Exhibit 10.4

 

REGISTRATION RIGHTS AGREEMENT

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of February 1,
2018 (“Effective Date”), is entered into among PetroShare Corp., a Colorado
corporation (the “Company”), and each of the other parties executing a
counterpart signature page hereof whether on or after the date hereof.

 

W I T N E S S E T H

 

WHEREAS, the Company, Providence Wattenberg, L.P. (“Providence”) and 5NR
Wattenberg Holdings, LLC (“Fifth,” Providence and Fifth are referred to as the
“Lenders”) are parties to that certain Secured Term Credit Agreement of even
date (the “Credit Agreement”), pursuant to which the Lenders agreed to make
certain term loans (the “Loans”) to the Company;

 

WHEREAS, the Credit Agreement provides that the Lenders have the right to
convert the Loans into shares of the Company’s common stock, par value $0.001
per share (the “Common Stock”), on the terms and subject to the conditions set
forth therein;

 

WHEREAS, the Credit Agreement in Section 7.16 provides that the Lenders shall
have the option to purchase up to 50% of any securities offered by the Company
to the public through December 31, 2018 and thereafter (as defined in the Credit
Agreement) 25% of any such offerings (collectively, “% Options”);

 

WHEREAS, the Credit Agreement also provides, and in accordance therewith, the
Company has issued to Lenders, a warrant entitling the Lenders to purchase
1,500,000 shares of Common Stock exercisable as set forth in the Credit
Agreement (“Warrant” with the % Option, collectively, the “Warrant and
Options”);

 

WHEREAS, the Company has agreed to provide the Lenders with the registration
rights specified in this Agreement with respect to all shares of Common Stock
which might be acquired by the Lenders upon conversion of the Loans or exercise
of the Warrant and Options or otherwise held by the Lenders, on the terms and
subject to the conditions set forth herein; and

 

WHEREAS, Providence Energy Operators, LLC is already a holder of 3,250,000
shares of Common Stock (the “Providence Shares”) and will also receive
registration under this Agreement as a party.

 

NOW, THEREFORE, in consideration of the premises, and the mutual covenants and
agreements set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.1                                   Definitions.  Capitalized terms
used in this Agreement and not otherwise defined herein shall have the meanings
set forth below:

 

“Adverse Effect” means an adverse effect on the price, timing or distribution of
the Registrable Shares or any other securities proposed to be included pursuant
to any Registration Statement, based on market conditions or otherwise.

 

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“Advice” has the meaning set forth in Section 2.5.

 

“Affiliate” means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries Controls, is controlled by, or
is under common Control with, such Person.

 

“Agreement” has the meaning set forth in the Preamble.

 

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

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City, New York are authorized or required by law to
close.

 

“Common Stock” has the meaning set forth in the Recitals.

 

“Company” has the meaning set forth in the Preamble.

 

“Company Covered Persons” has the meaning set forth in Section 2.7(b).

 

“Control” (including the terms “controlling”, “controlled by” or “under common
control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.

 

“Credit Agreement” has the meaning set forth in the Recitals.

 

“Default Rate” has the meaning set forth in the Credit Agreement.

 

“Disclosure Package” means, with respect to any offering of securities, (i) the
preliminary prospectus and (ii) each Issuer Free Writing Prospectus.

 

“Effective Date” has the meaning set forth in the Preamble.

 

“Effectiveness Period” has the meaning set forth in Section 2.1(b).

 

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

 

“Excluded Registration” means a registration under the Securities Act of
(i) securities on Form S-8 or any similar successor form, (ii) securities to
effect the acquisition of, or combination with, another Person registered on
Form S-4 or any similar successor form,  or (iii) securities in connection with
any dividend or distribution reinvestment or similar plan.

 

“Governmental Authority” means any international, supranational or national
government, any state, provincial, local or other political subdivision thereof;
any entity, authority or body exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government; any
court, tribunal or arbitrator; any self-regulatory organization; or any
securities exchange or quotation system.

 

“Holder” means (i) each Person executing a counterpart signature hereto and
(ii) any other Person who shall have become a party to this Agreement in
accordance with Section 2.8.

 

“Holder Covered Persons” has the meaning set forth in Section 2.7(a).

 

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“Inspectors” has the meaning set forth in Section 2.4(g).

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus” as
defined in Rule 433 promulgated under the Securities Act.

 

“Joinder Agreement” has the meaning set forth in Section 2.8.

 

“Lenders” has the meaning set forth in the Recitals.

 

“Loans” has the meaning set forth in the Recitals.

 

“Mandatory Shelf Effectiveness Deadline” has the meaning set forth in
Section 2.1(b).

 

“Mandatory Shelf Filing Date” has the meaning set forth in Section 2.1(a).

 

“Material Disclosure Event” means, as of any date of determination, any event
relating to the Company or any of its Subsidiaries that the Board reasonably
determines in good faith, after consultation with outside counsel to the
Company, (i) would require disclosure of material, non-public information in any
Registration Statement or related prospectus including Registrable Shares
(including documents incorporated by reference therein) so that such
Registration Statement would not be materially misleading or otherwise not in
compliance with applicable securities laws, (ii) would not otherwise be required
to be publicly disclosed by the Company at that time in a periodic report to be
filed with or furnished to the SEC under the Exchange Act but for the filing of
such Registration Statement or related prospectus and (iii) for which the
Company has a bona fide business purpose for not disclosing.

 

“Notice” has the meaning set forth in Section 4.8(a).

 

“Party” means any party to this Agreement.

 

“% Option” has the meaning set forth in the Recitals.

 

“Person” or “person” means any natural person, firm, limited liability company,
general or limited partnership, association, corporation, company, joint
venture, trust, Governmental Authority or other entity.

 

“Piggyback Registration” has the meaning set forth in Section 2.2(a).

 

“Providence Shares” has the meaning set forth in the Recitals.

 

“Records” has the meaning set forth in Section 2.4(h).

 

“register,” “registered” and “registration” refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities
Act, and the declaration or ordering of the effectiveness of such registration
statement.

 

“Registrable Shares” means (i) the shares of Common Stock issuable upon
conversion of the Loans pursuant to the Credit Agreement, (ii) the shares of
Common Stock issuable upon exercise of the Warrant, (iii) the shares of Common
Stock issuable upon the exercise of the % Options, (iv) the Providence Shares
and (v) any and all shares of Common Stock issued or issuable with respect to
such shares of Common Stock set forth in (i) through (iv) above by way of stock
dividend or a stock split or in connection with any combination of shares,
recapitalization, merger, consolidation or other reorganization; provided,
however, that with respect to such shares of Common Stock set forth in (i)

 

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through (v) above, such shares of Common Stock shall cease to be Registrable
Shares to the extent that such shares of Common Stock are otherwise freely
tradable without any limitations or restrictions under the Securities Act.

