Document:

Exhibit 10 (a)

 

SECOND AMENDMENT

 

THIS SECOND AMENDMENT dated as of August 18, 2005
(the “Amendment”) is entered into among Tenet Healthcare Corporation, a
Nevada corporation (the “Borrower”), the Subsidiary Guarantors party
hereto, the Lenders party hereto and Bank of America, N.A., as Administrative
Agent. All capitalized terms used herein and not otherwise defined herein shall
have the meanings given to such terms in the Credit Agreement (as defined
below).

 

RECITALS

 

WHEREAS, the Borrower, the Lenders and the
Administrative Agent entered into that certain Credit Agreement dated as of December 31,
2004 (as amended or modified from time to time, the “Credit Agreement”);
and

 

WHEREAS, the Borrower has requested that the Lenders
amend the Credit Agreement as set forth below;

 

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

 

1.             Amendments
to Credit Agreement.

 

(a)           The definition of “Termination Date”
in Section 1.01 of the Credit Agreement is hereby amended to read as
follows:

 

“Termination Date” means June 30, 2008.

 

(b)           The
following definition is hereby added to Section 1.01 of the Credit Agreement in
the appropriate alphabetical order and shall read as follows:

 

“Second Amendment Effective Date” means August 18,
2005.

 

(c)           Section 2.01(e) of the
Credit Agreement is hereby amended to read as follows:

 

(e)           Expiry Dates. No Letter of Credit shall have an expiry
date later than the fifth Domestic Business Day before the Termination Date;
provided, that the expiry date of any Letter of Credit may be extended at the
Borrower’s request delivered pursuant to Section 2.01(f) so long as
such extension has been approved by all of the Lenders; provided further, that the
expiry date of any Letter of Credit issued after the Second Amendment Effective
Date shall not occur more than twelve months after the date of issuance.

 

2.             Amendment
to Financing Documents. Any reference to the Credit Agreement in any of the
Financing Documents shall be a reference to the Credit Agreement, as amended,
restated, modified, supplemented and extended from time to time.

 

3.             Conditions
Precedent. This Amendment shall be effective upon satisfaction of the
following conditions precedent:

 

 

(a)           Receipt by the
Administrative Agent of counterparts of this Amendment duly executed by the
Borrower, the Subsidiary Guarantors, the Lenders and the Administrative Agent;
and

 

(b)           Receipt by the
Administrative Agent (i) for the account of the Lenders of an amendment
fee equal to eight basis points (0.08%) on the aggregate Commitments and (ii) any
other fees and expenses payable in connection with this Amendment.

 

4.             Miscellaneous.

 

(a)           The Credit
Agreement, and the obligations of the Borrower thereunder and of the Credit
Parties under the other Financing Documents, are hereby ratified and confirmed
and shall remain in full force and effect according to their terms.

 

(b)           Each Credit Party
hereby represents and warrants as follows:

 

(i)            Each Credit
Party has taken all necessary action to authorize the execution, delivery and
performance of this Amendment.

 

(ii)           This Amendment
has been duly executed and delivered by each Credit Party and constitutes each
Credit Party’s legal, valid and binding obligations, enforceable in accordance
with its terms, except as such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered
in a proceeding at law or in equity).

 

(iii)          No consent,
approval, authorization or order of, or filing, registration or qualification
with, any court or governmental authority or third party is required in connection
with the execution, delivery or performance by any Credit Party of this
Amendment.

 

(c)           The Borrower and
each other Credit Party, as applicable, represent and warrant to the Lenders
that (i) the representations and warranties of the Borrower set forth in Article 4
of the Credit Agreement and of the Credit Parties in each other Security
Document are true and correct as of the date hereof with the same effect as if
made on and as of the date hereof, except to the extent such representations
and warranties expressly relate solely to an earlier date and (ii) no
event has occurred and is continuing which constitutes a Default or an Event of
Default.

 

(d)           This Amendment
may be executed in any number of counterparts, each of which when so executed
and delivered shall be an original, but all of which shall constitute one and
the same instrument. Delivery of an executed counterpart of this Amendment by telecopy
shall be effective as an original and shall constitute a representation that an
executed original shall be delivered.

 

(e)           THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.

 

[remainder of page intentionally left
blank]

 

2

 

Each of the parties hereto
has caused a counterpart of this Amendment to be duly executed and delivered as
of the date first above written.

 

	
  BORROWER:

  	
  TENET HEALTHCARE CORPORATION,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ ROBERT S. SHAPARD

  
	
   

  	
  Name:

  	
  Robert S. Shapard

  
	
   

  	
  Title:

  	
  CFO

  

 

	
  SUBSIDIARY GUARANTORS:

  	
   

  	
   

  
	
   

  	
  AHM ACQUISITION CO., INC.

  	
   

  
	
   

  	
  ALVARADO HOSPITAL MEDICAL
  CENTER, INC.

