Document:

Exhibit 4.1

 

Execution Version

 

AMENDED AND RESTATED
 REGISTRATION RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of October 11, 2016, is made and entered into by and among Centennial Resource Development, Inc. (f/k/a Silver Run Acquisition Corporation), a Delaware corporation (the “Company”), Silver Run Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), the undersigned individuals listed under Holder on the signature page hereto (collectively, the “Individual Holders and, together with the Sponsor, the “Existing Holders”), Centennial Resource Development, LLC, a Delaware limited liability company (“CRD”), NGP Centennial Follow-On LLC, a Delaware limited liability company (“NGP Follow-On”), Celero Energy Company, LP, a Delaware limited partnership (“Celero”) and Riverstone Centennial Holdings, L.P., a Delaware limited partnership (“Riverstone”).

 

RECITALS

 

WHEREAS, the Company and the Sponsor have entered into that certain Securities Purchase Agreement (the “Founder Shares Purchase Agreement”), dated as of November 6, 2015, pursuant to which the Sponsor purchased an aggregate of 11,500,000 shares (the “Initial Founder Shares”) of the Company’s Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), and the Sponsor subsequently transferred an aggregate of 120,000 Founder Shares to the Individual Holders;

 

WHEREAS, on February 23, 2016, the Company declared a stock dividend with respect to the Class B Common Stock of 1,437,500 shares of Class B Common Stock (together with the Initial Founder Shares, the “Founder Shares”);

 

WHEREAS, on April 8, 2016, the Sponsor forfeited 437,500 Founder Shares following the expiration of the underwriters’ remaining over-allotment option in connection with the Company’s initial public offering;

 

WHEREAS, upon the closing of the transactions (the “Transactions”) contemplated by that certain Contribution Agreement, dated as of July 6, 2016, by and among CRD, NGP Follow-On, Celero, New Centennial, LLC, a Delaware limited liability company, and Centennial Resource Production, LLC, a Delaware limited liability company (“CRP”), as amended by that certain Amendment No. 1 to Contribution Agreement dated July 29, 2016 and as supplemented by that certain Joinder Agreement dated as of October 7, 2016 (the “Contribution Agreement”), the Founder Shares converted into shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”), on a one-for-one basis;

 

WHEREAS, on February 23, 2016, the Company and the Sponsor entered into that certain Sponsor Warrants Purchase Agreement, pursuant to which the Sponsor purchased 8,000,000 warrants (the “Private Placement Warrants”), in a private placement transaction occurring simultaneously with the closing of the Company’s initial public offering;

 

WHEREAS, on February 23, 2016, the Company and the Existing Holders entered into that certain Registration Rights Agreement (the “Existing Registration Rights Agreement”), pursuant to which the Company granted the Existing Holders certain registration rights with respect to certain securities of the Company;

 

1

 

WHEREAS, in connection with the Transactions, among other things, the Centennial Holders will receive an aggregate of 20,000,000 common units in CRP (the “CRP Units”);

 

WHEREAS, in accordance with the Fifth Amended and Restated Limited Liability Company Agreement of Centennial Resource Production, LLC, dated as of the date hereof (the “CRP LLC Agreement”), the Centennial Holders will be entitled to cause CRP to redeem or exchange all or a portion of their CRP Units for cash or shares of Common Stock at the Company’s election;

 

WHEREAS, in connection with the Transactions, on July 21, 2016, the Company and Riverstone, entered into that certain Subscription Agreement, pursuant to which Riverstone purchased 81,005,000 shares of Common Stock in a private placement transaction occurring simultaneously with the closing of the Transactions (the “Private Placement”);

 

WHEREAS, pursuant to Section 5.5 of the Existing Registration Rights Agreement, the provisions, covenants and conditions set forth therein may be amended or modified upon the written consent of the Company and the Holders (as defined in the Existing Registration Rights Agreement) of at least a majority-in-interest of the Registrable Securities (as defined in the Existing Registration Rights Agreement) at the time in question; and

 

WHEREAS, the Company and all of the Existing Holders desire to amend and restate the Existing Registration Rights Agreement in order to provide the Holders (as defined below) certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I. DEFINITIONS

 

1.1                               Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:

 

“Adverse Disclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or principal financial officer of the Company, after consultation with counsel to the Company, (i) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein (in the case of any prospectus and any preliminary prospectus, in the light of the circumstances under which they were made) not misleading, (ii) would not be required to be made at such time if the Registration Statement were not being filed, and (iii) the Company has a bona fide business purpose for not making such information public.

 

2

 

“Affiliate” means, with respect to a specified Person, each other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified; provided that no Holder shall be deemed an Affiliate of any other Holder by reason of an investment in, or holding of Common Stock (or securities convertible or exchangeable for share of Common Stock) of, the Company. As used in this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of voting securities or by contract or other agreement).

 

“Agreement” shall have the meaning given in the Preamble.

 

“Blackout Period” shall have the meaning given in subsection 3.4.2.

 

“Board” shall mean the Board of Directors of the Company.

 

“Celero” shall have the meaning given in the Preamble.

 

“Centennial Holder” and “Centennial Holders” means Celero, CRD, NGP Follow-On and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 in connection with a Permitted Transfer (as defined in the CRP LLC Agreement) of CRP Units by any Centennial Holder.

 

“Centennial Minimum Amount” shall have the meaning given in subsection 2.1.4.2.

 

“Commission” shall mean the Securities and Exchange Commission.

 

“Common Stock” shall have the meaning given in the Recitals hereto.

 

“Company” shall have the meaning given in the Preamble.

 

“Contribution Agreement” shall have the meaning given in the Recitals hereto.

 

“Contribution Closing Date” means October 11, 2016, the date on which the Transactions closed.

 

“CRD” shall have the meaning given in the Preamble.

 

“CRP” shall have the meaning given in the Recitals hereto.

 

“CRP LLC Agreement” shall have the meaning given in the Recitals hereto.

 

“CRP Units” shall have the meaning given in the Recitals hereto.

 

“Demand Registration” shall have the meaning given in subsection 2.1.1.

 

“Demanding Holder” means, as applicable, (a) the Holders making a written demand for the Registration of Registrable Securities pursuant to Section 2.1.1 or (b) the Centennial Holders making a written demand for a Shelf Underwritten Offering of Registrable Securities pursuant to Section 2.1.4.2.

 

3

 

“Effectiveness Deadline” shall have the meaning given in subsection 2.3.1.1.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.

 

“Existing Holders” shall have the meaning given in the Preamble.

 

“Existing Registration Rights Agreement” shall have the meaning given in the Recitals hereto.

 

“Form S-1” shall have the meaning given in subsection 2.1.1.

 

“Form S-3” shall have the meaning given in subsection 2.3.

 

“Founder Shares” shall have the meaning given in the Recitals hereto and shall be deemed to include the shares of Common Stock issued upon conversion thereof.

 

“Founder Shares Lock-up Period” shall mean, with respect to the Founder Shares, the period ending on the earlier of (A) one year after the Contribution Closing Date, (B) if the last sale price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Contribution Closing Date or (C) the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property.

 

“Founder Shares Purchase Agreement” shall have the meaning given in the Recitals hereto.

 

“Holder” and “Holders” means the Existing Holders, the Centennial Holders, Riverstone and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2.

 

“Individual Holders” shall have the meaning given in the Preamble.

 

“Initial Founder Shares” shall have the meaning given in the Recitals hereto.

 

“Insider Letter” shall mean that certain letter agreement, dated as of February 23, 2016, by and between the Company, the Sponsor and each of the Company’s officers, directors and director nominees.

 

“Maximum Number of Securities” shall have the meaning given in subsection 2.1.4.

 

“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated in a Registration Statement or Prospectus, or necessary to make the statements in a Registration Statement or Prospectus in the light of the circumstances under which they were made not misleading.

 

4

 

“NGP Follow-On” shall have the meaning given in the Preamble.

 

“Permitted Transferees” shall mean, with respect to an Existing Holder, a person or entity to whom an Existing Holder of Registrable Securities is permitted to transfer such Registrable Securities prior to the expiration of the Founder Shares Lock-up Period or Private Placement Lock-up Period, as the case may be, under the Insider Letter and any other applicable agreement between such Existing Holder and the Company, and to any transferee thereafter.

 

“Person” means an individual or any corporation, partnership, limited liability company, trust, unincorporated organization, association, joint venture or any other organization or entity, whether or not a legal entity.

 

“Piggyback Registration” shall have the meaning given in subsection 2.2.1.

