Document:

EX-10.1

 Exhibit 10.1 

EXCHANGE AGREEMENT 

This EXCHANGE AGREEMENT (this “Agreement”), is made and entered into as of November 2, 2016, by and between APPROACH
RESOURCES INC., a Delaware company (the “Company”), and each of WILKS BROTHERS, LLC, a Texas limited liability company (“Wilks Brothers”) and SDW INVESTMENTS, LLC, a Texas limited liability company
(“SDW”) (Wilks Brothers and SDW, collectively, the “Noteholders” and each, a “Noteholder”). 

RECITALS 
 WHEREAS, the Company
has issued and outstanding $230,320,000 principal amount of the 7.00% Senior Notes due 2021 (the “Notes”), issued pursuant to that certain Base Indenture, dated as of June 11, 2013 (the “Base Indenture”)
by and among the Company, the guarantors party thereto and Wilmington Trust, National Association, as Trustee (the “Trustee”), as supplemented by the First Supplemental Indenture, dated as of June 11, 2013 (the “First
Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) by and among the Company, the guarantors party thereto and the Trustee; 

WHEREAS, each Noteholder is the Beneficial Owner of the aggregate principal amount of Notes set forth opposite its name on Schedule A
attached hereto; 
 WHEREAS, the Parties have determined to enter into this Agreement, pursuant to which, amongst other things, each
Noteholder shall transfer to the Company, and the Company shall acquire, directly or indirectly, all of the Notes held by such Noteholder in exchange for, shares of common stock, par value $0.01 per share, of the Company (the “Common
Stock”), at an exchange ratio (the “Exchange Ratio”) of 300 shares of Common Stock for each $1,000 aggregate principal of amount of Notes exchanged pursuant hereto (the “Exchange Transaction”); 

WHEREAS, in connection with the Exchange Transaction, the Company and the Noteholders have entered into or desire to enter into this Agreement
and, at Closing, the Stockholders Agreement and the Registration Rights Agreement (each, the “Additional Agreements”) in accordance herewith; 

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

1. Exchange and Purchase. Subject to the terms and conditions set forth in this Agreement, at the Closing each Noteholder will assign,
transfer and deliver to the Company all of its right, title and interest in and to all of the Exchange Notes set forth opposite its name on Schedule A attached hereto free and clear of all mortgages, liens, pledges, security interests,
charges, claims, restrictions and encumbrances of any nature whatsoever, other than liens arising under this Agreement to the extent surviving the Closing (collectively, “Liens”), against issuance and delivery, or payment, to such
Noteholder, which shall be in full satisfaction of all obligations 

 
of the Company under the Exchange Notes, of (i) a number of shares of Common Stock (the “Shares”) equal to (A) the Exchange Ratio, multiplied by (B) (x) the
aggregate principal amount of Exchange Notes, divided by (y) $1,000, and (ii) an amount in U.S. dollars (the “Cash Payment”) equal to the accrued (but unpaid) interest, from and including the most recent date to which
interest has been paid pursuant to the terms of the Notes and the Indenture to but excluding the date of the Closing, on the aggregate principal amount of Exchange Notes set forth opposite its name on Schedule A attached hereto. 

2. Closing and Closing Deliveries. The closing of the Exchange Transaction (the “Closing”) shall take place at the
offices of Weil, Gotshal & Manges LLP, 200 Crescent Court, Suite 300, Dallas, Texas 75201, at 10:00 a.m., local time, on the third Business Day following the satisfaction or, to the extent permitted by applicable law, waiver of the
conditions set forth in Section 6 below (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of those conditions),
unless another date, time or place is agreed to in writing by the parties hereto. 
 At the Closing: 

a. the Company shall: 
 (i)
deliver to each Noteholder’s custodian by means of book-entry transfer, which custodian shall be designated in writing by such Noteholder not less than five (5) business days prior to the Closing, Common Stock registered in the name of
such Noteholder representing the aggregate number of Shares issuable to such Noteholder as determined pursuant to Section 1; 

(ii) pay to each Noteholder, by wire transfer of immediately available funds to such account or accounts as designated by each Noteholder at
least five (5) Business Days prior to the Closing, the Cash Payment payable to such Noteholder as determined pursuant to Section 1. above; 

(iii) deliver to the Noteholders a counterpart of the stockholders agreement (the “Stockholders Agreement”) in the form
attached hereto as Exhibit A duly executed by the Company; 
 (iv) deliver to the Noteholders a counterpart of the registration
rights agreement (the “Registration Rights Agreement”) in the form attached hereto as Exhibit B duly executed by the Company; and 

b. the Noteholders shall: 
 (i)
effect by book entry, in accordance with the applicable procedures of the Depository Trust Company, the delivery to the Company (or its transfer agent or designee) of all of the Exchange Notes set forth opposite the relevant Noteholder’s name
on Schedule A attached hereto and all other documents and instruments reasonably requested by the Company to effect the transfer of the Notes to the Company; 

  
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 (ii) deliver to the Company a counterpart of the Stockholders Agreement duly executed by each
Noteholder; and 
 (iii) deliver to the Company a counterpart of the Registration Rights Agreement duly executed by each Noteholder. 

3. Representations and Warranties of the Noteholders. Each Noteholder, severally and not jointly nor jointly and severally, represents
and warrants to the Company as follows: 
 a. Title to Notes. (i) Such Noteholder is the sole Beneficial Owner of the
aggregate principal amount of Notes set forth opposite its name on Schedule A hereto (“Exchange Notes”), the Exchange Notes set forth opposite the name of a Noteholder on Schedule A hereto are held by such
Noteholder free and clear of all Liens, and none of the Noteholder or any Affiliate of such Noteholder owns or holds beneficially or of record any Notes (or any rights or interests of any nature whatsoever in or with respect to any Notes) other than
Exchange Notes set forth on Schedule A hereto, and (ii) such Noteholder is the sole Beneficial Owner of the number of shares of Common Stock (“Owned Shares”) set forth opposite its name on Schedule A
hereto, the Owned Shares set forth opposite the name of a Noteholder on Schedule A hereto are held by such Noteholder free and clear of all Liens and none of the Noteholder or any Affiliate of such Noteholder owns or holds beneficially
or of record any shares of Common Stock (or any rights or interests of any nature whatsoever in or with respect to any Common Stock) other than Owned Shares set forth on Schedule A hereto. Other than this Agreement and the Consent, such
Noteholder is not party to or bound by any contract, option or other arrangement or understanding with respect to the purchase, sale, delivery, transfer, gift, pledge, hypothecation, encumbrance, assignment or other disposition or acquisition of
(including by operation of law) (i) any Notes (or any rights or interests of any nature whatsoever in or with respect to any Notes), or as to voting, agreeing or consenting (or abstaining therefrom) with respect to any amendment to or waiver of
any terms of, or taking any action whatsoever with respect to, the Notes and/or the Indenture or (ii) any shares of Common Stock (or any rights or interests of any nature whatsoever in or with respect to any shares of Common Stock), or as to
voting, agreeing or consenting (or abstaining therefrom) with respect to any matter relating to, or taking any action whatsoever with respect to, the Company or any shares of Common Stock (whether or not a Beneficial Owner thereof as of the date
hereof). 
 b. Existence; Authority; Binding Effect. Such Noteholder is duly incorporated or organized, validly existing and in good
standing under the laws of its jurisdiction of organization. Such Noteholder has full legal capacity, power and authority to execute and deliver this Agreement, the Additional Agreements, the Consent attached hereto as Exhibit C (the
“Consent”), to which the form of Second Supplemental Indenture (the “Supplemental Indenture”) is attached, and any other agreements or instruments executed or to be executed by it in connection herewith and to
consummate the transactions contemplated herein and therein. The execution, delivery and performance by such Noteholder of this Agreement, the Additional Agreements, the Consent and any other agreements or instruments executed or to be executed and
delivered by such Noteholder in connection herewith, and the consummation of the transactions contemplated hereby and thereby by such Noteholder, have been duly and validly authorized and approved by the board of directors or other governing body of
such Noteholder, and no other actions on the part of such Noteholder are necessary in respect thereof. Each of this 

  
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Agreement and the Consent is, and each of the Additional Agreements and the other agreements and instruments executed hereunder by such Noteholder in connection herewith will be, a valid and
binding obligation of such Noteholder, in each case, to the extent party thereto, enforceable in accordance with its respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a proceeding
in equity or at law). The Consent, and every proxy or agency authority granted therein, is a continuing consent as such term is used in the Indenture, is coupled with an interest and is irrevocable for the term of this Agreement. 

c. No Violation. None of the execution and delivery of this Agreement, the Consent or any of the Additional Agreements or any other
agreements or instruments executed and delivered by such Noteholder in connection herewith, nor the performance of any obligations hereunder or thereunder by such Noteholder, including the exchange of the Notes pursuant to this Agreement, will
conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under or result in the creation of any lien upon the Notes held by such Noteholder under (i) the organizational documents of such
person, including any limited liability company agreement, certificate of incorporation or bylaws or similar agreement; (ii) any law, order, writ, injunction or decree applicable to such Noteholder or by which any property or asset of such
Noteholder is bound or affected; or (iii) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise, or other instrument or obligation to which such Noteholder is a party or by which such Noteholder or any
property or asset of such Noteholder is bound or affected, except, in the case of clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults, events, losses, payments, cancellations, encumbrances, or other occurrences that
are not, individually or in the aggregate, reasonably expected to prevent or materially delay the Closing or the performance by such Noteholder of any of its obligations under this Agreement or any Additional Agreement to which it is or will be a
party. 
 d. Consents and Approvals. No consent, approval, order or authorization of, or registration, declaration, filing with or
notice to, any governmental entity or any other Person is required to be obtained, made or given by or with respect to such Noteholder in connection with the execution and delivery of this Agreement, the Consent or any Additional Agreements or other
agreements or instruments executed and delivered hereunder or thereunder by such Noteholder, or the performance of any obligations hereunder or thereunder by such Noteholder, including the exchange of the Notes. 

e. Transfer Restrictions. The offer and sale of the Shares to be issued pursuant to this Agreement are intended to be exempt from
registration pursuant to Section 4(a)(2) of the Securities Act. Such Noteholder acknowledges and agrees that (i) the Shares are “restricted securities” (as such term is commonly used with regard to Federal and state securities
laws), (ii) the Shares may not be offered or sold except pursuant to an effective registration statement under the Securities Act or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of
the Securities Act, and otherwise in accordance with applicable state securities laws, (iii) the Shares are subject to the terms and conditions of the Stockholders Agreement, and (iv) in connection with any transfer of the Shares other
than pursuant to an effective registration statement, the Company may require the 

  
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transferor thereof to provide to the Company documents or other support, including, but not limited to, certain representations by such Noteholder, reasonably requested by the Company and a
customary opinion of counsel experienced in such matters and reasonably acceptable to the Company. Such Noteholder acknowledges and agrees that the Shares will contain a legend in substantially the following form (and customary corresponding
instructions and stop-transfer orders will be made in the stock transfer records, electronically or otherwise, for shares in book-entry form): 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR PURSUANT TO THE
SECURITIES OR “BLUE SKY” LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED, OR OTHERWISE ASSIGNED EXCEPT PURSUANT TO A REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER SUCH ACT
OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR ANY APPLICABLE “BLUE SKY” LAWS. 
 THIS SECURITY IS
SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN A STOCKHOLDERS AGREEMENT, A COPY OF WHICH MAY BE OBTAINED UPON REQUEST FROM THE COMPANY OR ANY SUCCESSOR THERETO. 

f. Ability to Bear Risk and Sophistication. Such Noteholder understands that the Exchange Transaction and ownership and investment in
the Shares, involves substantial risk. Such Noteholder has such knowledge and experience in financial and business matters, and its financial situation is such, that it is capable of evaluating the merits and risks of its participation in the
Exchange Transaction and of bearing the economic risk of its investment in the Shares (including the complete loss of such investment). 
 g.
Qualified Institutional Buyer. Such Noteholder is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, and is acquiring the Shares for investment purposes and solely for its account and
not with a view to further distribution or resale in violation of the Securities Act. 
 h. No Brokers or Finders. Such Noteholder has
not incurred nor become liable for any broker’s commission or finder’s fee relating to the transactions contemplated by this Agreement. 

i. Advice. Such Noteholder has completed its own independent inquiry and has relied fully upon the advice of its own legal counsel,
accountant, financial and other advisors in determining the legal, tax, financial and other consequences of this Agreement and the transactions contemplated hereby and the suitability of this Agreement and the transactions contemplated hereby for
such Noteholder and its particular circumstances. 

  
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 j. Certain Information. The information provided by such Noteholder for inclusion or
incorporation by reference in the Proxy Statement will not, at the time it is first mailed to the Company’s stockholders, at the time of any amendments or supplements thereto and at the time of the Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading. Each of the Noteholder Board
Designees has agreed, and each of the Noteholder Designee Replacements shall have agreed, to serve as a director and to provide any information reasonably requested by the Company for inclusion in the Proxy Statement. 

k. No Other Representations or Warranties. Except for the representations and warranties contained in Section 4 hereof, none
of the Company nor any Affiliate or Representative of the Company nor any other Person has made or is making any representation or warranty of any kind or nature whatsoever, oral or written, express or implied with respect to the Company, this
Agreement, the Additional Agreements or the transactions contemplated hereby or thereby and such Noteholder disclaims any reliance on any representation or warranty of the Company or any Affiliate or Representative thereof except for the
representations and warranties expressly set forth in Section 4 hereof. 
 4. Representations and Warranties of the
Company. The Company represents and warrants to the Noteholders as follows: 
 a. Existence; Authority; Binding Effect. The
Company and each subsidiary of the Company is (i) duly incorporated or organized, validly existing and in good standing under the laws of its jurisdiction of organization and has full power and authority to own, lease and operate its properties
and to carry on its business as it is now being conducted and (ii) duly qualified or licensed as a foreign corporation to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated
by it or the nature of its business makes such qualification or licensing necessary, except for any such failures to be so qualified or licensed and in good standing as that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect on the Company. The execution and delivery of this Agreement, the Additional Agreements, the Supplemental Indenture, and any other agreements or instruments executed or to be executed and delivered in
connection herewith, and the consummation of the transactions contemplated hereby and thereby, by the Company, including the issuance and delivery of the Shares to the Noteholders pursuant to this Agreement, have been duly and validly authorized and
approved by the board of directors of the Company and no other actions on the part of the Company are necessary in respect thereof other than (i) the affirmative vote (in person or by proxy) of the holders of a majority of Common Stock present
or represented by proxy at the Stockholders Meeting on the proposal presented for the approval of the issuance of the Shares for purposes of NASDAQ Listing Rules 5635(b) and (d) in connection with the consummation of the transactions
contemplated by this Agreement (the “Nasdaq Approval”) and (ii) solely with respect to consummation of the Exchange Offer, the affirmative vote (in person or by proxy) of the majority of the outstanding shares of Common Stock
on the proposal presented at the Stockholders Meeting for the approval of the Amendment (the “Charter Amendment”) to the Restated Certificate of Incorporation (the “Charter”) in the form attached hereto as
Exhibit D (the “Charter Amendment Approval” and, collectively with the Nasdaq Approval, the 

  
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“Shareholder Approvals”). This Agreement is, and each of the Additional Agreements, the Supplemental Indenture and the other agreements and instruments executed hereunder by the
Company in connection herewith will be, a valid and binding obligation of the Company, enforceable in accordance with its respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws relating to or affecting enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law). 
 b. No Violation. None of the execution, delivery or, upon receipt of the Nasdaq Approval and, with
respect to the Exchange Offer, upon receipt of the Charter Amendment Approval, performance of this Agreement, the Supplemental Indenture, each of the Additional Agreements and each of the other agreements or instruments executed and delivered by the
Company in connection herewith, will conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under or give rise to a right of termination, cancellation, modification or acceleration of any
obligation or to a loss of a benefit under, or result in the creation of any lien upon any of the properties or assets of the Company or any of its subsidiaries under (i) the certificate of incorporation, bylaws or similar organizational
documents of the Company or any of its subsidiaries; (ii) any law, order, writ, injunction or decree applicable to the Company or any of its subsidiaries or by which any property or asset of the Company or any of its subsidiaries is bound or
affected; or (iii) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise, or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which the Company or any of its
subsidiaries or any property or asset of the Company or any of its subsidiaries is bound or affected, except, in the case of clause (i), for obtaining a resignation from a director if and when required to comply with Section 2.1.1(a) of
the Stockholders Agreement, and in the case of clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults, events, losses, payments, cancellations, encumbrances, or other occurrences that are not, individually or in the
aggregate, reasonably expected to (A) have a material adverse effect on the assets, liabilities, condition (financial or otherwise), business or results of operations of the Company and its subsidiaries taken as a whole, or (B) prevent or
materially delay the performance by the Company of any of its obligations under this Agreement or any Additional Agreement to which it is or will be a party (collectively, (A) and (B), and except as hereinafter provided, a “Material
Adverse Effect”). 
 c. Consents and Approvals. No consent, approval, order or authorization of, or registration,
declaration, filing with or notice to, any governmental entity or any other Person is required to be obtained, made or given by or with respect to the Company or any subsidiary of the Company in connection with the execution and delivery of this
Agreement, the Supplemental Indenture or any Additional Agreements or other agreements or instruments executed and delivered hereunder by the Company, or the performance of any obligations hereunder or thereunder by the Company, except for
(i) the Nasdaq Approval, (ii) with respect to the Exchange Offer, the filing of the Charter Amendment with the Delaware Secretary of State subject to receipt of the Charter Amendment Approval, (iii) the filing of the Proxy Statement
with the SEC, and (iv) such other filings by the Company with the SEC as are appropriate in connection with or required by the federal and state securities laws and rules and regulations thereunder in connection with the transactions
contemplated hereby. 

  
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 d. Capitalization. 

(i) As of the date of this Agreement, (A) the authorized capital stock of the Company consists of 90,000,000 shares of Common Stock, par
value $0.01 per share, and 10,000,000 shares of preferred stock, par value $0.01 per share; (B) (x) 41,608,374 shares of Common Stock are issued and outstanding and (y) no shares of preferred stock of the Company are issued and
outstanding; and (C) all outstanding shares of Common Stock have been duly authorized and validly issued and are fully paid and nonassessable and have been issued in compliance with all applicable preemptive, participation, rights of first
refusal and other similar rights. 
 (ii) Other than pursuant to this Agreement and other than shares of Common Stock issued and issuable
pursuant to options and other rights granted under the Company’s 2007 Stock Incentive Plan, as the same may be amended from time to time, there are (A) no securities, options, warrants, calls, pre-emptive exchange, conversion, purchase or
subscription rights, or other rights, agreements, arrangements or commitments of any kind, contingent or otherwise, that could require the Company to issue, sell or otherwise cause to become outstanding, any shares of capital stock or other equity
or debt interest in the Company or require the Company to grant or enter into any such option, warrant, call, subscription, conversion, purchase or other right, agreement, arrangement or commitment, and no authorization has been given therefor, and
(B) no commitments or agreements of any kind to which the Company or any subsidiary is bound obligating the Company to either (x) repurchase, redeem or otherwise acquire any shares of the Company’s capital stock or any of the Notes
(other than to the extent required by the Indenture) or (y) accelerate the vesting or exercisability of any instrument referred to in clause (A) of this paragraph as a result of this Agreement, either alone or upon the occurrence of any
additional subsequent events. 
 e. Issuance of the Shares. Upon issuance in accordance herewith, the Shares issuable hereunder will
be duly authorized, validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under applicable federal and state securities laws and under the Additional Agreements or any Liens created or
imposed by any Noteholder. 
 f. Offering. Subject to the accuracy of each Noteholder’s representations and warranties in
Section 3.e., f., g. and i. hereof, the offer, exchange, purchase and issuance of the Shares to each of the Noteholders constitute transactions exempt from the registration requirements of Section 5 of the
Securities Act and will be issued in compliance with all applicable federal and state securities laws. 
 g. No Solicitation. No form
of general solicitation or advertising (within the meaning of Regulation D under the Securities Act) has been or will be used by the Company or any of its Representatives in connection with the offer or sale of any of the Shares, including,
without limitation, articles, notices or other communications published in any newspaper, magazine or similar medium or broadcast over television or radio, or any seminar or meeting whose attendees have been invited by any general solicitation or
general advertising. 

  
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 h. Litigation. There is no pending action, suit, claim, inquiry, investigation, audit or
proceeding by or before any governmental authority, or any arbitration, mediation or other similar proceeding (each of the foregoing, a “Proceeding”), and to the knowledge of the Company, there is no Proceeding threatened against
the Company or any of its subsidiaries, that seeks to prevent, hinder, modify, delay or challenge the transactions contemplated hereby or any action taken or to be taken pursuant hereto. 

i. SEC Documents. The Company has timely filed and furnished all required reports, schedules, forms, certifications, prospectuses, and
registration, and other statements with the SEC since January 1, 2015 (collectively and together with all documents filed on a voluntary basis on Form 8-K, and in each case including all exhibits and schedules thereto and documents
incorporated by reference therein, the “SEC Documents”). As of their respective effective dates and as of their respective SEC filing dates, the SEC Documents complied in all material respects with the requirements of the Exchange
Act, the Securities Act and the Sarbanes-Oxley Act of 2002, as the case may be, applicable to such SEC Documents, and none of the SEC Documents as of such respective dates contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. 

j. No Other Representations or Warranties. Except for the representations and warranties contained in Section 3 hereof, none
of the Noteholders nor any Affiliate or Representative of the Noteholders nor any other Person has made or is making any representation or warranty of any kind or nature whatsoever, oral or written, express or implied with respect to the
Noteholders, this Agreement, the Additional Agreements or the transactions contemplated hereby or thereby and the Company (on behalf of itself and each of its subsidiaries) disclaims any reliance on any representation or warranty of any Noteholder
or any Affiliate or Representative thereof except for the representations and expressly set forth in Section 3 hereof. 
 5.
Covenants of the Company and of the Noteholders. 
 a. Restrictions on Acquisition and Transfer. 

(i) From the date hereof until the earlier of (1) (x) the termination of this Agreement in accordance with its terms if such
termination is the result of any reason other than a breach by Noteholder or (y) the three-month anniversary of the termination of this Agreement in accordance with its terms if such termination is the result of a breach by Noteholder and
(2) the Closing, each Noteholder agrees that it shall not, and it shall cause each of its Affiliates not to, except pursuant to the terms of this Agreement, directly or indirectly (A) purchase, sell, deliver, transfer, give, pledge,
encumber, assign or otherwise dispose of or acquire, or enter into any contract, option or other arrangement or understanding with respect to the purchase, sale, delivery, transfer, gift, pledge, hypothecation, encumbrance, assignment or other
disposition or acquisition of (including by operation of law) any Notes (or any rights or interests of any nature whatsoever in or with respect to any Notes), or as to voting, agreeing or consenting (or abstaining therefrom) with respect to any
amendment to or waiver of any terms of, or taking any other action whatsoever with respect to, the Notes and/or the Indenture, or (B) agree (whether or not in writing) to take any of the actions referred to in the foregoing clause (A) of
this Section 5.a.(i); 

  
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 (ii) From the date hereof until the earlier of (1) (x) the termination of this
Agreement in accordance with its terms if such termination is the result of any reason other than a breach by Noteholder or (y) the three-month anniversary of the termination of this Agreement in accordance with its terms if such termination is
the result of a breach by Noteholder and (2) the Closing, each Noteholder agrees that it shall not, and it shall cause each of its Affiliates not to, directly or indirectly: 

(A) in any manner acquire, agree to acquire or make any proposal or offer to acquire, directly or indirectly, any voting
securities or property of the Company or any rights or options to acquire any such voting securities or property, except pursuant to the terms of this Agreement; 

(B) propose to enter into, directly or indirectly, any merger or business combination involving the Company or propose to
purchase, directly or indirectly, a material portion of the assets of the Company; 
 (C) make, or in any way participate,
directly or indirectly, in any “solicitation” of “proxies” (as such terms are used in Regulation 14A promulgated under the Exchange Act) to vote or consent, or seek or advise or influence any person with respect to the
voting of, or granting of a consent with respect to, any voting securities of the Company or to vote or abstain from voting on the Nasdaq Approval, or cause or permit its Beneficially Owned Shares to be present for purposes of determining whether a
quorum is present, at the Stockholders Meeting; 
 (D) form, join or in any way participate in a “group” (within
the meaning of Section 13(d)(3) of the Exchange Act) with respect to any voting securities of the Company; 
 (E)
request the Company, the board of directors or any committee of the board of directors, or any of their respective Representatives to amend or waive any provision of this Section 5; 

(F) except as may be required by law (provided that such legal requirement does not arise as a result of or in connection with
any breach of this Agreement by the Noteholders or its Representatives or Affiliates), disclose any intention, plan or arrangement inconsistent with the foregoing; 

(G) provide, or act as agent for the purpose of obtaining, debt or equity financing for any transaction described in
clauses (A) or (B) of this Section 5.a.(ii); or 
 (H) advise, assist or encourage any other persons in
connection with any of the foregoing. 

  
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 b. Press Release. The Company and each Noteholder agree that the Company shall issue a
press release, in form and substance reasonably acceptable to the Company and the Noteholders, announcing the Exchange Transaction prior to the opening of the financial markets in New York City no later than the business day immediately after the
date hereof. 
 c. Proxy Statement. 

(i) The Company agrees to use its commercially reasonable efforts to prepare and file with the SEC as soon as practicable after the Company has
received certified copies of each of the fully executed Consent Letters attached to the Consent a proxy statement to be sent to holders of the Company’s Common Stock in connection with a meeting of holders of the Common Stock (including any
adjournment or postponement thereof, the “Stockholders Meeting”) to consider the Nasdaq Approval, the Charter Amendment Approval and such other matters as the Company in its reasonable determination may present at the Stockholders
Meeting (the “Proxy Statement”). The Proxy Statement shall comply as to form in all material respects with the applicable provisions of the Exchange Act and the rules and regulations thereunder. The Noteholders and their advisors
will have the right to review and comment upon the Proxy Statement and any amendment thereto prior to the filing thereof with the SEC, the Company agrees to consider any such comments and include in the Proxy Statement or any amendment thereto such
comments as it deems appropriate or advisable, in its good faith discretion, and the Company shall provide to the Noteholders a draft of the Proxy Statement and each amendment thereto no later than five (5) business days prior to the
anticipated filing date thereof for purposes of such review and comment (it being understood and agreed that the Company shall not be required to delay the filing of (or thereafter amend) the Proxy Statement in respect of comments not provided
within such five (5) business day period). The Company shall use its commercially reasonable efforts to (A) clear any comments provided by the SEC with respect to the Proxy Statement as promptly as reasonably practicable after receipt
thereof, and (B) mail or otherwise deliver (or cause to be mailed or otherwise delivered) the Proxy Statement to the holders of the Company’s Common Stock promptly after, and hold the Stockholders Meeting for the purposes of obtaining the
Shareholder Approvals not later than sixty (60) calendar days after, (x) the 10th calendar day after the Proxy Statement in preliminary form has been filed with the SEC if the SEC has not informed the Company that it intends to review the
Proxy Statement by such 10th calendar day or (y) the 10th calendar day after the SEC has informed the Company that it has no further comments on the Proxy Statement. Except as permitted in clause (x) of the following sentence, the board of
directors of the Company shall not withdraw, qualify or modify in a manner adverse to the Noteholders, or publicly propose to withdraw, qualify or modify in a manner adverse to the Noteholders, its recommendation of the Shareholder Approvals.
Notwithstanding the foregoing or anything to the contrary contained in this Agreement, but without limiting the other obligations of the Company contained in this Section 5.c.(i), (x) if prior to obtaining the Shareholder Approvals,
the board of directors determines in good faith, after consultation with outside counsel, that failure to so withdraw, qualify or modify its recommendation would be inconsistent with the exercise of its fiduciary duties, the board of directors may
withdraw or modify its recommendation of either the Nasdaq Approval or the Charter Amendment Approval, or both of them and (y) the Company may adjourn or postpone the Stockholders Meeting one or more times (i) to a date not more than
twenty (20) days after the original date of such Stockholders 

  
 11 

 
Meeting if as of the time for which the Stockholders Meeting is originally scheduled (as set forth in the Proxy Statement) there are insufficient shares of Common Stock of the Company represented
(either in person or by proxy) to constitute a quorum necessary to conduct the business of the Stockholders Meeting or there shall be insufficient affirmative votes for the Nasdaq Approval to satisfy the condition in Section 6.a.(i) or
(ii) as otherwise necessary to comply with applicable law. Except as set forth in the immediately preceding sentence, the Company shall not postpone or adjourn the Stockholders Meeting without the consent of the Noteholders. 

(ii) At all times from and after the date hereof to and through the completion of the Stockholders Meeting, the Noteholders shall, and shall
cause each of their respective Affiliates and each person named in Section 5.e. below (and any other director nominee proposed pursuant thereto) director nominees pursuant to the Stockholders Agreement to, use commercially reasonable
efforts to provide to the Company (and to update) such information relating to any of them for inclusion in the Proxy Statement as may be reasonably requested by the Company that is required by Schedule 14A under the Exchange Act or is
otherwise necessary, proper or advisable in connection with the preparation, filing and mailing thereof, including information in respect of its nominees to the board of directors of the Company pursuant to the terms and conditions of the
Stockholders Agreement (and customary questionnaires for purposes of preparing the Proxy Statement executed by such nominees) or any national securities exchange on which the Company’s shares are then listed. 

d. Listing. Subject to receipt of the Nasdaq Approval, the Company shall use its reasonable best efforts to take, or cause to be taken,
all actions, and do or cause to be done all things, reasonably necessary, proper or advisable on its part under applicable laws and the rules and policies of the Nasdaq Global Select Market (“Nasdaq”) to cause the Shares to be
approved for listing on Nasdaq, subject to official notice of issuance (the “Listing”). 
 e. Board Composition. The
Company shall take such action as is necessary to cause (i) at the time of the Closing the full board of directors of the Company to consist of five directors and (ii) effective upon the Closing (1) the full board of directors to be
increased by three members to consist of eight directors and (2) Morgan D. Neff (or such other person as the Noteholders may designate in writing delivered to the Company not later than 5 business days prior to the Closing, provided that such
person is reasonably acceptable to the board of directors of the Company) to be appointed as a director in Class I (as such term is used in the Charter), Matthew D. Wilks (or such other person as the Noteholders may designate in writing
delivered to the Company not later than 5 business days prior to the Closing, provided that such person is reasonably acceptable to the board of directors of the Company) to be appointed as a director in Class II (as such term is used in the
Charter), and Matthew R. Kahn (or such other person as the Noteholders may designate in writing delivered to the Company not later than 5 business days prior to the Closing, provided that such person is reasonably acceptable to the board of
directors of the Company) to be appointed as a director in Class III (as such term is used in the Charter); provided, however, that the person designated by the Noteholders pursuant to the foregoing as a director in Class III
shall be required to execute and deliver to the Company, at the time of and as a condition to such appointment, a conditional resignation in such form as attached as Exhibit A to the Stockholders Agreement, which conditional resignation shall become
effective only in the circumstances in which the Noteholders are entitled to designate two (2) members of the board 

  
 12 

 
pursuant to Section 2.1.1(a) and 2.1.7(c) of the Stockholders Agreement. Should any Noteholder designee to the board of directors pursuant to this Section 5.e
(each, a “Noteholder Board Designee”) be rendered unable to, or refuse to, be appointed to, or for any other reason fail to serve or is not serving, on the board of directors of the Company and a replacement individual (the
“Noteholder Designee Replacement”) has not been designated in accordance with the preceding sentence then the Company shall not be obligated to designate an individual to fill such vacancy as of Closing and such vacancy shall be
filled as soon as practicable after the Closing in accordance with the Stockholders Agreement. Each person designated by the Noteholders and elected to the board of directors of the Company pursuant to this Section 5.e shall be referred
to as an “Elected Board Designee.” The Noteholders shall cause each Elected Board Designee to recuse themselves from any vote of approval of the board of directors regarding the Exchange Offer, including the determination of the
exchange ratio to be utilized therein (as contemplated by Section 5.g). 
 f. Payment of Expenses. The Company shall pay
or cause to be paid the Company’s fees, disbursements and expenses incurred in connection with the issuance of the Shares, and the Noteholders shall pay or caused to be paid the Noteholders’ fees, disbursements and expenses incurred in
connection with the Exchange Transaction, including the fees, disbursements and expenses of their respective advisors, counsel, accountants and other experts. For the avoidance of doubt, the Company acknowledges and agrees that it will pay or cause
to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and accountants in connection with preparation and negotiation of this Agreement, the Additional Agreements, the Consent, the Supplemental
Indenture and the other agreements and instruments entered into in connection herewith, and the issue of the Shares; (ii) all fees and expenses associated with the preparation, filing and distribution of the Proxy Statement for, and the holding
of, the Stockholders Meeting, (iii) all fees and expenses associated with the Listing; (iv) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the
Consent and the Supplemental Indenture; and (v) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section 5.f. The Noteholders acknowledge
and agrees, however, that, notwithstanding the foregoing, the Noteholders will pay or cause to be paid all of its own fees, disbursements and expenses incurred in connection with this Agreement, the Additional Agreements, the Consent, and the other
agreements and instruments to be entered into in connection herewith, including all fees, disbursements and expenses of counsel for and other advisers to the Noteholders in any connection herewith; provided, however that if this
Agreement is terminated for any reason other than the failure of the conditions to Closing set forth in Section 6.c., the Company shall pay or cause to be paid the reasonable and documented fees, disbursements and expenses of one firm of
legal counsel for the Noteholders incurred in connection with the Exchange Transaction up to $500,000. 
 g. Follow-on Exchange. If
the Charter Amendment Approval is obtained, then as soon as reasonably practicable, and in any event within 30 days, after the Closing, the Company will use its commercially reasonable efforts to make an offer (the “Exchange Offer”)
to the holders of the Notes, on terms, and subject to conditions, customary or appropriate in the good faith judgment of the board of directors of the Company to exchange any and all Notes for shares of Common Stock at an exchange ratio of shares of
Common Stock to each $1,000 aggregate principal amount of Notes equal to (i) the Exchange Ratio or (ii) if the Exchange Offer Adjusted Exchange Ratio is less than the Exchange Ratio, an exchange ratio not (A) greater than the Exchange
Ratio or (B) less than the Exchange Offer Adjusted Exchange Ratio. 

