore held
by it.

 

5.            INDEMNIFICATION.

 

In the event that any Registrable Securities
are included in the Registration Statement under this Agreement:

 

(a)           To
the extent permitted by law, the Company shall indemnify and hold harmless
Purchaser against any losses, claims, damages, liabilities or reasonable
out-of-pocket expenses (whether joint or several) (collectively, including
legal or other expenses reasonably incurred in connection with investigating or
defending same, “Losses”), insofar as any such Losses arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in such Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or (ii) the omission or alleged omission to state
therein a material fact required to

 

3

 

be stated therein, or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  The Company will
reimburse Purchaser for any legal or other expenses as reasonably incurred in
connection with investigating or defending any Loss; provided, however, that
the foregoing indemnity shall not apply to amounts paid in settlement of any
Loss if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be obligated
to indemnify Purchaser for any Loss to the extent that such Loss arises out of
or is based upon and in conformity with written information furnished by such
person expressly for use in such Registration Statement; and provided, further,
that the Company shall not be required to indemnify Purchaser to the extent
that any Loss results from Purchaser selling Registrable Securities (i) to
a person to whom there was not sent or given, at or prior to the written
confirmation of the sale of such shares, a copy of the Prospectus, as most
recently amended or supplemented, if the Company has previously furnished or
made available copies thereof or (ii) during any period following written
notice by the Company to Purchaser of an event described in Section 3(d) or
3(e).

 

(b)           To
the extent permitted by law, Purchaser shall indemnify and hold harmless the
Company, the officers, directors, employees, agents and representatives of the
Company, and each person, if any, who controls the Company within the meaning
of the Securities Act or the Exchange Act, against any Losses to the extent
(and only to the extent) that any such Losses arise out of or are based upon
and in conformity with written information furnished by the Purchaser expressly
for use in such Registration Statement; and Purchaser will reimburse any legal
or other expenses as reasonably incurred by the Company and any such officer,
director, employee, agent, representative, or controlling person, in connection
with investigating or defending any such Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of Purchaser, which
consent shall not be unreasonably withheld; provided, that, in no event shall
any indemnity under this Section 5(b) exceed the net purchase price
of securities sold by Purchaser under the Registration Statement.

 

(c)           Promptly
after receipt by an indemnified party under this Section 5 of notice of
the commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 5, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in and to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the reasonably
incurred fees and expenses of one such counsel to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate under applicable standards of
professional conduct due to actual or potential conflicting interests between
such indemnified party and any other party represented by such counsel in such
proceeding.  The failure to deliver
written notice to the indemnifying party within a reasonable time of the commencement
of any such action, to the extent prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 5 with respect to such action, but
the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 5 or with respect to any other action.

 

(d)           In
the event that the indemnity provided in subsection (a) or (b) of
this Section 5 is unavailable or insufficient to hold harmless an
indemnified party for any reason, the Company and Purchaser agree , severally
and not jointly, to contribute to the aggregate Losses to which the Company or
Purchaser may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and Purchaser in connection with the statements
or omissions which resulted in such Losses; provided, however, that in no case
shall Purchaser be responsible for any amount in excess of the net purchase
price of securities sold by it under the Registration Statement.  Relative fault shall be determined by
reference

 

4

 

to whether any alleged untrue statement or
omission relates to information provided by the Company or by Purchaser.  The Company and Purchaser agree that it would
not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. 
Notwithstanding the provisions of this paragraph (d), 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 is
not guilty of such fraudulent misrepresentation.  For purposes of this Section 5, each
person who controls the Company within the meaning of either the Securities Act
or the Exchange Act and each officer, director, employee, agent or
representative of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
subsection (d).

 

(e)           The
obligations of the Company and Purchaser under this Section 5 shall
survive the completion of any offering of Registrable Securities pursuant to
the Registration Statement under this Agreement, or otherwise.

