AMENDED AND RESTATED BACKSTOP COMMITMENT AND EQUITY INVESTMENT AGREEMENT AMONG VANGUARD NATURAL RESOURCES, LLC AND THE COMMITMENT PARTIES PARTY HERETO Dated as of February 24, 2017 As Amended and Restated May 23, 2017
AMENDED AND RESTATED BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT
AMONG
VANGUARD NATURAL RESOURCES, LLC
AND
THE COMMITMENT PARTIES PARTY HERETO
Dated as of February 24, 2017
As Amended and Restated May 23, 2017
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS .................................................................................................. 2
Section 1.1 Definitions..............................................................................................2
Section 1.2 Construction ......................................................................................... 19
ARTICLE II BACKSTOP COMMITMENT ...................................................................... 19
Section 2.1 The Transactions; Subscription Rights ................................................... 19
Section 2.2 The Commitments ................................................................................ 20
Section 2.3 Commitment Party Default; Replacement of Defaulting
Commitment Parties ............................................................................. 21
Section 2.4 Escrow Account Funding ...................................................................... 23
Section 2.5 Closing................................................................................................. 24
Section 2.6 Designation and Assignment Rights ...................................................... 24
Section 2.7 Exit Term Loan Purchase Commitments ................................................ 27
ARTICLE III BACKSTOP COMMITMENT PREMIUM AND EXPENSE
REIMBURSEMENT..................................................................................... 27
Section 3.1 Premium Payable by the Company ........................................................ 27
Section 3.2 Payment of Commitment Premium ........................................................ 28
Section 3.3 Expense Reimbursement ....................................................................... 28
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY .......... 29
Section 4.1 Organization and Qualification.............................................................. 29
Section 4.2 Corporate Power and Authority ............................................................. 29
Section 4.3 Execution and Delivery; Enforceability ................................................. 30
Section 4.4 Authorized and Issued Equity Interests .................................................. 30
Section 4.5 Issuance ............................................................................................... 31
Section 4.6 No Conflict........................................................................................... 31
Section 4.7 Consents and Approvals........................................................................ 32
Section 4.8 Arm’s-Length ....................................................................................... 32
Section 4.9 Financial Statements ............................................................................. 32
Section 4.10 Company SEC Documents and Disclosure Statement............................. 32
Section 4.11 Absence of Certain Changes.................................................................. 33
Section 4.12 No Violation; Compliance with Laws .................................................... 33
Section 4.13 Legal Proceedings................................................................................. 33
Section 4.14 Labor Relations .................................................................................... 33
Section 4.15 Intellectual Property.............................................................................. 33
Section 4.16 Title to Real and Personal Property........................................................ 34
Section 4.17 No Undisclosed Relationships ............................................................... 34
Section 4.18 Licenses and Permits............................................................................. 35
Section 4.19 Environmental ...................................................................................... 35
Section 4.20 Tax Returns .......................................................................................... 36
Section 4.21 Employee Benefit Plans ........................................................................ 36
Section 4.22 Internal Control Over Financial Reporting ............................................. 37
Section 4.23 Disclosure Controls and Procedures....................................................... 37
Section 4.24 Material Contracts ................................................................................ 38
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TABLE OF CONTENTS (cont’d)
Page
Section 4.25 No Unlawful Payments ......................................................................... 38
Section 4.26 Compliance with Money Laundering and Sanctions Laws ...................... 38
Section 4.27 Reserve Report ..................................................................................... 39
Section 4.28 No Broker’s Fees .................................................................................. 39
Section 4.29 Investment Company Act ...................................................................... 39
Section 4.30 Insurance .............................................................................................. 39
Section 4.31 Alternative Transactions ....................................................................... 39
Section 4.32 ▇▇▇▇▇▇▇ Compliance ............................................................................. 40
Section 4.33 Equity Investment Documents ............................................................... 40
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE
COMMITMENT PARTIES.......................................................................... 40
Section 5.1 Organization ......................................................................................... 40
Section 5.2 Organizational Power and Authority...................................................... 40
Section 5.3 Execution and Delivery ......................................................................... 40
Section 5.4 No Conflict........................................................................................... 41
Section 5.5 Consents and Approvals........................................................................ 41
Section 5.6 No Registration..................................................................................... 41
Section 5.7 Purchasing Intent .................................................................................. 42
Section 5.8 Sophistication; Investigation ................................................................. 42
Section 5.9 No Broker’s Fees .................................................................................. 42
Section 5.10 Sufficient Funds ................................................................................... 42
ARTICLE VI ADDITIONAL COVENANTS ..................................................................... 42
Section 6.1 Orders Generally .................................................................................. 42
Section 6.2 Confirmation Order; Plan and Disclosure Statement............................... 43
Section 6.3 Conduct of Business ............................................................................. 43
Section 6.4 Access to Information; Confidentiality .................................................. 44
Section 6.5 Financial Information............................................................................ 46
Section 6.6 Commercially Reasonable Efforts ......................................................... 46
Section 6.7 Registration Rights Agreement; Company Organizational
Documents ........................................................................................... 47
Section 6.8 Blue Sky............................................................................................... 47
Section 6.9 DTC Eligibility..................................................................................... 47
Section 6.10 Use of Proceeds .................................................................................... 47
Section 6.11 Unit Legend.......................................................................................... 48
Section 6.12 Antitrust Approval ................................................................................ 48
Section 6.13 Alternative Transactions ....................................................................... 50
Section 6.14 Hedging Arrangements ......................................................................... 50
Section 6.15 Reorganized Company .......................................................................... 50
Section 6.16 Withdrawal of Commitment Party ......................................................... 51
Section 6.17 Equity Investment Defaults ................................................................... 51
Section 6.18 Continued ▇▇▇▇▇▇▇ Compliance............................................................. 51
Section 6.19 Reserve Information ............................................................................. 52
TABLE OF CONTENTS (cont’d)
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ARTICLE VII CONDITIONS TO THE OBLIGATIONS OF THE PARTIES ................. 52
Section 7.1 Conditions to the Obligations of the Commitment Parties....................... 52
Section 7.2 Waiver of Conditions to Obligations of Commitment Parties.................. 55
Section 7.3 Conditions to the Obligations of the Debtors.......................................... 55
ARTICLE VIII INDEMNIFICATION AND CONTRIBUTION ....................................... 56
Section 8.1 Indemnification Obligations .................................................................. 56
Section 8.2 Indemnification Procedure .................................................................... 57
Section 8.3 Settlement of Indemnified Claims ......................................................... 58
Section 8.4 Contribution ......................................................................................... 58
Section 8.5 Treatment of Indemnification Payments ................................................ 59
Section 8.6 No Survival .......................................................................................... 59
ARTICLE IX TERMINATION .......................................................................................... 59
Section 9.1 Consensual Termination........................................................................ 59
Section 9.2 Automatic Termination ......................................................................... 59
Section 9.3 Termination by the Company ................................................................ 61
Section 9.4 Effect of Termination............................................................................ 63
ARTICLE X GENERAL PROVISIONS............................................................................. 64
Section 10.1 Notices ................................................................................................. 64
Section 10.2 Assignment; Third Party Beneficiaries................................................... 65
Section 10.3 Prior Negotiations; Entire Agreement .................................................... 66
Section 10.4 Governing Law; Venue ......................................................................... 66
Section 10.5 Waiver of Jury Trial.............................................................................. 66
Section 10.6 Counterparts ......................................................................................... 67
Section 10.7 Waivers and Amendments; Rights Cumulative; Consent ........................ 67
Section 10.8 Headings .............................................................................................. 68
Section 10.9 Specific Performance ............................................................................ 68
Section 10.10 Damages .............................................................................................. 68
Section 10.11 No Reliance.......................................................................................... 68
Section 10.12 Publicity ............................................................................................... 68
Section 10.13 Settlement Discussions ......................................................................... 69
Section 10.14 No Recourse ......................................................................................... 69
SCHEDULES
Schedule 1 Commitment Schedule
Schedule 2 Exit Term Loan Backstop Commitment Schedule
EXHIBITS
Exhibit A-1 Form of 1145 Rights Offering Procedures
Exhibit A-2 Form of Accredited Investor Rights Offering Procedures
Exhibit B Form of Joinder Agreement for Related Purchaser
Exhibit C-1 Form of Joinder Agreement for Existing Commitment Party Purchaser
TABLE OF CONTENTS (cont’d)
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Exhibit C-2 Form of Amendment for Existing Commitment Party Purchaser
Exhibit D Form of Joinder Agreement for New Purchaser
Exhibit E Form of Joinder Agreement for Exit Term Loan Backstop Commitment
AMENDED AND RESTATED BACKSTOP COMMITMENT AGREEMENT
THIS BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT (this “Agreement”), dated as of February 24, 2017 (and amended and restated as
of May 23. 2017), is made by and among Vanguard Natural Resources, LLC, a Delaware limited
liability company and the ultimate parent of each of the other Debtors (as the debtor in
possession and a reorganized debtor, as applicable, the “Company”), on behalf of itself and each
of the other Debtors (as defined below), on the one hand, and each Commitment Party (as
defined below), on the other hand. The Company and each Commitment Party is referred to
herein, individually, as a “Party” and, collectively, as the “Parties”. Capitalized terms that are
used but not otherwise defined in this Agreement shall have the meanings given to them in
Section 1.1 hereof or, if not defined therein, shall have the meanings given to them in the Plan.
