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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): January 10, 2024
SOUTHWESTERN ENERGY COMPANY
(Exact name of registrant as specified in its
charter)
| Delaware |
|
001-08246 |
|
71-0205415 |
(State or other jurisdiction of
incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
10000 Energy Drive
Spring, TX 77389
(Address of principal executive offices) (Zip Code)
(832) 796-1000
(Registrant’s telephone number, including
area code)
Not Applicable
(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:
x
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))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
| Common Stock, Par Value $0.01 |
|
SWN |
|
New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ¨
| Item 1.01 | Entry into a Material Definitive Agreement. |
On January 10, 2024, Southwestern Energy
Company, a Delaware corporation (NYSE: SWN) (“Southwestern” or the “Company”), entered into an Agreement
and Plan of Merger (the “Merger Agreement”) with Chesapeake Energy Corporation, an Oklahoma corporation (NASDAQ: CHK)
(“Chesapeake”), Hulk Merger Sub, Inc., a Delaware corporation and a newly formed, wholly-owned subsidiary of Chesapeake
(“Merger Sub”) and Hulk LLC Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of Chesapeake
(“LLC Sub” and together with Merger Sub, Southwestern and Chesapeake, the “Parties”). Subject to
the terms and conditions set forth in the Merger Agreement, Merger Sub will be merged with and into Southwestern, with Southwestern continuing
as the surviving entity (the “Surviving Corporation”) and a wholly-owned subsidiary of Chesapeake (the “Merger”).
At the time the Merger becomes effective (the
“Effective Time”), (i) each share of capital stock of Merger Sub issued and outstanding immediately prior to the
Effective Time will be converted automatically into one (1) share of common stock, par value $0.01 per share, of Southwestern (“Southwestern
Common Stock”), which will constitute the only outstanding shares of capital stock of Southwestern immediately following the
Effective Time and (ii) each share of Southwestern Common Stock issued and outstanding immediately prior to the Effective Time (excluding
certain excluded shares held by Southwestern as treasury shares, or by Chesapeake or Merger Sub or LLC Sub, and certain equity awards
of Southwestern) (such shares of Southwestern Common Stock, the “Eligible Shares”) will be converted automatically
into the right to receive the number of shares of Chesapeake common stock, par value $0.01 per share (“Chesapeake Common Stock”)
equal to 0.0867 (the “Exchange Ratio”), such that the aggregate consideration to be paid to the holders of Eligible
Shares in the transaction will consist of validly issued, fully paid and nonassessable shares of Chesapeake Common Stock (the “Merger
Consideration”). The Merger Consideration is subject to adjustment as provided in the Merger Agreement. No fractional shares
of Chesapeake Common Stock will be issued in the Merger, and holders of shares of Southwestern Common Stock will receive cash in lieu
of fractional shares of Chesapeake Common Stock, if any, in accordance with the terms of the Merger Agreement.
Immediately following the Effective Time, the
Surviving Corporation will be merged with and into LLC Sub, with LLC Sub continuing as the surviving entity and as a wholly owned subsidiary
of Chesapeake. On January 10, 2024, the board of directors of Southwestern, the board of directors of Chesapeake, the managing member
of LLC Sub and the board of directors of Merger Sub unanimously approved the Merger Agreement.
The Merger Agreement also specifies the treatment
of outstanding Southwestern equity awards in connection with the Merger, which shall be treated as follows at the Effective Time:
| ● | each Company Option Award (as defined in the Merger Agreement) that is outstanding and unexercised immediately prior to the Effective
Time will cease to represent a right to acquire shares of Southwestern Common Stock and will be automatically canceled and terminated
without consideration payable or owed; |
| ● | each outstanding Company Restricted Stock Award (as defined in the Merger Agreement) will automatically become fully vested and the
restrictions with respect thereto will lapse and each such Company Restricted Stock Award will be converted into the right to receive
the number of shares of Chesapeake Common Stock equal to (x) the Exchange Ratio, multiplied by (y) the total number of shares
of Southwestern Common Stock attributable to such Company Restricted Stock Award; |
| ● | each Company Restricted Stock Unit Award (as defined in the Merger Agreement) outstanding under Southwestern’s Nonemployee Director
Deferred Compensation Plan will automatically become fully vested as of the Closing Date (as defined in the Merger Agreement) and be canceled
and converted into the right to receive the number of shares of Chesapeake Common Stock equal to (x) the Exchange Ratio, multiplied
by (y) the total number of shares of Southwestern Common Stock attributable to such Company Restricted Stock Unit Award together
with accrued dividend equivalent payments, in each case issuable and payable at the time(s) as specified in Southwestern’s
Nonemployee Director Deferred Compensation Plan and in accordance with the applicable director’s deferral elections as set forth
in the applicable deferred compensation agreement; |
| ● | each outstanding Company Restricted Stock Unit Award that was granted pursuant to Southwestern’s 2013 Incentive Plan, or was
granted prior to the date of the Merger Agreement and is held by an employee of the Company or its subsidiaries that is terminated upon
or immediately after the Effective Time, and, in either case, that is subject only to time-based vesting conditions will be deemed to
be fully vested as of the Closing Date, and each such Company Restricted Stock Unit Award will be canceled and converted into the right
to receive a number of shares of Chesapeake Common Stock equal to (x) the Exchange Ratio, multiplied by (y) the total number
of shares of Southwestern Common Stock subject to each such Company Restricted Stock Unit Award, together with accrued dividend equivalent
payments, in each case issuable and payable in accordance with the terms of the applicable award agreement; |
| ● | each outstanding Company Restricted Stock Unit Award that was granted pursuant to Southwestern’s 2022 Incentive Plan (other
than those described in the third bullet point of this list), and that is subject only to time-based vesting conditions, will be canceled
and converted into an award of restricted stock units (each, a “Chesapeake RSU Award”) in respect of the number of
shares of Chesapeake Common Stock (rounded to the nearest whole share) equal to the product of (x) the total number of shares of
Southwestern Common Stock subject to such Company Restricted Stock Unit Award immediately prior to the Effective Time multiplied by (y) the
Exchange Ratio. Such Chesapeake RSU Award will vest and be payable on the same terms and conditions (including “double-trigger”
vesting provisions) as are set forth in the corresponding award agreement (except that such award will be payable in Chesapeake Common
Stock); |
| ● | each outstanding Company Performance Unit Award (as defined in the Merger Agreement) that was granted pursuant to Southwestern’s
2013 Incentive Plan or was granted prior to the date of the Merger Agreement and is held by an employee of Southwestern or its subsidiaries
that is terminated upon or immediately after the Effective Time will automatically be deemed to be fully vested and payable at the greater
of (x) the level based on actual performance determined immediately prior to the Effective Time in accordance with the terms of the
applicable award agreement and (y) target level (the number of shares of Southwestern Common Stock payable pursuant to the foregoing,
the “Earned Company Performance Shares”) and will be canceled and converted into the right to receive a number of shares
of Chesapeake Common Stock equal to the Exchange Ratio multiplied by the number of Earned Company Performance Shares, together with accrued
dividend equivalent payments, in each case issuable and payable in accordance with the terms of the applicable award agreement; |
| ● | each outstanding Company Performance Unit Award that was granted pursuant to Southwestern’s 2022 Incentive Plan (other than
those described in the immediately foregoing bullet point) will be deemed to correspond to a number of Earned Company Performance Shares
determined in the same manner as described in the foregoing bullet point and will be canceled and converted into a Chesapeake RSU Award
in respect of the number of shares of Chesapeake Common Stock (rounded to the nearest whole share) equal to the number of Earned Company
Performance Shares with respect to such Company Performance Unit Award multiplied by the Exchange Ratio. Such Chesapeake RSU Award shall
vest and be payable on the same terms and conditions (including “double-trigger” vesting provisions) as are set forth in the
corresponding award agreement (except that such award will be payable in Chesapeake Common Stock); |
| ● | each outstanding Company Performance Cash Unit Award (as defined in the Merger Agreement) that (i) was granted pursuant to Southwestern’s
2013 Incentive Plan, or was granted prior to the date of the Merger Agreement and is held by an employee of Southwestern or its Subsidiaries
that is terminated upon or immediately after the Effective Time will automatically be deemed to be fully vested as of the Closing Date
and payable in cash in an amount equal to $1.00 for each unit granted under such Company Performance Cash Unit Award multiplied by the
greater of (x) the percentage earned based on actual performance determined immediately prior to the Effective Time in accordance
with the terms of the applicable award agreement and (y) 100% (the “Cash Unit Award Amount”); and |
| ● | was granted pursuant to Southwestern’s 2022 Incentive Plan (other than those described in the immediately foregoing bullet point)
will be deemed earned at a level equal to the Cash Unit Award Amount and such amount will vest and be payable in cash at the end of the
original performance period associated with the corresponding Company Performance Cash Unit Award and will otherwise be subject to and
payable on the same terms and conditions (including “double-trigger” vesting provisions) as are set forth in the corresponding
award agreement. |
The consummation of the Merger is subject to the
satisfaction or waiver of customary closing conditions, including: (a) receipt of the required approvals from the stockholders of
Southwestern and Chesapeake, (b) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the “HSR Act”) and no agreement between or commitment by the Parties and any governmental
entity not to consummate the Merger being in effect, (c) no law or governmental order being in effect restraining, enjoying, making
illegal or unlawful, or otherwise prohibiting the consummation of the Merger, (d) Chesapeake’s registration statement on Form S-4
(the “Registration Statement”) to register the Chesapeake Common Stock to be issued pursuant to the Merger Agreement
having been declared effective by the U.S. Securities and Exchange Commission (the “SEC”) and not being subject to
any stop order or proceeding, and (e) the shares of Chesapeake Common Stock issuable to holders of shares of Southwestern Common
Stock pursuant to the Merger Agreement having been authorized for listing on the Nasdaq Global Select Market, subject to official notice
of issuance. The obligation of each party to consummate the Merger is also conditioned upon the other party’s representations and
warranties being true and correct (subject to certain materiality exceptions), and the receipt of an officer’s certificate from
the other party to such effect. Additionally, Southwestern’s obligation to consummate the Merger is conditioned on its receipt from
legal counsel that the Merger will qualify as a “reorganization” within Section 368(a) of the Tax Code.
The Merger Agreement contains customary representations
and warranties of Southwestern and Chesapeake relating to their respective businesses, financial statements and public filings, in each
case generally subject to customary materiality qualifiers. Additionally, the Merger Agreement provides for customary pre-closing covenants
of Southwestern and Chesapeake, including, subject to certain exceptions, covenants relating to conducting their respective businesses
in the ordinary course consistent with past practice and refraining from taking certain actions, excepting in each case actions expressly
permitted or required by the Merger Agreement, required by law or consented to by the other party in writing. Southwestern and Chesapeake
also agreed to use their respective reasonable best efforts to cause the Merger to be consummated and to obtain expiration or termination
of the waiting period under the HSR Act, subject to certain limitations set forth in the Merger Agreement.
The Merger Agreement provides that, during the
period from the date of the Merger Agreement until the Effective Time, Southwestern and Chesapeake will be subject to certain restrictions
on its ability to solicit alternative acquisition proposals from third parties, to provide non-public information to third parties and
to engage in discussions with third parties regarding alternative acquisition proposals, subject to customary exceptions as set forth
in the Merger Agreement. Southwestern and Chesapeake are required to call a meeting of their respective stockholders to approve the Merger
Agreement and, subject to certain exceptions, to recommend that its stockholders approve the Merger Agreement.
The Merger Agreement contains termination rights
for each of Southwestern and Chesapeake, including, among others, (a) if the consummation of the Merger does not occur on or before
the date that is 12 months from the date of the Merger Agreement, which date would be automatically extended to 18 months from the date
of the Merger Agreement for lack of antitrust clearance or other antitrust-related obstacles to closing, (b) if either Chesapeake’s
or Southwestern’s stockholders fail to approve a required proposal in connection with the Merger; (c) if a final and nonappealable
governmental order or law permanently prohibits the Merger; (d) if the other party has breached its representations, warranties or
covenants in the Merger Agreement, subject to certain conditions; (e) if the other party’s board of directors has changed its
recommendation in connection with the Merger; (f) in order to enter into a Superior Proposal (as defined in the Merger Agreement);
and (g) if the other party or its directors or executive officers willfully and materially breaches its non-solicitation obligations.
Upon termination of the Merger Agreement under specified circumstances, Chesapeake or Southwestern, as applicable, would be required to
pay the other party a termination fee. In addition, if the Merger Agreement is terminated due to a failure of Chesapeake’s stockholders
or Southwestern’s stockholders to approve the applicable proposals in connection with the Merger, Chesapeake or Southwestern, as
applicable, may be required to reimburse the other party for its expenses.
As of the Effective Time, Chesapeake will cause
its name and NASDAQ ticker symbol to be changed to such name and ticker symbol determined in consultation in good faith with Southwestern.
At the Effective Time, Chesapeake is required to take all necessary actions to cause four current members of the board of directors of
Southwestern, who are selected by Southwestern’s board of directors and are reasonably acceptable to Chesapeake, to be appointed
to the board of directors of Chesapeake immediately following the Effective Time.
The foregoing description of the Merger Agreement
and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the full text
of the Merger Agreement, a copy of which is attached as Exhibit 2.1 to this Current Report on Form 8-K and incorporated into
this Item 1.01 by reference.
The Merger Agreement has been included to provide
investors with information regarding its terms. It is not intended to provide any other factual information about Southwestern. The representations,
warranties and covenants contained in the Merger Agreement were made only for purposes of the Merger Agreement as of the specific dates
therein, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting
parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties
to the Merger Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the
contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Merger Agreement
and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state
of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the
subject matter of representations and warranties may change after the date of the Merger Agreement, which subsequent information may or
may not be fully reflected in Southwestern’s public disclosures.
| Item 7.01 | Regulation FD Disclosure. |
Attached as Exhibit 99.1 to this Current
Report on Form 8-K is an investor presentation regarding the Merger, which is incorporated into this Item 7.01 by reference.
The information furnished pursuant to this Item
7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”).
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This report includes certain statements that may
be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. All statements, other than statements of historical fact or present financial information, included in this report that address activities,
outcomes and other matters that Southwestern or Chesapeake expects, believes or anticipates will or may occur in the future, including,
without limitation, statements regarding the proposed transaction between Southwestern and Chesapeake (the “proposed transaction”),
the expected closing of the proposed transaction and the timing thereof and as adjusted descriptions of the post-transaction company and
its operations, strategies and plans, integration, debt levels and leverage ratio, capital expenditures, cash flows and anticipated uses
thereof, synergies, opportunities and anticipated future performance, including an expected accretion to earnings and free cash flow and
dividend payments, are forward looking statements. Although we and Chesapeake believe the expectations expressed in such forward-looking
statements are based on reasonable assumptions, such statements are not guarantees of future performance. We and Chesapeake have no obligation
and make no undertaking to publicly update or revise any forward-looking statements, except as may be required by law.
Forward-looking statements include the items identified
in the preceding paragraph, information concerning possible or assumed future results of operations and other statements in this report
identified by words such as “anticipate,” “intend,” “plan,” “project,” “predict,”
“estimate,” “continue,” “potential,” “should,” “could,” “may,”
“will,” “shall,” “become,” “objective,” “guidance,” “outlook,”
“effort,” “expect,” “believe,” “predict,” “budget,” “projection,”
“goal,” “forecast,” “model,” “target,” or similar words. Statements may be forward-looking
even in the absence of these particular words.
You should not place undue reliance on forward-looking
statements. They are subject to known and unknown risks, uncertainties and other factors that may affect our operations, markets, products,
services and prices and cause our actual results, performance or achievements to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements. These forward-looking statements are based on current beliefs
of the management of Southwestern and Chesapeake, based on currently available information, as to the outcome and timing of future events.
In addition to any assumptions and other factors referred to specifically in connection with forward-looking statements, risks, uncertainties
and factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are
not limited to: the risk that Southwestern’s and Chesapeake’s businesses will not be integrated successfully; the risk that
cost savings, synergies and growth from the proposed transaction may not be fully realized or may take longer to realize than expected;
the risk that the credit ratings of the combined company or its subsidiaries may be different from what the companies expect; the possibility
that stockholders of Chesapeake may not approve the issuance of new shares of Chesapeake Common Stock in the proposed transaction or that
stockholders of Chesapeake or stockholders of Southwestern may not approve the proposed transaction; the risk that a condition to closing
of the proposed transaction may not be satisfied, that either party may terminate the Merger Agreement or that the closing of the proposed
transaction might be delayed or not occur at all; potential adverse reactions or changes to business or employee relationships, including
those resulting from the announcement or completion of the proposed transaction; the risk the parties do not receive regulatory approval
of the proposed transaction; the occurrence of any other event, change or other circumstances that could give rise to the termination
of the Merger Agreement; the risk that changes in Chesapeake’s capital structure and governance could have adverse effects on the
market value of its securities; the ability of Southwestern and Chesapeake to retain customers and retain and hire key personnel and maintain
relationships with their suppliers and customers and on Southwestern’s and Chesapeake’s operating results and business generally;
the risk the proposed transaction could distract management from ongoing business operations or cause Southwestern and/or Chesapeake to
incur substantial costs; the risk of any litigation relating to the proposed transaction; the risk that Chesapeake may be unable to reduce
expenses or access financing or liquidity; the impact of COVID-19 or other diseases; the impact of adverse changes in interest rates and
inflation; and the risk of changes in governmental regulations or enforcement practices, especially with respect to environmental, health
and safety matters. All such factors are difficult to predict and are beyond our and Chesapeake’s control, including those detailed
in our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that are available on
our website at www.swn.com under the “Investors” tab and on the website of the SEC at www.sec.gov, and those detailed in Chesapeake’s
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that are available on Chesapeake’s
website at http://investors.chk.com/ and on the website of the SEC.
Should one or more of the risks or uncertainties
described above or elsewhere in this report occur, or should underlying assumptions prove incorrect, actual results and plans could differ
materially from those expressed in any forward-looking statements. We specifically disclaim all responsibility to update publicly any
information contained in a forward-looking statement or any forward-looking statement in its entirety and therefore disclaim any resulting
liability for potentially related damages.
All forward-looking statements attributable to
us are expressly qualified in their entirety by this cautionary statement.
No Offer or Solicitation
This report is not intended to and shall not constitute
an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any
vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful
prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Important Additional Information Regarding
the Transaction Will Be Filed with the SEC and Where to Find It
In connection with the proposed transaction between
Southwestern and Chesapeake, Chesapeake intends to file with the SEC the Registration Statement to register the shares of Chesapeake’s
common stock to be issued in connection with the proposed transaction. The Registration Statement will include a document that serves
as a prospectus of Chesapeake and joint proxy statement of Southwestern and Chesapeake (the “joint proxy statement/prospectus”),
and each party will file other documents regarding the proposed transaction with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME,
AND OTHER RELEVANT DOCUMENTS FILED BY Southwestern AND Chesapeake
WITH THE SEC BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT Southwestern AND Chesapeake,
THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.
After the Registration Statement has been declared
effective, a definitive joint proxy statement/prospectus will be mailed to stockholders of Southwestern and stockholders of Chesapeake
as of the record date. Investors will be able to obtain free copies of the Registration Statement and the joint proxy statement/prospectus,
as each may be amended from time to time, and other relevant documents filed by Southwestern and Chesapeake with the SEC (when they become
available) through the website maintained by the SEC at www.sec.gov. Copies of documents filed with the SEC by Southwestern, including
the joint proxy statement/prospectus (when available), will be available free of charge from Southwestern’s website at www.swn.com
under the “Investors” tab. Copies of documents filed with the SEC by Chesapeake, including the joint proxy statement/prospectus
(when available), will be available free of charge from Chesapeake’s website at http://investors.chk.com/.
Participants in the Solicitation
Southwestern and certain of its directors, executive
officers and other members of management and employees, Chesapeake, and certain of its directors, executive officers and other members
of management and employees may be deemed to be participants in the solicitation of proxies from Southwestern’s stockholders and
the solicitation of proxies from Chesapeake’s stockholders, in each case with respect to the proposed transaction. Information about
Southwestern’s directors and executive officers is available in Southwestern’s Annual Report on Form 10-K for the 2022
fiscal year filed with the SEC on February 23, 2023 and its definitive proxy statement for the 2023 annual meeting of stockholders
filed with the SEC on April 5, 2023, and in the joint proxy statement/prospectus (when available). Information about Chesapeake’s
directors and executive officers is available in its Annual Report on Form 10-K for the 2022 fiscal year filed with the SEC on February 22,
2023 and its definitive proxy statement for the 2023 annual meeting of stockholders filed with the SEC on April 28, 2023, and the
joint proxy statement/prospectus (when available). Other information regarding the participants in the solicitations and a description
of their direct and indirect interests, by security holdings or otherwise, will be contained in the Registration Statement, the joint
proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction when they become available.
Stockholders of Southwestern, stockholders of Chesapeake, potential investors and other readers should read the joint proxy statement/prospectus
carefully when it becomes available before making any voting or investment decisions.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| * | Annexes, schedules and certain exhibits have been omitted pursuant to Item 601(a)(5) of
Regulation S-K. Southwestern hereby undertakes to furnish supplemental copies of any of the omitted annexes, schedules and exhibits
upon request by the SEC. |
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.
| |
SOUTHWESTERN
ENERGY COMPANY |
| |
|
| Dated: January 11, 2024 |
By: |
/s/ CHRIS LACY |
| |
Name: |
Chris
Lacy |
| |
Title: |
Senior Vice President,
General Counsel & Secretary |
Exhibit 2.1
Execution Version
AGREEMENT AND PLAN OF MERGER
among
CHESAPEAKE ENERGY CORPORATION,
HULK MERGER SUB, INC.,
HULK LLC SUB, LLC,
and
SOUTHWESTERN ENERGY COMPANY
Dated as of January 10, 2024
TABLE
OF CONTENTS
|
|
Page |
| |
|
|
| Article I
CERTAIN DEFINITIONS |
2 |
| Section 1.1 |
Certain
Definitions |
2 |
| Section 1.2 |
Terms
Defined Elsewhere |
2 |
| |
|
|
| Article II
THE MERGER |
5 |
| Section 2.1 |
The
Merger |
5 |
| Section 2.2 |
Closing |
5 |
| Section 2.3 |
Effect
of the Merger |
5 |
| Section 2.4 |
Certificate
of Incorporation and Bylaws of the Surviving Corporation |
5 |
| Section 2.5 |
Directors
and Officers |
6 |
| Section 2.6 |
Integration
and Governance |
6 |
| Section 2.7 |
Post-Closing
Merger |
7 |
| |
|
|
| Article III
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE |
7 |
| Section 3.1 |
Effect
of the Merger on Capital Stock |
7 |
| Section 3.2 |
Treatment
of Equity Compensation Awards |
8 |
| Section 3.3 |
Payment
for Securities; Exchange |
11 |
| |
|
|
| Article IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
16 |
| Section 4.1 |
Organization,
Standing and Power |
16 |
| Section 4.2 |
Capital
Structure |
16 |
| Section 4.3 |
Authority;
No Violations; Consents and Approvals |
18 |
| Section 4.4 |
Consents |
19 |
| Section 4.5 |
Company
SEC Documents; Financial Statements |
19 |
| Section 4.6 |
Absence
of Certain Changes or Events |
20 |
| Section 4.7 |
No
Undisclosed Material Liabilities |
21 |
| Section 4.8 |
Information
Supplied |
21 |
| Section 4.9 |
Company
Permits; Compliance with Applicable Law |
21 |
| Section 4.10 |
Compensation;
Benefits |
22 |
| Section 4.11 |
Labor
Matters |
24 |
| Section 4.12 |
Taxes |
25 |
| Section 4.13 |
Litigation |
26 |
| Section 4.14 |
Intellectual
Property |
27 |
| Section 4.15 |
Privacy
and Cybersecurity |
27 |
| Section 4.16 |
Real
Property |
28 |
| Section 4.17 |
Rights-of-Way |
29 |
| Section 4.18 |
Oil
and Gas Matters |
29 |
| Section 4.19 |
Environmental
Matters |
32 |
| Section 4.20 |
Material
Contracts |
33 |
| Section 4.21 |
Derivative
Transactions |
35 |
| Section 4.22 |
Insurance |
35 |
| Section 4.23 |
Opinion
of Financial Advisor |
36 |
| Section 4.24 |
Brokers |
36 |
| Section 4.25 |
Takeover
Laws |
36 |
| Section 4.26 |
Related
Party Transactions |
36 |
| Section 4.27 |
No
Additional Representations |
37 |
|
|
| Article V
REPRESENTATIONS AND WARRANTIES OF PARENT,
MERGER SUB AND LLC SUB |
38 |
| Section 5.1 |
Organization,
Standing and Power |
38 |
| Section 5.2 |
Capital
Structure |
38 |
| Section 5.3 |
Authority;
No Violations; Consents and Approvals |
40 |
| Section 5.4 |
Consents |
41 |
| Section 5.5 |
Parent
SEC Documents; Financial Statements |
42 |
| Section 5.6 |
Absence
of Certain Changes or Events |
43 |
| Section 5.7 |
No
Undisclosed Material Liabilities |
43 |
| Section 5.8 |
Information
Supplied |
43 |
| Section 5.9 |
Parent
Permits; Compliance with Applicable Law |
44 |
| Section 5.10 |
Compensation;
Benefits |
45 |
| Section 5.11 |
Labor
Matters |
46 |
| Section 5.12 |
Taxes |
47 |
| Section 5.13 |
Litigation |
49 |
| Section 5.14 |
Intellectual
Property |
49 |
| Section 5.15 |
Privacy
and Cybersecurity |
50 |
| Section 5.16 |
Real
Property |
50 |
| Section 5.17 |
Rights-of-Way |
51 |
| Section 5.18 |
Oil
and Gas Matters |
51 |
| Section 5.19 |
Environmental
Matters |
54 |
| Section 5.20 |
Material
Contracts |
54 |
| Section 5.21 |
Derivative
Transactions |
57 |
| Section 5.22 |
Insurance |
57 |
| Section 5.23 |
Opinion
of Financial Advisor |
58 |
| Section 5.24 |
Brokers |
58 |
| Section 5.25 |
Ownership
of Company Common Stock |
58 |
| Section 5.26 |
Business
Conduct |
58 |
| Section 5.27 |
Related
Party Transactions |
58 |
| Section 5.28 |
Takeover
Laws |
59 |
| Section 5.29 |
No
Additional Representations |
59 |
| |
|
60 |
| Article VI
COVENANTS AND AGREEMENTS |
60 |
| Section 6.1 |
Conduct
of Company Business Pending the Merger |
64 |
| Section 6.2 |
Conduct
of Parent Business Pending the Merger |
64 |
| Section 6.3 |
No
Solicitation by the Company |
68 |
| Section 6.4 |
No
Solicitation by Parent |
75 |
| Section 6.5 |
Preparation
of the Joint Proxy Statement/Prospectus and Registration Statement |
81 |
| Section 6.6 |
Stockholders
Meetings |
83 |
| Section 6.7 |
Access
to Information |
85 |
| Section 6.8 |
HSR
and Other Approvals |
87 |
| Section 6.9 |
Employee
Matters |
90 |
| Section 6.10 |
Indemnification;
Directors’ and Officers’ Insurance |
93 |
| Section 6.11 |
Transaction
Litigation |
94 |
| Section 6.12 |
Public
Announcements |
95 |
| Section 6.13 |
Advice
on Certain Matters; Control of Business |
95 |
| Section 6.14 |
Financing
Cooperation |
96 |
| Section 6.15 |
Reasonable
Best Efforts; Notification |
98 |
| Section 6.16 |
Section 16
Matters |
99 |
| Section 6.17 |
Stock
Exchange Listing and Delistings |
99 |
| Section 6.18 |
Certain Indebtedness |
100 |
| Section 6.19 |
Tax Matters |
100 |
| Section 6.20 |
Takeover Laws |
101 |
| Section 6.21 |
Obligations of Merger Sub and LLC Sub |
101 |
| Section 6.22 |
Transfer Taxes |
101 |
| Section 6.23 |
Derivative Contracts; Hedging Matters |
101 |
| |
|
|
| Article VII
CONDITIONS PRECEDENT |
102 |
| Section 7.1 |
Conditions to Each Party’s Obligation to Consummate the Merger |
102 |
| Section 7.2 |
Additional Conditions to Obligations of Parent, Merger Sub and LLC
Sub |
102 |
| Section 7.3 |
Additional Conditions to Obligations of the Company |
103 |
| Section 7.4 |
Frustration of Closing Conditions |
104 |
| |
|
|
| Article VIII
TERMINATION |
104 |
| Section 8.1 |
Termination |
104 |
| Section 8.2 |
Notice of Termination; Effect of Termination |
106 |
| Section 8.3 |
Expenses and Other Payments |
107 |
| |
|
|
| Article IX
GENERAL PROVISIONS |
110 |
| Section 9.1 |
Schedule Definitions |
110 |
| Section 9.2 |
Survival; Exclusive Remedy |
110 |
| Section 9.3 |
Notices |
110 |
| Section 9.4 |
Rules of Construction |
112 |
| Section 9.5 |
Counterparts |
113 |
| Section 9.6 |
Entire Agreement; No Third Party Beneficiaries |
114 |
| Section 9.7 |
Governing Law; Venue; Waiver of Jury Trial |
114 |
| Section 9.8 |
Severability |
115 |
| Section 9.9 |
Assignment |
115 |
| Section 9.10 |
Specific Performance |
116 |
| Section 9.11 |
Affiliate Liability |
116 |
| Section 9.12 |
Amendment |
116 |
| Section 9.13 |
Extension; Waiver |
117 |
| Section 9.14 |
Non-Recourse |
117 |
| Section 9.15 |
Debt Financing Sources |
118 |
| |
|
|
| Annexes and Exhibits |
|
|
| |
|
|
| Annex A |
Certain Definitions |
|
| |
|
|
| Exhibit A |
Form of Certificate of Incorporation of the Surviving Corporation |
|
| Exhibit B |
Form of Bylaws of the Surviving Corporation |
|
| Exhibit C |
Form of LLC Sub Merger Agreement |
|
AGREEMENT AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER, dated as of January 10, 2024 (this “Agreement”), is entered into by and among
Chesapeake Energy Corporation, an Oklahoma corporation (“Parent”), Hulk Merger Sub, Inc., a Delaware corporation
and a wholly owned Subsidiary of Parent (“Merger Sub”), Hulk LLC Sub, LLC, a Delaware limited liability company
and a wholly owned Subsidiary of Parent (“LLC Sub”), and Southwestern Energy Company, a Delaware corporation (the
“Company”).
WHEREAS, the Board of Directors
of the Company (the “Company Board”), at a meeting duly called and held, has (i) determined that this Agreement
and the Transactions, including the merger of Merger Sub with and into the Company, with the Company continuing as the surviving entity
following such merger (the “Merger”), are fair and reasonable to, and in the best interests of, the Company and the
holders of the shares of common stock of the Company, par value $0.01 per share (the “Company Common Stock”), (ii) approved
and declared advisable this Agreement and the Transactions and (iii) resolved to recommend that the holders of Company Common Stock
approve and adopt this Agreement and the Transactions;
WHEREAS, the Board of Directors
of Parent (the “Parent Board”), at a meeting duly called and held, has (i) determined that this Agreement and
the Transactions, including the issuance of the shares of common stock of Parent, par value $0.01 per share (“Parent Common
Stock”), pursuant to this Agreement (the “Parent Stock Issuance”), are fair and reasonable to, and in the
best interests of, Parent and the holders of Parent Common Stock, (ii) approved and declared advisable this Agreement and the consummation
of the Transactions, including the Parent Stock Issuance and (iii) resolved to recommend that the holders of Parent Common Stock
approve the Parent Stock Issuance;
WHEREAS, the Board of Directors
of Merger Sub (the “Merger Sub Board”) has (i) determined that this Agreement and the Transactions are fair and
reasonable to and in the best interests of, Merger Sub and its stockholder, (ii) approved and declared advisable this Agreement
and the Transactions and (iii) recommended this Agreement and the Transactions to Parent for approval and adoption thereby in its
capacity as the sole stockholder of Merger Sub;
WHEREAS, Parent (i) in
its capacity as the sole stockholder of Merger Sub, will approve and adopt this Agreement and (ii) in its capacity as the sole member
of LLC Sub, will approve and adopt this Agreement, in each case, promptly following its execution;
WHEREAS, Parent desires to
acquire 100% of the issued and outstanding shares of capital stock of the Company on the terms and subject to the conditions set forth
in this Agreement;
WHEREAS,
immediately after the Effective Time, the Surviving Corporation shall be merged with and into LLC Sub, with LLC Sub continuing as the
surviving entity in the LLC Sub Merger as a wholly owned subsidiary of Parent; and
WHEREAS,
for U.S. federal income tax purposes, it is intended that (i) the Merger and the LLC Sub Merger (together, the “Integrated
Mergers”), taken together, qualify as a “reorganization” within the meaning of Section 368(a) of the
U.S. Internal Revenue Code of 1986, as amended (the “Code”), and (ii) this Agreement and the LLC Sub Merger Agreement,
taken together, constitute and be adopted as a “plan of reorganization” for purposes of Sections 354 and 361 of the Code
and within the meaning of Treasury Regulations §§ 1.368-2(g) and 1.368-3(a).
NOW, THEREFORE, in consideration
of the foregoing and the representations, warranties, covenants and agreements contained in this Agreement, and for other valuable consideration,
the receipt and sufficiency of which are acknowledged, Parent, Merger Sub, LLC Sub and the Company agree as follows:
Article I
CERTAIN DEFINITIONS
Section 1.1 Certain
Definitions. As used in this Agreement, the capitalized terms have the meanings ascribed
to such terms in Annex A or as otherwise defined elsewhere in this Agreement.
Section 1.2 Terms
Defined Elsewhere. As used in this Agreement, the following capitalized terms are defined
in this Agreement as referenced in the following table:
| Definition |
Section |
| |
|
| Acceptable Confidentiality
Agreement |
6.3(c)(i) |
| Agreement |
Preamble |
| Antitrust Laws |
6.8(b)(ii) |
| Bonus Payment Date |
6.9(h) |
| Book-Entry Shares |
3.3(b)(ii) |
| |
|
| Certificate of Merger |
2.2(b) |
| Certificates |
3.3(b)(i) |
| Closing |
2.2(a) |
| Closing Date |
2.2(a) |
| Code |
Recitals |
| Company |
Preamble |
| Company 401(k) Plans |
6.9(f) |
| Company Alternative Acquisition
Agreement |
6.3(e)(vi) |
| Company Board |
Recitals |
| Company Board Recommendation |
4.3(a) |
| Company Capital Stock |
4.2(a) |
| Company Change of Recommendation |
6.3(e)(viii) |
| Company Common Stock |
Recitals |
| Company Contracts |
4.20(b) |
| Company Designee |
2.5(a) |
| Company Disclosure Letter |
Article IV |
| Company Employee |
6.9(a) |
| Company Independent Petroleum
Engineer |
4.18(a) |
| Company Intellectual Property |
4.14(a) |
| Company Material Adverse
Effect |
4.1 |
| Company Material
Leased Real Property |
4.16 |
| Definition |
Section |
| |
|
| Company Material Real Property |
4.16 |
| Company Material Real Property
Lease |
4.16 |
| Company Owned Real Property |
4.16 |
| Company Permits |
4.9(a) |
| Company Preferred Stock |
4.2(a) |
| Company Privacy Obligations |
4.15(a) |
| Company Refinanced Indebtedness |
6.1(b)(x) |
| Company Refinancing Indebtedness |
6.1(b)(x) |
| Company Related Party Transaction |
4.26 |
| Company Reserve Report |
4.18(a) |
| Company SEC Documents |
4.5(a) |
| Company Tax Certificate |
6.19(c) |
| Confidentiality Agreement |
6.7(b) |
| D&O Insurance |
6.10(d) |
| Debt Financing |
6.14(b) |
| Debt Financing Sources |
6.14(b) |
| DGCL |
2.1 |
| Effective Time |
2.2(b) |
| Eligible Shares |
3.1(b)(i) |
| e-mail |
9.3 |
| Earned Company Performance
Shares |
3.2(d)(i) |
| Exchange Agent |
3.3(a) |
| Exchange Fund |
3.3(a) |
| Exchange Ratio |
3.1(b)(i) |
| Excluded Shares |
3.1(b)(iii) |
| GAAP |
4.5(b) |
| HSR Act |
4.4 |
| Indemnified Liabilities |
6.10(a) |
| Indemnified Persons |
6.10(a) |
| Joint Proxy Statement/Prospectus
|
4.4 |
| Letter of Transmittal |
3.3(b)(i) |
| LLC Sub Merger |
2.7 |
| LLC Sub Merger Agreement |
2.7 |
| Material Company Insurance
Policies |
4.22 |
| Material Parent Insurance
Policies |
5.22 |
| Merger |
Recitals |
| Merger Consideration |
3.1(b)(i) |
| Merger Sub |
Preamble |
| Merger Sub Board |
Recitals |
| Outside Date |
8.1(b)(ii) |
| Parent |
Preamble |
| Parent 401(k) Plan |
6.9(f) |
| Parent Alternative Acquisition
Agreement |
6.4(e)(vi) |
| Parent Board |
Recitals |
| Parent Board Recommendation |
5.3(a) |
| Definition |
Section |
| |
|
| Parent Capital
Stock |
5.2(a) |
| Parent Change of Recommendation |
6.4(e)(viii) |
| Parent Closing Price |
3.3(h) |
| Parent Common Stock |
Recitals |
| Parent Contracts |
5.20(b) |
| Parent Disclosure Letter |
Article V |
| Parent Independent Petroleum
Engineer |
5.18(a) |
| Parent Intellectual Property |
5.14(a) |
| Parent Material Adverse
Effect |
5.1 |
| Parent Material Leased
Real Property |
5.16 |
| Parent Material Real Property |
5.16 |
| Parent Material Real Property
Lease |
5.16 |
| Parent Owned Real Property |
5.16 |
| Parent Permits |
5.9(a) |
| Parent Preferred Stock |
5.2(a) |
| Parent Privacy Obligations |
5.15(a) |
| Parent Refinanced Indebtedness |
6.2(b)(ix) |
| Parent Refinancing Indebtedness |
6.2(b)(ix) |
| Parent Related Party Transaction |
5.27 |
| Parent Reserve Report |
5.18(a) |
| Parent RSU Award |
3.2(c)(iii) |
| Parent SEC Documents |
5.5(a) |
| Parent Stock Issuance |
Recitals |
| Parent Stock Plans |
5.2(b) |
| Parent Tax Certificate |
6.19(c) |
| Parent Warrants |
5.2(a) |
| Participating Employee |
6.9(h) |
| Phase II |
6.7(a)(iv) |
| Registration Statement |
4.8 |
| Remedy Action |
6.8(c) |
| Reserved Shares |
5.2(b) |
| Reserved Warrants |
5.2(b) |
| Rights-of-Way |
4.17 |
| Security Incident |
4.15(b) |
| Subject Courts |
9.15 |
| Surviving Corporation |
2.1 |
| Tail Period |
6.10(d) |
| Terminable Breach |
8.1(b)(iii) |
| Transaction Litigation |
6.11 |
Article II
THE MERGER
Section 2.1 The
Merger. Upon the terms and subject to the conditions of this Agreement, at the Effective
Time, Merger Sub will be merged with and into the Company in accordance with the provisions of the General Corporation Law of the State
of Delaware (the “DGCL”). As a result of the Merger, the separate existence of Merger Sub shall cease and the Company
shall continue its existence under the laws of the State of Delaware as the surviving corporation (in such capacity, the Company is sometimes
referred to herein as the “Surviving Corporation”), as a wholly owned subsidiary of Parent.
Section 2.2 Closing.
(a) The
closing of the Merger (the “Closing”), shall take place by the exchange of documents by “portable document format”
(“.pdf”) or other electronic means at 9:00 a.m., Houston, Texas time, on the date that is three (3) Business Days immediately
following the satisfaction or (to the extent permitted by applicable Law) waiver in accordance with this Agreement of all of the conditions
set forth in Article VII (other than any such conditions which by their nature cannot be satisfied until the Closing Date,
which shall be required to be so satisfied or (to the extent permitted by applicable Law) waived in accordance with this Agreement on
the Closing Date), unless another date, time or place is agreed to in writing by Parent and the Company. For purposes of this Agreement,
“Closing Date” shall mean the date on which the Closing occurs.
(b) As
soon as practicable on the Closing Date in connection with the Closing, the Parties will cause a certificate of merger, prepared and
executed in accordance with the relevant provisions of the DGCL to consummate the Merger (the “Certificate of Merger”),
to be filed with the Secretary of State of the State of Delaware. The Merger shall become effective upon the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware, or at such later time as shall be agreed upon in writing by Parent and
the Company and specified in the Certificate of Merger (the time the Merger becomes effective being the “Effective Time”).
Section 2.3 Effect
of the Merger. At the Effective Time, the Merger shall have the effects set forth in this
Agreement and the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective
Time, all the property, rights, privileges, powers and franchises of each of the Company and Merger Sub shall vest in the Surviving Corporation,
and all debts (including the Notes), liabilities, obligations, restrictions, disabilities and duties of each of the Company and Merger
Sub shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation.
Section 2.4 Certificate
of Incorporation and Bylaws of the Surviving Corporation. At the Effective Time, (a) the
certificate of incorporation of the Company in effect immediately prior to the Effective Time shall be amended and restated in its entirety
as of the Effective Time to be in the form set forth in Exhibit A and (b) the bylaws of the Company in effect immediately
prior to the Effective Time shall be amended and restated in their entirety as of the Effective Time to be in the form set forth in Exhibit B,
and shall be the certificate of incorporation and bylaws, respectively, of the Surviving Corporation from and after the Effective Time,
in each case until duly amended and/or restated in accordance with their respective terms and applicable Law.
Section 2.5
Directors and Officers.
(a) Parent
Board. Unless otherwise agreed to by the Parties, Parent shall take all actions necessary to cause the Parent Board to consist, at
the Effective Time, of eleven (11) members, including four (4) individuals selected by the Company (the “Company Designees”),
each of whom is a member of the Company Board as of the date of this Agreement and will meet the requirements under the rules and
regulations of NASDAQ to be considered an independent director on the Parent Board, with such directors to serve until their respective
successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Organizational
Documents of Parent and applicable Law. The Company shall deliver to Parent, prior to the time that the Registration Statement is declared
effective by the SEC, a written notice listing the names of all four (4) of the Company Designees and providing any relevant information
about such designees as Parent may reasonably request for the purpose of including such information in filings with the SEC. If any of
the Company Designees shall be unable or unwilling to serve at the Closing, the Company shall promptly designate a replacement director
who meets the requirements of a Company Designee and provide any relevant information about such designees as Parent may reasonably request
for the purpose of including such information in filings with the SEC. Following the Closing, Parent, through the Parent Board, shall
take all necessary action to nominate such Company Designees for election to the Parent Board in the proxy statement relating to the
first annual meeting of the stockholders of Parent thereafter.
(b) Surviving
Corporation Directors and Officers. From and after the Effective Time, the Parties shall take all actions necessary so that, until
successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with applicable
Law, (i) the members of the board of directors of Merger Sub at the Effective Time shall be the directors of the Surviving Corporation
and (ii) the officers of Merger Sub at the Effective Time shall be the officers of the Surviving Corporation.
(c) Name
and Ticker Symbol. As of the Effective Time, Parent shall cause the name and NASDAQ ticker symbol of Parent to be changed to such
name and ticker symbol as determined by Parent following consultation in good faith with the Company prior to the Effective Time.
Section 2.6 Integration
and Governance. From and after the date of this Agreement until the Effective Time, each
of Parent and the Company shall, and shall cause each of its respective Subsidiaries to, subject to applicable Law, cooperate with the
other Party in connection with planning the integration of the businesses of Parent and the Company, the identification of synergies
and the adoption of best practices for Parent and its Subsidiaries following the Effective Time. In furtherance of the foregoing, promptly
following the date of this Agreement, the respective Chief Executive Officers and Chief Financial Officers of Parent and the Company
shall mutually develop an integration plan with the assistance of an integration team, the members of which shall be persons selected
by the respective Chief Executive Officers and Chief Financial Officers of Parent and the Company, and such integration team shall meet
at least once per month (unless otherwise determined by the respective Chief Executive Officers and Chief Financial Officers of Parent
and the Company) prior to the Closing Date (subject to applicable Law as advised by their respective legal counsels) and as otherwise
reasonably requested by Parent and the Company to conduct transition and integration planning.
Section 2.7 Post-Closing
Merger. Immediately following the Effective Time, the Surviving Corporation shall merge
with and into LLC Sub (the “LLC Sub Merger”), with LLC Sub continuing as the surviving entity in such merger as a
wholly owned subsidiary of Parent, pursuant to a merger agreement substantially in the form attached hereto as Exhibit C
(the “LLC Sub Merger Agreement”). At the time of and immediately after the LLC Sub Merger, Parent shall own all of
the membership interests and other equity, if any, in LLC Sub and shall be the sole member of LLC Sub, and LLC Sub shall be treated as
an entity disregarded as separate from Parent for U.S. federal income Tax purposes.
Article III
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE
Section 3.1 Effect
of the Merger on Capital Stock. Subject to the other provisions of this Article III,
at the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company, or any holder of
any securities of Parent, Merger Sub or the Company:
(a) Capital
Stock of Merger Sub. Each share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall
be converted into and shall represent one (1) validly issued, fully paid and nonassessable share of common stock, par value $0.01 per
share, of the Surviving Corporation, which shall constitute the only outstanding shares of capital stock of the Surviving Corporation
immediately following the Effective Time.
(b) Capital
Stock of the Company.
(i) Each
share of Company Common Stock issued and outstanding immediately prior to the Effective Time (excluding any Excluded Shares, and, to
the extent set forth in Section 3.2, Company Incentive Awards) (such shares of Company Common Stock, the “Eligible
Shares”) shall be converted automatically at the Effective Time into the right to receive that number of validly issued, fully-paid
and nonassessable shares of Parent Common Stock equal to the Exchange Ratio (the “Merger Consideration”). As used
in this Agreement, “Exchange Ratio” means 0.0867.
(ii) All
Eligible Shares, when so converted, shall cease to be outstanding and shall automatically be canceled and cease to exist and each holder
of an Eligible Share that was outstanding immediately prior to the Effective Time shall cease to have any rights with respect thereto,
except the right to receive (A) the Merger Consideration, (B) any dividends or other distributions in accordance with Section 3.3(g) and
(C) any cash to be paid in lieu of any fractional shares of Parent Common Stock in accordance with Section 3.3(h), in
each case to be issued or paid in consideration therefor upon the exchange of any Certificates or Book-Entry Shares, as applicable, in
accordance with Section 3.3(a).
(iii) All
shares of Company Common Stock held by the Company as treasury shares or held by Parent or Merger Sub immediately prior to the Effective
Time and, in each case, not held on behalf of third parties (collectively, “Excluded Shares”) shall automatically
be canceled and cease to exist as of the Effective Time, and no consideration shall be delivered in exchange therefor.
(c) Impact
of Stock Splits, Etc. In the event of any change in (i) the number of shares of Company Common Stock, or securities convertible
or exchangeable into or exercisable for shares of Company Common Stock or (ii) the number of shares of Parent Common Stock, or securities
convertible or exchangeable into or exercisable for shares of Parent Common Stock (including options to purchase Parent Common Stock),
in each case issued and outstanding after the date of this Agreement and prior to the Effective Time by reason of any stock split, reverse
stock split, stock dividend, subdivision, reclassification, recapitalization, combination, exchange of shares or the like, the Exchange
Ratio shall be equitably adjusted to reflect the effect of such change and, as so adjusted, shall from and after the date of such event,
be the applicable portion of the Merger Consideration, subject to further adjustment in accordance with this Section 3.1(c).
Nothing in this Section 3.1(c) shall be construed to permit the Parties to take any action except to the extent such
action is consistent with, and not otherwise prohibited by, the terms of this Agreement.
Section 3.2 Treatment
of Equity Compensation Awards.
(a) Treatment
of Options. At the Effective Time, each Company Option Award that is outstanding and unexercised as of immediately prior to the Effective
Time shall cease to represent a right to acquire shares of Company Common Stock and shall be automatically canceled and terminated without
consideration payable or owed therefor.
(b) Treatment
of Restricted Stock. At the Effective Time, each outstanding Company Restricted Stock Award shall automatically, and without any
action on the part of the holder thereof, become fully vested and the restrictions with respect thereto shall lapse, and each such Company
Restricted Stock Award shall be converted into the right to receive a number of shares of Parent Common Stock equal to (i) the Exchange
Ratio, multiplied by (ii) the total number of shares of Company Common Stock attributable to such Company Restricted Stock Award.
(c) Treatment
of Restricted Stock Units.
(i) At
the Effective Time, each Company Restricted Stock Unit Award that is outstanding under the Company’s Nonemployee Director Deferred
Compensation Plan shall automatically and without any action on the part of the holder thereof, become fully vested as of the Closing
Date, and each such Company Restricted Stock Unit Award shall be canceled and converted into the right to receive a number of shares
of Parent Common Stock equal to (A) the Exchange Ratio, multiplied by (B) the total number of shares of Company Common Stock
subject to such Company Restricted Stock Unit Award, together with accrued dividend equivalent payments, in each case issuable and payable
at the time(s) as specified in the Company’s Nonemployee Director Deferred Compensation Plan and in accordance with such Director’s
deferral elections as set forth in the applicable Deferred Compensation Agreement.
(ii) At
the Effective Time, each outstanding Company Restricted Stock Unit Award that (A) was granted pursuant to the Company’s 2013
Incentive Plan, or (B) was granted prior to the date of this Agreement and is held by an employee of the Company or its Subsidiaries
that is terminated upon or immediately after the Effective Time, and, in either case, that is subject only to time-based vesting conditions
shall be deemed to be fully vested as of the Closing Date, and each such Company Restricted Stock Unit Award shall be canceled and converted
into the right to receive a number of shares of Parent Common Stock equal to (1) the Exchange Ratio, multiplied by (2) the
total number of shares of Company Common Stock subject to each such Company Restricted Stock Unit Award, together with accrued dividend
equivalent payments, in each case issuable and payable in accordance with the terms of the applicable award agreement.
(iii) At
the Effective Time, each outstanding Company Restricted Stock Unit Award that was granted pursuant to the Company’s 2022 Incentive
Plan and that is not covered by Section 3.2(c)(ii), and that is subject only to time-based vesting conditions, shall be canceled
and converted into an award of restricted stock units in respect of Parent Common Stock (each, a “Parent RSU Award”)
in respect of that number of shares of Parent Common Stock (rounded to the nearest whole share) equal to the product of (1) the
total number of shares of Company Common Stock subject to such Company Restricted Stock Unit Award immediately prior to the Effective
Time multiplied by (2) the Exchange Ratio. Such Parent RSU Award shall vest and be payable on the same terms and conditions (including
“double-trigger” vesting provisions) as are set forth in the corresponding award agreement (except that such award will be
payable in Parent Common Stock).
