Document:

Document

Exhibit 10.22

[date]

[Recipient]
[address]
[address]

Re:       Employment Terms and Conditions – [job position]

Dear [recipient]:

[[Thank you for your continued service to Bonanza Creek Energy, Inc. (the “Company”). The Company] [Bonanza Creek Energy, Inc. (the “Company”)]] is excited to offer you [[a promotion to the position of] [an employment position as]] [job position] reporting to [supervisor] as [supervisor’s title] effective as of [effective date].  In summary, as [job position] your compensation will be:

•An annual salary of $______ (“Base Salary”), to be paid on a bi-weekly basis, subject to all withholdings and deductions;
•Continued participation in the Company’s 2017 Long Term Incentive Program (“LTIP”), subject to the terms and conditions of the LTIP and the award agreement(s) to be entered into thereunder, at the discretion of the Company’s Compensation Committee and Board of Directors;
•Continued participation in the Company’s Short Term Incentive Program (the “STIP”) as further discussed below;
•Participation in the Company’s No Tracking Vacation Program; ten (10) days sick leave annually; and eleven (11) paid holidays per year, all in accordance with the Company’s benefits policy; 
•Option to participate or continue to participate in the Company’s 401(k) Plan, in accordance with such plan; currently the Company provides matching contributions of 6% of W-2 income, which amount may be amended from time to time in accordance with the terms of the 401(k) Plan;
•Option to participate or continue to participate in the Company’s health insurance plans upon your election subject to the terms and conditions of the plans;
•Option to participate or to continue to participate in the Company’s flexible benefit plan (Section 125 Plan); and
•Participation in the Company’s Executive Change in Control and Severance Plan (the “Severance Plan”) as a Tier __ Executive (as such term is defined in the Severance Plan), a copy of which is attached hereto as Exhibit A.

As you know, the STIP is administered by the Compensation Committee and Board of Directors of the Company.  The STIP has been designed to supplement your base salary and provide a year-over-year short term incentive cash bonus payment opportunity when the Company meets or exceeds its goals.  Your “target” cash bonus opportunity as [job position] for 20__ will be equal to __% of Base Salary, based on Company performance achievement as well as your individual performance achievement.1  Bonuses under the STIP for each year, if any, will typically be paid in March of the following year.

___________________
1 Add the following language at the end of this sentence if applicable for prorated STIP: “, and will be calculated on a pro-rata basis for 20__ based on the number of days in 20__ during which you were [job position] and the number of days in 20__ during which you were [prior job position] at the __% target level.

The Company may modify compensation and benefits from time to time as it deems necessary in accordance with the terms and conditions of the plans set forth above and the Company’s policies.  

The terms and conditions of employment set forth in this Employment Letter are contingent upon your execution of the Company’s Employee Restrictive Covenants, Proprietary Information and Inventions Agreement attached hereto (“PIIA”) attached hereto as Exhibit B.  You will continue to be expected to abide by the Company’s rules and regulations, as such may be modified by the Company from time to time.  

Notwithstanding anything to the contrary, your employment with the Company is AT WILL.  You may terminate your employment with the Company at any time and for any reason whatsoever simply by notifying the Company, subject only to any rights or obligations that may be required by the Severance Plan or PIIA, each as may be amended from time to time.  Likewise, the Company may terminate your employment at any time and for any reason whatsoever, with or without cause or advance notice, subject only to any rights and obligations that may be required by the Severance Plan or PIIA, as each may be amended from time to time.

In consideration for the benefits to be provided to you under this Employment Letter to which you are not currently entitled, by executing this Employment Letter, you hereby (i) accept the terms of employment outlined in this Employment Letter and (ii) acknowledge and agree that this Employment Letter constitutes the entire agreement between you and the Company concerning your employment (except as otherwise may be set forth in the LTIP and any agreements entered into thereunder, the STIP, the Severance Plan, the PIIA or the Indemnity Agreement to be entered into between you and the Company attached hereto as Exhibit C (collectively, the “Additional Agreements”)), and supersedes and terminates all prior and contemporaneous agreements and understandings, both written and oral, between the parties with respect to its subject matters, except for the Additional Agreements.  You agree that the Company has not made any promise or representation to you concerning this Employment Letter not expressed in this Employment Letter, and that, in signing this Employment Letter, you are not relying on any prior oral or written statement or representation by the Company, but are instead relying solely on your own judgment and the judgment of your legal and tax advisors, if any.

Again, we are thrilled to offer you this promotion and look forward to working with you in this new role.  If you have any questions or need additional information, please let me know.

									
			Sincerely,
			
			
			Name:
			Title:
			
	Accepted and agreed:		
			
			
			
	[recipient]		
	Date: _____________________________		

Exhibit A
Executive Change in Control and Severance Plan

Exhibit B
Employee Restrictive Covenants, Proprietary Information and Inventions Agreement

BONANZA CREEK ENERGY, INC.
EMPLOYEE RESTRICTIVE COVENANTS, PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
In consideration of my employment or continued employment by Bonanza Creek Energy, Inc., a Delaware corporation (collectively with its subsidiaries and affiliates, the “Company”), and the compensation now and hereafter paid to me, I hereby agree as follows:
1.Nondisclosure.
1.1.Recognition of Company’s Rights; Nondisclosure.  At all times during my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Proprietary Information (as defined below), except as such disclosure, use or publication may be required in connection with my work for the Company, or unless an officer of the Company expressly authorizes such in writing.  I will obtain the Company’s written approval before publishing or submitting for publication any material (written, verbal, or otherwise) that incorporates any Proprietary Information.  I hereby assign to the Company any rights I may have or acquire in such Proprietary Information and recognize that all Proprietary Information will be the sole property of the Company and its assigns.
1.2.Proprietary Information.  The term “Proprietary Information” means any and all confidential and/or proprietary knowledge, data or information of the Company.  By way of illustration, but not limitation, “Proprietary Information” includes all technical and non-technical information of the Company including (a) trade secrets, including, but not limited to, the whole or any portion or phase of any scientific or technical information, design, process, procedure, improvement, confidential business or financial information, listing or name, addresses or telephone number, or other information relating to any business that is secret and of value; (b) inventions, ideas, materials, concepts, processes, formulas, data, other works of authorship, know-how, improvements, discoveries, developments, designs, techniques, drilling reports, maps, well logs, mud logs, seismic data and geological or geophysical data and analyses (collectively, “Inventions”); (c) information regarding research, development, production, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers and the existence of any business discussions, negotiations or agreements between the Company and any third party; and (d) information regarding the skills and compensation of the Company’s employees, contractors or other service providers. 
1.3.Third Party Information.  I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for the Company) or use, except in connection with my work for the Company, Third Party Information unless expressly authorized by an officer of the Company in writing.
1.4.No Improper Use of Information of Prior Employers and Others.  During my employment by the Company, I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person.  I will use in the performance of my duties only information which is generally known and used by persons with training and experience comparable to my own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company.

