Exhibit 10.2

WARRANT AGREEMENT

between

ULTRA PETROLEUM CORP.,

COMPUTERSHARE INC.

and

COMPUTERSHARE TRUST COMPANY N.A.,

as Warrant Agent

Dated as of December 21, 2018

Warrants to Purchase Common Shares

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

                 Page   1.      Definitions      1   2.      Warrant
Certificates      6        2.1      Original Issuance of Warrants      6       
2.2      Form of Warrant Certificates      7        2.3      Execution and
Delivery of Warrant Certificates      7        2.4      Global Warrant
Certificates      7   3.      Exercise and Expiration of Warrants      9       
3.1      Right to Acquire Common Shares Upon Exercise      9        3.2     
Exercise and Expiration of Warrants      9        3.3      Application of Funds
upon Exercise of Warrants      12        3.4      Payment of Taxes      12     
  3.5      Cancellation of Warrant Certificates      12        3.6      Shares
Issuable      12        3.7      Cashless Exercise      13        3.8      Cost
Basis Information      13   4.      Dissolution, Liquidation or Winding up     
14   5.      Adjustments      14        5.1      Adjustments      14        5.2
     Fractional Interest      22        5.3      No Other Adjustments      22  
6.      Loss or Mutilation      23   7.      Reservation and Authorization of
Common Shares      23   8.      Warrant Transfer Books      24   9.      Warrant
Holders      25        9.1      No Voting or Dividend Rights      25        9.2
     Rights of Action      26        9.3      Treatment of Holders of Warrant
Certificates      26   10.      Concerning the Warrant Agent      26        10.1
     Rights and Duties of the Warrant Agent.      26        10.2      Limitation
of Liability.      29        10.3      Indemnification.      29        10.4     
Right to Consult Counsel      30        10.5      Compensation and Reimbursement
     30        10.6      Warrant Agent May Hold Company Securities      30     
  10.7      Resignation and Removal; Appointment of Successor      30       
10.8      Appointment of Countersigning Agent      31  

 

i

--------------------------------------------------------------------------------

11.      Notices      32        11.1      Notices Generally      32        11.2
    

Required Notices to Holders

     33   12.     

Inspection

     34   13.     

Amendments

     34   14.     

Waivers

     35   15.     

Successor to Company

     35   16.     

Headings

     36   17.     

Counterparts

     36   18.     

Severability

     36   19.     

No Redemption

     36   20.     

Persons Benefiting

     36   21.     

Applicable Law; Submission to Jurisdiction; Service of Process; Waiver of
Immunity

     37   22.     

Entire Agreement

     38   23.     

Force Majeure

     38   24.     

Further Assurances

     38   25.     

Information Rights

     38   26.     

Confidentiality

     38   27.     

Tax Treatment

     38  

EXHIBITS

 

Exhibit A    Form of Warrant Certificate Exhibit B    Form of Lock-Up Agreement

 

ii

--------------------------------------------------------------------------------

WARRANT AGREEMENT

This Warrant Agreement (as may be supplemented, amended or amended and restated
pursuant to the applicable provisions hereof, this “Agreement”), dated as of
December 21, 2018, between Ultra Petroleum Corp., a corporation incorporated
under the Yukon Business Corporations Act (and any Successor Company that
becomes successor to the Company in accordance with Section 15) (the “Company”),
Computershare Inc., a Delaware corporation (“Computershare”) and its
wholly-owned subsidiary Computershare Trust Company, N.A., a federally chartered
trust company (and any successors of such Warrant Agent appointed in accordance
with the terms hereof) (collectively, the “Warrant Agent”). Capitalized terms
that are used in this Agreement shall have the meanings set forth in Section 1
hereof.

WITNESSETH THAT:

WHEREAS, the Corporation and the other parties thereto have entered into an
Exchange Agreement, dated as of December 17, 2018 (the “Exchange Agreement”),
pursuant to which the Company proposes to issue and deliver Warrants (as defined
below) to purchase up to an aggregate of 10,919,499 Common Shares (as defined
below), subject to adjustment as provided herein, and the Warrant Certificates
evidencing such Warrants;

WHEREAS, each Warrant shall entitle the registered owner thereof to purchase one
Common Share, subject to adjustment as provided herein; and

WHEREAS, the Company desires that the Warrant Agent act on behalf of the
Company, and the Warrant Agent is willing to so act, in connection with the
issuance, exchange, transfer, substitution and exercise of Warrants.

NOW THEREFORE, in consideration of the mutual agreements herein contained, the
Company and the Warrant Agent agree as follows:

 

1.

Definitions.

“Action” has the meaning set forth in Section 11.2.

“Adjustment Events” has the meaning set forth in Section 5.1.

“Affiliate” of any specified Person, means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control” when used with respect to any Person means the power to direct the
management and policies of such specified Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

“Agent Members” has the meaning set forth in Section 2.4(b).

“Agreement” has the meaning set forth in the preamble hereto.

--------------------------------------------------------------------------------

“Applicable Procedures” means, with respect to any transfer or exchange of, or
exercise of any Warrants evidenced by, any Global Warrant Certificate, the rules
and procedures of the Depositary that apply to such transfer, exchange or
exercise.

“Appropriate Officer” means the Chief Executive Officer, President, Chief
Financial Officer and any Vice President, Treasurer or Secretary of the Company.

“Board of Directors” means either the board of directors of the Company or any
duly authorized committee of that board.

“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which
is not (i) a legal holiday in the State of New York or (ii) a day on which
banking institutions and trust companies in the State of New York or the
Depositary are authorized or obligated by law, regulation or executive order to
close.

“Cash Transaction” means any Transaction in which the holders of Common Shares
receive solely cash in respect of their Common Shares.

“Cashless Exercise” has the meaning set forth in Section 3.7.

“Cashless Exercise Current Market Price” means the Current Market Price of the
Common Shares on the Exercise Date with respect to any Cashless Exercise.

“Cashless Exercise Warrant” has the meaning set forth in Section 3.7.

“Commission” means the Securities and Exchange Commission, or any other federal
agency at the time administering the Securities Act or the Exchange Act,
whichever is the relevant statute for the particular purpose.

“Common Shares” means, subject to the provisions of Section 5.1(h), the common
shares, no par value, of the Company.

“Company” means the company identified in the preamble hereof.

“Company Order” means a written request or order signed in the name of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, any Vice President, its Treasurer, any Assistant Treasurer, its
Secretary or any Assistant Secretary, and delivered to the Warrant Agent.

“Company Selected Expert” has the meaning set for in Section 5.1(f)(vi)(B).

“corporation” means a corporation, association, company (including limited
liability company), joint-stock company, business trust or other similar entity.

“Countersigning Agent” means any Person authorized by the Warrant Agent to act
on behalf of the Warrant Agent to countersign Warrant Certificates.

 

2

--------------------------------------------------------------------------------

“Current Market Price” means on any date:

(i) if the reference is to the per share price of Common Shares on any date
herein specified and if on such date the Common Shares are listed or admitted to
trading on any U.S. national securities exchange or traded and quoted in the
over-the-counter market in the United States:

(A) for the purpose of any computation under this Agreement (except under
Section 5.2), the average of the Quoted Prices for the 30 consecutive Trading
Days ending on the Trading Day that is or next precedes the date in question; or

(B) for the purposes of any computation under Section 5.2, the Quoted Price for
such date or, if such date is not a Trading Day, for the next preceding Trading
Day; or

(ii) if the reference is to the per share price of Common Shares on any date
herein specified and if on such date the Common Shares are not listed or
admitted to trading on any U.S. national securities exchange or traded and
quoted in the over-the-counter market in the United States, the amount which a
willing buyer would pay a willing seller in an arm’s length transaction on such
date (neither being under any compulsion to buy or sell) for one Common Share as
determined as of such date by the Board of Directors of the Company in good
faith and in a commercially reasonable manner, whose determination shall be
conclusive and evidenced by a certificate of such officer delivered to the
Warrant Agent.

For the avoidance of doubt, no appraisal of any Person or third-party (other
than the Board of Directors of the Company as further described in clause (ii))
above shall be permitted or required to determine the Current Market Price.

“Definitive Warrant Certificate” means a Warrant Certificate registered in the
name of the Holder thereof that does not bear the Global Warrant Legend and that
does not have a “Schedule of Decreases of Warrants” attached thereto.

“Depositary” means DTC and its successors as depositary hereunder.

“DTC” means The Depository Trust Company.

“Ex-Dividend Date” means the first date on which the Common Shares trade on the
applicable exchange or in the applicable market, regular way, without the right
to receive the dividend or distribution in question, from the Company or, if
applicable, from the seller of Common Shares on such exchange or market (in the
form of due bills or otherwise) as determined by such exchange or market.

“Exchange Act” means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case, as amended from time to time.

“Exercise Date” has the meaning set forth in Section 3.2(g).

“Exercise Form” has the meaning set forth in Section 3.2.

 

3

--------------------------------------------------------------------------------

“Exercise Period” means the period from and including the Original Issue Date to
and including the Expiration Date.

“Exercise Price” means the exercise price per Common Share, initially set at
$0.01, subject to adjustment as provided in Section 5.1.

“Expiration Date” means the earliest to occur of (x) the Scheduled Expiration
Date, (y) the date of consummation of a Cash Transaction to which clause (iii)
of Section 5.1(h) applies and (z) a Winding Up.

“Funds” has the meaning set forth in Section 3.3.

“Global Warrant Certificate” means a Warrant Certificate deposited with or on
behalf of and registered in the name of the Depositary or its nominee, that
bears the Global Warrant Legend and that has the “Schedule of Decreases of
Warrants” attached thereto.

“Global Warrant Legend” means the legend set forth in Section 2.4(a).

“Holder” means any Person in whose name at the time any Warrant Certificate is
registered upon the Warrant Register and, when used with respect to any Warrant
Certificate, the Person in whose name such Warrant Certificate is registered in
the Warrant Register.

“Independent Financial Expert” means any independent investment banking or
financial valuation firm of nationally recognized standing (x) which does not
(and whose directors, officers, employees and affiliates, to the knowledge of
the Company, do not) have a material direct or indirect financial interest in
the Company or any of its Affiliates and (y) which has not been, within the last
two years, and, at the time it is called upon to give independent financial
advice to the Company or any of its Affiliates, is not (and none of whose
directors, officers, employees or affiliates, to the knowledge of the Company,
is) a promoter, director or officer of the Company or any of its Affiliates or
an underwriter with respect to any of the securities of the Company or any of
its Affiliates.

“Lock-Up Agreement” means an agreement signed by a Holder in the form set forth
in Exhibit A attached hereto.

“Notice Date” has the meaning set forth in Section 5.1(f)(vi)(B).

“Original Issue Date” means December 21, 2018, the date on which Warrants are
originally issued under this Agreement.

“outstanding” when used with respect to any Warrants, means, as of the time of
determination, all Warrants theretofore originally issued under this Agreement
except (i) Warrants that have been exercised pursuant to Section 3.2(a),
(ii) Warrants that have expired pursuant to Section 3.2(c), Section 4 or
Section 5.1(h)(iii) and (iii) Warrants that have otherwise been acquired by the
Company; provided, however, that in determining whether the Holders of the
requisite amount of the outstanding Warrants have given any request, demand,
authorization, direction, notice, consent or waiver under the provisions of this
Agreement, Warrants held directly or beneficially by the Company or any
Subsidiary or Affiliate of the Company or any of their respective employees
shall be disregarded and deemed not to be outstanding.

 

4

--------------------------------------------------------------------------------

“Person” means any individual, corporation, limited liability company,
partnership, joint venture, trust, any other entity, unincorporated organization
or government or any agency or political subdivision thereof.

“Quoted Price” means, on any Trading Day, with respect to the Common Shares, the
VWAP of the Common Shares on such Trading Day on the principal U.S. national
securities exchange on which the Common Shares are listed or admitted to trading
or, if the Common Shares are not listed or admitted to trading on any U.S.
national securities exchange, the average of the closing bid and asked prices in
the over-the-counter market in the United States as furnished by any New York
Stock Exchange member firm that shall be selected from time to time by the
Company for that purpose.

“Recipient” has the meaning set forth in Section 3.2(f).

“Reference Property” has the meaning set forth in Section 5.1(h).

“Required Warrant Holders” means Holders of Warrant Certificates evidencing a
majority of the then-outstanding Warrants.

“Scheduled Expiration Date” means July 14, 2025.

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

“Specified Dividend” has the meaning set forth in Section 5.1(d).

“Subsidiary” means a corporation (as defined in this Section 1) more than 50% of
the outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For purposes of this definition, “voting stock” means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

“Successor Company” has the meaning set forth in Section 15.

“Trading Day” means each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any day on which securities are not traded on the applicable securities
exchange or in the applicable securities market.

“Transaction” has the meaning set forth in Section 5.1(h).

“Trigger Event” has the meaning set forth in Section 5.1(d)(ii).

“unit of Reference Property” has the meaning set forth in Section 5.1(h)(i)(A).

 

5

--------------------------------------------------------------------------------

“VWAP” means the volume-weighted average price for trading hours of the regular
trading session (including any extensions thereof), determined without regard to
pre-open or after-hours trading or any other trading outside of the trading
hours of the regular trading session (including any extensions thereof).

“Warrant Agent” has the meaning set forth in the preamble hereof.

“Warrant Certificates” means those certain warrant certificates evidencing the
Warrants, substantially in the form set forth in Exhibit A attached hereto,
which, for the avoidance of doubt, are either Global Warrant Certificates or
Definitive Warrant Certificates.

“Warrant Register” has the meaning set forth in Section 8.

“Warrants” means those certain warrants to purchase initially up to an aggregate
of 10,919,499 Common Shares at the Exercise Price, subject to adjustment
pursuant to Section 5, issued hereunder.

“Winding Up” has the meaning set forth in Section 4.

 

2.

Warrant Certificates.

2.1 Original Issuance of Warrants.

(a) On the Original Issue Date, one or more Global Warrant Certificates
evidencing the Warrants shall be executed by the Company and delivered to the
Warrant Agent for countersignature, and the Warrant Agent shall, upon receipt of
a Company Order and at the direction of the Company set forth therein,
countersign and deliver such Global Warrant Certificates for original issuance
to the Depositary, or its custodian, for crediting to the accounts of its
participants for the benefit of the holders of beneficial interests in the
Warrants on the Original Issue Date pursuant to the Applicable Procedures of the
Depositary on the Original Issue Date.

(b) Except as set forth in Section 2.4, Section 3.2(e), Section 6 and Section 8,
the Global Warrant Certificates delivered to the Depositary (or a nominee
thereof) on the Original Issue Date shall be the only Warrant Certificates
issued or outstanding under this Agreement.

(c) Each Warrant Certificate shall evidence the number of Warrants specified
therein, and each Warrant evidenced thereby shall represent the right, subject
to the provisions contained herein and therein, to purchase one Common Share,
subject to adjustment as provided in Section 5.

(d) Each Warrant Certificate shall at all times bear an unrestricted CUSIP.