(d) Treatment
of Performance Units.
(i) At
the Effective Time, each outstanding Company Performance Unit Award that (A) was granted pursuant to the Company’s 2013 Incentive
Plan, or (B) was granted prior to the date of this Agreement and is held by an employee of the Company or its Subsidiaries that
is terminated upon or immediately after the Effective Time shall (I) automatically, by virtue of the occurrence of the Closing,
be deemed to be fully vested and payable at the greater of (1) the level based on actual performance determined as of immediately
prior to the Effective Time in accordance with the terms of the applicable award agreement and (2) target level (the number of shares
of Company Common Stock payable pursuant to the foregoing, the “Earned Company Performance Shares”), and (II) be
canceled and converted into the right to receive a number of shares of Parent Common Stock equal to (x) the Exchange Ratio, multiplied
by (y) the number of Earned Company Performance Shares, together with accrued dividend equivalent payments, in each case issuable
and payable in accordance with the terms of the applicable award agreement.
(ii) At
the Effective Time, each outstanding Company Performance Unit Award that was granted pursuant to the Company’s 2022 Incentive Plan
and that is not covered by Section 3.2(d)(i) shall be deemed to correspond to a number of Earned Company Performance
Shares determined in the same manner as described in Section 3.2(d)(i) and shall be canceled and converted into a Parent
RSU Award in respect of that number of shares of Parent Common Stock (rounded to the nearest whole share) equal to (1) the number
of Earned Company Performance Shares with respect to such Company Performance Unit Award multiplied by (2) the Exchange Ratio. Such
Parent RSU Award shall vest at the end of the original performance period associated with the corresponding Company Performance Unit
Award and shall otherwise be subject to and payable on the same terms and conditions (including “double-trigger” vesting
provisions) as are set forth in the corresponding award agreement (except that such award will be payable in Parent Common Stock).
(e) Treatment
of Performance Cash Units.
(i) At
the Effective Time, each outstanding Company Performance Cash Unit Award that (A) was granted pursuant to the Company’s 2013
Incentive Plan, or (B) was granted prior to the date of this Agreement and is held by an employee of the Company or its Subsidiaries
that is terminated upon or immediately after the Effective Time shall automatically, by virtue of the occurrence of the Closing, be deemed
to be fully vested as of the Closing Date and payable in cash in an amount equal to $1.00 for each unit granted under such Company Performance
Cash Unit Award multiplied by the greater of (1) the percentage earned based on actual performance determined as of immediately
prior to the Effective Time in accordance with the terms of the applicable award agreement and (2) 100%.
(ii) At
the Effective Time, each outstanding Company Performance Cash Unit Award that was granted pursuant to the Company’s 2022 Incentive
Plan and that is not covered by Section 3.2(e)(i) above shall be deemed earned at a level equal to $1.00 for each unit
granted under such Company Performance Cash Unit Award multiplied by the greater of (1) the percentage earned based on actual performance
determined as of immediately prior to the Effective Time in accordance with the terms of the applicable award agreement and (2) 100%.
Such amount shall vest and be payable in cash at the end of the original performance period associated with the corresponding Company
Performance Cash Unit Award and shall otherwise be subject to and payable on the same terms and conditions (including “double-trigger”
vesting provisions) as are set forth in the corresponding award agreement.
(f) Administration.
Prior to the Effective Time, the Company Board and/or the Compensation Committee of the Company Board shall take such action and adopt
such resolutions as are required to (i) effectuate the treatment of the Company Incentive Awards pursuant to the terms of this Section 3.2,
(ii) if requested by Parent in writing at least ten (10) days prior to the Company Stockholders Meeting, cause the Company
Equity Plan to terminate at or prior to the Effective Time and (iii) take actions reasonably required to effectuate any provision
of this Section 3.2, including to ensure that from and after the Effective Time, other than as otherwise contemplated by
this Agreement, neither Parent nor the Surviving Corporation will be required to deliver shares of Company Common Stock or other capital
stock of the Company to any Person pursuant to or in settlement of any equity awards of the Company. Notwithstanding anything in this
Agreement to the contrary, each of Parent, the Company, and their respective Affiliates shall be entitled to deduct or withhold from
any amounts payable to any Person pursuant to this Agreement, including the payments under this Section 3.2; provided,
that the Parties shall reasonably cooperate in good faith to minimize any such deduction or withholding.
(g) Parent
Actions. Parent shall take all actions that are necessary for the treatment of Company Incentive Awards pursuant to this Section 3.2,
including the reservation, issuance and listing of Parent Common Stock as necessary to effect the transactions contemplated by this Section 3.2.
If registration of any plan interests in any Company Benefit Plan or the shares of Parent Common Stock issuable in satisfaction of any
Company Incentive Awards following the Effective Time (and giving effect to this Section 3.2) is required under the
Securities Act, Parent shall file with the SEC as soon as reasonably practicable on or after the Closing Date a registration statement
on Form S-8 with respect to such plan interests or shares of Parent Common Stock, and shall use its reasonable best efforts
to maintain the effectiveness of such registration statement for so long as the relevant Company Benefit Plan or Company Incentive Awards
remain outstanding or in effect and such registration of interests therein or the shares of Parent Common Stock issuable thereunder continues
to be required. With respect to those individuals who will be subject to the reporting requirements under Section 16(a) of
the Exchange Act subsequent to the Effective Time, where applicable, Parent shall administer the Company Incentive Awards assumed pursuant
to this Section 3.2 in a manner that complies with Rule 16b-3 promulgated under the Exchange Act.
Section 3.3 Payment
for Securities; Exchange.
(a) Exchange
Agent; Exchange Fund. Prior to the Closing, Parent shall enter into an agreement with Parent’s or the Company’s transfer
agent to act as agent for the holders of Company Common Stock in connection with the Merger (the “Exchange Agent”)
and to receive the Merger Consideration and all cash payable pursuant to this Article III. On the Closing Date and prior
to the filing of the Certificate of Merger, Parent shall deposit, or cause to be deposited, with the Exchange Agent, for the benefit
of the holders of Eligible Shares, for distribution in accordance with this Article III through the Exchange Agent, (i) the
number of shares of Parent Common Stock issuable in respect of Eligible Shares pursuant to Section 3.1 and (ii) sufficient
cash to make payments in lieu of fractional shares pursuant to Section 3.3(h). Parent agrees to make available to the Exchange
Agent, from time to time as needed, cash sufficient to pay any dividends and other distributions pursuant to Section 3.3(g).
The Exchange Agent shall, pursuant to irrevocable instructions, deliver the Merger Consideration contemplated to be issued in exchange
for Eligible Shares pursuant to this Agreement out of the Exchange Fund. Except as contemplated by this Section 3.3(a), Section 3.3(g) and
Section 3.3(h), the Exchange Fund shall not be used for any other purpose. Any cash and shares of Parent Common Stock deposited
with the Exchange Agent (including as payment for fractional shares in accordance with Section 3.3(h) and any dividends
or other distributions in accordance with Section 3.3(g)) shall hereinafter be referred to as the “Exchange Fund.”
Parent or the Surviving Corporation shall pay all charges and expenses, including those of the Exchange Agent, in connection with the
exchange of Eligible Shares pursuant to this Agreement. The cash portion of the Exchange Fund may be invested by the Exchange Agent as
reasonably directed by Parent. To the extent, for any reason, the amount in the Exchange Fund is below that required to make prompt payment
of the aggregate cash payments contemplated by this Article III, Parent shall promptly replace, restore or supplement (or
cause to be replaced, restored or supplemented) the cash in the Exchange Fund so as to ensure that the Exchange Fund is at all times
maintained at a level sufficient for the Exchange Agent to make the payment of the aggregate cash payments contemplated by this Article III.
Any interest or other income resulting from investment of the cash portion of the Exchange Fund shall become part of the Exchange Fund,
and any amounts in excess of the amounts payable hereunder shall, at the discretion of Parent, be promptly returned to Parent or the
Surviving Corporation.
(b) Payment
Procedures.
(i) Certificates.
As soon as practicable after the Effective Time, Parent shall cause the Exchange Agent to deliver to each record holder, as of immediately
prior to the Effective Time, of an outstanding Eligible Share represented by a certificate (“Certificates”), a letter
of transmittal (“Letter of Transmittal”) (which shall specify that delivery shall be effected, and risk of loss and
title to Certificates shall pass, only upon proper delivery of such Certificates to the Exchange Agent, and which shall be in a customary
form and agreed to by Parent and the Company prior to the Closing) and instructions for use in effecting the surrender of Certificates
for payment of the Merger Consideration set forth in Section 3.1(b)(i). Upon surrender to the Exchange Agent of a Certificate
(or an affidavit of loss in lieu of the Certificate as provided in Section 3.3(f)), together with the Letter of Transmittal,
duly completed and validly executed in accordance with the instructions thereto, and such other customary documents as may be reasonably
required by the Exchange Agent, the holder of the Eligible Share(s) formerly represented by such Certificate shall be entitled to
receive in exchange therefor (A) the number of shares of Parent Common Stock (which shall be in uncertificated book-entry form)
representing, in the aggregate, the whole number of shares of Parent Common Stock, if any, that such holder has the right to receive
pursuant to Section 3.1 (after taking into account all Eligible Shares then held by such holder immediately prior to the
Effective Time) and (B) a check or wire transfer in an aggregate amount equal to the cash payable in lieu of any fractional shares
of Parent Common Stock pursuant to Section 3.3(h) and any dividends and other distributions pursuant to Section 3.3(g).
(ii) Non-DTC
Book-Entry Shares. As soon as practicable after the Effective Time, Parent shall cause the Exchange Agent to deliver to each record
holder, as of immediately prior to the Effective Time, of Eligible Shares represented by book-entry (“Book-Entry Shares”)
not held through DTC, (A) a statement reflecting the number of shares of Parent Common Stock (which shall be in uncertificated book-entry
form) representing, in the aggregate, the whole number of shares of Parent Common Stock, if any, that such holder has the right to receive
pursuant to Section 3.1 (after taking into account all Eligible Shares held by such holder immediately prior to the Effective
Time) and (B) a check or wire transfer in an aggregate amount equal to the cash payable in lieu of any fractional shares of Parent
Common Stock pursuant to Section 3.3(h) and any dividends and other distributions to which such holder is entitled pursuant
to Section 3.3(g).
(iii) DTC
Book-Entry Shares. With respect to Book-Entry Shares held through DTC, Parent and the Company shall cooperate to establish procedures
with the Exchange Agent and DTC to ensure that the Exchange Agent will transmit to DTC or its nominees as soon as reasonably practicable
on or after the Closing Date, upon surrender of Eligible Shares held of record by DTC or its nominees in accordance with DTC’s
customary surrender procedures, the Merger Consideration, the cash to be paid in lieu of any fractional shares of Parent Common Stock
in accordance with Section 3.3(h), if any, and any unpaid non-stock dividends and any other dividends or other distributions,
in each case, that DTC has the right to receive pursuant to this Article III.
(iv) No
interest shall be paid or accrued on the Merger Consideration or any other amount payable in respect of any Eligible Shares pursuant
to this Article III.
(v) With
respect to any Eligible Shares represented by Certificates immediately prior to the Effective Time, if payment of the Merger Consideration
(including any dividends or other distributions with respect to Parent Common Stock pursuant to Section 3.3(g) and any
cash payable in lieu of fractional shares of Parent Common Stock pursuant to Section 3.3(h)) is to be made to a Person other
than the record holder of such Eligible Shares, it shall be a condition of payment that the Certificates so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the Person requesting such payment shall have paid any transfer and
other Taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of such shares
surrendered or shall have established to the satisfaction of the Surviving Corporation that such Taxes either have been paid or are not
applicable. With respect to Book-Entry Shares, payment of the Merger Consideration (including any dividends or other distributions with
respect to Parent Common Stock pursuant to Section 3.3(g) and any cash payable in lieu of fractional shares of Parent
Common Stock pursuant to Section 3.3(h)) shall only be made to the Person in whose name such Book-Entry Shares are registered
in the stock transfer books of the Company as of the Effective Time. Until surrendered as contemplated by this Section 3.3(b)(v) (together
with the Letter of Transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other customary
documents as may be reasonably required by the Exchange Agent), each Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender (and delivery of such duly completed and validly executed Letter of Transmittal
with such other customary documents) the Merger Consideration payable in respect of such shares of Company Common Stock, cash payable
in lieu of any fractional shares of Parent Common Stock in accordance with Section 3.3(h) and any dividends or other
distributions to which such holder is entitled pursuant to Section 3.3(g).
(c) Termination
of Rights. All Merger Consideration (including any dividends or other distributions with respect to Parent Common Stock pursuant
to Section 3.3(g) and any cash payable in lieu of fractional shares of Parent Common Stock pursuant to Section 3.3(h))
paid upon the surrender of and in exchange for Eligible Shares in accordance with the terms hereof shall be deemed to have been paid
in full satisfaction of all rights pertaining to such Company Common Stock. At the Effective Time, the stock transfer books of the Surviving
Corporation shall be closed immediately with respect to shares outstanding prior to the Effective Time, and there shall be no further
registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding
immediately prior to the Effective Time.
(d) Termination
of Exchange Fund. Any portion of the Exchange Fund that remains undistributed to the former stockholders of the Company on the 180th
day after the Closing Date shall be delivered to Parent, upon demand, and any holders of Eligible Shares as of immediately prior to the
Effective Time who have not theretofore received the Merger Consideration, any cash payable in lieu of fractional shares of Parent Common
Stock to which they are entitled pursuant to Section 3.3(h) and any dividends or other distributions with respect to
Parent Common Stock to which they are entitled pursuant to Section 3.3(g), in each case without interest thereon, to which
they are entitled under this Article III shall thereafter look only to the Surviving Corporation and Parent for payment of
their claim for such amounts.
(e) No
Liability. None of the Surviving Corporation, Parent, Merger Sub, LLC Sub or the Exchange Agent shall be liable to any holder of
Company Common Stock for any amount of Merger Consideration properly delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law. If any Certificate has not been surrendered prior to the time that is immediately prior to the time
at which Merger Consideration in respect of the Eligible Shares represented by such Certificate would otherwise escheat to or become
the property of any Governmental Entity, any such shares, cash, dividends or distributions in respect of such Eligible Shares shall,
to the extent permitted by applicable Law, become the property of Parent, free and clear of all claims or interest of any Person previously
entitled thereto.
(f) Lost,
Stolen, or Destroyed Certificates. If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit
of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by Parent or the Surviving
Corporation, the posting by such Person of a bond in such reasonable amount as the Surviving Corporation may direct as indemnity against
any claim that may be made against it with respect to such Certificate, the Exchange Agent shall issue in exchange for such lost, stolen
or destroyed Certificate the Merger Consideration payable in respect of the Eligible Shares formerly represented by such Certificate,
any cash payable in lieu of fractional shares of Parent Common Stock to which the holder thereof is entitled pursuant to Section 3.3(h) and
any dividends or other distributions to which the holder thereof is entitled pursuant to Section 3.3(g).
(g) Dividends
or Other Distributions with Respect to Unexchanged Shares of Parent Common Stock. No dividends or other distributions declared or
made with respect to shares of Parent Common Stock with a record date after the Effective Time shall be paid to the holder of any Eligible
Shares immediately prior to the Effective Time represented by an unsurrendered Certificate with respect to the whole shares of Parent
Common Stock that such holder would be entitled to receive upon surrender of such Certificate and no cash payment in lieu of fractional
shares of Parent Common Stock shall be paid to any such holder, in each case until such holder shall surrender such Certificate in accordance
with this Section 3.3 (or an affidavit of loss in lieu of the Certificate as provided in Section 3.3(f)). Following
surrender of any such Certificate (or an affidavit of loss in lieu of the Certificate as provided in Section 3.3(f)) (together
with the Letter of Transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other customary
documents as may be reasonably required by the Exchange Agent), there shall be paid to such holder of whole shares of Parent Common Stock
issuable in exchange therefor, without interest, (i) promptly after the time of such surrender (and delivery of such duly completed
and validly executed Letter of Transmittal with such other customary documents), the amount of dividends or other distributions with
a record date after the Effective Time theretofore paid with respect to such whole shares of Parent Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to such
surrender and delivery and a payment date subsequent to such surrender and delivery payable with respect to such whole shares of Parent
Common Stock. For purposes of dividends or other distributions in respect of shares of Parent Common Stock, all whole shares of Parent
Common Stock to be issued pursuant to the Merger shall be entitled to dividends pursuant to the immediately preceding sentence as if
such whole shares of Parent Common Stock were issued and outstanding as of the Effective Time.
(h) No
Fractional Shares of Parent Common Stock. No fractional shares or certificates or scrip representing fractional shares of Parent
Common Stock shall be issued upon the exchange of Eligible Shares and no holder of Eligible Shares immediately prior to the Effective
Time shall have any right to vote or have any other rights of a stockholder of Parent or a holder of shares of Parent Common Stock in
respect of the fractional shares such holder would otherwise be entitled to receive. Notwithstanding any other provision of this Agreement,
each holder of Eligible Shares immediately prior to the Effective Time exchanged pursuant to the Merger who would otherwise have been
entitled to receive a fraction of a share of Parent Common Stock (after taking into account all Eligible Shares formerly represented
by Certificates and Book-Entry Shares held by such holder immediately prior to the Effective Time) shall receive, in lieu thereof, cash
(without interest) in an amount equal to the product of (i) such fractional part of a share of Parent Common Stock multiplied
by (ii) the volume weighted average price of Parent Common Stock for the five (5) consecutive trading days ending immediately
prior to the Closing Date as reported by Bloomberg, L.P. or, if not reported thereby, by another authoritative source mutually selected
by Parent and the Company (the “Parent Closing Price”). As promptly as practicable after the determination of the
amount of cash, if any, to be paid to a holder of Eligible Shares immediately prior to the Effective Time who would otherwise be entitled
to receive a fractional share of Parent Common Stock, the Exchange Agent shall so notify Parent, and Parent shall cause the Exchange
Agent to forward payments to such holders subject to and in accordance with the terms hereof when payable pursuant to this Article III.
The payment of cash in lieu of fractional shares of Parent Common Stock is not a separately bargained-for consideration but merely represents
a mechanical rounding-off of the fractions in the conversion of the Eligible Shares in the Merger.
(i) No
Appraisal Rights. In accordance with Section 262 of the DGCL, no appraisal rights will be available to holders of Company Common
Stock in connection with the Merger.
(j) Withholding
Taxes. Notwithstanding anything in this Agreement to the contrary, Parent, Merger Sub, the Surviving Corporation, LLC Sub and the
Exchange Agent shall be entitled to deduct and withhold from any amounts otherwise payable to any holder of Company Common Stock pursuant
to this Agreement any amount required to be deducted and withheld with respect to the making of such payment under applicable Law and
shall pay the amount deducted or withheld to the appropriate Taxing Authority in accordance with applicable Law. Parent, Merger Sub,
the Surviving Corporation, LLC Sub and the Exchange Agent, as the case may be, shall reasonably cooperate in good faith to minimize any
such deduction or withholding, and, except in the case of withholding required under applicable Law in respect of any consideration payable
pursuant to Section 3.2, Section 3.3(g) or Section 3.3(h), the relevant withholding party shall
use reasonable best efforts to provide prior written notice to the Company promptly after it determines withholding is required under
this Section 3.3(j). To the extent such amounts are so properly deducted or withheld and paid over to the relevant Taxing
Authority by Parent, Merger Sub, the Surviving Corporation, LLC Sub or the Exchange Agent, as the case may be, such deducted or withheld
amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Common Stock to which such
amounts would have been paid absent such deduction or withholding by Parent, Merger Sub, the Surviving Corporation, LLC Sub or the Exchange
Agent, as the case may be.
Article IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as (i) set forth
in the disclosure letter dated as of the date of this Agreement and delivered by the Company to Parent, Merger Sub and LLC Sub on or
prior to the date of this Agreement (the “Company Disclosure Letter”) or (ii) disclosed in the Company SEC Documents
(including all exhibits and schedules thereto and documents incorporated by reference therein) filed with or furnished to the SEC and
available on Edgar since December 31, 2021 and prior to the date of this Agreement (excluding any disclosures set forth or referenced
in any risk factor section or in any other section, in each case, to the extent they are forward-looking statements or cautionary,
predictive, non-specific or forward-looking in nature, including any historical factual information contained within such headings, disclosure
or statements), the Company represents and warrants to Parent, Merger Sub and LLC Sub as follows:
Section 4.1 Organization,
Standing and Power. Each of the Company and its Subsidiaries is a corporation, partnership
or limited liability company duly incorporated, organized or formed, as the case may be, validly existing and in good standing under
the Laws of its jurisdiction of incorporation, organization or formation, with all requisite entity power and authority to own, lease
and operate its assets and properties and to carry on its business as now being conducted, other than, in the case of each of the Company’s
Subsidiaries, where the failure to be so organized or to have such power, authority or standing would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole (a “Company
Material Adverse Effect”). Each of the Company and its Subsidiaries is duly qualified or licensed and in good standing to do
business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing of its assets and properties,
makes such qualification or license necessary, other than where the failure to so qualify, license or be in good standing would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has heretofore made available to
Parent complete and correct copies of its Organizational Documents and the Organizational Documents of each of its Subsidiaries, each
as amended prior to the execution of this Agreement, and each as made available to Parent is in full force and effect, and neither the
Company nor any of its Subsidiaries is in violation of any of the provisions of such Organizational Documents.
Section 4.2 Capital
Structure.
(a) As
of the date of this Agreement, the authorized capital stock of the Company consists of (i) 2,500,000,000 shares of Company Common
Stock and (ii) 10,000,000 shares of preferred stock, par value $0.01 per share (“Company Preferred Stock” and,
together with the Company Common Stock, the “Company Capital Stock”). At the close of business on January 10,
2024, 1,101,464,507 shares of Company Common Stock (including outstanding Company Restricted Stock Awards and Company Common Stock subject
to stock options and excluding outstanding Company Restricted Stock Unit Awards and Company Performance Unit Awards) were issued and
outstanding and no shares of Company Preferred Stock were issued and outstanding.
(b) At
the close of business on January 10, 2024 there were (i) 820,138 shares of Company Common Stock subject to outstanding Company
Option Awards under the Company Equity Plans, (ii) 231,941 shares of Company Common Stock subject to outstanding Company Restricted
Stock Awards under the Company Equity Plans; (iii) 4,970,667 shares of Company Common Stock subject to outstanding Company Restricted
Stock Unit Awards under the Company Equity Plans; (iv) 2,440,090 shares of Company Common Stock subject to outstanding Company Performance
Unit Awards granted under the Company Equity Plans (at the target award level); and (v) 36,875,052 shares of Company Common Stock
remaining available for future awards pursuant to the Company Equity Plans.
(c) All
outstanding equity securities of the Company, including Company Common Stock, have been duly authorized and are validly issued, fully
paid and non-assessable and are not subject to preemptive rights. All outstanding equity securities of the Company have been issued and
granted in compliance in all material respects with (i) applicable securities Laws and other applicable Law and (ii) all requirements
set forth in applicable contracts (including the Company Equity Plan). As of the date of this Agreement, except as set forth in this
Section 4.2, there are no outstanding options, warrants or other rights to subscribe for, purchase or acquire from the Company
or any of its Subsidiaries any capital stock of the Company or securities convertible into or exchangeable or exercisable for capital
stock of the Company (and the exercise, conversion, purchase, exchange or other similar price thereof). All outstanding shares of capital
stock or other equity interests of the Subsidiaries of the Company are owned by the Company, or a direct or indirect wholly owned Subsidiary
of the Company, are free and clear of all Encumbrances, other than Permitted Encumbrances, and have been duly authorized and are validly
issued, fully paid and nonassessable. Except as set forth in this Section 4.2, there are outstanding: (1) no shares
of capital stock, other equity interests, Voting Debt or other voting securities of the Company, (2) no securities of the Company
or any of its Subsidiaries convertible into or exchangeable or exercisable for shares of capital stock, other equity interests, Voting
Debt or other voting securities of the Company and (3) no options, warrants, subscriptions, calls, rights (including preemptive
and appreciation rights), commitments or agreements to which the Company or any of its Subsidiaries is a party or by which it is bound
in any case obligating the Company or any of its Subsidiaries to issue, deliver, sell, purchase, redeem or acquire, or cause to be issued,
delivered, sold, purchased, redeemed or acquired, additional shares of capital stock, other equity interests or any Voting Debt or other
voting securities of the Company, or obligating the Company or any of its Subsidiaries to grant, extend or enter into any such option,
warrant, subscription, call, right, commitment or agreement. There are no stockholder agreements, voting trusts or other agreements to
which the Company or any of its Subsidiaries is a party or by which it or they are bound relating to the voting of any shares of capital
stock or other equity interests of the Company or any of its Subsidiaries. No Subsidiary of the Company owns any shares of Company Capital
Stock.
(d) As
of the date of this Agreement, neither the Company nor any of its Subsidiaries has any (i) interests in a material joint venture
or, directly or indirectly, equity securities or other similar equity interests in any Person or (ii) material obligations, whether
contingent or otherwise, to consummate any material additional investment in any Person other than its Subsidiaries and its joint ventures
listed on Schedule 4.2(d) of the Company Disclosure Letter.
Section 4.3 Authority;
No Violations; Consents and Approvals.
(a) The
Company has all requisite corporate power and authority to execute and deliver this Agreement and, subject to the filing of the Certificate
of Merger with the Secretary of State of the State of Delaware and the obtaining of the Company Stockholder Approval, to perform its
obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by the Company of the Transactions
have been duly authorized by all necessary corporate action on the part of the Company, subject, only with respect to the consummation
of the Integrated Mergers, to the Company Stockholder Approval and the filing of the Certificate of Merger in respect of each of the
Integrated Mergers with the Secretary of State of the State of Delaware. This Agreement has been duly executed and delivered by the Company
and, assuming the due and valid execution of this Agreement by Parent, Merger Sub and LLC Sub, constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its terms, subject, as to enforceability, to Creditors’ Rights.
The Company Board, at a meeting duly called and held, has (A) determined that this Agreement and the Transactions, including the
Integrated Mergers, are fair and reasonable to, and in the best interests of, the Company and the holders of Company Common Stock, (B) approved
and declared advisable this Agreement and the Transactions and (C) resolved to recommend that the holders of Company Common Stock
approve and adopt this Agreement and the Transactions (such recommendation described in this clause (C), the “Company
Board Recommendation”). The Company Stockholder Approval is the only approval of the holders of any class or series of the
Company Capital Stock necessary to approve and adopt this Agreement and the Company’s consummation of the Transactions contemplated
hereby, including the Integrated Mergers.
(b) The
execution, delivery and performance of this Agreement does not, and the consummation of the Transactions will not (with or without notice
or lapse of time, or both) (i) contravene, conflict with or result in a breach or violation of any provision of the Organizational
Documents of the Company (assuming that the Company Stockholder Approval is obtained) or any of its Subsidiaries, (ii) assuming
the payoff and termination of the Company Credit Facility at or prior to the Closing, with or without notice, lapse of time or both,
result in a breach or violation of, a termination (or right of termination) of or default under, the creation or acceleration of any
obligation or the loss of a benefit under, or result in the creation of any Encumbrance upon any of the properties or assets of the Company
or any of its Subsidiaries under, any provision of any loan or credit agreement, note, bond, mortgage, indenture, lease or other agreement,
permit, franchise or license to which the Company or any of its Subsidiaries is a party or by which it or any of its Subsidiaries or
its or their respective properties or assets are bound, or (iii) assuming the Consents referred to in Section 4.4 are
duly and timely obtained or made and the Company Stockholder Approval has been obtained, contravene, conflict with or result in a violation
of any Law applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, other than, in the case
of clauses (ii) and (iii), any such contraventions, conflicts, violations, defaults, acceleration, losses, or Encumbrances
that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.4 Consents.
No Consent from any Governmental Entity is required to be obtained or made by the Company or any of its Subsidiaries or Affiliates in
connection with the execution, delivery and performance of this Agreement by the Company or the consummation by the Company of the Transactions,
except for: (a) the filing of any required premerger notification and report forms under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder (the “HSR Act”), and the expiration
or termination of any applicable waiting period with respect thereto; (b) the filing with the SEC of (i) a joint proxy statement/prospectus
in preliminary and definitive form (including any amendments or supplements, the “Joint Proxy Statement/Prospectus”)
relating to the Company Stockholders Meeting and the Parent Stockholders Meeting, which Joint Proxy Statement/Prospectus may form part
of the Registration Statement, and (ii) such reports under the Securities Act, the Exchange Act and the rules and regulations
thereunder, as may be required in connection with this Agreement and the Transactions; (c) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware; (d) filings with the NYSE; (e) such filings and approvals as may be required
by any applicable state securities or “blue sky” Laws or Takeover Laws; and (f) any such Consent that the failure to
obtain or make would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
Section 4.5 Company
SEC Documents; Financial Statements.
(a) Since
December 31, 2021, the Company has filed or furnished with the SEC, on a timely basis, all forms, reports, certifications, schedules,
statements and documents required to be filed or furnished under the Securities Act or the Exchange Act, respectively, (such forms, reports,
certifications, schedules, statements and documents, collectively, the “Company SEC Documents”). As of their respective
dates, each of the Company SEC Documents, as amended, complied, or if not yet filed or furnished, will comply as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Company SEC Documents, and none of the Company SEC Documents
contained, when filed or, if amended prior to the date of this Agreement, as of the date of such amendment with respect to those disclosures
that are amended, or if filed with or furnished to the SEC subsequent to the date of this Agreement, will contain any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. No Subsidiary of the Company is subject to periodic reporting
requirements of the Exchange Act other than as part of the Company’s consolidated group or required to file any form, report or
other document with the SEC, the NYSE, any other stock exchange or comparable Governmental Entity other than routine and ordinary filings
(such as filings regarding ownership holdings or transfers).
(b) The
financial statements of the Company included in the Company SEC Documents, including all notes and schedules thereto, complied, or, in
the case of Company SEC Documents filed after the date of this Agreement, will comply, in all material respects, when filed or if amended
prior to the date of this Agreement, as of the date of such amendment, with the rules and regulations of the SEC with respect thereto,
were, or, in the case of Company SEC Documents filed after the date of this Agreement, will be, prepared in accordance with generally
accepted accounting principles in the United States (“GAAP”) applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation
S-X of the SEC) and fairly present in all material respects in accordance with applicable requirements of GAAP (subject, in the case
of the unaudited statements, to normal year-end audit adjustments, and to any other adjustments described therein, including the notes
thereto) the financial position of the Company and its consolidated Subsidiaries as of their respective dates and the results of operations
and the cash flows of the Company and its consolidated Subsidiaries for the periods presented therein.
(c) The
Company has established and maintains a system of internal control over financial reporting and disclosure controls and procedures (as
such terms are defined in Rule 13a-15 or Rule 15d-15, as applicable, under the Exchange Act); such disclosure controls and
procedures are designed to ensure that material information relating to the Company, including its consolidated Subsidiaries, required
to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is accumulated and communicated to the
Company’s principal executive officer and its principal financial officer to allow timely decisions regarding required disclosure;
and such disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports
that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in
SEC rules and forms, and further designed and maintained to provide reasonable assurance regarding the reliability of the Company’s
financial reporting and the preparation of the Company financial statements for external purposes in accordance with GAAP. There (i) is
no significant deficiency or material weakness in the design or operation of internal controls over financial reporting (as defined in
Rule 13a-15(f) under the Exchange Act) utilized by the Company or its Subsidiaries, (ii) is not, and since December 31,
2021 there has not been, any illegal act or fraud, whether or not material, that involves management or other employees who have a significant
role in the Company’s internal controls, and (iii) is not, and since December 31, 2021 there has not been, any “extensions
of credit” (within the meaning of Section 402 of the Sarbanes-Oxley Act) or prohibited loans to any executive officer of the
Company (as defined in Rule 3b-7 under the Exchange Act) or director of the Company or any of its Subsidiaries. The principal executive
officer and the principal financial officer of the Company have made all certifications required by the Sarbanes-Oxley Act, the Exchange
Act and any related rules and regulations promulgated by the SEC with respect to the Company SEC Documents, and the statements contained
in such certifications were complete and correct as of the dates they were made.
Section 4.6 Absence
of Certain Changes or Events.
(a) Since
December 31, 2022, there has not been any Company Material Adverse Effect or any event, change, effect or development that, individually
or in the aggregate, could reasonably be expected to have a Company Material Adverse Effect.
(b) From
December 31, 2022 through the date of this Agreement:
(i) the
Company and its Subsidiaries have conducted their business in the Ordinary Course in all material respects;
(ii) there
has not been any material damage, destruction or other casualty loss with respect to any material asset or property owned, leased or
otherwise used by the Company or any of its Subsidiaries, including the Oil and Gas Properties of the Company and its Subsidiaries, whether
or not covered by insurance; and
(iii) neither
the Company nor any of its Subsidiaries has taken, or agreed, committed, arranged, authorized or entered into any understanding to take,
any action that, if taken after the date of this Agreement, would (without Parent’s prior written consent) have constituted a breach
of any of the covenants set forth in Section 6.1(b) (other than the covenants set forth in Section 6.1(b)(ix) and
the issuance of Company Incentive Awards).
Section 4.7 No
Undisclosed Material Liabilities. There are no liabilities of the Company or any of its
Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, other than: (a) liabilities
adequately provided for on the balance sheet of the Company dated as of September 30, 2023 (including the notes thereto) contained
in the Company’s Quarterly Report on Form 10-Q for the nine (9) months ended September 30, 2023; (b) liabilities
incurred in the Ordinary Course subsequent to September 30, 2023; (c) liabilities incurred in connection with the Transactions;
and (d) liabilities that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
Section 4.8 Information
Supplied. None of the information supplied or to be supplied by the Company for inclusion
or incorporation by reference in (a) the registration statement on Form S-4 to be filed with the SEC by Parent pursuant to
which shares of Parent Common Stock issuable in the Merger will be registered with the SEC (including any amendments or supplements,
the “Registration Statement”) shall, at the time the Registration Statement becomes effective under the Securities
Act, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which they are made, not misleading or (b) the Joint Proxy
Statement/Prospectus will, at the date it is first mailed to stockholders of the Company and at the time of the Company Stockholders
Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they are made, not misleading; provided, however,
that, in the case of clause (a) and (b), no representation or covenant is made by the Company with respect to the
statements made therein based on information supplied by Parent specifically for inclusion or incorporation by reference therein. Subject
to the accuracy of the Registration Statement and the first sentence of Section 5.8, the Joint Proxy Statement/Prospectus
and the Registration Statement will comply as to form in all material respects with, as applicable, the provisions of the Exchange Act
and the Securities Act, respectively, and the rules and regulations thereunder; provided, however, that no representation
or covenant is made by the Company with respect to the statements made therein based on information supplied by Parent, Merger Sub or
LLC Sub specifically for inclusion or incorporation by reference therein.
Section 4.9 Company
Permits; Compliance with Applicable Law.
(a) The
Company and its Subsidiaries hold and at all times since December 31, 2021 have held all permits, licenses, certifications, registrations,
consents, authorizations, variances, exemptions, waivers, orders, franchises and approvals of all Governmental Entities necessary to
own, lease and operate their respective properties and assets and for the lawful conduct of their respective businesses as they were
or are now being conducted, as applicable (collectively, the “Company Permits”), and have paid all fees and assessments
due and payable in connection therewith, except where the failure to so hold or make such a payment would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect. All Company Permits are in full force and effect and no
suspension or cancellation of any of the Company Permits is pending or, to the Knowledge of the Company, threatened, and the Company
and its Subsidiaries are, and at all times since December 31, 2021 have been, in compliance with the terms of the Company Permits,
except where the failure to be in full force and effect or failure to so comply would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
(b) The
businesses of the Company and its Subsidiaries and, with respect to the Oil and Gas Properties of the Company and its Subsidiaries that
are operated by third parties, to the Knowledge of the Company, are not currently being conducted, and at no time since December 31,
2021 have been conducted, in violation of any applicable Law, except, in each case, for violations that would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect. Other than as may arise under Antitrust Laws with respect
to the Transactions, no investigation or review by any Governmental Entity with respect to the Company or any of its Subsidiaries is
pending or, to the Knowledge of the Company, threatened, other than those the outcome of which has not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) Neither
the Company nor any of its Subsidiaries, nor any of their respective directors, officers, employees, or, to the Knowledge of the Company,
agents, has directly or indirectly made, offered, promised or authorized any payment or gift of any money or anything of value to or
for the benefit of any Person for the purpose of (i) influencing any official act or decision of a foreign government official,
political party, or candidate for political office, (ii) inducing such official, party or candidate to use his, her or its influence
to affect any act or decision of a foreign Governmental Entity, or (iii) securing any improper advantage, in the case of clauses
(i), (ii) and (iii) in violation of any applicable Anti-Corruption Laws.
(d) Neither
the Company nor any of its Subsidiaries, nor any of their respective directors, officers, employees, or, to the Knowledge of the Company,
agents:
(i) has
been nor is a Sanctioned Person;
(ii) has
knowingly transacted any business directly or indirectly with any Sanctioned Person or otherwise knowingly violated Sanctions; nor
(iii) has
knowingly violated any applicable material Ex-Im Law.
Section 4.10 Compensation;
Benefits.
(a) Set
forth on Schedule 4.10(a) of the Company Disclosure Letter is a list of each material Company Benefit Plan.
(b) True,
correct and complete copies of each material Company Benefit Plan (or, in the case of any material Company Benefit Plan not in writing,
a description of the material terms thereof) and related trust documents and favorable determination letters, if applicable, have been
furnished or made available to Parent or its Representatives, along with, as applicable, with respect to each material Company Benefit
Plan, the most recent report filed on Form 5500, summary plan description, and all material correspondence to or from (including
non-routine filings made with) any Governmental Entity in the past three (3) years.
(c) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Company Benefit
Plan has been maintained, funded and operated in compliance with its terms and all applicable Laws, including ERISA and the Code.
(d) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, there are no actions,
suits or claims (other than routine claims for benefits) pending or, to the Knowledge of the Company, threatened against, or with respect
to, any of the Company Benefit Plans (or the assets thereof), and there are no Proceedings by a Governmental Entity pending with respect
to any of the Company Benefit Plans (or the assets thereof).
(e) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, all contributions or
other payments required to be made by the Company or any of its Subsidiaries with respect to each of the Company Benefit Plans pursuant
to their terms or applicable Laws have been timely made or, if not yet due, accrued in accordance with GAAP.
(f) Each
Company Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the Internal
Revenue Service to be qualified under Section 401(a) of the Code and nothing has occurred that could reasonably be expected
to adversely affect the qualification of any such Company Benefit Plan. Except as would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect, none of the Company, any of its Subsidiaries or, to the Knowledge of the Company,
any other Person, has engaged in a transaction with respect to any Company Benefit Plan in connection with which the Company or any of
its Subsidiaries or any Company Benefit Plan could, in each case, reasonably be expected to be subject to either a civil penalty assessed
pursuant to Section 409 or 502(i) of ERISA or a Tax imposed pursuant to Section 4975 or 4976 of the Code.
(g) Except
as set forth on Schedule 4.10(g) of the Company Disclosure Letter, none of the Company, any of its Subsidiaries or any
of their respective ERISA Affiliates maintains, sponsors, contributes to or has an obligation to contribute to, or otherwise has any
current or contingent liability or obligation under or with respect to, and no Company Benefit Plan is, a plan subject to Title IV of
ERISA, Sections 302 or 303 of ERISA, or Sections 412 or 430 of the Code, a “multiemployer plan” (as defined in
Section 3(37) of ERISA), a “multiple employer plan” (within the meaning of Section 210 of ERISA or Section 413(c) of
the Code), or a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).
(h) Except
as set forth on Schedule 4.10(h) of the Company Disclosure Letter or as required by applicable Law, no Company Benefit
Plan provides retiree or post-employment medical or life insurance benefits to any Person, and neither the Company nor any of its Subsidiaries
has any obligation to provide such benefits. Except as would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, neither the Company nor any of its Subsidiaries has incurred (whether or not assessed) or could reasonably
be expected to incur any Tax or penalty under Section 4980B, 4980D, 4980H, 6721 or 6722 of the Code.
(i) Except
as set forth on Schedule 4.10(i) of the Company Disclosure Letter, neither the execution and delivery of this Agreement
nor the consummation of the Transactions will, either alone or in combination with another event, (i) entitle any employees of the
Company or any of its Subsidiaries to any amount of compensation or benefits (including any severance pay or any material increase in
severance pay or any loan forgiveness), (ii) accelerate the time of payment or vesting, or increase the amount of compensation due
to any such employee of the Company or any of its Subsidiaries, (iii) directly or indirectly cause the Company to transfer or set
aside any assets to fund any material benefits under any Company Benefit Plan, (iv) otherwise give rise to any liability under any
Company Benefit Plan or (v) limit or restrict the right to amend, terminate or transfer the assets of any Company Benefit Plan on
or following the Effective Time.
(j) Except
as set forth on Schedule 4.10(j) of the Company Disclosure Letter, neither the execution and delivery of this Agreement
nor the consummation of the Transactions could, either alone or in combination with another event, result in any “excess parachute
payment” within the meaning of Section 280G of the Code.
(k) Neither
the Company nor any of its Subsidiaries has any obligation to provide, and no Company Benefit Plan or other agreement provides any individual
with the right to, a gross up, indemnification, reimbursement or other payment for any excise or additional Taxes, interest or penalties
incurred pursuant to Section 409A or Section 4999 of the Code or due to the failure of any payment to be deductible under Section 280G
of the Code.
(l) No
Company Benefit Plan is maintained outside the jurisdiction of the United States or covers any employees of the Company or any of its
Subsidiaries who reside or work outside of the United States.
Section 4.11 Labor
Matters.
(a) (i) Neither
the Company nor any of its Subsidiaries is a party to or bound by any collective bargaining or similar agreement with any labor union
or labor organization, (ii) to the Knowledge of the Company there is no pending union representation petition filed with the National
Labor Relations Board or any other Governmental Entity, with respect to employees of the Company or any of its Subsidiaries, and (iii) to
the Knowledge of the Company, there is no labor organizing activity by any labor union or labor organization (or representative thereof)
to organize employees of the Company or its Subsidiaries.
(b) Except
for such matters as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, there
is no unfair labor practice charge or complaint or any other complaint, litigation or judicial or administrative proceeding before the
National Labor Relations Board or any other Governmental Entity, in each case, involving any employees of the Company or any of its Subsidiaries
pending, or, to the Knowledge of the Company, threatened.
(c) There
is no strike, slowdown, work stoppage or lockout pending, or, to the Knowledge of the Company, threatened, against the Company or
any of its Subsidiaries by or involving any employees of the Company or any of its Subsidiaries, other than as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(d) The
Company and its Subsidiaries are, and since December 31, 2021 have been, in compliance in all respects with all applicable Laws
respecting employment and employment practices except, in each case, for violations that would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to, or otherwise bound
by, any consent decree with or citation by any Governmental Entity relating to its employees or employment practices pursuant to which
it has any outstanding liabilities or obligations, except as would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect.
(e) In
the last three (3) years: (i) to the Knowledge of the Company, no material allegations of sexual harassment have been made
by any current or former employee of the Company against any current or former officer or director of the Company or its Subsidiaries;
and (ii) neither the Company nor any of its Subsidiaries have been involved in any material Proceedings, or entered into any material
settlement agreements, related to allegations of sexual harassment or sexual misconduct by any current or former officer or director
of the Company or any of its Subsidiaries.
Section 4.12 Taxes.
(a) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(i) All
Tax Returns required to be filed by or on behalf of the Company or any of its Subsidiaries have been duly and timely filed (taking into
account extensions of time for filing), and all such filed Tax Returns are complete and accurate in all respects. All Taxes that are
due and payable by the Company or any of its Subsidiaries (other than Taxes being contested in good faith by appropriate Proceedings
and for which adequate reserves have been established in accordance with GAAP) have been paid in full. All withholding Tax requirements
imposed on or with respect to the Company or any of its Subsidiaries have been satisfied in full, and the Company and its Subsidiaries
have complied in all respects with all information reporting (and related withholding) and record retention requirements.
(ii) There
is not in force any waiver or agreement for any extension of time for the assessment or payment of any Tax by the Company or any of its
Subsidiaries.
(iii) There
is no outstanding claim, assessment or deficiency against the Company or any of its Subsidiaries for any Taxes that have been asserted
or, to the Knowledge of the Company, threatened in writing by any Taxing Authority. There are no Proceedings pending or, to the Knowledge
of the Company, threatened in writing regarding any Taxes of the Company or any of its Subsidiaries.
(iv) Neither
the Company nor any of its Subsidiaries is a party to any Tax allocation, sharing or indemnity contract or arrangement (not including,
for the avoidance of doubt (i) an agreement or arrangement solely between or among the Company and/or any of its Subsidiaries, or
(ii) any customary Tax sharing or indemnification provisions contained in any commercial agreement entered into in the Ordinary
Course and not primarily relating to Tax). Neither the Company nor any of its Subsidiaries has (x) been a member of an affiliated
group filing a consolidated U.S. federal income Tax Return (other than a group the common parent of which is or was the Company or any
of its Subsidiaries) or (y) any liability for Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury
Regulations § 1.1502-6 (or any similar provision of state, local or foreign Law) or as a transferee or successor.
(v) Neither
the Company or any of its Subsidiaries has participated, or is currently participating, in a “listed transaction,” as defined
in Treasury Regulations § 1.6011-4(b)(2) (or any similar provision of state, local or foreign Law).
(vi) Neither
the Company nor any of its Subsidiaries has constituted a “distributing corporation” or a “controlled corporation”
in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code (or so much of Section 356
of the Code as relates to Section 355 of the Code) (i) in the two (2) years prior to the date of this Agreement or (ii) as
part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code)
in conjunction with the Transactions.
(vii) No
written claim has been made by any Taxing Authority in a jurisdiction where the Company or any of its Subsidiaries does not currently
file a Tax Return that it is or may be subject to any Tax in such jurisdiction, nor has any such assertion been threatened or proposed
in writing and received by the Company or any of its Subsidiaries.
(viii) Neither
the Company nor any of its Subsidiaries has requested, has received or is subject to any written ruling of a Taxing Authority that will
be binding on it for any taxable period ending after the Closing Date or has entered into any “closing agreement” as described
in Section 7121 of the Code (or any similar provision of state, local or foreign Law).
(ix) There
are no Encumbrances for Taxes on any of the assets of the Company or any of its Subsidiaries, except for those described in clause
(ii)(B) of Permitted Encumbrances.
(x) Neither
of the Company nor any of its Subsidiaries has availed itself of the benefit of any Tax credits or deferred the payment of any Taxes
pursuant to COVID-19 Measures.
(xi) The
Company is, and has been since formation, properly classified for U.S. federal income tax purposes as a corporation.
(b) Neither
the Company nor any of its Subsidiaries is aware of the existence of any fact, or has taken or agreed to take any action, that would
reasonably be expected to prevent or impede the Integrated Mergers, taken together from qualifying as a “reorganization”
within the meaning of Section 368(a) of the Code.
Section 4.13 Litigation.
Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect
(or as may arise under Antitrust Laws with respect to the Transactions), there is no (a) Proceeding pending, or, to the Knowledge
of the Company, threatened against the Company or any of its Subsidiaries or any of their Oil and Gas Properties, or (b) judgment,
decree, injunction, ruling, order, writ or award of any Governmental Entity or arbitrator with outstanding obligations against either
the Company or any of its Subsidiaries. To the Knowledge of the Company, as of the date hereof, no officer or director of the Company
is a defendant in any Proceeding in connection with his or her status as an officer or director of the Company.
Section 4.14 Intellectual
Property.
(a) The
Company and its Subsidiaries own or have the right to use all Intellectual Property used in or necessary for the operation of the businesses
of each of the Company and its Subsidiaries as presently conducted (collectively, the “Company Intellectual Property”)
free and clear of all Encumbrances except for Permitted Encumbrances, except where the failure to own or have the right to use such properties
has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) To
the Knowledge of the Company, the use of the Company Intellectual Property by the Company and its Subsidiaries in the operation of the
business of the Company and its Subsidiaries as presently conducted does not infringe, misappropriate or otherwise violate any Intellectual
Property of any other Person, except for such matters that have not had and would not reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect. To the Knowledge of the Company, no third party is infringing on the Company Intellectual
Property, except for such matters that have not had and would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(c) The
Company and its Subsidiaries have taken reasonable measures consistent with prudent industry practices to protect the confidentiality
of trade secrets used in the businesses of the Company and its Subsidiaries as presently conducted, except where failure to do so has
not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(d) Except
as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the
IT Assets owned, used, or held for use by the Company or any of its Subsidiaries (i) are sufficient for the current needs of the
businesses of the Company and its Subsidiaries; (ii) have not malfunctioned or failed within the past three (3) years and (iii) to
the Knowledge of the Company, are free from any malicious code.
Section 4.15 Privacy
and Cybersecurity.
(a) The
Company and its Subsidiaries maintain and are in compliance with, and since December 31, 2021 have maintained and been in compliance
with, (i) all applicable Laws relating to the privacy and/or security of Personal Information, (ii) the Company’s and
its Subsidiaries’ posted or publicly facing privacy policies or notices, and (iii) the Company’s and its Subsidiaries’
contractual obligations concerning the privacy and/or security of Personal Information and the IT Assets (clauses (i) through
(iii) collectively, “Company Privacy Obligations”), in each case of clauses (i) through (iii) above,
other than any non-compliance that, individually or in the aggregate, has not been and would not reasonably be expected to be material
to the Company and its Subsidiaries. There are no actions by any Person (including any Governmental Entity) pending to which the Company
or any of the Company’s Subsidiaries is a named party or, to the knowledge of the Company, threatened in writing against the Company
or its Subsidiaries alleging a violation of any Company Privacy Obligations.
(b) The
Company and its Subsidiaries have implemented and at all times maintained commercially reasonable and legally compliant administrative,
technical and physical safeguards designed to protect the IT Assets and all confidential and sensitive information (including trade secrets)
and Personal Information in the Company or any Subsidiary’s possession or control against unauthorized access, use, loss, modification,
disclosure or other misuse (“Security Incident”). Other than as disclosed on Schedule 4.15(b) of
the Company Disclosure Letter, neither the Company nor any Subsidiary of the Company has (i) experienced any material Security Incident,
or (ii) received any written notice or complaint from any Person with respect to any of the foregoing, nor has any such notice or
complaint been threatened in writing against the Company or any of the Company’s Subsidiaries.