 

“Registration Default Event” has the meaning set forth in Section 2.1(d).

 

“Registration Statement” shall mean each of any Resale Shelf Registration
Statement and any registration statement in connection with a Piggyback
Registration.

 

“Resale Shelf Registration Statement” has the meaning set forth in
Section 2.1(b).

 

“Rule 144” means Rule 144 promulgated under the Securities Act, as the same may
be amended from time to time, and any successor or similar rule or regulation
hereafter adopted by the SEC.

 

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

 

“Secondary Offering Securityholders” has the meaning set forth in
Section 2.2(b)(ii).

 

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

 

“Selling Securityholder Questionnaire” has the meaning set forth in
Section 2.14.

 

“Shelf Registration” means the filing of a registration statement with the SEC
to effect a registration of shares of Common Stock or other securities in a
continuous offering pursuant to Rule 415 under the Securities Act (or any
successor rule).

 

“Shelf Registration Statement Effectiveness Period”.

 

“Subsidiaries” means any Person (a) in which the Company owns, directly or
indirectly, fifty percent (50%) or more of the securities or other ownership
interests of such other Person, or (b) in which the Company owns, directly or
indirectly, securities or other ownership interests having ordinary voting power
to elect a majority of the board of managers or directors, or other persons
performing similar functions, of such other Person.

 

“Suspension Notice” has the meaning set forth in Section 2.5.

 

“Suspension Period” has the meaning set forth in Section 2.5.

 

“12 Month Option” has the meaning set forth in the Recitals.

 

“Warrant and Option” has the meaning set forth in the Recitals.

 

Section 1.2                                                    Headings. 
Headings shall be ignored in construing this Agreement.

 

Section 1.3                                                    Singular, plural,
gender.  References to one gender include all genders and references to the
singular include the plural and vice versa.

 

Section 1.4                                                    Recitals and
Sections.  References to this Agreement shall include the Recitals to it and
references to Sections are to Sections of this Agreement.

 

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Section 1.5                                                    Information. 
References to books, records or other information mean books, records or other
information in any form including paper, electronically stored data, magnetic
media, film and microfilm.

 

Section 1.6                                                    Interpretation. 
Whenever the words “include,” “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation.”  This Agreement shall be construed as if it is drafted by all the
parties hereto and no presumption or burden of proof will arise favoring or
disfavoring any party by virtue of authorship of any of the provisions of this
Agreement if an ambiguity or question of intent or interpretation arises.

 

ARTICLE 2

 

REGISTRATION RIGHTS

 

Section 2.1                                   Registration.

 

(a)                     Registration Statement.  The Company shall, upon written
demand by Holders of not less than 25% of the Registrable Shares (determined
after assuming conversion of the Loan and exercise of the Warrants) delivered in
accordance with Section  4.8, but no more than once during each twelve month
period, prepare and file with the SEC a Registration Statement covering the
Registrable Shares within 60 days of the receipt of such demand (such filing
date, the “Mandatory Shelf Filing Date”).  The Registration Statement shall
provide for registration and resale, on a continuous or delayed basis pursuant
to Rule 415, of all of the Registrable Shares then outstanding from time to
time. The demand for registration may be made at any time during a period of
five (5) years beginning on the Effective Date.

 

(b)                     Form and Effectiveness.  Such registration statement
shall be on Form S-1 (or any equivalent or successor form) under the Securities
Act (or to the extent the Company is eligible to use Form S-3 or any equivalent
or successor form or forms, on Form S-3 or any comparable or successor form);
provided, however, that if the Company has filed the registration statement on
Form S-1 and subsequently becomes eligible to use Form S-3 or any equivalent or
successor form or forms, the Company may elect, in its sole discretion, to
(i) file a post-effective amendment to the registration statement converting
such registration statement on Form S-1 to a registration statement on Form S-3
or any equivalent or successor form or forms or (ii) withdraw the registration
statement on Form S-1 and file a registration statement on Form S-3 or any
equivalent or successor form or forms, (the registration statement on such form,
as amended or supplemented, the “Resale Shelf Registration Statement”). The
Company shall use its commercially reasonable efforts to cause the Resale Shelf
Registration Statement to be declared effective under the Securities Act by the
SEC as soon as reasonably practicable after the Mandatory Shelf Filing Date; but
in no event later than five (5) Business Days after the date on which the SEC
informs the Company (A) that the SEC will not review the Resale Shelf
Registration Statement or (B) that the Company may request the acceleration of
the effectiveness of the Resale Shelf Registration Statement and the Company
makes such request (the “Mandatory Shelf Effectiveness Deadline”). The Company
shall use its commercially reasonable efforts to keep the Resale Shelf
Registration Statement continuously effective under the Securities Act until
there remain no Registrable Shares pursuant to Section 3.1 (such period, the
“Effectiveness Period”). During the Effectiveness Period, the Company will file
any supplements to the prospectus contained therein or post-effective amendments
required to be filed by applicable law in order to incorporate into such
prospectus any Current Reports on Form 8-K necessary or required to be filed by
applicable law, any Quarterly Reports on Form 10-Q or any Annual Reports on
Form 10-K filed by the Company with the SEC, or any other information necessary
so that (i) the Resale Shelf Registration Statement shall not include any untrue
statement of material fact or omit to state any material fact necessary in order
to make the statements

 

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therein not misleading, and (ii) the Company complies with its obligations under
Item 512(a)(1) of Regulation S-K.

 

(c)                      Blackout and Delay Rights.  The Company shall not be
required to file the Resale Shelf Registration Statement (or any amendment
thereto) or, if a Resale Shelf Registration Statement has been filed but not
declared effective by the Commission, request effectiveness of such Resale Shelf
Registration Statement, for the shortest period practicable, but in no event
longer than forty-five (45) days, if the Company furnishes to the Holders a
certificate signed by an executive officer of the Company stating that such
filing or effectiveness would (i) come at the time of a Material Disclosure
Event or (ii) in the good faith determination of the Board, after consultation
with counsel, render the Company unable to comply with applicable Law; provided,
however, that (x) in no event shall any such period exceed an aggregate of
ninety (90) days in any 365-day period and (y) this right, together with the
right to suspend use of a Registration Statement pursuant to Section 2.5, may
not be exercised more than two (2) times in any 365-day period.  Provided
further, the Company shall not register any securities for its own account or
that of any other security holder during such period.