 

6.            REPORTS.

 

With a view to making available to Purchaser
the benefits of Rule 144 under the Securities Act (“Rule 144”)
and any other similar rule or regulation of the SEC that may at any time
permit Purchaser to sell securities of the Company to the public without
registration, the Company agrees to:

 

(a)           make
and keep public information available, as those terms are understood and defined
in Rule 144;

 

(b)           file
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and

 

(c)           furnish
to Purchaser, so long as Purchaser owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company, if true, that it has
complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested
in availing the Purchaser of any rule or regulation of the SEC which
permits the selling of any such securities without registration.

 

7.            MISCELLANEOUS.

 

(a)           Expenses
of Registration.  All expenses, other
than underwriting discounts and commissions and fees and expenses of counsel to
Purchaser, incurred in connection with the registrations, filings or
qualifications described herein, including (without limitation) all
registration, filing and qualification fees, printers’ and accounting fees and
the fees and disbursements of counsel for the Company shall be borne by the
Company.

 

(b)           Amendment;
Waiver.  Any provision of this
Agreement may be amended only pursuant to a written instrument executed by the
Company and the Purchaser. Any waiver of the provisions of this Agreement may
be made only pursuant to a written instrument executed by the party against
whom enforcement is sought.  Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon Purchaser and the Company.  The
failure of any party to exercise any right or remedy under this Agreement or
otherwise, or the delay by any party in exercising such right or remedy, shall
not operate as a waiver thereof.

 

5

 

(c)           Notices.  Any notice, demand or request required or
permitted to be given by any party to any other party pursuant to the terms of
this Agreement shall be in writing and shall be deemed given (i) when
made, if made by hand delivery, and upon confirmation of receipt, if made by
facsimile; (ii) the day of receipt of shipment after confirmation of
receipt of shipment by the recipient if shipped courier, postage prepaid, or (iii) the
day of receipt of shipment after confirmation of receipt of shipment by the
recipient if shipped by certified or registered mail, return receipt requested,
postage prepaid addressed to the parties as follows:

 

If to the
Company:

 

Cano Petroleum, Inc.

The Oil and Gas Commerce Building

309 West Seventh Street, Suite 1600

Fort Worth, Texas 76102

Attn.:      James
K. Teringo, Jr.

Fax:         817-698-0796

 

with a
copy to:

 

Haynes and Boone, LLP

901 Main Street, Suite 3100

Dallas, Texas 75202

Attn.:      W.
Bruce Newsome

Fax:         214-200-0636

 

If to the
Purchaser:

 

Miles O’Loughlin

Hwy 152 West

P.O. Box 960

Pampa, Texas 79066

Fax:         806-665-1960

 

In each of (ii) and (iii) above, the signature of the
recipient or an agent of the recipient shall constitute confirmation of receipt
of shipment.

 

(d)           Termination.  This Agreement shall terminate on the earlier
to occur of (a) the end of the Registration Period and (b) the date
on which all of the Registrable Securities have been publicly distributed; but
any such termination shall be without prejudice to (i) the parties’ rights
and obligations arising from breaches of this Agreement occurring prior to such
termination and (ii) the indemnification and contribution obligations
under this Agreement.

 

(e)           Assignment.  The rights of Purchaser hereunder shall not
the assignable.

 

(f)            Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed one and the same instrument.  This Agreement, once executed by a party, may
be delivered to any other party hereto by facsimile transmission.

 

(g)           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas
without regard to the conflict of laws provisions thereof.  Each party hereby

 

6

 

irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in the City of Fort Worth,
Tarrant County, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper.

 

7

 

SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT

 

IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date indicated by their signature.

 

 

	
  PURCHASER NAME:

  	
    /s/ Miles O’Loughlin

  	
   

  	
  Dated: November 29, 2005

  
	
   

  	
  Miles O’Loughlin

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted this 29th day of November, 2005.

