UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 27, 2016

 

 

ATLAS ENERGY GROUP, LLC

(Exact name of registrant specified in its charter)

 

 

 

Delaware   001-36725   45-3741247

(State or Other Jurisdiction

Of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

Park Place Corporate Center One

1000 Commerce Drive, Suite 400

Pittsburgh, PA 15275

(Address of principal executive offices, zip code)

Registrant’s telephone number, including area code: (412) 489-0006

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 1.01 Entry Into a Material Definitive Agreement.

Pursuant to the terms of the Second Lien Credit Agreement (the “ Second Lien Credit Agreement ”) by and among Atlas Energy Group, LLC (the “ Company ”), New Atlas Holdings, LLC, Riverstone Credit Partners, L.P. and the other lenders party thereto (the “ Lenders ”), dated as of March 30, 2016, on April 27, 2016 the Company issued to the Lenders warrants (the “ Warrants ”) to purchase an aggregate of up to 4,668,044 common units representing limited partner interests in the Company at an exercise price of $0.20 per unit. The Warrants expire on March 30, 2026 and are subject to customary anti-dilution provisions. The Warrants include a cashless exercise provision entitling the Lenders to surrender a portion of the underlying common units that has a value equal to the aggregate exercise price in lieu of paying cash upon exercise of a warrant.

This summary of the Warrants does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Warrants, the form of which is filed as Exhibit 4.1 to this Current Report on Form 8-K, which is incorporated by reference herein.

In connection with the issuance and sale of the Warrants, the Company entered into a registration rights agreement with the Lenders, dated April 27, 2016 (the “ Registration Rights Agreement ”), relating to the registered resale of the common units underlying the Warrants, as well as any common units issued as in-kind interest payments under the Second Lien Credit Agreement. Pursuant to the Registration Rights Agreement, the Company is required to file a shelf registration statement within 90 days of request by the Lenders and to use commercially reasonable efforts to cause such registration statement to become effective within 120 days of such request. In certain circumstances, the Lenders will have piggyback registration rights on certain registered offerings and will have rights to request an underwriter offering. The Lenders will cease to have rights under the Registration Rights Agreement on the later of (i) the earlier of (x) the fourth anniversary of the date on which all of such Lender’s Warrants have been exercised for common units and (y) April 27, 2026 and (ii) the earlier of (x) the date on which such Lender is no longer an “affiliate” as such term is defined in Rule 144 promulgated under the Securities Act of 1933, as amended (the “ Securities Act ”) and (y) April 27, 2026.

This summary of the Registration Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Registration Rights Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, which is incorporated by reference herein.

 

Item 3.02 Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 of this Current Report on Form 8-K regarding the Warrants is incorporated herein by reference.

The Warrants were, and the underlying common units will be, offered and sold in a private placement pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act. Other exemptions from registration may apply.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

In connection with the issuance of the Warrants on April 27, 2016, the board of directors of the Company amended (“ Amendment No. 2 ”) the Company’s Third Amended and Restated Limited Liability Company Agreement, dated as of February 27, 2015, as amended, to clarify certain tax provisions related to the issuance of the Warrants.

This summary of Amendment No. 2 does not purport to be complete and is subject to, and qualified in its entirety by, the full text of Amendment No. 2, which is filed as Exhibit 3.1 to this Current Report on Form 8-K, which is incorporated by reference herein.

 

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

 

Exhibit Number

  

Description

  3.1    Amendment No. 2, dated April 27, 2016, to Third Amended and Restated Limited Liability Company Agreement of Atlas Energy Group, LLC.
  4.1    Form of Warrant to Purchase Atlas Energy Group, LLC common units, issued effective as of March 30, 2016.
10.1    Registration Rights Agreement, dated as of April 27, 2016, by and among Atlas Energy Group, LLC, Riverstone Credit Partners, L.P., AEG Asset Management, LLC and The Leon and Toby Cooperman Family Foundation.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    ATLAS ENERGY GROUP, LLC
Dated: April 29, 2016     By:  

/s/ Jeffrey M. Slotterback

      Name:   Jeffrey M. Slotterback
      Title:   Chief Financial Officer


EXHIBIT INDEX

 

Exhibit Number

  

Description

  3.1    Amendment No. 2, dated April 27, 2016, to Third Amended and Restated Limited Liability Company Agreement of Atlas Energy Group, LLC.
  4.1    Form of Warrant to Purchase Atlas Energy Group, LLC common units, issued effective as of March 30, 2016.
10.1    Registration Rights Agreement, dated as of April 27, 2016, by and among Atlas Energy Group, LLC, Riverstone Credit Partners, L.P., AEG Asset Management, LLC and The Leon and Toby Cooperman Family Foundation.

Exhibit 3.1

AMENDMENT NO. 2 TO THE THIRD AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT OF

ATLAS ENERGY GROUP, LLC

THIS AMENDMENT NO. 2 TO THE THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF ATLAS ENERGY GROUP, LLC (this “ Amendment ”), dated as of April 27, 2016, is entered into and effectuated by the Board of Directors (the “ Board of Directors ”) of Atlas Energy Group, LLC (the “ Company ”) pursuant to authority granted to it in Sections 5.5 and 12.1 of the Third Amended and Restated Limited Liability Company Agreement of Atlas Energy Group, LLC, dated as of February 27, 2015, as amended (the “ Limited Liability Company Agreement ”). Capitalized terms used but not defined herein are used as defined in the Limited Liability Company Agreement.

RECITALS:

WHEREAS, Section 5.5(a) of the Limited Liability Company Agreement provides that the Company may issue additional Company Interests and options, rights, warrants and appreciation rights relating to the Company Interests for any Company purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the Board of Directors shall determine, all without the approval of any Members;

WHEREAS, Section 12.1(g) of the Limited Liability Company Agreement provides that the Board of Directors, without the approval of any Member, may amend any provision of the Limited Liability Company Agreement that the Board of Directors determines to be necessary or appropriate in connection with the authorization or issuance of any class or series of Company Interests, or any options, warrants, rights and/or appreciation rights relating to any Company Interest, pursuant to Section 5.5(a) of the Limited Liability Company Agreement;

WHEREAS, the Board of Directors has determined that the issuance of warrants to purchase up to 4,668,044 Common Units in connection with is permitted by Section 5.5 of the Limited Liability Company Agreement; and

WHEREAS, the Board of Directors deems it in the best interest of the Company to effect this Amendment to provide for certain tax matters as are provided herein.

NOW, THEREFORE, it is hereby agreed as follows:

A. Amendment . The Limited Liability Company Agreement is hereby amended as follows:

1. Section 5.4(d)(i) of the Limited Liability Company Agreement is amended and restated in its entirety to read as follows:

(i) In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f) and Treasury Regulation Section 1.704-1(b)(2)(iv)(s), on an issuance of additional Company Interests for cash or Contributed Property or the issuance of Company Interests as

 

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consideration for the provision of services or the conversion of a Series A Preferred Unit or the exercise of a warrant exercisable in exchange for a Company Interest, the Capital Account of all Members and the Carrying Value of each Company property immediately prior to such issuance, or immediately after such conversion (with respect to the conversion of a Series A Preferred Unit or the exercise of a warrant exercisable in exchange for a Company Interest), shall be adjusted upward or downward to reflect any Unrealized Gain or Unrealized Loss attributable to such Company property, as if such Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each such property for an amount equal to its fair market value immediately prior to such issuance or such conversion; provided , that in the event of an issuance of Company Interests for a de minimis amount of cash or Contributed Property, or in the event of an issuance of a de minimis amount of Company Interests as consideration for the provision of services, the Board of Directors may determine that such adjustments are unnecessary for the proper administration of the Company; provided, further , that, in the event of multiple conversions of Series A Preferred Units and/or exercises of a warrant exercisable for a Company Interest within a single Month or shorter time period, the Board of Directors may (to the extent not prohibited by Treasury Regulations or similarly binding authority) adjust the Capital Account of all Members and the Carrying Value of each Company property once for such period or otherwise adjust the timing of such adjustments to reduce the administrative burden of multiple adjustments. Any such Unrealized Gain or Unrealized Loss (or items thereof) shall be allocated (A) if the operation of this sentence is triggered by the conversion of a Series A Preferred Unit or the exercise of a warrant exercisable for a Company Interest, first to the Members holding Common Units and converted Series A Preferred Units and exercised warrants until the Capital Account attributable to each such Unit is the same, and (B) any remaining Unrealized Gain or Unrealized Loss shall be allocated among the Members pursuant to Section 6.1 in the same manner as any item of gain or loss actually recognized would have been allocated. If the Unrealized Gain or Unrealized Loss allocated as a result of the conversion of a Series A Preferred Unit or the exercise of a warrant exercisable for a Company Interest is not sufficient to cause the Capital Account attributable to each Common Unit and converted Series A Preferred Unit and exercised warrants to be the same, then Capital Account balances shall be reallocated between the Members holding such Units so as to cause the Capital Account attributable to each such Unit to be the same, in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(s)(3). In determining such Unrealized Gain or Unrealized Loss for purposes of maintaining Capital Accounts, the aggregate fair market value of all Company property (including cash or cash equivalents) immediately prior to the issuance of additional Company Interests or the conversion of a Series A Preferred Unit or the exercise of a warrant exercisable for a Company Interest shall be determined by the Board of Directors using such method of valuation as it may adopt. For this purpose, the Board of Directors may determine that it is appropriate to first determine an aggregate value for the Company, based on the current trading price of the Common Units, and taking fully into account the fair market value of the Company Interests (on a fully converted basis) of all Members at such time and, if before the conversion of any Series A Preferred Units or the exercise of any warrants exercisable in exchange for a Company Interest, may

 

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(A) reduce the fair market value of all Company assets by the excess, if any, of the sum of the fair market value of any unconverted Series A Preferred Units and the fair market value of any unexercised warrants exercisable in exchange for a Company Interest over the aggregate Capital Accounts attributable to such Series A Preferred Units to the extent of any Unrealized Gain that has not been reflected in the Members’ Capital Accounts previously, and

(B) increase the fair market value of all Company assets by the excess, if any, of the aggregate Capital Accounts attributable to such Series A Preferred Units, over the sum of the fair market value of any unconverted Series A Preferred Units and the fair market value of any unexercised warrants exercisable in exchange for a Company Interest to the extent of any Unrealized Loss that has not been reflected in the Members’ Capital Accounts previously,

in each case consistent with the methodology of Treasury Regulation Section 1.704-1(b)(2)(iv)(h)(2). The Board of Directors shall allocate such aggregate value among the assets of the Company (in such manner as it determines) to arrive at a fair market value for individual properties.

B. Agreement in Effect . Except as hereby amended, the Limited Liability Company Agreement shall remain in full force and effect.

C. Applicable Law . This Amendment shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to principles of conflicts of laws.

D. Invalidity of Provisions . If any provisions of this Amendment are or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

 

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IN WITNESS WHEREOF, this Amendment has been executed as of the date first written above.

 

ATLAS ENERGY GROUP, LLC
By:  

/s/ Jeffrey Slotterback

Name: Jeffrey Slotterback
Title: Chief Financial Officer

 

[ Signature Page to Amendment No. 2 to Third A&R LLC Agreement of Atlas Energy Group, LLC ]

Exhibit 4.1

FORM OF WARRANT

THIS WARRANT AND THE SECURITIES FOR WHICH THIS WARRANT MAY BE EXERCISED (COLLECTIVELY, THE “ SECURITIES ”) HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF, THE SECURITIES ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS.