Section 4.16 Real
Property. Except as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect and with respect to clauses (a) and
(b), except with respect to any of the Company’s Oil and Gas Properties, (a) the Company and its Subsidiaries have
good, valid and defensible title to all material real property owned by the Company or any of its Subsidiaries (subject to the exclusion
of the Company’s Oil and Gas Properties and the Rights-of-Way, collectively, the “Company Owned Real Property”)
and valid leasehold estates in all material real property leased, subleased, licensed or otherwise occupied (whether as tenant, subtenant
or pursuant to other occupancy arrangements) by the Company or any of its Subsidiaries, but excluding the Company Oil and Gas Properties
and the Rights-of-Way (collectively, including the improvements thereon, but subject to the exclusion of the Company’s Oil and
Gas Properties and Rights-of-Way, the “Company Material Leased Real Property,” and together with the Company Owned
Real Property, the “Company Material Real Property”) free and clear of all Encumbrances and defects and imperfections,
except Permitted Encumbrances, (b) each agreement under which the Company or any of its Subsidiaries is the landlord, sublandlord,
tenant, subtenant, or occupant with respect to the Company Material Leased Real Property (each, a “Company Material Real Property
Lease”) is in full force and effect and is valid and enforceable against the Company or such Subsidiary and, to the Knowledge
of the Company, the other parties thereto in accordance with its terms, subject, as to enforceability, to Creditors’ Rights, and
neither the Company nor any of its Subsidiaries, or to the Knowledge of the Company, any other party thereto, has received written notice
of any default under any Company Material Real Property Lease and no event has occurred and no circumstance exists which, if not remedied,
would result in such a default (with or without notice or lapse of time, or both), and (c) as of the date of this Agreement, there
does not exist any pending or, to the Knowledge of the Company, threatened, condemnation or eminent domain Proceedings that affect any
Company Owned Real Property or Company Material Leased Real Property. The Company Owned Real Property, Company Material Leased Real Property
and all other real property leased and owned by the Company and its Subsidiaries are sufficient for the current needs of the businesses
of the Company and its Subsidiaries, except for such real property the absence of which would not reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect.
Section 4.17 Rights-of-Way.
Each of the Company and its Subsidiaries has such Consents, easements, rights-of-way, permits and licenses from each Person (collectively
“Rights-of-Way”) as are sufficient to conduct its business as presently conducted in the Ordinary Course, except for
such Rights-of-Way the absence of which would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. Each of the Company and its Subsidiaries has fulfilled and performed all of its material obligations with respect to
such Rights-of-Way and conduct their business in a manner that does not violate any of the Rights-of-Way and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment of the rights
of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect. All pipelines operated by the Company and its Subsidiaries
are located on or are subject to valid Rights-of-Way or are located on real property owned or leased by the Company, and there are no
gaps (including any gap arising as a result of any breach by the Company or any of its Subsidiaries of the terms of any Rights-of-Way)
in the Rights-of-Way other than gaps that would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.
Section 4.18 Oil
and Gas Matters.
(a) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, and except for property
(i) sold or otherwise disposed of in the Ordinary Course since the date specified in the reserve reports prepared by Netherland,
Sewell & Associates, Inc. (the “Company Independent Petroleum Engineer”) relating to the Company’s
interests referred to therein and dated as of January 31, 2023 (the “Company Reserve Report”) or (ii) reflected
in the Company Reserve Report or in the Company SEC Documents as having been sold or otherwise disposed of (other than transactions effected
after the date hereof in accordance with Section 6.1(b)(v)), the Company and its Subsidiaries, except as set forth on Schedule 4.18(a) of
the Company Disclosure Letter, have good and defensible title to all Oil and Gas Properties forming the basis for the reserves reflected
in the Company Reserve Report and in each case as attributable to interests owned by the Company and its Subsidiaries, free and clear
of any Encumbrances (other than Permitted Encumbrances). For purposes of the foregoing sentence, “good and defensible title”
means that the Company’s and/or one or more of its Subsidiaries’, as applicable, title (as of the date hereof and as of the
Closing) to each of the Oil and Gas Properties held or owned by them (or purported to be held or owned by them) that (A) entitles
the Company (and/or one or more of its Subsidiaries, as applicable) to receive (after satisfaction of all Production Burdens applicable
thereto), not less than the net revenue interest share shown in the Company Reserve Report of all Hydrocarbons produced from such Oil
and Gas Properties throughout the productive life of such Oil and Gas Properties (other than decreases in connection with operations
in which the Company and/or its Subsidiaries may be a non-consenting co-owner from and after the date hereof, decreases resulting from
reversion of interests to co-owners with respect to operations in which such co-owners elected not to consent from and after the date
of the Company Reserve Report, and decreases resulting from the establishment of pools or units from and after the date of the Company
Reserve Report), (B) obligates the Company (and/or one or more of its Subsidiaries, as applicable) to bear a percentage of the costs
and expenses for the maintenance and development of, and operations relating to, such Oil and Gas Properties, of not greater than the
working interest shown on the Company Reserve Report for such Oil and Gas Properties (other than any positive difference in such percentage
and the applicable working interest shown on the Company Reserve Report for such Oil and Gas Properties that are accompanied by a proportionate
(or greater) increase in the net revenue interest in such Oil and Gas Properties) and (C) is free and clear of all Encumbrances
(other than Permitted Encumbrances).
(b) Except
for any such matters that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect,
the factual, non-interpretive data supplied by the Company to the Company Independent Petroleum Engineer relating to the Company’s
interests referred to in the Company Reserve Report, by or on behalf of the Company and its Subsidiaries that was material to such firm’s
estimates of proved oil and gas reserves attributable to the Oil and Gas Properties of the Company and its Subsidiaries in connection
with the preparation of the Company Reserve Report was, as of the time provided, accurate in all respects. To the Company’s Knowledge,
any assumptions or estimates provided by any of the Company’s Subsidiaries to the Company Independent Petroleum Engineer in connection
with its preparation of the Company Reserve Report were made in good faith and on a reasonable basis based on the facts and circumstances
in existence and that were known to the Company at the time such assumptions or estimates were made. Except for any such matters that
would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the oil and gas reserve
estimates of the Company set forth in the Company Reserve Report are derived from reports that have been prepared by the Company Independent
Petroleum Engineer, and such reserve estimates fairly reflect, in all respects, the oil and gas reserves of the Company and its Subsidiaries
at the dates indicated therein and are in accordance with SEC guidelines applicable thereto applied on a consistent basis throughout
the periods involved. Except for changes generally affecting the oil and gas exploration, development and production industry (including
changes in commodity prices) and normal depletion by production, there has been no change in respect of the matters addressed in the
Company Reserve Report that would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(c) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) all rentals,
shut-ins and similar payments owed to any Person under (or otherwise with respect to) any Oil and Gas Leases owned or held by the Company
or any of its Subsidiaries have been properly and timely paid or are being contested in good faith through appropriate Proceedings, (ii) all
royalties, minimum royalties, overriding royalties and other Production Burdens with respect to any Oil and Gas Properties owned or held
by the Company or any of its Subsidiaries have been timely and properly paid (other than any such Production Burdens that are being held
in suspense by the Company or its Subsidiaries in accordance with applicable Law) or are being contested in good faith through appropriate
Proceedings and (iii) neither the Company nor any of its Subsidiaries (and, to the Company’s Knowledge, no third party operator)
has violated any provision of, or taken or failed to take any act that, with or without notice, lapse of time, or both, would constitute
a default under the provisions of any Oil and Gas Lease (or entitle the lessor thereunder to cancel or terminate such Oil and Gas Lease)
included in the Oil and Gas Properties owned or held by the Company or any of its Subsidiaries.
(d) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, all proceeds from the
sale of Hydrocarbons produced from the Oil and Gas Properties of the Company and its Subsidiaries are being received by them in a timely
manner or are being contested in good faith through appropriate Proceedings and are not being held in suspense (by the Company, any of
its Subsidiaries, any third party operator thereof or any other Person) for any reason other than awaiting preparation and approval of
division order title opinions and the receipt of division orders for execution for recently drilled Wells. Neither the Company nor any
of its Subsidiaries (i) is obligated by virtue of a take-or-pay payment, advance payment or similar payment (other than royalties,
overriding royalties and similar arrangements established in the Oil and Gas Leases) to deliver Hydrocarbons or proceeds from the sale
thereof attributable to such Person’s interest in its Oil and Gas Properties at some future time without receiving payment therefor
at the time of delivery or (ii) has any material transportation, processing or plant imbalance, and no Person has given notice that
any such imbalance constitutes all of the relevant Person’s ultimately recoverable reserves from a balancing area.
(e) All
of the Wells and all water, CO2, injection or other wells located on the Oil and Gas Properties of the Company and its Subsidiaries
or otherwise associated with an Oil and Gas Property of the Company or its Subsidiaries that were drilled and completed by the Company
or its Subsidiaries, and to the Knowledge of the Company, all such wells that were not drilled and completed by the Company or its Subsidiaries,
have been drilled, completed and operated within the limits permitted by the applicable Contracts entered into by the Company or any
of its Subsidiaries related to such wells, and in accordance with applicable Law and applicable Company Permits, and all drilling and
completion (and plugging and abandonment) of such wells and all related development, production and other operations have been conducted
in compliance with all applicable Contracts and Laws and applicable Company Permits except, in each case, as would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as set forth on Schedule 4.18(e) of
the Company Disclosure Letter, there are no wells that constitute a part of the Oil and Gas Properties of the Company and its Subsidiaries
of which the Company or a Subsidiary has received a written notice, claim, demand or order from any Governmental Entity notifying, claiming,
demanding or requiring that such well(s) be temporarily or permanently plugged and abandoned.
(f) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, none of the Oil and
Gas Properties of the Company or its Subsidiaries is subject to any preferential purchase, tag-along, right of first refusal, consent
or similar right that would become operative as a result of the execution of this Agreement or the consummation of the Transactions.
(g) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, since the date of the
Company Reserve Reports, neither the Company nor any of its Subsidiaries has elected not to participate in any operation or activity
proposed with respect to any of the Oil and Gas Properties owned or held by it (or them, as applicable) that could result in a penalty
or forfeiture as a result of such election not to participate in such operation or activity that would be material to the Company and
its Subsidiaries, taken as a whole and is not reflected in the Company Reserve Report.
Section 4.19 Environmental
Matters.
(a) Except
for those matters that would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(i) the
Company and its Subsidiaries and their respective operations and assets are, and at all times since December 31, 2021 have been,
in compliance with all Environmental Laws, which compliance includes, and since December 31, 2021 has included, obtaining, maintaining
and complying with all Company Permits required under Environmental Laws;
(ii) the
Company and its Subsidiaries are not subject to any pending or, to the Company’s Knowledge, threatened Proceedings under Environmental
Laws, and the Company and its Subsidiaries have not received any written notice of a violation of, or liability under, Environmental
Laws, the subject of which is unresolved;
(iii) there
has been no Release, treatment, storage, transportation or handling of, or exposure to, Hazardous Materials at, on, under, or from any
property currently or, to the Knowledge of the Company, formerly owned, leased, operated or otherwise used by the Company or any of its
Subsidiaries, or, to the Knowledge of the Company, by any predecessors of the Company or any of its Subsidiaries, or to the Knowledge
of the Company, at, on, under, or from any other property, which has resulted or is reasonably likely to result in liability to the Company
or its Subsidiaries under any Environmental Law, and, as of the date of this Agreement, neither the Company nor any of its Subsidiaries
has received any unresolved written notice, claim, demand, or order asserting a liability or obligation under any Environmental Laws
with respect to the investigation, remediation, removal, or monitoring of any Release of Hazardous Materials at, on, under, or from any
property currently or formerly owned, leased, operated, or otherwise used by the Company, or at, on, under, or from any offsite location
where Hazardous Materials from the Company’s or its Subsidiaries’ operations have been sent for treatment, disposal, storage
or handling; and
(iv) neither
the Company nor any of its Subsidiaries has assumed, either expressly or, to the Company’s Knowledge, by operation of Law, any
liability of any other Person related to Hazardous Materials or Environmental Laws.
(b) As
of the date of this Agreement, there have been no environmental, health or safety investigations, studies, audits, or other analyses
conducted during the past three (3) years by or on behalf of, or that are in the possession of, the Company or its Subsidiaries
relating to any instance of material noncompliance with Environmental Laws by or any material liability arising under Environmental Laws
of the Company or its Subsidiaries, or any material Release of Hazardous Materials with respect to any property owned, operated or otherwise
used by any of them that have not been made available to Parent prior to the date hereof.
Section 4.20 Material
Contracts.
(a) Schedule 4.20(a) of
the Company Disclosure Letter, together with the lists of exhibits contained in the Company SEC Documents, sets forth a true and complete
list, as of the date of this Agreement, of:
(i) each
“material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under the Exchange Act) to which
the Company or any of its Subsidiaries is a party;
(ii) each
Contract that provides for the acquisition, disposition, license, use, distribution or outsourcing of assets, services, rights or properties
(other than Oil and Gas Properties and any Contract of the type described in Section 4.20(a)(v)) with respect to which the
Company reasonably expects that the Company and its Subsidiaries will make or receive payments in any calendar year in excess of $25,000,000
or aggregate payments in excess of $50,000,000;
(iii) each
Contract that constitutes a commitment relating to Indebtedness or the deferred purchase price of property by the Company or any of its
Subsidiaries (whether incurred, assumed, guaranteed or secured by any asset) in excess of $50,000,000, other than agreements solely between
or among the Company and any of its Subsidiaries;
(iv) each
Contract to which the Company or any of its Subsidiaries is a party that (A) restricts the ability of the Company or any of its
Subsidiaries to compete in any business or with any Person in any geographical area, (B) requires the Company or any of its Subsidiaries
to conduct any business on a “most favored nations” basis with any third party or (C) provides for “exclusivity”
or any similar requirement in favor of any third party, except in the case of each of clauses (A), (B) and (C) for
such restrictions, requirements and provisions that are not material to the Company and its Subsidiaries;
(v) any
Contract providing for the purchase or sale by the Company or any of its Subsidiaries of Hydrocarbons that:
(A) has
a remaining term of greater than one year and does not allow the Company or such Subsidiary to terminate it without penalty on one year’s
notice or less,
(B) contains
a minimum throughput commitment, minimum volume commitment, “take-or-pay” clause or any similar material prepayment or forward
sale arrangement or obligation (excluding “gas balancing” arrangements associated with customary joint operating agreements)
to deliver Hydrocarbons at some future time, or
(C) contains
acreage dedication, minimum volume commitments or capacity reservation fees to a gathering, transportation or other arrangement downstream
of the wellhead that, in each case, cover, guaranty, dedicate or commit (1) more than 1,000 net acres or (2) volumes in excess
of 10,000 MMcf of gas or 2,000 boe of liquid Hydrocarbons on a monthly basis (calculated on a yearly average basis);
(vi) any
acquisition or divestiture Contract that contains “earn out” or other similar contingent payment obligations (other than
asset retirement obligations, plugging and abandonment obligations and other reserves of the Company set forth in the Company Reserve
Report), that would reasonably be expected to result in annual payments in excess of $50,000,000;
(vii) each
contract for lease of personal property or real property (other than leases for compressors and leases in respect of Oil and Gas Properties)
involving payments in excess of $2,000,000 in any calendar year or aggregate payments in excess of $10,000,000 over the life of the contract
that are not terminable without penalty or other liability to the Company (other than any ongoing obligation pursuant to such contract
that is not caused by any such termination) within sixty (60) days;
(viii) each
Contract that would reasonably be expected to require the disposition of a material portion of the assets or any line of business of
the Company or its Subsidiaries (or, after the Effective Time, Parent or its Subsidiaries);
(ix) each
Contract involving the pending acquisition or sale of (or option to purchase or sell) any material amount of the assets or properties
of the Company or any of its Subsidiaries (including any material portion of the Oil and Gas Properties), taken as a whole, other than
Contracts involving the acquisition or sale of (or option to purchase or sell) Hydrocarbons in the Ordinary Course;
(x) each
material partnership, joint venture or limited liability company agreement, other than any customary joint operating agreements, or
unit agreements affecting the Oil and Gas Properties of the Company;
(xi) each
joint development agreement, exploration agreement, participation, farm-out, farm-in or program agreement or similar Contract requiring
the Company or any of its Subsidiaries to make expenditures from and after December 31, 2022 that would reasonably be expected to
be in excess of $25,000,000 in the aggregate, other than customary joint operating agreements and continuous development obligations
under Oil and Gas Leases;
(xii) each
agreement under which the Company or any of its Subsidiaries has advanced or loaned any amount of money to any of its officers, directors,
employees or consultants, in each case with a principal amount in excess of $120,000; and
(xiii) each
contract for any Company Related Party Transaction.
(b) Collectively,
the Contracts described in Section 4.20(a) are referred to as the “Company Contracts.” A complete
and correct copy of each of the Company Contracts has been made available to Parent. Except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, each Company Contract is legal, valid, binding and enforceable in
accordance with its terms on the Company and each of its Subsidiaries that is a party thereto and, to the Knowledge of the Company, each
other party thereto, and is in full force and effect, subject, as to enforceability, to Creditors’ Rights. Except as would not
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its
Subsidiaries is in breach or default under any Company Contract nor, to the Knowledge of the Company, is any other party to any such
Company Contract in breach or default thereunder, and no event has occurred that with the lapse of time or the giving of notice or both
would constitute a default thereunder by the Company or its Subsidiaries, or, to the Knowledge of the Company, any other party thereto.
Except as would not reasonably be expected to have individually or in the aggregate, a Company Material Adverse Effect, there are no
disputes pending or, to the Knowledge of the Company, threatened with respect to any Company Contract and neither the Company nor any
of its Subsidiaries has received any written notice of the intention of any other party to any Company Contract to terminate for default,
convenience or otherwise any Company Contract, nor to the Knowledge of the Company, is any such party threatening to do so.
Section 4.21 Derivative
Transactions.
(a) Schedule 4.21
of the Company Disclosure Letter contains a complete and correct list of all outstanding material Derivative Transactions (including
each outstanding Hydrocarbon or financial hedging position attributable to the Hydrocarbon production of the Company or any of its Subsidiaries)
entered into by the Company or any of its Subsidiaries or for the account of any of their respective customers as of the date hereof
pursuant to which such party has outstanding rights or obligations. All such Derivative Transactions entered into by the Company or any
of its Subsidiaries or for the account of any of its customers as of the date of this Agreement were, in all material respects, entered
into in accordance with applicable Laws, and in accordance with the investment, securities, commodities, risk management and other policies,
practices and procedures employed by the Company and its Subsidiaries, and were, in all material respects, entered into with counterparties
believed at the time to be financially responsible and able to understand (either alone or in consultation with their advisers) and to
bear the risks of such Derivative Transactions.
(b) Except
as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company and each
of its Subsidiaries have duly performed in all respects all of their respective obligations under the Derivative Transactions to the
extent that such obligations to perform have accrued, and there are no breaches, violations, collateral deficiencies, requests for collateral
or demands for payment, or defaults or allegations or assertions of such by any party thereunder.
(c) The
Company SEC Documents accurately summarize, in all material respects, the outstanding positions under any such Derivative Transaction
of the Company and its Subsidiaries, including Hydrocarbon and financial positions under any such Derivative Transaction of the Company
attributable to the production and marketing of the Company and its Subsidiaries, as of the dates reflected therein.
Section 4.22 Insurance.
Set forth on Schedule 4.22 of the Company Disclosure Letter is a true, correct and complete list of all material insurance
policies held by the Company or any of its Subsidiaries as of the date of this Agreement (other than those constituting or funding Company
Benefit Plans) (collectively, the “Material Company Insurance Policies”). Except as would not reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect, each of the Material Company Insurance Policies is in full
force and effect on the date of this Agreement and a true, correct and complete copy of each Material Company Insurance Policy has been
made available to Parent. The Material Company Insurance Policies are with reputable insurance carriers, provide full and adequate coverage
for all normal risks incident to the business of the Company and its Subsidiaries and their respective properties and assets, and are
in breadth of coverage and amount at least equivalent to that carried by Persons engaged in similar businesses and subject to the same
or similar perils or hazards, except as would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect,
all premiums payable under the Material Company Insurance Policies prior to the date of this Agreement have been duly paid to date, and
neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that (including with respect to the
Transactions), with notice or lapse of time or both, would constitute a breach or default, or permit a termination of any of the Material
Company Insurance Policies. Except as would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect, as of the date of this Agreement, no written notice of cancellation or termination has been received with respect to
any Material Company Insurance Policy. As of the date of this Agreement, the Company and its Subsidiaries do not have aggregate claims
pending with insurers that are reasonably expected to result in insurance recoveries of more than $1,500,000 in the aggregate.
Section 4.23 Opinion
of Financial Advisor. The Company Board has
received the opinion of Goldman Sachs & Co. LLC addressed to the Company Board to the effect that, based upon and subject
to the assumptions, qualifications, limitations, and other matters considered in connection with the preparation of each such opinion,
as of the date of the opinion, the Exchange Ratio is fair, from a financial point of view, to the holders (other than the Parent and
its Affiliates) of Company Common Stock.
Section 4.24 Brokers.
Except for the fees and expenses payable to Goldman Sachs & Co. LLC and RBC Capital Markets, LLC, no broker, investment banker,
advisor or other Person is entitled to any broker’s, finder’s or other similar fee or commission in connection with the Transactions
based upon arrangements made by or on behalf of the Company.
Section 4.25 Takeover
Laws. Assuming the accuracy of the representations
contained in Section 5.25, the approval of the Company Board of this Agreement and the Transactions represents all the action
necessary to render inapplicable to this Agreement and the Transactions the restrictions of any Takeover Law or any anti-takeover provision
in Company’s Organizational Documents that is applicable to the Company, the shares of Company Common Stock, this Agreement or
the Transactions.
Section 4.26 Related
Party Transactions. Schedule 4.26
of the Company Disclosure Letter sets forth, as of the date of this Agreement, a complete and correct list of any transaction or arrangement
(other than any Company Benefit Plan) under which any (a) present or former executive officer or director of the Company or any
of its Subsidiaries, (b) beneficial owner (within the meaning of Section 13(d) of the Exchange Act) of 5% or more of any
class of the equity securities of the Company or any of its Subsidiaries whose status as a 5% holder is known to the Company as of the
date of this Agreement or (c) Affiliate, “associate” or member of the “immediate family” (as such terms
are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of the foregoing Persons described in clause (a) or
(b) (but only, with respect to the Persons in clause (b), to the Knowledge of the Company), in each case as
would be required to be disclosed by the Company pursuant to Item 404 of Regulation S-K promulgated under the Exchange Act, is a party
to any actual or proposed loan, lease or other contract with or binding upon the Company or any of its Subsidiaries or any of their respective
properties or assets or has any interest in any property owned by the Company or any of its Subsidiaries, in each case, including any
bond, letter of credit, guarantee, deposit, cash account, escrow, policy of insurance or other credit support instrument or security
posted or delivered by any Person listed in clauses (a), (b) or (c) in connection with the operation of
the business of the Company or any of its Subsidiaries (each of the foregoing, a “Company Related Party Transaction”).
Section 4.27 No
Additional Representations.
(a) Except
for the representations and warranties made in this Article IV, neither the Company nor any other Person makes any express
or implied representation or warranty with respect to the Company or any of its Subsidiaries or their respective businesses, operations,
assets, liabilities or conditions (financial or otherwise) in connection with this Agreement or the Transactions, and the Company hereby
disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither the Company
nor any other Person makes or has made any representation or warranty to Parent, Merger Sub, LLC Sub, or any of their respective Affiliates
or Representatives with respect to (i) any financial projection, forecast, estimate, budget or prospect information relating to
the Company or any of its Subsidiaries or their respective businesses; or (ii) except for the representations and warranties made
by the Company in this Article IV, any oral or written information presented to Parent, Merger Sub, LLC Sub or any of their
respective Affiliates or Representatives in the course of their due diligence investigation of the Company, the negotiation of this Agreement
or in the course of the Transactions. Notwithstanding the foregoing, nothing in this Section 4.27 shall limit Parent’s,
Merger Sub’s or LLC Sub’s remedies with respect to claims of fraud arising from or relating to the express written representations
and warranties made by the Company in this Article IV.
(b) Notwithstanding
anything contained in this Agreement to the contrary, the Company acknowledges and agrees that none of Parent, Merger Sub, LLC Sub or
any other Person has made or is making any representations or warranties relating to Parent or its Subsidiaries (including Merger Sub
and LLC Sub) or any other matter whatsoever, express or implied, beyond those expressly given by Parent, Merger Sub and LLC Sub in Article V,
including any implied representation or warranty as to the accuracy or completeness of any information regarding Parent furnished or
made available to the Company or any of its Representatives, and that the Company has not relied on any such other representation or
warranty not expressly set forth in Article V of this Agreement. Without limiting the generality of the foregoing, the Company
acknowledges that no representations or warranties are made with respect to any projections, forecasts, estimates, budgets or prospect
information that may have been made available to the Company or any of its Representatives (including in certain “data rooms,”
“virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, the Integrated
Mergers or the other Transactions).
Article V
REPRESENTATIONS AND WARRANTIES OF PARENT, MERGER SUB AND LLC SUB
Except
as (i) set forth in the disclosure letter dated as of the date of this Agreement and delivered by Parent, Merger Sub and LLC Sub
to the Company on or prior to the date of this Agreement (the “Parent Disclosure Letter”) or (ii) disclosed in
the Parent SEC Documents (including all exhibits and schedules thereto and documents incorporated by reference therein) filed with or
furnished to the SEC and available on Edgar since December 31, 2021 and prior to the date of this Agreement (excluding any disclosures
set forth or referenced in any risk factor section or in any other section, in each case, to the extent they are forward-looking
statements or cautionary, predictive, non-specific or forward-looking in nature, including any historical factual information contained
within such headings, disclosure or statements), Parent, Merger Sub and LLC Sub, jointly and severally, represent and warrant to the
Company as follows:
Section 5.1 Organization,
Standing and Power. Each of Parent and its
Subsidiaries is a corporation, partnership or limited liability company duly incorporated, organized or formed, as the case may be, validly
existing and in good standing under the Laws of its jurisdiction of incorporation, organization or formation, with all requisite entity
power and authority to own, lease and operate its assets and properties and to carry on its business as now being conducted, other than,
in the case of each of Parent’s Subsidiaries, where the failure to be so organized or to have such power, authority or standing
would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on Parent and its Subsidiaries,
taken as a whole (a “Parent Material Adverse Effect”). Each of Parent and its Subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the business it is conducting, or the operation, ownership or leasing
of its assets and properties, makes such qualification or license necessary, other than where the failure to so qualify, license or be
in good standing would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Parent,
Merger Sub and LLC Sub each has heretofore made available to the Company complete and correct copies of its Organizational Documents
and the Organizational Documents of each of its Subsidiaries, each as amended prior to the execution of this Agreement, and each as made
available to the Company is in full force and effect, and neither Parent nor any of its Subsidiaries is in violation of any of the provisions
of such Organizational Documents.
Section 5.2 Capital
Structure.
(a) As
of the date of this Agreement, the authorized capital stock of Parent consists of (i) 450,000,000 shares of Parent Common Stock
and (ii) 45,000,000 shares of preferred stock, par value $0.01 per share (“Parent Preferred Stock” and, together
with the Parent Common Stock, the “Parent Capital Stock”). At the close of business on January 10, 2024, (A) 130,794,580
shares of Parent Common Stock were issued and outstanding, (B) no shares of Parent Preferred Stock were issued and outstanding and
(C) 10,148,220 shares of Parent Common Stock were issuable under warrants to purchase Parent Common Stock (“Parent Warrants”),
rounded up to the nearest whole share and assuming all Parent Warrants were exercised via “Cashless Settlement” with an “Exercise
Date” of January 10, 2024 (as such terms are defined in the Parent Warrant Agreements).
(b) At
the close of business on January 10, 2024, there were (i) no outstanding options to purchase shares of Parent Common Stock
pursuant to Parent’s Stock and Performance Incentive Plan, as amended from time to time, and prior plans (the “Parent
Stock Plans”), (ii) there were outstanding other stock-settled equity-based awards (other than shares of restricted stock
or other equity based awards included in the number of shares of Parent Common Stock outstanding set forth above) with respect to 1,326,416
shares of Parent Common Stock and (iii) there were (A) 777,368 shares of Parent Common Stock (the “Reserved Shares”)
and (B) Parent Warrants exercisable for 1,091,933 shares of Parent Common Stock, rounded up to the nearest whole share assuming
all such Parent Warrants were exercised via “Cashless Settlement” with an “Exercise Date” of January 10,
2024 (as such terms are defined in the Parent Warrant Agreements) (the “Reserved Warrants”), in each case held in
reserve for future issuance relating to general unsecured claims.
(c) As
of the date of this Agreement, the authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01 per
share, all of which shares are validly issued, fully paid and nonassessable and are owned by Parent.
(d) As
of the date of this Agreement, the authorized capital interests of LLC Sub consists of 1,000 units, all of which units are validly issued,
fully paid and nonassessable and are owned by Parent.
(e) All
outstanding equity securities of Parent, including Parent Common Stock have been duly authorized and are validly issued, fully paid and
non-assessable and are not subject to preemptive rights. All outstanding equity securities of Parent have been issued and granted in
compliance in all material respects with (i) applicable securities Laws and other applicable Law and (ii) all requirements
set forth in applicable contracts. The Parent Common Stock to be issued pursuant to this Agreement, when issued, will be issued in compliance
in all material respects with (A) applicable securities Laws and other applicable Law and (B) all requirements set forth in
applicable contracts. As of the date of this Agreement, except as set forth in this Section 5.2, there are no outstanding
options, warrants or other rights to subscribe for, purchase or acquire from Parent or any of its Subsidiaries any capital stock of Parent
or securities convertible into or exchangeable or exercisable for capital stock of Parent (and the exercise, conversion, purchase, exchange
or other similar price thereof). All outstanding shares of capital stock or other equity interests of the Subsidiaries of Parent are
owned by Parent, or a direct or indirect wholly owned Subsidiary of Parent, are free and clear of all Encumbrances, other than Permitted
Encumbrances, and have been duly authorized and are validly issued, fully paid and nonassessable. Except as set forth in this Section 5.2,
there are outstanding: (1) no shares of capital stock, other equity interests, Voting Debt or other voting securities of Parent;
(2) no securities of Parent or any Subsidiary of Parent convertible into or exchangeable or exercisable for shares of capital stock,
other equity interests, Voting Debt or other voting securities of Parent; and (3) no options, warrants, subscriptions, calls, rights
(including preemptive and appreciation rights), commitments or agreements to which Parent or any Subsidiary of Parent is a party or by
which it is bound in any case obligating Parent or any Subsidiary of Parent to issue, deliver, sell, purchase, redeem or acquire, or
cause to be issued, delivered, sold, purchased, redeemed or acquired, additional shares of capital stock, other equity interests or any
Voting Debt or other voting securities of Parent, or obligating Parent or any Subsidiary of Parent to grant, extend or enter into any
such option, warrant, subscription, call, right, commitment or agreement. There are no stockholder agreements, voting trusts or other
agreements to which Parent or any of its Subsidiaries is a party or by which it is bound relating to the voting of any shares of capital
stock or other equity interests of Parent or any of its Subsidiaries. No Subsidiary of Parent owns any shares of Parent Common Stock
or any other shares of Parent Capital Stock.
(f) As
of the date of this Agreement, neither Parent nor any of its Subsidiaries has any (i) interests in a material joint venture or,
directly or indirectly, equity securities or other similar equity interests in any Person or (ii) material obligations, whether
contingent or otherwise, to consummate any material additional investment in any Person other than its Subsidiaries and its joint ventures
listed on Schedule 5.2(f) of the Parent Disclosure Letter.
Section 5.3 Authority;
No Violations; Consents and Approvals.
(a) Each
of Parent, Merger Sub and LLC Sub has all requisite power and authority to execute and deliver this Agreement and, subject to the filing
of the Certificate of Merger with the Secretary of State of the State of Delaware and the obtaining of Parent Stockholder Approval, to
perform its obligations hereunder. The execution and delivery of this Agreement by Parent and Merger Sub and the consummation by Parent,
Merger Sub and LLC Sub of the Transactions have been duly authorized by all necessary action on the part of each of Parent (subject,
only with respect to the Parent Stock Issuance, to obtaining Parent Stockholder Approval), Merger Sub (other than the adoption of this
Agreement by Parent as sole stockholder of Merger Sub, which shall occur immediately after the execution and delivery of this Agreement)
and LLC Sub (other than the adoption of this Agreement by Parent as sole managing member of LLC Sub, which shall occur immediately after
the execution and delivery of this Agreement), and the filing of the Certificate of Mergers for each of the Integrated Mergers with the
Secretary of State for the State of Delaware. This Agreement has been duly executed and delivered by each of Parent, Merger Sub and LLC
Sub, and, assuming the due and valid execution of this Agreement by the Company, constitutes a valid and binding obligation of each of
Parent, Merger Sub and LLC Sub enforceable against Parent, Merger Sub and LLC Sub in accordance with its terms, subject as to enforceability
to Creditors’ Rights. The Parent Board, at a meeting duly called and held, has (i) determined that this Agreement and the
Transactions are fair and reasonable to, and advisable and in the best interests of, Parent and the holders of Parent Common Stock, (ii) approved
the execution, delivery and performance of this Agreement and the consummation of the Transactions, including the Parent Stock Issuance,
and (iii) resolved to recommend that the holders of shares of Parent Common Stock approve the Parent Stock Issuance (such recommendation
described in clause (iii), the “Parent Board Recommendation”). The Merger Sub Board, acting by written consent,
has (A) determined that this Agreement and the Transactions are fair and reasonable to, and in the best interests of, Merger Sub
and the sole stockholder of Merger Sub, (B) approved and declared advisable this Agreement and the Transactions and (C) recommended
this Agreement and the Transactions to Parent for approval and adoption thereby in its capacity as the sole stockholder of Merger Sub.
The Parent Stockholder Approval is the only approval of the holders of any class or series of the Parent Capital Stock necessary to approve
and adopt this Agreement and the Parent and its Subsidiaries’ consummation of the Transactions contemplated hereby, including the
Integrated Mergers and the Parent Stock Issuance. Parent, as the owner of all of the outstanding shares of capital stock of Merger Sub,
will immediately after the execution and delivery of this Agreement adopt this Agreement in its capacity as sole stockholder of Merger
Sub. The approval of the Transactions contemplated hereby, including the Merger, by Parent, as the sole stockholder of Merger Sub, is
the only approval of the holders of any class or series of capital stock of Merger Sub necessary to approve and adopt this Agreement,
which approval shall be obtained no later than one Business Day following the date hereof. The approval of the Transactions contemplated
hereby, including the LLC Sub Merger, by Parent, as the sole member of LLC Sub, and, following the Effective Time, as the sole equityholder
of the Company, is the only approval of the holders of any class or series of membership interests of LLC Sub necessary to approve and
adopt this Agreement and the LLC Sub’s consummation of the Transactions contemplated hereby, which approval shall be obtained no
later than one Business Day following the date hereof.
(b) The
execution, delivery and performance of this Agreement does not, and the consummation of the Transactions will not (with or without notice
or lapse of time, or both) (i) contravene, conflict with or result in a breach or violation of any provision of the Organizational
Documents of Parent (assuming that the Parent Stockholder Approval is obtained) or any of its Subsidiaries, (ii) with or without
notice, lapse of time or both, result in a breach or violation of, a termination (or right of termination) of or default under, the creation
or acceleration of any obligation or the loss of a benefit under, or result in the creation of any Encumbrance upon any of the properties
or assets of Parent or any of its Subsidiaries under, any provision of any loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, permit, franchise or license to which Parent or any of its Subsidiaries is a party or by which Parent, Merger
Sub, LLC Sub or any of their respective Subsidiaries or their respective properties or assets are bound or (iii) assuming the Consents
referred to in Section 5.4 are duly and timely obtained or made and the Parent Stockholder Approval has been obtained, contravene,
conflict with or result in a violation of any Law applicable to Parent or any of its Subsidiaries or any of their respective properties
or assets, other than, in the case of clauses (ii) and (iii), any such contraventions, conflicts, violations, defaults,
acceleration, losses or Encumbrances that would not reasonably be expected to have, individually or in the aggregate, a Parent Material
Adverse Effect. Parent is not party to any contract, arrangement or other commitment that does, would or would reasonably be expected
to entitle any Person to appoint one or more directors to the Parent Board.
Section 5.4 Consents.
No Consent from any Governmental Entity is required to be obtained or made by Parent or any of its Subsidiaries or Affiliates in connection
with the execution, delivery and performance of this Agreement by Parent, Merger Sub and LLC Sub or the consummation by Parent, Merger
Sub and LLC Sub of the Transactions, except for: (a) the filing of any required premerger notification and report forms under the
HSR Act, and the expiration or termination of any applicable waiting period with respect thereto; (b) the filing with the SEC of
(i) the Registration Statement relating to the registration under the Securities Act of the shares of Parent Common Stock to be
issued under this Agreement, (ii) the Joint Proxy Statement/Prospectus relating to the Company Stockholders Meeting and the Parent
Stockholders Meeting which Joint Proxy Statement/Prospectus may form part of the Registration Statement and (iii) such reports under
the Securities Act, the Exchange Act and the rules and regulations thereunder, as may be required in connection with this Agreement
and the Transactions; (c) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware; (d) filings
with NASDAQ; (e) such filings and approvals as may be required by any applicable state securities or “blue sky” Laws
or Takeover Laws; and (f) any such Consent that the failure to obtain or make would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect.
Section 5.5 Parent
SEC Documents; Financial Statements.
(a) Since
December 31, 2021, Parent has filed or furnished with the SEC, on a timely basis, all forms, reports, certifications, schedules,
statements and documents required to be filed or furnished under the Securities Act or the Exchange Act, respectively, (such forms, reports,
certifications, schedules, statements and documents, collectively, the “Parent SEC Documents”). As of their respective
dates, each of the Parent SEC Documents, as amended, complied, or if not yet filed or furnished, will comply as to form in all material
respects with the applicable requirements of the Securities Act, the Exchange Act and the Sarbanes-Oxley Act, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such Parent SEC Documents, and none of the Parent SEC Documents contained,
when filed or, if amended prior to the date of this Agreement, as of the date of such amendment with respect to those disclosures that
are amended, or if filed with or furnished to the SEC subsequent to the date of this Agreement, will contain any untrue statement of
a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading. No Subsidiary of Parent is subject to periodic reporting requirements
of the Exchange Act other than as part of Parent’s consolidated group or required to file any form, report or other document with
the SEC, NASDAQ, any other stock exchange or comparable Governmental Entity other than routine and ordinary filings (such as filings
regarding ownership holdings or transfers).
(b) The
financial statements of Parent included in the Parent SEC Documents, including all notes and schedules thereto, complied, or, in the
case of Parent SEC Documents filed after the date of this Agreement, will comply, in all material respects, when filed or if amended
prior to the date of this Agreement, as of the date of such amendment, with the rules and regulations of the SEC with respect thereto,
were, or, in the case of Parent SEC Documents filed after the date of this Agreement, will be, prepared in accordance with GAAP applied
on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements,
as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present in all material respects in accordance with applicable
requirements of GAAP (subject, in the case of the unaudited statements, to normal year-end audit adjustments, and to any other adjustments
described therein, including the notes thereto) the financial position of Parent and its consolidated Subsidiaries as of their respective
dates and the results of operations and the cash flows of Parent and its consolidated Subsidiaries for the periods presented therein.
(c) Parent
has established and maintains a system of internal control over financial reporting and disclosure controls and procedures (as such terms
are defined in Rule 13a-15 or Rule 15d-15, as applicable, under the Exchange Act); such disclosure controls and procedures
are designed to ensure that material information relating to Parent, including its consolidated Subsidiaries, required to be disclosed
by Parent in the reports that it files or furnishes under the Exchange Act is accumulated and communicated to Parent’s principal
executive officer and its principal financial officer to allow timely decisions regarding required disclosure; and such disclosure controls
and procedures are effective to ensure that information required to be disclosed by Parent in the reports that it files or furnishes
under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms,
and further designed and maintained to provide reasonable assurance regarding the reliability of Parent’s financial reporting and
the preparation of Parent financial statements for external purposes in accordance with GAAP. There (i) is no significant deficiency
or material weakness in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act) utilized by Parent or its Subsidiaries, (ii) is not, and since December 31, 2021, there has not been, any
illegal act or fraud, whether or not material, that involves management or other employees who have a significant role in Parent’s
internal controls, and (iii) is not, and since December 31, 2021, there has not been, any “extensions of credit”
(within the meaning of Section 402 of the Sarbanes-Oxley Act) or prohibited loans to any executive officer of Parent (as defined
in Rule 3b-7 under the Exchange Act) or director of Parent or any of its Subsidiaries. The principal executive officer and the principal
financial officer of Parent have made all certifications required by the Sarbanes-Oxley Act, the Exchange Act and any related rules and
regulations promulgated by the SEC with respect to Parent SEC Documents, and the statements contained in such certifications were complete
and correct as of the dates they were made.
Section 5.6 Absence
of Certain Changes or Events.
(a) Since
December 31, 2022, there has not been any Parent Material Adverse Effect or any event, change, effect or development that, individually
or in the aggregate, could reasonably be expected to have a Parent Material Adverse Effect.
(b) From
December 31, 2022 through the date of this Agreement:
(i) Parent
and its Subsidiaries have conducted their business in the Ordinary Course in all material respects;
(ii) there
has not been any material damage, destruction or other casualty loss with respect to any material asset or property owned, leased or
otherwise used by Parent or any of its Subsidiaries, including the Oil and Gas Properties of Parent and its Subsidiaries, whether or
not covered by insurance; and
(iii) neither
Parent nor any of its Subsidiaries has taken, or agreed, committed, arranged, authorized or entered into any understanding to take, any
action that, if taken after the date of this Agreement, would (without the Company’s prior written consent) have constituted a
breach of any of the covenants set forth in Section 6.2(b).
Section 5.7 No
Undisclosed Material Liabilities. There are
no liabilities of Parent or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, other than: (a) liabilities adequately provided for on the balance sheet of Parent dated as of September 30,
2023 (including the notes thereto) contained in Parent’s Quarterly Report on Form 10-Q for the nine (9) months ended
September 30, 2023; (b) liabilities incurred in the Ordinary Course subsequent to September 30, 2023; (c) liabilities
incurred in connection with the Transactions; and (d) liabilities that would not reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect.
Section 5.8 Information
Supplied. None of the information supplied
or to be supplied by Parent for inclusion or incorporation by reference in (a) the Registration Statement shall, at the time the
Registration Statement becomes effective under the Securities Act, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under
which they are made, not misleading or (b) the Joint Proxy Statement/Prospectus will, at the date it is first mailed to the stockholders
of the Company and to the stockholders of Parent and at the time of the Company Stockholders Meeting and the Parent Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they are made, not misleading; provided, however,
that, in the case of clause (a) and (b), no representation or covenant is made by Parent with respect to the statements
made therein based on information supplied by the Company specifically for inclusion or incorporation by reference therein. Subject to
the accuracy of the first sentence of Section 4.8, the Joint Proxy Statement/Prospectus and the Registration Statement will
comply as to form in all material respects with, as applicable, the provisions of the Exchange Act and the Securities Act, respectively,
and the rules and regulations thereunder; provided, however, that no representation is made by Parent with respect
to the statements made therein based on information supplied by the Company specifically for inclusion or incorporation by reference
therein.
Section 5.9 Parent
Permits; Compliance with Applicable Law.
(a) Parent
and its Subsidiaries hold and at all times since December 31, 2021 have held all permits, licenses, certifications, registrations,
consents, authorizations, variances, exemptions, waivers, orders, franchises, and approvals of all Governmental Entities necessary to
own, lease and operate their respective properties and assets and for the lawful conduct of their respective businesses as they were
or are now being conducted, as applicable (collectively, the “Parent Permits”), and have paid all fees and assessments
due and payable in connection therewith, except where the failure to so hold or make such a payment would not reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect. All Parent Permits are in full force and effect and no suspension
or cancellation of any of the Parent Permits is pending or, to the Knowledge of Parent, threatened, and Parent and its Subsidiaries are,
and at all times since December 31, 2021 have been, in compliance with the terms of the Parent Permits, except where the failure
to be in full force and effect or failure to so comply would not reasonably be expected to have, individually or in the aggregate, a
Parent Material Adverse Effect.
(b) The
businesses of Parent and its Subsidiaries and, with respect to the Oil and Gas Properties of Parent and its Subsidiaries that are operated
by third parties, to the Knowledge of Parent, are not currently being conducted, and at no time since December 31, 2021 have been
conducted, in violation of any applicable Law, except, in each case, for violations that would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect. Other than as may arise under Antitrust Laws with respect to the Transactions,
no investigation or review by any Governmental Entity with respect to Parent or any of its Subsidiaries is pending or, to the Knowledge
of Parent, threatened, other than those the outcome of which has not had and would not reasonably be expected to have, individually or
in the aggregate, a Parent Material Adverse Effect.
(c) Neither
Parent nor any of its Subsidiaries, nor any of their respective directors, officers, employees, or, to the Knowledge of Parent, agents,
has directly or indirectly made, offered, promised or authorized any payment or gift of any money or anything of value to or for the
benefit of any Person for the purpose of (i) influencing any official act or decision of a foreign government official, political
party, or candidate for political office, (ii) inducing such official, party or candidate to use his, her or its influence to affect
any act or decision of a foreign Governmental Entity, or (iii) securing any improper advantage, in the case of clauses (i), (ii) and
(iii) in violation of any applicable Anti-Corruption Laws.
(d) Neither
Parent nor any of its Subsidiaries, nor any of their respective directors, officers, employees, or, to the Knowledge of Parent, agents:
(i) has
been nor is a Sanctioned Person;
(ii) has
knowingly transacted any business directly or indirectly with any Sanctioned Person or otherwise knowingly violated Sanctions; nor
(iii) has
knowingly violated any applicable material Ex-Im Law.
Section 5.10 Compensation;
Benefits.
(a) Set
forth on Schedule 5.10(a) of the Parent Disclosure Letter is a list of each material Parent Plan.
(b) True,
correct and complete copies of each material Parent Plan (or, in the case of any material Parent Plan not in writing, a description of
the material terms thereof) and related trust documents and favorable determination letters, if applicable, have been furnished or made
available to the Company, along with, as applicable, with respect to each material Parent Plan, the most recent report filed on Form 5500,
summary plan description, and all material correspondence to or from (including non-routine filings made with) any Governmental Entity
in the past three (3) years.
(c) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, each Parent Plan has
been maintained, funded and operated in compliance with its terms and all applicable Laws, including ERISA and the Code.
(d) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, there are no actions,
suits or claims (other than routine claims for benefits) pending or, to the Knowledge of Parent, threatened against, or with respect
to, any of the Parent Plans (or the assets thereof), and there are no Proceedings by a Governmental Entity pending with respect to any
of the Parent Plans (or the assets thereof).
(e) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, all contributions or
other payments required to be made by Parent or any of its Subsidiaries with respect to each of the Parent Plans pursuant to their terms
or applicable Laws have been timely made or, if not yet due, accrued in accordance with GAAP.
(f) Each
Parent Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the Internal Revenue Service
to be qualified under Section 401(a) of the Code and nothing has occurred that could reasonably be expected to adversely affect
the qualification of any such Parent Plan. Except as would not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect, none of Parent, any of its Subsidiaries or, to the Knowledge of Parent, any other Person, has engaged in a transaction
with respect to any Parent Plan in connection with which Parent, any of its Subsidiaries or any Parent Plan could, in each case, reasonably
be expected to be subject to either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a Tax imposed pursuant
to Section 4975 or 4976 of the Code.
(g) Except
as set forth on Schedule 5.10(g) of the Parent Disclosure Letter, none of Parent, any of its Subsidiaries or any of
their respective ERISA Affiliates maintains, sponsors, contributes to or has an obligation to contribute to, or otherwise has any current
or contingent liability or obligation under or with respect to, and no Parent Plan is, a plan subject to Title IV of ERISA, Sections 302
or 303 of ERISA, or Sections 412 or 430 of the Code, a “multiemployer plan” (as defined in Section 3(37) of ERISA),
a “multiple employer plan” (within the meaning of Section 210 of ERISA or Section 413(c) of the Code), or
a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA).
(h) Except
as set forth on Schedule 5.10(h) of the Parent Disclosure Letter or as required by applicable Law, no Parent Plan provides
retiree or post-employment medical, or life insurance benefits to any Person, and neither Parent nor any of its Subsidiaries has any
obligation to provide such benefits. Except as would not reasonably be expected to have, individually or in the aggregate, a Parent Material
Adverse Effect, neither Parent nor any of its Subsidiaries has incurred (whether or not assessed) or could reasonably be expected to
incur any Tax or penalty under Section 4980B, 4980D, 4980H, 6721 or 6722 of the Code.
(i) Except
as set forth on Schedule 5.10(i) of the Parent Disclosure Letter, neither the execution and delivery of this Agreement nor
the consummation of the Transactions will, either alone or in combination with another event, (i) entitle any employees of Parent
or any of its Subsidiaries to any amount of compensation or benefits (including any severance pay or any material increase in severance
pay or any loan forgiveness), (ii) accelerate the time of payment or vesting, or increase the amount of compensation due to any
such employee of Parent or any of its Subsidiaries, (iii) directly or indirectly cause Parent to transfer or set aside any assets
to fund any material benefits under any Parent Plan, (iv) otherwise give rise to any liability under any Parent Plan or (v) limit
or restrict the right to amend, terminate or transfer the assets of any Parent Plan on or following the Effective Time.
(j) Neither
Parent nor any of its Subsidiaries has any obligation to provide, and no Parent Plan or other agreement provides any individual with
the right to, a gross up, indemnification, reimbursement or other payment for any excise or additional Taxes, interest or penalties incurred
pursuant to Section 409A or Section 4999 of the Code or due to the failure of any payment to be deductible under Section 280G
of the Code.
(k) No
Parent Plan is maintained outside the jurisdiction of the United States or covers any employees of Parent or any of its Subsidiaries
who reside and work exclusively outside of the United States.
Section 5.11 Labor
Matters.
(a) (i) Neither
Parent nor any of its Subsidiaries is a party to or bound by any collective bargaining or similar agreement with any labor union or labor
organization, (ii) to the Knowledge of Parent there is no pending union representation petition filed with the National Labor Relations
Board or any other Governmental Entity with respect to employees of Parent or any of its Subsidiaries, and (iii) to the Knowledge
of Parent, there is no labor organizing activity by any labor union or labor organization (or representative thereof) to organize employees
of Parent or its Subsidiaries.
(b) Except
for such matters as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, there
is no unfair labor practice charge or complaint or any other complaint, litigation or judicial or administrative proceeding before the
National Labor Relations Board or any other Governmental Entity, in each case, involving any employees of Parent or any of its Subsidiaries
pending, or, to the Knowledge of Parent, threatened.
(c) There
is no strike, slowdown, work stoppage or lockout pending, or, to the Knowledge of Parent, threatened, against Parent or any of its
Subsidiaries by or involving any employees of Parent or any of its Subsidiaries, other than as would not reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
(d) Parent
and its Subsidiaries are, and since December 31, 2021 have been, in compliance in all respects with all applicable Laws respecting
employment and employment practices except, in each case, for violations that would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect. Neither Parent nor any of its Subsidiaries is a party to, or otherwise bound by,
any consent decree with or citation by any Governmental Entity relating to its employees or employment practices pursuant to which it
has any outstanding liabilities or obligations, except as would not reasonably be expected to have, individually or in the aggregate,
a Parent Material Adverse Effect.