2.Promise of Access to Proprietary Information, Specialized Training, and Goodwill
2.1.Access to Proprietary Information.  During my employment, the Company agrees to provide me with access to Proprietary Information relevant to my position and responsibilities.  The Company promises to disclose Proprietary Information to me in order to enable me to perform the duties and responsibilities of my position for the Company.  I further acknowledge that, prior to my employment at the Company, I was unfamiliar with Proprietary Information.  Finally, I acknowledge that the unauthorized disclosure of Proprietary Information could place the Company at a competitive disadvantage.
2.2.Access to Specialized Training.  To the extent appropriate to my position, the Company also promises that it will provide me with specialized training and instruction regarding (a) the methods, products and services designed, developed, enhanced, modified, manufactured, sold or provided by or for the Company, (b) the Company’s operations, (c) marketing and operational techniques and strategies, and (d) the Company’s technology.  The Company promises to provide specialized training and instruction to me regardless of whether I become or remain employed by the Company, in order to enable me to perform duties for the Company.  I agree to use this training for the Company’s exclusive benefit, and agrees not to use such training in a way that would harm the Company’s business interests during employment and thereafter.
2.3.Access to Goodwill.  I acknowledge that the Company has developed, over a period of time, and will continue to develop, significant relationships and goodwill between itself and its customers and suppliers by providing superior products and services.  I further acknowledge that these relationships and this goodwill are a valuable asset belonging solely to the Company.  I further acknowledge that any business relationship that Employee brings or has brought to the Company will belong to and will inure to the benefit of the Company after I begin employment.  Finally, I acknowledge that the responsibility to build and maintain business relationships and goodwill with current and prospective customers creates a special relationship of trust and confidence between me, the Company, and such customers.  The Company promises to permit me to use its goodwill in contacting and in doing business with its current and prospective customers and suppliers.  The Company further promises to compensate me according to its normal payroll procedures while I build and/or maintain the Company’s business relationships and goodwill with its current and prospective customers and suppliers.  If and when appropriate, and pursuant to company policy and procedure, the Company agrees to reimburse me for reasonable and necessary business expenses incurred in building and maintaining business relationships and goodwill with the Company’s current and prospective customers and suppliers.
3.Assignment of Inventions.
3.1.Proprietary Rights.  The term “Proprietary Rights” means all trade secret, patent, copyright, moral rights and other intellectual property rights throughout the world.
3.2.Previous Inventions.  Inventions, if any, patented or unpatented, which I made prior to the commencement of my employment with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, within two (2) business days following my signing of this Agreement, I will provide to the Company a complete written list of all Inventions relevant to the subject matter of my employment by the Company that I have, alone or jointly with others, conceived, developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement (collectively referred to as “Previous Inventions”).  If I do not timely provide the Company with my written list of Previous Inventions, I represent that there are no Previous Inventions.  If, in the course of my employment with the Company, I incorporate a Previous Invention into any work product for the Company, the Company is hereby granted and will have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, use, reproduce, make derivative works of, distribute, publicly perform, publicly display, import and sell such Previous Invention.  Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, Previous Inventions in any Company Inventions without the Company’s prior written consent.

3.3.Assignment of Inventions.  Subject to Sections 3.4 and 3.6, I hereby assign and agree to assign in the future (when any such Inventions or Proprietary Rights are first reduced to practice or first fixed in a tangible medium, as applicable) to the Company all my right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company.  Inventions assigned to the Company, or to a third party as directed by the Company pursuant to this Section 3, are hereinafter referred to as “Company Inventions.”  I hereby forever waive and agree not to assert any and all Proprietary Rights I may have in or with respect to a Company Invention. 
3.4.Nonassignable Inventions.  I recognize that, in the event of a specifically applicable state law, regulation, rule, or public policy (“Specific Inventions Law”), this Agreement will not be deemed to require assignment of any invention which qualifies fully for protection under a Specific Inventions Law by virtue of the fact that any such invention was, for example, developed entirely on my own time without using the Company’s equipment, supplies, facilities, or trade secrets and neither related to the Company’s actual or anticipated business, research or development, nor resulted or was derived from work performed by me directly or indirectly for the Company.  In the absence of a Specific Inventions Law, the preceding sentence will not apply. 
3.5.Obligation to Keep Company Informed.  During the period of my employment and for one (1) year after termination of my employment with the Company, I will promptly disclose to the Company fully and in writing all Inventions authored, conceived or reduced to practice by me, either alone or jointly with others.  In addition, I will promptly disclose to the Company all patent applications filed by me or on my behalf or in which I am named as an inventor or co-inventor within one (1) year after termination of employment.  At the time of each such disclosure, I will advise the Company in writing of any Inventions that I believe fully qualify for protection under the provisions of a Specific Inventions Law; and I will at that time provide to the Company in writing all evidence necessary to substantiate that belief.  The Company will keep in confidence and will not use for any purpose or disclose to third parties without my consent any confidential information disclosed in writing to the Company pursuant to this Agreement relating to Inventions that qualify fully for protection under a Specific Inventions Law.  I will preserve the confidentiality of any Invention that does not fully qualify for protection under a Specific Inventions Law.
3.6.Government or Third Party.  I also agree to assign all my right, title and interest in and to any particular Company Invention to a third party, including, without limitation, the United States, as directed by the Company.
3.7.Works for Hire.  I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment and which are protectable by copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101).
3.8.Enforcement of Proprietary Rights.  I will assist the Company in every proper way to obtain, and from time to time enforce, United States and foreign Proprietary Rights relating to Company Inventions in any and all countries.  To that end I will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the assignment thereof.  In addition, I will execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee.  My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries will continue beyond the termination of my employment, but the Company will compensate me at a reasonable rate after my termination for the time actually spent by me at the Company’s request on such assistance.
3.9.Further Assurances.  In the event the Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in the preceding paragraph, I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act for and in my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of this Section 2 with the same legal force and effect as if executed by me.  I hereby waive, assign and quitclaim to the Company any and all claims, of any nature whatsoever, 