ATLAS ENERGY GROUP, LLC

W ARRANT T O P URCHASE C OMMON U NITS

 

Warrant No.: [●]

 

Number of Common Units: [●]

Atlas Energy Group, LLC, a Delaware limited liability company (the “ Company ”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, [●], the registered holder hereof or its permitted assigns (the “ Holder ”), is entitled, subject to the terms set forth below, to purchase from the Company, at any time or times on or after the date hereof, but not after 5:00 P.M. New York City time on the Expiration Date up to [●] ( [ ] ) Common Units (the “ Warrant Units ”) at the Exercise Price.

This Warrant has been issued effective as of March 30, 2016 (the “ Original Issue Date ”) pursuant to that certain Second Lien Credit Agreement by and among the Company, New Atlas Holdings, LLC, Riverstone Credit Partners, L.P., as the administrative agent and collateral agent, and the other lender party thereto, dated as of March 30, 2016 (the “ Second Lien Credit Agreement ”).

Section 1. Definitions . The following words and terms as used in this Warrant shall have the following meanings:

(a) “ Board ” means the board of directors of the Company.

(b) “ Business Combination ” means any of the following: (i) a merger, consolidation, statutory share exchange or similar transaction that requires approval of the common unitholders of the Company; (ii) the sale, transfer or disposition, including any spin-off or in-kind distribution of all or substantially all of the assets, business or securities of the Company (on a consolidated basis) to any Person or group (other than the Company or one or more of its wholly-owned subsidiaries); (iii) the dissolution, liquidation or winding up of the Company; or (iv) the Company effecting any reorganization, recapitalization (which shall not include, for the avoidance of doubt, any issuance of Common Units for cash) or reclassification of the Common Units, other than dividends and splits subject to Section 8 , or any compulsory exchange pursuant to which the Common Units are effectively converted into or exchanged for other securities, cash or property.

(c) “ Business Day ” means any day other than Saturday, Sunday or other day on which commercial banks in the city of New York are authorized or required by law to remain closed.

(d) “ Common Units ” means (i) the common units representing limited liability company interests in the Company and (ii) any capital securities into which such Common Units shall have been changed or any capital securities resulting from a reclassification of such Common Units.


(e) “ Common Units Deemed Outstanding ” means, at any given time, the sum of (a) the number of Common Units actually outstanding at such time, plus (b) the number of Common Units issuable upon exercise of Options actually outstanding at such time, plus (c) the number of Common Units issuable upon conversion or exchange of Convertible Securities actually outstanding at such time (treating as actually outstanding any Convertible Securities issuable upon exercise of Options actually outstanding at such time), in each case, regardless of whether the Options or Convertible Securities are actually exercisable or convertible at such time; provided , that Common Units Deemed Outstanding at any given time shall not include units owned or held by or for the account of the Company or any of its wholly owned subsidiaries.

(f) “ Convertible Securities ” means any securities (directly or indirectly) convertible into or exchangeable for Common Units, but excluding Options.

(g) “ Disinterested Director ” means each member of the Board of Directors who is not an officer, employee, director or other Affiliate of the party to the transaction in connection with which the Company is required to make a determination of the fair value of any assets or property.

(h) “ Excluded Issuances ” means any issuance or sale (or deemed issuance or sale in accordance with Section 8(a)(iv) ) by the Company after the Original Issue Date of: (i) Common Units issued upon the exercise of this Warrant or any Common Unit or other Option issued pursuant to the terms of the Second Lien Credit Agreement; (ii) Common Units issued directly or upon the exercise of Options to directors, officers, employees, or consultants of the Company pursuant to the Company’s long-term incentive plan (including all Common Units and Options outstanding prior to the Original Issue Date); and (iii) additional Series A Preferred Units issued as distributions in kind to the holders of the Company’s Series A Preferred Units, which units, in each case, shall have the rights, privileges and conversion terms as in effect on the date hereof.

(i) “ Exercise Date ” means for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 2 shall have been satisfied at or prior to 5:00 p.m., New York City time, on a Business Day, including the receipt by the Company of the Exercise Delivery Documents.

(j) “ Exercise Price ” shall be equal to, with respect to each Warrant Unit, $0.20, subject to adjustment as hereinafter provided.

(k) “ Expiration Date ” means March 30, 2026.

(l) “ Fair Market Value ” means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Units for such day on all domestic securities exchanges on which the Common Units may at the time be listed; (b) if there have been no sales of the Common Units on any such exchange on any such day, the average of the highest bid and lowest asked prices for the Common Units on all such exchanges at the end of such day; (c) if on any such day the Common Units are not listed on a domestic securities exchange, the closing sales price of the Common Units as quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Units on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for the Common Units quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over ten (10) consecutive Business Days ending on the Business Day immediately prior to the day as of which “Fair Market Value” is being determined; provided , that if the Common Units are listed on any

 

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domestic securities exchange, the term “Business Day” as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Units are not listed on any domestic securities exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association, the “Fair Market Value” of the Common Units shall be the fair market value per unit as determined jointly by the Board and the Holder.

(m) “ LLC Agreement ” means the Third Amended and Restated Limited Liability Company Agreement of the Company, as the same may be amended from time to time.

(n) “ Options ” means any warrants or other rights or options to subscribe for or purchase Common Units or Convertible Securities.

(o) “ OTC Bulletin Board ” means the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

(p) “ Person ” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof or any other legal entity.

(q) “ Pink OTC Markets ” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB and OTC Pink.

(r) “ Registration Rights Agreement ” means that certain registration rights agreement dated of even date herewith, by and among the Company, the Holder and the other parties thereto.

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

(t) “ Warrant ” means this Warrant and all Warrants issued in exchange, transfer or replacement hereof pursuant to the terms of this Warrant.

Section 2. Exercise of Warrant .

(a) Subject to the terms and conditions hereof, Warrants may be exercised by the Holder, in whole or in part, at any time on any Business Day on or after the date hereof and prior to 5:00 P.M. New York City time on the Expiration Date by (i) delivery of a written notice, in the form attached as Exhibit A hereto (the “ Exercise Notice ”), of such holder’s election to exercise his Warrants, which notice shall specify the number of Warrant Units to be purchased, and (ii) payment to the Company of an amount equal to the Exercise Price multiplied by the number of Warrant Units as to which his Warrant is being exercised (the “ Aggregate Exercise Price ”) in accordance with Section 2(b) .

(b) Payment of the Aggregate Exercise Price shall be made, at the option of the Holder as expressed in the Exercise Notice, by the following methods:

(i) by wire transfer of immediately available funds (or by check if the Company has not provided the Holder with wire transfer instructions for such payment) in the amount of such Aggregate Exercise Price; or

 

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(ii) by instructing the Company to withhold a number of Warrant Units then issuable upon exercise of this Warrant with an aggregate Fair Market Value on the day immediately preceding the date on which the Holder deivers an Exercise Notice equal to such Aggregate Exercise Price.

In the event of any withholding of Warrant Units pursuant to clause (ii) above where the number of units whose value is equal to the Aggregate Exercise Price is not a whole number, the number of units withheld by the Company shall be rounded up to the nearest whole unit and the Company shall make a cash payment to the Holder (by delivery of a certified or official bank check or by wire transfer of immediately available funds) based on the incremental fraction of a unit being so withheld by the Company in an amount equal to the product of (x) such incremental fraction of a unit being so withheld multiplied by (y) the Fair Market Value per Warrant Unit as of the Exercise Date.

(c) In the event of any exercise of the rights represented by the Warrant in compliance with Section 2 , the Company shall on the second (2nd) Business Day (the “ Warrant Unit Delivery Date ”) following the date of its receipt of the later of the Exercise Notice and the Aggregate Exercise Price (the “ Exercise Delivery Documents ”), issue the Warrant Units to which the Holder shall be entitled by registering such Warrant Units in the name of the Holder or its designee upon the books and records of the Company, the number of Common Units to which the Holder shall be entitled. Upon the later of the date of delivery of (x) the Exercise Notice and (y) the Aggregate Exercise Price, a Holder of Warrants shall be deemed for all purposes to have become the Holder of record of the Warrant Units with respect to which his Warrant has been exercised (the date thereof being referred to as the “ Deemed Issuance Date ”), irrespective of the date of delivery of the Warrant Units. In the case of a dispute as to the determination of the arithmetic calculation of the number of Warrant Units, the Company shall promptly issue to the Holder the number of Warrant Units that is not disputed and shall submit the disputed determinations or arithmetic calculations to the Holder within two (2) Business Days of receipt of the Holder’s Exercise Notice. If the Holder and the Company are unable to agree upon the determination of the arithmetic calculation of the number of Warrant Units within one (1) Business Day of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall promptly submit the disputed arithmetic calculation of the number of Warrant Units to its independent public accountant. The Company shall direct the independent accountant to perform the determinations or calculations and notify the Company and the Holder of the results no later than two (2) Business Days after the date it receives the disputed determinations or calculations. Such independent accountant’s determination or calculation, as the case may be, shall be deemed conclusive absent demonstrable error.

(d) If this Warrant is submitted for exercise, as may be required by Section 2(f) , and unless the rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, as soon as practicable and in no event later than four (4) Business Days after receipt of this Warrant and at its own expense, issue a new Warrant identical in all respects to this Warrant except it shall represent rights to purchase the number of Warrant Units purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Units with respect to which such Warrant is exercised.

(e) No fractional Common Units are to be issued upon the exercise of this Warrant, but rather the number of Common Units issued upon exercise of this Warrant shall be rounded up or down to the nearest whole number (with 0.5 rounded up).

(f) Notwithstanding anything to the contrary set forth herein, upon exercise of this Warrant in accordance with the terms hereof, the Holder shall not be required to physically surrender this Warrant to the Company unless it is being exercised for all of the Warrant Units represented by the Warrant. The Holder and the Company shall maintain records showing the number of Warrant Units

 

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exercised and issued and the dates of such exercises or shall use such other method, reasonably satisfactory to the Holder and the Company, so as not to require physical surrender of this Warrant upon each such exercise. In the event of any dispute or discrepancy, such records of the Company establishing the number of Warrant Units to which the Holder is entitled shall be controlling and determinative in the absence of demonstrable error. Notwithstanding the foregoing, if this Warrant is exercised as aforesaid, the Holder may not transfer this Warrant unless the holder first physically surrenders this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant of like tenor, registered as the holder may request, representing in the aggregate the remaining number of Warrant Units represented by this Warrant. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following exercise of any portion of this Warrant, the number of Warrant Units represented by this Warrant may be less than the number stated on the face hereof. Each Warrant shall bear the following legend:

ANY TRANSFEREE OF THIS WARRANT SHOULD CAREFULLY REVIEW THE TERMS OF THIS WARRANT, INCLUDING SECTION 2(f) THEREOF. THE NUMBER OR WARRANT UNITS FOR WHICH THIS WARRANT IS EXERCISABLE MAY BE LESS THAN THE NUMBER SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 2(f) THEREOF.

Section 3. Representations and Covenants . The Company hereby represents, covenants and agrees as follows:

(a) This Warrant is, and any Warrants issued in substitution for or replacement of this Warrant will upon issuance be, duly authorized and validly issued.