  	
   

  
	
   

  	
  AMI INFORMATION SYSTEMS GROUP,
  INC.

  	
   

  
	
   

  	
  AMERICAN MEDICAL (CENTRAL),
  INC.

  	
   

  
	
   

  	
  AMISUB (HEIGHTS), INC.

  	
   

  
	
   

  	
  AMISUB (HILTON HEAD), INC.

  	
   

  
	
   

  	
  AMISUB (IRVINE MEDICAL CENTER),
  INC.

  	
   

  
	
   

  	
  AMISUB (NORTH RIDGE HOSPITAL),
  INC.

  	
   

  
	
   

  	
  AMISUB (SAINT JOSEPH HOSPITAL),
  INC.

  	
   

  
	
   

  	
  AMISUB (SFH), INC.

  	
   

  
	
   

  	
  AMISUB (TWELVE OAKS), INC.

  	
   

  
	
   

  	
  AMISUB OF CALIFORNIA, INC.

  	
   

  
	
   

  	
  AMISUB OF NORTH CAROLINA, INC.

  	
   

  
	
   

  	
  AMISUB OF SOUTH CAROLINA, INC.

  	
   

  
	
   

  	
  AMISUB OF TEXAS, INC.

  	
   

  
	
   

  	
  BROOKWOOD HEALTH SERVICES, INC.

  	
   

  
	
   

  	
  CGH HOSPITAL, LTD.

  	
   

  
	
   

  	
  COMMONWEALTH CONTINENTAL HEALTH
  CARE, INC.

  	
   

  
	
   

  	
  COMMUNITY HOSPITAL OF LOS
  GATOS, INC.

  	
   

  
	
   

  	
  CORAL GABLES HOSPITAL, INC.

  	
   

  
	
   

  	
  CYPRESS FAIRBANKS MEDICAL
  CENTER, INC.

  	
   

  
	
   

  	
  DELRAY MEDICAL CENTER, INC.

  	
   

  
	
   

  	
  DOCTORS HOSPITAL OF MANTECA,
  INC.

  	
   

  
	
   

  	
  DOCTORS MEDICAL CENTER OF
  MODESTO, INC.

  	
   

  
	
   

  	
  EAST COOPER COMMUNITY HOSPITAL,
  INC.

  	
   

  
	
   

  	
  FMC ACQUISITION, INC.

  	
   

  
	
   

  	
  FMC HOSPITAL, LTD.

  	
   

  
	
   

  	
  FMC MEDICAL, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ ROBERT S. SHAPARD

  
	
   

  	
  Name:

  	
  Robert S. Shapard

  
	
   

  	
  Title:

  	
  CFO

  
				

 

 

	
   

  	
  FOUNTAIN VALLEY REGIONAL
  HOSPITAL & MEDICAL CENTER

  	
   

  
	
   

  	
  FRYE REGIONAL MEDICAL CENTER,
  INC.

  	
   

  
	
   

  	
  GULF COAST COMMUNITY HOSPITAL,
  INC.

  	
   

  
	
   

  	
  HILTON HEAD HEALTH SYSTEM, L.P.

  	
   

  
	
   

  	
  HNMC, INC.

  	
   

  
	
   

  	
  HNW GP, INC.

  	
   

  
	
   

  	
  HNW LP, INC.

  	
   

  
	
   

  	
  HOLLYWOOD MEDICAL CENTER, INC.

  	
   

  
	
   

  	
  HOUSTON NORTHWEST MEDICAL
  CENTER, INC.

  	
   

  
	
   

  	
  HOUSTON NORTHWEST PARTNERS,
  LTD.

  	
   

  
	
   

  	
  JFK MEMORIAL HOSPITAL, INC.

  	
   

  
	
   

  	
  LAKE POINTE GP, INC.

  	
   

  
	
   

  	
  LAKE POINTE INVESTMENTS, INC.

  	
   

  
	
   

  	
  LAKE POINTE PARTNERS, LTD.

  	
   

  
	
   

  	
  LAKEWOOD REGIONAL MEDICAL
  CENTER, INC.

  	
   

  
	
   

  	
  LIFEMARK HOSPITALS OF FLORIDA,
  INC.

  	
   

  
	
   

  	
  LIFEMARK HOSPITALS OF
  LOUISIANA, INC.

  	
   

  
	
   

  	
  LIFEMARK HOSPITALS, INC.

  	
   

  
	
   

  	
  LOS ALAMITOS MEDICAL CENTER,
  INC.

  	
   

  
	
   

  	
  MCF, INC.

  	
   

  
	
   

  	
  MEDICAL CENTER OF GARDEN GROVE

  	
   

  
	
   

  	
  MEODOWCREST HOSPITAL, LLC

  	
   

  
	
   

  	
  NEW MEDICAL HORIZONS, II,
  LTD.

  	
   

  
	
   

  	
  NME HEADQUARTERS, INC.