 

6

--------------------------------------------------------------------------------

2.2 Form of Warrant Certificates.

The Warrant Certificates evidencing the Warrants shall be in registered form
only and substantially in the form set forth in Exhibit A hereto, shall be dated
the date on which countersigned by the Warrant Agent, shall have such insertions
as are appropriate or required or permitted by this Agreement and may have such
letters, numbers or other marks of identification and such legends and
endorsements typed, stamped, printed, lithographed or engraved thereon (which
does not impact the Warrant Agent’s rights, duties or immunities) as the
officers of the Company executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation pursuant thereto or with any rule or regulation of
any securities exchange on which the Warrants may be listed, or to conform to
usage.

2.3 Execution and Delivery of Warrant Certificates.

(a) Warrant Certificates evidencing the Warrants which may be countersigned and
delivered under this Agreement are limited to Warrant Certificates evidencing
10,919,499 Warrants except for Warrant Certificates countersigned and delivered
upon registration of transfer of, or in exchange for, or in lieu of, one or more
previously countersigned Warrant Certificates pursuant to Section 2.4,
Section 3.2(e), Section 6 and Section 8.

(b) The Warrant Agent is hereby authorized to countersign and deliver Warrant
Certificates as required by Section 2.1 or by Section 2.4, Section 3.2(e),
Section 6 or Section 8.

(c) The Warrant Certificates shall be executed in the corporate name and on
behalf of the Company by the Chairman (or any Co-Chairman) of the Board of
Directors, the Chief Executive Officer, the President or any one of the Vice
Presidents of the Company under corporate seal reproduced thereon and attested
to by the Secretary, the Treasurer or one of the Assistant Secretaries of the
Company, either manually or by facsimile signature printed thereon. The Warrant
Certificates shall be countersigned, either by manual or facsimile signature, by
the Warrant Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company whose signature shall have
been placed upon any of the Warrant Certificates shall cease to be such officer
of the Company before countersignature by the Warrant Agent and issue and
delivery thereof, such Warrant Certificates may, nevertheless, be countersigned
by the Warrant Agent and issued and delivered with the same force and effect as
though such person had not ceased to be such officer of the Company, and any
Warrant Certificate may be signed on behalf of the Company by such person as, at
the actual date of the execution of such Warrant Certificate, shall be a proper
officer of the Company, although at the date of the execution of this Agreement
any such person was not such officer.

2.4 Global Warrant Certificates.

(a) Any Global Warrant Certificate shall bear the legend substantially in the
form set forth in Exhibit A hereto (the “Global Warrant Legend”).

(b) So long as a Global Warrant Certificate is registered in the name of the
Depositary or its nominee, members of, or participants in, the Depositary
(“Agent Members”) shall have no rights under this Agreement with respect to the
Warrants evidenced by such Global Warrant Certificate held on their behalf by
the Depositary or its custodian, and the Depositary may be treated by the
Company, the Warrant Agent and any agent of the Company or the Warrant Agent as
the absolute owner of such Warrants, and as the sole Holder of such Warrant
Certificate, for all purposes. Accordingly, any such Agent Member’s beneficial
interest in such Warrants will

 

7

--------------------------------------------------------------------------------

be shown only on, and the transfer of such interest shall be effected only
through, records maintained by the Depositary or its nominee or its Agent
Members, and neither the Company nor the Warrant Agent shall have any
responsibility or liability with respect to such records maintained by the
Depositary or its nominee or its Agent Members. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Warrant Agent or any agent of the
Company or the Warrant Agent from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or impair, as between
the Depositary and its Agent Members, the operation of customary practices
governing the exercise of the rights of a holder of any security.

(c) Any holder of a beneficial interest in Warrants evidenced by a Global
Warrant Certificate registered in the name of the Depositary or its nominee
shall, by acceptance of such beneficial interest, agree that transfers of
beneficial interests in the Warrants evidenced by such Global Warrant
Certificate may be effected only through a book-entry system maintained by the
Holder of such Global Warrant Certificate (or its agent), and that ownership of
a beneficial interest in Warrants evidenced thereby shall be reflected solely in
such book-entry form.

(d) Transfers of a Global Warrant Certificate registered in the name of the
Depositary or its nominee shall be limited to transfers in whole, and not in
part, to the Depositary, its successors, and their respective nominees except as
set forth in Section 2.4(e). Interests of beneficial owners in a Global Warrant
Certificate registered in the name of the Depositary or its nominee shall be
transferred in accordance with the Applicable Procedures of the Depositary.

(e) A Global Warrant Certificate registered in the name of the Depositary or its
nominee shall be exchanged for Definitive Warrant Certificates only if the
Depositary (i) has notified the Company that it is unwilling or unable to
continue as or ceases to be a clearing agency registered under Section 17A of
the Exchange Act and (ii) a successor to the Depositary registered as a clearing
agency under Section 17A of the Exchange Act is not able to be appointed by the
Company within 90 days or the Depositary is at any time unwilling or unable to
continue as Depositary and a successor to the Depositary is not able to be
appointed by the Company within 90 days. In any such event, each Global Warrant
Certificate registered in the name of the Depositary or its nominee shall be
surrendered to the Warrant Agent for cancellation in accordance with
Section 3.5, and the Company shall execute, and the Warrant Agent shall
countersign and deliver, upon the Company’s written instruction, to each
beneficial owner identified by the Depositary, in exchange for such beneficial
owner’s beneficial interest in such Global Warrant Certificate, Definitive
Warrant Certificates evidencing, in the aggregate, the number of Warrants
theretofore represented by such Global Warrant Certificate with respect to such
beneficial owner’s respective beneficial interest. Any Definitive Warrant
Certificate delivered in exchange for an interest in a Global Warrant
Certificate pursuant to this Section 2.4(e) shall not bear the Global Warrant
Legend. Interests in any Global Warrant Certificate may not be exchanged for
Definitive Warrant Certificates other than as provided in this Section 2.4(e).

(f) The holder of a Global Warrant Certificate registered in the name of the
Depositary or its nominee may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder of a Warrant Certificate is entitled
to take under this Agreement or such Global Warrant Certificate.

 

8

--------------------------------------------------------------------------------

(g) Each Global Warrant Certificate will evidence such of the outstanding
Warrants as will be specified therein and each shall provide that it evidences
the aggregate number of outstanding Warrants from time to time endorsed thereon
and that the aggregate number of outstanding Warrants evidenced thereby may from
time to time be reduced, to reflect exercises or expirations. Any endorsement of
a Global Warrant Certificate to reflect the amount of any decrease in the
aggregate number of outstanding Warrants evidenced thereby will be made by the
Warrant Agent (i) in the case of an exercise, in accordance with the Applicable
Procedures as required by Section 3.2(d) or (ii) in the case of an expiration,
in accordance with Section 3.2(c).

(h) The Company initially appoints DTC to act as Depositary with respect to the
Global Warrant Certificates.

(i) Every Warrant Certificate authenticated and delivered in exchange for, or in
lieu of, a Global Warrant Certificate or any portion thereof, pursuant to this
Section 2.4 or Section 6 or Section 8, shall be authenticated and delivered in
the form of, and shall be, a Global Warrant Certificate, and a Global Warrant
Certificate may not be exchanged for a Definitive Warrant Certificate, in each
case, other than as provided in Section 2.4(e). Whenever any provision herein
refers to issuance by the Company and countersignature and delivery by the
Warrant Agent of a new Warrant Certificate in exchange for the portion of a
surrendered Warrant Certificate that has not been exercised, in lieu of the
surrender of any Global Warrant Certificate and the issuance, countersignature
and delivery of a new Global Warrant Certificate in exchange therefor, the
Warrant Agent, on the Company’s written instruction, may endorse such Global
Warrant Certificate to reflect a reduction in the number of Warrants evidenced
thereby in the amount of Warrants so evidenced that have been so exercised.

(j) Beneficial interests in any Global Warrant Certificate may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in the
same Global Warrant Certificate in accordance with the Applicable Procedures.

(k) At such time as all Warrants evidenced by a particular Global Warrant
Certificate have been exercised or expired in whole and not in part, such Global
Warrant Certificate shall, if not in custody of the Warrant Agent, be
surrendered to or retained by the Warrant Agent for cancellation in accordance
with Section 3.5.

 

3.

Exercise and Expiration of Warrants.

3.1 Right to Acquire Common Shares Upon Exercise. Each Warrant Certificate
shall, when countersigned by the Warrant Agent, entitle the Holder thereof,
subject to the provisions thereof and of this Agreement, to acquire from the
Company, for each Warrant evidenced thereby, one Common Share at the Exercise
Price, subject to adjustment as provided in this Agreement. The Exercise Price,
and the number of Common Shares obtainable upon exercise of each Warrant, shall
be adjusted from time to time as required by Section 5.1.

3.2 Exercise and Expiration of Warrants.

(a) Exercise of Warrants. Subject to and upon compliance with the terms and
conditions set forth herein, including Section 3.2(b), a Holder of a Warrant
Certificate may exercise all or any whole number of the Warrants evidenced
thereby, on any Business Day from and after the Original Issue Date until
5:00 p.m., New York time, on the Expiration Date, for the Common Shares
obtainable thereunder.

 

9

--------------------------------------------------------------------------------

(b) Condition to Exercise of Warrants. No Holder of a Warrant Certificate may
exercise any Warrant evidenced thereby until the Current Market Price of the
Common Shares has equaled or exceeded $2.50 per share (subject to adjustment in
the same manner as the Exercise Price) on any Trading Day. For the avoidance of
doubt, the Warrants shall be exercisable from and after any Trading Day on which
the Current Market Price of the Common Shares has equaled or exceeded $2.50 per
share (subject to adjustment in the same manner as the Exercise Price),
regardless of the Current Market Price of the Common Shares on the applicable
Exercise Date.

(c) Expiration of Warrants. The Warrants, to the extent not exercised prior
thereto, shall automatically expire, terminate and become void as of 5:00 p.m.,
New York time, on the Expiration Date. No further action of any Person
(including by, or on behalf of, any Holder, the Company, or the Warrant Agent)
shall be required to effectuate the expiration of Warrants pursuant to this
Section 3.2(c).

(d) Method of Exercise. In order for a Holder to exercise all or any of the
Warrants represented by a Warrant Certificate, the Holder thereof must
(i) (x) in the case of a Global Warrant Certificate, comply with the Applicable
Procedures of the Depositary to provide notice of the number of Warrants being
exercised and, if applicable, whether Cashless Exercise is being elected with
respect thereto, and deliver such Warrants by book-entry transfer through the
facilities of the Depositary to the Warrant Agent in accordance with the
Applicable Procedures and otherwise comply with the Applicable Procedures in
respect of the exercise of such Warrants or (y) in the case of a Definitive
Warrant Certificate, at the office of the Warrant Agent designated for such
purpose, (I) deliver to the Warrant Agent an exercise form for the election to
exercise such Warrants substantially in the form set forth in Exhibit A hereto
(an “Exercise Form”), setting forth the number of Warrants being exercised and,
if applicable, whether Cashless Exercise is being elected with respect thereto,
and otherwise properly completed and duly executed by the Holder thereof
accompanied by a signature guarantee and such other documentation as the Warrant
Agent may reasonably request, and (II) surrender to the Warrant Agent the
Definitive Warrant Certificate evidencing such Warrants; (ii) pay to the Warrant
Agent an amount equal to (x) all taxes required to be paid by the Holder, if
any, pursuant to Section 3.4 prior to, or concurrently with, exercise of such
Warrants and (y) except in the case of a Cashless Exercise, the aggregate of the
Exercise Price in respect of each Common Share into which such Warrants are
exercisable, in case of (x) and (y), by wire transfer in immediately available
funds, to the account (No. 4427699265; ABA No. 026009593; Reference: Ultra
Petroleum Corp.; Attention: Abby Cowart) of the Company at the Warrant Agent or
such other account of the Company at such banking institution as the Company
shall have given notice to the Warrant Agent and such Holder in accordance with
Section 11.1(b); and (iii) deliver to the Company, with a copy to the Warrant
Agent, a Lock-Up Agreement with respect to the Common Shares to be received on
exercise of such Warrants.

(e) Partial Exercise. If fewer than all the Warrants represented by a Warrant
Certificate are exercised, (i) in the case of exercise of Warrants evidenced by
a Global Warrant Certificate, the Warrant Agent shall cause the custodian of DTC
to endorse the “Schedule of Decreases of Warrants” attached to such Global
Warrant Certificate to reflect the Warrants being

 

10

--------------------------------------------------------------------------------

exercised and (ii) in the case of exercise of Warrants evidenced by a Definitive
Warrant Certificate, such Definitive Warrant Certificate shall be surrendered
and a new Definitive Warrant Certificate of the same tenor and for the number of
Warrants which were not exercised shall be executed by the Company. The Warrant
Agent shall countersign the new Definitive Warrant Certificate, registered in
such name or names, subject to the provisions of Section 8 regarding
registration of transfer and payment of governmental charges in respect thereof,
as may be directed in writing by the Holder, and shall deliver the new
Definitive Warrant Certificate to the Person or Persons in whose name such new
Definitive Warrant Certificate is so registered. The Company, whenever required
by the Warrant Agent, will supply the Warrant Agent with Definitive Warrant
Certificates duly executed on behalf of the Company for such purpose.

(f) Issuance of Common Shares. Upon due exercise of Warrants evidenced by any
Warrant Certificate in conformity with the foregoing provisions of
Section 3.2(d), the Warrant Agent shall, when actions specified in
Section 3.2(d)(i) have been effected and any payment specified in
Section 3.2(d)(ii) is received, deliver to the Company the Exercise Form
received pursuant to Section 3.2(d)(i), deliver or deposit all funds, in
accordance with Section 3.3, received as instructed in writing by the Company
and advise the Company by telephone promptly thereafter of the amount of funds
so deposited to its account. The Company shall thereupon, as promptly as
practicable, and in any event within five (5) Business Days after the Exercise
Date referred to below, (i) determine the number of Common Shares issuable
pursuant to exercise of such Warrants pursuant to Section 3.6 or, if Cashless
Exercise applies, Section 3.7 and (ii) (x) in the case of exercise of Warrants
evidenced by a Global Warrant Certificate, deliver or cause to be delivered to
the Recipient (as defined below) in accordance with the Applicable Procedures
Common Shares in book-entry form to be so held through the facilities of DTC in
an amount equal to, or, if the Common Shares may not then be held in book-entry
form through the facilities of DTC, duly executed certificates representing, or
(y) in the case of exercise of Warrants evidenced by Definitive Warrant
Certificates, execute or cause to be executed and deliver or cause to be
delivered to the Recipient (as defined below) a certificate or certificates
representing, in case of (x) and (y), the aggregate number of Common Shares
issuable upon such exercise (based upon the aggregate number of Warrants so
exercised), as so determined, together with an amount in cash in lieu of any
fractional share(s), if the Company so elects pursuant to Section 5.2. The
Common Shares in book-entry form or certificate or certificates representing
Common Shares so delivered shall be, to the extent possible, in such
denomination or denominations as such Holder shall request in the applicable
Exercise Form and shall be registered or otherwise placed in the name of, and
delivered to, the Holder or, subject to Section 3.4, such other Person as shall
be designated by the Holder in such Exercise Form (the Holder or such other
Person being referred to herein as the “Recipient”). If the Company has a
stockholder rights plan in effect upon exercise of the Warrants, each Common
Share issued upon such exercise shall be entitled to receive the appropriate
number of rights, if any, and any certificates representing the Common Shares
issued upon such exercise shall bear such legends, if any, in each case as may
be provided by the terms of any such stockholder rights plan, as the same may be
amended from time to time.