(b) All Warrant Units that may be issued upon the exercise of the rights represented by the Warrants will, upon issuance, be validly issued, fully paid and nonassessable, subject to applicable provisions of the Delaware Limited Liability Company Act, free of preemptive rights and free from all taxes, liens, charges and security interests with respect to the issuance thereof.

(c) During the period within which the rights represented by the Warrant may be exercised, the Company will at all times have authorized and reserved a sufficient number of Common Units to provide for the exercise of the rights then represented by the Warrants.

(d) The Company shall promptly secure the listing of the Common Units issuable upon exercise of this Warrant on the market or exchange on which the Common Units are traded or listed, if any, and shall maintain, so long as any other Common Units shall be so traded or listed, such listing of all Common Units from time to time issuable upon the exercise of this Warrant.

(e) The Company will not, by amendment of its LLC Agreement or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but will at all times in good faith assist in the carrying out of all the provisions of the Warrants and in the taking of all such action as may reasonably be requested by the Holder of any Warrant in order to protect the exercise privilege of such Holder against impairment, consistent with the tenor and purpose of the Warrants. Without limiting the generality of the foregoing, the Company will take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue Common Units upon the exercise of any Warrants.

 

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(f) The Warrants will be binding upon any entity succeeding to the Company by merger, consolidation or acquisition of all or substantially all of the Company’s assets.

Section 4. Taxes . Company shall pay any and all taxes (excluding income taxes, franchise taxes or other taxes levied on gross earnings, profits or the like of Holders of Warrants) that may be payable with respect to the issuance and delivery of Warrant Units upon exercise of Warrants.

Section 5. Holder not deemed a Member . The Holder, as such, shall not be entitled to vote or receive distributions or be deemed the holder of Common Units for any purpose solely due to its ownership of the Warrant, nor shall anything contained in the Warrant be construed to confer upon the Holder, as such, any of the rights of a member of the Company or any right to vote, give or withhold consent to any Company action (whether any reorganization, issue of limited liability company units or interests, reclassification of limited liability company units of interests, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive distributions or subscription rights, or otherwise, prior to the Deemed Issuance Date of the Warrant Units that such Holder is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any obligations or liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a member of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.

Section 6. Representations of Holder .

(a) The holder of this Warrant, by the acceptance hereof, represents that it is acquiring this Warrant, and upon exercise hereof will acquire the Warrant Units, for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Units, except pursuant to transactions registered or exempted from registration under the Securities Act; provided, however , that by making the representations herein, the Holder does not agree to hold this Warrant or any of the Warrant Units for any minimum or other specific term and reserves the right to dispose of this Warrant and the Warrant Units at any time in accordance with or pursuant to a registration statement or an exemption from registration under the Securities Act.

(b) The Holder further represents, by acceptance hereof, that, as of this date, such holder is an “accredited investor” as such term is defined in Rule 501of Regulation D promulgated by the Securities and Exchange Commission under the Securities Act (an “ Accredited Investor ”) and has had the opportunity to ask questions and receive answers concerning the Company, the Warrant and the offering thereof from the Company. The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Units.

(c) The Holder understands and acknowledges that this Warrant and the Warrant Units to be issued upon exercise hereof are “restricted securities” under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(d) Each delivery of an Exercise Notice shall constitute confirmation at such time by the Holder of the representations concerning the Warrant Units set forth in this Section 6 , unless

 

6


contemporaneous with the delivery of such Exercise Notice, the Holder notifies the Company in writing that it is not making such representations (a “ Representation Notice ”). If the Holder delivers a Representation Notice in connection with an exercise, it shall be a condition to such holder’s exercise of this Warrant and the Company’s obligations set forth in Section 2 in connection with such exercise, that the Company receive such other representations as the Company considers reasonably necessary to assure the Company that the issuance of its securities upon exercise of this Warrant shall not violate any United States or state securities laws, and the time periods for the Company’s compliance with its obligations set forth in Section 2 shall be tolled until such Holder provides the Company with such other representations.

Section 7. Ownership and Transfer .

(a) The Company shall maintain at its principal executive offices or at the offices of its transfer agent (or such other office or agency of the Company as it may designate by notice to the Holder), a register for this Warrant, in which the Company shall record the name and address of the person in whose name this Warrant has been issued, as well as the name and address of each transferee. The Company may treat the person in whose name any Warrant is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any transfers made in accordance with the terms of this Warrant.

(b) This Warrant and the rights granted hereunder shall be assignable by the Holder without the consent of the Company (subject to the requirements of Section 7(c) ); in connection with any such transfer or assignment, Holder must comply with the requirements set forth in the Form of Assignment substantially in the form attached hereto as Exhibit B . If such transfer or assignment shall be permitted by the preceding sentence, title to a Warrant shall be transferred upon delivery thereof duly endorsed by the Holder or by his duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment or authority to transfer, together with a properly completed Form of Assignment in substantially the form attached hereto as Exhibit B . The Company shall immediately register all properly completed assignments and transfers.

(c) Neither the Warrant nor the Warrant Units shall be transferable by any Holder except in compliance with all federal and applicable state securities laws. Prior to any transfer, and as a condition thereto, the Company may, in its reasonable discretion, require certification by any responsible officer of the Holder and the transferee with respect to compliance with all federal and applicable state securities laws.

(d) The Company is obligated to register the resale of the Warrant Units under the Securities Act pursuant to the Registration Rights Agreement, and the Holder (and assignees thereof) is entitled to the registration rights in respect of the Warrant Units to the extent set forth in the Registration Rights Agreement.

Section 8. Adjustments . The Exercise Price and the number of Common Units issuable upon exercise of this Warrant shall be subject to adjustment from time to time as follows; provided , that if more than one subsection of this Section 8 is applicable to a single event, the subsection shall be applied that produces the largest adjustment and no single event shall cause an adjustment under more than one subsection of this Section 8 so as to result in duplication:

(a) Issuance of Common Units .

(i) Except as provided in Section 8(a)(iii) and except in the case of an event described in either Section 8(b) or Section 8(c) , if the Company shall, at any time or from time to time

 

7


after the Original Issue Date, issue or sell, or in accordance with Section  8(a)(iv) is deemed to have issued or sold, any Common Units without consideration or for consideration per unit less than the Exercise Price in effect immediately prior to such issuance or sale (or deemed issuance or sale), then immediately upon such issuance or sale (or deemed issuance or sale), the Exercise Price in effect immediately prior to any such issuance or sale (or deemed issuance or sale) shall be reduced (and in no event increased) to an Exercise Price equal to the quotient obtained by dividing (x) the sum of (A) the product obtained by multiplying the number of Common Units deemed outstanding immediately prior to such issuance or sale (or deemed issuance or sale) by of the Exercise Price then in effect plus (B) the aggregate consideration, if any, received by the Company upon such issuance or sale (or deemed issuance or sale) by (y) the sum of (A) the number of Common Units Deemed Outstanding immediately prior to such issuance or sale (or deemed issuance or sale) plus (B) the aggregate number of Common Units issued or sold (or deemed issued or sold) by the Company in such issuance or sale (or deemed issuance or sale).

(ii) Upon any and each adjustment of the Exercise Price as provided in Section 8(a)(i) , the number of Warrant Units issuable upon the exercise of this Warrant immediately prior to any such adjustment shall be increased to a number of Warrant Units equal to the quotient obtained by dividing (x) the product of (A) the Exercise Price in effect immediately prior to any such adjustment multiplied by (B) the number of Warrant Units issuable upon exercise of this Warrant immediately prior to any such adjustment by (y) the Exercise Price resulting from such adjustment.

(iii) Anything herein to the contrary notwithstanding, there shall be no adjustment to the Exercise Price or the number of Warrant Units issuable upon exercise of this Warrant with respect to any Excluded Issuance.

(iv) For purposes of determining the adjusted Exercise Price under Section 8(a)(i) , the following shall be applicable:

(A) If the Company shall, at any time or from time to time after the Original Issue Date, in any manner issue, distribute, grant or sell (whether directly or by assumption in a merger or otherwise) any Options, whether or not such Options (excluding, for avoidance of doubt, the Warrants) or the right to convert or exchange any Convertible Securities issuable upon the exercise of such Options are immediately exercisable, and the price per unit (determined as provided in this paragraph and in Section 8(a)(iv)(E) ) for which Common Units are issuable upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon the exercise of such Options is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such Options, then the total maximum number Common Units issuable upon the exercise of such Options or upon conversion or exchange of the total maximum amount of Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued as of the date of granting or sale of such Options (and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price under Section 8(a)(i) ), at a price per unit equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable consideration received for purposes of Section 8(a)(i) ) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting or sale of all such Options, plus (y) the minimum aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus (z), in the case of such Options which relate to Convertible Securities, the minimum aggregate amount of additional consideration, if any, payable to the Company upon the issuance or sale of all such Convertible Securities and the conversion or exchange of all such Convertible Securities, by (B) the total maximum number of Common Units issuable upon the exercise of all such Options or upon the conversion or exchange of all Convertible Securities issuable upon the exercise of all such Options. Except as otherwise provided in Section 8(a)(iv)(C) , no further adjustment of the Exercise Price shall be made upon the actual issuance of Common Units or of Convertible Securities upon exercise of such Options or upon the actual issuance of Common Units upon conversion or exchange of Convertible Securities issuable upon exercise of such Options.

 

8


(B) If the Company shall, at any time or from time to time after the Original Issue Date, in any manner issue, distribute, grant or sell (whether directly or by assumption in a merger or otherwise) any Convertible Securities, whether or not the right to convert or exchange any such Convertible Securities is immediately exercisable, and the price per unit (determined as provided in this paragraph and in Section 8(a)(iv)(E) ) for which Common Units are issuable upon the conversion or exchange of such Convertible Securities is less than the Exercise Price in effect immediately prior to the time of the granting or sale of such Convertible Securities, then the total maximum number of Common Units issuable upon conversion or exchange of the total maximum amount of such Convertible Securities shall be deemed to have been issued as of the date of granting or sale of such Convertible Securities (and thereafter shall be deemed to be outstanding for purposes of adjusting the Exercise Price pursuant to Section 8(a)(i) ), at a price per unit equal to the quotient obtained by dividing (A) the sum (which sum shall constitute the applicable consideration received for purposes of Section 8(a)(i) ) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting or sale of such Convertible Securities, plus (y) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange of all such Convertible Securities, by (B) the total maximum number of Common Units issuable upon the conversion or exchange of all such Convertible Securities. Except as otherwise provided in Section 8(a)(iv)(C) , no further adjustment of the Exercise Price shall be made upon the actual issuance of Common Units upon conversion or exchange of such Convertible Securities.

(C) Upon any change in any of (w) the total amount received or receivable by the Company as consideration for the issuance, granting or sale of any Options or Convertible Securities referred to in Section 8(a)(iv)(A) or Section 8(a)(iv)(B) hereof, (x) the minimum aggregate amount of additional consideration, if any, payable to the Company upon the exercise of any Options or upon the issuance, conversion or exchange of any Convertible Securities referred to in Section 8(a)(iv)(A) or Section 8(a)(iv)(B) hereof, (y) the rate at which Convertible Securities referred to in Section 8(a)(iv)(A) or Section 8(a)(iv)(B) hereof are convertible into or exchangeable for Common Units, or (z) the maximum number of Common Units issuable in connection with any Options referred to in Section 8(a)(iv)(A) hereof or any Convertible Securities referred to in Section 8(a)(iv)(B) hereof (in each case, other than in connection with an Excluded Issuance), then (whether or not the original issuance or sale of such Options or Convertible Securities resulted in an adjustment to the Exercise Price pursuant to this Section 8 ) the Exercise Price in effect at the time of such change shall be adjusted or readjusted, as applicable, to the Exercise Price which would have been in effect at such time pursuant to the provisions of this Section 8 had such Options or Convertible Securities still outstanding provided for such changed consideration, conversion rate or maximum number of units, as the case may be, at the time initially granted, issued or sold, but only if as a result of such adjustment or readjustment, the Exercise Price then in effect is reduced and the number of Warrant Units issuable upon exercise of this Warrant immediately prior to any such adjustment or readjustment shall be correspondingly adjusted or readjusted pursuant to the provisions of Section 8(a)(ii) .