RECITALS
WHEREAS, the Company, the Commitment Parties (as defined below) and the
other Restructuring Support Parties (as defined in the Restructuring Support Agreement) are
party to a Restructuring Support Agreement, dated as of February 1, 2017 (including the terms
and conditions set forth in the exhibits thereto including the Plan Term Sheet (the
“Restructuring Term Sheet”) attached as Exhibit A to the Restructuring Support Agreement,
dated February 1, 2017, and amended as of May 23, 2017 by and among the Company and the
signature parties thereto (the Restructuring Term Sheet, the Restructuring Support Agreement
and all other the exhibits thereto, as may be amended, supplemented or otherwise modified from
time to time, the “Restructuring Support Agreement”)), which (a) provides for the
restructuring of the Debtors’ capital structure and financial obligations pursuant to a plan of
reorganization to be filed in the Debtors’ jointly administered cases (the “Chapter 11 Cases”)
under Title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (as it may be amended from
time to time, the “Bankruptcy Code”), pending in the United States Bankruptcy Court for
Southern District of Texas (the “Bankruptcy Court”), implementing the terms and conditions of
the Restructuring Transactions and (b) requires that the Plan be consistent with the Restructuring
Support Agreement; and
WHEREAS, pursuant to the Plan and this Agreement, the Company will conduct
(a) a rights offering for the 1145 Rights Offering Units (as defined below) at an aggregate
purchase price equal to the 1145 Rights Offering Amount (as defined below) and a per-unit
purchase price equal to the Per Unit Purchase Price (as defined below), (b) a rights offering for
the Accredited Investor Rights Offering Units (as defined below) at an aggregate purchase price
equal to the Accredited Investor Rights Offering Amount (as defined below) and a per-unit
purchase price equal to the Per Unit Purchase Price and (c) a sale of the 4(a)(2) Backstop
Commitment Units (as defined below) at an aggregate purchase price equal to the 4(a)(2)
Backstop Commitment Amount and a per-unit purchase price equal to the Per Unit Purchase
price; and
WHEREAS, subject to the terms and conditions contained in this Agreement,
each Commitment Party has agreed (a) to purchase (on a several and not a joint basis) its
Commitment Percentage of the Unsubscribed Units, if any and (b) purchase (on a several and not
a joint basis) its Commitment Percentage of the 4(a)(2) Backstop Commitment Units; and
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WHEREAS, subject to the terms and conditions contained in this Agreement,
each Exit Term Loan Commitment Party (as defined below), including each Incremental Senior
Commitment Party (as defined below), have agreed (on a several and not joint basis) to purchase
$31,250,000 of the Exit Term Loan;
NOW, THEREFORE, in consideration of the mutual promises, agreements,
representations, warranties and covenants contained herein, the Company (on behalf of itself and
each other Debtor) and each of the Commitment Parties hereby agrees as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Except as otherwise expressly
provided in this Agreement, whenever used in this Agreement (including any Exhibits and
Schedules hereto), the following terms shall have the respective meanings specified therefor
below or in the Plan, as applicable:
“1145 Rights” means the rights to subscribe to up to the 1145 Rights Offering
Amount of 1145 Rights Offering Units at a price per share equal to the Per Unit Purchase Price.
“1145 Rights Offering” means the offering of the 1145 Rights, to be conducted
in reliance upon the exemption from registration under the Securities Act provided in
Section 1145 of the Bankruptcy Code, to 1145 Rights Offering Participants in accordance with
the 1145 Rights Offering Procedures.
“1145 Rights Offering Amount” means an amount equal to $10,176,081.
“1145 Rights Offering Participants” means those Persons who duly subscribe
for 1145 Rights Offering Units in accordance with the 1145 Rights Offering Procedures.
“1145 Rights Offering Procedures” means the procedures with respect to the
1145 Rights Offering that are approved by the Bankruptcy Court pursuant to the Plan Solicitation
Order, which procedures shall be in form and substance substantially as set forth on Exhibit A-1
hereto, as may be modified in a manner that is reasonably acceptable to the Requisite
Commitment Parties and the Company.
“1145 Rights Offering Units” means the Common Units distributed pursuant to
and in accordance with the 1145 Rights Offering Procedures in the 1145 Rights Offering
(including any such Common Units that are Unsubscribed Units purchased by the Commitment
Parties pursuant to this Agreement).
“2019 Notes” means those certain 8 3/8% Senior Notes due 2019 issued under the
Indenture dated as of May 27, 2011, among Eagle Rock Energy Partners, L.P., Eagle Rock
Energy Finance Corp., and each of the guarantors party thereto and U.S. Bank National
Association, as trustee as amended and supplemented by the First Supplemental Indenture, dated
as of June 28, 2011, the Second Supplemental Indenture dated as of November 19, 2012, the
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Third Supplemental Indenture dated as of July 1, 2014 and the Fourth Supplemental Indenture
effective as of October 8, 2015, among Vanguard Operating, LLC, the subsidiary guarantors
named therein and U.S. Bank National Association, as trustee.
“2020 Notes” means those certain 7.875% Senior Notes due 2020 issued under
the Indenture dated April 4, 2012, by and among the Company, VNR Finance Corp., and each of
the guarantor parties thereto and U.S. Bank National Association, as trustee as amended and
supplemented by the First Supplemental Indenture dated as of April 4, 2012 and as further
amended and supplemented by the Second Supplemental Indenture dated as of December 9,
2015.
“2L Available Units” has the meaning set forth in Section 6.17.
“2L Investors” has the meaning set forth in the Restructuring Support
Agreement.
“2L Investment” means the commitment to purchase an aggregate amount of
new Common Units in the amount of $19,250,000 by the 2L Investors.
“2L Undersubscription” has the meaning set forth in Section 6.17.
“4(a)(2) Backstop Commitment” means the obligation of the Commitment
Parties to effect the 4(a)(2) Backstop Commitment Investment.
“4(a)(2) Backstop Commitment Amount” means an amount equal to
$127,875,000.
“4(a)(2) Backstop Commitment Investment” means the purchase by the
Commitment Parties of the 4(a)(2) Backstop Commitment Units for the 4(a)(2) Backstop
Commitment Amount in connection with the Restructuring Transactions substantially on the
terms reflected in the Restructuring Support Agreement and this Agreement.
“4(a)(2) Backstop Commitment Units” means the Common Units to be
purchased by the Commitment Parties in the 4(a)(2) Backstop Commitment Investment.
“Acceptable Hedging Program” has the meaning set forth in Section 6.14.
“Accredited Investor Rights” means the rights to subscribe to up to the
Accredited Investor Rights Offering Amount of Accredited Investor Rights Offering Units at a
price per share equal to the Per Unit Purchase Price.
“Accredited Investor Rights Offering” means the offering of the Accredited
Investor Rights, to be conducted in reliance upon the exemption from registration under the
Securities Act provided in Section 4(a)(2) of the Securities Act, to Accredited Investor Rights
Offering Participants in accordance with the Accredited Investor Rights Offering Procedures.
“Accredited Investor Rights Offering Amount” means an amount equal to
$117,698,919.
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“Accredited Investor Rights Offering Participants” means those Persons who
duly subscribe for Accredited Investor Rights Offering Units in accordance with the Accredited
Investor Rights Offering Procedures.
“Accredited Investor Rights Offering Procedures” means the procedures with
respect to the Accredited Investor Rights Offering that are approved by the Bankruptcy Court
pursuant to the Plan Solicitation Order, which procedures shall be in form and substance
substantially as set forth on Exhibit A-2 hereto, as may be modified in a manner that is
reasonably acceptable to the Requisite Commitment Parties and the Company.
“Accredited Investor Rights Offering Units” means the Common Units
distributed pursuant to and in accordance with the Accredited Investor Rights Offering
Procedures in the Accredited Investor Rights Offering (including any such Common Units that
are Unsubscribed Units purchased by the Commitment Parties pursuant to this Agreement).
“Affiliate” means, with respect to any Person, any other Person that, directly or
indirectly, Controls or is Controlled by or is under common Control with such Person, and shall
include the meaning of “affiliate” set forth in section 101(2) of the Bankruptcy Code.
“Affiliated” has a correlative meaning.
“Affiliated Fund” means any investment fund the primary investment advisor to
which is a Commitment Party or an Affiliate thereof.
“Aggregate Common Units” means the total number of Common Units
outstanding as of the Effective Date after giving effect to the Plan (but excluding all Common
Units issued or issuable under the EIP).
“Agreement” has the meaning set forth in the Preamble.
“Alternative Transaction” means any dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors, merger, transaction, consolidation,
business combination, joint venture, partnership, sale of assets, financing (debt or equity), or
restructuring of any of the Debtors, other than the Restructuring Transactions.
“Antitrust Authorities” means the United States Federal Trade Commission, the
Antitrust Division of the United States Department of Justice, the attorneys general of the several
states of the United States and any other Governmental Entity, whether domestic or foreign,
having jurisdiction pursuant to the Antitrust Laws, and “Antitrust Authority” means any of
them.
“Antitrust Laws” means the ▇▇▇▇▇▇▇ Act, the ▇▇▇▇▇▇▇ Act, the HSR Act, the
Federal Trade Commission Act, and any other Law, whether domestic or foreign, governing
agreements in restraint of trade, monopolization, pre-merger notification, the lessening of
competition through merger or acquisition or anti-competitive conduct, and any foreign
investment Laws.
“Applicable Consent” has the meaning set forth in Section 4.7.
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“Available Units” means the Common Units that any Commitment Party fails to
purchase as a result of a Commitment Party Default by such Commitment Party.
