Document:

Exhibit

Exhibit 4.1.1

DESCRIPTION OF CAPITAL STOCK

The following summary of certain provisions of our capital stock does not purport to be complete and is not intended to give full effect to provisions of statutory or common law. The summary is subject to and is qualified in its entirety by reference to all the provisions of our amended and restated certificate of incorporation (the “certificate of incorporation”) and amended and restated bylaws (the “bylaws”) and by the provisions of applicable law. Each of the certificate of incorporation and the bylaws are incorporated herein by reference.

General

Under our certificate of incorporation, we have the authority to issue 400,000,000 shares of common stock, par value $0.001 per share, and 75,000,000 shares of preferred stock, par value $0.001 per share. As of February 4, 2020, there were 213,669,597 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding.

Common Stock

Voting Rights

Each share of our common stock is entitled to one vote for each share on all matters requiring a vote of stockholders; provided, however, that except as otherwise required by law, holders of our common stock are not entitled to vote on any amendment to our certificate of incorporation (including any Certificate of Designations relating to any series of preferred stock) that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled to vote on such matter pursuant to our certificate of incorporation or otherwise. Stockholders do not have cumulative voting rights in elections of directors or for any other purpose. All elections of directors are determined by a plurality of the votes cast, except as otherwise required by law.

Dividend Rights

Subject to the rights of the holders of any outstanding shares of preferred stock, each share of our common stock is entitled to receive any dividends, in cash, securities or property, as may be declared from time to time by our board out of funds legally available therefor.

Liquidation and Other Rights

In the event of the liquidation, dissolution or winding up of the Company, the holders of our common stock are entitled to receive ratably our net assets available after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock.

Exchange Listing

Our common stock is listed on the NYSE under the symbol “HPR.”

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare Trust Company, N.A.

Miscellaneous

The holders of our common stock do not have preemptive rights, redemption rights or conversion rights, and there are no redemption or sinking fund provisions applicable to our common stock. Under the Stockholders Agreement dated as of March 19, 2018 (the “Stockholders Agreement”), by and among the Company, Fifth Creek Energy Company, LLC (“FCEC”), and NGP Natural Resources XI, L.P., FCEC has certain contractual preemptive rights. The rights, preferences and privileges of the holders of our common stock are subject to and may be 

adversely affected by the rights of holders of any series of preferred stock that we may designate and issue in the future.

Preferred Stock

The preferred stock may have such relative rights, preferences and designations as may be determined by our board of directors in its sole discretion upon the issuance of any shares of preferred stock. The shares of preferred stock may be issued from time to time by our board of directors in its sole discretion (without further approval or authorization by our stockholders), in one or more series, each of which series may have any particular distinctive designations as well as relative rights and preferences as determined by our board of directors. The relative rights and preferences that may be determined by our board of directors in its discretion from time to time include but are not limited to the following:

		
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	the annual dividend rate for such series, if any, and the date or dates from which dividends will commence to accrue;

		
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	the redemption price or prices, if any, for shares of such series and the terms and conditions on which such shares may be redeemed;

		
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	the provisions for a sinking, purchase or similar fund, if any, for the redemption or purchase of shares of such series;

		
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	the preferential amount or amounts payable upon shares of such series in the event of our voluntary or involuntary liquidation;

		
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	the voting rights, if any, of such series;

		
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	the terms and conditions, if any, upon which shares of such series may be converted and the class or classes or series of our securities into which such shares may be converted;

		
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	the relative seniority, parity or junior rank of such series with respect to other series of preferred stock then or thereafter to be issued; and

		
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	any other specific terms, preferences, rights, privileges, limitations or restrictions of such series.

The existence of authorized but unissued shares of preferred stock could have anti-takeover effects because we could issue preferred stock with special dividend or voting rights that could discourage potential bidders.

We may issue shares of preferred stock that have dividend, voting and other rights superior to those of the common stock, or that convert into shares of common stock, without the approval of the holders of common stock.

Anti-Takeover Effect of the Company’s Governing Documents and the Delaware General Corporation Law

Our certificate of incorporation, bylaws, and the Stockholders Agreement contain a number of provisions relating to corporate governance and to the rights of our stockholders. Certain of these provisions may have a potential “anti-takeover” effect by delaying, deferring or preventing a change of control of the Company. In addition, certain provisions of the Delaware General Corporation Law (the “DGCL”) may have a similar effect. Our bylaws require our stockholders to provide advance notice if they wish to submit a proposal or nominate candidates for directors at our annual meeting of stockholders. Further, our certificate of incorporation provides that a special meeting of stockholders may only be called by our board of directors.riograndestockholdersagr

                          EXECUTION VERSION                                                                                                                                                     STOCKHOLDERS AGREEMENT                OF    HighPoint Resources Corporation      Dated as of March 19, 2018                               

 

                               TABLE OF CONTENTS                                                                            Page                                     ARTICLE I                             GOVERNANCE MATTERS   1.1   Board Composition; Representation ............................................................................... 1  1.2   Vacancies ........................................................................................................................ 4  1.3   Compensation; Indemnification ...................................................................................... 4  1.4   Selection of Board Representatives; Committees ........................................................... 4  1.5   Nomination of Non-Investor Directors ........................................................................... 4                                    ARTICLE II              RESTRICTED ACTIVITIES; PREEMPTIVE RIGHTS; VOTING   2.1   Transfer Restrictions ....................................................................................................... 5  2.2   Restricted Activities ........................................................................................................ 6  2.3   Preemptive Rights ........................................................................................................... 8  2.4   ATM Offer and Election to Purchase ........................................................................... 10  2.5   Voting ........................................................................................................................... 10  2.6   Amendment to Parent Certificate of Incorporation ...................................................... 11  2.7   Removal and Replacement of the Chief Executive Officer .......................................... 11  2.8   Indebtedness .................................................................................................................. 11  2.9   Controlled Company ..................................................................................................... 12                                    ARTICLE III                             REGISTRATION RIGHTS   3.1   Registration ................................................................................................................... 12  3.2   Expenses of Registration............................................................................................... 15  3.3   Obligations of the Company ......................................................................................... 15  3.4   Suspension of Sales....................................................................................................... 18  3.5   Termination of Registration Rights .............................................................................. 18  3.6   Furnishing Information ................................................................................................. 19  3.7   Indemnification ............................................................................................................. 19  3.8   Assignment of Registration Rights ............................................................................... 21  3.9   Holdback; Lockup ......................................................................................................... 21  3.10  Rule 144 ........................................................................................................................ 22  3.11  Definitions..................................................................................................................... 22  3.12  Voluntary Forfeiture ..................................................................................................... 24                                    ARTICLE IV                                  DEFINITIONS   4.1   Defined Terms .............................................................................................................. 24  4.2   Terms Generally ............................................................................................................ 29                                         -i- 

 

                                    ARTICLE V                                MISCELLANEOUS   5.1   Term .............................................................................................................................. 29  5.2   Representations and Warranties .................................................................................... 29  5.3   Legends; Securities Act Compliance ............................................................................ 30  5.4   No Inconsistent Agreements ......................................................................................... 30  5.5   Amendments and Waivers ............................................................................................ 30  5.6   Successors and Assigns ................................................................................................. 31  5.7   Severability ................................................................................................................... 31  5.8   Counterparts .................................................................................................................. 31  5.9   Entire Agreement .......................................................................................................... 31  5.10  Governing Law; Jurisdiction ......................................................................................... 31  5.11  Waiver of Jury Trial ...................................................................................................... 32  5.12  Specific Performance .................................................................................................... 32  5.13  No Third-Party Beneficiaries ........................................................................................ 32  5.14  Notices .......................................................................................................................... 32      Exhibits  Exhibit A   Initial Board Representatives  Exhibit B   Company Competitors                                           -ii-   

 

                             STOCKHOLDERS AGREEMENT                This Stockholders Agreement, dated as of March 19, 2018 (as it may be amended   from time to time, this “Agreement”), is made by and among HighPoint Resources Corporation,   a Delaware corporation (the “Company”), Fifth Creek Energy Company, LLC, a Delaware   limited liability company (the “Investor”) and solely for the purposes of Section 2.2, NGP   Natural Resources XI, L.P. (the “Fund”).                                      R E C I T A L S                WHEREAS, the Company, Fifth Creek Energy Operating Company, LLC, a   Delaware limited liability company, Bill Barrett Corporation, a Delaware corporation, Rio   Merger Sub, LLC, a Delaware limited liability company and a direct wholly owned Subsidiary of   the Company and Rider Merger Sub, Inc., a Delaware corporation and a direct wholly owned   Subsidiary of the Company have entered into that certain Agreement and Plan of Merger dated   as of the date hereof (as it may be amended from time to time, the “Merger Agreement”),   pursuant to which, upon the terms and subject to the conditions set forth in the Merger   Agreement, on the Closing Date, Parent and Rio Grande will become wholly owned subsidiaries   of the Company in connection with the consummation of the mergers (the “Mergers”)   contemplated by the Merger Agreement;                WHEREAS, on the Closing Date, the Investor will receive shares of common   stock, par value $0.001 per share, of the Company (“Company Common Stock”) in accordance   with the terms of the Merger Agreement (the shares of Company Common Stock received by the   Investor on the Closing Date, the “Shares”) representing, in the aggregate, approximately 48% of   the outstanding shares of Company Common Stock, after giving effect to the issuance of such   Shares; and                WHEREAS, each of the parties hereto wishes to set forth in this Agreement   certain terms and conditions regarding the Investor’s ownership of the Shares and certain rights   and obligations related thereto.                NOW, THEREFORE, in consideration of the mutual covenants, representations,   warranties and agreements contained in this Agreement, and for other good and valuable   consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be   legally bound hereby, the parties agree as follows:                                      ARTICLE I                              GOVERNANCE MATTERS          1.1   Board Composition; Representation.                  (a)   At the Effective Time, the Company will cause the Board Representatives   and Non-Investor Directors listed in Exhibit A hereto to be appointed to the Board of Directors   of the Company (the “Board”). Following the Effective Time until the Board Designation   Expiration Date, the Company shall take any and all necessary action to cause the Board to be  comprised of no more than a total of eleven authorized directorships, and, without Company  Non-Affiliate Approval, not less than eleven authorized directorships, and in no event shall the     

 

   total number of authorized directorships be less than the number that is one more than two times  the Investor Director Number at such time; provided, however, that the Company, at the  direction of the Investor, shall be required to increase the size of the Board if required in order to  permit the number of Board Representatives entitled to be designated by the Investor pursuant to  this Section 1.1 to be included on the Board.               (b)   From and after the date of the Closing until the Board Designation  Expiration Date, the manner for selecting nominees for election to the Board will be as follows:                     (i)   In connection with each annual or special meeting of stockholders        of the Company at which directors are to be elected (each such annual or special meeting,        an “Election Meeting”), the Investor shall have the right to designate for nomination a        number of Board Representatives as follows: (A) for so long as the Investor Percentage        Interest is greater than or equal to 40% (provided that for the period ending on the six-       month anniversary of the Closing Date such percentage shall be 35%) of all of the        outstanding shares of Company Common Stock, five (5) Board Representatives;        provided, that at least two (2) of such Board Representatives must be Independent        Directors; (B) for so long as the Investor Percentage Interest is less than 40% (provided        that for the period ending on the six-month anniversary of the Closing Date such        percentage shall be 35%) but greater than or equal to 30%, four (4) Board        Representatives; provided, that at least one (1) of such Board Representatives must be an        Independent Director; (C) for so long as the Investor Percentage Interest is less than 30%        but greater than or equal to 20%, two (2) Board Representatives; (D) for so long as the        Investor Percentage Interest is less than 20% but greater than or equal to 10%, one (1)        Board Representative; and (E) if the Investor Percentage Interest is less than 10%, no        Board Representatives.                      (ii)  The Investor shall give written notice to the Governance        Committee (as defined below) of each such Board Representative no later than the date        that is sixty (60) days before the first anniversary of the date that the Company’s annual        proxy for the prior year was first mailed to the Company’s stockholders and the Investor        shall provide, or cause such individual(s) to provide, to the Company, such information        about such individuals and the nomination to the Company, at such times as the        Company may reasonably request in order to ensure compliance with the Exchange Rules        and the applicable securities Laws, and to enable the Board of any committee thereof to        make determinations with respect to the qualifications of the individual(s) to be Board        Representative(s) (the “Required Information”); provided, however, that if the Investor        fails to give such notice or the Required Information in a timely manner, then the Investor        shall be deemed to have nominated the incumbent Board Representative or Board        Representatives, as applicable, in a timely manner; provided, further, that if the number        of incumbent Board Representatives is less than the number of Board Representatives the        Investor is entitled to designate pursuant to Section 1.1(b)(i), the Company and the        Investor shall use their respective reasonable best efforts to mutually agree on the Board        Representative or Board Representatives, as applicable, for such Election Meeting.                     (iii) In the event that the Company amends its certificate of        incorporation to provide that the Board shall be classified into separate classes of                                         -2- 

