Common use of Majority of the Voting Power Clause in Contracts

Majority of the Voting Power. Notwithstanding anything to the contrary contained in this Agreement, but subject to Section 2.4(b), the Company shall not take (or, with respect to any Subsidiary of the Company, approve or cause to occur) any of the following actions without the approval of the Majority of the Voting Power: (i) establish and maintain any Budget or amend a Budget in any material respect, which amendment for the purposes of this provision means (A) the modification or reallocation of (I) the aggregate amount provided in the Budget by more than five percent (5%), or (II) any particular line item of the Budget by more than ten percent (10%), or (B) making expenditures for any proposed Project not currently in the Budget requiring capital expenditures in excess of $1,000,000 (any deviation from the Budget not in excess of the thresholds described in the foregoing clauses (A) or (B), a “Permitted Variance”); (ii) incur any expenditure or series of related expenditures not otherwise a part of an approved Budget, except any expenditure or series of related expenditures (x) as required under Section 2.7, (y) as permitted under Section 2.8 or (z) that constitute a Permitted Variance; (iii) sell, transfer, farm out or otherwise dispose of (directly or indirectly) any property or assets of the Company (including, without limitation, any of its Subsidiaries) having a value in excess of $1,000,000; (iv) except in accordance with a hedge policy or guideline approved by a Majority of the Voting Power, enter into or become obligated under any swap, collar, floor, cap or other derivative contract or any option, forward sale, exchange-traded contract or other hedging contract with respect to interest rates or commodity prices or basis differentials; (v) enter into any marketing arrangements or commitments for midstream services, other than such agreements or commitments that have a term of 180 days or less; (vi) amend or modify, or compromise or waive any rights under, or exercise any rights of the Company or any Subsidiary of the Company to terminate, any operating agreement, development agreement, operator agreement or similar agreement to which the Company or any of its Subsidiaries is a party or their assets are bound; (vii) except consistent with the then current Budget, elect or make a determination to consent to or elect to participate with respect to any new well or any Drilling and Completion Activities or other material operation (including any re-entry, sidetracking or recompletion) with respect to any well under the Participation Agreement, the Primary JOA, or any other operating, participation or similar agreement to which the Company or any of its Subsidiaries is a party or their assets are bound; (viii) elect to exercise tag-along rights or preferential rights to purchase under any operating agreement, participation agreement or similar agreement; (ix) amend, modify or supplement, or waive any rights under, or exercise any rights of the Company or any Subsidiary of the Company to terminate, the Participation Agreement, the Primary JOA or the Contract Operating Agreement; (x) reduce the coverage or amount of coverage for insurance as reflected on Exhibit C; (xi) authorize the issuance of or issue any additional Units or other Interests of the Company (other than pursuant to the terms of this Agreement), and any amendment to this Agreement to reflect the creation of such Units if of an additional or different classes or series of Units; (xii) subject to Section 3.1(b) and Section 3.1(c), authorize the admission of any new Member to the Company; (xiii) effect any change (whether by conversion, recapitalization, Internal Restructure or otherwise) in the legal form of the Company from a limited liability company to any other type of legal entity; (xiv) except as provided for in a Budget, borrow any money or otherwise incur, guarantee or otherwise become liable for any Indebtedness; (xv) mortgage, pledge, assign in trust or otherwise encumber any property or assets of the Company or any of its Subsidiaries, or assign any monies owed or to be owed to the Company or any of its Subsidiaries, except for customary Liens contained in or arising under operating or similar agreements executed by or binding on the Company or any of its Subsidiaries or to secure Indebtedness; (xvi) initiate, compromise or settle any lawsuit, administrative matter or other dispute where the amount the Company or any Subsidiary of the Company may recover or might be obligated to pay, as applicable, is in excess of $100,000, or to repair or replace property or assets of the Company or any Subsidiary of the Company damaged or destroyed as a result of an accident or other occurrence when the Company’s or such Subsidiary’s share of the costs of repair or replacement (either individually or in the