(e) In
the last three (3) years: (i) to the Knowledge of Parent, no material allegations of sexual harassment have been made by any
current or former employee of Parent against any current or former officer or director of Parent or its Subsidiaries; and (ii) neither
Parent nor any of its Subsidiaries have been in involved in any material Proceedings, or entered into any material settlement agreements,
related to allegations of sexual harassment or sexual misconduct by any current or former officer or director of Parent or any of its
Subsidiaries.
Section 5.12 Taxes.
(a) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect:
(i) All
Tax Returns required to be filed by or on behalf of Parent or any of its Subsidiaries have been duly and timely filed (taking into account
extensions of time for filing), and all such filed Tax Returns are complete and accurate in all respects. All Taxes that are due and
payable by Parent or any of its Subsidiaries (other than Taxes being contested in good faith by appropriate Proceedings and for which
adequate reserves have been established in accordance with GAAP) have been paid in full. All withholding Tax requirements imposed on
or with respect to Parent or any of its Subsidiaries have been satisfied in full, and Parent and its Subsidiaries have complied in all
respects with all information reporting (and related withholding) and record retention requirements.
(ii) There
is not in force any waiver or agreement for any extension of time for the assessment or payment of any Tax by Parent or any of its Subsidiaries.
(iii) There
is no outstanding claim, assessment or deficiency against Parent or any of its Subsidiaries for any Taxes that have been asserted or,
to the Knowledge of Parent, threatened in writing by any Taxing Authority. There are no Proceedings pending or, to the Knowledge of Parent,
threatened in writing regarding any Taxes of Parent or any of its Subsidiaries.
(iv) Neither
Parent nor any of its Subsidiaries is a party to any Tax allocation, sharing or indemnity contract or arrangement (not including, for
the avoidance of doubt (i) an agreement or arrangement solely between or among Parent and/or any of its Subsidiaries, or (ii) any
customary Tax sharing or indemnification provisions contained in any commercial agreement entered into in the Ordinary Course and not
primarily relating to Tax). Neither Parent nor any of its Subsidiaries has (x) been a member of an affiliated group filing a consolidated
U.S. federal income Tax Return (other than a group the common parent of which is or was Parent or any of its Subsidiaries) or (y) any
liability for Taxes of any Person (other than Parent or any of its Subsidiaries) under Treasury Regulations § 1.1502-6 (or
any similar provision of state, local or foreign Law) or as a transferee or successor.
(v) Neither
Parent or any of its Subsidiaries has participated, or is currently participating, in a “listed transaction,” as defined
in Treasury Regulations § 1.6011-4(b)(2) (or any similar provision of state, local or foreign Law).
(vi) Neither
Parent nor any of its Subsidiaries has constituted a “distributing corporation” or a “controlled corporation”
in a distribution of stock intended to qualify for tax-free treatment under Section 355 of the Code (or so much of Section 356
of the Code as relates to Section 355 of the Code) (i) in the two (2) years prior to the date of this Agreement or (ii) as
part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code)
in conjunction with the Transactions.
(vii) No
written claim has been made by any Taxing Authority in a jurisdiction where Parent or any of its Subsidiaries does not currently file
a Tax Return that it is or may be subject to any Tax in such jurisdiction, nor has any such assertion been threatened or proposed in
writing and received by Parent or any of its Subsidiaries.
(viii) Neither
Parent nor any of its Subsidiaries has requested, has received or is subject to any written ruling of a Taxing Authority that will be
binding on it for any taxable period ending after the Closing Date or has entered into any “closing agreement” as described
in Section 7121 of the Code (or any similar provision of state, local or foreign Law).
(ix) There
are no Encumbrances for Taxes on any of the assets of Parent or any of its Subsidiaries, except for those described in clause (ii)(B) of
Permitted Encumbrances.
(x) Neither
of Parent nor any of its Subsidiaries has availed itself of the benefit of any Tax credits or deferred the payment of any Taxes pursuant
to COVID-19 Measures.
(xi) Each
of Parent and Merger Sub is, and has been since formation, properly classified for U.S. federal income tax purposes as a corporation.
LLC Sub is, and has been since formation, properly classified for U.S. federal income tax purposes as an entity disregarded as separate
from Parent.
(b) Neither
Parent nor any of its Subsidiaries is aware of the existence of any fact, or has taken or agreed to take any action, that would reasonably
be expected to prevent or impede the Integrated Mergers, taken together, from qualifying as a “reorganization” within the
meaning of Section 368(a) of the Code.
Section 5.13 Litigation.
Except for such matters as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect
(or as may arise under Antitrust Laws with respect to the Transactions), there is no (a) Proceeding pending, or to the Knowledge
of Parent, threatened against Parent or any of its Subsidiaries or any of their Oil and Gas Properties, or (b) judgment, decree,
injunction, ruling, order, writ or award of any Governmental Entity or arbitrator with outstanding obligations against Parent or any
of its Subsidiaries. To the Knowledge of Parent, as of the date hereof, no officer or director of Parent is a defendant in any Proceeding
in connection with his or her status as an officer or director of Parent.
Section 5.14 Intellectual
Property.
(a) Parent
and its Subsidiaries own or have the right to use all Intellectual Property used in or necessary for the operation of the businesses
of each of Parent and its Subsidiaries as presently conducted (collectively, the “Parent Intellectual Property”) free
and clear of all Encumbrances except for Permitted Encumbrances, except where the failure to own or have the right to use such properties
has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b) To
the Knowledge of Parent, the use of Parent Intellectual Property by Parent and its Subsidiaries in the operation of the business of Parent
and its Subsidiaries as presently conducted does not infringe, misappropriate or otherwise violate any Intellectual Property of any other
Person, except for such matters that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect. To the Knowledge of Parent, no third party is infringing on the Parent Intellectual Property, except for such
matters that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(c) Parent
and its Subsidiaries have taken reasonable measures consistent with prudent industry practices to protect the confidentiality of trade
secrets used in the businesses of Parent and its Subsidiaries as presently conducted, except where failure to do so has not had and would
not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(d) Except
as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, the
IT Assets owned, used, or held for use by Parent or any of its Subsidiaries (i) are sufficient for the current needs of the businesses
of Parent and its Subsidiaries; (ii) have not malfunctioned or failed within the past three (3) years and (iii) to the
Knowledge of Parent, are free from any malicious code.
Section 5.15 Privacy
and Cybersecurity.
(a) Parent
and its Subsidiaries maintain and are in compliance with, and since December 31, 2021 have maintained and been in compliance with,
(i) all applicable Laws relating to the privacy and/or security of Personal Information, (ii) Parent’s and its Subsidiaries’
posted or publicly facing privacy policies or notices, and (iii) Parent’s and its Subsidiaries’ contractual obligations
concerning the privacy and/or security of Personal Information and the IT Assets (clauses (i) through (iii) collectively,
“Parent Privacy Obligations”), in each case of clauses (i) through (iii) above, other than
any non-compliance that, individually or in the aggregate, has not been and would not reasonably be expected to be material to Parent
and its Subsidiaries. There are no actions by any Person (including any Governmental Entity) pending to which Parent or any of Parent’s
Subsidiaries is a named party or, to the knowledge of Parent, threatened in writing against Parent or its Subsidiaries alleging a violation
of any Parent Privacy Obligations.
(b) Parent
and its Subsidiaries have implemented and at all times maintained commercially reasonable and legally compliant administrative, technical
and physical safeguards designed to protect the IT Assets and all confidential and sensitive information (including trade secrets) and
Personal Information in Parent or any Subsidiary’s possession or control against Security Incident. Other than as disclosed on
Schedule 5.15(b) of the Parent Disclosure Letter, neither Parent nor any Subsidiary of Parent has (i) experienced
any material Security Incident, or (ii) received any written notice or complaint from any Person with respect to any of the foregoing,
nor has any such notice or complaint been threatened in writing against Parent or any of Parent’s Subsidiaries.
Section 5.16 Real
Property. Except as would not reasonably be
expected to have, individually or in the aggregate, a Parent Material Adverse Effect and with respect to clauses (a) and
(b), except with respect to any of Parent’s Oil and Gas Properties, (a) Parent and its Subsidiaries have good, valid
and defensible title to all material real property owned by Parent or any of its Subsidiaries (subject to the exclusion of Parent’s
Oil and Gas Properties and the Rights-of-Way, collectively, the “Parent Owned Real Property”) and valid leasehold
estates in all material real property leased, subleased, licensed or otherwise occupied (whether as tenant, subtenant or pursuant to
other occupancy arrangements) by Parent or any of its Subsidiaries, but excluding the Parent Oil and Gas Properties and the Rights-of-Way
(collectively, including the improvements thereon, but subject to the exclusion of Parent’s Oil and Gas Properties and Rights-of-Way,
the “Parent Material Leased Real Property,” and together with Parent Owned Real Property, the “Parent Material
Real Property”) free and clear of all Encumbrances and defects and imperfections, except Permitted Encumbrances, (b) each
agreement under which Parent or any of its Subsidiaries is the landlord, sublandlord, tenant, subtenant, or occupant with respect to
Parent Material Leased Real Property (each, a “Parent Material Real Property Lease”) is in full force and effect and
is valid and enforceable against Parent or such Subsidiary and, to the Knowledge of Parent, the other parties thereto in accordance with
its terms, subject, as to enforceability, to Creditors’ Rights, and neither Parent nor any of its Subsidiaries, or to the Knowledge
of Parent, any other party thereto, has received written notice of any default under any Parent Material Real Property Lease and no event
has occurred and no circumstance exists which, if not remedied, would result in such a default (with or without notice or lapse of time,
or both), and (c) as of the date of this Agreement, there does not exist any pending or, to the Knowledge of Parent, threatened,
condemnation or eminent domain Proceedings that affect any Parent Owned Real Property or Parent Material Leased Real Property. The Parent
Owned Real Property, Parent Material Leased Real Property and all other real property leased and owned by the Parent and its Subsidiaries
are sufficient for the current needs of the businesses of the Parent and its Subsidiaries, except for such real property the absence
of which would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.17 Rights-of-Way.
Each of Parent and its Subsidiaries has such Rights-of-Way as are sufficient to conduct its business as presently conducted in the Ordinary
Course, except for such Rights-of-Way the absence of which would not reasonably be expected to have, individually or in the aggregate,
a Parent Material Adverse Effect. Each of Parent and its Subsidiaries has fulfilled and performed all of its material obligations with
respect to such Rights-of-Way and conduct their business in a manner that does not violate any of the Rights-of-Way and no event has
occurred that allows, or after notice or lapse of time would allow, revocation or termination thereof or would result in any impairment
of the rights of the holder of any such Rights-of-Way, except for such revocations, terminations and impairments that would not reasonably
be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. All pipelines operated by Parent and its Subsidiaries
are located on or are subject to valid Rights-of-Way, or are located on real property owned or leased by Parent, and there are no gaps
(including any gap arising as a result of any breach by Parent or any of its Subsidiaries of the terms of any Rights-of-Way) in the Rights-of-Way
other than gaps that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.18 Oil
and Gas Matters.
(a) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, and except for property
(i) sold or otherwise disposed of in the Ordinary Course since the date specified in the reserve report prepared by Netherland,
Sewell & Associates, Inc. (the “Parent Independent Petroleum Engineer”) relating to Parent’s interests
referred to therein and dated as of February 9, 2023 (the “Parent Reserve Report”) or (ii) reflected in
the Parent Reserve Report or in the Parent SEC Documents as having been sold or otherwise disposed of (other than transactions effected
after the date hereof in accordance with Section 6.1(b)(v)), Parent and its Subsidiaries have good and defensible title to
all Oil and Gas Properties forming the basis for the reserves reflected in the Parent Reserve Report and in each case as attributable
to interests owned by Parent and its Subsidiaries, free and clear of any Encumbrances (other than Permitted Encumbrances). For purposes
of the foregoing sentence, “good and defensible title” means that Parent’s and/or one or more of its Subsidiaries’,
as applicable, title (as of the date hereof and as of the Closing) to each of the Oil and Gas Properties held or owned by them (or purported
to be held or owned by them) that (A) entitles Parent (and/or one or more of its Subsidiaries, as applicable) to receive (after
satisfaction of all Production Burdens applicable thereto), not less than the net revenue interest share shown in the Parent Reserve
Report of all Hydrocarbons produced from such Oil and Gas Properties throughout the productive life of such Oil and Gas Properties (other
than decreases in connection with operations in which Parent and/or its Subsidiaries may be a non-consenting co-owner from and after
the date hereof, decreases resulting from reversion of interests to co-owners with respect to operations in which such co-owners elected
not to consent from and after the date of the Parent Reserve Report, and decreases resulting from the establishment of pools or units
from and after the date of the Parent Reserve Report), (B) obligates Parent (and/or one or more of its Subsidiaries, as applicable)
to bear a percentage of the costs and expenses for the maintenance and development of, and operations relating to, such Oil and Gas Properties,
of not greater than the working interest shown on the Parent Reserve Report for such Oil and Gas Properties (other than any positive
difference in such percentage and the applicable working interest shown on the Parent Reserve Report for such Oil and Gas Properties
that are accompanied by a proportionate (or greater) increase in the net revenue interest in such Oil and Gas Properties) and (C) is
free and clear of all Encumbrances (other than Permitted Encumbrances).
(b) Except
for any such matters that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect,
the factual, non-interpretive data supplied by Parent to the Parent Independent Petroleum Engineer relating to Parent interests referred
to in the Parent Reserve Report, by or on behalf of Parent and its Subsidiaries that was material to such firm’s estimates of proved
oil and gas reserves attributable to the Oil and Gas Properties of Parent and its Subsidiaries in connection with the preparation of
the Parent Reserve Report was, as of the time provided, accurate in all respects. To Parent’s Knowledge, any assumptions or estimates
provided by any of Parent’s Subsidiaries to the Parent Independent Petroleum Engineer in connection with its preparation of the
Parent Reserve Report were made in good faith and on a reasonable basis based on the facts and circumstances in existence and that were
known to Parent at the time such assumptions or estimates were made. Except for any such matters that would not reasonably be expected
to have, individually or in the aggregate, a Parent Material Adverse Effect, the oil and gas reserve estimates of Parent set forth in
the Parent Reserve Report are derived from reports that have been prepared by the Parent Independent Petroleum Engineer, and such reserve
estimates fairly reflect, in all respects, the oil and gas reserves of Parent and its Subsidiaries at the dates indicated therein and
are in accordance with SEC guidelines applicable thereto applied on a consistent basis throughout the periods involved. Except for changes
generally affecting the oil and gas exploration, development and production industry (including changes in commodity prices) and normal
depletion by production, there has been no change in respect of the matters addressed in the Parent Reserve Report that would reasonably
be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(c) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, (i) all rentals,
shut-ins and similar payments owed to any Person under (or otherwise with respect to) any Oil and Gas Leases owned or held by Parent
or any of its Subsidiaries have been properly and timely paid or are being contested in good faith through appropriate Proceedings, (ii) all
royalties, minimum royalties, overriding royalties and other Production Burdens with respect to any Oil and Gas Properties owned or held
by Parent or any of its Subsidiaries have been timely and properly paid (other than any such Production Burdens that are being held in
suspense by Parent or its Subsidiaries in accordance with applicable Law) or are being contested in good faith through appropriate Proceedings
and (iii) none of Parent or any of its Subsidiaries (and, to Parent’s Knowledge, no third party operator) has violated any
provision of, or taken or failed to take any act that, with or without notice, lapse of time, or both, would constitute a default under
the provisions of any Oil and Gas Lease (or entitle the lessor thereunder to cancel or terminate such Oil and Gas Lease) included in
the Oil and Gas Properties owned or held by Parent or any of its Subsidiaries.
(d) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, all proceeds from the
sale of Hydrocarbons produced from the Oil and Gas Properties of Parent and its Subsidiaries are being received by them in a timely manner
or are being contested in good faith through appropriate Proceedings and are not being held in suspense (by Parent, any of its Subsidiaries,
any third party operator thereof or any other Person) for any reason other than awaiting preparation and approval of division order title
opinions and the receipt of division orders for execution for recently drilled Wells. Neither Parent nor any of its Subsidiaries (i) is
obligated by virtue of a take-or-pay payment, advance payment or similar payment (other than royalties, overriding royalties and similar
arrangements established in the Oil and Gas Leases) to deliver Hydrocarbons or proceeds from the sale thereof attributable to such Person’s
interest in its Oil and Gas Properties at some future time without receiving payment therefor at the time of delivery or (ii) has
any material transportation, processing or plant imbalance, and no Person has given notice that any such imbalance constitutes all of
the relevant Person’s ultimately recoverable reserves from a balancing area.
(e) All
of the Wells and all water, CO2, injection or other wells located on the Oil and Gas Properties of Parent and its Subsidiaries or otherwise
associated with an Oil and Gas Property of Parent or its Subsidiaries that were drilled and completed by Parent or its Subsidiaries,
and to the Knowledge of Parent, all such wells that were not drilled and completed by Parent or its Subsidiaries, have been drilled,
completed and operated within the limits permitted by the applicable Contracts entered into by Parent or any of its Subsidiaries related
to such wells, and in accordance with applicable Law and applicable Parent Permits, and all drilling and completion (and plugging and
abandonment) of such wells and all related development, production and other operations have been conducted in compliance with all applicable
Contracts and Laws and applicable Parent Permits except, in each case, as would not reasonably be expected to have, individually or in
the aggregate, a Parent Material Adverse Effect. Except as set forth on Schedule 5.18(e) of the Parent Disclosure Letter,
there are no wells that constitute a part of the Oil and Gas Properties of Parent and its Subsidiaries of which Parent or a Subsidiary
has received a written notice, claim, demand or order from any Governmental Entity notifying, claiming, demanding or requiring that such
well(s) be temporarily or permanently plugged and abandoned.
(f) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, none of the Oil and
Gas Properties of Parent or its Subsidiaries is subject to any preferential purchase, tag-along, right of first refusal, consent or similar
right that would become operative as a result of the execution of this Agreement or the consummation of the Transactions.
(g) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, since the date of the
Parent Reserve Reports, neither the Parent nor any of its Subsidiaries has elected not to participate in any operation or activity proposed
with respect to any of the Oil and Gas Properties owned or held by it (or them, as applicable) that could result in a penalty or forfeiture
as a result of such election not to participate in such operation or activity that would be material to Parent and its Subsidiaries,
taken as a whole and is not reflected in the Parent Reserve Report.
Section 5.19 Environmental
Matters.
(a) Except
for those matters that would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect:
(i) Parent
and its Subsidiaries and their respective operations and assets are, and at all times since December 31, 2021 have been, in compliance
with all Environmental Laws, which compliance includes, and since December 31, 2021 has included, obtaining, maintaining and complying
with all Parent Permits required under Environmental Laws;
(ii) Parent
and its Subsidiaries are not subject to any pending or, to Parent’s Knowledge, threatened Proceedings under Environmental Laws,
and Parent and its Subsidiaries have not received any written notice of a violation of, or liability under, Environmental Laws, the subject
of which is unresolved;
(iii) there
has been no Release, treatment, storage, transportation or handling of, or exposure to, Hazardous Materials at, on, under, or from any
property currently or, to the Knowledge of Parent, formerly owned, leased, operated or otherwise used by Parent or any of its Subsidiaries,
or, to the Knowledge of Parent, by any predecessors of Parent or any Subsidiary of Parent, or to the Knowledge of Parent, at, on, under,
or from any other property, which has resulted or is reasonably likely to result in liability to Parent or its Subsidiaries under any
Environmental Law, and, as of the date of this Agreement, neither Parent nor any of its Subsidiaries has received any unresolved written
notice, claim, demand, or order asserting a liability or obligation under any Environmental Laws with respect to the investigation, remediation,
removal, or monitoring of any Release of Hazardous Materials at, on, under, or from any property currently or formerly owned, leased,
operated, or otherwise used by Parent, or at, on, under, or from any offsite location where Hazardous Materials from Parent’s or
its Subsidiaries’ operations have been sent for treatment, disposal, storage or handling; and
(iv) neither
Parent nor any of its Subsidiaries has assumed, either expressly or, to Parent’s Knowledge, by operation of Law, any liability
of any other Person related to Hazardous Materials or Environmental Laws.
(b) As
of the date of this Agreement, there have been no environmental, health or safety investigations, studies, audits, or other analyses
conducted during the past three (3) years by or on behalf of, or that are in the possession of, Parent or its Subsidiaries relating
to any instance of material noncompliance with Environmental Laws by or any material liability arising under Environmental Laws of Parent
or its Subsidiaries, or any material Release of Hazardous Materials with respect to any property owned, operated or otherwise used by
any of them that have not been made available to the Company prior to the date hereof.
Section 5.20 Material
Contracts.
(a) Schedule 5.20(a) of
the Parent Disclosure Letter, together with the lists of exhibits contained in the Parent SEC Documents, sets forth a true and complete
list, as of the date of this Agreement, of:
(i) each
“material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K under the Exchange Act) to which Parent
or any of its Subsidiaries is a party;
(ii) each
Contract that provides for the acquisition, disposition, license, use, distribution or outsourcing of assets, services, rights or properties
(other than Oil and Gas Properties and any Contract of the type described in Section 5.20(a)(v)) with respect to which Parent
reasonably expects that Parent and its Subsidiaries will make or receive payments in any calendar year in excess of $25,000,000 or aggregate
payments in excess of $50,000,000;
(iii) each
Contract that constitutes a commitment relating to Indebtedness or the deferred purchase price of property by Parent or any of its Subsidiaries
(whether incurred, assumed, guaranteed or secured by any asset) in excess of $50,000,000, other than agreements solely between or among
Parent and any of its Subsidiaries;
(iv) each
Contract to which Parent or any of its Subsidiaries is a party that (A) restricts the ability of Parent or any of its Subsidiaries
to compete in any business or with any Person in any geographical area, (B) requires Parent or any of its Subsidiaries to conduct
any business on a “most favored nations” basis with any third party or (C) provides for “exclusivity” or
any similar requirement in favor of any third party, except in the case of each of clauses (A), (B) and (C) for
such restrictions, requirements and provisions that are not material to Parent and its Subsidiaries;
(v) any
Contract providing for the purchase or sale by Parent or any of its Subsidiaries of Hydrocarbons that:
(A) has
a remaining term of greater than one year and does not allow Parent or such Subsidiary to terminate it without penalty on one year’s
notice or less,
(B) contains
a minimum throughput commitment, minimum volume commitment, “take-or-pay” clause or any similar material prepayment or forward
sale arrangement or obligation (excluding “gas balancing” arrangements associated with customary joint operating agreements)
to deliver Hydrocarbons at some future time, or
(C) contains
acreage dedication, minimum volume commitments or capacity reservation fees to a gathering, transportation or other arrangement downstream
of the wellhead that, in each case, cover, guaranty, dedicate or commit (1) more than 1,000 net acres or (2) volumes in excess
of 10,000 MMcf of gas or 2,000 boe of liquid Hydrocarbons on a monthly basis (calculated on a yearly average basis);
(vi) any
acquisition or divestiture Contract that contains “earn out” or other similar contingent payment obligations (other than
asset retirement obligations, plugging and abandonment obligations and other reserves of Parent set forth in the Parent Reserve Report),
that would reasonably be expected to result in annual payments in excess of $50,000,000;
(vii) each
Contract for lease of personal property or real property (other than leases for compressors and leases in respect of Oil and Gas Properties)
involving payments in excess of $2,000,000 in any calendar year or aggregate payments in excess of $10,000,000 over the life of the contract
that are not terminable without penalty or other liability to Parent (other than any ongoing obligation pursuant to such contract that
is not caused by any such termination) within sixty (60) days;
(viii) each
contract that would reasonably be expected to require the disposition of a material portion of the assets or any line of business of
Parent or its Subsidiaries;
(ix) each
Contract involving the pending acquisition or sale of (or option to purchase or sell) any material amount of the assets or properties
of Parent or any of its Subsidiaries (including any material portion of the Oil and Gas Properties), taken as a whole, other than Contracts
involving the acquisition or sale of (or option to purchase or sell) Hydrocarbons in the Ordinary Course;
(x) each
material partnership, joint venture or limited liability company agreement, other than any customary joint operating agreements, or unit
agreements affecting the Oil and Gas Properties of Parent;
(xi) each
joint development agreement, exploration agreement, participation, farm-out, farm-in or program agreement or similar Contract requiring
Parent or any of its Subsidiaries to make expenditures from and after December 31, 2022 that would reasonably be expected to be
in excess of $25,000,000 in the aggregate, other than customary joint operating agreements and continuous development obligations under
Oil and Gas Leases;
(xii) each
agreement under which Parent or any of its Subsidiaries has advanced or loaned any amount of money to any of its officers, directors,
employees or consultants, in each case with a principal amount in excess of $120,000; and
(xiii) each
contract for any Parent Related Party Transaction.
(b) Collectively,
the Contracts described in Section 5.20(a) are referred to as the “Parent Contracts.” A complete
and correct copy of each of the Parent Contracts has been made available to the Company. Except as would not reasonably be expected to
have, individually or in the aggregate, a Parent Material Adverse Effect, each Parent Contract is legal, valid, binding and enforceable
in accordance with its terms on Parent and each of its Subsidiaries that is a party thereto and, to the Knowledge of Parent, each other
party thereto, and is in full force and effect, subject, as to enforceability, to Creditors’ Rights. Except as would not reasonably
be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, neither Parent nor any of its Subsidiaries is
in breach or default under any Parent Contract nor, to the Knowledge of Parent, is any other party to any such Parent Contract in breach
or default thereunder, and no event has occurred that with the lapse of time or the giving of notice or both would constitute a default
thereunder by Parent or its Subsidiaries, or, to the Knowledge of Parent, any other party thereto. Except as would not reasonably be
expected to have individually or in the aggregate, a Parent Material Adverse Effect, there are no disputes pending or, to the Knowledge
of Parent, threatened with respect to any Parent Contract and neither Parent nor any of its Subsidiaries has received any written notice
of the intention of any other party to any Parent Contract to terminate for default, convenience or otherwise any Parent Contract, nor
to the Knowledge of Parent, is any such party threatening to do so.
Section 5.21 Derivative
Transactions.
(a) Schedule 5.21 of the Parent Disclosure Letter contains a complete and correct list of all outstanding material Derivative Transactions (including
each outstanding Hydrocarbon or financial hedging position attributable to the Hydrocarbon production of Parent or any of its Subsidiaries)
entered into by Parent or any of its Subsidiaries or for the account of any of their respective customers as of the date hereof pursuant
to which such party has outstanding rights or obligations. All such Derivative Transactions entered into by Parent or any of its Subsidiaries
or for the account of any of its customers as of the date of this Agreement were, in all material respects, entered into in accordance
with applicable Laws, and in accordance with the investment, securities, commodities, risk management and other policies, practices and
procedures employed by Parent and its Subsidiaries, and were, in all material respects, entered into with counterparties believed at
the time to be financially responsible and able to understand (either alone or in consultation with their advisers) and to bear the risks
of such Derivative Transactions.
(b) Except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, Parent and each of its
Subsidiaries have duly performed in all respects all of their respective obligations under the Derivative Transactions to the extent
that such obligations to perform have accrued, and there are no breaches, violations, collateral deficiencies, requests for collateral
or demands for payment, or defaults or allegations or assertions of such by any party thereunder.
(c) The
Parent SEC Documents accurately summarize, in all material respects, the outstanding positions under any such Derivative Transaction
of Parent and its Subsidiaries, including Hydrocarbon and financial positions under any such Derivative Transaction of Parent attributable
to the production and marketing of Parent and its Subsidiaries, as of the dates reflected therein.
Section 5.22 Insurance.
Set forth on Schedule 5.22 of Parent Disclosure Letter is a true, correct and complete list of all material insurance policies
held by Parent or any of its Subsidiaries as of the date of this Agreement (other than those constituting or funding Parent Plans) (collectively,
the “Material Parent Insurance Policies”). Except as would not reasonably be expected to have, individually or in
the aggregate, a Parent Material Adverse Effect, each of the Material Parent Insurance Policies is in full force and effect on the date
of this Agreement and a true, correct and complete copy of each Material Parent Insurance Policy has been made available to Parent. The
Material Parent Insurance Policies are with reputable insurance carriers, provide full and adequate coverage for all normal risks incident
to the business of Parent and its Subsidiaries and their respective properties and assets, and are in breadth of coverage and amount
at least equivalent to that carried by Persons engaged in similar businesses and subject to the same or similar perils or hazards, except
as would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Except as would not
reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, all premiums payable under the Material
Parent Insurance Policies prior to the date of this Agreement have been duly paid to date, and neither Parent nor any of its Subsidiaries
has taken any action or failed to take any action that (including with respect to the Transactions), with notice or lapse of time or
both, would constitute a breach or default, or permit a termination of any of the Material Parent Insurance Policies. Except as would
not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, as of the date of this Agreement,
no written notice of cancellation or termination has been received with respect to any Material Parent Insurance Policy. As of the date
of this Agreement, the Parent and its Subsidiaries do not have aggregate claims pending with insurers that are reasonably expected to
result in insurance recoveries of more than $1,500,000 in the aggregate.
Section 5.23 Opinion
of Financial Advisor. The Parent Board has received the oral opinion of Evercore Group LLC
addressed to the Parent Board, to be confirmed by delivery of a written opinion, to the effect that, based upon and subject to the assumptions,
qualifications, limitations, and other matters set forth in such opinion, as of the date of the opinion, the Exchange Ratio is fair,
from a financial point of view, to Parent.
Section 5.24 Brokers.
Except for the fees and expenses payable to Evercore Group LLC and J.P. Morgan Securities LLC, no broker, investment banker, advisor
or other Person is entitled to any broker’s, finder’s or other similar fee or commission in connection with the Transactions
based upon arrangements made by or on behalf of Parent.
Section 5.25 Ownership
of Company Common Stock. As of the date hereof, neither Parent nor any of its Subsidiaries
own, or has within the last three (3) years owned, any shares of Company Common Stock (or other securities or derivatives convertible
into, exchangeable for or exercisable for shares of Company Common Stock).
Section 5.26 Business
Conduct. Merger Sub was incorporated on January 3, 2024, and LLC Sub was formed on
January 3, 2024. Since its inception, each of Merger Sub and LLC Sub has not engaged in any activity, other than such actions in
connection with (a) its organization and (b) the preparation, negotiation and execution of this Agreement and the Transactions.
Each of Merger Sub and LLC Sub has no operations, has not generated any revenues and has no assets or liabilities other than those incurred
in connection with the foregoing and in association with the Merger as provided in this Agreement.
Section 5.27 Related
Party Transactions. Schedule 5.27 of the Parent Disclosure Letter sets forth,
as of the date of this Agreement, a complete and correct list of any transaction or arrangement under which any (a) present or former
executive officer or director of Parent or any of its Subsidiaries, (b) beneficial owner (within the meaning of Section 13(d) of
the Exchange Act) of 5% or more of any class of the equity securities of Parent or any of its Subsidiaries whose status as a 5% holder
is known to Parent as of the date of this Agreement or (c) Affiliate, “associate” or member of the “immediate
family” (as such terms are respectively defined in Rules 12b-2 and 16a-1 of the Exchange Act) of any of the foregoing Persons
described in clause (a) or (b) (but only, with respect to the Persons in clause (b), to the Knowledge
of Parent), in each case as would be required to be disclosed by the Parent pursuant to Item 404 of Regulation S-K promulgated under
the Exchange Act is a party to any actual or proposed loan, lease or other contract with or binding upon Parent or any of its Subsidiaries
or any of their respective properties or assets or has any interest in any property owned by Parent or any of its Subsidiaries, in each
case, including any bond, letter of credit, guarantee, deposit, cash account, escrow, policy of insurance or other credit support instrument
or security posted or delivered by any Person listed in clauses (a), (b) or (c) in connection with
the operation of the business of Parent or any of its Subsidiaries (each of the foregoing, a “Parent Related Party Transaction”).
Section 5.28 Takeover
Laws. The approval of the Parent Board of this Agreement and the Transactions represents
all the action necessary to render inapplicable to this Agreement and the Transactions the restrictions of any Takeover Law or any anti-takeover
provision in Parent’s Organizational Documents that is applicable to Parent, the shares of Parent Common Stock, this Agreement
or the Transactions.
Section 5.29 No
Additional Representations.
(a) Except
for the representations and warranties made in this Article V, neither Parent nor any other Person makes any express or implied
representation or warranty with respect to Parent or any of its Subsidiaries or their respective businesses, operations, assets, liabilities
or conditions (financial or otherwise) in connection with this Agreement or the Transactions, and Parent hereby disclaims any such other
representations or warranties. In particular, without limiting the foregoing disclaimer, neither Parent nor any other Person makes or
has made any representation or warranty to the Company or any of its Affiliates or Representatives with respect to (i) any financial
projection, forecast, estimate, budget or prospect information relating to Parent or any of its Subsidiaries or their respective businesses;
or (ii) except for the representations and warranties made by Parent in this Article V, any oral or written information
presented to the Company or any of its Affiliates or Representatives in the course of their due diligence investigation of Parent, the
negotiation of this Agreement or in the course of the Transactions. Notwithstanding the foregoing, nothing in this Section 5.29 shall limit the Company’s remedies with respect to claims of fraud arising from or relating to the express written representations
and warranties made by Parent, Merger Sub and LLC Sub in this Article V.
(b) Notwithstanding
anything contained in this Agreement to the contrary, Parent acknowledges and agrees that neither the Company nor any other Person has
made or is making any representations or warranties relating to the Company or its Subsidiaries or any other matter whatsoever, express
or implied, beyond those expressly given by the Company in Article IV, including any implied representation or warranty as
to the accuracy or completeness of any information regarding the Company furnished or made available to Parent or any of its Representatives,
and that none of Parent, Merger Sub or LLC Sub has relied on any such other representation or warranty not expressly set forth in Article IV of this Agreement. Without limiting the generality of the foregoing, Parent acknowledges that no representations or warranties are
made with respect to any projections, forecasts, estimates, budgets or prospect information that may have been made available to Parent
or any of its Representatives (including in certain “data rooms,” “virtual data rooms,” management presentations
or in any other form in expectation of, or in connection with, the Merger or the other Transactions).
Article VI
COVENANTS AND AGREEMENTS
Section 6.1 Conduct
of Company Business Pending the Merger.
(a) Except
(i) as set forth on Schedule 6.1(a) of the Company Disclosure Letter, (ii) as expressly permitted, contemplated
or required by this Agreement, (iii) as may be required by applicable Law, or (iv) as otherwise consented to by Parent in writing
(which consent shall not be unreasonably withheld, delayed or conditioned), the Company covenants and agrees that, until the earlier
of the Effective Time and the termination of this Agreement pursuant to Article VIII, it shall, and shall cause each of its
Subsidiaries to, use reasonable best efforts to conduct its businesses in the Ordinary Course, including by using reasonable best efforts
to preserve substantially intact its present business organization, goodwill and assets, to keep available the services of its current
officers and employees and preserve its existing relationships with Governmental Entities and its significant customers, suppliers, licensors,
licensees, distributors, lessors and others having significant business dealings with it.
(b) Except
(i) as set forth on Schedule 6.1(b) of the Company Disclosure Letter, (ii) as expressly permitted, contemplated
or required by this Agreement, (iii) as may be required by applicable Law, or (iv) otherwise consented to by Parent in writing
(which consent shall not be unreasonably withheld, delayed or conditioned), until the earlier of the Effective Time and the termination
of this Agreement pursuant to Article VIII the Company shall not, and shall not permit its Subsidiaries to (in each case
whether directly or indirectly or by merger, consolidation, division, operation of law or otherwise):
(i) (A) declare,
set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests
in, the Company or its Subsidiaries, except for dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company
to the Company or another direct or indirect wholly owned Subsidiary of the Company; (B) split, combine, exchange, subdivide, recapitalize
or reclassify any capital stock of, or other equity interests in, or issue or authorize or propose the issuance of any other securities
in respect of, in lieu of or in substitution for equity interests in the Company or any of its Subsidiaries; or (C) purchase, redeem
or otherwise acquire, or offer to purchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, the Company
or any Subsidiary of the Company, except as required by the terms of any capital stock or equity interest of a Subsidiary or in respect
of any Company Incentive Awards outstanding as of the date hereof in accordance with the terms of the Company Equity Plan and applicable
award agreements;
(ii) offer,
issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, or other equity
interests in, the Company or any of its Subsidiaries or any securities convertible into, or any rights, warrants or options to acquire,
any such capital stock or equity interests, other than: (A) the delivery of Company Common Stock upon the exercise, vesting or settlement
of any Company Incentive Awards outstanding on the date hereof or granted after the date hereof in compliance with this Agreement in
accordance with the terms of the Company Equity Plan and applicable award agreements; and (B) issuances by a wholly owned Subsidiary
of the Company of such Subsidiary’s capital stock or other equity interests to the Company or any other wholly owned Subsidiary
of the Company;
(iii) amend
or propose to amend the Company’s Organizational Documents or amend or propose to amend the Organizational Documents of any of
the Company’s Subsidiaries (other than ministerial changes);
(iv) (A) merge,
consolidate, combine or amalgamate with any Person or effect any division transaction, in each case, other than between wholly owned
Subsidiaries of the Company or (B) acquire or agree to acquire or make an investment in (including by merging or consolidating with,
purchasing any equity interest in or a substantial portion of the assets of, licensing, or by any other manner), any assets, properties
or any business or any corporation, partnership, association or other business organization or division thereof, in each case other than
acquisitions for which the consideration is less than $50,000,000 in the aggregate;
(v) sell,
lease, swap, exchange, transfer, farmout, license, Encumber (other than Permitted Encumbrances), abandon, permit to lapse, discontinue
or otherwise dispose of, or agree to sell, lease, swap, exchange, transfer, farmout, license, Encumber (other than Permitted Encumbrances),
abandon, permit to lapse, discontinue or otherwise dispose of, any material portion of its assets or properties, other than (A) sales,
leases, exchanges or dispositions for which the consideration is less than $20,000,000 in the aggregate (or as otherwise permitted hereunder);
(B) the sale of Hydrocarbons and rights thereto in the Ordinary Course; (C) among the Company and its wholly owned Subsidiaries
or among wholly owned Subsidiaries of the Company; (D) sales or dispositions of excess, obsolete or worthless equipment in the Ordinary
Course; (E) asset swaps the fair market value of which are less than, (x) for those entered in the Ordinary Course, $20,000,000
individually and $100,000,000 in the aggregate or (y) in all other cases, $10,000,000 in the aggregate; (F) with respect to
relinquishment or abandonment, as required by Law, permit or any applicable Contract; or (G) for the expiration of any oil and gas
lease in accordance with its terms.
(vi) authorize,
recommend, propose, enter into, adopt a plan or announce an intention to adopt a plan of complete or partial liquidation, dissolution,
restructuring, recapitalization or other reorganization of the Company or any of its Subsidiaries, other than such transactions among
wholly owned Subsidiaries of the Company;
(vii) change
in any material respect its financial accounting principles, practices or methods that would materially affect the consolidated assets,
liabilities or results of operations of the Company and its Subsidiaries, except as required by GAAP or applicable Law;
(viii) (A) make,
change or revoke any material Tax election or accounting method, but excluding any election that must be made periodically and is made
consistent with past practice, (B) file any material amended Tax Return, (C) except to the extent otherwise required by applicable
Law, file any material Tax Return other than on a basis consistent with past practice, (D) consent to any extension or waiver of
the limitation period applicable to any material claim or assessment in respect of material Taxes, (E) enter into any material Tax
allocation, sharing or indemnity agreement, any material Tax holiday agreement or other similar agreement with respect to Taxes, (F) enter
into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax Proceeding, or (H) surrender
any right to claim a material Tax refund, offset or other reduction in Tax liability;
(ix) except
as required by applicable Law or by the terms of any Company Benefit Plan existing as of the date hereof, (A) grant any increases
in the compensation or benefits payable or to become payable to any of its current or former directors, officers, employees or other
individual service providers, other than (1) salary or wage increases made in the Ordinary Course with respect to employees (other
than the Company’s named executive officers) and service providers (not to exceed 4% in the aggregate) or (2) any increases
provided to a newly promoted employee as permitted hereunder (and so long as such newly promoted employee’s compensation and other
terms and conditions of employment are substantially comparable to those of the employee that he or she is replacing); (B) take
any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation
or benefits; (C) grant any new equity-based or equity-linked awards or Company Performance Cash Unit Awards or other long-term compensation
awards, amend or modify the terms of any outstanding equity-based or equity-linked awards or Company Performance Cash Unit Awards or
other long-term compensation awards or approve treatment of outstanding equity awards or Company Performance Cash Unit Awards in connection
with the Transactions that is inconsistent with the treatment contemplated by Section 3.2; (D) other than in the Ordinary
Course, pay or agree to pay to any current or former director, officer, employee or other service provider any pension, retirement allowance
or other benefit not required by the terms of any Company Benefit Plan existing as of the date hereof; (E) enter into any new, or
materially amend any existing, employment or severance agreement or, except in the Ordinary Course, any termination agreement, in any
case with any current or former director, officer, vice-president or higher level employee or service provider except for entry into
offer letters with newly hired employees on a form that has previously been provided by Parent to the Company or a form that is substantially
similar thereto; (F) establish or adopt any benefit or compensation plan, policy, program, agreement or arrangement that was not
in existence prior to the date of this Agreement but that would be a Company Benefit Plan if in effect on the date of this Agreement,
or amend or terminate any Company Benefit Plan in existence on the date of this Agreement, other than de minimis administrative
amendments that do not have the effect of enhancing any benefits thereunder or otherwise resulting in increased costs to the Company
or any of its Subsidiaries except for (i) changes to the contractual terms of health and welfare plans made in the Ordinary Course
that do not materially increase the cost to Parent and its Subsidiaries, or (ii) arrangements necessary to effectuate any expressly
permitted actions under this clause 6.1(b)(ix) on terms and conditions provided herein; (G) hire or promote any employee
or engage any other service provider (who is a natural person) who is (or would be) an executive officer or who has (or would have) an
annualized base salary in excess of $300,000 (except for the hire or promotion of an employee as is reasonably necessary to replace any
employee, so long as the new employee’s compensation and other terms and conditions of employment are substantially comparable
to those of the employee being replaced); (H) terminate the employment of any executive officer other than for cause; or (I) enter
into, amend or terminate any collective bargaining agreement with any labor union, works council or labor organization;
(x) (A) incur,
create, assume, repurchase or offer to repurchase any Indebtedness or guarantee any such Indebtedness of another Person or (B) create
any Encumbrances on any property or assets of the Company or any of its Subsidiaries in connection with any Indebtedness thereof, other
than Permitted Encumbrances; provided, however, that the foregoing clauses (A) and (B) shall not
restrict (1) the incurrence or repayment of Indebtedness under the Company Credit Facility in the Ordinary Course, (2) the
incurrence or repayment of Indebtedness by the Company that is owed to any wholly owned Subsidiary of the Company or by any Subsidiary
of the Company that is owed to the Company or a wholly owned Subsidiary of the Company, (3) the incurrence or assumption of Indebtedness
in connection with any acquisition permitted by Sections 6.1(b)(iv) and 6.1(b)(v), (4) the incurrence of
additional Indebtedness in an amount not to exceed (x) at any time on or prior to June 30, 2024, $50,000,000, and (y) at
any time after June 30, 2024, an additional $50,000,000 (for an aggregate permitted amount of $100,000,000), (5) the incurrence
of any Indebtedness (such new Indebtedness, the “Company Refinancing Indebtedness”) that replaces, renews, extends,
refinances or refunds existing Indebtedness (other than in respect of the Company Credit Facility) (such existing Indebtedness, the “Company
Refinanced Indebtedness”) (including Indebtedness incurred to repay or refinance related fees, premiums and expenses) and the
repurchase or repayment of such Company Refinanced Indebtedness; provided that (A) such Company Refinancing Indebtedness
does not contain covenants and events of default that are more restrictive in any material respect than those under the Company Refinanced
Indebtedness as in effect on the date hereof, (B) such Company Refinancing Indebtedness does not contain terms or provisions that
prohibit or restrict the Transactions contemplated by the terms of this Agreement except for encumbrances or restrictions that are no
more restrictive in any material respect than those under the Company Refinanced Indebtedness, and (C) to the extent the Company
Refinanced Indebtedness is unsecured and/or subordinated (including in right of payment) to any other Indebtedness of the Company, such
Company Refinancing Indebtedness is unsecured and/or subordinated (including in right of payment) to such other Indebtedness on terms
at least as favorable to the holders of such senior Indebtedness as those contained in the documentation governing the Company Refinanced
Indebtedness, (6) the repurchase or repayment of Indebtedness within one year of its maturity date or (7) the creation of any
Encumbrance securing Indebtedness permitted by the foregoing clauses (1), (2), (3), (4) or (5);
(xi) other
than in the Ordinary Course, (A) enter into any contract that would be a Company Contract if it were in effect on the date of this
Agreement, (B) modify, amend, terminate or assign, or waive or assign any rights under, any Company Contract (other than the renewal
of an existing Company Contract on substantially the same terms), or (C) except to the extent necessary to remain in compliance
with the Company Credit Facility, enter into any material Derivative Transaction;
(xii) other
than in the Ordinary Course or with respect to amounts that are not material to such Party and its Subsidiaries, taken as a whole, cancel,
modify or waive any debts or claims held by the Company or any of its Subsidiaries or waive any rights held by the Company or any of
its Subsidiaries;
(xiii) waive,
release, assign, settle or compromise or offer or propose to waive, release, assign, settle or compromise, any material Proceeding (excluding
any Proceeding in respect of Taxes) other than (A) the settlement of such Proceedings involving only the payment of monetary damages
by the Company or any of its Subsidiaries of any amount not exceeding $3,000,000 individually or $10,000,000 in the aggregate and (B) as
would not result in any material restriction on future activity or conduct or a finding or admission of a violation of Law; provided,
that the Company shall be permitted to settle any Transaction Litigation in accordance with Section 6.11;
(xiv) make
or commit to make any capital expenditures that are, in the aggregate for any fiscal quarter, greater than 115% of the aggregate amount
of capital expenditures (excluding capitalized interest, which is set forth on Schedule 6.1(b)(xiv)) contemplated for such
fiscal quarter by the Company’s annual capital expenditure budget as set forth in Schedule 6.1(b)(xiv) of the
Company Disclosure Letter, except for capital expenditures to repair damage resulting from insured casualty events or capital expenditures
required on an emergency basis or for the safety of individuals, assets or the environments in which individuals perform work for the
Company and its Subsidiaries (provided that the Company shall notify Parent of any such emergency expenditure as soon as reasonably
practicable) or delayed capital expenditures from a previous fiscal quarter’s capital expenditure budget in the Ordinary Course;
(xv) take
any action, cause any action to be taken, knowingly fail to take any action or knowingly fail to cause any action to be taken, which
action or failure to act would prevent or impede, or would be reasonably likely to prevent or impede, the Integrated Mergers, taken together,
from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xvi) fail
to maintain in full force and effect in all material respects, or fail to replace or renew, the insurance policies of the Company and
its Subsidiaries at a level at least comparable to current levels or otherwise in a manner inconsistent with past practice; or
(xvii) agree
to take any action that is prohibited by this Section 6.1(b).
Section 6.2 Conduct
of Parent Business Pending the Merger.
(a) Except
(i) as set forth on Schedule 6.2(a) of the Parent Disclosure Letter, (ii) as expressly permitted, contemplated
or required by this Agreement, (iii) as may be required by applicable Law, or (iv) as otherwise consented to by the Company
in writing (which consent shall not be unreasonably withheld, delayed or conditioned), Parent covenants and agrees that, until the earlier
of the Effective Time and the termination of this Agreement pursuant to Article VIII, it shall, and shall cause each of its
Subsidiaries to, use reasonable best efforts to conduct its businesses in the Ordinary Course, including by using reasonable best efforts
to preserve substantially intact its present business organization, goodwill and assets, to keep available the services of its current
officers and employees and preserve its existing relationships with Governmental Entities and its significant customers, suppliers, licensors,
licensees, distributors, lessors and others having significant business dealings with it.