which I now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.
3.10.Presumption of Ownership.  Due to the difficulty of establishing when an Invention is first conceived or developed, whether it results from access to the Company’s actual or anticipated business or research or development, or whether it is a direct or indirect result or derivation of any work I perform for the Company, I hereby acknowledge and agree that ownership of all Inventions conceived, developed, suggested or reduced to practice by me, alone or jointly with others during my employment shall be presumed to belong to the Company and I shall have the burden of proof to prove otherwise.
4.Records.  Unless otherwise directed or requested by the Company, I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that may be required by the Company) of all Proprietary Information developed by me and all Company Inventions made by me during the period of my employment at the Company, which records will be available to and remain the sole property of the Company at all times.
5.No Conflicts.  I acknowledge that during my employment I will have access to and knowledge of Proprietary Information.  To protect the Company’s Proprietary Information, I agree that during the period of my employment by the Company I will not, without the Company’s express written consent, engage in any other employment or business activity which is competitive with the Company, or would otherwise conflict with my obligations to the Company, except that nothing herein shall prevent my service on corporate, civic, charitable or industry boards or committees.
6.Non-Compete and Non-Solicitation Obligations.
6.1.Definitions.
a.“Business” shall mean the acquisition, exploration, development and production of onshore oil, natural gas and associated liquids in the United States of America.
b.“Business Opportunities” shall mean all business ideas, prospects, proposals or other opportunities pertaining to the Business, that are or were developed by me during my employment with the Company or any of the Company’s Affiliates or originated by any third party and brought to my attention during my employment with the Company or any of the Company’s Affiliates and in such capacity, together with information relating thereto (including, without limitation, geological and seismic data and interpretations thereof, whether in the form of maps, charts, logs, seismographs, calculations, summaries, memoranda, opinions or other written or charted means).
c.“Post-Termination Non-Compete Term” shall mean the same time period of time as the Severance Obligation Period (as that term is defined in the Executive Change in Control and Severance Plan, as amended).
6.2.Covenant Not to Compete During Term of Employment.  I acknowledge that, during my employment with the Company, I will have access to and knowledge of Proprietary Information, including, without limitation, trade secret information.  During the term of my employment with the Company and except as provided below or as otherwise permitted by the Company (acting upon the instruction of the board of directors of the Company), to protect the Company’s Proprietary Information, I agree that:
a.I shall not, other than through the Company or any person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the Company and any predecessor to any such entity (each a “Company Affiliate” and collectively, the “Company’s Affiliates”), engage or participate in any manner, whether directly or indirectly for my direct benefit through a family member or as an employee, employer, consultant, agent, principal, partner, more than five percent shareholder, officer, director, licensor, lender, lessor, or in any other individual or representative capacity, in (i) any business or activity that is competitive with the Business (as defined above), (ii) any business or activity that is engaged in leasing, acquiring, exploring, developing or producing hydrocarbons and related products, or (iii) any enterprise in which a material portion of its business is materially competitive in any way with any business in which the Company or any 

of the Company’s Affiliates is engaged during my employment with the Company or any of the Company’s Affiliates (including, without limitation, any business if the Company devoted material resources to entering into such business); and
b.all investments made by me (whether in my own name or for my direct benefit through an immediate family member or intermediary)( collectively, “Employee Affiliates), which relate to the Business or the lease, acquisition, exploration, development or production of hydrocarbons and related products shall be made solely through the Company or any of the Company’s Affiliates; and I shall not (directly or indirectly), and shall not permit any Employee Affiliates to: (i) invest or otherwise participate alongside the Company or any of the Company’s Affiliates in any Business Opportunities (as defined above) or (ii) invest or otherwise participate in any business or activity relating to a Business Opportunity, regardless of whether the Company or any of the Company’s Affiliates ultimately participates in such business or activity; provided, however, that this Section 6.2 shall not apply to (w) the existing personal oil and gas investments owned by me, my family members or any Employee Affiliates as of the date of this Agreement set forth on Exhibit A hereto (the “Existing Personal Investments”), (x) future expenditures made by me, my family members or any Employee Affiliates in the Existing Personal Investments, provided that such future expenditures do not go beyond the limited allowed for Permitted Investments (as defined below), (y) Permitted Investments (as defined below) and (z) any opportunity that is first offered to, and subsequently declined by, the Company (acting through the Company’s board of directors of the Company or its designee), if and to the extent that such opportunities are outside the Geographic Scope (as defined below).  For purposes of this Agreement, “Permitted Investments” means passive investments in securities or other ownership interests of businesses made by me, my family members or any Employee Affiliates, provided that the aggregate amount owned by me, my family members and Employee Affiliates does not exceed 5% of the outstanding securities or other ownership interests of any such business.
6.3.Covenant Not to Compete After the Date of Termination.  I hereby acknowledge and agree that the purpose of this Section 6.3 is to protect the Company from unfair loss of goodwill and business advantage, to shield me from the pressure to use or disclose Proprietary Information or to trade on the goodwill belonging to the Company, for the protection of the Company’s trade secret and Proprietary Information, and because of the knowledge I have acquired or will acquire as an executive or management personnel, or as an officer, or as profession staff to executive and management personnel.  Accordingly, during the Post-Termination Non-Compete Term, I agree not to engage or participate in any manner, whether directly or indirectly for my benefit, through a family member, or as an employee, employer, consultant, agent, principal, partner, shareholder, officer, director, licensor, lender (other than as an employee of a chartered commercial bank with assets of $500 million or greater), lessor, or in any other individual or representative capacity, in any business engaged in leasing, acquiring, exploring, developing, or producing hydrocarbons and related products within the boundaries of, or within a twenty-five (25) mile radius of the boundaries of, any mineral property interest of the Company or the Company’s Affiliates (including, without limitation, a mineral lease, overriding royalty interest, production payment, net profits interest, mineral fee interest, or option or right to acquire any of the foregoing, or an area of mutual interest as designated pursuant to contractual agreement between the Company or any of the Company’s Affiliates and any third party) or any other property on which the Company or the Company’s Affiliates have a right, license, or authority to conduct or direct exploratory activities, such as three dimensional seismic acquisitions or other seismic, geophysical, and geochemical activities as of the date my employment with the Company is terminated (the “Geographic Scope”); provided, however, that this subparagraph shall not be construed to preclude me from (w) holding the Existing Personal Investments, (x) making future expenditures made by me, my family members or any Employee Affiliates in the Existing Personal Investments, provided that such future expenditures do not go beyond the limited allowed for Permitted Investments, (y) making Permitted Investments and (z) investing in any opportunity that is first offered to, and subsequently declined by, the Company (acting through the board of directors of the Company or its designee), if and to the extent that such opportunities are outside the Geographic Scope.