(D) Upon the expiration or termination of any unexercised Option (or portion thereof) or any unconverted or unexchanged Convertible Security (or portion thereof) for which any adjustment (either upon its original issuance or upon a revision of its terms) was made pursuant to this Section 8 (including upon the redemption or purchase for consideration of all or any portion of such Option or Convertible Security by the Company), the Exercise Price then in effect hereunder shall forthwith be changed pursuant to the provisions of this Section 8 to the Exercise Price which would have been in effect at the time of such expiration or termination had such unexercised Option (or portion thereof) or unconverted or unexchanged Convertible Security (or portion thereof), to the extent outstanding immediately prior to such expiration or termination, never been issued.

 

9


(E) If the Company shall, at any time or from time to time after the Original Issue Date, issue or sell, or is deemed to have issued or sold in accordance with Section 8(a)(iv) , any Common Units, Options or Convertible Securities: (w) for cash, the consideration received therefor shall be deemed to be the net amount received by the Company therefor; (x) for consideration other than cash, the amount of the consideration other than cash received by the Company shall be the fair value of such consideration, except (i) where such consideration consists of marketable securities, in which case the amount of consideration received by the Company shall be the market price (as reflected on any securities exchange, quotation system or association or similar pricing system covering such security) for such securities as of the end of business on the date of receipt of such securities and (ii) where such consideration is received in connection with any transaction with an Affiliate of the Company, such value shall be determined in good faith by (1) a majority of the Board of Directors of the Company, including a majority of the Disinterested Directors, or (2) a nationally recognized investment banking, appraisal or valuation firm, which is not an Affiliate of the Company, in each case, taking into account, among all other factors deemed relevant by the Board of Directors or the investment banking, appraisal or valuation firm, the trading price and volume of such security on any national securities exchange or automated quotation system on which such security is traded; (y) for no specifically allocated consideration in connection with an issuance or sale of other securities of the Company, together comprising one integrated transaction, the amount of the consideration therefor shall be deemed to be the fair value of such portion of the aggregate consideration received by the Company in such transaction as is attributable to such Common Units, Options or Convertible Securities, as the case may be, issued in such transaction; or (z) to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving corporation, the amount of consideration therefor shall be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such Common Units, Options or Convertible Securities, as the case may be, issued to such owners. The net amount of any cash consideration and the fair value of any consideration other than cash or marketable securities shall be determined in good faith jointly by the Board and the Holder.

(b) Splits, Subdivisions, Reclassifications or Combinations . If the Company shall (i) declare and pay a dividend or make a distribution on its Common Units in Common Units or units of any other capital securities of the Company, (ii) subdivide or reclassify the outstanding Common Units into a greater number of units or (iii) combine or reclassify the outstanding Common Units into a smaller number of units, the number of Warrant Units issuable upon exercise of this Warrant at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted so that a Warrant Holder after such date shall be entitled to purchase the aggregate number and kind of capital securities which such Holder would have owned or been entitled to receive in respect of Common Units subject to this Warrant after such date had this Warrant been exercised immediately prior to such date. In such event, the Exercise Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification shall be adjusted to the number obtained by dividing (x) the product of (1) the number of Warrant Units issuable upon the exercise of this Warrant before such adjustment and (2) the Exercise Price in effect immediately prior to the record or effective date, as the case may be, for the dividend, distribution, subdivision, combination or reclassification giving rise to this adjustment by (y) the new number of Warrant Units issuable upon exercise of the Warrant determined pursuant to the immediately preceding sentence.

(c) Business Combinations . In case of any Business Combination or reclassification of Common Units, the Holder’s right to receive Warrant Units upon exercise of this Warrant shall be

 

10


converted into the right to exercise this Warrant to acquire the number of units or other securities or property (including cash) which the Common Unit issuable (at the time of such Business Combination or reclassification) upon exercise of this Warrant immediately prior to such Business Combination or reclassification would have been entitled to receive upon consummation of such Business Combination or reclassification; and in any such case, if necessary, the provisions set forth herein with respect to the rights and interests thereafter of the Holder shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to the Holder’s right to exercise this Warrant in exchange for any shares of stock or other securities or property pursuant to this paragraph. In determining the kind and amount of units, securities or the property receivable upon exercise of this Warrant following the consummation of such Business Combination, if the holders of Common Units have the right to elect the kind or amount of consideration receivable upon consummation of such Business Combination, then the consideration that the Holder shall be entitled to receive upon exercise shall be deemed to be the types and amounts of consideration received by the majority of all holders of Common Units that affirmatively make an election (or of all such holders if none make an election).

(d) Rounding of Calculations; Minimum Adjustments . All calculations under this Section 8 shall be made to the nearest one-tenth (1/10th) of a cent or to the nearest one hundredth (1/100th) of a unit, as the case may be. Any provision of this Section 8 to the contrary notwithstanding, no adjustment in the number of Warrant Units shall be made if the amount of such adjustment would be less than one-tenth (1/10th) of a Common Unit, but any such amount shall be carried forward and an adjustment with respect thereto shall be made at the time of and together with any subsequent adjustment which, together with such amount and any other amount or amounts so carried forward, shall aggregate 1/10th of a Common Unit or more.

(e) Timing of Issuance of Additional Common Units upon Certain Adjustments . In any case in which the provisions of this Section 8 shall require that an adjustment shall become effective immediately after a record date for an event, the Company may defer until the occurrence of such event (i) issuing to the holder of this Warrant exercised after such record date and before the occurrence of such event the additional Common Units issuable upon such exercise by reason of the adjustment required by such event over and above the Common Units issuable upon such exercise before giving effect to such adjustment and (ii) paying to such holder any amount of cash in lieu of fractional Common Units; provided , however , that the Company upon request shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional units, and such cash, upon the occurrence of the event requiring such adjustment.

(f) Statement Regarding Adjustments . Whenever the number of Warrant Units into which this Warrant is exercisable shall be adjusted as provided in this Section 8 , the Company shall forthwith file at the principal office of the Company a statement showing in reasonable detail the facts requiring such adjustment and the number of Warrant Units into which Warrants shall be exercisable after such adjustment, and the Company shall also cause a copy of such statement to be sent to the Holder.

(g) Proceedings Prior to Any Action Requiring Adjustment . As a condition precedent to the taking of any action which would require an adjustment pursuant to this Section 8 , the Company shall take any action which may be necessary, including obtaining regulatory, or member approvals or exemptions, in order that the Company may thereafter validly and legally issue as fully paid and nonassessable all Warrant Units issuable pursuant to the Warrants.

(h) Adjustment Rules . Any adjustments pursuant to this Section 8 shall be made successively whenever an event referred to herein shall occur.

 

11


Section 9. Lost, Stolen, Mutilated or Destroyed Warrant . If this Warrant is lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt of an indemnification undertaking by the Holder (or in the case of a mutilated Warrant, the Warrant), issue a new Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.

Section 10. Tax Treatment . For federal, state and local income tax purposes, the Company and the Holder agree that (i) the Warrants will be treated as an option to acquire Common Units, (ii) the Warrants will not be treated as currently outstanding Common Units or other currently outstanding equity interest in the Company, (iii) the Warrant is a “non-compensatory option” as defined in Treasury Regulation Section 1.721-2(f) that will be subject to the rules set forth in Treasury Regulation Section 1.721-2(a)(1) and Treasury Regulation Section 1.704-1(b)(2)(iv)(d)(4) and (s) at the time the Warrant is exercised and (iv) the fair market value of this Warrant is $0.35 per Warrant Unit. The Company and the Holder agree to report the Warrants consistent with this agreement for all federal, state and local tax purposes and the Company and the Holder agree to notify each other and consult with each other if such tax treatment is challenged by any taxing authority.

Section 11. Notice . Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Warrant must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

Atlas Energy Group, LLC

Park Place Corporate Center One

1000 Commerce Drive, Suite 410

Pittsburgh, PA 15275

Telephone: (412) 489-0006

Facsimile: (412) 262-2820

Attention: Chief Legal Officer

With copy to:

Paul Hastings LLP

600 Travis Street, 58th Floor

Houston, TX 77002

Telephone: (713) 860-7300

Facsimile: (713) 353-3100

Attention: Douglas V. Getten

                R. William Burns

If to the Holder:

 

12


[●]

[●]

[●]

[●]

Fax: [●]

Attn: [●]

Section 12. Termination . This Warrant, in all events, shall be wholly void and of no effect after 5:00 P.M., New York City time, on the Expiration Date, except that notwithstanding any other provisions hereof, the provisions of Section 7 shall continue in full force and effect after such date as to any Warrant Units or other securities issued upon the exercise of this Warrant.

Section 13. Amendment and Waiver . This Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only with the written consent of the Holder; provided, however , that the Company may, without the consent of the Holder, amend or supplement this Warrant to cure defects or inconsistencies.

Section 14. Descriptive Headings; Governing Law . The descriptive headings of the several sections and paragraphs of this Warrant are inserted for convenience only and do not constitute a part of this Warrant. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York.

Section 15. Rules of Construction . Unless the context otherwise requires, (a) all references to Sections, Schedules or Exhibits are to Sections, Schedules or Exhibits contained in or attached to this Warrant, (b) each accounting term not otherwise defined in this Warrant has the meaning assigned to it in accordance with accounting principles generally accepted in the United States, (c) words in the singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall include the masculine, feminine and neuter and (d) the use of the word “including” in this Warrant shall be by way of example rather than limitation.

* * * * * *

 

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IN WITNESS WHEREOF , the Company has caused this Warrant to be executed as of the date first written above.

 

ATLAS ENERGY GROUP, LLC
By:  

 

Name:   Jeffrey M. Slotterback
Title:   Chief Financial Officer

 

[Signature Page to ATLS Common Unit Warrant]


EXHIBIT A

EXERCISE NOTICE

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

ATLAS ENERGY GROUP, LLC

The undersigned holder hereby exercises the right to purchase                      Common Units (“ Warrant Units ”) of Atlas Energy Group, LLC, a Delaware limited liability company (the “ Company ”), pursuant to the Warrant registered in the name of the undersigned (the “ Warrant ”) on the books and records of the Company. Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

1. Warrant Exercise. The holder intends to exercise the Warrant with respect to             Warrant Units.

2. Payment of Aggregate Exercise Price.

Check one:

 

  ¨ The Holder shall pay the Aggregate Exercise Price in the sum of $             to the Company in accordance Section 2(b)(i) .

 

  ¨ The Holder elects to have the Company withhold Warrant Units to satisfy the Aggregate Exercise             Price in accordance with Section 2(b)(ii) .