 

           directors, then proper provision shall be made such that the designees of the Investor         shall be distributed as evenly as possible among such classes of directors in order to         preserve the designation rights of the Investor in accordance with this Section 1.1.                 (c)   From and after the date of the Closing until the Board Designation   Expiration Date, the Company shall take all actions necessary (to the extent such actions are   permitted by Law) to cause the Board to include the Board Representative(s) entitled to be   designated by the Investor pursuant to Section 1.1(b) and otherwise to reflect the Board   composition contemplated by Section 1.1, including the following: (i) at each Election Meeting,   include (x) the Board Representative(s) entitled to be designated by the Investor pursuant to   Section 1.1(b) and (y) the Nominated Non-Investor Directors in the slate of nominees   recommended by the Board to the Company’s stockholders for election as directors, (ii) to solicit   proxies in order to obtain stockholder approval of the election of the Board Representative(s) and   the Nominated Non-Investor Directors, including causing officers of the Company who hold   proxies (unless otherwise directed by the Company stockholder submitting such proxy) to vote   such proxies in favor of the election of such Board Representative(s) and the Nominated Non-  Investor Directors, (iii) to cause the Board Representative(s) and the Nominated Non-Investor  Directors to be elected to the Board, including recommending that the Company’s stockholders  vote in favor of the Board Representative(s) and the Nominated Non-Investor Directors in any  proxy statement used by the Company to solicit the vote of its stockholders in connection with  each Election Meeting, (iv) if necessary, expanding the size of the Board and filling any resulting  vacancies with individuals designated by the Investor pursuant to this Section 1.1 and (v) causing   any director resignation or other similar policy of the Company to not be applicable to the Board   Representatives.                  (d)   If at any time the number of Board Representatives serving on the Board   exceeds the Investor Director Number, then unless otherwise requested by the Board by action of   the Non-Affiliated Directors, the Investor shall promptly (and in any event prior to the time the   Board next takes any action, whether at a meeting or by written consent) cause one or more such   Board Representative(s) to resign from the Board such that, following such resignation(s), the   number of Board Representatives serving on the Board does not exceed the Investor Director   Number.   If at any time any Board Representative that was required pursuant to Section 1.2(b)   to be an Independent Director ceases to be an Independent Director and as a result the number of   Board Representatives that constitute Independent Directors is less than the number of Board   Representatives required to be Independent Directors pursuant to Section 1.1(b)(i), then unless   otherwise requested by the Board by action of the Non-Affiliated Directors, the Investor shall   promptly (and in any event prior to the time the Board next takes any action, whether at a   meeting or by written consent) cause such Board Representative to resign from the Board, it   being understood that the Investor shall be entitled to fill the vacancy resulting therefrom in   accordance with Section 1.2(a).                  (e)   On the date that the Investor Percentage Interest is less than ten percent   (10%), or at such earlier time that the Investor delivers an irrevocable written waiver of its rights   under this Section 1.1 and Section 1.2 to the Company, the Investor will have no further rights   under this Section 1.1 and Section 1.2.                                           -3- 

 

           1.2   Vacancies.                  (a)   Subject to Sections 1.1 and 1.4, if at any time the number of Board   Representatives serving on the Board is less than the total number of Board Representatives the   Investor is entitled to designate pursuant to Section 1.1(b), whether due to the death, resignation,   retirement, disqualification or removal from office as a member of the Board of a Board   Representative or otherwise, the Board shall take all action (to the extent permitted by Law)   required to fill the vacancy resulting therefrom with such replacement designated by the Investor   as promptly as practicable. In furtherance thereof, the Board shall use its reasonable best efforts,   if requested by the Investor, to fill such vacancy prior to the time the Board next takes action on   any other matter.                (b)   In the event of any vacancy on the Board occurring due to the death,   resignation, retirement, disqualification or removal from office as a member of the Board of any   Non-Investor Director, the Board shall take all action (to the extent permitted by Law) required   to fill the vacancy resulting therefrom with such replacement selected by the Non-Investor  Directors acting by Company Non-Affiliate Approval as promptly as practicable.          1.3   Compensation; Indemnification.  Each Board Representative shall be entitled to   the same expense reimbursement and advancement, exculpation and indemnification in   connection with his or her role as a director as the other members of the Board, as well as   reimbursement for documented, reasonable out-of-pocket expenses incurred in attending  meetings of the Board or any committee of the Board of which such Board Representative is a  member, if any, in each case to the same extent as the other members of the Board.  Each Board  Representative shall be also entitled to any retainer, equity compensation or other fees or  compensation paid to the non-employee Directors of the Company for their services as a  director, including any service on any committee of the Board; provided, however, that any such   Board Representative that is an employee of the Fund or any of its Affiliates shall not receive   any such equity compensation, but in lieu thereof shall be entitled to receive cash compensation   equal to twice the amount of any cash retainer or other cash fees or cash compensation paid to   the non-employee Directors of the Company for their services as a director, including any   service on any committee of the Board.          1.4   Selection of Board Representatives; Committees.  For purposes of this   Agreement, “Board Representative” means any person designated by the Investor to be elected   or appointed to the Board, or his or her replacement designated in accordance with Section 1.2,   provided, that such person’s service as a director must not be prohibited by Law.  The parties   hereto agree that the persons listed on Exhibit A to this Agreement are qualified for service   pursuant to the foregoing sentence.  Subject to applicable Law and stock exchange rules, until   the Board Designation Expiration Date, each committee of the Board shall include at least one   Board Representative.          1.5   Nomination of Non-Investor Directors.  Anything in the Certificate of   Incorporation and the By-Laws of the Company notwithstanding and subject to Section 1.2(b),   the Governance Committee shall take all actions necessary to nominate incumbent Non-Investor  Directors for election at an Election Meeting, unless otherwise approved by the Non-Affiliated  Directors acting by Company Non-Affiliate Approval.                                           -4- 

 

                                    ARTICLE II              RESTRICTED ACTIVITIES; PREEMPTIVE RIGHTS; VOTING         2.1   Transfer Restrictions.                 (a)   Other than solely in the case of a Transfer to an Affiliate of the Fund, or, if  the Fund ceases to be an Affiliate of the Investor, to an Affiliate of the Investor (provided that  such Affiliate (i) has executed a customary joinder to this Agreement, in form and substance  reasonably acceptable to the Company, in which such Affiliate agrees to be bound by the terms  and conditions of this Agreement applicable to the Investor and (ii) remains an Affiliate of the  Fund, or the Investor, if applicable, throughout the Restricted Period), the Investor shall not  Transfer any shares of Company Common Stock prior to the date that is ninety (90) days after  the Closing (such period, the “Restricted Period”).  Following the Restricted Period, the Investor  shall be free to Transfer any shares of Company Common Stock subject only to the restrictions  set forth in this Agreement and applicable Law.                (b)   Until the Sunset Date, without Company Non-Affiliate Approval, the  Investor shall not Transfer any shares of Company Common Stock to any Person or Group who:                     (i)   is a Company Competitor;                      (ii)  individually or in the aggregate with all Affiliates, Beneficially        Owns, or would, after giving effect to such Transfer, Beneficially Own, 15% or more of        the outstanding shares of Company Common Stock; provided that in the cases of clauses        (i) and (ii) the restriction shall not apply to (A) Transfers into the public market effected        through an underwritten offering that qualifies as a “public offering” pursuant to the rules        and regulations of the NYSE or that is otherwise broadly marketed, in each case, pursuant        to an exercise of the registration rights provided for in this Agreement; (B) Transfers in        open market transactions through an ordinary brokerage transaction; provided that such        Transfers are not undertaken with the purpose or intent of circumventing this Section 2.1;        or (C) a Transfer to (1) an Affiliate of the Fund (provided that such Affiliate has executed        a customary joinder to this Agreement, in form and substance reasonably acceptable to        the Company, in which such Affiliate agrees to be bound by the terms and conditions of        this Agreement applicable to the Investor), it being understood, for the avoidance of       doubt, that any direct or indirect Transfer of such Person that results in such Person       ceasing to remain an Affiliate  shall be treated as a Transfer that is subject to the       provisions of this Section 2.1 or (2) any party or parties not affiliated with the Investor        who are acquiring direct or indirect ownership of the Company in a merger, tender offer        or other transaction approved or recommended by the Board; or                     (iii) is an Affiliate of the Fund or, if the Fund ceases to be an Affiliate        of the Investor, is an Affiliate of the Investor unless such Affiliate has executed a        customary joinder to this Agreement, in form and substance reasonably acceptable to the        Company, in which such Affiliate agrees to be bound by the terms and conditions of this        Agreement applicable to the Investor for so long as such Person remains an Affiliate of        the Fund or the Investor, as applicable, it being understood, for the avoidance of doubt,        that any direct or indirect Transfer of such Person that results in such Person ceasing to                                         -5- 

 

         remain an Affiliate  shall be treated as a Transfer that is subject to the provisions of this        Section 2.1.                (c)   Any Transfer or attempted Transfer of Company Common Stock in  violation of this Section 2.1 shall, to the fullest extent permitted by applicable Law, be null and  void ab initio, and the Company shall not, and shall instruct its transfer agent and other third  parties not to, record or recognize any such purported transaction on the share register of the  Company.               In connection with any Transfer of Company Common Stock to an Affiliate of the  Fund or the Investor, that is permitted pursuant to this Agreement, the Company shall grant such  approvals and take all other actions as are necessary to exempt such transaction from Section 203  of the DGCL.         2.2   Restricted Activities.                  (a)   The Investor and the Fund shall not and shall cause their respective  Controlled Affiliates not to, directly or indirectly, without the Company’s prior written consent:                    (i)   make any statement or proposal to the Board, any of the       Company’s Representatives, or any of the Company’s stockholders regarding, or make       any public announcement, proposal or offer (including any “solicitation” of “proxies” as       such terms are defined or used in Regulation 14A of the Securities Exchange Act of       1934, as amended) with respect to, or otherwise solicit, seek or offer to effect (including,       for the avoidance of doubt, indirectly by means of communication with the press or       media) (1) any business combination, merger, tender offer, exchange offer or similar       transaction involving the Company or any of its Subsidiaries, (2) any restructuring,       recapitalization, liquidation or similar transaction involving the Company or any of its       Subsidiaries, or (3) subject to clause (vi) below, any acquisition of any of the Company’s        loans, debt securities, equity securities or assets, or rights or options to acquire interests        in any of the Company’s loans, debt securities, equity securities or assets; provided,        however, that nothing in this Section 2.2(a)(i) shall prohibit the Fund or a Controlled        Affiliate of the Fund from privately communicating any such statement or proposal to the       directors or Chief Executive Officer of the Company so long as such private       communications do not, and would not reasonably be expected to, trigger public       disclosure obligations of or for any Person (including, without limitation, the filing of a       Schedule 13D or Schedule 13G or any amendment thereof);                     (ii)  deposit any Voting Securities into a voting trust or similar contract        or subject any Voting Securities to any voting agreement, pooling arrangement or similar        arrangement or other contract (other than solely between (A) the Investor and its        Affiliates or (B) the Investor and any Permitted Transferee with respect any shares of        Company Common Stock Transferred to any such Permitted Transferee by the Investor        as permitted by this Agreement) or grant any proxy with respect to any Voting Securities        (other than (A) pursuant to Section 2.5 or (B) otherwise to the Company or a Person        specified by the Company in a proxy card provided to stockholders of the Company by or        on behalf of the Company);                                         -6- 

 

