Exhibit 10.1

MIDSTATES PETROLEUM COMPANY, INC.

STOCKHOLDERS’ AGREEMENT

DATED AS OF APRIL 24, 2012

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TABLE OF CONTENTS

 

         Page   Article I DEFINITIONS; RULES OF CONSTRUCTION      1   

1.1

  Definitions      1   

1.2

  Rules of Construction      6    Article II ISSUANCES AND TRANSFERS OF
SECURITIES      6   

2.1

  Issuances and Transfers of Securities      6    Article III BOARD GOVERNANCE;
RESERVED MATTERS      7   

3.1

  Size and Composition of Board      7   

3.2

  Reserved Matters      9    Article IV REGISTRATION RIGHTS      10   

4.1

  Required Registration      10   

4.2

  Piggyback Registration      12   

4.3

  Holdback Agreement      13   

4.4

  Preparation and Filing      13   

4.5

  Expenses      16   

4.6

  Indemnification      17   

4.7

  Underwriting Agreement      19   

4.8

  Information by Holder      20   

4.9

  Exchange Act Compliance      21   

4.10

  Suspension      21    Article V AMENDMENT AND WAIVER      21   

5.1

  Amendment      21   

5.2

  Waiver      21    Article VI MISCELLANEOUS      22   

6.1

  Severability      22   

6.2

  Entire Agreement      22   

6.3

  Independence of Agreements and Covenants      22   

6.4

  Successors and Assigns      22   

6.5

  Counterparts; Facsimile Signatures; Validity      23   

6.6

  Remedies      23   

6.7

  Notices      24   

6.8

  Governing Law      25   

6.9

  Waiver of Jury Trial      25   

6.10

  Further Assurances      25   

6.11

  Conflicting Agreements      26   

6.12

  Third Party Reliance      26   

 

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STOCKHOLDERS’ AGREEMENT dated as of April 24, 2012 (as amended, modified,
supplemented or restated from time to time, this “Agreement”), among MIDSTATES
PETROLEUM COMPANY, INC., a Delaware corporation (the “Company”), FR MIDSTATES
INTERHOLDING, LP, a Delaware limited partnership (“First Reserve”), the Founding
Stockholders identified on the signature pages hereto, Management Stockholders
identified on the Signature Pages hereto, the Executive Stockholders identified
on the signature pages hereto, and any other Persons signatory hereto from time
to time (together with the Founding Stockholders, Management Stockholders,
Executive Stockholders and First Reserve, the “Stockholders”).

WHEREAS, the Company is proposing to consummate the transactions contemplated by
the Company’s Registration Statement on Form S-1 (File No. 333-177966),
including an initial public offering of its Common Stock (the “Initial Public
Offering”).

WHEREAS, the Stockholders will receive Stockholder Shares in the Company as a
result of a reorganization of the Company’s equity structure in connection with
the Initial Public Offering, which reorganization will occur immediately prior
to the execution of an underwriting agreement with respect to the Initial Public
Offering (the transactions in which the Stockholders initially acquire the
Stockholder Shares being referred to collectively as the “Reorganization”).

WHEREAS, the parties hereto desire to provide for the terms with respect to
certain matters regarding the relationship between the Company and the
Stockholders and the relationship among the Stockholders.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as set forth below.

ARTICLE I

DEFINITIONS; RULES OF CONSTRUCTION

 

1.1 Definitions.

As used in this Agreement, the following terms shall have the meanings set forth
below.

“Automatic Shelf Registration Statement” means a registration statement filed on
Form S-3 (or successor form or other appropriate form under the Securities Act)
by a WKSI pursuant to General Instruction I.D. or I.C. (or other successor or
appropriate instruction) of such forms, respectively.

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

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

“Commission” means the U.S. Securities and Exchange Commission.

 

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“Common Stock” means the common stock of the Company, par value $0.01 per share.

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

“Control” means, (including, with correlative meaning, the terms “controlling,”
“controlled by” and “under common control with”) with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management, policies or investment decisions of such Person,
whether through the ownership of voting securities, by contract or otherwise.

“Director” means a member of the Board.

“Disclosure Package” means, with respect to any offering of Securities, (i) the
preliminary prospectus, (ii) each Free Writing Prospectus and (iii) all other
information, in each case, that is deemed, under Rule 159 promulgated by the
Commission under the Securities Act, to have been conveyed to purchasers of
Securities at the time of sale of such Securities (including a contract of
sale).

“Equity Securities” means any equity securities of the Company or any options,
warrants or other securities that are directly or indirectly convertible into,
or exercisable or exchangeable for, any equity securities of the Company.

“Executive Stockholders” has the meaning set forth in the Preamble; provided,
however, that as of the date that any Executive Stockholder is no longer
employed by the Company or a Company Subsidiary, the rights, obligations and
restrictions of this Agreement with respect to such Executive Stockholder shall
terminate and be of no further effect., so long as Midstates Incentive Holdings
LLC has not waived or deferred any forfeiture or repurchase rights or other
limitations on the Executive Stockholder’s Private Plan Participation that exist
as of the date hereof.

“Exchange Act” means the Securities Exchange Act of 1934 or any successor
statute, and the rules and regulations of the Commission promulgated thereunder,
all as the same shall be in effect from time to time.

“FINRA” means the Financial Industry Regulatory Authority, Inc.

“Founding Stockholders” has the meaning set forth in the Preamble.

“Free Writing Prospectus” means “free writing prospectus” as defined Rule 405
promulgated by the Commission under the Securities Act.

“Information” has the meaning set forth in Section 4.4(i).

“Independent Director” means an individual that is independent within the
meaning of “independent director” under the New York Stock Exchange rules or the
rules of such other national securities exchange on which the Common Stock is
then listed for trading.

“Initial Public Offering” has the meaning set forth in the Recitals.

 

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“Inspectors” has the meaning set forth in Section 4.4(i).

“Law” means any federal, state, county, local or foreign statute, law,
ordinance, regulation, rule, code, order or rule of common law.

“Management Stockholders” has the meaning set forth in the Preamble; provided,
however, that as of the date that any Management Stockholder is no longer
employed by the Company or a Company Subsidiary, the rights, obligations and
restrictions of this Agreement with respect to such Management Stockholder shall
terminate and be of no further effect, so long as Midstates Incentive Holdings
LLC has not waived or deferred any forfeiture or repurchase rights or other
limitations on the Management Stockholder’s Private Plan Participation that
exist as of the date hereof.

“Necessary Action” shall mean, with respect to a specified result, all actions
(to the extent such actions are permitted by law and, in the case of any action
by the Company that requires a vote or other action on the part of the Board, to
the extent such action is consistent with the fiduciary duties that the
Directors may have in such capacity) necessary to cause such result, including
(i) voting or providing a written consent or proxy with respect to shares of
Common Stock, (ii) causing the adoption of stockholders’ resolutions and
amendments to the organizational documents of the Company, (iii) executing
agreements and instruments and (iv) making or causing to be made, with
governmental, administrative or regulatory authorities, all filings,
registrations or similar actions that are required to achieve such result.

“Original Holdings” of a Stockholder means the number of Stockholder Shares held
by a Stockholder immediately after giving effect to the consummation of the
Reorganization.

“Other Shares” means at any time those shares of Common Stock which do not
constitute Primary Shares or Registrable Shares hereunder.

“Person” shall be construed as broadly as possible and shall include an
individual person, a partnership (including a limited liability partnership), a
corporation, an association, a joint stock company, a limited liability company,
a trust, a joint venture, an unincorporated organization and a governmental
authority.

“Primary Shares” means, at any time, authorized but unissued shares of Common
Stock.

“Private Plan Participation” means, with respect to a Stockholder, any direct or
indirect interest in the membership interests in FR Midstates Interholding, LP,
a Delaware limited partnership, or the economic rights associated therewith.