(g) Time of Exercise. Each exercise of a Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which each of
the requirements for exercise of such Warrant specified in Section 3.2(d) has
been duly satisfied (the “Exercise Date”). At such time, subject to
Section 5.1(f)(iv), Common Shares in book-entry form or the certificates for the
Common Shares issuable upon such exercise as provided in Section 3.2(f) shall be
deemed to have been issued and, for all purposes of this Agreement, the
Recipient shall, as between such Person and the Company, be deemed to be and
entitled to all rights of the holder of record of such Common Shares.

 

11

--------------------------------------------------------------------------------

3.3 Application of Funds upon Exercise of Warrants. All funds received by
Computershare under this Agreement that are to be distributed or applied by
Computershare in the performance of the services hereunder (the “Funds”) shall
be held by Computershare as agent for the Company and deposited in one or more
bank accounts to be maintained by Computershare in its name as agent for the
Company. Until paid pursuant to the terms of this Agreement, Computershare will
hold the Funds through such accounts in: deposit accounts of commercial banks
with Tier 1 capital exceeding $1 billion or with an average rating above
investment grade by S&P (LT Local Issuer Credit Rating), Moody’s (Long Term
Rating) and Fitch Ratings, Inc. (LT Issuer Default Rating) (each as reported by
Bloomberg Finance L.P.). Computershare shall have no responsibility or liability
for any diminution of the Funds that may result from any deposit made by
Computershare in accordance with this Agreement, including any losses resulting
from a default by any bank, financial institution or other third party.
Computershare may from time to time receive interest, dividends or other
earnings in connection with such deposits. Computershare shall not be obligated
to pay such interest, dividends or earnings to the Company, any holder or any
other party. The Warrant Agent shall forward funds received for warrant
exercises in a given month by the fifth Business Day of the following month by
wire transfer to an account designated by the Company.

3.4 Payment of Taxes. The Company shall pay any and all documentary, issuance,
registration, stamp and similar taxes that may be payable in respect of the
issue or delivery of Common Shares on exercise of Warrants pursuant hereto. The
Company or the Warrant Agent shall not be required, however, to pay any tax or
other charge imposed in respect of any transfer involved in the issue and
delivery of Common Shares in book-entry form or any certificates for Common
Shares or payment of cash or other property to any Recipient other than the
Holder of the Warrant Certificate evidencing the exercised Warrant, and in case
of such transfer or payment, the Warrant Agent and the Company shall not be
required to issue or deliver any Common Shares in book-entry form or any
certificate or pay any cash until (a) such tax or charge has been paid or an
amount sufficient for the payment thereof has been delivered to the Warrant
Agent or the Company or (b) it has been established to the Company’s and the
Warrant Agent’s satisfaction that any such tax or other charge that is or may
become due has been paid.

3.5 Cancellation of Warrant Certificates. Any Definitive Warrant Certificate
surrendered for exercise shall, if surrendered to the Company, be delivered to
the Warrant Agent. All Warrant Certificates surrendered or delivered to or
received by the Warrant Agent for cancellation pursuant to this Section 3.5 or
Section 2.4(e) or Section 2.4(k) shall be promptly cancelled by the Warrant
Agent and shall not be reissued by the Company. The Warrant Agent shall destroy
any such cancelled Warrant Certificates and deliver its certificate of
destruction to the Company, unless the Company shall otherwise direct in
writing.

3.6 Shares Issuable. The number of Common Shares “obtainable upon exercise” of
Warrants at any time shall be the number of Common Shares into which such
Warrants are then exercisable. The Company will confirm the number of shares
issuable if so requested by the Warrant Agent. The number of Common Shares “into
which each Warrant is exercisable” shall be one share, subject to adjustment as
provided in Section 5.1.

 

12

--------------------------------------------------------------------------------

3.7 Cashless Exercise. Notwithstanding any provisions herein to the contrary,
if, on the Exercise Date of a Cashless Exercise, the Cashless Exercise Current
Market Price of one Common Share is greater than the applicable Exercise Price
on the Exercise Date, then, in lieu of paying to the Company the applicable
Exercise Price by wire transfer in immediately available funds, the Holder may
elect to receive Common Shares equal to the value (as determined below) of the
Warrants or any portion thereof being exercised (such portion, the “Cashless
Exercise Warrants” with respect to such date) by (i) in the case of Warrants
evidenced by a Global Warrant Certificate, providing written notice to the
Warrant Agent pursuant to the Applicable Procedures; or (ii) in the case of
Warrants evidenced by a Definitive Warrant Certificate, providing notice
pursuant to the Exercise Form, in the case of (i) or (ii), that the Holder
desires to effect a “cashless exercise” (a “Cashless Exercise”) with respect to
the Cashless Exercise Warrants, in which event the Company shall issue to the
Holder a number of Common Shares with respect to Cashless Exercise Warrants
computed using the following formula (it being understood that any portion of
the Warrants being exercised on such date that are not Cashless Exercise
Warrants will not be affected by this calculation):

 

     X = (Y × (A-B)) ÷ A

WhereX =

   the number of Common Shares to be issued to the Holder in respect of the
Cashless Exercise Warrants

Y  =

   the number of Common Shares purchasable under the Cashless Exercise Warrants
being exercised by the Holder (on the Exercise Date)

A  =

   the applicable Cashless Exercise Current Market Price of one Common Share (on
the Exercise Date)

B   =

   the applicable Exercise Price (as adjusted through and including the Exercise
Date).

The Company shall calculate and transmit to the Warrant Agent the number of
Common Shares to be issued on such Cashless Exercise, and the Warrant Agent
shall have no obligation under this Agreement to calculate, confirm or verify
such amount.

3.8 Cost Basis Information.

(a) In the event of a cash exercise, the Company hereby instructs the Warrant
Agent to record cost basis for newly issued shares at the time of such exercise
in accordance with written instructions by the Company. If the Company does not
provide such cost basis information to the Warrant Agent, as outlined above,
then the Warrant Agent will treat those shares issued hereunder as uncovered
securities or the equivalent, and each holder of such shares must obtain such
cost basis information from the Company.

 

13

--------------------------------------------------------------------------------

(b) In the event of a Cashless Exercise, the Company shall provide cost basis
for shares issued pursuant to a Cashless Exercise at the time the Company
provides the shares issued pursuant to such Cashless Exercise to the Warrant
Agent pursuant to Section 3.7 hereof.

 

4.

Dissolution, Liquidation or Winding up.

Unless Section 5.1(h) applies, if, on or prior to the Expiration Date, the
Company (or any other Person controlling the Company) shall propose a voluntary
or involuntary dissolution, liquidation or winding up (a “Winding Up”) of the
affairs of the Company, the Company shall give written notice thereof to the
Warrant Agent and all Holders in the manner provided in Section 11.1(b) prior to
the date on which such transaction is expected to become effective or, if
earlier, the record date for such transaction. Such notice shall also specify
the date as of which the holders of record of the Common Shares shall be
entitled to exchange their shares for securities, money or other property
deliverable upon such dissolution, liquidation or winding up, as the case may
be, on which date each Holder of Warrant Certificates shall receive the
securities, money or other property which such Holder would have been entitled
to receive had such Holder been the holder of record of the Common Shares into
which the Warrants were exercisable immediately prior to such dissolution,
liquidation or winding up (net of the then-applicable Exercise Price) and the
rights to exercise the Warrants shall terminate.

Unless Section 5.1(h) applies, in case of any such voluntary or involuntary
dissolution, liquidation or winding up of the Company, the Company shall deposit
with the Warrant Agent any funds or other property which the Holders are
entitled to receive pursuant to the above paragraph, together with a Company
Order as to the distribution thereof. After receipt of such deposit from the
Company and after receipt of surrendered Warrant Certificates evidencing
Warrants, and any such other necessary information as the Warrant Agent may
reasonably require (including, but not limited to, signature guarantees), the
Warrant Agent shall make payment in appropriate amount to such Person or Persons
as it may be directed in writing by the Holder surrendering such Warrant
Certificate. The Warrant Agent shall not be required to pay interest on any
money deposited pursuant to the provisions of this Section 4 except such as it
shall agree in writing with the Company to pay thereon. Any moneys, securities
or other property which at any time shall be deposited by the Company or on its
behalf with the Warrant Agent pursuant to this Section 4 shall be, and are
hereby, assigned, transferred and set over to the Warrant Agent in accordance
with Section 3.3 hereof; provided, that, moneys, securities or other property
need not be segregated from other funds, securities or other property held by
the Warrant Agent except to the extent required by law.

 

5.

Adjustments.

5.1 Adjustments. In order to prevent dilution of the rights granted under the
Warrants and to grant the Holders certain additional rights, the Exercise Price
shall be subject to adjustment from time to time only as specifically provided
in this Section 5.1 (the “Adjustment Events”) and the number of Common Shares
obtainable upon exercise of Warrants shall be subject to adjustment from time to
time only as specifically provided in this Section 5.1.

 

14

--------------------------------------------------------------------------------

(a) Subdivisions and Combinations. In the event the Company shall, at any time
or from time to time after the Original Issue Date while any Warrants remain
outstanding and unexpired in whole or in part, effect a subdivision (by any
stock split or otherwise) of the outstanding Common Shares into a greater number
of Common Shares (other than (x) a subdivision upon a Transaction to which
Section 5.1(h) applies or (y) a stock split effected by means of a stock
dividend or distribution to which Section 5.1(b) applies), then and in each such
event the Exercise Price in effect at the opening of business on the date upon
which such subdivision becomes effective shall be proportionately decreased.
Conversely, if the Company shall, at any time or from time to time after the
Original Issue Date while any Warrants remain outstanding and unexpired in whole
or in part, effect a combination (by any reverse stock split or otherwise) of
the outstanding Common Shares into a smaller number of Common Shares (other than
a combination upon a Transaction to which Section 5.1(h) applies), then and in
each such event the Exercise Price in effect at the opening of business on the
date upon which such combination becomes effective shall be proportionately
increased. Any adjustment under this Section 5.1(a) shall become effective
immediately after the opening of business on the date upon which the subdivision
or combination becomes effective (or, if the subdivision or combination does not
become effective until after the opening of business on such date, the
adjustment under this Section 5.1(a) shall become effective immediately after
the effectiveness of such subdivision or combination).

(b) Common Share Dividends. In the event the Company shall, at any time or from
time to time after the Original Issue Date while any Warrants remain outstanding
and unexpired in whole or in part, make or issue to the holders of its Common
Shares a dividend or distribution payable in, or otherwise make or issue a
dividend or other distribution on any class of its capital stock payable in,
Common Shares (other than a dividend or distribution upon a Transaction to which
Section 5.1(h) applies), then and in each such event the Exercise Price in
effect immediately prior to the close of business on the date for the
determination of the holders of Common Shares entitled to receive such dividend
or distribution shall be decreased by multiplying such Exercise Price by a
fraction (not to be greater than 1):

(i) the numerator of which shall be the total number of Common Shares issued and
outstanding at the close of business on such date for determination; and

(ii) the denominator of which shall be the total number of Common Shares issued
and outstanding at the close of business on such date for determination plus the
number of Common Shares issuable in payment of such dividend or distribution.

Any adjustment under this Section 5.1(b) shall, subject to Section 5.1(f)(iv),
become effective immediately prior to the opening of business on the day after
the date for the determination of the holders of Common Shares entitled to
receive such dividend or distribution.

(c) Reclassifications. A reclassification of the Common Shares (other than any
such reclassification in connection with a merger or consolidation or sale to
which Section 5.1(h) applies) into Common Shares and shares of any other class
of stock shall be deemed:

(i) a Specified Dividend by the Company to the holders of its Common Shares of
such shares of such other class of stock for the purposes and within the meaning
of Section 5.1(d) (and the effective date of such reclassification shall be
deemed to be “the date for the determination of the holders of Common Shares
entitled to receive such dividend or distribution” for the purposes and within
the meaning of Section 5.1(d)); and

 

15

--------------------------------------------------------------------------------

(ii) if the outstanding Common Shares shall be changed into a larger or smaller
number of Common Shares as a part of such reclassification, such change shall be
deemed a subdivision or combination, as the case may be, of the outstanding
Common Shares for the purposes and within the meaning of Section 5.1(a) (and the
effective date of such reclassification shall be deemed to be “the date upon
which such subdivision becomes effective” or “the date upon which such
combination becomes effective,” as applicable, for the purposes and within the
meaning of Section 5.1(a)).

(d) Specified Dividends. In the event the Company shall, at any time or from
time to time after the Original Issue Date while any Warrants remain outstanding
and unexpired in whole or in part, make or issue any dividend of cash or other
distribution of cash and/or property (including rights, options or warrants),
whether in a spin-off transaction or otherwise, to all holders of its Common
Shares (other than any dividend or distribution (i) upon a Transaction to which
Section 5.1(h) applies or (ii) to which Section 5.1(b) applies) (a “Specified
Dividend”), then and in each such event, the Exercise Price in effect
immediately prior to the close of business on the date for the determination of
the holders of Common Shares entitled to receive such dividend or distribution
shall be decreased by multiplying such Exercise Price by a fraction (not to be
greater than 1):

(i) the numerator of which shall be (x) the Quoted Price on the Trading Day
immediately preceding the Ex-Dividend Date for such dividend or distribution
minus (y) the amount of any cash and the fair market value of any non-cash
property as of the Ex-Dividend Date for such dividend or distribution (as
determined by the Board of Directors in good faith and in a commercially
reasonable manner) to be distributed with respect to each Common Share; and

(ii) the denominator of which shall be the Quoted Price on the Trading Day
immediately preceding the Ex-Dividend Date for such dividend or distribution.

Any adjustment under this Section 5.1(d) shall, subject to Section 5.1(f)(iv),
become effective immediately prior to the opening of business on the day after
the date for the determination of the holders of Common Shares entitled to
receive such Specified Dividend.

Rights or warrants issued by the Company to all holders of the Common Shares
entitling the holders thereof to subscribe for or purchase Common Shares, which
rights or warrants (A) are deemed to be transferred with such Common Shares,
(B) are not exercisable and (C) are also issued in respect of future issuances
of Common Shares, in each case in clauses (A) through (C) until the occurrence
of a specified event or events (“Trigger Event”), shall not give rise to an
adjustment pursuant to this Section 5.1(d) until the occurrence of the earliest
Trigger Event.