                       (iii) form, join or in any way participate in any Group with any Person         with respect to any Voting Securities other than forming, joining or in any way         participating in a Group solely between or among (A) the Investor and its Affiliates or         (B) the Investor and any Permitted Transferee with respect any shares of Company         Common Stock Transferred to any such Permitted Transferee by the Investor as         permitted by this Agreement;                      (iv)  enter, agree to enter, propose or offer to enter into any merger,         business combination, recapitalization, restructuring, change in control transaction or         other similar extraordinary transaction involving the Company or any of its Subsidiaries         (unless such transaction is affirmatively publicly recommended by the Board and there         has otherwise been no breach of this Section 2.2 in connection with or relating to such         transaction);                      (v)   otherwise act with any Person, including by providing financing         for another party, to seek to control or influence the management, the Board or the         policies of the Company;                       (vi)  acquire, agree or propose to acquire any Voting Securities of the         Company or any Subsidiary thereof, other than as a result of any stock split or stock         dividend of Voting Securities or exercise of preemptive rights pursuant to Section 2.3;                      (vii) call, or seek to call, a meeting of the stockholders of the Company         or initiate any stockholder proposal for action by stockholders of the Company, including         nominating any Person to the Board (except pursuant to Section 1.1);                      (viii) publicly disclose any intention, plan or arrangement prohibited by,         or inconsistent with, the foregoing; or                       (ix)  knowingly instigate, facilitate, encourage or assist any third party         to do any of the foregoing;    provided that this Section 2.2 shall in no way limit (x) the activities of any director of the   Company, so long as such activities are undertaken solely in his or her capacity as a director of   the Company or (y) any non-public communications by and between (A) the Investor and its   Affiliates or (B) the Investor and any Permitted Transferee with respect to any shares of  Company Common Stock Transferred to any such Permitted Transferee by the Investor as   permitted by this Agreement; provided, further that (other than as may be a violation of clauses   (i) and (ii) above) the right or ability of the Investor or its Controlled Affiliates to exercise their   rights under this Agreement or the exercise by the Investor or its Controlled Affiliates of their   right to vote shall not, in either case be deemed a breach of this Section 2.2.  For purposes of this   Section 2.2, the term “Voting Securities” shall be deemed to include any security of the company   that is convertible into a Voting Security at any time.                (b)   The Investor further agrees, it shall not and shall cause its Controlled   Affiliates not to, without the prior written consent of the Company, publicly request the   Company to amend or waive any provision of this Section 2.2 (including this sentence) or do so   in a manner that would require the Company to publicly disclose such request.                                         -7- 

 

                 (c)   The provisions in this Section 2.2 shall terminate on the Sunset Date.                (d)   For the purposes of this Section 2.2, consent of the Company shall require   Company Non-Affiliate Approval.           2.3   Preemptive Rights.                  (a)   Subject to the provisions of this Section 2.3 (including Section 2.3(f)), the   Company hereby grants to the Investor the right, subject to applicable Law, to purchase the   Investor’s Pro Rata Portion of any additional shares of Voting Securities, other equity securities  or any securities convertible into, or exchangeable for Voting Securities or equity securities of  the Company equity securities that the Company may from time to time propose to issue  (collectively, the “New Securities”); provided that, for the avoidance of doubt, no Proposed   Issuance (including any issuance of New Securities to the Investor) completed in compliance   with this Section 2.3 shall be applied in a circular manner to this Section 2.3 so as to result in   duplicative or iterative pre-emptive rights.                (b)   The Company shall undertake commercially reasonable efforts to provide   the Investor with advance written notice of any proposed issuance subject to this Section 2.3 (a   “Proposed Issuance”).  Prior to or in connection with the consummation of a Proposed Issuance,   the Company shall promptly notify the Investor in writing (an “Issuance Notice”).  The Investor   shall have a right to purchase the New Securities of the kind offered in such Proposed Issuance  on the following terms:                      (i)   In the event a Proposed Issuance is conducted as a registered         public offering, the Investor shall be entitled to purchase such New Securities at the         public offering price for such Proposed Issuance and on the same terms and at the same         time as the New Securities are proposed to be Issued by the Company.                      (ii)  In the event the Proposed Issuance includes a separate closing for         the issuance of New Securities pursuant to the underwriters’ over-allotment or similar         option, the Company shall provide a separate Issuance Notice to the Investor with respect         to such issuance.                      (iii) In the event the Proposed Issuance is conducted as an offering         other than a public offering (e.g., a private placement), Purchaser shall be entitled to         purchase such New Securities at the same price that was paid by the purchasers of New         Securities in such Proposed Issuance and on the same terms and at the same time as the         New Securities are proposed to be Issued by the Company.                (c)   The Investor shall have seven (7) calendar days from the receipt of an   Issuance Notice (the “Exercise Period”) to elect to purchase its Pro Rata Portion of the New   Securities, at an all-cash purchase price per New Security (the “Per Security Offering Price”)   equal to: (i) in the case of all-cash consideration proposed to be received by the Company in   respect of the Proposed Issuance, the cash purchase price per New Security set forth in the   Issuance Notice or (2) in the case of consideration other than all-cash consideration proposed to   be received by the Company in respect of the Proposed Issuance, the per New Security price   derived from the aggregate fair market value of all consideration proposed to be received by the                                         -8- 

 

   Company as of the date of closing of the Proposed Issuance.  The Investor may exercise its  election by delivering a written notice to the Company during the Exercise Period. Such notice  must indicate the specific amount of New Securities that the Investor desires to purchase and  may not be conditioned in any manner not also available to other potential purchasers of the  Proposed Issuance, except that it may be conditioned on the consummation of the Proposed  Issuance.  The Investor, if so exercising its election, shall be entitled and obligated to purchase,  that portion of the New Securities so offered to the Investor specified in the Investor’s notice on  the terms and conditions set forth in this Section 2.3.  The failure of the Investor to exercise its  election to purchase of its allotment of the New Securities during the Exercise Period shall be  deemed a waiver by the Investor of its rights under this Section 2.3 with respect to such Proposed  Issuance.  The closing of any purchase by the Investor shall be consummated concurrently with  the consummation of the Proposed Issuance; provided, however, that the closing of any purchase  by any the Investor may be extended beyond the closing of the consummation of the Proposed  Issuance to the extent necessary to obtain required governmental approvals (a “Closing  Extension”), but for the avoidance of doubt the Company shall not be required to delay or extend  the closing of the other portion of the Proposed Issuance to the extent not subject to such  governmental approval requirement.  In the event of a Closing Extension, the Investor’s Investor  Percentage Interest during such period shall be calculated as if such purchase of New Securities  by the Investor had been consummated concurrently with the closing of the other portion of the  Proposed Issuance not subject to any governmental approval requirement.               (d)   Subject to Section 2.3(e), if the Investor fails to purchase its allotment of  the New Securities within the time period described in Section 2.3(c), the Company shall be free  to complete the Proposed Issuance within sixty (60) days following the date of the Issuance  Notice to the extent and with respect to which the Investor failed to exercise the option set forth  in this Section 2.3 on terms no less favorable to the Company (including with respect to  consideration) than those set forth in the Issuance Notice (except that the amount of New  Securities to be issued or sold by the Company may be reduced).  If the Company has not  completed the sale of New Securities in accordance with the foregoing sentence, the Company  shall provide a new Issuance Notice to the Investor on the terms and provisions set forth in  Section 2.3.               (e)   In the event that the Company has been advised by its outside counsel that  the issuance of New Securities in full to the Investor pursuant to this Section 2.3 would require  the approval of the Company’s stockholders under applicable Law, including the rules of the  New York Stock Exchange (the “NYSE”) or the rules of such other national securities exchange  on which the Company Common Stock is then listed or trading, the excess amount of such New  Securities to the extent otherwise triggering such stockholder approval requirement will be  excluded from the total number of New Securities that the Investor would otherwise have a right  to purchase pursuant to this Section 2.3.               (f)   The preemptive rights under this Section 2.3 shall not apply to (i) issuance  or sales of New Securities to employees, officers, directors, managers or consultants of the  Company or any of its Subsidiaries pursuant to employee benefits or similar employee or  management equity incentive plans or arrangements of the Company or any Subsidiary thereof  approved by the Compensation Committee by unanimous vote or approved by a majority of the  issued and outstanding Company Common Stock; (ii) issuances or sales to a Person (who are not                                         -9- 

 

     affiliates of the Company) in connection with an acquisition (or series of related acquisitions),   joint venture, business combination or merger; (iii) issuances of New Securities by the Company   to a wholly owned Subsidiary of the Company; or (iv) an ongoing at-the-market offering of  equity securities or other similar offering of equity securities (an “ATM Offering”).          2.4   ATM Offer and Election to Purchase.  The foregoing notwithstanding, if the   Company conducts an ATM Offering, the Company shall not be required to provide the Investor   with advance notice of any such ATM Offering; provided, however, that the Company shall be   required to offer (an “ATM Offer”) the Investor the opportunity to purchase New Securities of   the same kind offered by the Company in the ATM Offering on a quarterly basis in arrears up to   such aggregate amount as would enable the Investor to maintain its Investor Percentage Interest,   on the following terms:                (a)   The ATM Offer shall be made in writing to the Investor promptly   following the end of each calendar quarter during which any New Securities were sold pursuant   to an ATM Offering, but in any event no later than the tenth (10th) Business Day following the   end of such calendar quarter, which offer shall include the purchase price and number and type   of New Securities that may be purchased;                (b)   The Investor shall be entitled to purchase such New Securities at a price   equal to the volume weighted average price at which such New Securities were sold by the   Company pursuant to such ATM Offering over the immediately preceding calendar quarter.                (c)   The Investor shall have seven (7) calendar days from the date of its receipt   of the ATM Offer pursuant to this Section 2.4 to elect to purchase, and to fully fund the purchase   of, of any such New Securities.  If the Investor does not elect to purchase any New Securities   and/or does not provide immediately available funds for the purchase of such New Securities to   the Company within such seven (7) calendar day period, the Investor’s rights to purchase such   New Securities shall terminate.          2.5   Voting.  From and after the date of this Agreement, until the Sunset Date, the   Investor agrees (i) to cause all Voting Securities held by the Investor or any of its Controlled   Affiliates or over which the Investor or any of its Subsidiaries otherwise has voting discretion or   control to be present at any Election Meeting either in person or by proxy; (ii) to vote such   Voting Securities Beneficially Owned by it or any of its Subsidiaries or over which the Investor   or any of its Subsidiaries otherwise has voting discretion or control (A) in favor of all director   nominees nominated by the Company’s Nominating and Corporate Governance Committee (the   “Governance Committee”) (including the Board Representatives and Non-Investor Directors   nominated to the Board pursuant to Sections 1.2(b) and 1.5 (such nominated Non-Investor   Directors, the “Nominated Non-Investor Directors”)), (B) against any other nominees and (C)   against the removal of any Non-Investor Director unless the Governance Committee so   recommends in favor of such removal (such recommendation not to be made without the   approval of the Non-Affiliated Directors acting by Company Non-Affiliated Approval), (iii) for   so long as the Investor Percentage Interest is greater than or equal to 30%, not to vote such   Voting Securities in favor of any proposals by stockholders of the Company (including under   Rule 14a-8 of the Exchange Act), except at the Investor’s discretion either (A) in a manner that is   proportionate to the manner in which all shares of Company Common Stock owned by other                                          -10- 