 

“Private Placement” shall have the meaning given in the Recitals hereto.

 

“Private Placement Lock-up Period” shall mean, with respect to Private Placement Warrants that are held by the initial purchasers of such Private Placement Warrants or their Permitted Transferees, and any of the Common Stock issued or issuable upon the exercise or conversion of the Private Placement Warrants and that are held by the initial purchasers of the Private Placement Warrants or their Permitted Transferees, the period ending 30 days after the Contribution Closing Date.

 

“Private Placement Warrants” shall have the meaning given in the Recitals hereto.

 

“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.

 

“Registrable Security” shall mean (a) the shares of Common Stock issued upon the conversion of the Founder Shares, (b) the Private Placement Warrants (including any shares of Common Stock issued or issuable upon the exercise of any such Private Placement Warrants), (c) any outstanding share of Common Stock or any other equity security (including the shares of Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by an Existing Holder as of the date of this Agreement, (d) any equity securities (including the shares of Common Stock issued or issuable upon the exercise of any such equity security) of the Company issuable upon conversion of any working capital loans in an amount up to $1,500,000 made to the Company by an Existing Holder, (e) the shares of Common Stock issued or issuable upon the redemption or exchange of any CRP Units, (f) the shares of Common Stock issued to Riverstone in the Private Placement and (g) any other equity security of the Company issued or issuable with respect to any such share of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or reorganization; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (A) a Registration Statement with respect to the sale of such securities shall have become effective under the

 

5

 

Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (B) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (C) such securities shall have ceased to be outstanding; or (D) such securities have been sold pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission).

 

“Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.

 

“Registration Expenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:

 

(A)                               all registration and filing fees (including fees with respect to filings required to be made with the Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Common Stock is then listed;

 

(B)                               fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel for the Underwriters in connection with blue sky qualifications of Registrable Securities);

 

(C)                               printing, messenger, telephone and delivery expenses;

 

(D)                               reasonable fees and disbursements of counsel for the Company;

 

(E)                                reasonable fees and disbursements of all independent registered public accountants of the Company incurred specifically in connection with such Registration; and

 

(F)                                 reasonable fees and expenses of one (1) legal counsel selected by the majority-in-interest of the Demanding Holders initiating a Demand Registration to be registered for offer and sale in the applicable Registration.

 

“Registration Statement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.

 

“Requesting Holder” shall have the meaning given in subsection 2.1.1.

 

“Riverstone Holder” and “Riverstone Holders” means Riverstone and any person or entity who hereafter becomes a party to this Agreement pursuant to Section 5.2 in connection with a transfer of Common Stock by any Riverstone Holder to an Affiliate.

 

“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

6

 

“Shelf Underwritten Offering” shall have the meaning given in subsection 2.1.4.2.

 

“Sponsor” shall have the meaning given in the Recitals hereto.

 

“Subscription Agreements” shall mean those certain subscription agreements, dated as of July 21, 2016, by and between the Company and (i) certain funds managed by Capital World Investors, (ii) certain funds managed by Fidelity Management & Research Company and (iii) Riverstone.

 

“Suspension Period” shall have the meaning given in subsection 3.4.1.

 

“Transactions” shall have the meaning given in the Recitals hereto.

 

“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.

 

“Underwritten Offering” shall mean an offering in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public (which shall, for the avoidance of doubt, include any Shelf Underwritten Offering).

 

“Warrant Agreement” shall mean that certain Warrant Agreement, dated as of February 23, 2016, by and between the Company and Continental Stock Transfer & Trust Company.

 

ARTICLE II. REGISTRATIONS

 

2.1                               Demand Registration.

 

2.1.1                     Request for Registration. Subject to the provisions of subsection 2.1.5 and Section 3.4, (a) the Existing Holders of at least a majority-in-interest of the then-outstanding number of Registrable Securities held by the Existing Holders and (b) the Riverstone Holders of at least a majority-in-interest of the then-outstanding number of Registrable Securities held by the Riverstone Holders may make a written demand for Registration of all or part of their Registrable Securities, which written demand shall describe the amount and type of securities to be included in such Registration and the intended method(s) of distribution thereof (such written demand a “Demand Registration”). The Company shall, within ten (10) days of the Company’s receipt of the Demand Registration, notify, in writing, all other Holders of Registrable Securities of such demand, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in a Registration pursuant to a Demand Registration (each such Holder that includes all or a portion of such Holder’s Registrable Securities in such Registration, a “Requesting Holder”) shall so notify the Company, in writing, within five (5) days after the receipt by the Holder of the notice from the Company. Upon receipt by the Company of any such written notification from a Requesting Holder(s) to the Company, such Requesting Holder(s) shall be entitled to have their Registrable Securities included in a Registration pursuant to a Demand Registration and the Company shall effect, as soon thereafter as practicable, but not more than forty five (45) days immediately after the Company’s receipt of the Demand Registration, the Registration of all Registrable Securities requested by the Demanding Holders and Requesting Holders pursuant to such Demand Registration. Under no circumstances shall the Company be obligated to effect more than (x) an aggregate of three (3)

 

7

 

Registrations pursuant to a Demand Registration by the Existing Holders under this subsection 2.1.1 with respect to any or all Registrable Securities held by such Existing Holders and (y) an aggregate of five (5) Registrations pursuant to a Demand Registration by the Riverstone Holders under this subsection 2.1.1 with respect to any or all Registrable Securities held by such Riverstone Holders; provided, however, that a Registration shall not be counted for such purposes unless a Form S-1 or any similar long-form registration statement that may be available at such time (“Form S-1”) has become effective and all of the Registrable Securities requested by the Demanding Holders and the Requesting Holders to be registered on behalf of the Demanding Holders and the Requesting Holders in such Form S-1 Registration have been sold, in accordance with Section 3.1.  Notwithstanding the foregoing, the Company shall not be required to give effect to a Demand Registration if the Company has registered Registrable Securities pursuant to a Demand Registration in the preceding ninety (90) days.

 

2.1.2                     Effective Registration. Notwithstanding the provisions of subsection 2.1.1 or any other part of this Agreement, a Registration pursuant to a Demand Registration shall not count as a Registration unless and until (i) the Registration Statement filed with the Commission with respect to a Registration pursuant to a Demand Registration has been declared effective by the Commission and (ii) the Company has complied with all of its obligations under this Agreement with respect thereto; provided, further, that if, after such Registration Statement has been declared effective, an offering of Registrable Securities in a Registration pursuant to a Demand Registration is subsequently interfered with by any stop order or injunction of the Commission, federal or state court or any other governmental agency the Registration Statement with respect to such Registration shall be deemed not to have been declared effective, unless and until, (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) a majority-in-interest of the Demanding Holders initiating such Demand Registration thereafter affirmatively elect to continue with such Registration and accordingly notify the Company in writing, but in no event later than five (5) days, of such election; provided, further, that the Company shall not be obligated or required to file another Registration Statement until the Registration Statement that has been previously filed with respect to a Registration pursuant to a Demand Registration becomes effective or is subsequently terminated.

 

2.1.3                     Underwritten Offering. Subject to the provisions of subsection 2.1.5 and Section 3.4, if a majority-in-interest of the Demanding Holders so advise the Company as part of their Demand Registration that the offering of the Registrable Securities pursuant to such Demand Registration shall be in the form of an Underwritten Offering, then the right of such Demanding Holder or Requesting Holder (if any) to include its Registrable Securities in such Registration shall be conditioned upon such Holder’s participation in such Underwritten Offering and the inclusion of such Holder’s Registrable Securities in such Underwritten Offering to the extent provided herein. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.1.3 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.