“Bankruptcy Code” has the meaning set forth in the Recitals.
“Bankruptcy Court” has the meaning set forth in the Recitals.
“Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure as
promulgated by the United States Supreme Court under section 2075 of title 28 of the United
States Code, 28 U.S.C. § 2075, as applicable to the Chapter 11 Cases and the general, local, and
▇▇▇▇▇▇▇▇ rules of the Bankruptcy Court.
“BCA Approval Obligations” means the obligations of the Company and the
other Debtors under this Agreement and the BCA Approval Order.
“BCA Approval Order” means an Order of the Bankruptcy Court that is not
stayed under Bankruptcy Rule 6004(h) or otherwise that (a) authorizes the Company (on behalf
of itself and the other Debtors) to execute and deliver this Agreement, including all exhibits and
other attachments hereto, pursuant to section 363 of the Bankruptcy Code and (b) provides that
the Commitment Premium, Expense Reimbursement and the indemnification provisions
contained herein shall constitute allowed administrative expenses of the Debtors’ estates under
sections 503(b) and 507 of the Bankruptcy Code and shall be payable by the Debtors as provided
in this Agreement without further Order of the Bankruptcy Court.
“BHC Act” means the Bank Holding Company Act of 1956, as amended, and the
rules and regulations promulgated thereunder.
“Business Day” means any day, other than a Saturday, Sunday or legal holiday,
as defined in Bankruptcy Rule 9006(a).
“Chapter 11 Cases” has the meaning set forth in the Recitals.
“Closing” has the meaning set forth in Section 2.5(a).
“Closing Date” has the meaning set forth in Section 2.5(a).
“Code” means the Internal Revenue Code of 1986, as amended.
“Commitment Party” means a Joinder Commitment Party, Incremental Senior
Commitment Party or a Senior Commitment Party.
“Commitment Party Default” means a Joinder Commitment Party Default or a
Senior Commitment Party Default.
“Commitment Party Replacement” has the meaning set forth in Section 2.3(b).
“Commitment Party Replacement Period” has the meaning set forth in
Section 2.3(b).
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“Commitment Percentage” means, with respect to any Commitment Party, such
Commitment Party’s percentage of the Rights Offering Backstop Commitment and the 4(a)(2)
Backstop Commitment as set forth opposite such Commitment Party’s name under the column
titled “Commitment Percentage” on Schedule 1 to this Agreement. Any reference to
“Commitment Percentage” in this Agreement means the Commitment Percentage in effect at the
time of the relevant determination.
“Commitment Premium” has the meaning set forth in Section 3.1.
“Commitment Premium Party” means each Senior Commitment Party
(including in its capacity as Incremental Senior Commitment Party) and each Joinder
Commitment Party that is an Exit Term Loan Party.
“Commitment Premium Share Amount” means, (a) with respect to a Joinder
Commitment Party that has backstopped its Required Exit Term Loan Share by the Required
Exit Term Loan Commitment Date, the number of Common Units equal to the product of (i) the
quotient obtained by dividing (A) such Joinder Commitment Party’s Commitment Percentage by
(B) the aggregate Commitment Percentages of the Joinder Commitment Parties, taken as a
whole, and (ii) the quotient obtained by dividing (A) the Joinder Commitment Premium
Maximum Amount by (B) the Per Unit Purchase Price; (b) with respect to an Incremental Senior
Backstop Party, the number of Common Units equal to the product of (i) the quotient obtained
by dividing (A) such Incremental Senior Commitment Party’s Incremental Commitment
Percentage by (B) the aggregate Incremental Commitment Percentage of the Incremental Senior
Commitment Parties, taken as a whole, and (ii) the quotient obtained by dividing (A) the
Incremental Senior Commitment Premium Amount by (B) the Per Unit Purchase Price, and (c)
with respect to a Senior Commitment Party, the number of Common Units equal to the product
of (i) the quotient obtained by dividing (A) such Senior Commitment Party’s Commitment
Percentage by (B) the aggregate Commitment Percentage of the Senior Commitment Parties,
taken as a whole, and (ii) the quotient obtained by dividing (A) the Senior Commitment Premium
Amount by (B) the Per Unit Purchase Price. For the avoidance of doubt, any Commitment Party
that is both an Incremental Senior Commitment Party and a Senior Commitment Party shall be
entitled to receive its proportional amount of the Senior Commitment Premium Amount and the
Incremental Senior Commitment Premium Amount.
“Commitment Schedule” means Schedule 1 to this Agreement, as amended,
supplemented or otherwise modified from time to time in accordance with this Agreement.
“Commitments” means, collectively, the Rights Offering Backstop Commitment
and the 4(a)(2) Backstop Commitment.
“Common Units” means the new common equity interests in the reorganized
Company.
“Company” has the meaning set forth in the Preamble.
“Company Benefit Plan” means any “employee pension benefit plan,” as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan), which is maintained or
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contributed to by any Debtor or any of their ERISA Affiliates, or with respect to which any such
entity has any actual or contingent liability or obligation.
“Company Disclosure Schedules” means the disclosure schedules delivered by
the Company to the Commitment Parties on the date of this Agreement.
“Company Organizational Documents” means collectively, the organizational
documents of the Company and, if applicable, New Parent, including any certificate of formation
or applicable articles of incorporation, limited liability company agreement, bylaws, or any
similar documents.
“Company Restructuring” has the meaning set forth in Section 6.15(a).
“Company SEC Documents” means all of the reports, schedules, forms,
statements and other documents (including exhibits and other information incorporated therein)
filed with the SEC by the Company.
“Complete Business Day” means on any Business Day, the time beginning at
and including 12:00 AM to 11:59 PM, Houston time (inclusive) on such Business Day.
“Confirmation Order” means a Final Order of the Bankruptcy Court confirming
the Plan pursuant to section 1129 of the Bankruptcy Code.
“Contract” means any agreement, contract or instrument, including any loan,
note, bond, mortgage, indenture, guarantee, deed of trust, license, franchise, commitment, lease,
franchise agreement, letter of intent, memorandum of understanding or other obligation, and any
amendments thereto, whether written or oral, but excluding the Plan.
“Control” means, with respect to any Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract or agency or
otherwise.
“Cover Transaction” has the meaning set forth in Section 2.3(c).
“Cover Transaction Period” has the meaning set forth in Section 2.3(c).
“Covered Fund” has the meaning set forth in Section 13 of the BCH Act and the
regulations issued thereunder.
“Debtors” means, collectively: (a) Vanguard Natural Resources, LLC; (b) Eagle
Rock Acquisition Partnership, L.P.; (c) Eagle Rock Acquisition Partnership II, L.P.; (d) Eagle
Rock Energy Acquisition Co., Inc.; (e) Eagle Rock Energy Acquisition Co. II, Inc.; (f) Eagle
Rock Upstream Development Company, Inc.; (g) Eagle Rock Upstream Development Company
II, Inc.; (h) Encore Clear Fork Pipeline LLC; (i) Escambia Asset Co. LLC; (j) Escambia
Operating Co. LLC; (k) Vanguard Natural Gas, LLC; (l) Vanguard Operating, LLC; (m) VNR
Finance Corp.; and (n) VNR Holdings, LLC.
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“Defaulting Commitment Party” means a Joinder Defaulting Commitment
Party or a Senior Defaulting Commitment Party.
“Definitive Documentation” means the definitive documents and agreements
governing the Restructuring Transactions as set forth in the Restructuring Support Agreement.
“Definitive Documents” has a correlative meaning. For the avoidance of doubt, all Definitive
Documentation shall be subject to the applicable consent rights set forth in Section 3 of the
Restructuring Support Agreement.
“DIP Facility” means any credit agreement for debtor-in-possession financing.
“DIP Orders” means, collectively, any Interim DIP Order, Final DIP Order, and
any other interim or Final Order authorizing the Debtors to obtain postpetition financing or use
cash collateral.
“Disclosure Statement” has the meaning set forth in the Restructuring Support
Agreement.
“Discount to Equity Value” means 0.25.
“Effective Date” means the date upon which (a) no stay of the Confirmation
Order is in effect, (b) all conditions precedent to the effectiveness of the Plan have been satisfied
or are expressly waived in accordance with the terms thereof, as the case may be, and (c) on
which the Restructuring and the other transactions to occur on the Effective Date pursuant to the
Plan become effective or are consummated.
“EIP” means the new employee incentive plan to be adopted by the reorganized
Company, after the Effective Date, on the terms and conditions set forth in the Restructuring
Term Sheet.
“End Date” has the meaning set forth in Section 9.2(a).
“Environmental Laws” means all applicable laws (including common law),
rules, regulations, codes, ordinances, orders in council, Orders, decrees, treaties, directives,
judgments or legally binding agreements promulgated or entered into by or with any
Governmental Entity, relating in any way to the environment, preservation or reclamation of
natural resources, the generation, management, Release or threatened Release of, or exposure to,
any Hazardous Material.
“Equity Commitment Agreement” has the meaning set forth in the
Restructuring Support Agreement.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated)
that, together with any of the Debtors, is, or at any relevant time during the past six years was,
treated as a single employer under any provision of Section 414 of the Code.
8
“Escrow Account” has the meaning set forth in Section 2.4(a).
“Escrow Account Funding Date” has the meaning set forth in Section 2.4(b).
“Event” means any event, development, occurrence, circumstance, effect,
condition, result, state of facts or change.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Existing Commitment Party Purchaser” has the meaning set forth in
Section 2.6(c).