aggregate, but net of insurance proceeds) is in excess of $50,000; (xvii) subject to Section 4.2(c), exercise the rights of the Company under the Services Agreement to terminate the Services Agreement or, at any time after the termination of the Services Agreement, to remove any Manager or designate any Person other than Carbon as Manager; (xviii) voluntarily file a petition in bankruptcy for the Company, make an assignment for the benefit of creditors of the Company, file a petition or answer seeking, consenting to or acquiescing in any reorganization, arrangement, readjustment, liquidation, dissolution or similar relief with respect to the Company under any statute, law or regulation or take any action seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator of the Company or any substantial part of the properties and assets of the Company; (xix) liquidate or dissolve the Company or any of its Subsidiaries; (xx) change in the number of Directors comprising the full Board; (xxi) approve a Capital Call (or issue a Capital Call Notice); (xxii) approve of a Transfer of Interests by Carbon or Yorktown pursuant to Section 6.1(a)(i), other than a Yorktown-Carbon Assignment; (xxiii) enter into any contract providing for (or committing to provide for), or delegating authority to any Person (including any subcommittee of the Board for) decisions on, any of the foregoing transactions or matters, or the delegation of authority to any Person to approve any of the foregoing transactions or matters; (xxiv) make (A) any determination of Available Cash or (B) any distributions to the Members pursuant to Section 5.4 or Section 5.5; (xxv) select, engage or dismiss the Company’s independent certified public accountants, which accounting firm as of the Effective Date is EKS&H LLLP; (xxvi) authorize or permit the Company to form any Subsidiary (other than OpCo); (xxvii) approve or consummate any acquisition of assets by the Company or any of its Subsidiaries or series of such acquisitions which individually or in the aggregate exceeds $1,000,000 in any six-month period, or approve any investment in or acquisition of any ownership interest in Restricted Interest offered by Carbon to the Company; (xxviii) set or adjust the compensation or benefits of any manager, officer or employee of the Company; or (xxix) take any action, authorize or approve, or enter into any binding agreement with respect to or otherwise commit to do any of the foregoing.

Majority of the Voting Power. Notwithstanding anything to the contrary contained in this Agreement, but subject to Section 2.4(b), the Company shall not take (or, with respect to any Subsidiary of the Company, approve or cause to occur) any of the following actions without the approval of the Majority of the Voting Power: (i) establish and maintain any Budget or amend a Budget in any material respect, which amendment for the purposes of this provision means (A) the modification or reallocation of (I) the aggregate amount provided in the Budget by more than five percent (5%), or (II) any particular line item of the Budget by more than ten percent (10%), or (B) making expenditures for any proposed Project not currently in the Budget requiring capital expenditures in excess of $1,000,000 (any deviation from the Budget not in excess of the thresholds described in the foregoing clauses (A) or (B), a “Permitted Variance”); (ii) incur any expenditure or series of related expenditures not otherwise a part of an approved Budget, except any expenditure or series of related expenditures (x) as required under Section 2.7, (y) as permitted under Section 2.8 or (z) that constitute a Permitted Variance; (iii) sell, transfer, farm out or otherwise dispose of (directly or indirectly) any property or assets of the Company (including, without limitation, any of its Subsidiaries) having a value in excess of $1,000,000; (iv) except in accordance with a hedge policy or guideline approved by a Majority of the Voting Power, enter into or become obligated under any swap, collar, floor, cap or other derivative contract or any option, forward sale, exchange-traded contract or other hedging contract with respect to interest rates or commodity prices or basis differentials; (v) enter into any marketing arrangements or commitments for midstream services, other than such agreements or commitments that have a term of 180 days or less; (vi) amend or modify, or compromise or waive any rights under, or exercise any rights of the Company or any Subsidiary of the Company to terminate, any operating agreement, development agreement, operator agreement or similar agreement to which the Company or any of its Subsidiaries is a party or their assets are bound; (vii) except consistent with the then current Budget, elect or make a determination to consent to or elect to participate with respect to any new well or any Drilling and Completion Activities or