  
 13 

 6. Conditions to Closing. 

a. The obligation of each party to effect the Exchange Transaction, and to execute and deliver documents, at the Closing is subject to the
satisfaction at or prior to the Closing of the following conditions: 
 (i) The Nasdaq Approval shall have been obtained by the Company; 

(ii) The Shares shall have been approved for listing on Nasdaq, subject to official notice of issuance; 

(iii) No governmental authority of competent jurisdiction shall have enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether temporary, preliminary or permanent) that is in effect and precludes consummation of the transactions contemplated hereby. No statute, rule, regulation, order, injunction or decree
shall have been enacted, entered, promulgated or enforced by any governmental authority that prohibits or makes illegal this Agreement or the transactions contemplated hereby; and 

(iv) The Supplemental Indenture shall have been executed by the Trustee and shall be in full force and effect. 

b. The obligation of the Noteholders to effect the Exchange Transaction, and to execute and deliver (or cause to be executed and delivered)
documents, at the Closing is subject to the satisfaction at or prior to the Closing of the following conditions: 
 (i) the representations
and warranties of the Company contained in Section 4.d.(i) hereof shall be true and correct in all respects (other than in respect of de minimis inaccuracies) as of the date of this Agreement, and the representations and
warranties of the Company contained in Section 4.d.(ii) hereof shall be true and correct in all material respects on and as of the date of this Agreement and the date of Closing, with the same force and effect as though made on and as of
such date; 
 (ii) the representations and warranties of the Company contained in Section 4 hereof (other than those contained in
Section 4.d.(i) and Section 4.d.(ii) hereof) shall be true and correct in all respects on and as of the date hereof and the date of Closing, with the same force and effect as though made on and as of such date, except
(A) to the extent that any representation or warranty is made as of a specified date, in which case such representation or warranty shall be true and correct as of such specified date, and (B) for such failures to be true and correct
(without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth in any individual representation or warranty) that, individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect; 

  
 14 

 (iii) the Company shall have delivered a certificate signed on behalf of the Company by an
authorized officer of the Company in the form attached hereto as Exhibit E; 
 (iv) the Company shall have delivered and paid to
the Noteholders, in accordance with Section 2.a. hereof, each of the items required to be delivered or paid by the Company pursuant to Section 2.a.; 

(v) the Company shall have performed or complied with, in all material respects, its covenants required to be performed or complied with as of
the Closing under this Agreement, except for the covenants set forth in Section 2.a. and Section 5.e. (to the extent required to be complied with at or prior to the Closing) hereof which the Company shall have performed and
complied with in all respects; 
 (vi) no Material Adverse Effect shall have occurred since the date of this Agreement; provide that, for
purposes of this Section 6.b.(vi), none of the following or the effects thereof shall constitute or shall be taken into account in determining whether there has occurred a Material Adverse Effect: (A) changes in general regulatory,
political, business or economic conditions that, in each case, generally affect the oil and gas industry (including, without limitation, changes in oil and gas prices); (B) any change in the United States or foreign economies or securities or
financial markets in general; (C) the outbreak or escalation of hostilities involving the United States, the declaration by the United States of a national emergency or war or the occurrence of any acts of terrorism; (D) any change in
accounting requirements or principles imposed upon the Company or its businesses by any change in GAAP or any change in applicable laws, or the interpretation thereof; (E) any effect resulting from the announcement of this Agreement;
(F) actions taken by any Noteholder or any of their respective Affiliates; (G) any action taken by the Company or any of its Affiliates at the express request or direction of any Noteholder; or (H) any failure by the Company to meet
any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period; except, in the cases of clauses (A), (B), (C), and (D) above, to the extent
the items described in such clauses affect the Company in a materially disproportionate manner as compared with other Persons engaged in the oil and gas industry in the same geographic areas in which the Company’s primary oil and gas assets are
located, in which case such occurrences may be deemed to constitute, and shall be taken into account in determining, whether a Material Adverse Effect has occurred; and 

(vii) no material Default and no Event of Default that, in either case, has not been cured (with the effect of any such cure being that neither
any material Default nor an Event of Default exists after giving effect to any such cure and the agent and lenders under the Credit Facility no longer have, at such time, the right to exercise any remedies under the Credit Facility conditioned upon
the occurrence and existence of a Default or Event of Default with respect to such Default or Event of Default) or waived (with the effect of any such waiver being that the agent and lenders under the Credit Facility, after giving effect to any such
waiver, no longer have the right to exercise any remedies conditioned upon the occurrence and existence of a Default or Event of Default with respect to such Default or Event of Default) by the agent or lenders (as required by the Credit Facility),
under the Credit Facility shall exist. 

  
 15 

 c. The obligation of the Company to effect the Exchange Transaction, and to execute and deliver
documents, at the Closing is subject to the satisfaction at or prior to the Closing of the following additional conditions: 
 (i) the
representations and warranties of each Noteholder contained in Section 3.a. hereof shall be true and correct in all respects, and all other representations and warranties of each Noteholder contained in Section 3 hereof shall
be true and correct in all material respects, on and as of the date hereof and the date of Closing, with the same force and effect as though made on and as of such date; 

(ii) each Noteholder shall have delivered to the Company, in accordance with Section 2.b. hereof, each of the items required to be
delivered by such Noteholder pursuant to Section 2.b.; 
 (iii) the Noteholder shall have delivered a certificate signed on
behalf of each Noteholder by an authorized officer thereof in the form attached hereto as Exhibit F; and 
 (iv) each Noteholder
shall have performed or complied with, in all material respects, its covenants required to be performed or complied with as of Closing under this Agreement, except for the covenants set forth in Section 2.b. hereof which each Noteholder
shall have performed and complied with in all respects. 
 7. Termination. 

a. This Agreement may be terminated: 

(i) by either the Company or the Noteholders, upon delivery of written notice of termination to the other Party, if the Closing has not
occurred on or before March 31, 2017, (the “End Date”); provided, however, that (x) the Company shall not be entitled to terminate this Agreement pursuant to this Section 7.a.(i) if (1) the
Company is in material breach of this Agreement as of the End Date or (2) any breach of this Agreement by the Company has caused the failure of any Closing condition or otherwise caused the Closing to not have occurred on or before the End Date
and (y) the Noteholders shall not be entitled to terminate this Agreement pursuant to this Section 7.a.(i) if (1) any Noteholder is in material breach of this Agreement as of the End Date or (2) any breach of this
Agreement by a Noteholder has caused the failure of any Closing condition or otherwise caused the Closing to not have occurred on or before the End Date. 

(ii) by the Company, upon delivery of written notice of termination to the Noteholders, if (A) any Noteholder has breached or failed to
perform any of its covenants or other agreements contained in this Agreement to be complied with by it such that the Closing condition set forth in Section 6.c.(iv) would not be satisfied or (B) there exists a breach of any
representation or warranty of any Noteholder contained in Section 3 of this Agreement such that the Closing condition set forth in Section 6.c.(i) would not be satisfied, and in the case of both clause (A) and clause
(B) above, such breach or failure to perform (x) has not been waived by the Company or cured on or before the earlier of thirty (30) days after receipt by the Noteholders of written notice thereof or the End Date or (y) is
incapable of being cured by the Noteholders by the End Date; provided, however, that the Company shall not be entitled to terminate this Agreement pursuant to this Section 7.a.(ii) if the Company is also in material breach
of this Agreement at such time; 

  
 16 

 (iii) by the Noteholders, upon written notice of termination to the Company, if (A) the
Company has breached or failed to perform any of its covenants or other agreements contained in this Agreement to be complied with by it such that the closing condition set forth in Section 6.b.(v) would not be satisfied, (B) there
exists a breach of any representation or warranty of the Company contained in Section 4 of this Agreement such that the Closing condition set forth in Section 6.b.(i) or Section 6.b.(ii) would not be satisfied,
and in the case of each of clauses (A) and (B) above, such breach, failure to perform or failure to satisfy such Closing condition, as applicable, (x) has not been waived by the Noteholders or cured on or before the earlier of
thirty (30) days after receipt by the Company of written notice thereof or the End Date or (y) is incapable of being cured by the Company by the End Date, or (C) (1) the Company or any of its subsidiaries shall have an order for
relief entered with respect to it or shall commence a voluntary case under the Bankruptcy Code or under any other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, manager, trustee, examiner or other custodian for all or a substantial part of its property or
shall make any assignment for the benefit of creditors, or (2) the Company or any of its subsidiaries shall be unable, or shall fail generally, or shall admit in writing its inability, generally to pay its debts or obligations when due;
provided, however, that the Noteholders shall not be entitled to terminate this Agreement pursuant to this Section 7.a.(iii) if a Noteholder is also in material breach of this Agreement at such time; or 

(iv) by the Noteholders, upon written notice of termination to the Company, if a material Default or an Event of Default exists under the
Credit Facility and, in either case, such Default or Event of Default has not been cured (with the effect of any such cure being that such Default or Event of Default no longer exists after giving effect to any such cure and, as a result, the
agent and lenders under the Credit Facility no longer have the right to exercise remedies under the Credit Facility conditioned upon the occurrence and existence of any Default or Event of Default with respect to such Default or Event of Default) or
waived (with the effect of any such waiver being that the agent and lenders under the Credit Facility, after giving effect to any such waiver no longer have the right to exercise any remedies under the Credit Facility conditioned upon the
occurrence and existence of a Default or Event of Default with respect to such Default or Event of Default) by the agent or lenders (as required by the Credit Facility), under the Credit Facility on or before the earlier of thirty (30) days
after receipt by the Company of written notice thereof or the End Date. 
 (v) by either the Company, upon delivery of written notice of
termination to the Noteholders, or the Noteholders, upon delivery of written notice of termination to the Company, at any time on or after the first day after the date of conclusion of the Stockholders Meeting (including any postponement or
adjournment thereof permitted by Section 5.c.) (such first date after the date of conclusion of the Stockholders Meeting, the “Termination Date”) if the Nasdaq Approval has not been obtained; provided,
however, that (x) the Company shall not be entitled to terminate this Agreement pursuant to this Section 7.a.(v) if (1) the Company is in material breach of this Agreement as of the Termination Date or (2) any
breach of this 

  
 17 

 
Agreement by the Company has caused the Nasdaq Approval to not be obtained and (y) the Noteholders shall not be entitled to terminate this Agreement pursuant to this
Section 7.a.(v) if (1) any Noteholder is in material breach of this Agreement as of the Termination Date or (2) any breach of this Agreement by a Noteholder has caused the Nasdaq Approval to not be obtained. 

b. Effect of Termination. In the event of termination of this Agreement by any Party as provided in Section 7.a., this
Agreement shall forthwith become void and there shall be no liability or obligation on the part of any Party (or any other person) with respect to this Agreement or the transactions contemplated in this Agreement or any Additional Agreement;
provided, however, that notwithstanding the foregoing, (a) no such termination shall relieve a Party from any breach by such Party prior to such termination and (b) the provisions of Section 3.k.,
Section 4.j., Section 5.f. (to the extent the Company is required thereby to pay any amounts to the Noteholders), this Section 7.b. and Section 9 (other than Section 9.j.,
Section 9.l. and Section 9.m.) shall survive such termination. 
 8. Indemnification. 

a. Indemnification Obligation. From and after the Closing, (i) the Company agrees to indemnify and hold harmless the Noteholders
and their Representatives from and against any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, attorneys’ fees, expenses and disbursements of any kind (“Losses”) which may be
imposed upon, incurred by or asserted against Noteholders or their Representatives in any manner relating to or arising out of any breach of any representation, warranty, covenant or agreement by the Company contained in this Agreement or the
certificate delivered by the Company pursuant to Section 6.b.(iii) and (ii) each Noteholder agrees to, severally, and not jointly nor jointly and severally, indemnify and hold harmless the Company and its Representatives, from and
against any Losses which may be imposed upon, incurred by or asserted against the Company or its Representatives in any manner relating to or arising out of any breach of any representation, warranty, covenant or agreement by such Noteholder
contained in this Agreement or the certificate delivered by such Noteholder pursuant to Section 6.c.(iii) (collectively, the “Indemnification Obligation”). 

b. Indemnification Procedure. All claims for indemnification by one or more Parties or Representatives entitled to be indemnified
hereunder (each, an “Indemnitee” and collectively, the “Indemnitee”) by one or more Parties hereto (each, an “Indemnitor” and collectively, the “Indemnitor”), shall be asserted and
resolved as follows: 
 (i) In the event that any action, suit, claim, proceeding, investigation, audit, examination, demand, assessment,
fine, judgment, settlement, compromise, interest, penalty, cost, remedial action and other expense (including, without limitation, reasonable attorneys’ fees and expenses) (collectively, “Actions”) for which the Indemnitee may
claim indemnity under this Agreement is asserted against or sought to be collected from the Indemnitee by a third party (a “Third-Party Claim”), the Indemnitee shall as promptly as practicable notify the Indemnitor following the
receipt by the Indemnitee of notice, written or otherwise, of such Action, specifying the nature of such Action and the amount or the estimated amount thereof to the extent then feasible (which estimate shall not be conclusive of the final amount of
such 

  
 18 

 
Action) (the “Claim Notice”); provided, however, that the failure so to notify the Indemnitor will not relieve the Indemnitor from any liability it may have to the
Indemnitee under this Agreement unless, and only to the extent that, such failure so to notify materially prejudices the Indemnitor or results in the loss of substantive rights or defenses. 

(ii) The Indemnitor shall have thirty calendar days from the date on which the Claim Notice is duly given (the “Notice
Period”) to notify the Indemnitee (A) whether or not it disputes the liability of the Indemnitor to the Indemnitee hereunder with respect to such claim or demand, and (B) whether or not the Indemnitor desires, at its sole cost and
expense, to defend the Indemnitee against such Action. If the Indemnitor notifies the Indemnitee within the Notice Period that it disputes its liability under the Indemnification Obligation to the Indemnitee with respect to a particular Action, and
such dispute is determined by a final and nonappealable order to be a wrongful denial of such liability, the Indemnitor shall be liable to the Indemnitee for the amount of any and all Losses arising from the Indemnitor’s failure to satisfy its
Indemnification Obligation with respect to such Action. 
 (iii) In the event the Indemnitor notifies (the “Indemnitor
Notice”) the Indemnitee within the Notice Period that it desires to defend the Indemnitee against such Action, then except as hereinafter provided the Indemnitor shall defend, at its sole cost and expense, the Indemnitee by appropriate
activities or proceedings, shall use its commercially reasonable efforts to settle or prosecute or otherwise contest, at Indemnitor’s election (subject to the terms of this Agreement), such activities or proceedings to a final conclusion in
such a manner as to attempt to avoid the Indemnitee becoming subject to any injunctive or other equitable order for relief or to liability for any other matter, and shall control the conduct of such defense; provided, however, that if
the Indemnitor fails to take reasonable steps necessary to defend the Indemnitee diligently against such Action after providing such Indemnitor Notice, within ten calendar days after receiving written notice from the Indemnitee stating that the
Indemnitee believes that the Indemnitor has failed to take such steps, the Indemnitee may assume its own defense and the Indemnitor shall be liable for all Losses arising out of such Action; provided, further, that the Indemnitor shall
not be entitled to assume the defense of any such Action pursuant to this Section 8 unless it has accepted and assumed in writing the obligation to indemnify the Indemnitee with respect to Losses arising from or relating to such Action,
and that the Indemnitor shall not in any Action in which Losses include any obligation other than, or in addition to, the payment of money for which the Indemnitor has assumed the obligation, without the prior written consent of the Indemnitee,
which consent shall not be unreasonably withheld or delayed, consent to the entry of any judgment against the Indemnitee or enter into any settlement or compromise which does not include, as an unconditional term thereof, the giving by all claimants
and plaintiffs to the Indemnitee of a release, in form and substance reasonably satisfactory to the Indemnitee, from all liability for which the Indemnitor is not liable pursuant to the terms of this Agreement in respect of any Action. If the
defendants in any such Action include both the indemnitor and the Indemnitee and the Indemnitee shall have reasonably concluded that there may be legal defenses or rights available to the Indemnitee which are different from, in actual or potential
conflict with, or additional to those available to the Indemnitor, the Indemnitee shall have the right to select one law firm to act at the Indemnitor’s expense as separate counsel, on behalf of the Indemnitee. In addition, if the Indemnitee
desires to participate in, but not control, any other defense or settlement, it may do so at its sole cost and expense. So long as the Indemnitor is defending in good faith any such 

  
 19 

 
Action, the Indemnitee shall not settle such Action without the consent of the Indemnitor, which shall not be unreasonably withheld or delayed; provided, however, that the
Indemnitee reserves the right to settle any Action at the Indemnitee’s sole cost and expense without the consent of the Indemnitor and the Indemnitor shall have no further liability or obligation with respect to any such Action so settled. 

(iv) Prior to the Indemnitor’s settling any Action, the defense of which it has assumed control, in which the settlement includes any
obligation of the Indemnitee other than, or in addition to, the payment of money for which the Indemnitor has assumed the obligation, the Indemnitor shall obtain the Indemnitee’s prior approval, confirmed in writing in accordance with the
notice provisions hereof, which approval shall not be unreasonably withheld or delayed. If such settlement consists of a bona fide offer and the Indemnitee notifies the Indemnitor of its disapproval of such settlement, the Indemnitee shall thereupon
become liable, from and after the date of its disapproval, for the amount of any award, settlement, costs, expenses (including, without limitation, reasonable attorneys’ fees and court costs) or other Losses in excess of the proposed settlement
amount and shall have the right to elect to control the defense of such Action at its sole cost and expense. 
 (v) In the event the
Indemnitee should have a claim for indemnification against the Indemnitor hereunder which does not involve a Third-Party Claim, the Indemnitee shall promptly send a Claim Notice with respect to such claim to the Indemnitor; provided,
however, that the failure so to notify the Indemnitor will not relieve the Indemnitor from any liability it may have to the Indemnitee under this Agreement unless, and only to the extent that, such failure so to notify materially prejudices
the Indemnitor or results in the loss of substantive rights or defenses. If the Indemnitor does not notify the Indemnitee within the Notice Period that it disputes such claim, the Indemnitor shall be liable for the amount of any Losses related
thereto. 
 c. Survival. All representations, warranties and agreements of the parties made in this Agreement shall survive for the
later of (i) six-months following the Closing or (ii) fifteen (15) business days after the date on which the Company files with the SEC its Annual Report on Form 10-K, including audited financial statements, for the year ending
December 31, 2016; provided, however, that the representations and warranties contained in Section 3.a. and Section 4.d. and the agreements set forth in Section 5.f., Section 5.g.
and Section 8 shall survive indefinitely (each such survival period as provided in this sentence, a “Survival Period”). The indemnifications set forth in Section 8.a. shall terminate in accordance with the
applicable Survival Period, except that any matters for which a specific written claim for indemnity has been delivered to the Indemnitor on or before the termination of the applicable Survival Period shall survive until the final resolution of such
claim.
 d. Remedies; Exclusive Remedy. Except (i) in the case of knowing and intentional actual fraud with respect to the
representations and warranties set forth in Section 3 and Section 4 of this Agreement or Willful and Material Breach of this Agreement by the Party against whom rights and remedies are sought to be enforced, and (ii) as
otherwise provided in Section 5.f., from and after Closing the rights and remedies under this Section 8 are the sole and exclusive rights and remedies and in lieu of any and all other rights and remedies that the Company and
its Representatives or the Noteholders and their Representatives may have against 

  
 20 

 
the Noteholders or the Company, respectively, under this Agreement or otherwise with respect to any breach of any representation or warranty or any failure to perform any covenant or agreement by
the Noteholders or the Company set forth in this Agreement. Effective as of the Closing, each of the Parties expressly waives, on their own behalf and on behalf of their Representatives any and all other rights, remedies and causes of action (other
than under this Section 8 and any exceptions thereto listed in the first sentence of this Section 8.d.) it or its Affiliates may have, in the case of the Company and its Representatives, against the Noteholders and, in the
case of the Noteholders and their Representatives, against the Company, now or in the future under any law with respect to the transactions contemplated by this Agreement (other than in respect of obligations undertaken pursuant to any of the
Additional Agreements). 
 9. Miscellaneous. 

a. Amendments and Waivers. Amendments or modifications to this Agreement may only be made, and compliance with any term, covenant,
agreement, condition or provision set forth herein may only be omitted or waived (either generally or in a particular instance and either retroactively or prospectively), upon the written consent of each party hereto. 

b. Notices. All notices, requests, consents, reports and demands shall be in writing, shall be deemed effectively given upon receipt and
shall be hand delivered, sent by facsimile or other electronic transmission (provided confirmation of receipt of the transmission is mechanically or electronically generated and kept on file by the sending party), or mailed, postage prepaid, to the
Noteholders at the applicable addresses and facsimile numbers or email addresses or to the Company at the address set forth below or, in each case, to such other address and/or facsimile number as may be furnished in writing to the other parties
hereto: 
 If to the Company: 

Approach Resources Inc. 

6500 West Freeway, Suite 800 

Fort Worth, Texas 76116 

Attention: J. Curtis Henderson 

Facsimile No.: (817) 989-9001 

Email: CHenderson@approachresources.com 

with a copy to: 

Weil, Gotshal & Manges LLP. 

200 Crescent Court, Suite 300 

Dallas, Texas 75201 

Attention: Rodney Moore 

Facsimile: (214) 746-8102 

Email: rodney.moore@weil.com 

  
 21 

 If to the Noteholders: 

Wilks Brothers, LLC 

17010 IH-20 

Cisco, Texas 76437 

Attention: Morgan Neff and Matt Wilks 

Facsimile: (817) 850-3698 

Email: MNeff@wilksbrothers.com or mwilks@ie-llc.net 

SDW Investments, LLC 

17010 IH-20 

Cisco, Texas 76437 

Attention: Morgan Neff and Matt Wilks 

Facsimile: (817) 850-3698 

Email: MNeff@wilksbrothers.com or mwilks@ie-llc.net 

with a copy to: 

Brown Rudnick LLP 

7 Times Square 

New York, New York 10036 

Attention: John F. Storz 

Facsimile: (212) 209-4801 

Email: jstorz@brownrudnick.com 

c. Titles and Headings. The section headings herein are for convenience only and shall not affect the construction hereof. 

d. Execution in Counterparts. This Agreement may be executed in multiple counterparts, each of which shall constitute an original but
all of which together shall constitute but one and the same instrument. Multiple counterparts of this Agreement may be delivered via facsimile or other electronic means, with the intention that they shall have the same effect as an original
counterpart hereof. 
 e. Governing Law; Jurisdiction; Jury Trial. This Agreement shall in all respects be construed in accordance
with and governed by the substantive laws of the State of New York, without reference to any choice of law rules (whether of the State of New York or any other jurisdictions) to the extent such rules would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably submits to the jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any
such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY 

  
 22 

 
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY. 
 f. Limitation on Damages. Notwithstanding anything to the contrary in this Agreement,
in no event shall a Party be liable under this Agreement to any other Party or its Representatives (under Section 8 or otherwise) for (i) any exemplary or punitive damages or (ii) any special, consequential, incidental or
indirect damages or lost profits, except (A) in the case of clause (ii), to the extent any such damages or lost profits would otherwise be recoverable under applicable law in an action for breach of contract or (B) in the case of
clause (i) or clause (ii), any such damages or lost profits that are included in any Third-Party Claim against an Indemnitee for which such Indemnitee is entitled to indemnification under this Agreement. 

g. Entire Agreement. This Agreement, including the Exhibits hereto and the Additional Agreements (which are an integral part hereof),
embody the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous oral or written agreements, representations, warranties, contracts, correspondence,
conversations, memoranda and understandings between or among the parties or any of their agents, Representatives or Affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents. 

h. Certain Definitions and Interpretive Principles. Capitalized terms in this Agreement shall have the meanings specified below, or as
specified elsewhere in this Agreement, for all purposes hereof. The following terms, as used in this Agreement, shall have the meanings as set forth below: 

(i) “Affiliate” or “Affiliated” means, with respect a specified Person, any other Person, directly or
indirectly Controlling or Controlled by or under direct or indirect common Control with such specified Person; provided, however, that the Company and its Subsidiaries shall not be deemed an Affiliate of any Noteholder. 

(ii) “Average Common Stock Price” means the volume-weighted average price per share of the Company’s Common Stock on the
securities exchanges on which such security is traded (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by the parties acting reasonably) for the thirty (30) consecutive full trading
days in which shares of the Company’s Common Stock are traded ending on, and including, the relevant calculation date. 
 (iii)
“Bankruptcy Code” means Title 11 of the United States (iii) Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute. 

(iv) “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act,
except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that
such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The term “Beneficially Owned” has a
corresponding meaning. 

  
 23 

 (v) “Control,” “Controlling” or “Controlled”
means, as to a specified Person, the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise. 

(vi) “Credit Facility” means the Amended and Restated Credit Agreement, dated as of May 7, 2014 (as amended from time to
time), by and among Approach Resources, Inc., JPMorgan Chase Bank, N.A. as administrative agent, and each of the lenders party. 
 (vii)
“Default” shall have the meaning given such term in the Credit Facility. 
 (viii) “Event of Default” shall
have the meaning given such term in the Credit Facility. 
 (ix) “Exchange Act” means the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the SEC thereunder. 
 (x) “Exchange Offer Adjusted Exchange Ratio” means
(A) a number of shares of Common Stock equal to (x) the Exchange Value divided by (y) the Average Common Stock Price determined on the date that is the third full trading day prior to the date that the Exchange Offer is first
distributed to the holders of the Notes after the Closing, for (B) each $1,000 aggregate principal amount of Notes exchanged pursuant to the Exchange Offer, rounded to the nearest whole share. 

(xi) “Exchange Value” means $953.62 per $1,000 aggregate principal amount of Notes. 

(xii) “GAAP” means United States generally accepted accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession that are in effect from time to time, applied on a consistent basis for the periods involved. 

(xiii) “Party” or “party” means the Company or the Noteholders, and “Parties” and
“parties” mean the Company and the Noteholders. 
 (xiv) “Person” means any individual, corporation,
partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity. 

(xv) “Representatives” means, with respect to any Person, such Person’s directors, officers, partners, employees,
members, managers, agents, advisors (including attorneys, accountants, consultants and financial advisors and any representatives of a Person’s advisors) and other representatives. 

  
 24 

 (xvi) “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC thereunder. 
 (xvii) “SEC” means the U.S. Securities and Exchange Commission. 

(xviii) “Significant Subsidiary” means such term as it is defined in Regulation S-X Rule 1-02(w) under the Securities Act.

 (xix) “Willful and Material Breach” means (A) a deliberate act or a deliberate failure to act, which act or failure
to act constitutes in and of itself a material breach of this Agreement and which was undertaken with the knowledge that such act or failure to act would be, or would reasonably be expected to cause, a material breach of this Agreement or
(B) the failure by any Party to consummate the transactions contemplated by this Agreement after all conditions to such Party’s obligations in Section 6 hereof have been satisfied or waived in accordance with the terms of this
Agreement (other than those conditions precedent which by their terms can only be satisfied simultaneously with the Closing but which are capable of being satisfied at the Closing). 

(xx) The words such as “herein,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural, and vice versa, unless the context otherwise requires. The masculine shall include the feminine and neuter, and vice versa, unless
the context otherwise requires. 
 i. Parties in Interest; Assignment. This Agreement binds and inures solely to the benefit of each
party hereto and its successors and assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. This
Agreement may not be assigned by any party without the prior written consent of the other parties. Any purported assignment without consent as required by this Section 9.j. hereof shall be null and void. 

j. Adjustments; fractional shares. If at any time after the date of this Agreement, any change in the outstanding shares of capital
stock of the Company (or any other securities convertible therefor or exchangeable thereto) shall occur as a result of any reclassification, stock split (including a reverse stock split), combination, exchange or readjustment of shares, or any stock
dividend or stock distribution, or any similar event, in each case, other than pursuant to the transactions contemplated by this Agreement, the number of shares issuable hereunder or as contemplated hereby and the price thereof, and any other
similarly dependent items shall be equitably adjusted to provide the same economic effect as contemplated by this Agreement prior to such action. No certificates or scrip representing fractional shares of Common Stock shall be issued pursuant hereto
or in the Exchange Offer. In lieu of any such fractional shares otherwise issuable to the Noteholders hereunder, the Noteholders shall be entitled to an amount in cash, without interest, rounded to the nearest cent, equal to the product of
(i) the amount of the fractional share interest in a share of Common Stock to which such holder is entitled under Section 1 and Section 2 hereof (or would be entitled but for this Section 9.j. hereof) and
(ii) an amount equal to the Average Common Stock Price determined on the date that is the third full trading day prior to the date of this Agreement. 

  
 25 

 k. Severability. In the event that one or more provisions of this Agreement shall be
deemed or held to be invalid, illegal or unenforceable in any respect under any applicable law, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted, and the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected or impaired thereby. 
 l. Further Assurances. From time to time, as and
when requested by either party, the other party will execute and deliver, or cause to be executed and delivered, all such documents and instruments as may be reasonably necessary to consummate the transactions contemplated by this Agreement. 

m. Specific Performance. It is understood and agreed by the parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement by the Company or the Noteholders, as applicable, and the non-breaching party of the Company or the Noteholders, as applicable, shall be entitled to specific performance and injunctive or other equitable relief as a remedy
of any such breach. 
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

  
 26 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

  

			
	 COMPANY:
  

APPROACH RESOURCES INC.

		
	By:	 	/s/ J. Ross Craft
	Name:	 	J. Ross Craft
	Title:	 	President and Chief Executive Officer

 [Signature Page to Exchange Agreement] 

 
			
	WILKS BROTHERS, LLC, as Noteholder
		
	By:	 	/s/ Morgan D. Neff
	Name:	 	Morgan D. Neff
	Title:	 	Senior Portfolio Manager
		
	By:	 	/s/ Matthew D. Wilks
	Name:	 	Matthew D. Wilks
	Title:	 	Portfolio Manager & Vice President of Capital Investments

  

			
	SDW INVESTMENTS, LLC, as Noteholder
		
	By:	 	/s/ Morgan D. Neff
	Name:	 	Morgan D. Neff
	Title:	 	Senior Portfolio Manager
		
	By:	 	/s/ Matthew D. Wilks
	Name:	 	Matthew D. Wilks
	Title:	 	Portfolio Manager & Vice President of Capital Investments

 [Signature Page to Exchange Agreement] 

 Schedule A 

 

									
	Noteholder	  	Principal Amount of
Notes Beneficially
Owned	 	  	Number of Shares
of Common Stock
Beneficially
Owned	 
	 Wilks Brothers, LLC
	  	$	110,421,000	  	  	 	0	  
	 SDW Investments, LLC
	  	 	20,131,000	  	  	 	101,000	  
		  	  
	  
	 	  	  
	  
	 
	 Total
	  	$	130,552,000	  	  	 	101,000	  
		  	  
	  
	 	  	  
	  
	 

  
 Sch A-1 

 Exhibit A 

Stockholders Agreement 

  
 A-1 

 EXHIBIT A 
  

 
  

STOCKHOLDERS AGREEMENT 
 by and
among 
 APPROACH RESOURCES INC., 

WILKS BROTHERS, LLC 
 and 

SDW INVESTMENTS, LLC 
 Dated as of
[●], 201[●] 

							
	 ARTICLE 1 DEFINITIONS
	  	 	1	  
	 Section 1.1
	 	 Definitions
	  	 	1	  
	 Section 1.2
	 	 Other Definitional and Interpretive Matters
	  	 	6	  
	 ARTICLE 2 MANAGEMENT OF THE COMPANY AND CERTAIN ACTIVITIES
	  	 	7	  
	 Section 2.1
	 	 Board
	  	 	7	  
	 ARTICLE 3 ACQUISITIONS; TRANSFERS
	  	 	11	  
	 Section 3.1
	 	 Restrictions on Acquisitions
	  	 	11	  
	 Section 3.2
	 	 Preemptive Rights
	  	 	13	  
	 Section 3.3
	 	 Restrictions on Transfers
	  	 	15	  
	 ARTICLE 4 TERMINATION
	  	 	16	  
	 ARTICLE 5 MISCELLANEOUS
	  	 	16	  
	 Section 5.1
	 	 Notices
	  	 	16	  
	 Section 5.2
	 	 Governing Law: Venue: Jurisdiction
	  	 	17	  
	 Section 5.3
	 	 Waiver of Jury Trial
	  	 	17	  
	 Section 5.4
	 	 Successors and Assigns
	  	 	18	  
	 Section 5.5
	 	 Counterparts
	  	 	18	  
	 Section 5.6
	 	 Severability
	  	 	18	  
	 Section 5.7
	 	 Specific Performance
	  	 	18	  
	 Section 5.8
	 	 No Waivers; Amendments
	  	 	19	  
	 Section 5.9
	 	 Non-Recourse
	  	 	19	  
	 Section 5.10
	 	 Further Assurances
	  	 	20	  
	 Section 5.11
	 	 Entire Agreement
	  	 	20	  
	 Section 5.12
	 	 Ownership and Aggregation of Common Stock; Action by Holders
	  	 	20	  

 Exhibit A – Form of Conditional Resignation 

  
 i 

 STOCKHOLDERS AGREEMENT 

THIS STOCKHOLDERS AGREEMENT (this “Agreement”), dated as of [●], 201[●], is entered into by and among APPROACH
RESOURCES INC., a Delaware corporation (the “Company”) and each of WILKS BROTHERS, LLC and SDW INVESTMENTS, LLC (collectively, the “Holders” and each, a “Holder”). 

Pursuant to, and in consideration of the obligations of the Company and the Holders under the Exchange Agreement (as hereinafter defined), the
premises, mutual covenants and agreements hereinafter contained, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 

ARTICLE 1 
 DEFINITIONS 

Section 1.1 Definitions. 

“ADF Acceptance Period” shall have the meaning set forth in Section 3.2.4(a). 

“Affiliate” means, with respect to any Person, any Person who, directly or indirectly, controls, is controlled by or is under
common control with that Person, and the term “control” (including the terms “controlled”, “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by contract (including proxy) or otherwise; provided, however, that for the avoidance of doubt that the Holders shall
not be deemed an affiliate of the Company solely on account of being party to this Agreement. 
 “Agreement” shall have the
meaning set forth in the introductory paragraph hereof. 
 “Alternative Debt Financing Offer” shall have the meaning set
forth in Section 3.2.2. 
 “Board” means the board of directors of the Company. 