(e) Tender and Exchange Offers. If the Company or any of its Subsidiaries makes
a payment in respect of a tender or exchange offer for the Common Shares, to the
extent that the cash and value of any other consideration (as determined by the
Board of Directors of the Company acting in good faith and in a commercially
reasonable manner) included in the payment

 

16

--------------------------------------------------------------------------------

per share of the Common Shares exceeds the Quoted Price on the Trading Day next
succeeding the last date on which tenders or exchanges may be made pursuant to
such tender or exchange offer, the Exercise Price in effect immediately prior to
the close of business on the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or exchange offer shall
be decreased by multiplying such Exercise Price by a fraction (not to be greater
than 1):

(i) the numerator of which shall be the product of (x) the number of Common
Shares outstanding immediately prior to the date such tender or exchange offer
expires (prior to giving effect to the purchase of all Common Shares accepted
for purchase or exchange in such tender or exchange offer) and (y) the Quoted
Price on the Trading Day next succeeding the date such tender or exchange offer
expires; and

(ii) the denominator of which shall be the sum of (x) aggregate value of all
cash and any other consideration (as determined by the Board of Directors of the
Company in good faith and in a commercially reasonable manner) paid or payable
for Common Shares purchased in such tender or exchange offer and (y) the product
of (A) the Quoted Price on the Trading Day next succeeding the date such tender
or exchange offer expires and (B) the number of Common Shares outstanding
immediately after the date such tender or exchange offer expires (after giving
effect to the purchase of all Common Shares accepted for purchase or exchange in
such tender or exchange offer).

Any adjustment under this Section 5.1(e) shall, subject to Section 5.1(f)(iv),
become effective immediately prior to the opening of business on the day after
the Trading Day next succeeding the last date on which tenders or exchanges may
be made pursuant to such tender or exchange offer.

(f) Other Provisions Applicable to Adjustments. The following provisions shall
be applicable to the making of adjustments to the Exercise Price and the number
of Common Shares into which each Warrant is exercisable under Section 5.1:

(i) Treasury Stock. The dividend or distribution of any issued Common Shares
owned or held by or for the account of the Company shall be deemed a dividend or
distribution of Common Shares for purposes of Section 5.1(b). The Company shall
not make or issue any dividend or distribution on Common Shares held in the
treasury of the Company. For the purposes of Section 5.1(b), the number of
Common Shares at any time outstanding shall not include shares held in the
treasury of the Company.

(ii) When Adjustments Are to be Made. The adjustments required by
Section 5.1(a), Section 5.1(b), Section 5.1(c), Section 5.1(d) and
Section 5.1(e) shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that no adjustment of the Exercise
Price that would otherwise be required shall be made unless and until such
adjustment either by itself or with other adjustments not previously made
increases or decreases the Exercise Price immediately prior to the making of
such adjustment by at least 1%. Any adjustment representing a change of less
than such minimum amount (except as aforesaid) shall be carried forward and made
as soon as such adjustment, together with other adjustments required by
Section 5.1(a), Section 5.1(b), Section 5.1(c), Section 5.1(d) and
Section 5.1(e) and not previously made, would result in such minimum adjustment
and, in any case, shall be made on any Exercise Date.

 

17

--------------------------------------------------------------------------------

(iii) Fractional Interests. In computing adjustments under Section 5.1,
fractional interests in Common Shares shall be taken into account to the nearest
one-thousandth of a share.

(iv) Deferral of Issuance Upon Exercise. In any case in which Section 5.1(b),
Section 5.1(d) or Section 5.1(e) shall require that a decrease in the Exercise
Price be made effective prior to the occurrence of a specified event and any
Warrant is exercised after the time at which the adjustment became effective but
prior to the occurrence of such specified event and, in connection therewith,
Section 5.1(g) shall require a corresponding increase in the number of Common
Shares into which each Warrant is exercisable, the Company may elect to defer,
with written notice to the Warrant Agent (but not in any event later than the
Expiration Date) until the occurrence of such specified event (A) the issuance
to the Holder of the Warrant Certificate evidencing such Warrant (or other
Person entitled thereto) of, and the registration of such Holder (or other
Person) as the record holder of, the Common Shares over and above the Common
Shares issuable upon such exercise on the basis of the number of Common Shares
obtainable upon exercise of such Warrant immediately prior to such adjustment
and to require payment in respect of such number of shares the issuance of which
is not deferred on the basis of the Exercise Price in effect immediately prior
to such adjustment and (B) the corresponding reduction in the Exercise Price;
provided, however, that the Company shall deliver to such Holder or other person
a due bill or other appropriate instrument that meet any applicable requirements
of the principal national securities exchange or other market on which the
Common Shares are then traded and evidences the right of such Holder or other
Person to receive, and to become the record holder of, such additional Common
Shares, upon the occurrence of such specified event requiring such adjustment
(without payment of any additional Exercise Price in respect of such additional
shares).

(v) Adjustment of Prices. Whenever any provision of this Warrant Agreement
requires the calculation of the Quoted Price over a span of multiple days
(including, without limitation, for purposes of determining the Current Market
Price), the Board of Directors shall make appropriate adjustments thereto to
account for any adjustment to the Exercise Price that becomes effective, or any
event requiring an adjustment to the Exercise Price where the record date,
effective date or Ex-Dividend Date, as the case may be, of the event occurs, at
any time during the period when the Quoted Price is to be calculated.

(vi) Valuation Determinations.

(A) If the Required Warrant Holders object to any determination by the Board of
Directors of the Company of (I) the fair market value of any non-cash property
distributed on the Common Shares pursuant to Section 5.1(d), (II) the value of
any non-cash consideration payable in a tender or exchange offer pursuant to
Section 5.1(e), (III) the Current Market Price pursuant to clause (ii) of the
definition thereof or (IV) the value of a unit of Reference Property pursuant to
Section 5.1(h)(i)(A), the Required Warrant Holders shall have the right to
deliver a

 

18

--------------------------------------------------------------------------------

written notice to the Company within 10 days after the Company delivers written
notice to Holders pursuant to Section 11.2 of such determination requesting that
an Independent Financial Expert calculate such value as of the date of
determination referred to in the applicable provision.

(B) No later than two Business Days after receiving notice from the Required
Warrant Holders pursuant to Section 5.1(f)(vi)(A) above, the Company shall
provide notice to the Holders of an Independent Financial Expert selected by the
Company (the “Company Selected Expert”) to make the related valuation
determination (the date on which such notice is delivered, the “Notice Date”).
In the event that the Required Warrant Holders object in writing to the Company
Selected Expert within seven days of the Notice Date, then the Company and
Required Warrant Holders shall jointly select an Independent Financial Expert by
no later than the 17th day after the Notice Date. If the Company and the
Required Warrant Holders are unable to agree on a jointly selected Independent
Financial Expert, the Required Warrant Holders shall select promptly, but no
later than the 17th day after the Notice Date, a separate Independent Financial
Expert and such Independent Financial Expert and the Company Selected Expert
shall select promptly, but no later than the 19th day after the Notice Date, a
third Independent Financial Expert to make the relevant valuation determination.
The determination of the finally selected Independent Financial Expert shall be
final and conclusive, and the fees and expenses of any such Independent
Financial Experts shall be borne by the Company. The relevant determination
shall be completed no later than the date that is 30 days after the date the
Company receives notice from the Required Warrant Holders pursuant to
Section 5.1(f)(vi)(A) above.

(C) Within two Business Days after completion of the determination of the
Independent Financial Expert pursuant to Section 5.1(f)(vi)(B) above, the
Company shall cause the complete written report of the Independent Financial
Expert as to such determination to be delivered to the Holders.

(g) Adjustment to Shares Obtainable Upon Exercise. Whenever the Exercise Price
is adjusted as provided in Section 5.1(a), (b), (c), (d) or (e), the number of
Common Shares into which a Warrant is exercisable shall simultaneously be
adjusted by multiplying such number of Common Shares into which a Warrant is
exercisable immediately prior to such adjustment by a fraction, the numerator of
which shall be the Exercise Price immediately prior to such adjustment, and the
denominator of which shall be the Exercise Price immediately thereafter.

(h) Changes in Common Shares. In case at any time or from time to time after the
Original Issue Date while any Warrants remain outstanding and unexpired in whole
or in part, the Company shall be a party to or shall otherwise engage in any
transaction or series of related transactions constituting: (1) a merger of the
Company into, a direct or indirect sale of all of the Company’s equity to, a
consolidation, amalgamation or similar transaction of the Company with, or a
sale of all or substantially all of the assets of the Company and its
Subsidiaries (taken as a whole) to, any other Person in which the previously
outstanding Common Shares shall be (either directly or upon subsequent
liquidation) cancelled, reclassified or converted or changed into or exchanged
for securities or other property (including cash) or any combination of the
foregoing,

 

19

--------------------------------------------------------------------------------

or (2) any merger of another Person into the Company or any recapitalization,
reclassification or change of the Common Shares, in each case, in which the
previously outstanding Common Shares shall be cancelled, reclassified or
converted or changed into or exchanged for securities of the Company or other
property (including cash) of the Company or another Person or any combination of
the foregoing (any such transaction or series of related transactions in clauses
(1) or (2), a “Transaction”) then:

(i) in the case of any Transaction other than a Cash Transaction, as a condition
to the consummation of such Transaction, the Company shall or shall cause such
other Person, as the case may be, to execute and deliver to the Warrant Agent a
written instrument providing that:

(A) so long as any Warrant remains outstanding in whole or in part (including
after giving effect to the changes specified under clause (B) below), such
Warrant, upon the exercise thereof at any time on or after the consummation of
such Transaction, shall be exercisable (on such terms and subject to such
conditions as shall be as nearly equivalent as may be practicable to the
provisions set forth in this Agreement) into, in lieu of the Common Shares
issuable upon such exercise prior to such consummation, the kind and amount of
shares of stock, other securities or other property or assets (including cash or
any combination thereof) that would have been receivable upon such Transaction
by a holder of the number of Common Shares into which such Warrant was
exercisable immediately prior to such Transaction (“Reference Property,” with
each “unit of Reference Property” meaning the kind and amount of Reference
Property that a holder of one Common Share is entitled to receive); provided
that (I) if the Transaction causes the Common Shares to be converted into, or
exchanged for, the right to receive more than a single type of consideration
(determined based in part upon any form of stockholder election), then the
Reference Property shall be deemed to be the weighted average of the types and
amounts of consideration actually received by the holders of Common Shares and
(II) the Quoted Price and Current Market Price shall be calculated based on the
value of a unit of Reference Property, as determined by the Board of Directors
of the Company acting in good faith and in a commercially reasonable manner; and

(B) the rights and obligations of such other Person and the Holders in respect
of Reference Property shall be substantially unchanged to be as nearly
equivalent as may be practicable to the rights and obligations of the Company
and Holders in respect of Common Shares hereunder as set forth in Section 3.1
hereof;

(ii) with respect to any Transaction other than a Cash Transaction, such written
instrument under clause (i) above shall provide for adjustments which, for
events subsequent to the effective date of such written instrument shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 5. The above provisions of this Section 5.1(h) shall similarly apply to
successive Transactions; or

(iii) if such Transaction is a Cash Transaction, then, at the effective time of
the consummation of such Cash Transaction any Warrants not exercised prior to
the closing of such Cash Transaction shall automatically terminate and become
void and shall be cancelled for no further consideration.

 

20

--------------------------------------------------------------------------------

(i) Compliance with Governmental Requirements. The Company will take any
corporate action that may be necessary in order that the Company may validly and
legally issue fully paid and non-assessable Common Shares at any applicable
adjusted Exercise Price.

(j) Optional Tax Adjustment. The Company may at its option, at any time during
the term of the Warrants, increase the number of Common Shares into which each
Warrant is exercisable, or decrease the Exercise Price, in addition to those
changes required by Section 5.1(a), Section 5.1(b), Section 5.1(c),
Section 5.1(d) and Section 5.1(e) as deemed advisable by the Board of Directors
of the Company, in order that any event treated for Federal income tax purposes
as a dividend of stock or stock rights shall not be taxable to the recipients of
such dividend of stock or stock rights.

(k) Warrants Deemed Exercisable. For purposes solely of this Section 5, the
number of Common Shares which the holder of any Warrant would have been entitled
to receive had such Warrant been exercised in full at any time or into which any
Warrant was exercisable at any time shall be determined assuming such Warrant
was exercisable in full at such time.

(l) Notice of Adjustment. Upon the occurrence of each adjustment of the Exercise
Price or the number of Common Shares into which a Warrant is exercisable
pursuant to this Section 5.1, the Company at its expense shall promptly:

(i) compute such adjustment in accordance with the terms hereof;

(ii) after such adjustment becomes effective, deliver to all Holders, in
accordance with Section 11.1(b) and Section 11.2 (including by means of a
current report on Form 8-K), a notice setting forth such adjustment and showing
in detail the facts upon which such adjustment is based; and

(iii) deliver to the Warrant Agent a certificate of the Chief Financial Officer
of the Company setting forth the Exercise Price and the number of Common Shares
into which each Warrant is exercisable after such adjustment and setting forth a
brief, reasonably detailed statement of the facts requiring such adjustment and
the computation by which such adjustment was made (including a description of
the basis on which the Current Market Price of the Common Shares was
determined). As provided in Section 10, the Warrant Agent shall be entitled to
rely on and shall be fully protected in relying on such certificate and on any
adjustment or statement therein contained and shall be under no duty or
responsibility with respect to any such certificate, except to exhibit the same
from time to time to any Holder desiring an inspection thereof during reasonable
business hours. The Company hereby agrees that it will provide the Warrant Agent
with reasonable written notice of any Adjustment Event set forth in this
Section 5.1. The Company further agrees that it will provide to the Warrant
Agent any new or amended exercise terms. The Warrant Agent shall have no
obligation under any Section of this Agreement to determine whether an
Adjustment Event has occurred or to calculate any of the adjustments set forth
herein.

 

21

--------------------------------------------------------------------------------

(m) Statement on Warrant Certificates. Irrespective of any adjustment in the
Exercise Price or amount or kind of shares into which the Warrants are
exercisable, Warrant Certificates theretofore or thereafter issued may continue
to express the same Exercise Price initially applicable or amount or kind of
shares initially issuable upon exercise of the Warrants evidenced thereby
pursuant to this Agreement.

5.2 Fractional Interest. The Company shall not be required upon the exercise of
any Warrant (including, without limitation, under Section 3.7) to issue any
fractional Common Shares, but may, in lieu of issuing any fractional Common
Shares make an adjustment therefore in cash on the basis of the Current Market
Price per Common Share on the date of such exercise. If Warrant Certificates
evidencing more than one Warrant shall be presented for exercise at the same
time by the same Holder, the number of full Common Shares which shall be
issuable upon such exercise thereof shall be computed on the basis of the
aggregate number of Warrants so to be exercised. The Holders, by their
acceptance of the Warrant Certificates, expressly waive their right to receive
any fraction of a Common Share or a stock certificate representing a fraction of
a Common Share if such amount of cash is paid in lieu thereof. If the Company
shall decide that cash will be provided instead of fractional shares, then the
Company shall inform the Warrant Agent of the amount to be paid upon the
fractional exercise of the Warrant. Further, if the Company shall decide that
cash will be provided instead of fractional shares, then the Company shall
provide an initial funding of two thousand dollars ($2000) for the purpose of
issuing cash in lieu of fractional shares. From time to time thereafter,
Computershare may request additional funding to cover fractional payments.
Computershare shall have no obligation to make fractional payments unless the
Company shall have provided the necessary funds to pay in full all amounts due
and payable with respect thereto.