  	
   

  
	
   

  	
   

  
	
  CANO PETROLEUM, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ S. Jeffrey Johnson

  	
   

  	
   

  
	
   

  	
  Name:

  	
    S. Jeffrey Johnson

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Chief Executive Officer

  	
   

  	
   

  
								

 

8Exhibit 4.2

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
by and among Cano Petroleum, Inc., a Delaware corporation (the “Company”),
and Scott White (the “Purchaser”).

 

In connection with the Stock Purchase Agreement by and
among the Company, W.O. Energy of Nevada, Inc., the Purchaser and Miles O’Loughlin
(the “Stock Purchase Agreement”), the Company has agreed (i) to issue to
Purchaser 895,660 shares (the “Shares”) of the Company’s common stock (the “Common
Stock”) and (ii) to provide certain registration rights under the
Securities Act of 1933, as amended (the “Securities Act”), and under
applicable state securities laws.

 

In consideration of Purchaser receiving the Shares
pursuant to the Stock Purchase Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties agree as follows:

 

1.            DEFINITIONS.

 

For purposes of this Agreement, the following
terms shall have the meanings specified:

 

(a)           “Anniversary
Date” means November 29, 2006.

 

(b)           “Blackout
Period” means such day or days, not to exceed an aggregate of thirty (30)
days during any period of twelve (12) consecutive months, with respect to which
the Board of Directors of the Company determines in good faith (A) that an
amendment or supplement to a Registration Statement or Prospectus contained
therein is necessary, in light of subsequent events, in order to correct a
material misstatement made therein or to include information the absence of
which would render such Registration Statement or such Prospectus materially
misleading and (B) that the filing of such amendment or supplement would
result in the disclosure of information which the Company has a bona  fide
business purpose for preserving as confidential; provided that the Company
shall be entitled to impose no more than three (3) Blackout Periods during
any period of twelve (12) consecutive months.

 

(c)           “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(d)           “Prospectus”
means the prospectus included in the Registration Statement (including, without
limitation, a prospectus that disclosed information previously omitted from a
prospectus filed as part of an effective registration statement in reliance
upon Rule 415 promulgated under the Securities Act), as amended or
supplemented by any amendment or prospectus supplement, including
post-effective amendments and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.

 

(e)           “Registrable
Securities” means the Shares, and any other shares of Common Stock
issuable, whether as a dividend or otherwise, and any shares of capital stock
issued or issuable from time to time (with any adjustments) in replacement of,
in exchange for or otherwise in respect of the Shares.

 

(f)            “Registration
Statement” means the registration statement of the Company that covers any
of the Registrable Securities pursuant to the provisions of this Agreement
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such registration statement.

 

 

(g)           “Securities
Act” means the Securities Act of 1933, as amended.

 

(h)           “SEC”
means the Securities and Exchange Commission

 

2.            REGISTRATION.

 

(a)           The
Company shall prepare and file with the SEC a Registration Statement for an
offering to be made on a delayed or continuous basis pursuant to Rule 415
of the Securities Act registering the resale from time to time by Purchaser of
all the Registrable Securities.  The
Company shall use its commercially reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act by the Anniversary
Date, and to use its commercially reasonable efforts to keep the Registration
Statement in effect until registration is no longer required because the
Registrable Securities are eligible for resale pursuant to the provisions of Rule 144(k)
of the Securities Act (the “Registration Period”).

 

(b)           If
the Registration Statement is not declared effective by the Anniversary Date,
beginning the day after the Anniversary Date, the Purchaser shall have the
right to cause the Shares to be purchased by the Company for the closing price
on November 29, 2005 (the “Purchase Option”).  If the Registration Statement is not declared
effective by the Anniversary Date, until the Purchaser elects to have the
Purchase Option exercised, the Company shall continue to use it commercially
reasonable efforts to cause the Registration Statement to be declared effective
under the Securities Act.  If the
Purchase Option is not exercised prior to the Registration Statement being
declared effective, it shall terminate upon the Registration Statement being
declared effective under the Securities Act.