(b) Except
(i) as set forth on Schedule 6.2(b) of the Parent Disclosure Letter, (ii) as expressly permitted or required
by this Agreement, (iii) as may be required by applicable Law, or (iv) as otherwise consented to by the Company in writing
(which consent shall not be unreasonably withheld, delayed or conditioned), until the earlier of the Effective Time and the termination
of this Agreement pursuant to Article VIII, Parent shall not, and shall not permit its Subsidiaries to (in each case whether
directly or indirectly or by merger, consolidation, division, operation of law or otherwise):
(i) (A) declare,
set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests
in, Parent or its Subsidiaries, except for (x) regular quarterly cash dividends payable by Parent in the Ordinary Course pursuant
to the formula set forth in Parent’s dividend policy, which is set forth on Schedule 6.2(b)(i) of the Parent Disclosure
Letter (which, for the avoidance of doubt, shall not include any special or other extraordinary dividends) and (y) dividends and
distributions by a direct or indirect wholly owned Subsidiary of Parent to Parent or another direct or indirect wholly owned Subsidiary
of Parent; (B) split, combine, exchange, subdivide, recapitalize or reclassify any capital stock of, or other equity interests in,
or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for equity interests
in Parent or any of its Subsidiaries; or (C) purchase, redeem or otherwise acquire, or offer to purchase, redeem or otherwise acquire,
any capital stock of, or other equity interests in, Parent, or any Subsidiary of Parent, except as required by the terms of any capital
stock or equity interest of a Subsidiary or in respect of any equity awards outstanding as of the date hereof or issued after the date
hereof in accordance with this Agreement in accordance with the terms of the Parent Stock Plan and applicable award agreements;
(ii) offer,
issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, or other equity
interests in, Parent or any of its Subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any
such capital stock or equity interests, other than: (A) the delivery of Parent Common Stock upon the exercise, vesting or settlement
of any equity awards outstanding as of the date hereof or granted after the date hereof in compliance with this Agreement in accordance
with the terms of the Parent Stock Plans (or any successor equity compensation plans) and applicable award agreements; (B) any equity
awards issued in the Ordinary Course after the date hereof under the Parent Stock Plans (or any successor equity compensation plans)
as otherwise allowed under the terms of this Agreement; (C) the issuance of shares of Parent Common Stock upon the exercise of Parent
Warrants outstanding on the date hereof; (D) the issuance of Reserved Shares and Reserved Warrants to satisfy general unsecured
claims; and (E) issuances by a wholly owned Subsidiary of Parent of such Subsidiary’s capital stock or other equity interests
to Parent or any other wholly owned Subsidiary of Parent;
(iii) amend
or propose to amend Parent’s Organizational Documents or amend or propose to amend the Organizational Documents of any of Parent’s
Subsidiaries (other than ministerial changes);
(iv) (A) merge,
consolidate, combine or amalgamate with any Person or effect any division transaction, in each case, other than between wholly owned
Subsidiaries of Parent or (B) acquire or agree to acquire or make an investment in (including by merging or consolidating with,
purchasing any equity interest in or a substantial portion of the assets of, licensing, or by any other manner), any assets, properties
or any business or any corporation, partnership, association or other business organization or division thereof, in each case, other
than acquisitions for which the consideration is less than $750,000,000 in the aggregate;
(v) sell,
lease, swap, exchange, transfer, farmout, license, Encumber (other than Permitted Encumbrances), abandon, permit to lapse, discontinue
or otherwise dispose of, or agree to sell, lease, swap, exchange, transfer, farmout, license, Encumber (other than Permitted Encumbrances),
abandon, permit to lapse, discontinue or otherwise dispose of, any material portion of its assets or properties, other than sales, leases,
exchanges or dispositions for which the consideration is less than $750,000,000, in the aggregate;
(vi) authorize,
recommend, propose, enter into, adopt a plan or announce an intention to adopt a plan of complete or partial liquidation, dissolution,
restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries, other than such transactions among wholly
owned Subsidiaries of Parent;
(vii) change
in any material respect its financial accounting principles, practices or methods that would materially affect the consolidated assets,
liabilities or results of operations of Parent and its Subsidiaries, except as required by GAAP or applicable Law;
(viii) (A) make,
change or revoke any material Tax election or accounting method, but excluding any election that must be made periodically and is made
consistent with past practice, (B) file any material amended Tax Return, (C) except to the extent otherwise required by applicable
Law, file any material Tax Return other than on a basis consistent with past practice, (D) consent to any extension or waiver of
the limitation period applicable to any material claim or assessment in respect of material Taxes, (E) enter into any material Tax
allocation, sharing or indemnity agreement, any material Tax holiday agreement or other similar agreement with respect to Taxes, (F) enter
into any closing agreement with respect to material Taxes, (G) settle or compromise any material Tax Proceeding, or (H) surrender
any right to claim a material Tax refund, offset or other reduction in Tax liability;
(ix) (A) incur,
create, assume, repurchase or offer to repurchase any Indebtedness or guarantee any such Indebtedness of another Person or (B) create
any Encumbrances on any property or assets of Parent or any of its Subsidiaries in connection with any Indebtedness thereof, other than
Permitted Encumbrances; provided, however, that the foregoing clauses (A) and (B) shall not restrict
(1) the incurrence or repayment of Indebtedness under the Parent Credit Facility in the Ordinary Course, (2) the incurrence
or repayment of Indebtedness by Parent that is owed to any wholly owned Subsidiary of Parent or by any Subsidiary of Parent that is owed
to Parent or a wholly owned Subsidiary of Parent, (3) the incurrence or assumption of Indebtedness in connection with any acquisition
of any Person, assets or properties, (4) the incurrence of additional Indebtedness in an amount not to exceed (x) at any time
on or prior to June 30, 2024, $50,000,000, and (y) at any time after June 30, 2024, an additional $50,000,000 (for an
aggregate permitted amount of $100,000,000), (5) the incurrence of any Indebtedness (such new Indebtedness, the “Parent
Refinancing Indebtedness”) that replaces, renews, extends, refinances or refunds existing Indebtedness (other than in respect
of the Parent Credit Facility) (such existing Indebtedness, the “Parent Refinanced Indebtedness”) (including Indebtedness
incurred to repay or refinance related fees, premiums and expenses) and the repurchase or repayment of such Parent Refinanced Indebtedness;
provided that (A) such Parent Refinancing Indebtedness does not contain covenants and events of default that are more restrictive
in any material respect than those under the Parent Refinanced Indebtedness as in effect on the date hereof, (B) such Parent Refinancing
Indebtedness does not contain terms or provisions that prohibit or restrict the Transactions contemplated by the terms of this Agreement
except for encumbrances or restrictions that are no more restrictive in any material respect than those under the Parent Refinanced Indebtedness,
and (C) to the extent the Parent Refinanced Indebtedness is unsecured and/or subordinated (including in right of payment) to any
other Indebtedness of Parent, such Parent Refinancing Indebtedness is unsecured and/or subordinated (including in right of payment) to
such other Indebtedness on terms at least as favorable to the holders of such senior Indebtedness as those contained in the documentation
governing the Parent Refinanced Indebtedness, (6) the incurrence of any Indebtedness pursuant to the Debt Financing; (7) the
repurchase or repayment of Indebtedness within one year of its maturity date or (8) the creation of any Encumbrance securing Indebtedness
permitted by the foregoing clauses (1), (2), (3), (4), (5) or (6);
(x) other
than in the Ordinary Course or with respect to amounts that are not material to such Party and its Subsidiaries, taken as a whole, cancel,
modify or waive any debts or claims held by the Parent or any of its Subsidiaries or waive any rights held by the Parent or any of its
Subsidiaries;
(xi) other
than (1) in the Ordinary Course or (2) in respect of any Parent Contracts or Derivative Transactions which do not exceed $750,000,000
in the aggregate, (A) enter into any contract that would be a Parent Contract if it were in effect on the date of this Agreement,
(B) modify, amend, terminate or assign, or waive or assign any rights under, any Parent Contract (other than the renewal of an existing
Parent Contract on substantially the same terms), or (C) except to the extent necessary to remain in compliance with the Parent
Credit Facility, enter into any material Derivative Transaction;
(xii) waive,
release, assign, settle or compromise or offer or propose to waive, release, assign, settle or compromise, any Proceeding (excluding
any Proceeding in respect of Taxes) other than (A) the settlement of such proceedings involving only the payment of monetary damages
by the Parent or any of its Subsidiaries of any amount not exceeding $3,000,000 individually or $10,000,000 in the aggregate and (B) as
would not result in any restriction on future activity or conduct or a finding or admission of a violation of Law; provided, that
Parent shall be permitted to settle any Transaction Litigation in accordance with Section 6.11;
(xiii) make
or commit to make any capital expenditures that are, in the aggregate, greater than 115% of the aggregate amount of capital expenditures
contemplated for such fiscal quarter by Parent’s capital expenditure budget as set forth in Schedule 6.2(b)(xiii) of
the Parent Disclosure Letter, except for capital expenditures to repair damage resulting from insured casualty events or capital expenditures
required on an emergency basis or for the safety of individuals, assets or the environments in which individuals perform work for the
Parent and its Subsidiaries (provided that the Parent shall notify Company of any such emergency expenditure as soon as reasonably
practicable) or delayed capital expenditures from a previous fiscal quarter’s capital expenditure budget in the Ordinary Course;
(xiv) take
any action, cause any action to be taken, knowingly fail to take any action or knowingly fail to cause any action to be taken, which
action or failure to act would prevent or impede, or would be reasonably likely to prevent or impede, the Integrated Mergers, taken together,
from qualifying as a reorganization within the meaning of Section 368(a) of the Code;
(xv) fail
to maintain in full force and effect in all material respects, or fail to replace or renew, the insurance policies of Parent and its
Subsidiaries at a level at least comparable to current levels or otherwise in a manner inconsistent with past practice; or
(xvi) agree
to take any action that is prohibited by this Section 6.2(b).
Section 6.3 No
Solicitation by the Company.
(a) From
and after the date of this Agreement and until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII,
the Company and its officers and directors will, and will cause the Company’s Subsidiaries and its and their controlled Affiliates
and respective officers and directors to, and will use their reasonable best efforts to cause the other Representatives to, immediately
cease, and cause to be terminated, any solicitation of, discussion or negotiations with any Person conducted heretofore by the Company
or any of its Subsidiaries, their respective controlled Affiliates or Representatives with respect to any inquiry, proposal or offer
that relates to, constitutes, or could reasonably be expected to lead to, a Company Competing Proposal. The Company shall, promptly following
the execution and delivery of this Agreement, terminate any physical or electronic data room relating to any potential Company Competing
Proposal.
(b) From
and after the date of this Agreement and until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII,
the Company and its officers and directors will not, and will cause the Company’s Subsidiaries and its and their respective controlled
Affiliates and respective officers and directors not to, and will use reasonable best efforts to cause the other Representatives not
to, directly or indirectly:
(i) initiate,
solicit, seek, propose, knowingly encourage, or knowingly facilitate (including by way of furnishing non-public information) any inquiry
regarding the making, submission or announcement by any Person (other than Parent or its Subsidiaries) of any proposal or offer, including
any proposal or offer to the Company’s stockholders, that constitutes, or could reasonably be expected to lead to, a Company Competing
Proposal;
(ii) engage
in, continue or otherwise participate in any discussions with any Person with respect to or negotiations with any Person with respect
to, relating to, or in furtherance of a Company Competing Proposal or any inquiry, proposal or offer that could reasonably be expected
to lead to a Company Competing Proposal;
(iii) furnish
or afford access to any material non-public information regarding the Company or its Subsidiaries to any Person (other than Parent and
its Subsidiaries) in connection with, for the purpose of soliciting, initiating, knowingly encouraging or knowingly facilitating, or
in response to any Company Competing Proposal or any inquiry, proposal or offer that could reasonably be expected to lead to a Company
Competing Proposal;
(iv) approve,
adopt, recommend, agree to or enter into, or propose to approve, adopt, recommend, agree to or enter into, any inquiry, proposal or offer
that constitutes, or could reasonably be expected to lead to, a Company Alternative Acquisition Agreement;
(v) enter
into any letter of intent, term sheet, memorandum of understanding, merger agreement, acquisition agreement, exchange agreement or duly
execute any other agreement (whether binding or not) with respect to any inquiry, proposal or offer that constitutes, or could reasonably
be expected to lead to, a Company Competing Proposal or that would require, or would reasonably be expected to require, the Company to
abandon, terminate or fail to consummate the Integrated Mergers or any other transaction contemplated by this Agreement;
(vi) waive
or release any Person from, forebear in the enforcement of, or amend or terminate any standstill agreement or any standstill provisions
of any other contract; provided that if the Company (acting under the direction of the Company Board) determines in good faith
after consultation with the Company’s outside legal counsel that the failure to waive a particular standstill provision would be
inconsistent with the relevant directors’ fiduciary duties under applicable Law, then the Company may waive such standstill provision,
solely to the extent necessary to permit a third party to make and pursue a non-public Company Competing Proposal that the Company reasonably
believes is likely to lead to a Company Superior Proposal;
(vii) submit
any Company Competing Proposal to the vote of the stockholders of the Company; or
(viii) resolve
or agree to do any of the foregoing.
(c) Notwithstanding
anything to the contrary in this Agreement, prior to obtaining the Company Stockholder Approval, the Company or any of its Representatives
may:
(i) provide
information in response to a request therefor by a Person who has made an unsolicited bona fide written Company Competing Proposal or
any inquiry, proposal or offer with respect to (or that could reasonably be expected to lead to) a Company Competing Proposal after the
date hereof that did not result from a breach of this Section 6.3 if the Company receives from the Person so requesting such
information an executed confidentiality agreement on terms not less restrictive to the other party than those contained in the Confidentiality
Agreement (an “Acceptable Confidentiality Agreement”), it being understood that such Acceptable Confidentiality Agreement
need not prohibit the making, or amendment, of a Company Competing Proposal and shall not prohibit compliance by the Company with this
Section 6.3, and the Company shall promptly (and, in any event, within 24 hours) disclose and provide copies of such Acceptable
Confidentiality Agreement and any such information provided to such Person to Parent to the extent not previously provided to Parent;
or
(ii) engage
or participate in any discussions or negotiations with any Person who has made such an unsolicited bona fide written Company Competing
Proposal after the date hereof that did not result from a breach of this Section 6.3;
in each case, if and only to the extent that,
prior to taking any action described in Section 6.3(c)(i) or Section 6.3(c)(ii), (A) the Company provides
the notice to Parent required by Section 6.3(d) and the Company Board determines in good faith after consultation with
its outside legal counsel that failure to take such action in light of the Company Competing Proposal or such other inquiry, proposal
or offer, as applicable, would be inconsistent with the Company Board’s fiduciary duties under applicable law, and (B) the
Company Board has determined in good faith based on the information then available and after consultation with its financial advisor
and outside legal counsel that such Company Competing Proposal either constitutes a Company Superior Proposal or is reasonably likely
to result in a Company Superior Proposal, provided that, notwithstanding anything to the contrary in this Section 6.3,
if the Company receives any Company Competing Proposal or any inquiry, proposal or offer with respect to (or that could reasonably be
expected to lead to) a Company Competing Proposal, the Company may seek clarification of the terms and conditions thereof so as to determine
whether such Company Competing Proposal or any inquiry, proposal or offer with respect to (or that could reasonably be expected to lead
to) a Company Competing Proposal constitutes a Company Superior Proposal or is reasonably likely to result in a Company Superior Proposal.
(d) From
and after the date of this Agreement, the Company shall promptly (and in any event, within 24 hours) notify Parent in writing of the
receipt by the Company of any Company Competing Proposal or any inquiry, proposal or offer with respect to (or that could reasonably
be expected to lead to) a Company Competing Proposal made on or after the date of this Agreement, any request for information or data
relating to the Company or any of its Subsidiaries made by any Person in connection with (or that could reasonably be expected to lead
to) a Company Competing Proposal or any request for discussions or negotiations with the Company or a Representative of the Company relating
to (or that could reasonably be expected to lead to) a Company Competing Proposal, and the Company shall notify Parent of the identity
of the Person making or submitting such request, inquiry, proposal or offer and provide to Parent (i) a copy of any such request,
inquiry, proposal or offer made in writing provided to the Company or any of its Subsidiaries or any of its and their respective Representatives
or (ii) if any such inquiry, request, proposal or offer is not made in writing, a written summary of such request, proposal or offer
(including the material terms and conditions thereof), in each case together with copies of any proposed transaction agreements. Thereafter
the Company shall keep Parent reasonably informed in writing on a current basis (and, in any event, within twenty-four (24) hours) regarding
material changes to the status of any such requests, inquiries, proposals or offers (including any amendments or changes thereto, which,
for the avoidance of doubt, shall include (among other things) any changes to the form or amount of consideration) and shall reasonably
apprise Parent of the status of any such negotiations to the extent the status changes in any material respect. Without limiting the
foregoing, the Company shall notify Parent if the Company determines to engage in discussions or negotiations concerning a Company Competing
Proposal.
(e) Except
as expressly permitted by Section 6.3, neither the Company Board nor any committee of the Company Board shall:
(i) withhold,
withdraw, qualify or modify, or publicly propose or announce any intention to withhold, withdraw, qualify or modify, in a manner adverse
to Parent or Merger Sub, the Company Board Recommendation;
(ii) fail
to include the Company Board Recommendation in the Joint Proxy Statement/Prospectus;
(iii) fail
to publicly announce, within ten (10) Business Days after a tender offer or exchange offer relating to the equity securities of
the Company shall have been commenced by any third party other than Parent and its Affiliates (and in no event later than one (1) Business
Day prior to the date of the Company Stockholders Meeting, as it may be postponed or adjourned in accordance with the terms of this Agreement),
a statement disclosing that the Company Board recommends rejection of such tender or exchange offer (for the avoidance of doubt, the
taking of no position or a neutral position by the Company Board in respect of the acceptance of any such tender offer or exchange offer
as of the end of such period shall constitute a failure to publicly announce that the Company Board recommends rejection of such tender
or exchange offer);
(iv) if
requested by Parent, fail to issue, within five (5) Business Days after a Company Competing Proposal is publicly announced (and
in no event later than one (1) Business Day prior to the date of the Company Stockholders Meeting, as it may be postponed or adjourned
in accordance with the terms of this Agreement), a press release reaffirming the Company Board Recommendation, which request may not
be made more than two times in respect of any specific Company Competing Proposal;
(v) approve,
recommend or declare advisable (or publicly propose to do so) any Company Competing Proposal;
(vi) approve,
adopt, recommend, agree to or enter into, or propose or resolve to approve, adopt, recommend, agree to or enter into, any letter of intent,
memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement,
partnership agreement or other agreement (other than an Acceptable Confidentiality Agreement entered into in accordance with Section 6.3(b))
relating to a Company Competing Proposal (a “Company Alternative Acquisition Agreement”);
(vii) cause
or permit the Company to enter into a Company Alternative Acquisition Agreement; or
(viii) publicly
propose to do any of the foregoing (together with any of the actions set forth in the foregoing clauses (i) though (vii),
a “Company Change of Recommendation”).
(f) Notwithstanding
anything in this Agreement to the contrary, prior to the receipt of the Company Stockholder Approval:
(i) the
Company Board may, after consultation with its outside legal counsel, make such disclosures as the Company Board determines in good faith
are necessary to comply with Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or other disclosure required
to be made in the Joint Proxy Statement/Prospectus by applicable U.S. federal securities Laws; provided, however, that
if such disclosure by the Company Board has the effect of withdrawing or materially and adversely modifying the Company Board Recommendation,
such disclosure shall be deemed to be a Company Change of Recommendation and Parent shall have the right to terminate this Agreement
as set forth in Section 8.1(c)(i);
(ii) in
response to a bona fide written Company Competing Proposal from a third party that has not been withdrawn, was received after
the date hereof, was not solicited at any time following the execution of this Agreement and did not result from a breach of the obligations
set forth in this Section 6.3, the Company Board may (x) effect a Company Change of Recommendation or (y) terminate
this Agreement pursuant to Section 8.1(d)(ii) in response to a Company Superior Proposal; provided, however,
that such Company Change of Recommendation or termination of this Agreement, as applicable, may not be made unless and until:
(A) the
Company Board determines in good faith after consultation with its financial advisors and outside legal counsel that such Company Competing
Proposal is a Company Superior Proposal;
(B) the
Company Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that failure to effect
a Company Change of Recommendation in response to such Company Superior Proposal would be inconsistent with the fiduciary duties of the
directors under applicable Law;
(C) the
Company provides Parent written notice of such proposed action four (4) Business Days in advance, which notice shall set forth in
writing that the Company Board intends to take such action, shall include the identity of the Person making such Company Competing Proposal
and shall contain a copy of such proposal and a draft of the definitive agreement to be entered into in connection therewith (or, if
not in writing, a written summary of the material terms and conditions thereof);
(D) during
the four (4) Business Day period commencing on the date of Parent’s receipt of the notice specified in clause (C) above
(subject to any applicable extensions), the Company negotiates (and causes its officers, employees, financial advisors, outside legal
counsel and other Representatives to negotiate) in good faith with Parent (to the extent Parent wishes to negotiate) to permit Parent
to make such adjustments, amendments or revisions to the terms of this Agreement so that the Company Competing Proposal that is the subject
of the notice specified in clause (C) above ceases to be a Company Superior Proposal;
(E) at
the end of the four (4) Business Day period, prior to taking action to effect a Company Change of Recommendation, the Company Board
takes into account any binding irrevocable adjustments, amendments or revisions to the terms of this Agreement proposed by Parent in
writing and any other information offered by Parent in response to the notice specified in clause (C) above, and determines
in good faith after consultation with its financial advisors and outside legal counsel, that the Company Competing Proposal remains a
Company Superior Proposal and that the failure to effect a Company Change of Recommendation in response to such Company Superior Proposal
would continue to be inconsistent with the fiduciary duties of the directors under applicable Law; provided that if there is any
material development with respect to or material modification of such Company Competing Proposal, the Company shall, in each case, be
required to deliver to Parent an additional notice consistent with that described in clause (C) above and a new negotiation
period under clause (D) above shall commence (except that the original four (4) Business Day notice period referred
to in clause (C) above) shall instead be equal to the longer of (1) two (2) Business Days and (2) the period
remaining under the first and original four (4) Business Day notice period of clause (C) above, during which time the
Company shall be required to comply with the requirements of clause (D) above and this clause anew with respect to such additional
notice (but substituting the time periods therein with the foregoing extended period); and
(F) in
the case of the Company terminating this Agreement to enter into a definitive agreement with respect to a Company Superior Proposal,
the Company shall have, prior to or contemporaneously with such termination, paid, or caused the payment of, the Company Termination
Fee.
(iii) in
response to a Company Intervening Event that is not caused by a Company Competing Proposal, that occurs or arises after the date of this
Agreement and that did not arise from or in connection with a material breach of this Agreement by the Company, the Company Board may
effect a Company Change of Recommendation; provided, however, that such Company Change of Recommendation may not be made
unless and until:
(A) the
Company Board determines in good faith after consultation with its financial advisors and outside legal counsel that a Company Intervening
Event has occurred;
(B) the
Company Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that failure to effect
a Company Change of Recommendation in response to such Company Intervening Event would be inconsistent with the fiduciary duties of the
directors under applicable Law;
(C) the
Company provides Parent written notice of such proposed action and the basis thereof four (4) Business Days in advance, which notice
shall set forth in writing that the Company Board intends to take such action and includes the reasons therefor a reasonable description
of the facts and circumstances of the Company Intervening Event and the reasons for the Company Board’s determination;
(D) during
the four (4) Business Day period commencing on the date of Parent’s receipt of the notice specified in clause (C) above
(subject to any applicable extensions), the Company negotiates (and causes its officers, employees, financial advisor, outside legal
counsel and other Representatives to negotiate) in good faith with Parent (to the extent Parent wishes to negotiate) to make such adjustments,
amendments or revisions to the terms of this Agreement as would permit the Company Board not to effect a Company Change of Recommendation
in response thereto; and
(E) at
the end of the four (4) Business Day period, prior to taking action to effect a Company Change of Recommendation, the Company Board
takes into account any binding irrevocable adjustments, amendments or revisions to the terms of this Agreement proposed by Parent in
writing and any other information offered by Parent in response to the notice specified in clause (C) above, and determines
in good faith after consultation with its financial advisors and outside legal counsel, that the failure to effect a Company Change of
Recommendation in response to such Company Intervening Event would continue to be inconsistent with the fiduciary duties of the directors
under applicable Law if such adjustments, amendments or revisions irrevocably offered in writing by Parent were to be given effect; provided that if there is any material development with respect to such Company Intervening Event, the Company shall, in each case, be required
to deliver to Parent an additional notice consistent with that described in clause (C) above and a new negotiation period
under clause (D) above shall commence (except that the original four (4) Business Day notice period referred to in clause
(C) above shall instead be equal to the longer of (1) two (2) Business Days and (2) the period remaining under
the first and original four (4) Business Day notice period of clause (C) above, during which time the Company shall
be required to comply with the requirements of clause (D) above and this clause anew with respect to such additional notice
(but substituting the time periods therein with the foregoing extended period)).
(g) Notwithstanding
anything to the contrary in this Section 6.3, any action, or failure to take action of a Representative of the Company that
is taken by, at the direction of, or at the request or on behalf of the Company or any of its Subsidiaries or its and their directors,
officers, employees or Affiliates in violation of this Section 6.3, shall be deemed to be a breach of this Section 6.3
by the Company.
Section 6.4 No
Solicitation by Parent.
(a) From
and after the date of this Agreement and until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII,
Parent and its officers and directors will, and will cause Parent’s Subsidiaries and its and their controlled Affiliates and respective
officers and directors to, and will use their reasonable best efforts to cause the other Representatives to, immediately cease, and cause
to be terminated, any solicitation of, discussion or negotiations with any Person conducted heretofore by Parent or any of its Subsidiaries,
their respective controlled Affiliates or Representatives with respect to any inquiry, proposal or offer that relates to, constitutes,
or could reasonably be expected to lead to, a Parent Competing Proposal. Parent shall, promptly following the execution and delivery
of this Agreement, terminate any access any such Persons may have to any physical or electronic data room relating to any potential Parent
Competing Proposal.
(b) From
and after the date of this Agreement and until the earlier of the Effective Time and termination of this Agreement pursuant to Article VIII,
Parent and its officers and directors will not, and will cause Parent’s Subsidiaries and its and their respective controlled Affiliates
and respective officers and directors not to, and will use their reasonable best efforts to cause the other Representatives not to, directly
or indirectly:
(i) initiate,
solicit, seek, propose, knowingly encourage, or knowingly facilitate (including by way of furnishing non-public information) any inquiry
regarding the making, submission or announcement by any Person (other than the Company or its Subsidiaries) of any proposal or offer,
including any proposal or offer to Parent’s stockholders, that constitutes, or could reasonably be expected to lead to, a Parent
Competing Proposal;
(ii) engage
in, continue or otherwise participate in any discussions with any Person with respect to or negotiations with any Person with respect
to, relating to, or in furtherance of a Parent Competing Proposal or any inquiry, proposal or offer that could reasonably be expected
to lead to a Parent Competing Proposal;
(iii) furnish
or afford access to any material non-public information regarding Parent or its Subsidiaries to any Person (other than the Company and
its Subsidiaries) in connection with, for the purpose of soliciting, initiating, knowingly encouraging or knowingly facilitating, or
in response to any Parent Competing Proposal or any inquiry, proposal or offer that could reasonably be expected to lead to a Parent
Competing Proposal;
(iv) approve,
adopt, recommend, agree to or enter into, or propose to approve, adopt, recommend, agree to or enter into, any inquiry, proposal or offer
that constitutes, or could reasonably be expected to lead to, a Parent Alternative Acquisition Agreement;
(v) enter
into any letter of intent, term sheet, memorandum of understanding, merger agreement, acquisition agreement, exchange agreement or duly
execute any other agreement (whether binding or not) with respect to any inquiry, proposal or offer that constitutes, or could reasonably
be expected to lead to, a Parent Competing Proposal or that would require, or would reasonably be expected to require Parent to abandon,
terminate or fail to consummate the Integrated Mergers or any other transaction contemplated by this Agreement;
(vi) waive
or release any Person from, forebear in the enforcement of, or amend or terminate any standstill agreement or any standstill provisions
of any other contract; provided that if Parent (acting under the direction of the Parent Board) determines in good faith after
consultation with Parent’s outside legal counsel that the failure to waive a particular standstill provision would be inconsistent
with the relevant directors’ fiduciary duties under applicable Law, then Parent may waive such standstill provision, solely to
the extent necessary to permit a third party to make and pursue a non-public Parent Competing Proposal that Parent reasonably believes
is likely to lead to a Parent Superior Proposal;
(vii) submit
any Parent Competing Proposal to the vote of the stockholders of Parent; or
(viii) resolve
or agree to do any of the foregoing.
(c) Notwithstanding
anything to the contrary in this Agreement, prior to obtaining the Parent Stockholder Approval, Parent or any of its Representatives
may:
(i) provide
information in response to a request therefor by a Person who has made an unsolicited bona fide written Parent Competing Proposal or
any inquiry, proposal or offer with respect to (or that could reasonably be expected to lead to) a Parent Competing Proposal after the
date hereof that did not result from a breach of this Section 6.4 if Parent receives from the Person so requesting such information
an Acceptable Confidentiality Agreement, it being understood that such Acceptable Confidentiality Agreement need not prohibit the making,
or amendment, of a Parent Competing Proposal and shall not prohibit compliance by Parent with this Section 6.4, and Parent
shall promptly (and, in any event, within 24 hours) disclose and provide copies of such Acceptable Confidentiality Agreement and any
such information provided to such Person to the Company to the extent not previously provided to the Company; or
(ii) engage
or participate in any discussions or negotiations with any Person who has made such an unsolicited bona fide written Parent Competing
Proposal after the date hereof that did not result from a breach of this Section 6.4;
in each case, if and only to the extent that,
prior to taking any action described in Section 6.4(c)(i) or Section 6.4(c)(ii), (A) Parent provides
the notice to the Company required by Section 6.4(d) and the Parent Board determines in good faith after consultation
with its outside legal counsel that failure to take such action in light of the Parent Competing Proposal or such other inquiry, proposal
or offer, as applicable, would be inconsistent with the Parent Board’s fiduciary duties under applicable law, and (B) the
Parent Board has determined in good faith based on the information then available and after consultation with its financial advisor and
outside legal counsel that such Parent Competing Proposal either constitutes a Parent Superior Proposal or is reasonably likely to result
in a Parent Superior Proposal, provided that, notwithstanding anything to the contrary in this Section 6.4, if Parent
receives any Parent Competing Proposal or any inquiry, proposal or offer with respect to (or that could reasonably be expected to lead
to) a Parent Competing Proposal, Parent may seek clarification of the terms and conditions thereof so as to determine whether such Parent
Competing Proposal or any inquiry, proposal or offer with respect to (or that could reasonably be expected to lead to) a Parent Competing
Proposal constitutes a Parent Superior Proposal or is reasonably likely to result in a Parent Superior Proposal.
(d) From
and after the date of this Agreement, Parent shall promptly (and in any event, within 24 hours) notify the Company in writing of the
receipt by Parent of any Parent Competing Proposal or any inquiry, proposal or offer with respect to (or that could reasonably be expected
to lead to) a Parent Competing Proposal made on or after the date of this Agreement, any request for information or data relating to
Parent or any of its Subsidiaries made by any Person in connection with (or that could reasonably be expected to lead to) a Parent Competing
Proposal or any request for discussions or negotiations with Parent or a Representative of Parent relating to (or that could reasonably
be expected to lead to) a Parent Competing Proposal, and Parent shall notify the Company of the identity of the Person making or submitting
such request, inquiry, proposal or offer and provide to the Company (i) a copy of any such request, inquiry, proposal or offer made
in writing provided to Parent or any of its Subsidiaries or any of its and their respective Representatives or (ii) if any such
request, inquiry, proposal or offer is not made in writing, a written summary of such request, proposal or offer (including the material
terms and conditions thereof), in each case together with copies of any proposed transaction agreements. Thereafter Parent shall keep
the Company reasonably informed in writing on a current basis (and, in any event, within twenty-four (24) hours) regarding material changes
to the status of any such requests, inquiries, proposals or offers (including any amendments or changes thereto, which, for the avoidance
of doubt, shall include (among other things) any changes to the form or amount of consideration) and shall reasonably apprise the Company
of the status of any such negotiations to the extent the status changes in any material respect. Without limiting the foregoing, Parent
shall notify the Company if Parent determines to engage in discussions or negotiations concerning a Parent Competing Proposal.
(e) Except
as expressly permitted by this Section 6.4, neither the Parent Board nor any committee of the Parent Board shall:
(i) withhold,
withdraw, qualify or modify, or publicly propose or announce any intention to withhold, withdraw, qualify or modify, in a manner adverse
to the Company, the Parent Board Recommendation;
(ii) fail
to include the Parent Board Recommendation in the Joint Proxy Statement/Prospectus;
(iii) fail
to publicly announce, within ten (10) Business Days after a tender offer or exchange offer relating to the equity securities of
Parent shall have been commenced by any third party other than the Company and its Affiliates (and in no event later than one (1) Business
Day prior to the date of the Parent Stockholders Meeting, as it may be postponed or adjourned in accordance with the terms of this Agreement),
a statement disclosing that the Parent Board recommends rejection of such tender or exchange offer (for the avoidance of doubt, the taking
of no position or a neutral position by the Parent Board in respect of the acceptance of any such tender offer or exchange offer as of
the end of such period shall constitute a failure to publicly announce that the Parent Board recommends rejection of such tender or exchange
offer);
(iv) if
requested by the Company, fail to issue, within five (5) Business Days after a Parent Competing Proposal is publicly announced (and
in no event later than one (1) Business Day prior to the date of the Parent Stockholders Meeting, as it may be postponed or adjourned
in accordance with the terms of this Agreement), a press release reaffirming the Parent Board Recommendation, which request may not be
made more than two times in respect of any specific Parent Competing Proposal;
(v) approve,
recommend or declare advisable (or publicly propose to do so) any Parent Competing Proposal;
(vi) approve,
adopt, recommend, agree to or enter into, or propose or resolve to approve, adopt, recommend, agree to or enter into, any letter of intent,
memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement,
partnership agreement or other agreement (other than an Acceptable Confidentiality Agreement entered into in accordance with Section 6.4(b))
relating to a Parent Competing Proposal (a “Parent Alternative Acquisition Agreement”);
(vii) cause
or permit Parent to enter into a Parent Alternative Acquisition Agreement; or
(viii) publicly
propose to do any of the foregoing (together with any of the actions set forth in the foregoing clauses (i) though (vii),
a “Parent Change of Recommendation”).
(f) Notwithstanding
anything in this Agreement to the contrary, prior to the receipt of the Parent Stockholder Approval:
(i) the
Parent Board may, after consultation with its outside legal counsel, make such disclosures as the Parent Board determines in good faith
are necessary to comply with Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or other disclosure required
to be made in the Joint Proxy Statement/Prospectus by applicable U.S. federal securities Laws; provided, however, that
if such disclosure by the Parent Board has the effect of withdrawing or materially and adversely modifying the Parent Board Recommendation,
such disclosure shall be deemed to be a Parent Change of Recommendation and the Company shall have the right to terminate this Agreement
as set forth in Section 8.1(d)(i);
(ii) in
response to a bona fide written Parent Competing Proposal from a third party that has not been withdrawn, was received after the
date hereof, was not solicited at any time following the execution of this Agreement and did not result from a breach of the obligations
set forth in this Section 6.4, the Parent Board may (x) effect a Parent Change of Recommendation or (y) terminate
this Agreement pursuant to Section 8.1(c)(ii) in response to a Parent Superior Proposal; provided, however,
that such Parent Change of Recommendation or termination of this Agreement, as applicable, may not be made unless and until:
(A) the
Parent Board determines in good faith after consultation with its financial advisors and outside legal counsel that such Parent Competing
Proposal is a Parent Superior Proposal;
(B) the
Parent Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that failure to effect
a Parent Change of Recommendation in response to such Parent Superior Proposal would be inconsistent with the fiduciary duties of the
directors under applicable Law;
(C) Parent
provides the Company written notice of such proposed action four (4) Business Days in advance, which notice shall set forth in writing
that the Parent Board intends to take such action, shall include the identity of the Person making such Parent Competing Proposal and
shall contain a copy of such proposal and a draft of the definitive agreement to be entered into in connection therewith (or, if not
in writing, a written summary of the material terms and conditions thereof);
(D) during
the four (4) Business Day period commencing on the date of the Company’s receipt of the notice specified in clause (C) above
(subject to any applicable extensions), Parent negotiates (and causes its officers, employees, financial advisors, outside legal counsel
and other Representatives to negotiate) in good faith with the Company (to the extent the Company wishes to negotiate) to permit the
Company to make such adjustments, amendments or revisions to the terms of this Agreement so that the Parent Competing Proposal that is
the subject of the notice specified in clause (C) above ceases to be a Parent Superior Proposal;
(E) at
the end of the four (4) Business Day period, prior to taking action to effect a Parent Change of Recommendation, the Parent Board
takes into account any binding irrevocable adjustments, amendments or revisions to the terms of this Agreement proposed by the Company
in writing and any other information offered by the Company in response to the notice specified in clause (C) above, and
determines in good faith after consultation with its financial advisors and outside legal counsel, that the Parent Competing Proposal
remains a Parent Superior Proposal and that the failure to effect a Parent Change of Recommendation in response to such Parent Superior
Proposal would be inconsistent with the fiduciary duties of the directors under applicable Law; provided that if there is any
material development with respect to or material modification of such Parent Competing Proposal, Parent shall, in each case, be required
to deliver to the Company an additional notice consistent with that described in clause (C) above and a new negotiation period
under clause (D) above shall commence (except that the original four (4) Business Day notice period referred to in clause (C) above
shall instead be equal to the longer of (1) two (2) Business Days and (2) the period remaining under the first and original
four (4) Business Day notice period of clause (C) above, during which time Parent shall be required to comply with the
requirements of clause (D) above and this clause anew with respect to such additional notice (but substituting the time periods
therein with the foregoing extended period)); and
(F) in
the case of Parent terminating this Agreement to enter into a definitive agreement with respect to a Parent Superior Proposal, Parent
shall have, prior to or contemporaneously with such termination, paid, or caused the payment of, the Parent Termination Fee.
(iii) in
response to a Parent Intervening Event that is not caused by a Parent Competing Proposal, that occurs or arises after the date of this
Agreement and that did not arise from or in connection with a breach of this Agreement by Parent, the Parent Board may effect a Parent
Change of Recommendation; provided, however, that such Parent Change of Recommendation may not be made unless and until:
(A) the
Parent Board determines in good faith after consultation with its financial advisors and outside legal counsel that a Parent Intervening
Event has occurred;
(B) the
Parent Board determines in good faith, after consultation with its financial advisors and outside legal counsel, that failure to effect
a Parent Change of Recommendation in response to such Parent Intervening Event would be inconsistent with the fiduciary duties of the
directors under applicable Law;
(C) Parent
provides the Company written notice of such proposed action and the basis thereof four (4) Business Days in advance, which notice
shall set forth in writing that the Parent Board intends to take such action and includes the reasons therefor a reasonable description
of the facts and circumstances of the Parent Intervening Event and the reasons for the Parent Board’s determination;
(D) during
the four (4) Business Day period commencing on the date of the Company’s receipt of the notice specified in clause (C) above
(subject to any applicable extensions), Parent negotiates (and causes its officers, employees, financial advisor, outside legal counsel
and other Representatives to negotiate) in good faith with the Company (to the extent the Company wishes to negotiate) to make such adjustments,
amendments or revisions to the terms of this Agreement as would permit the Parent Board not to effect a Parent Change of Recommendation
in response thereto; and
(E) at
the end of the four (4) Business Day period, prior to taking action to effect a Parent Change of Recommendation, the Parent Board
takes into account any binding irrevocable adjustments, amendments or revisions to the terms of this Agreement proposed by the Company
in writing and any other information offered by Parent in response to the notice specified in clause (C) above, and determines
in good faith after consultation with its financial advisors and outside legal counsel, that the failure to effect a Parent Change of
Recommendation in response to such Parent Intervening Event would continue to be inconsistent with the fiduciary duties of the directors
under applicable Law if such adjustments, amendments or revisions irrevocably offered in writing by the Company were to be given effect;
provided that if there is any material development with respect to such Parent Intervening Event, Parent shall, in each case,
be required to deliver to the Company an additional notice consistent with that described in clause (C) above and a new negotiation
period under clause (D) above shall commence (except that the original four (4) Business Day notice period referred
to in clause (C) above shall instead be equal to the longer of (1) two (2) Business Days and (2) the
period remaining under the first and original four (4) Business Day notice period of clause (C) above, during which
time Parent shall be required to comply with the requirements of clause (D) above and this clause anew with respect to such
additional notice (but substituting the time periods therein with the foregoing extended period)).
(g) Notwithstanding
anything to the contrary in this Section 6.4, any action, or failure to take action of a Representative of Parent that is
taken by, at the direction of or at the request or on behalf of Parent or any of its Subsidiaries or its and their directors, officers,
employees or Affiliates, in violation of this Section 6.4, shall be deemed to be a breach of this Section 6.4
by Parent.
Section 6.5 Preparation
of the Joint Proxy Statement/Prospectus and Registration Statement.
(a) Parent
will promptly furnish to the Company such data and information relating to it, its Subsidiaries (including Merger Sub) and the holders
of its capital stock, as the Company may reasonably request for the purpose of including such data and information in the Joint Proxy
Statement/Prospectus and any amendments or supplements thereto. The Company will promptly furnish to Parent such data and information
relating to it, its Subsidiaries and the holders of its capital stock, as Parent may reasonably request for the purpose of including
such data and information in the Joint Proxy Statement/Prospectus and the Registration Statement and any amendments or supplements thereto.
(b) Promptly
following the date hereof, the Company and Parent shall cooperate in preparing and shall use their respective reasonable best efforts
to cause to be filed with the SEC as promptly as practicable following the execution of this Agreement, and in any event no more than
forty-five (45) days following the date of this Agreement, a mutually acceptable (i) Joint Proxy Statement/Prospectus relating to
the matters to be submitted to the holders of Company Common Stock at the Company Stockholders Meeting and the matters to be submitted
to the holders of Parent Common Stock at the Parent Stockholders Meeting and (ii) Registration Statement (of which the Joint Proxy
Statement/Prospectus will be a part). The Company and Parent shall each use reasonable best efforts to cause the Joint Proxy Statement/Prospectus
and the Registration Statement to comply as to form and substance in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations promulgated thereunder and to respond as promptly as practicable to any comments
of the SEC or its staff. Parent and the Company shall each use its reasonable best efforts to cause the Registration Statement to become
effective under the Securities Act as soon after such filing as reasonably practicable and Parent shall use reasonable best efforts to
keep the Registration Statement effective as long as is necessary to consummate the Merger. Each of the Company and Parent will advise
the other promptly after it receives any request by the SEC for amendment of the Joint Proxy Statement/Prospectus or the Registration
Statement or comments thereon and responses thereto or any request by the SEC for additional information and Parent and the Company shall
jointly prepare any response to such comments or requests, and shall provide each other with copies of all correspondence that is provided
between it, on one hand, and by the SEC on the other hand. Each of Parent and the Company agrees to permit the other (in each case, to
the extent practicable), and their respective counsels, to participate in all meetings and conferences with the SEC. Each of Parent and
the Company shall use reasonable best efforts to cause all documents that it is responsible for filing with the SEC in connection with
the Transactions to comply as to form and substance in all material respects with the applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated thereunder. Notwithstanding the foregoing, prior to filing the Registration
Statement (or any amendment or supplement thereto) or filing or mailing the Joint Proxy Statement/Prospectus (or any amendment or supplement
thereto) or responding to any comments of the SEC with respect thereto, each of the Company and Parent will (A) provide the other
with a reasonable opportunity to review and comment on such document or response (including the proposed final version of such document
or response), (B) include in such document or response all comments reasonably and promptly proposed by the other and (C) not
file or mail such document or respond to the SEC prior to receiving the approval of the other, which approval shall not be unreasonably
withheld, conditioned or delayed.
(c) Parent
and the Company shall make all necessary filings with respect to the Integrated Mergers and the Transactions under the Securities Act
and the Exchange Act and applicable “blue sky” laws and the rules and regulations thereunder and the rules and
regulations of NASDAQ or the NYSE, as applicable. Each Party will advise the other, promptly after it receives notice thereof, of the
time when the Registration Statement has become effective or any supplement or amendment has been filed, the issuance of any stop or
cease-trade order, or the suspension of the qualification of the shares of Parent Common Stock issuable in connection with the Merger
for offering or sale in any jurisdiction. Each of the Company and Parent will use reasonable best efforts to have any such stop or cease-trade
order or suspension lifted, reversed or otherwise terminated.
(d) If
at any time prior to the Effective Time, any information relating to Parent or the Company, or any of their respective Affiliates, officers
or directors, should be discovered by Parent or the Company that should be set forth in an amendment or supplement to the Joint Proxy
Statement/Prospectus or the Registration Statement, so that such documents would not include any misstatement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading,
the Party that discovers such information shall promptly notify the other Party and an appropriate amendment or supplement describing
such information shall be promptly filed with the SEC and, to the extent required by applicable Law, disseminated to the stockholders
of the Company and the stockholders of Parent.
Section 6.6 Stockholders
Meetings.
(a) The
Company shall take all action necessary in accordance with applicable Laws and the Organizational Documents of the Company to duly give
notice of, convene and hold (in person or virtually, in accordance with applicable Law) the Company Stockholders Meeting, to be held
as promptly as practicable following the clearance of the Joint Proxy Statement/Prospectus by the SEC and the Registration Statement
is declared effective by the SEC (and in any event will use reasonable best efforts to convene such meeting within forty-five (45) days
thereof and no later than five (5) Business Days prior to the Outside Date). Except where a Company Change of Recommendation has
been made in compliance with Section 6.3, the Company Board shall recommend that the stockholders of the Company approve
and adopt this Agreement at the Company Stockholders Meeting and the Joint Proxy Statement/Prospectus shall include the Company Board
Recommendation. The Company shall solicit from stockholders of the Company proxies in favor of the adoption of this Agreement, use its
reasonable best efforts to obtain the Company Stockholder Approval and submit the proposal to adopt this Agreement to the stockholders
of the Company at the Company Stockholders Meeting. The Company shall ensure that all proxies solicited in connection with the Company
Stockholders Meeting are solicited in compliance with any applicable Laws. Notwithstanding anything to the contrary contained in this
Agreement, the Company (i) shall be required to adjourn or postpone the Company Stockholders Meeting (A) to the extent necessary
to ensure that any legally required supplement or amendment to the Joint Proxy Statement/Prospectus is provided to the Company’s
stockholders or (B) if, as of the time for which the Company Stockholders Meeting is scheduled, there are insufficient shares of
Company Common Stock represented (either in person or by proxy) to constitute a quorum necessary to conduct business at such Company
Stockholders Meeting and (ii) may adjourn or postpone the Company Stockholders Meeting with the written consent of Parent if, as
of the time for which the Company Stockholders Meeting is scheduled, there are insufficient shares of Company Common Stock represented
(either in person or by proxy) to obtain the Company Stockholder Approval; provided, however, that (x) unless otherwise
agreed to by the Parties, the Company Stockholders Meeting shall not be adjourned or postponed to a date that is more than ten (10) Business
Days after the date for which the meeting was previously scheduled except as may be required by applicable Law; (y) the Company
Stockholders Meeting shall not be adjourned or postponed to a date on or after five (5) Business Days prior to the Outside Date;
and (z) no such adjournment or postponement may have the effect of changing the record date for determining the stockholders of
the Company entitled to notice of or to vote at the Company Stockholders Meeting without the written consent of Parent (which consent
shall not be unreasonably withheld, conditioned, or delayed). If requested by Parent, the Company shall promptly provide Parent with
all voting tabulation reports relating to the Company Stockholders Meeting that have been prepared by the Company or the Company’s
transfer agent, proxy solicitor or other Representative, and shall otherwise keep Parent reasonably informed regarding the status of
the solicitation and any material oral or written communications from or to the Company’s stockholders with respect thereto. Unless
there has been a Company Change of Recommendation made in accordance with Section 6.3, the Parties agree to cooperate and
use their reasonable best efforts to defend against any efforts by any of the Company’s stockholders or any other Person to prevent
the Company Stockholder Approval from being obtained. The Company, in consultation with Parent, shall fix a record date for determining
the stockholders of the Company entitled to notice of, and to vote at, the Company Stockholders Meeting and the Company shall not change
such record date or establish a different record date for the Company Stockholders Meeting without the prior written consent of Parent
(which consent shall not be unreasonably withheld, conditioned or delayed). Without the prior written consent of Parent or as required
by applicable Law, (i) the adoption of this Agreement shall be the only matter (other than a non-binding advisory proposal regarding
compensation that may be paid or become payable to the named executive officers of the Company in connection with the Integrated Mergers
and matters of procedure, including any adjournment proposal) that the Company shall propose to be acted on by the stockholders of the
Company at the Company Stockholders Meeting and the Company shall not submit any other proposal to such stockholders in connection with
the Company Stockholders Meeting or otherwise (including any proposal inconsistent with the adoption of this Agreement or the consummation
of the Transactions) and (ii) the Company shall not call any meeting of the stockholders of the Company (or solicit any other stockholder
action by written consent) other than the Company Stockholders Meeting.
(b) Parent
shall take all action necessary in accordance with applicable Laws and the Organizational Documents of Parent to duly give notice of,
convene and hold (in person or virtually, in accordance with applicable Law) the Parent Stockholders Meeting, to be held as promptly
as practicable following the clearance of the Joint Proxy Statement/Prospectus by the SEC and the Registration Statement is declared
effective by the SEC (any in any event will use reasonable best efforts to convene such meeting within forty-five (45) days thereof and
no later than five (5) Business Days prior to the Outside Date). Except where a Parent Change of Recommendation has been made in
compliance with Section 6.4, the Parent Board shall recommend that the stockholders of Parent approve and adopt this Agreement
at the Parent Stockholders Meeting and the Joint Proxy Statement/Prospectus shall include the Parent Board Recommendation. Parent shall
solicit from stockholders of Parent proxies in favor of the adoption of this Agreement, use its reasonable best efforts to obtain the
Parent Stockholder Approval and submit the proposal to adopt this Agreement to the stockholders of Parent at the Parent Stockholders
Meeting. Parent shall ensure that all proxies solicited in connection with the Parent Stockholders Meeting are solicited in compliance
with any applicable Laws. Notwithstanding anything to the contrary contained in this Agreement, Parent (i) shall be required to
adjourn or postpone the Parent Stockholders Meeting (A) to the extent necessary to ensure that any legally required supplement or
amendment to the Joint Proxy Statement/Prospectus is provided to Parent’s stockholders or (B) if, as of the time for which
the Parent Stockholders Meeting is scheduled, there are insufficient shares of Parent Common Stock represented (either in person or by
proxy) to constitute a quorum necessary to conduct business at such Parent Stockholders Meeting and (ii) may adjourn or postpone
the Parent Stockholders Meeting with the written consent of the Company if, as of the time for which the Parent Stockholders Meeting
is scheduled, there are insufficient shares of Parent Common Stock represented (either in person or by proxy) to obtain the Parent Stockholder
Approval; provided, however, that (x) unless otherwise agreed to by the Parties, the Parent Stockholders Meeting shall
not be adjourned or postponed to a date that is more than ten (10) Business Days after the date for which the meeting was previously
scheduled except as may be required by applicable Law; (y) the Parent Stockholders Meeting shall not be adjourned or postponed to
a date on or after five (5) Business Days prior to the Outside Date; and (z) no such adjournment or postponement may have the
effect of changing the record date for determining the stockholders of Parent entitled to notice of or to vote at the Parent Stockholders
Meeting without the written consent of the Company (which consent shall not be unreasonably withheld, conditioned, or delayed). If requested
by the Company, Parent shall promptly provide the Company with all voting tabulation reports relating to the Parent Stockholders Meeting
that have been prepared by Parent or Parent’s transfer agent, proxy solicitor or other Representative, and shall otherwise keep
the Company reasonably informed regarding the status of the solicitation and any material oral or written communications from or to Parent’s
stockholders with respect thereto. Unless there has been a Parent Change of Recommendation made in accordance with Section 6.4,
the Parties agree to cooperate and use their reasonable best efforts to defend against any efforts by any of Parent’s stockholders
or any other Person to prevent Parent Stockholder Approval from being obtained. Parent, in consultation with the Company, shall fix a
record date for determining the stockholders of Parent entitled to notice of, and to vote at, the Parent Stockholders Meeting and Parent
shall not change such record date or establish a different record date for the Parent Stockholders Meeting without the prior written
consent of the Company (which consent shall not be unreasonably withheld, conditioned or delayed). Without the prior written consent
of the Company or as required by applicable Law, (i) the Parent Stock Issuance shall be the only matter that Parent shall propose
to be acted on by the stockholders of Parent at the Parent Stockholders Meeting and Parent shall not submit any other proposal to such
stockholders in connection with the Parent Stockholders Meeting or otherwise (including any proposal inconsistent with the adoption of
this Agreement or the consummation of the Transactions) and (ii) Parent shall not call any meeting of the stockholders of Parent
(or solicit any other stockholder action by written consent) other than the Parent Stockholders Meeting.