“Pro Rata Share” means, with respect to a Stockholder, the number of Stockholder
Shares that, if Transferred by the Stockholder, would result in (a) the ratio of
(i) the number of Stockholder Shares then held by such Stockholder to (ii) the
Original Holdings of such Stockholder, being equal to (b) the ratio of (i) the
number of Stockholder Shares then held by First Reserve (giving effect to any
proposed Transfer by First Reserve for which a Pro Rata Share is being
determined, if applicable, and excluding any shares acquired by First Reserve
after the Reorganization), to (ii) the Original Holdings of First Reserve.

 

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“Prospectus” means the prospectus included in a Registration Statement,
including any amendment or prospectus subject to completion, and any such
prospectus as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Shares and, in
each case, by all other amendments and supplements to such prospectus, including
post-effective amendments, and in each case including all material incorporated
by reference therein.

“Public Offering” means the closing of a public offering of Common Stock
pursuant to a Registration Statement declared effective under the Securities
Act, except that a Public Offering shall not include an offering of securities
issuable pursuant to an employee benefit plan.

“Records” has the meaning set forth in Section 4.4(i).

“Registrable Shares” means any Stockholder Shares; provided that any Registrable
Shares shall cease to be a Registrable Shares when (i) they have been
effectively registered under the Securities Act and they have been disposed of
in accordance with the Registration Statement covering them, (ii) they are
eligible to be sold or distributed pursuant to Rule 144 in a single transaction
by any Stockholder without limitation, or (iii) they shall have ceased to be
outstanding.

“Registration Expenses” has the meaning set forth in Section 4.5.

“Registration Statement” means any registration statement of the Company that
covers an offering of any Registrable Shares, and all amendments and supplements
to any such registration statement, including post-effective amendments, in each
case including the prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.

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

“Representative” of a Person shall be construed broadly and shall include such
Person’s partners, members, officers, directors, managers, investment advisors,
employees, agents, advisors, counsel, accountants and other representatives.

“Rule 144” means Rule 144 (including Rule 144(b)(1) and all other subdivisions
thereof) promulgated by the Commission under the Securities Act, as such rule
may be amended from time to time, or any similar or successor rule then in
force.

“Secondary Offering” an offering by Stockholders of Stockholder Shares as part
of the Initial Public Offering, together with any sale of Stockholder Shares in
connection with the exercise of any over-allotment option granted by
Stockholders to underwriters in the Initial Public Offering.

“Securities” means “securities” as defined in Section 2(1) of the Securities Act
and includes, with respect to any Person, the capital stock or other equity
interests in such Person or any options, warrants or other securities that are
directly or indirectly convertible into, or exercisable or exchangeable for, the
capital stock or other equity or equity-linked interests in such Person,
including phantom stock and stock appreciation rights. Whenever a reference
herein to Securities is referring to any derivative Securities, the rights of a
Stockholder shall apply to such derivative Securities and all underlying
Securities directly or indirectly issuable upon conversion, exchange or exercise
of such derivative securities.

 

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“Securities Act” means the Securities Act of 1933, as amended, or any successor
Federal statute, and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect from time to time.

“Shelf Registration Statement” shall mean a registration statement of the
Company filed with the Commission on Form S-3 (or any successor form or other
appropriate form under the Securities Act) for an offering to be made on a
continuous basis pursuant to Rule 415 under the Securities Act (or any similar
rule that may be adopted by the Commission) covering the Registrable Shares, as
applicable.

“Stockholders’ Counsel” has the meaning set forth in Section 4.4(b).

“Stockholder Shares” means (a) any equity Securities of the Company (including
the Common Stock) held by any Stockholder or (b) any Securities issued or
issuable directly or indirectly with respect to the Securities referred to in
clause (a) above by way of stock dividend or stock split or in connection with a
combination of shares, recapitalization, reclassification, merger, consolidation
or other reorganization.

“Subsidiary” means, at any time, with respect to any Person (the “subject
person”), any other Person of which either (a) more than fifty percent (50%) of
the Securities or other interests entitled to vote in the election of directors
or comparable governance bodies performing similar functions or (b) more than a
50% interest in the profits or capital of such Person, are at the time owned or
controlled directly or indirectly by the subject person or through one or more
Subsidiaries of the subject person.

“Suspension Period” shall have the meaning set forth in Section 4.10.

“Transfer” of Securities shall be construed broadly and shall include any
issuance, sale, assignment, transfer, participation, gift, bequest,
distribution, or other disposition thereof, or any pledge or hypothecation
thereof, placement of a lien thereon or grant of a security interest therein or
other encumbrance thereon, in each case whether voluntary or involuntary or by
operation of law or otherwise. Notwithstanding anything to the contrary
contained herein, Transfer shall not include (a) the exercise or conversion of
any warrant, option or other convertible or exercisable Security granted by the
Company,(b) the sale or transfer of Stockholder Shares by any Management
Stockholder to the Company or any of its designees hereunder or pursuant to any
employment, option, subscription or restricted stock purchase agreement between
the Company and such Management Stockholder or any plan relating to the
foregoing or (c) a transfer by a Stockholder to a Person that is a natural
person made for bona fide estate planning purposes, either during a
Stockholder’s lifetime or on death by will or intestacy to a Stockholder’s
spouse, child (natural or adopted), or any other direct lineal descendant of
such Stockholder (or his or her spouse) (all of the foregoing collectively
referred to as “family members”), or any other person approved by the Board of
the Company, or any custodian or trustee of any trust, partnership or limited
liability company for the benefit of, or the ownership interests of which are
owned wholly by, such Stockholder or any such family members, or to a
“charitable organization” as described by Section 501(c)(3) of the Internal
Revenue Code of 1986, as in effect from time to time , so long as in the case of
each transfer in clause (c) the transferee agrees to be bound by the terms
hereof.

 

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“Voting Securities” means the capital stock of a Person of the class or classes
pursuant to which the holders thereof are entitled to vote generally in the
election of directors or other governing body, as the case may be, of such
Person

“WKSI” means a “well-known seasoned issuer” as defined in Rule 405 promulgated
under the Securities Act and which (i) is a “well-known seasoned issuer” under
paragraph (1)(i)(A) of such definition or (ii) is a “well-known seasoned issuer”
under paragraph (1)(i)(B) of such definition and is also eligible to register a
primary offering of its securities relying on General Instruction I.B.1 of Form
S-3 or Form F-3 under the Securities Act.

 

1.2 Rules of Construction.

The use in this Agreement of the term “including” means “including, without
limitation.” The words “herein,” “hereof,” “hereunder” and other words of
similar import refer to this Agreement as a whole, including the schedules and
exhibits, as the same may from time to time be amended, modified, supplemented
or restated, and not to any particular Section, subsection, paragraph,
subparagraph or clause contained in this Agreement. All references to Sections,
schedules and exhibits mean the Sections of this Agreement and the schedules and
exhibits attached to this Agreement, except where otherwise stated. The title of
and the Section and paragraph headings in this Agreement are for convenience of
reference only and shall not govern or affect the interpretation of any of the
terms or provisions of this Agreement. The use herein of the masculine, feminine
or neuter forms shall also denote the other forms, as in each case the context
may require. Where specific language is used to clarify by example a general
statement contained herein, such specific language shall not be deemed to
modify, limit or restrict in any manner the construction of the general
statement to which it relates. The language used in this Agreement has been
chosen by the parties to express their mutual intent, and no rule of strict
construction shall be applied against any party. Unless expressly provided
otherwise, the measure of a period of one month or year for purposes of this
Agreement shall be that date of the following month or year corresponding to the
starting date, provided that if no corresponding date exists, the measure shall
be that date of the following month or year corresponding to the next day
following the starting date. For example, one month following February 18 is
March 18, and one month following March 31 is May 1 (or in the case of
January 29, 30 or 31, the following month shall be March 1).