 

3.            OBLIGATIONS OF THE COMPANY.

 

In addition to performing its obligations
hereunder, including those pursuant to Section 2(a) and (b) above,
the Company shall:

 

(a)           prepare
and file with the SEC such amendments and supplements to the Registration
Statement and the Prospectus used in connection with such Registration
Statement as may be necessary to comply with the provisions of the Securities
Act or to maintain the effectiveness of such Registration Statement during the
Registration Period, or as may be reasonably requested by the Purchaser in
order to incorporate information concerning the Purchaser’s intended method of
distribution;

 

(b)           furnish
to the Purchaser such number of copies of the Prospectus included in such
Registration Statement, including a preliminary prospectus, in conformity with
the requirements of the Securities Act, and such other documents as the
Purchaser may reasonably request in order to facilitate the disposition of the
Purchaser’s Registrable Securities;

 

(c)           use
all commercially reasonable efforts to register or qualify the Registrable
Securities under the securities or “blue sky” laws of such jurisdictions within
the United States as shall be reasonably requested from time to time by
Purchaser, and do any and all other acts or things which may be necessary or
advisable to enable Purchaser to consummate the public sale or other
disposition of the Registrable Securities in such jurisdictions; provided that the
Company shall not be required in connection therewith or as a condition thereto
to qualify to do business or to file a general consent to service of process in
any such jurisdiction;

 

(d)           notify
Purchaser immediately upon the occurrence of any event as a result of which the
Prospectus included in such Registration Statement, as then in effect, contains
an untrue statement of material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing, and (except during a

 

2

 

Blackout Period) as promptly as practicable,
prepare, file and furnish to Purchaser a reasonable number of copies of a
supplement or an amendment to such Prospectus as may be necessary so that such
Prospectus does not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;

 

(e)           use
all commercially reasonable efforts to prevent the issuance of any stop order
or other order suspending the effectiveness of any Registration Statement and,
if such an order is issued, to obtain the withdrawal thereof at the earliest
possible time and to notify Purchaser of the issuance of such order and the
resolution thereof;

 

(f)            provide
Purchaser and its representatives the opportunity to conduct a reasonable
inquiry of the Company’s financial and other records during normal business
hours and make available its officers, directors and employees for questions
regarding information which Purchaser may reasonably request in order to
fulfill any due diligence obligation on its part; and

 

(g)           permit
counsel for Purchaser (at Purchaser’s expense) to review the Registration
Statement and all amendments and supplements thereto a reasonable period of
time prior to the filing thereof with the Commission.

 

4.            OBLIGATIONS OF PURCHASER.

 

In connection with the registration of the
Registrable Securities pursuant to the Registration Statement, Purchaser shall:

 

(a)           furnish
to the Company such information regarding itself and the intended method of
disposition of Registrable Securities as the Company shall reasonably request
in order to effect the registration thereof;

 

(b)           upon
receipt of any notice from the Company of the happening of any event of the
kind described in Sections 3(d) or 3(e), immediately discontinue
disposition of Registrable Securities pursuant to the Registration Statement
until the filing of an amendment or supplement as described in Section 3(d) or
withdrawal of the stop order referred to in Section 3(e);

 

(c)           to
the extent required by applicable law, deliver a Prospectus to each purchaser
of Registrable Securities; and

 

(d)           notify
the Company when it has sold all of the Registrable Securities theretofore held
by it.