 

(d)                     Registration Defaults.  If  the Resale Shelf
 Registration Statement is not filed with the SEC on or prior to the Mandatory
Shelf Filing Date or the Company does not request that the Registration
Statement be declared effective (a “Registration Default Event”), then in
addition to any other rights the Holders may have hereunder or under applicable
law, automatically in such case and so long as such Registration Default Event
shall continue, (i) if the Loans (as defined in the Credit Agreement) are
outstanding, all Loans outstanding, together with all overdue amounts shall bear
interest at the Default Rate or (ii) if the Loans are no longer outstanding,
Company shall pay to Holders, pro rata in accordance with the amount of any
Registrable Shares held by them, an amount equal to the daily amount of interest
that would accrue on the maximum principal amount of Loans that was outstanding
if such principal amount were still outstanding at a rate per annum equal to the
Default Rate.

 

Section 2.2                                   Piggyback Registrations

 

(a)                     Right to Piggyback.  If at any time beginning with the
Effective Date and continuing for a period of five years thereafter, there
remain any Registrable Shares pursuant to Section 3.1 and the Company proposes
to register any shares of Common Stock (other than pursuant to an Excluded
Registration) for sale to the public (whether for the account of the Company or
the account of any security holder of the Company) (a “Piggyback Registration”),
the Company shall give prompt written notice to each Holder of Registrable
Shares not less than twenty (20) days prior to the anticipated filing date of
the Company’s registration statement. Such notice shall offer each such Holder
the opportunity to include any or all of its Registrable Shares in such
registration statement, subject to the limitations contained in
Section 2.2(b) hereof.  Each Holder who desires to have its Registrable Shares
included in such registration statement shall so advise the Company in writing
(stating the number of shares desired to be registered) within fifteen (15) days
after the receipt of such notice from the Company.  In the event the
registration statement is not declared effective within ninety (90) days
following the initial filing of such registration statement, unless a road show
for an underwritten offering pursuant to such registration statement is actually
in progress at such time, the Company shall promptly provide a new written
notice to all Holders of Registrable Shares giving them another opportunity to
elect to include Registrable Shares in the pending registration statement.  Each
Holder receiving such new written notice shall have the same rights afforded
above.  Subject to Section 2.2(b) below, the Company shall include in such
registration statement all such Registrable Shares so requested to be included
therein; provided that the Company may at any time withdraw or cease proceeding
with any such registration if it shall at the same time withdraw or cease
proceeding with the registration of all other equity securities originally
proposed to be registered and shall provide each

 

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Holder who requested to have its Registrable Shares included in such
registration statement with prompt written notice of such withdrawal or
cessation; provided, further that any Holder shall have the right to withdraw
such Holder’s request for inclusion of such Holder’s Registrable Shares in any
registration statement pursuant to this Section 2.3(a) by giving written notice
to the Company of such withdrawal at least fifteen (15) days prior to such
registration statement becoming effective.

 

(b)                                 Priority on Piggyback Registrations.

 

(i)                                     If a Piggyback Registration is an
underwritten offering and was initiated by the Company, and if the managing
underwriters advise the Company that the inclusion of Registrable Shares or
other securities requested to be included in the registration statement would
cause an Adverse Effect, then the Company shall be required to include in such
registration statement, to the extent of the amount of securities that the
managing underwriters advise may be sold without causing such Adverse Effect,
(A) first, the securities the Company proposes to sell; (B) second, the
Registrable Shares requested to be included in such registration by any Holder
thereof together with any other securities requested to be included by any other
holders of piggyback registration rights existing on date hereof, pro rata among
such Holders and such other holder of piggyback registration rights on the basis
of the number of Registrable Shares and such other securities requested to be
registered by each such Holder or each such other holder of piggyback
registration rights; and (C) third, any other securities requested to be
included in such registration. If, as a result of the provisions of this
Section 2.2(b)(i), any Holder shall not be entitled to include all Registrable
Shares in a registration that such Holder has requested to be so included, such
Holder may withdraw such Holder’s request to include Registrable Shares in such
registration statement.

 

(ii)                                  If a Piggyback Registration is an
underwritten offering and was initiated by any of the other security holders of
the Company (the “Secondary Offering Securityholders”), and if the managing
underwriters advise the Company that the inclusion of Registrable Shares and
securities held by the Secondary Offering Securityholders and any other holders
of piggyback registration rights requested to be included in the Registration
Statement would cause an Adverse Effect, the Company shall include in such
registration statement, to the extent of the amount of securities that the
managing underwriters advise may be sold without causing such Adverse Effect,
(A) first, the other securities requested to be included by the Secondary
Offering Securityholders, pro rata among such Secondary Offering Securityholders
on the basis of the number of such other securities requested to be registered
by each such Secondary Offering Securityholder; (B) second, the Registrable
Shares requested to be included in such registration by any Holder thereof
together with any other securities requested to be included by any other holders
of piggyback registration rights existing on the date hereof, pro rata among
such Holders and such other holders of piggyback registration rights on the
basis of the number of Registrable Shares and such other securities requested to
be registered by each such Holder and each such other holder of piggyback
registration rights; and (C) third, any other securities requested to be
included in such registration (including securities to be sold for the account
of the Company).  If, as a result of the provisions of this Section 2.2(b)(ii),
any Holder shall not be entitled to include all Registrable Shares in a
registration that such Holder has requested to be so included, such Holder may
withdraw such Holder’s request to include Registrable Shares in such
registration statement.

 

(iii)                               Notwithstanding any of the foregoing, the
provisions of Sections 2.2(b)(i) and (ii) shall not apply to a Piggyback
Registration that is a Shelf Registration.

 

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(iv)                              No Holder may participate in any registration
statement in respect of a Piggyback Registration hereunder unless such Holder
(x) agrees to sell such Holder’s Registrable Shares on the basis provided in any
underwriting agreement approved by the Company and (y) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
agreements; provided that no such Holder shall be required to make any
representations or warranties in connection with any such registration other
than representations and warranties as to (i) such Holder’s ownership of his,
her or its Registrable Shares to be transferred free and clear of all liens,
claims, and encumbrances created by such Holder, (ii) such Holder’s power and
authority to effect such transfer, and (iii) such matters pertaining to such
Holder’s compliance with securities laws with respect to the Registrable Shares
as may be reasonably requested; provided, further that any obligation of such
Holder to indemnify any Person pursuant to any such underwriting agreements
shall be several, not joint and several, among such Holders selling Registrable
Shares, and such liability shall be limited to the net amount received by such
Holder from the sale of his, her or its Registrable Shares pursuant to such
Piggyback Registration (which amounts shall include the amount of cash or the
fair market value of any assets, including Common Stock, received in exchange
for the sale or exchange of such Registrable Shares or that are the subject of a
distribution), and the relative liability of each such Holder shall be in
proportion to such net amounts; provided, further that this
Section 2.2(b)(iv) shall not require any Holder of Registrable Shares to agree
to any lock-up agreement, market standoff agreement or holdback agreement.