ARTICLE II

ISSUANCES AND TRANSFERS OF SECURITIES

 

2.1 Issuances and Transfers of Securities.

(a) The provisions in this Article II shall apply to all Stockholder Shares now
owned or hereafter acquired by a Stockholder, including Stockholder Shares
acquired by reason of original issuance, dividend, distribution, exchange,
conversion and acquisition of outstanding Stockholder Shares from another
Person, and such provisions shall apply to any Stockholder Shares obtained by a
Stockholder upon the exercise, exchange or conversion of any option, warrant or
other derivative Security.

 

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(b) Except as set forth in this Article II or as otherwise approved by First
Reserve, no Founding Stockholder or Management Stockholder may Transfer any
Stockholder Shares prior to January 1, 2014 and no Executive Stockholder may
Transfer any Stockholder Shares prior to January 1, 2015.

(c) Subject to any separate restrictions in Article IV, each Management
Stockholder and Founding Stockholder may Transfer up to:

(i) prior to January 1, 2013, the greater of their Pro Rata Share or a number of
Stockholder Shares that would result in such Management Stockholders and
Founding Stockholders holding 67% of their Original Holdings;

(ii) on or after January 1, 2013 through December 31, 2013, the greater of their
Pro Rata Share or a number of Stockholder Shares that would result in such
Management Stockholders and Founding Stockholders holding 33% of their Original
Holdings; and

(iii) on or after January 1, 2014, all of their Stockholder Shares without
restriction.

(d) Subject to any separate restrictions in Article IV, each Executive
Stockholder may Transfer from and after December 1, 2012 through December 31,
2014, up to their Pro Rata Share. Each Executive Stockholder may transfer all of
their Stockholder Shares without restriction on or after January 1, 2015.

(e) Notwithstanding anything to the contrary contained herein, (i) the
restrictions in this Article II do not apply to the sale of any Stockholder
Shares in connection with the Initial Public Offering that are registered for
sale pursuant to the Company’s Registration Statement on Form S-1 (File
No. 333-177966), (ii) no Stockholder shall Transfer any Stockholder Shares to
any Person unless such Transfer is done in accordance with applicable Law,
including, but not limited to, the Securities Act, and (iii) each Stockholder
that is an entity that has no substantial assets other than Stockholder Shares
acknowledges and agrees that no shares of the common stock or other equity
interests of such entity may be Transferred to any Person other than in
accordance with the terms and provisions of this Agreement as if such common
stock or other equity interests were Stockholder Shares.

ARTICLE III

BOARD GOVERNANCE; RESERVED MATTERS

 

3.1 Size and Composition of Board.

(a) The Board shall consist of no more than nine (9) Directors. Until such date
as First Reserve ceases to hold at least 25% of the then outstanding shares of
Common Stock, the Company will not decrease or increase the number of Directors
without the consent of First Reserve.

 

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(b) The Company and the Stockholders shall take all Necessary Actions to cause
the Board to consist of members designated as follows:

(i) Three (3) nominees shall be designated by First Reserve (the “First Reserve
Directors”), which First Reserve Directors shall initially be Alex T. Krueger,
Anastasia Deulina and John Mogford; provided, that, (A) the number of First
Reserve Directors shall be reduced to two (2) Directors at such time as the
Board provides First Reserve with notice that an Independent Director has been
identified, at which point one First Reserve Director shall tender his or her
resignation to the Board, and (B) the number of First Reserve Directors shall be
reduced to one (1) at such time as First Reserve holds less than 25% of the then
outstanding shares of Common Stock, at which point one First Reserve Director
shall tender his or her resignation to the Board. At any given time, and
provided that the Directors are allocated among separate classes, each First
Reserve Director shall be in a different class of Directors as each of the other
First Reserve Directors; and

(ii) The initial additional Directors shall be Stephen J. McDaniel (Chairman),
John A. Crum, Thomas L. Mitchell, Mary P. Ricciardello and Loren M. Leiker (the
“Non-First Reserve Directors”), and initially there shall be one vacancy.

(c) A First Reserve Director shall serve on any committee of the Board to the
extent permitted by applicable listing requirements and Commission rules.

(d) At each election of Directors held after the date hereof (or each written
consent in lieu thereof), each Stockholder agrees to vote all shares of Common
Stock entitled to vote in the election of directors owned or held of record by
such Stockholder, and to take any other Necessary Actions, to elect (or to
execute such written consent consenting to the election of) the nominees
designated pursuant to this Article III. The voting agreements herein are
coupled with an interest and may not be revoked or amended except as set forth
in this Agreement.

(e) If First Reserve provides written notice to each other Stockholder entitled
to vote in the election of Directors indicating that First Reserve desires to
remove a First Reserve Director previously designated by First Reserve, then
such First Reserve Director shall be removed, and each Stockholder hereby agrees
to vote all shares of Common Stock owned or held of record by such Stockholder
to effect such removal. Notwithstanding the foregoing, no First Reserve Director
shall be removed, with or without cause, without the prior written consent of
First Reserve.

(f) If a vacancy is created on the Board at any time by death, disability,
retirement, resignation, removal (with or without cause) of a First Reserve
Director nominated pursuant to this Article III (other than in connection with
the resignation of such First Reserve Director as set forth in Section 3.1
(b)(i)), First Reserve shall be entitled to designate a replacement First
Reserve Director to fill such vacancy. Any other vacancy on the Board, whether
as a result of (i) the initial vacancy in the Board, (ii) an increase in size of
the Board, (iii) the resignation of a First Reserve Director required by
Section 3.1(b)(i), or (iv) the death, disability, retirement, resignation,
removal (with or without cause) of a Non-First Reserve Director or any Director
other than a First Reserve Director, shall be filled by a Person nominated by
the Nominating and

 

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Governance Committee, and unanimously approved by all Directors then in office.
Each Stockholder entitled to vote in the election of Directors hereby agrees to
vote all voting shares of Common Stock owned or held of record by it for the
individual designated to fill such vacancy in the manner provided in this
Section 3.1(f); provided, such designee was not previously removed from the
Board for cause.

(g) This Section 3.1 shall terminate upon receipt by the Board of First
Reserve’s written election to waive its nomination rights hereunder.

 

3.2 Reserved Matters.

(a) The business and affairs of the Company shall be managed under the direction
of the Board to the fullest extent permitted by Section 141(a) of the Delaware
General Corporation Law, except that in addition to any vote or consent of the
Board or the stockholders of the Company required by applicable law or the
certificate of incorporation, or any other provision of this Agreement, the
Company shall not take (or, to the extent applicable, permit any Subsidiary to
take) any of the following actions, or enter into any arrangement or contract to
do any of the following actions, without the consent in writing of First
Reserve, which shall be necessary for authorizing, effecting or validating such
transactions:

(i) the incurrence of indebtedness for borrowed money (including through capital
leases, the issuance of debt securities or the guarantee of indebtedness of
another Person) that would result in the Company’s Total Net Indebtedness to
EBITDA for the trailing twelve month period exceeding 2.50:1.0 (the terms “Total
Net Indebtedness” and “EBITDA” shall, for the purposes of this Section 3.2(a)(i)
only, have the meanings ascribed to such terms in the Company’s Amended and
Restated Credit Agreement, dated December 10, 2010, as amended through, and as
in effect on, the date hereof);

(ii) any authorization, creation (by way of reclassification, merger,
consolidation, subdivision of shares of Common Stock, or other similar
reorganization) or issuance of any Equity Securities, other than (A) pursuant to
compensation plans approved by the Compensation Committee of the Board, or
(B) as issued in connection with a Permitted Acquisition, provided that the
maximum amount of Equity Securities that may be issued in any Permitted
Acquisition, when combined with all other Equity Securities issued in reliance
on the exception in this clause (B), shall not exceed 10% of the total
outstanding Common Stock of the Company, on a fully diluted basis, immediately
prior to such transaction;

(iii) any redemption, acquisition or other purchase of any shares of Common
Stock or other Securities of the Company (a “Repurchase”), other than a
Repurchase from an employee or director in connection with such employee’s or
director’s termination or as provided for in the agreement with such employee or
director pursuant to which shares of Common Stock were issued;