“Board Designee” shall have the meaning set forth in Section 2.1.1(b). 

“Board Determination Date” shall have the meaning set forth in Section 2.1.1(a). 

“Board Reduction Event” shall have the meaning set forth in Section 2.1.1(a). 

“Business Day” means any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions
in New York City, New York or Fort Worth, Texas are not required to be opened. 
 “Bylaws” means the Second Amended and
Restated Bylaws of the Company, as adopted on November 6, 2013, as the same may be amended, restated, amended and restated, waived, supplemented or otherwise modified from time to time in accordance with its terms. 

  
 1 

 “Certificate of Incorporation” means the Restated Certificate of Incorporation
of the Company, as the same may be amended, restated, amended and restated, waived, supplemented or otherwise modified from time to time in accordance with its terms. 

“Charter Amendment Approval” shall have the meaning set forth in the Exchange Agreement. 

“Commission” means the United States Securities and Exchange Commission. 

“Common Stock” means the common stock, par value $0.01 per share, of the Company, and any shares or capital stock for or into
which such common stock hereafter is exchanged, converted, reclassified or recapitalized by the Company or pursuant to an agreement to which the Company is a party. 

“Company” shall have the meaning set forth in the introductory paragraph hereof. 

“Contracting Parties” shall have the meaning set forth in Section 5.9. 

“Class I” means the class of directors of the Board designated as Class I pursuant to the Certificate of Incorporation. 

“Class II” means the class of directors of the Board designated as Class II pursuant to the Certificate of Incorporation. 

“Class III” means the class of directors of the Board designated as Class III pursuant to the Certificate of Incorporation.

 “Currency Agreement” means any foreign exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect the Company or any of its Subsidiaries against fluctuations in currency values. 
 “Director
Nominating Committee” means the Nominating and Corporate Governance Committee of the Company that exists pursuant to the Nominating and Corporate Governance Committee Charter, adopted as of November 4, 2014, or such successor committee
of the Board that nominates, or approves for nomination, candidates for election to the Board. 
 “Dribble Out Period” shall
have the meaning set forth in Section 3.3.2. 
 “Equity Cap” means 48.61%. 

“Equity Securities” means common stock or other equity securities, including any security, convertible security, exercisable
warrant, option or other similar instrument conveying rights with respect to equity securities, including, in the case of the Company, Common Stock. 

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

  
 2 

 “Exchange Agreement” means the Exchange Agreement, dated November 2, 2016,
by and between the Company and Holders. 
 “Exchange Offer” shall have the meaning set forth in the Exchange Agreement. 

“Exchange Transaction” shall have the meaning set forth in the Exchange Agreement. 

“Exempt Offerings” means (i) an issuance of awards of Equity Securities (“Awards”) to an employee
pursuant to any plan or arrangement approved by the Board, or a duly authorized subcommittee of the Board, or the issuance of Equity Securities upon the exercise or conversion of any such Awards, (ii) an issuance of Equity Securities pursuant
to an exercise or conversion of any Equity Securities with respect to which preemptive rights were provided at the time such Equity Securities were issued (or the issuance of which was itself an Exempt Offering), (iii) a subdivision of the
issued and outstanding Equity Securities into a larger number of Equity Securities or the issuance of Equity Securities as a pro rata dividend or distribution in respect of outstanding Equity Securities and Board, or (iv) Equity Securities
issued in consideration of a bona fide acquisition by the Company or any of its Subsidiaries, joint venture or other strategic transaction that was approved by the Board. 

“Extraordinary Transaction” means any merger, tender offer, exchange offer, consolidation, business combination,
recapitalization, restructuring, sale of all or substantially all assets, liquidation or dissolution involving the Company, and of its Subsidiaries or any of its or their securities or assets. 

“GAAP” means United States generally accepted accounting principles set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession that are in effect from time to time, applied on a consistent basis for the periods involved. 

“Holder” and “Holders” shall have the meaning set forth in the introductory paragraph hereof. 

“Holder Ownership Percentage” means, at any time, a fraction (expressed as a percentage), the numerator of which is the number
of shares of Common Stock beneficially owned (as such term is used in Rule 13d-3 of the Exchange Act), collectively, by the Holders and their Affiliates at such time, and the denominator of which is the total number of issued and outstanding shares
of Common Stock at such time. 
 “Independent” means, with respect to any Board Designee, that such Board Designee shall
qualify as an independent director of the Company under the Company’s corporate governance and independence guidelines, applicable law and the rules and regulations of the Commission (or any successor thereto) and NASDAQ (or any other stock
exchange on which the Company is then listed), including, if applicable, any enhanced requirements with respect to certain committees of the Company. 

“Non-Party Affiliates” shall have the meaning set forth in Section 5.9. 

  
 3 

 “Per Share Equity Value” means, as of the date of determination, the volume
weighted average closing stock price of a share of Common Stock for the thirty (30) day period immediately preceding the date of any such determination, as reported by NASDAQ, or, if the shares of Common Stock are then traded on a national
securities exchange other than NASDAQ, on the principal national securities exchange on which such shares are so traded. 

“Person” or “person” means any individual, firm, partnership, company or other entity, and shall include any
successor (by merger or otherwise) of such entity. 
 “Preemptive Debt Election Notice” shall have the meaning set forth in
Section 3.2.2. 
 “Preemptive Debt Notice” shall have the meaning set forth in Section 3.2.1. 

“Preemptive Debt Securities” means any bonds, debentures, notes, or other similar evidences of indebtedness commonly known as
“securities”, in each case, which bonds, debentures, notes, or other similar evidences of indebtedness are secured by a lien and/or security interest on any property of any of the Company and its Subsidiaries and which lien and/or security
interest is expressly subordinated (pursuant to any intercreditor agreement, subordination agreement or other similar agreement) in priority to any senior secured first lien indebtedness for borrowed money of any of the Company and/or its
Subsidiaries. For the avoidance of doubt, Preemptive Debt Securities does not include any bank debt financing or other credit facilities, including, without limitation, the Revolving Credit Facility and any refinancing thereof. 

“Preemptive Debt Terms” shall have the meaning set forth in Section 3.2.1. 

“Preemptive Debt Offer Period” shall have the meaning set forth in Section 3.2.2. 

“Preemptive Debt Purchase Election” shall have the meaning set forth in Section 3.2.2. 

“Preemptive Equity Election Notice” shall have the meaning set forth in Section 3.2.7. 

“Preemptive Equity Notice” shall have the meaning set forth in Section 3.2.6. 

“Preemptive Equity Offer Period” shall have the meaning set forth in Section 3.2.7. 

“Preemptive Equity Purchase Election” shall have the meaning set forth in Section 3.2.7. 

“Preemptive Equity Securities” means Equity Securities or rights to acquire Equity Securities issued by the Company from and
after the date of this Agreement except Equity Securities issued in an Exempt Offering. 
 “Registration Rights Agreement”
means that certain registration rights agreement, dated as of [●], 201[●], by and among the Company and the Holders, as the same may be amended, restated, amended and restated, waived, supplemented or otherwise modified from time to time
in accordance with its terms. 

  
 4 

 “Representatives” means, with respect to any Person, such Person’s
directors, officers, partners, employees, members, managers, agents, advisors (including attorneys, accountants, consultants and financial advisors and any representatives of a Person’s advisors) and other representatives 

“Restricted Period” shall have the meaning set forth in Section 3.3.1. 

“Revolving Credit Facility” means the senior secured revolving credit facility pursuant to the Amended and Restated Credit
Agreement, dated as of May 7, 2014, by and among the Company, JPMorgan Chase Bank, N.A., as Administrative Agent, and the lenders from time-to-time party thereto, as amended from time to time. 

“Sale Transaction” means (a) the sale of all or substantially all of the consolidated assets of the Company and its
subsidiaries to a third-party purchaser; or (b) a merger, consolidation, recapitalization or reorganization of the Company with or into a third-party purchaser. 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission
thereunder. 
 “Stockholder Meeting” shall have the meaning set forth in the Exchange Agreement. 

“Subsidiary” of any Person means (a) a corporation a majority of whose outstanding shares of capital stock or other
equity interests with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more subsidiaries of such Person or by such Person and one or more subsidiaries of such
Person, and (b) any other Person (other than a corporation) in which such Person, a subsidiary of such Person or such Person and one or more subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has
(i) at least a majority ownership interest or (ii) the power to elect or direct the election of the directors or other governing body of such Person. 

“Target Value” means that the Total Market Capitalization equals or exceeds the sum of (a) the product of $10 and the
number of shares of Common Stock issued and outstanding immediately following the closing of the Exchange Transaction and (b) the product of $10 and the number of any shares of Common Stock issued pursuant to the Exchange Offer. 

“Total Market Capitalization” means, at any time, the product of (a) the Per Share Equity Value and (b) the number
of shares of Common Stock issued and outstanding as of such time. 
 “Transfer” means, when used as a verb, to sell,
transfer, assign, convey or otherwise dispose, and when used as a noun, any direct or indirect sale, transfer, assignment, conveyance or other disposition, including by merger, operation of law, bequest or pursuant to any domestic relations order,
whether voluntarily or involuntarily. 
 “Trigger Event” means the Per Share Equity Value is equal to or greater than the
Target Value. 

  
 5 

 “Voting Securities” means any securities (including Equity Securities) that vote
generally in the election of directors, in the admission of general partners or in the selection of any other similar governing body. 

Section 1.2 Other Definitional and Interpretive Matters. For purposes of this Agreement, the following rules shall apply: 

1.2.1 Calculation of Time Period. When calculating the period of time before which, within which or following which any act is to be
done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business
Day. 
 1.2.2 Dollars. Any reference in this Agreement to “$” shall mean U.S. dollars. 

1.2.3 Exhibits/Schedules. The Exhibits and Schedules to this Agreement are hereby incorporated and made a part hereof and are an
integral part of this Agreement. All Exhibits and Schedules annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth in full herein. Any capitalized terms used in any Schedule or Exhibit but
not otherwise defined therein shall be defined as set forth in this Agreement. 
 1.2.4 Gender and Number. Any reference in this
Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa. 

1.2.5 Headings. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and
the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement. All references in this Agreement to any “Article” or “Section” are to the
corresponding Article or Section of this Agreement unless otherwise specified. 
 1.2.6 Herein. The words such as “herein,”
“hereinafter,” “hereof,” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. 

1.2.7 Including. The word “including” or any variation thereof means “including, without limitation” and shall not
be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. 
 1.2.8
Successor Laws. Any reference to any law or code section thereof will be interpreted to include any revision of or successor to that section regardless of how it is numbered or classified. 

1.2.9 Heirs, Executors, etc. References herein to any Person shall include such Person’s heirs, executors, personal
representatives, administrators, successors and assigns; provided, however, that nothing contained in this Section 1.2.9 is intended to authorize any assignment or other Transfer not otherwise permitted by this Agreement.

  
 6 

 1.2.10 Joint Drafting. It is the intention of the parties that every covenant, term and
provision of this Agreement shall be construed simply according to its fair meaning and not strictly for or against any party (notwithstanding any rule of law requiring an agreement to be strictly construed against the drafting party). Further,
prior drafts of this Agreement or any ancillary agreements hereto or the fact that any clauses have been added, deleted or otherwise modified from any prior drafts of this Agreement or any ancillary agreements hereto shall not be used as an aide of
construction or otherwise constitute evidence of the intent of the parties hereto; and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of such prior drafts. 

ARTICLE 2 
 MANAGEMENT OF THE
COMPANY AND CERTAIN ACTIVITIES 
 Section 2.1 Board. 

2.1.1 Board Representation. 

(a) Until such time as the rights of the Holders are terminated or reduced in accordance with Section 2.1.7, the Holders,
collectively, shall be entitled to designate for nomination for election to the Board three (3) members of the Board as provided in Sections 2.1.2 and 2.1.3 hereof. If, at December 31, 2017 (the “Board Determination
Date’), the Holder Ownership Percentage is (x) less than 40%, the Holders shall cause the Board Designee who has been appointed as a Class III director to promptly tender his or her resignation, effective as of the Board Determination
Date, from the Board and any committee thereof on which he or she may be a member; or (y) equal to or greater than 40%, the Company shall cause a director other than a Board Designee to promptly tender his or her resignation, effective as of
the Board Determination Date, from the Board and any committee thereof on which he or she may be a member (either such resignation, the “Board Reduction Event”). In furtherance of the foregoing, Matthew R. Kahn (and each successor
Board Designee to Matthew R. Kahn’s position as a Class III director on the Board appointed or elected prior to the Board Determination Date) shall, prior to, and as a condition to his or her appointment to the Board as a Board Designee, and
the Holders shall cause Matthew R. Kahn (and each successor Board Designee to Matthew R. Kahn’s position as a Class III director on the Board appointed or elected prior to the Board Determination Date) to, execute an irrevocable conditional
resignation as director in the form attached hereto as Exhibit A. At the time of the Board Reduction Event, the Company shall take such action as is necessary to cause at such time the full board of directors of the Company to be decreased by
one member (with such decrease being the elimination of the directorship vacated by the Board Reduction Event to consist of seven (7) directors. 

(b) Members of the Board designated by the Holders pursuant to this Section 2.1.1 or appointed to fill a vacancy by the Holders as
provided in Section 2.1.2 or Section 2.1.5 shall be referred to as the “Board Designees.” The Company and the Board shall, subject to and consistent with the Board’s fiduciary duties and applicable law,
take such actions as necessary to cause Board Designees to be nominated and submitted to the stockholders of the Company for election to the Board, or appointed to the Board by the remaining members of the Board, as provided in
Section 2.1.2 and Section 2.1.4. 

  
 7 

 (c) Prior to the Board Reduction Event, the number of directors on the Board shall not be
increased to greater than eight (8) without the unanimous approval of the Board Designees. Following the Board Reduction Event, the number of directors on the Board shall not be increased to greater than seven (7) without the unanimous
approval of the Board Designees. 
 2.1.2 Initial Board Representation. 

(a) Simultaneously with the execution and delivery of this Agreement, the three (3) Board Designees shall be appointed to the Board as
follows: (i) Morgan D. Neff shall be appointed as a Class I director on the Board; (ii) Matthew D. Wilks shall be appointed as a Class II director on the Board; and (iii) Matthew R. Kahn shall be appointed as a Class III director on
the Board. 
 2.1.3 Classified Board. For so long as the Company classifies and divides the Board into more than one class in which
the terms of the directors serving on the Board expire at different times depending on their class, then for so long as Holders are entitled to designate (A) two (2) Board Designees one such Board Designee shall serve as a Class I director
and one such Board Designee shall serve as a Class II director or (B) three (3) Board Designees one such Board Designee shall serve as a Class I director, one such Board Designee shall serve as a Class II director and one such Board
Designee shall serve as a Class III director. 
 2.1.4 Annual Meeting. 

(a) At each annual meeting of the Company’s stockholders or any special meeting in lieu thereof at which the term of any Board Designee
is to expire or at the date of which proxy materials for such meeting are mailed to the Company’s stockholders there shall be less than the maximum number of Board Designees that Holders are then entitled to designate serving on the Board, the
Holders, collectively, shall be entitled to designate for nomination as a director the number of individuals necessary so that, if such designees are elected to the Board at such annual meeting or any special meeting in lieu thereof, the maximum
number of Board Designees shall be serving on the Board. The Company and the Board shall, subject to and consistent with the Board’s fiduciary duties and applicable law, take such actions as necessary to cause each Board Designee so designated
by the Holders and to be nominated for election to the Board at each annual meeting of the Company’s stockholders or any special meeting in lieu thereof. To the extent the Company’s proxy statement for any annual meeting of stockholders,
or any special meeting in lieu thereof, includes a recommendation regarding the election of any other nominees to the Board, the Company and the Board shall, subject to and consistent with the Board’s fiduciary duties and applicable law,
include a recommendation of its Board that the stockholders also vote in favor of each Board Designee standing for election at such meeting. 

(b) For any annual meeting of the Company’s stockholders or any special meeting in lieu thereof at which Holders are entitled to
designate an individual for nomination as a director pursuant to Section 2.1.4(a), the Company shall use its good faith efforts to notify Holders in writing no less than ten (10) days before the advance notice deadline set forth in
the Company’s bylaws of such entitlement. If, at any time neither Holder advises the Board in writing, delivered to the Board not less than ninety (90) and no more than one hundred 

  
 8 

 
twenty (120) calendar days prior to the one year anniversary of the date of the Company’s proxy statement issued in connection with the prior year’s annual meeting in the case of
an annual meeting, and not less than sixty (60) days prior to the meeting in the case of a special meeting (provided, however, that if a Holder notifies the Board that Holders are unable to notify the Board within such time period, the Holders
and Board will work together in good faith to establish a later time period (taking into account the minimum amount of time the Company will reasonably need to include the information required by clauses (i) and (ii) below in any proxy
solicitation materials and prepare any other materials related thereto and to the election of directors)), of Holders intention to designate the number of directors which the Holders are then entitled to designate for nomination at the next annual
meeting of the Company’s stockholders or special meeting in lieu thereof, then the rights granted under this Section 2.1 with respect to the designation of Board Designees shall be applicable for such meeting only with respect to
the number of nominees as indicated in such writing, if any, that the Holders intend to designate, but shall continue to be fully effective with respect to subsequent meetings and interim vacancies. The Holders shall provide (i) the information
regarding each Board Designee as would be required to be included in solicitations of proxies for the election of directors in an election context or is otherwise required pursuant to the federal securities laws and regulations, had the nominee been
nominated, or intended to be nominated, by the Board and (ii) the consent of each such Board Designee to serve as a director of the Company if so elected. 

2.1.5 Board Committees. Subject to the Company’s corporate governance and independence guidelines, applicable law and the rules and
regulations of NASDAQ (or any other stock exchange on which the Company is then listed), including, if applicable, any enhanced requirements of with respect to certain committees of the Company, in each case, requiring that certain committee members
qualify as Independent, for so long as the Holders are represented on the Board by at least one Board Designee, the Company and the Board shall take such actions as necessary to cause at least one such Board Designee to be elected to, and to at all
times be a member of, each committee established by the Board based, if applicable, on whether or not such Board Designee qualifies as Independent; provided that such Board Designee, in his or her sole discretion, may decline to serve on such
committee. 
 2.1.6 Vacancies. If, prior to his or her election or appointment to the Board pursuant to this Section 2.1,
any Board Designee shall be unable or unwilling to serve as a director of the Company, then the Holders shall be entitled to nominate a replacement Board Designee, and the Company and the Board shall, subject to and consistent with the Board’s
fiduciary duties and applicable law, take such actions as necessary to cause such replacement Board Designee to be appointed to the Board or nominated and submitted to the stockholders, as applicable, pursuant to this Section 2.1. If,
following an election or appointment to the Board pursuant to this Section 2.1, any Board Designee shall resign or be removed or be unable to serve for any reason prior to the expiration of his or her term as a director of the Company,
then the Holders shall, within thirty (30) days of such event, notify the Board in writing of a replacement Board Designee, and the Company and the Board shall, subject to and consistent with the Board’s fiduciary duties and applicable
law, take such actions as necessary to cause such replacement Board Designee to be appointed to the Board to fill the unexpired term of the Board Designee who such new Board Designee is replacing. 

  
 9 

 2.1.7 Reduction; Termination of Rights. The right of the Holders to designate directors
under this Section 2.1 shall be reduced and terminate as follows: 
 (a) Upon written request to the Holders, if the number of
Board Designees exceeds the number of directors the Holders shall be entitled to designate pursuant to Section 2.1.1 (as such number may be adjusted pursuant to this Section 2.1.7, the Holders shall cause the number of Board
Designee(s) in excess of the number of Board Designees to which the Holders are then entitled to designate to resign from the Board such that the number of Board Designees shall be reduced to the number the Holders are then entitled to designate.

 (b) Upon the completion of a Sale Transaction, the Holders’ right to designate Board Designees to the Board and its committees shall
immediately expire and the Holders shall cause each Board Designee then serving on the Board to resign from the Board immediately after the completion of a Sale Transaction; provided, however, that in the event such completed Sale
Transaction is a sale of all or substantially all of the consolidated assets of the Company and its Subsidiaries, the Holders’ right to designate Board Designees to the Board and its committees shall not expire until such time as a final
determination has been made with respect to the complete disposition of the proceeds from such Sale Transaction, at which point in time the Holders shall cause each Board Designee then serving on the Board to resign from the Board. 

(c) Upon the Holder Ownership Percentage being less than 40% at any time on or after the Board Determination Date, the Holders’ right to
designate members of the Board pursuant to Section 2.1.1(a) shall be reduced to the right to designate two (2) members of the Board; provided, that, subject to Section 2.1.1(a) with respect to a Board Reduction
Event, the then current term of the Board Designees then serving on the Board shall not be affected solely by the loss of such right. 
 (d)
Upon the Holder Ownership Percentage being reduced to less than 20%, the Holders’ right to designate members of the Board pursuant to Section 2.1.1(a) shall be reduced to the right to designate one (1) member of the Board;
provided, that the then current term of the Board Designees then serving on the Board shall not be affected solely by the loss of such right. 

(e) Upon the Holder Ownership Percentage being reduced to less than 10%, the Holders’ right to designate members to the Board pursuant to
Section 2.1.1(a) shall immediately expire; provided, that the then current term of the Board Designees then serving on the Board shall not be affected solely by the loss of such right. 

2.1.8 Company Policies; Fees; Costs and Expenses. The parties hereto acknowledge that each Board Designee, upon election to the Board,
will serve as a member of the Board and will be governed by the same protections and obligations regarding confidentiality, conflicts of interest, related party transactions, fiduciary duties, codes of conduct, trading and disclosure policies,
director resignation policies, and other governance guidelines and policies of the Company as other directors, and shall be required to preserve the confidentiality of Company business and information, including discussions or matters considered in
meetings of the Board or committees of the Board, and shall have the same rights 

  
 10 

 
and benefits, including with respect to insurance, indemnification and, with respect to Board Designees who qualify as Independent, compensation that are applicable to all Independent directors
of the Company. The Company will pay and reimburse each Board Designee (whether such Board Designee qualifies as Independent or not) for all reasonable out-of-pocket expenses incurred by such Board Designee in connection with his or her
participation in (or attendance at) meetings of the Board (and committees thereof) and the boards of directors (and committees thereof) of the Subsidiaries of the Company to the same extent as the Company reimburses all other directors of the
Company. 
 2.1.9 Voting. Until the occurrence of a Trigger Event, each Holder shall, and shall cause its Affiliates to, vote all
Voting Securities of the Company (including all Common Stock) held by such Holder and its Affiliates or over which such Holder or its Affiliates has voting control, and shall take all other necessary or desirable actions within its control
(including in its capacity as a stockholder, director, member of a board committee, officer or otherwise) to vote in the same proportion as shares of Voting Securities of the Company (including Common Stock) that are not held by such Holder or its
Affiliates or over which such Holder or its Affiliates does not have voting control with respect to (a) any ratification of the appointment of the Company’s independent registered public accounting firm; (b) the Board’s
recommendation with respect to the Company’s “say-on-pay” proposal or with respect to any other Company proposal or stockholder proposal (other than any proposal with respect to any Extraordinary Transaction); (c) each nominee
(including those that are not Board Designees) nominated and approved by the Director Nominating Committee; or (d) the removal of any Board Designees selected by the Director Nominating Committee to reduce the number of Board Designees to the
number of Board Designees to which the Holders are then entitled to designate if such Board Designees have not been removed in accordance with Section 2.1.7. Following the occurrence of a Trigger Event, the foregoing restrictions on each
of the Holders’ or its Affiliates’ voting of Voting Securities of the Company (including all Common Stock) held by such Holder or its Affiliates or over which such Holder or its Affiliates has voting control, shall terminate and each such
Holder or Affiliate shall be free to vote its Voting Securities in respect of each of the matters referenced in the immediately preceding sentence in any way it chooses to do so. 

 
 ARTICLE 3 

ACQUISITIONS; TRANSFERS 

Section 3.1 Restrictions on Acquisitions. 

3.1.1 Subject to Section 3.1.2, from the date hereof until the eighteen (18) month anniversary of this Agreement, each Holder
agrees that other than in accordance herewith (including pursuant to the exercise of its rights under Section 2.1.1) or without the prior written consent of the Board, such Holder shall not, and shall cause each of its Affiliates not to,
directly or indirectly: 
 (a) in any manner acquire, agree to acquire or make any proposal or offer to acquire, directly or indirectly,
(i) any Voting Securities of the Company or any rights or options to acquire any such Voting Securities which would result in the Holder Ownership Percentage following such acquisition exceeding the Equity Cap or (ii) any property of the
Company or any rights or options to acquire any such property; 

  
 11 

 (b) propose to have such Holder or an Affiliate of such Holder enter into, directly or
indirectly, any merger or business combination involving the Company or propose to have such Holder or an Affiliate of such Holder purchase, directly or indirectly, a material portion of the assets of the Company; 

(c) make, or in any way participate, directly or indirectly, in any “solicitation” of “proxies” (as such terms are used in
Regulation 14A promulgated under the Exchange Act) to vote or consent, or seek or advise or influence any person with respect to the voting of, or granting of a consent with respect to, any Voting Securities of the Company; 

(d) other than with other Holders, form, join or in any way participate in a “group” (within the meaning of Section 13(d)(3) of
the Exchange Act) with respect to any Voting Securities of the Company; 
 (e) except as may be required by law (provided that such legal
requirement does not arise as a result of or in connection with any breach of this Agreement by such Holder or its Representatives or Affiliates), disclose any intention, plan or arrangement inconsistent with the foregoing; 

(f) except as permitted pursuant to Section 3.2 hereof, provide, or act as agent for the purpose of obtaining, debt or equity financing
for any transaction described in clause (a) or (b) of this Section 3.1.1; or 
 (g) advise, assist or encourage any
other persons in connection with any of the foregoing. 
 Notwithstanding the foregoing provisions of this Section 3.1.1, the
restrictions set forth in this Section 3.1.1 shall terminate and be of no further force and effect if a public announcement or commencement is made of a tender or exchange offer by any Person (other than a Holder or its Affiliates) for,
or upon completion of which any Person would beneficially own (as such term is used in Rule 13d-3 of the Exchange Act), fifty percent (50%) or more of the outstanding Voting Securities of the Company, and the Board approves or fails to oppose
that tender or exchange offer in its statements in Schedule 14D-9 under the Exchange Act. 
 For the avoidance of doubt, nothing in
this Section 3.1.1 shall prohibit a Holder or any Affiliate of a Holder from engaging in discussions regarding potential transactions with unaffiliated third parties provided that it promptly and fully discloses any such discussions to
the Board and does not undertake any actions in furtherance of such a transaction without having first obtained the approval of the Board. 

3.1.2 Notwithstanding Section 3.1.1 or the expiration of the term thereof, each Holder shall not, and shall cause each of its
Affiliates not to, (a) until May 7, 2019, take any action (including any action described in Section 3.1.1) at any time if such action would result in a “Change of Control” (as such term is defined in the Revolving
Credit Facility) under the terms 

  
 12 

 
of the Revolving Credit Facility or (b) acquire, agree to acquire or make any proposal or offer to acquire, directly or indirectly, Common Stock such that, upon such acquisition, the Holder
Ownership Percentage would exceed the Equity Cap; provided that the restriction set forth in this Section 3.1.2(b) may be waived by the Company after a Trigger Event if such waiver is approved by a majority of the members of the
Board other than Board Designees and any other members of the Board nominated for election to the Board by Holders or any Holder. 

Section 3.2 Preemptive Rights. 

3.2.1 The Company shall not issue or sell, or agree to issue or sell, any Preemptive Debt Securities (other than (a) debt securities
issuable with respect to intercompany debt by and between the Company and any Subsidiaries or (b) in connection with the Exchange Offer (as such term is defined in the Exchange Agreement) contemplated by Section 5.g of the Exchange
Agreement) to any third party unless the Company shall have first delivered written notice (a “Preemptive Debt Notice”) to the Holders of the Company’s intent to issue, sell or exchange Preemptive Debt Securities, which
Preemptive Debt Notice shall (x) state the aggregate principal amount of the Preemptive Debt Securities the Company proposes to issue or sell and (y) may include the price and other material terms and conditions on which the Company
proposes to issue or sell the Preemptive Debt Securities (such items as described in this clause (y), the “Preemptive Debt Terms”). 

3.2.2 For a period of ten (10) Business Days from the date the Preemptive Debt Notice is delivered to Holders (the “Preemptive
Debt Offer Period”), the Holders may, by written notice to the Company (the “Preemptive Debt Election Notice”): (a) if the Preemptive Debt Notice included Preemptive Debt Terms, elect to purchase (“Preemptive
Debt Purchase Election”) all of the Preemptive Debt Securities, which shall constitute an offer to purchase such Preemptive Debt Securities which shall remain open and irrevocable for a period of ten (10) Business Days or
(b) offer to provide debt financing (“Alternative Debt Financing Offer”) in an amount equal to the aggregate principal amount of the Preemptive Debt Securities stated in the Preemptive Debt Notice and on such terms and
conditions as the Holders shall specify in the Election Notice, which shall constitute an offer to provide such debt financing which shall remain open and irrevocable until the end of the ADF Acceptance Period. 

3.2.3 If one or both Holders makes a timely Preemptive Debt Purchase Election, the Company shall provide written notice to such Holders
establishing the date of the new issuance of the Preemptive Debt Securities and the procedures for purchasing the Preemptive Debt Securities and the Holder(s) delivering such Preemptive Debt Purchase Election shall be obligated to provide the debt
financing referred to in the Preemptive Debt Notice on the Preemptive Debt Terms. 
 3.2.4 If the Company receives an Alternative Debt
Financing Offer from one or both Holders: 
 (a) The Company shall have thirty (30) days following its receipt of the Alternative Debt
Financing Offer (the “ADF Acceptance Period”) to determine whether to accept or reject the Alternative Debt Financing Offer. If the Company accepts the Alternative Debt Financing Offer, then the Holder(s) delivering such Alternative
Debt Financing Offer shall be obligated to provide the debt financing referred to in the Alternative Debt Financing Offer on the terms and conditions set forth in the Alternative Debt Financing Offer within sixty (60) days from the
Company’s acceptance. 

  
 13 

 (b) If the Company rejects or otherwise does not accept the Alternative Debt Financing Offer,
then the Company may proceed with the issuance of the Preemptive Debt Securities to a third party during the one hundred and fifty (150) day period following the expiration of the ADF Acceptance Period on such terms and conditions as determined
by the Company in its sole discretion; provided such terms and conditions of the Preemptive Debt Securities must be no less favorable, taken as a whole and considering all factors deemed relevant by the Company, than the Preemptive Debt Terms
or the terms and conditions of the Alternative Debt Financing Offer. If the Company has not issued or sold (or executed definitive documents to issue or sell) the Preemptive Debt Securities within the one hundred and fifty (150) days following
the expiration of the ADF Acceptance Period, any proposed issuance of such Preemptive Debt Securities shall once again be subject to the terms and conditions of this Section 3.2. Notwithstanding the foregoing, if the Preemptive Debt
Notice included Preemptive Debt Terms and the Company rejects or otherwise does not accept the Alternative Debt Financing Offer, Company shall so notify Holders, and Holders shall have three (3) Business Days following such notification to make
a Preemptive Debt Purchase Election pursuant to Section 3.2.2, and if Holders do not make a Preemptive Debt Purchase Election within such three (3) business day period the Company may proceed with the issuance of the Preemptive Debt
Securities to a third party in accordance with the preceding sentence. 
 3.2.5 If neither Holder delivers a Preemptive Debt Election Notice
during the Preemptive Debt Offer Period, the Company shall be entitled to sell such Preemptive Debt Securities specified in the Preemptive Debt Notice on such terms and conditions as determined by the Company in its sole discretion for a period of
one hundred and eighty (180) days following the expiration of the Preemptive Debt Offer Period. Any Preemptive Debt Securities to be sold by the Company following the expiration of such one hundred and eighty (180) day period must be
reoffered to the Holders pursuant to the terms of this Section 3.2. 
 3.2.6 The Company shall not issue or sell, or agree to
issue or sell, any Preemptive Equity Securities to any third party unless the Company shall have first delivered written notice (a “Preemptive Equity Notice”) to the Holders of the Company’s intent to issue, sell or exchange
Preemptive Equity Securities, which Preemptive Equity Notice (a) shall state the number and type of Preemptive Equity Securities proposed to be issued and (b) may include the price and other material terms and conditions on which the
Company proposes to issue the Preemptive Equity Securities (provided if the Company does not include the price at which the Company proposes to issue the Preemptive Equity Securities in a Preemptive Equity Notice, the Company shall use good faith
efforts to provide to the Holders reasonable advance notice of the price range or price, when determined, at which the Company proposes to issue the Preemptive Equity Securities). 

3.2.7 For a period of ten (10) Business Days from the date the Preemptive Equity Notice is delivered to Holders (the “Preemptive
Equity Offer Period”), the Holders may, by written notice to the Company (the “Preemptive Equity Election Notice”) elect to purchase (the “Preemptive Equity Purchase Election”), on the terms and conditions
specified in the 

  
 14 

 
Preemptive Equity Election Notice but subject to Section 3.1.2, up to a number of Preemptive Equity Securities, in the aggregate as to both Holders, equal to (a) the number of
Preemptive Equity Securities proposed to be issued or sold by the Company multiplied by (b) the Holder Ownership Percentage immediately prior to the delivery of the Preemptive Equity Notice by the Company, which shall constitute an offer
to purchase such Preemptive Equity Securities. 
 3.2.8 If one or both Holders makes a timely Preemptive Equity Purchase Election, the
Company shall provide written notice to such Holder(s) establishing the date of the new issuance of Preemptive Equity Securities and the procedures for purchasing the Preemptive Equity Securities. Notwithstanding the foregoing, the Company shall be
under no obligation to consummate any proposed issuance of Preemptive Equity Securities, nor shall there be any liability on the part of the Company, or to the Board, to the Holders if the Company has not consummated any proposed issuance of
Preemptive Equity Securities pursuant to this Section 3.2 for whatever reason, regardless of whether the Company shall have delivered a Preemptive Equity Notice. 