 

(c)                      Selection of Underwriters and Counsel.  If any
Piggyback Registration is an underwritten offering initiated by the Company or
another security holder of the Company, the Company or such other security
holder shall select legal counsel and an investment banking firm or firms to
manage the offering.

 

(d)                     Effect on Resale Registrations.  The registration of all
or a portion of the Registrable Shares effected under this Section 2.2 shall
relieve the Company of its obligation to effect a registration of Registrable
Shares pursuant to Section 2.1 with regard to any Registrable Shares that are
included in the Piggyback Registration pursuant to this Section 2.2 so long as
such registration remains effective.

 

(e)                      Limitations on Subsequent Registration Rights.  From
and after the date of this Agreement, the Company shall not, without the prior
written consent of the Holders of 66 2/3% the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company that would allow such holder or prospective holder
(i) to include such securities in any registration unless, under the terms of
such agreement, such holder or prospective holder may include such securities in
any such registration only to the extent that the inclusion of such securities
will not reduce the number of the Registrable Securities of the Holders that are
included; or (ii) allow such holder or prospective holder to initiate a demand
for registration of any securities held by such holder or prospective holder;
provided that this limitation shall not apply to any additional Holder who
becomes a party to this Agreement in accordance with Subsection 2.8.

 

Section 2.3                                   SEC Registration
Statements.                           All Registration Statements shall comply
with applicable requirements of the Securities Act, and  shall not contain any
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
the case of any prospectus contained in such Registration Statement, in light of
the circumstances under which it is made).

 

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Section 2.4                                   Registration Procedures.  The
Company shall use commercially reasonable efforts to effect the registration of
such Registrable Shares in accordance with the terms hereof, and pursuant
thereto the Company shall as expeditiously as possible, but subject to the other
provisions of this Agreement:

 

(a)                     prepare and file with the SEC by the Mandatory Shelf
Filing Deadline, the Registration Statement on the appropriate form under the
Securities Act with respect to such Registrable Shares as required or permitted
in accordance with the terms of this Agreement and use commercially reasonable
efforts to cause such Registration Statement to become effective by the
Mandatory Shelf Effectiveness Deadline, and to remain continuously effective
throughout the Effectiveness Period, prepare and file with the SEC such
amendments, post-effective amendments, and supplements to each Registration
Statement and the prospectus used in connection therewith as may be necessary to
keep such Registration Statement effective throughout the Effectiveness Period
and comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Shares during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement;

 

(b)                     furnish without charge to each Holder selling
Registrable Shares and the underwriters, if any, of the securities being
registered such number of copies of each Registration Statement, each amendment
and supplement thereto, the prospectus included in such Registration Statement
(including each preliminary prospectus and any summary prospectus), any
documents incorporated by reference therein and such other documents as such
Holder or underwriters may reasonably request in order to facilitate the
disposition of the Registrable Shares owned by such Holder or the sale of such
securities by such underwriters (it being understood that, subject to this
Section 2.4 and the requirements of the Securities Act and applicable state
securities laws, the Company consents to the use of the prospectus and any
amendment or supplement thereto by each such Holder and the underwriters in
connection with the offering and sale of the Registrable Shares covered by the
Registration Statement of which such prospectus, amendment or supplement is a
part);

 

(c)                      use commercially reasonable efforts to register or
qualify such Registrable Shares under such other securities or “blue sky” laws
of such jurisdictions as the selling Holders or the underwriters may reasonably
request; and do any and all other acts and things which may be reasonably
necessary or advisable to enable each such Holder to consummate the disposition
of the Registrable Shares owned by such Holder in such jurisdictions; provided
that the Company shall not be required to (i) use such efforts to register or
qualify the offer or sale of the Registrable Securities in more than 12 states;
(ii) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph, (iii) subject itself
to taxation in any such jurisdiction where it is not at such time so subject, or
(iv) consent to general service of process in any such jurisdiction where it is
not at such time so subject;

 

(d)                     promptly notify each Holder of such Registrable Shares
and each underwriter, if any, in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed and, with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of the issuance by any state securities or other regulatory
authority of any order suspending the qualification or exemption from
qualification of any of the Registrable Shares under state securities or “blue
sky” laws or the initiation or threat of initiation of any proceedings for that
purpose; and (iii) if such Registration Statement or related prospectus, at the
time it or any amendment thereto became effective or at any time such prospectus
is required to be delivered under the Securities Act, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, upon
the discovery by the Company of such material misstatement or omission or of the
happening of any event

 

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as a result of which the Company believes there would be such a material
misstatement or omission; provided that, in the case of clause (iii), promptly
after delivery of such notice, the Company shall, as the case may be,
(x) prepare and file with the SEC a post-effective amendment to such
Registration Statement and use commercially reasonable efforts to cause such
amendment to become effective so that such Registration Statement, as so
amended, shall not contain any untrue statement of a material fact or omit a
material fact necessary to make the statements therein not misleading or
(y) prepare and furnish a supplement or amendment to such prospectus so that, as
thereafter deliverable to the purchasers of such Registrable Shares, such
prospectus shall not contain any untrue statement of a material fact or omit a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;

 

(e)                      permit any selling Holder that, in such Holder’s
reasonable judgment, may be deemed to be an underwriter or a controlling person
of the Company (in each case, within the meaning of the Securities Act) to
participate in the preparation of such Registration Statement or related
prospectus and reasonably incorporate any information about such Holder
furnished to the Company by such Holder that, in the reasonable judgment of the
Company, should be included;

 

(f)                       otherwise use commercially reasonable efforts to
comply with all applicable rules and regulations of the SEC, including the
Securities Act and the Exchange Act, and make generally available to the
Company’s security holders an earnings statement satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder, as soon as
reasonably practicable, but no later than thirty (30) days after the end of the
twelve (12)-month period beginning with the first day of the Company’s first
fiscal quarter commencing after the effective date of a Registration Statement,
which earnings statement shall cover said twelve (12)-month period; provided
that such requirement shall be deemed satisfied if the Company timely files
complete and accurate information on Forms 10-Q, 10-K and 8-K under the Exchange
Act as required thereby and otherwise complies with Rule 158 under the
Securities Act;

 