(iv) any amendment, repeal or alteration of the Company’s certificate of
incorporation or the bylaws, whether by or in connection with a merger or
consolidation or otherwise;

 

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(v) any (A) acquisition by the Company or any Subsidiary of the Securities,
equity interests or assets of any Person, or the acquiring by the Company or any
Subsidiary by any other manner of any business, properties, assets, or Persons,
in one transaction or a series of related transactions or (B) disposition of
assets of the Company or any Subsidiary or the shares or other Securities or
equity interests of any Subsidiary, in each case where the amount of
consideration for any such acquisition or disposition exceeds $100 million in
any single transaction, or an aggregate amount of $200 million in any series of
transactions during a calendar year (any of such transactions under clause
(A) where the consideration paid is equal to or less than $100 million
individually and $200 million in the aggregate, as applicable, being a
“Permitted Acquisition”);

(vi) any proposed transaction or series of related transactions involving a
transaction resulting in any person or group (as such terms are defined in
Sections 13(d) and 14(d) of the Exchange Act) acquiring “beneficial ownership”
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of
the total outstanding Voting Securities of the Company (measured by voting power
rather than number of shares)(a “Change in Control”);

(vii) the adoption, approval or issuance of any “poison pill” or similar rights
plan, or other device or mechanism designed or intended to prevent or delay a
Change in Control; and

(viii) any plan of liquidation, dissolution or winding-up of the Company and any
voluntary bankruptcy or similar filing by the Company and an of its
Subsidiaries.

(b) Nothing in this Section 3.2 shall be deemed to eliminate or reduce any
fiduciary duties a member of the Board may have to any stockholder or group of
stockholders of the Company that may otherwise exist under the Delaware General
Corporation Law.

(c) This Section 3.2 shall terminate on the earlier of (i) receipt by the Board
of First Reserve’s written election to waive its rights under this Section 3.2,
(ii) the date First Reserve ceases to hold at least 35% of the then outstanding
shares of Common Stock, (iii) the third anniversary of the Initial Public
Offering or (iv) the date on which there are no First Reserve Directors serving
as members of the Board.

ARTICLE IV

REGISTRATION RIGHTS

 

4.1 Required Registration.

(a) If the Company shall receive from First Reserve, at any time after six
(6) months after the date of the consummation of the Company’s Initial Public
Offering, a written request that the Company file a registration statement with
respect to First Reserve’s Registrable Shares, then the Company shall, within
thirty (30) days of the receipt thereof, give written notice of such request to
all Stockholders, and subject to the limitations of this Section 4.1, use its
commercially reasonable efforts to effect, as soon as reasonably practicable,
the registration under the

 

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Securities Act of the sale of all Registrable Shares that the Stockholder
request to be registered, pro rata based upon the number of Registrable Shares
owned by each such Stockholder requesting inclusion at the time of such
registration. Notwithstanding anything to the contrary in this Agreement, First
Reserve may request that the Company register the sale of such Registrable
Shares on an appropriate form, including a Shelf Registration Statement (so long
as the Company is eligible to use Form S-3) and, if the Company is a WKSI, an
Automatic Shelf Registration Statement. The Company shall not be obligated to
take any action to effect any such registration:

(i) after it has effected six (6) such registrations pursuant to this
Section 4.1, and such registrations have been declared or ordered effective;

(ii) within six (6) months of a registration pursuant to this Section 4.1 that
has been declared or ordered effective;

(iii) during the period starting with the date sixty (60) days prior to its good
faith estimate of the date of filing of, and ending on a date one hundred eighty
(180) days after the effective date of, a Company-initiated registration (other
than a registration relating solely to the sale of securities to employees of
the Company pursuant to a stock option, stock purchase or similar plan or to a
Commission Rule 145 transaction), provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective;

(iv) where the anticipated aggregate offering price of all securities included
in such offering is equal to or less than fifty million dollars ($50,000,000);
or

(v) if the Company shall furnish to such Stockholders a certificate signed by
the President of the Company stating that in the good faith judgment of the
Board of the Company it would be seriously detrimental to the Company and its
equity holders for such registration statement to be filed at the time filing
would be required and it is therefore essential to defer the filing of such
registration statement, the Company shall have the right to defer such filing
for a period of not more than one hundred twenty (120) days after receipt of the
request of the Stockholders, provided that the Company shall not defer its
obligation in this manner more than once in any twelve (12) month period.

(b) At any time before the registration statement covering such Registrable
Shares becomes effective, First Reserve may request the Company to withdraw or
not to file the registration statement. In that event, unless such request of
withdrawal was caused by, or made in response to, in each case as determined by
First Reserve in good faith (i) a material adverse effect or a similar event
related to the business, properties, condition, or operations of the Company not
known (without imputing the knowledge of any other Person to such holders) by
First Reserve at the time their request was made, or other material facts not
known to First Reserve at the time their request was made, or (ii) a material
adverse change in the financial markets, the holders of Registrable Securities
shall be deemed to have used one of their registration rights under
Section 4.1(a); provided, however, that such withdrawn registration shall not
count as a requested registration pursuant to Section 4.1(a) if the Company
shall have been reimbursed (in the absence of any agreement to the contrary, pro
rata by First Reserve) for all out-of-pocket expenses incurred by the Company in
connection with such withdrawn registration.

 

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(c) To the extent an automatic shelf registration statement has been filed under
Section 4.1, the Company shall use commercially reasonable efforts to remain a
WKSI and not become an ineligible issuer (as defined in Rule 405 under the
Securities Act) during the period during which such automatic shelf registration
statement is required to remain effective. If the automatic shelf registration
statement has been outstanding for at least three years, at the end of the third
year the Company shall refile a new automatic shelf registration statement
covering the Registrable Securities that remain unsold. If at any time when the
Company is required to re-evaluate its WKSI status, the Company determines that
it is not a WKSI, the Company shall use commercially reasonable efforts to
refile the shelf registration statement on Form S-3 and, if such form is not
available, Form S-1 and keep such registration statement effective during the
period during which such registration statement is required to be kept
effective.

(d) If, after it has become effective, (i) such registration statement has not
been kept continuously effective for a period of at least 180 days (or such
shorter period which will terminate when all the Registrable Shares covered by
such registration statement have been sold pursuant thereto), (ii) such
registration requested pursuant to Section 4.1(a) becomes subject to any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason, or (iii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied or waived, other than by
reason of some act or omission by First Reserve, such registration shall not
count as a requested registration pursuant to Section 4.1(a).

 

4.2 Piggyback Registration.

(a) If the Company, at any time, proposes for any reason to register any of its
Primary Shares (in any event either for its own account or for the account of
other security holders) under the Securities Act (other than on Form S-4 or Form
S-8 promulgated under the Securities Act (or any successor forms thereto) in
connection with an underwritten offering shares of Common Stock to be public for
cash on a form that would permit registration of Registrable Shares, or
otherwise engage in an underwritten offering pursuant to an effective Shelf
Registration Statement, it shall give written notice to the Stockholders of its
intention to so register such Primary Shares promptly and the Company shall use
its commercially reasonable efforts to cause all Registrable Shares included in
a written response delivered by a Stockholder to the Company within five
(5) days after delivery of the Company’s notice to be included in such
registration, or in any prospectus supplement to the prospectus included in an
already effective Shelf Registration Statement and underwriting involved therein
on the same terms and conditions as the securities otherwise being sold;
provided, however, that in the case of an “overnight” or “bought” offering, such
requests must be made within one (1) Business Day after the delivery of any such
notice by the Company; provided further, however, that if the managing
underwriter, if any, advises the Company that the inclusion of all Primary
Shares, Registrable Shares and Other Shares requested to be included in such
registration would interfere with the successful marketing (within a price range
acceptable to holders a majority of Registrable Securities that have been
requested for inclusion) of the shares of Common Stock proposed to be registered
by the Company, then the number of Primary Shares, Registrable Shares and Other
Shares proposed to be included in such registration shall be included in the
order set forth below:

(i) first, the Primary Shares;

 

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(ii) second, the Registrable Shares owned by the Stockholders requesting that
their Registrable Shares be included in such registration pursuant to the terms
of this Section 4.2, pro rata based upon the number of Registrable Shares owned
by each such Stockholder requesting inclusion at the time of such registration;
and

(iii) third, the Other Shares.