3.2.9 If neither Holder delivers a Preemptive Equity Election Notice during the Preemptive Equity Offer Period, the Company shall be entitled
to sell such Preemptive Equity Securities in the Preemptive Equity Notice on such terms and conditions as determined by the Company in its sole discretion for a period of one hundred and fifty (150) days following the expiration of the
Preemptive Equity Offer Period. Any Preemptive Equity Securities to be sold by the Company following expiration of such one hundred and fifty (150) day period must be reoffered to the Holders pursuant to the terms of this
Section 3.2. 
 Section 3.3 Restrictions on Transfers. 

3.3.1 From the date hereof until the six (6) month anniversary of the this Agreement (the “Restricted Period”), each
Holder agrees that, without the prior written consent of the Company, such Holder shall not, and it shall cause each of its Affiliates not to, directly or indirectly, Transfer any shares of Common Stock (or any rights or interests of any nature
whatsoever in or with respect to any shares of Common Stock) beneficially owned (as such term is used in Rule 13d-3 of the Exchange Act) by such Holder or its Affiliates. 

3.3.2 Upon the completion of the Restricted Period, the Holders agree not to Transfer more than five percent (5%) of the shares of Common
Stock beneficially owned (as such term is used in Rule 13d-3 of the Exchange Act) by the Holders and their Affiliates, in the aggregate, per each rolling ninety (90) day period beginning with a Holder’s (or its Affiliate’s) first
transfer of shares of Common Stock after the termination of the Restricted Period until the date that is eighteen (18) months from the end of the Restricted Period (the “Dribble Out Period”); provided, however,
that, following the date that is six (6) months after the completion of the Restricted Period, the foregoing restriction set forth in this Section 3.3.2 shall not apply to any underwritten offering effected pursuant to a
Holder’s rights under, and subject to the terms of, the Registration Rights Agreement. 
 3.3.3 Upon the completion of the Dribble Out
Period, each Holder will be free to Transfer shares of Common Stock without limitation, except that all such Transfers shall be in compliance with applicable state and federal securities laws and the terms of this Agreement. 

  
 15 

 3.3.4 Notwithstanding the foregoing, a Holder may Transfer shares of Common Stock (i) to
any Affiliate of such Holder; provided, that in the case of any such Transfer to such Affiliate, the Affiliate shall agree to be bound by the terms of this Section 3.3 and (ii) pursuant to any merger, consolidation,
recapitalization or reorganization of the Company with or into a third-party purchaser. 
 3.3.5 Notwithstanding this
Section 3.3, each Holder agrees that it shall not, and it shall cause each of its Affiliates not to, directly or indirectly, Transfer any shares of Common Stock (or any rights or interests of any nature whatsoever in or with respect to
any shares of Common Stock) beneficially owned (as such term is used in Rule 13d-3 of the Exchange Act) by the Holder or its Affiliates if such Transfer would result in a “Change of Control” (as such term is defined the Revolving Credit
Facility) under the terms of the Revolving Credit Facility; provided, however, that the foregoing restriction shall not apply to any Transfer effected (a) as a brokers’ transaction on a national securities exchange or
(b) pursuant to an underwritten public offering registered under the Securities Act. 
 ARTICLE 4 

TERMINATION 
 This Agreement
shall terminate automatically upon the earlier to occur of: (i) the Holder Ownership Percentage being reduced to less than ten percent (10%); and (ii) the five (5) year anniversary of this Agreement. 

ARTICLE 5 
 MISCELLANEOUS 

Section 5.1 Notices. Any notices or other communications required or permitted hereunder shall be in writing, and shall be
sufficiently given if made by hand delivery, by facsimile or registered or certified mail, postage prepaid, return receipt requested, addressed as follows (or at such other address as may be substituted by notice given as herein provided): 

If to the Company: 

Approach Resources Inc. 

6500 West Freeway, Suite 800 

Fort Worth, Texas 76116 

Attention: J. Curtis Henderson 

Facsimile No.: (817) 989-9001 

  
 16 

 If to the Holders: 

Wilks Brothers, LLC 

17010 IH-20 

Cisco, Texas 76437 

Attention: Morgan Neff and Matt Wilks 

Facsimile No.: (817) 850-3698 

SDW Investments, LLC 

17010 IH-20 

Cisco, Texas 76437 

Attention: Morgan Neff and Matt Wilks 

Facsimile No.: (817) 850-3698 

Any notice or communication hereunder shall be deemed to have been given or made as of the date so delivered if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on receipt if sent by registered or certified mail. 

Section 5.2 Governing Law: Venue: Jurisdiction. THIS AGREEMENT and all claims or causes of action (whether in contract or tort)
that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in
or in connection with this Agreement) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. Each party hereby agrees that any action based upon, arising out of or
relating to this Agreement (including any action concerning the violation or threatened violation of this Agreement) shall be heard and determined in any state or federal court sitting in the Court of Chancery of the State of Delaware (or, if the
Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, in the United States District Court for the District of Delaware), and the parties hereto hereby irrevocably submit to the exclusive jurisdiction of
such courts (and, in the case of appeals, appropriate appellate courts therefrom) in any such action or proceeding and irrevocably waive the defense of an inconvenient forum to the maintenance of any such action or proceeding. In addition, each
party consents to process being served in any such lawsuit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such services shall
constitute good and sufficient service of process and notice thereof. The consents to jurisdiction set forth in this paragraph shall not constitute general consents to service of process in the State of Delaware and shall have no effect for any
purpose except as provided in this Section 5.2 and shall not be deemed to confer rights on any Person other than the parties hereto. Nothing in this Section 5.2 shall affect or limit any right to serve process in any other
manner permitted by law. 
 Section 5.3 Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RESPECTIVE RIGHT TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT WHETHER BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY RECOGNIZES AND AGREES THAT THE FOREGOING WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS AGREEMENT. EACH

  
 17 

 
PARTY REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. 
 Section 5.4 Successors and Assigns. This Agreement shall be binding upon the Company, the Holders, and their
respective successors and permitted assigns (which shall be deemed to include any Affiliate of any Holder to which a Holder Transfers any shares of Common Stock); provided that if any Holder Transfers any shares of Common Stock to any of its
Affiliates such Holder shall remain the sole party entitled to exercise the rights of such Holder under this Agreement and such Affiliate shall (and such Holder shall require such Affiliate to execute a joinder to this Agreement in form and
substance reasonably acceptable to the Company agreeing to) be bound by the terms of this Agreement with respect to all shares of Common Stock held by such Affiliate. No Holder may assign any of its rights under this Agreement to any other Person
(including any transferee of any Common Stock held by a Holder) without the prior written consent of the Company, which consent may be granted or denied by the Company in its sole discretion and to be valid must be approved by a majority of the
members of the Board other than Board Designees and any other members of the Board nominated for election to the Board by Holders or any Holder, and any assignment in violation of the foregoing shall be void ab initio. 

Section 5.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed to be an
original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. This Agreement and any signed agreement entered into in connection herewith or contemplated hereby, and any amendments
hereto or thereto, to the extent signed and delivered by facsimile, by electronic mail in “portable document format” (“.pdf”) form, or any other electronic transmission, shall be treated in all manner and respects as an original
contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. 

Section 5.6 Severability. Any provision of this Agreement which is prohibited, unenforceable or not authorized in any jurisdiction
is, as to such jurisdiction, ineffective to the extent of any such prohibition, unenforceability or nonauthorization without invalidating the remaining provisions hereof, or affecting the validity, enforceability or legality of such provision in any
other jurisdiction, unless the ineffectiveness of such provision would result in such a material change as to cause completion of the transactions contemplated hereby to be unreasonable. Upon a determination that any provision of this Agreement is
prohibited, unenforceable or not authorized, the parties hereto agree to negotiate in good faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible, in a mutually acceptable manner, in order
that the transactions contemplated hereby are consummated as originally contemplated to the fullest extent possible. 
 Section 5.7
Specific Performance. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, including if the
parties hereto fail to take any action required of them hereunder to consummate this Agreement. It is accordingly agreed that, 

  
 18 

 
in addition to any other applicable remedies at law or equity, the parties shall be entitled to an injunction or injunctions, without proof of damages, to prevent breaches of this Agreement and
to enforce specifically the terms and provisions of this Agreement. Each party hereto agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (i) the other party has an
adequate remedy at law or (ii) an award of specific performance is not an appropriate remedy for any reason at law or in equity. Each of the parties hereto hereby waives (i) any defenses in any action for specific performance, including
the defense that a remedy at law would be adequate and (ii) any requirement under any law to post a bond or other security as a prerequisite to obtaining equitable relief. 

Section 5.8 No Waivers; Amendments. 

5.8.1 No failure or delay on the part of the Company or the Holder in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies provided for herein are cumulative and are not
exclusive of any remedies that may be available to the Company or any Holder at law or in equity or otherwise. 
 5.8.2 Any provision of this
Agreement may be amended or waived if, but only if, such amendment or waiver makes specific reference to this Agreement, and, (i) in the case of an amendment, such amendment is with the written consent of the Company and each Holder, and (ii),
in the case of a waiver, such waiver is signed by the Person against whom it is to be enforced; provided that any amendment of this Agreement or waiver by the Company hereunder shall only be effective if such amendment or waiver is approved by a
majority of the members of the Board other than Board Designees and any other members of the Board nominated for election to the Board by Holders or any Holder. 

Section 5.9 Non-Recourse. All claims, obligations, liabilities, or causes of action (whether in contract or in tort, in law or in
equity, or granted by statute) that may be based upon, in respect of, arise under, out or by reason of, be connected with, or relate in any manner to this Agreement, or the negotiation, execution, or performance of this Agreement (including any
representation or warranty made in, in connection with, or as an inducement to, this Agreement), may be made only against (and are expressly limited to) the entities that are expressly identified as parties in the preamble to this Agreement
(“Contracting Parties”). No Person who is not a Contracting Party, including any director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney, or representative of, and any financial
advisor or lender to, any Contracting Party, or any director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney, or representative of, and any financial advisor or lender to, any of the foregoing
(“Non-party Affiliates”), shall have any liability (whether in contract or in tort, in law or in equity, or granted by statute) for any claims, causes of action, obligations, or liabilities arising under, out of, in connection with,
or related in any manner to this Agreement or based on, in respect of, or by reason of this Agreement or its negotiation, execution, performance, or breach; and, to the maximum extent permitted by law, each Contracting Party hereby waives and
releases all such liabilities, claims, causes of action, and obligations against any such Non-party Affiliates. 

  
 19 

 Section 5.10 Further Assurances. Each party shall cooperate and shall take such
further action and shall execute and deliver such further documents as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement. 

Section 5.11 Entire Agreement. This Agreement (including all schedules and exhibits hereto) contains the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect to such matters. 

Section 5.12 Ownership and Aggregation of Common Stock; Action by Holders. 

5.12.1 All shares of Common Stock beneficially owned by each Holder and its Affiliates shall be aggregated for purposes of interpreting the
term and terms of, and determining the application and availability of any obligations and rights under, this Agreement, unless the context otherwise requires. 

5.12.2 Any action to be taken or consent or approval to be given by Holders pursuant to this Agreement shall be deemed taken, consented to or
approved upon the affirmative consent or approval by either Holder; provided that, if the Company receives conflicting direction, consents or approvals from the Holders with respect to any action to be taken or consent or approval to be given by
Holders pursuant to this Agreement, then any action to be taken or consent or approval to be given by Holders pursuant to this Agreement shall be deemed taken, consented to or approved upon the affirmative consent or approval by the Holder that
holds a majority of the Common Stock held by both Holders. 
 5.12.3 From time to time upon the written request by the Company, each Holder
shall provide to the Company in writing a statement setting forth the number of shares of Common stock beneficially owned (as such term is used in Rule 13d-3 of the Exchange Act) by such Holder, certified by an officer or other duly authorized
representative of such Holder. 
 [Remainder of Page Intentionally Left Blank] 

  
 20 

 SIGNATURES TO STOCKHOLDERS AGREEMENT 

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

 

			
	APPROACH RESOURCES INC.
		
	By:	 	 
	Name:
	Title:

 [Signature Page to Stockholders Agreement] 

 SIGNATURES TO STOCKHOLDERS AGREEMENT 

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

 

			
	WILKS BROTHERS, LLC
		
	By:	 	 
	Name:
	Title:
		
	By:	 	 
	Name:
	Title:

  

			
	SDW INVESTMENTS, LLC
		
	By:	 	 
	Name:
	Title:
		
	By:	 	 
	Name:
	Title:

 [Signature Page to Stockholders Agreement] 

 EXHIBIT A 

Conditional Resignation of Director 

[●], 201[●] 
 Approach Resources Inc.

 One Ridgmar Centre 
 6500 West Freeway, Suite 800 

Fort Worth, Texas 76116 
 Attention: Corporate Secretary 

Ladies and Gentlemen: 
 Reference is hereby made
to that certain Stockholders Agreement, dated as of the date hereof, by and among Approach Resources Inc. (the “Company”), Wilks Brothers, LLC and SDW Investments, LLC (the “Stockholders Agreement”). Capitalized
terms used but not defined herein shall have the meanings ascribed to them in the Stockholders Agreement. 
 Effective upon the Board
Determination Date, I, Matthew R. Kahn, resign as a member of the board of directors of the Company and as a member of each committee of the board of directors of the Company on which I serve as of the Board Determination Date (the
“Conditional Resignation”); provided, if as of the Board Determination Date the Holder Ownership Percentage is equal to or greater than 40%, the Conditional Resignation shall be null and void. 

 

	
	Sincerely,
	
	   

	Matthew R. Kahn

  
 A-1 

 Exhibit B 

Registration Rights Agreement 

  
 B-1 

 EXHIBIT B 

REGISTRATION RIGHTS AGREEMENT 

This REGISTRATION RIGHTS AGREEMENT, dated as of [●], 201[●] (this “Agreement”), is by and among Approach
Resources Inc., a Delaware corporation (the “Company”), and each of Wilks Brothers, LLC and SDW Investments, LLC (collectively, the “Holders”, and each, a “Holder”). 

RECITALS 
 WHEREAS,
on [●], 201[●], the Holders acquired the number of shares of common stock, par value $0.01 per share, of the Company (the “Company Common Stock”) set forth on Schedule A pursuant to the Exchange Agreement, dated
November 2, 2016, by and between the Company and the Holders (the “Exchange Agreement”); and 
 WHEREAS,
resales by a Holder of the Company Common Stock may be required to be registered under the Securities Act and applicable state securities laws, depending upon the status of such Holder or the intended method of distribution of the Company Common
Stock. 
 NOW, THEREFORE, in consideration of the premises, mutual covenants and agreements hereinafter contained and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE
I – REGISTRATION RIGHTS 
 1.1 Demand Registration. 

(a) From and after the one (1) year anniversary following the Closing, and subject to Section 1.1(b),
Section 1.1(c) and Section 2.3, upon written request from a Holder requesting that the Company effect the registration under the Securities Act of all or part of the Registrable Securities held by such Holder, which notice
may be delivered at any time after such one (1) year anniversary and which notice shall specify the intended method or methods of disposition of such Registrable Securities (“Registration Request Notice”), unless such
Registrable Securities are included in a currently effective Registration Statement permitting the resale of such Registrable Securities in the manner contemplated by the Registration Request Notice, the Company will use its commercially reasonable
efforts to file the appropriate Registration Statement under the Securities Act with the SEC as promptly as reasonably practicable after receipt of the Registration Request Notice and, as promptly as reasonably practicable following such
Registration Request Notice, cause such Registration Statement to be declared effective by the SEC and to permit the disposition of such Registrable Securities in accordance with the intended method or methods of disposition stated in such
Registration Request Notice. The Company shall not be required to maintain the effectiveness of such Registration Statement beyond the earlier to occur of (i) one hundred twenty 120 days after the effective date thereof and
(ii) consummation of the distribution by Holder of the Registrable Securities included in such Registration Statement (such period, the “Effectiveness Period”). 

(b) Notwithstanding Section 1.1(a), if the Company previously shall have caused a Registration Statement to be declared effective
by the SEC with respect to the Registrable Securities, the Company shall not be required to cause a subsequent Registration Statement to be declared effective by the SEC pursuant to this Section 1.1 until a period of one hundred twenty
(120) days shall have elapsed from the effective date of the most recent such previous registration. 
 (c) Notwithstanding
Section 1.1(a), the Company shall not be required to effect (i) more than two (2) registrations pursuant to this Section 1.1 in any twelve (12) consecutive month period or (ii) a registration of
Registrable Securities, the fair market value of which on the date of receipt by the Company of the Registration Request Notice is less than twenty million dollars ($20,000,000). 

 1.2 Piggyback Registration. 

(a) If at any time the Company proposes to register any of its equity securities (other than pursuant to an Excluded Registration) under the
Securities Act for sale to the public (whether for the account of the Company or the account of any securityholder of the Company) and the form of Registration Statement to be used permits the registration of Registrable Securities, the Company
shall give prompt written notice to each Holder (which notice shall be given not less than fifteen (15) days prior to the anticipated filing date), which notice shall offer each Holder the opportunity to include any or all of its Registrable
Securities in such Registration Statement, subject to the limitations contained in Section 1.2(b) hereof. If a Holder (in such capacity, a “Participating Holder”) desires to have its Registrable Securities included in
such Registration Statement, it shall so advise the Company in writing (stating the number of shares desired to be registered) within ten (10) days after the date of such notice from the Company. Each Holder shall have the right to withdraw
such Holder’s request for inclusion of Holder’s Registrable Securities in any registration statement pursuant to this Section 1.2(a) by giving written notice to the Company of such withdrawal. Subject to
Section 1.2(b) below, the Company shall use commercially reasonable efforts to include in such Registration Statement all such Registrable Securities so requested to be included therein; provided, however, that the Company
may at any time and in its sole and absolute discretion withdraw or cease proceeding with any such registration if it shall at the same time withdraw or cease proceeding with the registration of all other equity securities originally proposed to be
registered. The Company shall not be required to maintain the effectiveness of such Registration Statement beyond the Effectiveness Period. 

(b) If a nationally recognized independent investment banking firm selected by the Company to act as lead underwriter in connection with the
public offering of securities under this Section 1.2 advises the Company that the inclusion of the Registrable Securities requested to be included in the Registration Statement pursuant to Section 1.2(a) will materially and
adversely affect the price or success of such offering (a “Material Adverse Effect”), the Company will be obligated to include in the Registration Statement (after registering all such shares for its own account), as to each
Participating Holder, only a portion of the shares such Participating Holder has requested be registered equal to the product of: (i) the ratio which such Participating Holder’s requested shares bears to the total number of shares
requested to be included in such Registration Statement subject to Section 1.2(a) by all Persons (including the Participating Holder) who have requested (pursuant to contractual registration rights) that their shares be included in such
Registration Statement; and (ii) the maximum number of Registrable Securities that such lead underwriter advises may be sold in an offering covered by the Registration Statement without a Material Adverse Effect. If, as a result of the
provisions of this Section 1.2(b), the Participating Holder shall not be entitled to include all Registrable Securities in a registration that the Participating Holder has requested to be so included, the Participating Holder may
withdraw such its request to include Registrable Securities in such Registration Statement by giving written notice to the Company of such withdrawal. 

1.3 Expenses. The Company shall bear all Registration Expenses in connection with any Registration Statement pursuant to this
Article I, whether or not such Registration Statement becomes effective; provided, however, that if a Holder requests a registration pursuant to Section 1.1 and subsequently withdraws its request, then such Holder
shall either pay all Registration Expenses incurred in connection with such registration or such registration will count as a registration for purposes of Section 1.1(c) and such Holder shall not have the right to request another
registration pursuant to Section 1.1 during the subsequent ninety (90) days, unless the withdrawal of such request is the result of facts or circumstances relating to the Company or the Company Common Stock that arise after the date
on which such request was made and would have a material adverse effect on the offering of the Registrable Securities. 

  
 2 

 1.4 Company Purchase Option. Notwithstanding the terms of this Agreement, if at any
time a Holder requests any Registrable Securities be included in a registration statement pursuant to this Agreement and at such time securities of the same class or series as the Registrable Securities are traded on a national securities exchange
or trading system or any other recognized quotation system which regularly provides quotes on such securities (a “Trading Forum”), the Company shall have the right and option, in its sole discretion, to, in lieu of including such
Registrable Securities in such Registration Statement, purchase all or any portion of such Registrable Securities requested to be included in such Registration Statement at the closing or last sales price of such security reported by such Trading
Forum on the date of Holder’s request for inclusion of such Registrable Securities in such Registration Statement is received by the Company, or, if there is no such reported quote for such date on any Trading Forum, the last reported closing
or sales price, as applicable, of such security by a Trading Forum. 
 ARTICLE II – PROCEDURES 

2.1 Underwriting.  

(a) For so long as a Holder holds Registrable Securities, such Holder may request by giving written notice (an “Underwriting
Request”) to the Company that an offering permitted under Section 1.1(a) shall be in the form of an underwritten offering (each, an “Underwritten Offering”); provided, however, that in the case of
each such Underwritten Offering, such Holder will be entitled to make such demand only if the proceeds from the sale of Registrable Securities in the offering (before the deduction of underwriting discounts) is reasonably expected to exceed, in the
aggregate, twenty million dollars ($20,000,000); provided, further that the Company shall not be obligated to effect more than two (2) Underwritten Offerings during any twelve (12) consecutive month period and shall not be
obligated to effect an Underwritten Offering within one hundred twenty (120) days after the pricing of a previous Underwritten Offering. 

(b) All Underwriting Requests shall specify the approximate number of Registrable Securities to be sold in the Underwritten Offering and the
expected price range (net of underwriting discounts and commissions) of such Underwritten Offering. 
 (c) With respect to any such
Underwritten Offering, the Holder making the request shall select an investment banking firm of international standing to be the managing underwriter for the offering, which firm shall be reasonably acceptable to the Company. The Company will enter
into and perform its obligations under an underwriting agreement with the underwriters for such Underwritten Offering, such agreement to contain such representations and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary distributions, which may include, without limitation, indemnities and contribution to the effect and to the extent provided in Article III and the provision of
opinions of counsel and accountants’ letters as are customarily delivered by issuers to underwriters in secondary underwritten public offerings of securities. The Holders shall be a party to any such underwriting agreement and the
representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters shall also be made to and for the benefit of such Holders of such securities, but only to the extent such
representations and warranties and other agreements are customarily made by issuers to selling stockholders in secondary underwritten public offerings, and the Holders shall be required to make representations or warranties to, and other agreements
with, the Company and the underwriters in connection with such underwriting agreement as are customarily made by selling stockholders in secondary underwritten public offerings; provided, however, that the Holders shall not be required
to make 

  
 3 

 
any representations or warranties to the Company or the underwriters regarding such Holder’s knowledge about the Company or to undertake any indemnification obligations to the Company with
respect thereto, except as otherwise provided in Article III), or to the underwriters with respect thereto, except to the extent of the indemnification being given to the Company and its controlling Persons in Article III. 

(d) If (i) the managing underwriter for such Underwritten Offering advises the Company or (ii) the Company concludes, after
consulting with its independent financial advisor (which shall be an investment banking firm of international standing), in either case, that in its opinion the number of Registrable Securities requested to be included in such Underwritten Offering
exceeds the number of Registrable Securities that can be sold in an orderly manner in such offering within a price range acceptable to the Holders, the Company shall include in such Underwritten Offering the number of each Holder’s Registrable
Securities which in the opinion of such managing underwriter or the Company’s independent financial advisor, as applicable, can be sold in an orderly manner within the price range of such offering. 

(e) Unless the managing underwriter otherwise agrees, each Holder agrees not to effect any public sale or private offer or distribution of any
shares of Company Common Stock or any other issue being registered or a similar security of the Company, or any securities convertible into or exchangeable or exercisable for such securities, during the fourteen (14) days prior to the anticipated
effectiveness under the Securities Act of any underwritten registration of any such securities (or with respect to an underwritten takedown of any such securities under a shelf registration, prior to the pricing of such offer) and during such time
period (not to exceed one hundred eighty (180) days) after the effectiveness under the Securities Act of any underwritten registration (or, with respect to an underwritten offering pursuant to a shelf registration statement, after the pricing of
such offering) as the Company and the managing underwriter may agree (except as part of such underwritten registration or offering, as applicable). 

2.2 Registration Procedures. If and whenever a Holder has requested that any Registrable Securities be registered pursuant to
this Agreement under Article I, and subject to the limitations set forth in this Agreement, the Company will use its commercially reasonable efforts to effect the registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company will: 
 (a) if the Registration Statement is not automatically
effective upon filing, use commercially reasonable efforts to cause such Registration Statement to become effective; 
 (b) notify such
Holder, promptly after the Company receives notice thereof, of the time when such Registration Statement has been declared effective or a supplement to any Prospectus forming a part of such Registration Statement has been filed; 

(c) after the Registration Statement becomes effective, notify such Holder of any request by the SEC that the Company amend or supplement such
Registration Statement or Prospectus; 
 (d) prepare and file with the SEC such amendments and supplements to the Registration Statement and
any Prospectus used in connection therewith as may be reasonably necessary to keep the Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by
the Registration Statement for the period required to effect the distribution of the Registrable Securities as set forth in Article I hereof; 

(e) to the extent necessary to properly sell any Registrable Securities, furnish to such Holder such numbers of copies of a Prospectus,
including a preliminary Prospectus, as required by the Securities Act, and such other documents as such Holder may reasonably request in order to facilitate its disposition of its Registrable Securities; 

  
 4 

 (f) use its commercially reasonable efforts to register and qualify the Registrable Securities
under such other securities or blue sky Laws of such jurisdictions as shall be reasonably requested by such Holder; provided, however, that the Company shall not be required in connection therewith or as a condition thereto
to qualify to do business in or to file a general consent to service of process in any jurisdiction, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act, or subject itself to
taxation in any such jurisdiction, unless the Company is already subject to taxation in such jurisdiction; 
 (g) use its commercially
reasonable efforts to cause all such Registrable Securities to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar equity securities issued by the Company are then
listed; 
 (h) provide a transfer agent and registrar for the Registrable Securities and provide a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of the Registration Statement; 
 (i) use its commercially reasonable efforts to
furnish, on the date that shares of Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for
the purposes of such registration, in form and substance as is customarily given to underwriters by the Company in an underwritten public offering, addressed to the underwriters and (ii) a letter dated as of such date, from the independent
public accountants of the Company, in form and substance as is customarily given by independent public accountants to underwriters in an underwritten public offering, addressed to the underwriters; 

(j) if requested by such Holder, cooperate with such Holder and the managing underwriter (if any) to facilitate the timely preparation and
delivery of certificates (which shall not bear any restrictive legends unless required under applicable Law) representing securities sold under the Registration Statement, and enable such securities to be in such denominations and registered in such
names as such Holder or the managing underwriter (if any) may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such Registration Statement a supply of such certificates; 

(k) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in form and
substance as is customarily given by the Company to underwriters in an underwritten public offering, with the underwriter(s) of such offering; 

(l) upon execution of confidentiality agreements in form and substance satisfactory to the Company, promptly make available for inspection by
such Holder, any underwriter(s) participating in any disposition pursuant to such Registration Statement, and any attorney or accountant or other agent retained by any such underwriter or selected by such Holder, all financial and other records,
pertinent corporate documents, and properties of the Company (collectively, “Records”), and use commercially reasonable efforts to cause the Company’s officers, directors, employees, and independent accountants to supply all
information reasonably requested by such Holder, an underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such Registration Statement and to conduct appropriate due
diligence in connection therewith; provided, Records that the Company determines, in good faith, to be confidential and that it notifies such Holder are confidential shall not be disclosed by such Holder unless the release of such
Records is ordered pursuant to a subpoena or 

  
 5 

 
other order from a court of competent jurisdiction or is otherwise required by applicable Law. Such Holder agrees that information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it or its Affiliates (other than with respect to such Holder’s due diligence) unless and until such information is made generally available to the public, and further agrees that, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, it shall give notice to the Company and allow the Company to undertake appropriate action to prevent disclosure of the Records deemed confidential; 

(m) in the event of the issuance of any stop order suspending the effectiveness of such Registration Statement, or of any order suspending or
preventing the use of any related Prospectus or suspending the qualification of any Registrable Securities included in such Registration Statement for sale in any jurisdiction, use its commercially reasonable efforts to obtain promptly the
withdrawal of such order; 
 (n) promptly notify such Holder at any time when a Prospectus relating thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which the Prospectus included in the Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made, and at the request of such Holder promptly prepare and furnish to such Holder a reasonable number of copies of a supplement
to or an amendment of such Prospectus, or a revised Prospectus, as may be necessary so that, as thereafter delivered to the purchasers of such securities, such Prospectus shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances under which they were made (following receipt of any supplement or amendment to any Prospectus, such Holder shall
deliver such amended, supplemental or revised Prospectus in connection with any offers or sales of Registrable Securities, and shall not deliver or use any Prospectus not so supplemented, amended or revised); and 

(o) take all such other actions as are reasonably necessary in order to facilitate the disposition of such Registrable Securities. 

2.3 Holder Obligations. Subject to Section 2.1(a), a Holder may not participate in any registration hereunder unless
such Holder: (i) agrees to sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Company; and (ii) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents, each in customary form, reasonably required under the terms of such underwriting arrangements; provided, however, that such Holder shall not be required to make any representations or
warranties in connection with any such registration other than representations and warranties as to (A) such Holder’s ownership of its Registrable Securities to be sold or transferred free and clear of all liens, claims and encumbrances;
(B) such Holder’s power and authority to effect such transfer; and (C) such matters pertaining to compliance with securities Laws as may be reasonably requested; provided, further, that such liability will be limited, to
the net amount received by such Holder from the sale of its Registrable Securities pursuant to such registration. 
 2.4 Blackout
Periods. 
 (a) (i) At any time when a Registration Statement effected pursuant to Article I relating to Registrable
Securities is effective, upon written notice from the Company to a Holder that the board of directors of the Company (or any duly appointed committee thereof) has determined in good faith, with the advice of counsel, that such Holder’s sale of
Registrable Securities pursuant to the Registration Statement would be reasonably likely to require disclosure of material non-public information 

  
 6 

 
the disclosure of which would not otherwise be required to be disclosed (provided that the Company shall not be required to disclose to such Holder any such material non-public information) and
would be reasonably likely to have a material adverse effect on the Company or that such sale otherwise might not be in the best interests of the Company’s stockholders (an “Information Blackout”), such Holder shall suspend
sales of Registrable Securities pursuant to such Registration Statement and (ii) if, while a Registration Request Notice or other registration request is pending pursuant to Article I, the board of directors of the Company (or any duly
appointed committee thereof) determines that an Information Blackout is required, or that any such filing or the offering of any Registrable Securities would be reasonably likely to adversely affect or delay any proposed financing, offer or sale of
securities, acquisition, disposition, corporate reorganization or other material transaction involving the Company, the Company shall deliver to such Holder a certificate to such effect signed by its Chief Executive Officer or Chief Financial
Officer, and the Company shall not be required to file a Registration Statement, Prospectus or any amendment or any supplement thereto pursuant to Articles I (a “Registration Delay”); provided, that any such suspension
or postponement under (i) and (ii) of this Section 2.4(a) shall only continue until the earliest of: 
 (1) the date
upon which such material information is disclosed to the public or ceases to be material; 
 (2) ten (10) days after the Company’s
delivery of such written notice to such Holder; 
 (3) in the case of clause (i) above, such time as the Company notifies such Holder
that sales pursuant to such Registration Statement may be resumed; and 
 (4) in the case of clause (ii) above, the date upon which the
financing, offer or sale of securities, acquisition, corporate reorganization or other material transaction referred to therein concludes or is abandoned. 

The number of days from such suspension of sales by a Holder until the day when such sales may be resumed under clause (1), (2) or (3) hereof, or
from the date of a notice of a Registration Delay until the date such affected registration process resumes under clause (1), (2) or (4) hereof, shall be called a “Blackout Period”. In no event may the Company deliver more
than two (2) notices, collectively, of an Information Blackout and/or a Registration Delay in any twelve (12) consecutive month period, and the aggregate number of days in which any Blackout Periods may be in effect in any twelve
(12) consecutive month period shall not exceed one hundred twenty (120) days. 
 (b) Any delivery by the Company of a written
notice of a Registration Delay following a registration request by a Holder pursuant to Section 1.1, and before the effectiveness of the related Registration Statement, or of a written notice of an Information Blackout during the sixty
(60) days immediately following effectiveness of any Registration Statement effected pursuant to Article I, shall give such Holder the right, by written notice to the Company within twenty (20) Business Days after the end of such
Blackout Period, to cancel such registration and obtain one additional registration right during such calendar year under Article I. 

(c) The Company shall not effect any public offering of its securities during any Blackout Period other than in connection with such proposed
transaction described in Section 2.4(a). 
 2.5 Transfer of Registration Rights. The registration rights of a
Holder under this Agreement with respect to any Registrable Securities may be transferred or assigned to (i) an Affiliate of such Holder, or (ii) if the Holder is an Entity, a partner, stockholder or member

  
 7 

 
thereof; provided, however, that (a) such Holder shall give the Company written notice prior to the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under this Agreement are being transferred; (b) such transferee shall agree in writing, in form and substance satisfactory to the Company, to be bound as a Holder by the
provisions of this Agreement; (c) such transferee is not a direct competitor of the Company; and (d) immediately following such transfer the further disposition of such securities by such transferee shall be restricted to the extent set
forth under applicable Law. 
 2.6 Current Public Information. With a view to making available to each Holder the benefits of
Rule 144 and Rule 144A promulgated under the Securities Act and other rules and regulations of the SEC that may at any time permit each Holder to sell securities of the Company to the public without registration, the Company covenants that it will
(i) use its commercially reasonable efforts to file in a timely manner all reports and other documents required, if any, to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted thereunder; and
(ii) make available information necessary to comply with Rule 144 and Rule 144A, if available with respect to resales of the Registrable Securities under the Securities Act, at all times, all to the extent required from time to time to enable
each Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by (x) Rule 144 and Rule 144A promulgated under the Securities Act (if available with respect to resales
of the Registrable Securities), as such rules may be amended from time to time or (y) any other rules or regulations now existing or hereafter adopted by the SEC. 