  	
   

  
	
   

  	
  NORTH FULTON MEDICAL CENTER,
  INC.

  	
   

  
	
   

  	
  NORTH MIAMI MEDICAL CENTER,
  LTD.

  	
   

  
	
   

  	
  NORTH SHORE REGIONAL MEDICAL
  CENTER, LLC

  	
   

  
	
   

  	
  ORNDA HOSPITAL CORPORATION

  	
   

  
	
   

  	
  ORNDA INVESTMENTS, INC.

  	
   

  
	
   

  	
  PALM BEACH GARDENS COMMUNITY
  HOSPITAL, INC.

  	
   

  
	
   

  	
  PLACENTIA-LINDA HOSPITAL, INC.

  	
   

  
	
   

  	
  REPUBLIC HEALTH CORPORATION OF
  ROCKWALL COUNTY

  	
   

  
	
   

  	
  RHC PARKWAY, INC.

  	
   

  
	
   

  	
  SAN DIMAS COMMUNITY HOSPITAL

  	
   

  
	
   

  	
  SAN RAMON REGIONAL MEDICAL
  CENTER, INC.

  	
   

  
	
   

  	
  SIERRA VISTA HOSPITAL, INC.

  	
   

  
	
   

  	
  TENET CALIFORNIA, INC.

  	
   

  
	
   

  	
  TENET FINANCE CORP.

  	
   

  
	
   

  	
  TENET FRISCO, LTD.

  	
   

  
	
   

  	
  TENET GOOD SAMARITAN, INC.

  	
   

  
	
   

  	
  TENET HEALTHCARE, LTD.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT S. SHAPARD

  
	
   

  	
  Name:

  	
  Robert S. Shapard

  
	
   

  	
  Title:

  	
  CFO

  
				

 

 

	
   

  	
  TENET HEALTHCARE-FLORIDA, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM BARTLETT,
  INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM BUCKS
  COUNTY, L.L.C.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM CFMC, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM DI, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM GB, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM GRADUATE,
  L.L.C.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM HAHNEMANN,
  L.L.C.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM HEALTHCORP.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM HOLDINGS,
  INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM HOSPITALS,
  INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM HOSPITALS
  DALLAS, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM MEDICAL,
  INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM MEMORIAL
  MEDICAL CENTER, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM NORRIS, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM NORTH SHORE,
  INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM
  PHILADELPHIA, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM ROXBOROUGH,
  LLC

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM SGH, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM SL, INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM SPALDING,
  INC.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM ST.
  CHRISTOPHER’S HOSPITAL FOR CHILDREN, L.L.C.

  	
   

  
	
   

  	
  TENET HEALTHSYSTEM DESERT, INC.

  	
   

  
	
   

  	
  TENET HIALEAH HEALTHSYSTEM,
  INC.

  	
   

  
	
   

  	
  TENET HOSPITALS, INC.

  	
   

  
	
   

  	
  TENET HOSPITALS LIMITED

  	
   

  
	
   

  	
  TENET SOUTH FULTON, INC.

  	
   

  
	
   

  	
  TENET ST. MARY’S, INC.

  	
   

  
	
   

  	
  TENETSUB TEXAS, INC.

  	
   

  
	
   

  	
  TWIN CITIES COMMUNITY HOSPITAL,
  INC.

  	
   

  
	
   

  	
  USC UNIVERSITY HOSPITAL, INC.

  	
   

  
	
   

  	
  WEST BOCA MEDICAL CENTER, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ ROBERT S. SHAPARD

  
	
   

  	
  Name:

  	
  Robert S. Shapard

  
	
   

  	
  Title:

  	
  CFO

  
				

 

 

	
  ADMINISTRATIVE AGENT:

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KEVIN WAGLEY

  
	
   

  	
  Name:

  	
  Kevin Wagley

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LENDERS:

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  as L/C Issuer and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ KEVIN WAGLEY

  
	
   

  	
  Name:

  	
  Kevin Wagley

  
	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  CITICORP USA, INC.,

  
	
   

  	
  as Syndication Agent and Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SUZANNE CRYMES

  
	
   

  	
  Name:

  	
  Suzanne Crymes

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  SUNTRUST BANK,

  
	
   

  	
  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ W. BROOKS HUBBARD

  
	
   

  	
  Name:

  	
  W. Brooks Hubbard

  
	
   

  	
  Title:

  	
  Director

  
	
   

  	
   

  	
   

  
	
   

  	
  THE BANK OF NOVA SCOTIA,

  
	
   

  	
  as Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ CAROLYN A. CALLOWAY

  
	
   

  	
  Name:

  	
  C. A. Calloway

  
	
   

  	
  Title:

  	
  Managing DirectorExhibit 10.1

 

THE SECURITIES OFFERED HEREIN HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”)
AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS
THAT TERMS IS DEFINED IN THE 1933 ACT) UNLESS THE SECURITIES ARE REGISTERED
UNDER THE 1933 ACT, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
1933 ACT IS AVAILABLE. THIS SUBSCRIPTION IS EXECUTED IN RELIANCE UPON THE
EXEMPTIONS PROVIDED BY RULE 506 OF REGULATION D UNDER THE 1933 ACT.