 

2.1.4                     Shelf Registration.

 

2.1.4.1                                                           The Company shall, as soon as practicable after the Contribution Closing Date, but in any event within thirty (30) days after the Contribution

 

8

 

Closing Date, file a Registration Statement under the Securities Act to permit the public resale of all the Registrable Securities held by the Centennial Holders from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) on the terms and conditions specified in this subsection 2.1.4.1 and shall use its commercially reasonable efforts to cause such Registration Statement to be declared effective as soon as practicable after the filing thereof, but in any event no later than the earlier of (i) ninety (90) days (or one hundred and twenty (120) days if the Commission notifies the Company that it will “review” the Registration Statement) after the Contribution Closing Date and (ii) the tenth (10th) business day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review (such earlier date, the “Effectiveness Deadline”). The Registration Statement filed with the Commission pursuant to this subsection 2.1.4.1 shall be on Form S-3 or, if Form S-3 is not then available to the Company, on Form S-1 or such other form of registration statement as is then available to effect a registration for resale of such Registrable Securities, covering such Registrable Securities, and shall contain a prospectus in such form as to permit any Centennial Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) at any time beginning on the effective date for such Registration Statement. A Registration Statement filed pursuant to this subsection 2.1.4.1 shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Centennial Holders. The Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this subsection 2.1.4.1 to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available or, if not available, that another registration statement is available, for the resale of all the Registrable Securities held by the Centennial Holders until all such Registrable Securities have ceased to be Registrable Securities. As soon as practicable following the effective date of a Registration Statement filed pursuant to this subsection 2.1.4.1, but in any event within three (3) business days of such date, the Company shall notify the Centennial Holders of the effectiveness of such Registration Statement. When effective, a Registration Statement filed pursuant to this subsection 2.1.4.1 (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain 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 the case of any prospectus contained in such Registration Statement, in the light of the circumstances under which such statement is made).

 

2.1.4.2                                                           In the event that the Centennial Holders of at least a majority-in-interest of the then-outstanding number of Registrable Securities held by the Centennial Holders elect to dispose of Registrable Securities under a Registration Statement pursuant to an Underwritten Offering (a “Shelf Underwritten Offering”) of all or part of such Registrable Securities that are registered by such Registration Statement and reasonably expect aggregate gross proceeds in excess of $50,000,000 (the “Centennial Minimum Amount”) from such Shelf Underwritten Offering, the Company shall, upon the written demand of such Centennial Holder(s), enter into an underwriting

 

9

 

agreement in a form as is customary in Underwritten Offerings of securities by the Company with the managing Underwriter or Underwriters selected by the Company after consultation with the Demanding Holders and shall take all such other reasonable actions as are requested by the managing Underwriter or Underwriters in order to expedite or facilitate the disposition of such Registrable Securities; provided, however, that the Company shall have no obligation to facilitate or participate in more than one (1)  Shelf Underwritten Offering pursuant to this subsection 2.1.4.2.  In connection with any Shelf Underwritten Offering contemplated by this subsection 2.1.4.2, the underwriting agreement into which each Centennial Holder and the Company shall enter shall contain such representations, covenants, indemnities (subject to Article IV) and other rights and obligations as are customary in underwritten offerings of securities by the Company. No Centennial Holder shall be required to make any representations or warranties to or agreements with the Company or the Underwriters other than representations, warranties or agreements regarding such Centennial Holder’s authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law.

 

2.1.4.3                                                           Notwithstanding anything to the contrary in this Agreement, neither the Company nor the Demanding Holders in a Shelf Underwritten Offering shall be required to include in any Shelf Underwritten Offering of Registrable Securities subject to an effective Registration Statement filed pursuant to subsection 2.1.4.1 other Registrable Securities that are not subject to such effective Registration Statement unless such Registrable Securities are subject to another effective Registration Statement or may be added to an effective Registration Statement by means of an automatically effective amendment thereto.

 

2.1.5                     Reduction of Underwritten Offering. If the managing Underwriter or Underwriters in an Underwritten Offering pursuant to a Demand Registration or a Shelf Underwritten Offering, in good faith, advises the Company, the Demanding Holders and the Requesting Holders (if any) in writing that the dollar amount or number of Registrable Securities that the Demanding Holders and the Requesting Holders (if any) desire to sell, taken together with all other Common Stock or other equity securities that the Company desires to sell and the Common Stock, if any, as to which a Registration has been requested pursuant to separate written contractual piggy-back registration rights held by any other stockholders who desire to sell, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in such Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then the Company shall include in such Underwritten Offering, as follows:

 

(a)                                 first, the Registrable Securities of the Demanding Holders (pro rata based on the respective number of Registrable Securities that each Demanding Holder has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Demanding Holders have requested be included in such Underwritten Offering) that can be sold without exceeding the Maximum Number of Securities;

 

10

 

(b)                                 second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (a), the Registrable Securities of the Requesting Holders (if any) (pro rata based on the respective number of Registrable Securities that each Requesting Holder (if any) or other Holder, as the case may be, has requested be included in such Underwritten Offering and the aggregate number of Registrable Securities that the Requesting Holders and such other Holders have requested be included in such Underwritten Offering) that can be sold without exceeding the Maximum Number of Securities;

 

(c)                                  third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (a) and clause (b), the Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and

 

(d)                                 fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (a), clause (b) and clause (c), the Common Stock or other equity securities of other persons or entities that the Company is obligated to register in a Registration pursuant to separate written contractual arrangements with such persons and that can be sold without exceeding the Maximum Number of Securities.

 

2.1.6                     Demand Registration Withdrawal. A Demanding Holder or a Requesting Holder shall have the right to withdraw all or any portion of its Registrable Securities included in a Demand Registration pursuant to subection 2.1.1 or a Shelf Underwritten Offering pursuant to subsection 2.1.4.2 for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of its intention to so withdraw at any time prior to (x) in the case of a Demand Registration not involving any Underwritten Offering, the effectiveness of the applicable Registration Statement or (y) in the case of any Demand Registration involving an Underwritten Offering or any Shelf Underwritten Offering, prior to the pricing of such Underwritten Offering or Shelf Underwritten Offering; provided, however, that upon withdrawal by a majority-in-interest of the Demanding Holders initiating a Demand Registration (or, in the case of a Shelf Underwritten Offering, withdrawal of an amount of Registrable Securities that results in the remaining amount of Registrable Securities included by the Centennial Holders in such Shelf Underwritten Offering, in their capacity as Demanding Holders, being less than the Centennial Minimum Amount), the Company shall cease all efforts to secure effectiveness of the applicable Registration Statement or complete the Underwritten Offering, as applicable.  Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with a Registration pursuant to a Demand Registration or a Shelf Underwritten Offering prior to its withdrawal under this subsection 2.1.6.

 

2.2                               Piggyback Registration.

 

2.2.1                     Piggyback Rights. If the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities, for its own account or for the account of stockholders of the Company (or by the Company and by the stockholders of the Company including, without limitation, pursuant to Section 2.1), other than a Registration Statement (i) filed in connection with any employee stock option or other benefit

 

11

 

plan, (ii) for an exchange offer or offering of securities solely to the Company’s existing stockholders, (iii) for an offering of debt that is convertible into equity securities of the Company, (iv) for a dividend reinvestment plan or (v) filed pursuant to subsection 2.1.4.1, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than ten (10) days before the anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, in such offering, and (B) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within five (5) days after receipt of such written notice (such Registration a “Piggyback Registration”). The Company shall, in good faith, cause such Registrable Securities to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1 shall enter into an underwriting agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company.

 

2.2.2                     Reduction of Piggyback Registration. If the managing Underwriter or Underwriters in an Underwritten Offering that is to be a Piggyback Registration, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that the dollar amount or number of the Common Stock that the Company desires to sell, taken together with (i) the Common Stock, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (ii) the Registrable Securities as to which registration has been requested pursuant Section 2.2, and (iii) the Common Stock, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Securities, then:

 

(a)                                 If the Registration is undertaken for the Company’s account, the Company shall include in any such Registration (i) first, the Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 (pro rata based on the respective number of Registrable Securities that each Holder has requested be included in such Piggyback Registration and the aggregate number of Registrable Securities that the Holders have requested be included in such Piggyback Registration), which can be sold without exceeding the Maximum Number of Securities; and (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i) and clause (ii), the Common Stock, if any, as to which Registration has been requested pursuant to written contractual piggy-back registration rights of other stockholders of the Company, which can be sold without exceeding the Maximum Number of Securities;

 

12

 

(b)                                 If the Registration is pursuant to a request by persons or entities other than the Holders of Registrable Securities, then the Company shall include in any such Registration (i) first, the Common Stock or other equity securities, if any, of such requesting persons or entities, other than the Holders of Registrable Securities, which can be sold without exceeding the Maximum Number of Securities; (ii) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 (pro rata based on the number of Registrable Securities that each Holder has requested be included in such Piggyback Registration and the aggregate number of Registrable Securities that the Holders have requested to be included in such Piggyback Registration), which can be sold without exceeding the Maximum Number of Securities; (iii) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i) and clause (ii), the Common Stock or other equity securities that the Company desires to sell, which can be sold without exceeding the Maximum Number of Securities; and (iv) fourth, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (i), clause (ii) and clause (iii), the Common Stock or other equity securities for the account of other persons or entities that the Company is obligated to register pursuant to separate written contractual arrangements with such persons or entities, which can be sold without exceeding the Maximum Number of Securities.