5.3 No Other Adjustments. Except in accordance with Section 5.1, the applicable
Exercise Price and the number of Common Shares obtainable upon exercise of any
Warrant will not be adjusted for the issuance of Common Shares or any securities
convertible into or exchangeable for Common Shares or carrying the right to
purchase any of the foregoing, including, without limitation

(i) upon the issuance of any other securities by the Company on or after the
Original Issue Date, or upon the issuance of Common Shares upon the exercise of
any such securities;

(ii) upon the issuance of any Common Shares or other securities or any payments
pursuant to any management or other equity incentive plan of the Company;

(iii) upon the issuance of any Common Shares pursuant to the exercise of the
Warrants; or

(iv) upon the issuance of any Common Shares or other securities of the Company
in connection with a business acquisition transaction.

 

22

--------------------------------------------------------------------------------

6.

Loss or Mutilation.

If (a) any mutilated Warrant Certificate is surrendered to the Warrant Agent or
(b) both (i) there shall be delivered to the Company and the Warrant Agent (A) a
claim by a Holder as to the destruction, loss or wrongful taking of any Warrant
Certificate of such Holder and a request thereby for a new replacement Warrant
Certificate, and (B) such open penalty surety bond and/or indemnity bond as may
be required by them to save each of them and any agent of either of them
harmless and (ii) such other reasonable requirements as may be imposed by the
Company or Warrant Agent as permitted by Section 8-405 of the Uniform Commercial
Code have been satisfied, then, in the absence of notice to the Company or the
Warrant Agent that such Warrant Certificate has been acquired by a “protected
purchaser” within the meaning of Section 8-405 of the Uniform Commercial Code or
bona fide purchaser, the Company shall execute and upon its written request the
Warrant Agent shall countersign and deliver to the registered Holder of the
lost, wrongfully taken, destroyed or mutilated Warrant Certificate, in exchange
therefore or in lieu thereof, a new Warrant Certificate of the same tenor and
for a like aggregate number of Warrants. At the written request of such
registered Holder, the new Warrant Certificate so issued shall be retained by
the Warrant Agent as having been surrendered for exercise, in lieu of delivery
thereof to such Holder, and shall be deemed for purposes of
Section 3.2(d)(i)(y)(II) to have been surrendered for exercise on the date the
conditions specified in clauses (A) or (B) of the preceding sentence were first
satisfied. The Warrant Agent may, at its option, issue replacement Warrants for
mutilated certificates upon presentation thereof without such indemnity.

Upon the issuance of any new Warrant Certificate under this Section 6, the
Company or the Warrant Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and other expenses (including the fees and expenses of the Warrant Agent
and of counsel to the Company) in connection therewith. The Warrant Agent has no
duty or obligation to issue a new Warrant Certificate unless it is satisfied
that such tax or charge has been paid.

Every new Warrant Certificate executed and delivered pursuant to this Section 6
in lieu of any lost, wrongfully taken or destroyed Warrant Certificate shall
constitute an additional contractual obligation of the Company, whether or not
the allegedly lost, wrongfully taken or destroyed Warrant Certificate shall be
at any time enforceable by anyone, and shall be entitled to the benefits of this
Agreement equally and proportionately with any and all other Warrant
Certificates duly executed and delivered hereunder.

The provisions of this Section 6 are exclusive and shall preclude (to the extent
lawful) all other rights or remedies with respect to the replacement of
mutilated, lost, wrongfully taken, or destroyed Warrant Certificates.

 

7.

Reservation and Authorization of Common Shares.

The Company covenants that, for the duration of the Exercise Period, the Company
will at all times reserve and keep available, from its authorized and unissued
Common Shares solely for issuance and delivery upon the exercise of the Warrants
and free of preemptive rights, such number of Common Shares and other
securities, cash or property as from time to time shall be issuable upon the
exercise in full of all outstanding Warrants for cash. The Company further
covenants that it shall, from time to time, take all steps necessary to increase
the authorized number of Common Shares if at any time the authorized number of
Common Shares remaining unissued would otherwise be insufficient to allow
delivery of all the Common Shares then deliverable upon the exercise in full of
all outstanding Warrants. The Company covenants that all Common Shares

 

23

--------------------------------------------------------------------------------

issuable upon exercise of the Warrants will, upon issuance, be duly and validly
issued, fully paid and nonassessable and will be free of restrictions on
transfer and will be free from all liens and charges in respect of the issue
thereof. The Company shall take all such actions as may be necessary to ensure
that all such Common Shares may be so issued without violation of any applicable
law or governmental regulation or any requirements of any U.S. national
securities exchange upon which Common Shares may be listed (except for official
notice of issuance which shall be immediately delivered by the Company upon each
such issuance). The Company covenants that all Common Shares will, at all times
that Warrants are exercisable, be duly approved for listing subject to official
notice of issuance on each securities exchange, if any, on which the Common
Shares are then listed. The Company covenants that the stock certificates issued
to evidence any Common Shares issued upon exercise of Warrants, if any, will
comply with the Yukon Business Corporations Act and any other applicable law.

The Company hereby authorizes and directs its current and future transfer agents
for the Common Shares at all times to reserve stock certificates for such number
of authorized shares, to the extent as, and if, required. The Company will
supply such transfer agents with duly executed stock certificates for such
purposes, to the extent as, and if, required.

 

8.

Warrant Transfer Books.

The Warrant Certificates evidencing the Warrants shall be issued in registered
form only. The Company shall cause to be kept at the office or offices of the
Warrant Agent designated for such purpose a warrant register (the “Warrant
Register”) in which, subject to such reasonable regulations as the Warrant Agent
may prescribe and such regulations as may be prescribed by law, the Company
shall provide for the registration of Warrant Certificates and of transfers or
exchanges of Warrant Certificates as herein provided.

Upon surrender for registration of transfer of any Warrant Certificate at the
office of the Warrant Agent designated for such purpose, the Company shall
execute, and the Warrant Agent shall countersign and deliver, in the name of the
designated transferee or transferees, one or more new Warrant Certificates
evidencing a like aggregate number of Warrants.

At the option of the Holder, Warrant Certificates may be exchanged at the office
or offices of the Warrant Agent upon payment of the charges hereinafter provided
for other Warrant Certificates evidencing a like aggregate number of Warrants.
Whenever any Warrant Certificates are so surrendered for exchange, the Company
shall execute, and the Warrant Agent shall countersign and deliver, the Warrant
Certificates of the same tenor and evidencing the same number of Warrants as
evidenced by the Warrant Certificates surrendered by the Holder making the
exchange.

All Warrant Certificates issued upon any registration of transfer or exchange of
Warrant Certificates shall be the valid obligations of the Company, evidencing
the same obligations, and entitled to the same benefits under this Agreement, as
the Warrant Certificates surrendered for such registration of transfer or
exchange.

 

24

--------------------------------------------------------------------------------

Every Warrant Certificate surrendered for registration of transfer or exchange
shall (if so required by the Company or the Warrant Agent) be: (i) duly endorsed
and containing a signature guarantee from an eligible guarantor institution
participating in a signature guarantee program approved by the Securities
Transfer Association, or (ii) be accompanied by a written instrument of transfer
in form satisfactory to the Company and the Warrant Agent, duly executed by the
Holder thereof or his attorney duly authorized in writing, also containing a
signature guarantee from an eligible guarantor institution participating in a
signature guarantee program approved by the Securities Transfer Association.
Further, to effect such transfer or exchange, all other necessary information or
documentation shall be provided as the Warrant Agent may reasonably request.

No service charge shall be made for any registration of transfer or exchange of
Warrant Certificates; provided, however, the Company or the Warrant Agent may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Warrant Certificates.

The Warrant Agent shall, upon the reasonable request of the Company from time to
time, deliver to the Company such reports of registered ownership of the
Warrants and such records of transactions with respect to the Warrants and the
Common Shares as the Company may reasonably request. The Warrant Agent shall,
upon reasonable advance notice, also make available to the Company for
inspection by the Company’s agents or employees (at the Company’s sole cost and
expense), from time to time as the Company may reasonably request, such original
books of accounts and records maintained by the Warrant Agent in connection with
the issuance and exercise of Warrants hereunder, such inspections to occur at
the office of the Warrant Agent designated for such purpose during normal
business hours.

The Warrant Agent shall keep copies of this Agreement and any notices given to
Holders hereunder available for inspection, upon reasonable advance notice, by
the Holders during normal business hours at the office of the Warrant Agent
designated for such purpose. The Company shall supply the Warrant Agent from
time to time with such numbers of copies of this Agreement as the Warrant Agent
may request.

 

9.

Warrant Holders.

9.1 No Voting or Dividend Rights.

(a) No Holder of a Warrant Certificate evidencing any Warrant shall have or
exercise any rights by virtue hereof as a holder of Common Shares of the
Company, including, without limitation, the right to vote, to receive dividends
and other distributions as a holder of Common Shares or to receive notice of, or
attend, meetings or any other proceedings of the holders of Common Shares.

(b) The consent of any Holder of a Warrant Certificate shall not be required
with respect to any action or proceeding of the Company.

(c) Except as provided in Section 4, no Holder of a Warrant Certificate, by
reason of the ownership or possession of a Warrant or the Warrant Certificate
representing the same, shall have any right to receive any cash dividends, stock
dividends, allotments or rights or other distributions paid, allotted or
distributed or distributable to the holders of Common Shares prior to, or for
which the relevant record date preceded, the date of the exercise of such
Warrant.

 

25

--------------------------------------------------------------------------------

(d) No Holder of a Warrant Certificate shall have any right not expressly
conferred hereunder or under, or by applicable law with respect to, the Warrant
Certificate held by such Holder.

9.2 Rights of Action. All rights of action against the Company in respect of
this Agreement, except rights of action vested in the Warrant Agent, are vested
in the Holders of the Warrant Certificates, and any Holder of any Warrant
Certificate, without the consent of the Warrant Agent or the Holder of any other
Warrant Certificate, may, in such Holder’s own behalf and for such Holder’s own
benefit, enforce and may institute and maintain any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of, such
Holder’s right to exercise such Holder’s Warrants in the manner provided in this
Agreement.

9.3 Treatment of Holders of Warrant Certificates. Every Holder, by virtue of
accepting a Warrant Certificate, consents and agrees with the Company, with the
Warrant Agent and with every subsequent holder of such Warrant Certificate that,
prior to due presentment of such Warrant Certificate for registration of
transfer, the Company and the Warrant Agent may treat the Person in whose name
the Warrant Certificate is registered as the owner thereof for all purposes and
as the Person entitled to exercise the rights granted under the Warrants, and
neither the Company, the Warrant Agent nor any agent thereof shall be affected
by any notice to the contrary.

 

10.

Concerning the Warrant Agent. Sections 10.1(d), 10.2, 10.3, 10.4, 10.5 and 10.6
shall survive termination or removal of the Warrant Agent.

10.1 Rights and Duties of the Warrant Agent.

(a) The Company hereby appoints the Warrant Agent to act as agent of the Company
as expressly set forth in this Agreement (and no implied terms or conditions
shall be read into this Agreement with respect to the Warrant Agent). The
Warrant Agent hereby accepts the appointment as agent of the Company and agrees
to perform that agency upon the express terms and conditions set forth in this
Agreement, by all of which the Company and the Holders of Warrant Certificates,
by their acceptance thereof, shall be bound; provided, however, that the terms
and conditions contained in the Warrant Certificates are subject to and governed
by this Agreement. The Warrant Agent shall act solely as agent of the Company
hereunder and does not assume any obligation or relationship of agency or trust
for or with any of the Holders or any beneficial owners of Warrants.

(b) The Warrant Agent shall not, by countersigning this Agreement, the Warrant
Certificates or by any other act hereunder, be deemed to make any
representations as to validity or authorization of (i) the Warrants or the
Warrant Certificates (except as to its countersignature thereon), (ii) any
securities or other property delivered upon exercise of any Warrant, (iii) the
accuracy of the computation of the number or kind or amount of stock or other
securities or other property deliverable upon exercise of any Warrant, (iv) the
correctness of any of the representations of the Company made in such
certificates that the Warrant Agent receives; or (v) any of the statements of
fact or recitals contained in this Warrant Agreement or the Warrant
Certificates. The Warrant Agent shall not at any time have any duty to calculate
or determine whether any facts exist that may require any adjustments pursuant
to Section 5 hereof with respect to the kind and amount of shares or

 

26

--------------------------------------------------------------------------------

other securities or any property issuable to Holders upon the exercise of
Warrants required from time to time. The Warrant Agent shall have no duty or
responsibility to determine the accuracy or correctness of such calculation or
with respect to the methods employed in making the same. The Warrant Agent shall
not be accountable with respect to the validity or value (or the kind or amount)
of any Common Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or upon any adjustment
pursuant to Section 5 hereof, and it makes no representation with respect
thereto. The Warrant Agent shall not be responsible for any failure of the
Company to make any cash payment or to issue, transfer or deliver any Common
Shares or stock certificates or other securities or property upon the surrender
of any Warrant Certificate for the purpose of exercise or upon any adjustment
pursuant to Section 5 hereof or to comply with any of the covenants of the
Company contained in Section 5 hereof. The Company shall perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further acts, instruments and assurances as may reasonably be
required by the Warrant Agent in order to enable it to carry out or perform its
duties under this Agreement.

(c) The Warrant Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Warrant Agreement or in the
Warrant Certificates (except its countersignature thereof) or be required to
verify the same, and all such statements and recitals are and shall be deemed to
have been made by the Company only.

(d) The Warrant Agent shall not have any duty or responsibility in the case of
the receipt of any written demand from any holder of Warrants with respect to
any action or default by the Company, including, without limiting the generality
of the foregoing, any duty or responsibility to initiate or attempt to initiate
any proceedings at law or otherwise or to make any demand upon the Company.

(e) The Warrant Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorney or agents, and the Warrant Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorney or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, absent gross negligence, willful misconduct, fraud or bad
faith (each as determined by a final judgment of a court of competent
jurisdiction) in the selection and continued employment thereof.

(f) The Warrant Agent may rely on and shall be held harmless and protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted to be taken by it absent gross negligence, willful misconduct, fraud or
bad faith (each as determined by a final judgment of a court of competent
jurisdiction) in reliance upon any certificate, statement, instrument, opinion,
notice, letter, facsimile transmission, telegram or other document, or any
security delivered to it, and believed by it to be genuine and to have been made
or signed by the proper party or parties, or upon any written or oral
instructions or statements from the Company with respect to any matter relating
to its acting as Warrant Agent hereunder.