 

SUBSCRIPTION

 

THIS SUBSCRIPTION (the “Subscription”) has been
executed by the undersigned in connection with the offering of 1,000,000 shares
of common stock, par value $0.001 (hereinafter referred to as the “Stock”), of
Cano Petroleum, Inc., a corporation organized under the laws of the State
of Delaware (hereinafter referred to as the “Issuer”).  There is no minimum offering.  The Stock being subscribed for pursuant to
this Subscription has not been registered under the 1933 Act.  The offer of the Stock and, if this
Subscription is accepted by the Issuer, the sale of Stock, is being made in
reliance upon Rule 506 of Regulation D promulgated under the 1933 Act.
(All dollar amounts in this Subscription are expressed in U.S. Dollars).

 

ARTICLE 1

SUBSCRIPTION

 

Subscription

 

1.1                                 The undersigned
(the “Subscriber”), as principal, hereby subscribe to purchase, in the
aggregate, a minimum of One Million (1,000,000) shares of Common Stock (the “Shares”),
having a purchase price of $4.14 per Share for an aggregate purchase price of $4,140,000
(the “Subscription Price”).

 

Minimum
Subscription

 

1.2                                 A minimum number of 1,000,000 Shares must be
purchased by the Subscriber.

 

Method of Payment

 

1.3                                 The Subscriber
shall pay the Subscription Price by delivering good funds in United States
Dollars by way of wire transfer of funds to the Issuer and concurrent with the
execution and delivery of this Subscription. 
The wire transfer instructions are:

 

Wires from
Correspondent Banks Worldwide:

 

	
  Beneficiary Bank:

  	
  Worth National Bank

  
	
   

  	
  801
  Cherry Street, unit 27

  
	
   

  	
  Fort
  Worth, TX 76102

  
	
   

  	
  Tel:
  817-877-2018

  
	
  Beneficiary:

  	
  Cano Petroleum, Inc.

  
	
  ABA Routing#:

  	
  111907568

  
	
  Account Number:

  	
  31002914

  

 

 

As soon as reasonably
practicable after September 14, 2005 (the “Closing Date”) the Company
shall issue and cause to be delivered to the Subscriber a certificate or
certificates representing the Shares (the “Certificates”) pursuant to Article 6
hereof.  Upon receipt of the
Certificates, the Subscriber shall deliver the full Subscription Funds to the wire instructions provided
above.  The Subscriber acknowledges that
the subscription for Shares hereunder may be rejected in whole or in part by
the Issuer in its sole discretion.

 

ARTICLE 2

REPRESENTATIONS
AND WARRANTIES OF THE SUBSCRIBER

 

Representations and Warranties

 

2.1                                 The Subscriber
represents and warrants in all material respects to the Issuer, with the intent
that the Issuer will rely thereon in accepting this Subscription, that:

 

(a)                                  Experience.  The Subscriber is sufficiently experienced in
financial and business matters to be capable of evaluating the merits and risks
of its investments, and to make an informed decision relating thereto, and to
protect its own interests in connection with the purchase of the Shares;

 

(b)                                 Own Account.  The Subscriber is purchasing the Shares as
principal for its own account.  The
Subscriber is purchasing the Stock for investment purposes only and not with an
intent or view towards further sale thereof, and has not pre-arranged any sale
with any other subscriber;

 

(c)                                  Not Underwriter.  The Subscriber is not an underwriter, or
dealer in, the Stock, and the Subscriber is not participating, pursuant to a
contractual agreement, in a distribution of the Stock;

 

(d)                                 Importance of
Representations.  The
Subscriber understands that the Stock are being offered and sold to it in
reliance on an exemption from the registration requirements of the 1933 Act,
and that the Issuer is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
the Subscriber set forth herein in order to determine the applicability of such
exemptions and the suitability of the Subscriber to acquire the Stock;

 

(e)                                  Registration.  The Issuer shall use its best efforts to file
a registration statement to be filed with and declared effective by the
Securities and Exchange Commission (the “SEC”) at the earliest practicable date
after the Closing Date.  The Subscriber
represents and warrants and hereby agrees that all offers and sales of the
Securities shall be made only pursuant to such registration or to such
exemption from registration;

 

(f)                                    Risk.  The Subscriber acknowledges that the purchase
of the Stock involves a high degree of risk, is aware of the risks and further
acknowledges that it can bear the economic risk of the Stock, including the
total loss of its investment;

 

(g)                                 Current
Information.  The
Subscriber has been furnished with or has acquired copies of all requested
information concerning the Issuer, including a copies of reports filed by the

 

2

 