3. Delivery of Warrant Units. The Company shall deliver Warrant Units in accordance with the terms of the Warrant in the following name and to the following address:

 

Issue to:                                                                                                                                                                                                                                            

Facsimile Number:                                                                                                                                                                                                                        

Account Number (if electronic book entry transfer):                                                                                                                                                       

Date:                  ,             

Name of Registered Holder

 

            By:  

 

Name:

Title:


ACKNOWLEDGMENT

The Company hereby acknowledges this Exercise Notice and hereby agrees to direct [TRANSFER AGENT] to issue the applicable number of Common Units in accordance with the Transfer Agent Instructions dated                 , 20        from the Company and acknowledged and agreed to by [TRANSFER AGENT].

 

ATLAS ENERGY GROUP, LLC
By:  

 

Name:  

 

Title:  

 


EXHIBIT B

FORM OF ASSIGNMENT

For value received, the undersigned hereby sells, assigns and transfer all of the rights of the undersigned under the within Warrant, unto:

 

Name of Assignee

   Address                                                                      

In connection with any transfer or exchange of any of the Warrants evidenced by this certificate, the undersigned confirms that such Warrants are being transferred:

CHECK ONE BOX BELOW:

 

(1)   ¨   to the Company; or
(2)   ¨   pursuant to an effective registration statement under the Securities Act of 1933; or
(3)   ¨   to a person who the undersigned reasonably believes is a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that is purchasing for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in compliance with Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
(4)   ¨   outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
(5)   ¨   pursuant to another available exemption from the registration requirements of the Securities Act of 1933.

Unless one of the boxes is checked, the Company will refuse to register any of the Warrants evidenced by this certificate in the name of any person other than Holder; provided, however , that if box (5) is checked, the Company may require, prior to registering any such transfer of the Warrants, in its sole discretion, such legal opinions, certifications and other information as the Company may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144.

 

Date:             ,         

     Name:                                                                     
     (Print)
                                                                                        
     (Signature)
     Address:

Exhibit 10.1

Execution Version

REGISTRATION RIGHTS AGREEMENT

among

ATLAS ENERGY GROUP, LLC

and

THE LENDERS NAMED ON SCHEDULE A HERETO


TABLE OF CONTENTS

 

         Page  
Article I DEFINITIONS      1   
  Section 1.01 Definitions      1   
  Section 1.02 Registrable Securities      3   
Article II REGISTRATION RIGHTS      3   
  Section 2.01 Shelf Registration      3   
  Section 2.02 Piggyback Registration      4   
  Section 2.03 Underwritten Offering      5   
  Section 2.04 Further Obligations      5   
  Section 2.05 Cooperation by Holders      8   
  Section 2.06 Restrictions on Public Sale by Holders of Registrable Securities      8   
  Section 2.07 Expenses      8   
  Section 2.08 Indemnification      8   
  Section 2.09 Rule 144 Reporting      10   
  Section 2.10 Transfer or Assignment of Registration Rights      10   
  Section 2.11 Limitation on Subsequent Registration Rights      10   
Article III MISCELLANEOUS      10   
  Section 3.01 Communications      10   
  Section 3.02 Binding Effect      11   
  Section 3.03 Assignment of Rights      11   
  Section 3.04 Recapitalization, Exchanges, Etc. Affecting Units      11   
  Section 3.05 Aggregation of Registrable Securities      11   
  Section 3.06 Specific Performance      11   
  Section 3.07 Counterparts      12   
  Section 3.08 Governing Law, Submission to Jurisdiction      12   
  Section 3.09 Waiver of Jury Trial      12   
  Section 3.10 Entire Agreement      12   
  Section 3.11 Amendment      12   
  Section 3.12 No Presumption      12   
  Section 3.13 Obligations Limited to Parties to Agreement      12   
  Section 3.14 Interpretation      13   
Schedule A — Lender Name; Notice and Contact Information      18   

 

-i-


REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT , dated as of April 27, 2016 (this “ Agreement ”) is entered into by and among ATLAS ENERGY GROUP, LLC , a Delaware limited liability company (the “ Company ”), and each of the Persons set forth on Schedule A hereto (the “ Lenders ”).

WHEREAS, this Agreement is made in connection with the issuance of warrants (“ Warrants ”) to purchase Common Units of the Company made pursuant to that certain Second Lien Credit Agreement, dated as of March 30, 2016 (the date of such closing, the “ Closing Date ”), by and among New Atlas Holdings, LLC, a Delaware limited liability company, the Company and the Lenders (the “ Credit Agreement ”); and

WHEREAS, the Company has agreed to provide the registration and other rights set forth in this Agreement for the benefit of the Lenders pursuant to the Credit Agreement.

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

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . As used in this Agreement, the following terms have the meanings indicated:

Affiliate ” means, with respect to a specified Person, any other Person, whether now in existence or hereafter created, directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, “control” (including, with correlative meanings, “controlling,” “controlled by” and “under common control with”) means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

Agreement ” has the meaning set forth in the introductory paragraph of this Agreement.

Business Day ” means any day other than a Saturday, Sunday, any federal holiday or day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

Closing Date ” has the meaning set forth in the Recitals of this Agreement.

Commission ” means the United States Securities and Exchange Commission.

Common Units ” shall have the meaning specified in the LLC Agreement.

Company ” has the meaning set forth in the introductory paragraph of this Agreement.

Credit Agreement ” has the meaning set forth in the Recitals of this Agreement.

Effective Date ” means the date of effectiveness of any Registration Statement.

Effectiveness Period ” has the meaning specified in Section 2.01(a) .

Exchange Act ” means the Securities Exchange Act of 1934, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

Holder ” means the record holder of any Registrable Securities.

Holder Underwriter Registration Statement ” has the meaning specified in Section 2.04(q) .

Included Registrable Securities ” has the meaning specified in Section 2.02(a) .

Lenders ” has the meaning set forth in the introductory paragraph of this Agreement.

 

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LLC Agreement ” means the Third Amended and Restated Limited Liability Company Agreement of the Company, as amended from time to time.

Losses ” has the meaning specified in Section 2.08(a) .

Managing Underwriter ” means, with respect to any Underwritten Offering, the book running lead manager of such Underwritten Offering.

NYSE ” means the New York Stock Exchange.

OTC Bulletin Board ” means the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

Other Holder ” has the meaning specified in Section 2.02(a) .

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

Piggyback Notice ” has the meaning specified in Section 2.02(a) .

Piggyback Opt-Out Notice ” has the meaning specified in Section 2.02(a) .

Piggyback Registration ” has the meaning specified in Section 2.02(a) .

PIK Common Units ” means any additional Common Units issued by the Company to the Lenders as in-kind interest payments pursuant to the terms of the Credit Agreement.

Pink OTC Markets ” means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB and OTC Pink.

Record Date ” has the meaning specified in the LLC Agreement.

Registration ” means any registration pursuant to this Agreement, including pursuant to a Registration Statement or a Piggyback Registration.

Registrable Securities ” means the Common Units issuable upon conversion of the Warrants and the PIK Common Units, all of which are subject to the rights provided herein until such time as such securities cease to be Registrable Securities pursuant to Section 1.02 .

Registration Expenses ” has the meaning specified in Section 2.07(a) .

Registration Statement ” has the meaning specified in Section 2.01(a) .

Securities Act ” means the Securities Act of 1933, as amended from time to time, and the rules and regulations of the Commission promulgated thereunder.

Selling Expenses ” has the meaning specified in Section 2.07(a) .

Selling Holder ” means a Holder who is selling Registrable Securities pursuant to a Registration Statement.

Selling Holder Indemnified Persons ” has the meaning specified in Section 2.08(a) .

Underwritten Offering ” means an offering (including an offering pursuant to a Registration Statement) in which Common Units are sold to an underwriter on a firm commitment basis for reoffering to the public or an offering that is a “bought deal” with one or more investment banks.

Warrant ” has the meaning set forth in the Recitals of this Agreement.

 

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WKSI ” means a well-known seasoned issuer (as defined in the rules and regulations of the Commission).

Section 1.02 Registrable Securities . Any Registrable Security will cease to be a Registrable Security upon the earliest to occur of the following: (a) when a registration statement covering such Registrable Security becomes or has been declared effective by the Commission and such Registrable Security has been sold or disposed of pursuant to such effective registration statement, (b) when such Registrable Security has been disposed of (excluding transfers or assignments by a Holder to an Affiliate or to another Holder or any of its Affiliates or to any assignee or transferee to whom the rights under this Agreement have been transferred pursuant to Section 2.10 ) pursuant to any section of Rule 144 (or any similar provision then in effect) under the Securities Act, (c) when such Registrable Security is held by the Company or one of its direct or indirect subsidiaries and (d) when such Registrable Security has been sold or disposed of in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of such securities pursuant to Section 2.10 . In addition, a Holder will cease to have rights to require registration of any Registrable Securities held by that Holder under this Agreement on the later of (i) the earlier of (x) the fourth anniversary of the date on which all of such Holder’s Warrants have been exercised for Common Units and (y) the tenth anniversary of the date hereof and (ii) the earlier of (x) the date on which such Holder is no longer an “affiliate” as such term is defined in Rule 144 promulgated under the Securities Act and (y) the tenth anniversary of the date hereof.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01 Shelf Registration .

(a) Shelf Registration . If the Company shall receive from any Holder, on or at any time after the date ninety (90) days after the Closing Date, a written request that the Company file a registration statement with respect to any of such Holder’s Registrable Securities, the Company shall, within ninety (90) days of receipt, use its commercially reasonable efforts to (i) prepare and file an initial registration statement under the Securities Act to permit the public resale of Registrable Securities from time to time as permitted by Rule 415 (or any similar provision adopted by the Commission then in effect) of the Securities Act (a “ Registration Statement ”) and (ii) cause such initial Registration Statement to become effective no later than one hundred twenty (120) days after the receipt of such notice. The Company will use its commercially reasonable efforts to cause any such initial Registration Statement filed pursuant to this Section 2.01(a) to be continuously effective under the Securities Act, with respect to any Holder, until the earliest to occur of the following: (A) the date on which all Registrable Securities covered by the Registration Statement have been distributed in the manner set forth and as contemplated in such Registration Statement, (B) the date on which there are no longer any Registrable Securities outstanding and (C) the tenth anniversary of the date hereof (in each case of clause (A), (B) or (C), the “ Effectiveness Period ”). A Registration Statement filed pursuant to this Section 2.01(a) shall be on such appropriate registration form of the Commission as shall be selected by the Company; provided that, if the Company is then eligible, it shall file such Registration Statement on Form S-3. A Registration Statement when declared effective (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (and, in the case of any prospectus contained in such Registration Statement, in the light of the circumstances under which a statement is made). As soon as practicable following the date that a Registration Statement becomes effective, but in any event within three (3) Business Days of such date, the Company shall provide the Holders with written notice of the effectiveness of a Registration Statement.

If the Holders receive PIK Common Units subsequent to the effectiveness of an initial Registration Statement, any Holder may request that the Company file an additional Registration Statement with respect to such additional Registrable Securities; provided , that the Company shall not be required to file such an additional Registration Statement unless at least $1 million of incremental Registrable Securities are proposed to be included (determined by multiplying the number of Registrable Securities owned by the average of the closing price on the NYSE, OTC Bulletin Board, Pink OTC Markets or any similar interdealer quotation system if the Company is not listed on the NYSE, for the Common Units for the ten trading days preceding the date of such notice); provided, further , that the Company shall not be required to file more than three (3) Registration Statements in the aggregate pursuant to this Section 2.01(a) .