 

2.2.3                     Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw all or any portion of its Registrable Securities included in a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw such Registrable Securities from such Piggyback Registration prior to (x) in the case of a Piggyback Registration not involving an Underwritten Offering or Shelf Underwritten Offering, the effectiveness of the applicable Registration Statement or (y) in the case of any Piggyback Registration involving an Underwritten Offering or any Shelf Underwritten Offering, prior to the pricing of such Underwritten Offering or Shelf Underwritten Offering. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. Notwithstanding anything to the contrary in this Agreement, the Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to its withdrawal under this subsection 2.2.3.

 

2.2.4                     Unlimited Piggyback Registration Rights. For purposes of clarity, any Registration effected pursuant to Section 2.2 shall not be counted as a Registration pursuant to a Demand Registration effected under Section 2.1 or a Shelf Underwritten Offering effected under subsection 2.1.4.2.

 

2.3                               Registrations on Form S-3. The Holders of Registrable Securities may at any time, and from time to time, request in writing that the Company, pursuant to Rule 415 under the

 

13

 

Securities Act (or any successor rule promulgated thereafter by the Commission), register the resale of any or all of their Registrable Securities on Form S-3 or similar short form registration statement that may be available at such time (“Form S-3”); provided, however, that the Company shall not be obligated to effect such request through an Underwritten Offering (i) in the case of the Centennial Contributors, except as provided in Section 2.1.4.2, and (ii) in the case of all other Holders, unless such Underwritten Offering is reasonably expected to result in gross proceeds in excess of $50,000,000. Within five (5) days of the Company’s receipt of a written request from a Holder or Holders of Registrable Securities for a Registration on Form S-3, the Company shall promptly give written notice of the proposed Registration on Form S-3 to all other Holders of Registrable Securities, and each Holder of Registrable Securities who thereafter wishes to include all or a portion of such Holder’s Registrable Securities in such Registration on Form S-3 shall so notify the Company, in writing, within ten (10) days after the receipt by the Holder of the notice from the Company. As soon as practicable thereafter, but not more than twelve (12) days after the Company’s initial receipt of such written request for a Registration on Form S-3, the Company shall register all or such portion of such Holder’s Registrable Securities as are specified in such written request, together with all or such portion of Registrable Securities of any other Holder or Holders joining in such request as are specified in the written notification given by such Holder or Holders; provided, however, that the Company shall not be obligated to effect any such Registration pursuant to this Section 2.3 if (i) a Form S-3 is not available for such offering; or (ii) the Holders of Registrable Securities, together with the Holders of any other equity securities of the Company entitled to inclusion in such Registration, propose to sell the Registrable Securities and such other equity securities (if any) at any aggregate price to the public of less than $10,000,000.

 

2.4                               Restrictions on Registration Rights.  Notwithstanding anything to the contrary contained in this Agreement, no Registration shall be effected or permitted and no Registration Statement shall become effective, with respect to any Registrable Securities held by any Existing Holder, until after the expiration of the Founder Shares Lock-Up Period or the Private Placement Lock-Up Period, as the case may be.

 

ARTICLE III. COMPANY PROCEDURES

 

3.1                               General Procedures. If the Company is required to effect the Registration of Registrable Securities, the Company shall use its reasonable best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as possible:

 

3.1.1                     prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold;

 

3.1.2                     prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the

 

14

 

Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;

 

3.1.3                     prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, and one legal counsel to such Holders, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (in each case including all exhibits thereto and documents incorporated by reference therein), the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration or the one legal counsel for such Holders may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;

 

3.1.4                     prior to any public offering of Registrable Securities, use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;

 

3.1.5                     use its reasonable best efforts to cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed;

 

3.1.6                     provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;

 

3.1.7                     advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or the initiation or threatening of any proceeding for such purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued;

 

3.1.8                     at least five (5) days prior to the filing of any Registration Statement or Prospectus or any amendment or supplement to such Registration Statement or Prospectus or any document that is to be incorporated by reference into such Registration Statement or Prospectus, furnish a copy thereof to each seller of such Registrable Securities or one counsel on behalf of such sellers;

 

15

 

3.1.9                     notify the Holders at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, and then to correct such Misstatement as set forth in Section 3.4;

 

3.1.10              permit a representative of the Holders, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate, at each such person’s own expense, in the preparation of the Registration Statement, and cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;

 

3.1.11              obtain a “cold comfort” letter from the Company’s independent registered public accountants in the event of an Underwritten Offering, in customary form and covering such matters of the type customarily covered by “cold comfort” letters as the managing Underwriter may reasonably request;

 

3.1.12              on the date the Registrable Securities are delivered for sale pursuant to such Registration, obtain an opinion, dated such date, of counsel representing the Company for the purposes of such Registration, addressed to the Holders, the placement agent or sales agent, if any, and the Underwriters, if any, covering such legal matters with respect to the Registration in respect of which such opinion is being given as the Holders, placement agent, sales agent, or Underwriter may reasonably request and as are customarily included in such opinions and negative assurance letters, and reasonably satisfactory to a majority-in-interest of the participating Holders;

 

3.1.13              in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;

 

3.1.14              make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);

 

3.1.15              if the Registration involves the Registration of Registrable Securities involving gross proceeds in excess of $50,000,000, use its reasonable efforts to make available senior executives of the Company to participate in customary “road show” presentations that may be reasonably requested by the Underwriter in any Underwritten Offering; and

 

16

 

3.1.16              otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such Registration.

 

3.2                               Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, Underwriter marketing costs and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.

 

3.3                               Requirements for Participation in Underwritten Offerings. No person may participate in any Underwritten Offering for equity securities of the Company unless such person (i) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by the Company and (ii) completes and executes all customary questionnaires, powers of attorney, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.

 

3.4                               Suspension of Sales; Adverse Disclosure.

 

3.4.1                     Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice), or until it is advised in writing by the Company that the use of the Prospectus may be resumed (any such period, a “Suspension Period”).

 

3.4.2                     If the filing, initial effectiveness or continued use of (including in connection with any Underwritten Offering) a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements that are unavailable to the Company for reasons beyond the Company’s control, then the Company may, upon giving prompt written notice to the Holders, delay the filing or initial effectiveness of, or suspend use of (including in connection with any Underwritten Offering), such Registration Statement for the shortest period of time, but in no event more than sixty (60) days, determined in good faith by the Company to be necessary for such purpose (any such period, a “Blackout Period”). In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities.

 

3.4.3.                  The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.  Notwithstanding anything to the contrary in this Section 3.4, in no event shall any Blackout Periods and any Suspension Periods continue for more than ninety (90) days in the aggregate during any 365-day period.

 

17

 

3.5                               Reporting Obligations. As long as any Holder shall own Registrable Securities, the Company, at all times while it shall be a reporting company under the Exchange Act, covenants to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish the Holders with true and complete copies of all such filings (the delivery of which will be satisfied by the Company’s filing of such reports on the Commission’s EDGAR system). The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell shares of Common Stock held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.

 

ARTICLE IV. INDEMNIFICATION AND CONTRIBUTION

 

4.1                               Indemnification.

 

4.1.1                     The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers and directors and each person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses (including attorneys’ fees) caused by any untrue or alleged untrue statement of material fact contained in any Registration Statement, Prospectus or preliminary 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, except insofar as the same are caused by or contained in any information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.

 

4.1.2                     In connection with any Registration Statement in which a Holder of Registrable Securities is participating, such Holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such Registration Statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers and agents and each person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses (including without limitation reasonable attorneys’ fees) resulting from any untrue statement of material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any 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 omission is contained in any information or affidavit so furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of

 

18

 

Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act) to the same extent as provided in the foregoing with respect to indemnification of the Company.

 

4.1.3                     Any person entitled to indemnification herein shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) 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. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one 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. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) or which settlement does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

 

4.1.4                     The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Company and each Holder of Registrable Securities participating in an offering also agrees to make such provisions as are reasonably requested by any indemnified party for contribution to such party in the event the Company’s or such Holder’s indemnification is unavailable for any reason.

 

4.1.5                     If the indemnification provided under Section 4.1 from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages, liabilities and expenses referred to herein, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages, liabilities and expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such indemnifying party or indemnified party, and the indemnifying party’s and indemnified party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this

 

19

 

subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.