“Exit RBL Facility” means the ‘Revolving Facility’ as defined in, and on the
terms set forth in, the Restructuring Support Agreement, or otherwise reasonably acceptable to
the Requisite Commitment Parties.
“Exit Term Loan Backstop Commitment” has the meaning set forth in
Section 2.7.
“Exit Term Loan Commitment Party” has the meaning set forth in Section 2.7.
“Exit Term Loan” means the ‘Term Facility A’ as defined in, and on the terms
set forth in, the Restructuring Support Agreement, or otherwise reasonably acceptable to the
Requisite Commitment Parties.
“Expense Reimbursement” has the meaning set forth in Section 3.3(a).
“Filing Party” has the meaning set forth in Section 6.12(b).
“Final DIP Order” means an Order authorizing use of cash collateral and/or
debtor-in-possession financing on a final basis.
“Final Order” means, as applicable, an Order of the Bankruptcy Court or other
court of competent jurisdiction with respect to the relevant subject matter that has not been
reversed, stayed, modified, or amended, and as to which the time to appeal or seek certiorari has
expired and no appeal or petition for certiorari has been timely taken, or as to which any appeal
that has been taken or any petition for certiorari that has been or may be filed has been resolved
by the highest court to which the Order could be appealed or from which certiorari could be
sought or the new trial, reargument, or rehearing shall have been denied, resulted in no
modification of such Order, or has otherwise been dismissed with prejudice.
“Financial Reports” has the meaning set forth in Section 6.5.
“Financial Statements” has the meaning set forth in Section 4.9.
“Funding Notice” has the meaning set forth in Section 2.4(a).
“Funding Notice Date” has the meaning set forth in Section 2.4(a).
9
“GAAP” means United States generally accepted accounting principles.
“Governmental Entity” has the meaning of “governmental unit” set forth in
section 101(27) of the Bankruptcy Code.
“Hazardous Materials” means all pollutants, contaminants, wastes, chemicals,
materials, substances and constituents, including explosive or radioactive substances or
petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated
biphenyls or radon gas, of any nature subject to regulation or which can give rise to liability
under any Environmental Law other than naturally occurring radioactive material (“NORM”) on
or inside of equipment ▇▇▇▇▇ or oil and gas property to the extent each of the foregoing is in
service.
“HSR Act” means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended from time to time.
“Hydrocarbons” means (i) oil, gas, minerals, casinghead gas, coalbed methane,
and other gaseous and liquid hydrocarbons, or any combination of the foregoing, (ii) sulfur
extracted from hydrocarbons and (iii) all other Lease substances.
“Incremental Commitment” means, collectively, the Rights Offering
Commitment and the 4(a)(2) Backstop Commitment of an Incremental Senior Commitment
Party. For the avoidance of doubt, any Commitment Party that is both a Senior Commitment
Party and an Incremental Senior Commitment Party, such Commitment Party’s Incremental
Commitment shall only include the amount set forth on Schedule 1 to this Agreement next to
such Commitment Party’s name as listed under the section “Incremental Commitment Parties”
on such Schedule.
“Incremental Commitment Percentage” means, with respect to any Incremental
Senior Commitment Party, such Incremental Senior Commitment Party’s percentage of the
Rights Offering Backstop Commitment and the 4(a)(2) Backstop Commitment as set forth
opposite such Incremental Senior Commitment Party’s name under the column titled “Additional
Commitment Percentage” on Schedule 1 to this Agreement. For the avoidance of doubt, any
Commitment Party that is both a Senior Commitment Party and an Incremental Commitment
Party, such Commitment Party’s Incremental Commitment Percentage shall only include the
percentage set forth on Schedule 1 to this Agreement next to such Commitment Party’s name as
listed under the section “Incremental Commitment Parties”. Any reference to “Incremental
Commitment Percentage” in this Agreement means the Incremental Commitment Percentage in
effect at the time of the relevant determination.
“Incremental Senior Commitment Party” means each Party listed as such on
Schedule 1 to this Agreement, solely with respect to the amount listed on such Schedule as its
“Additional Commitment Percentage.”
“Incremental Senior Commitment Premium Amount” means an amount equal
to 17.2% of the Commitment Premium.
10
“Indemnified Claim” has the meaning set forth in Section 8.2.
“Indemnified Person” has the meaning set forth in Section 8.1.
“Indemnifying Party” has the meaning set forth in Section 8.1.
“Intellectual Property Rights” has the meaning set forth in Section 4.15.
“Interim DIP Order” means an Order authorizing use of cash collateral and/or
debtor-in-possession financing on an interim basis.
“Investment Company Act” has the meaning set forth in Section 4.29.
“IRS” means the United States Internal Revenue Service.
“Joinder Commitment” means, collectively, the Rights Offering Commitment
and the 4(a)(2) Backstop Commitment of a Joinder Commitment Party. For the avoidance of
doubt, such Joinder Commitment Party’s Joinder Commitment shall only include the amount set
forth on Schedule 1 to this Agreement next to such Commitment Party’s name as listed under the
section “Joinder Commitment Parties” on such Schedule.
“Joinder Commitment Party” means each Party listed as such on Schedule 1 to
this Agreement.
“Joinder Commitment Party Default” means the failure by any Joinder
Commitment Party to (a) deliver and pay the aggregate Per Unit Purchase Price for such Joinder
Commitment Party’s Commitment Percentage of any Unsubscribed Units by the Escrow
Account Funding Date in accordance with Section 2.4(b), (b) fully exercise all Subscription
Rights that are issued to it pursuant to the Rights Offering and duly purchase all Rights Offering
Units issuable to it pursuant to such exercise, in accordance with this Agreement and the Plan or
(c) deliver and pay the aggregate Per Unit Purchase Price for such Joinder Commitment Party’s
4(a)(2) Backstop Commitment Units by the Escrow Account Funding Date in accordance with
Section 2.4(b).
“Joinder Commitment Premium Maximum Amount” means an amount equal
to 16.7% of the Commitment Premium.
“Joinder Defaulting Commitment Party” means in respect of a Joinder
Commitment Party Default that is continuing, the applicable defaulting Joinder Commitment
Party.
“Joint Filing Party” has the meaning set forth in Section 6.12(c).
“Knowledge of the Company” means the actual knowledge, after reasonable
inquiry of their direct reports, of ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇. As used herein, “actual knowledge” means information that is personally known by the
listed individual(s).
11
“Law” means any law (statutory or common), statute, regulation, rule, code or
ordinance enacted, adopted, issued or promulgated by any Governmental Entity.
“Lease” means any existing oil and gas lease, oil, gas and mineral lease, sublease,
and other leasehold interest, and the leasehold estates created thereby, including carried interests,
rights of recoupment, options, reversionary interests, convertible interests, rights to reassignment,
farm-out/farm-in rights, options and other rights to Hydrocarbons in place, and without limiting
the foregoing, other rights of whatever nature relating thereto, whether legal or equitable, and
whether vested or contingent.
“Legal Proceedings” has the meaning set forth in Section 4.13.
“Legend” has the meaning set forth in Section 6.11.
“Lien” means any lien, adverse claim, charge, option, right of first refusal,
servitude, security interest, mortgage, pledge, deed of trust, easement, encumbrance, restriction
on transfer, conditional sale or other title retention agreement, defect in title, lien or judicial lien
as defined in sections 101(36) and (37) of the Bankruptcy Code or other restrictions of a similar
kind.
“Losses” has the meaning set forth in Section 8.1.
“Material Adverse Effect” means any Event, which individually, or together
with all other Events, has had or would reasonably be expected to have a material and adverse
effect on (a) the business, assets, liabilities, finances, properties, results of operations or
condition (financial or otherwise) of the Debtors, taken as a whole, or (b) the ability of the
Debtors, taken as a whole, to perform their obligations under, or to consummate the transactions
contemplated by, the Transaction Agreements, including the Transactions, in each case, except to
the extent such Event results from, arises out of, or is attributable to, the following (either alone
or in combination): (i) the events leading up to, the filing or pendency of the Chapter 11 Cases
or actions taken in connection with the Chapter 11 Cases that are directed by the Bankruptcy
Court and made in compliance with the Bankruptcy Code and the Transaction Agreements; (ii)
the effect of any action taken by the Commitment Parties or their Affiliates with respect to the
Debtors (including through such Person’s participation in the Chapter 11 Cases) in breach of this
Agreement; (iii) any matters expressly disclosed in the Disclosure Statement or the Company
Disclosure Schedules as delivered on the date hereof; or (iv) the occurrence of a Commitment
Party Default.
“Material Contracts” means (a) all “plans of acquisition, reorganization,
arrangement, liquidation or succession” and “material contracts” (as such terms are defined in
Items 601(b)(2) and 601(b)(10) of Regulation S-K under the Exchange Act) to which any of the
Debtors is a party, (b) any Contracts to which any of the Debtors is a party that is likely to
reasonably involve consideration of more than $5,000,000, in the aggregate, over a twelve-month
period, has a term of greater than one year and is not cancelable without material penalty on not
more than thirty (30) days’ notice, (c) any Hydrocarbon purchase and sale, exchange, marketing,
compression, gathering, transportation, processing, refining, or similar Contracts (in each case)
to which any of the Debtors is a party that has a term of greater than one year and is not
12
cancelable without material penalty on not more than thirty (30) days’ notice (including any
Contract providing for volumetric or monetary commitments or indemnification therefor or for
dedication of future production), (d) any Contract binding upon the Debtors to sell, lease, farm-
out, or otherwise dispose of or encumber any interest in any of the Real Property after the
Effective Date, (e) any Contract that would obligate the reorganized Company, the New Parent
or any of their respective Subsidiaries to drill additional ▇▇▇▇▇ or conduct other material
development operations after the Effective Date, (f) any Contract for the use or sharing of
drilling rigs, (g) any Contract that is a seismic or other geophysical acquisition agreement or
license or (h) any Contract that is a water rights agreement or disposal agreement, and all other
Contracts relating to the sourcing, transportation or disposal of water.