6.4.Covenant Not to Solicit.  I shall not, during my employment with the Company or the Post-Termination Non-Compete Term (a) directly or indirectly, on behalf of myself or any third party, solicit, encourage, facilitate, or induce any advertiser, supplier, broker, vendor, agent, sales representative, employee, contractor, consultant, or licensee of the Company or of the Company’s Affiliates to breach any agreement or contract with, or discontinue or curtail his, her or its business relationships with the Company or any of the Company’s Affiliates or (b) directly or indirectly, solicit, recruit, induce, or otherwise engage as an employee, independent contractor or otherwise, either for myself or any other third party, any person who is employed by the Company or any of the Company’s Affiliates at the time of such solicitation, recruitment or inducement.
6.5.Non-Disparagement.  I shall not, during my employment with the Company or the Post-Termination Non-Compete Term, make to any other person or party any statement (whether oral, written, electronic, anonymous, on the internet, or otherwise), which directly or indirectly impugns the quality or integrity of the Company or its Affiliates’ business or employment practices, operations, or services, or any other disparaging or derogatory remarks about the Company or its Affiliates.  
7.No Conflicting Obligation.  I represent that my performance of all the terms of this Agreement and as an employee of the Company does not and will not breach any non-compete agreement or any agreement to keep in confidence information acquired by me in confidence or in trust prior to my employment by the Company.  I have not entered into, and I agree I will not enter into, any agreement either written or oral in conflict with this Agreement.
8.Return Of Company Documents.  When I leave the employ of the Company or upon request by the Company during the course of my employment, I will deliver to the Company any and all property, equipment, drawings, notes, memoranda, specifications, devices, formulas, and documents, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Proprietary Information of Company.  I agree that I will not copy, delete or alter any information contained on my Company computer before I return it to Company.  I further agree that any property situated on Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.  I understand and agree that compliance with this paragraph may require that data be removed from my personal computer equipment or other electronic storage devices or media.  Consequently, upon reasonable prior notice, I agree to permit the qualified personnel of Company and/or its contractors access to such computer equipment or other electronic storage devices or media for that purpose.  Prior to leaving, I will cooperate with the Company in completing and signing the Company’s termination statement.
9.Legal And Equitable Remedies.  Because my services are personal and unique and because I may have access to and become acquainted with the Company’s Proprietary Information, the Company has the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.  This paragraph shall not be construed as an election of any remedy, or as a waiver of any right available to Company under this Agreement or the law, including the right to seek damages from me for a breach of any provision of this Agreement, nor shall this paragraph be construed to limit the rights or remedies available under applicable law or in equity for any violation of any provision of this Agreement, including, but not limited to claims for damages.  If employee violates and covenant contained in Section 5, the duration of such covenant shall be automatically extended for the period of time equal to the period of such violation.
10.Notices.  Any notices required or permitted hereunder will be given to the appropriate party at the address specified below or at such other address as the party may specify in writing.  Such notice will be deemed given upon personal delivery to the appropriate address or if sent by certified or registered mail, three (3) days after the date of mailing.
11.Notification Of New Employer.  In the event that I leave the employ of the Company, I hereby consent to the notification of my new employer of my rights and obligations under this Agreement.

12.General Provisions.
12.1.Governing Law; Consent to Personal Jurisdiction.  This Agreement will be governed by and construed according to the laws of the State of Colorado, without regard for its conflicts of law principles that would require application of the laws of a different state.  I hereby expressly consent to the personal jurisdiction of the state and federal courts located in Denver, Colorado for any lawsuit filed there against me by Company arising from or related to this Agreement.
12.2.Attorneys’ Fees and Costs.  Should the Parties take any action or commence any legal proceeding relating to this Agreement, if either Party prevails in all or any part of its claims or defenses, such Party shall be entitled to recover all costs and expenses from the other party, including reasonable attorneys’ fees, incurred in connection with such action or other legal proceeding.
12.3.Severability.  In case any one or more of the provisions contained in this Agreement is, for any reason, held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect the other provisions of this Agreement, and this Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained herein.  Notwithstanding the foregoing, if any one or more of the provisions contained in this Agreement is held to be excessively broad as to duration, geographical scope, activity or subject, for any reason, it will be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it then appears.
12.4.Successors and Assigns.  This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.  This Agreement and shall be freely assignable by Company in its sole discretion, at any time, without the requirement of notice or consent by me.
12.5.Survival.  The provisions of this Agreement will survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.
12.6.Employment.  I acknowledge and agree that my relationship with the Company is “AT-WILL”, and that both the Company and I may terminate my employment relationship at any time, with or without cause or advance notice.  I further agree and understand that nothing in this Agreement will confer any right with respect to continuation of employment by the Company, nor will it interfere in any way with my right or the Company’s right to terminate my employment at any time, with or without cause or advance notice.
12.7.Waiver.  No waiver by the Company of any breach of this Agreement will be a waiver of any preceding or succeeding breach.  No waiver by the Company of any right under this Agreement will be construed as a waiver of any other right.  The Company will not be required to give notice to enforce strict adherence to all terms of this Agreement.
12.8.Entire Agreement.  The obligations pursuant to Sections 1 and 2 of this Agreement will apply to any time during which I was previously employed, or am in the future employed, by the Company as a consultant if no other agreement governs nondisclosure and assignment of inventions during such period.  This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions and agreements between us relating to the subject matter hereof.  No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the party to be charged.  Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.
12.9.Advice of Counsel. I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT.  THIS AGREEMENT MAY NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF. 