If the Company is a WKSI and permitted to add additional Registrable Securities to an effective Registration Statement, it may do so to satisfy its obligations under this Section 2.01(a) in lieu of filing a separate Registration Statement.

(b) Delay Rights . Notwithstanding anything to the contrary contained herein, the Company may, upon written notice to any Selling Holder whose Registrable Securities are included in a Registration Statement, suspend such Selling Holder’s use

 

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of any prospectus which is a part of such Registration Statement (in which event the Selling Holder shall suspend sales of the Registrable Securities pursuant to such Registration Statement) if (i) the Company is pursuing an acquisition, merger, reorganization, disposition or other similar transaction and the Company determines in good faith that the Company’s ability to pursue or consummate such a transaction would be materially and adversely affected by any required disclosure of such transaction in such Registration Statement or (ii) the Company has experienced some other material non-public event, the disclosure of which at such time, in the good faith judgment of the Company, would materially and adversely affect the Company; provided , however, that in no event shall the Selling Holders be suspended from selling Registrable Securities pursuant to such Registration Statement for a period that exceeds forty-five (45) consecutive days or an aggregate of sixty (60) days in any 180-day period or ninety (90) days in any 365-day period. Upon disclosure of such information or the termination of the condition described above, the Company shall provide prompt notice to the Selling Holders whose Registrable Securities are included in such Registration Statement, and shall promptly terminate any suspension of sales it has put into effect and shall take such other actions necessary or appropriate to permit registered sales of Registrable Securities as contemplated in this Agreement.

Section 2.02 Piggyback Registration .

(a) Participation . If on or at any time after the date ninety (90) days after the Closing Date the Company proposes to file (i) a Registration Statement on a form which would permit the registration of Registrable Securities (other than a Registration Statement on Form S-4 or S-8) for purposes of registering the offer and sale of Common Units by the Company or on behalf of any other Persons who have or have been granted registration rights (“ Other Holders ”) or (ii) a prospectus supplement relating to the sale of Common Units pursuant to an effective “automatic” registration statement, so long as the Company is a WKSI at such time or, whether or not the Company is a WKSI, so long as the Registrable Securities were previously included in the underlying shelf Registration Statement or are included on an effective Registration Statement, or in any case in which Holders may participate in such offering without the filing of a post-effective amendment, in each case, for the sale of Common Units in an Underwritten Offering (including an Underwritten Offering undertaken pursuant to Section 2.03 ), then the Company shall give not less than three Business Days’ notice (including, but not limited to, notification by electronic mail) (the “ Piggyback Notice ”) of such proposed Underwritten Offering to each Holder (together with its Affiliates) and such Piggyback Notice shall offer such Holder the opportunity to include in such Underwritten Offering such number of Registrable Securities (the “ Included Registrable Securities ”) as such Holder may request in writing (a “ Piggyback Registration . Each Piggyback Notice shall be provided to Holders by 9:00 a.m. New York City time on a Business Day pursuant to Section 3.01 . Each such Holder will have two Business Days (or one Business Day in connection with any overnight or bought Underwritten Offering) after such Piggyback Notice has been delivered to request in writing the inclusion of Registrable Securities in the Underwritten Offering for Other Holders. If no request for inclusion from a Holder is received within the specified time, such Holder shall have no further right to participate in such Underwritten Offering. If, at any time after giving written notice of its intention to undertake an Underwritten Offering and prior to the closing of such Underwritten Offering, the Company shall determine for any reason not to undertake or to delay such Underwritten Offering, the Company may, at its election, give written notice of such determination to the Selling Holders and, (1) in the case of a determination not to undertake such Underwritten Offering, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated Underwritten Offering, and (2) in the case of a determination to delay such Underwritten Offering, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the Underwritten Offering. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such Underwritten Offering by giving written notice to the Company of such withdrawal at least one Business Day prior to the time of pricing of such Underwritten Offering. Any Holder may deliver written notice (a “ Piggyback Opt-Out Notice ”) to the Company requesting that such Holder not receive notice from the Company of any proposed Underwritten Offering; provided , however, that such Holder may later revoke any such Piggyback Opt-Out Notice in writing. Following receipt of a Piggyback Opt-Out Notice from a Holder (unless subsequently revoked), the Company shall not be required to deliver any notice to such Holder pursuant to this Section 2.02(a) and such Holder shall no longer be entitled to participate in Underwritten Offerings pursuant to this Section 2.02(a) , unless such Piggyback Opt-Out Notice is revoked by such Holder.

(b) Priority of Piggyback Registration . If the Managing Underwriter or Underwriters of any proposed Underwritten Offering advise the Company that the total amount of Registrable Securities that the Selling Holders and any Other Holders intend to include in such offering exceeds the number that can be sold in such offering without being likely to have an adverse effect on the price, timing or distribution of the Common Units offered or the market for the Common Units in any material respect, then the Common Units to be included in such Underwritten Offering shall include (i)  first, all securities proposed to be offered by the Company and (ii)  second, only the number of Registrable Securities proposed to be included by the Selling Holders and Other Holders that such Managing Underwriter or Underwriters advise the Company can be sold without having such adverse effect, with such number to be allocated pro rata among the Selling Holders and the Other Holders who have

 

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requested such Underwritten Offering or participation in the Piggyback Registration (based, for each such Selling Holder or Other Holder, on the percentage derived by dividing (A) the number of Common Units proposed to be sold by such Selling Holder or such Other Holder in such offering by (B) the aggregate number of Common Units proposed to be sold by all Selling Holders and all Other Holders in the Piggyback Registration).

Section 2.03 Underwritten Offering .

(a) S-3 Registration . In the event that any of the Holders elect to dispose of Registrable Securities under a Registration Statement pursuant to an Underwritten Offering and reasonably expect gross proceeds of at least $25 million (determined by multiplying the number of Registrable Securities owned by the average of the closing price on the NYSE, OTC Bulletin Board, Pink OTC Markets or any similar interdealer quotation system if the Company is not listed on the NYSE, for the Common Units for the ten trading days preceding the date of such notice) from such Underwritten Offering (together with any Registrable Securities to be disposed of by a Selling Holder who has elected to participate in such Underwritten Offering pursuant to Section 2.02 ), the Company shall, at the request of such Selling Holder(s), enter into an underwriting agreement in a form as is customary in Underwritten Offerings of securities by the Company with the Managing Underwriter or Underwriters selected by the Company, which shall include, among other provisions, indemnities to the effect and to the extent provided in Section 2.08 , and shall take all such other reasonable actions as are requested by the Managing Underwriter in order to expedite or facilitate the disposition of such Registrable Securities; provided , however, that the Company shall have no obligation to facilitate or participate in, including entering into any underwriting agreement, more than an aggregate of three (3) Underwritten Offerings or one (1) Underwritten Offering in any twelve-month period requested by the Holders; provided, further, that if the Company is conducting or actively pursuing a securities offering with anticipated offering proceeds of at least $25 million (other than in connection with any at-the-market offering or similar continuous offering program), then the Company may suspend such Selling Holder’s right to require the Company to conduct an Underwritten Offering on such Selling Holder’s behalf pursuant to this Section 2.03 ; provided, however, that the Company may only suspend such Selling Holder’s right to require the Company to conduct an Underwritten Offering pursuant to this Section 2.03 once in any six month period.

(b) General Procedures . In connection with any Underwritten Offering contemplated by Section 2.03(a) , the underwriting agreement into which each Selling Holder and the Company shall enter shall contain such representations, covenants, indemnities (subject to Section 2.08 ) and other rights and obligations as are customary in Underwritten Offerings of securities by the Company. No Selling Holder shall be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements regarding such Selling Holder’s authority to enter into such underwriting agreement and to sell, and its ownership of, the securities being registered on its behalf, its intended method of distribution and any other representation required by law. If any Selling Holder disapproves of the terms of an Underwritten Offering contemplated by this Section 2.03 , such Selling Holder may elect to withdraw therefrom by notice to the Company and the Managing Underwriter; provided , however, that such withdrawal must be made at least one Business Day prior to the time of pricing of such Underwritten Offering to be effective. No such withdrawal or abandonment shall affect the Company’s obligation to pay Registration Expenses.

Section 2.04 Further Obligations . In connection with its obligations under this Article II , the Company will:

(a) promptly prepare and file with the Commission such amendments and supplements to a Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for the Effectiveness Period and as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement;

(b) if a prospectus supplement will be used in connection with the marketing of an Underwritten Offering under a Registration Statement and the Managing Underwriter at any time shall notify the Company in writing that, in the sole judgment of such Managing Underwriter, inclusion of detailed information to be used in such prospectus supplement is of material importance to the success of such Underwritten Offering, the Company shall use its commercially reasonable efforts to include such information in such prospectus supplement;

(c) furnish to each Selling Holder (i) as far in advance as reasonably practicable before filing a Registration Statement or any other registration statement contemplated by this Agreement or any supplement or amendment thereto, upon request, copies of reasonably complete drafts of all such documents proposed to be filed (including exhibits and each document incorporated by reference therein to the extent then required by the rules and regulations of the Commission), and provide each such Selling Holder the opportunity to object to any information pertaining to such Selling Holder and its plan of distribution that is contained therein and, to the extent timely received, make the corrections reasonably requested by such Selling Holder

 

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with respect to such information prior to filing such Registration Statement or such other registration statement and the prospectus included therein or any supplement or amendment thereto, and (ii) such number of copies of such Registration Statement or such other registration statement and the prospectus included therein and any supplements and amendments thereto as such Persons may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities covered by such Registration Statement or other registration statement;

(d) if applicable, use its commercially reasonable efforts to promptly register or qualify the Registrable Securities covered by any Registration Statement or any other registration statement contemplated by this Agreement under the securities or blue sky laws of such jurisdictions as the Selling Holders or, in the case of an Underwritten Offering, the Managing Underwriter, shall reasonably request; provided , however, that the Company will not be required to qualify generally to transact business in any jurisdiction where it is not then required to so qualify or to take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

(e) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the filing of a Registration Statement or any other registration statement contemplated by this Agreement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to a Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective; and (ii) the receipt of any written comments from the Commission with respect to any filing referred to in clause (i) and any written request by the Commission for amendments or supplements to any such Registration Statement or any other registration statement or any prospectus or prospectus supplement thereto;

(f) promptly notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered by any of them under the Securities Act, of (i) the happening of any event as a result of which the prospectus or prospectus supplement contained in a Registration Statement or any other registration statement contemplated by this Agreement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any prospectus contained therein, in the light of the circumstances under which a statement is made); (ii) the issuance or express threat of issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement or any other registration statement contemplated by this Agreement, or the initiation of any proceedings for that purpose; or (iii) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction. Following the provision of such notice, the Company agrees to, as promptly as practicable, amend or supplement the prospectus or prospectus supplement or take other appropriate action so that the prospectus or prospectus supplement does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing and to take such other action as is reasonably necessary to remove a stop order, suspension, threat thereof or proceedings related thereto;

(g) upon request and subject to appropriate confidentiality obligations, furnish to each Selling Holder copies of any and all transmittal letters or other correspondence with the Commission or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) relating to such offering of Registrable Securities;