ARTICLE III – INDEMNIFICATION 

3.1 Indemnification. 

(a) The Company agrees to indemnify and reimburse, to the fullest extent permitted by Law, each Holder, with respect to the sale of Registrable
Securities pursuant hereto, and each of its employees, advisors, agents, representatives, partners, officers, and directors and each Person who controls such Holder (within the meaning of the Securities Act or the Exchange Act) and any agent or
investment advisor thereof (collectively, the “Seller Affiliates”): (i) against any and all losses, claims, damages, liabilities and expenses, joint or several (including, without limitation, attorneys’ fees and
disbursements except as limited by Section 3.1(c)) based upon, arising out of, related to or resulting from any untrue or alleged untrue statement of a material fact contained in any Registration Statement or Prospectus or any amendment
thereof or supplement thereto, or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation or investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon, arising
out of, related to or resulting from any such untrue statement or omission or alleged untrue statement or omission; and (iii) against any and all costs and expenses (including reasonable fees and disbursements of counsel) as may be reasonably
incurred in investigating, preparing or defending against any litigation, investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon, arising out of, related to or resulting from any
such untrue statement or omission or alleged untrue statement or omission, or such violation of the Securities Act or Exchange Act, to the extent that any such expense or cost is not paid under subparagraph (i) or (ii) above; except
insofar as any such statements are made in reliance upon information furnished to the Company by a Holder or any Seller Affiliate for use therein or arise from a Holder’s or any Seller Affiliate’s failure to deliver a copy of the
Registration Statement or Prospectus or any amendments or supplements thereto after the Company has furnished such Holder or its Seller Affiliate with a sufficient number of copies of the same, in which case the Company will not so indemnify and
reimburse such Holder or its Seller Affiliates. The reimbursements required by this Section 3.1(a) will be made by periodic payments during the course of the investigation or defense, as and when bills are received or expenses incurred.

  
 8 

 (b) In connection with any Registration Statement in which a Holder is participating as a seller
of Registrable Securities, such Holder will furnish to the Company such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the fullest extent permitted by
Law, such Holder will indemnify the Company and its directors and officers and each Person who controls the Company (within the meaning of the Securities Act or the Exchange Act) against any and all losses, claims, damages, liabilities and expenses
(including, without limitation, reasonable attorneys’ fees and disbursements except as limited by Section 3.1(c)) resulting from any untrue statement or alleged untrue statement of a material fact contained in the Registration
Statement, Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission or alleged omission is contained in any information or affidavit so furnished by such Holder or any of its Seller Affiliates specifically for inclusion in the Registration Statement;
provided that such liability will be limited to the net amount received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement; provided, however, that such Holder shall not be liable in
any such case to the extent that prior to the filing of any such Registration Statement or Prospectus or amendment thereof or supplement thereto, such Holder has furnished to the Company information expressly for use in such Registration Statement
or Prospectus or any amendment thereof or supplement thereto which corrected or made not misleading information previously furnished to the Company. 

(c) Any Person entitled to indemnification hereunder will: (i) give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification (provided that the failure to give such notice shall not limit the rights of such Person); and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any
person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless (A) the
indemnifying party has agreed to pay such fees or expenses or (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person. If such defense is not assumed by the
indemnifying party as permitted hereunder, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld, conditioned or delayed).
If such defense is assumed by the indemnifying party pursuant to the provisions hereof, such indemnifying party shall not settle or otherwise compromise the applicable claim unless (i) such settlement or compromise contains a full and
unconditional release of the indemnified party or (ii) the indemnified party otherwise consents in writing (which consent will not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not
to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified
party, a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the reasonable fees and disbursements of
such additional counsel or counsels. 
 (d) Each party hereto agrees that, if for any reason the indemnification provisions contemplated by
Section 3.1(a) or Section 3.1(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities or expenses (or actions in respect thereof) referred to therein,
then each indemnifying party shall contribute to the amount paid or payable by 

  
 9 

 
such indemnified party as a result of such losses, claims, liabilities or expenses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the
indemnifying party and the indemnified party in connection with the actions which resulted in the losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of such indemnifying party
and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such
indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 3.1(d) were determined by pro rata allocation (even if a Holder or any underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 3.1(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or, except as provided in Section 3.1(c), defending any such action or claim.
Notwithstanding the provisions of this Section 3.1(d), no Holder shall be required to contribute an amount greater than the dollar amount by which the net proceeds received by such Holder with respect to the sale of any Registrable
Securities exceeds the amount of damages which such Holder has otherwise been required to pay by reason of any and all untrue or alleged untrue statements of material fact or omissions or alleged omissions of material fact made in any Registration
Statement or Prospectus or any amendment thereof or supplement thereto related to such sale of Registrable Securities. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. Each Holder’s obligations in this Section 3.1(d) to contribute shall be several in proportion to the amount of Registrable Securities
registered by them and not joint. 
 If indemnification is available under this Section 3.1, the indemnifying parties shall
indemnify each indemnified party to the full extent provided in Section 3.1(a) and Section 3.1(b) without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 3.1(d) subject, in the case of a Holder, to the limited dollar amounts set forth in Section 3.1(b). 

(e) The indemnification and contribution provided for under this Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and will survive the transfer of securities. 

ARTICLE IV – TERMINATION 

4.1 Termination. The provisions of this Agreement shall terminate and be of no further force and effect upon the earlier of
(a) the four (4) year anniversary following the Closing and (b) the date when all Registrable Securities have been sold or are available to be sold under Rule 144 promulgated under the Securities Act without regard to volume limits.

 ARTICLE V – MISCELLANEOUS 

5.1 Amendment. Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement or in the case of a waiver, by the party against whom the waiver is to be effective. 

  
 10 

 5.2 Counterparts and Facsimile. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in PDF form, or by
any other electronic means designed to preserve the original graphic and pictorial appearance of a document, will be deemed to have the same effect as physical delivery of the paper document bearing the original signatures. This Agreement shall
become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no
effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication). 

5.3 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. 

(a) This Agreement shall be governed by and construed in accordance with and governed by the Laws of the State of Delaware, without regard to
the conflicts of law rules of such State that would result in the application of any Law other than the Law of the State of Delaware. 
 (b)
Each party to this Agreement hereby irrevocably and unconditionally (i) consents to the submission to the exclusive jurisdiction of the Court of Chancery of the State of Delaware sitting in Wilmington, Delaware for any proceedings arising out
of or relating to this Agreement or the transactions contemplated hereby, (ii) agrees not to commence any proceeding relating thereto except in such court and in accordance with the provisions of this Agreement, (iii) agrees that service
of any process, summons, notice or document by U.S. registered mail, or otherwise in the manner provided for notices in Section 3.5 hereof, shall be effective service of process for any such proceeding brought against it in any such
court, (iv) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding in such courts and (v) agrees not to plead or claim in any court
that any such proceeding brought in any such court has been brought in an inconvenient forum. Each of the parties hereto agrees that a final judgment in any such proceeding shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by applicable Law. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by applicable Law. 

(c) THE PARTIES HERETO WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
(WHETHER BASED ON CONTRACT, EQUITY, TORT OR ANY OTHER THEORY) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTION AGREEMENT, OR THE NEGOTIATION, EXECUTION, PERFORMANCE, OR ENFORCEMENT OF THIS AGREEMENT, THE
TRANSACTION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR PROCEEDING. EACH PARTY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. 
 5.4 Notices. All notices and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed given if delivered personally, transmitted by facsimile or e-mail (and confirmed), mailed by registered or certified mail with postage prepaid and return receipt requested, or
sent by commercial overnight courier, courier fees prepaid (if available; otherwise, by the next best class of service available), to the parties at the following addresses: 

If to the Company: 

Approach Resources Inc. 

6500 West Freeway, Suite 800 

Fort Worth, Texas 76116 

Attention: J. Curtis Henderson 

Facsimile: (817) 989-9001 

  
 11 

 With copies to (which shall not constitute notice): 

Weil, Gotshal & Manges LLP 

200 Crescent Court, Suite 300 

Dallas, Texas 75201 

Attention: Rodney Moore 

Facsimile: (214) 746-8102 

Email: rodney.moore@weil.com 

If to any Holder, at its address listed on the signature pages hereof. 

Any party may from time to time change its address or designee for notification purposes by giving the other parties prior notice in the
manner specified above of the new address or the new designee and the subsequent date upon which the change shall be effective. 
 5.5
Entire Agreement; Etc.. This Agreement (including the Exhibit hereto) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all other prior agreements and understandings,
both written and oral, among the parties hereto with respect to the subject matter hereof. 
 5.6 Headings. The
Article and Section headings in this Agreement are for convenience of reference only, do not constitute a part of this Agreement and shall not limit, extend or otherwise affect the meaning or interpretation of the terms and provisions of this
Agreement. 
 5.7 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other Governmental Entity to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party hereto. Upon such a determination, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties hereto as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest
extent possible. 
 5.8 No Third Party Beneficiaries. Subject to the following sentence, nothing in this Agreement is intended
or shall be construed to give any Person, other than the parties hereto and their respective successors, assigns and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision
contained herein. 
 5.9 Expenses. Except as otherwise explicitly contemplated by this Agreement, each party will bear and pay
the costs and expenses incurred by such party in connection with the transactions contemplated under this Agreement. 

  
 12 

 5.10 Existing Registration Rights Agreement. Notwithstanding anything to the
contrary in this Agreement, the provisions of this Agreement are subject to the Existing Registration Right Agreement. To the extent a Holder has any right, or the Company has any obligation, that is in conflict with or affected by the Existing
Registration Rights Agreement, the provisions of the Existing Registration Rights Agreement shall govern and the provisions hereof shall be read in conjunction with, and subject to, such provisions in the Existing Registration Rights Agreement. 

5.11 Other Definitional and Interpretive Matters. Unless otherwise expressly provided or the context otherwise requires, for
purposes of this Agreement the following rules of interpretation apply. 
 (a) When calculating the period of time before which, within which
or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period is excluded. If the last day of such period is a non-Business Day, the period in question ends on the
next succeeding Business Day. 
 (b) Any reference in this Agreement to $ means U.S. dollars. 

(c) The Exhibit to this Agreement are hereby incorporated and made a part hereof as if set forth in full in this Agreement and are an integral
part of this Agreement. Any capitalized terms used in any Exhibit but not otherwise defined therein are defined as set forth in this Agreement. 

(d) Any reference in this Agreement to gender includes all genders, and words imparting the singular number also include the plural and vice
versa. 
 (e) The division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience
of reference only and do not affect, and should not be utilized in, the construction or interpretation of this Agreement. 
 (f) All
references in this Agreement to any “Article,” “Section or “Exhibit” are to the corresponding Article, Section or Exhibit of this Agreement. 

(g) The words “herein,” “hereinafter,” “hereof,” and “hereunder” refer to
this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. 
 (h) The word
“including” or any variation thereof means “including, but not limited to,” and does not limit any general statement that it follows to the specific or similar items or matters immediately following it. 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 

  
 13 

 Exhibit A 

Certain Definitions 
 Agreement.
“Agreement” has the meaning set forth in the Introductory Paragraph. 
 Affiliate. “Affiliate” means, with respect to any Person,
any Person who, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with any Person. 

Beneficial Ownership. “Beneficial Ownership” and terms of similar import shall be as defined under and determined pursuant to Rule 13d-3
promulgated under the Exchange Act. 
 Blackout Period. “Blackout Period” has the meaning set forth in Section 2.4(a). 

Business Day. “Business Day” means any day other than (i) a Saturday, Sunday or a federal holiday, or (ii) a day on which commercial
banks in New York City, New York or Fort Worth, Texas are authorized or required to be closed. 
 Closing. “Closing” has the meaning given
to such term in the Exchange Agreement. 
 Company. “Company” has the meaning set forth in the Introductory Paragraph. 

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

Entity. “Entity” means any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity. 

Effectiveness Period. “Effectiveness Period” has the meaning set forth in Section 1.1(a). 

Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and
regulations promulgated by the SEC thereunder. 
 Exchange Agreement. “Exchange Agreement” has the meaning set forth in the Recitals. 

Excluded Registration. “Excluded Registration” means a registration under the Securities Act of (i) securities registered on Form S-8 or
any similar successor form and (ii) securities registered to effect the acquisition of or combination with another Person. 
 Existing Registration
Rights Agreement. “Existing Registration Rights Agreement” means the Registration Rights Agreement, dated as of November 14, 2007, by and among the Company and each of the other parties thereto. 

Governmental Entity. “Governmental Entity” means any U.S., foreign, federal, national, state or local government or political subdivision
thereof, any entity, agency, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, any court, tribunal or arbitrator, and any self-regulatory organization. 

Holder. “Holder” has the meaning set forth in the Introductory Paragraph. 

  
 A-1 

 Information Blackout. “Information Blackout” has the meaning set forth in
Section 2.4(a). 
 Law. “Law” means any federal, state, local, municipal, foreign or other law, statute, legislation,
constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement, specification, determination, decision, opinion or interpretation
issued, enacted, adopted, passed, approved, promulgated, made, implemented or otherwise put into effect by or under the authority of any Governmental Entity (including those laws relating to record keeping, customs, export and sanctions compliance,
foreign assets control, foreign corrupt practices, possession and handling of classified information or zoning). 
 Material Adverse Effect.
“Material Adverse Effect” has the meaning set forth in Section 1.2(b). 
 Participating Holder. “Participating Holder”
has the meaning set forth in Section 1.2(a). 
 Person. “Person” means any individual, Entity or Governmental Entity. 

Prospectus. “Prospectus” means the prospectus (including any preliminary, final or summary prospectus) included in any Registration Statement,
all amendments and supplements to such prospectus and all other material incorporated by reference in such prospectus. 
 Records. “Records”
has the meaning set forth in Section 2.2(l). 
 Register. “Register,” “registered” and “registration” refer
to a registration effected by preparing and filing a Registration Statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such Registration Statement. 

Registrable Securities. “Registrable Securities” means, at any time, the Company Common Stock owned by a Holder, whether owned on the date
hereof or acquired hereafter; provided, however, that Registrable Securities shall not include any shares (i) the sale of which has been registered pursuant to the Securities Act and which shares have been sold pursuant to such
registration; (ii) which have been sold on any U.S. national securities exchange or quotation system on which the Registrable Securities are then listed or traded, pursuant to Rule 144 under the Securities Act or otherwise; (iii) that have
been sold, transferred or disposed of by a Holder to a Person that is not an Affiliate of such Holder, and such Person may immediately thereafter fully transfer such Registrable Securities without restriction under the applicable securities laws of
the United States; or (iv) which have been sold pursuant to Rule 144 under the Securities Act or are eligible for resale pursuant to Rule 144 under the Securities Act without regard to volume or manner of sale restrictions. 

Registration Delay. “Registration Delay” has the meaning set forth in Section 2.4(a). 

Registration Expenses. “Registration Expenses” means all expenses (other than underwriting discounts and commissions) arising from or incident
to the registration of Registrable Securities in compliance with this Agreement, including, without limitation: (i) SEC, stock exchange, FINRA and other registration and filing fees; (ii) all fees and expenses incurred in connection with
complying with any securities or blue sky Laws (including, without limitation, fees, charges and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) all printing, messenger and delivery
expenses; (iv) the fees, charges and disbursements of counsel to the Company and of its independent public accountants and any other accounting and legal fees, charges and expenses incurred by the Company (including, without limitation, any
expenses arising from any special audits or “comfort” letters required in connection with or incident to any registration); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities on any
national securities exchange or the quotation of Registrable Securities on any 

  
 A-2 

 
inter-dealer quotation system; (vi) the fees and expenses incurred by the Company in connection with any “road show” for underwritten offerings; and (vii) reasonable fees,
charges and disbursements of counsel to the Holders, including, for the avoidance of doubt, any expenses of counsel to the Holders in connection with the filing or amendment of any Registration Statement or Prospectus hereunder; provided that
Registration Expenses shall only include the fees and expenses of one counsel to the Holders (and one local counsel per jurisdiction) with respect to any offering. 

Registration Request Notice. “Registration Request Notice” has the meaning set forth in Section 1.1(a). 

Registration Statement. “Registration Statement” means any registration statement of the Company that covers the resale of any Registrable
Securities pursuant to the provisions of this Agreement filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the related Prospectus, amendments and supplements to such registration
statement, including pre- and post-effective amendments, and all exhibits, financial information and all other material incorporated by reference in such registration statement. 

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

Securities Act. “Securities Act” means the Securities Act of 1933, as amended, or any similar Federal statute, and the rules and regulations
promulgated by the SEC thereunder. 
 Seller Affiliates. “Seller Affiliates” has the meaning set forth in Section 3.1. 

Trading Forum. “Trading Forum” has the meaning set forth in Section 1.4. 

Underwriting Request. “Underwriting Request” has the meaning set forth in Section 2.1(a). 

Underwritten Offering. “Underwritten Offering” has the meaning set forth in Section 2.1(a). 

  
 A-3 

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

			
	APPROACH RESOURCES INC.
		
	By:	 	 
	Name:
	Title:

 [Signature page to Registration Rights Agreement] 

 
			
	WILKS BROTHERS, LLC
		
	By:	 	 
	Name:	 	 
	Title:	 	 
		
	By:	 	 
	Name:	 	 
	Title:	 	 

  

			
	 Address:
  

17010 IH-20
 Cisco, Texas 76437

Attention: Morgan Neff and Matt Wilks
 Facsimile No.:
(817) 850-3698
 Email: MNeff@wilksbrothers.com and

mwilks@ie-llc.net
  

Copy to:
  

Brown Rudnick LLP
 7 Times Square

New York, New York 10036
 Attention: John F. Storz

Facsimile: (212) 209-4801
 Email: jstorz@brownrudnick.com

 
 SDW INVESTMENTS, LLC

		
	By:	 	 
	Name:	 	 
	Title:	 	 
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 
			
	  
 Address:

 
 17010 IH-20

Cisco, Texas 76437
 Attention: Morgan Neff and Matt Wilks

Facsimile No.: (817) 850-3698
 Email: MNeff@wilksbrothers.com
and
 mwilks@ie-llc.net
  

Copy to:
  

Brown Rudnick LLP
 7 Times Square

New York, New York 10036
 Attention: John F. Storz

Facsimile: (212) 209-4801
 Email:
jstorz@brownrudnick.com

 [Signature page to Registration Rights Agreement] 

 Exhibit C 

Consent 

  
 C-1 

 CONSENT OF BENEFICIAL OWNERS OF NOTES 

November 2, 2016 
  

	 	Re:	7.00% Senior Notes due 2021 

 Reference is made to (i) the base indenture, dated as of
June 11, 2013, by and among Approach Resources, Inc., a Delaware corporation (the “Company”), the guarantors party thereto, and Wilmington Trust, National Association, as successor trustee (the “Trustee”), as
amended, supplemented, restated or otherwise modified from time to time (the “Base Indenture”), (ii) the First Supplemental Indenture to the Base Indenture, dated as of June 11, 2013, by and among the Company, the guarantors party
thereto and the Trustee, as amended, supplemented, restated or otherwise modified from time to time (the “First Supplemental Indenture” and, collectively with the Base Indenture, the “Indenture”) providing for the
issuance by the Company of $250,000,000 aggregate principal amount of 7.00% Senior Notes Due 2021, of which $230,320,000 are issued and outstanding (the “Notes”) and (iii) the Second Supplemental Indenture to the Base Indenture, in
the form attached as Exhibit A hereto, expected to be dated on or about the date hereof (the “Second Supplemental Indenture”), by and among the Company, the guarantors party thereto and the Trustee, providing for the
Amendments (as defined in the Second Supplemental Indenture). Capitalized terms used herein without definition shall have the meanings assigned to them in the Base Indenture, the First Supplemental Indenture and the Second Supplemental
Indenture, as applicable. 
 By their signatures below, each of the holders set forth on Schedule 1 hereto (collectively, the
“Specified Holders”) hereby (a) certifies that it is, as of the date hereof, the Beneficial Owner of the aggregate principal amount of Notes set forth opposite such entity’s name on Schedule 1 hereto, (b) certifies that
it has full power and authority to execute and deliver this Consent, (c) consents to the Amendments, (d) certifies that attached hereto as Exhibit B are true, correct and complete copies of consent letters (the
“Consent Letters”) duly executed by the Specified Holders requesting that Cede & Co., the nominee of The Depository Trust Company (“DTC”) and registered Holder of the Notes, consent to the Amendments in respect
of the aggregate principal amount of Notes set forth opposite such Specified Holders’ name on Schedule 1 hereto and that each of such Consent Letters have been delivered to the DTC Participant identified therein for execution and delivery to
DTC, (e) agrees to use commercially reasonable efforts to cause each of the Consent Letters to be promptly executed by the DTC Participant specified in the Consent Letter, and thereafter promptly delivered for execution, and executed, by Cede
& Co., and to execute and deliver such further instruments, and to do such further acts, as may be reasonably necessary or proper, upon request by the Company or the Trustee, or both, to make the Consent Letters effective, to evidence such
consent by the Beneficial Owners and by the registered Holder of the Notes (including by providing to the Company certified originals or copies of each of the fully executed Consent Letters) and to carry out more effectively the intent of this
Consent and the Second Supplemental Indenture, and (f) requests, authorizes and directs the Company, the guarantors and the Trustee, subject to delivery of the fully executed Consent Letters, to execute and deliver the Second Supplemental Indenture
and to take all such actions and deliver all such documents as are reasonably necessary or proper to effectuate this Consent and the Second Supplemental Indenture. For the avoidance of doubt, it is expressly understood and agreed, however, that
the Amendments will not become effective and operative unless and until the Closing under the Exchange Agreement (as defined in the Second Supplemental Indenture) shall have occurred, and in the event that the Exchange Agreement is terminated
without the Closing having occurred, the Amendments shall have no force or effect. It is further understood and agreed that the Beneficial Owner’s obligations under paragraph (e) shall not include the initiation of any litigation. 

The execution and delivery of this Consent shall not operate as a waiver of any right, power or remedy of the Specified Holders under the Base
Indenture or First Supplemental Indenture, nor constitute 

 
an amendment of any provision of the Base Indenture or First Supplemental Indenture or for any purpose except as expressly set forth in the Second Supplemental Indenture. This Consent, and
every proxy or agency authority granted herein, is coupled with an interest and is irrevocable, is a continuing consent as such term is used in the Indenture and shall bind every Holder, now or hereafter, of the Notes. 

[Signature page follows] 

 IN WITNESS WHEREOF, each of the undersigned has executed this consent to the Second Supplemental
Indenture as of the date first written above. 
  

			
	 WILKS BROTHERS, LLC, as Noteholder

		
	 By:
	 	/s/ Morgan D. Neff
	 Name:
	 	Morgan D. Neff
	 Title:
	 	Senior Portfolio Manager
		
	 By:
	 	/s/ Matthew D. Wilks
	 Name:
	 	Matthew D. Wilks
	 Title:
	 	Portfolio Manager & Vice President of Capital Investments
	
	 SDW INVESTMENTS, LLC, as Noteholder

		
	 By:
	 	/s/ Morgan D. Neff
	Name:	 	Morgan D. Neff
	Title:	 	Senior Portfolio Manager
		
	 By:
	 	/s/ Matthew D. Wilks
	Name:	 	Matthew D. Wilks
	Title:	 	Portfolio Manager & Vice President of Capital Investments

 [Signature Page to Holder Consent] 

 Schedule 1 
  

							
	 Holder
	  	 CUSIP Number
	  	 DTC Participant
	  	 Principal Amount of Notes

	 Wilks Brothers, LLC
	  	03834A AA1	  		  	$110,421,000
	 SDW Investments, LLC
	  	03834A AA1	  		  	$20,131,000
		  		  	TOTAL	  	$130,552,000

 Exhibit A 

Form of Second Supplemental Indenture 

 Exhibit A 

SECOND SUPPLEMENTAL INDENTURE 

SECOND SUPPLEMENTAL INDENTURE (this “Second Supplemental Indenture”), dated as of [●], 2016, between Approach Resources
Inc., a Delaware corporation (the “Company”), the Guarantors (as hereinafter defined) and Wilmington Trust, National Association, as successor trustee under the Indenture referred to below (the “Trustee”). 

W I T N E S S E T H 
 WHEREAS,
the Company and the guarantors party thereto (the “Guarantors”) delivered to the Trustee a base indenture, dated as of June 11, 2013 (the “Base Indenture”), by and among the Company, the guarantors party thereto and
the Trustee, as supplemented by the First Supplemental Indenture dated as of June 11, 2013 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”) providing for the issuance by
the Company of a series of senior notes designated as 7.00% Senior Notes due 2021 (the “Notes”); 
 WHEREAS, pursuant to
that certain Exchange Agreement, dated as of the date hereof (the “Exchange Agreement”), by and between the Company and Wilks Brothers, LLC, a Texas limited liability company and SDW Investments, LLC, a Texas limited liability
company (the “Noteholders”), the Company and the Noteholders have reached an agreement pursuant to which, amongst other things, upon satisfaction of the conditions to closing set forth therein, the Noteholders will transfer to the
Company, and the Company shall acquire, directly or indirectly, all of the Notes held by the Noteholders in exchange for, shares of Common Stock (as defined in the Exchange Agreement) of the Company (the “Exchange”); 

WHEREAS, in connection with the Exchange Agreement, the Noteholders have delivered one or more consent letters executed by Cede & Co, the
registered Holder of the Notes, on behalf of the Noteholders (collectively, the “Noteholder Consents”) to supplement the Indenture to effect the amendments set forth in Sections 2, 3, 4 and 5 hereof (collectively, the
“Amendments”) on the terms set forth herein, including that this Second Supplemental Indenture shall be in full force and effect on the date first written above and such Amendments shall become operative with respect to the
Indenture only if the Closing (as defined in the Exchange Agreement) shall occur (such Closing, the “Operative Time”); 

WHEREAS, subject to certain exceptions, Section 1002 of the First Supplemental Indenture provides, among other things, that the Company, the
Guarantors and the Trustee may amend or supplement the Indenture, the Securities Guarantees and the Notes (and the Company and the Guarantors desire to amend and supplement the Indenture, the Securities Guarantees and the Notes as provided
herein) with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding voting as a single class; 

WHEREAS, the Noteholders beneficially own $130,552,000, or 56.7% of the $230,200,000 aggregate principal amount of the issued and outstanding
Notes, Cede & Co. has executed the Noteholder Consents in respect of such aggregate principal amount, and accordingly the Holder of at least a majority in aggregate principal amount of the outstanding Notes for the purposes of Section 1002 of
the First Supplemental Indenture has duly consented to this Second Supplemental Indenture; and 
 WHEREAS, all conditions necessary to
authorize the execution and delivery of this Second Supplemental Indenture and to make this Second Supplemental Indenture valid and binding have been complied with or performed. 

  
 1 

 NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the Company, the Guarantors, and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows: 

1.    CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture. 
 2.    AMENDMENTS
TO SECTION 201 OF THE FIRST SUPPLEMENTAL INDENTURE. Section 201 of the First Supplemental Indenture is hereby amended at
the Operative Time by deleting those definitions and cross references that, by virtue of the amendments effected in Sections 3, 4 and 5 hereof, are no longer used in the Indenture or the Notes. 

3.    AMENDMENTS TO SECTION 601 OF THE
FIRST SUPPLEMENTAL INDENTURE.
 (a)    Each of the
following clauses of Section 601 of the First Supplemental Indenture is hereby deleted in their entirety at the Operative Time and each such clause is replaced at such time with the following: “[Intentionally Omitted]” (and all references
thereto in the Indenture are hereby deleted in their entirety) at such time: 
  

	 	•	 	clause (4) (failure to comply with the incurrence of indebtedness, restricted payments, change of control or asset sale covenants); 

  

	 	•	 	clause (5) (default with respect to agreements under the Indenture other than those specified in clauses (1) through (4)); 

  

	 	•	 	clause (6) (payment default or cross-acceleration with respect to other material debt); and 

  

	 	•	 	clause (7) (failure to pay judgments). 

 (b)    (i) Clause (3) of Section
601 of the First Supplemental Indenture is hereby amended at the Operative Time to delete the phrase “or to consummate a purchase of Notes when required pursuant to Section 1110 or Section 1115 of this Supplemental Indenture”; and (ii)
each of clause (9) and clauses (10)(a), (b), and (c) of Section 601 of the First Supplemental Indenture is hereby amended at the Operative Time to delete the following phrase, each time it appears therein: “, any Significant Subsidiary or
any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary,”. 

4.    AMENDMENTS TO SECTION 901 OF THE
FIRST SUPPLEMENTAL INDENTURE.
 Each of clauses (3) and (4) of Section 901
of the First Supplemental Indenture is hereby deleted in its entirety at the Operative Time and each such clause is replaced at such time with the following: “[Intentionally Omitted]” (and all references thereto in the Indenture are hereby
deleted in their entirety at such time), and the proviso at the end of the first paragraph of Section 901 is hereby deleted in its entirety at such time. 

  
 2 

 5.    AMENDMENTS TO ARTICLE
11 OF THE FIRST SUPPLEMENTAL INDENTURE. Each of the following sections of the First Supplemental Indenture is hereby deleted in its entirety at the
Operative Time and each such section is replaced at such time with the following: “[Intentionally Omitted]” (and all references thereto in the Indenture are hereby deleted in their entirety at such time): 

 

	 	•	 	Section 1106 “Reports” 

  

	 	•	 	Section 1107 “Payment of Taxes” 

  

	 	•	 	Section 1110 “Repurchase of Notes Upon a Change of Control” 

  

	 	•	 	Section 1111 “Incurrence of Indebtedness and Issuance of Preferred Stock” 

  

	 	•	 	Section 1112 “Restricted Payments” 

  

	 	•	 	Section 1113 “Limitation on Liens” 

  

	 	•	 	Section 1114 “Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries” 

  

	 	•	 	Section 1115 “Asset Sales” 

  

	 	•	 	Section 1116 “Transactions with Affiliates” 

  

	 	•	 	Section 1117 “Future Subsidiary Guarantees” 

6.    NEW YORK LAW TO
GOVERN. THE LAWS OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS SECOND SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 

7.    COUNTERPARTS. The parties may sign any number of copies of this Second
Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 

8.    EFFECT OF HEADINGS. The Section headings
herein are for convenience only and shall not affect the construction hereof. 
 9.    INCORPORATION
OF INDENTURE. All the provisions of this Second Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented and amended by
this Agreement, shall be read, taken and construed as one and the same instrument. 
 10.    THE
TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Second Supplemental Indenture or for or in respect of the recitals contained
herein. 
 11.    EFFECTIVENESS OF THIS SECOND
SUPPLEMENTAL INDENTURE. Upon the execution of this Second Supplemental Indenture by the Company, the Guarantors, and the Trustee, the Indenture shall

  
 3 

 
be amended and supplemented in accordance herewith, and this Second Supplemental Indenture shall form a part of the Indenture for all purposes, and the parties hereto and every Holder of Notes
shall be bound hereby; provided, however, that the Amendments will not become effective and operative unless and until the Operative Time shall have occurred, at which time such Amendments shall immediately become effective and operative for
all purposes of the Indenture without further action by any Person, and simultaneously therewith the Notes and the Securities Guarantees shall be deemed supplemented and amended for all purposes, as and to the same extent as the Indenture has been
supplemented and amended hereby. In the event that the Exchange Agreement is terminated without the Closing having occurred, the Amendments will not become effective and operative, and this Supplemental Indenture shall immediately upon such
termination be of no further force or effect. The Company shall give the Trustee prompt written notice of the occurrence of the Operative Time or the termination of the Exchange Agreement. For the avoidance of doubt, nothing in this Second
Supplemental Indenture shall effect in any way the deletion and replacement, or intentional omission, of any Article, Section, clause or other provision of the Base Indenture specified in Section 102 of the First Supplemental Indenture, which
Section 102 shall remain in full force and effect subject only to the amendments specified in this Second Supplemental Indenture, or amend the Base Indenture as it may apply to any Securities other than the Notes. 

  
 4 

 Exhibit A 

IN WITNESS WHEREOF, the parties hereto have caused this Second Supplemental Indenture to be duly executed and delivered, all as of the date
first above written. 
 Dated: [●], 2016 
  

			
	APPROACH RESOURCES INC., as the Company
		
	By:	 	  

		 	Name:   [●]
		 	Title:     [●]
	
	GUARANTORS
		
	[●]	 	
		
	By:	 	  

		 	Name:   [●]
		 	Title:     [●]
	
	[GUARANTOR SIGNATURE BLOCKS TO BE ADDED]
	
	TRUSTEE
	
	Wilmington Trust, National Association,
	  as Trustee
		
	By:	 	  

		 	Authorized Signatory

 Exhibit B 

The Consent Letters 

 Instructions: 

Please complete the form below as needed to indicate the action desired for owned issues. 

All submissions must be on the participant’s letterhead and must have that participant’s medallion stamp.

You must submit completed forms via the WINS application. A user guide to the process can be found here:
http://www.dtcc.com/~/media/Files/Downloads/Settlement-Asset-Services/Issuer%20Services/WINS-User-Guide-Demand-and-Dissents.pdf 
 For
questions or additional forms, send requests via electronic mail to: 
 demandanddissent@dtcc.com 

 CONSENT OF NOTEHOLDER 

TO SUPPLEMENTAL INDENTURE 
 Date: November
2, 2016 
 The Depository Trust Company 
 Proxy Department 

55 Water Street-25th Floor 

New York, NY 10041 
 Attention: Demand and Dissent 

 

	Re:	Approach Resources Inc.7.00% Senior Notes due 2021 - CUSIP: 03834A AA1 

 [Insert DTC
Participant Name & Account Number] 
 Dear Partner: 

Please cause your nominee, Cede & Co., to sign one copy of the attached letter (the “Consent Letter”) in order to enable our customer to
exercise its right to consent with respect to $[●] principal amount of the above-referenced securities credited to our DTC Participant account on the date hereof. 

In addition to acknowledging that this request is subject to the indemnification provided for in DTC Rule 6, the undersigned hereby certifies to DTC and Cede
& Co, that the information and facts set forth in the Consent Letter are true and correct, including the following: 
  

	1.	The aggregate principal amount of the securities credited to our DTC Participant account that are beneficially owned by our customer, and 

 

	2.	There have been no prior requests to DTC or Cede & Co, for execution of a letter similar to the attached Consent Letter with respect to the principal amount of securities referred to therein. 