[Signatures on Following Page] 

						
		This Agreement is effective as of [date]
		
		I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  
		
		Dated: ____________________________________________
		
		
		Signature
		Name:  [recipient]
		
	Bonanza Creek Energy, Inc.	
		
	By: ________________________________	
	Name:  	
	Title:  	
	Dated: ______________________________	

Exhibit A
Existing Investments

Exhibit C
Indemnity AgreementDocument

DESCRIPTION OF THE REGISTRANT’S SECURITIES 
REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT

The following description sets forth certain material terms and provisions of the securities of Virgin Galactic Holdings, Inc. ( “we,” “us” or “our”) that are registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The following description of our securities is not complete and may not contain all the information you should consider before investing in our securities. This description is summarized from, and qualified in its entirety by reference to, our certificate of incorporation and bylaws, which are incorporated herein by reference. The summary below is also qualified by reference to the provisions of the General Corporation Law of the State of Delaware (the “DGCL”).

As of December 31, 2019, we had three classes of securities registered under the Exchange Act: our common stock, par value $0.0001 per share; warrants to purchase shares of our common stock; and units consisting of a share of common stock and one-third of a warrant to purchase shares of our common stock.

Authorized Capital Stock

The total amount of our authorized capital stock consists of 700,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. 

Common Stock

General

Holders of our common stock are not entitled to preemptive or other similar subscription rights to purchase any of our securities. Our common stock is neither convertible nor redeemable. Unless our board of directors determines otherwise, we expect to issue all shares of our capital stock in uncertificated form.

Voting Rights

Each holder of our common stock is entitled to one vote per share on each matter submitted to a vote of stockholders, as provided by the certificate of incorporation. Our bylaws provide that the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at all meetings of the stockholders for the transaction of business. When a quorum is present, the affirmative vote of a majority of the votes cast is required to take action, unless otherwise specified by law, the Stockholders’ Agreement, dated October 25, 2019, by and among us, Vieco USA, Inc. (“Vieco US”), SCH Sponsor Corp. (“SCH Sponsor”) and Chamath Palihapitiya (as may be amended from time to time, the “Stockholders’ Agreement”), our bylaws or our certificate of incorporation, and except for the election of directors, which is determined by a plurality vote. There are no cumulative voting rights.

Under the Stockholders’ Agreement, Vieco US has the right to designate three directors (the “VG designees”) for as long as Vieco US beneficially owns a number of shares of our common stock representing at least the 50% of the number of shares beneficially owned by Vieco US immediately following the effective time of the transactions effected on October 25, 2019 in connection with our initial business combination, provided that (x) when such percentage falls below 50%, Vieco US will have the right to designate only two directors, (y) when such percentage falls below 25%, Vieco US will have the right to designate only one director and (z) when such percentage falls below 10%, Vieco US will not have the right to designate any directors. Each of SCH Sponsor and Mr. Palihapitiya have agreed to vote, or cause to vote, all of their outstanding shares of common stock at any annual or special meeting of stockholders in which directors are elected, so as to cause the election of the VG designees.

Additionally, pursuant to the Stockholders’ Agreement, Mr. Palihapitiya has the right to designate two directors (“CP designees”), one of which must qualify as an “independent director” under applicable stock exchange regulations, for as long as Mr. Palihapitiya and SCH Sponsor collectively beneficially own a number of shares of our common stock representing at least 90% of the number of shares beneficially owned by them as of immediately following the effective time of the transactions effected on October 25, 2019 in connection with our initial business combination (excluding the shares purchased from Vieco US by Mr. Palihapitiya on that date), provided that (x) 

when such percentage falls below 90%, Mr. Palihapitiya will have the right to designate only one director, who will not be required to qualify as an “independent director” and (y) when such percentage falls below 50%, Mr. Palihapitiya will not have the right to designate any directors. Vieco US has agreed to vote, or cause to vote, all of its outstanding shares of our common stock at any annual or special meeting of stockholders in which directors are elected, so as to cause the election of the CP designees. 

Dividend Rights

Each holder of shares of our common stock is entitled to the payment of dividends and other distributions as may be declared by our board of directors from time to time out of our assets or funds legally available for dividends or other distributions. These rights are subject to the preferential rights of the holders of our preferred stock, if any, and any contractual limitations on our ability to declare and pay dividends.

Other Rights

Each holder of our common stock is subject to, and may be adversely affected by, the rights of the holders of any series of our preferred stock that we may designate and issue in the future.

Liquidation Rights

If we are involved in voluntary or involuntary liquidation, dissolution or winding up of our affairs, or a similar event, each holder of our common stock will participate pro rata in all assets remaining after payment of liabilities, subject to prior distribution rights of our preferred stock, if any, then outstanding.

Anti-Takeover Effects of the Certificate of Incorporation and the Bylaws

Our certificate of incorporation and our bylaws contain provisions that may delay, defer or discourage another party from acquiring control of our company. We expect that these provisions, which are summarized below, will discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of our company to first negotiate with our board of directors, which we believe may result in an improvement of the terms of any such acquisition in favor of our stockholders. However, they also give our board of directors the power to discourage mergers that some stockholders may favor.
Special Meetings of Stockholders

Our certificate of incorporation provides that a special meeting of stockholders may be called by the (a) the chairperson of our board of directors, (b) our board of directors or (c) for so long as we qualify as a “controlled company” under Section 303A of the New York Stock Exchange Listed Company Manual (a “Controlled Company”), by any holder of record of at least 25% of our issued and outstanding shares, provided that our board of directors approves such request.
Action by Written Consent

Our certificate of incorporation provides that any action required or permitted to be taken at any meeting of stockholders may, except as otherwise required by law or the Stockholders’ Agreement, for so long as we qualify as a Controlled Company, be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, will be signed by the holders of record of not less than a majority of our outstanding shares of stock entitled to vote thereon. Pursuant to the Stockholders’ Agreement, Vieco US will first consult and discuss with our board of directors before taking such action by written consent for so long as the earlier to occur of (i) Vieco US no longer has the right to designate two directors to our board of directors and (ii) Mr. Palihapitiya no longer has the right to designate two directors to our board of directors (the “Sunset Date”).