 

27

--------------------------------------------------------------------------------

(g) The Warrant Agent shall not be obligated to expend or risk its own funds or
to take any action that it believes would expose or subject it to expense or
liability or to a risk of incurring expense or liability, unless it has been
furnished with assurances of repayment or indemnity satisfactory to it.

(h) The Warrant Agent shall not be liable or responsible for any failure of the
Company to comply with any of its obligations relating to any registration
statement filed with the Securities and Exchange Commission or this Warrant
Agreement, including without limitation obligations under applicable regulation
or law.

(i) The Warrant Agent shall not be accountable or under any duty or
responsibility for the use by the Company of any Warrants authenticated by the
Warrant Agent and delivered by it to the Company pursuant to this Warrant
Agreement or for the application by the Company of the proceeds of the issue and
sale, or exercise, of the Warrants.

(j) The Warrant Agent shall act hereunder solely as agent for the Company, and
its duties shall be determined solely by the express provisions hereof (and no
duties or obligations shall be inferred or implied). The Warrant Agent shall not
assume any obligations or relationship of agency or trust with any of the owners
or holders of the Warrants.

(k) The Warrant Agent may rely on and be fully authorized and protected in
acting or failing to act upon (a) any guaranty of signature by an “eligible
guarantor institution” that is a member or participant in the Securities
Transfer Agents Medallion Program or other comparable “signature guarantee
program” or insurance program in addition to, or in substitution for, the
foregoing; or (b) any law, act, regulation or any interpretation of the same
even though such law, act, or regulation may thereafter have been altered,
changed, amended or repealed.

(l) In the event the Warrant Agent believes any ambiguity or uncertainty exists
hereunder or in any notice, instruction, direction, request or other
communication, paper or document received by the Warrant Agent hereunder, the
Warrant Agent, may, in its sole discretion, refrain from taking any action, and
shall be fully protected and shall not be liable in any way to Company, the
holder of any Warrant Certificate or any other person or entity for refraining
from taking such action, unless the Warrant Agent receives written instructions
signed by the Company which eliminates such ambiguity or uncertainty to the
satisfaction of Warrant Agent.

(m) Whenever in the performance of its duties under this Agreement, the Warrant
Agent shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a statement signed by the Chairman of the Board, the Chief Executive Officer,
the President, a Vice President, the Chief Financial Officer or the Secretary of
the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon
such statement, and will be held harmless for such reliance, and shall not be
held liable in connection with any delay in receiving such statement.

 

28

--------------------------------------------------------------------------------

10.2 Limitation of Liability.

(a) The Warrant Agent shall be liable hereunder only for its own gross
negligence, willful misconduct, fraud or bad faith (each as determined by a
final judgment of a court of competent jurisdiction) in the performance of its
duties hereunder. Notwithstanding anything contained herein to the contrary, the
Warrant Agent’s aggregate liability during any term of this Agreement with
respect to, arising from, or arising in connection with this Agreement, or from
all services provided or omitted to be provided under this Agreement, whether in
contract, or in tort, or otherwise, is limited to, and shall not exceed, the
amounts paid hereunder by the Company to Warrant Agent as fees and charges, but
not including reimbursable expenses, during the twelve (12) months immediately
preceding the event for which recovery from Warrant Agent is being sought.
Neither party to this Agreement shall be liable to the other party for any
consequential, indirect, special or incidental damages under any provisions of
this Agreement or for any consequential, indirect, punitive, special or
incidental damages arising out of any act or failure to act hereunder even if
that party has been advised of or has foreseen the possibility of such damages.

(b) Exclusions. The Warrant Agent shall have no responsibility with respect to
the validity of this Agreement or with respect to the validity or execution of
any Warrant. The Warrant Agent shall not be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Warrant. The Warrant Agent shall not be responsible to make any adjustments
required under the provisions of Section 5 hereof or responsible for the manner,
method, or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment; nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Common Shares to be issued pursuant to this Agreement or any
Warrant or as to whether any Common Shares shall, when issued, be valid and
fully paid and non-assessable.

10.3 Indemnification.

(a) The Company covenants and agrees to indemnify and to hold the Warrant Agent
harmless against any costs, expenses (including reasonable and documented fees
of its legal counsel), losses or damages, which may be paid, incurred or
suffered by or to which it may become subject, arising from or out of, directly
or indirectly, any claims or liability resulting from its actions as Warrant
Agent pursuant hereto; provided, that such covenant and agreement does not
extend to, and the Warrant Agent shall not be indemnified with respect to, such
costs, expenses, losses and damages incurred or suffered by the Warrant Agent as
a result of, or arising out of, its gross negligence, bad faith, or willful
misconduct (each as determined by a final decision of a court of competent
jurisdiction).

(b) Instructions. From time to time, the Company may provide the Warrant Agent
with instructions, by Company Order or otherwise, concerning the services
performed by the Warrant Agent hereunder. In addition, at any time the Warrant
Agent may apply to any officer of Company for instruction, and may consult with
legal counsel for the Warrant Agent or the Company with respect to any matter
arising in connection with the services to be performed by the Warrant Agent
under this Warrant Agreement. Warrant Agent and its agents and subcontractors
shall not be liable and shall be indemnified by Company for any action taken,
suffered or omitted to be taken by Warrant Agent in reliance upon any Company
instructions or upon the advice or opinion of such counsel. Warrant Agent shall
not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from Company.

 

29

--------------------------------------------------------------------------------

10.4 Right to Consult Counsel. The Warrant Agent may at any time consult with
legal counsel satisfactory to it (who may be legal counsel for the Company), and
the Warrant Agent shall incur no liability or responsibility to the Company or
to any Holder for any action taken, suffered or omitted by it absent gross
negligence, willful misconduct, fraud or bad faith (each as determined by a
final judgment of a court of competent jurisdiction) in accordance with the
opinion or advice of such counsel.

10.5 Compensation and Reimbursement. The Company agrees to pay the Warrant Agent
from time to time compensation for all fees and expenses relating to its
services hereunder in accordance with a mutually agreed upon fee schedule and to
reimburse the Warrant Agent for reasonable expenses and disbursements, including
reasonable counsel fees incurred in connection with the preparation, delivery,
negotiation, amendment, administration and execution of this Agreement and the
exercise and performance of Warrant Agent’s duties hereunder.

10.6 Warrant Agent May Hold Company Securities. The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Warrant
Agreement. Nothing herein shall preclude the Warrant Agent from acting in any
other capacity for the Company or for any other legal entity. Nothing herein
shall preclude the Warrant Agent or any Countersigning Agent from acting in any
other capacity for the Company or for any other legal entity.

10.7 Resignation and Removal; Appointment of Successor.

(a) The Warrant Agent may resign its duties and be discharged from all further
duties and liability hereunder (except liability arising prior to such
resignation as a result of the Warrant Agent’s own gross negligence or willful
misconduct each as determined in a final non-appealable decision of a court of
competent jurisdiction) after giving 30 days’ prior written notice to the
Company. In the event the transfer agency relationship in effect between the
Company and the Warrant Agent terminates, the Warrant Agent will be deemed to
have resigned automatically and be discharged from its duties under this
Agreement as of the effective date of such termination. The Company may remove
the Warrant Agent upon 30 days’ written notice, and the Warrant Agent shall
thereupon in like manner be discharged from all further duties and liabilities
hereunder, except as aforesaid. The Warrant Agent shall, at the expense of the
Company, cause notice to be given in accordance with Section 11.1(b) to the
Company of said notice of resignation. Upon such resignation or removal, the
Company shall appoint in writing a new Warrant Agent. If the Company shall fail
to make such appointment within a period of 30 calendar days after it has been
notified in writing of such resignation by the resigning Warrant Agent or after
such removal, then the Holder of any Warrant Certificate may apply to any court
of competent jurisdiction for the appointment of a new Warrant Agent. The new
Warrant Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein

 

30

--------------------------------------------------------------------------------

as the Warrant Agent, without any further assurance, conveyance, act or deed;
but if for any reason it shall be reasonably necessary or expedient to execute
and deliver any further assurance, conveyance, act or deed, the same shall be
done at the reasonable expense of the Company and shall be legally and validly
executed and delivered by the resigning or removed Warrant Agent. The
predecessor Warrant Agent shall not be required to make any additional
expenditure (without assurance of reimbursement satisfactory to it) or assume
any additional liability in connection with the foregoing. Not later than the
effective date of any such appointment, the Company shall file notice thereof
with the resigning or removed Warrant Agent. Failure to give any notice provided
for in this Section 10.7(a), however, or any defect therein, shall not affect
the legality or validity of the resignation of the Warrant Agent or the
appointment of a new Warrant Agent as the case may be.

(b) Any Person into which the Warrant Agent or any new Warrant Agent may be
merged, or any Person resulting from any consolidation to which the Warrant
Agent or any new Warrant Agent shall be a party, shall be a successor Warrant
Agent under this Agreement without any further act. Any such successor Warrant
Agent shall promptly cause notice of its succession as Warrant Agent to be given
in accordance with Section 11.1(b) to each Holder of a Warrant Certificate at
such Holder’s last address as shown on the Warrant Register.

10.8 Appointment of Countersigning Agent.

(a) The Warrant Agent may appoint a Countersigning Agent or Agents which shall
be authorized to act on behalf of the Warrant Agent to countersign Warrant
Certificates issued upon original issue and upon exchange, registration of
transfer or pursuant to Section 6, and Warrant Certificates so countersigned
shall be entitled to the benefits of this Agreement equally and proportionately
with any and all other Warrant Certificates duly executed and delivered
hereunder. Wherever reference is made in this Agreement to the countersignature
and delivery of Warrant Certificates by the Warrant Agent or to Warrant
Certificates countersigned by the Warrant Agent, such reference shall be deemed
to include countersignature and delivery on behalf of the Warrant Agent by a
Countersigning Agent and Warrant Certificates countersigned by a Countersigning
Agent.

(b) Any Person into which a Countersigning Agent may be merged or any
corporation resulting from any consolidation to which such Countersigning Agent
shall be a party, shall be a successor Countersigning Agent without any further
act; provided, that, such corporation would be eligible for appointment as a new
Countersigning Agent under the provisions of Section 10.8(a), without the
execution or filing of any paper or any further act on the part of the Warrant
Agent or the Countersigning Agent. Any such successor Countersigning Agent shall
promptly cause notice of its succession as Countersigning Agent to be given in
accordance with Section 11.1(b) to each Holder of a Warrant Certificate at such
Holder’s last address as shown on the Warrant Register.

(c) A Countersigning Agent may resign at any time by giving 30 days’ prior
written notice thereof to the Warrant Agent and to the Company. The Warrant
Agent may at any time terminate the agency of a Countersigning Agent by giving
30 days’ prior written notice thereof to such Countersigning Agent and to the
Company.

 

31

--------------------------------------------------------------------------------

(d) The Warrant Agent agrees to pay to each Countersigning Agent from time to
time reasonable compensation for its services under this Section 10.8 and the
Warrant Agent shall be entitled to be reimbursed for such payments, subject to
the provisions of Section 10.5.

(e) Any Countersigning Agent shall have the same rights and immunities as those
of the Warrant Agent set forth Section 10 and this Agreement.

 

11.

Notices.

11.1 Notices Generally.

(a) Any request, notice, direction, authorization, consent, waiver, demand or
other communication permitted or authorized by this Agreement to be made upon,
given or furnished to or filed with the Company or the Warrant Agent by the
other party hereto or by any Holder shall be sufficient for every purpose
hereunder if in writing (including telecopy communication), sent via trackable
or first-class mail or delivered by hand (including by courier service) as
follows:

if to the Company, to:

Ultra Petroleum Corp.

116 Inverness Drive East, Suite 400

Englewood, Colorado 80112

 Attention:    Chief Financial Officer    Chief Accounting Officer    Legal
Department

Facsimile:

with a copy which shall not constitute notice to:

Kirkland & Ellis LLP

609 Main Street, Suite 4700

Houston, Texas 77002

 Attention:    Matthew R. Pacey  Facsimile:    (713) 836-3601

if to the Warrant Agent, to:

Computershare Inc.

250 Royall Street

Canton, MA 02021

 Facsimile:    (781) 575-2549  Attention:    Corporate Actions

 

32

--------------------------------------------------------------------------------

with a copy which shall not constitute notice to:

Computershare Inc.

480 Washington Boulevard, 29th Floor

Jersey City, New Jersey 07310

 Facsimile:    (201) 680-4610  Attention:    Legal Department

or, in either case, such other address as shall have been set forth in a notice
delivered in accordance with this Section 11.1(a).

All such communications shall be effective when sent.

Any Person that telecopies any communication hereunder to any Person shall, on
the same date as such telecopy is transmitted, also send, by trackable or first
class mail, postage prepaid and addressed to such Person as specified above, an
original copy of the communication so transmitted.

(b) Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, by trackable or first-class mail, to each Holder
affected by such event, at the address of such Holder as it appears in the
Warrant Register. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice.

In case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made by a method approved by the Warrant Agent as one
which would be most reliable under the circumstances for successfully delivering
the notice to the addressees shall constitute a sufficient notification for
every purpose hereunder.

Where this Agreement provides for notice of any event to a Holder of a Global
Warrant Certificate, such notice shall be sufficiently given if given to the
Depositary (or its designee), pursuant to its Applicable Procedures, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice.

11.2 Required Notices to Holders. In the event the Company shall:

(a) take any action that would result in an adjustment to the Exercise Price
and/or the number of Common Shares issuable upon exercise of a Warrant pursuant
to Section 5.1 or

(b) consummate any Transaction (each of (a) or (b), an “Action”);

 

33

--------------------------------------------------------------------------------

then, in each such case, unless the Company has made a filing with the
Commission, including pursuant to a Current Report on Form 8-K, which filing
discloses such Action, the Company shall cause to be delivered to the Warrant
Agent and shall give to each Holder of a Warrant Certificate, in accordance with
Section 11.1(b) hereof, a written notice of such Action, including, in the case
of an action pursuant to Section 11.2(a), the information required under
Section 5.1(k)(ii). Such notice shall be given promptly after taking such
Action.

If at any time the Company shall cancel any of the Actions for which notice has
been given under this Section 11.2 prior to the consummation thereof, the
Company shall give each Holder prompt notice of such cancellation in accordance
with Section 11.1(b), unless the Company has made a filing with the Commission,
including pursuant to a current report on Form 8-K, which filing discloses the
cancellation of such Actions.

If at any time the Board of Directors of the Company shall determine (I) the
fair market value of any non-cash property distributed on the Common Shares
pursuant to Section 5.1(d), (II) the value of any non-cash consideration payable
in a tender or exchange offer pursuant to Section 5.1(e), (III) the Current
Market Price pursuant to clause (ii) of the definition thereof or (IV) the value
of a unit of Reference Property pursuant to Section 5.1(h)(i)(A), the Company
shall provide written notice of such determination to each Holder of a Warrant
Certificate promptly after making such determination.

