Exhibit 10.7
Execution Version
NON-TRANSFER AGREEMENT
THIS NON-TRANSFER AGREEMENT (this
“ Agreement ”) is made and entered into as of
June 26, 2008, by and between Knight Energy Group II Holding
Company, LLC, a Delaware limited liability company (the “
Stockholder ” ), and Crusader Energy
Group Inc., a Nevada corporation (the “ Company
”).
RECITALS
A. Effective December 31,
2007, Stockholder and the Company entered into a Contribution
Agreement (the “ Contribution Agreement ”),
which provides for the acquisition by the Company of all of the
outstanding equity interest of Knight Energy Group II, LLC, a
Delaware limited liability company (the “ Acquisition
”) in exchange for common stock, par value $0.01 per share,
of the Company (the “ Company Common Stock ”),
as set forth in the Contribution Agreement.
B. As of the date hereof,
Stockholder may Beneficially Own (as defined below) a number of
Shares (as defined below).
C. Pursuant to the Contribution
Agreement, Stockholder agreed to restrict the transfer or
disposition of its Shares as provided in this Agreement.
NOW, THEREFORE, the parties hereto
hereby agree as follows:
1. Certain
Definitions . Capitalized terms not defined herein and
defined in the Contribution Agreement shall have the meanings
ascribed to them in the Contribution Agreement. For purposes of
this Agreement:
(a) A
Person shall be deemed to “ Beneficially Own ” a
security if such Person has “beneficial ownership” of
such security as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended.
(b)
“ Constructive Sale ” means, with respect to any
security, a short sale or entering into or acquiring an offsetting
derivative contract with respect to such security, entering into or
acquiring a futures or forward contract to deliver such security or
entering into any other hedging or other derivative transaction
that has the effect of materially changing the economic benefits
and risks of ownership of such security.
(c)
“ Expiration Date ” means December 23,
2008.
(d)
“ Options ” means: (i) all securities
Beneficially Owned by Stockholder as of the date of this Agreement
that are convertible into, or exercisable or exchangeable for,
shares of capital stock of the Company, including, without
limitation, options, warrants and other rights to acquire shares of
Company Common Stock or other shares of capital stock of the
Company; and (ii) all securities of which Stockholder acquires
Beneficial Ownership during the period from the date of this
Agreement through and including the Expiration Date that are
convertible into, or exercisable or exchangeable for, shares of
capital stock of the Company, including, without
limitation, options, warrants and other rights to acquire shares of
Company Common Stock or other shares of capital stock of the
Company.
(e)
“ Person ” means any (i) individual,
(ii) corporation, limited liability company, partnership,
limited partnership or other entity, or (iii) Governmental
Authority.
(f)
“ Shares ” means: all shares of capital stock of
the Company of which Stockholder has or acquires Beneficial
Ownership during the period from the date of this Agreement through
and including the Expiration Date, including, without limitation,
in each case, shares issued upon the conversion, exercise or
exchange of Options.
(g)
“ Transfer ” means, with respect to any
security, the direct or indirect (i) assignment, sale,
transfer, tender, pledge, hypothecation, placement in voting trust,
Constructive Sale or other disposition of such security (excluding
transfers by testamentary or intestate succession), of any right,
title or interest in such security (including, without limitation,
any right or power to vote to which the holder thereof may be
entitled, whether such right or power is granted by proxy or
otherwise) or of the record or beneficial ownership of such
security, or (ii) offer to make any such sale, transfer,
tender, pledge, hypothecation, placement in voting trust,
Constructive Sale or other disposition, and each agreement,
arrangement or understanding, whether or not in writing, to effect
any of the foregoing, in each case, excluding any (1) Transfer
pursuant to a court order and (2) such actions pursuant to
which Stockholder maintains all voting rights with respect to such
security.
2. No Transfer of Shares
or Options . Stockholder agrees that, at all times during
the period beginning on the date hereof and ending on and excluding
the Expiration Date, Stockholder shall not Transfer (or cause or
permit any Transfer of) any Shares or Options, or make any
agreement relating thereto, in each case, without the prior written
consent of the Company. Stockholder agrees that any Transfer in
violation of this Agreement shall be void ab initio and of
no force or effect. Stockholder hereby agrees with, and covenants
to, the Company that Stockholder shall not request that the Company
register the Transfer (book entry or otherwise) of any certificate
or uncertificated interest representing any of its Shares, unless
such Transfer is made in compliance with this Agreement.
3. Representations,
Warranties and Covenants of Stockholder . Stockholder
hereby represents, warrants and covenants to the Company as
follows:
(a) Stockholder
has the sole, full right, power and authority to dispose, vote or
direct the voting of Stockholder’s Shares with no
limitations, qualifications or restrictions on such rights, subject
to applicable securities laws and the terms of this
Agreement.
(b) The
execution and delivery of this Agreement by Stockholder does not,
and Stockholder’s performance of its obligations under this
Agreement will not, conflict with or violate or require any
consent, approval or notice under, any order, decree, judgment,
statute, law, rule, regulation or agreement applicable to
Stockholder or by which Stockholder or any of Stockholder’s
properties or assets, including, without limitation, the Shares and
Options, is bound.
2
(c) Stockholder
has the sole, full right, power and authority to make, enter into
and carry out the terms of this Agreement with respect to all of
its Shares without limitation, qualification or restriction on such
power and authority. This Agreement has been duly executed and
delivered by Stockholder and constitutes a legal, valid and
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