 

5.             INDEMNIFICATION.

 

In the event that any Registrable Securities
are included in the Registration Statement under this Agreement:

 

(a)           To
the extent permitted by law, the Company shall indemnify and hold harmless
Purchaser against any losses, claims, damages, liabilities or reasonable
out-of-pocket expenses (whether joint or several) (collectively, including
legal or other expenses reasonably incurred in connection with investigating or
defending same, “Losses”), insofar as any such Losses arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in such Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, or (ii) the omission or alleged omission to state
therein a material fact required to

 

3

 

be stated therein, or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.  The Company will
reimburse Purchaser for any legal or other expenses as reasonably incurred in
connection with investigating or defending any Loss; provided, however, that
the foregoing indemnity shall not apply to amounts paid in settlement of any
Loss if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld), nor shall the Company be obligated
to indemnify Purchaser for any Loss to the extent that such Loss arises out of
or is based upon and in conformity with written information furnished by such
person expressly for use in such Registration Statement; and provided, further,
that the Company shall not be required to indemnify Purchaser to the extent
that any Loss results from Purchaser selling Registrable Securities (i) to
a person to whom there was not sent or given, at or prior to the written
confirmation of the sale of such shares, a copy of the Prospectus, as most
recently amended or supplemented, if the Company has previously furnished or
made available copies thereof or (ii) during any period following written
notice by the Company to Purchaser of an event described in Section 3(d) or
3(e).

 

(b)           To
the extent permitted by law, Purchaser shall indemnify and hold harmless the
Company, the officers, directors, employees, agents and representatives of the
Company, and each person, if any, who controls the Company within the meaning
of the Securities Act or the Exchange Act, against any Losses to the extent
(and only to the extent) that any such Losses arise out of or are based upon
and in conformity with written information furnished by the Purchaser expressly
for use in such Registration Statement; and Purchaser will reimburse any legal
or other expenses as reasonably incurred by the Company and any such officer,
director, employee, agent, representative, or controlling person, in connection
with investigating or defending any such Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of Purchaser, which
consent shall not be unreasonably withheld; provided, that, in no event shall
any indemnity under this Section 5(b) exceed the net purchase price
of securities sold by Purchaser under the Registration Statement.

 

(c)           Promptly
after receipt by an indemnified party under this Section 5 of notice of
the commencement of any action (including any governmental action), such
indemnified party will, if a claim in respect thereof is to be made against any
indemnifying party under this Section 5, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in and to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the reasonably
incurred fees and expenses of one such counsel to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate under applicable standards of
professional conduct due to actual or potential conflicting interests between
such indemnified party and any other party represented by such counsel in such
proceeding.  The failure to deliver
written notice to the indemnifying party within a reasonable time of the commencement
of any such action, to the extent prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 5 with respect to such action, but
the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this Section 5 or with respect to any other action.

 

(d)           In
the event that the indemnity provided in subsection (a) or (b) of
this Section 5 is unavailable or insufficient to hold harmless an
indemnified party for any reason, the Company and Purchaser agree , severally
and not jointly, to contribute to the aggregate Losses to which the Company or
Purchaser may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and Purchaser in connection with the statements
or omissions which resulted in such Losses; provided, however, that in no case
shall Purchaser be responsible for any amount in excess of the net purchase
price of securities sold by it under the Registration Statement.  Relative fault shall be determined by
reference

 

4

 

to whether any alleged untrue statement or
omission relates to information provided by the Company or by Purchaser.  The Company and Purchaser agree that it would
not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. 
Notwithstanding the provisions of this paragraph (d), 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 is
not guilty of such fraudulent misrepresentation.  For purposes of this Section 5, each
person who controls the Company within the meaning of either the Securities Act
or the Exchange Act and each officer, director, employee, agent or
representative of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
subsection (d).

 

(e)           The
obligations of the Company and Purchaser under this Section 5 shall
survive the completion of any offering of Registrable Securities pursuant to
the Registration Statement under this Agreement, or otherwise.

 

6.            REPORTS.

 

With a view to making available to Purchaser
the benefits of Rule 144 under the Securities Act (“Rule 144”)
and any other similar rule or regulation of the SEC that may at any time
permit Purchaser to sell securities of the Company to the public without
registration, the Company agrees to:

 

(a)           make
and keep public information available, as those terms are understood and defined
in Rule 144;

 

(b)           file
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and the Exchange Act; and

 

(c)           furnish
to Purchaser, so long as Purchaser owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company, if true, that it has
complied with the reporting requirements of Rule 144, the Securities Act
and the Exchange Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested
in availing the Purchaser of any rule or regulation of the SEC which
permits the selling of any such securities without registration.