Removal of Directors

Pursuant to the Stockholders’ Agreement, Vieco US has the exclusive right to remove one or more of the Vieco US directors from our board of directors and Mr. Palihapitiya has the exclusive right to remove one or more of Mr. Palihapitiya’s directors from our board of directors. Vieco US and Mr. Palihapitiya have the exclusive right 

to designate directors for election to our board of directors to fill vacancies created by reason of death, removal or resignation of the Vieco US directors and the directors designated by Mr. Palihapitiya, respectively. Vieco US will not be able to remove independent directors until the expiration of the earlier of the Sunset Date and the expiration of the two-year lock-up period.

Vieco US’s Approval Rights

Amendment to Certificate of Incorporation and Bylaws

The DGCL provides generally that the affirmative vote of a majority of the outstanding stock entitled to vote on amendments to a corporation’s certificate of incorporation or bylaws is required to approve such amendment, unless a corporation’s certificate of incorporation or bylaws, as the case may be, requires a greater percentage. Our bylaws may be further amended, altered, changed or repealed by a majority vote of our board of directors. However, pursuant to the Stockholders’ Agreement, no amendment to our certificate of incorporation or bylaws may be made without Vieco US’s prior written consent for so long as Vieco US has the right to designate one director to our board of directors under the Stockholders’ Agreement.

Operational Matters

Vieco US has expansive rights of approval for certain material operational and other matters for us, including:

•for so long as Vieco US is entitled to designate one director to our board of directors under the Stockholders’ Agreement, in addition to any vote or consent of the stockholders or our board of directors as required by law, we and our subsidiaries must obtain Vieco US’s prior written consent to engage in:

◦any business combination or similar transaction;

◦a liquidation or related transaction; or

◦an issuance of capital stock in excess of 5% of our then issued and outstanding shares or those of any of our subsidiaries; and

•for so long as Vieco US is entitled to designate two directors to our board of directors under the Stockholders’ Agreement, in addition to any vote or consent of our stockholders or board of directors as required by law, we must obtain Vieco US’s prior written consent to engage in:

◦a business combination or similar transaction having a fair market value of $10.0 million or more;

◦a non-ordinary course sale of assets or equity interest having a fair market value of $10.0 million or more;

◦an acquisition of any business or assets having a fair market value of $10.0 million or more;

◦approval of any non-ordinary course investment having a fair market value of $10.0 million or more;

◦an issuance or sale of any shares of our capital stock, other than an issuance of shares of our capital stock upon the exercise of options to purchase shares of our capital stock;

◦making any dividends or distribution to our stockholders other than those made in connection with the cessation of services of employees;

◦incurring indebtedness outside of the ordinary course in an amount greater than $25.0 million in a single transaction or $100.0 million in aggregate consolidated indebtedness;

◦amendment of the terms of the Stockholders’ Agreement or the Amended and Restated Registration Rights Agreement, dated October 25, 2019, by and among us, Vieco US, SCH Sponsor and Mr. Palihapitiya;

◦a liquidation or similar transaction;

◦transactions with any interested stockholder pursuant to Item 404 of Regulation S-K; or

◦increasing or decreasing the size of our board of directors.

Delaware Anti-Takeover Statute

Section 203 of the DGCL provides that if a person acquires 15% or more of the voting stock of a Delaware corporation, such person becomes an “interested stockholder” and may not engage in certain “business combinations” with such corporation for a period of three years from the time such person acquired 15% or more of such corporation’s voting stock, unless: (1) our board of directors of such corporation approves the acquisition of stock or the merger transaction before the time that the person becomes an interested stockholder, (2) the interested stockholder owns at least 85% of the outstanding voting stock of such corporation at the time the merger transaction commences (excluding voting stock owned by directors who are also officers and certain employee stock plans) or (3) the merger transaction is approved by our board of directors and at a meeting of stockholders, not by written consent, by the affirmative vote of two-thirds of the outstanding voting stock which is not owned by the interested stockholder. A Delaware corporation may elect in its certificate of incorporation or bylaws not to be governed by this particular Delaware law.

Under our certificate of incorporation, we have opted out of Section 203 of the DGCL.

Pursuant to the Stockholders’ Agreement, until the Sunset Date, our board of directors may not approve any transaction (excluding those involving consideration less than $0.1 million) between an interested stockholder (defined as Vieco US or any affiliate of Vieco US) and us, without the affirmative vote of at least a majority of our directors that are not designees of Vieco US.

Under certain circumstances, this provision would make it more difficult for us to effect various transactions with a person who would be an “interested stockholder” for these purposes. However, this provision would not be likely to discourage any parties interested in entering into a potential transaction with us, other than Vieco US and its affiliates. This provision may encourage Vieco US and Vieco US’s affiliates, to the extent they are interested in entering into certain significant transactions with us, to negotiate in advance with the full board of directors because the board approval requirement would be satisfied by the affirmative vote of at least a majority of our directors that are not designees of Vieco US.

Corporate Opportunity

Under our certificate of incorporation, an explicit waiver regarding corporate opportunities is granted to certain “exempted persons” (including Vieco US and Mr. Palihapitiya and their respective affiliates, successors, directly or indirectly managed funds or vehicles, partners, principals, directors, officers, members, managers and employees, including any of the foregoing who will serve as our directors). Such “exempted persons” will not include us or our officers or employees and such waiver will not apply to any corporate opportunity that is expressly offered to any of our directors in their capacity as such (in which such opportunity we do not renounce an interest or expectancy). Our certificate of incorporation provides that, to the fullest extent permitted by law, (i) the exempted persons do not have any fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us, (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to the exempted persons, even if the opportunity is one that we might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so and (iii) no exempted person will have any duty to communicate or offer such business opportunity to us and no exempted person will be liable to us for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such exempted person pursues or acquires such business 

opportunity, directs such business opportunity to another person or fails to present such business opportunity, or information regarding such business opportunity, to us.