“Milbank” means Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP.
“Money Laundering Laws” has the meaning set forth in Section 4.26(a).
“Multiemployer Plan” means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any of the Debtors or any ERISA Affiliate is making or accruing
an obligation to make contributions, has within any of the preceding six plan years made or
accrued an obligation to make contributions, or each such plan with respect to which any such
entity has any actual or contingent liability or obligation.
“Net Debt Amount” means an amount equal to $1,023,000,000.
“New Parent” has the meaning set forth in Section 6.15(a).
“New Purchaser” has the meaning set forth in Section 2.6(d).
“Non-Consenting Commitment Party” has the meaning set forth in Section
6.16.
“Note Claims” means all claims and obligations arising under or in connection
with the 2020 Notes and the 2019 Notes.
“Noteholders” means all holders of the Notes.
“Notes” means, collectively, the 2020 Notes and the 2019 Notes.
“Order” means any judgment, order, award, injunction, writ, permit, license or
decree of any Governmental Entity or arbitrator of applicable jurisdiction.
“Outside Date” has the meaning set forth in Section 9.2(a).
“Party” has the meaning set forth in the Preamble.
“PBGC” means the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.
13
“Per Unit Purchase Price” means (a)(i) the Plan Enterprise Value minus (ii) the
Net Debt Amount multiplied by (b) (i) one (1) minus (ii) the Discount to Equity Value and then
divided by (c) the Aggregate Common Units, rounded to two decimal places.
“Permitted Liens” means (a) Liens for Taxes that (i) are not yet delinquent or (ii)
are being contested in good faith by appropriate proceedings and for which adequate reserves
have been made with respect thereto; (b) landlord’s, operator’s, vendors’, carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other similar Liens for labor,
materials or supplies or other like Liens arising by operation of law in the ordinary course of
business or incident to the exploration, development, operation and maintenance of oil and gas
properties provided with respect to any Real Property or personal property incurred in the
ordinary course of business consistent with past practice and as otherwise not prohibited under
this Agreement, for amounts that are not more than sixty (60) days delinquent and that do not
materially detract from the value of, or materially impair the use of, any of the Real Property or
personal property of any of the Debtors, or, if for amounts that do materially detract from the
value of, or materially impair the use of, any of the Real Property or personal property of any of
the Debtors, if such Lien is being contested in good faith by appropriate proceedings and for
which adequate reserves have been made with respect thereto; (c) zoning, building codes and
other land use Laws regulating the use or occupancy of any Real Property or the activities
conducted thereon that are imposed by any Governmental Entity having jurisdiction over such
Real Property; provided, that no such zoning, building codes and other land use Laws prohibit
the use or occupancy of such Real Property; (d) easements, covenants, conditions, minor
encroachments, restrictions and other similar matters adversely affecting title to any Real
Property and other title defects and encumbrances that do not or would not materially impair the
use or occupancy of such Real Property or the operation of the Debtors’ business; (e) Liens
granted under any Contracts (including joint operating agreements, oil and gas leases, farmout
agreements, joint development agreements, transportation agreements, marketing agreements,
seismic licenses and other similar operational oil and gas agreements), in each case, to the extent
the same are ordinary and customary in the oil and gas business and do not or would not
materially impair the ownership, use or occupancy of any Real Property or the operation of the
Debtors’ business and which are for claims not more than sixty (60) days delinquent or, if such
claim does materially impair such ownership, use, occupancy or operation and are for obligations
that are more than sixty (60) days delinquent, are being contested in good faith by appropriate
proceedings and for which adequate reserves have been made with respect thereto; (f) Liens
granted under the DIP Facility and the DIP Orders; (g) from and after the occurrence of the
Effective Date, Liens granted in connection with the Exit RBL Facility and Exit Term Loans; (h)
Liens listed on Section 1.1 of the Company Disclosure Schedules; and (i) Liens that, pursuant to
the Confirmation Order, will not survive beyond the Effective Date.
“Person” means an individual, firm, corporation (including any non-profit
corporation), partnership, limited liability company, joint venture, association, trust,
Governmental Entity or other entity or organization.
14
“Plan” means the Debtors’ joint plan of reorganization to be approved by the
Confirmation Order, including the Plan Supplement and all exhibits, supplements, appendices
and schedules thereto, consistent with the Restructuring Term Sheet and this Agreement and
otherwise in form and substance reasonably satisfactory to each of the Requisite Commitment
Parties, as may be amended, supplemented, or modified from time to time in accordance with its
terms and with the Restructuring Support Agreement and this Agreement and in a manner that is
reasonably acceptable to the Requisite Commitment Parties.
“Plan Enterprise Value” means an amount equal to $1,425,000,000.
“Plan Solicitation Order” means an Order consistent with the Restructuring
Support Agreement and this Agreement and otherwise in form and substance reasonably
acceptable to the Requisite Commitment Parties and the Company, approving the Disclosure
Statement with respect to the Plan and approving the Rights Offering Procedures and the
solicitation with respect to the Plan which are consistent with the Restructuring Support
Agreement and this Agreement and otherwise in form and substance reasonably acceptable to the
Requisite Commitment Parties and the Company.
“Plan Supplement” means the documents set forth on Exhibit C to the
Restructuring Support Agreement.
“Pre-Closing Period” has the meaning set forth in Section 6.3.
“RBL Agent” means Citibank, N.A., or any successor thereto, as administrative
agent under the RBL Credit Agreement, solely in its capacity as such.
“RBL Credit Agreement” means that certain Third Amended and Restated
Credit Agreement, dated as of September 30, 2011, by and among Vanguard Natural Gas, LLC,
the lenders from time to time party thereto and the RBL Agent.
“Real Property” means, collectively, all right, title and interest (including any
leasehold estate) in and to any and all parcels of or interests in real property owned in fee or
leased by any of the Debtors, together with, in each case, all easements, hereditaments and
appurtenances relating thereto, all improvements and appurtenant fixtures incidental to the
ownership or lease thereof.
“Registration Rights Agreement” has the meaning set forth in Section 6.7(a).
“Related Party” means, with respect to any Person, (i) any former, current or
future director, officer, agent, Affiliate, employee, general or limited partner, member, manager
or stockholder of such Person and (ii) any former, current or future director, officer, agent,
Affiliate, employee, general or limited partner, member, manager or stockholder of any of the
foregoing.
“Related Purchaser” has the meaning set forth in Section 2.6(b).
15
“Release” means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, disposing or migrating. “Released” has a
correlative meaning.
“Replacing Commitment Parties” has the meaning set forth in Section 2.3(b).
“Representatives” means, with respect to any Person, such Person’s directors,
officers, members, partners, managers, employees, agents, investment bankers, attorneys,
accountants, advisors and other representatives.
“Required Exit Term Loan Commitment Date” means June 2, 2017.
“Required Exit Term Loan Share” means the percentage of the Exit Term Loan
Backstop Commitment set forth next to the name of a Joinder Commitment Party on Schedule 1
as its Required Exit Term Loan Share.
“Requisite Commitment Parties” means the Senior Commitment Parties holding
at least two-thirds of the aggregate Rights Offering Backstop Commitments as of the date on
which the consent or approval of such members is solicited.
“Reserve Report” has the meaning set forth in Section 4.27.
“Restructuring” has the meaning set forth in the Restructuring Support
Agreement.
“Restructuring Support Agreement” has the meaning set forth in the Recitals.
“Restructuring Term Sheet” has the meaning set forth in the Recitals.
“Restructuring Transactions” means, collectively, the transactions
contemplated by the Restructuring Support Agreement.
“Rights Offering” means the 1145 Rights Offering and the Accredited Investor
Rights Offering that are backstopped by the Commitment Parties for the 1145 Rights Offering
Amount and the Accredited Investor Rights Offering Amount, respectively, in connection with
the Restructuring Transactions substantially on the terms reflected in the Restructuring Support
Agreement and this Agreement, and in accordance with the Rights Offering Procedures.
“Rights Offering Amount” means the sum of the 1145 Rights Offering Amount
and the Accredited Investor Rights Offering Amount.
“Rights Offering Backstop Commitment” has the meaning set forth in
Section 2.2(b).
“Rights Offering Commencement Time” means the time and date set forth in
the Rights Offering Procedures.
16
“Rights Offering Expiration Time” means the time and the date on which the
rights offering subscription forms must be duly delivered to the Rights Offering Subscription
Agent in accordance with the Rights Offering Procedures, together with the applicable aggregate
Per Unit Purchase Price, if applicable.
“Rights Offering Participants” means those Persons who duly subscribe for
Rights Offering Units in accordance with the Rights Offering Procedures.
“Rights Offering Procedures” means the 1145 Rights Offering Procedures and
the Accredited Investor Rights Offering Procedures.
“Rights Offering Units” means the 1145 Rights Offering Units and the
Accredited Investor Rights Offering Units.
“Rights Offering Subscription Agent” means Delaware Trust Company or
another subscription agent appointed by the Company and satisfactory to the Requisite
Commitment Parties.