In addition, in the event the Company enters into any definitive agreement with
respect to any Transaction, unless the Company has made a filing with the
Commission, including pursuant to a Current Report on Form 8-K, which filing
discloses such agreement, the Company shall cause to be delivered to the Warrant
Agent and shall give to each Holder of a Warrant Certificate, in accordance with
Section 11.1(b), a notice of the entering into such definitive agreement.

 

12.

Inspection.

The Warrant Agent shall cause a copy of this Agreement to be available for
inspection by any Holder of any Warrant Certificate during the Warrant Agent’s
normal business hours at the office of the Warrant Agent designated for such
purpose. The Warrant Agent may require any such Holder to submit its Warrant
Certificate for inspection by the Warrant Agent.

 

13.

Amendments.

(a) This Agreement may be amended by the Company and the Warrant Agent with the
consent of the Required Warrant Holders.

(b) Notwithstanding the foregoing, the Company and the Warrant Agent may,
without the consent or concurrence of the Holders of the Warrant Certificates,
by supplemental agreement or otherwise, amend this Agreement for the purpose of
making any changes or corrections in this Agreement that (i) are required to
cure any ambiguity or to correct or supplement any defective or inconsistent
provision or clerical omission or mistake or manifest error herein contained or
(ii) add to the covenants and agreements of the Company in this Agreement
further covenants and agreements of the Company thereafter to be observed, or
surrender any rights or powers reserved to or conferred upon the Company in this
Agreement; provided, however, that in either case such amendment shall not
adversely affect the rights or interests of the Holders of the Warrant
Certificates hereunder in any material respect.

 

34

--------------------------------------------------------------------------------

(c) Notwithstanding anything to the contrary herein, the consent of each Holder
of any Warrant Certificate evidencing any Warrants affected thereby shall be
required for any supplement or amendment to this Agreement or the Warrants, or
any waiver thereof, that would: (i) increase the Exercise Price or decrease the
number of Common Shares receivable upon exercise of Warrants, in each case other
than as provided in Section 5.1; (ii) change the Expiration Date to an earlier
date; (iii) modify the provisions contained in Section 5.1 in a manner adverse
to the Holders of Warrant Certificates generally with respect to their Warrants;
(iv) modify the provisions of this Section 13; (v) modify the provisions of
Section 3.2(b); or (vi) make any change that adversely affects the exercise
rights of the Warrants.

(d) The Warrant Agent shall join with the Company in the execution and delivery
of any such amendment unless such amendment affects the Warrant Agent’s own
rights, duties or immunities hereunder (as determined by the Warrant Agent), in
which case the Warrant Agent may, but shall not be required to, join in such
execution and delivery; provided, that, as a condition precedent to the Warrant
Agent’s execution of any amendment to this Agreement, the Company shall deliver
to the Warrant Agent a certificate from an Appropriate Officer that states that
the proposed amendment is in compliance with the terms of this Section 13. No
supplement or amendment to this Agreement shall be effective unless duly
executed by the Warrant Agent. Upon execution and delivery of any amendment
pursuant to this Section 13, such amendment shall be considered a part of this
Agreement for all purposes and every Holder of a Warrant Certificate theretofore
or thereafter countersigned and delivered hereunder shall be bound thereby.

(e) Promptly after the execution by the Company and the Warrant Agent of any
such amendment, unless the Company has made a filing with the Commission,
including pursuant to a current report on Form 8-K, which filing discloses such
adjustment, the Company shall give notice to the Holders of Warrant
Certificates, setting forth in general terms the substance of such amendment, in
accordance with the provisions of Section 11.1(b). Any failure of the Company to
mail such notice or any defect therein, shall not, however, in any way impair or
affect the validity of any such amendment.

 

14.

Waivers.

The Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the Required Warrant Holders, as required pursuant to
Section 13, subject to Section 13(c).

 

15.

Successor to Company.

So long as Warrants remain outstanding, the Company will not consolidate with,
amalgamate with, merge with or into, or sell, convey, transfer or lease all or
substantially all of its properties and assets to another Person, other than in
a Cash Transaction, unless the resulting, surviving or transferee Person (the
“Successor Company”), if not the Company, shall be a corporation organized and
existing under the laws of Canada or any of its Provinces, the United States of
America, any State thereof or the District of Columbia, and shall expressly
assume by a supplemental agreement, executed and delivered to the Warrant Agent,
in form reasonably satisfactory to the Warrant Agent, the due and punctual
performance of every covenant of this Agreement on the part of the Company to be
performed and observed and shall have provided for

 

35

--------------------------------------------------------------------------------

exercise rights in accordance with Section 5.1(h)(i). Upon the consummation of
such assumption, the Successor Company shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Agreement with
the same effect as if such Successor Company had been named as the Company
herein.

 

16.

Headings.

The section headings contained in this Agreement are inserted for convenience
only and will not affect in any way the meaning or interpretation of this
Agreement.

 

17.

Counterparts.

This Agreement may be executed in two or more counterparts, each of which will
be deemed to be an original, but all of which together constitute one and the
same instrument. A signature to this Agreement transmitted electronically shall
have the same authority, effect and enforceability as an original signature.

 

18.

Severability.

The provisions of this Agreement will be deemed severable and the invalidity or
unenforceability of any provision hereof will not affect the validity or
enforceability of the other provisions hereof; provided, that, if any provision
of this Agreement, as applied to any party or to any circumstance, is adjudged
by a court or governmental body not to be enforceable in accordance with its
terms, the parties agree that the court or governmental body making such
determination will have the power to modify the provision in a manner consistent
with its objectives such that it is enforceable, and/or to delete specific words
or phrases, and in its reduced form, such provision will then be enforceable and
will be enforced; provided, further, that, if any such modified or excluded
provision shall adversely affect the rights, immunities, liabilities, duties or
obligations of the Warrant Agent, the Warrant Agent shall be entitled to resign
immediately upon written notice to the Company.

 

19.

No Redemption.

The Warrants shall not be subject to redemption by the Company or any other
Person; provided, that, the Warrants may be acquired by means other than a
redemption, whether by tender offer, open market purchases, negotiated
transactions or otherwise, in accordance with applicable securities laws, so
long as such acquisition does not otherwise violate the terms of this Agreement.

 

20.

Persons Benefiting.

This Agreement shall be binding upon and inure to the benefit of the Company,
the Warrant Agent and the Holders from time to time. Nothing in this Agreement,
express or implied, is intended to confer upon any person other than the
Company, the Warrant Agent and the Holders any rights or remedies under or by
reason of this Agreement or any part hereof, and all covenants, conditions,
stipulations, promises and agreements contained in this Warrant Agreement shall
be for the sole and exclusive benefit of the parties hereto and of the Holders.
Each Holder, by acceptance of a Warrant Certificate, agrees to all of the terms
and provisions of this Agreement applicable thereto.

 

36

--------------------------------------------------------------------------------

21.

Applicable Law; Submission to Jurisdiction; Service of Process; Waiver of
Immunity.

THIS AGREEMENT, EACH WARRANT CERTIFICATE ISSUED HEREUNDER, EACH WARRANT
EVIDENCED THEREBY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO AND
THERETO, INCLUDING THE INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEABILITY
THEREOF, SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

The Company irrevocably consents and agrees, for the benefit of the Holders from
time to time of the Warrants and the Warrant Agent, that any legal action, suit
or proceeding against it with respect to obligations, liabilities or any other
matter arising out of or in connection with this Warrant Agreement or the
Warrants may be brought in the courts of the State of New York or the courts of
the United States located in the Borough of Manhattan, New York City, New York
and hereby irrevocably consents and submits to the non-exclusive jurisdiction of
each such court in personam, generally and unconditionally with respect to any
action, suit or proceeding for itself in respect of its properties, assets and
revenues.

The Company irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions, suits or proceedings arising out of or
in connection with this Warrant Agreement brought in the courts of the State of
New York or the courts of the United States located in the Borough of Manhattan,
New York City, New York and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum.

The Company irrevocably appoints Cogency Global Inc. as its authorized agent in
the Borough of Manhattan in the City of New York upon which process may be
served in any legal action, suit or proceeding against it with respect to
obligations, liabilities or any other matter arising out of or in connection
with this Warrant Agreement or the Warrants, and agrees that service of process
upon such agent, and written notice of said service to the Company by the person
serving the same to Ultra Petroleum Corp., 116 Inverness Drive East, Suite 400,
Englewood, Colorado 80112, Attention: Legal Department, shall be deemed in every
respect effective service of process upon the Company in any such action, suit
or proceeding. The Company further agrees to take any and all action as may be
necessary to maintain such appointment of such agent in full force and effect
for as long as any Warrants remain outstanding. If for any reason such agent
shall cease to be such agent for service of process, the Company shall forthwith
appoint a new agent of recognized standing for service of process in the State
of New York and deliver to the Warrant Agent a copy of the new agent’s
acceptance of that appointment within five Business Days of such acceptance.
Nothing herein shall affect the right of the Warrant Agent, any agent or any
Holder to serve process in any other manner permitted by law. To the extent that
the Company has or hereafter may acquire any sovereign or other immunity from
jurisdiction of any court or from any legal process with respect to itself or
its property, the Company irrevocably waives such immunity in respect of its
obligations hereunder or under any Warrant.

 

37

--------------------------------------------------------------------------------

22.

Entire Agreement.

This Agreement sets forth the entire agreement of the parties hereto as to the
subject matter hereof and supersedes all previous agreements among all or some
of the parties hereto with respect thereto, whether written, oral or otherwise.

 

23.

Force Majeure.

Notwithstanding anything to the contrary contained herein, the Warrant Agent
will not be liable for any delays or failures in performance resulting from acts
beyond its reasonable control including, without limitation, acts of God,
terrorist acts, shortage of supply, disruptions in public utilities,
interruptions or malfunction of computer facilities, or loss of data due to
power failures or mechanical difficulties with information storage or retrieval
systems, labor difficulties, war, or civil unrest.

 

24.

Intentionally deleted.

 

25.

Information Rights.

Whether or not the Company is subject to the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act, the Company shall (a) make
available to the Holders without cost to any Holder any reports or other
information delivered to the holders of Common Shares solely in their capacity
as stockholders by the Company or its Subsidiaries at the same time such reports
or other information are delivered or made available to such holders of Common
Shares solely in their capacity as stockholders, and (b) provide Holders access
to conference calls, webcasts or similar electronic communications to which
holders of Common Shares are provided access by the Company or its Subsidiaries
solely in their capacity as stockholders, if any, at the same time such
conference calls, webcasts or similar communications are made accessible to such
holders of Common Shares solely in their capacity as stockholders.

 

26.

Confidentiality.

The Warrant Agent and the Company agree that all books, records, information and
data pertaining to the business of the other party, including inter alia,
personal, non-public warrant holder information, which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement including the
fees for services shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law, including,
without limitation, pursuant to subpoenas from state or federal government
authorities (e.g., in divorce and criminal actions).

 

27.

Tax Treatment.

The Warrant Agent and the Company intend to treat, for U.S. federal income tax
purposes, the issuance of the Warrants as a contribution of such Warrants by the
Company to Ultra Resources, Inc., a Delaware corporation, followed by the
delivery of such Warrants by Ultra Resources, Inc. to the recipients party to
the Exchange Agreement. The parties hereto shall not take any action
inconsistent with such treatment, unless otherwise required by a “determination”
within the meaning of Section 1313(a) of the Internal Revenue Code of 1986, as
amended.

[Remainder of Page Intentionally Left Blank]

 

38

--------------------------------------------------------------------------------

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

 

ULTRA PETROLEUM CORP.

By:

  /s/ Brad Johnson  

Name: Brad Johnson

 

Title:   Interim Chief Executive Officer

 

COMPUTERSHARE INC.

By:

  /s/ Collin Ekeogu  

Name: Collin Ekeogu

 

Title:   Manager, Corporate Actions

 

COMPUTERSHARE TRUST COMPANY, N.A.

By:

  /s/ Collin Ekeogu  

Name: Collin Ekeogu

 

Title:   Manager, Corporate Actions

 

[Signature Page to Warrant Agreement]

--------------------------------------------------------------------------------

EXHIBIT A

FORM OF WARRANT CERTIFICATE

[FACE OF WARRANT CERTIFICATE]1

ULTRA PETROLEUM CORP.

WARRANT CERTIFICATE

EVIDENCING

WARRANTS TO PURCHASE COMMON SHARES

[FACE]

 

No. [___]   CUSIP No. [___]

[UNLESS THIS GLOBAL WARRANT CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO ULTRA PETROLEUM CORP. (THE “COMPANY”), THE CUSTODIAN OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

TRANSFER OF THIS GLOBAL WARRANT CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN
WHOLE, AND NOT IN PART, TO THE COMPANY, DTC, THEIR SUCCESSORS AND THEIR
RESPECTIVE NOMINEES.]2

 

 

1 

To be removed in the versions of the Definitive Warrant Certificates printed in
multiple copies for use by the Warrant Agent in preparing Definitive Warrants
Certificates for issuance and delivery from time to time to holders.

2 

Include only on Global Warrant Certificate.

 

A-1

--------------------------------------------------------------------------------

ULTRA PETROLEUM CORP.

 

No. [__]    [__,__,___] Warrants

CUSIP No. [•]

THIS CERTIFIES THAT, for value received, [_______________________], or
registered assigns, is the registered owner of the number of Warrants to
purchase Common Shares of Ultra Petroleum Corp., a corporation incorporated
under the Yukon Business Corporations Act (the “Company”, which term includes
any successor thereto under the Warrant Agreement, dated as of December 21, 2018
(the “Warrant Agreement”), between the Company, Computershare Inc., a Delaware
corporation, and its wholly-owned subsidiary Computershare Trust Company, N.A.,
a federally chartered trust company) specified above [or such lesser number as
may from time to time be endorsed on the “Schedule of Decreases in Warrants”
attached hereto]3, and is entitled, subject to and upon compliance with the
provisions hereof and of the Warrant Agreement, at such Holder’s option, at any
time when the Warrants evidenced hereby are exercisable, to purchase from the
Company one Common Share of the Company for each Warrant evidenced hereby, at
the purchase price of $0.01 per share (as adjusted from time to time, the
“Exercise Price”), payable in full at the time of purchase, the number of Common
Shares into which and the Exercise Price at which each Warrant shall be
exercisable each being subject to adjustment as provided in Section 5 of the
Warrant Agreement.

All Common Shares issuable by the Company upon the exercise of Warrants shall,
upon such issuance, be duly and validly issued and fully paid and nonassessable.
The Company shall pay any and all documentary, issuance, registration, stamp and
similar taxes that may be payable in respect of the issue or delivery of Common
Shares on exercise of Warrants. The Company shall not be required, however, to
pay any tax or other charge imposed in respect of any transfer involved in the
issue and delivery of Common Shares in book-entry form or any certificates for
Common Shares or payment of cash to any Person other than the Holder of the
Warrant Certificate evidencing the exercised Warrant, and in case of such
transfer or payment, the Warrant Agent and the Company shall not be required to
issue or deliver any Common Shares in book-entry form or any certificate or pay
any cash until (a) such tax or charge has been paid or an amount sufficient for
the payment thereof has been delivered to the Warrant Agent or to the Company,
(b) it has been established to the Company’s satisfaction that any such tax or
other charge that is or may become due has been paid or (c) the receipt of any
other such information as set forth in the Warrant Agreement.