 

ARTICLE V. MISCELLANEOUS

 

5.1                               Notices. Any notice or communication under this Agreement must be in writing and given by (i) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (ii) delivery in person or by courier service providing evidence of delivery, or (iii) transmission by hand delivery, electronic mail, telecopy, telegram or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy, telegram or facsimile, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to: 1401 Seventeenth Street, Suite 1000, Denver, CO 80202, Attention: Davis O’Connor or by facsimile at (303) 845-9516, and, if to any Holder, at such Holder’s address or facsimile number as set forth in the Company’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1.

 

5.2                               Assignment; No Third Party Beneficiaries.

 

5.2.1                     This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.

 

5.2.2                     Prior to the expiration of the Founder Shares Lock-up Period or the Private Placement Lock-up Period, as the case may be, no Existing Holder may assign or delegate such Existing Holder’s rights, duties or obligations under this Agreement, in whole or in part, except in connection with a transfer of Registrable Securities by such Existing Holder to a Permitted Transferee.  No Centennial Holder or Riverstone Holder may assign or delegate its rights, duties or obligations under this Agreement, in whole or in part, except (i) in the case of a Centennial Holder, in connection with a Permitted Transfer (as defined in the CRP LLC Agreement) of CRP Units by such Centennial Holder and (ii) in the case of a Riverstone Holder, in connection with a transfer of Common Stock by such Riverstone Holder to an Affiliate.

 

20

 

5.2.3                     This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holders, which shall include Permitted Transferees.

 

5.2.4                     This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2.

 

5.2.5                     No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (i) written notice of such assignment as provided in Section 5.1 and (ii) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or certificate of joinder to this Agreement). Any transfer or assignment made other than as provided in this Section 5.2 shall be null and void.

 

5.3                               Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.

 

5.4                               Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION.

 

5.5                               Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority-in-interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, (i) any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of the shares of capital stock of the Company, in a manner that is materially different from the other Holders (in such capacity) shall require the consent of the Holder so affected and (ii) any amendment hereto or waiver hereof that adversely affects the Existing Holders, Centennial Holders or Riverstone Holders, as applicable, solely in their respective capacity as Existing Holders, Centennial Holders or Riverstone Holders, as applicable, in a manner that is materially different from the other Holders, shall require the consent of the Existing Holders, Centennial Holders or Riverstone Holders, as applicable, of a majority-in-interest of the then-outstanding number of Registrable Securities held by the Existing Holders, Centennial Holders or Riverstone Holders, as applicable. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.

 

21

 

5.6                               Other Registration Rights. Other than pursuant to the terms of the Subscription Agreements and the Warrant Agreements, the Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. The Company (i) represents and warrants that no Subscription Agreement or Warrant Agreement has been amended in any manner since its applicable effective date and (ii) shall not amend the Subscription Agreements or the Warrant Agreements in any manner that would provide to any party thereto registration rights superior to the rights of the Centennial Holders set forth herein unless the Company amends this Agreement to provide substantially similar rights to the Centennial Holders.  Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions among the parties hereto and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.

 

5.7                               Term. This Agreement shall terminate upon the earlier of (i) the tenth anniversary of the date of this Agreement or (ii) the date as of which (A) all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission)) or (B) no Registrable Securities remain outstanding. The provisions of Section 3.5 and Article IV shall survive any termination.

 

[SIGNATURE PAGES FOLLOW]

 

22

 

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

 

	
 
    	
COMPANY:
    
	
 
    	
 
    	
 
    
	
 
    	
CENTENNIAL   RESOURCE DEVELOPMENT, INC.,
   a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Mark. G. Papa
    
	
 
    	
Name:   Mark G. Papa
    
	
 
    	
Title:  Chief Executive Officer
    

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	
 
    	
HOLDERS:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SILVER   RUN SPONSOR, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Silver   Run Sponsor Manager, LLC, 
    
	
 
    	
 
    	
Member   and Managing Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas J. Walker
    
	
 
    	
Name:   Thomas J. Walker
    
	
 
    	
Title:   Managing Director
    
					

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	
 
    	
By:
    	
/s/   William D. Gutermuth
    
	
 
    	
Name:   William D. Gutermuth
    

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	
 
    	
By:
    	
/s/   Jeffrey H. Tepper
    
	
 
    	
Name:   Jeffrey H. Tepper
    

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	
 
    	
By:
    	
/s/   Diana J. Walters
    
	
 
    	
Name:   Diana J. Walters
    

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	
 
    	
CENTENNIAL   RESOURCE DEVELOPMENT, LLC,
   a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ward Polzin
    
	
 
    	
Name:   Ward Polzin
    
	
 
    	
Title:   Chief Executive Officer
    
				

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	
 
    	
NGP   CENTENNIAL FOLLOW-ON LLC, 
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
NGP   X US Holdings, L.P., 
    
	
 
    	
 
    	
Managing   Member
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
NGP   X US Holdings GP, L.L.C., 
    
	
 
    	
 
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Tony R. Weber
    
	
 
    	
Name:   Tony R. Weber
    
	
 
    	
Title:   Authorized Person
    
				

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	
 
    	
CELERO   ENERGY COMPANY, LP, 
    
	
 
    	
a   Delaware limited partnership
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
Celero   Energy Management, LLC, 
    
	
 
    	
 
    	
General   Partner
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Bruce Selkirk
    
	
 
    	
Name:   Bruce Selkirk
    
	
 
    	
Title:   Authorized Person
    
				

 

[Signature Page to Amended and Restated Registration Rights Agreement]

 

 

	
 
    	
RIVERSTONE   CENTENNIAL HOLDINGS, L.P.,
    
	
 
    	
a   Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
By:   Riverstone VI REL Holdings GP, LLC, its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas J. Walker
    
	
 
    	
Name:   Thomas J. Walker
    
	
 
    	
Title:   Managing Director
    

 

[Signature Page to Amended and Restated Registration Rights Agreement]Exhibit 10.3

 

EXECUTION VERSION

 

SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Second Amendment”), dated as of October 11, 2016 (the “Second Amendment Effective Date”), is among CENTENNIAL RESOURCE PRODUCTION, LLC, a Delaware limited liability company (the “Borrower”); each of the undersigned guarantors (the “Guarantors”, and together with the Borrower, the “Credit Parties”); each of the Lenders party hereto; and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

Recitals

 

A.                                    The Borrower, the Administrative Agent and the Lenders are parties to that certain Amended and Restated Credit Agreement dated as of October 15, 2014 (as amended prior to the date hereof, the “Credit Agreement”), pursuant to which the Lenders have, subject to the terms and conditions set forth therein, made certain credit available to and on behalf of the Borrower.

 

B.                                    The Borrower has advised the Administrative Agent and the Lenders that certain members of the NGP Group and Affiliates of Riverstone Investment Group LLC (“Riverstone”) entered into the Contribution Agreement dated as of July 6, 2016, as amended, modified or assigned on or before the date hereof (the “Acquisition Agreement”) whereby Silver Run Acquisition Corporation, a Delaware corporation to be renamed Centennial Resource Development, Inc. (“Silver Run”), agreed to acquire approximately 89% of the outstanding Equity Interests of the Borrower from NGP (such acquisition, the “Silver Run Acquisition”).

 

C.                                    The Borrower has advised the Administrative Agent and the Lenders that, concurrently with the Silver Run Acquisition, Silver Run will issue approximately 101,005,000 shares of its Class A Common Stock to certain Affiliates of Riverstone and certain other accredited investors (the “Silver Run Equity Issuance”), the proceeds of which will be used, directly or indirectly by Silver Run and the Borrower, to, among other things, (i) consummate the Silver Run Acquisition, (ii) repay in full the Term Loans, (iii) repay the aggregate principal amount of any outstanding Revolving Loans, and (iv) make a one-time cash distribution to the Centennial Contributors (as defined in the Acquisition Agreement) pursuant to Section 2.1(b) of the Acquisition Agreement, and make redemptions by Silver Run’s public stockholders of shares of Class A Common Stock to the extent required by the Acquisition Agreement (the “Specified Distribution”), in each case, on the Second Amendment Effective Date (the consummation of the Silver Run Acquisition, the making of the Silver Run Equity Issuance and the Specified Distribution, the repayment in full of the Term Loans and the repayment of any outstanding Revolving Loans, collectively, the “Second Amendment Transactions”).

 

D.                                    The Borrower has requested that the Lenders enter into this Second Amendment to (i) amend the Credit Agreement in certain respects as set forth herein including, without limitation, to (A) permit the Silver Run Acquisition and (B) replace Annex I to reflect the repayment in full of all Term Loans, and (ii) reflect the increase of the Borrowing Base from $140,000,000 to $200,000,000, in each case upon the terms and conditions set forth herein and in each case to be effective as of the Second Amendment Effective Date.