 

     holders of Company Common Stock who are not Controlled Affiliates of the Investor are voted   with respect to such matter, so that, for any such matter, the shares of Company Common Stock   owned by Investor or any of its Controlled Affiliates or over which the Investor or any of its   Subsidiaries otherwise has voting discretion or control shall reflect voting results with respect to   “shares voted for,” “shares voted against,” “shares abstained,” “shares withheld” and “broker   non-votes” proportionate to the aggregate voting results for shares of Company Common Stock   that are owned by other holders of Company Common Stock that are not Controlled Affiliates of   the Investor or over which the Investor or any of its Subsidiaries otherwise does not have voting   discretion or control and that are deemed present in person or by proxy at such stockholder   meeting, or (B) in a manner that is consistent with the recommendation of the Board, (iv) to not   vote such Voting Securities in favor of any Change of Control Transaction submitted to the   Company’s stockholders for approval or adoption pursuant to which the per-share consideration  to be received by the Investor or any of its Affiliates in respect of their shares of Company  Common Stock in such Change of Control Transaction is different in amount or form from the  per-share consideration to be received by other holders of Company Common Stock who are not  Affiliates of the Investor or the Company in respect of their shares of Company Common Stock  in such Change of Control Transaction, disregarding any right to select cash and/or securities as  consideration in such Change of Control Transaction that is offered generally to holders of  Company Common Stock in such Change of Control Transaction, unless such Change of Control  Transaction is approved by the Board with Company Non-Affiliate Approval or any dissenters’  rights,  and (v) not to take, alone or in concert with any other Persons, any action to remove or  oppose any Non-Investor Director or to seek to change the size or composition of the Board or   otherwise seek to expand the Investor’s representation on the Board in each case in a manner   inconsistent with Section 1.1(b).  As promptly as practicable following the record date for an   Election Meeting or any annual or special meeting at which directors are to be removed, the   Investor shall provide the Company a proxy for purposes of effecting the immediately preceding   sentence. For the avoidance of doubt, nothing in this Section 2.5 shall require the Investor to vote   any Voting Securities or cause any such Voting Securities to be voted in accordance with the   Board’s recommendation with respect to any other matter requiring stockholder approval under   Law that is not expressly addressed above.          2.6   Amendment to Parent Certificate of Incorporation. The Company shall not   amend, or propose to amend, the Parent Certificate of Incorporation in any manner that is   inconsistent with or would nullify or supersede any of the terms of this Agreement or would   prevent any party hereto from complying with its obligations hereunder unless such proposed   amendment is approved by a majority of the entire Board as well as (1) a majority of the Board   Representatives and (2) a majority of the Non-Investor Directors, in each case then serving on   the Board.          2.7   Removal and Replacement of the Chief Executive Officer.  From the Effective   Time until the Sunset Date, the Company agrees that the removal and/or replacement of the   Chief Executive Officer of the Company, or appointment of a new Chief Executive Officer in the   event of a vacancy in such office, shall require approval of a majority of  the Board including   Company Non-Affiliate Approval.          2.8   Indebtedness.  During the period beginning on the Closing Date and ending on the   one year anniversary of the Closing Date, the Company shall not incur any Indebtedness, other                                          -11- 

 

   than Indebtedness under the Existing Credit Facility, without the approval of a majority of the  Board Representatives.           2.9   Controlled Company.  From the Effective Time until the Sunset Date, the  Company shall not elect to be treated as a “controlled company” under, nor avail itself of any  “controlled company” exceptions to the corporate governance requirements of, the rules and  regulations of the NYSE or any similar rules of such other national securities exchange on which  the Company Common Stock is then listed or trading, without the approval of a majority of  the  Board including Company Non-Affiliate Approval.                                    ARTICLE III                             REGISTRATION RIGHTS         3.1   Registration.                 (a)   The Company shall, as soon as practicable after the Closing Date, file a  shelf registration statement under the Securities Act to permit the public resale of all the  Registrable Securities held by the Investor from time to time as permitted by Rule 415 under the  Securities Act (or any successor or similar provision adopted by the SEC then in effect) (a “Shelf  Registration Statement”) and use reasonable best efforts to cause such Shelf Registration  Statement to be declared effective as promptly as practicable (but in any event, prior to  expiration of the Restricted Period).  Subject to Section 3.4, the Company shall use reasonable  best efforts to keep such Shelf Registration Statement continuously effective, to be supplemented  and amended to the extent necessary to ensure that such Shelf 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 Investor and other Holders and in compliance with the  Securities Act and usable for resale of such Registrable Securities for a period from the date of  its initial effectiveness until the earlier of (i) the date on which all Registrable Securities covered  by the Shelf Registration Statement have been sold thereunder in accordance with the plan and  method of distribution disclosed in the prospectus included in the Shelf Registration Statement,  or otherwise cease to be Registrable Securities, and (ii) the date on which this Agreement  terminates pursuant to Section 5.1.  If the Company is a well-known seasoned issuer (as defined  in Rule 405 under the Securities Act) at the time of filing of the Shelf Registration Statement  with the SEC, such Shelf Registration Statement shall be designated by the Company as an  automatic Shelf Registration Statement.               (b)   Subject to the eligibility of the Company to use a registration statement on  Form S-3 (a “Form S-3”), any registration pursuant to this Section 3.1 shall be effected by means  of a Form S-3 providing for an offering to be made on a continuous basis pursuant to Rule 415  under the Securities Act in accordance with the methods and distribution set forth in the Shelf  Registration Statement and Rule 415.  If the Investor or any other holder of Registrable  Securities to whom the registration rights conferred by this Agreement have been transferred in  compliance with this Agreement intends to distribute any Registrable Securities included by it on  the Shelf Registration Statement by means of an underwritten offering (a “Underwritten Shelf  Take-Down ”), it shall promptly so advise the Company in writing and the Company shall take  all reasonable steps to facilitate such distribution, including amending or supplementing the  Shelf Registration Statement as necessary in order to enable such Registrable Securities to be                                         -12- 

 

     distributed pursuant to the Underwritten Shelf Take-Down and the actions required pursuant to   Section 3.3; provided that the Company shall not be required to facilitate, and the Investor   (together with all other Holders) shall not be entitled to request, (i) more than six (6)   Underwritten Shelf Take-Downs in the aggregate or (ii) an Underwritten Shelf Take-Down  unless the expected gross proceeds from such Underwritten Shelf Take-Down exceed  $50,000,000.  The lead underwriters in any such distribution shall be selected by the holders of a  majority of the Registrable Securities to be distributed; provided that such selections are   reasonably acceptable to the Company.                (c)   The Company shall not be required to effect a registration (including a   resale of Registrable Securities from an effective Shelf Registration Statement) or an   underwritten offering pursuant to this Section 3.1:  (i) with respect to securities that are not   Registrable Securities or (ii) during any Permitted Black-out Period; provided that such right to   delay a registration or underwritten offering shall be exercised by the Company only if the   Company has generally exercised (or is concurrently exercising) similar black-out rights against   holders of similar securities that have registration rights.                 (d)   If, during a period when the Shelf Registration Statement is not effective   or available (provided, for the avoidance of doubt, that the failure of the Shelf Registration   Statement to be effective or available shall not be a requirement for the Investor or any Holder to   exercise its rights pursuant to this Section 3.1(d) and Section 3.1(e) with respect to any   Piggyback Registration that is proposed to be an underwritten offering), the Company proposes   to file a Registration Statement or prospectus supplement with respect to an offering of its equity   securities, other than a registration pursuant to Section 3.1(a) or a Special Registration, and the   registration form to be filed may be used for the registration or qualification for distribution of   Registrable Securities, the Company will give prompt written notice to the Investor and all other   Holders of its intention to effect such a registration (but in no event less than ten (10) Business   Days prior to the anticipated filing date) and (subject to clause (f) below) will include in such   registration all Registrable Securities with respect to which the Company has received written   requests for inclusion therein within five (5) Business Days after the date of the Company’s   notice (a “Piggyback Registration”).  Any such person that has made such a written request may   withdraw its Registrable Securities from such Piggyback Registration by giving written notice to   the Company and the managing underwriter, if any, on or before the pricing date of such   Piggyback Registration.  The Company may terminate or withdraw any registration under this   Section 3.1(d) prior to the effectiveness of such registration, whether or not the Investors or any   other Holders have elected to include Registrable Securities in such registration.  “Special   Registration” means the registration of (i) equity securities and/or options or other rights in   respect thereof solely registered on Form S-4 or Form S-8 (or successor form) or (ii) shares of  equity securities and/or options or other rights in respect thereof to be offered to directors,  members of management, employees, consultants, customers, lenders or vendors of the  Company or its subsidiaries or in connection with dividend reinvestment plans.                (e)   If the registration referred to in Section 3.1(d) is proposed to be   underwritten, the Company will so advise the Investor and all other Holders as a part of the   written notice given pursuant to Section 3.1(d).  In such event, the right of any Investor and all   other Holders to registration pursuant to this Section 3.1 will be conditioned upon such persons’   participation in such underwriting and the inclusion of such persons’ Registrable Securities in the                                          -13- 

 

   underwriting, and each such person will (together with the Company and the other persons  distributing their securities through such underwriting) enter into an underwriting agreement in  customary form with the underwriter or underwriters selected for such underwriting by the  Company.  Any Holder so participating shall not be required to make any representations or  warranties to or agreements with the Company or the underwriters in connection with such  underwriting agreement other than representations, warranties or agreements regarding such  Holder, such Holder’s title to the Registrable Securities, such Holder’s authority to sell the  Registrable Securities, such Holder’s intended method of distribution, absence of liens with  respect to the Registrable Securities, enforceability of the applicable underwriting agreement as  against such Holder, receipt of all consents and approvals with respect to the entry into such  underwriting agreement and the sale of such Registrable Securities by such Holder and any other  representations required to be made by such Holder under applicable law, rule or regulation, and  the aggregate amount of the liability of such Holder in connection with such underwriting  agreement shall not exceed such Holder’s net proceeds from such underwritten offering (i.e., less  underwriting discounts and commissions).  If any participating person disapproves of the terms  of the underwriting, such person may elect to withdraw therefrom by written notice to the  Company and the managing underwriter prior to the execution of the underwriting agreement  with respect thereto.                (f)   If, in connection with a Piggyback Registration under Section 3.1(d), the  managing underwriters advise the Company that in their reasonable opinion the number of  securities requested to be included in such offering exceeds the number which can be sold  without adversely affecting the marketability of such offering (including an adverse effect on the  per share offering price), the Company will include in such registration or prospectus only such  number of securities that in the reasonable opinion of such underwriters can be sold without  adversely affecting the marketability of the offering (including an adverse effect on the per share  offering price), which securities will be so included in the following order of priority:                       (i)   if the Piggyback Registration relates to an offering for the        Company’s own account, then (A) first, the securities the Company proposes to sell,        (B) second, Registrable Securities of the Investor and all other Holders who have        requested registration of Registrable Securities pursuant to Section 3.1(d), as applicable,        pro rata on the basis of the aggregate number of such securities or shares owned by each        such person, and (C) third, any other securities of the Company that have been requested        to be so included, subject to the terms of this Agreement; or                     (ii)  if the Piggyback Registration relates to an offering other than for        the Company’s own account, then (A) first, (1) if such registration is being made at the        request of Investor or any Holder pursuant to this Section 3.1, all Registrable Securities        of the Investor and all other Holders who have requested registration of Registrable        Securities pursuant to Section 3.1(b) or 3.1(d), as applicable, pro rata on the basis of the        aggregate number of such securities or shares owned by each such person, or (ii) if such        registration is not being made at the request of Investor or any Holder pursuant to this        Section 3.1, the securities sought to be registered by Persons who have sought to have        securities of the Company registered pursuant to rights to demand such registration and        the Registrable Securities of the Investor and all other Holders who have requested        registration of Registrable Securities pursuant to Section 3.1(d), pro rata on the basis of                                         -14- 