The undersigned understands that letters similar to the attached Consent Letter are being forwarded by other beneficial owners of the above-referenced
securities whose holdings, together with the principal amount referred to above, constitute a majority of the principal amount of the above-referenced securities now outstanding. 

Please make the Consent Letter available for pick-up by [●]. 

 

			
	Very truly yours,
	
	[INSERT NAME OF DTC PARTICIPANT]
		
	By:	 	  

	Name:	 	
	Title:	 	

 Medallion Stamp 

 CONSENT OF NOTEHOLDER 

TO SUPPLEMENTAL INDENTURE 

Date: November 2, 2016 
 Approach Resources Inc.

 One Ridgmar Centre 
 6500 West Freeway, Suite 800 

Fort Worth, Texas 
 Attn: Josh Dazey, Vice President, General
Counsel and Assistant Secretary 
  

	RE:	Approach Resources Inc.7.00% Senior Notes due 2021 - CUSIP: 03834A AA1 (the “Notes”) 

 
 Reference is made to the base indenture, dated as of
June 11, 2013, by and among Approach Resources Inc., a Delaware corporation (the “Company”), the guarantors party thereto, and Wilmington Trust, National Association, as successor trustee (the “Trustee”), as
amended, supplemented, restated or otherwise modified from time to time (the “Base Indenture”), and the First Supplemental Indenture to the Base Indenture, dated as of June 11, 2013, by and among the Company, the guarantors
party thereto and the Trustee, as amended, supplemented, restated or otherwise modified from time to time (the “First Supplemental Indenture” and, collectively with the Base Indenture, the “Indenture”), pursuant to
which the Notes were issued.
 The undersigned Beneficial Owner (as defined below) hereby represents and warrants that the undersigned is the Beneficial
Owner of the Notes of the above-referenced issue in the principal amount stated below. At the request of Participant, on behalf of the undersigned Beneficial Owner of the Notes, Cede & Co., as the registered Holder of the Notes, hereby
consents to amendments (the “Amendments”) to the Indenture that, if and when they become effective, will: 
  

	 	1.	delete in their entirety the following sections of the First Supplemental Indenture: Section 1106; Section 1107; Section 1110; Section 1111; Section 1112; Section 1113; Section 1114; Section 1115; Section 1116; and
Section 1117; 

  

	 	2.	delete in their entirety clauses (4), (5), (6) and (7) of Section 601 of the First Supplemental Indenture and clauses (3) and (4) of Section 901 of the Indenture; 

 

	 	3.	delete the phrase “or to consummate a purchase of Notes when required pursuant to Section 1110 or Section 1115 of this Supplemental Indenture” from clause (3) of Section 601 of the First Supplemental
Indenture; 

  

	 	4.	delete the phrase “, any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary,” from each of clause (9) and clauses (10)(a), (b), and (c) of Section 601 of the First Supplemental Indenture each time it appears therein; and 

 

	 	5.	delete those definitions and cross references in Section 201 of the First Supplemental Indenture that, by virtue of the foregoing amendments, are no longer used in the Indenture or the Notes. 

The Amendments will be set forth in a Second Supplemental Indenture to the Indenture, attached hereto as Annex A, and will become effective only
at the time, and subject to the conditions precedent, specified therein. 
 This letter should be read in conjunction with similar letters which the
undersigned understands are being forwarded by other Beneficial Owners of the Notes whose holdings, together with the principal amount of 

 
the Notes specified below, constitute a majority of the principal amount of the Notes now outstanding. Accordingly, for the purposes of Section 1002 of the First Supplemental Indenture, the
undersigned, together with other Beneficial Owners of the Notes which together aggregate in excess of 50% of the principal amount of the Notes, will have duly consented to the Amendments.

While Cede & Co., is furnishing this consent letter as the registered Holder of the Notes, it does so at the request of the Participant and only as a
nominal party for the true party in interest, Wilks Brothers, LLC (the “Beneficial Owner”). Cede & Co. has no interest in this matter other than to take those steps which are necessary to ensure that the Beneficial Owner is not
denied its rights to consent to the Amendments as the beneficial owner of the Notes, and Cede & Co. assumes no further responsibility in this matter. This Consent, and every proxy or agency authority granted herein, is coupled with an interest
and is irrevocable, is a continuing consent as such term is used in the Indenture and shall bind every Holder, now or hereafter, of the Notes. 
  

			
	Very truly yours,
	Cede & Co
		
	BY:	 	  

	A.	EXECUTION BY BENEFICIAL OWNER 

 The undersigned Beneficial Owner of the Notes set forth
below hereby instructs the Custodian of the Notes held on behalf of the Beneficial Owner to execute this consent letter. 
  

			
	Name of Beneficial Owner:	  	 Wilks Brothers, LLC

			
	(Print Name of Authorized Signature):	  	 Morgan D. Neff

			
	Signature:	  	 /s/ Morgan D. Neff

			
	(Print Name of Authorized Signature):	  	 Matthew D. Wilks

			
	Signature:	  	 /s/ Matthew D. Wilks

			
	Address:	  	 17010 IH-20, Cisco, Texas 6437, Attention Morgan Neff and Matt
Wilks

			
	Phone:	  	 (817) 850-3698

			
	Fax:	  	  

			
	Total Principal Amount Owned:	  	  

  

	B.	EXECUTION BY CUSTODIAN (DTC PARTICIPANT) 

 The undersigned Custodian (DTC Participant)
hereby executes this consent letter pursuant to the instructions set forth above by the Beneficial Owner. 
  

			
	Name of Custodian:	  	  

			
	(Print Name of Authorized Signature):	  	  

			
	Signature:	  	  

			
	Address:	  	  

			
	Phone:	  	  

			
	Fax:	  	  

			
	Total Principal Amount With Respect	  	

			
	to Which This Demand Letter is Given:	  	  

  

	C.	EXECUTION BY REGISTERED HOLDER 

 The undersigned Registered Holder hereby executes this
consent letter pursuant to the instructions of the Custodian (DTC Participant). 
  

			
	Name of Registered Holder:	  	 Cede & Co.

			
	(Print Name of Authorized Signature):	  	  

			
	Signature:	  	  

			
	Address:	  	 c/o The Depository Trust Company

55 Water Street

			
	 New York, New York 10041

			
	Phone:	  	 (212)

			
	Fax:	  	 (212)

			
	Total Principal Amount With Respect	  	

			
	To Which This Demand Letter is given:	  	  

 Instructions: 

Please complete the form below as needed to indicate the action desired for owned issues. 

All submissions must be on the participant’s letterhead and must have that participant’s medallion stamp. 

You must submit completed forms via the WINS application. A user guide to the process can be found here:
http://www.dtcc.com/~/media/Files/Downloads/Settlement-Asset-Services/Issuer%20Services/WINS-User-Guide-Demand-and-Dissents.pdf 
 For
questions or additional forms, send requests via electronic mail to: 
 demandanddissent@dtcc.com 

 CONSENT OF NOTEHOLDER 

TO SUPPLEMENTAL INDENTURE 
 Date: November
2, 2016 
 The Depository Trust Company 
 Proxy Department 

55 Water Street-25th Floor 

New York, NY 10041 
 Attention: Demand and Dissent 

 

	Re:	Approach Resources Inc.7.00% Senior Notes due 2021 - CUSIP: 03834A AA1 

 [Insert DTC
Participant Name & Account Number] 
 Dear Partner: 

Please cause your nominee, Cede & Co., to sign one copy of the attached letter (the “Consent Letter”) in order to enable our customer to
exercise its right to consent with respect to $[●] principal amount of the above-referenced securities credited to our DTC Participant account on the date hereof. 

In addition to acknowledging that this request is subject to the indemnification provided for in DTC Rule 6, the undersigned hereby certifies to DTC and Cede
& Co, that the information and facts set forth in the Consent Letter are true and correct, including the following: 
  

	1.	The aggregate principal amount of the securities credited to our DTC Participant account that are beneficially owned by our customer, and 

 

	2.	There have been no prior requests to DTC or Cede & Co, for execution of a letter similar to the attached Consent Letter with respect to the principal amount of securities referred to therein. 

The undersigned understands that letters similar to the attached Consent Letter are being forwarded by other beneficial owners of the above-referenced
securities whose holdings, together with the principal amount referred to above, constitute a majority of the principal amount of the above-referenced securities now outstanding. 

Please make the Consent Letter available for pick-up by [●]. 

 

			
	Very truly yours,
	[INSERT NAME OF DTC PARTICIPANT]
		
	By:	 	  

	Name:	 	
	Title:	 	

 Medallion Stamp 

  
 2 

 CONSENT OF NOTEHOLDER 

TO SUPPLEMENTAL INDENTURE 

Date: November 2, 2016 
 Approach Resources Inc.

 One Ridgmar Centre 
 6500 West Freeway, Suite 800 

Fort Worth, Texas 
 Attn: Josh Dazey, Vice President, General
Counsel and Assistant Secretary 
  

	RE:	Approach Resources Inc.7.00% Senior Notes due 2021 - CUSIP: 03834A AA1 (the “Notes”) 

 
 Reference is made to the base indenture, dated as of
June 11, 2013, by and among Approach Resources Inc., a Delaware corporation (the “Company”), the guarantors party thereto, and Wilmington Trust, National Association, as successor trustee (the “Trustee”), as
amended, supplemented, restated or otherwise modified from time to time (the “Base Indenture”), and the First Supplemental Indenture to the Base Indenture, dated as of June 11, 2013, by and among the Company, the guarantors party
thereto and the Trustee, as amended, supplemented, restated or otherwise modified from time to time (the “First Supplemental Indenture” and, collectively with the Base Indenture, the “Indenture”), pursuant to which the
Notes were issued. 
 The undersigned Beneficial Owner (as defined below) hereby represents and warrants that the undersigned is the Beneficial Owner of the
Notes of the above-referenced issue in the principal amount stated below. At the request of Participant, on behalf of the undersigned Beneficial Owner of the Notes, Cede & Co., as the registered Holder of the Notes, hereby consents to amendments
(the “Amendments”) to the Indenture that, if and when they become effective, will: 
  

	 	1.	delete in their entirety the following sections of the First Supplemental Indenture: Section 1106; Section 1107; Section 1110; Section 1111; Section 1112; Section 1113; Section 1114; Section 1115; Section 1116; and
Section 1117; 

  

	 	2.	delete in their entirety clauses (4), (5), (6) and (7) of Section 601 of the First Supplemental Indenture and clauses (3) and (4) of Section 901 of the Indenture; 

 

	 	3.	delete the phrase “or to consummate a purchase of Notes when required pursuant to Section 1110 or Section 1115 of this Supplemental Indenture” from clause (3) of Section 601 of the First Supplemental
Indenture; 

  

	 	4.	delete the phrase “, any Significant Subsidiary or any group of Restricted Subsidiaries that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary,” from each of clause (9) and clauses (10)(a), (b), and (c) of Section 601 of the First Supplemental Indenture each time it appears therein; and 

 

	 	5.	delete those definitions and cross references in Section 201 of the First Supplemental Indenture that, by virtue of the foregoing amendments, are no longer used in the Indenture or the Notes. 

The Amendments will be set forth in a Second Supplemental Indenture to the Indenture, attached hereto as Annex A, and will become effective only
at the time, and subject to the conditions precedent, specified therein. 
 This letter should be read in conjunction with similar letters which the
undersigned understands are being forwarded by other Beneficial Owners of the Notes whose holdings, together with the principal amount of 

  
 3 

 
the Notes specified below, constitute a majority of the principal amount of the Notes now outstanding. Accordingly, for the purposes of Section 1002 of the First Supplemental Indenture, the
undersigned, together with other Beneficial Owners of the Notes which together aggregate in excess of 50% of the principal amount of the Notes, will have duly consented to the Amendments. 

While Cede & Co., is furnishing this consent letter as the registered Holder of the Notes, it does so at the request of the Participant and only as a
nominal party for the true party in interest, SDW Investments, LLC (the “Beneficial Owner”). Cede & Co. has no interest in this matter other than to take those steps which are necessary to ensure that the Beneficial Owner is not
denied its rights to consent to the Amendments as the beneficial owner of the Notes, and Cede & Co. assumes no further responsibility in this matter. This Consent, and every proxy or agency authority granted herein, is coupled with an interest
and is irrevocable, is a continuing consent as such term is used in the Indenture and shall bind every Holder, now or hereafter, of the Notes. 

Very truly yours, 

Cede & Co 

BY:                   
                                        

  
 4 

	A.	EXECUTION BY BENEFICIAL OWNER 

 The undersigned Beneficial Owner of the Notes set forth
below hereby instructs the Custodian of the Notes held on behalf of the Beneficial Owner to execute this consent letter. 
  

			
	 Name of Beneficial Owner:
	  	 SDW Investments, LLC

			
	 (Print Name of Authorized Signature):
	  	 Morgan D. Neff

			
	 Signature:
	  	 /s/ Morgan D. Neff

			
	 (Print Name of Authorized Signature):
	  	 Matthew D. Wilks

			
	 Signature:
	  	 /s/ Matthew D. Wilks

			
	 Address:
	  	 17010 IH-20, Cisco, Texas 6437, Attention Morgan Neff and Matt Wilks

			
	 Phone:
	  	 (817) 850-3698

			
	 Fax:
	  	  

			
	 Total Principal Amount Owned:
	  	  

  

	B.	EXECUTION BY CUSTODIAN (DTC PARTICIPANT) 

 The undersigned Custodian (DTC Participant)
hereby executes this consent letter pursuant to the instructions set forth above by the Beneficial Owner. 

Name of Custodian:                  
                                         
                                         
                                         
                                         
                            

(Print Name of Authorized Signature):              
                                         
                                         
                                         
                                      

Signature:                     
                                         
                                         
                                         
                                         
                                         
   

Address:                      
                                         
                                         
                                         
                                         
                                         
    

Phone:                      
                                         
                                         
                                         
                                         
                                         
        

Fax:                      
                                         
                                         
                                         
                                         
                                         
             
 Total Principal Amount With Respect 

to Which This Demand Letter is Given:            
                                         
                                         
                                         
                                     

 

	C.	EXECUTION BY REGISTERED HOLDER 

 The undersigned Registered Holder hereby executes this
consent letter pursuant to the instructions of the Custodian (DTC Participant). 
  

			
	Name of Registered Holder:	  	 Cede & Co.

			
	(Print Name of Authorized Signature):	  	  

			
	Signature:	  	  

			
	Address:	  	 c/o The Depository Trust Company

55 Water Street

			
	 New York, New York 10041

			
	Phone:	  	 (212)

			
	Fax:	  	 (212)

			
	Total Principal Amount With Respect	  	

			
	To Which This Demand Letter is given:	  	  

  
 5 

 Exhibit D 

Charter Amendment 

  
 D-1 

 EXHIBIT D 

CERTIFICATE OF AMENDMENT 

OF 
 RESTATED 

CERTIFICATE OF INCORPORATION 

OF 
 APPROACH RESOURCES
INC. 
 Approach Resources Inc., a corporation organized and existing under the laws of the State of Delaware
(the “Corporation”), hereby certifies as follows: 
 1. The name of the Corporation is Approach Resources Inc. 

2. The Board of Directors of the Corporation, acting in accordance with the provisions of Section 141 and 242 of the Delaware General
Corporation Law, adopted resolutions to amend Section 4.1 of the Restated Certificate of Incorporation of the Corporation so that the first paragraph thereof is hereby amended and replaced as follows: 

The total number of shares of all classes of stock that the Corporation shall have the authority to issue is 190,000,000, of which 180,000,000
of such shares shall be Common Stock, all of one class, having a par value of $0.01 per share (“Common Stock”), and 10,000,000 of such shares shall be Preferred Stock, having a par value of $0.01 per share (“Preferred
Stock”). 
 3. This Certificate of Amendment was submitted to the stockholders of the Corporation and was duly adopted by the
required vote of stockholders of the Corporation in accordance with Section 242 of the Delaware General Corporation Law. 
 4. This
Certificate of Amendment shall become effective immediately upon being duly filed with the Secretary of State of the State of Delaware. 

 IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Amendment as of
[●], 201[●]. 
  

					
	APPROACH RESOURCES INC.
		
	By:	 	 
		 	J. Ross Craft
		 	Chief Executive Officer

 CERTIFICATE OF AMENDMENT 

 Exhibit E 

Company Closing Certificate 

  
 E-1 

 OFFICER’S CERTIFICATE 

of 
 APPROACH RESOURCES
INC. 
 [●] 

This Officer’s Certificate (this “Certificate”) is delivered by Approach Resources Inc., a Delaware corporation (the
“Company”), to each of Wilks Brothers, LLC, a Texas limited liability company (“Wilks Brothers”) and SDW Investments, LLC, a Texas limited liability company (“SDW”) (Wilks Brothers and SDW,
collectively, the “Noteholders” and each, a “Noteholder”), pursuant to Section 6.b.(iii) of that certain Exchange Agreement, dated November 2, 2016 (the “Exchange Agreement”), by and between
the Company and the Noteholders. Capitalized terms used herein, and not otherwise defined herein, have the respective meanings given to such terms in the Exchange Agreement. 

The undersigned officer of the Company hereby certifies on behalf of the Company, solely in his capacity as an authorized officer of the
Company, and not in any individual capacity, as follows: 
  

	1.	Each of the representations and warranties of the Company contained in Section 4.d(i) were true and correct in all respects (other than in respect of de minimis inaccuracies) as of the date of the Exchange
Agreement, and the representations and warranties of the Company contained in Section 4.d.(ii) were true and correct in all material respects on and as of the date of the Exchange Agreement and the date of Closing, with the same force and
effect as though made on and as of Closing. 

  

	2.	Each of the representations and warranties of the Company contained in Section 4 of the Exchange Agreement (other than those contained in Section 4.d.(i) and Section 4.d.(ii)) were true and correct
in all respects on and as of the date of the Exchange Agreement and the date of Closing, with the same force and effect as though made on and as of Closing, except (A) to the extent that any representation or warranty is made as of specified date,
in which case such representation or warranty shall be true and correct as of such specified date, and (B) for such failures to be true and correct (without giving effect to any limitation as to “materiality” or Material Adverse
Effect” set forth in any individual representation or warranty) that, individually or in the aggregate, have not had and would not reasonably be expected to have a Material Adverse Effect. 

 

	3.	The Company has complied with and performed in all material respects all covenants and agreements required to be performed or complied with by it under the Exchange Agreement at or prior to the Closing, except for the
covenants set forth in Section 2.a. and Section 5.e. of the Exchange Agreement (to the extent required to be complied with at or prior to the Closing), which the Company has performed and complied with in all respects.

  

	4.	To the undersigned’s knowledge, as of the date of this Certificate the condition specified in Section 6.b.(vi) of the Exchange Agreement is satisfied. 

 

	5.	As of the date of this Certificate the condition specified in Section 6.b.(vii) of the Exchange Agreement is satisfied. 

[Remainder of Page Intentionally Left Blank] 

 IN WITNESS WHEREOF, the undersigned has executed this Certificate on behalf of the Company as of
the date first stated above. 
  

			
	APPROACH RESOURCES INC.
		
	By:	 	 
	Name:	 	
	Title:	 	

 [OFFICER’S CERTIFICATE OF THE COMPANY] 

 Exhibit F 

Noteholders Closing Certificate 

  
 F-1 

 OFFICER’S CERTIFICATE 

of 
 WILKS BROTHERS, LLC

 and 
 SDW
INVESTMENTS, LLC 
 [●] 

This Officer’s Certificate (this “Certificate”) is delivered by each of Wilks Brothers, LLC, a Texas limited liability
company (“Wilks Brothers”) and SDW Investments, LLC, a Texas limited liability company (“SDW”) (Wilks Brothers and SDW, collectively, the “Noteholders” and each, a “Noteholder”), to
Approach Resources Inc., a Delaware corporation (the “Company”), pursuant to Section 6.c.(iii) of that certain Exchange Agreement, dated November 2, 2016 (the “Exchange Agreement”), by and between the Company
and the Noteholders. Capitalized terms used herein, and not otherwise defined herein, have the respective meanings given to such terms in the Exchange Agreement. 

The undersigned officer of each of the Noteholders hereby certifies on behalf of each of the Noteholders, solely in his capacity as an
authorized officer of each of the Noteholders, and not in any individual capacity, as follows: 
  

	1.	Each of the representations and warranties of each Noteholder contained in Section 3.a. were true and correct in all respects, and all other representations and warranties of each Noteholder contained in
Section 3 were true and correct in all material respects on and as of the date of the Exchange Agreement and the date of Closing, with the same force and effect as though made on and as of Closing. 

 

	2.	Each Noteholder has complied with and performed in all material respects all covenants and agreements required to be performed or complied with by it under the Exchange Agreement at or prior to the Closing, except for
the covenants set forth in Section 2.b. of the Exchange Agreement, which the Company has performed and complied with in all respects. 

 IN WITNESS WHEREOF, the undersigned has executed this Certificate on behalf of the Company as of
the date first stated above. 
  

	
	 WILKS BROTHERS, LLC

	
	
By:                  
                                         
                                    

	 Name:

	 Title:

	
	
By:                  
                                         
                                    

	 Name:

	 Title:

	
	 SDW INVESTMENTS, LLC

	
	
By:                  
                                         
                                    

	 Name:

	 Title:

	
	
By:                  
                                         
                                    

	 Name:

	 Title:

 [OFFICER’S CERTIFICATE OF THE NOTEHOLDERS]Exhibit 4.7

 

OVASCIENCE, INC.

 

Issuer

 

AND

 

[ ]

 

Trustee

 

INDENTURE

 

Dated as of [   ]

 

Senior Debt Securities

 

 

CROSS-REFERENCE TABLE (1)

 

	
Section of
    	
 
    	
 
    
	
Trust Indenture Act
    	
 
    	
Section of
    
	
of 1939, as Amended
    	
 
    	
Indenture
    
	
 
    	
 
    	
 
    
	
310(a).
    	
 
    	
7.09
    
	
310(b).
    	
 
    	
7.08
    
	
 
    	
 
    	
7.10
    
	
310(c).
    	
 
    	
Inapplicable
    
	
311(a).
    	
 
    	
7.13(a)
    
	
311(b).
    	
 
    	
7.13(b)
    
	
311(c).
    	
 
    	
Inapplicable
    
	
312(a)
    	
 
    	
5.02(a)
    
	
312(b).
    	
 
    	
5.02(b)
    
	
312(c).
    	
 
    	
5.02(c)
    
	
313(a).
    	
 
    	
5.04(a)
    
	
313(b).
    	
 
    	
5.04(a)
    
	
313(c).
    	
 
    	
5.04(a)
    
	
 
    	
 
    	
5.04(b)
    
	
313(d).
    	
 
    	
5.04(b)
    
	
314(a).
    	
 
    	
5.03
    
	
314(b).
    	
 
    	
Inapplicable
    
	
314(c).
    	
 
    	
13.06
    
	
314(d).
    	
 
    	
Inapplicable
    
	
314(e).
    	
 
    	
13.06
    
	
314(f).
    	
 
    	
Inapplicable
    
	
315(a).
    	
 
    	
7.01(a)
    
	
 
    	
 
    	
7.02
    
	
315(b).
    	
 
    	
6.07
    
	
315(c).
    	
 
    	
7.01
    
	
315(d).
    	
 
    	
7.01(b)
    
	
 
    	
 
    	
7.01(c)
    
	
315(e).
    	
 
    	
6.07
    
	
316(a).
    	
 
    	
6.06
    
	
 
    	
 
    	
8.04
    
	
316(b).
    	
 
    	
6.04
    
	
316(c).
    	
 
    	
8.01
    
	
317(a).
    	
 
    	
6.02
    
	
317(b).
    	
 
    	
4.03
    
	
318(a).
    	
 
    	
13.08
    

 

(1) This Cross-Reference Table does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms or provisions.

 

i

 

TABLE OF CONTENTS (2)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 1.01
    	
Definitions of Terms
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II ISSUE,   DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
    	
4
    
	
 
    	
 
    	
 
    
	
SECTION 2.01
    	
Designation and Terms of Securities
    	
4
    
	
 
    	
 
    	
 
    
	
SECTION 2.02
    	
Form of Securities and Trustee’s Certificate
    	
5
    
	
 
    	
 
    	
 
    
	
SECTION 2.03
    	
Denominations: Provisions for Payment
    	
6
    
	
 
    	
 
    	
 
    
	
SECTION 2.04
    	
Execution and Authentications
    	
7
    
	
 
    	
 
    	
 
    
	
SECTION 2.05
    	
Registration of Transfer and Exchange
    	
7
    
	
 
    	
 
    	
 
    
	
SECTION 2.06
    	
Temporary Securities
    	
8
    
	
 
    	
 
    	
 
    
	
SECTION 2.07
    	
Mutilated, Destroyed, Lost or Stolen Securities
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 2.08
    	
Cancellation
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 2.09
    	
Benefits of Indenture
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 2.10
    	
Authenticating Agent
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 2.11
    	
Global Securities
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE III REDEMPTION OF   SECURITIES AND SINKING FUND PROVISIONS
    	
11
    
	
 
    	
 
    	
 
    
	
SECTION 3.01
    	
Redemption
    	
11
    
	
 
    	
 
    	
 
    
	
SECTION 3.02
    	
Notice of Redemption
    	
11
    
	
 
    	
 
    	
 
    
	
SECTION 3.03
    	
Payment Upon Redemption
    	
12
    
	
 
    	
 
    	
 
    
	
SECTION 3.04
    	
Sinking Fund
    	
12
    
	
 
    	
 
    	
 
    
	
SECTION 3.05
    	
Satisfaction of Sinking Fund Payments with Securities
    	
12
    
	
 
    	
 
    	
 
    
	
SECTION 3.06
    	
Redemption of Securities for Sinking Fund
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE IV COVENANTS
    	
13
    
	
 
    	
 
    	
 
    
	
SECTION 4.01
    	
Payment of Principal, Premium and Interest
    	
13
    
	
 
    	
 
    	
 
    
	
SECTION 4.02
    	
Maintenance of Office or Agency
    	
13
    
	
 
    	
 
    	
 
    
	
SECTION 4.03
    	
Paying Agents
    	
13
    
	
 
    	
 
    	
 
    
	
SECTION 4.04
    	
Appointment to Fill Vacancy in Office of Trustee
    	
14
    
	
 
    	
 
    	
 
    
	
SECTION 4.05
    	
Compliance with Consolidation Provisions
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE V SECURITYHOLDERS’   LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
    	
14
    
	
 
    	
 
    	
 
    
	
SECTION 5.01
    	
Company to Furnish Trustee Names and Addresses of   Securityholders
    	
14
    
	
 
    	
 
    	
 
    
	
SECTION 5.02
    	
Preservation of Information; Communications with   Securityholders
    	
14
    
	
 
    	
 
    	
 
    
	
SECTION 5.03
    	
Reports by the Company
    	
15
    
	
 
    	
 
    	
 
    
	
SECTION 5.04
    	
Reports by the Trustee
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE VI REMEDIES OF THE   TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
    	
16
    
	
 
    	
 
    	
 
    
	
SECTION 6.01
    	
Events of Default
    	
16
    
	
 
    	
 
    	
 
    
	
SECTION 6.02
    	
Collection of Indebtedness and Suits for Enforcement by   Trustee
    	
17
    
	
 
    	
 
    	
 
    
	
SECTION 6.03
    	
Application of Moneys Collected
    	
18
    

 

ii

 

	
SECTION 6.04
    	
Limitation on Suits
    	
18
    
	
 
    	
 
    	
 
    
	
SECTION 6.05
    	
Rights and Remedies Cumulative; Delay or Omission Not   Waiver
    	
19
    
	
 
    	
 
    	
 
    
	
SECTION 6.06
    	
Control by Securityholders
    	
19
    
	
 
    	
 
    	
 
    
	
SECTION 6.07
    	
Undertaking to Pay Costs
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE VII CONCERNING THE   TRUSTEE
    	
20
    
	
 
    	
 
    	
 
    
	
SECTION 7.01
    	
Certain Duties and Responsibilities of Trustee
    	
20
    
	
 
    	
 
    	
 
    
	
SECTION 7.02
    	
Certain Rights of Trustee
    	
21
    
	
 
    	
 
    	
 
    
	
SECTION 7.03
    	
Trustee Not Responsible for Recitals or Issuance of   Securities
    	
22
    
	
 
    	
 
    	
 
    
	
SECTION 7.04
    	
May Hold Securities
    	
22
    
	
 
    	
 
    	
 
    
	
SECTION 7.05
    	
Moneys Held in Trust
    	
22
    
	
 
    	
 
    	
 
    
	
SECTION 7.06
    	
Compensation and Reimbursement
    	
22
    
	
 
    	
 
    	
 
    
	
SECTION 7.07
    	
Reliance on Officers’ Certificate
    	
23
    
	
 
    	
 
    	
 
    
	
SECTION 7.08
    	
Disqualification; Conflicting Interests
    	
23
    
	
 
    	
 
    	
 
    
	
SECTION 7.09
    	
Corporate Trustee Required; Eligibility
    	
23
    
	
 
    	
 
    	
 
    
	
SECTION 7.10
    	
Resignation and Removal; Appointment of Successor
    	
23
    
	
 
    	
 
    	
 
    
	
SECTION 7.11
    	
Acceptance of Appointment By Successor
    	
24
    
	
 
    	
 
    	
 
    
	
SECTION 7.12
    	
Merger, Conversion, Consolidation or Succession to Business
    	
25
    
	
 
    	
 
    	
 
    
	
SECTION 7.13
    	
Preferential Collection of Claims Against the Company
    	
26
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII CONCERNING THE SECURITYHOLDERS
    	
26
    
	
 
    	
 
    	
 
    
	
SECTION 8.01
    	
Evidence of Action by Securityholders
    	
26
    
	
 
    	
 
    	
 
    
	
SECTION 8.02
    	
Proof of Execution by Securityholders
    	
26
    
	
 
    	
 
    	
 
    
	
SECTION 8.03
    	
Who May be Deemed Owners
    	
27
    
	
 
    	
 
    	
 
    
	
SECTION 8.04
    	
Certain Securities Owned by Company Disregarded
    	
27
    
	
 
    	
 
    	
 
    
	
SECTION 8.05
    	
Actions Binding on Future Securityholders
    	
27
    
	
 
    	
 
    	
 
    
	
SECTION 8.06
    	
Purposes for Which Meetings May Be Called
    	
27
    
	
 
    	
 
    	
 
    
	
SECTION 8.07
    	
Call Notice and Place of Meetings
    	
27
    
	
 
    	
 
    	
 
    
	
SECTION 8.08
    	
Persons Entitled To Vote at Meetings
    	
28
    
	
 
    	
 
    	
 
    
	
SECTION 8.09
    	
Quorum; Action
    	
28
    
	
 
    	
 
    	
 
    
	
SECTION 8.10
    	
Determination of Voting Rights; Conduct and Adjournment of   Meetings
    	
28
    
	
 
    	
 
    	
 
    
	
SECTION 8.11
    	
Counting Votes and Recording Action of Meetings
    	
29
    
	
 
    	
 
    	
 
    
	
ARTICLE IX SUPPLEMENTAL   INDENTURES
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 9.01
    	
Supplemental Indentures Without the Consent of   Securityholders
    	
29
    
	
 
    	
 
    	
 
    
	
SECTION 9.02
    	
Supplemental Indentures With Consent of Securityholders
    	
30
    
	
 
    	
 
    	
 
    
	
SECTION 9.03
    	
Effect of Supplemental Indentures
    	
31
    
	
 
    	
 
    	
 
    
	
SECTION 9.04
    	
Securities Affected by Supplemental Indentures
    	
31
    
	
 
    	
 
    	
 
    
	
SECTION 9.05
    	
Execution of Supplemental Indentures
    	
31
    
	
 
    	
 
    	
 
    
	
ARTICLE X SUCCESSOR ENTITY
    	
31
    
	
 
    	
 
    	
 
    
	
SECTION 10.01
    	
Company May Consolidate, Etc.
    	
31
    
	
 
    	
 
    	
 
    
	
SECTION 10.02
    	
Successor Entity Substituted
    	
32
    

 

iii

 

	
SECTION 10.03
    	
Evidence of Consolidation, Etc. to Trustee
    	
32
    
	
 
    	
 
    	
 
    
	
ARTICLE XI SATISFACTION AND   DISCHARGE
    	
32
    
	
 
    	
 
    	
 
    
	
SECTION 11.01
    	
Satisfaction and Discharge of Indenture
    	
32
    
	
 
    	
 
    	
 
    
	
SECTION 11.02
    	
Discharge of Obligations
    	
33
    
	
 
    	
 
    	
 
    
	
SECTION 11.03
    	
Deposited Moneys to be Held in Trust
    	
33
    
	
 
    	
 
    	
 
    
	
SECTION 11.04
    	
Payment of Moneys Held by Paying Agents
    	
33
    
	
 
    	
 
    	
 
    
	
SECTION 11.05
    	
Repayment to Company
    	
33
    
	
 
    	
 
    	
 
    
	
ARTICLE XII IMMUNITY OF   INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 12.01
    	
No Recourse
    	
34
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII MISCELLANEOUS   PROVISIONS
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 13.01
    	
Effect on Successors and Assigns
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 13.02
    	
Actions by Successor
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 13.03
    	
Surrender of Company Powers
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 13.04
    	
Notices
    	
34
    
	
 
    	
 
    	
 
    
	
SECTION 13.05
    	
Governing Law
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 13.06
    	
Treatment of Securities as Debt
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 13.07
    	
Compliance Certificates and Opinions
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 13.08
    	
Payments on Business Days
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 13.09
    	
Conflict with Trust Indenture Act
    	
35
    
	
 
    	
 
    	
 
    
	
SECTION 13.10
    	
Counterparts
    	
36
    
	
 
    	
 
    	
 
    
	
SECTION 13.11
    	
Separability
    	
36
    
	
 
    	
 
    	
 
    
	
SECTION 13.12
    	
Assignment
    	
36
    
	
 
    	
 
    	
 
    

 

(2) This Table of Contents does not constitute part of the Indenture and shall not have any bearing on the interpretation of any of its terms and provisions.

 

iv

 

INDENTURE, dated as of [  ], by and between OvaScience, Inc., a Delaware corporation (the “Company”), and [   ], as trustee (the “Trustee”):

 

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of debt securities (hereinafter referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time to time in one or more series as in this Indenture provided, as registered Securities without coupons, to be authenticated by the certificate of the Trustee;

 

WHEREAS, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution of this Indenture; and

 

WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.