 

 

E.                                     The Administrative Agent and the Lenders have agreed, subject to the terms and conditions set forth herein, to enter into this Second Amendment.

 

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

 

Section 1.                                           Defined Terms.  Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Second Amendment, shall have the meaning ascribed such term in the Credit Agreement, as amended hereby.  Unless otherwise indicated, all section references in this Second Amendment refer to the Credit Agreement.

 

Section 2.                                           Amendments.  In reliance on the representations, warranties, covenants and agreements contained in this Second Amendment, and subject to the satisfaction of the conditions precedent set forth in Section 5 hereof, the Credit Agreement shall be amended effective as of the Second Amendment Effective Date in the manner provided in this Section 2.

 

2.1                               Additional Definitions.  Section 1.02 of the Credit Agreement is hereby amended to add thereto in alphabetical order the following definitions which shall read in full as follows:

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of any EEA Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or clause (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

2

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

 

“Immaterial Subsidiary” shall mean any Restricted Subsidiary designated by the Borrower as an Immaterial Subsidiary if and for so long as such Immaterial Subsidiary, together with all other Immaterial Subsidiaries so designated as Immaterial Subsidiaries, does not have total assets at such time exceeding $100,000; provided that no Subsidiary may be an Immaterial Subsidiary if it owns Oil and Gas Properties that are included in the then effective Borrowing Base.

 

“Riverstone” means Riverstone Investment Group LLC (the “Manager”), Riverstone Global Energy and Power Fund VI, L.P., Riverstone Non-ECI Partners, L.P., and Riverstone Energy Limited, together with the parallel investment entities and alternative investment entities of the foregoing, and any future investment fund or co-investment fund managed by the Manager or any of its Affiliates, and any Affiliates of one or more of the foregoing; provided that in no event will any portfolio company of any of the foregoing be included in the definition of “Riverstone”.

 

“Second Amendment” means that certain Second Amendment to Amended and Restated Credit Agreement dated as of the Second Amendment Effective Date, among the Borrower, the Guarantors party thereto, the Administrative Agent and the Lenders party thereto.

 

“Second Amendment Effective Date” means October 11, 2016.

 

“Second Amendment Transactions” has the meaning set forth in the Second Amendment.

 

“Centennial Resource Development” means Centennial Resource Development, Inc., a Delaware corporation formerly known as Silver Run Acquisition Corporation.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

2.2                               Amended Definitions. The following definitions contained in Section 1.02 of the Credit Agreement are hereby amended as follows:

 

(a)                                 Clause (d) of the definition of “Defaulting Lender” is hereby amended to insert “or become the subject of a Bail-In Action” immediately after “or bankruptcy” therein.

 

3

 

(b)                                 The definition of “LIBO Rate” is hereby amended to add the following sentence at the end of such definition:  “Notwithstanding anything to the contrary contained herein, in no event shall the LIBO Rate be less than 0%.”

 

(c)                                  The last sentence of the definition of “Parent” is hereby deleted in its entirety.

 

2.3                               Amended and Restated Definitions.  The following definitions contained in Section 1.02 of the Credit Agreement are hereby amended and restated in their entirety to read in full as follows:

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Applicable Margin” means for any day, with respect to any ABR Loan or Eurodollar Loan that is a Revolving Loan, or with respect to the Revolving Credit Commitment Fee Rate, as the case may be, the rate per annum set forth in the Borrowing Base Utilization Grid below based upon the Borrowing Base Utilization Percentage then in effect:

 

	
Borrowing Base Utilization Grid
    

 

	
Borrowing Base   Utilization Percentage
    	
 
    	
<   25%
    	
 
    	
> 25% <   50%
    	
 
    	
> 50% <   75%
    	
 
    	
> 75% <   90%
    	
 
    	
> 90%
    	
 
    
	
Eurodollar Loans
    	
 
    	
2.250%
    	
 
    	
2.500%
    	
 
    	
2.750%
    	
 
    	
3.000%
    	
 
    	
3.250%
    	
 
    
	
ABR Loans
    	
 
    	
1.250%
    	
 
    	
1.500%
    	
 
    	
1.750%
    	
 
    	
2.000%
    	
 
    	
2.250%
    	
 
    
	
Revolving Credit   Commitment Fee Rate
    	
 
    	
0.500%
    	
 
    	
0.500%
    	
 
    	
0.500%
    	
 
    	
0.500%
    	
 
    	
0.500%
    	
 
    

 

Each change in the Applicable Margin for Revolving Loans shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change; provided that if at any time the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then the “Applicable Margin” means, with respect to Revolving Loans, the rate per annum set forth on the grid when the Borrowing Base Utilization Percentage is at its highest level until such Reserve Report is delivered.

 

“Change in Control” means (a)  any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 of the Securities Exchange Act) other than Riverstone, shall have acquired beneficial ownership or control of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Centennial Resource Development, the Parent or the Borrower, (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors of Centennial Resource 

 

4

 

Development by Persons who were neither (i) nominated, appointed or approved for consideration by shareholders for election by the board of directors of Centennial Resource Development or (ii) appointed by directors so nominated, appointed or approved, (c) the failure of Centennial Resource Development to (i) own more than 50% of the Equity Interests of the Borrower with ordinary voting power to elect or appoint the managers of the Borrower or (ii) Control the Borrower, or (d) the failure of the Parent (at any time that the Parent is not the Borrower) to own 100% of the Equity Interests in the Borrower.

 

“EBITDAX” means, for any period, the sum of Consolidated Net Income for such period plus (a) the following expenses or charges to the extent deducted from Consolidated Net Income in such period: (i) interest, (ii) income taxes (however denominated), (iii) depreciation, depletion, amortization and other similar noncash charges, (iv) exploration expenses, including plugging and abandonment expenses, (v) transaction costs, expenses and charges with respect to the acquisition or disposition of Oil and Gas Properties incurred in such period in an aggregate amount not to exceed $5,000,000 in any Reference Period, (vi) costs, fees and expenses incurred by the Credit Parties in connection with the closing of this Agreement and the Transactions occurring on or about the Effective Date, and (vi) costs, fees and expenses incurred by the Credit Parties in connection with the Second Amendment Transactions, minus (b) all noncash income added to Consolidated Net Income. For the purposes of calculating EBITDAX (including any component thereof) for any period of four (4) consecutive fiscal quarters (each, a “Reference Period”) pursuant to any determination of the financial ratio contained in Section 9.01(a), if at any time during such Reference Period the Parent or any Restricted Subsidiary shall have made any Material Disposition or Material Acquisition, the EBITDAX for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Disposition or Material Acquisition had occurred on the first day of such Reference Period (such calculations to be reasonably acceptable to the Administrative Agent).

 

“Loan Documents” means this Agreement, the First Amendment, the Second Amendment, the Notes, the Letter of Credit Agreements, the Letters of Credit, the Engagement Letter and the Security Instruments.

 

“Permitted Tax Distributions” means, with respect to the Borrower so long as it is taxable as a partnership for United Stated federal income tax purposes, tax distributions to the members of the Borrower in an aggregate amount that does not exceed (a) the sum of the highest marginal United States federal and New York state income tax rates applicable to individuals on ordinary income, multiplied by (b) the Borrower’s federal taxable income.

 

“Qualifying IPO” means the Second Amendment Transactions.

 

5

 

2.4                               Amendments to Section 3.04.  Section 3.04(c)(iv), 3.04(c)(v) and 3.04(c)(vi) of the Credit Agreement are each hereby deleted in their respective entireties and replaced in each instance with “[Reserved]”.

 

2.5                               Amendment to Article VII.  Article VII of the Credit Agreement is hereby amended to insert the new Section 7.24 below immediately after Section 7.23 thereof, which shall read in full as follows:

 

Section 7.24 EEA Financial Institutions.  No Credit Party is an EEA Financial Institution.

 

2.6                               Amendment to Section 8.14(a).  Section 8.14(a) of the Credit Agreement is hereby amended to amend and restate each instance therein of “80%” with “85%”.