(c) The
Parties shall cooperate and use their reasonable best efforts to set the record dates for and hold the Company Stockholders Meeting and
the Parent Stockholders Meeting, as applicable, on the same day and at approximately the same time.
(d) Promptly
following the execution of this Agreement, Parent shall cause the adoption of this Agreement (i) in its capacity as the sole stockholder
of Merger Sub in accordance with applicable Law and the Organizational Documents of Merger Sub and (ii) in its capacity as sole
member of LLC Sub in accordance with applicable Law and the Organizational Documents of LLC Sub and, in each case, deliver to the Company
evidence of such votes or actions by written consent so approving and adopting this Agreement.
Section 6.7 Access
to Information.
(a) Subject
to applicable Law and the other provisions of this Section 6.7, the Company and Parent each shall (and shall cause its Subsidiaries
to), upon reasonable advance written notice by the other, use reasonable best efforts to furnish the other with all information concerning
itself, its Subsidiaries, directors, officers and stockholders and such other matters as may be reasonably necessary or advisable in
connection with the Joint Proxy Statement/Prospectus, the Registration Statement, or any other statement, filing, notice or application
made by or on behalf of Parent, the Company or any of their respective Subsidiaries to any third party or any Governmental Entity in
connection with the Transactions. The Company and Parent shall, and shall cause each of its Subsidiaries to, the other Party, use reasonable
best efforts to afford the other Party’s officers and its Representatives, during the period prior to the earlier of the Effective
Time and the termination of this Agreement pursuant to the terms of Section 8.1, reasonable access, at reasonable times upon
reasonable prior notice, to the officers, key employees, agents, properties, offices and other facilities of the other Party and its
Subsidiaries and to their books, records, contracts and documents and shall, and shall cause each of its Subsidiaries to, furnish reasonably
promptly to such Party and its Representatives such information concerning its and its Subsidiaries’ business, properties, contracts,
records and personnel as may be reasonably requested, from time to time, by or on behalf of the other Party; provided, that such
access may be limited by either Party to the extent reasonably necessary to comply with applicable Law; provided, further, that
if any access is withheld pursuant to the immediately preceding proviso, the withholding Party shall use commercially reasonable efforts
to seek an alternative means to provide the access to the withheld information in a manner that does not violate any such Law. Each Party
and its Representatives shall conduct any such activities in such a manner as not to interfere unreasonably with the business or operations
of the other Party or its Subsidiaries or otherwise cause any unreasonable interference with the prompt and timely discharge by the employees
of the other Party and its Subsidiaries of their normal duties. Notwithstanding the foregoing:
(i) No
Party shall be required to, or to cause any of its Subsidiaries to, grant access or furnish information, as applicable, to the other
Party or any of its Representatives to the extent that such information is subject to an attorney/client privilege or the attorney work
product doctrine or that such access or the furnishing of such information, as applicable, is prohibited by applicable Law or an existing
contract or agreement (provided, however, the Company or Parent, as applicable, shall inform the other Party as to the
general nature of what is being withheld and the Company and Parent shall reasonably cooperate to make appropriate substitute arrangements
to permit reasonable disclosure that does not suffer from any of the foregoing impediments, including through the use of commercially
reasonable efforts to (A) obtain the required consent or waiver of any third party required to provide such information and (B) implement
appropriate and mutually agreeable measures to permit the disclosure of such information in a manner to remove the basis for the objection,
including by arrangement of appropriate clean room procedures, redaction or entry into a customary joint defense agreement with respect
to any information to be so provided, if the Parties determine that doing so would reasonably permit the disclosure of such information
without violating applicable Law or jeopardizing such privilege);
(ii) No
Party shall have access to personnel records of the other Party or any of its Subsidiaries relating to individual performance or evaluation
records, medical histories or other personnel information that in the other Party’s good faith opinion the disclosure of which
could subject the other Party or any of its Subsidiaries to risk of liability;
(iii) No
Party shall be required to, or to cause any of its Subsidiaries to, grant access or furnish information, as applicable, to the other
Party or any of its Representatives to the extent that such results in the disclosure of competitively sensitive information or information
concerning the valuation of the Company, Parent or any of their respective Subsidiaries;
(iv) Notwithstanding
the foregoing, neither Party shall be permitted to conduct any invasive or intrusive sampling, testing or analysis (commonly known as
a “Phase II”) of any environmental media or building materials at any facility of the other Party or its Subsidiaries
without the prior written consent of the other Party (which may be granted or withheld in such Party’s sole discretion); and
(v) No
investigation or information provided pursuant to this Section 6.7 shall affect or be deemed to modify any representation
or warranty made by the Company, Parent, Merger Sub or LLC Sub herein and no Party shall, and each Party shall use their reasonable best
efforts to cause their respective Representatives to not, use any information obtained pursuant to this Section 6.7 for any
purpose unrelated to the evaluation, negotiation or consummation of the Transactions; provided, that in event that the Company
or Parent, as applicable, objects to any request submitted pursuant to and in accordance with this Section 6.7(a) and
withholds information on the basis of the foregoing clauses (i) through (v), the Company or Parent, as applicable,
shall inform the other Party in writing as to the general nature of what is being withheld and shall use reasonable best efforts to make
appropriate substitute arrangements to permit reasonable disclosure that does not suffer from any of the foregoing impediments. Each
of the Company and Parent, as it deems advisable and necessary, may reasonably designate competitively sensitive material provided to
the other as “Outside Counsel Only Material” or with similar restrictions. Such materials and the information contained therein
shall be given only to the outside legal counsel of the recipient, or otherwise as the restriction indicates, and be subject to any additional
confidentiality or joint defense agreement between the Parties. All requests for information made pursuant to this Section 6.7(a) shall
be directed to the Person designated by the Company or Parent, as applicable.
(b) The
Confidentiality Agreement between Parent and the Company (the “Confidentiality Agreement”) shall survive the execution
and delivery of this Agreement and shall apply to all information furnished thereunder or hereunder; provided that, for the avoidance
of doubt, the restrictions set forth in the Confidentiality Agreement shall not limit the disclosure or dissemination of information
(including publicly) if required by Law or requested by any Governmental Entity, Financial Industry Regulatory Authority, NYSE or NASDAQ.
From and after the date of this Agreement until the earlier of the Effective Time and termination of this Agreement in accordance with
Article VIII, each Party shall continue to provide access to the other Party and its Representatives to the electronic data
room relating to the Transactions maintained by or on behalf of it to which the other Party and its Representatives were provided access
prior to the date of this Agreement.
Section 6.8 HSR
and Other Approvals.
(a) Except
for the Consents and other matters related to Antitrust Laws to which Sections 6.8(b) and 6.8(c), and not this
Section 6.8(a), shall apply, promptly following the execution of this Agreement, the Parties shall proceed to prepare and
file with the appropriate Governmental Entities and other third parties all Consents that are necessary in order to consummate the Transactions
and shall diligently and expeditiously prosecute, and shall cooperate fully with each other in the prosecution of, such matters. Notwithstanding
the foregoing, in no event shall either the Company or Parent or any of their respective Affiliates be required to pay any consideration
to any third parties or give anything of value to obtain any such Person’s Consent to effectuate the Transactions, other than filing,
recordation or similar fees. Parent and the Company shall have the right to review in advance and, to the extent reasonably practicable,
each will consult with the other on and consider in good faith the views of the other in connection with, all of the information relating
to Parent or the Company, as applicable, and any of their respective Subsidiaries or Affiliates, that appears in any filing made with,
or written materials submitted to, any third party or any Governmental Entity in connection with the Transactions (including the Joint
Proxy Statement/Prospectus) under this Section 6.8(a). The Company and its Subsidiaries and Affiliates shall not agree to
any actions, restrictions or conditions with respect to obtaining any Consents in connection with the Transactions without the prior
written consent of Parent (which consent may be withheld in Parent’s sole discretion).
(b) As
promptly as reasonably practicable but in no event later than fifteen (15) Business Days after the date of this Agreement (unless Parent
and the Company agree in writing to a later date), the Parties shall, or shall cause their Affiliates to, make any filings required under
the HSR Act in connection with the Transactions. Each Party shall use reasonable best efforts to obtain the expiration or termination
of any waiting period under the HSR Act applicable to the Transactions and bring about the Closing as promptly as reasonably practicable
(and in any event before the Outside Date). In furtherance of the foregoing, each Party shall:
(i) cooperate
fully with the other Party and furnish to it such necessary information and reasonable assistance as it may reasonably request in connection
with its preparation of any required filings under the HSR Act;
(ii) use
reasonable best efforts to respond appropriately as promptly as reasonably practicable to any request for information in connection with
the Transactions from any Governmental Entity under the HSR Act or any other Law designed or intended to prohibit, restrict or regulate
actions having the purpose or effect of monopolization, restraint of trade or lessening competition through merger or acquisition (collectively,
“Antitrust Laws”);
(iii) keep
the other Party apprised of any substantive communications with, and any inquiries or requests for additional information from, any Governmental
Entity in connection with the Transactions;
(iv) provide
copies to the other Party of all substantive written communications relating to the Transactions to or from any Governmental Entity,
provided, that each Party may redact or withhold materials due to reasonable good-faith confidentiality or privilege concerns
or designate such communications as “Outside Counsel Only Material”;
(v) permit
the other Party a reasonable opportunity to review any proposed substantive written communications to a Governmental Entity, and consider
in good faith the other Party’s comments thereon;
(vi) not
participate in any substantive discussion with any Governmental Entity in relation to the Transactions without giving the other Party
reasonable notice and an opportunity to participate;
(vii) use
reasonable efforts to share information protected from disclosure under the attorney-client privilege, work product doctrine, joint defense
privilege or any other privilege pursuant to this Section 6.8(b) so as to preserve any applicable privilege; and
(viii) not
enter into any timing agreement with any Governmental Entity that would reasonably be expected to extend beyond the Outside Date, without
the prior written consent of the other Party.
(c) In
furtherance of the foregoing, the Parties shall each use reasonable best efforts to take, or cause to be taken, all actions and to do
or cause to be done, all things necessary, proper or advisable to consummate the Transactions as promptly as reasonably practicable (taking
into account the time reasonably needed to respond to and resolve concerns or requirements of applicable regulators), including (i) proposing,
negotiating, agreeing to, and effecting the sale, leasing, licensing, divestiture or other disposition of any assets, operations, businesses
or interests of the Company or Parent and their respective Subsidiaries and Affiliates; (ii) terminating existing relationships,
contractual rights or obligations of the Company or Parent and their respective Subsidiaries and Affiliates; (iii) terminating any
venture or other arrangement of the Company or Parent and their respective Subsidiaries and Affiliates; (iv) creating any relationship,
contractual rights or obligations binding on the Company or Parent and their respective Subsidiaries and Affiliates; (v) effectuating
any other change or restructuring of the Company or Parent and their respective Subsidiaries and Affiliates; or (vi) agreeing to
restrictions or actions that after the Closing would limit Parent’s or its Subsidiaries’ freedom of action or operation (any
such action, a “Remedy Action”), and, in connection therewith, entering into appropriate agreements with or stipulating
to the entry of an order by any Governmental Entity; provided, however, that (x) any Remedy Action shall be conditioned
on the Closing and (y) notwithstanding anything to the contrary contained in this Agreement, nothing in this Section 6.8
or otherwise in this Agreement shall require Parent or any of its Subsidiaries or Affiliates to offer, propose, negotiate, commit
to, agree to, effect or take any Remedy Action that would, or would reasonably be expected to, either individually or in the aggregate,
have a material adverse effect on the financial condition, business, assets, or results of operations of Parent, the Company and their
respective Subsidiaries, taken as a whole, provided, however, that for this purpose, Parent, the Company and their respective
Subsidiaries, taken as a whole, shall be deemed a consolidated group of entities of the size and scale of a hypothetical company that
is 100% of the size of the Company and its Subsidiaries, taken as a whole, taking into account the terms of any divestiture or other
disposition of assets, as of the date of this Agreement. The Company shall (and shall cause its Subsidiaries and Affiliates to) take,
or agree to take, any Remedy Action that Parent requests in writing, provided that such Remedy Action is conditioned on the Closing.
The Company shall not (and shall cause its Subsidiaries and Affiliates not to) offer, propose, negotiate, commit to, agree to, effect
or take any Remedy Action without Parent’s prior written consent. If a Proceeding is instituted by any Governmental Entity challenging
the validity or legality or seeking to restrain the consummation of the Transactions, the Parties shall each use their reasonable best
efforts to resist, resolve, or, if necessary defend, such Proceeding. Parent shall, upon reasonable consultation with the Company and
in consideration of the Company’s views in good faith, and, subject to the penultimate sentence of Section 6.8(b),
control, lead and direct all actions, decisions and strategy for, and make all final determinations as to the timing and appropriate
course of action with respect to, making and obtaining Consents with or from Governmental Entities in connection with the Transactions
and responding to and defending any Proceeding by or with any Governmental Entity in connection with the Transactions, including all
matters relating to Antitrust Laws, provided, however, that Parent shall afford the Company a reasonable opportunity to
participate therein and shall consider the views of the Company in good faith in connection with the foregoing.
(d) Neither
Party shall take any action that would reasonably be expected to prevent or materially delay the Closing or the expiration or termination
of the waiting period under the HSR Act. In furtherance of the foregoing, each Party shall not, and shall cause its respective Subsidiaries
and Affiliates not to, acquire or merge with any Person or portion thereof (or agree to do the foregoing), if the entering into of a
definitive agreement relating to or the consummation of such transaction would reasonably be expected to (x) materially delay the
Closing or the expiration or termination of the waiting period under the HSR Act, (y) materially increase the risk of any Governmental
Entity instituting a Proceeding seeking to prohibit the Transactions, or (z) materially increase the risk of any Governmental Entity
entering an order prohibiting the Transactions.
Section 6.9 Employee
Matters.
(a) Until
the date that is twelve (12) months following the Closing Date, (or, if earlier, the date of the applicable employee’s termination
of employment with Parent or one of its Subsidiaries), Parent shall cause each individual who was employed immediately prior to the Closing
by the Company or a Subsidiary thereof (a “Company Employee”) and who remains employed by Parent or any of its Subsidiaries
(including the Surviving Corporation, LLC Sub and their respective Subsidiaries) to be provided with (i) a base salary or wages,
as applicable, that are no less favorable than those provided to such Company Employee immediately prior to the Closing Date; (ii) a
total annual cash incentive opportunity that is no less favorable than that provided to such Company Employee immediately prior to the
Closing Date; (iii) equity compensation or long-term cash incentive compensation opportunity, as applicable, that is substantially
comparable to that provided to such Company Employee immediately prior to the Closing Date, provided that the amount of such equity
compensation or long-term cash incentive compensation opportunity, as applicable, may be adjusted to avoid duplication that otherwise
may arise as a result of differences in timing of grants by the Company prior to the Closing Date and by Parent following the Closing
Date, provided further that such long-term cash incentive compensation opportunity may instead be in the form of equity compensation;
and (iv) employee benefits (excluding for the avoidance of doubt, incentives and equity compensation, which are covered above, and
severance benefits, which are covered below) at a level that is no less favorable in the aggregate than either the employee benefits
in effect for such Company Employee immediately prior to the Closing Date or the employee benefits provided to similarly situated employees
of Parent and its Subsidiaries. In the case of a Company Employee who is terminated during the 12-month period following Closing, such
Company Employee will be eligible for severance benefits under and subject to the terms and conditions of the Southwestern Energy Change
in Control Severance Plan or, if applicable, such Company Employee’s individual severance agreement entered into with the Company.
(b) Parent
shall, or shall cause the Surviving Corporation, LLC Sub and their respective Subsidiaries, to assume and honor their respective obligations
under all employment, severance, change in control, retention and other agreements, if any, between the Company (or a Subsidiary thereof)
and a Company Employee.
(c) From
and after the Effective Time, as applicable, Parent shall, or shall cause its Subsidiaries (including the Surviving Corporation, LLC
Sub and their respective Subsidiaries), to credit the Company Employees for purposes of vesting, eligibility and benefit accrual under
the Parent Plans and any other benefit or compensation plan, program, policy, agreement or arrangement of Parent or any of its Subsidiaries
(including the Surviving Corporation, LLC Sub and their respective Subsidiaries) (other than with respect to any “defined benefit
plan” as defined in Section 3(35) of ERISA, retiree medical, dental, life or disability benefits, or to the extent such credit
would result in a duplication of benefits) in which the Company Employees participate, for such Company Employees’ service with
the Company and its Subsidiaries, to the same extent and for the same purposes that such service was taken into account under a corresponding
Company Benefit Plan immediately prior to the Closing Date. Parent shall, or shall cause its Subsidiaries (including the Surviving Corporation
and its Subsidiaries) to, give service credit for long term disability coverage purposes for the Company Employees’ service with
the Company and its Subsidiaries.
(d) From
and after the Effective Time, as applicable, Parent shall, or shall cause its Subsidiaries (including the Surviving Corporation, LLC
Sub and their respective Subsidiaries) to, take commercially reasonable efforts to, for the plan year in which the Closing Date occurs,
(i) waive any limitation on health and welfare coverage of any Company Employee and his or her eligible dependents due to pre-existing
conditions and/or waiting periods, active employment requirements and requirements to show evidence of good health under the applicable
health and welfare Parent Plan to the extent such Company Employee and his or her eligible dependents are covered under a Company Benefit
Plan immediately prior to the Closing Date, and such conditions, periods or requirements are satisfied or waived under such Company Benefit
Plan and (ii) give each Company Employee credit towards applicable deductibles and annual out-of-pocket limits for medical expenses
incurred prior to the Closing Date for which payment has been made.
(e) It
is acknowledged and agreed that the consummation of the transactions contemplated hereby will constitute a “change of control”
(or “change in control” or transaction of similar import) of the Company and its Subsidiaries under the terms of the Company
Benefit Plans.
(f) If
requested by Parent in writing not less than ten (10) days prior to the Effective Time, the Company shall, or shall cause its applicable
Subsidiaries to, adopt resolutions necessary to terminate each Company Benefit Plan that is intended to be qualified under Section 401(a) of
the Code and that contains a cash or deferred arrangement within the meaning of Section 401(k) of the Code (collectively, the
“Company 401(k) Plans”), effective as of the day immediately prior to the Closing Date, and the Company shall
provide Parent with copies of such resolutions to terminate the Company 401(k) Plans, the form of such resolutions shall be subject
to the reasonable approval of Parent. To the extent the Company 401(k) Plans are terminated pursuant to Parent’s request,
the Company Employees shall be eligible to participate immediately after the Closing in a 401(k) plan maintained by Parent or one
of its Subsidiaries (“Parent 401(k) Plan”). Parent shall or shall cause the Parent 401(k) Plan to accept
the rollover of any “eligible rollover distribution” (within the meaning of Section 402(c)(4) of the Code) from
the Company 401(k) Plans that is in cash but including plan loans.
(g) For
purposes of determining the number of vacation days and other paid time off to which each Company Employee is entitled during the calendar
year in which the Closing occurs, Parent, LLC Sub, the Surviving Corporation or one of their Subsidiaries will credit such Company Employee
for such Company Employee’s service with the Company and its Subsidiaries, to the same extent and for the same purposes that such
service was taken into account under the applicable Company Benefit Plans, and Parent, the Surviving Corporation or one of their Subsidiaries
will assume and honor all unused vacation and other paid time off days accrued or earned by each Company Employee through the Closing,
pursuant to the terms of the applicable Company Benefit Plan as in effect immediately prior to the Closing, provided that the
foregoing shall not prohibit Parent or the Surviving Corporation from amending or modifying its applicable vacation policies as in effect
from time to time so long as Parent and Surviving Corporation comply with the provisions of this Section 6.9(g).
(h) If
the Effective Time occurs in 2024, each Company Employee who as of immediately prior to the Effective Time is eligible for an annual
bonus for 2024 (each a “Participating Employee”) and who remains employed with Parent or its Subsidiaries through
the payment date, shall receive in cash, on Parent’s regular payment date for annual bonuses (the “Bonus Payment Date”),
the following bonus to the extent such bonus is not otherwise paid prior to the Effective Time: (i) for the period from January 1,
2024 through the Effective Time (or the last day of the month immediately preceding the Effective Time, if the Effective Time does not
occur on the last day of a month) a bonus in an amount determined based on the level of attainment of the applicable performance measures
measured as of the Effective Time (or the last day of the month immediately preceding the Effective Time, if the Effective Time does
not occur on the last day of a month) against budgeted performance for such period, but in no event less than 100% of the target amount
of such bonus, which bonus, for the avoidance of doubt, will be prorated to reflect the number of calendar days during such period and
(ii) if applicable, for the post-Effective Time portion of 2024, an annual bonus opportunity prorated for the post-Effective Time
portion of the year in which the Effective Time occurs in accordance with Section 6.9(a)(i), with payout based on the satisfaction
of performance objectives determined by Parent with respect to such post-Closing period, but in no event less than 100% of the target
amount of such bonus opportunity.
(i) Nothing
in this Agreement shall constitute an establishment of, amendment to, or be construed as amending or terminating, any Parent Plan, Company
Benefit Plan or other Employee Benefit Plan which, in each case, is sponsored, maintained or contributed to by the Company, Parent or
any of their respective Subsidiaries. The provisions of this Section 6.9 are for the sole benefit of the Parties and nothing
herein, expressed or implied, is intended or will be construed to confer upon or give to any Person (including, for the avoidance of
doubt, any Company Employee or other current or former employee of the Company, Parent or any of their respective Affiliates), other
than the Parties and their respective permitted successors and assigns, any third-party beneficiary, legal or equitable or other rights
or remedies (including with respect to the matters provided for in this Section 6.9) under or by reason of any provision
of this Agreement. Nothing in this Agreement is intended to prevent Parent, LLC Sub, the Surviving Corporation or any of their Affiliates
(i) from amending or terminating any of their respective Employee Benefit Plans or, after the Closing, any Company Benefit Plan
in accordance with their terms or (ii) after the Closing, from terminating the employment of any Company Employee at any time and
for any reason.
Section 6.10 Indemnification;
Directors’ and Officers’ Insurance.
(a) Without
limiting any other rights that any Indemnified Person may have pursuant to any employment agreement, organizational document or indemnification
agreement in effect on the date hereof or otherwise, and to the fullest extent permitted by applicable Law, from the Effective Time and
until the six (6) year anniversary of the Effective Time, Parent and the Surviving Corporation shall, jointly and severally, indemnify,
defend and hold harmless in the same manner as provided by the Company immediately prior to the date of this Agreement, each Person who
is now, or has been at any time prior to the date of this Agreement or who becomes prior to the Effective Time, a director or officer
of the Company or any of its Subsidiaries or who acts as a fiduciary under any Company Benefit Plan, in each case, when acting in such
capacity (the “Indemnified Persons”) against all losses, claims, damages, costs, fines, penalties, expenses (including
attorneys’ and other professionals’ fees and expenses), liabilities or judgments or amounts that are paid in settlement,
of or incurred in connection with any threatened or actual Proceeding to which such Indemnified Person is or is threatened to be made
a party by reason of the fact that such Person is or was a director or officer of the Company or any of its Subsidiaries, a fiduciary
under any Company Benefit Plan or, while a director or officer of the Company or any of its Subsidiaries, is or was serving at the request
of the Company or any of its Subsidiaries as a director, officer or fiduciary of another corporation, partnership, limited liability
company, joint venture, Employee Benefit Plan, trust or other enterprise, as applicable, whether pertaining to any act or omission occurring
or existing at or prior to, but not after, the Effective Time and whether asserted or claimed prior to, at or after the Effective Time
(“Indemnified Liabilities”), including all Indemnified Liabilities based in whole or in part on, or arising in whole
or in part out of, or pertaining to, this Agreement or the Transactions, in each case to the fullest extent permitted under applicable
Law (and Parent and the Surviving Corporation shall, jointly and severally, pay expenses incurred in connection therewith in defending
any such Proceeding in advance of the final disposition of any such Proceeding to each Indemnified Person to the fullest extent permitted
under applicable Law upon receipt of an undertaking from such Person to repay any such amounts so advanced if it shall ultimately be
determined that such Person is not entitled to indemnification from Parent or the Surviving Corporation therefor). Any Indemnified Person
wishing to claim indemnification or advancement of expenses under this Section 6.10, upon learning of any such Proceeding,
shall notify Parent and the Surviving Corporation (but the failure so to notify shall not relieve a Party from any obligations that it
may have under this Section 6.10 except to the extent such failure prejudices Parent, the Surviving Corporation or such Party’s
position with respect to such claims or liability therefor). With respect to any determination of whether any Indemnified Person is entitled
to indemnification by Parent or Surviving Corporation under this Section 6.10, such Indemnified Person shall have the right,
as contemplated by the DGCL, to require that such determination be made by special, independent legal counsel selected by the Indemnified
Person and approved by Parent or Surviving Corporation, as applicable (which approval shall not be unreasonably withheld or delayed),
and who has not otherwise performed material services for Parent, Surviving Corporation or the Indemnified Person within the last three
(3) years.
(b) Parent
and the Surviving Corporation agree that, until the six (6) year anniversary date of the Effective Time, that neither Parent nor
the Surviving Corporation shall amend, repeal or otherwise modify any provision in the Organizational Documents of the Surviving Corporation
or its Subsidiaries in any manner that would affect (or manage the Surviving Corporation or its Subsidiaries, with the intent to or in
a manner that would) adversely the rights thereunder or under the Organizational Documents of the Surviving Corporation or any of its
Subsidiaries of any Indemnified Person to indemnification, exculpation and advancement except to the extent required by applicable Law.
Parent shall, and shall cause the Surviving Corporation and its Subsidiaries to, fulfill and honor any indemnification, expense advancement
or exculpation agreements between the Company or any of its Subsidiaries and any of their respective directors or officers existing and
in effect immediately prior to the Effective Time.
(c) Parent
and the Surviving Corporation shall indemnify any Indemnified Person against all reasonable costs and expenses (including reasonable
and documented attorneys’ fees and expenses), such amounts to be payable in advance upon request as provided in Section 6.10(a),
relating to the enforcement of such Indemnified Person’s rights under this Section 6.10 or under any charter, bylaw
or Contract; provided, that if any such payment is for costs or expenses relating to a loss or liability that is determined by
a court of competent jurisdiction to have resulted primarily from the fraud, bad faith, willful misconduct or gross negligence of such
Indemnified Person, such Indemnified Person shall promptly repay such amount to Parent or the Surviving Corporation, as applicable.
(d) Parent
and the Surviving Corporation shall cause to be put in place, and Parent shall fully prepay immediately prior to the Effective Time,
“tail” insurance policies with a claims reporting or discovery period of at least six (6) years from the Effective Time
(the “Tail Period”) from an insurance carrier with the same or better credit rating as the Company’s current
insurance carrier with respect to directors’ and officers’ liability insurance (“D&O Insurance”) in
an amount and scope at least as favorable as the Company’s existing policies with respect to matters, acts or omissions existing
or occurring at, prior to, or after, the Effective Time; provided, however, that in no event shall the aggregate cost of
the D&O Insurance exceed during the Tail Period 300% of the current aggregate annual premium paid by the Company for such purpose
for the 2023 fiscal year; and provided, further, that if the cost of such insurance coverage exceeds such amount, the Surviving
Corporation shall obtain a policy with the greatest coverage reasonably available for a cost not exceeding such amount.
(e) In
the event that, prior to the six (6) year anniversary date of the Effective Time, Parent, the Surviving Corporation or any of their
respective successors or assignees (i) consolidates with or merges into any other Person and shall not be the continuing or surviving
company or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any
Person, then, in each such case, proper provisions shall be made so that the successors and assigns of Parent or the Surviving Corporation,
as the case may be, shall assume the obligations set forth in this Section 6.10. The provisions of this Section 6.10
are intended to be for the benefit of, and shall be enforceable by, the Parties and each Person entitled to indemnification or insurance
coverage or expense advancement pursuant to this Section 6.10, and his heirs and Representatives. The rights of the Indemnified
Persons under this Section 6.10 are in addition to any rights such Indemnified Persons may have under the Organizational
Documents of Parent, the Company or any of their respective Subsidiaries, or under any applicable contracts or Law.
Section 6.11 Transaction
Litigation. In the event any Proceeding (but excluding any Proceeding under or related to Antitrust Laws, for which Section 6.8
shall control) by any Governmental Entity or other Person (other than the Parties hereto) is commenced or, to the Knowledge of the
Company or Parent, as applicable, threatened against such Party, that questions the validity or legality of the Transactions or seeks
damages or an injunction in connection therewith, including stockholder litigation (“Transaction Litigation”), the
Company or Parent, as applicable, shall promptly notify the other Party of such Transaction Litigation and shall keep the other Party
reasonably informed with respect to the status thereof. Each Party shall give the other Party a reasonable opportunity to participate
in the defense or settlement of any Transaction Litigation (at such other Party’s cost) and shall consider in good faith, acting
reasonably, the other Party’s advice with respect to such Transaction Litigation; provided, that the Party that is subject
to such Transaction Litigation shall not offer or agree to settle any Transaction Litigation without the prior written consent of the
other Party (which consent shall not be unreasonably withheld, conditioned or delayed).
Section 6.12 Public
Announcements. The initial press release with respect to the execution of this Agreement shall be a joint press release to be
reasonably agreed upon by the Parties. No Party shall, and each will use its reasonable best efforts to cause its Representatives not
to, issue any public announcements or make other public disclosures regarding this Agreement or the Transactions, without the prior written
approval of the other Party. Notwithstanding the foregoing, but subject to the provisions of Section 6.3 and Section 6.4,
a Party, its Subsidiaries or their Representatives may issue a public announcement or other public disclosures (a) required by applicable
Law, (b) required by the rules of any stock exchange upon which such Party’s or its Subsidiary’s capital stock
is traded or (c) consistent with the final form of the joint press release announcing the Merger and the investor presentation given
to investors on the morning of announcement of the Merger; provided, in each case, such Party uses reasonable best efforts to afford
the other Party an opportunity to first review the content of the proposed disclosure and provide reasonable comments thereon (which
such comments shall be considered in good faith by the disclosing party); and provided, however, that no provision in this
Agreement shall be deemed to restrict in any manner a Party’s ability to communicate directly and confidentially with its employees
and that neither Party shall be required by any provision of this Agreement to consult with or obtain any approval from any other Party
with respect to a public announcement or press release issued in connection with the receipt and existence of a Company Competing Proposal
or a Parent Competing Proposal, as applicable, and matters related thereto or a Company Change of Recommendation or a Parent Change of
Recommendation, other than as set forth in Section 6.3 or Section 6.4, as applicable.
Section 6.13 Advice
on Certain Matters; Control of Business. Subject to compliance with applicable Law, the Company and Parent, as the case may be,
shall confer on a regular basis with each other and shall promptly advise each other orally and in writing of any change or event having,
or that would be reasonably likely to have, individually or in the aggregate, a Company Material Adverse Effect or Parent Material Adverse
Effect, as the case may be. Except with respect to Antitrust Laws as provided in Section 6.8, the Company and Parent shall
promptly provide each other (or their respective counsel) copies of all filings made by such Party or its Subsidiaries with the SEC or
any other Governmental Entity in connection with this Agreement and the Transactions. Without limiting in any way any Party’s rights
or obligations under this Agreement, nothing contained in this Agreement shall give any Party, directly or indirectly, the right to control
or direct the other Party and their respective Subsidiaries’ operations prior to the Effective Time. Prior to the Effective Time,
each of the Parties shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over
its and its Subsidiaries’ respective operations.
Section 6.14 Financing
Cooperation.
(a) Until
the earlier of the Closing and the termination of this Agreement pursuant to Article VIII, the Company shall use commercially
reasonable efforts to provide, and shall cause its Subsidiaries and use commercially reasonable efforts to cause its and their respective
Representatives to provide, such cooperation, at Parent’s sole cost and expense, as may be reasonably requested by Parent in connection
(i) with any evaluation or analysis of, or diligence with respect to, the existing Indebtedness of the Company or any of its Subsidiaries,
including (a) reasonably promptly furnishing any pertinent and customary information regarding the Company and its Subsidiaries
as may be reasonably requested by Parent relating to the existing Indebtedness of the Company or any of its Subsidiaries (including using
commercially reasonable efforts to ensure that lenders and/or holders of the existing Indebtedness of the Company or any of its Subsidiaries
and their advisors and consultants shall have sufficient access to the Company and its Subsidiaries and its and their respective Representatives)
and (b) upon reasonable notice and at reasonable, mutually agreed times and locations, participating in meetings and presentations
with lenders and/or holders of the existing Indebtedness of the Company or any of its Subsidiaries (in each case which shall be telephonic
or virtual meetings or sessions, as circumstances require) and (ii) with any consents from, or agreements with, lenders or noteholders,
or any internal reorganization transactions, in each case with respect to the assumption of the existing Indebtedness of the Company
by Parent (other than, for the avoidance of doubt, the Company Credit Facility) and the waiver of any requirement to consummate any redemption
thereof.
(b) Until
the earlier of the Closing and the termination of this Agreement pursuant to Article VIII, the Company shall use commercially
reasonable efforts to provide, and shall cause its Subsidiaries and use commercially reasonable efforts to cause its and their respective
Representatives to provide, such cooperation, at Parent’s sole cost and expense, as may be reasonably requested by Parent in connection
with the arrangement of any debt financing that may be arranged by Parent or any of its Affiliates in connection with the Transactions
(the “Debt Financing”), including by using commercially reasonable efforts to (i) upon reasonable advance notice
and at mutually agreeable times and locations, participate in a reasonable number of bank meetings, due diligence sessions and similar
presentations to and with prospective arrangers, underwriters or lenders with respect to the Debt Financing (including the parties to
any commitment letters, engagement letters, joinder agreements, indentures or credit agreements entered into pursuant to or relating
to any Debt Financing, the “Debt Financing Sources”) and rating agencies, including direct contact between senior
management and the other Representatives of the Company, on the one hand, and the actual and potential Debt Financing Sources and ratings
agencies, on the other hand, (ii) furnish Parent with such customary historical financial and other factual information that is
readily available to, and in the form customarily prepared by, the Company and its Subsidiaries regarding the Company and its Subsidiaries
as may be reasonably requested by Parent’s actual and potential Debt Financing Sources and is customarily provided in connection
with financings of the type contemplated by any Debt Financing, (iii) reasonably assist with the preparation of (as applicable)
customary bank books, “road show presentations”, information memoranda, prospectuses, pricing term sheets, offering or private
placement memoranda, and other marketing materials or customary information packages (A) suitable for use in a customary syndication
process or “road show”, in each case, regarding the business, operations, financial condition and projections of the Company
(which prospectuses, offering or private placement memoranda or other customary information for use in a “road show” will
be in a form that will enable the independent registered public accountants of Company to render a customary “comfort letter”
(including customary “negative assurances”) on the Closing Date) or (B) reasonably requested by Parent or its financing
sources in connection with the syndication or other marketing of the Debt Financing (subject to advance review of and consultation with
respect to such use), (iv) reasonably assist with the preparation of any pledge and security documents, any loan agreement, currency
or interest hedging agreement, other definitive financing documents for any Debt Financing, including information in respect of the oil
and gas reserves attributable to the Oil and Gas Properties of the Company and its Subsidiaries and schedules to the definitive documentation
for any Debt Financing, or other certificates, legal opinions delivered by counsel to Parent or documents as may be reasonably requested
by Parent and usual and customary for transactions of the type contemplated by such Debt Financing, (v) reasonably facilitate the
pledging of collateral for any Debt Financing (including cooperation in connection with the pay-off of existing Indebtedness to the extent
contemplated by this Agreement or the Debt Financing and the release of related Encumbrances and termination of security interests (including
delivering prepayment or termination notices as required by the terms of any existing Indebtedness and delivering customary payoff letters))
and (vi) provide to Parent and its Debt Financing Sources at least three (3) Business Days prior to the Closing Date all documentation
and other information required by Governmental Entities under applicable “know your customer” and anti-money laundering rules and
regulations to the extent reasonably requested in writing by Parent at least ten (10) Business Days prior to the Closing. Parent
shall be permitted to disclose confidential information to any parties providing commitments for any Debt Financing, rating agencies
and prospective lenders during syndication of such Debt Financing, subject to such parties providing commitments, rating agencies and
prospective lenders entering into customary confidentiality undertakings for a syndication with respect to such information.
(c) Notwithstanding
anything in this Agreement to the contrary, nothing herein shall require (i) the Company, its Subsidiaries or any of their respective
Representatives to execute or enter into any certificate, instrument, agreement or other document in connection with any Debt Financing
which will be effective prior to the Closing, (ii) cooperation or other actions or efforts on the part of the Company, any of its
Subsidiaries, or any of their respective Representatives, in connection with any Debt Financing to the extent, in the Company’s
reasonable judgment, it would (A) interfere unreasonably with the business or operations of the Company or its Subsidiaries, (B) subject
any director, manager, officer or employee of the Company or a Subsidiary thereof to any actual or potential personal liability or (C) result
in a failure of any condition to the obligations of the parties hereto to consummate the Transactions, (iii) the Company or its
Subsidiaries or any of their respective Representatives to pay any commitment or other fee or incur any other liability in connection
with any Debt Financing that is not reimbursed by Parent, (iv) the board of directors or similar governing body of any of the Company
or its Subsidiaries, prior to the Closing, to adopt resolutions approving, or otherwise approve, the agreements, documents or instruments
pursuant to which any Debt Financing is made, (v) the Company and its Subsidiaries to provide any access or information if (A) doing
so would reasonably be expected to violate any fiduciary duty, applicable Law or existing Contract to which the Company or such Subsidiary
is party, (B) doing so would reasonably be expected to result in the loss of the ability to successfully assert attorney-client,
work product or similar privileges or (C) doing so would reasonably be expected to violate any Company policies regarding access
to such books, Contracts and records or jeopardize the health and safety of any employee, independent contract or other agent of the
Company or any of its Subsidiaries; provided, that the Company and its Subsidiaries shall, in the case of clauses (A) through
(C), use commercially reasonable efforts to make appropriate substitute arrangements under circumstances in which the foregoing
restrictions do not apply, (vi) cooperation that would violate, or result in the waiver of any benefit under this Agreement, any
other material Contract (not entered in contemplation hereof) or any Law to which Company, any of its Subsidiaries, or any of their respective
Representatives, is a party or subject or (vii) the Company or its Subsidiaries or any of their respective Representatives to prepare
or provide (and Parent shall be solely responsible for) (A) pro forma financial information, including pro forma cost savings, synergies,
capitalization or other pro forma adjustments in each case giving effect to the transactions desired to be incorporated into any pro
forma financial information in connection with any Debt Financing, (B) any description of all or any component of any Debt Financing,
or (C) projections or other forward-looking statements relating to all or any component of any debt financing. Parent shall be responsible
for all fees and expenses related to any Debt Financing, including the compensation of any contractor or advisor of Parent or the Company
directly related to actions taken pursuant to Section 6.14(a) or Section 6.14(b). Accordingly, notwithstanding
anything to the contrary herein, Parent shall promptly, upon written request by the Company, reimburse the Company for all reasonable
and documented out-of-pocket costs and expenses (including reasonable and documented compensation or other fees of any contractor or
advisor) incurred in connection with the Debt Financing incurred by the Company and its Subsidiaries and their respective Representatives
in connection with the Debt Financing, including the cooperation of the Company and the Subsidiaries thereof contemplated by this Section 6.14,
and shall indemnify and hold harmless the Company and its Subsidiaries and their respective Representatives from and against any and
all losses, claims, damages, liabilities, judgments, obligations, causes of action, payments, charges, fines, assessments and costs and
expenses (including reasonable attorneys’ fees, legal and other expenses incurred in connection therewith) suffered or incurred
by any of them in connection with this Section 6.14, the arrangement of the Debt Financing or any information used in connection
therewith, in each case, except to the extent suffered or incurred as a result of the gross negligence, bad faith or willful misconduct
by the Company or any of its Subsidiaries or, in each case, their respective Representatives.
(d) Notwithstanding
anything to the contrary herein, the condition set forth in Section 7.2(b) as it applies to the Company’s obligations
under this Section 6.14, shall be deemed satisfied unless (i) the Company has failed to satisfy its obligations under
Section 6.14 in any material respect, (ii) Parent has notified the Company of such failure in writing a reasonably sufficient
amount of time prior to the Closing Date to afford the Company with a reasonable opportunity to cure such failure and (iii) such
failure has been the primary cause of Parent’s failure to consummate any Debt Financing. Parent acknowledges and agrees that obtaining
any Debt Financing is not a condition to Closing. If any Debt Financing has not been obtained, Parent shall continue to be obligated,
until such time as the Agreement is terminated in accordance with Article VIII and subject to the waiver or fulfillment of
the conditions set forth in Article VII, to complete the transactions contemplated by this Agreement.
Section 6.15 Reasonable
Best Efforts; Notification.
(a) Except
to the extent that the Parties’ obligations are specifically set forth elsewhere in this Article VI, and subject to
the terms of Section 6.8, which shall control with respect to Consents and other matters related to Antitrust Laws, upon
the terms and subject to the conditions set forth in this Agreement (including Section 6.3), each of the Parties shall use
reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with
the other Party in doing, all things necessary, proper or advisable to consummate and make effective, as promptly as reasonably practicable,
the Transactions.
(b) Subject
to applicable Law and as otherwise required by any Governmental Entity, and subject to the terms of Section 6.8, which shall
control with respect to Consents and other matters related to Antitrust Laws, the Company and Parent each shall keep the other apprised
of the status of matters relating to the consummation of the Transactions, including promptly furnishing the other with copies of notices
or other communications received by Parent or the Company, as applicable, or any of its Subsidiaries, from any third party or any Governmental
Entity with respect to the Transactions (including those alleging that the approval or consent of such Person is or may be required in
connection with the Transactions). The Company shall give prompt written notice to Parent, and Parent shall give prompt written notice
to the Company, upon becoming aware of (i) any condition, event or circumstance that will result in any of the conditions in Section 7.2(a) or
7.3(a) not being met, or (ii) the failure by such Party to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it under this Agreement; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of the Parties or the conditions to the obligations of the Parties
under this Agreement.
Section 6.16 Section 16
Matters. Prior to the Effective Time, Parent, Merger Sub, LLC Sub and the Company shall take all such steps as may be reasonably
required to cause any dispositions of equity securities of the Company (including derivative securities) or acquisitions of equity securities
of Parent (including derivative securities) in connection with this Agreement by each individual who is subject to the reporting requirements
of Section 16(a) of the Exchange Act with respect to the Company, or will become subject to such reporting requirements with
respect to Parent, to be exempt under Rule 16b-3 under the Exchange Act, to the extent permitted by applicable Laws.
Section 6.17 Stock
Exchange Listing and Delistings. Parent shall take all action necessary to cause the Parent Common Stock to be issued in the
Merger to be approved for listing on NASDAQ prior to the Effective Time, subject to official notice of issuance. Prior to the Closing
Date, the Company shall cooperate with Parent and use reasonable best efforts to take, or cause to be taken, all actions, and do or cause
to be done all things, reasonably necessary, proper or advisable on its part under applicable Law and rules and policies of the
NYSE to enable the delisting by the Surviving Corporation of the shares of Company Common Stock from the NYSE and the deregistration
of the shares of Company Common Stock under the Exchange Act as promptly as practicable after the Effective Time, and in any event no
more than ten (10) days after the Effective Time. If the Surviving Corporation is required to file any quarterly or annual report
pursuant to the Exchange Act by a filing deadline that is imposed by the Exchange Act and that falls on a date within the fifteen (15)
days following the Closing Date, the Company shall make available to Parent, at least five (5) Business Days prior to the Closing
Date, a substantially final draft of any such annual or quarterly report reasonably likely to be required to be filed during such period.
Section 6.18 Certain
Indebtedness. The Company and its Subsidiaries shall deliver to Parent at least two (2) Business Days prior to the Closing
Date a copy of a payoff letter, setting forth the total amounts payable pursuant to the Company Credit Facility to fully satisfy all
principal, interest, fees, costs, and expenses owed to each holder of Indebtedness under the Company Credit Facility as of the anticipated
Closing Date (and the daily accrual thereafter), together with appropriate wire instructions, and the agreement from the administrative
agent under the Company Credit Facility that upon payment in full of all such amounts owed to such holder, all Indebtedness under the
Company Credit Facility shall be discharged and satisfied in full, the Loan Documents (as defined in the Company Credit Facility) shall
be terminated with respect to the Company and its Subsidiaries that are borrowers or guarantors thereof (or the assets or equity of which
secure such Indebtedness) and all liens on the Company and its Subsidiaries and their respective assets and equity securing the Company
Credit Facility shall be released and terminated, together with any applicable documents reasonably necessary to evidence the release
and termination of all liens on the Company and its Subsidiaries and their respective assets and equity securing, and any guarantees
by the Company and its Subsidiaries in respect of, such Company Credit Facility. The Company shall reasonably cooperate with Parent in
replacing any letters of credit issued pursuant to the Company Credit Facility evidencing the above referenced Indebtedness or obligations.
Section 6.19 Tax
Matters.
(a) Each
of Parent, Merger Sub, LLC Sub and the Company will (and will cause its respective Subsidiaries to) use its reasonable best efforts to
cause the Integrated Mergers, taken together, to qualify, and will not take or knowingly fail to take (and will cause its Subsidiaries
not to take or knowingly fail to take) any actions that would, or would reasonably be expected to, prevent or impede the Integrated Mergers,
taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code. Each of
Parent, Merger Sub, LLC Sub and the Company will notify the other Party promptly after becoming aware of any reason to believe that the
Integrated Mergers, taken together, may not qualify as a “reorganization” within the meaning of Section 368(a) of
the Code. Each of Parent, Merger Sub, LLC Sub and the Company will comply (and will cause its respective Subsidiaries to comply) with
all representations, warranties and covenants contained in the Parent Tax Certificate and the Company Tax Certificate, respectively,
to the extent necessary to cause the Integrated Mergers, taken together, to qualify as a “reorganization” within the meaning
of Section 368(a) of the Code.
(b) This
Agreement and the LLC Sub Merger Agreement, taken together, are intended to constitute, and the Parties hereto adopt the foregoing as,
a “plan of reorganization” for purposes of Sections 354 and 361 of the Code and within the meaning of Treasury Regulations
§§1.368-2(g) and 1.368-3(a).
(c) Parent
and the Company will cooperate to facilitate the issuance of the opinion described in Section 7.3(d) and any other opinions
to be filed in connection with the Registration Statement or the Joint Proxy Statement/Prospectus regarding the U.S. federal income tax
treatment of the Integrated Mergers. In connection therewith, (i) Parent shall deliver to Kirkland & Ellis LLP and/or Latham &
Watkins LLP (or other applicable legal counsel), as applicable, a duly executed certificate containing such representations, warranties
and covenants as shall be reasonably necessary or appropriate to enable the relevant counsel to render the opinion described in Section 7.3(d) and
any opinions to be filed in connection with the declaration of effectiveness of the Registration Statement or the Joint Proxy Statement/Prospectus
regarding the U.S. federal income tax treatment of the Integrated Mergers, taken together (the “Parent Tax Certificate”),
and (ii) the Company shall deliver to Kirkland & Ellis LLP and/or Latham & Watkins LLP (or other applicable legal
counsel), as applicable a duly executed certificate containing such representations, warranties and covenants as shall be reasonably
necessary or appropriate to enable the relevant counsel to render the opinion described in Section 7.3(d) and any opinions
to be filed in connection with the declaration of effectiveness of the Registration Statement or the Joint Proxy Statement/Prospectus
regarding the U.S. federal income tax treatment of the Integrated Mergers, taken together (the “Company Tax Certificate”),
in each case, dated as of the Closing Date (and such additional dates as may be necessary in connection with the preparation, filing
and delivery of the Registration Statement or the Joint Proxy Statement/Prospectus). Parent and the Company shall provide such other
information as reasonably requested by Kirkland & Ellis LLP and/or Latham & Watkins LLP (or other applicable legal
counsel), as applicable, for purposes of rendering the opinion described in Section 7.3(d) and any opinions to be filed
in connection with the Registration Statement or the Joint Proxy Statement/Prospectus.
Section 6.20 Takeover
Laws. None of the Parties will take any action that would cause the Transactions to be subject to requirements imposed by any
Takeover Laws, and each of them will take all reasonable steps within its control to exempt (or ensure the continued exemption of) the
Transactions from the Takeover Laws of any state that purport to apply to this Agreement or the Transactions.
Section 6.21 Obligations
of Merger Sub and LLC Sub. Parent shall take all action necessary to cause Merger Sub and LLC Sub to perform its obligations
under this Agreement and the LLC Sub Merger Agreement and to consummate the transactions contemplated hereby, including the Integrated
Mergers, upon the terms and subject to the conditions set forth in this Agreement and the LLC Sub Merger Agreement.
Section 6.22 Transfer
Taxes. All Transfer Taxes imposed with respect to the Merger or the transfer of shares of Company Common Stock pursuant to the
Merger shall be borne by the Surviving Corporation. The Parties will cooperate, in good faith, in the filing of any Tax Returns with
respect to such Transfer Taxes and the minimization, to the extent reasonably permissible under applicable Law, of the amount of any
such Transfer Taxes.
Section 6.23 Derivative
Contracts; Hedging Matters. Until the earlier of the Closing and the termination of this Agreement pursuant to Article VIII,
each Party shall use commercially reasonable efforts to cooperate with the other Party as reasonably requested by the other Party, in
connection with the development of a post-Closing hedging strategy for the Parent and the mechanics for implementing that strategy, including,
without limitation, the amendment, assignment, termination or novation of any Derivative Transaction (including any commodity hedging
arrangement or related Contract) of the Company or any of its Subsidiaries on terms that are reasonably requested by Parent and effective
at and conditioned upon the Closing. Each Party shall be responsible for its own costs and expenses in connection with the foregoing.
Notwithstanding the foregoing, among other potential reasons, any such requested cooperation under this Section 6.23 will
not be considered commercially reasonably if it would materially or unreasonably interfere with the operations of the Party (or any of
its Subsidiaries) requested to provide such cooperation.
Article VII
CONDITIONS PRECEDENT
Section 7.1 Conditions
to Each Party’s Obligation to Consummate the Merger. The respective obligation of each Party to consummate the Merger is
subject to the satisfaction at or prior to the Effective Time of the following conditions, any or all of which may be waived jointly
by the Parties, in whole or in part, to the extent permitted by applicable Law:
(a) Stockholder
Approvals. (i) The Company Stockholder Approval shall have been obtained in accordance with applicable Law and the Organizational
Documents of the Company and (ii) the Parent Stockholder Approval shall have been obtained in accordance with applicable Law and
the Organizational Documents of Parent.
(b) Regulatory
Approval. All waiting periods (and any extensions thereof) applicable to the Transactions under the HSR Act, and any commitment to,
or agreement (including any timing agreement) with, any Governmental Entity to delay the consummation of, or not to consummate before
a certain date, the Transactions, shall have expired or been terminated.
(c) No
Injunctions or Restraints. No Law shall be in effect restraining, enjoining, making illegal or unlawful, or otherwise prohibiting
the consummation of the Transactions (it being understood for avoidance of doubt that an HSR Reservation Notice shall not constitute
such a Law).