Issuer pursuant to the
United States Securities Exchange Act of 1934, as amended (the “1934 Act”) and
copies of press releases issued by the Issuer;

 

(h)                                 Independent
Investigation.  The Subscriber, in making the decision to
subscribe for the Shares, has relied upon independent investigations made by it
and its purchaser representatives, if any, and the Subscriber and such
representatives, if any, have, prior to making this Subscription, been given
access and the opportunity to examine all material contracts and documents
relating to this offering and an opportunity to ask questions of, and to
receive answers from, the Issuer or any person acting on its behalf concerning
the terms and conditions of this offering. 
The Subscriber and its advisors, if any, have been furnished with access
to all materials relating to the business, finances and operation of the Issuer
and materials relating to the offer and sale of the Shares which have been
requested.  The Subscriber and its
advisors, if any, have received complete and satisfactory answers to any such
inquiries;

 

(i)                                     No Written or
Oral Representations.  No person
has made to the Subscriber any written or oral representations

 

(i)                                                             that any person will resell or
repurchase the Stock,

 

(ii)                                                          that any person will refund the
purchase price of the Stock, or

 

(iii)                                                       as to the future price or value of
the Stock;

 

(j)                                     No
Recommendation or Endorsement.  The Subscriber understands that no federal or
state agency has passed on or made any recommendation or endorsement of the
Stock;

 

(k)                                  Partnership,
Corporation or Trust.  If
the Subscriber is a partnership, corporation or trust, the person executing
this Subscription on its behalf represents and warrants that

 

(i)                                     he or she has
made due inquiry to determine the truthfulness of the representations and
warranties made pursuant to this Subscription, and

 

(ii)                                  he or she is
duly authorized (and if the undersigned is a trust, by the trust agreement) to
make this investment and to enter into and execute this Subscription on behalf
of such entity;

 

(l)                                     Affiliate
Status.  Upon purchase of the Stock,
the Subscriber will be an affiliate of the Issuer and the Subscriber
acknowledges that the Stock held by it will be subject to certain resale
restrictions under the 1933 Act;

 

(m)                               Other
Subscribers.  The Subscriber acknowledges that Shares
may be issued to other purchasers under this offering concurrently with the
Closing;

 

(n)                                 No
Advertisement or General Solicitation.  The sale of the Shares has not been
advertised through any article, notice or other communication published in any
newspaper, magazine, or similar media or broadcast over television or radio; or
through any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising;

 

3

 

(o)                                 Accredited Investor. 
The Subscriber is (i) an “accredited investor” as that term is
defined in Rule 501 of the General Rules and Regulations under the
1933 Act by reason of Rule 501(a)(3), (ii) experienced in making
investments of the kind described in this Agreement and the related documents, (iii) able,
by reason of the business and financial experience of its officers (if an
entity) and professional advisors (who are not affiliated with or compensated
in any way by the Company or any of its Affiliates or selling agents), to
protect its own interests in connection with the transactions described in this
Subscription, and to evaluate the merits and risks of an investment in the
Stock, and (iv) able to afford the entire loss of its investment in the
Stock.;

 

(p)                                 Hedging Transactions. 
The Subscriber acknowledges and agrees that all offers and sales of the
Stock, as applicable, by the Subscriber shall be made only pursuant to
registration of the Stock under the 1933 Act, or pursuant to an available
exemption from the registration requirements of the 1933 Act.;

 

(q)                                 Beneficial Ownership. 
Upon consummation of the transactions contemplated by this Subscription,
the Subscriber will be the beneficial owner of the Stock issued to it pursuant
to this Subscription.  The Subscriber has
not pre-arranged any sale of the Stock with any person or persons in the United
States;

 

(r)                                    No Short Position. 
The Subscriber will not, directly or indirectly, or through one or more
intermediaries, maintain any short position in the common shares of the Company
during the applicable distribution compliance period;

 

(s)                                  Restriction on Transfer. 
The Subscriber understands and acknowledges that the Issuer will not
allow any transfer or other disposition of the Stock until the Stock has been
registered under the 1933 Act.  The
Certificate(s) shall bear the following legend in addition to any other legend
required under this Subscription:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Non-Merger and Survival

 

2.2                                 The
representations and warranties of the Subscribers contained herein will be true
at the date of execution of this Subscription by the Subscribers and as of the
Closing Date in all material respects as though such representations and
warranties were made as of such times and shall survive the Closing Date and
the delivery of the Certificates.

 

Indemnity

 

2.3                                 The Subscriber
agrees to indemnify and hold harmless the Issuer from and against any and all
claims, demands, actions, suits, proceedings, assessments, judgments, damages,
costs, losses and expenses, including attorney’s fees incurred in contesting
any such claim and any payment made in good

 

4

 

faith in settlement of any
claim (subject to the right of the Subscriber to defend any such claim),
resulting from the breach of any representation or warranty of such party under
this Subscription.