 

2.7                               Amendment to Section 8.14(b).  Section 8.14(b) of the Credit Agreement is hereby amended and restated in its entirety to read in full as follows:

 

(b)                                 In the event that (i) the Parent creates or acquires any Restricted Subsidiary other than an Immaterial Subsidiary (including by designating any Unrestricted Subsidiary as a Restricted Subsidiary pursuant to the terms hereof) or (ii) any Domestic Subsidiary incurs or guarantees any Funded Debt, the Borrower shall, or shall cause the Parent to, promptly cause such Restricted Subsidiary (if other than the Borrower) to execute and deliver the Guaranty Agreement and the Security Agreement (or supplements thereto or assumption agreements thereto, as applicable) pursuant to which such Restricted Subsidiary shall guarantee the Indebtedness and grant liens and security interests in its personal property that constitutes Collateral (as defined in the Security Agreement). In the event that the Parent creates or acquires any Restricted Subsidiary other than an Immaterial Subsidiary, the Credit Party that owns the Equity Interests in such new Restricted Subsidiary shall execute and deliver a supplement to the Security Agreement pursuant to which such Credit Party will confirm the pledge of all of the Equity Interests of such new Restricted Subsidiary to secure the Indebtedness. In connection with the foregoing, the Credit Parties shall (i) deliver original stock certificates, if any, evidencing the Equity Interests of such new Restricted Subsidiary, together with an appropriate undated stock power for each certificate duly executed in blank by the registered owner thereof and (ii) execute and deliver such other additional closing documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent. Parent and Borrower shall cause any Subsidiary (if other than the Borrower) that guarantees the obligations with respect to any Permitted Senior Unsecured Notes to become a Guarantor by executing and delivering to the Administrative Agent an assumption agreement with respect to the Guaranty Agreement.

 

2.8                               Amendments to Section 9.04(a).  Section 9.04(a) of the Credit Agreement is hereby amended to (a) delete the “and” immediately before “(vi)” therein, (b) amend and restate the “.” at the end of the first sentence thereof with “; (vii) the Parent may make cash distributions; provided that, in the case of the this clause (vii), (A) no Default or Event of Default exists or results from the making of such Restricted Payment, (B) after giving effect to such Restricted Payment, Liquidity is not less than the greater of (1) $40,000,000 or (2) twenty percent (20%) of the Borrowing Base then in effect and (C) after giving effect to such Restricted 

 

6

 

Payment, the Parent’s ratio of Total Funded Debt (as of such date) to EBITDAX (for the Rolling Period for which financial statements have been, or are required to have been, delivered pursuant to Section 8.01(a) or (b)) shall not exceed 2.75 to 1.00 on a pro forma basis, and (viii) the Borrower may use proceeds from the Silver Run Cash Contribution (as defined in the Acquisition Agreement (as defined in the Second Amendment)) to make a cash distribution on the Second Amendment Effective Date to the Centennial Contributors (as defined in the Acquisition Agreement) pursuant to Section 2.1(b) of the Acquisition Agreement and (c) amend and restate clause (iv) therein in its entirety with the following clause (iv) which shall read in full as “(iv) the Borrower may make Permitted Tax Distributions in accordance with the last sentence of this Section 9.04;”.

 

2.9                               Amendments to Section 9.13. Section 9.13 of the Credit Agreement is hereby amended to (a) delete the “and” immediately before “(g)” therein, (b) amend and restate the “.” at the end of the first sentence thereof with “; and (h) the Second Amendment Transactions”.

 

2.10                        Amendment to Section 9.17(a)(i).  Section 9.17(a)(i) of the Credit Amendment is hereby amended and restated in its entirety to read in full as follows:

 

(i)                                           Subject to clause (b) of this Section 9.17, Swap Agreements with an Approved Counterparty in respect of commodities the notional volumes of which (when aggregated with other commodity Swap Agreements then in effect) do not exceed, as of the date such Swap Agreement is entered into (and for each month during the period during which such Swap Agreement is in effect), the applicable percentage set forth in the table below for the time periods (relative to the execution date of the relevant Swap Agreement) set forth in the table below of the reasonably anticipated production of crude oil, natural gas and natural gas liquids and condensate, calculated separately and, in each case, as such production is forecast from the Parent’s and its Restricted Subsidiaries’ Oil and Gas Properties constituting Proved Reserves as set forth on the most recent Reserve Report delivered pursuant to the terms of this Agreement:

 

	
Period (relative to execution date of
   relevant Swap Agreement)
    	
 
    	
Percentage Limitation
    
	
Months 1-24
    	
 
    	
80% of Proved
    
	
Months 25-60
    	
 
    	
65% of Proved
    

 

provided, however, that such Swap Agreements shall not, in any case, have a tenor of greater than five (5) years.  It is understood that Swap Agreements in respect of commodities which may, from time to time, “hedge” the same volumes, but different elements of commodity risk thereof (such as, for example, basis risk and price risk), shall not be aggregated together when calculating the foregoing limitations on notional volumes or for any other purpose of this Section.

 

2.11                        Amendment to Section 12.02(b)(vii).  Section 12.02(b)(vii) of the Credit Agreement is hereby amended to amend and restate “80%” therein with “85%”.

 

7

 

2.12                        Amendment to Article XII.  Article XII of the Credit Agreement is hereby amended to insert the new Section 12.20 below immediately after Section 12.19 thereof, which shall read in full as follows:

 

Section 12.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)                                       the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

(b)                                       the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i)                                           a reduction in full or in part or cancellation of any such liability;

 

(ii)                                        a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

(iii)                                     the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

2.13                        Replacement of Annex I.  Annex I to the Credit Agreement is hereby replaced in its entirety with Annex I attached hereto and Annex I attached hereto shall be deemed to be attached as Annex I to the Credit Agreement.

 

Section 3.                                           Redetermination of Borrowing Base.  The Lenders hereby agree that for the period from and including the Second Amendment Effective Date, but until the next Scheduled Redetermination Effective Date, the next Interim Redetermination Date or the next adjustment to the Borrowing Base under Section 2.08(e) of the Credit Agreement or Section 8.13(c) of the Credit Agreement, whichever occurs first, the amount of the Borrowing Base shall be increased from $140,000,000 to $200,000,000, which redetermination of the Borrowing Base shall constitute the October 1, 2016 Scheduled Redetermination of the Borrowing Base.  This Section 3 constitutes the New Borrowing Base Notice for the October 1, 2016 Scheduled Redetermination of the Borrowing Base.

 

8

 

Section 4.                                           Conditions Precedent.  The effectiveness of this Second Amendment is subject to the following:

 

4.1                               The Administrative Agent shall have received counterparts of this Second Amendment from the Credit Parties and each of the Lenders.

 

4.2                               The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Second Amendment Effective Date including, without limitation, the Second Amendment Upfront Fees referred to in Section 4.3 below.

 

4.3                               The Administrative Agent shall have received, for the account of each of the Second Amendment Increasing Lenders (as defined below) party to this Second Amendment (including, without limitation, JPMorgan Chase Bank, N.A.), upfront fees (the “Second Amendment Upfront Fees”) in an aggregate amount for each such Second Amendment Increasing Lender equal to 45 basis points (0.45%) of the amount of such Second Amendment Increasing Lender’s Second Amendment Increased Commitment (as defined below).  As used herein, “Second Amendment Increasing Lender” means each Lender whose Revolving Credit Commitment after giving effect to the increase to the Borrowing Base pursuant to Section 3 of this Second Amendment exceeds such Lender’s Revolving Credit Commitment (including if such Revolving Credit Commitment was zero), if any, that was in effect immediately prior to giving effect to the increase to the Borrowing Base pursuant to Section 3 of this Second Amendment, and “Second Amendment Increased Commitment” means the amount of such excess.

 

4.4                               (a) The Borrower will have received the direct or indirect proceeds from the Silver Run Equity Issuance made, on or prior to the Second Amendment Effective Date, in cash by Silver Run, in an amount sufficient to repay the Term Loans and the aggregate principal amount of all outstanding Revolving Loans in full, (b) the Term Loans and all such outstanding Revolving Loans shall have been repaid, or shall concurrently be repaid, with the closing of the Second Amendment Transactions on the Second Amendment Effective Date and (c) after giving effect to the Second Amendment Transactions on the Second Amendment Effective Date, the Borrower shall have no less than $100,000,000 of unencumbered cash on its balance sheet.

 

4.5                               The Silver Run Acquisition shall have been consummated, or shall concurrently be consummated, on the Second Amendment Effective Date pursuant to the terms of the Acquisition Agreement.

 

4.6                               The Administrative Agent shall be reasonably satisfied that the Security Instruments create first priority, perfected Liens (subject only to Excepted Liens) on at least 85% of the total value of the Proved Oil and Gas Properties evaluated in the most recently delivered Reserve Report.