(b) No registration effected pursuant to this Section 4.2 shall relieve the
Company of its obligation to effect any registration upon request under
Section 4.1 hereof, nor shall any registration hereunder be deemed to have been
effected pursuant to Section 4.1. The Company will pay all expenses of
registration in connection with each registration pursuant to this Section 4.2.

 

4.3 Holdback Agreement.

If the Company at any time pursuant to Section 4.1 shall register under the
Securities Act an offering and sale of Registrable Shares held by the
Stockholders for sale to the public pursuant to an underwritten Public Offering,
the Company and the Stockholders shall not, without the prior written consent of
the lead underwriters for such offering, effect any public sale or distribution
of Securities similar to those being registered, or any securities convertible
into or exercisable or exchangeable for such securities, for such period as
shall be determined by the lead underwriters and that is for the same period and
on substantially similar terms as agreed to by First Reserve.

 

4.4 Preparation and Filing.

If and whenever the Company is under an obligation pursuant to the provisions of
this Agreement to use its commercially reasonable efforts to effect the
registration of an offering and sale of any Registrable Shares, the Company
shall, as expeditiously as practicable (but subject to the timing provisions in
Section 4.2 with respect to “overnight” or “bought” offerings :

(a) use its commercially reasonable efforts to cause a Registration Statement
that registers such offering of Registrable Shares to contain a “Plan of
Distribution” that permits the distribution of Securities pursuant to all means
in compliance with Law, and to cause such Registration Statement to become and
remain effective pursuant to the terms of this Agreement for a period of 180
days or until all of such Registrable Shares have been disposed of (if earlier);

(b) furnish, at least five (5) Business Days before filing a Registration
Statement that registers such Registrable Shares, a Prospectus relating thereto,
or, with respect to an effective Shelf Registration Statement, a prospectus
supplement to the Prospectus included in such Shelf Registration Statement, and
any amendments or supplements relating to such Registration Statement or
Prospectus, to one counsel selected by the First Reserve for the benefit of the
Stockholders whose Registrable Shares are to be covered by such Registration
Statement (the

 

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“Stockholders’ Counsel”), copies of all such documents proposed to be filed (it
being understood that such 5 Business Day period need not apply to successive
drafts of the same document proposed to be filed so long as such successive
drafts are supplied to such counsel in advance of the proposed filing by a
period of time that is customary and reasonable under the circumstances), and
shall use its commercially reasonable efforts to reflect in each such document,
when so filed with the Commission, such comments as the Stockholders whose
Registrable Shares are to be covered by such Registration Statement may
reasonably propose;

(c) prepare and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as may be
necessary to keep such Registration Statement effective for a period of at least
180 days or until all of such Registrable Shares have been disposed of (if
earlier) and to comply with the provisions of the Securities Act with respect to
the offering and sale or other disposition of such Registrable Shares;

(d) notify the Stockholders’ Counsel promptly in writing of (i) any comments by
the Commission with respect to such Registration Statement or Prospectus, or any
request by the Commission for the amending or supplementing thereof or for
additional information with respect thereto; (ii) the issuance by the Commission
of any stop order suspending the effectiveness of such Registration Statement or
Prospectus or any amendment or supplement thereto or the initiation of any
proceedings for that purpose; and (iii) the receipt by the Company of any
notification with respect to the suspension of the qualification of such
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purposes;

(e) use its commercially reasonable efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws of such
jurisdictions as any seller of Registrable Shares reasonably requests and do any
and all other acts and things that may reasonably be necessary or advisable to
enable such seller of Registrable Shares to consummate the disposition in such
jurisdictions of the Registrable Shares owned by such seller;

(f) furnish to each seller of such Registrable Shares such number of copies of a
summary Prospectus or other Prospectus, including a preliminary Prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such seller of Registrable Shares may reasonably request in order to
facilitate the Public Offering and sale or other disposition of such Registrable
Shares (to the extent not publicly available on EDGAR or the Company’s website);

(g) use its commercially reasonable efforts to cause such offering and sale of
Registrable Shares to be registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the business and
operations of the Company to enable the seller or sellers thereof to consummate
the disposition of such Registrable Shares;

(h) notify on a timely basis each seller of such Registrable Shares at any time
when a Prospectus relating to such Registrable Shares is required to be
delivered under the Securities Act within the appropriate period mentioned in
Section 4.4(b) of the happening of any event as a result of which the Prospectus
included in such Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein

 

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or necessary to make the statements therein not misleading in light of the
circumstances then existing and, at the request of such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the offerees of such shares, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing;

(i) make available for inspection by any seller of such Registrable Shares, any
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by any such
seller or underwriter (collectively, the “Inspectors”), all pertinent financial,
business and other records, pertinent corporate documents and properties of the
Company (collectively, the “Records”), as shall reasonably be necessary to
enable them to exercise their due diligence responsibility, and cause the
Company’s officers, directors and employees to supply all information (together
with the Records, the “Information”) reasonably requested by any such Inspector
in connection with such Registration Statement (and any of the Information that
the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, shall not be disclosed by the
Inspectors unless (A) the disclosure of such Information is necessary to avoid
or correct a misstatement or omission in the Registration Statement; (B) the
release of such Information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction; (C) such Information has been made
generally available to the public; or (D) the seller of Registrable Shares
agrees that it will, upon learning that disclosure of such Information is sought
in a court of competent jurisdiction, give notice to the Company and allow the
Company, at the Company’s expense, to undertake appropriate action to prevent
disclosure of the Information deemed confidential);

(j) use its commercially reasonable efforts to obtain from its independent
certified public accountants a “cold comfort” letter (or, in the case of any
such Person which does not satisfy the conditions for receipt of a “cold
comfort” letter specified in Statement on Auditing Standards No. 72, an “agreed
upon procedures” letter) signed by the independent certified public accountants
and addressed to the selling Stockholders, the Board, and the underwriter, if
any, in customary form and covering such matters of the type customarily covered
by cold comfort letters;

(k) use its commercially reasonable efforts to obtain, from its counsel, an
opinion or opinions in customary form (which shall also be addressed to the
Stockholders selling Registrable Shares in such registration);

(l) have appropriate officers of the Company prepare and make presentations at
any “road shows” and before analysts and rating agencies, as the case may be,
and other information meetings organized by the underwriters, take other actions
to obtain ratings for any Registrable Shares (if they are eligible to be rated)
and otherwise use its commercially reasonable efforts to cooperate as reasonably
requested by the sellers of such Registrable Shares in the offering, marketing
or selling of such Registrable Shares, provided, that, the gross proceeds for
such offering are reasonably anticipated by the managing underwriters to be in
excess of fifty million dollars ($50,000,000) and provided further that such
officers shall not be required to participate in such presentations at any “road
shows” and before analysts and rating agencies, as the case may be, more than
twice in a 365 day period;

 

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(m) provide a transfer agent and registrar (which may be the same Person and
which may be the Company) for such Registrable Shares;

(n) issue to any underwriter to which any seller of Registrable Shares may sell
shares in such offering certificates evidencing such Registrable Shares;

(o) list such Registrable Shares on any national securities exchange on which
any shares of the Common Stock are listed or, if the Common Stock is not listed
on a national securities exchange, use its commercially reasonable efforts to
qualify such Registrable Shares for quotation on the automated quotation system
of the NASDAQ, National Market System, Euronext or such other national
securities exchange as the holders of a majority of such Registrable Shares
included in such registration shall request;

(p) register such Registrable Shares under the Exchange Act, and otherwise use
its commercially reasonable efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable but not later than eighteen (18) months after the
effective date, earnings statements (which need not be audited) covering a
period of twelve (12) months beginning within three (3) months after the
effective date of the Registration Statement, which earnings statements shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;

(q) not take any direct or indirect action prohibited by Regulation M under the
Exchange Act; provided, however, that to the extent that any prohibition is
applicable to the Company, the Company will take such action as is necessary to
make any such prohibition inapplicable; and

(r) use its commercially reasonable efforts to take all other steps necessary to
effect the registration of such Registrable Shares contemplated hereby.