 

           the aggregate number of such securities or shares owned by each such person and (B)         second, the securities the Company proposes to sell.            3.2   Expenses of Registration.  All Registration Expenses incurred in connection with   any registration, qualification or compliance hereunder shall be borne by the Company.  All   Selling Expenses incurred in connection with any registrations hereunder shall be borne by the   holders of the securities so registered pro rata on the basis of the aggregate offering or sale price   of the securities so registered.          3.3   Obligations of the Company.  The Company shall use its reasonable best efforts   for so long as there are Registrable Securities outstanding, to take such actions as are under its   control to remain a well-known seasoned issuer (as defined in Rule 405 under the Securities Act)   if it becomes eligible for such status in the future (and not become an ineligible issuer (as defined   in Rule 405 under the Securities Act)).  In addition, whenever required to effect the registration  of any Registrable Securities or facilitate the distribution of Registrable Securities pursuant to an  effective Shelf Registration Statement, the Company shall, as expeditiously as reasonably  practicable:                (a)   Prepare and file with the SEC a prospectus supplement with respect to a   proposed offering of Registrable Securities pursuant to an effective Registration Statement,   subject to this Section 3.3, keep such Registration Statement effective or such prospectus   supplement current until the securities described therein are no longer Registrable Securities.                (b)   Prepare and file with the SEC such amendments and supplements to the   applicable Registration Statement and the prospectus or prospectus supplement used in   connection with such Registration Statement as may be necessary to comply with the provisions   of the Securities Act with respect to the disposition of all securities covered by such Registration   Statement.                (c)   Furnish to the Holders and any underwriters such number of copies of the   applicable Registration Statement and each such amendment and supplement thereto (including   in each case all exhibits) and of a prospectus, including a preliminary prospectus, in conformity   with the requirements of the Securities Act, and such other documents as they may reasonably   request in order to facilitate the disposition of Registrable Securities owned or to be distributed   by them.                (d)   Use its reasonable best efforts to register and qualify the securities covered   by such Registration Statement under such other securities or blue sky laws of such jurisdictions   as shall be reasonably requested by the Holders or any managing underwriter(s), to keep such   registration or qualification in effect for so long as such Registration Statement remains in effect,   and to take any other action which may be reasonably necessary to enable such seller to   consummate the disposition in such jurisdictions of the securities owned by such Holder;   provided that the Company shall not be required in connection therewith or as a condition thereto   to qualify to do business or to file a general consent to service of process in any such states or   jurisdictions.                                          -15- 

 

               (e)   Notify promptly each Holder of Registrable Securities at any time when a  prospectus relating thereto is required to be delivered under the Securities Act of the happening  of any event as a result of which the applicable prospectus, as then in effect, includes an untrue  statement of a material fact or omits to state a material fact required to be stated therein or  necessary to make the statements therein not misleading in light of the circumstances then  existing.               (f)   Give prompt written notice to the Holders:                     (i)   when any Registration Statement filed pursuant to Section 3.1 or        any amendment thereto has been filed with the SEC (except for any amendment effected        by the filing of a document with the SEC pursuant to the Exchange Act) and when such        Registration Statement or any post-effective amendment thereto has become effective;                     (ii)  of any request by the SEC for amendments or supplements to any        Registration Statement or the prospectus included therein or for additional information;                     (iii) of the issuance by the SEC of any stop order suspending the        effectiveness of any Registration Statement or the initiation of any proceedings for that       purpose;                    (iv)  of the receipt by the Company or its legal counsel of any       notification with respect to the suspension of the qualification of Company Common       Stock for sale in any jurisdiction or the initiation or threatening of any proceeding for       such purpose;                    (v)   of the happening of any event that requires the Company to make       changes in any effective Registration Statement or the prospectus related to the       Registration Statement in order to make the statements therein not misleading (which       notice shall be accompanied by an instruction to suspend the use of the prospectus until       the requisite changes have been made); and                    (vi)  if at any time the representations and warranties of the Company       contained in any underwriting agreement contemplated by Section 3.3(j) cease to be true        and correct.               (g)   Use its reasonable best efforts to prevent the issuance or obtain the  withdrawal of any order suspending the effectiveness of any Registration Statement referred to in  Section 3.3(f)(iii) at the earliest practicable time.               (h)   Upon the occurrence of any event contemplated by Section 3.3(e) or  3.3(f)(v), promptly prepare a post-effective amendment to such Registration Statement or a  supplement to the related prospectus or file any other required document so that, as thereafter  delivered to the Holders and any underwriters, the prospectus will not contain an untrue  statement of a material fact or omit to state any material fact necessary to make the statements  therein, in light of the circumstances under which they were made, not misleading.                                          -16- 

 

                 (i)   Use reasonable best efforts to procure the cooperation of the Company’s   transfer agent in settling any offering or sale of Registrable Securities.                (j)   If an Underwritten Shelf Take-Down is requested pursuant to Section   3.1(b), enter into an underwriting agreement in customary form, scope and substance and take all   such other actions reasonably requested by the Holders of a majority of the Registrable Securities   being sold in connection therewith or by the managing underwriter(s), if any, to expedite or   facilitate the underwritten disposition of such Registrable Securities, and in connection therewith   in any underwritten offering (including making members of management and executives of the   Company reasonably available to participate in “road shows,” similar sales events and other   marketing activities), (i) make such representations and warranties to the Holders that are selling   stockholders and the managing underwriter(s), if any, with respect to the business of the   Company and its subsidiaries, and the Shelf Registration Statement, prospectus and documents,   if any, incorporated or deemed to be incorporated by reference therein, in each case, in   customary form, substance and scope, and, if true, confirm the same if and when requested,   (ii) use its reasonable best efforts to furnish the underwriters with opinions of counsel to the   Company, addressed to the managing underwriter(s), if any, covering the matters customarily   covered in such opinions requested in underwritten offerings, (iii) use its reasonable best efforts   to obtain “cold comfort” letters from the independent certified public accountants and reserve   engineers of the Company (and, if necessary, any other independent certified public accountants   of any business acquired by the Company for which financial statements and financial data are   included in the Shelf Registration Statement) who have certified the financial statements   included in such Shelf Registration Statement, addressed to each of the managing underwriter(s),   if any, such letters to be in customary form and covering matters of the type customarily covered   in “cold comfort” letters, (iv) if an underwriting agreement is entered into, the same shall contain   indemnification provisions and procedures customary in underwritten offerings, and (v) deliver   such documents and certificates as may be reasonably requested by the Holders of a majority of   the Registrable Securities being sold in connection therewith, their counsel and the managing   underwriter(s), if any, to evidence the continued validity of the representations and warranties   made pursuant to clause (i) above and to evidence compliance with any customary conditions   contained in the underwriting agreement or other agreement entered into by the Company.    Notwithstanding anything contained herein to the contrary, the Company shall not be required to   enter into any underwriting agreement or permit any underwritten offering absent an agreement   by the applicable underwriter(s) to indemnify the Company in form, scope and substance as is   customary in underwritten offerings by the Company.                (k)   (A) make available for inspection by a representative of Holders that are  selling stockholders, the managing underwriter(s), if any, and any attorneys or accountants  retained by such Holders or managing underwriter(s), at the offices where normally kept, upon  reasonable advance notice and during reasonable business hours, financial and other records,  pertinent corporate documents and properties of the Company, and cause the officers, directors  and employees of the Company to supply all information in each case reasonably requested (and   of the type customarily provided in connection with due diligence conducted in connection with   a registered public offering of securities) by any such representative, managing underwriter(s),   attorney or accountant in connection with such Shelf Registration Statement and (B) use   reasonable best efforts to procure customary legal opinions and auditor and reserve engineer                                          -17- 

 

   “comfort” letters in connection with the sale of Registrable Securities the Investor or any other  Holder utilizing the Shelf Registration Statement.               (l)   Cause all such Registrable Securities to be listed on each securities  exchange on which similar securities issued by the Company are then listed or, if no similar  securities issued by the Company are then listed on any securities exchange, use its reasonable  best efforts to cause all such Registrable Securities to be listed on the NYSE or the NASDAQ  Stock Market, as determined by the Company.               (m)   If requested by Holders of a majority of the Registrable Securities being  registered and/or sold in connection therewith, or the managing underwriter(s), if any, promptly  include in a prospectus supplement or amendment such information as the Holders of a majority  of the Registrable Securities being registered and/or sold in connection therewith or managing  underwriter(s), if any, may reasonably request in order to permit the intended method of  distribution of such securities and make all required filings of such prospectus supplement or  such amendment as soon as practicable after the Company has received such request.               (n)   Timely provide to its security holders earning statements satisfying the  provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.         3.4   Suspension of Sales.  During (i) any Permitted Black-out Period or (ii) upon  receipt of written notice from the Company that a Registration Statement, prospectus or  prospectus supplement contains or may contain an untrue statement of a material fact or omits or  may omit to state a material fact required to be stated therein or necessary to make the statements  therein not misleading or that circumstances exist that make inadvisable use of such Registration  Statement, prospectus or prospectus supplement, each Holder of Registrable Securities shall  forthwith discontinue disposition of Registrable Securities until termination of such Permitted  Black-out Period or until such Holder has received copies of a supplemented or amended  prospectus or prospectus supplement, or until such Holder is advised in writing by the Company  that the use of the prospectus and, if applicable, prospectus supplement may be resumed, and, if  so directed by the Company, such Holder shall deliver to the Company (at the Company’s  expense) all copies, other than permanent file copies then in such Holder’s possession, of the  prospectus and, if applicable, prospectus supplement covering such Registrable Securities current  at the time of receipt of such notice.  The total number of days that any such suspension  described in clause (ii) of this paragraph may be in effect in any 180-day period shall not exceed  30 days.  The total number of days that any suspension periods described in clause (ii), together  with any Permitted Blackouts Periods, may collectively be in effect during any 12-month period  shall not exceed 120 days.            3.5   Termination of Registration Rights.  A Holder’s registration rights as to any  securities held by such Holder shall terminate on the date such securities cease to qualify as  Registrable Securities.                                         -18- 

 

           3.6   Furnishing Information.                  (a)   Neither any Investor nor any Holder shall use any free writing prospectus   (as defined in Rule 405) in connection with the sale of Registrable Securities without the prior   written consent of the Company.                (b)   It shall be a condition precedent to the obligations of the Company to take   any action pursuant to Section 3.3 that the Investors and/or the selling Holders shall furnish to   the Company such information regarding themselves, the Registrable Securities held by them   and the intended method of disposition of such securities as shall be reasonably required to effect   the registered offering of their Registrable Securities.          3.7   Indemnification.                  (a)   The Company agrees to indemnify each Holder and, if a Holder is a   person other than an individual, such Holder’s direct or indirect partners, members or   stockholders and each of such partner’s, member’s or stockholder’s partners, members or   stockholders and, with respect to all of the foregoing Persons, each of their respective Affiliates,   employees, directors, officers, trustees or agents and controlling Persons within the meaning of   the Securities Act and each of their respective representatives (each, an “Indemnitee”), against   any and all Losses, joint or several, arising out of or based upon (i) any untrue statement or   alleged untrue statement of material fact contained in any Registration Statement, including any   preliminary prospectus or final prospectus contained therein or any amendments or supplements   thereto or any documents incorporated therein by reference or contained in any free writing   prospectus (as such term is defined in Rule 405) prepared by the Company or authorized by it in   writing for use by such Holder (or any amendment or supplement thereto) or any omission to   state therein a material fact required to be stated therein or necessary to make the statements   therein, in light of the circumstances under which they were made, not misleading; provided, that   the Company shall not be liable to such Indemnitee in any such case to the extent that any such   loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of   or is based upon (A) an untrue statement or omission made in such Registration Statement,   including any such preliminary prospectus or final prospectus contained therein or any such   amendments or supplements thereto or contained in any free writing prospectus (as such term is   defined in Rule 405) prepared by the Company or authorized by it in writing for use by such   Holder (or any amendment or supplement thereto), in reliance upon and in conformity with   information regarding such Indemnitee or its plan of distribution or ownership interests which   was furnished in writing to the Company by such Indemnitee expressly for use in connection   with such Registration Statement, including any such preliminary prospectus or final prospectus   contained therein or any such amendments or supplements thereto, or (B) offers or sales effected  by or on behalf such Indemnitee “by means of” (as defined in Rule 159A) a “free writing  prospectus” (as such term is defined in Rule 405) that was not authorized in writing by the  Company; (ii) any violation or alleged violation by the Company of any federal, state or common  law rule or regulation applicable to the Company or any of its subsidiaries in connection with  any such registration, qualification, compliance or sale of Registrable Securities; (iii) any failure  to register or qualify Registrable Securities in any state where the Company or its agents have  affirmatively undertaken or agreed in writing that the Company (the undertaking of any  underwriter being attributed to the Company) will undertake such registration or qualification on                                          -19- 