 

4.7                               The Administrative Agent shall have received one or more certificates of the Secretary or an Assistant Secretary of the Borrower and each Guarantor setting forth (a) resolutions of its board of directors (or comparable governing body) with respect to the authorization of the Borrower or such Guarantor to execute and deliver the Second Amendment and to enter into the transactions contemplated herein and in the Loan Documents, (b) the articles or certificate of incorporation and bylaws (or comparable organizational documents for any 

 

9

 

Credit Parties that are not corporations) of the Borrower and such Guarantor, certified as being true and complete (or, alternatively with respect to this clause (b), a certification that there have been no changes to the organizational documents most recently delivered and certified to under the Credit Agreement), (c) the officers of the Borrower or such Guarantor (i) who are authorized to sign the Loan Documents to which the Borrower or such Guarantor is a party and (ii) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with the Credit Agreement (as amended hereby) and the transactions contemplated thereby and (d) specimen signatures of such authorized officers.  The Administrative Agent and the Lenders may conclusively rely on such certificates until the Administrative Agent receives notice in writing from the Borrower to the contrary.

 

4.8                               The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying (a) as to the foregoing Sections 4.4(c) and 4.5 and (b) that attached thereto is a true and correct copy of the Acquisition Agreement and all amendments, supplements or modifications thereto.

 

4.9                               The Administrative Agent shall have received such other documents as the Administrative Agent or counsel to the Administrative Agent may reasonably request.

 

Section 5.                                           Miscellaneous.

 

5.1                               Confirmation and Effect.  The provisions of the Credit Agreement (as amended by this Second Amendment) shall remain in full force and effect in accordance with its terms following the effectiveness of this Second Amendment, and this Second Amendment shall not constitute a waiver of any provision of the Credit Agreement or any other Loan Document, except as expressly provided for herein.  Each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof’, “herein”, or words of like import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference to the Credit Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby.

 

5.2                               Ratification and Affirmation of Credit Parties.  Each of the Credit Parties hereby expressly (a) acknowledges the terms of this Second Amendment, (b) ratifies and affirms its obligations under the Credit Agreement, the Guaranty Agreement and the other Loan Documents to which it is a party, (c) acknowledges, renews and extends its continued liability under the Credit Agreement, the Guaranty Agreement and the other Loan Documents to which it is a party, (d) agrees that its guarantee under the Guaranty Agreement and the other Loan Documents to which it is a party remains in full force and effect with respect to the Indebtedness as amended hereby, (e) represents and warrants to the Lenders and the Administrative Agent that each representation and warranty of such Credit Party contained in the Credit Agreement, the Guaranty Agreement and the other Loan Documents to which it is a party is true and correct in all material respects as of the date hereof and after giving effect to the amendments set forth in Section 2 hereof except (i) to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the date hereof, such representations and warranties shall continue to be true and correct as of such specified earlier date, and (ii) to the

 

10

 

extent that any such representation and warranty is expressly qualified by materiality or by reference to Material Adverse Effect, such representation and warranty (as so qualified) shall continue to be true and correct in all respects, (f) represents and warrants to the Lenders and the Administrative Agent that the execution, delivery and performance by such Credit Party of this Second Amendment are within such Credit Party’s corporate, limited partnership or limited liability company powers (as applicable), have been duly authorized by all necessary action and that this Second Amendment constitutes the valid and binding obligation of such Credit Party enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditor’s rights generally, and (g) represents and warrants to the Lenders and the Administrative Agent that, after giving effect to this Second Amendment, no Borrowing Base Deficiency, Default or Event of Default exists.

 

5.3                               Counterparts.  This Second Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of this Second Amendment by facsimile or electronic (e.g. pdf) transmission shall be effective as delivery of a manually executed original counterpart hereof.

 

5.4                               No Oral Agreement.  THIS WRITTEN SECOND AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES THAT MODIFY THE AGREEMENTS OF THE PARTIES IN THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

5.5                               Governing Law.  THIS SECOND AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

5.6                               Payment of Expenses.  The Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and expenses incurred in connection with this Second Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.

 

5.7                               Severability.  Any provision of this Second Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

5.8                               Successors and Assigns.  This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

[Signature Pages Follow.]

 

11

 

The parties hereto have caused this Second Amendment to be duly executed as of the day and year first above written.

 

	
BORROWER:
    	
CENTENNIAL   RESOURCE PRODUCTION, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   George S. Glyphis
    
	
 
    	
 
    	
George S. Glyphis
    
	
 
    	
 
    	
Vice President and Chief Financial Officer
    

 

SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

CENTENNIAL RESOURCE PRODUCTION, LLC

 

 

	
GUARANTORS:
    	
ATLANTIC   EXPLORATION, LLC, a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   George S. Glyphis
    
	
 
    	
 
    	
George S. Glyphis
    
	
 
    	
 
    	
Vice President and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
CENTENNIAL   RESOURCE MANAGEMENT, LLC, a Delaware limited liability company
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ward Polzin
    
	
 
    	
 
    	
Ward Polzin
    
	
 
    	
 
    	
Chief Executive Officer
    

 

SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

CENTENNIAL RESOURCE PRODUCTION, LLC

 

 

	
 
    	
JPMORGAN   CHASE BANK, N.A.,   as Administrative Agent and a Lender
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Ryan Fuessel
    
	
 
    	
Name:
    	
Ryan   Fuessel
    
	
 
    	
Title:
    	
Authorized   Officer
    

 

SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

CENTENNIAL RESOURCE PRODUCTION, LLC

 

 

	
 
    	
WELLS   FARGO BANK, N.A.,   as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brad Elliott
    
	
 
    	
Name:
    	
Brad   Elliott
    
	
 
    	
Title:
    	
Vice   President
    

 

SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

CENTENNIAL RESOURCE PRODUCTION, LLC

 

 

	
 
    	
COMERICA   BANK, as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Garrett R. Merrell
    
	
 
    	
Name:
    	
Garrett   R. Merrell
    
	
 
    	
Title:
    	
Relationship   Manager
    

 

SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

CENTENNIAL RESOURCE PRODUCTION, LLC

 

 

	
 
    	
BMO   HARRIS BANK, N.A.,   as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Matthew Davis
    
	
 
    	
Name:
    	
Matthew   Davis
    
	
 
    	
Title:
    	
Vice   President
    

 

SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

CENTENNIAL RESOURCE PRODUCTION, LLC

 

 

	
 
    	
CANADIAN   IMPERIAL BANK OF COMMERCE, NEW YORK BRANCH, as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Daria Mahoney
    
	
 
    	
Name:
    	
Daria   Mahoney
    
	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Trudy Nelson
    
	
 
    	
Name:
    	
Trudy   Nelson
    
	
 
    	
Title:
    	
Authorized   Signatory
    

 

SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

CENTENNIAL RESOURCE PRODUCTION, LLC

 

 

	
 
    	
U.S.   BANK NATIONAL ASSOCIATION, as a Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Benjamin J. Leonard
    
	
 
    	
Name:
    	
Benjamin   J. Leonard
    
	
 
    	
Title:
    	
Vice   President
    

 

SIGNATURE PAGE TO SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

CENTENNIAL RESOURCE PRODUCTION, LLC

 

 

ANNEX I

ALLOCATION OF MAXIMUM REVOLVING CREDIT AMOUNTS

 

	
Name of Lender
    	
 
    	
Applicable Revolving
   Credit Percentage
    	
 
    	
Maximum Revolving Credit
   Amount
    	
 
    
	
JPMorgan Chase   Bank, N.A.
    	
 
    	
20.23809524
    	
%
    	
$
    	
101,190,476.22
    	
 
    
	
Wells Fargo   Bank, N.A.
    	
 
    	
20.23809524
    	
%
    	
$
    	
101,190,476.22
    	
 
    
	
Comerica Bank
    	
 
    	
20.23809524
    	
%
    	
$
    	
101,190,476.21
    	
 
    
	
BMO Harris Bank,   N.A.
    	
 
    	
13.09523809
    	
%
    	
$
    	
65,476,190.45
    	
 
    
	
Canadian   Imperial Bank of Commerce, New York Branch
    	
 
    	
13.09523809
    	
%
    	
$
    	
65,476,190.45
    	
 
    
	
U.S. Bank   National Association
    	
 
    	
13.09523809
    	
%
    	
$
    	
65,476,190.45
    	
 
    
	
TOTAL
    	
 
    	
100.00000000
    	
%
    	
$
    	
500,000,000.00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00263-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00263-of-00352.parquet"}]]