 

4.5 Expenses.

Except as expressly provided otherwise, all expenses incident to the Company’s
performance of or compliance with Sections 4.1, 4.2, and 4.4, including, without
limitation, (a) all registration and filing fees, and any other fees and
expenses associated with filings required to be made with any stock exchange,
the Commission and FINRA (including, if applicable, the fees and expenses of any
“qualified independent underwriter” and its counsel as may be required by the
rules and regulations of FINRA); (b) all fees and expenses of compliance with
state securities or “blue sky” laws (including fees and disbursements of counsel
for the underwriters or Stockholders in connection with “blue sky”
qualifications of the Registrable Shares and determination of their eligibility
for investment under the laws of such jurisdictions as the managing underwriters
may designate); (c) all printing and related messenger and delivery expenses
(including expenses of printing certificates for the Registrable Shares in a
form eligible for deposit with The Depository Trust Company and of printing
prospectuses, all fees and disbursements of counsel for the Company and of all
independent certified public accountants of the issuer (including the expenses
of any special audit and “cold comfort” letters required by or

 

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incident to such performance); (d) Securities Act liability insurance if the
Company so desires or the underwriters so require; (e) all fees and expenses
incurred in connection with the listing of the Registrable Shares on any
securities exchange and all rating agency fees; (f) all reasonable and
documented fees and disbursements of counsel (plus appropriate special and local
counsel) selected by First Reserve to represent it in connection with such
registration (it being understood that all other expenses incurred by a
Stockholders shall be borne by such Stockholder); (g) all fees and disbursements
of underwriters customarily paid by the issuer or sellers of securities,
excluding underwriting fees, commissions, discounts and allowances, if any, and
fees and disbursements of counsel to underwriters (other than such fees and
disbursements incurred in connection with any registration or qualification of
Registrable Shares under the securities or “blue sky” laws of any state); and
(h) fees and expenses of other Persons retained by the Company (all such
expenses being herein called “Registration Expenses”), will be borne by the
Company, regardless of whether the Registration Statement becomes effective. In
addition, the Company will, in any event, pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any audit and the fees
and expenses of any Person, including special experts, retained by the Company.

 

4.6 Indemnification.

(a) In connection with any registration of any offering and sale of Registrable
Shares under the Securities Act pursuant to this Agreement, the Company and its
Subsidiaries shall indemnify and hold harmless the seller of such Registrable
Shares, each underwriter, broker or any other Person acting on behalf of such
seller, each other Person, if any, who controls any of the foregoing Persons
within the meaning of the Securities Act and each Representative of any of the
foregoing Persons, against any losses, claims, damages or liabilities, joint or
several, to which any of the foregoing Persons may become subject, whether
commenced or threatened, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement under which such
Registrable Shares were registered, any preliminary Prospectus or final
Prospectus contained therein, any offering circular, offering memorandum or
Disclosure Package, or any amendment or supplement thereto, or any document
incident to registration or qualification of any offering and sale of any
Registrable Shares, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or, with respect to any
Prospectus, necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or any violation by the
Company or any of its Subsidiaries of the Securities Act or state securities or
blue sky laws applicable to the Company or any of its Subsidiaries and relating
to action required or inaction of the Company or its Subsidiaries in connection
with such registration or qualification under such state securities or blue sky
laws, and the Company and its Subsidiaries shall promptly reimburse such seller,
underwriter, broker, controlling Person or Representative for any legal or other
expenses incurred by any of them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
neither the Company nor its Subsidiaries shall be liable to any such Person to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in said Registration Statement, preliminary

 

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Prospectus, amendment thereto, or any document incident to registration or
qualification of any Registrable Shares in reliance upon and in conformity with
written information furnished to the Company or its Subsidiaries through an
instrument duly executed by such Person, or a Person duly acting on their
behalf, specifically for use in the preparation thereof; provided, further,
however, that the foregoing indemnity agreement is subject to the condition
that, insofar as it relates to any untrue statement or allegedly untrue
statement in, or omission or alleged omission made in any Prospectus but
eliminated or remedied in the final Prospectus (filed pursuant to Rule 424 of
the Securities Act) or any amendment or supplement thereof, such indemnity
agreement shall not inure to the benefit of any indemnified party from whom the
Person asserting any loss, claim, damage, liability or expense purchased the
Registrable Shares which are the subject thereof, if a copy of such final
Prospectus, amendment or supplement had been timely made available to such
indemnified person and such final Prospectus, amendment or supplement was not
delivered to such Person with or prior to the written confirmation of the sale
of such Registrable Shares to such Person.

(b) In connection with any registration of an offering and sale of Registrable
Shares under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares severally, and not jointly, shall indemnify and hold harmless
(in the same manner and to the same extent as set forth in Section 4.6(a)) the
Company, its Subsidiaries, their Directors and officers, each underwriter or
broker involved in such offering, each other seller of Registrable Shares under
such Registration Statement, each Person who controls any of the foregoing
Persons within the meaning of the Securities Act and any Representative of the
foregoing Persons with respect to any untrue statement or allegedly untrue
statement in or omission or alleged omission from such Registration Statement,
any preliminary Prospectus, final Prospectus or Free Writing Prospectus
contained therein, any amendment or supplement thereto or any document incident
to registration or qualification of any such offering and sale of Registrable
Shares, if such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company, its Subsidiaries,
or such underwriter through an instrument duly executed by such seller or a
Person duly acting on such seller’s behalf specifically for use in connection
with the preparation of such Registration Statement, preliminary Prospectus,
final Prospectus, Free Writing Prospectus, amendment or supplement; provided,
however, that the maximum amount of liability in respect of such indemnification
shall be limited, in the case of each seller of Registrable Shares, to an amount
equal to the proceeds (net of underwriting discounts and commissions) actually
received by such seller from the sale of Registrable Shares effected pursuant to
such registration.

(c) Promptly after receipt by an indemnified party of notice of the commencement
of any action involving a claim referred to in the preceding paragraphs of this
Section 4.6, such indemnified party will, if a claim in respect thereof is not
made against an indemnifying party, give written notice to the latter of the
commencement of such action (provided, however, that an indemnified party’s
failure to give such notice in a timely manner shall only relieve the
indemnification obligations of an indemnifying party to the extent such
indemnifying party is materially prejudiced by such failure). In case any such
action is brought against an indemnified party, the indemnifying party will be
entitled to participate in and to assume the defense thereof, jointly with any
other indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election to assume the
defense thereof, the

 

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indemnifying party shall not be responsible for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof; provided, however, that if any indemnified party shall have reasonably
concluded (based upon the written advice of counsel) that there may be one or
more legal or equitable defenses available to such indemnified party which are
in addition to or in conflict with those available to the indemnifying party, or
that such claim or litigation involves or could have an effect upon matters
beyond the scope of the indemnity agreement provided in this Section 4.6, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party and such indemnifying party shall reimburse
such indemnified party and any Person controlling such indemnified party for
that portion of the fees and expenses of any one lead counsel (plus appropriate
special and local counsel) retained by the indemnified party that are reasonably
related to the matters covered by the indemnity agreement provided in this
Section 4.6; provided, further, that, if there is more than one indemnified
party, then the indemnifying party shall only be required to reimburse the
expenses for the lead counsel (plus appropriate special and local counsel)
approved in writing by the indemnified party or parties (as applicable) holding
a majority of the Registrable Shares held by all indemnified parties.