(g)                      promptly make available for inspection by any selling
Holder and any underwriter participating in any disposition pursuant to any
Registration Statement, and any attorney, accountant or other agent or
representative retained by any such selling Holder or underwriter (collectively,
the “Inspectors”), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the “Records”), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors, employees and
independent accountants to supply all information reasonably requested by any
such Inspector in connection with such Registration Statement; provided that,
unless the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in the Registration Statement or the release of such
Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, the Company shall not be required to provide any
information under this subparagraph (g) if (i) the Company reasonably determines
in good faith, after consultation with outside counsel, that to do so would
cause the Company to forfeit an attorney-client privilege that was applicable to
such information or (ii) either (A) the Company has requested and been granted
from the SEC confidential treatment of such information contained in any filing
with the SEC or documents provided supplementally or otherwise or (B) the
Company reasonably determines in good faith that such Records are confidential
and so notifies the Inspectors in writing, unless prior to furnishing any such
information with respect to clause (ii) such selling Holder requesting such
information agrees to enter into a confidentiality agreement in customary form
and subject to customary exceptions; and provided, further that each selling
Holder agrees that it shall, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company and
allow the Company, at its expense, to undertake appropriate action and to
prevent disclosure of the Records deemed confidential;

 

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(h)       furnish to each selling Holder and underwriter, if any, copies of
(i) an opinion or opinions of counsel to the Company and addressed to the Holder
and updates thereof covering the matters customarily covered in opinions
requested in underwritten offerings and (ii) a comfort letter or comfort letters
and updates thereof from the Company’s independent public accountants, each in
customary form and covering such matters of the type customarily covered by
comfort letters to underwriters in connection with underwritten offerings;

 

(i)        cause the Registrable Shares included in any Registration Statement
to be listed on each securities exchange or quotation system, if any, on which
similar securities issued by the Company are then listed or quoted;

 

(j)        if applicable, enter into an underwriting agreement for such
offering, such agreement to contain such representations and warranties by the
Company and such other terms and provisions as are customarily contained in
underwriting agreements with respect to that offering, including indemnities and
contribution to the effect and to the extent provided in Section 2.7 and the
provision of opinion of counsel and accountants’ letters to the effect and to
the extent provided in Section 2.4(h) and enter into any other such customary
agreements and take all such other actions as the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of such
Registrable Shares;

 

(k)       advise each selling Holder, promptly after it shall receive notice or
obtain knowledge thereof and make every reasonable effort to prevent the entry
of any order suspending the effectiveness of the Registration Statement and, in
the event of the issuance of any such stop order, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any security included in such Registration Statement for sale in any
jurisdiction, the Company shall use commercially reasonable efforts promptly to
obtain the withdrawal of such order;

 

(l)        upon request and subject to appropriate confidentiality obligations,
furnish to each selling Holder copies of any and all transmittal letters or
other correspondence with the SEC or any other Governmental Authority relating
to such offering of Registrable Shares.

 

Section 2.5                 Suspension of Dispositions.  Each Holder agrees by
acquisition of any Registrable Shares that, upon receipt of any notice (a
“Suspension Notice”) from the Company of the happening of any Material
Disclosure Event, such Holder shall promptly discontinue such Holder’s
disposition of Registrable Shares until such Holder’s receipt of the copies of
the supplemented or amended prospectus, or until it is advised in writing by the
Company (the “Advice”) that the use of the prospectus may be resumed, and has
received copies of any additional or supplemental filings that are incorporated
by reference in the prospectus, and, if so directed by the Company, such Holder
shall deliver to the Company all copies, other than permanent file copies then
in such Holder’s possession, of the prospectus covering such Registrable Shares
current at the time of receipt of such notice. In the event the Company shall
give any Suspension Notice, the Effectiveness Period relating to the disposition
of such Registrable Shares shall be extended by the number of days during the
period from and including the date of the giving of the Suspension Notice to and
including the date when each seller of Registrable Shares covered by such
Registration Statement shall have received the copies of the supplemented or
amended prospectus or the Advice (such period, a “Suspension Period”).  The
Company shall use commercially reasonable efforts and take such actions as are
reasonably necessary to render the Advice as promptly as practicable and shall
as promptly as practicable after the expiration of the Suspension Period prepare
a post-effective amendment or supplement to the Registration Statement or the
prospectus or any document incorporated therein by reference, or file any
required document so that, as thereafter delivered to purchasers of the
Registrable Shares included therein, the prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the

 

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circumstances under which they were made, not misleading. Notwithstanding
anything herein to the contrary, the Company shall not be entitled to more than
two (2) Suspension Periods during any consecutive twelve (12)-month period,
which Suspension Periods shall have durations of not more than ninety (90) days
in the aggregate; provided that a Suspension Period shall automatically expire
upon the public disclosure of the information to which the Material Disclosure
Event relates.

 

Section 2.6                 Registration Expenses.  Except as specifically set
forth elsewhere in this Agreement, the Company shall pay all reasonable,
out-of-pocket fees and expenses incident to any registration of the Registrable
Shares hereunder, including all expenses incident to the Company’s performance
of or compliance with this Article 2, all registration and filing fees, all
internal fees and expenses of the Company (including any allocation of salaries
of employees of the Company or any of its Subsidiaries or other general overhead
expenses of the Company and its Subsidiaries or other expenses related to the
preparation of financial statements or other data normally prepared by the
Company and its Subsidiaries in the ordinary course of business and expenses of
its officers and employees performing legal or accounting duties), all fees and
expenses associated with filings required to be made with any applicable
Governmental Authority, as may be required by the rules and regulations of such
Governmental Authority, fees and expenses of compliance with securities or “blue
sky” laws (including reasonable fees and disbursements of counsel in connection
with “blue sky” qualifications of the Registrable Shares), printing expenses
(including expenses of printing certificates for the Registrable Shares in a
form eligible for deposit with Depository Trust Company and of printing
prospectuses if the printing of prospectuses is requested by a Holder of
Registrable Shares), duplicating, distribution and delivery expenses, the
expense of any annual audit or quarterly review, the fees and expenses incurred
in connection with any listing or quotation of the Registrable Shares, fees and
expenses of counsel for the Company, fees and expenses of one counsel for the
Holders and fees and expenses of its independent certified public accountants
(including the expenses of any special audit or “cold comfort” letters required
by or incident to such performance), and the fees and expenses of any special
experts retained by the Company in connection with such registration.  Any
underwriting discounts, commissions, fees or stock transfer taxes attributable
to the sale of the Registrable Shares shall, unless otherwise agreed, be borne
by the Holders pro rata on the basis of the number of shares so registered
whether or not any Registration Statement becomes effective, and the fees and
expenses of any counsel, accountants, or other persons retained or employed by
any Holder shall be borne by such Holder.

 

Section 2.7            Indemnification.