 

   behalf of the Holders of such Registrable Securities (provided that in such instance the Company  shall not be so liable if it has undertaken its reasonable best efforts to so register or qualify such  Registrable Securities); or (iv) any actions or inactions or proceedings in respect of the foregoing  whether or not an Indemnitee is a party thereto, whether such Registration Statement, final  prospectus, preliminary prospectus, free writing prospectus (as defined in Rule 405) or other  document is issued pursuant to this Agreement or otherwise.               (b)   In connection with any Registration Statement in which a Holder is  participating, each such Holder shall, severally and not jointly, indemnify the Company, its  directors and officers, and each Person, if any, who controls the Company within the meaning of  the Securities Act to the same extent as the foregoing indemnity provided for in Section 3.7(a)  from the Company to the Holders, but only to the extent arising out of or based upon information  furnished in writing by such Holder, or on such Holder’s behalf, expressly for use in any  Registration Statement or any prospectus, including any amendment or supplement thereto.  In  no event shall the liability of such Holder hereunder be greater in amount than the dollar amount  of the net proceeds (less underwriting discounts and commissions) received by such Holder  under the sale of Registrable Securities giving rise to such indemnification obligation.                (c)   Any Person entitled to indemnification hereunder (the “Indemnified  Party”) shall give prompt written notice to the Person against whom such indemnity may be  sought (the “Indemnifying Party”) of any claim with respect to which it seeks indemnification;  provided, however, the failure to give such notice shall not release the Indemnifying Party from  its obligation, except to the extent that the Indemnifying Party has been actually and materially  prejudiced by such failure to provide such notice on a timely basis.               (d)   In any case in which any such action is brought against any Indemnified  Party, and it notifies an Indemnifying Party of the commencement thereof, the Indemnifying  Party will be entitled to participate therein, and, to the extent that it may wish, to assume the  defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice  from the Indemnifying Party to such Indemnified Party of its election so to assume the defense  thereof and acknowledging the obligations of the Indemnifying Party with respect to such  proceeding, the Indemnifying Party will not (so long as it shall continue to have the right to  defend, contest, litigate and settle the matter in question in accordance with this paragraph) be  liable to such Indemnified Party hereunder for any legal or other expense subsequently incurred  by such Indemnified Party in connection with the defense thereof other than reasonable costs of  investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects  to such assumption on the grounds that there may be defenses available to it which are different  from or in addition to the defenses available to such Indemnifying Party and, as a result, a  conflict of interest exists or (ii) the Indemnifying Party shall have failed within a reasonable  period of time to assume such defense and the Indemnified Party is or would reasonably be  expected to be materially prejudiced by such delay, in either event the indemnified party shall be  promptly reimbursed by the Indemnifying Party for the reasonable expenses incurred in  connection with retaining one separate legal counsel (for the avoidance of doubt, for all  indemnified parties in connection therewith)).  For the avoidance of doubt, notwithstanding any  such assumption by an Indemnifying Party, the indemnified party shall have the right to employ  separate counsel in any such matter and participate in the defense thereof, but the fees and  expenses of such counsel shall be at the expense of such indemnified party except as provided in                                         -20- 

 

   the previous sentence.  An Indemnifying Party shall not be liable for any settlement of an action  or claim effected without its consent (which consent shall not be unreasonably withheld,  conditioned or delayed).  No matter shall be settled by an Indemnifying Party without the  consent of the indemnified party (which consent shall not be unreasonably withheld, conditioned  or delayed), unless such settlement (x) includes 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, (y) does not include any statement as to or any admission of fault, culpability  or a failure to act by or on behalf of any indemnified party, and (z) does not involve any  injunctive or equitable relief that would be binding on the indemnified party or any payment that  is not covered by the indemnification hereunder.               (e)   The indemnification provided for under this Agreement shall survive the  Transfer of the Registrable Securities and the termination of this Agreement.                (f)   If the indemnification provided for in this Section 3.7 is unavailable to a  Indemnified Party from the Person against the Indemnifying Party with respect to any Losses or  is insufficient to hold the Indemnified Party harmless as contemplated therein, then the  Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the  amount paid or payable by such Indemnified Party as a result of such Losses in such proportion  as is appropriate to reflect the relative fault of the Indemnified Party, on the one hand, and the  Indemnifying Party, on the other hand, in connection with the statements or omissions which  resulted in such Losses as well as any other relevant equitable considerations.  The relative fault  of the Indemnifying Party, on the one hand, and of the Indemnified Party, on the other hand,  shall be determined by reference to, among other factors, whether the untrue statement of a  material fact or omission to state a material fact relates to information supplied by the  Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge,  access to information and opportunity to correct or prevent such statement or omission; the  Company and each Holder agree that it would not be just and equitable if contribution pursuant  to this Section 3.7(f) were determined by pro rata allocation or by any other method of allocation  that does not take account of the equitable considerations referred to in this Section 3.7.  No  Indemnified Party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of  the Securities Act) shall be entitled to contribution from any Indemnifying Party if the  Indemnifying Party was not guilty of such fraudulent misrepresentation.         3.8   Assignment of Registration Rights.  The rights of any Holder to registration of  Registrable Securities pursuant to Article III (but no other rights hereunder) may be assigned by  such Holder to a transferee or assignee of Registrable Securities (i) that is a Permitted Transferee  of such Holder to which there is Transferred at least $5,000,000 in Registrable Securities or (ii)  to which there is Transferred to such transferee no less than $50,000,000 in Registrable  Securities, as otherwise permitted by this Agreement; provided, however, that the transferor  shall, within ten (10) days after such transfer, furnish to the Company written notice of the name  and address of such transferee or assignee and the number and type of Registrable Securities that  are being assigned.         3.9   Holdback; Lockup.  With respect to any underwritten offering of Registrable  Securities by the Investors or other Holders pursuant to this Article III, (i) the Company agrees  not to effect (other than pursuant to such registration or pursuant to a Special Registration) any                                         -21- 

 

     public sale or distribution, or to file any Registration Statement (other than such registration or a   Special Registration) covering any of its equity securities, or any securities convertible into or   exchangeable or exercisable for such securities, during the period not to exceed ten (10) days   prior and sixty (60) days following the date of execution of the underwriting agreement with   respect to such underwritten offering or such longer period up to ninety (90) days as may be   requested by the managing underwriter and (ii) the Company agrees to cause each of its directors   and senior executive officers to execute and deliver, and each Holder also agrees to execute and   deliver, customary lockup agreements in such form and for such time period up to ninety (90)   days as may be requested by the managing underwriter; provided that each Holder shall not be   required to execute and deliver any lockup agreement different in form or substance as any   lockup executed by the Company’s directors and senior executive officers.            3.10  Rule 144.  With a view to making available to the Investor and Holders the   benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable   Securities to the public without registration, the Company agrees to use its reasonable best   efforts to:                (a)   make and keep public information available, as those terms are understood   and defined in Rule 144(c)(1) or any similar or analogous rule promulgated under the Securities   Act, at all times after the effective date of this Agreement;                (b)   file with the SEC, in a timely manner, all reports and other documents   required of the Company under the Exchange Act;               (c)   so long as an Investor or a Holder owns any Registrable Securities, furnish  to such Investor or such Holder forthwith upon request:  a written statement by the Company as  to its compliance with the reporting requirements of Rule 144 under the Securities Act, and of  the Exchange Act; a copy of the most recent annual or quarterly report of the Company; and such  other reports and documents as the Investor or Holder may reasonably request in availing itself  of any rule or regulation of the SEC allowing it to sell any such securities without registration;  and               (d)   take such further action as any Holder may reasonably request (including,  without limitation (i) making its Chief Executive Officer and Chief Financial Officer reasonably  available to potential purchasers in a reasonable manner (by telephone where feasible) and  except during periods when the Company has restricted access to investors in accordance with its  Regulation FD procedures and other policies and procedures required by applicable law; and (ii)  executing a customary engagement letter that will provide for customary indemnification of a  placement agent with respect to such placement), all to the extent required from time to time to  enable such Holder to sell Registrable Securities without registration under the Securities Act,  and provided that the commission and fees for such placement shall be at the expense of the  requesting Holder         3.11  Definitions.  As used in this Article III, the following terms shall have the   following respective meanings:                                          -22- 

 

                 (a)   “Holder” means the Investor and any other holder of Registrable   Securities to whom the registration rights conferred by this Agreement have been transferred in   compliance with Section 3.8.                (b)   “Holders’ Counsel” means one counsel for the selling Holders chosen by   Holders holding a majority interest in the Registrable Securities being registered.                (c)   “Permitted Black-out Period” means, in the event that the Company   determines in good faith that the registration would (x) reasonably be expected to materially   adversely affect or materially interfere with any bona fide material financing of the Company or   any material transaction under consideration by the Company or (y) would require disclosure of   material information that the Company has a bona fide business purpose for not disclosing and   that has not been, and is not otherwise required to be, disclosed to the public, a period of up to   sixty (60) days; provided, that a Permitted Blackout Period described in this clause (ii) may not   occur more than twice in any period of twelve (12) consecutive months.                (d)   “Register,” “registered,” and “registration” shall refer to a registration   effected by preparing and (a) filing a Registration Statement in compliance with the Securities   Act and applicable rules and regulations thereunder, and the declaration or ordering of   effectiveness of such Registration Statement or (b) filing a prospectus and/or prospectus   supplement in respect of an appropriate effective Registration Statement on Form S-3.                (e)   “Registrable Securities” means (A) all Company Common Stock held by   the Holders from time to time and (B) any equity securities issued or issuable directly or   indirectly with respect to the securities referred to in the foregoing clause (A) by way of stock   dividend or stock split or in connection with a combination of shares, recapitalization,   reclassification, merger, amalgamation, arrangement, consolidation or other reorganization,   provided that, once issued, such securities will cease to constitute Registrable Securities upon the   earliest to occur of (i) when they are sold pursuant to an effective Registration Statement under   the Securities Act, (ii) when they are sold pursuant to Rule 144 and the transferee thereof does   not receive “restricted securities” as defined in Rule 144, (iii) when they shall have ceased to be   outstanding or (iv) when they have been sold in a private transaction in which the transferor’s  rights under this Agreement are not assigned to the transferee of the securities; provided,   however, that any Registrable Security shall cease to be a Registrable Security at such time that   (A) the holder thereof (together with its Affiliates) ceases to hold at least 5.0% of the outstanding   Company Common Stock, (B) such Registrable Security may be sold by the holder thereof   pursuant to Rule 144 without limitation thereunder on volume or manner of sale or information   requirements thereunder and (C) at least two years have elapsed since the Closing Date.  No   Registrable Securities may be registered under more than one Registration Statement at one time.                (f)   “Registration Expenses” means all expenses incurred by the Company in   effecting any registration pursuant to this Agreement (whether or not any registration or   prospectus becomes effective or final) or otherwise complying with its obligations under this   Article III, including all registration, filing and listing fees, printing expenses, fees and   disbursements of counsel for the Company, blue sky fees and expenses, expenses incurred by the   Company in connection with any “road show,” the reasonable fees and disbursements of   Holders’ Counsel, and expenses of the Company’s independent accountants in connection with                                          -23- 

 

     any regular or special reviews or audits incident to or required by any such registration, but shall   not include Selling Expenses and the compensation of regular employees of the Company, which   shall be paid in any event by the Company.                (g)   “Rule 144,” “Rule 144A,” “Rule 158,” “Rule 159A,” “Rule 405” and   “Rule 415” mean, in each case, such rule promulgated under the Securities Act (or any successor   provision), as the same shall be amended from time to time.                (h)   “Selling Expenses” means all discounts, selling commissions and stock   transfer taxes applicable to the sale of Registrable Securities and fees and disbursements of   counsel for any Holder (other than the fees and disbursements of Holders’ Counsel included in   Registration Expenses).          3.12  Voluntary Forfeiture.  At any time, any holder of Registrable Securities (including   any Holder) may elect to forfeit its rights set forth in this Article III from that date forward;   provided, that a Holder forfeiting such rights shall nonetheless be entitled to participate under   Sections 3.1(d)-(f) in any Pending Underwritten Offering to the same extent that such Holder   would have been entitled to if the holder had not withdrawn; and provided, further, that no such   forfeiture shall terminate a Holder’s rights or obligations under Section 3.5 with respect to any   prior registration or Pending Underwritten Offering.  “Pending Underwritten Offering” means,   with respect to any Holder forfeiting its rights pursuant to this Section 3.12, any underwritten   offering of Registrable Securities in which such Holder has advised the Company of its intent to   register its Registrable Securities either pursuant to Section 3.1(b) or 3.1(d) prior to the date of   such Holder’s forfeiture.  In addition, Investor or any other Holder may deliver written notice (an   “Opt-Out Notice”) to the Company requesting that such Investor or Holder not receive notice   from the Corporation of any proposed Underwritten Offering; provided, however, that Investor   or other Holder, as applicable, may later revoke any such Opt-Out Notice in writing. Following  receipt of an Opt-Out Notice from Investor or other Holder (unless subsequently revoked), the  Company shall not, and shall not be required to, deliver any notice to Investor or such other  Holder, as applicable, pursuant to Section 3.1.                                     ARTICLE IV                                   DEFINITIONS          4.1   Defined Terms.  Capitalized terms when used in this Agreement have the   following meanings:                “Action” means any claim, action, suit, arbitration, litigation or proceeding.                “Affiliate” means, with respect to any Person, any Person who directly or   indirectly Controls, is Controlled by, or is under common Control with the specified Person.    Notwithstanding the foregoing, the Company shall be deemed to not be an Affiliate of the Fund   and the Investor for purposes of this Agreement.                   “Agreement” has the meaning set forth in the preamble.                “ATM Offering” has the meaning set forth in Section 2.4.                                          -24- 