 

7.            MISCELLANEOUS.

 

(a)           Expenses
of Registration.  All expenses, other
than underwriting discounts and commissions and fees and expenses of counsel to
Purchaser, incurred in connection with the registrations, filings or
qualifications described herein, including (without limitation) all
registration, filing and qualification fees, printers’ and accounting fees and
the fees and disbursements of counsel for the Company shall be borne by the
Company.

 

(b)           Amendment;
Waiver.  Any provision of this
Agreement may be amended only pursuant to a written instrument executed by the
Company and the Purchaser. Any waiver of the provisions of this Agreement may
be made only pursuant to a written instrument executed by the party against
whom enforcement is sought.  Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon Purchaser and the Company.  The
failure of any party to exercise any right or remedy under this Agreement or
otherwise, or the delay by any party in exercising such right or remedy, shall
not operate as a waiver thereof.

 

5

 

(c)           Notices.  Any notice, demand or request required or
permitted to be given by any party to any other party pursuant to the terms of
this Agreement shall be in writing and shall be deemed given (i) when
made, if made by hand delivery, and upon confirmation of receipt, if made by
facsimile; (ii) the day of receipt of shipment after confirmation of
receipt of shipment by the recipient if shipped courier, postage prepaid, or (iii) the
day of receipt of shipment after confirmation of receipt of shipment by the
recipient if shipped by certified or registered mail, return receipt requested,
postage prepaid addressed to the parties as follows:

 

If to the
Company:

 

Cano Petroleum, Inc.

The Oil and Gas Commerce Building

309 West Seventh Street, Suite 1600

Fort Worth, Texas 76102

Attn.:      James
K. Teringo, Jr.

Fax:         817-698-0796

 

with a
copy to:

 

Haynes and Boone, LLP

901 Main Street, Suite 3100

Dallas, Texas 75202

Attn.:      W.
Bruce Newsome

Fax:         214-200-0636

 

If to the
Purchaser:

 

Scott White

Hwy 152 West

P.O. Box 960

Pampa, Texas 79066

Fax:         806-665-1960

 

In each of (ii) and (iii) above, the signature of the
recipient or an agent of the recipient shall constitute confirmation of receipt
of shipment.

 

(d)           Termination.  This Agreement shall terminate on the earlier
to occur of (a) the end of the Registration Period and (b) the date
on which all of the Registrable Securities have been publicly distributed; but
any such termination shall be without prejudice to (i) the parties’ rights
and obligations arising from breaches of this Agreement occurring prior to such
termination and (ii) the indemnification and contribution obligations
under this Agreement.

 

(e)           Assignment.  The rights of Purchaser hereunder shall not
the assignable.

 

(f)            Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed one and the same instrument.  This Agreement, once executed by a party, may
be delivered to any other party hereto by facsimile transmission.

 

(g)           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas
without regard to the conflict of laws provisions thereof.  Each party hereby

 

6

 

irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in the City of Fort Worth,
Tarrant County, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper.

 

7

 

SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT

 

IN WITNESS WHEREOF, the undersigned have
executed this Agreement as of the date indicated by their signature.

 

 

	
  PURCHASER NAME: 

  	
  /s/ Scott White

  	
   

  	
  Dated: November 29, 2005

  
	
   

  	
  Scott White

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Accepted this 29th day of November,
  2005.

  	
   

  
	
   

  	
   

  
	
  CANO PETROLEUM, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/ S. Jeffrey Johnson

  	
   

  	
   

  
	
   

  	
  Name:

  	
    S. Jeffrey Johnson

  	
   

  	
   

  
	
   

  	
  Title:

  	
    Chief Executive Officer

  	
   

  	
   

  
								

 

8

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