 

(a)       The Company agrees to indemnify and hold harmless, to the fullest
extent permitted by applicable law, each seller of Registrable Shares, its
Affiliates and their respective employees, advisors, agents, representatives,
successors, stockholders, partners, members, officers, and directors, each other
Person who participates as an underwriter, broker or dealer in any offering or
sale of securities and each other Person who controls such seller or any such
participating Person (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) and any agent or investment advisor thereof
(collectively, the “Holder Covered Persons”) against, and reimburse, (i) any and
all losses, claims, damages, liabilities and expenses, joint or several
(including reasonable attorneys’ fees and disbursements, other than to the
extent limited by Section 2.7(c) and (d)), (x) based upon, arising out of,
related to or resulting from any untrue or alleged untrue statement of a
material fact contained in any Registration Statement or any amendment thereto,
or any document incorporated by reference therein, or any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, and (y) based upon, arising out of,
related to or resulting from any untrue or alleged untrue statement of a
material fact contained in any prospectus, preliminary prospectus, Disclosure
Package or Issuer Free Writing Prospectus or any amendment or supplement
thereto, or any document incorporated by reference therein, or any omission or
alleged omission of a material fact required to be stated therein or necessary
to make the statements

 

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therein, in light of the circumstances in which they were made, not misleading;
(ii) any and all losses, claims, damages, liabilities and expenses whatsoever,
as incurred, to the extent of the aggregate amount paid in settlement of any
litigation or investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim whatsoever based upon, arising out of,
related to or resulting from any such untrue statement or omission or alleged
untrue statement or omission; and (iii) any and all costs and expenses
(including reasonable fees and disbursements of counsel) as may be reasonably
incurred in investigating, preparing, or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon, arising out of, related to or
resulting from any such untrue statement or omission or alleged untrue statement
or omission, to the extent that any such expense or cost is not paid under
clauses (i) or (ii) above; except (A) insofar as any such statements or
omissions are caused by or contained in written information furnished to the
Company by such seller or by any Holder Covered Person on behalf of such seller
specifically for inclusion in such Registration Statement, prospectus,
preliminary prospectus, Disclosure Package, Issuer Free Writing Prospectus,
amendment or supplement thereto or (B) to the extent that any loss, claim,
damage, liability or expense is incurred by a seller of Registrable Shares as a
result of selling such Registrable Shares during a Suspension Period.

 

(b)       In connection with any Registration Statement or prospectus in which a
seller of Registrable Shares is participating pursuant to this Article 2, each
such seller shall furnish to the Company such written information and affidavits
regarding such seller, the Registrable Shares and the intended distribution
thereof as the Company reasonably requests for use in connection with any such
Registration Statement or prospectus and as shall be reasonably required in
connection with any registration, qualification or compliance required in
connection with this Article 2 and, to the fullest extent permitted by
applicable law, each such seller shall indemnify the Company, and its officers
and directors and each other Person who controls the Company (within the meaning
of the Securities Act or the Exchange Act) and any of its or their respective
officers, directors, employees, agents, representatives, successors, members,
stockholders and partners (the “Company Covered Persons”) against any and all
losses, claims, damages, liabilities and expenses, joint or several (including
reasonable attorneys’ fees and disbursements, other than to the extent limited
by Section 2.7(c) and (d)), (x) based upon, arising out of, related to or
resulting from any untrue or alleged untrue statement of a material fact
contained in any Registration Statement or any amendment thereto, or any
document incorporated by reference therein, or any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, and (y) based upon, arising out of, related
to or resulting from any untrue or alleged untrue statement of a material fact
contained in any prospectus, preliminary prospectus, Disclosure Package or
Issuer Free Writing Prospectus or any amendment or supplement thereto, or any
document incorporated by reference therein, or any omission or alleged omission
of 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, but, in the case of either (x) or (y), only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission is
contained in any written information furnished by such seller or by any Holder
Covered Person on behalf of such seller  specifically stating that it has been
provided for inclusion in such Registration Statement, prospectus, preliminary
prospectus, Disclosure Package or Issuer Free Writing Prospectus or amendment or
supplement thereto, or document incorporated by reference therein; provided that
the obligation to indemnify shall be several, not joint and several, among such
sellers of Registrable Shares, and the liability of each such seller of
Registrable Shares shall be in proportion to, and shall be limited to, the net
amount of proceeds received by such seller from the sale of Registrable Shares
pursuant to such Registration Statement.

 

(c)       Any Person entitled to indemnification hereunder shall (i) give prompt
written notice to the indemnifying party of any claim with respect to which it
seeks indemnification; provided that the failure to give such notice shall not
limit the rights of such Person or relieve the indemnifying

 

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party from any liability that it may have under subsection (a) and (b) above
unless and only to the extent that failure to give such notice materially
prejudices the indemnifying party; and (ii) unless in such indemnified party’s
reasonable judgment a conflict of interest between such indemnified and any
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party; provided that any Person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate in the defense of such claim at the expense of such indemnified
person, unless (x) the indemnifying party has agreed to pay such fees or
expenses or (y) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably satisfactory to such person. If such
defense is not assumed by the indemnifying party when permitted hereunder, the
indemnified party shall be entitled to assume and control such defense and to
settle and agree to pay in full such claim without the consent of the
indemnifying party without prejudice to the ability of the indemnified party to
enforce its claim for indemnification against the indemnifying party hereunder.

 

(d)       Except as otherwise provided in the preceding paragraph, the
indemnifying party shall not be subject to any liability for any settlement made
by the indemnified party without its consent, which consent shall not be
unreasonably withheld or delayed. If such defense is assumed by the indemnifying
party pursuant to the provisions hereof, such indemnifying party shall not
settle or otherwise compromise the applicable claim (i) unless (A) such
settlement or compromise contains a full and unconditional release of the
indemnified party and (B) such settlement or compromise does not include any
statement as to, or any admission of, fault, culpability or a failure to act by
or on behalf of the indemnified party or (ii) if such settlement or compromise
provides for injunctive or other non-monetary relief, in each case, unless the
indemnified party otherwise consents in writing. An indemnifying party who is
not entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one (1) counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party, a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the reasonable fees and disbursements of such
additional counsel or counsels.

 

(e)       The indemnification provided for under this Agreement shall remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director, or controlling Person of such
indemnified party and shall survive the transfer of securities and the
termination of this Agreement.  The provisions of this Section 2.7 shall be in
addition to any other rights to indemnification which an indemnified party may
have pursuant to law, equity, contract or otherwise.

 

(f)        As used in this Section 2.7, the terms “officers” and “directors”
shall include the direct or indirect partners, members or managers of Holders of
Registrable Shares that are partnerships or limited liability companies, as the
case may be.