(h) in the case of an Underwritten Offering, furnish, or use its reasonable efforts to cause to be furnished, upon request, (i) an opinion of counsel for the Company addressed to the underwriters, dated the date of the closing under the applicable underwriting agreement and (ii) a “ comfort ” letter addressed to the underwriters, dated the pricing date of such Underwritten Offering and a letter of like kind dated the date of the closing under the applicable underwriting agreement, in each case, signed by the independent public accountants who have certified the Company’s financial statements included or incorporated by reference into the applicable Registration Statement, and each of the opinion and the “ comfort ” letter shall be in customary form and covering substantially the same matters with respect to such Registration Statement (and the prospectus and any prospectus supplement) as have been customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in Underwritten Offerings of securities by the Company and such other matters as such underwriters may reasonably request;

(i) otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;

(j) make available to the appropriate representatives of the Managing Underwriter during normal business hours access to such information and Company personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act; provided , however, that the Company need not disclose any non-public information to any such representative unless and until such representative has entered into a confidentiality agreement with the Company;

 

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(k) use its commercially reasonable efforts to cause all Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or nationally recognized quotation system on which similar securities issued by the Company are then listed;

(l) use its commercially reasonable efforts to cause Registrable Securities to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable the Selling Holders to consummate the disposition of such Registrable Securities;

(m) provide a transfer agent and registrar for all Registrable Securities covered by any Registration Statement not later than the Effective Date of such Registration Statement;

(n) enter into customary agreements and take such other actions as are reasonably requested by the Selling Holders or the underwriters, if any, in order to expedite or facilitate the disposition of Registrable Securities (including making appropriate officers of the Company available to participate in customary marketing activities); provided, however, that the officers of the Company shall not be required to dedicate an unreasonably burdensome amount of time in connection with any roadshow and related marketing activities for any Underwritten Offering;

(o) if reasonably requested by a Selling Holder, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Selling Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;

(p) if reasonably required by the Company’s transfer agent, the Company shall promptly deliver any authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to transfer such Registrable Securities without legend upon sale by the Holder of such Registrable Securities under the Registration Statement; and

(q) if any Holder could reasonably be deemed to be an “ underwriter, ” as defined in Section 2(a)(11) of the Securities Act, in connection with the Registration Statement and any amendment or supplement thereof (a “ Holder Underwriter Registration Statement ”), then the Company will reasonably cooperate with such Holder in allowing such Holder to conduct customary “ underwriter’s due diligence ” with respect to the Company and satisfy its obligations in respect thereof. In addition, at any Holder’s request, the Company will furnish to such Holder, on the date of the effectiveness of the Holder Underwriter Registration Statement and thereafter from time to time on such dates as such Holder may reasonably request (provided that such request shall not be more frequently than on an annual basis unless such Holder is offering Registrable Securities pursuant to a Holder Underwriter Registration Statement), (i) a “ comfort ” letter, dated such date, from the Company’s independent certified public accountants in form and substance as has been customarily given by independent certified public accountants to underwriters in Underwritten Offerings of securities by the Company, addressed to such Holder, (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of the Holder Underwriter Registration Statement, in form, scope and substance as has been customarily given in Underwritten Offerings of securities by the Company, including standard “ 10b-5 ” negative assurance for such offerings, addressed to such Holder and (iii) a standard officer’s certificate from the chief executive officer or chief financial officer, or other officers serving such functions, of the Company addressed to the Holder, as has been customarily given by such officers in Underwritten Offerings of securities by the Company. The Company will also use its reasonable efforts to provide legal counsel to such Holder with an opportunity to review and comment upon any such Holder Underwriter Registration Statement, and any amendments and supplements thereto, prior to its filing with the Commission.

Notwithstanding anything to the contrary in this Section 2.04 , the Company will not name a Holder as an underwriter (as defined in Section 2(a)(11) of the Securities Act) in any Registration Statement or Holder Underwriter Registration Statement, as applicable, without such Holder’s consent. If the staff of the Commission requires the Company to name any Holder as an underwriter (as defined in Section 2(a)(11) of the Securities Act), and such Holder does not consent thereto, then such Holder’s Registrable Securities shall not be included on the applicable Registration Statement and the Company shall have no further obligations hereunder with respect to Registrable Securities held by such Holder, unless such Holder has not had an opportunity to conduct customary underwriter’s due diligence as set forth in subsection (q) of this Section 2.04 with respect to the Company at the time such Holder’s consent is sought.

 

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Each Selling Holder, upon receipt of notice from the Company of the happening of any event of the kind described in subsection (f) of this Section 2.04 , shall forthwith discontinue offers and sales of the Registrable Securities by means of a prospectus or prospectus supplement until such Selling Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by subsection (f) of this Section 2.04 or until it is advised in writing by the Company that the use of the prospectus may be resumed and has received copies of any additional or supplemental filings incorporated by reference in the prospectus, and, if so directed by the Company, such Selling Holder will, or will request the Managing Underwriter or Managing Underwriters, if any, to deliver to the Company (at the Company’s expense) all copies in their possession or control, other than permanent file copies then in such Selling Holder’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

Section 2.05 Cooperation by Holders . The Company shall have no obligation to include Registrable Securities of a Holder in a Registration Statement or in an Underwritten Offering pursuant to Section 2.03(a) who has failed to timely furnish such information that the Company determines, after consultation with its counsel, is reasonably required in order for any registration statement or prospectus supplement, as applicable, to comply with the Securities Act.

Section 2.06 Restrictions on Public Sale by Holders of Registrable Securities . Each Holder of Registrable Securities participating in an Underwriting Offering included in a Registration Statement agrees to enter into a customary letter agreement with underwriters providing that such Holder will not effect any public sale or distribution of Registrable Securities during the forty-five (45) calendar day period beginning on the date of a prospectus or prospectus supplement filed with the Commission with respect to the pricing of such Underwritten Offering; provided , however, that (i) the duration of the foregoing restrictions shall be no longer than the duration of the shortest restriction generally imposed by the underwriters on the Company or the officers, directors or any other Affiliate of the Company on whom a restriction is imposed and (ii) the restrictions set forth in this Section 2.06 shall not apply to any Registrable Securities that are included in such Underwritten Offering by such Holder.

Section 2.07 Expenses .

(a) Certain Definitions . “ Registration Expenses ” shall not include Selling Expenses but otherwise means all expenses incident to the Company’s performance under or compliance with this Agreement to effect the registration of Registrable Securities on a Registration Statement pursuant to Section 2.01 , a Piggyback Registration pursuant to Section 2.02 , or an Underwritten Offering pursuant to Section 2.03 , and the disposition of such Registrable Securities, including, without limitation, all registration, filing, securities exchange listing and NYSE fees, all registration, filing, qualification and other fees and expenses of complying with securities or blue sky laws, fees of the Financial Industry Regulatory Authority, fees of transfer agents and registrars, all word processing, duplicating and printing expenses, and the fees and disbursements of counsel and independent public accountants for the Company, including the expenses of any special audits or “cold comfort” letters required by or incident to such performance and compliance. “ Selling Expenses ” means all underwriting fees, discounts and selling commissions and transfer taxes allocable to the sale of the Registrable Securities.

(b) Expenses . The Company will pay all reasonable Registration Expenses, as determined in good faith, in connection with a shelf Registration, a Piggyback Registration or an Underwritten Offering, whether or not any sale is made pursuant to such shelf Registration, Piggyback Registration or Underwritten Offering. Each Selling Holder shall pay its pro rata share of all Selling Expenses in connection with any sale of its Registrable Securities hereunder. In addition, except as otherwise provided in Section 2.08 , the Company shall not be responsible for professional fees (including legal fees) incurred by Holders in connection with the exercise of such Holders’ rights hereunder.

Section 2.08 Indemnification .

(a) By the Company . In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless each Selling Holder thereunder, its directors, officers, managers, partners, employees and agents and each Person, if any, who controls such Selling Holder within the meaning of the Securities Act and the Exchange Act, and its directors, officers, managers, partners, employees or agents (collectively, the “ Selling Holder Indemnified Persons ”), against any losses, claims, damages, expenses or liabilities (including reasonable attorneys’ fees and expenses) (collectively, “ Losses ”), joint or several, to which such Selling Holder Indemnified Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact (in the case of any prospectus, in light of the circumstances under which such statement is made)

 

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contained in (which, for the avoidance of doubt, includes documents incorporated by reference in) the applicable Registration Statement or other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement or final prospectus contained therein, or any amendment or supplement thereof, or any free writing prospectus relating thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse each such Selling Holder Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating, defending or resolving any such Loss or actions or proceedings; provided , however, that the Company will not be liable in any such case if and to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by such Selling Holder Indemnified Person in writing specifically for use in the applicable Registration Statement or other registration statement, or prospectus supplement, as applicable. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Selling Holder Indemnified Person, and shall survive the transfer of such securities by such Selling Holder.

(b) By Each Selling Holder . Each Selling Holder agrees severally and not jointly to indemnify and hold harmless the Company, its directors, officers, employees and agents and each Person, who, directly or indirectly, controls the Company within the meaning of the Securities Act or of the Exchange Act to the same extent as the foregoing indemnity from the Company to the Selling Holders, but only with respect to information regarding such Selling Holder furnished in writing by or on behalf of such Selling Holder expressly for inclusion in a Registration Statement or any other registration statement contemplated by this Agreement, any preliminary prospectus, prospectus supplement or final prospectus contained therein, or any amendment or supplement thereto or any free writing prospectus relating thereto; provided , however, that the liability of each Selling Holder shall not be greater in amount than the dollar amount of the proceeds (net of any Selling Expenses) received by such Selling Holder from the sale of the Registrable Securities giving rise to such indemnification.

(c) Notice . Promptly after receipt by an indemnified party hereunder of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party hereunder, notify the indemnifying party in writing thereof, but the omission to so notify the indemnifying party shall not relieve it from any liability that it may have to any indemnified party other than under this Section 2.08(c) except to the extent that the indemnifying party is materially prejudiced by such failure. In any action brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof. The indemnifying party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake 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 and undertake the defense thereof, the indemnifying party shall not be liable to such indemnified party under this Section 2.08 for any legal expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation and of liaison with counsel so selected; provided , however, that, (i) if the indemnifying party has failed to assume the defense or employ counsel reasonably satisfactory to the indemnified party or (ii) if the defendants in any such action include both the indemnified party and the indemnifying party and counsel to the indemnified party shall have concluded that there may be reasonable defenses available to the indemnified party that are different from or additional to those available to the indemnifying party, or if the interests of the indemnified party reasonably may be deemed to conflict with the interests of the indemnifying party, then the indemnified party shall have the right to select a separate counsel and to assume such legal defense and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other reasonable expenses related to such participation to be reimbursed by the indemnifying party as incurred. Notwithstanding any other provision of this Agreement, no indemnifying party shall settle any action brought against any indemnified party with respect to which such indemnified party may be entitled to indemnification hereunder without the consent of the indemnified party, unless the settlement thereof imposes no liability or obligation on, includes a complete and unconditional release from liability of, and does not contain any admission of wrongdoing by, the indemnified party.