Limitations on Liability and Indemnification of Officers and Directors

Our certificate of incorporation limits the liability of our directors to the fullest extent permitted by the DGCL, and our bylaws provide that we will indemnify them to the fullest extent permitted by such law. We have entered into and expect to continue to enter into agreements to indemnify our directors, executive officers and other employees as determined by our board of directors. Under the terms of such indemnification agreements, we are required to indemnify each of our directors and officers, to the fullest extent permitted by the laws of the state of Delaware, if the basis of the indemnitee’s involvement was by reason of the fact that the indemnitee is or was our director or officer or was serving at our request in an official capacity for another entity. We must indemnify our officers and directors against all reasonable fees, expenses, charges and other costs of any type or nature whatsoever, including any and all expenses and obligations paid or incurred in connection with investigating, defending, being a witness in, participating in (including on appeal), or preparing to defend, be a witness or participate in any completed, actual, pending or threatened action, suit, claim or proceeding, whether civil, criminal, administrative or investigative, or establishing or enforcing a right to indemnification under the indemnification agreement. The indemnification agreements also require us, if so requested, to advance all reasonable fees, expenses, charges and other costs that such director or officer incurred, provided that such person will return any such advance if it is ultimately determined that such person is not entitled to indemnification by us. Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

Exclusive Jurisdiction of Certain Actions

Our certificate of incorporation requires, to the fullest extent permitted by law, that derivative actions brought in our name against our directors, officers or employees for breach of fiduciary duty, any provision of the DGCL, our certificate of incorporation or our bylaws or other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel. Notwithstanding the foregoing, our certificate of incorporation provides that the exclusive forum provision will not apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended (the “Securities Act”), the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder. Similarly, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Although we believe this provision benefits us by providing increased consistency in the application of Delaware law in the types of lawsuits to which it applies, the provision may have the effect of discouraging lawsuits against our directors and officers.

Transfer Agent

The transfer agent for our common stock is Continental Stock Transfer & Trust Company.

Warrants
Our outstanding warrants consist of warrants initially sold in our initial public offering (the “public warrants”) and warrants initially sold in a private placement concurrently with our initial public offering to SCH Sponsor (the “private warrants” and, together with the public warrants, the “warrants”). The private warrants are identical to the public warrants, except that so long as they are held by SCH Sponsor or its permitted transferees the private warrants may be exercised for cash or on a “cashless basis” and are not redeemable by us.

Our warrants are issued in registered (book-entry) form under the Warrant Agreement, dated September 13, 2017, by and between us and Continental Stock Transfer & Trust Company, as warrant agent (the “Warrant Agent”). The following summary of certain provisions relating to our warrants does not purport to be complete and is subject to, and is qualified in its entirety by reference to the Warrant Agreement. You should review the Warrant Agreement for a complete description of the terms and conditions applicable to the warrants.

General

Each whole warrant entitles the holder to purchase one share of our common stock for $11.50 per share, subject to certain adjustments (the “Exercise Price”). The public warrants will expire at the earliest to occur of (i) 5:00 p.m., New York City time on October 25, 2024 and (ii) 5:00 p.m., New York City time on the redemption date, if any, that we may fix in accordance with the Warrant Agreement. The private warrants are not subject to redemption by us, and therefore will expire at 5:00 p.m., New York City time on October 25, 2024. We may extend the duration of the warrants so long as we provide at least 20 days’ prior written notice to all registered holders. Any such extension must be identical among all of the warrants. Any warrant not exercised prior to its expiration will become void.

We will not issue fractional warrants upon any detachment of the warrants from then units. If, upon the detachment of public warrants from the units or otherwise, a holder of warrants would be entitled to receive a fractional warrant, we will round down to the nearest whole number the number of warrants to be issued to such holder.

Exercise and Expiration

A warrant may be exercised by delivering to the Warrant Agent (i) the warrant, (ii) an election to purchase, a form of which is attached to the Warrant Agreement, and (iii) the payment in full of the Exercise Price and any and all applicable taxes due in connection with the exercise. 

So long as they are held by SCH Sponsor or a permitted transferee, the private warrants can be exercised on a cashless basis for a number of shares of our common stock equal to the quotient obtained by dividing (x) the product of (i) the number of shares of common stock underlying the warrants and (ii) the excess of the “fair market value” of our common stock over the Exercise Price by (y) the “fair market value” of our common stock. In this scenario, the “fair market value” means the average last sale price of our common stock for the 10 trading days ending on the third trading day prior to the date on which notice of exercise of the warrant is sent to the Warrant Agent.

As soon as practicable after the exercise of any warrant we will issue a book-entry position or certificate, as applicable, for the shares of common stock. All shares of common stock issued upon the proper exercise of a warrant in conformity with the Warrant Agreement will be validly issued, fully paid and nonassessable.

Additionally, a warrant holder may notify us in writing of the holder’s election to be subject to a provision of the Warrant Agreement preventing the holder from exercising a warrant, to the extent that, after giving effect to such exercise, the holder (together with its affiliates), to the Warrant Agent’s actual knowledge, would beneficially own in excess of 9.8% (the “Maximum Percentage”) of our outstanding common stock immediately after giving effect to such exercise. By written notice to us, a warrant holder may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided, however, that any such increase will not be effective until the sixty-first (61st) day after such notice is delivered to us.

Registration and Cashless Exercise

We have agreed to use our best efforts to file with the Securities and Exchange Commission (the “Commission”) as soon as practicable a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the warrants. We are obligated to use our best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants. Warrant holders have the right, until such registration statement is declared effective by the Commission, and during any other period that we may fail to have maintained an effective registration statement covering the shares of common stock issuable upon exercise of the warrants, to exercise such warrants on a “cashless basis.” In a cashless exercise, holders may exchange their warrants for a number of shares of our common stock equal to the quotient obtained by dividing (x) the product of (i) the number of shares of common stock underlying the warrants and (ii) the excess of the “fair market value” of our common stock over the Exercise Price by (y) the “fair market value” of our common stock. In this scenario, the “fair market 

value” means the volume weighted average price of our common stock as reported during the 10-trading-day period ending on the trading day prior to the date that notice of exercise is received by the Warrant Agent. Unless and until all of the warrants have been exercised or have expired, we will continue to be obligated to comply with the registration obligations described in this paragraph.