 

Section 2.8            Transfer of Registration Rights.  Provided that the
Company is given prompt written notice by the Holder of Registrable Shares of
any transfer of Registrable Shares by such Holder of Registrable Shares stating
the name and address of the transferee of such Registrable Shares and
identifying the securities with respect to which the rights under this Article 2
are being assigned, the rights of such Holder of Registrable Shares under this
Article 2 may be transferred in whole or in part at any time to any such
transferee, so long as such transfer of securities is in accordance with all
applicable state and federal securities laws and regulations, with this
Agreement and the provisions of any other instruments executed by and among each
of the parties hereto, and such transferee agrees in writing to be bound by the
terms of this Agreement by executing and delivering a Joinder Agreement in the
form of Exhibit A hereto (the “Joinder Agreement”).  The Company shall be
responsible for the expenses of

 

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registration in accordance with Section 2.6 of any transferee or assignee
pursuant to this Section 2.8 to the same extent as the original transferor.

 

Section 2.9            Rule 144.  The Company shall timely file (taking into
account all valid extensions) the reports required to be filed by it under the
Securities Act and the Exchange Act (or, if the Company is not required to file
such reports, shall, upon the request of the Holders, make publicly available
information substantially similar to the type of information that would be
required if the Company was subject to rules under the Securities Act and the
Exchange Act) and shall use commercially reasonable efforts to take such further
action as the Holders may reasonably request, in each case to the extent
required from time to time to enable the Holders to sell Common Stock without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144.

 

Section 2.10         Listing.  So long as any Registrable Shares are
outstanding, the Company shall use its commercially reasonable efforts to
maintain the approval of the Common Stock for listing on the exchange or trading
market on which the Common Stock is then listed.

 

Section 2.11         Deemed Underwriters.  To the extent that, in connection
with a registration of any of the Registrable Shares under the Securities Act
pursuant to Section 2.1, any selling Holder is deemed to be an underwriter of
Registrable Shares pursuant to any SEC comments or policies, the Company agrees
that (1) the indemnification and contribution provisions contained in
Section 2.7 shall be applicable to the benefit of such selling Holder in its
role as deemed underwriter in addition to its capacity as Holder and (2) such
selling Holder shall be entitled to conduct the due diligence which it would
normally conduct in connection with an offering of securities registered under
the Securities Act, including receipt of customary opinions and comfort letters.

 

Section 2.12         Cooperation by Holders.  Each selling Holder agrees to
furnish to the Company a completed questionnaire (a “Selling Securityholder
Questionnaire”) not later than three (3) Business Days following the date on
which such Holder receives the form of Selling Securityholder Questionnaire with
respect to any Registration Statement.  A Holder shall provide to the Company
all such information, including information regarding such Holder and the
distribution proposed by such Holder, and all such materials, including a
Selling Securityholder Questionnaire and updates thereto, as may be requested,
and take all such action, in each case as may be required or reasonably
requested in order to permit the Company to comply with all applicable
requirements of the Securities Act, the Exchange Act and any applicable
regulatory or self-regulatory authority and the obligations and requirements of
this Agreement, such provision of information and materials to be a condition
precedent to the obligations of the Company pursuant to this Agreement to
register the Registrable Shares held by such Holder.

 

ARTICLE 3

 

TERMINATION

 

Section 3.1            Termination.  A particular Registrable Share shall cease
to be a Registrable Share when: (a) a registration statement covering such
Registrable Share has been declared effective under the Securities Act by the
SEC and such Registrable Share has been disposed of pursuant to such effective
registration statement; (b) such Registrable Share is sold to the public
pursuant to Rule 144; (c) such Registrable Share becomes eligible for sale
pursuant to Rule 144 without (i) notice or current information requirements,
(ii) manner of sale restrictions, or (iii) volume restrictions; (d) such
Registrable Share is otherwise freely tradable without any limitations or
restrictions under the Securities Act; or (e) such Registrable Share ceases to
be outstanding.

 

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ARTICLE 4

 

MISCELLANEOUS

 

Section 4.1            Whole Agreement.  This Agreement, together with the
Credit Agreement and the other transaction documents delivered in connection
therewith, constitute the entire agreement among the parties hereto and thereto
with respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, both oral and written, between the parties with
respect to the subject matter hereof and thereof.

 

Section 4.2            Successors and Assigns.  Except as otherwise provided
herein, no party hereto may assign, directly or indirectly, by operation of law
or otherwise, any of its respective rights or delegate any of its
responsibilities, liabilities or obligations under this Agreement, without the
prior written consent of each other party hereto.

 

Section 4.3            Amendment and Waiver.  Except as otherwise provided
herein and other than as a result of the execution and delivery of a Joinder
Agreement, no amendment, alteration or modification of this Agreement or waiver
of any provision of this Agreement shall be effective against the Company or the
Holders unless such amendment, alteration, modification or waiver is approved in
writing by the Company and the Holders of 66-2/3% of the Registrable Shares. 
The failure of any party to enforce any provision of this Agreement shall not be
construed as a waiver of such provision and shall not affect the right of such
party thereafter to enforce each provision of this Agreement in accordance with
its terms.

 

Section 4.4            Severability.  If any provision of this Agreement,
including any phrase, sentence, clause, Section or subsection, is inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever. If
any provision of this Agreement shall be adjudged to be excessively broad as to
duration, geographical scope, activity or subject, the parties hereto intend
that such provision shall be deemed modified to the minimum degree necessary to
make such provision valid and enforceable under applicable law and that such
modified provision shall thereafter be enforced to the fullest extent possible.

 

Section 4.5            Remedies.  The Parties agree that money damages or
another remedy at law would not be a sufficient or adequate remedy for any
breach or violation of, or a default under, this Agreement by them and that, in
addition to all other remedies available to them, each of them shall be entitled
to an injunction restraining such breach, violation or default or threatened
breach, violation or default and to any other equitable relief including
specific performance without bond or other security being required.

 

Section 4.6            No Third Party Beneficiaries.  Nothing in this Agreement,
express or implied, is intended or shall be construed to give any person other
than the Parties (including any permitted transferees that hereafter become
Parties in accordance with Section 2.8) to this Agreement, or any of their
respective successors and permitted assigns any legal or equitable right, remedy
or claim under or in respect of any agreement or provision contained herein.

 

Section 4.7            Counterparts.  This Agreement may be executed in several
counterparts (including by facsimile, .pdf or other electronic transmission),
each of which shall be deemed an original and all of which shall together
constitute one and the same instrument.

 

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Section 4.8            Notices

 

(a)       Any notice or other communication in connection with this Agreement
(each, a “Notice”) shall be:

 

(i)            in writing in English; and

 

(ii)           delivered by hand, email, registered post or by courier using a
nationally recognized overnight delivery or courier company.

 

(b)       Notices to the Company shall be sent to at the following address, or
such other person or address as the Company may notify to the stockholders from
time to time:

 

PetroShare Corp.
9635 Maroon Circle
Englewood, Colorado 80112
Attention: Stephen J. Foley, Chief Executive Officer
Email: sfoley@petrosharecorp.com

 

with copies to (which shall not constitute notice):

 

Polsinelli PC
1401 Lawrence Street
Denver, Colorado 80202
Attention: David Babiarz
E-mail: dbabiarz@polsinelli.com

 

(c)       Notices to the Holders shall be sent to such Holders at the addresses
set forth on each Holder’s signature page hereto or as provided on any Joinder
Signature Page, as applicable, or such other addresses as the applicable Holder
may notify the Company in writing from time to time in accordance with this
Section 4.8.