(d) Registration
Statement. The Registration Statement shall have been declared effective by the SEC under the Securities Act and shall not be the
subject of any stop order or Proceedings seeking a stop order.
(e) NASDAQ
Listing. The shares of Parent Common Stock issuable to the holders of shares of Company Common Stock pursuant to this Agreement shall
have been authorized for listing on NASDAQ, subject to official notice of issuance.
Section 7.2 Additional
Conditions to Obligations of Parent, Merger Sub and LLC Sub. The obligations of Parent and Merger Sub to consummate the Merger
are subject to the satisfaction at or prior to the Effective Time of the following conditions, any or all of which may be waived exclusively
by Parent, in whole or in part, to the extent permitted by applicable Law:
(a) Representations
and Warranties of the Company. (i) The representations and warranties of the Company set forth in the first sentence of Section 4.1
(Organization, Standing and Power), Section 4.2(a) (Capital Structure), Section 4.2(b) (Capital
Structure), the third and fifth sentences of Section 4.2(c) (Capital Structure), Section 4.3(a) (Authority),
Section 4.6(a) (Absence of Certain Changes or Events) and Section 4.24 (Brokers) shall have been true and
correct as of the date of this Agreement and shall be true and correct as of the Closing Date, as though made on and as of the Closing
Date (except, with respect to Section 4.2(a), Section 4.2(b), the third and fifth sentences of Section 4.2(c) and
Section 4.24, for any de minimis inaccuracies) (except that representations and warranties that speak as of a specified
date or period of time shall have been true and correct only as of such date or period of time), (ii) all other representations
and warranties of the Company set forth in Section 4.2(c) (Capital Structure) shall have been true and correct in all
material respects as of the date of this Agreement and shall be true and correct in all material respects as of the Closing Date, as
though made on and as of the Closing Date (except that representations and warranties that speak as of a specified date or period of
time shall have been true and correct in all material respects only as of such date or period of time), and (iii) all other representations
and warranties of the Company set forth in Article IV shall have been true and correct as of the date of this Agreement and
shall be true and correct as of the Closing Date, as though made on and as of the Closing Date (except that representations and warranties
that speak as of a specified date or period of time shall have been true and correct only as of such date or period of time), except,
in the case of this clause (iii), where the failure of such representations and warranties to be so true and correct (without
regard to qualification or exceptions contained therein as to “materiality,” “in all material respects” or “Company
Material Adverse Effect”) would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
(b) Performance
of Obligations of the Company. The Company shall have performed, or complied with, in all material respects all agreements and covenants
required to be performed or complied with by it under this Agreement on or prior to the Effective Time.
(c) Compliance
Certificate. Parent shall have received a certificate of the Company signed by an executive officer of the Company, dated the Closing
Date, confirming that the conditions in Section 7.2(a) and (b) have been satisfied.
Section 7.3 Additional
Conditions to Obligations of the Company
.
The obligation of the Company to consummate the Merger is subject to the satisfaction at or prior to the Effective Time of the following
conditions, any or all of which may be waived exclusively by the Company, in whole or in part, to the extent permitted by applicable
Law:
(a) Representations
and Warranties of Parent, Merger Sub and LLC Sub. (i) The representations and warranties of Parent, Merger Sub and LLC Sub set
forth in the first sentence of Section 5.1 (Organization, Standing and Power), Section 5.2(a) (Capital Structure),
Section 5.2(b) (Capital Structure), the second sentence, fifth sentence and seventh sentence of Section 5.2(e) (Capital
Structure), Section 5.3(a) (Authority), Section 5.6(a) (Absence of Certain Changes or Events) and Section 5.24
(Brokers) shall have been true and correct as of the date of this Agreement and shall be true and correct as of the Closing Date,
as though made on and as of the Closing Date (except, with respect to Section 5.2(a), Section 5.2(b), the fourth
sentence and sixth sentence of Section 5.2(e) and Section 5.24 for any de minimis inaccuracies) (except
that representations and warranties that speak as of a specified date or period of time shall have been true and correct only as of such
date or period of time), (ii) all other representations and warranties of Parent set forth in Section 5.2(e) (Capital
Structure) shall have been true and correct in all material respects as of the date of this Agreement and shall be true and correct in
all material respects as of the Closing Date, as though made on and as of the Closing Date (except that representations and warranties
that speak as of a specified date or period of time shall have been true and correct in all material respects only as of such date or
period of time), and (iii) all other representations and warranties of Parent, Merger Sub and LLC Sub set forth in Article V
shall have been true and correct as of the date of this Agreement and shall be true and correct as of the Closing Date, as though
made on and as of the Closing Date (except that representations and warranties that speak as of a specified date or period of time shall
have been true and correct only as of such date or period of time), except where the failure of such representations and warranties to
be so true and correct (without regard to qualification or exceptions contained therein as to “materiality,” “in all
material respects” or “Parent Material Adverse Effect”) that would not reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect.
(b) Performance
of Obligations of Parent, Merger Sub and LLC Sub. Parent, Merger Sub and LLC Sub each shall have performed, or complied with, in
all material respects all agreements and covenants required to be performed or complied with by them under this Agreement at or prior
to the Effective Time.
(c) Compliance
Certificate. The Company shall have received a certificate of Parent signed by an executive officer of Parent, dated the Closing
Date, confirming that the conditions in Section 7.3(a) and (b) have been satisfied.
(d) Tax
Opinion. The Company shall have received an opinion from Kirkland & Ellis LLP (or other legal counsel selected by the Company
and reasonably satisfactory to Parent), in form and substance reasonably satisfactory to the Company, dated as of the Closing Date, to
the effect that, on the basis of the facts, representations and assumptions set forth or referred to in such opinion, the Integrated
Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In
rendering the opinion described in this Section 7.3(d), Kirkland & Ellis LLP (or other applicable legal counsel)
shall have received and may rely upon the Parent Tax Certificate and the Company Tax Certificate and such other information reasonably
requested by and provided to it by the Company or Parent for purposes of rendering such opinion.
Section 7.4 Frustration
of Closing Conditions. None of the Parties may rely, either as a basis for not consummating the Merger or for terminating this
Agreement, on the failure of any condition set forth in Section 7.1, Section 7.2 or Section 7.3,
as the case may be, to be satisfied if such failure was caused by such Party’s breach in any material respect of any provision
of this Agreement.
Article VIII
TERMINATION
Section 8.1 Termination.
This Agreement may be terminated and the Transactions may be abandoned at any time prior to the Effective Time, whether (except as expressly
set forth below) before or after the Company Stockholder Approval or the Parent Stockholder Approval has been obtained:
(a) by
mutual written consent of the Company and Parent;
(b) by
either the Company or Parent:
(i) if
any Law permanently restraining, enjoining, making illegal or unlawful, or otherwise prohibiting the consummation of any of the Transactions
has become final and nonappealable; provided, however, that the right to terminate this Agreement under this Section 8.1(b)(i) shall
not be available to any Party whose material breach of any covenant or agreement under this Agreement has been the primary cause of or
resulted in the action or event described in this Section 8.1(b)(i) occurring;
(ii) if
the Merger shall not have been consummated on or before 5:00 p.m. Houston time on January 10, 2025 (such date, the “Outside
Date”); provided, however, that if five (5) days prior to the Outside Date, all of the conditions to closing
in Article VII have been satisfied or waived, other than any of the conditions in Section 7.1(b) or Section 7.1(c) (solely
if the applicable Law relates to any Antitrust Law) and conditions to be satisfied at the Closing (so long as such conditions remain
capable of being satisfied), the Outside Date shall automatically be extended to July 10, 2025, which later date shall thereafter
be deemed the Outside Date; provided, however, that if five (5) days prior to such extended date, all of the conditions
to closing in Article VII have been satisfied or waived, other than any of the conditions in Section 7.1(b) or
Section 7.1(c) (solely if the applicable Law relates to any Antitrust Law) and conditions to be satisfied at the Closing
(so long as such conditions remain capable of being satisfied), the Outside Date shall automatically be extended to January 10,
2026, which later date shall thereafter be deemed the Outside Date; provided, further, however, that the right to
terminate this Agreement under this Section 8.1(b)(ii) shall not be available to any Party whose material breach of
any covenant or agreement under this Agreement has been the primary cause of or resulted in the failure of the Merger to be consummated
on or before such date;
(iii) in
the event of a breach by the other Party of any representation, warranty, covenant or other agreement contained in this Agreement which
would give rise to the failure of a condition set forth in Sections 7.2(a) or (b) or Sections 7.3(a) or
(b), as applicable (and such breach is not curable prior to the Outside Date, or if curable prior to the Outside Date, has not
been cured by the earlier of (A) thirty (30) days after the giving of written notice to the breaching Party of such breach and (B) two
(2) Business Days prior to the Outside Date) (a “Terminable Breach”); provided, however, that the
terminating Party is not then in Terminable Breach of any representation, warranty, covenant or other agreement contained in this Agreement;
(iv) if
the Company Stockholder Approval shall not have been obtained upon a vote held at a duly held Company Stockholders Meeting, or at any
final adjournment or postponement thereof; or
(v) if
the Parent Stockholder Approval shall not have been obtained upon a vote held at a duly held Parent Stockholders Meeting, or at any final
adjournment or postponement thereof;
(c) by
Parent:
(i) prior
to, but not after, the time the Company Stockholder Approval is obtained, (A) if the Company Board or a committee thereof shall
have effected a Company Change of Recommendation (whether or not such Company Change of Recommendation is permitted by this Agreement)
or (B) if the Company shall have Willfully and Materially Breached any of its obligations under Section 6.3, in a manner
that materially impedes, interferes with or prevents the consummation of the Transaction on or before the Outside Date; or
(ii) prior
to, but not after, the time the Parent Stockholder Approval is obtained, in order to enter into a definitive agreement with respect to
a Parent Superior Proposal; provided, however, that (i) Parent has received a Parent Superior Proposal after the date
of this Agreement that did not result from a breach of Section 6.4, (ii) Parent has complied with Section 6.4
with respect to such Parent Superior Proposal (including the requirements set forth in Section 6.4(f)(ii)), (iii) the
Parent Board has authorized Parent to enter into, and Parent substantially concurrently enters into, a definitive written agreement providing
for such Parent Superior Proposal (it being agreed that Parent may enter into such definitive written agreement concurrently with any
such termination), and (iv) Parent shall have contemporaneously with such termination paid the Company the Parent Termination Fee
pursuant to Section 8.3;
(d) by
the Company:
(i) prior
to, but not after, the time the Parent Stockholder Approval is obtained, (A) if the Parent Board or a committee thereof shall have
effected a Parent Change of Recommendation (whether or not such Parent Change of Recommendation is permitted by this Agreement) or (B) if
Parent shall have Willfully and Materially Breached any of its obligations under Section 6.4, in a manner that materially
impedes, interferes with or prevents the consummation of the Transaction on or before the Outside Date; or
(ii) prior
to, but not after, the time the Company Stockholder Approval is obtained, in order to enter into a definitive agreement with respect
to a Company Superior Proposal; provided, however, that (i) the Company has received a Company Superior Proposal after
the date of this Agreement that did not result from a breach of Section 6.3, (ii) the Company has complied with Section 6.3
with respect to such Company Superior Proposal (including the requirements set forth in Section 6.3(f)(ii)), (iii) the
Company Board has authorized the Company to enter into, and the Company substantially concurrently enters into, a definitive written
agreement providing for such Company Superior Proposal (it being agreed that the Company may enter into such definitive written agreement
concurrently with any such termination), and (iv) the Company shall have contemporaneously with such termination paid Parent the
Company Termination Fee pursuant to Section 8.3.
Section 8.2 Notice
of Termination; Effect of Termination.
(a) A
terminating Party shall provide written notice of termination to the other Party specifying with particularity the reason for such termination
and, if made in accordance with this Agreement, any termination shall be effective immediately upon delivery of such written notice to
the other Party.
(b) In
the event of termination of this Agreement by any Party as provided in Section 8.1, this Agreement shall forthwith become
void and there shall be no liability or obligation on the part of any Party except with respect to this Section 8.2(b), Section 6.7(b),
Section 6.18, Section 8.3 and Article I and Article IX (and the provisions that substantively
define any related defined terms not substantively defined in Article I); provided, however, that notwithstanding
anything to the contrary herein, no such termination shall relieve any Party from liability for any damages or liability for a Willful
and Material Breach of any of its representations, warranties, covenants, agreements or obligations hereunder or fraud; in which case
the non-breaching Party shall be entitled to all rights and remedies available at law or in equity.
Section 8.3 Expenses
and Other Payments.
(a) Except
as otherwise provided in this Agreement, each Party shall pay its own expenses incident to preparing for, entering into and carrying
out this Agreement and the consummation of the Transactions, whether or not the Merger shall be consummated; provided, however,
that Parent and the Company shall each be responsible for the payment of 50% of the HSR filing fee applicable to the Merger.
(b) If
(i) Parent terminates this Agreement pursuant to Section 8.1(c)(i)(A) (Company Change of Recommendation) or Section 8.1(c)(i)(B) (Company
Willful Breach of Non-Solicit), or (ii) Parent or the Company terminates this Agreement pursuant to Section 8.1(b)(ii) (Outside
Date) or Section 8.1(b)(iv) (Failure to Obtain Company Stockholder Approval) at a time when Parent would have been entitled
to terminate this Agreement pursuant to Section 8.1(c)(i) (Company Change of Recommendation), then the Company shall
pay Parent the Company Termination Fee in cash by wire transfer of immediately available funds to an account designated by Parent no
later than three (3) Business Days after notice of termination of this Agreement.
(c) If
(i) the Company terminates this Agreement pursuant to Section 8.1(d)(i)(A) (Parent Change of Recommendation) or
Section 8.1(d)(i)(B) (Parent Willful Breach of Non-Solicit), or (ii) Parent or the Company terminates this Agreement
pursuant to Section 8.1(b)(ii) (Outside Date) or Section 8.1(b)(v) (Failure to Obtain Parent Stockholder
Approval) at a time when the Company would have been entitled to terminate this Agreement pursuant to Section 8.1(d)(i) (Parent
Change of Recommendation), then Parent shall pay the Company the Parent Termination Fee in cash by wire transfer of immediately available
funds to an account designated by the Company no later than three (3) Business Days after notice of termination of this Agreement.
(d) If
the Company terminates this Agreement pursuant to Section 8.1(d)(ii) (Company Superior Proposal), then the Company shall
pay Parent the Company Termination Fee, in cash by wire transfer of immediately available funds to an account designated by Parent, prior
to or concurrently with the termination of this Agreement.
(e) If
Parent terminates this Agreement pursuant to Section 8.1(c)(ii) (Parent Superior Proposal), then Parent shall pay the
Company the Parent Termination Fee, in cash by wire transfer of immediately available funds to an account designated by the Company,
prior to or concurrently with the termination of this Agreement.
(f) If
(i) (A) Parent or the Company terminates this Agreement pursuant to Section 8.1(b)(iv) (Failure to Obtain
Company Stockholder Approval), and on or before the date of any such termination, a Company Competing Proposal shall have been publicly
announced or publicly disclosed and not publicly withdrawn without qualification at least seven (7) Business Days prior to the Company
Stockholders Meeting or (B) (1) the Company terminates this Agreement pursuant to Section 8.1(b)(ii) (Outside
Date) at a time when Parent would be permitted to terminate this Agreement pursuant to Section 8.1(b)(iii) (Company
Terminable Breach) or (2) Parent terminates this Agreement pursuant to Section 8.1(b)(iii) (Company Terminable
Breach) and, in the case of each of clauses (1) and (2), following the execution of this Agreement and on or before
the date of any such termination a Company Competing Proposal shall have been announced, disclosed or otherwise communicated to the Company
Board and not withdrawn without qualification at least seven (7) Business Days prior to the date of such termination, and (ii) within
twelve (12) months of the date of such termination, the Company enters into a definitive agreement with respect to a Company Competing
Proposal (or publicly approves or recommends to the stockholders of the Company or otherwise does not oppose, in the case of a tender
or exchange offer, a Company Competing Proposal) or consummates a Company Competing Proposal, then the Company shall pay Parent the Company
Termination Fee (less any amount previously paid by the Company pursuant to Section 8.3(h)) within three (3) Business
Days after the earlier to occur of (x) the consummation of such Company Competing Proposal or (y) entering into a definitive
agreement relating to a Company Competing Proposal. For purposes of this Section 8.3(f) any reference in the definition
of Company Competing Proposal to “20% or more” shall be deemed to be a reference to “more than 50%”.
(g) If
(i) (A) Parent or the Company terminates this Agreement pursuant to Section 8.1(b)(v) (Failure to Obtain Parent
Stockholder Approval), and on or before the date of any such termination, a Parent Competing Proposal shall have been publicly
announced or publicly disclosed and not publicly withdrawn without qualification at least seven (7) Business Days prior to the Parent
Stockholders Meeting or (B) (1) Parent terminates this Agreement pursuant to Section 8.1(b)(ii) (Outside Date)
at a time when the Company would be permitted to terminate this Agreement pursuant to Section 8.1(b)(iii) (Parent Terminable
Breach) or (2) the Company terminates this Agreement pursuant to Section 8.1(b)(iii) (Parent Terminable Breach)
and, in the case of each of clauses (1) and (2), following the execution of this Agreement and on or before the date
of any such termination a Parent Competing Proposal shall have been announced, disclosed or otherwise communicated to the Parent Board
and not withdrawn without qualification at least seven (7) Business Days prior to the date of such termination, and (ii) within
twelve (12) months of the date of such termination, Parent enters into a definitive agreement with respect to a Parent Competing Proposal
(or publicly approves or recommends to the stockholders of Parent or otherwise does not oppose, in the case of a tender or exchange offer,
a Parent Competing Proposal) or consummates a Parent Competing Proposal, then Parent shall pay the Company the Parent Termination Fee
(less any amount previously paid by Parent pursuant to Section 8.3(i)) within three (3) Business Days after the earlier
to occur of (x) the consummation of such Parent Competing Proposal or (y) entering into a definitive agreement relating to
a Parent Competing Proposal. For purposes of this Section 8.3(g), any reference in the definition of Parent Competing Proposal
to “20% or more” shall be deemed to be a reference to “more than 50%”.
(h) If
Parent or the Company terminates this Agreement pursuant to Section 8.1(b)(iv) (Failure to Obtain Company Stockholder
Approval), then the Company shall pay Parent the Parent Expenses no later than three (3) Business Days after notice of termination
of this Agreement.
(i) If
Parent or the Company terminates this Agreement pursuant to Section 8.1(b)(v) (Failure to Obtain Parent Stockholder
Approval), then Parent shall pay the Company the Company Expenses no later than three (3) Business Days after notice of termination
of this Agreement.
(j) In
no event shall Parent or the Company, respectively, be entitled to receive more than one payment of the Company Termination Fee or Parent
Termination Fee, as applicable, or Parent Expenses or Company Expenses, as applicable. Notwithstanding anything in this Agreement to
the contrary, the payment of the Parent Expenses or of the Company Expenses shall not relieve the Company or Parent, respectively, of
any subsequent obligation to pay the Company Termination Fee or the Parent Termination Fee, as applicable; provided, that the
Company shall be entitled to credit any prior Parent Expenses actually paid by the Company pursuant to Section 8.3(h) against
the amount of any Company Termination Fee required to be paid and Parent shall be entitled to credit any prior Company Expenses actually
paid by Parent pursuant to Section 8.3(i) against the amount of any Parent Termination Fee required to be paid. The
Parties agree that the agreements contained in this Section 8.3 are an integral part of the Transactions, and that, without
these agreements, the Parties would not enter into this Agreement. Each of the Parties acknowledges and agrees that the Company Termination
Fee and the Parent Termination Fee, as applicable, is not intended to be a penalty, but rather is liquidated damages in a reasonable
amount that will compensate Parent or the Company, as applicable, in the circumstances in which such Company Termination Fee or Parent
Termination Fee is due and payable and which do not involve fraud or Willful And Material Breach, for the efforts and resources expended
and opportunities forgone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation
of the Transactions contemplated by this Agreement, which amount would otherwise be impossible to calculate with precision. If a Party
fails to promptly pay the amount due by it pursuant to this Section 8.3, interest shall accrue on such amount from the date
such payment was required to be paid pursuant to the terms of this Agreement until the date of payment at the rate of 8% per annum (compounded
annually). If in order to obtain such payment, the other Party commences a Proceeding that results in judgment for such Party for such
amount, the defaulting Party shall pay the other Party its reasonable out-of-pocket costs and expenses (including reasonable attorneys’
fees and expenses, provided, that, in no event shall attorneys’ fees that are based on a contingency fee, “success”
fee or any other type of fee arrangement dependent on the outcome of the Proceeding be deemed to constitute reasonable out-of-pocket
attorneys’ fees) incurred in connection with such Proceeding. The Parties agree that the monetary remedies set forth in this Section 8.3
and the specific performance remedies set forth in Section 9.10 shall be the sole and exclusive remedies of (i) the
Company and its Subsidiaries against Parent and its Subsidiaries and any of their respective former, current or future directors, officers,
stockholders, Representatives or Affiliates for any loss suffered as a result of the failure of any of the Integrated Mergers to be consummated
except in the case of fraud or a Willful and Material Breach of any representation, warranty, covenant, agreement or obligation (in which
case only Parent shall be liable for damages for such fraud or Willful and Material Breach), and upon payment of such amount, none of
Parent or any of its former, current or future directors, officers, stockholders, Representatives or Affiliates shall have any further
liability or obligation relating to or arising out of this Agreement or the Transactions, except for the liability of Parent in the case
of fraud or a Willful and Material Breach of any representation, warranty, covenant, agreement or obligation; and (ii) Parent and
its Subsidiaries against the Company and its Subsidiaries and any of their respective former, current or future directors, officers,
stockholders, Representatives or Affiliates for any loss suffered as a result of the failure of any of the Integrated Mergers to be consummated
except in the case of fraud or a Willful and Material Breach of any representation, warranty, covenant, agreement or obligation (in which
case only the Company shall be liable for damages for such fraud or Willful and Material Breach), and upon payment of such amount, none
of the Company and its Subsidiaries or any of their respective former, current or future directors, officers, stockholders, Representatives
or Affiliates shall have any further liability or obligation relating to or arising out of this Agreement or the Transactions, except
for the liability of the Company in the case of fraud or a Willful and Material Breach of any representation, warranty, covenant, agreement
or obligation.
Article IX
GENERAL PROVISIONS
Section 9.1 Schedule Definitions.
All capitalized terms in the Company Disclosure Letter and the Parent Disclosure Letter shall have the meanings ascribed to them herein
(including in Annex A) except as otherwise defined therein.
Section 9.2 Survival;
Exclusive Remedy.
(a) Except
as otherwise provided in this Agreement, none of the representations, warranties, agreements and covenants contained in this Agreement
will survive the Closing; provided, however, that Article I (and the provisions that substantively define any
related defined terms not substantively defined in Article I), this Article IX and the agreements of the Parties
in Article II and III, and Section 4.27 (No Additional Representations), Section 5.29 (No
Additional Representations), Section 6.9 (Employee Matters), Section 6.10 (Indemnification; Directors’
and Officers’ Insurance), Section 6.18 (Certain Indebtedness and Financing Cooperation), Section 6.19 (Tax
Matters), and those other covenants and agreements contained herein that by their terms apply, or that are to be performed in whole or
in part, after the Closing, shall survive the Closing. The Confidentiality Agreement shall (i) survive termination of this Agreement
in accordance with its terms and (ii) terminate as of the Effective Time.
(b) From
and after the Closing, except for claims of fraud, the remedies expressly provided for in this Agreement shall be the sole and exclusive
remedies for any and all claims against any Party to the extent arising under, out of, related to or in connection with this Agreement
including with respect to the Comprehensive Environmental Response, Compensation and Liability Act or any other Environmental Law. Without
limiting the generality of the foregoing, each of Company and Parent hereby waives, as of the Closing, to the fullest extent permitted
under applicable Law, any and all rights, claims and causes of action that it or any of their respective Affiliates may have against
the other Party or any of its Affiliates or its or their respective Representatives with respect to the subject matter of this Agreement,
whether under any contract, misrepresentation, tort, or strict liability theory, or under applicable Law, and whether in Law or in equity;
provided that the foregoing waiver shall not apply to any claims for fraud.
Section 9.3 Notices.
All notices, requests and other communications to any Party under, or otherwise in connection with, this Agreement shall be in writing
and shall be deemed to have been duly given (a) upon delivery in person to the Party to be notified; (b) if transmitted by
electronic mail (“e-mail”), upon confirmation by non-automated reply email; provided that each notice Party
shall use reasonable best efforts to confirm receipt of any such email correspondence promptly upon receipt of such request; or (c) upon
delivery if transmitted by national overnight courier (with confirmation of delivery) in each case as addressed as follows:
| |
(i) |
if
to Parent, Merger Sub or LLC Sub, to: |
| |
|
|
| |
|
Chesapeake
Energy Corporation |
| |
|
6100
North Western Avenue |
| |
|
Oklahoma
City, Oklahoma 73118 |
| |
|
Attention: |
Benjamin
E. Russ |
| |
|
E-mail: |
ben.russ@chk.com |
| |
|
|
| |
|
with
a required copy to (which copy shall not constitute notice): |
| |
|
|
| |
|
Latham &
Watkins LLP |
| |
|
811
Main Street, Suite 3700 |
| |
|
Houston,
Texas 77002 |
| |
|
Attention: |
Kevin
M. Richardson |
| |
|
|
William
N. Finnegan IV |
| |
|
|
Ryan
J. Lynch |
| |
|
E-mail: |
kevin.richardson@lw.com |
| |
|
|
bill.finnegan@lw.com |
| |
|
|
ryan.lynch@lw.com |
| |
|
|
| |
|
and |
| |
|
|
| |
|
Wachtell,
Lipton, Rosen & Katz |
| |
|
51
West 52nd Street |
| |
|
New
York, New York 10019 |
| |
|
Attention: |
David
A. Katz |
| |
|
E-mail: |
DAKatz@wlrk.com |
| |
|
|
| |
(ii) |
if
to the Company, to: |
| |
|
|
| |
|
Southwestern
Energy Company |
| |
|
10000
Energy Drive |
| |
|
Spring,
Texas 77389 |
| |
|
Attention: |
Chris
Lacy |
| |
|
E-mail: |
Chris_Lacy@swn.com |
| |
|
|
| |
|
with
a required copy to (which copy shall not constitute notice): |
| |
|
|
| |
|
Kirkland &
Ellis LLP |
| |
|
609
Main Street, Suite 4700 |
| |
|
Houston,
Texas 77002 |
| |
|
Attention: |
Douglas
E. Bacon, P.C. |
| |
|
|
Kim
Hicks, P.C. |
| |
|
|
Patrick
Salvo |
| |
|
E-mail: |
douglas.bacon@kirkland.com |
| |
|
|
kim.hicks@kirkland.com |
| |
|
|
patrick.salvo@kirkland.com |
Section 9.4 Rules of
Construction.
(a) Each
of the Parties acknowledges that it has been represented by independent counsel of its choice throughout all negotiations that have preceded
the execution of this Agreement and that it has executed the same with the advice of said independent counsel. Each Party and its counsel
cooperated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto
exchanged between the Parties shall be deemed the work product of the Parties and may not be construed against any Party by reason of
its preparation. Accordingly, any rule of Law or any legal decision that would require interpretation of any ambiguities in this
Agreement against any Party that drafted it is of no application and is hereby expressly waived.
(b) The
inclusion of any information in the Company Disclosure Letter or Parent Disclosure Letter shall not be deemed an admission or acknowledgment,
in and of itself and solely by virtue of the inclusion of such information in the Company Disclosure Letter or Parent Disclosure Letter,
as applicable, that such information is required to be listed in the Company Disclosure Letter or Parent Disclosure Letter, as applicable,
that such items are material to the Company and its Subsidiaries, taken as a whole, or Parent and its Subsidiaries, taken as a whole,
as the case may be, or that such items have resulted in a Company Material Adverse Effect or a Parent Material Adverse Effect. The headings,
if any, of the individual sections of each of the Parent Disclosure Letter and the Company Disclosure Letter are inserted for convenience
only and shall not be deemed to constitute a part thereof or a part of this Agreement. The Company Disclosure Letter and Parent Disclosure
Letter are arranged in sections corresponding to the Sections of this Agreement merely for convenience, and the disclosure
of an item in one section of the Company Disclosure Letter or Parent Disclosure Letter, as applicable, as an exception to a particular
representation or warranty shall be deemed adequately disclosed as an exception with respect to all other representations or warranties
to the extent that the relevance of such item to such representations or warranties is reasonably apparent on its face, notwithstanding
the presence or absence of an appropriate section of the Company Disclosure Letter or Parent Disclosure Letter with respect to such
other representations or warranties or an appropriate cross reference thereto.
(c) The
specification of any dollar amount in the representations and warranties or otherwise in this Agreement or in the Company Disclosure
Letter or Parent Disclosure Letter is not intended and shall not be deemed to be an admission or acknowledgment of the materiality of
such amounts or items, nor shall the same be used in any dispute or controversy between the Parties to determine whether any obligation,
item or matter (whether or not described herein or included in any schedule) is or is not material for purposes of this Agreement.
(d) All
references in this Agreement to Annexes, Exhibits, Schedules, Articles, Sections, subsections and other subdivisions refer to the
corresponding Annexes, Exhibits, Schedules, Articles, Sections, subsections and other subdivisions of this Agreement unless expressly
provided otherwise. Titles appearing at the beginning of any Articles, Sections, subsections or other subdivisions of this Agreement
are for convenience only, do not constitute any part of such Articles, Sections, subsections or other subdivisions, and shall be
disregarded in construing the language contained therein. The words “this Agreement,” “herein,” “hereby,”
“hereunder” and “hereof” and words of similar import, refer to this Agreement as a whole and not to any particular
subdivision unless expressly so limited. The words “this Section,” “this subsection” and words of similar import,
refer only to the Sections or subsections hereof in which such words occur. The word “including” (in its various
forms) means “including, without limitation.” Pronouns in masculine, feminine or neuter genders shall be construed to state
and include any other gender and words, terms and titles (including terms defined herein) in the singular form shall be construed to
include the plural and vice versa, unless the context otherwise expressly requires. Unless the context otherwise requires, all defined
terms contained herein shall include the singular and plural and the conjunctive and disjunctive forms of such defined terms. Unless
the context otherwise requires, all references to a specific time shall refer to Houston, Texas time. Unless otherwise clearly indicated
to the contrary or expressly specified herein by the context or use thereof: (i) the word “or” is not exclusive; (ii) the
word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends and
such phrase shall not mean simply “if”; and (iii) references to “written” or “writing” and words
of similar import includes printing, typing and other means of reproducing words (including, electronic form, and, for the avoidance
of doubt, including e-mail transmission or electronic communication by .pdf, but not text messages) in a visible form. The term “dollars”
and the symbol “$” mean United States Dollars. The table of contents and headings herein are for convenience of reference
only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof.
(e) In
this Agreement, except as the context may otherwise require, references to: (i) any agreement (including this Agreement), contract,
statute or regulation are to the agreement, contract, statute or regulation as amended, modified, supplemented, restated or replaced
from time to time (in the case of an agreement or contract, to the extent permitted by the terms thereof and, if applicable, by the terms
of this Agreement); (ii) any Governmental Entity includes any successor to that Governmental Entity; (iii) any applicable Law
refers to such applicable Law as amended, modified, supplemented or replaced from time to time (and, in the case of statutes, include
any rules and regulations promulgated under such statute) and references to any section of any applicable Law or other law
include any successor to such section; (iv) “days” mean calendar days; when calculating the period of time within which,
or following which, any act is to be done or step taken pursuant to this Agreement, the date that is the reference day in calculating
such period shall be excluded and if the last day of the period is a non-Business Day, the period in question shall end on the next Business
Day or if any action must be taken hereunder on or by a day that is not a Business Day, then such action may be validly taken on or by
the next day that is a Business Day; and (v) “made available” means, with respect to any document, that such document
was filed with or furnished to the SEC and available on Edgar or in the virtual data room, relating to the Transactions maintained by
the Company or Parent, as applicable, in each case, no later than 5:00 p.m. (Houston time) on the day that is one (1) Business
Day prior to the execution of this Agreement.
Section 9.5 Counterparts.
This Agreement may be executed in two (2) or more counterparts, including via facsimile or email in .pdf form transmission, all
of which shall be considered one and the same agreement and shall become effective when two (2) or more counterparts have been signed
by each of the Parties and delivered to the other Parties, it being understood that all Parties need not sign the same counterpart.
Section 9.6 Entire
Agreement; No Third Party Beneficiaries. This Agreement (together with the Confidentiality Agreement and any other documents
and instruments executed pursuant hereto) constitutes the entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the Parties with respect to the subject matter hereof. Except for the provisions of (a) Article III
(including, for the avoidance of doubt, the rights of the former holders of Company Common Stock and Company Incentive Awards to
receive the Merger Consideration) but only from and after the Effective Time and (b) Section 6.10 (which from and after
the Effective Time is intended for the benefit of, and shall be enforceable by, the Persons referred to therein and by their respective
heirs and Representatives) but only from and after the Effective Time, nothing in this Agreement, express or implied, is intended to
or shall confer upon any Person other than the Parties any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
Section 9.7 Governing
Law; Venue; Waiver of Jury Trial.
(a) SUBJECT
TO Section 9.15, THIS AGREEMENT, AND ALL CLAIMS OR CAUSES OF ACTION (WHETHER
IN CONTRACT OR TORT) THAT MAY BE BASED UPON, ARISE OUT OF RELATE TO THIS AGREEMENT, OR THE NEGOTIATION, EXECUTION OR PERFORMANCE
OF THIS AGREEMENT, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO
THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. NOTWITHSTANDING THE FOREGOING, ALL MATTERS RELATING TO THE FIDUCIARY OBLIGATIONS OF THE PARENT
BOARD SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF OKLAHOMA WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF TO THE EXTENT SUCH PRINCIPLES WOULD DIRECT A MATTER TO ANOTHER JURISDICTION.
(b) SUBJECT
TO Section 9.15, THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE
COURT OF CHANCERY OF THE STATE OF DELAWARE OR, IF THE COURT OF CHANCERY OF THE STATE OF DELAWARE OR THE DELAWARE SUPREME COURT DETERMINES
THAT, NOTWITHSTANDING SECTION 111 OF THE DGCL, THE COURT OF CHANCERY DOES NOT HAVE OR SHOULD NOT EXERCISE SUBJECT MATTER JURISDICTION
OVER SUCH MATTER, THE SUPERIOR COURT OF THE STATE OF DELAWARE AND THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE
OF DELAWARE SOLELY IN CONNECTION WITH ANY DISPUTE THAT ARISES IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND THE DOCUMENTS REFERRED TO IN THIS AGREEMENT OR IN RESPECT OF THE TRANSACTIONS, AND HEREBY WAIVE, AND AGREE NOT TO ASSERT,
AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR INTERPRETATION OR ENFORCEMENT HEREOF OR ANY SUCH DOCUMENT THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF SAID COURTS OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN
SAID COURTS OR THAT VENUE THEREOF MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN
OR BY SUCH COURTS, AND THE PARTIES IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND
DETERMINED EXCLUSIVELY BY SUCH DELAWARE STATE OR FEDERAL COURT, AND EACH OF THE PARTIES AGREE NOT TO COMMENCE ANY SUCH ACTION, SUIT OR
PROCEEDING EXCEPT IN SUCH DELAWARE STATE OR FEDERAL COURT. THE PARTIES HEREBY CONSENT TO AND GRANT ANY SUCH COURT JURISDICTION OVER THE
PERSON OF SUCH PARTIES AND OVER THE SUBJECT MATTER OF SUCH DISPUTE AND AGREE THAT MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION WITH
SUCH ACTION, SUIT OR PROCEEDING IN THE MANNER PROVIDED IN Section 9.3 OR IN
SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW SHALL BE VALID AND SUFFICIENT SERVICE THEREOF.
(c) EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) SUCH PARTY UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF THE FOREGOING WAIVER; (III) SUCH PARTY MAKES THE FOREGOING WAIVER VOLUNTARILY AND (IV) SUCH
PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS IN THIS Section 9.7.
Section 9.8 Severability.
Each Party agrees that, should any court or other competent authority hold any provision of this Agreement or part hereof to be invalid,
illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision
of this Agreement or invalidate or render unenforceable such other term or provision in any other jurisdiction. Upon such determination
that any term or other provision is invalid, illegal or unenforceable, the Parties shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the Transactions
be consummated as originally contemplated to the greatest extent possible. Except as otherwise contemplated by this Agreement, in response
to an order from a court or other competent authority for any Party to take any action inconsistent herewith or not to take an action
consistent herewith or required hereby, to the extent that a Party took an action inconsistent with this Agreement or failed to take
action consistent with this Agreement or required by this Agreement pursuant to such order, such Party shall not incur any liability
or obligation unless such Party did not in good faith seek to resist or object to the imposition or entering of such order.
Section 9.9 Assignment.
Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the Parties (whether by
operation of Law or otherwise) without the prior written consent of the other Party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.
Any purported assignment in violation of this Section 9.9 shall be void.
Section 9.10 Specific
Performance. The Parties agree that irreparable damage, for which monetary damages would not be an adequate remedy, would occur
in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise
breached by the Parties. Prior to the termination of this Agreement pursuant to Section 8.1, it is accordingly agreed that
the Parties shall be entitled to an injunction or injunctions, or any other appropriate form of specific performance or equitable relief,
to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of competent jurisdiction,
in each case in accordance with this Section 9.10, this being in addition to any other remedy to which they are entitled
under the terms of this Agreement at Law or in equity. Each Party accordingly agrees not to raise any objections to the availability
of the equitable remedy of specific performance to prevent or restrain breaches or threatened breaches of, or to enforce compliance with,
the covenants and obligations of such Party under this Agreement all in accordance with the terms of this Section 9.10. Each
Party further agrees that no other Party or any other Person shall be required to obtain, furnish or post any bond or similar instrument
in connection with or as a condition to obtaining any remedy referred to in this Section 9.10, and each Party irrevocably
waives any right it may have to require the obtaining, furnishing or posting of any such bond or similar instrument. If prior to the
Outside Date, any Party brings an action to enforce specifically the performance of the terms and provisions hereof by any other Party,
the Outside Date shall automatically be extended by such other time period established by the court presiding over such action.
Section 9.11 Affiliate
Liability. Each of the following is herein referred to as a “Company Affiliate”: (a) any direct or indirect
holder of equity interests or securities in the Company (whether stockholders or otherwise), and (b) any director, officer, employee,
Representative or agent of (i) the Company, or (ii) any Person who controls the Company. No Company Affiliate shall have any
liability or obligation to Parent, Merger Sub or LLC Sub of any nature whatsoever in connection with or under this Agreement or the Transactions
other than for fraud, and Parent, Merger Sub and LLC Sub waive and release all claims of any such liability and obligation, other than
for fraud. Each of the following is referred to as a “Parent Affiliate”: (x) any direct or indirect holder of equity
interests or securities in Parent (whether stockholders or otherwise), and (y) any director, officer, employee, Representative or
agent of (i) Parent or (ii) any Person who controls Parent. No Parent Affiliate shall have any liability or obligation to the
Company of any nature whatsoever in connection with or under this Agreement or the Transactions other than for fraud, and the Company
waives and releases all claims of any such liability and obligation, other than for fraud.
Section 9.12 Amendment.
This Agreement may be amended by the Parties at any time before or after adoption of this Agreement by the stockholders of the Company,
but, after any such adoption, no amendment shall be made which by Law would require the further approval by such stockholders without
first obtaining such further approval. Subject to Section 9.15, this Agreement may not be amended except by an instrument
in writing signed on behalf of each of the Parties.
Section 9.13 Extension;
Waiver. At any time prior to the Effective Time, the Company and Parent may, to the extent
legally allowed:
(a) extend
the time for the performance of any of the obligations or acts of the other Party hereunder;
(b) waive
any inaccuracies in the representations and warranties of the other Party contained herein or in any document delivered pursuant hereto;
or
(c) waive
compliance with any of the agreements or conditions of the other Party contained herein.
Notwithstanding the foregoing,
no failure or delay by the Company or Parent in exercising any right hereunder shall operate as a waiver thereof nor shall any single
or partial exercise thereof preclude any other or further exercise of any other right hereunder. No agreement on the part of a Party to
any such extension or waiver shall be valid unless set forth in an instrument in writing signed on behalf of such Party. No waiver by
any of the Parties of any default, misrepresentation or breach of representation, warranty, covenant or other agreement hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach or affect in any way any
rights arising by virtue of any prior or subsequent such occurrence.
Section 9.14 Non-Recourse.
This Agreement may only be enforced against, and any claim or cause of action based upon, arising out of, or related to this Agreement
or the Transactions may only be brought against, the entities that are expressly named as parties hereto and then only with respect to
the specific obligations set forth herein with respect to such party. Except to the extent a named party to this Agreement (and then only
to the extent of the specific obligations undertaken by such named party in this Agreement and not otherwise), no past, present or future
director, manager, officer, employee, incorporator, member, partner, equityholder, Affiliate, agent, attorney, advisor, consultant, Debt
Financing Source Related Party or Representative or Affiliate of any of the foregoing shall have any liability (whether in contract, tort,
equity or otherwise) for any one or more of the representations, warranties, covenants, agreements or other obligations or liabilities
of any one or more of Parent, the Company, Merger Sub or LLC Sub under this Agreement (whether for indemnification or otherwise) or of
or for any claim based on, arising out of, or related to this Agreement or the Transactions.
Section 9.15 Debt
Financing Sources. Notwithstanding anything in this Agreement to the contrary, each of the
parties on behalf of itself and each of its Affiliates hereby: (a) agrees that any legal action (whether in Law or in equity, whether
in Contract or in tort or otherwise), involving any Debt Financing Source Related Party, arising out of or relating to this Agreement,
any Debt Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, shall be subject
to the exclusive jurisdiction of any New York State court or federal court of the United States of America, in each case, sitting in New
York County and any appellate court thereof (each such court, the “Subject Courts”) and each party irrevocably submits
itself and its property with respect to any such legal action to the exclusive jurisdiction of such Subject Courts and agrees that any
such dispute shall be governed by, and construed in accordance with, the Laws of the State of New York, except as otherwise set forth
in any commitment letter in respect of such Debt Financing with respect to (i) the determination of the accuracy of any “specified
acquisition agreement representation” (as such term or similar term is defined in such commitment letter) and whether as a result
of any inaccuracy thereof Parent or any of its Affiliates has the right to terminate its or their obligations hereunder pursuant to Section 8.1(b)(iii) or
decline to consummate the Closing as a result thereof pursuant to Section 7.2(a) and (iii) the determination of
whether the Closing has been consummated in all material respects in accordance with the terms hereof, which shall in each case be governed
by and construed in accordance with the Laws of the State of Delaware, without giving effect to any choice or conflict of Law provision
or rule that would cause the application of Laws of any other jurisdiction, (b) agrees not to bring or support or permit any
of its Affiliates to bring or support any legal action (including any action, cause of action, claim, cross-claim or third party claim
of any kind or description, whether in Law or in equity, whether in Contract or in tort or otherwise), against any Debt Financing Source
Related Party in any way arising out of or relating to this Agreement, any Debt Financing or any of the transactions contemplated hereby
or thereby or the performance of any services thereunder in any forum other than any Subject Court, (c) irrevocably waives, to the
fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such legal action in any such
Subject Court, (d) knowingly, intentionally and voluntarily waives to the fullest extent permitted by applicable Law trial by jury
in any legal action brought against any Debt Financing Source Related Party in any way arising out of or relating to this Agreement, any
Debt Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, (e) agrees
that no Debt Financing Source Related Party will have any liability to any of the Company, the Company’s Subsidiaries or their respective
shareholders or Affiliates relating to or arising out of this Agreement, any Debt Financing or any of the transactions contemplated hereby
or thereby or the performance of any services thereunder and that none of the Company, the Company’s Subsidiaries or any of their
respective Affiliates or shareholders shall bring or support any legal action (including any action, cause of action, claim, cross-claim
or third party claim of any kind or description, whether in Law or in equity, whether in Contract or in tort or otherwise), against any
Debt Financing Source Related Source relating to or in any way arising out of this Agreement, any Debt Financing or any of the transactions
contemplated hereby or thereby or the performance of any services thereunder, (f) waives, and agrees not to assert, by way of motion
or as a defense, counterclaim or otherwise, in any legal action involving any Debt Financing Source Related Party or the transactions
contemplated hereby, any claim that it is not personally subject to the jurisdiction of the Subject Courts as described herein for any
reason, and (g) agrees (i) that any Debt Financing Source Related Parties are express third party beneficiaries of, and may
enforce, any of the provisions in this Section 9.15 (or the definitions of any terms used in this Section 9.15)
and (ii) to the extent any amendments to any provision of this Section 9.15 (or, solely as they relate to such Section,
the definitions of any terms used in this Section 9.15) are materially adverse to any Debt Financing Source Related Party,
such provisions shall not be amended without the prior written consent of each applicable Debt Financing Source. Notwithstanding anything
contained herein to the contrary, nothing in this Section 9.15 shall in any way affect any party’s or any of their respective
Affiliates’ rights and remedies under any binding agreement to which a Debt Financing Source is a party.
[Signature Pages Follow]
IN WITNESS WHEREOF, each Party
has caused this Agreement to be signed by its respective officer thereunto duly authorized, all as of the date first written above.
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PARENT: |
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CHESAPEAKE ENERGY CORPORATION |
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By: |
/s/
Domenic J. Dell’Osso, Jr. |
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Name: |
Domenic J. Dell'Osso, Jr. |
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Title: |
President and Chief Executive Officer |
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MERGER SUB: |
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HULK MERGER SUB, INC. |
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By: |
/s/ Domenic J.
Dell’Osso, Jr. |
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Name: |
Domenic J. Dell'Osso, Jr. |
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Title: |
President and Chief Executive Officer |
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|
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LLC SUB: |
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HULK LLC SUB, LLC |
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|
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|
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By: |
/s/ Domenic J.
Dell’Osso, Jr. |
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Name: |
Domenic J. Dell'Osso, Jr. |
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Title: |
President and Chief Executive Officer |
[Signature Page to Agreement
and Plan of Merger]
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COMPANY: |
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SOUTHWESTERN ENERGY COMPANY |
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|
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By: |
/s/
Bill Way |
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Name: |
Bill Way |
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Title: |
President & Chief Executive Officer |
[Signature Page to Agreement
and Plan of Merger]
ANNEX A
Certain Definitions
“Affiliate”
means, with respect to any Person, any other Person directly or indirectly, controlling, controlled by, or under common control with,
such Person, through one or more intermediaries or otherwise.
“Anti-Corruption
Laws” means (i) the United States Foreign Corrupt Practices Act of 1977, as amended, (ii) the U.K. Bribery Act 2010,
(iii) legislation adopted in furtherance of the OECD Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions and (iv) similar legislation applicable to the Company or Parent and their respective Subsidiaries, as applicable,
from time to time.
“Business Day”
means a day other than a day on which banks in the State of New York or the State of Delaware are authorized or obligated to be closed.
“Company Benefit
Plan” means an Employee Benefit Plan that is sponsored, maintained, contributed to or required to be contributed to by the Company
or any of its Subsidiaries or with respect to which the Company or any of its Subsidiaries has any obligation or liability (contingent
or otherwise).
“Company Competing
Proposal” means any contract, proposal, offer or indication of interest relating to any transaction or series of related transactions
(other than transactions only with Parent or any of its Subsidiaries) involving, directly or indirectly: (a) any acquisition (by
asset purchase, stock purchase, merger, or otherwise) by any Person or group of any business or assets of the Company or any of its Subsidiaries
(including capital stock of or ownership interest in any Subsidiary) that generated 20% or more of the Company’s and its Subsidiaries’
assets (by fair market value), net revenue or earnings before interest, Taxes, depreciation and amortization for the preceding twelve
(12) months, or any license, lease or long-term supply agreement having a similar economic effect, (b) any acquisition by any Person
resulting in, or proposal or offer, which if consummated would result in, any Person becoming the beneficial owner of directly or indirectly,
in one or a series of related transactions, 20% or more of the total voting power or of any class of equity securities of the Company
or those of any of its Subsidiaries, or 20% or more of the consolidated total assets (including, without limitation, equity securities
of its Subsidiaries) or (c) any merger, amalgamation, consolidation, division, tender offer, exchange offer, deSPAC transaction,
share exchange, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company or any of
its Subsidiaries.
“Company Credit Facility”
means that certain Amended and Restated Credit Agreement, dated as of April 8, 2022, by and among the Company, the financial institutions
from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent as amended by that certain Amendment No. 1
to Amended and Restated Credit Agreement dated as of August 4, 2022.
“Company Equity Plans”
means the Company’s 2022 Incentive Plan, the Company’s 2013 Incentive Plan, and the Company’s Nonemployee Director Deferred
Compensation Plan, in each case, as amended.
“Company Expenses”
means a cash amount equal to $37,250,000 to be paid in respect of the Company’s costs and expenses in connection with the negotiation,
execution and performance of this Agreement and the Transactions.
“Company
Incentive Awards” means the Company Option Awards, Company Performance Unit Awards, Company Performance Cash Unit Awards, Company
Restricted Stock Awards and Company Restricted Stock Unit Awards.
“Company Intervening
Event” means a development, event, effect, state of facts, condition, occurrence or change in circumstance that materially affects
the business or assets of the Company and its Subsidiaries (taken as a whole) that occurs or arises after the date of this Agreement that
was not known to or reasonably foreseeable by the Company Board as of the date of this Agreement (or, if known or reasonably foreseeable,
the magnitude or material consequences of which were not known or reasonably foreseeable by the Company Board as of the date of this Agreement);
provided, however, that in no event shall the following constitute a Company Intervening Event: (i) the receipt, existence
or terms of an actual or possible Company Competing Proposal or Company Superior Proposal, (ii) any Effect relating to Parent or
any of its Subsidiaries, (iii) any change, in and of itself, in the price or trading volume of shares of Company Common Stock or
Parent Common Stock (it being understood that the underlying facts giving rise or contributing to such change may be taken into account
in determining whether there has been a Company Intervening Event, to the extent otherwise permitted by this definition), (iv) the
fact that the Company or any of its Subsidiaries exceeds (or fails to meet) internal or published projections or guidance or any matter
relating thereto or of consequence thereof (it being understood that the underlying facts giving rise or contributing to such change may
be taken into account in determining whether there has been a Company Intervening Event, to the extent otherwise permitted by this definition),
(v) conditions (or changes in such conditions) in the oil and gas exploration and production industry (including changes in commodity
prices, general market prices and political or regulatory changes affecting the industry or any changes in applicable Law) or (vi) any
opportunity to acquire (by merger, joint venture, partnership, consolidation, acquisition of stock or assets or otherwise), directly or
indirectly, any assets, securities, properties or businesses from, or enter into any licensing, collaborating or similar arrangements
with, any other Person.