(d) If the indemnification provided for in this Section 4.6 is held by a court
of competent jurisdiction to be unavailable to an indemnified party with respect
to any loss, claim, damage or liability referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amounts paid or payable by such indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and of the indemnified party on the other hand in connection with the
statements or omissions that resulted in such loss, claim, damage or liability
as well as any other relevant equitable considerations; provided, however, that
the maximum amount of liability in respect of such contribution shall be
limited, in the case of each seller of Registrable Shares, to an amount equal to
the net proceeds actually received by such seller from the sale of Registrable
Shares effected pursuant to such registration. The relative fault of the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. No Person guilty of fraud shall be entitled
to indemnification or contribution hereunder.

(e) The indemnification and contribution provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party and will survive the transfer of Registrable
Shares.

 

4.7 Underwriting Agreement.

(a) Notwithstanding the provisions of Sections 4.3, 4.4 and 4.6, to the extent
that the Stockholders selling Registrable Shares in a proposed registration
shall enter into an underwriting or similar agreement that contains provisions
covering one or more issues addressed in such Sections of this Agreement, the
provisions contained in such Sections of this Agreement addressing such issue or
issues shall be of no force or effect with respect to such registration, but
this provision shall not apply to the Company if the Company is not a party to
the underwriting or similar agreement.

 

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(b) If any registration pursuant to Sections 4.1 is requested to be an
underwritten Public Offering, the Company shall negotiate in good faith to enter
into a reasonable and customary underwriting agreement with the underwriters
thereof. Such underwriting agreement shall be satisfactory in form and substance
to First Reserve, or if First Reserve is not participating in such offering,
holders of a majority of Registrable Securities included in such offering, and
shall contain such representations and warranties by, and such other agreements
on the part of, the Company and such other terms as are generally prevailing in
agreements of that type. Any Stockholder participating in the offering shall be
a party to such underwriting agreement and, at its option, may require that any
or all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters also shall be
made to and for the benefit of such Stockholder and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
Stockholder; provided, however, that the Company shall not be required to make
any representations or warranties with respect to written information
specifically provided by a selling Stockholder for inclusion in the registration
statement. No Stockholder shall be required to make any representations or
warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such Stockholder, its
ownership of and title to the Registrable Securities and its intended method of
distribution; and any liability of such Stockholder to any underwriter or other
Person under such underwriting agreement shall be limited to liability arising
from breach of its representations and warranties and shall be limited to an
amount equal to the proceeds (net of underwriting discounts and commissions)
that it derives from such registration. The Company shall be entitled to receive
indemnities from lead institutions, underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, to the same extent as provided above with respect to information
so furnished in writing by such Persons specifically for inclusion in any
Prospectus or Registration Statement and to the extent customarily given their
role in such distribution.

(c) No Stockholder may participate in any registration hereunder that is
underwritten unless such Stockholder agrees to sell such Stockholder’s
Registrable Shares proposed to be included therein on the basis provided in any
underwriting arrangements reasonably acceptable to the Company and, to the
extent First Reserve is participating in such registration, to First Reserve.

 

4.8 Information by Holder.

Each holder of Registrable Shares to be included in any registration shall
furnish to the Company and the managing underwriter such written information
regarding such holder and the distribution proposed by such holder as the
Company or the managing underwriter may reasonably request in writing and as
shall be reasonably required in connection with any registration, qualification
or compliance referred to in this Agreement. Each Stockholder shall as
expeditiously as possible, notify the Company of the occurrence of any event
concerning such Stockholder as a result of which the Prospectus relating to such
registration contains an untrue statement of material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

 

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4.9 Exchange Act Compliance.

From and after the date a registration statement is filed by the Company
pursuant to the Exchange Act relating to the Company’s Securities and shall have
become effective, the Company shall comply with all of the reporting
requirements of the Exchange Act (whether or not it shall be required to do so)
and shall comply with all other public information reporting requirements of the
Commission that are conditions to the availability of Rule 144 for the sale of
the Common Stock. The Company shall cooperate with each Stockholder in supplying
such information as may be necessary for such Stockholder to complete and file
any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of Rule 144.

 

4.10 Suspension.

Anything contained in this Agreement to the contrary notwithstanding, if after
any Registration Statement to which rights hereunder apply becomes effective
(and prior to completion of any sales thereunder), the Board determines in good
faith that the failure of the Company to (suspend sales of Securities under the
Registration Statement of (ii) amend or supplement the Registration Statement,
would have a material adverse effect on the Company, the Company shall so notify
each Stockholder participating in such registration and each Stockholder shall
suspend any further sales under such Registration Statement until the Company
advises the Stockholder that the Registration Statement has been amended or that
conditions no longer exit that would require such suspension, provided that the
Company may impose any such suspension for no more than 30 days and no more than
two (2) times during any twelve month period The Company may (but shall not be
obligated to) withdraw the effectiveness of any registration statement subject
to this provision.

ARTICLE V

AMENDMENT AND WAIVER

 

5.1 Amendment.

Except as expressly set forth herein, the provisions of this Agreement may only
be amended or waived with the prior written consent of (a) the Company, and
(b) the holders of a majority of shares of Common Stock held by each of
(i) First Reserve and (ii) the Management Stockholders.

 

5.2 Waiver.

No course of dealing between the Company and the Stockholders (or any of them)
or any delay in exercising any rights hereunder will operate as a waiver of any
rights of any party to this Agreement. The failure of any party to enforce any
of the provisions of this Agreement will in no way be construed as a waiver of
such provisions and will not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.

 

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ARTICLE VI

MISCELLANEOUS

 

6.1 Severability.

It is the desire and intent of the parties hereto that the provisions of this
Agreement be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
by a court of competent jurisdiction to be invalid, prohibited or unenforceable
for any reason, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or unenforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

 

6.2 Entire Agreement.

This Agreement embodies the entire agreement and understanding among the parties
hereto with respect to the subject matter hereof and thereof and supersede and
preempt any and all prior and contemporaneous understandings, agreements,
arrangements or representations by or among the parties, written or oral, which
may relate to the subject matter hereof or thereof in any way.

 

6.3 Independence of Agreements and Covenants.

All agreements and covenants hereunder shall be given independent effect so that
if a certain action or condition constitutes a default under a certain agreement
or covenant, the fact that such action or condition is permitted by another
agreement or covenant shall not affect the occurrence of such default, unless
expressly permitted under an exception to such initial agreement or covenant.

 

6.4 Successors and Assigns.

Except as otherwise provided herein, this Agreement will bind and inure to the
benefit of and be enforceable by the Company and its successors and permitted
assigns and the Stockholders. Except as specifically set forth herein, the
Company may not assign its rights or obligations hereunder without the prior
written consent of First Reserve; provided, that notwithstanding any such
assignment by the Company, the Company shall remain liable for its obligations
hereunder. Notwithstanding anything to the contrary contained in this
Section 6.4, any Stockholder may elect to transfer all or a portion of its
Registrable Shares to any third party (to the extent such transfer is otherwise
permissible under this Agreement) without assigning its rights hereunder with
respect thereto; provided, that in any such event all rights under this
Agreement with respect to the Registrable Shares so transferred shall cease and
terminate; provided, further, however, that in the case of a transfer to a third
party purchaser by First Reserve, the rights and obligations under Section 3.1
and Article IV of this Agreement may, at the election of First Reserve, be
assigned to such third party purchaser in whole or in part if (i)

 

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concurrent with such transfer, such third party purchaser enters into an
agreement to be bound by this Agreement, and (ii) in connection with any
assignment of the rights and obligations under Section 3.1, First Reserve is
transferring to such third party purchaser in one or more transactions at least
25% of the then outstanding shares of Common Stock. For the avoidance of doubt,
for purposes of determining the Original Holdings of First Reserve and/or such
transferee for the purposes of Article IV following any transfer, the holdings
of First Reserve and such transferee shall be aggregated.