“SEC” means the U.S. Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Senior Commitment Party” means each Party listed as such on Schedule 1 to
this Agreement.
“Senior Commitment Party Default” means the failure by any Senior
Commitment Party to (a) deliver and pay the aggregate Per Unit Purchase Price for such Senior
Commitment Party’s Commitment Percentage of any Unsubscribed Units by the Escrow
Account Funding Date in accordance with Section 2.4(b), (b) deliver and pay the aggregate Per
Unit Purchase Price for such Senior Commitment Party’s relative Commitment Percentage of
any Available Units resulting from a Joinder Commitment Party Default by the Escrow Account
Funding Date in accordance with Section 2.4(b), (c) fully exercise all Subscription Rights that
are issued to it pursuant to the Rights Offering and duly purchase all Rights Offering Units
issuable to it pursuant to such exercise, in accordance with this Agreement and the P lan or (d)
deliver and pay the aggregate Per Unit Purchase Price for such Senior Commitment Party’s
4(a)(2) Backstop Commitment Units by the Escrow Account Funding Date in accordance with
Section 2.4(b).
“Senior Commitment Premium Amount” means an amount equal to the
Commitment Premium minus the sum of (a) the Joinder Commitment Party Premium Maximum
Amount multiplied by the quotient obtained by dividing (y) the Commitment Percentage of all
Joinder Commitment Parties who backstopped their Required Exit Term Loan Share by (z) the
Commitment Percentage of all Joinder Commitment Parties plus (b) the Incremental Senior
Premium Amount.
17
“Senior Defaulting Commitment Party” means in respect of a Senior
Commitment Party Default that is continuing, the applicable defaulting Senior Commitment
Party.
“Subscription Rights” means the subscription rights to purchase Rights Offering
Units.
“Subsidiary” means, with respect to any Person, any corporation, partnership,
joint venture or other legal entity as to which such Person (either alone or through or together
with any other subsidiary), (a) owns, directly or indirectly, more than fifty percent (50%) of the
stock or other equity interests, (b) has the power to elect a majority of the board of directors or
similar governing body, or (c) has the power to direct the business and policies.
“Taxes” means all taxes, assessments, duties, levies or other mandatory
governmental charges paid to a Governmental Entity, including all federal, state, local, foreign
and other income, franchise, profits, gross receipts, capital gains, capital stock, transfer, property,
sales, use, value-added, occupation, excise, severance, windfall profits, stamp, payroll, social
security, withholding and other taxes, assessments, duties, levies or other mandatory
governmental charges of any kind whatsoever paid to a Governmental Entity (whether payable
directly or by withholding and whether or not requiring the filing of a return), all estimated taxes,
deficiency assessments, additions to tax, penalties and interest thereon and shall include any
liability for such amounts as a result of being a member of a combined, consolidated, unitary or
affiliated group. For the avoidance of doubt, such term shall exclude any tax, penalties or
interest thereon that result or have resulted from the non-payment of royalties.
“Total Commitment Amount” means an amount equal to the 4(a)(2) Backstop
Commitment Amount plus the Rights Offering Amount.
“Transaction Agreements” has the meaning set forth in Section 4.2(a).
“Transactions” means, collectively, the 4(a)(2) Backstop Commitment
Investment and the Rights Offering.
“Transfer” means to sell, transfer, assign, pledge, hypothecate, participate,
donate or otherwise encumber or dispose of, directly or indirectly (including through derivatives,
options, swaps, pledges, forward sales or other transactions in which any Person receives the
right to own or acquire any current or future interest in a Subscription Right, a Note Claim, a
Rights Offering Unit, a 4(a)(2) Backstop Commitment Unit or Common Unit). “Transfer” used
as a noun has a correlative meaning.
“Unsubscribed Units” means the Rights Offering Units that have not been duly
purchased in the Rights Offering by Noteholders that are not Commitment Parties in accordance
with the Rights Offering Procedures and the Plan.
“▇▇▇▇▇▇▇ Rule” has the meaning set forth in Section 4.32(a).
“willful or intentional breach” has the meaning set forth in Section 9.4(a).
18
Section 1.2 Construction. In this Agreement, unless the context
otherwise requires:
(a) references to Articles, Sections, Exhibits and Schedules are references to
the articles and sections or subsections of, and the exhibits and schedules attached to, this
Agreement;
(b) references in this Agreement to “writing” or comparable expressions
include a reference to a written document transmitted by means of electronic mail in portable
document format (pdf), facsimile transmission or comparable means of communication;
(c) words expressed in the singular number shall include the plural and vice
versa; words expressed in the masculine shall include the feminine and neuter gender and vice
versa;
(d) the words “hereof”, “herein”, “hereto” and “hereunder”, and words of
similar import, when used in this Agreement, shall refer to this Agreement as a whole, including
all Exhibits and Schedules attached to this Agreement, and not to any provision of this
Agreement;
(e) the term “this Agreement” shall be construed as a reference to this
Agreement as the same may have been, or may from time to time be, amended, modified,
varied, novated or supplemented;
(f) “include”, “includes” and “including” are deemed to be followed by
“without limitation” whether or not they are in fact followed by such words;
(g) references to “day” or “days” are to calendar days;
(h) references to “the date hereof” means the date of this Agreement;
(i) unless otherwise specified, references to a statute means such statute as
amended from time to time and includes any successor legislation thereto and any rules or
regulations promulgated thereunder in effect from time to time; and
(j) references to “dollars” or “$” refer to currency of the United States of
America, unless otherwise expressly provided.
ARTICLE II
BACKSTOP COMMITMENT
Section 2.1 The Transactions; Subscription Rights.
(a) On and subject to the terms and conditions hereof, including entry of the
BCA Approval Order by the Bankruptcy Court, the Company shall conduct the Rights Offering
and the 4(a)(2) Backstop Commitment Investment pursuant to and in accordance with the
Rights Offering Procedures, this Agreement and the Plan Solicitation Order, as applicable.
19
(b) If reasonably requested by the Requisite Commitment Parties from time
to time prior to the Rights Offering Expiration Time (and any permitted extensions thereto), the
Company shall notify, or cause the Rights Offering Subscription Agent to notify, within 48
hours of receipt of such request by the Company, the Commitment Parties of the aggregate
number of Subscription Rights known by the Company or the Rights Offering Subscription
Agent to have been exercised pursuant to the Rights Offering as of the most recent practicable
time before such request. The 1145 Rights Offering will be conducted, and the Common Units
issued in satisfaction of the Company’s obligation to pay the Commitment Premium will be
issued, in reliance upon the exemption from registration under the Securities Act provided in
Section 1145 of the Bankruptcy Code, and the Disclosure Statement will include a statement to
that effect. Each of the Accredited Investor Rights Offering and the 4(a)(2) Backstop
Commitment Investment will be conducted in reliance upon the exemption from registration
under the Securities Act provided in Section 4(a)(2) of the Securities Act, and the Disclosure
Statement shall include a statement to such effect. The offer and sale of the Unsubscribed Units
purchased by the Commitment Parties pursuant to this Agreement will be made in reliance on
the exemption from registration provided by Section 4(a)(2) of the Securities Act or another
available exemption from registration under the Securities Act, and the Disclosure Statement
shall include a statement to such effect.
Section 2.2 The Commitments.
(a) On and subject to the terms and conditions hereof, including entry of the
BCA Approval Order, each Commitment Party agrees, severally (in accordance with its
Commitment Percentage) and not jointly, to fully exercise (or cause certain of its and its
affiliates’ managed funds and/or accounts to fully exercise) all Subscription Rights that are
issued to it (or such managed funds or accounts) pursuant to the Rights Offering, and duly
purchase all Rights Offering Units issuable to it pursuant to such exercise, in accordance with
the Rights Offering Procedures and the Plan; provided that any Defaulting Commitment Party
shall be liable to each Senior Commitment Party that is not a Defaulting Commitment Party,
and the Company, as a result of any breach of its obligations hereunder.
(b) On and subject to the terms and conditions hereof, including entry of the
Confirmation Order, each Commitment Party agrees, severally (in accordance with its
Commitment Percentage) and not jointly, to purchase (or cause certain of its and its affiliates’
managed funds and/or accounts to purchase), and the Company shall sell to such Commitment
Party (or such managed funds or accounts), on the Closing Date for the applicable aggregate Per
Unit Purchase Price, the number of Unsubscribed Units equal to (x) such Commitment Party’s
Commitment Percentage multiplied by (y) the aggregate number of Unsubscribed Units,
rounded among the Commitment Parties solely to avoid fractional units as the Requisite
Commitment Parties may determine in their sole discretion (provided that in no event shall such
rounding reduce the aggregate commitment of such Commitment Parties). The obligations of
the Commitment Parties to purchase such Unsubscribed Units as described in this Section 2.2(b)
shall be referred to as the “Rights Offering Backstop Commitment”.
(c) On and subject to the terms and conditions hereof, including entry of the
Confirmation Order, each Commitment Party agrees, severally (in accordance with its
Commitment Percentage) and not jointly, to purchase (or cause certain of its and its affiliates’
20
managed funds and/or accounts to purchase), and the Company shall sell to such Commitment
Party (or such managed funds or accounts), on the Closing Date for the applicable aggregate Per
Unit Purchase Price, the number of 4(a)(2) Backstop Commitment Units equal to (x) such
Commitment Party’s Commitment Percentage multiplied by (y) the aggregate number of 4(a)(2)
Backstop Commitment Units, rounded among the Commitment Parties solely to avoid fractional
units as the Requisite Commitment Parties may determine in their sole discretion (provided that
in no event shall such rounding reduce the aggregate commitment of such Commitment
Parties); provided that any Defaulting Commitment Party shall be liable to each Senior
Commitment Party that is not a Defaulting Commitment Party, and the Company, as a result of
any breach of its obligations hereunder.