 

(d)       A Notice shall be effective upon receipt and shall be deemed to have
been received:

 

(i)            at the time of delivery, if delivered by hand, registered post or
courier; and

 

(ii)           at the expiration of two (2) hours after completion of the
transmission, if sent by email;

 

provided that if a Notice would become effective under the above provisions
after 5:30 p.m. on any Business Day, then it shall be deemed instead to become
effective at 9:30 a.m. on the next Business Day. References in this Agreement to
time are to local time at the location of the addressee as set out in the
Notice.

 

(e)       Subject to the foregoing provisions of this Section 4.8, in proving
service of a Notice, it shall be sufficient to prove that the envelope
containing such Notice was properly addressed and delivered by hand, registered
post, overnight delivery service or courier to the relevant address pursuant to
the above provisions or an email was timely and properly sent attaching a copy
of the subject notice as a .pdf.

 

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Section 4.9            Governing Law and Venue; Waiver of Jury Trial

 

(a)       THIS AGREEMENT AND ALL DISPUTES BETWEEN THE PARTIES UNDER OR RELATING
TO THIS AGREEMENT OR THE FACTS AND CIRCUMSTANCES LEADING TO ITS EXECUTION AND
DELIVERY, WHETHER IN CONTRACT, TORT OR OTHERWISE, WILL BE GOVERNED BY AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO
WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES THAT WOULD RESULT IN THE
APPLICATION OF THE LAW OF ANY OTHER STATE.

 

(b)       ANY ACTION, SUIT OR PROCEEDING SEEKING TO ENFORCE ANY PROVISION OF, OR
BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION WITH, THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY SHALL ONLY BE BROUGHT IN ANY FEDERAL COURT
LOCATED IN THE STATE OF TEXAS OR ANY STATE COURT, AND EACH PARTY CONSENTS TO THE
EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS (AND OF THE APPROPRIATE
APPELLATE COURTS THEREFROM) IN ANY SUCH ACTION, SUIT OR PROCEEDING AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH, ACTION,
SUIT OR PROCEEDING IN ANY SUCH COURT OR THAT ANY SUCH ACTION, SUIT OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM; PROVIDED,
HOWEVER, THAT ANY ACTION, SUIT OR PROCEEDING, SEEKING TO ENFORCE A FINAL
JUDGMENT RENDERED IN SUCH COURT MAY BE BROUGHT IN ANY COURT OF COMPETENT
JURISDICTION. PROCESS IN ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE SERVED ON
ANY PARTY ANYWHERE IN THE WORLD, WHETHER WITHIN OR WITHOUT THE JURISDICTION OF
ANY SUCH COURT.

 

(c)       EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE
OUT OF OR RELATING TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY EXPRESSLY, IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION OR DISPUTE DIRECTLY OR INDIRECTLY BASED UPON OR
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING
HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS CONTEMPLATED
HEREBY. THE SCOPE OF THIS WAIVER IS INTENDED TO ENCOMPASS ANY AND ALL ACTIONS,
SUITS AND PROCEEDINGS THAT RELATE TO THE SUBJECT MATTER OF THE TRANSACTIONS
CONTEMPLATED HEREBY, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.

 

Section 4.10         Independent Nature of Each Holder’s Obligations and
Rights.  The obligations of each Holder under this Agreement are several and not
joint with the obligations of any other Holder, and each Holder shall not be
responsible in any way for the performance of the obligations of any other
Holder under this Agreement. Nothing contained herein and no action taken by any
Holder pursuant hereto, shall be deemed to constitute such Holders as a
partnership, an association, a joint venture, or any other kind of entity, or
create a presumption that the Holders are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated by this
Agreement. Each Holder shall be entitled to independently protect and enforce
its rights, including the rights arising out of this Agreement, and it shall not
be necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.

 

18

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.

 

 

PETROSHARE CORP.

 

 

 

By:

/s/ Stephen J. Foley

 

Name:

 Stephen J. Foley

 

Title:

Chief Executive Officer

 

[Signature Page to Registration Rights Agreement]

 

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HOLDERS:

ADDRESS FOR NOTICE:

Providence Wattenberg, L.P.

16400 North Dallas Parkway, Ste. 400

 

Dallas, Texas 75248

By: Providence Wattenberg GP, LLC

 

Attention:

Luke Allen

 

 

Tel:

214-522-9131

By:

/s/ Michael Allen

 

E-mail

lallen@providence-energy.com

Name:

Michael Allen

 

 

 

Title:

Manager

 

ADDRESS FOR NOTICE:

Taxpayer ID #:

 

 

16400 North Dallas Parkway, Ste. 400

 

 

 

Dallas, Texas 75248

HOLDERS:

Attention:

Joe Drysdale

5NR Wattenberg Holdings, LLC

Tel:

972-392-6182

 

 

E-mail

jdrysdale@fifthpartners.com

By:

/s/ Joe Drysdale

 

 

 

Name:

Joe Drysdale

 

ADDRESS FOR NOTICE:

Title:

Manager

 

 

Taxpayer ID #:

 

 

 

 

 

 

 

 

 

Attention:

 

HOLDERS:

 

Tel:

 

Providence Energy Operators, LLC

E-mail

 

 

 

 

By: PEC E&P, LLC

 

ADDRESS FOR NOTICE:

 

 

16400 North Dallas Parkway, Ste. 400

By:

/s/ Michael Allen

 

Dallas, Texas 75248

Name:

Michael Allen

 

Attention:

Luke Allen

Title:

CEO

 

Tel:

214-522-9131

Taxpayer ID #:

 

 

E-mail

lallen@providence-energy.com

 

[Signature Page to Registration Rights Agreement]

 

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EXHIBIT A

 

JOINDER SIGNATURE PAGE

 

The undersigned hereby (i) joins as a “Holder” in the Registration Rights
Agreement, dated as of February 1, 2018 (as the same shall be amended from time
to time), by and among the parties set forth on the signature pages thereto and
any other signatories added thereafter (the “Registration Rights Agreement”),
(ii) authorizes this signature page to be attached as a counterpart of such
Registration Rights Agreement, and (iii) agrees to be bound by, and shall be
entitled to the benefits of, such Registration Rights Agreement.

 

Dated:

 

 

 

 

 

Name

 

 

 

 

 

Address

 

 

 

 

 

 

Signature

 

 

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