 

                 “Beneficially Own” with respect to any securities shall mean having “beneficial   ownership” of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act   without giving effect to the sixty (60)-day limitation on determining beneficial ownership   contained in Rule 13d-3(d)), including pursuant to any agreement, arrangement or understanding,   whether or not in writing.                “Board” has the meaning set forth in Section 1.1.                “Board Designation Expiration Date” means the earlier of (i) the date on which   the Investor Percentage Interest is less than 10% and (ii) the date on which this Agreement is   validly terminated pursuant to Section 5.1.                “Board Representative” has the meaning set forth in Section 1.4.                “Business Day” means any day on which banks are not required or authorized to   close in the City of New York.                “Change of Control Transaction” means the existence or occurrence of any of the   following: (a) the sale, conveyance or disposition of all or substantially all of the assets of the   Company; (b) the consolidation, merger or other business combination of the Company with or   into any other entity, immediately following which the then current stockholders of the Company   fail to own, directly or indirectly, at least Majority Voting Power; (c) a transaction or series of   transactions in which any person or “group” (as such term is used in Sections 13(d) and 14(d) of   the Exchange Act) acquires Majority Voting Power (other than (i) a reincorporation or similar   corporate transaction in which the Company’s stockholders own, immediately thereafter,   interests in the new parent company in essentially the same percentage as they owned in the   Company immediately prior to such transaction, or (ii) a transaction described in clause (b) (such   as a triangular merger) in which the threshold in clause (b) is not passed) or (d) the replacement   of a majority of the Board of Directors with individuals who were not nominated or elected by at   least a majority of the directors at the time of such replacement.                “Closing” has the meaning set forth in the Merger Agreement.                “Closing Date” has the meaning set forth in the Merger Agreement.                “Company” has the meaning set forth in the preamble.                “Company Common Stock” has the meaning set forth in the recitals.                “Company Competitor” means (a) any Person listed on Exhibit A hereto, or any   Controlled Affiliate thereof or (b) (1) any Person whose primary business is oil and natural gas   exploration and development in the Denver-Julesburg Basin or (2) any Affiliate of such Person  (other than (i) a private equity or similar firm that Controls the Person described in clause (b)(1)  and (ii) such private equity or similar firm’s Affiliates, other than such Person and its Controlled  Affiliates).                “Company Non-Affiliate Approval” means the approval of a majority of the total   number of Non-Affiliated Directors.                                          -25- 

 

                 “Control” means the possession, directly or indirectly, of the power to direct or   cause the direction of the management and policies of a Person, whether through the ownership   of voting securities, by contract or otherwise.                “DGCL” means the General Corporation Law of the State of Delaware, as   amended.                “Effective Time” has the meaning set forth in the Merger Agreement.                “Exchange Act” means the Securities Exchange Act of 1934, as amended.                “Existing Credit Facility” means that certain Third Amended and Restated Credit   Agreement, dated as of March 16, 2010, by among Bill Barrett Corporation, the financial   institutions from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative   agent, as amended, restated, supplemented or otherwise modified.                “Form S-3” has the meaning set forth in Section 3.1(b).                “Governance Committee” has the meaning set forth in Section 2.4.                “Group” has the meaning assigned to such term in Section 13(d)(3) of the   Exchange Act.                “Indebtedness” means all indebtedness, liabilities and obligations, now existing or   hereafter arising, for money borrowed by a Person, or any contingent liability for or guaranty by   a Person of any obligation of any other Person (including the pledge of any collateral or grant of   any security interest by a Person in any property as security for any such liability, guaranty or  obligation) whether or not any of the foregoing is evidenced by any note, indenture, guaranty or  agreement, but excluding all trade payables incurred in the ordinary course of business.                “Indemnified Party” has the meaning set forth in Section 3.7(c).                “Indemnifying Party” has the meaning set forth in Section 3.7(c).                “Indemnitee” has the meaning set forth in Section 3.7(a).                “Independent Director” means a director who (i) is not an officer, director,   principal, managing partner or employee of the Investor or the Fund or any of its Affiliates or   any spouse, parent, child or sibling of any of the foregoing, (ii) would qualify as an “Independent   Director” pursuant to the listing standards of the NYSE, or, if the Company Common Stock is   not then listed for trading on the NYSE, pursuant to the rules of the national securities exchange   on which the Company Common Stock is then listed or trading, with respect to the Company,   and (iii) receives no compensation from the Fund, the Investor or any Affiliate thereof for or   related to his or her service as a director of the Company and such Person’s actual investment in   the Fund does not exceed $1 million during such director’s service as a director of the Company.                “Investor” has the meaning set forth in the recitals hereto, provided that, for the   avoidance of doubt, any transferee of securities of the Company that is required to enter into, or                                          -26- 

 

   enters into, a joinder agreeing to be bound by the terms of Sections 2.1, 2.2 and 2.5 of this  Agreement applicable to Investors shall be deemed to be an Investor for purposes of Sections  2.1, 2.2 and 2.5 of this Agreement.                “Investor Director Number” means the number of Board Representatives that the  Investor is at such time (or would then be if an Election Meeting were to be held at such time)  entitled to designate pursuant to Section 1.1(b)(i).                “Investor Percentage Interest” means, as of any date of determination, the  percentage represented by the quotient of (i) the number of Voting Securities that are then- Beneficially Owned by the Investor and its Affiliates and (ii) the number of all then-outstanding  Voting Securities.               “Law” means any applicable federal, state, local, foreign or international law,  statute, code, ordinance, order, rule, rule of common law, regulation, judgment, decree,  injunction or treaty.               “Losses” means all losses, costs, interest, charges, expenses (including reasonable  attorneys’ fees), obligations, liabilities, settlement payments, awards, judgments, fines, penalties,  damages, assessments or deficiencies.               “Majority Voting Power” of the Company means a majority of the ordinary  voting power in the election of directors of all the outstanding Voting Securities of the Company.               “Mergers” has the meaning set forth in the recitals.               “Merger Agreement” has the meaning set forth in the recitals.               “Nominated Non-Investor Directors” has the meaning set forth in Section 2.5.                “Non-Affiliated Directors” means a director who qualifies as “independent” under  the rules of the NYSE or the rules of such other national securities exchange on which the  Company Common Stock is then listed or trading and who is not a Board Representative.               “Non-Investor Director” means a director who is not a Board Representative.               “NYSE” has the meaning set forth in Section 2.3(e).               “Pending Underwritten Offering” has the meaning set forth in Section 3.12.               “Permitted Transferee” means (i) any Affiliate of the Investor and (ii) any holder  of membership interests in the Investor and each of such holders’ direct and indirect equity  holders.               “Person” means an individual, a partnership, a joint venture, a corporation, a  limited liability company, a trust, an unincorporated organization or a government or department  or agency thereof.                                         -27- 

 

                 “Piggyback Registration” has the meaning set forth in Section 3.1(d).                “Pro Rata Portion” means, with respect to the Investor, on any issuance date for   New Securities, the number of New Securities equal to the product of (i) the total number of   New Securities to be issued by the Company on such date and (ii) the Investor Percentage   Interest, determined immediately prior to such issuance date.                “Registration Statement” means the prospectus and other documents filed with the   SEC to effect a registration under the Securities Act.                “Representatives” has the meaning set forth in the Merger Agreement.                “SEC” means the U.S. Securities and Exchange Commission.                “Securities Act” means the Securities Act of 1933, as amended.                “Shares” has the meaning set forth in the recitals.                “Shelf Registration Statement” has the meaning set forth in Section 3.1(b).                “Special Registration” has the meaning set forth in Section 3.1(d).                “Subsidiary” means, with respect to any Person, another Person, (a) an amount of   the voting securities, other voting ownership or voting partnership interests of which is sufficient   to elect at least a majority of its board of directors or other governing Person or body or (b) more   than fifty (50%) percent of the equity interests of which is owned directly or indirectly by such  first Person.                “Sunset Date” means the earlier of: (i) the last day of the first period of six   continuous months during which the Investor Percentage Interest is less than 20% and (ii) the   last day of the first period of six continuous months ending on or after the fifth (5th) anniversary   of the Closing Date during which the Investor Percentage Interest is less than 30%.                “Transfer” means (i) any direct or indirect offer, sale, lease, assignment,   encumbrance, pledge, hypothecation, disposition or other transfer (by operation of law or   otherwise), either voluntary or involuntary, or entry into any contract, option or other   arrangement or understanding with respect to any offer, sale, lease, assignment, encumbrance,   pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), of any   capital stock or interest in any capital stock or (ii) in respect of any capital stock or interest in   any capital stock, to enter into any swap or any other agreement, transaction or series of   transactions that hedges or transfers, in whole or in part, directly or indirectly, the economic   consequence of such ownership of such capital stock or interest in capital stock, whether any   such transaction, swap or series of transactions is to be settled by delivery of securities, in cash   or otherwise.  Notwithstanding anything to the contrary in this Agreement, a sale, transfer or   other change in the ownership of any equity interests in a Person shall not be deemed to result in   the Transfer of capital stock or any interest in capital stock held by such Person unless such sale,   transfer or other change in ownership results in a change of Control of such Person.                                            -28- 

 

                 “Underwritten Shelf Take-Down” has the meaning set forth in Section 3.1(b).                “Voting Securities” means shares of Company Common Stock and any other   securities of the Company entitled to vote generally at any annual or special meeting of the   Company’s stockholders.          4.2   Terms Generally.  The words “hereby,” “herein,” “hereof,” “hereunder” and   words of similar import refer to this Agreement as a whole and not merely to the specific section,   paragraph or clause in which such word appears.  All references herein to Articles and Sections   shall be deemed references to Articles and Sections of this Agreement unless the context shall   otherwise require.  The words “include,” “includes” and “including” shall be deemed to be   followed by the phrase “without limitation.”  References to “$” or “dollars” means United States   dollars.  The definitions given for terms in this Article IV and elsewhere in this Agreement shall   apply equally to both the singular and plural forms of the terms defined.  Whenever the context   may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.    References herein to any agreement or letter (including the Merger Agreement) shall be deemed   references to such agreement or letter as it may be amended, restated or otherwise revised from   time to time.  If, and as often as, there is any change in the outstanding shares of Company   Common Stock by reason of a share dividend or distribution, or stock split or other subdivision,   or in connection with a combination of stock, recapitalization, reclassification, merger,   amalgamation, arrangement, consolidation or other reorganization or other similar capital   transaction, appropriate anti-dilution adjustments will be made in the provisions of this   Agreement so as to fairly and equitably preserve the rights and obligations set forth herein.                                     ARTICLE V                                 MISCELLANEOUS          5.1   Term.  This Agreement will be effective as of the Closing Date and, except as   otherwise set forth herein will continue in effect thereafter until the earlier of (a) the time when   no shares of Company Common Stock are held by the Investor or any other Holder and (b) its   termination by the consent of all parties hereto or their respective successors in interest.          5.2   Representations and Warranties.  Each party hereto hereby represents and   warrants to each other party to this Agreement that as of the date such party executes this   Agreement:  (a) it is duly organized, validly existing and in good standing under the Laws of the   jurisdiction of its organization; (b) this Agreement has been duly and validly executed and   delivered by such party and this Agreement constitutes a legal and binding obligation of such   party , enforceable against the such party in accordance with its terms; (c) the execution, delivery  and performance by such party of this Agreement and the consummation by such party of the  transactions contemplated hereby will not, with or without the giving of notice or lapse of time,  or both (i) violate any Law applicable to it, or (ii) conflict with, or result in a breach or default  under, any term or condition of any agreement or other instrument to which such party is a party  or by which such party is bound, except for such violations, conflicts, breaches or defaults that  would not, in the aggregate, materially affect such party’s ability to perform its obligations  hereunder. The Investor hereby represents and warrants to the Company that:  (i) is acquiring its  shares of Company Common Stock for its own account, solely for investment and not with a  view toward, or for sale in connection with, any distribution thereof in violation of any federal or                                          -29- 