other material operation (including any re-entry, sidetracking or recompletion) with respect to any well under the Participation Agreement, the Primary JOA, or any other operating, participation or similar agreement to which the Company or any of its Subsidiaries is a party or their assets are bound; (viii) elect to exercise tag-along rights or preferential rights to purchase under any operating agreement, participation agreement or similar agreement; (ix) amend, modify or supplement, or waive any rights under, or exercise any rights of the Company or any Subsidiary of the Company to terminate, the Participation Agreement, the Primary JOA or the Contract Operating Agreement; (x) reduce the coverage or amount of coverage for insurance as reflected on Exhibit CF; (xi) authorize the issuance of or issue any additional Units or other Interests of the Company (other than pursuant to the terms of this Agreement), and any amendment to this Agreement to reflect the creation of such Units if of an additional or different classes or series of Units; (xii) subject to Section 3.1(b) and Section 3.1(c), authorize the admission of any new Member to the Company; (xiii) effect any change (whether by conversion, recapitalization, Internal Restructure or otherwise) in the legal form of the Company from a limited liability company to any other type of legal entity; (xiv) except as provided for in a Budget, borrow any money or otherwise incur, guarantee or otherwise become liable for any Indebtedness; (xv) mortgage, pledge, assign in trust or otherwise encumber any property or assets of the Company or any of its Subsidiaries, or assign any monies owed or to be owed to the Company or any of its Subsidiaries, except for customary Liens contained in or arising under operating or similar agreements executed by or binding on the Company or any of its Subsidiaries or to secure Indebtedness; (xvi) initiate, compromise or settle any lawsuit, administrative matter or other dispute where the amount the Company or any Subsidiary of the Company may recover or might be obligated to pay, as applicable, is in excess of $100,000, or to repair or replace property or assets of the Company or any Subsidiary of the Company damaged or destroyed as a result of an accident or other occurrence when the Company’s or such Subsidiary’s share of the costs of repair or replacement (either individually or in the aggregate, but net of insurance proceeds) is in excess of $50,000; (xvii) subject to Section 4.2(c), exercise the rights of the Company under the Services Agreement to terminate the Services Agreement or, at any time after the termination of the Services Agreement, to remove any Manager or designate any Person other than Carbon as Manager; (xviii) voluntarily file a petition in bankruptcy for the Company, make an assignment for the benefit of creditors of the Company, file a petition or answer seeking, consenting to or acquiescing in any reorganization, arrangement, readjustment, liquidation, dissolution or similar relief with respect to the Company under any statute, law or regulation or take any action seeking, consenting to or acquiescing in the appointment of a trustee, receiver or liquidator of the Company or any substantial part of the properties and assets of the Company; (xix) liquidate or dissolve the Company or any of its Subsidiaries; (xx) change in the number of Directors comprising the full Board; (xxi) approve a Capital Call (or issue a Capital Call Notice); (xxii) approve of a Transfer of Interests by Carbon or Yorktown pursuant to Section 6.1(a)(i), other than a Yorktown-Carbon Assignment; (xxiii) enter into any contract providing for (or committing to provide for), or delegating authority to any Person (including any subcommittee of the Board for) decisions on, any of the foregoing transactions or matters, or the delegation of authority to any Person to approve any of the foregoing transactions or matters; (xxiv) make (A) any determination of Available Cash or (B) any distributions to the Members pursuant to Section 5.4 or Section 5.5; (xxv) select, engage or dismiss the Company’s independent certified public accountants, which accounting firm as of the Effective Date is initially shall be EKS&H LLLP; (xxvi) authorize or permit the Company to form any Subsidiary (other than OpCo); (xxvii) approve or consummate any acquisition of assets by the Company or any of its Subsidiaries or series of such acquisitions which individually or in the aggregate exceeds $1,000,000 in any six-month period, or approve any investment in or acquisition of any ownership interest in Restricted Interest offered by Carbon to the Company; (xxviii) set or adjust the compensation or benefits of any manager, officer or employee of the Company; or (xxix) take any action, authorize or approve, or enter into any binding agreement with respect to or otherwise commit to do any of the foregoing.