 

NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit of the holders of Securities:

 

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01              Definitions of Terms.

 

The terms defined in this Section (except as in this Indenture otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section and shall include the plural as well as the singular.  All other terms used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that are by reference in such Act defined in the Securities Act of 1933, as amended (except as herein otherwise expressly provided or unless the context otherwise requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said Securities Act as in force at the date of the execution of this instrument.

 

“Authenticating Agent” means an authenticating agent with respect to all or any of the series of Securities appointed with respect to all or any series of the Securities by the Trustee pursuant to Section 2.10.

 

“Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors.

 

“Board of Directors” means the Board of Directors of the Company or any duly authorized committee of such Board.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification.

 

“Business Day” means, with respect to any series of Securities, any day other than a day on which Federal or State banking institutions in the Borough of Manhattan, the City and State of New York, are authorized or obligated by law, executive order or regulation to close.

 

“Certificate” means a certificate signed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company.  The Certificate need not comply with the provisions of Section 13.07.

 

“Commission” means the Securities and Exchange Commission.

 

“Company” means the corporation named as the “Company” in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor corporation.

 

 

“Corporate Trust Office” means the office of the Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at [ ], except that whenever a provision herein refers to an office or agency of the Trustee in the Borough of Manhattan, the City and State of New York, such office is located, at the date hereof, at [ ].

 

“Custodian” means any receiver, trustee, assignee, liquidator, or similar official under any Bankruptcy Law.

 

“Default” means an event which is, or after notice or lapse of time, or both, would constitute an Event of Default.

 

“Depositary” means, with respect to Securities of any series, for which the Company shall determine that such Securities will be issued as a Global Security, The Depository Trust Company, New York, New York, another clearing agency, or any successor registered as a clearing agency under the Exchange Act, or other applicable statute or regulation, which, in each case, shall be designated by the Company pursuant to either Section 2.01 or Section 2.11.

 

“Event of Default” means, with respect to Securities of a particular series, any event specified in Section 6.01, continued for the period of time, if any, therein designated.

 

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

 

“Global Security” means, with respect to any series of Securities, a Security executed by the Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction, all in accordance with this Indenture, which shall be registered in the name of the Depositary or its nominee.

 

“Governmental Obligations” means securities that are (i) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America that, in either case, are non-callable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such Governmental Obligation or a specific payment of principal of or interest on any such Governmental Obligation held by such custodian for the account of the holder of such depositary receipt; provided, however, that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the Governmental Obligation or the specific payment of principal of or interest on the Governmental Obligation evidenced by such depositary receipt.

 

“herein,” “hereof” and “hereunder,” and other words of similar import, refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.

 

“Indenture” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into in accordance with the terms hereof.

 

“Interest Payment Date,” when used with respect to any installment of interest on a Security of a particular series, means the date specified in such Security or in a Board Resolution or in an indenture supplemental hereto with respect to such series as the fixed date on which an installment of interest with respect to Securities of that series is due and payable.

 

“Officers’ Certificate” means a certificate signed by the President or a Vice President and by the Chief Financial Officer, Vice President of Finance, the Treasurer or an Assistant Treasurer or the Controller or an Assistant Controller or the Secretary or an Assistant Secretary of the Company that is delivered to the Trustee in accordance with the terms hereof.  Certificate shall include the statements provided for in Section 13.07, if and to the extent required by the provisions thereof.

 

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“Opinion of Counsel” means a written opinion of counsel, who may be counsel to the Company (and may include directors or employees of the Company) and which opinion is acceptable to the Trustee which acceptance shall not be unreasonably withheld.

 

“Outstanding”, when used with reference to Securities of any series, means, subject to the provisions of Section 8.04, as of any particular time, all Securities of that series theretofore authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for cancellation or that have previously been canceled; (b) Securities or portions thereof for the payment or redemption of which moneys or Governmental Obligations in the necessary amount shall have been deposited in trust with the Trustee or with any paying agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own paying agent); provided, however, that if such Securities or portions of such Securities are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in Article III provided, or provision satisfactory to the Trustee shall have been made for giving such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have been authenticated and delivered pursuant to the terms of Section 2.07.

 

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

 

“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.

 

“Responsible Officer,” when used with respect to the Trustee, means any officer of the Trustee, including any vice president, assistant vice president, secretary, assistant secretary, the treasurer, any assistant treasurer, the managing director or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“Securities” means the debt Securities authenticated and delivered under this Indenture.

 

“Security Register” has the meaning specified in Section 2.05.

 

“Security Registrar” has the meaning specified in Section 2.05.

 

“Securityholder,” “holder of Securities,” “registered holder,” or other similar term, means the Person or Persons in whose name or names a particular Security shall be registered in the Security Register.

 

“Subsidiary” means, with respect to any Person, (i) any corporation at least a majority of whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any general partnership, joint venture or similar entity, at least a majority of whose outstanding partnership or similar interests shall at the time be owned by such Person, or by one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited partnership of which such Person or any of its Subsidiaries is a general partner.

 

“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean such successor Trustee.  The term “Trustee” as used with respect to a particular series of the Securities shall mean the trustee with respect to that series.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, subject to the provisions of Sections 9.01, 9.02, and 10.01, as in effect at the date of execution of this instrument; provided, however, that in the event the

 

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Trust Indenture Act is amended after such date, Trust Indenture Act means, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended, or any successor statute.

 

“Voting Stock,” as applied to any Person, means shares, interests, participations or other equivalents in the equity interest (however designated) in such Person having ordinary voting power for the election of a majority of the directors (or the equivalent) of such Person, other than shares, interests, participations or other equivalents having such power only by reason of the occurrence of a contingency.

 

ARTICLE II

 

ISSUE, DESCRIPTION, TERMS, EXECUTION,
 REGISTRATION AND EXCHANGE OF SECURITIES

 

SECTION 2.01              Designation and Terms of Securities.

 

(a)                                 The aggregate principal amount of Securities that may be authenticated and delivered under this Indenture is unlimited.  The Securities may be issued in one or more series up to the aggregate principal amount of Securities of that series from time to time authorized by or pursuant to a Board Resolution of the Company or pursuant to one or more indentures supplemental hereto. Prior to the initial issuance of Securities of a given series, there shall be established in or pursuant to a Board Resolution of the Company, and set forth in an Officers’ Certificate of the Company, or established in one or more indentures supplemental hereto:

 

(1)                                 the title of the Security of the series (which shall distinguish the Securities of the series from all other Securities);

 

(2)                                 the aggregate principal amount of the Securities of such series initially to be issued and any limit upon the aggregate principal amount of the Securities of that series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that series);

 

(3)                                 the currency or units based on or relating to currencies in which debt securities of such series are denominated and the currency or units in which principal or interest or both will or may be payable;

 

(4)                                 the date or dates on which the principal of the Securities of the series is payable and the place(s) of payment;

 

(5)                                 the rate or rates at which the Securities of the series shall bear interest or the manner of calculation of such rate or rates, if any;

 

(6)                                 the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest will be payable or the manner of determination of such Interest Payment Dates, the place(s) of payment, and the record date for the determination of holders to whom interest is payable on any such Interest Payment Dates or the method for determining such dates;

 

(7)                                 the right, if any, to extend the interest payment periods or to defer the payment of interest and the duration of such extension;

 

(8)                                 the period or periods within which, the price or prices at which and the terms and conditions upon which, Securities of the series may be redeemed, in whole or in part, at the option of the Company;

 

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(9)                                 the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions (including payments made in cash in satisfaction of future sinking fund obligations) or at the option of a holder thereof and the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(10)                          whether or not the debt securities will be secured or unsecured, and the terms of any secured debt;

 

(11)                          the form of the Securities of the series including the form of the Certificate of Authentication for such series;

 

(12)                          if other than denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, the denominations in which the Securities of the series shall be issuable;

 

(13)                          any and all other terms with respect to such series (which terms shall not be inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including any terms which may be required by or advisable under United States laws or regulations or advisable in connection with the marketing of Securities of that series;

 

(14)                          whether the Securities are issuable as a Global Security and, in such case, the identity of the Depositary for such series;

 

(15)                          whether the Securities will be convertible into shares of common stock or other securities of the Company and, if so, the terms and conditions upon which such Securities will be so convertible, including the conversion price and the conversion period;

 

(16)                          if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01; and

 

(17)                          any additional or different Events of Default or restrictive covenants provided for with respect to the Securities of the series.

 

All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to any such Board Resolution or in any indentures supplemental hereto.

 

If any of the terms of the series are established by action taken pursuant to a Board Resolution of the Company, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate of the Company setting forth the terms of the series.

 

Securities of any particular series may be issued at various times, with different dates on which the principal or any installment of principal is payable, with different rates of interest, if any, or different methods by which rates of interest may be determined, with different dates on which such interest may be payable and with different redemption dates.

 

SECTION 2.02              Form of Securities and Trustee’s Certificate.

 

The Securities of any series and the Trustee’s certificate of authentication to be borne by such Securities shall be substantially of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in a Board Resolution of the Company and as set forth in an Officers’ Certificate of the Company and may have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the Company may deem appropriate and as are not inconsistent with the

 

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provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which Securities of that series may be listed, or to conform to usage.

 

SECTION 2.03              Denominations:  Provisions for Payment.

 

The Securities shall be issuable as registered Securities and in the denominations of one thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(12).  The Securities of a particular series shall bear interest payable on the dates and at the rate specified with respect to that series.  The principal of and the interest on the Securities of any series, as well as any premium thereon in case of redemption thereof prior to maturity, shall be payable in the coin or currency of the United States of America that at the time is legal tender for public and private debt, at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, the City and State of New York.  Each Security shall be dated the date of its authentication.  Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve 30-day months.

 

The interest installment on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date for Securities of that series shall be paid to the Person in whose name said Security (or one or more Predecessor Securities) is registered at the close of business on the regular record date for such interest installment.  In the event that any Security of a particular series or portion thereof is called for redemption and the redemption date is subsequent to a regular record date with respect to any Interest Payment Date and prior to such Interest Payment Date, interest on such Security will be paid upon presentation and surrender of such Security as provided in Section 3.03.

 

Any interest on any Security that is payable, but is not punctually paid or duly provided for, on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”) shall forthwith cease to be payable to the registered holder on the relevant regular record date by virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its election, as provided in clause (1) or clause (2) below:

 

(1)                                 The Company may make payment of any Defaulted Interest on Securities to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered at the close of business on a special record date for the payment of such Defaulted Interest, which shall be fixed in the following manner:  the Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each such Security and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a special record date for the payment of such Defaulted Interest which shall not be more than 15 nor less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Trustee shall promptly notify the Company of such special record date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the special record date therefor to be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears in the Security Register, not less than 10 days prior to such special record date.  Notice of the proposed payment of such Defaulted Interest and the special record date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities (or their respective Predecessor Securities) are registered on such special record date.

 

(2)                                 The Company may make payment of any Defaulted Interest on any Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment

 

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pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

 

Unless otherwise set forth in a Board Resolution of the Company or one or more indentures supplemental hereto establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term “regular record date” as used in this Section with respect to a series of Securities with respect to any Interest Payment Date for such series shall mean either the fifteenth day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the last day of the month immediately preceding the month in which an Interest Payment Date established for such series pursuant to Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month, whether or not such date is a Business Day.

 

Subject to the foregoing provisions of this Section, each Security of a series delivered under this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such other Security.

 

SECTION 2.04              Execution and Authentications.

 

The Securities shall be signed on behalf of the Company by its President, or one of its Vice Presidents, or its Treasurer, or one of its Assistant Treasurers, or its Secretary, or one of its Assistant Secretaries, under its corporate seal attested by its Secretary or one of its Assistant Secretaries.  Signatures may be in the form of a manual or facsimile signature.  The Company may use the facsimile signature of any Person who shall have been a President or Vice President thereof, or of any Person who shall have been a Treasurer or Assistant Treasurer thereof, or of any Person who shall have been a Secretary or Assistant Secretary thereof, notwithstanding the fact that at the time the Securities shall be authenticated and delivered or disposed of such Person shall have ceased to be the President or a Vice President, the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary, of the Company.  The seal of the Company may be in the form of a facsimile of such seal and may be impressed, affixed, imprinted or otherwise reproduced on the Securities.  The Securities may contain such notations, legends or endorsements required by law, stock exchange rule or usage.  Each Security shall be dated the date of its authentication.

 

A Security shall not be valid or obligatory for any purpose and shall not be entitled to any benefit under this Indenture, in each case, until authenticated with a certificate of authentication manually signed by an authorized signatory of the Trustee, or by an Authenticating Agent.  Such certificate shall be conclusive evidence, and the only evidence, that the Security so authenticated has been duly authenticated and delivered hereunder and that the Security is entitled to the benefits of this Indenture.  At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a written order of the Company for the authentication and delivery of such Securities, signed by its President or any Vice President and its Secretary or any Assistant Secretary, and the Trustee in accordance with such written order shall authenticate and deliver such Securities.

 

In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form and terms thereof have been established in conformity with the provisions of this Indenture.

 

The Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable to the Trustee.

 

SECTION 2.05              Registration of Transfer and Exchange.

 

(a)                                 Securities of any series may be exchanged upon presentation thereof at the office or agency of the Company designated for such purpose in the Borough of Manhattan, the City and State of New York, for other Securities of such series of authorized denominations, and for a like aggregate principal amount, upon payment of a sum sufficient to cover any tax or other governmental charge

 

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in relation thereto, all as provided in this Section.  In respect of any Securities so surrendered for exchange, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in exchange therefor the Security or Securities of the same series that the Securityholder making the exchange shall be entitled to receive, bearing numbers not contemporaneously outstanding.

 

(b)                                 The Company shall keep, or cause to be kept, at its office or agency designated for such purpose in the Borough of Manhattan, the City and State of New York, or such other location designated by the Company a register or registers (herein referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall register the Securities and the transfers of Securities as in this Article provided and which at all reasonable times shall be open for inspection by the Trustee.  The registrar for the purpose of registering Securities and transfer of Securities as herein provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).

 

Upon surrender for transfer of any Security at the office or agency of the Company designated for such purpose, the Company shall execute, the Trustee shall authenticate and such office or agency shall deliver in the name of the transferee or transferees a new Security or Securities of the same series as the Security presented for a like aggregate principal amount.

 

All Securities presented or surrendered for exchange or registration of transfer, as provided in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by a written instrument or instruments of transfer, in form satisfactory to the Company or the Security Registrar, duly executed by the registered holder or by such holder’s duly authorized attorney in writing.

 

(c)                                  No service charge shall be made for any exchange or registration of transfer of Securities, or issue of new Securities in case of partial redemption of any series, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge in relation thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not involving any transfer.

 

(d)                                 The Company shall not be required (i) to issue, exchange or register the transfer of any Securities during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of less than all the Outstanding Securities of the same series and ending at the close of business on the day of such mailing, nor (ii) to register the transfer of or exchange any Securities of any series or portions thereof called for redemption.  The provisions of this Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.

 

SECTION 2.06              Temporary Securities.

 

Pending the preparation of definitive Securities of any series, the Company may execute, and the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or typewritten) of any authorized denomination.  Such temporary Securities shall be substantially in the form of the definitive Securities in lieu of which they are issued, but with such omissions, insertions and variations as may be appropriate for temporary Securities, all as may be determined by the Company.  Every temporary Security of any series shall be executed by the Company and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities of such series.  Without unnecessary delay the Company will execute and will furnish definitive Securities of such series and thereupon any or all temporary Securities of such series may be surrendered in exchange therefor (without charge to the holders), at the office or agency of the Company designated for the purpose in the Borough of Manhattan, the City and State of New York, and the Trustee shall authenticate and such office or agency shall deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of such series, unless the Company advises the Trustee to the effect that definitive Securities need not be executed and furnished until further notice from the Company.  Until so exchanged, the temporary Securities of such series shall be entitled to the same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder.

 

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SECTION 2.07              Mutilated, Destroyed, Lost or Stolen Securities.

 

In case any temporary or definitive Security shall become mutilated or be destroyed, lost or stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the same series, bearing a number not contemporaneously outstanding, in exchange and substitution for the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or stolen.  In every case the applicant for a substituted Security shall furnish to the Company and the Trustee such security or indemnity as may be required by them to save each of them harmless, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s Security and of the ownership thereof.  The Trustee may authenticate any such substituted Security and deliver the same upon the written request or authorization of any officer of the Company.  Upon the issuance of any substituted Security, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.  In case any Security that has matured or is about to mature shall become mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Security) if the applicant for such payment shall furnish to the Company and the Trustee such security or indemnity as they may require to save them harmless, and, in case of destruction, loss or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or theft of such Security and of the ownership thereof.

 

Every replacement Security issued pursuant to the provisions of this Section shall constitute an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of the same series duly issued hereunder.  All Securities shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement or payment of negotiable instruments or other securities without their surrender.

 

SECTION 2.08              Cancellation.

 

All Securities surrendered for the purpose of payment, redemption, exchange or registration of transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall be issued in lieu thereof except as expressly required or permitted by any of the provisions of this Indenture.  On request of the Company at the time of such surrender, the Trustee shall deliver to the Company canceled Securities held by the Trustee.  In the absence of such request the Trustee may dispose of canceled Securities in accordance with its standard procedures and deliver a certificate of disposition to the Company.  If the Company shall otherwise acquire any of the Securities, however, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation.

 

SECTION 2.09              Benefits of Indenture.

 

Nothing in this Indenture or in the Securities, express or implied, shall give or be construed to give to any Person, other than the parties hereto and the holders of the Securities any legal or equitable right, remedy or claim under or in respect of this Indenture, or under any covenant, condition or provision herein contained; all such covenants, conditions and provisions being for the sole benefit of the parties hereto and of the holders of the Securities.

 

SECTION 2.10              Authenticating Agent.

 

So long as any of the Securities of any series remain Outstanding there may be an Authenticating Agent for any or all such series of Securities which the Trustee shall have the right to appoint.  Said Authenticating Agent shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, transfer or partial redemption thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder.  All references in this Indenture

 

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to the authentication of Securities by the Trustee shall be deemed to include authentication by an Authenticating Agent for such series.  Each Authenticating Agent shall be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as most recently reported or determined by it, sufficient under the laws of any jurisdiction under which it is organized or in which it is doing business to conduct a trust business, and that is otherwise authorized under such laws to conduct such business and is subject to supervision or examination by Federal or State authorities.  If at any time any Authenticating Agent shall cease to be eligible in accordance with these provisions, it shall resign immediately.

 

Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trustee and to the Company.  The Trustee may at any time (and upon request by the Company shall) terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and to the Company.  Upon resignation, termination or cessation of eligibility of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent acceptable to the Company.  Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder as if originally named as an Authenticating Agent pursuant hereto.

 

SECTION 2.11              Global Securities

 

(a)                                 If the Company shall establish pursuant to Section 2.01 that some or all of the Securities of a particular series are to be issued as a Global Security, then the Company shall execute and the Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the Outstanding Securities of such series which are to be issued as a Global Security, (ii) shall be registered in the name of the Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction and (iv) shall bear a legend substantially to the following effect:  “Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred, in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or to a nominee of such successor Depositary.”

 

(b)                                 Notwithstanding the provisions of Section 2.05, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 2.05, only to another nominee of the Depositary for such series, or to a successor Depositary for such series selected or approved by the Company or to a nominee of such successor Depositary.

 

(c)                                  If at any time the Depositary for a series of the Securities notifies the Company that it is unwilling or unable to continue as Depositary for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation, and a successor Depositary for such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such condition, as the case may be, this Section 2.11 shall no longer be applicable to the Securities of such series and the Company will execute, and subject to Section 2.05, the Trustee will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security.  In addition, the Company may at any time determine that the Securities of any series shall no longer be represented by a Global Security and that the provisions of this Section 2.11 shall no longer apply to the Securities of such series.  In such event the Company will execute and subject to Section 2.05, the Trustee, upon receipt of an Officers’ Certificate evidencing such determination by the Company, will authenticate and deliver the Securities of such series in definitive registered form without coupons, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security.  Upon the exchange of the Global Security for such Securities in definitive registered form without coupons, in authorized denominations, the Global Security shall be canceled by the Trustee.  Such Securities in definitive registered form issued in exchange for the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the

 

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Trustee.  The Trustee shall deliver such Securities to the Depositary for delivery to the Persons in whose names such Securities are so registered.

 

ARTICLE III

 

REDEMPTION OF SECURITIES AND SINKING
 FUND PROVISIONS

 

SECTION 3.01              Redemption.

 

The Company may redeem the Securities of any series issued hereunder on and after the dates and in accordance with the terms established for such series pursuant to Section 2.01 hereof.

 

SECTION 3.02              Notice of Redemption.

 

(a)                                 In case the Company shall desire to exercise such right to redeem all or, as the case may be, a portion of the Securities of any series in accordance with the right reserved so to do, the Company shall, or shall cause the Trustee to, give notice of such redemption to holders of the Securities of such series to be redeemed by mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not more than 90 days before the date fixed for redemption of that series to such holders at their last addresses as they shall appear upon the Security Register unless a shorter period is specified in the Securities to be redeemed.  Any notice that is mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder receives the notice.  In any case, failure duly to give such notice to the holder of any Security of any series designated for redemption in whole or in part, or any defect in the notice, shall not affect the validity of the proceedings for the redemption of any other Securities of such series or any other series.  In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with any such restriction.

 

Each such notice of redemption shall specify the date fixed for redemption and the redemption price at which Securities of that series are to be redeemed, and shall state that payment of the redemption price of such Securities to be redeemed will be made at the office or agency of the Company in the Borough of Manhattan, the City and State of New York, upon presentation and surrender of such Securities, that interest accrued to the date fixed for redemption will be paid as specified in said notice, that from and after said date interest will cease to accrue and that the redemption is for a sinking fund, if such is the case.  If less than all the Securities of a series are to be redeemed, the notice to the holders of Securities of that series to be redeemed in whole or in part shall specify the particular Securities to be so redeemed.  In case any Security is to be redeemed in part only, the notice that relates to such Security shall state the portion of the principal amount thereof to be redeemed, and shall state that on and after the redemption date, upon surrender of such Security, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof will be issued.

 

(b)                                 If less than all the Securities of a series are to be redeemed, the Company shall give the Trustee at least 30 days’ notice in advance of the date fixed for redemption as to the aggregate principal amount of Securities of the series to be redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem appropriate and fair in its discretion and that may provide for the selection of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the principal amount of such Securities of a denomination larger than $1,000, the Securities to be redeemed and shall thereafter promptly notify the Company in writing of the numbers of the Securities to be redeemed, in whole or in part.  The Company may, if and whenever it shall so elect, by delivery of instructions signed on its behalf by its President or any Vice President, instruct the Trustee or any paying agent to call all or any part of the Securities of a particular series for redemption and to give notice of redemption in the manner set forth in this Section, such notice to be in the name of the Company or its own name as the Trustee or such paying agent may deem advisable.  In any case in which notice of redemption is to be given by the

 

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Trustee or any such paying agent, the Company shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying agent, as the case may be, such Security Register, transfer books or other records, or suitable copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any notice by mail that may be required under the provisions of this Section.

 

SECTION 3.03              Payment Upon Redemption.

 

(a)                                 If the giving of notice of redemption shall have been completed as above provided, the Securities or portions of Securities of the series to be redeemed specified in such notice shall become due and payable on the date and at the place stated in such notice at the applicable redemption price, together with interest accrued to the date fixed for redemption and interest on such Securities or portions of Securities shall cease to accrue on and after the date fixed for redemption, unless the Company shall default in the payment of such redemption price and accrued interest with respect to any such Security or portion thereof.  On presentation and surrender of such Securities on or after the date fixed for redemption at the place of payment specified in the notice, said Securities shall be paid and redeemed at the applicable redemption price for such series, together with interest accrued thereon to the date fixed for redemption (but if the date fixed for redemption is an interest payment date, the interest installment payable on such date shall be payable to the registered holder at the close of business on the applicable record date pursuant to Section 2.03).

 

(b)                                 Upon presentation of any Security of such series that is to be redeemed in part only, the Company shall execute and the Trustee shall authenticate and the office or agency where the Security is presented shall deliver to the holder thereof, at the expense of the Company, a new Security of the same series of authorized denominations in principal amount equal to the unredeemed portion of the Security so presented.

 

SECTION 3.04              Sinking Fund.

 

The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01 for Securities of such series.

 

The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an “optional sinking fund payment.”  If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05.  Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series.

 

SECTION 3.05              Satisfaction of Sinking Fund Payments with Securities.

 

The Company (i) may deliver Outstanding Securities of a series (other than any Securities previously called for redemption) and (ii) may apply as a credit Securities of a series that have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series, provided that such Securities have not been previously so credited.  Such Securities shall be received and credited for such purpose by the Trustee at the redemption price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.

 

SECTION 3.06              Redemption of Securities for Sinking Fund.

 

Not less than 45 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for that series

 

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pursuant to the terms of the series, the portion thereof, if any, that is to be satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the basis for such credit and will, together with such Officers’ Certificate, deliver to the Trustee any Securities to be so delivered.  Not less than 30 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 3.02.  Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 3.03.

 

ARTICLE IV

 

COVENANTS

 

SECTION 4.01              Payment of Principal, Premium and Interest.

 

The Company will duly and punctually pay or cause to be paid the principal of (and premium, if any) and interest on the Securities of that series at the time and place and in the manner provided herein and established with respect to such Securities.

 

SECTION 4.02              Maintenance of Office or Agency.

 

So long as any series of the Securities remain Outstanding, the Company agrees to maintain an office or agency in the Borough of Manhattan, the City and State of New York, with respect to each such series and at such other location or locations as may be designated as provided in this Section 4.02, where (i) Securities of that series may be presented or surrendered for payment, (ii) Securities of that series may be presented as herein above authorized for registration of transfer and exchange, and (iii) notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be given or served, such designation to continue with respect to such office or agency until the Company shall, by written notice signed by its President or a Vice President and delivered to the trustee, designate some other office or agency for such purposes or any of them.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, notices and demands.

 

SECTION 4.03              Paying Agents.

 

(a)                                 If the Company shall appoint one or more paying agents for all or any series of the Securities, other than the Trustee, the Company will cause each such paying agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section:

 

(1)                                 that it will hold all sums held by it as such agent for the payment of the principal of (and premium, if any) or interest on the Securities of that series (whether such sums have been paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of the Persons entitled thereto;

 

(2)                                 that it will give the Trustee notice of any failure by the Company (or by any other obligor of such Securities) to make any payment of the principal of (and premium, if any) or interest on the Securities of that series when the same shall be due and payable;

 

(3)                                 that it will, at any time during the continuance of any failure referred to in the preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such paying agent; and

 

(4)                                 that it will perform all other duties of paying agent as set forth in this Indenture.

 

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(b)                                 If the Company shall act as its own paying agent with respect to any series of the Securities, it will on or before each due date of the principal of (and premium, if any) or interest on Securities of that series, set aside, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient with monies held by all other paying agents to pay such principal (and premium, if any) or interest so becoming due on Securities of that series until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or any failure (by it or any other obligor on such Securities) to take such action.  Whenever the Company shall have one or more paying agents for any series of Securities, it will, prior to each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with the paying agent a sum sufficient to pay the principal (an premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such paying agent is the Trustee) the Company will promptly notify the Trustee of this action or failure so to act.

 

(c)                                  Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) the Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums held in trust by the Company or such paying agent, such sums to be held by the Trustee upon the same terms and conditions as those upon which such sums were held by the Company or such paying agent; and, upon such payment by any paying agent to the Trustee, such paying agent shall be released from all further liability with respect to such money.

 

SECTION 4.04              Appointment to Fill Vacancy in Office of Trustee.

 

The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee hereunder.

 

SECTION 4.05              Compliance with Consolidation Provisions.

 

The Company will not, while any of the Securities remain Outstanding, consolidate with or merge into any other Person, in either case where the Company is not the survivor of such transaction, or sell or convey all or substantially all of its property to any other company unless the provisions of Article X hereof are complied with.

 

ARTICLE V

 

SECURITYHOLDERS’ LISTS AND REPORTS
 BY THE COMPANY AND THE TRUSTEE

 

SECTION 5.01              Company to Furnish Trustee Names and Addresses of Securityholders.

 

If the Company is not the Security Register, the Company will furnish or use reasonable efforts to cause to be furnished to the Trustee (a) on each regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably require, of the names and addresses of the holders of each series of Securities as of such regular record date, provided that the Company shall not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee by the Company and (b) at such other times as the Trustee may request in writing within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; provided, however, that, in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar.

 

SECTION 5.02              Preservation of Information; Communications with Securityholders.

 

(a)                                 The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the holders of Securities contained in the most recent list furnished to

 

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it as provided in Section 5.01 and as to the names and addresses of holders of Securities received by the Trustee in its capacity as Security Registrar (if acting in such capacity) and shall otherwise comply with Section 312(a) of the Trust Indenture Act.

 

(b)                                 The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

 

(c)                                  Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act with other Securityholders with respect to their rights under this Indenture or under the Securities.

 

SECTION 5.03              Reports by the Company.

 

(a)                                 The Company covenants and agrees to file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of such sections, then to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports that may be required pursuant to Section 13 of the Exchange Act, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; provided, however, the Company shall not be required to deliver to the Trustee any materials for which the Company has sought and received confidential treatment by the Commission.  The Company also shall comply with the other provisions of Section 314(a) of the Trust Indenture Act.

 

(b)                                 The Company covenants and agrees to file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants provided for in this Indenture as may be required from time to time by such rules and regulations.

 

(c)                                  The Company covenants and agrees to transmit by mail, first class postage prepaid, or reputable over-night delivery service that provides for evidence of receipt, to the Securityholders, as their names and addresses appear upon the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to be filed by the Company pursuant to subsections (a) and (b) of this Section as may be required by rules and regulations prescribed from time to time by the Commission.

 

SECTION 5.04              Reports by the Trustee.

 

(a)                                 The Trustee shall transmit to holders as provided in Section 313 of the Trust Indenture Act such reports concerning the Trustee and its actions under this Indenture as may be required by Section 313 of the Trust Indenture Act at the times and in the manner provided by the Trust Indenture Act.

 

(b)                                 A copy of each such report shall, at the time of such transmission to Securityholders, be filed by the Trustee with the Company, with each stock exchange upon which any Securities are listed (if so listed) and, if required by Section 313 of the Trust Indenture Act, also with the Commission.  The Company agrees to notify the Trustee when any Securities become listed on any stock exchange.

 

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ARTICLE VI

 

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
 ON EVENT OF DEFAULT

 

SECTION 6.01              Events of Default.

 

(a)                                 Whenever used herein with respect to Securities of a particular series, “Event of Default” means any one or more of the following events that has occurred and is continuing:

 

(1)                                 the Company defaults in the payment of any installment of interest upon any of the Securities of that series, as and when the same shall become due and payable, and continuance of such default for a period of 90 days; provided, however, that a valid extension of an interest payment period by the Company in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of interest for this purpose;

 

(2)                                 the Company defaults in the payment of the principal of (or premium, if any, on) any of the Securities of that series as and when the same shall become due and payable whether at maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking or analogous fund established with respect to that series; provided, however, that a valid extension of the maturity of such Securities in accordance with the terms of any indenture supplemental hereto shall not constitute a default in the payment of principal or premium, if any;

 

(3)                                 the Company fails to observe or perform any other of its covenants or agreements with respect to that series contained in this Indenture or otherwise established with respect to that series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has been expressly included in this Indenture solely for the benefit of one or more series of Securities other than such series) for a period of 90 days after the date on which written notice of such failure, requiring the same to be remedied and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified mail, or to the Company and the Trustee by the holders of not less than a majority in principal amount of the Securities of that series at the time Outstanding;

 

(4)                                 the Company pursuant to or within the meaning of any Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its property or (iv) makes a general assignment for the benefit of its creditors; or

 

(5)                                 a court of competent jurisdiction enters an order under any Bankruptcy Law that (i) is for relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all or substantially all of its property, or (iii) orders the liquidation of the Company, and the order or decree remains unstayed and in effect for 90 consecutive days.

 

(b)                                 In each and every such case, unless the principal of all the Securities of that series shall have already become due and payable, either the Trustee or the holders of not less than a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder, by notice in writing to the Company (and to the Trustee if given by such Securityholders), may declare the principal (or, if any Securities of that series are discount securities, that portion of the principal amount as may be specified in the terms of that series pursuant to Section 2.01(a)(16)) of (and premium, if any, on) and accrued and unpaid interest, if any, on all the Securities of that series to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable.

 

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(c)                                  At any time after the principal of the Securities of that series shall have been so declared due and payable, and before a judgment or decree for the payment of the moneys due shall have been obtained or entered as hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of that series then Outstanding hereunder (or, by action at a meeting of holders of the Securities of such series in accordance with Section 8.09, the holders of a majority in aggregate principal amount of the Securities of such series then Outstanding represented at such meeting), by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if:  (i) the Company has paid or deposited with the Trustee a sum sufficient to pay all matured installments of interest upon all the Securities of that series and the principal of (and premium, if any, on) any and all Securities of that series that shall have become due otherwise than by acceleration and (ii) any and all Events of Default under this Indenture with respect to such series, other than the nonpayment of principal of (and premium, if any, on) and accrued and unpaid interest, if any, on Securities of that series that shall have become due solely because of such acceleration, shall have been remedied, cured or waived as provided in Section 6.06.  No such rescission and annulment shall extend to or shall affect any subsequent default or impair any right consequent thereon.

 

(d)                                 In case the Trustee shall have proceeded to enforce any right with respect to Securities of that series under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case, subject to any determination in such proceedings, the Company, and the Trustee shall be restored respectively to their former positions and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall continue as though no such proceedings had been taken.

 

SECTION 6.02              Collection of Indebtedness and Suits for Enforcement by Trustee.