 

ARTICLE 3

REPRESENTATIONS
AND WARRANTIES OF THE ISSUER

 

3.1                                 The Issuer,
upon taking up and accepting this Subscription, represents and warrants in all
material respects to the Subscriber, with the intent that the Subscriber will
rely thereon in making this Subscription, that:

 

(a)                                  Legality.  The Issuer has the requisite corporate power
and authority to accept this Subscription and to issue, sell and deliver the
Shares; this Subscription and the issuance, sale and delivery of the Shares
hereunder and the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action by the Issuer; this Subscription
and the Shares have been duly and validly executed and delivered by and on
behalf of the Issuer, and are valid and binding agreements of the Issuer,
enforceable in accordance with their respective terms, except as enforceability
may be limited by general equitable principles, bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, or other laws affecting creditors’
rights generally;

 

(b)                                 Transfer.  Provided that
a registration statement in respect of the Shares is in effect as required
under all applicable securities laws, such Shares shall be freely transferable
on the books and records of the Issuer, provided that the sale is made to a
bona-fide purchaser and that the prospectus delivery requirements are met;

 

 

 

(c)                                  Listed Company Status. 
The Issuer is required to make current filings with the SEC pursuant to Section 13
or 15(d) of the 1934 Act,
the Stock is presently listed on the American Stock Exchange and the Issuer has
received no notice, either oral or written, with respect to its continued
eligibility for such listing;

 

(d)                                 Listing of Shares. 
Subject to notification to the American Stock Exchange of actual
issuance, the Shares are listed on the American Stock Exchange.

 

(e)                                  Proper
Organization.  The Issuer
is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation and is duly qualified as a
foreign corporation in all jurisdictions where the failure to be so qualified
would have a materially adverse effect on its business, taken as whole;

 

(f)                                    No Legal
Proceedings.  There is no
action, suit or proceeding before or by any court or any governmental agency or
body, domestic or foreign, now pending or to the knowledge of the Issuer,
threatened, against or affecting the Issuer, or any of its properties or
assets, which might result in any material adverse change in the condition
(financial or otherwise) or in the earnings, business affairs or business
prospects of the Issuer, or which might materially and adversely affect the
properties or assets thereof;

 

(g)                                 Non-Default.  The Issuer is not in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust or other material
instrument or agreement to which it is a party or by which it or its property
may be bound; and

 

5

 

(h)                                 Non-Contravention.  The execution and delivery of this
Subscription and the consummation of the issuance of the Shares and the
transactions contemplated by this Agreement do not and will not conflict with
or result in a breach by the Issuer of any of the terms or provisions of, or constitute a
default under, the Certificate of Incorporation or Bylaws of the Issuer, or any
indenture, mortgage, deed of trust, or other material agreement or instrument
to which the Issuer is a party or by which it or any of its properties or
assets are bound, or any existing applicable decree, judgment or order of any
court, Federal or state regulatory body, administrative agency or other
domestic governmental body having jurisdiction over the Issuer or any of its
properties or assets.  

 

Non-Merger and Survival

 

3.2                                 The
representations and warranties of the Issuer contained herein will be true at
the date of execution of this Subscription by the Issuer and as of the Closing
Date in all material respects as though such representations and warranties
were made as of such times and shall survive the Closing Date and the delivery
of the Certificates.

 

Indemnity

 

3.3                                 The Issuer
agrees to indemnify and hold harmless the Subscriber from and against any and
all claims, demands, actions, suits, proceedings, assessments, judgments,
damages, costs, losses and expenses, including attorney’s fees incurred in
contesting any such claim and any payment made in good faith in settlement of
any claim (subject to the right of the Issuer to defend any such claim),
resulting from the breach of any representation, warranty or covenant of such
party under this Subscription.

 

ARTICLE 4

COVENANTS
OF THE ISSUER

 

Covenants of the Issuer

 

4.1                                 The Issuer
covenants and agrees with the Subscriber that:

 

(a)                                  Filings.  The Issuer will make all necessary filings in
connection with the sale of the Shares as required by the laws and regulations
of all appropriate jurisdictions;

 

(b)                                 Section 13
Compliance.  The Issuer
shall, from and after the Closing Date, use its best efforts to comply with the
requirements of Section 13 of the 1934 Act and maintain the listing of the
Common Stock on the American Stock Exchange or other quotation medium;

 

(c)                                  Rule 144
Opinion.  The Issuer will, upon written
request by the Subscriber, take such steps as are necessary to cause its
counsel to issue an opinion to the Issuer’s transfer agent allowing the
Subscriber to offer and sell any Shares issued in reliance on the applicable
provisions of Rule 144 provided that the holding period and other
requirements of such Rule 144 are met. 
The costs of obtaining such an opinion shall be borne by the Issuer; and

 

(d)                                 Use of Proceeds.  The Issuer will apply the Subscription Price,
together will all other subscription funds received from other subscribers
under this offering, for general corporate and working capital purposes.