“Company Option Award”
means an option to purchase shares of Company Common Stock granted to an employee or individual service provider of the Company pursuant
to a Company Equity Plan.
“Company Performance
Cash Unit Award” an award in the form of cash units, the value of which depends on the performance of the Company over a specified
time period.
“Company Performance
Unit Award” means each award of restricted stock units granted pursuant to a Company Equity Plan that is subject performance-based
vesting conditions and for which the applicable performance period has not been completed as of the applicable determination date.
“Company Restricted
Stock Award” means each award of Company Common Stock that vests based on continued service to the Company, and which is granted
pursuant to a Company Equity Plan.
“Company Restricted
Stock Unit Award” means each award of restricted stock units relating to shares of Company Common Stock that vests based on
continued service to the Company granted pursuant to a Company Equity Plan (but does not include Company Performance Unit Awards).
“Company Stockholder
Approval” means the adoption of this Agreement by the holders of a majority in voting power of the outstanding shares of Company
Common Stock entitled to vote thereon in accordance with the DGCL and the Organizational Documents of the Company.
“Company Stockholders
Meeting” means the meeting of the stockholders of the Company to be held for the purposes of obtaining Company Stockholder Approval,
including any postponement, adjournment or recess thereof.
“Company Superior
Proposal” means a bona fide Company Competing Proposal that is not solicited after the date of this Agreement (or otherwise
resulting from a breach of Section 6.3) by any Person or group (other than Parent or any of its Affiliates) to acquire, directly
or indirectly, (a) businesses or assets of the Company or any of its Subsidiaries (including capital stock of or ownership interest
in any Subsidiary) that account for 50% or more of the fair market value of such assets or that generated 50% or more of the Company’s
and its Subsidiaries’ net revenue or earnings before interest, Taxes, depreciation and amortization for the preceding twelve (12)
months, respectively, or (b) 50% or more of the total voting power or of any class of equity securities of the Company or those of
any of its Subsidiaries, in each case whether by way of merger, amalgamation, share exchange, tender offer, exchange offer, recapitalization,
consolidation, sale of assets or otherwise, that in the good faith determination of the Company Board, (i) if consummated, would
result in a transaction more favorable to the Company’s stockholders (in their capacity as such) than the Merger (after taking into
account the time likely to be required to consummate such proposal and any binding irrevocable adjustments or revisions to the terms of
this Agreement offered by Parent in response to such proposal or otherwise) and (ii) is reasonably likely to be consummated on the
terms proposed, in each case taking into account any legal, financial, regulatory and stockholder approval requirements, including the
sources, availability and terms of any financing, financing market conditions and the existence of a financing contingency, the likelihood
of termination, the timing of Closing, the identity of the Person or Persons making the proposal and any other aspects considered relevant
by the Company Board.
“Company Termination
Fee” means $260,000,000.
“Consent”
means any filing, notice, notification, report, declaration, registration, certification, approval, clearance, consent, ratification,
permit, permission, waiver, expiration or termination of waiting periods, or authorization.
“Contract”
means any contract, legally binding commitment, license, promissory note, loan, bond, mortgage, indenture, lease or other legally binding
instrument or agreement (whether written or oral).
“control”
and its correlative terms, means the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
“Creditors’
Rights” means, collectively, bankruptcy, insolvency, reorganization, moratorium and other Laws of general applicability
relating to or affecting creditors’ rights and to general principles of equity regardless of whether such enforceability is considered
in a Proceeding in equity or at Law.
“Debt Financing Source
Related Parties” means the Debt Financing Sources, the respective Affiliates of each of the foregoing and the respective officers,
directors, employees, controlling Persons, agents, advisors and the other Representatives and successors of each of the foregoing.
“Derivative Transaction”
means any swap transaction, option, hedge, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor
transaction or collar transaction relating to one or more currencies, commodities (including, without limitation, natural gas, natural
gas liquids, crude oil and condensate), bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related
events or conditions or any indexes, or any other similar transaction (including any put, call or other option with respect to any of
these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments
or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or
other similar arrangements related to such transactions.
“DTC” means
The Depositary Trust Company.
“Edgar”
means the Electronic Data Gathering, Analysis and Retrieval System administered by the SEC.
“Employee Benefit
Plan” of any Person means any “employee benefit plan” (within the meaning of Section 3(3) of ERISA, regardless
of whether such plan is subject to ERISA), and any personnel policy (oral or written), equity option, restricted equity, equity purchase,
equity compensation, phantom equity or appreciation rights, bonus, incentive award, vacation or holiday pay, retention or severance, deferred
compensation, change in control, hospitalization or other medical, dental, vision, accident, disability, or life, executive compensation
or supplemental income, consulting, employment, and any other benefit or compensation plan, agreement, arrangement, program, or policy,
including for any present or former director, employee or contractor of the Person, but excluding any such plan, program or arrangement
that is administered by a Governmental Entity.
“Encumbrances”
means liens, pledges, charges, encumbrances, claims, hypothecation, mortgages, deeds of trust, security interests, restrictions, rights
of first refusal, defects in title, prior assignment, license sublicense or other burdens, options or encumbrances of any kind or any
agreement, option, right or privilege (whether by Law, contract or otherwise) capable of becoming any of the foregoing (any action of
correlative meaning, to “Encumber”).
“Environmental Laws”
means any and all Laws in effect as of or prior to the date hereof pertaining to pollution, protection of the environment or natural resources
(including, without limitation, any natural resource damages), human health and safety (to the extent relating to exposure to Hazardous
Materials), and the generation, treatment, storage, disposal, handling, use, manufacturing, transportation, discharge, emission or Release
of, or exposure to, Hazardous Materials.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate”
means, with respect to any Person, any other Person that is treated as a single employer with such Person within the meaning of Section 414
of the Code.
“Ex-Im Law”
means all Laws and regulations relating to export, re-export, transfer or import controls, including, without limitation, the Export Administration
Regulations administered by the U.S. Department of Commerce, and customs and import Laws administered by U.S. Customs and Border Protection.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended.
“fraud”
means, with respect to any Party, knowing actual common law fraud under the Laws of the State of Delaware in the making of any representation
or warranty made by such Party and set forth in Article IV or Article V of this Agreement.
“Governmental Entity”
means any U.S. or non-U.S. federal, state, tribal, local or municipal court or other adjudicative body or entity, legislature, governmental,
regulatory or administrative agency or commission or other governmental authority or instrumentality, domestic or foreign.
“group”
has the meaning ascribed to such term in Section 13(d) of the Exchange Act.
“Hazardous Materials”
means any (a) chemical, product, material, substance or waste that is defined or listed as hazardous or toxic, or as a pollutant
or contaminant, or that is otherwise regulated under, or for which standards of conduct or liability may be imposed pursuant to, any Environmental
Law due to its hazardous or dangerous properties or characteristics; (b) asbestos or asbestos-containing materials, whether in a
friable or non-friable condition, lead-containing material, polychlorinated biphenyls, per- and polyfluoroalkyl substances, naturally
occurring radioactive materials or radon; and (c) any Hydrocarbons.
“HSR Reservation
Notice” means a communication or notification from a Governmental Entity that an investigation of the Transaction under Antitrust
Laws may be conducted or continue following the expiration of the waiting period under the HSR Act and the consummation of the Merger.
“Hydrocarbons”
means any hydrocarbon-containing substance, crude oil, natural gas, casinghead gas, condensate, drip gas and natural gas liquids, coalbed
gas, ethane, propane, iso-butane, nor-butane, gasoline, scrubber liquids and other liquids or gaseous hydrocarbons or other substances
(including minerals or gases), or any combination thereof, produced, derived, refined or associated therewith.
“Indebtedness”
of any Person means, without duplication: (a) indebtedness of such Person for borrowed money; (b) obligations of such Person
to pay the deferred purchase or acquisition price for any property of such Person; (c) reimbursement obligations of such Person in
respect of drawn letters of credit or similar instruments issued or accepted by banks and other financial institutions for the account
of such Person; (d) obligations of such Person under a lease to the extent such obligations are required to be classified and accounted
for as a capital lease on a balance sheet of such Person under GAAP; and (e) indebtedness of others as described in clauses (a) through
(d) above guaranteed by such Person; but Indebtedness does not include accounts payable to trade creditors, or accrued expenses
arising in the Ordinary Course, in each case, that are not yet due and payable, or are being disputed in good faith, and the endorsement
of negotiable instruments for collection in the Ordinary Course.
“Intellectual Property”
means any and all proprietary, industrial and intellectual property rights, under the applicable Law of any jurisdiction or rights under
international treaties, both statutory and common Law rights, including: (a) utility models, supplementary protection certificates,
invention disclosures, registrations, patents and applications for same, and extensions, divisions, continuations, continuations-in-part,
reexaminations, revisions, renewals, substitutes, and reissues thereof; (b) trademarks, service marks, certification marks, collective
marks, brand names, d/b/a’s, trade names, slogans, domain names, symbols, logos, trade dress and other identifiers of source, and
registrations and applications for registrations thereof and renewals of the same (including all common Law rights and goodwill associated
with the foregoing and symbolized thereby); (c) published and unpublished works of authorship, whether copyrightable or not, copyrights
therein and thereto, together with all common Law and moral rights therein, database rights, and registrations and applications for registration
of the foregoing, and all renewals, extensions, restorations and reversions thereof; (d) trade secrets, know-how, and other rights
in information, including designs, formulations, concepts, compilations of information, methods, techniques, procedures, and processes,
whether or not patentable; (e) Internet domain names and URLs; and (f) all other intellectual property, industrial or proprietary
rights.
“IT Assets”
means computers, software, servers, networks, workstations, routers, hubs, circuits, switches, data communications lines, and all other
information technology equipment, and all associated documentation.
“Knowledge”
means the actual knowledge of, (a) in the case of the Company, the individuals listed in Schedule 1.1 of the Company
Disclosure Letter, and (b) in the case of Parent, the individuals listed in Schedule 1.1 of the Parent Disclosure Letter.
“Law” means
any law, statute, rule, regulation, ordinance, code, judgment, order, decree, injunction, decision, ruling, writ, award, treaty or convention,
U.S. or non-U.S., of any Governmental Entity, including common law.
“Material Adverse
Effect” means, when used with respect to any Party, any fact, circumstance, effect, change, event or development (“Effect”)
that (a) would prevent, materially delay or materially impair the ability of such Party or its Subsidiaries to consummate the Transactions
or (b) has, or would have, a material adverse effect on the financial condition, business, or results of operations of such Party
and its Subsidiaries, taken as a whole; provided, however, that with respect to this clause (b) only, no Effect
(by itself or when aggregated or taken together with any and all other Effects) to the extent directly or indirectly resulting from, arising
out of, attributable to, or related to any of the following shall be deemed to be or constitute a “Material Adverse Effect”
or shall be taken into account when determining whether a “Material Adverse Effect” has occurred or may, would or could occur:
| (i) | general economic conditions (or changes in such conditions) or conditions in the U.S. or global economies
generally; |
| (ii) | conditions (or changes in such conditions) in the securities markets, credit markets, commodity markets,
currency markets or other financial markets, including (A) changes in interest rates and changes in exchange rates for the currencies
of any countries and (B) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally
on any securities exchange or over-the-counter market; |
| (iii) | conditions (or changes in such conditions) in the oil and gas exploration, development or production
industry (including changes in commodity prices, general market prices and regulatory changes affecting the industry); |
| (iv) | political conditions (or changes in such conditions) or acts of war, sabotage or terrorism (including
any escalation or general worsening of any such acts of war, sabotage or terrorism); |
| (v) | earthquakes, hurricanes, tsunamis, tornadoes, floods, mudslides, wild fires or other natural disasters,
pandemics, epidemics or other widespread health crises or weather conditions; |
| (vi) | effects resulting from the negotiation, execution and announcement of this Agreement or the pendency or
consummation of the Transactions, including the impact thereof on the relationship of such Party and its Subsidiaries with customers,
suppliers, partners, employees or governmental bodies, agencies, officials or authorities (other than with respect to any representation
or warranty that is intended to address the consequences of the execution or delivery of this Agreement or the announcement or consummation
of the Transactions); |
| (vii) | the execution and delivery of or compliance with the terms of, or the taking of any action or failure
to take any action which action or failure to act is requested in writing by Parent or expressly permitted or required by, this Agreement
(except for any obligation under this Agreement to operate in the Ordinary Course (or similar obligation) pursuant to Sections 6.1
or 6.2, as applicable), the public announcement of this Agreement or the Transactions (provided that this clause (vii) shall
not apply to any representation or warranty to the extent the purpose of such representation or warranty is to address the consequences
resulting from the execution and delivery of this Agreement or the consummation of the Transactions); |
| (viii) | any litigation brought by any holder of Company Common Stock against the Company or holder of Parent Common
Stock against Parent, or against any of their respective Subsidiaries and/or respective directors or officers relating to the Merger and
any of the other Transactions or this Agreement; |
| (ix) | changes in Law or other legal or regulatory conditions, or the interpretation thereof, or changes in GAAP
or other accounting standards (or the interpretation thereof), or that result from any action taken for the purpose of complying with
any of the foregoing; |
| (x) | any Remedy Action or any effects arising due to Antitrust Law in relation to the Transactions; |
| (xi) | any changes in such Party’s stock price or the trading volume of such Party’s stock, or any
failure by such Party to meet any analysts’ estimates or expectations of such Party’s revenue, earnings or other financial
performance or results of operations for any period, or any failure by such Party or any of its Subsidiaries to meet any internal or published
budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that
the facts or occurrences giving rise to or contributing to such changes or failures may constitute, or be taken into account in determining
whether there has been or will be, a Material Adverse Effect); |
provided,
however, except to the extent such Effects directly or indirectly resulting from, arising out of, attributable to or related to
the matters described in the foregoing clauses (i) through (v) and (ix) disproportionately adversely
affect such Party and its Subsidiaries, taken as a whole, as compared to other similarly situated participants operating in the oil and
gas exploration, development or production industry (in which case, such adverse effects (if any) shall be taken into account when
determining whether a “Material Adverse Effect” has occurred or may, would or could occur solely to the extent they are disproportionate).
“NASDAQ”
means the Nasdaq Global Select Market.
“Notes”
means the Company’s (i) 4.950% Senior Notes due 2025, (ii) 8.375% Senior Notes due 2028, (iii) 5.375% Senior Notes
due 2029, (iv) 5.375% Senior Notes due 2030, and (v) 4.750% Senior Notes due 2032, and each series of Notes in the preceding
clauses (i) through (v) a “Series of Notes”.
“NYSE”
means the New York Stock Exchange.
“Oil and Gas Leases”
means all leases, subleases, licenses or other occupancy or similar agreements (including any series of related leases with the same lessor)
under which a Person leases, subleases or licenses or otherwise acquires or obtains rights to produce Hydrocarbons from real property
interests.
“Oil and Gas Properties”
means all interests in and rights with respect to (a) oil, gas, mineral, and similar properties of any kind and nature, including
working, leasehold and mineral interests and operating rights and royalties, overriding royalties, production payments, net profit interests
and other non-working interests and non-operating interests (including all Oil and Gas Leases, operating agreements, unitization and pooling
agreements and orders, division orders, transfer orders, mineral deeds, royalty deeds, and in each case, interests thereunder), surface
interests, carried interests, fee interests, reversionary interests, reservations and concessions and (b) all Wells.
“Ordinary Course”
means, with respect to an action taken by any Person, that such action is taken in the ordinary course of business consistent with the
past practices of such Person.
“Organizational Documents”
means (a) with respect to a corporation, the charter, articles or certificate of incorporation, as applicable, and bylaws thereof,
(b) with respect to a limited liability company, the certificate of formation or organization, as applicable, and the operating or
limited liability company agreement thereof, (c) with respect to a partnership, the certificate of formation or partnership and the
partnership agreement, and (d) with respect to any other Person the organizational, constituent and/or governing documents and/or
instruments of such Person.
“other Party”
means (a) when used with respect to the Company, Parent, Merger Sub and LLC Sub and (b) when used with respect to Parent, Merger
Sub or LLC Sub, the Company.
“Parent Competing
Proposal” means any contract, proposal, offer or indication of interest relating to any transaction or series of related transactions
(other than transactions only with the Company or any of its Subsidiaries) involving, directly or indirectly: (a) any acquisition
(by asset purchase, stock purchase, merger, or otherwise) by any Person or group of any business or assets of Parent or any of its Subsidiaries
(including capital stock of or ownership interest in any Subsidiary) that generated 20% or more of Parent’s and its Subsidiaries’
assets (by fair market value), net revenue or earnings before interest, Taxes, depreciation and amortization for the preceding twelve
(12) months, or any license, lease or long-term supply agreement having a similar economic effect, (b) any acquisition by any Person
resulting in, or proposal or offer, which if consummated would result in, any Person becoming the beneficial owner of directly or indirectly,
in one or a series of related transactions, 20% or more of the total voting power or of any class of equity securities of Parent or those
of any of its Subsidiaries, or 20% or more of the consolidated total assets (including, without limitation, equity securities of its Subsidiaries)
or (c) any merger, amalgamation, consolidation, division, tender offer, exchange offer, deSPAC transaction, share exchange, business
combination, recapitalization, liquidation, dissolution or similar transaction involving Parent or any of its Subsidiaries.
“Parent Credit Facility”
means that certain Credit Agreement, dated as of December 9, 2022, by and among Parent, the financial institutions from time to time
party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
“Parent Expenses”
means a cash amount equal to $55,600,000 to be paid in respect of Parent’s costs and expenses in connection with the negotiation,
execution and performance of this Agreement and the Transactions.
“Parent Intervening
Event” means a development, event, effect, state of facts, condition, occurrence or change in circumstance that materially affects
the business or assets of Parent and its Subsidiaries (taken as a whole) that occurs or arises after the date of this Agreement that was
not known to or reasonably foreseeable by the Parent Board as of the date of this Agreement (or, if known or reasonably foreseeable, the
magnitude or material consequences of which were not known or reasonably foreseeable by the Parent Board as of the date of this Agreement);
provided, however, that in no event shall the following constitute a Parent Intervening Event: (i) the receipt, existence
or terms of an actual or possible Parent Competing Proposal or Parent Superior Proposal, (ii) any Effect relating to the Company
or any of its Subsidiaries, (iii) any change, in and of itself, in the price or trading volume of shares of Parent Common Stock or
Company Common Stock (it being understood that the underlying facts giving rise or contributing to such change may be taken into account
in determining whether there has been a Parent Intervening Event, to the extent otherwise permitted by this definition), (iv) the
fact that Parent or any of its Subsidiaries exceeds (or fails to meet) internal or published projections or guidance or any matter relating
thereto or of consequence thereof (it being understood that the underlying facts giving rise or contributing to such change may be taken
into account in determining whether there has been a Parent Intervening Event, to the extent otherwise permitted by this definition),
(v) conditions (or changes in such conditions) in the oil and gas exploration and production industry (including changes in commodity
prices, general market prices and political or regulatory changes affecting the industry or any changes in applicable Law) or (vi) any
opportunity to acquire (by merger, joint venture, partnership, consolidation, acquisition of stock or assets or otherwise), directly or
indirectly, any assets, securities, properties or businesses from, or enter into any licensing, collaborating or similar arrangements
with, any other Person.
“Parent Plan”
means an Employee Benefit Plan and any successor plan thereto that, in each case, is sponsored, maintained, contributed to or required
to be contributed to by Parent or any of its Subsidiaries or with respect to which Parent or any of its Subsidiaries has any obligation
or liability (contingent or otherwise).
“Parent Stockholder
Approval” means the approval of the Parent Stock Issuance by the affirmative vote of a majority of the votes cast at the Parent
Stockholders Meeting in accordance with the rules and regulations of NASDAQ and the Organizational Documents of Parent.
“Parent Stockholders
Meeting” means the meeting of the stockholders of the Parent to be held for the purposes of obtaining Parent Stockholder Approval,
including any postponement adjournment or recess thereof.
“Parent Superior
Proposal” means a bona fide Parent Competing Proposal that is not solicited after the date of this Agreement (or otherwise
resulting from a breach of Section 6.4) by any Person or group to acquire, directly or indirectly, (a) businesses or
assets of Parent or any of its Subsidiaries (including capital stock of or ownership interest in any Subsidiary) that account for 50%
or more of the fair market value of such assets or that generated 50% or more of Parent’s and its Subsidiaries’ net revenue
or earnings before interest, Taxes, depreciation and amortization for the preceding twelve (12) months, respectively, or (b) 50%
or more of the total voting power or of any class of equity securities of Parent or those of any of its Subsidiaries, in each case whether
by way of merger, amalgamation, share exchange, tender offer, exchange offer, recapitalization, consolidation, sale of assets or otherwise,
that in the good faith determination of the Parent Board, (i) if consummated, would result in a transaction more favorable to Parent’s
stockholders (in their capacity as such) than the Merger (after taking into account the time likely to be required to consummate such
proposal and any binding irrevocable adjustments or revisions to the terms of this Agreement offered by the Company in response to such
proposal or otherwise) and (ii) is reasonably likely to be consummated on the terms proposed, in each case taking into account any
legal, financial, regulatory and stockholder approval requirements, including the sources, availability and terms of any financing, financing
market conditions and the existence of a financing contingency, the likelihood of termination, the timing of Closing, the identity of
the Person or Persons making the proposal and any other aspects considered relevant by the Parent Board.
“Parent Termination
Fee” means $389,000,000.
“Parent Warrant Agreements”
means that certain (i) Class A Warrant Agreement, dated as of February 9, 2021, between Parent and Equiniti Trust Company,
(ii) Class B Warrant Agreement, dated as of February 9, 2021, between Parent and Equiniti Trust Company and (iii) Class C
Warrant Agreement, dated as of February 9, 2021, between Parent and Equiniti Trust Company.
“Party”
or “Parties” means a party or the parties to this Agreement, except as the context may otherwise require.
“Permitted Encumbrances”
means:
| (i) | to the extent not applicable to the Transactions or otherwise waived prior to the Effective Time, preferential
purchase rights, rights of first refusal, purchase options and similar rights granted pursuant to any contracts, including joint operating
agreements, joint ownership agreements, participation agreements, development agreements, stockholders agreements, consents and other
similar agreements and documents; |
| (ii) | (A) contractual or statutory mechanic’s, materialmen’s, warehouseman’s, journeyman’s,
vendor’s, repairman’s, construction and carrier’s liens and other similar Encumbrances arising in the Ordinary Course
for amounts not yet delinquent and (B) Encumbrances for Taxes or assessments or other governmental charges that are not yet delinquent
or, in all instances, if delinquent, that are being contested in good faith by appropriate Proceeding and for which adequate reserves
have been established on the financial statements of the Company or Parent, as applicable, in accordance with GAAP; |
| (iii) | Production Burdens payable to third parties that are deducted in the calculation of discounted present
value in the Company Reserve Report or the Parent Reserve Report, as applicable; |
| (iv) | Encumbrances arising in the Ordinary Course under operating agreements, joint venture agreements, partnership
agreements, Oil and Gas Leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or
exchange of oil, gas or other Hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development
agreements, joint ownership arrangements and other agreements that are customary in the oil and gas business, provided, however,
that, in each case, such Encumbrance (i) secures obligations that are not Indebtedness or a deferred purchase price and are not delinquent
and (ii) would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect, on the value, use
or operation of the property encumbered thereby; |
| (v) | such Encumbrances as the Company (in the case of Encumbrances with respect to properties or assets of
Parent or its Subsidiaries) or Parent (in the case of Encumbrances with respect to properties or assets of the Company or its Subsidiaries),
as applicable, have expressly waived in writing; |
| (vi) | all easements, zoning restrictions, conditions, covenants, rights-of-way, servitudes, permits, surface
leases and other similar rights in respect of surface operations, and easements for pipelines, facilities, streets, alleys, highways,
telephone lines, power lines, railways removal of timber, grazing, logging operations, canals, ditches, reservoirs and other easements
and rights-of-way, on, over or in respect of any of the properties of the Company or Parent, as applicable, or any of their respective
Subsidiaries, that are customarily granted in the oil and gas industry and do not materially interfere with the operation, value or use
of the property or asset affected; |
| (vii) | any Encumbrances to be discharged at or prior to the Effective Time (including Encumbrances securing any
Indebtedness that will be paid off in connection with Closing); |
| (viii) | Encumbrances imposed or promulgated by applicable Law or any Governmental Entity with respect to real
property, including zoning, building or similar restrictions; |
| (ix) | Encumbrances, exceptions, defects or irregularities in title, easements, imperfections of title, claims,
charges, security interests, rights-of-way, covenants, restrictions and other similar matters that would be accepted by a reasonably prudent
purchaser of oil and gas interests in the geographic area where such oil and gas interests are located, that would not reduce the net
revenue interest share of the Company or Parent (without at least a proportionate increase in net revenue interest), as applicable, or
such Party’s Subsidiaries, in any Oil and Gas Lease below the net revenue interest share shown in the Company Reserve Report, with
respect to such lease, or increase the working interest of the Company or Parent, as applicable, or of such Party’s Subsidiaries,
in any Oil and Gas Lease above the working interest shown on the Company Reserve Report, with respect to such lease and, in each case,
that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or
Parent Material Adverse Effect, as applicable; |
| (x) | with respect to (i) Parent and its Subsidiaries, Encumbrances arising under the Parent Credit Facility
and (ii) the Company and its Subsidiaries, Encumbrances arising under the Company Credit Facility; |
| (xi) | Encumbrances arising from precautionary Uniform Commercial Code financing statements or similar filings
made in respect of operating leases; |
| (xii) | Encumbrances that are contractual rights of set-off, revocation, refund, or chargeback (i) relating
to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness, (ii) relating
to pooled deposits or sweep accounts to permit satisfaction of overdraft or similar obligations incurred in the Ordinary Course or (iii) relating
to purchase orders and other agreements entered in the Ordinary Course; |
| (xiii) | Encumbrances solely on any cash earnest money deposits or escrow arrangements in connection with any letter
of intent or purchase agreement relating to any acquisition of property permitted hereunder; |
| (xiv) | Encumbrances on insurance policies and the proceeds thereof securing the financing of the related insurance
premiums; |
| (xv) | ground leases in respect of real property on which facilities owned or leased by the Company, Parent or
any of their respective Subsidiaries are located; |
| (xvi) | any right which any municipal or governmental body or agency may have by virtue of any franchise, license,
contract or statute to purchase, or designate a purchaser of or order the sale or disposition of, any property upon payment of reasonable
compensation therefor or to terminate any franchise, license or other rights or to regulate the property and business of the Company or
Parent, as applicable; |
| (xvii) | Encumbrances on (x) property of the Company or a Subsidiary thereof securing its obligations owing
to the Company or a wholly owned Subsidiary thereof and (y) property of Parent or a Subsidiary thereof securing its obligations owing
to Parent or a wholly owned Subsidiary thereof; and |
| (xviii) | Encumbrances consisting of deposits which secure public or statutory obligations, or surety, custom or
appeal bonds, or the payment of contested taxes or import duties. |
“Person”
means any individual, partnership, limited liability company, corporation, joint stock company, trust, estate, joint venture, Governmental
Entity, association or unincorporated organization, or any other form of business or professional entity.
“Personal Information”
means any information that (i) alone or in combination with other information held by the Company or any of its Subsidiaries, identifies
or could reasonably be used to identify an individual, and/or (ii) is considered “personally identifiable information,”
“personal information,” “personal data,” or any similar term by any applicable Laws.
“Proceeding”
means any cause of action, action, audit, demand, litigation, suit, proceeding, investigation, citation, inquiry, hearing, arbitration
or other proceeding at Law or in equity or order or ruling, in each case whether civil, criminal, administrative, investigative or otherwise,
whether in contract, in tort or otherwise.
“Production Burdens”
means any royalties (including lessor’s royalties), overriding royalties, production payments, net profit interests or other similar
interests that constitute a burden on, and are measured by or are payable out of the production of Hydrocarbons or the proceeds realized
from the sale or other disposition thereof.
“Release”
means any releasing, depositing, spilling, leaking, pumping, pouring, placing, emitting, discarding, abandoning, emptying, discharging,
injecting, escaping, leaching, dumping, dispersing or disposing into or onto the indoor or outdoor environment.
“Representatives”
means, with respect to any Person, the officers, directors, employees, accountants, consultants, agents, legal counsel, financial advisors
and other representatives of such Person.
“Sanctioned Person”
means, at any time, any Person: (a) listed on any Sanctions-related list of designated or blocked Persons; (b) resident in or
organized under the Laws of a country or territory that is the subject of comprehensive Sanctions from time to time; or (c) majority
owned or controlled by any of the foregoing.
“Sanctions”
means those trade, economic and financial sanctions Laws, regulations, embargoes and restrictive measures (in each case having the force
of Law) administered, enacted or enforced from time to time by (a) the United States (including, without limitation, the Department
of Treasury, Office of Foreign Assets Control), (b) the European Union and enforced by its member states, (c) the United Nations
or (d) Her Majesty’s Treasury.
“Sarbanes-Oxley Act”
means the Sarbanes-Oxley Act of 2002.
“SEC” means
the United States Securities and Exchange Commission.
“Securities Act”
means the Securities Act of 1933, as amended.
“Subsidiary”
means, with respect to a Person, any Person, whether incorporated or unincorporated, of which (a) more than 50% of the securities
or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other Persons performing
similar functions, (b) a general partner interest or (c) a managing member interest, is directly or indirectly owned or controlled
by the subject Person or by one or more of its respective Subsidiaries.
“Takeover Law”
means any “fair price,” “moratorium,” “control share acquisition,” “business combination”
or any other anti-takeover statute or similar statute enacted under applicable Law, including Section 203 of the DGCL and Sections
1090.3 and 1145 through 1155 of the Oklahoma General Corporation Act.
“Tax Returns”
means any return, report, statement, information return or other document (including any related or supporting information) filed or required
to be filed with any Taxing Authority in connection with the determination, assessment, collection or administration of any Taxes, including
any schedule or attachment thereto and any amendment thereof.
“Taxes”
means any and all taxes and similar charges, duties, levies or other assessments, each in the nature of a tax, including, but not limited
to, income, estimated, business, occupation, corporate, gross receipts, transfer, stamp, employment, occupancy, license, severance, capital,
impact fee, production, ad valorem, excise, property, sales, use, turnover, value added and franchise taxes, deductions, withholdings
and custom duties, imposed by any Governmental Entity, including interest, penalties, and additions to tax imposed with respect thereto.
“Taxing Authority”
means any Governmental Entity having jurisdiction in matters relating to Tax matters.
“Transactions”
means the Merger, the LLC Sub Merger and the other transactions contemplated by this Agreement and each other agreement to be executed
and delivered in connection with this Agreement.
“Transfer Taxes”
means any transfer, sales, use, stamp, registration or other similar Taxes; provided, for the avoidance of doubt, that Transfer
Taxes shall not include any income, franchise or similar taxes.
“Voting Debt”
of a Person means bonds, debentures, notes or other Indebtedness having the right to vote (or convertible into securities having the right
to vote) on any matters on which stockholders of such Person may vote.
“Wells”
means all oil or gas wells, whether producing, operating, shut-in or temporarily abandoned, located on an Oil and Gas Lease or any pooled,
communitized or unitized acreage that includes all or a part of such Oil and Gas Lease or otherwise associated with an Oil and Gas Property
of the applicable Person or any of its Subsidiaries, together with all oil, gas and mineral production from such well.
“Willful and Material
Breach” including the correlative term “Willfully and Materially Breach,” shall mean a breach that is material (or
the committing of a breach that is material) that is a consequence of an act or failure to take an act by the breaching party with the
knowledge (actual or constructive) that the taking of such act (or the failure to take such act) would constitute, or would reasonably
be expected to result in, a breach of this Agreement.
EXHIBIT A
Form of Certificate of Incorporation of
the Surviving Corporation
[Omitted.]
EXHIBIT B
Form of Bylaws of the Surviving Corporation
[Omitted.]
EXHIBIT C
Form of LLC Sub Merger Agreement
[Omitted.]
Exhibit 99.1
The following presentation was published on Southwestern Energy Company's website
on January 11, 2024 for information regarding the proposed merger between Chesapeake Energy Corporation and Southwestern Energy Company
Accelerating America’s Energy Reach Fueling a More Affordable, Reliable and Lower Carbon Future JANUARY 11, 2024
Accelerating America’s Energy Reach 2 ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed transaction between Chesapeake Energy Corporation (“Chesapeake”) and Southwestern Energy Comp any (“Southwestern”), Chesapeake intends to file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S - 4 (the “registration statement”) to register the shares of Chesapeake’ s common stock to be issued in connection with the proposed transaction. The registration statement will include a joint proxy statement of Chesapeake and Southwestern and will also constitute a prospectus of Chesap eak e (the “joint proxy statement/prospectus”). Each of Chesapeake and Southwestern may also file other documents regarding the proposed transaction with the SEC. This document is not a substitute for the joint proxy s tat ement/prospectus or the registration statement or any other document that Chesapeake or Southwestern may file with the SEC. BEFORE MAKING ANY VOTING DECISION, INVESTORS ARE URGED TO CAREFULLY READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMEN T/ PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS FILED OR THAT MAY BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTI ON, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, AS THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT CHE SAP EAKE, SOUTHWESTERN, THE PROPOSED TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS. After the registration statement has been declared effective, a definitive joint proxy statement/prospectus will be mailed to th e stockholders of Chesapeake and Southwestern. Investors will be able to obtain free copies of the registration statement and joint proxy statement/prospectus and other relevant documents containing important information abo ut Chesapeake, Southwestern and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov . Copies of the documents filed with the SEC by Chesapeake may be obtained free of charge on Chesapeake’s website at http://investors.chk.com/ . Copies of the documents filed with the SEC by Southwestern may be obtained free of charge on Southwestern’s website at https://ir.swn.com/CorporateProfile/default.aspx . PARTICIPANTS IN THE SOLICITATION Chesapeake and Southwestern and certain of their respective directors, executive officers and other members of management and em ployees may be deemed to be participants in the solicitation of proxies in connection with the proposed transaction contemplated by the joint proxy statement/prospectus. Information regarding Chesapeake’s direct ors and executive officers and their ownership of Chesapeake’s securities is set forth in Chesapeake’s filings with the SEC, including Chesapeake’s Annual Report on Form 10 - K for the fiscal year ended December 31, 2022 , and its Proxy Statement on Schedule 14A, which was filed with the SEC on April 28, 2023. To the extent such person’s ownership of Chesapeake’s securities has changed since the filing of Chesapeake’s proxy sta tem ent, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the SEC thereafter. Information regarding Southwestern’s directors and executive officers and their ownersh ip of Southwestern’s securities is set forth in Southwestern’s filings with the SEC, including Southwestern’s Annual Report on Form 10 - K for the fiscal year ended December 31, 2022, and its Proxy Statement on Schedule 14A, which was filed with the SEC on April 5, 2023. To the extent such person’s ownership of Southwestern’s securities has changed since the filing of Southwestern’s proxy statement, such changes have been or will b e r eflected on Statements of Change in Ownership on Form 4 filed with the SEC thereafter. Additional information regarding the interests of those persons and other persons who may be deemed participants in the proxy so licitations may be obtained by reading the joint proxy statement/prospectus and other relevant materials that will be filed with the SEC regarding the proposed transaction when such documents become available. Y ou may obtain free copies of these documents as described in the preceding paragraph. NO OFFER OR SOLICITATION This communication relates to the proposed transaction between Chesapeake and Southwestern. This communication is for informa tio nal purposes only and shall not constitute an offer to sell or exchange, or the solicitation of an offer to buy or exchange, any securities or a solicitation of any vote or approval, in any jurisdiction, pursuant to th e p roposed transaction or otherwise, nor shall there be any sale, issuance, exchange or transfer of the securities referred to in this document in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Important Information for Investors and Stockholders
Accelerating America’s Energy Reach 3 This communication contains “forward - looking statements” within the meaning of the federal securities laws. Forward - looking stat ements may be identified by words such as “anticipates,” “believes,” “cause,” “continue,” “could,” “depend,” “develop,” “estimates,” “expects,” “forecasts,” “goal,” “guidance,” “have,” “impact,” “implement,” “increa se, ” “intends,” “lead,” “maintain,” “may,” “might,” “plans,” “potential,” “possible,” “projected,” “reduce,” “remain,” “result,” “scheduled,” “seek,” “should,” “will,” “would” and other similar words or expressions. The abse nce of such words or expressions does not necessarily mean the statements are not forward - looking. Forward - looking statements are not statements of historical fact and reflect Chesapeake’s and Southwestern’s current views about future events. These forward - looking statements include, but are not limited to, statements regarding the proposed transaction between Chesapeake and Southwestern, the expected closing of the proposed transaction and the timing thereof and the proforma combined company and its operations, strategies and plans, integration, enhancements to investment grade credit profile, emissions profile, debt levels and leverage ratio, capit al expenditures, liquidity, return on capital employed, net asset value, cost of capital, operating cash flows, cash flows and anticipated uses thereof, synergies, opportunities and anticipated future performance, capital structur e, achievement of investment - grade credit rating, expected accretion to earnings NAV, ROCE, cash flow and free cash flow, anticipated dividends, and natural gas portfolio, demand for products, quality of inventory and abil ity to deliver affordable lower carbon energy. Information adjusted for the proposed transaction should not be considered a forecast of future results. Although we believe our forward - looking statements are reasonable, statements ma de regarding future results are not guarantees of future performance and are subject to numerous assumptions, uncertainties and risks that are difficult to predict. Forward - looking statements are based on current exp ectations, estimates and assumptions that involve a number of risks and uncertainties that could cause actual results to differ materially from those projected. Actual outcomes and results may differ materially from the results stated or implied in the forward - looking statements included in this communication due to a number of factors, including, but not limited to: the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the possibility that Ch esa peake stockholders may not approve the issuance of Chesapeake’s common stock in connection with the proposed transaction; the possibility that the stockholders of Southwestern may not approve the merger agreement; the ris k t hat Chesapeake or Southwestern may be unable to obtain governmental and regulatory approvals required for the proposed transaction, or required governmental and regulatory approvals may delay the merger or result in th e i mposition of conditions that could cause the parties to abandon the merger; the risk that the parties may not be able to satisfy the conditions to the proposed transaction in a timely manner or at all; risks related to disrupti on of management time from ongoing business operations due to the proposed transaction; the risk that any announcements relating to the proposed transaction could have adverse effects on the market price of Chesapeake’s common stoc k o r Southwestern’s common stock; the risk of any unexpected costs or expenses resulting from the proposed transaction; the risk of any litigation relating to the proposed transaction; the risk that the proposed transac tio n and its announcement could have an adverse effect on the ability of Chesapeake and Southwestern to retain and hire key personnel, on the ability of and Southwestern to attract third - party customers and maintain its relationship s with derivatives counterparties and on Chesapeake’s and Southwestern’s operating results and businesses generally; the risk that problems Chesapeake may arise in successfully integrating the businesses of the companies, which may result in the combined company not operating as eff ectively and efficiently as expected; the risk that the combined company may be unable to achieve synergies or other anticipated benefits of the proposed transacti on or it may take longer than expected to achieve those synergies or benefits and other important factors that could cause actual results to differ materially from those projected; the volatility in commodity prices for cru de oil and natural gas, the presence or recoverability of estimated reserves; the ability to replace reserves; environmental risks, drilling and operating risks, including the potential liability for remedial actions or assessments unde r e xisting or future environmental regulations and litigation; exploration and development risks; the effect of future regulatory or legislative actions on the companies or the industry in which they operate, including the risk of new re str ictions with respect to oil and natural gas development activities; the risk that the credit ratings of the combined business may be different from what the companies expect; the ability of management to execute its plans to meet its go als and other risks inherent in Chesapeake’s and Southwestern’s businesses; public health crises, such as pandemics and epidemics, and any related government policies and actions; the potential disruption or interruption of Ch esapeake’s or Southwestern’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond Chesapeake’s or Southwestern’s control; and t he combined company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry. Other unpredictable or unknown factors not discussed in this communication could also have materi al adverse effects on forward - looking statements. All such factors are difficult to predict and are beyond Chesapeake’s or Southwestern’s control, including those detailed in Che sapeake’s annual reports on Form 10 - K, quarterly reports on Form 10 - Q and current reports on Form 8 - K that are available on its website at http://investors.chk.com/ and on the SEC’s website at http://www.sec.gov , and those detailed in Southwestern’s annual reports on Form 10 - K, quarterly reports on Form 10 - Q and current reports on Form 8 - K that are available on Southwestern’s website at https://ir.swn.com/CorporateProfile/default.aspx and on the SEC’s website at http://www.sec.gov . Forward - looking statements are based on the estimates and opinions of management at the time the statements are made. Chesapeake and Southwestern undertake no obligation to publicly correct or update the forward - looking statements in this communication, in other documents, or on their respective websites to reflect new information, future events or otherwise, except as required b y a pplicable law. All such statements are expressly qualified by this cautionary statement. Readers are cautioned not to place undue reliance on these forward - looking statements that speak only as of the date hereof. This presentation contains certain financial measures that are not prepared or presented in accordance with generally accepte d a ccounting principles (“GAAP”). These non - GAAP financial measures include EBITDAX and net debt. Non - GAAP financial measures are not measurements of financial performance under GAAP and should not be alternatives to amounts presented in accordance with GAAP. Chesapeake and Southwestern view these non - GAAP financial measures as supplemental and they are not intended to be a substitute for, or superior to, the information pr ovided by GAAP financial results. Forward - Looking Statements
Accelerating America’s Energy Reach 4 Accelerating America’s Energy Reach Pro Forma Ownership ~60% / ~40% Chesapeake / Southwestern Stock - for - Stock Exchange 0.0867 shares of CHK common stock for each share of SWN common stock Combined Enterprise Value ~$24 billion TRANSACTION OVERVIEW Expanding Board: 7 CHK / 4 SWN Non - Exec Chairman: Mike Wichterich President and CEO: Nick Dell’Osso Company will assume a new name upon close HQ in OKC with material presence in Houston PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP Significant synergies and accretive to all financial metrics including shareholder returns Creates platform to expand marketing and trading business to reach more markets, mitigate price volatility and increase revenue Investment Grade quality capital structure that handles volatility and buffers returns Sustainability leadership through 100% certified Responsibly Sourced Gas (RSG) volumes Premier natural gas portfolio with favorable market access and growth upside to deliver affordable energy for consumers
STRATEGIC PILLARS Superior Capital Returns Deep, Attractive Inventory Premier Balance Sheet Sustainability Leadership Most efficient operator, returning more cash to shareholders than domestic gas peers Premium rock, returns, runway with best - in - class execution Investment Grade quality balance sheet provides strategic through - cycle advantages Consistent and measurable progress on our path to net zero COMBINATION METRICS ~$1.0B – $1.5B of per annum dividends at current strip >5,000 pro forma gross locations across Appalachia and Haynesville Accelerates path to Investment Grade rating and lowers cost of capital 100% RSG certified across all basins and production Accelerating America’s Energy Reach 5 Combination Advances Strategic Pillars PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP
LA TX OH WV PA PA NY Clear Industrial Logic with Complementary Positions in Premium Basins Accelerating America’s Energy Reach 6 Premier Natural Gas Portfolio PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP Note: 3 Q23 actual production for CHK and SWN from public filings; Excludes Eagle Ford CHK SWN ~ 7.9 bcfe/d >5,000 gross locations > 15 years of inventory ▪ Provides capital allocation flexibility and the ability to grow volumes ▪ >25 geographically diverse sales points ▪ Improves scale and credit quality, enhancing deliverability to consumers HAYNESVILLE Louisiana: ~650,000 net acres, ~3.3 bcfe/d, 100% dry gas Ohio & West Virginia: ~530,000 net acres, ~1.8 bcfe/d, 65% dry gas Pennsylvania: ~650,000 net acres, ~2.8 bcfe/d, 100% dry gas APPALACHIA
Creates a Globally Relevant Natural Gas Producer 3Q23 Actual Gas Production (bcf/d) 7.9 7.7 7.1 7.0 5.7 5.0 4.9 3.1 2.9 2.3 2.3 2.1 1.8 1.7 1.6 1.4 1.4 1.4 1.1 CVX XOM CHK + SWN SHEL BP EQT EQNR TTE COP CTRA TOU AR WDS OXY EOG OVV RRC CNX ARX DVN Accelerating America’s Energy Reach 7 Scale Enhances Ability to Deliver Affordable Gas to Consumers 7.3 PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP Note: 3 Q23 actual production for CHK and SWN from public filings; Excludes Eagle Ford
Accelerating America’s Energy Reach 8 ▪ Diversified portfolio with >25 sales points ▪ Scaled assets in proximity to Gulf Coast / LNG corridor ▪ Link up to 20% of production to international markets ▪ Establishes global platform to enhance marketing and trading business based in Houston Together We Are LNG Ready PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP Results in: ▪ Improved access to new domestic and international markets through delivery enhanced by infrastructure, storage and customer relationships ▪ Reduced sensitivity to commodity price volatility and enhanced revenues ▪ Increased cash flow certainty and returns APP: Northeast/ Citygate: ~10% APP: Greater Appalachia: ~30% APP: Midwest: ~1 % HV: GC LNG Corridor: ~ 20% HV: Gulf Coast: ~26% APP: Southeast: ~3% APP: GC LNG Corridor: ~2 % APP: Gulf Coast: ~7% APP: Canada: ~1% CHK SWN Corporate HQ Marketing and Trading Org
Accelerating America’s Energy Reach 9 Identified Synergies Enhance Shareholder Value Complementary Operations Lead to Significant Pro Forma Synergies Annual Synergies ($ millions) (1) Capital P&L ~$400/yr PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP Immediately accretive across all metrics Cash flow per share, free cash flow per share, NAV per share and ROCE Lowers corporate breakevens through operational efficiencies Improved drilling performance, extended laterals and infrastructure optimization Improves credit and cost of capital Further upside potential beyond quantified synergies (1) Expect to achieve full synergies by 2026 ~20% more dividends per share projected over next five years $125 $75 $200 $130 $20 $50 $70 Corporate & Regional Costs D&C Cost Savings Other Operating & Capital Total Expected Synergies
$1,900 $1,600 $800 $700 $400 $400 $300 $300 COP EOG DVN FANG CHK + SWN OXY CTRA APA OVV MRO EQT Delivering Increased Shareholder Returns Accelerating America’s Energy Reach 10 ▪ ~20% more dividends per share projected over next five years ▪ Flexibility for additional returns through debt paydown and share repurchases ▪ Returns further bolstered by improving S&P 500 Index qualifications $4,100 $3,500 Projected to be the 5 th Largest E&P Dividend Payer Annual Total Dividend ($ millions) (1) (1) Per FactSet 2025 consensus estimates and company disclosures; CHK + SWN dividends assuming 2025 consensus pricing Synergy enhanced best - in - class capital return framework ~$1,400 Base dividend re - affirming annual $2.30/sh Variable dividend 50% of post - base FCF (when available) Share repurchases flexible program Balance sheet management through debt reduction Capital Return Framework PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP
Investment Grade Quality Capital Structure Accelerating America’s Energy Reach 11 ▪ Expected to reach <1.0x net debt / EBITDAX within one year of closing (2) ▪ Commitment to utilize cash - on - hand to repay debt • Targeting ~$1.1B of debt retirement by YE25 ▪ “Hedge - the - wedge” strategy continues to de - risk capital spend SCALE ~7.9 bcfe/d >15 tcfe of PDP reserves PROFITABILITY Enhanced corporate breakevens DIVERSIFICATION Liquids and increasing exposure to global markets FINANCIAL POLICY Target <1.0x net debt / EBITDAX at $3.00/mcf (~$4.5B or less of pro forma net debt) Transaction Enhances Credit Profile (1) SWN revolver balance as of 9/30/2023 (2) Assuming stri p as of 1/4/2024 PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP ~ $3,000 $389 $500 $388 $304 $500 $1,200 $1,150 $950 $700 Estimated YE23 Liquidity 2024 2025 2026 2027 2028 2029 2030 2031 2032 Long - Dated Capital Structure with Low Coupons $2,150 (1)
Accelerating America’s Energy Reach 12 ▪ 100% RSG certified across all basins and production ▪ Low - emissions intensity leader focused on continuous improvement ▪ Committed to achieving net zero Scope 1 and 2 GHG emissions by 2035 Sustainability Leadership Deliver energy to accelerate economic progress and increase welfare Minimize emissions from operations Invest in low - carbon solutions with adjacent technologies Transparent disclosures with measurable progress For additional information please refer to CHK’s 2022 Sustainability Report and SWN’s 2022 Corporate Responsibility Report PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP Sustainability Fundamentals
Accelerating America’s Energy Reach • Positioned to grow production and deliver lower - cost gas for domestic and international consumers • Diversified asset base provides confidence for longer - term supply agreements • Ability to return more cash with lower volatility through price cycles • Investment Grade quality capital structure, improved long - term credit outlook • Enhanced natural gas delivery to de - carbonize power generation through coal displacement • Larger platform to drive ESG synergies and technical innovation • Committed to enhancing communities through ongoing investment and partnerships • Continued responsible operations across portfolio 13 Combination Benefits All Stakeholders Consumers Shareholders Environment Communities PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP
Don’t overpay. • Attractive relative valuation and balanced contribution from both companies • ~$400 million in annual synergies, with upside Protects balance sheet. • Expects to achieve pro forma net debt / EBITDAX under 1.0x within one year from closing (1) • Accelerates path to Investment Grade Accretive to key metrics. • CFO / share • FCF / share • NAV / share • ROCE Lowers emissions profile. • Increased scale of RSG volumes in a larger and better positioned platform to target net zero Scope 1 and 2 GHG emissions by 2035 Better, not just bigger. • In creases projected dividends per share by ~ 20 % over the next five years • Delivers scale and financial strength sufficient for potential S&P 500 inclusion • Together, the combined company is LNG ready Accelerating America’s Energy Reach 14 Meeting Our Non - Negotiables (1) Assuming stri p as of 1/4/2024 PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP
Accelerating America’s Energy Reach 15 PREMIER PORTFOLIO REACHING MORE MARKETS SYNERGIES + ACCRETION CAPITAL STRUCTURE SUSTAINABILITY LEADERSHIP Accelerating America’s Energy Reach Fueling a More Affordable, Reliable and Lower Carbon Future Premier Natural Gas Portfolio Combination of three premier natural gas assets provides capital allocation flexibility and the ability to grow volumes Reach More Markets, Mitigate Price Volatility and Increase Revenue Scaled, geographically - advantaged assets create platform to expand marketing and trading function to reach more markets Significant Synergies, Accretive to All Key Per Share Metrics ~$400 million in annual synergies, ~20% improvement to projected dividends, accretive to cash flow, free cash flow, NAV and ROCE Investment Grade Quality Capital Structure Maintain commitment to <1.0x net debt / EBITDAX, lowers cost of capital and improves LNG opportunities Sustainability Leadership 100% RSG certified across all basins and production
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