 

(a)                                 The Company covenants that (1) in case it shall default in the payment of any installment of interest on any of the Securities of a series, or any payment required by any sinking or analogous fund established with respect to that series as and when the same shall have become due and payable, and such default shall have continued for a period of 90 Business Days, or (2) in case it shall default in the payment of the principal of (or premium, if any, on) any of the Securities of a series when the same shall have become due and payable, whether upon maturity of the Securities of a series or upon redemption or upon declaration or otherwise, then, upon demand of the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities of that series, the whole amount that then shall have been become due and payable on all such Securities for principal (and premium, if any) or interest, or both, as the case may be, with interest upon the overdue principal (and premium, if any) and (to the extent that payment of such interest is enforceable under applicable law) upon overdue installments of interest at the rate per annum expressed in the Securities of that series; and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, and the amount payable to the Trustee under Section 7.06.

 

(b)                                 If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, shall be entitled and empowered to institute any action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may prosecute any such action or proceeding to judgment or final decree, and may enforce any such judgment or final decree against the Company or other obligor upon the Securities of that series and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or other obligor upon the Securities of that series, wherever situated.

 

(c)                                  In case of any receivership, insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement, composition or judicial proceedings affected the Company, or its creditors or property, the Trustee shall have power to intervene in such proceedings and take any action therein that may be permitted by the court and shall (except as may be otherwise provided by law) be entitled to file such proofs of claim and other papers and documents as may be necessary or

 

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advisable in order to have the claims of the Trustee and of the holders of Securities of such series allowed for the entire amount due and payable by the Company under this Indenture at the date of institution of such proceedings and for any additional amount that may become due and payable by the Company after such date, and to collect and receive any moneys or other property payable or deliverable on any such claim, and to distribute the same after the deduction of the amount payable to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization is hereby authorized by each of the holders of Securities of such series to make such payments to the Trustee, and, in the event that the Trustee shall consent to the making of such payments directly to such Securityholders, to pay to the Trustee any amount due it under Section 7.06.

 

(d)                                 All rights of action and of asserting claims under this Indenture, or under any of the terms established with respect to Securities of that series, may be enforced by the Trustee without the possession of any of such Securities, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for payment to the Trustee of any amounts due under Section 7.06, be for the ratable benefit of the holders of the Securities of such series.

 

In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

 

Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement, adjustment or composition affecting the Securities of that series or the rights of any holder thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any such proceeding.

 

SECTION 6.03              Application of Moneys Collected.

 

Any moneys collected by the Trustee pursuant to this Article with respect to a particular series of Securities shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal (or premium, if any) or interest, upon presentation of the Securities of that series, and notation thereon the payment, if only partially paid, and upon surrender thereof if fully paid:

 

FIRST:  To the payment of costs and expenses of collection and of all amounts payable to the Trustee under Section 7.06; and

 

SECOND:  To the payment of the amounts then due and unpaid upon Securities of such series for principal (and premium, if any) and interest, in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively.

 

SECTION 6.04              Limitation on Suits.

 

No holder of any Security of any series shall have any right by virtue or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof with respect to the Securities of such series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less than a majority in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as trustee

 

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hereunder; (iii) such holder or holders shall have offered to the Trustee such reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred therein or thereby; and (iv) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity, shall have failed to institute any such action, suit or proceeding and (v) during such 60 day period, the holders of a majority in principal amount of the Securities of that series (or such amount as shall have acted at a meeting of the holders of Securities of such series pursuant to the provisions of this Indenture) do not give the Trustee a direction inconsistent with the request; provided, however, that no one or more of such holders may use this Indenture to prejudice the rights of another holder or to obtain preference or priority over another holder.

 

Notwithstanding anything contained herein to the contrary, any other provisions of this Indenture, the right of any holder of any Security to receive payment of the principal of (and premium, if any) and interest on such Security, as therein provided, on or after the respective due dates expressed in such Security (or in the case of redemption, on the redemption date), or to institute suit for the enforcement of any such payment on or after such respective dates or redemption date, shall not be impaired or affected without the consent of such holder and by accepting a Security hereunder it is expressly understood, intended and covenanted by the taker and holder of every Security of such series with every other such taker and holder and the Trustee, that no one or more holders of Securities of such series shall have any right in any manner whatsoever by virtue or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of the holders of any other of such Securities, or to obtain or seek to obtain priority over or preference to any other such holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all holders of Securities of such series.  For the protection and enforcement of the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

 

SECTION 6.05              Rights and Remedies Cumulative; Delay or Omission Not Waiver.

 

(a)                                 Except as otherwise provided in Section 2.07, all powers and remedies given by this Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any other powers and remedies available to the Trustee or the holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture or otherwise established with respect to such Securities.

 

(b)                                 No delay or omission of the Trustee or of any holder of any of the Securities to exercise any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall impair any such right or power, or shall be construed to be a waiver of any such default or on acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given by this Article or by law to the Trustee or the Securityholders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

 

SECTION 6.06              Control by Securityholders.

 

The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding, determined in accordance with Section 8.01, shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee with respect to such series; provided, however, that such direction shall not be in conflict with any rule of law or with this Indenture or be unduly prejudicial to the rights of holders of Securities of any other series at the time Outstanding determined in accordance with Section 8.01.  Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow any such direction if the Trustee in good faith shall, by a Responsible Officer or Officers of the Trustee, determine that the proceeding so directed would involve the Trustee in personal liability.  The holders either (a) through the written consent of not less than a majority in aggregate principal amount of the Securities of any series at the time Outstanding or (b) by action at a meeting of holders of the Securities of such series in accordance with Section 8.09, by the holders of a majority in aggregate principal amount of the Securities of such series then Outstanding represented at such meeting, may on behalf of the holders of all of the Securities of such series waive any past default in the performance of any of the covenants contained herein or established pursuant to Section 2.01 with respect to such series and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on, any of the Securities of that series as and when the same shall

 

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become due by the terms of such Securities otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all matured installments of interest and principal and any premium has been deposited with the Trustee (in accordance with Section 6.01(c)) and except in respect a provision hereof which, under Section 9.02, cannot be modified or amended without the consent of the holders of each Outstanding Security affected; provided however that this Section shall not limit the right of holders of Securities of a series to rescind and annul any acceleration as set forth in Section 6.01.  Upon any such waiver, the default covered thereby shall be deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.  The provisions which otherwise would be automatically deemed to be contained in this Indenture pursuant to Section (316)(a)(1) of the Trust Indenture Act are hereby expressly excluded from this Indenture, except to the extent such provisions are expressly included herein.

 

SECTION 6.07              Undertaking to Pay Costs.

 

All parties to this Indenture agree, and each holder of any Securities by such holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Trustee, to any suit instituted by any Securityholder, or group of Securityholders, holding more than 10% in aggregate principal amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security of such series, on or after the respective due dates expressed in such Security or established pursuant to this Indenture.

 

ARTICLE VII

 

CONCERNING THE TRUSTEE

 

SECTION 7.01              Certain Duties and Responsibilities of Trustee.

 

(a)                                 The Trustee, prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing of all Events of Default with respect to the Securities of that series that may have occurred, shall undertake to perform with respect to the Securities of such series such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants shall be read into this Indenture against the Trustee.  In case an Event of Default with respect to the Securities of a series has occurred (that has not been cured or waived), the Trustee shall exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

 

(b)                                 No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

(1)                                 prior to the occurrence of an Event of Default with respect to the Securities of a series and after the curing or waiving of all such Events of Default with respect to that series that may have occurred:

 

(i)                                     the duties and obligations of the Trustee shall with respect to the Securities of such series be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable with respect to the Securities of such series except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

 

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(ii)                                  in the absence of bad faith on the part of the Trustee, the Trustee may with respect to the Securities of such series conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirement of this Indenture;

 

(2)                                 the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee, was negligent in ascertaining the pertinent facts;

 

(3)                                 the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the holders of not less than a majority in principal amount of the Securities of any series at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture with respect to the Securities of that series; and

 

(4)                                 None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or liability is not reasonably assured to it under the terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.

 

SECTION 7.02              Certain Rights of Trustee.

 

Except as otherwise provided in Section 7.01:

 

(a)                                 The Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

 

(b)                                 Any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company, by the President or any Vice President and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer thereof (unless other evidence in respect thereof is specifically prescribed herein);

 

(c)                                  The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or suffered or omitted hereunder in good faith and in reliance thereon;

 

(d)                                 The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders, pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that may be incurred therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of an Event of Default with respect to a series of the Securities (that has not been cured or waived) to exercise with respect to Securities of that series such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs;

 

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(e)                                  The Trustee shall not be liable for any action taken or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

 

(f)                                   The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, security, or other papers or documents, unless requested in writing so to do by the holders of not less than a majority in principal amount of the Outstanding Securities of the particular series affected thereby (determined as provided in Section 8.04); provided, however, that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities as a condition to so proceeding.  The reasonable expense of every such examination shall be paid by the Company or, if paid by the Trustee, shall be repaid by the Company upon demand; and

 

(g)                                  The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

 

SECTION 7.03              Trustee Not Responsible for Recitals or Issuance of Securities.

 

(a)                                 The recitals contained herein and in the Securities shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same.

 

(b)                                 The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities.

 

(c)                                  The Trustee shall not be accountable for the use or application by the Company of any of the Securities or of the proceeds of such Securities, or for the use or application of any moneys paid over by the Trustee in accordance with any provision of this Indenture or established pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent other than the Trustee.

 

SECTION 7.04              May Hold Securities.

 

The Trustee or any paying agent or Security Registrar, in its individual or any other capacity, may become the owner or pledgee of Securities with the same rights it would have if it were not Trustee, paying agent or Security Registrar.

 

SECTION 7.05              Moneys Held in Trust.

 

Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for interest on any moneys received by it hereunder except such as it may agree with the Company to pay thereon.

 

SECTION 7.06              Compensation and Reimbursement.

 

(a)                                 The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled to, such reasonable compensation (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust), as the Company, and the Trustee may from time to time agree in writing, for all services rendered by it in the execution of the trusts hereby created and in the exercise and performance of any of the powers and duties hereunder of the Trustee, and, except as otherwise expressly provided herein, the Company will pay or reimburse the Trustee

 

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upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith.  The Company also covenants to indemnify the Trustee (and its officers, agents, directors and employees) for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Trustee and arising out of or in connection with the acceptance or administration of this trust, including the costs and expenses of defending itself against any claim of liability in the premises.

 

(b)                                 The obligations of the Company under this Section to compensate and indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder.  Such additional indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the holders of particular Securities.

 

SECTION 7.07              Reliance on Officers’ Certificate.

 

Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting to take any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture upon the faith thereof.

 

SECTION 7.08              Disqualification; Conflicting Interests.

 

If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act.

 

SECTION 7.09              Corporate Trustee Required; Eligibility.

 

There shall at all times be a Trustee with respect to the Securities issued hereunder which shall at all times be a corporation organized and doing business under the laws of the United States of America or any State or Territory thereof or of the District of Columbia, or a corporation or other Person permitted to act as trustee by the Commission, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by Federal, State, Territorial, or District of Columbia authority.  If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  The Company may not, nor may any Person directly or indirectly controlling, controlled by, or under common control with the Company, serve as Trustee.  In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10.

 

SECTION 7.10              Resignation and Removal; Appointment of Successor.

 

(a)                                 The Trustee or any successor hereafter appointed, may at any time resign with respect to the Securities of one or more series by giving written notice thereof to the Company and by transmitting notice of resignation by mail, first class postage prepaid, to the Securityholders of such series, as their names and addresses appear upon the Security Register.  Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee with respect to Securities of such series by written instrument, in duplicate, executed by order of the Board of

 

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Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee.  If no successor trustee shall have been so appointed and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee with respect to Securities of such series, or any Securityholder of that series who has been a bona fide holder of a Security or Securities for at least six months may on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee.  Such court may thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

 

(b)                                 In case at any time any one of the following shall occur:

 

(1)                                 the Trustee shall fail to comply with the provisions of Section 7.08 after written request therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or Securities for at least six months; or

 

(2)                                 the Trustee shall cease to be eligible in accordance with the provisions of Section 7.09 and shall fail to resign after written request therefor by the Company or by any such Securityholder; or

 

(3)                                 the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its property shall be appointed or consented to, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, the Company may remove the Trustee with respect to all Securities and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, unless the Trustee’s duty to resign is stayed as provided herein, any Securityholder who has been a bona fide holder of a Security or Securities for at least six months may, on behalf of that holder and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee.  Such court may thereupon after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

 

(c)                                  The holders of a majority in aggregate principal amount of the Securities of any series at the time Outstanding may at any time remove the Trustee with respect to such series by so notifying the Trustee and the Company and may appoint a successor Trustee for such series with the consent of the Company.

 

(d)                                 Any resignation or removal of the Trustee and appointment of a successor trustee with respect to the Securities of a series pursuant to any of the provisions of this Section shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11.

 

(e)                                  Any successor trustee appointed pursuant to this Section may be appointed with respect to the Securities of one or more series or all of such series, and at any time there shall be only one Trustee with respect to the Securities of any particular series.

 

SECTION 7.11              Acceptance of Appointment By Successor.

 

(a)                                 In case of the appointment hereunder of a successor trustee with respect to all Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties

 

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of the retiring Trustee; but, on the request of the Company or the successor trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor trustee all the rights, powers, and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property and money held by such retiring Trustee hereunder.

 

(b)                                 In case of the appointment hereunder of a successor trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates, (2) shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any act or failure to act on the part of any other Trustee hereunder; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall with respect to the Securities of that or those series to which the appointment of such successor trustee relates have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture, and each such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor trustee relates; but, on request of the Company or any successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor trustee relates.

 

(c)                                  Upon request of any such successor trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee all such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may be.

 

(d)                                 No successor trustee shall accept its appointment unless at the time of such acceptance such successor trustee shall be qualified and eligible under this Article.

 

(e)                                  Upon acceptance of appointment by a successor trustee as provided in this Section, the Company shall transmit notice of the succession of such trustee hereunder by mail, first class postage prepaid, to the Securityholders, as their names and addresses appear upon the Security Register.  If the Company fails to transmit such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be transmitted at the expense of the Company.

 

SECTION 7.12              Merger, Conversion, Consolidation or Succession to Business.

 

Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided that such corporation shall be qualified under the provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution or filing of any paper or any further act on the part of any of the

 

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parties hereto, anything herein to the contrary notwithstanding.  In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.

 

SECTION 7.13              Preferential Collection of Claims Against the Company.

 

The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of the Trust Indenture Act.  A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent included therein.

 

ARTICLE VIII

 

CONCERNING THE SECURITYHOLDERS

 

SECTION 8.01              Evidence of Action by Securityholders.

 

Whenever in this Indenture it is provided that the holders of a majority or specified percentage in aggregate principal amount of the Securities of a particular series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action the holders of such majority or specified percentage of that series have joined therein may be evidenced by any instrument or any number of instruments of similar tenor executed by such holders of Securities of that series in Person or by agent or proxy appointed in writing.

 

If the Company shall solicit from the Securityholders of any series any request, demand, authorization, direction, notice, consent, waiver or other action, the Company may, at its option, as evidenced by an Officers’ Certificate, fix in advance a record date for such series for the determination of Securityholders entitled to give such request, demand, authorization, direction, notice, consent, waiver or other action, but the Company shall have no obligation to do so.  If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other action may be given before or after the record date, but only the Securityholders of record at the close of business on the record date shall be deemed to be Securityholders for the purposes of determining whether Securityholders of the requisite proportion of Outstanding Securities of that series have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other action, and for that purpose the Outstanding Securities of that series shall be computed as of the record date; provided, however, that no such authorization, agreement or consent by such Securityholders on the record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

 

SECTION 8.02              Proof of Execution by Securityholders.

 

Subject to the provisions of Section 7.01, proof of the execution of any instrument by a Securityholder (such proof will not require notarization) or his agent or proxy and proof of the holding by any Person of any of the Securities shall be sufficient if made in the following manner:

 

(a)                                 The fact and date of the execution by any such Person of any instrument may be proved in any reasonable manner acceptable to the Trustee.

 

(b)                                 The ownership of Securities shall be proved by the Security Register of such Securities or by a certificate of the Security Registrar thereof.

 

(c)                                  The Trustee may require such additional proof of any matter referred to in this Section as it shall deem necessary.

 

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SECTION 8.03              Who May be Deemed Owners.

 

Prior to the due presentment for registration of transfer of any Security, the Company, the Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name such Security shall be registered upon the books of the Company as the absolute owner of such Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving payment of or on account of the principal of, premium, if any, and (subject to Section 2.03) interest on such Security and for all other purposes; and neither the Company nor the Trustee nor any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

 

SECTION 8.04              Certain Securities Owned by Company Disregarded.

 

In determining whether the holders of the requisite aggregate principal amount of Securities of a particular series have concurred in any direction, consent of waiver under this Indenture, the Securities of that series that are owned by the Company or any other obligor on the Securities of that series or by any Person directly or indirectly controlling or controlled by or under common control with the Company or any other obligor on the Securities of that series shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver, only Securities of such series that the Trustee actually knows are so owned shall be so disregarded.  The Securities so owned that have been pledged in good faith may be regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any such other obligor.  In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

 

SECTION 8.05              Actions Binding on Future Securityholders.

 

At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action, any holder of a Security of that series that is shown by the evidence to be included in the Securities the holders of which have consented to such action may, by filing written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Security.  Except as aforesaid any such action taken by the holder of any Security shall be conclusive and binding upon such holder and upon all future holders and owners of such Security, and of any Security issued in exchange therefor, on registration of transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto is made upon such Security.  Any action taken by the holders of the majority or percentage in aggregate principal amount of the Securities of a particular series specified in this Indenture in connection with such action shall be conclusively binding upon the Company, the Trustee and the holders of all the Securities of that series.

 

SECTION 8.06              Purposes for Which Meetings May Be Called.

 

A meeting of holders of any series of Securities may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be made, given or taken by holders of such series of Securities.

 

Notwithstanding anything contained in this Article VIII, the Trustee may, during the pendency of a Default or an Event of Default, call a meeting of holders of any series of Securities in accordance with its standard practices.

 

SECTION 8.07              Call Notice and Place of Meetings.

 

(a)                                 The Trustee may at any time call a meeting of holders of any series of Securities for any purpose specified in Section 8.06 hereof, to be held at such time and at such place in The City of New York or Boston, Massachusetts.  Notice of every meeting of holders of any series of Securities, setting forth the time and the place of such meeting, in general terms the action proposed to be

 

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taken at such meeting and the percentage of the principal amount of the Outstanding Securities of such series which shall constitute a quorum at such meeting, shall be given, in the manner provided in Section 13.04 hereof, not less than 21 nor more than 180 days prior to the date fixed for the meeting to holders of Outstanding Securities of such series.

 

(b)                                 In case at any time the Company, pursuant to a Board Resolution, or the holders of at least 10% in principal amount of the Outstanding Securities of any series shall have requested the Trustee to call a meeting of the holders of Securities of such series for any purpose specified in Section 8.06 hereof, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first publication of the notice of such meeting within 21 days after receipt of such request or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company or the holders of Securities of such series in the amount specified, as the case may be, may determine the time and the place in The City of New York or Boston, Massachusetts for such meeting and may call such meeting for such purposes by giving notice thereof as provided in paragraph (a) of this Section.

 

SECTION 8.08              Persons Entitled To Vote at Meetings.

 

To be entitled to vote at any meeting of holders of Securities of a given series, a Person shall be (a) a holder of one or more Outstanding Securities of such series or (b) a Person appointed by an instrument in writing as proxy for a holder or holders of one or more Outstanding Securities of such series by such holder or holders.  The only Persons who shall be entitled to be present or to speak at any meeting of holders shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

 

SECTION 8.09              Quorum; Action.

 

The Persons entitled to vote a majority in aggregate principal amount of the Outstanding Securities of a given series shall constitute a quorum with respect to a meeting of holders of Outstanding Securities of such series.  In the absence of a quorum within 30 minutes of the time appointed for any such meeting, the meeting shall, if convened at the request of holders of Securities of such series, be dissolved.  In any other case, the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting.  In the absence of a quorum at any such adjourned meeting, such adjourned meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such adjourned meeting.  Notice of the reconvening of any adjourned meeting shall be given as provided in Section 8.07(a) hereof, except that such notice need be given only once and not less than five days prior to the date on which the meeting is scheduled to be reconvened.

 

At a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid, any resolution and all matters (except as limited by the proviso to the first paragraph of Section 9.02 hereof) shall be effectively passed and decided if passed or decided by the Persons entitled to vote not less than a majority in aggregate principal amount of Outstanding Securities of a series represented and voting at such meeting with respect to a meeting of holders of Outstanding Securities of such series.

 

Any resolution passed or decisions taken at any meeting of holders of Securities duly held in accordance with this Section shall be binding on all the holders of Securities of such series, whether or not present or represented at the meeting.

 

SECTION 8.10              Determination of Voting Rights; Conduct and Adjournment of Meetings.

 

(a)                                 Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of holders of Securities in regard to proof of the holding of Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other

 

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evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate.

 

(b)                                 The Trustee shall, by an instrument in writing, appoint a temporary chairman (which may be the Trustee) of the meeting, unless the meeting shall have been called by the Company or by holders of Securities of a given series as provided in Section 8.07(b) hereof, in which case the Company or the holders of Securities of such series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman.  A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting.

 

(c)                                  At any meeting, each holder of a Security of the series in respect of which such meeting is being held or proxy shall be entitled to one vote for each $1,000 principal amount of Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security of such series challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding.  The chairman of the meeting shall have no right to vote, except as a holder of a Security of such series or proxy.

 

(d)                                 Any meeting of holders of Securities duly called pursuant to Section 8.07 hereof at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of the series in respect of which such meeting is being held represented at the meeting, and the meeting may be held as so adjourned without further notice.

 

SECTION 8.11              Counting Votes and Recording Action of Meetings.

 

The vote upon any resolution submitted to any meeting of holders of Securities of a given series shall be by written ballots on which shall be subscribed the signatures of the holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them.  The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting.  A record, at least in duplicate, of the proceedings of each meeting of holders of Securities of such series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 8.07 hereof and, if applicable, Section 8.09 hereof. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.  Any record so signed and verified shall be conclusive evidence of the matters therein stated.

 

ARTICLE IX

 

SUPPLEMENTAL INDENTURES

 

SECTION 9.01              Supplemental Indentures Without the Consent of Securityholders.

 

In addition to any supplemental indenture otherwise authorized by this Indenture, the Company and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect), without the consent of the Securityholders, for one or more of the following purposes:

 

(a)                                 cure any ambiguity, correct or supplement any provision herein which may be inconsistent with any other provision herein or which is otherwise defective, or make any other provisions with respect to matters or questions arising under this Indenture which the Company and the Trustee

 

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may deem necessary or desirable and which shall not be inconsistent with the provisions of this Indenture;

 

(b)                                 to comply with Article X;

 

(c)                                  to provide for uncertificated Securities in addition to or in place of certificated Securities;

 

(d)                                 to add to the covenants of the Company for the benefit of the holders of all or any Series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company;

 

(e)                                  to add to, delete from, or revise the conditions, limitations, and restrictions on the authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as herein set forth;

 

(f)                                   to make any change that does not adversely affect the rights of any Securityholder in any material respect;

 

(g)                                  to provide for the issuance of and establish the form and terms and conditions of the Securities of any series as provided in Section 2.01, to establish the form of any certifications required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to add to the rights of the holders of any series of Securities; or

 

(h)                                 comply with the requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act.

 

The Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

 

Any supplemental indenture authorized by the provisions of this Section may be executed by the Company and the Trustee without the consent of the holders of any of the Securities at the time Outstanding, notwithstanding any of the provisions of Section 9.02.

 

SECTION 9.02              Supplemental Indentures With Consent of Securityholders.

 

With the written consent of the holders of at least a majority in aggregate principal amount of the Outstanding Securities of any series or by action at a meeting of holders of the Securities of such series in accordance with Section 8.09, by the holders of a majority in aggregate principal amount of the Securities of such series then Outstanding represented at such meeting, the Company, when authorized by Board Resolutions, and the Trustee may from time to time and at any time enter into an indenture or indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in effect) for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of any supplemental indenture or of modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of such series under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the holders of each Security then Outstanding and affected thereby, (i) extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable upon the redemption thereof, (ii) reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, or any consent or waiver, (iii) reduce the principal amount of discount securities payable upon acceleration of the maturity of any Securities of any series or (iv) make the principal of or premium or interest on any Security of a series payable in currency or currency units other than that stated in the Securities of such series.

 

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It shall not be necessary for the consent of the Securityholders of any series affected thereby under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such consent shall approve the substance thereof.

 

SECTION 9.03              Effect of Supplemental Indentures.

 

Upon the execution of any supplemental indenture pursuant to the provisions of this Article or of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be modified and amended in accordance therewith and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders of Securities of the series affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

SECTION 9.04              Securities Affected by Supplemental Indentures.

 

Securities of any series affected by a supplemental indenture, authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article or of Section 10.01, may bear a notation in form approved by the Company, provided such form meets the requirements of any exchange upon which such series may be listed, as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new Securities of that series so modified as to conform, in the opinion of the Board of Directors of the Company, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Company, authenticated by the Trustee and delivered in exchange for the Securities of that series then Outstanding.

 

SECTION 9.05              Execution of Supplemental Indentures.

 

Upon the request of the Company, accompanied by its Board Resolutions authorizing the execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion but shall not be obligated to enter into such supplemental indenture.  The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article is authorized or permitted by, and conforms to, the terms of this Article and that it is proper for the Trustee under the provisions of this Article to join in the execution thereof; provided, however, that such Opinion of Counsel need not be provided in connection with the execution of a supplemental indenture that establishes the terms of a series of Securities pursuant to Section 2.01 hereof.

 

Promptly after the execution by the Company and the Trustee of any supplemental indenture pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to the Securityholders of all series affected thereby as their names and addresses appear upon the Security Register.  Any failure of the Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture.

 

ARTICLE X

 

SUCCESSOR ENTITY

 

SECTION 10.01       Company May Consolidate, Etc.

 

Nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of the Company with or into any other Person (whether or not affiliated with the Company) or successive consolidations or mergers in which the Company or its successor or successors shall be a party or parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of the Company or its successor or successors as an entirety, or substantially as an entirety, to any other corporation (whether or not affiliated with the Company or its

 

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successor or successors) authorized to acquire and operate the same; provided, however, the Company hereby covenants and agrees that, upon any such consolidation or merger (in each case, if the Company is not the survivor of such transaction), sale, conveyance, transfer or other disposition, the due and punctual payment of the principal of (premium, if any) and interest on all of the Securities of all series in accordance with the terms of each series, according to their tenor and the due and punctual performance and observance of all the covenants and conditions of this Indenture with respect to each series or established with respect to such series pursuant to Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect) satisfactory in form to the Trustee executed and delivered to the Trustee by the entity formed by such consolidation, or into which the Company shall have been merged, or by the entity which shall have acquired such property.

 

SECTION 10.02       Successor Entity Substituted.

 

(a)                                 In case of any such consolidation, merger, sale, conveyance, transfer or other disposition and upon the assumption by the successor entity by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of, premium, if any, and interest on all of the Securities of all series Outstanding and the due and punctual performance of all of the covenants and conditions of this Indenture or established with respect to each series of the Securities pursuant to Section 2.01 to be performed by the Company with respect to each series, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named as the Company herein, and thereupon the predecessor corporation shall be relieved of all obligations and covenants under this Indenture and the Securities.

 

(b)                                 In case of any such consolidation, merger, sale, conveyance,  transfer or other disposition such changes in phraseology and form (but not in substance) may be made in the Securities thereafter to be issued as may be appropriate.

 

(c)                                  Nothing contained in this Article shall require any action by the Company in the case of a consolidation or merger of any Person into the Company where the Company is the survivor of such transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the property of any other Person (whether or not affiliated with the Company).

 

SECTION 10.03       Evidence of Consolidation, Etc. to Trustee.

 

The Trustee, subject to the provisions of Section 7.01, may receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or other disposition, and any such assumption, comply with the provisions of this Article.

 

ARTICLE XI

 

SATISFACTION AND DISCHARGE

 

SECTION 11.01       Satisfaction and Discharge of Indenture.

 

If at any time:  (a) the Company shall have delivered to the Trustee for cancellation all Securities of a series theretofore authenticated (other than any Securities that shall have been destroyed, lost or stolen and that shall have been replaced or paid as provided in Section 2.07) and Securities for whose payment money or Governmental Obligations have theretofore been deposited in trust or segregated and held in trust by the Company (and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05); or (b) all such Securities of a particular series not theretofore delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations sufficient or a combination thereof, sufficient (assuming that no tax liability will be imposed on the Trustee) in the

 

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opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay at maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder with respect to such series by the Company then this Indenture shall thereupon cease to be of further effect with respect to such series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06 and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the Company and at the cost and expense of the Company shall execute proper instruments acknowledging satisfaction of and discharging this Indenture with respect to such series.

 

SECTION 11.02       Discharge of Obligations.

 

If at any time all such Securities of a particular series not heretofore delivered to the Trustee for cancellation or that have not become due and payable as described in Section 11.01 shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption all such Securities of that series not theretofore delivered to the Trustee for cancellation, including principal (and premium, if any) and interest due or to become due to such date of maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company with respect to such series, then after the date such moneys or Governmental Obligations, as the case may be, are deposited with the Trustee the obligations of the Company under this Indenture with respect to such series shall cease to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4.03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid thereafter, Sections 7.06 and 11.05 shall survive.

 

SECTION 11.03       Deposited Moneys to be Held in Trust.

 

Subject to Section 11.05, all moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and shall be available for payment as due, either directly or through any paying agent (including the Company acting as its own paying agent), to the holders of the particular series of Securities for the payment or redemption of which such moneys or Governmental Obligations have been deposited with the Trustee.

 

SECTION 11.04       Payment of Moneys Held by Paying Agents.

 

In connection with the satisfaction and discharge of this Indenture all moneys or Governmental Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all further liability with respect to such moneys or Governmental Obligations.

 

SECTION 11.05       Repayment to Company.

 

Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then held by the Company, in trust for payment of principal of or premium or interest on the Securities of a particular series that are not applied but remain unclaimed by the holders of such Securities for two years after the date upon which the principal of (and premium, if any) or interest on such Securities shall have respectively become due and payable, shall be repaid to the Company or (if then held by the Company) shall be discharged from such trust in each case, promptly after the end of any such two-year period or, at the request of the Company, on a later date specified by the Company; and thereupon the paying agent and the Trustee shall be released from all further liability with respect to such moneys or Governmental Obligations, and the holder of any of the Securities entitled to receive such payment shall thereafter, as an unsecured general creditor, look only to the Company for the payment thereof.

 

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ARTICLE XII

 

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

SECTION 12.01       No Recourse.

 

No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, stockholder, officer or director, past, present or future as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers or directors as such, of the Company or of any predecessor or successor corporation, or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, stockholder, officer or director as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Securities.

 

ARTICLE XIII

 

MISCELLANEOUS PROVISIONS

 

SECTION 13.01       Effect on Successors and Assigns.

 

All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Company shall bind its successors and assigns, whether so expressed or not.

 

SECTION 13.02       Actions by Successor.

 

Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or officer of the Company shall and may be done and performed with like force and effect by the corresponding board, committee or officer of any corporation that shall at the time be the lawful successor of the Company.

 

SECTION 13.03       Surrender of Company Powers.

 

The Company by instrument in writing executed by authority of its Board of Directors and delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon such power so surrendered shall terminate both as to the Company and as to any successor corporation.

 

SECTION 13.04       Notices.

 

Except as otherwise expressly provided herein any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the holders of Securities to or on the Company may be given or served by being deposited first class postage prepaid in a post-office letterbox addressed (until another address is filed in writing by the Company with the Trustee), as follows:  OvaScience, Inc., Attn: [   ], 215 First Street, Suite 240, Cambridge, Massachusetts 02142.  Any notice, election, request or demand by the Company or any Securityholder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or made in writing at the Corporate Trust Office of the Trustee.  Any notice or communication to a holder shall be mailed by first-class mail to his address shown on the Security Register kept by the Security Registrar.

 

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Failure to mail a notice or communication to a holder or any defect in such notice or communication shall not affect its sufficiency with respect to other holders.  If a notice or communication is mailed or sent in the manner provided above within the time prescribed, it is duly given as of the date it is mailed, whether or not the addressee receives it, except that notice to the Trustee or the Company shall only be effective upon receipt thereof by the Trustee or the Company, respectively.  If the Company mails a notice or communication to holders of Securities, it shall mail a copy to the Trustee at the same time.

 

SECTION 13.05       Governing Law.

 

This Indenture and each Security shall be deemed to be a contract made under the internal laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State.

 

SECTION 13.06       Treatment of Securities as Debt.

 

It is intended that the Securities will be treated as indebtedness and not as equity for federal income tax purposes.  The provisions of this Indenture shall be interpreted to further this intention.

 

SECTION 13.07       Compliance Certificates and Opinions.

 

(a)                                 Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture,  the Company, shall furnish to the Trustee an Officers’ Certificate stating that all conditions precedent provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or demand, no additional certificate or opinion need be furnished.

 

(b)                                 Each certificate or opinion provided for in this Indenture and delivered to the Trustee with respect to compliance with a condition or covenant in this Indenture shall include (1) a statement that the Person making such certificate or opinion has read such covenant or condition; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such Person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been complied with.

 

SECTION 13.08       Payments on Business Days.

 

Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and as set forth in an Officers’ Certificate, or established in one or more indentures supplemental to this Indenture, in any case where the date of maturity of interest or principal of any Security or the date of redemption of any Security shall not be a Business Day, then payment of interest or principal (and premium, if any) may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of maturity or redemption, and no interest shall accrue for the period after such nominal date.

 

SECTION 13.09       Conflict with Trust Indenture Act.

 

If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control.

 

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SECTION 13.10       Counterparts.

 

This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

SECTION 13.11       Separability.

 

In case any one or more of the provisions contained in this Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Indenture or of such Securities, but this Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.

 

SECTION 13.12       Assignment.

 

The Company will have the right at all times to assign any of its rights or obligations under this Indenture to a direct or indirect wholly-owned Subsidiary of the Company, provided that, in the event of any such assignment, the Company, will remain liable for all such obligations.  Subject to the foregoing, this Indenture is binding upon and inures to the benefit of the parties thereto and their respective successors and assigns.  This Indenture may not otherwise be assigned by the parties thereto.

 

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

 

 

	
 
    	
OVASCIENCE, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[                          ],
    
	
 
    	
As   Trustee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

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