 

6

 

Survival

 

4.2                                 The covenants
set forth in this Article 4 shall survive the Closing for the benefit of
the Subscriber.

 

ARTICLE 5

DEMAND REGISTRATION RIGHTS

 

Registration Statement

 

4.1                                 Upon the Closing, the Issuer shall
use its best efforts to file a registration statement under the 1933 Act and
under any applicable Blue Sky laws registering the resale of Shares and shall
use its best efforts to cause such registration statement to be declared
effective by the Commission at the earliest practicable date, all at the Issuer’s
sole cost and expense.  Such best efforts shall include promptly
responding to all comments received by the staff of the SEC, and promptly
preparing and filing amendments to such registration statement which are
responsive to the comments received from the staff of the SEC, and in no event
later than twenty-one (21) days from receipt by the Issuer of the comments of
the staff of the SEC.  Such registration statement shall name the
Subscriber as a selling shareholder and shall provide for the sale of the
Shares by the Subscriber from time to time directly to purchasers or in the
over-the-counter market or through or to securities brokers or dealers that may
receive compensation in the form of discounts, concessions, or
commissions.  The Issuer shall provide the Subscriber with such number of
copies of the prospectus as shall be reasonably requested to facilitate the
sale of the Shares.  None of the foregoing shall in any way limit the
Subscriber’s rights to sell the Shares in reliance on an exemption from the
registration requirements under the 1933 Act in connection with a particular
transaction.

 

Currency of Registration Statement

 

4.2                                 The Issuer shall use its best
efforts to maintain the currency of the registration statement filed with the
SEC and under all applicable Blue Sky laws in respect of the Shares for 12
months from the Closing Date.

 

Indemnification of Subscriber by Issuer

 

4.3                                 To the extent permitted by law,
the Issuer will indemnify the Subscriber, within the meaning of Section 15
of the 1933 Act, with respect to which registration, qualification or
compliance has been effected pursuant to this Subscription Agreement, and each
underwriter, if any, and each person who controls any underwriter within the
meaning of Section 15 of the 1933 Act, against all expenses, claims,
losses, damages or liabilities (or actions in respect thereof), including any
of the foregoing incurred in settlement of any litigation, commenced or
treated, to the extent such expenses, claims, losses, damages or liabilities
arise out of or are based on any untrue statement (or alleged untrue statement)
of a material fact contained in any registration statement, prospectus,
offering circular or other document, or any amendment or supplement thereto,
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or any violation by the
Issuer of the 1933 Act or any rule or regulation promulgated under the
1933 Act applicable to the Issuer in connection with any such registration,
qualification or compliance, and the Issuer will reimburse the Subscriber, each
of its officers and directors and partners, and each person controlling the
Subscriber, each such underwriter and each person who controls any such
underwriter, for any legal and any other expense reasonably incurred in
connection with investigation,

 

7

 

preparing or defending any such claim, loss, damage, liability or
action, provided, however, that the indemnity contained herein shall not apply
to amounts paid in settlement of any claim, loss, damage, liability or expense
if settlement is effected without the consent of the Issuer (which consent shall
not unreasonably be withheld); provided, further, that the Issuer will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Issuer by the Subscriber,
such controlling person or such underwriter specifically for use therein.  Notwithstanding the foregoing, insofar as the
foregoing indemnity relates to any such untrue statement (or alleged untrue
statement) or omission (or alleged omission) made in the preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the SEC at
the time the registration statement becomes effective or in the final
prospectus filed with the SEC pursuant to Rule 424(b) of the SEC, the
indemnity agreement herein shall not inure to the benefit of any underwriter or
(if there is no underwriter) the Subscriber if a copy of the final prospectus
filed pursuant to Rule 424(b) was not furnished to the person or
entity asserting the loss, liability, claim or damage at or prior to the time
such furnishing is required by the 1933 Act.

 

Indemnification of Issuer by Subscriber

 

4.4                                 To the extent permitted by law,
the Subscriber will indemnify the Issuer, each of its directors and officers,
affiliates, counsel, advisors, employees and, each underwriter, if any, of the
Issuer’s securities covered by such a registration statement, each person who controls
the Issuer or such underwriter within the meaning of Section 15 of the
1933 Act, and each other person selling the Issuer’s securities covered by such
registration statement, each of such person’s officers and directors and each
person controlling such persons within the meaning of Section 15 of the
1933 Act, against all claims, losses, damages and liabilities (or actions in
respect thereof), including attorneys fees and costs, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement, prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein or
necessary to make the statements therein not misleading or any other violation
by the Subscriber of any rule or regulation promulgated under the 1933 Act
applicable to the Subscriber and relating to action or inaction required of the
Subscriber in connection with any such registration, qualification or
compliance, and will reimburse the Issuer, such other person, such directors,
officers, persons, underwriters or control persons for any legal or other
expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability or action; provided, however, that the
indemnity contained herein shall not apply to amounts paid in settlement of any
claim, loss, damage, liability or expense if settlement is effected without the
consent of the Subscriber (which consent shall not be unreasonably withheld).
Notwithstanding the foregoing, the liability of the Subscriber under this subsection (b) shall
be limited in an amount equal to the net proceeds from the sale of the shares
sold by the Subscriber, unless such liability arises out of or is based on
wilful conduct by the Subscriber.