Section 2.3 Commitment Party Default; Replacement of
Defaulting Commitment Parties.
(a) Upon the occurrence of a Joinder Commitment Party Default, the Senior
Commitment Parties and their respective Affiliated Funds, shall, within four (4) Business Days
after receipt of written notice from the Company to all Senior Commitment Parties of such
Joinder Commitment Party Default, which notice shall be given promptly following the
occurrence of such Joinder Commitment Party Default and to all Senior Commitment Parties
concurrently, make arrangements to purchase all Available Units on the terms and subject to the
conditions set forth in this Agreement based upon the relative applicable Commitment
Percentages of the Senior Commitment Parties and their Affiliated Funds. Any Available Units
so purchased by a Senior Commitment Party (and any commitment and applicable aggregate
Per Unit Purchase Price associated therewith) shall be included, among other things, in the
determination of (x) the Common Units to be purchased by such Senior Commitment Party for
all purposes hereunder and (y) the Commitment Percentage of such Senior Commitment Party
for purposes of Section 2.3(e), Section 2.4(b), Section 3.1 and Section 3.2. If a Joinder
Commitment Party Default occurs, the Outside Date shall be delayed only to the extent
necessary to allow for the purchase by the Senior Commitment Parties to be completed in
accordance with this Section 2.3.
(b) Upon the occurrence of a Senior Commitment Party Default, the Senior
Commitment Parties and their respective Affiliated Funds (other than any Defaulting
Commitment Party) shall have the right and opportunity (but not the obligation), within four
(4) Business Days after receipt of written notice from the Company to all Commitment Parties
of such Senior Commitment Party Default, which notice shall be given promptly following the
occurrence of such Commitment Party Default and to all Commitment Parties substantially
concurrently (such four (4) Business Day period, the “Commitment Party Replacement
Period”), to make arrangements for one or more of the Senior Commitment Parties and their
respective Affiliated Funds (other than the Defaulting Commitment Party) to purchase all or any
portion of the Available Units (such purchase, a “Commitment Party Replacement”) on the
terms and subject to the conditions set forth in this Agreement and in such amounts as may be
agreed upon by all of the Senior Commitment Parties electing to purchase all or any portion of
the Available Units, or, if no such agreement is reached, based upon the relative applicable
Commitment Percentages of any such Senior Commitment Parties and their respective
Affiliated Funds (other than any Defaulting Commitment Party) (such Commitment Parties the
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“Replacing Commitment Parties”). Any Available Units purchased by a Replacing
Commitment Party (and any commitment and applicable aggregate Per Unit Purchase Price
associated therewith) shall be included, among other things, in the determination of (x) the
Unsubscribed Units of such Replacing Commitment Party for all purposes hereunder, (y) the
Commitment Percentage of such Replacing Commitment Party for purposes of Section 2.3(e),
Section 2.4(b), Section 3.1 and Section 3.2 and (z) the Backstop Commitment of such Replacing
Commitment Party for purposes of the definition of “Requisite Commitment Parties”. If a
Senior Commitment Party Default occurs, the Outside Date shall be delayed only to the extent
necessary to allow for the Commitment Party Replacement to be completed within the
Commitment Party Replacement Period.
(c) In the event that any Available Units are available for purchase pursuant
to Section 2.3(b) and the Senior Commitment Parties do not elect to purchase all such Available
Units pursuant to the provisions thereof, the Company may, in its sole discretion, elect to utilize
the Cover Transaction Period to consummate a Cover Transaction. As used herein, “Cover
Transaction” means a circumstance in which the Company arranges for the sale of all or any
portion of the Available Shares to any other Person, on the terms and subject to the conditions
set forth in this Agreement, during the Cover Transaction Period, and “Cover Transaction
Period” means the ten (10) Business Day period following expiration of the four (4) Business
Day period specified in Section 2.3(b). For the avoidance of doubt, the Company’s election to
pursue a Cover Transaction, whether or not consummated, shall not relieve any Commitment
Party of its obligation to fulfill its Commitments.
(d) Notwithstanding anything in this Agreement to the contrary, if a
Commitment Party is a Defaulting Commitment Party, or if this Agreement is terminated with
respect to such Commitment Party as a result of its default hereunder, it shall not be entitled to
any of the Commitment Premium or expense reimbursement applicable to such Defaulting
Commitment Party (including the Expense Reimbursement) or indemnification provided, or to
be provided, under or in connection with this Agreement (and if (x) the Closing occurs
notwithstanding such a default or termination with respect to a Commitment Party, and (y) the
amount funded in the Rights Offering (including the purchase of Unsubscribed Shares
hereunder) and the 4(a)(2) Backstop Commitment Investment is less than the Total
Commitment Amount because of the failure of such Commitment Party to fund, then the
Commitment Premium shall be reduced ratably).
(e) Except as set forth in Section 2.3(a) and (b) above, nothing in this
Agreement shall be deemed to require a Senior Commitment Party to purchase more than its
Commitment Percentage of the Unsubscribed Units.
(f) For the avoidance of doubt, notwithstanding anything to the contrary set
forth in Section 9.4 but subject to Section 10.10, no provision of this Agreement shall relieve
any Joinder Commitment Party or Senior Defaulting Commitment Party from liability
hereunder, or limit the availability of the remedies set forth in Section 10.9, in connection with
any such Defaulting Commitment Party’s Commitment Party Default.
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Section 2.4 Escrow Account Funding.
(a) Funding Notice. No later than the seventh (7th) Business Day following
the Rights Offering Expiration Time, the Rights Offering Subscription Agent shall, on behalf of
the Company, deliver to each Commitment Party a written notice (the “Funding Notice ,” and
the date of such delivery, the “Funding Notice Date”) setting forth (i) the number of Rights
Offering Units elected to be purchased by the Rights Offering Participants, and the aggregate
Per Unit Purchase Price therefor; (ii) the aggregate number of Unsubscribed Units, if any, and
the aggregate Per Unit Purchase Price therefor; (iii) the Commitment Party’s Commitment
Percentage and the aggregate number of Rights Offering Units (based upon such Commitment
Party’s Commitment Percentage) to be issued and sold by the Company to such Commitment
Party on account of any Unsubscribed Units, and the aggregate Per Unit Purchase Price
therefor; (iv) if applicable, the number of Rights Offering Units such Commitment Party is
subscribed for in the Rights Offering and for which such Commitment Party had not yet paid to
the Rights Offering Subscription Agent the aggregate Per Unit Purchase Price therefor, together
with such aggregate Per Unit Purchase Price; (v) the number of 4(a)(2) Backstop Commitment
Units each Commitment Party is obligated to purchase, and the aggregate Per Unit Purchase
Price therefor; and (vi) subject to the last sentence of Section 2.4(b), the escrow account
designated in escrow agreements satisfactory to the Requisite Commitment Parties and the
Company, each acting reasonably, to which such Commitment Party shall deliver and pay the
aggregate Per Unit Purchase Price for such Commitment Party’s Commitment Percentage of the
Unsubscribed Units, such Commitment Party’s aggregate Per Unit Purchase Price for the
4(a)(2) Backstop Commitment Units and, if applicable, the aggregate Per Unit Purchase Price
for the Rights Offering Units such Commitment Party has subscribed for in the Rights Offering
(the “Escrow Account”). The Company shall promptly direct the Rights Offering Subscription
Agent to provide any written backup, information and documentation relating to the information
contained in the applicable Funding Notice as any Commitment Party may reasonably request.
(b) Escrow Account Funding. On the Effective Date or such earlier date
agreed with the Requisite Commitment Parties pursuant to escrow agreements satisfactory to
the Requisite Commitment Parties and the Company, each acting reasonably, which shall not be
earlier than the fourth (4th) Business Day following receipt of the Funding Notice or more than
five (5) Business Days prior to the planned Effective Date (the “Escrow Account Funding
Date”), each Commitment Party shall deliver and pay an amount equal to the sum of (i) the
aggregate Per Unit Purchase Price for such Commitment Party’s Commitment Percentage of the
Unsubscribed Units, plus (ii) the aggregate Per Unit Purchase Price for the Common Units
issuable pursuant to such Commitment Party’s exercise of all the Subscription Rights issued to
it in the Rights Offering, plus (iii) the aggregate Per Unit Purchase Price for the 4(a)(2)
Backstop Commitment Units to be purchased by such Commitment Party, by wire transfer of
immediately available funds in U.S. dollars into the Escrow Account in satisfaction of such
Commitment Party’s Rights Offering Backstop Commitment, its obligations to fully exercise its
Subscription Rights and its obligations to purchase its portion of the 4(a)(2) Backstop
Commitment Units. If the Closing does not occur, all amounts deposited by the Commitment
Parties in the Escrow Account shall be returned to the Commitment Parties in accordance with
the terms of the escrow agreement. Notwithstanding the foregoing, all payments contemplated
to be made by any Commitment Party to the Escrow Account pursuant to this Section 2.4 may
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instead be made, at the option of such Commitment Party, to a segregated bank account of the
Rights Offering Subscription Agent designated by the Rights Offering Subscription Agent in the
Funding Notice and shall be delivered and paid to such account on the Escrow Account Funding
Date.