(d) Contribution . If the indemnification provided for in this Section 2.08 is held by a court or government agency of competent jurisdiction to be unavailable to any indemnified party or is insufficient to hold them harmless in respect of any Losses, then each such 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 indemnifying party, on the one hand, and of the indemnified party, on the other hand, in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations; provided , however, that in no event shall any Selling Holder be required to contribute an aggregate amount in excess of the dollar amount of proceeds (net of Selling Expenses) received by such Selling Holder from the sale of Registrable Securities giving rise to such indemnification. The relative fault of the indemnifying party, on the one hand, and the indemnified party, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact has been made by, or relates to, information supplied by such party, and the parties’ relative

 

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intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this paragraph were to be determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to herein. The amount paid by an indemnified party as a result of the Losses referred to in the first sentence of this paragraph shall be deemed to include any legal and other expenses reasonably incurred by such indemnified party in connection with investigating, defending or resolving any Loss that is the subject of this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

(e) Other Indemnification . The provisions of this Section 2.08 shall be in addition to any other rights to indemnification or contribution that an indemnified party may have pursuant to law, equity, contract or otherwise.

Section 2.09 Rule 144 Reporting . With a view to making available the benefits of certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use its commercially reasonable efforts to:

(a) make and keep public information regarding the Company available, as those terms are understood and defined in Rule 144 under the Securities Act (or any similar provision then in effect), at all times from and after the date hereof;

(b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at all times from and after the date hereof; and

(c) so long as a Holder owns any Registrable Securities, furnish (i) to the extent accurate, forthwith upon request, a written statement of the Company that it has complied with the reporting requirements of Rule 144 under the Securities Act (or any similar provision then in effect) and (ii) unless otherwise available via the Commission’s EDGAR filing system, to such Holder forthwith upon request a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed as such Holder may reasonably request in availing itself of any rule or regulation of the Commission allowing such Holder to sell any such securities without registration.

Section 2.10 Transfer or Assignment of Registration Rights . The rights to cause the Company to register Registrable Securities under this Article II may be transferred or assigned by each Holder to one or more transferees or assignees of Registrable Securities or securities convertible into Registrable Securities; provided , however, that (a) unless any such transferee or assignee is an Affiliate of, and after such transfer or assignment continues to be an Affiliate of, such Holder, the amount of Registrable Securities or securities convertible into Registrable Securities, as applicable, transferred or assigned to such transferee or assignee shall represent at least $1 million of Registrable Securities (determined by multiplying the number of Registrable Securities owned by the average of the closing price on the NYSE, OTC Bulletin Board, Pink OTC Markets or any similar interdealer quotation system if the Company is not listed on the NYSE, for the Common Units for the ten trading days preceding the date of such notice), (b) the Company is given written notice prior to any said transfer or assignment, stating the name and address of each such transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned and (c) each such transferee or assignee assumes in writing responsibility for its portion of the obligations of such transferring Holder under this Agreement.

Section 2.11 Limitation on Subsequent Registration Rights . From and after the date hereof, the Company shall not, without the prior written consent of the Holders of a majority of the outstanding Registrable Securities or securities convertible into Registrable Securities, as applicable, enter into any agreement with any current or future holder of any securities of the Company that would allow such current or future holder to require the Company to include securities in any registration statement filed by the Company for Other Holders on a basis other than pari passu with, or expressly subordinate to, the piggyback rights of the Holders of Registrable Securities hereunder.

ARTICLE III

MISCELLANEOUS

Section 3.01 Communications . All notices and demands provided for hereunder shall be in writing and shall be given by registered or certified mail, return receipt requested, telecopy, air courier guaranteeing overnight delivery, personal delivery or (in the case of any notice given by the Company to the Lenders) email to the following addresses:

(a) If to the Lenders, to the addresses set forth on Schedule A , with a copy to (which shall not constitute notice):

 

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Latham & Watkins LLP

811 Main Street, Suite 3700

Houston, Texas 77002

Attention: J. Michael Chambers

Email: michael.chambers@lw.com

(b) If to the Company:

Atlas Energy Group, LLC

1000 Commerce Dr., Suite 400

Pittsburgh, PA 15275

Fax: 215-405-3882

Attention: Jeffrey Slotterback

Email: JSlotterback@atlasenergy.com

with a copy to (which shall not constitute notice):

Paul Hastings LLP

600 Travis Street, 58th Floor

Houston TX 77002

Attention: Douglas V. Getten

                 R. William Burns

Facsimile: (713) 353-2574

Email: douggetten@paulhastings.com

or to such other address as the Company or the Lenders may designate to each other in writing from time to time or, if to a transferee or assignee of the Lenders or any transferee or assignee thereof, to such transferee or assignee at the address provided pursuant to Section 2.10 . All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; upon actual receipt if sent by certified or registered mail, return receipt requested, or regular mail, if mailed; upon actual receipt of the facsimile or email copy, if sent via facsimile or email; and upon actual receipt when delivered to an air courier guaranteeing overnight delivery.

Section 3.02 Binding Effect . This Agreement shall be binding upon the Company, each of the Lenders and their respective successors and permitted assigns, including subsequent Holders of Registrable Securities to the extent permitted herein. Except as expressly provided in this Agreement, this Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and permitted assigns.

Section 3.03 Assignment of Rights . Except as provided in Section 2.10 , neither this Agreement nor any of the rights, benefits or obligations hereunder may be assigned or transferred, by operation of law or otherwise, by any party hereto without the prior written consent of the other party.

Section 3.04 Recapitalization, Exchanges, Etc. Affecting Units . The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all units of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets or otherwise) that may be issued in respect of, in exchange for or in substitution of, the Registrable Securities, and shall be appropriately adjusted for combinations, unit splits, recapitalizations, pro rata distributions of units and the like occurring after the date of this Agreement.

Section 3.05 Aggregation of Registrable Securities . All Registrable Securities held or acquired by Persons who are Affiliates of one another shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

Section 3.06 Specific Performance . Damages in the event of breach of this Agreement by a party hereto may be difficult, if not impossible, to ascertain, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to seek an injunction or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.

 

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Section 3.07 Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same agreement.

Section 3.08 Governing Law, Submission to Jurisdiction . This Agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement), will be construed in accordance with and governed by the laws of the State of Delaware without regard to principles of conflicts of laws. Any action against any party relating to the foregoing shall be brought in any federal or state court of competent jurisdiction located within the State of Delaware, and the parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of any federal or state court located within the State of Delaware over any such action. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.

Section 3.09 Waiver of Jury Trial . THE PARTIES TO THIS AGREEMENT EACH HEREBY WAIVE, AND AGREE TO CAUSE THEIR AFFILIATES TO WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Section 3.10 Entire Agreement . This Agreement, the Credit Agreement and the other agreements and documents referred to herein are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or in the Credit Agreement with respect to the rights granted by the Company or any of its Affiliates or the Lenders or any of their respective Affiliates set forth herein or therein. This Agreement, the Credit Agreement and the other agreements and documents referred to herein or therein supersede all prior agreements and understandings between the parties with respect to such subject matter.

Section 3.11 Amendment . This Agreement may be amended only by means of a written amendment signed by the Company and the Holders of a majority of the outstanding Registrable Securities or securities convertible into Registrable Securities, as applicable; provided, however, that no such amendment shall adversely affect the rights of any Holder hereunder without the consent of such Holder. Any amendment, supplement or modification of or to any provision of this Agreement, any waiver of any provision of this Agreement, and any consent to any departure by the Company or any Purchaser from the terms of any provision of this Agreement shall be effective only in the specific instance and for the specific purpose for which such amendment, supplement, modification, waiver or consent has been made or given.

Section 3.12 No Presumption . This Agreement has been reviewed and negotiated by sophisticated parties with access to legal counsel and shall not be construed against the drafter.

Section 3.13 Obligations Limited to Parties to Agreement . Each of the parties hereto covenants, agrees and acknowledges that, other than as set forth herein, no Person other than the Lenders, the Selling Holders, their respective permitted assignees and the Company shall have any obligation hereunder and that, notwithstanding that one or more of such Persons may be a corporation, partnership or limited liability company, no recourse under this Agreement or under any documents or instruments delivered in connection herewith shall be had against any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of such Persons or their respective permitted assignees, or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any former, current or future director, officer,

 

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employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of such Persons or any of their respective assignees, or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder or Affiliate of any of the foregoing, as such, for any obligations of such Persons or their respective permitted assignees under this Agreement or any documents or instruments delivered in connection herewith or for any claim based on, in respect of or by reason of such obligation or its creation, except, in each case, for any assignee of any Purchaser or a Selling Holder hereunder.

Section 3.14 Interpretation . Article, Section and Schedule references in this Agreement are references to the corresponding Article, Section or Schedule to this Agreement, unless otherwise specified. All Schedules to this Agreement are hereby incorporated and made a part hereof as if set forth in full herein and are an integral part of this Agreement. All references to instruments, documents, contracts and agreements are references to such instruments, documents, contracts and agreements as the same may be amended, supplemented and otherwise modified from time to time, unless otherwise specified. The word “including” shall mean “including but not limited to” and shall not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. Whenever the Company has an obligation under this Agreement, the expense of complying with that obligation shall be an expense of the Company unless otherwise specified. Any reference in this Agreement to “$” shall mean U.S. dollars. Whenever any determination, consent or approval is to be made or given by a Purchaser, such action shall be in such Purchaser’s sole discretion, unless otherwise specified in this Agreement. If any provision in this Agreement is held to be illegal, invalid, not binding or unenforceable, (a) such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, not binding or unenforceable provision had never comprised a part of this Agreement, and the remaining provisions shall remain in full force and effect, and (b) the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is a non-Business Day, the period in question shall end on the next succeeding Business Day. Any words imparting the singular number only shall include the plural and vice versa. The words such as “herein,” “hereinafter,” “hereof” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The provision of a Table of Contents, the division of this Agreement into Articles, Sections and other subdivisions and the insertion of headings are for convenience of reference only and shall not affect or be utilized in construing or interpreting this Agreement.

[Remainder of Page Left Intentionally Blank]

 

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

 

ATLAS ENERGY GROUP, LLC , as Parent
  By:  

/s/ Jeffrey M. Slotterback

  Name:   Jeffrey M. Slotterback
  Title:   Chief Financial Officer and
    Authorized Signatory

 

[Signature Page to Registration Rights Agreement]


RIVERSTONE CREDIT PARTNERS, L.P.,
as Administrative Agent and as Lender
By: RCP F1 GP, L.P., its general partner
By: RCP F1 GP, L.L.C., its general partner
By:  

/s/ Christopher A. Abbate

Name:   Christopher A. Abbate
Title:   Managing Director

 

[Signature Page to Registration Rights Agreement]


AEG ASSET MANAGEMENT, LLC,
as a Lender
By:  

/s/ Jonathan Z. Cohen

Name:   Jonathan Z. Cohen
Title:   Chief Financial Officer

 

[Signature Page to Registration Rights Agreement]


THE LEON AND TOBY COOPERMAN FAMILY FOUNDATION,
as a Lender
By:  

/s/ Leon G. Cooperman

Name:   Leon G. Cooperman
Title:   Trustee

 

[Signature Page to Registration Rights Agreement]


Schedule A

Lender Name; Notice and Contact Information

 

Lender

  

Contact Information

Riverstone Credit Partners, L.P.   

712 Fifth Avenue

36th Floor

New York, New York 10019

Attn: Christopher Abbate

Phone: (212) 271-2942

Fax: (212) 993-0077

AEG Asset Management, LLC   

1000 Commerce Dr., Suite 400

Pittsburgh, PA 15275

Fax: 215-405-3882

Attention: Johnathan Z. Cohen

The Leon and Toby Cooperman Family Foundation   

P.O. Box 2369

Clifton, NJ 07015-2369

Phone: (973) 778-8885