Subject to and upon compliance with the terms and conditions set forth herein,
each Warrant evidenced hereby may be exercised by the Holder hereof at the
Exercise Price then in effect on any Business Day from and after the Original
Issue Date until 5:00 p.m., New York time, on the Expiration Date in the Warrant
Agreement; provided, however, that no such Holder may exercise any Warrant
evidenced hereby until the Current Market Price of the Common Shares has equaled
or exceeded $2.50 per share (subject to adjustment in the same manner as the
Exercise Price) on any Trading Day. For the avoidance of doubt, the Warrants
evidenced hereby shall be exercisable from and after any Trading Day on which
the Current Market Price of the Common Shares has equaled or exceeded $2.50 per
share (subject to adjustment in the same manner as the Exercise Price),
regardless of the Current Market Price of the Common Shares on the applicable
Exercise Date.

 

 

3 

Include only on Global Warrant Certificate.

 

A-2

--------------------------------------------------------------------------------

Subject to the provisions hereof and of the Warrant Agreement, the Holder of
this Warrant Certificate may exercise all or any whole number of the Warrants
evidenced hereby by, in the case of a Global Warrant Certificate, complying with
the Applicable Procedures of the Depositary to provide notice of the number of
Warrants being exercised and, if applicable, whether Cashless Exercise is being
elected with respect thereto, and delivering such Warrants by book-entry
transfer through the facilities of the Depositary to the Warrant Agent in
accordance with the Applicable Procedures and otherwise complying with the
Applicable Procedures in respect of the exercise of such Warrants or, in the
case of a Definitive Warrant Certificate, delivery to the Warrant Agent of the
Exercise Form on the reverse hereof, setting forth the number of Warrants being
exercised and, if applicable, whether Cashless Exercise is being elected with
respect thereto, and otherwise properly completed and duly executed by the
Holder thereof to the Warrant Agent, and surrendering this Warrant Certificate
to the Warrant Agent at its office maintained for such purpose, together with
payment in full of the Exercise Price as then in effect for each Common Share
receivable upon exercise of each Warrant being submitted for exercise unless
Cashless Exercise is being elected with respect thereto. Any such payment of the
Exercise Price is to be by wire transfer in immediately available funds to such
account of the Company at such banking institution as the Company shall have
designated from time to time for such purpose.

Reference is hereby made to the further provisions of this Warrant Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

Unless this Warrant Certificate has been countersigned by the Warrant Agent by
manual signature of an authorized officer on behalf of the Warrant Agent, this
Warrant Certificate shall not be valid for any purpose and no Warrant evidenced
hereby shall be exercisable.

This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Warrant Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Warrant Agent, the Company and the Holders.

IN WITNESS WHEREOF, the Company has caused this certificate to be duly executed
under its corporate seal.

Dated: [________ __], 20[__]

 

   

ULTRA PETROLEUM CORP.

[SEAL]

     

By:

   

ATTEST:

       

 

A-3

--------------------------------------------------------------------------------

Countersigned:    Computershare Trust Company, N.A., as Warrant Agent   
[                 ] OR

 

By:

       

By:

      Authorized Agent       as Countersigning Agent      

By:

            Authorized Officer

Reverse of Warrant Certificate

ULTRA PETROLEUM CORP.

WARRANT CERTIFICATE

EVIDENCING

WARRANTS TO PURCHASE COMMON SHARES

The Warrants evidenced hereby are one of a duly authorized issue of Warrants of
the Company designated as its Warrants to Purchase Common Shares (“Warrants”),
limited in aggregate number to 10,919,499 issued under and in accordance with
the Warrant Agreement, dated as of December 21, 2018 (the “Warrant Agreement”),
between the Company, Computershare Inc., a Delaware corporation
(“Computershare”), and its wholly-owned subsidiary Computershare Trust Company,
N.A., a federally chartered trust company (collectively, the “Warrant Agent”,
which term includes any successor thereto permitted under the Warrant
Agreement), to which the Warrant Agreement and all amendments thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Warrant Agent, the Holders
of Warrant Certificates and the owners of the Warrants evidenced thereby and of
the terms upon which the Warrant Certificates are, and are to be, countersigned
and delivered. A copy of the Warrant Agreement shall be available at all
reasonable times at the office of the Warrant Agent for inspection by the Holder
hereof.

The Warrant Agreement provides that, in addition to certain adjustments to the
number of Common Shares into which a Warrant is exercisable and the Exercise
Price required to be made in certain circumstances, in the case of any
Transaction (other than a Cash Transaction) the Company shall cause the other
Person involved in such Transaction to execute and deliver to the Warrant Agent
a written instrument providing that (i) the Warrants evidenced hereby, if then
outstanding, will be exercisable thereafter, during the period the Warrants
evidenced hereby shall be exercisable as specified herein, only into the
Reference Property that would have been receivable upon such Transaction by a
holder of the number of Common Shares that would have been issued upon exercise
of such Warrant if such Warrant had been exercised in full immediately prior to
such Transaction (upon certain assumptions specified in the Warrant Agreement);
and (ii) the rights and obligations of the other Person involved in such
Transaction and the holders in respect of Reference Property shall be
substantially unchanged to be as nearly equivalent as may be practicable to the
rights and obligations of the Company and Holders in respect of Common Shares.

 

A-4

--------------------------------------------------------------------------------

Except as provided in the Warrant Agreement, all outstanding Warrants shall
expire and all rights of the Holders of Warrant Certificates evidencing such
Warrants shall automatically terminate and cease to exist, as of 5:00 p.m., New
York time, on the Expiration Date. The “Expiration Date” shall mean the earliest
to occur of (x) July 14, 2025; (y) the date of consummation of a Cash
Transaction to which clause (iii) of Section 5.1(h) of the Warrant Agreement
applies; and (z) a Winding Up.

In the event of the exercise of less than all of the Warrants evidenced hereby,
a new Warrant Certificate of the same tenor and for the number of Warrants which
are not exercised shall be issued by the Company in the name or upon the written
order of the Holder of this Warrant Certificate upon the cancellation hereof.

The Warrant Certificates are issuable only in registered form in denominations
of whole numbers of Warrants. Upon surrender at the office of the Warrant Agent
and payment of the charges specified herein and in the Warrant Agreement, this
Warrant Certificate may be exchanged for Warrant Certificates in other
authorized denominations or the transfer hereof may be registered in whole or in
part in authorized denominations to one or more designated transferees;
provided, however, that such other Warrant Certificates issued upon exchange or
registration of transfer shall evidence the same aggregate number of Warrants as
this Warrant Certificate. The Company shall cause to be kept at the office or
offices of the Warrant Agent the Warrant Register in which, subject to such
reasonable regulations as the Warrant Agent may prescribe and such regulations
as may be prescribed by law, the Company shall provide for the registration of
Warrant Certificates and of transfers or exchanges of Warrant Certificates. No
service charge shall be made for any registration of transfer or exchange of
Warrant Certificates; provided, however, the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Warrant
Certificates.

Prior to due presentment of this Warrant Certificate for registration of
transfer, the Company, the Warrant Agent and any agent of the Company or the
Warrant Agent may treat the Person in whose name this Warrant Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Warrant Agent nor any such agent shall be affected by notice to the contrary.

The Warrant Agreement permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of Warrant Certificates under the Warrant
Agreement at any time by the Company and the Warrant Agent with the consent of
the Required Warrant Holders.

Until the exercise of any Warrant, subject to the provisions of the Warrant
Agreement and except as may be specifically provided for in the Warrant
Agreement, (i) no Holder of a Warrant Certificate evidencing any Warrant shall
have or exercise any rights by virtue hereof as a holder of Common Shares of the
Company, including, without limitation, the right to vote, to receive dividends
and other distributions or to receive notice of, or attend meetings of,
stockholders or any other proceedings of the Company; (ii) the consent of any
such Holder shall not be required with

 

A-5

--------------------------------------------------------------------------------

respect to any action or proceeding of the Company; (iii) except as provided
with respect to a Winding Up of the Company, no such Holder, by reason of the
ownership or possession of a Warrant or the Warrant Certificate representing the
same, shall have any right to receive any cash dividends, stock dividends,
allotments or rights or other distributions (except as specifically provided in
the Warrant Agreement), paid, allotted or distributed or distributable to the
stockholders of the Company prior to or for which the relevant record date
preceded the date of the exercise of such Warrant; and (iv) no such Holder shall
have any right not expressly conferred by the Warrant or Warrant Certificate
held by such Holder.

This Warrant Certificate, each Warrant evidenced thereby and the Warrant
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

All terms used in this Warrant Certificate which are defined in the Warrant
Agreement shall have the meanings assigned to them in the Warrant Agreement.

 

A-6

--------------------------------------------------------------------------------

Exercise Form

Computershare Inc.

Address

Attention: Transfer Department

Re: Ultra Petroleum Corp. Warrant Agreement, dated as of December 21, 2018

In accordance with and subject to the terms and conditions hereof and of the
Warrant Agreement, the undersigned registered Holder of this Warrant Certificate
hereby irrevocably elects to exercise                          Warrants
evidenced by this Warrant Certificate and represents that for each of the
Warrants evidenced hereby being exercised such Holder either has (please check
one box only):

 

  ☐

tendered the Exercise Price in the aggregate amount of $                     by
wire transfer in immediately available funds to such account of the Company at
such banking institution as the Company shall have designated from time to time
for such purpose; or

 

  ☐

elected a “Cashless Exercise”.

The undersigned requests that the Common Shares issuable upon exercise be in
fully registered form in such denominations and registered in such names and
delivered, together with any other property receivable upon exercise, in such
manner as is specified in the instructions set forth below.

If the number of Warrants exercised is less than all of the Warrants evidenced
hereby, (i) if this Warrant Certificate is a Global Warrant Certificate, the
Warrant Agent shall endorse the “Schedule of Decreases in Warrants” attached
hereto to reflect the Warrants being exercised or (ii) if this Warrant
Certificate is a Definitive Warrant Certificate, the undersigned requests that a
new Definitive Warrant Certificate representing the remaining Warrants evidenced
hereby be issued and delivered to the undersigned unless otherwise specified in
the instructions below.

 

A-7

--------------------------------------------------------------------------------

Dated:    

 

    Name:    

 

            (Please Print)   (Insert Social Security or Other Identifying Number
of Holder)     Address:                           Signature       (Signature
must conform in all respects to name of Holder as specified on the face of this
Warrant Certificate and must bear a signature guarantee by a bank, trust company
or member firm of a U.S. national securities exchange.)

Signature Guaranteed:

Instructions (i) as to denominations and names of Common Shares issuable upon
exercise and as to delivery of such securities and any other property issuable
upon exercise and (ii) if applicable, as to Definitive Warrant Certificates
evidencing unexercised Warrants:

Assignment

(Form of Assignment To Be Executed If Holder Desires To Transfer Warrant
Certificate)

FOR VALUE RECEIVED                                                       hereby
sells, assigns and transfers unto

Please insert social security or

other identifying number

(Please print name and address including zip code)

the Warrants represented by the within Warrant Certificate and does hereby
irrevocably constitute and appoint                                     
Attorney, to transfer said Warrant Certificate on the books of the within-named
Company with full power of substitution in the premises.

 

Dated:    

 

    Signature    

 

      (Signature must conform in all respects to name of Holder as specified on
the face of this Warrant Certificate and must bear a signature guarantee by a
bank, trust company or member firm of a U.S. national securities exchange.)

 

A-8

--------------------------------------------------------------------------------

SCHEDULE A

SCHEDULE OF DECREASES IN WARRANTS

The following decreases in the number of Warrants evidenced by this Global
Warrant Certificate have been made:

 

Date

  

Amount of decrease in

number of Warrants

evidenced by this Global

Warrant Certificate

  

Number of Warrants

evidenced by this Global

Warrant Certificate

following such decrease

  

Signature of authorized
signatory]4

 

 

4 

Include only on Global Warrant Certificate.

 

A-9

--------------------------------------------------------------------------------

EXHIBIT B

FORM OF LOCK-UP AGREEMENT

Lock-Up Agreement

[Date]

Ultra Petroleum Corp.

16 Inverness Drive East, Suite 400,

Englewood, Colorado 80112

Attention: Legal Department

Computershare Trust Company N.A.

250 Royall Street

Canton, MA 02021

 

  Re:

Ultra Petroleum Corp. - Lock-Up Agreement

Ladies and Gentlemen:

In accordance with the Warrant Agreement, dated as of December 21, 2018 (the
“Warrant Agreement”), by and among Ultra Petroleum Corp., a corporation
incorporated under the Yukon Business Corporations Act (and any Successor
Company that becomes successor to the Company in accordance with Section 15)
(the “Company”), Computershare Inc., a Delaware corporation (“Computershare”)
and its wholly-owned subsidiary Computershare Trust Company, N.A., a federally
chartered trust company (and any successors of such Warrant Agent appointed in
accordance with the terms hereof) (collectively, the “Warrant Agent”), on or
about the date first set forth above, the undersigned has exercised Warrants to
purchase [                    ] Common Shares (the “Issued Shares”). Terms
capitalized but not otherwise defined in this Lock-Up Agreement shall have the
meanings ascribed to such terms in the Warrant Agreement.

In consideration of the issuance by the Company of the Issued Shares, and of
other good and valuable consideration the receipt and sufficiency of which is
hereby acknowledged, the undersigned agrees that, during the period beginning
from the date of this Lock-Up Agreement and continuing to and including the date
60 days after such date, the undersigned will not sell any of the Issued Shares.

Notwithstanding the foregoing, the undersigned may transfer the Issued Shares
(i) pursuant to an order of a court or regulatory agency or to comply with any
regulations related to the undersigned’s ownership of Common Shares, (ii) as a
distribution or transfer to general partners, limited partners, members or
stockholders of the undersigned, (iii) to the undersigned’s subsidiaries,
affiliates, or to any investment fund or other entity which controls or manages
or is controlled or managed by, or under common control or management with, the
undersigned, (iv) in connection with a tender or exchange offer, (v) in the
event of a merger, (vi) by operation of law, (vii) by way of foreclosure on a
pledge of the Issued Shares, (viii) with the prior written

 

B-1

--------------------------------------------------------------------------------

consent of the Company or (ix) if the undersigned is given a client order to
close the account that holds the Issued Shares and such order is bona fide and
is not given for the purpose of avoiding the restrictions under this Agreement.
The undersigned is expressly permitted to offer, sell, contract to sell, pledge,
grant any option to purchase, make any short sale or otherwise dispose of any
Common Shares other than the Issued Shares.

This Lock-Up Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

 

Very truly yours,  

 

Exact Name of Shareholder  

 

Authorized Signature  

 

Title

 

B-2