 

   state securities or “blue sky” laws, or with any present intention of distributing or selling such  shares of Company Common Stock in violation of any such laws, (ii) has such knowledge and  experience in financial and business matters and in investments of this type that it is capable of  evaluating the merits and risks of its investment in the shares of Company Common Stock and of  making an informed investment decision and (iii) is an “accredited investor” within the meaning  of Rule 501 of Regulation D under the Securities Act.          5.3   Legends; Securities Act Compliance.                 (a)   A copy of this Agreement shall be filed with the Secretary of the  Company and kept with the records of the Company.  Each Holder agrees that all certificates,  book entry shares or other instruments representing such Shares will bear a legend substantially  in to the following effect:               THE SECURITIES EVIDENCED BY THIS CERTIFICATE MAY NOT BE              SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE              OF AN EFFECTIVE REGISTRATION STATEMENTS FOR THE              SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED              (THE “SECURITIES ACT”) OR UNLESS THE COMPANY HAS RECEIVED              AN OPINION OF COUNSEL SATISFACTORY TO IT THAT THE              SECURITIES MAY BE SOLD PURSUANT TO RULE 144 OR ANOTHER              AVAILABLE EXEMPTION UNDER THE SECURITIES ACT AND THE              RULES AND REGULATIONS THEREUNDER.  THE SECURITIES              EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A              STOCKHOLDERS AGREEMENT WITH CERTAIN RESTRICTIONS ON              TRANSFER, COPIES OF WHICH MAY BE OBTAINED FROM THE              COMPANY OR FROM THE HOLDER OF THIS CERTIFICATE.  ANY              ATTEMPTED TRANSFER OR DISPOSITION OF THE SECURITIES              REPRESENTED BY THIS CERTIFICATE IN VIOLATION OF THE              STOCKHOLDERS’ AGREEMENT SHALL BE NULL, VOID AND OF NO              EFFECT.               (b)   Notwithstanding Section 5.3(a), at the request of the Investor or other  applicable Holder, (i) at such time as the restrictions described in the foregoing are no longer  applicable to the Investor or such other Holder and (ii) with respect to restrictions that refer to  the Securities Act or other Laws, upon receipt by the Company of an opinion of counsel to the  effect that the first sentence of the foregoing legend is no longer required under the Securities  Act or other Laws, as the case may be, the Company will promptly cause such legend to be  removed from any certificate or book entry share for any Shares held by the Investor or such  other Holder.         5.4   No Inconsistent Agreements.  The Company will not hereafter enter into any  agreement with respect to its securities that violates or is inconsistent or conflicts with the rights  granted to the holders of Registrable Securities in this Agreement.         5.5   Amendments and Waivers.  Except as otherwise provided herein, the provisions  of this Agreement may be amended or waived only upon the prior written consent of (i) the                                         -30- 

 

   Company by Company Non-Affiliate Approval and (ii) the Investor.  No failure or delay by any  party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor  shall any single or partial exercise thereof preclude any other or further exercise thereof or the  exercise of any other right, power or privilege.  The rights and remedies herein provided shall be  cumulative and not exclusive of any rights or remedies provided by applicable law.        5.6   Successors and Assigns.  Except as set forth in Section 3.8, neither this  Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of  the parties hereto, in whole or in part (whether by operation of law or otherwise), without the  prior written consent of the other party; provided, however, that the Investor may assign it rights  under (i) Article I to any Affiliate of the Investor; provided that such Affiliate (x) has executed a  customary joinder to this Agreement, in form and substance reasonably acceptable to the  Company, in which such Affiliate agrees to be subject to the terms and conditions of this  Agreement applicable to the Investor and (y) remains an Affiliate of the Fund for so long as  Article I remains in Effect; provided, further, that no more than one Person shall be entitled to  exercise the rights of the Investor under Article I at any time, and (ii) Section 2.3, in whole or in  part, to any Affiliate of the Investor, provided that such Affiliate (x) has executed a customary  joinder to this Agreement, in form and substance reasonably acceptable to the Company, in  which such Affiliate agrees to be subject to the terms and conditions of this Agreement  applicable to the Investor and (y) remains an Affiliate of the Fund for so long as Section 2.3  remains in effect.  This Agreement will be binding upon, inure to the benefit of and be  enforceable by the parties and their respective permitted successors and assigns.  Any attempted  assignment in violation of this Section 5.6 shall be void.          5.7   Severability.  Whenever possible, each provision of this Agreement will be  interpreted in such manner as to be effective and valid under Law, but if any provision of this  Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law  or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other  provision or the effectiveness or validity of any provision in any other jurisdiction, and this  Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid,  illegal or unenforceable provision had never been contained herein.         5.8   Counterparts.  This Agreement may be executed in two or more counterparts, all  of which shall be considered one and the same agreement and shall become effective when  counterparts have been signed by each of the parties and delivered to the other parties, it being  understood that each party need not sign the same counterpart.         5.9   Entire Agreement.  This Agreement (including the documents and the instruments  referred to in this Agreement), together with the Merger Agreement, constitutes the entire  agreement and supersedes all prior agreements and understandings, both written and oral,  between the parties with respect to the subject matter of this Agreement.         5.10  Governing Law; Jurisdiction.  This Agreement shall be governed by and  construed in accordance with the Laws of the state of Delaware applicable to contracts executed  and to be performed wholly within such State and without reference to the choice or conflict of  law principles (whether of the state of Delaware or any other jurisdiction) that would result in the  application of the Laws of a different jurisdiction.  Each party hereto irrevocably submits to the                                         -31- 

 

     jurisdiction of the Court of Chancery of the state of Delaware (or solely if such courts decline   jurisdiction in any federal court located in the state of Delaware) any Action arising out of or   relating to this Agreement, and hereby irrevocably agrees that all claims in respect of such   Action may be heard and determined in such court.  Each party hereto hereby irrevocably   waives, and agrees not to assert by way of motion, defense, counterclaim, or otherwise, the   defense of an inconvenient forum to the maintenance of such Action.  The parties hereto further   agree, (i) to the extent permitted by Law, that final and nonappealable judgment against any of   them in any Action contemplated above shall be conclusive and may be enforced in any other   jurisdiction within or outside the United States by suit on the judgment, a certified copy of which   shall be conclusive evidence of the fact and amount of such judgment and (ii) that service of   process upon such party in any such action or proceeding shall be effective if notice is given in   accordance with Section 5.14.          5.11  Waiver of Jury Trial.  Each party hereto knowingly, intentionally, and voluntarily   waives to the fullest extent permitted by applicable Law trial by jury in any action, proceeding or   counterclaim brought by any of them against the other arising out of or in any way connected   with this Agreement, or any other agreements executed in connection herewith or the   administration thereof or any of the transactions contemplated herein or therein.  No party hereto  shall seek a jury trial in any lawsuit, proceeding, counterclaim or any other litigation procedure  based upon, or arising out of, this Agreement or any related instruments or the relationship   between the parties hereto.  No party hereto will seek to consolidate any such action in which a   jury trial has been waived with any other action in which a jury trial cannot be or has not been   waived.  Each party hereto certifies that it has been induced to enter into this agreement or   instrument by, among other things, the mutual waivers and certifications set forth above in this   Section 5.11.  No party hereto has in any way agreed with or represented to any other party that   the provisions of this Section 5.11 will not be fully enforced in all instances.          5.12  Specific Performance.  The parties hereto agree that irreparable damage would   occur if any provision of this Agreement were not performed in accordance with the terms hereof   and that, except as otherwise provided in Section 5.10, the parties shall be entitled to an   injunction or injunctions or other equitable relief to prevent breaches of this Agreement or to   enforce specifically the performance of the terms and provisions hereof in any court set forth in   Section 5.10, in addition to any other remedy to which they are entitled at law or in equity.          5.13  No Third-Party Beneficiaries.  Nothing in this Agreement shall confer any rights   upon any Person other than the parties hereto and each such party’s respective heirs, successors   and permitted assigns, all of whom shall be third-party beneficiaries of this Agreement; provided   that (i) any Person (other than the Investors) that becomes an Investor shall be an intended third-  party beneficiary hereof and (ii) the Persons indemnified under Article III are intended third-  party beneficiaries of Article III.          5.14  Notices.  All notices and other communications to be given to any party hereunder   shall be sufficiently given for all purposes hereunder if in writing and upon delivery if delivered   by hand, one Business Day after being sent by courier or overnight delivery service, three (3)   Business Days after being mailed by certified or registered mail, return receipt requested, with   appropriate postage prepaid, or when sent in the form of a facsimile or e-mail and receipt   confirmation is received, and shall be directed to the address, facsimile number or e-mail set                                          -32- 

 

   forth below (or at such other address or facsimile number as such party shall designate by like  notice):               If to the Company, to:                     HighPoint Resources Corporation                   1099 18th Street, Suite 2300                    Denver, CO 80202                    Attention:  William M. Crawford                                Kenneth A. Wonstolen                    E-mail:     bcrawford@hpres.com                                kwonstolen@hpres.com               with a copy (which shall not constitute notice) to:                     Wachtell, Lipton, Rosen & Katz                    51 West 52nd Street                    New York, New York 10019                    Attention:  Mark Gordon                    E-mail:     MGordon@wlrk.com               If to the Investor, to:                     Fifth Creek Energy Company, LLC                    c/o NGP Natural Resources XI, L.P.                    5221 N. O’Connor Blvd., 11th Floor                    Irving, TX 75039                    Attention:  Jeffrey A. Zlotky                    E-mail:     jzlotky@ngptrs.com               with a copy (which shall not constitute notice) to:                     Vinson & Elkins LLP                    1001 Fannin Street, Suite 2500                    Houston, Texas 77002                    Attention:  Douglas E. McWilliams                    E-mail:     DMcWilliams@velaw.com               If to the Fund, to:                     NGP Natural Resources XI, L.P.                    5221 N. O’Connor Blvd., 11th Floor                    Irving, TX 75039                    Attention:  Jeffrey A. Zlotky                    E-mail:     jzlotky@ngptrs.com                    [The remainder of this page left intentionally blank.]                                         -33- 

 

 

 

                     NGP Natural Resources XI, L.P.                         By:                           Name:  Tony R. Weber                           Title:  Authorized Person    Signature Page to Stockholders Agreement

 

                                     Exhibit A                             Initial Company Directors   Board Representatives         •  Scott A. Gieselman         •  Craig S. Glick         •  Michael R. Starzer         •  Mark S. Berg         •  Andrew C. Kidd   Non-Investor Directors         •  Jim W. Mogg         •  William F. Owens         •  Edmund P. Segner        •  Randy I. Stein        •  Michael E. Wiley        •  R. Scot Woodall                                                                      A-1 

 

                                       Exhibit B                                Company Competitors    Approach Resources, Inc.   Anadarko Petroleum Corporation   Bayswater Exploration and Production, LLC   Bonanza Creek Energy, Inc.   Callon Petroleum Company   Carrizo Oil & Gas, Inc.   Clayton Williams Energy, Inc.   Comstock Resources, Inc.   Confluence Energy, LLC   Crestone Peak Resources   EOG Resources, Inc.   EXCO Resources, Inc.  Jones Energy, Inc.   Laredo Petroleum, Inc.  Matador Resources Company   Noble Energy Inc.  PDC Energy, Inc.  Resolute Energy Corporation  RSP Permian, Inc.  Samson Energy Company, LLC  Sanchez Energy Corporation  Sandridge Energy, Inc.  Synergy Resources Corporation  Verdad Oil & Gas Corporation  Whiting Petroleum Corporation                                          B-1

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