Additionally, we may require exercises of public warrants to be made on a “cashless basis” if our common stock is, at the time of any exercise, not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act. In that case, we will not be required to file or maintain in effect a registration statement for the registration of the shares of common stock issuable upon exercise of the warrants. Instead, we will be required to use our best efforts to register or qualify for sale those shares of common stock under the applicable blue sky laws, to the extent an exemption is not available.

If, by reason of any exercise of warrants on a “cashless basis”, the holder of any warrant would be entitled, upon the exercise of such warrant, to receive a fractional interest in a share of common stock, we will round down to the nearest whole number, the number of shares of common stock to be issued to such holder.

Redemption and Notice

We have the right to redeem the warrants, at any time while they are exercisable and prior to their expiration, at the price of $0.01 per warrant (the “Redemption Price”). If we choose to do so, we are required to (i) redeem all of the outstanding warrants (other than private warrants held by SCH Sponsor or its permitted transferees), (ii) fix a date for the redemption and (iii) provide notice to the registered holders of the warrants at least 30 days prior to the redemption date.

We will mail any such notice of redemption by first class mail, postage prepaid, not less than 30 days prior to the redemption date to registered warrant holders. The notice will be sent to each registered holder’s last address as it appears on the registration books. Any notice so mailed will be conclusively presumed to have been duly given, whether or not the registered holder actually receives such notice.

We may only redeem the warrants if (i) the last reported sale price of our common stock has been at least $18.00 per share (subject to certain adjustments), on 20 trading days within the 30-trading-day period ending on the third trading day prior to the date on which notice of the redemption is given and (ii) there is an effective registration statement covering the shares of common stock issuable upon exercise of the warrants, and a current prospectus relating thereto, available throughout the 30 days prior to the redemption date. If there is no effective registration statement and current prospectus available, we may, at the election of our board, nonetheless require holders to exercise their warrants on a “cashless basis,” provided that the conditions set forth in clause (i) above are satisfied.

If we require holders to exercise their warrants on a “cashless basis” in such a scenario, holders of the warrants will be required to surrender the warrants for a number of shares of our common stock equal to the quotient obtained by dividing (x) the product of (i) the number of shares of common stock underlying the warrants and (ii) the excess of the “fair market value” of our common stock over the Exercise Price by (y) the “fair market value” of our common stock. In this scenario, the “fair market value” means the average last sale price of our common stock for the 10 trading days ending on the third trading day prior to the date that notice of redemption is sent to the holders of the warrants.

The warrants may be exercised for cash or on a “cashless basis”, as applicable, at any time after we send a notice of redemption and prior to the redemption date. If we require all warrant holders to exercise their warrants on a “cashless basis,” the notice of redemption will contain the information necessary to calculate the number of shares of common stock to be received upon exercise of the warrants.

On and after the redemption date, the record holder of the warrants will have no further rights except to receive, upon surrender of the warrants, the Redemption Price.

Adjustments

The number of shares of common stock issuable upon the exercise of the warrants is subject to customary adjustments in certain circumstances, such as a stock split, dividend or reclassification of our common stock, as described in the Warrant Agreement. In the event the number of shares of common stock purchasable upon the exercise of the warrants is adjusted, the Exercise Price will be adjusted (to the nearest cent) by:

•taking the Exercise Price immediately prior to such adjustment,

•multiplying it by the number of shares of common stock purchasable upon the exercise of the warrants immediately prior to such adjustment, and then

•dividing by the number of shares of common stock so purchasable immediately thereafter.

If, by reason of any adjustment made pursuant to the events described above (each, an “Adjustment”), the holder of any warrant would be entitled, upon the exercise of such warrant, to receive a fractional interest in a share, we will, upon such exercise, round down to the nearest whole number the number of shares of common stock to be issued to such holder.

Warrant holders will also have replacement rights in the case of certain reorganization, merger, consolidation or sale transactions involving our company or substantially all of our assets (each a “Replacement Event”). Upon the occurrence of any Replacement Event, warrant holders will have the right to purchase and receive (in lieu of shares of our common stock) the kind and amount of stock or other securities or property (including cash) receivable upon such Replacement Event that the holder would have received if the warrants were exercised immediately prior to such event.

Upon any adjustment of the Exercise Price or the number of shares issuable upon exercise of a warrant, we will provide written notice of such adjustment to the Warrant Agent stating the Exercise Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a warrant. We will also provide notice of any adjustment described above to each warrant holder at the last address set forth in the warrant register stating the date of the event.

Additionally, in case of any event affecting us to which the adjustments described above are not strictly applicable, but which would require an adjustment to the terms of the warrants in order to avoid an adverse impact on the warrants and to effectuate the intent and purpose of the adjustments provided for in the Warrant Agreement, we will appoint an appropriate independent firm to give its opinion as to whether any adjustment is necessary and, if so, the terms of such adjustment. In such an event, we will then adjust the terms of the warrants in a manner consistent with the recommended adjustment.

Transfers and Exchanges

Warrants may be exchanged or transferred upon surrender of the warrant to the Warrant Agent, together with a written request for exchange or transfer. Upon any transfer, a new warrant representing an equal aggregate number of warrants will be issued and the old warrant will be cancelled by the Warrant Agent.

Book-entry warrants may be transferred only in whole and warrants bearing a restrictive legend, including the private warrants, may transferred or exchanged only if the Transfer Agent has received an opinion of counsel stating that such transfer may be made and indicating whether the new warrants must also bear a restrictive legend.

No Rights as a Stockholder

A warrant does not entitle the holder to any of the rights of a stockholder of our company, including, without limitation, the right to receive dividends, the right to vote or the right to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of our company.

Units

Our units are comprised of one share of our common stock and one-third of one whole public warrant. Unit holders must elect to separate the units into the underlying public shares and warrants prior to exercising the underlying warrants or the rights of the underlying common stock. If holders hold their units in an account at a brokerage firm or bank, holders must notify their broker or bank that they elect to separate the units into the underlying public shares and warrants, or if a holder holds units registered in the holder’s own name, the holder must contact the Warrant Agent, directly and instruct them to do so.

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