 

Removal of Legend

 

4.5                                 After the registration statement
referenced in Section 4.1 is declared effective by the SEC, the
Subscribers may deliver to the Issuer the Certificate representing the Shares
issued to such Subscriber and the Issuer will, within three days after receipt
by the Issuer of the foregoing, issue a new certificate representing and in
exchange for the aforementioned certificate, which new certificate shall be
legended as follows:

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF

 

8

 

1933, AS AMENDED. THE SECURITIES MAY BE
SOLD PURSUANT TO THE REGISTRATION STATEMENT PROVIDED THAT (I) THE REGISTRATION
STATEMENT IS CURRENT AND EFFECTIVE, (II) THE HOLDER COMPLIES WITH THE
PROSPECTUS DELIVERY REQUIREMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND (III) THE SALE IS IN COMPLIANCE WITH THE PLAN OF DISTRIBUTION SET FORTH IN
THE PROSPECTUS. THE TRANSFER OF SUCH SECURITIES IS RESTRICTED AS SET FORTH IN A
SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE HOLDER, A COPY OF WHICH MAY BE
OBTAINED FROM THE ISSUER.

 

ARTICLE 6

ISSUANCE OF CERTIFICATES

 

As soon as reasonably practicable following
the Closing Date, the Issuer will prepare and issue one or more Certificates
for the Shares registered in such name or names as specified by the Subscriber
and cause the same to be delivered to the Subscriber pursuant to the delivery
instructions provided by the Subscriber.

 

ARTICLE 7

CLOSING

 

Closing shall be effected
through the acceptance of this Subscription by the Issuer and the taking up of
the Subscription Funds by the Issuer.

 

ARTICLE 8

GENERAL
PROVISIONS

 

Governing Law

 

8.1                                 This Subscription shall be
governed by and construed under the law of the State of Delaware without regard
to its choice of law provision.  Any
disputes arising out of, in connection with, or with respect to this
Subscription, the subject matter hereof, the performance or non-performance of
any obligation hereunder, or any of the transactions contemplated hereby shall
be adjudicated in a Court of competent civil jurisdiction sitting in the City
of Wilmington, Delaware and nowhere else.

 

Successors and Assigns

 

8.2                                 This
Subscription shall inure to the benefit of and be binding on the respective
successors and assigns of the parties hereto.

 

Execution by Counterparts and Facsimile

 

8.3                                 This
Subscription may be executed in counterparts and by facsimile, each of which
when executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Subscription.

 

9

 

[Remainder of page intentionally
left blank.]

 

10

 

SIGNATURE PAGE FOR
ENTITIES

 

IN WITNESS WHEREOF, the undersigned represents that
the foregoing statements are true and that it caused this Subscription to be
duly executed on its behalf on this 13th day of September, 2005.

 

 

	
  Thomas S. Dwan

  	
   

  	
  /s/ Thomas S.
  Dwan

  	
   

  
	
  Printed Name

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
  CFO

  	
   

  	
   

  
	
  Printed Title

  	
   

  

 

 

Agreed to this 14th day of September, 2005:

 

CANO PETROLEUM, INC.

 

	
  Per:

  	
  /s/ Michael J. Ricketts

  	
   

  

 

Print Name:  Michael J. Ricketts

 

 

This is page 11 to the Subscription by the above subscriber to
Cano Petroleum, Inc. dated as stated above.

 

 

Full Name and Address of Subscriber for
Registration Purposes:

 

NAME:                                                       Touradji Global Resources Master
Fund, Ltd.

 

ADDRESS:                                    Spectrum GFA, PO Box 10243 APO,
Anchorage Center, 2nd Floor, George Town, Grand Cayman, Cayman
Islands, BWI

 

TEL.NO.:                                               345-946-4060

 

FAX NO.:

 

EMAIL ADDRESS:                                         td@touradji.com

 

CONTACT NAME:                                        Tom Dwan

 

Delivery Instructions (if different from
Registration Name):

 

NAME:                                                       Touradji Global Resources Master
Fund, Ltd.

 

ADDRESS:                                    101 Park Ave, 47th
Floor, New York, NY 10178

 

TEL.NO.:                                               212-984-8879

 

FAX NO.:                                           212-984-8881

 

CONTACT NAME:                                        Tom Dwan

 

SPECIAL INSTRUCTIONS:

 

 

 

 

This is page 12 to the Subscription by the above subscriber to
Cano Petroleum, Inc.

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]