 

6.5 Counterparts; Facsimile Signatures; Validity.

This Agreement may be executed in two or more counterparts, all of which shall
be considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered (by
facsimile or otherwise) to the other party, it being understood that all parties
need not sign the same counterpart. Any counterpart or other signature hereupon
delivered by facsimile shall be deemed for all purposes as constituting good and
valid execution and delivery of this Agreement by such party.

 

6.6 Remedies.

(a) Each Stockholder shall have all rights and remedies reserved for such
Stockholder pursuant to this Agreement and all rights and remedies which such
holder has been granted at any time under any other agreement or contract and
all of the rights which such holder has under any law or equity. Any Person
having any rights under any provision of this Agreement will be entitled to
enforce such rights specifically, to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law
or equity.

(b) The parties hereto agree that if any parties seek to resolve any dispute
arising under this Agreement pursuant to a legal proceeding, the prevailing
parties to such proceeding shall be entitled to receive reasonable fees and
expenses (including reasonable attorneys’ fees and expenses) incurred in
connection with such proceedings.

(c) It is acknowledged that it will be impossible to measure in money the
damages that would be suffered by any party hereto if any other Person party
hereto fails to comply with any of the obligations imposed on it upon them in
this Agreement and that in the event of any such failure, the aggrieved party
will be irreparably damaged and will not have an adequate remedy at law. Any
such aggrieved party shall, therefore, be entitled to equitable relief,
including specific performance, to enforce such obligations, and if any action
should be brought in equity to enforce any of the provisions of this Agreement,
none of the parties hereto shall raise the defense that there is an adequate
remedy at law.

 

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6.7 Notices.

All notices, amendments, waivers or other communications pursuant to this
Agreement shall be in writing and shall be deemed to have been duly given if
personally delivered, telecopied, sent by nationally recognized overnight
courier or mailed by registered or certified mail with postage prepaid, return
receipt requested, to the parties hereto at the following addresses (or at such
other address for a party as shall be specified by like notice):

(a) if to the Company:

Midstates Petroleum Company, Inc.

4400 Post Oak Parkway, Suite 1900

Houston, TX 77027

Attention: Chief Financial Officer

with a copy to:

Vinson & Elkins LLP

1001 Fannin, Suite 2500

Houston, Texas 77002

Attention: Matthew Pacey

Email: mpacey@velaw.com

Fax:   713-615-5139

(b) if to First Reserve:

FR Midstates Interholding, LP

c/o First Reserve Corporation

600 Travis, Suite 6000

Houston, Texas 77002

Attention: Joel C. Lambert

Email: jlambert@firstreserve.com

Fax:   713 224-0771

with a copy to:

Gibson Dunn & Crutcher

1801 California Street, Suite 4200

Denver, CO 80202

Attention: Beau Stark

Email: BStark@gibsondunn.com

Fax:   303-313-2839

(c) if to any Stockholder, to it at its address set forth on Schedule I attached
hereto; or to such other address as the party to whom notice is to be given may
have furnished to each other party in writing in accordance herewith. Any such
notice or communication shall be deemed to have been given and received (a) when
delivered, if personally delivered; (b) when sent, if sent by telecopy on a
Business Day (or, if not sent on a Business Day, on the next Business Day after
the date sent by telecopy); (c) on the next Business Day after dispatch, if sent
by nationally recognized overnight courier guaranteeing next Business Day
delivery; and (d) on the fifth Business Day following the date on which the
piece of mail containing such communication is posted, if sent by mail.

 

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6.8 Governing Law.

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING
PROVISION OR RULE (WHETHER OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
EACH PARTY AGREES AND CONSENTS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF
THE STATE OF DELAWARE OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
DELAWARE, TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFOR, FOR THE
PURPOSES OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY
ACTION, SUIT OR PROCEEDING RELATING HERETO, THAT IT IS NOT SUBJECT TO SUCH
JURISDICTION OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS
NOT MAINTAINABLE IN SUCH COURTS. EACH PARTY IRREVOCABLY CONSENTS TO PERSONAL
JURISDICTION, SERVICE AND VENUE IN ANY SUCH COURT.

 

6.9 Waiver of Jury Trial.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT
MATTER HEREOF. EACH OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR
SECURITY UPON SUCH BOND THAT MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE
OTHER PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY
AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.
EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO THIS AGREEMENT. EACH OF THE PARTIES HERETO FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED OR HAD THE OPPORTUNITY TO REVIEW
THIS WAIVER WITH ITS RESPECTIVE LEGAL COUNSEL, AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.

 

6.10 Further Assurances.

Each party hereto shall do and perform or cause to be done and performed all
such further acts and things and shall execute and deliver all such other
agreements, certificates, instruments, and documents as any other party hereto
reasonably may request in order to carry out the provisions of this Agreement
and the consummation of the transactions contemplated hereby or thereby.

 

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6.11 Conflicting Agreements.

No Stockholder shall enter into any stockholder agreements or arrangements of
any kind with any Person with respect to any Stockholder Shares on terms
inconsistent with the provisions of this Agreement (whether or not such
agreements or arrangements are with other Stockholders or with Persons that are
not parties to this Agreement), including agreements or arrangements with
respect to the acquisition or disposition of Stockholder Shares in a manner
which is inconsistent with this Agreement.

 

6.12 Third Party Reliance.

(a) Anything contained herein to the contrary notwithstanding, the covenants of
the Company contained in this Agreement (a) are being given by the Company as an
inducement to the Stockholders to enter into this Agreement (and the Company
acknowledges that the Stockholders have expressly relied thereon) and (b) are
solely for the benefit of the Stockholders. Accordingly, no third party
(including, without limitation, any holder of capital stock of the Company) or
anyone acting on behalf of any thereof other than the Stockholders, shall be a
third party or other beneficiary of such covenants and no such third party shall
have any rights of contribution against the Stockholders or the Company with
respect to such covenants or any matter subject to or resulting in
indemnification under this Agreement or otherwise.

(b) None of the provisions hereof shall create, or be construed or deemed to
create, any right to employment in favor of any Person by the Company.

 

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IN WITNESS WHEREOF, the undersigned have executed this Stockholders’ Agreement
as of the date set forth above.

 

FR MIDSTATES INTERHOLDING, LP By:   FR XII ALTERNATIVE GP, L.L.C., its general
partner By:   FIRST RESERVE GP XII, L.P., its managing member By:   FIRST
RESERVE GP XII LIMITED, its general partner By:   /s/ Joel Lambert Name:   Joel
Lambert Title:   Vice President, Legal

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MIDSTATES PETROLEUM COMPANY, INC. By:   /s/ John A. Crum

Name: John A. Crum

Title: President and Chief Executive Officer

 

[Signature Page to Stockholders Agreement]

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FOUNDING STOCKHOLDERS /s/ Stephen McDaniel Stephen McDaniel /s/ Kristen McDaniel
Kristen McDaniel

[Signature Page to Stockholders Agreement]

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EXECUTIVE STOCKHOLDERS /s/ John A. Crum John A. Crum /s/ Thomas L. Mitchell
Thomas L. Mitchell /s/ Stephen C. Pugh Stephen C. Pugh

 

[Signature Page to Stockholders Agreement]

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MANAGEMENT STOCKHOLDERS /s/ Brad Broekstra Brad Broekstra /s/ John P. Foley John
P. Foley /s/ Matthew David Matthew David /s/ Larry M. White Larry M. White /s/
Dexter A. Burleigh Dexter A. Burleigh /s/ Curtis Newstrom Curtis Newstrom /s/
James R. Hart James R. Hart /s/ Ray Royer Ray Royer /s/ Robert McDaniel Robert
McDaniel

[Signature Page to Stockholders Agreement]