Section 2.5 Closing.
(a) Subject to Article VII, unless otherwise mutually agreed in writing
between the Company and the Requisite Commitment Parties, the closing of the Transactions
(the “Closing”) shall take place at the offices of Milbank, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, at 10:00 a.m., New York City time, on the date on which all of the conditions set
forth in Article VII shall have been satisfied or waived in accordance with this Agreement
(other than conditions that by their terms are to be satisfied at the Closing, but subject to the
satisfaction or waiver of such conditions). The date on which the Closing actually occurs shall
be referred to herein as the “Closing Date”.
(b) At the Closing, the funds held in the Escrow Account (and any amounts
paid to a Rights Offering Subscription Agent bank account pursuant to the last sentence of
Section 2.4(b)) shall, as applicable, be released and utilized in accordance with the Plan.
(c) At the Closing, issuance of the Unsubscribed Units and the 4(a)(2)
Backstop Commitment Units will be made by the Company to each Commitment Party (or to its
designee in accordance with Section 2.6(b) against payment of the aggregate Per Unit Purchase
Price for the Unsubscribed Units and the 4(a)(2) Backstop Commitment Units purchased by
such Commitment Party, in satisfaction of such Commitment Party’s Commitments. Unless a
Commitment Party requests delivery of a physical unit certificate, the entry of any
Unsubscribed Units and 4(a)(2) Backstop Commitment Units to be delivered pursuant to this
Section 2.5(c) into the account of a Commitment Party pursuant to the Company’s book entry
procedures and delivery to such Commitment Party of an account statement reflecting the book
entry of such Unsubscribed Units and 4(a)(2) Backstop Commitment Units shall be deemed
delivery of such Unsubscribed Units and 4(a)(2) Backstop Commitment Units for purposes of
this Agreement. Notwithstanding anything to the contrary in this Agreement, all Unsubscribed
Units and 4(a)(2) Backstop Commitment Units will be delivered with all issue, stamp, transfer,
sales and use, or similar transfer Taxes or duties that are due and payable (if any) in connection
with such delivery duly paid by the Company on behalf of the Company.
(d) At the Closing, each Exit Term Loan Commitment Party shall deliver and
pay an amount equal to such Exit Term Loan Commitment Party’s Exit Term Loan Backstop
Commitment, by wire transfer of immediately available funds in U.S. dollars to the agent under
the Exit Term Loan for the benefit of the lenders under the RBL Credit Agreement that elect
treatment under “Option 1” as defined in the Restructuring Term Sheet.
Section 2.6 Designation and Assignment Rights.
(a) Other than as expressly set forth in this Section 2.6, no Commitment Party
shall be permitted to Transfer its Commitments.
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(b) Each Commitment Party shall have the right to designate by written notice
to the Company, the Subscription Agent and Milbank, no later than two (2) Business Days prior
to the Closing Date that some or all of the Unsubscribed Units or 4(a)(2) Backstop Commitment
Units that it is obligated to purchase hereunder be issued in the name of, and delivered to, one or
more of its Affiliates or Affiliated Funds (other than any portfolio company of such Commitment
Party (or its Affiliates) or any Subsidiary thereof) (each, a “Related Purchaser”) upon receipt
by the Company of payment therefor in accordance with the terms hereof, which notice of
designation shall (i) be addressed to the Company and signed by such Commitment Party and
each such Related Purchaser, (ii) specify the number of Unsubscribed Units or 4(a)(2) Backstop
Commitment Units to be delivered to or issued in the name of such Related Purchaser and
(iii) contain a confirmation by each such Related Purchaser of the accuracy of the representations
set forth in Sections 5.6 through 5.9 as applied to such Related Purchaser; provided, that no such
Transfer pursuant to this Section 2.6(b) shall relieve such Commitment Party from its obligations
under this Agreement. Additionally, subject to Section 2.6(e), each Commitment Party shall
have the right to Transfer all or any portion of its Commitments to any creditworthy Related
Purchaser, provided, that such Commitment Party shall (i) provide written notice to the
Company of such Transfer as far in advance thereof as practicable and (ii) deliver to the
Company, the Rights Offering Subscription Agent and Milbank a joinder to this Agreement,
substantially in the form attached hereto as Exhibit B, executed by such Commitment Party and
such Related Purchaser.
(c) Subject to Section 2.6(e), each Commitment Party shall have the right to
Transfer all or any portion of its Commitments to any other Commitment Party or such other
Commitment Party’s Related Purchaser (each, an “Existing Commitment Party Purchaser”),
provided, that (i) such Existing Commitment Party Purchaser or such Existing Commitment
Party Purchaser’s Affiliate or Affiliated Fund shall have been a Commitment Party as of
immediately prior to such Transfer and (ii)(1) to the extent such Existing Commitment Party
Purchaser is not a Commitment Party hereunder, such Commitment Party shall deliver to the
Company, the Rights Offering Subscription Agent and Milbank a joinder to this Agreement,
substantially in the form attached hereto as Exhibit C-1, executed by such Commitment Party
and such Existing Commitment Party Purchaser and (2) to the extent such Existing Commitment
Party Purchaser is already a Commitment Party hereunder, such Commitment Party shall deliver
to the Company, the Rights Offering Subscription Agent and Milbank an amendment to this
Agreement, substantially in the form attached hereto as Exhibit C-2, executed by such
Commitment Party and such Existing Commitment Party Purchaser.
(d) Subject to Section 2.6(e), each Commitment Party shall have the right to
Transfer all or any portion of its Commitments to any Person that is not an Existing Commitment
Party Purchaser (each of the Persons to whom a Transfer is made, a “New Purchaser”),
provided, that (i) such Transfer shall have been consented to by the Requisite Commitment
Parties in writing (such consent not to be unreasonably withheld, conditioned or delayed;
provided, that the Requisite Commitment Parties shall be deemed to have so consented if they
fail to deliver an objection to such Transfer in writing to Milbank by the close of business on the
third (3rd) Complete Business Day following delivery of such proposed Transfer), (ii) such
Transfer shall have been consented to by the Company in writing (such consent not be
unreasonably withheld, conditioned or delayed, it being understood that it would be unreasonable
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for the Company to withhold its consent to any such Transfer if the New Purchaser has the
financial wherewithal to fulfill its obligations with respect to the Commitments to be transferred;
provided, that the Company shall be deemed to have so consented if it fails to deliver an
objection to such Transfer in writing to Milbank by the close of business on the third (3rd)
Complete Business Day following delivery of such proposed Transfer), and (iii) such
Commitment Party shall deliver to the Company, the Rights Offering Subscription Agent and
Milbank a joinder to this Agreement, substantially in the form attached hereto as Exhibit D
executed by such Commitment Party, such New Purchaser and the Company.
(e) No Commitment Party shall have the right to Transfer all or any portion of
its Commitments to the Company or any of the Company’s Affiliates. A Commitment Party
shall have the right to Transfer all or any portion of its Commitments to any other Person
pursuant to the terms of this Agreement whether or not it is making a simultaneous transfer of a
corresponding amount of the Note Claims. For the avoidance of doubt, it is the intent of the
Parties that a Transfer of the Commitments pursuant to this Section 2.6 will represent a transfer
of proportional portions of the Rights Offering Backstop Commitment and the 4(a)(2) Backstop
Commitment and that, accordingly, any Transfer of such Commitment Party’s Rights Offering
Backstop Commitment or 4(a)(2) Backstop Commitment shall be permitted only if coupled by a
proportional Transfer of the other. Except as set forth in the first sentence of Section 2.6(b), no
Commitment Party shall have the right to Transfer all or any portion of its Commitments to any
other Person following receipt of the Funding Notice pursuant to, and in accordance with,
Section 2.4. Any Commitment Party seeking to Transfer its Commitments to any other Person
must provide the Company, the Subscription Agent and Milbank with prior written notice of
such proposed Transfer no less than three (3) Complete Business Days prior to the date of the
consummation of such proposed Transfer, which notice shall state the total amount of (i)
Commitments to be Transferred (ii) Joinder Commitments to be Transferred and (iii) Incremental
Commitments to be Transferred, in each case, to the extent applicable to such Transfer. Any
Transfer made (or attempted to be made) in violation of this Agreement shall be deemed null and
void ab initio and of no force or effect, regardless of any prior notice provided to the Parties or
any Commitment Party, and shall not create (or be deemed to create) any obligation or liability
of any other Commitment Party or any Debtor to the purported transferee or limit, alter or impair
any agreements, covenants, or obligations of the proposed transferor under this Agreement.
After the Closing Date, nothing in this Agreement shall limit or restrict in any way the ability of
any Commitment Party (or any permitted transferee thereof) to Transfer any of the Common
Units or any interest therein.
(f) Any Person that is Transferred a Joinder Commitment by a Joinder
Commitment Party in compliance with the terms of this Section 2.6 shall be a Joinder
Commitment Party with respect to such Commitment, as applicable, for all purposes herein.
Any Person that is Transferred a Commitment by a Senior Commitment Party in compliance
with the terms of this Section 2.6 shall be a Senior Commitment Party with respect to such
Commitment. Any Person that is Transferred an Incremental Commitment by an Incremental
Senior Commitment Party in compliance with the terms of this Section 2.6, shall be an
Incremental Senior Commitment Party with respect to such Incremental Commitment.
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(g) No Exit Term Loan Commitment Party shall be permitted to Transfer its
Exit Term Loan Backstop Commitment, other than (i) a Transfer of all or any portion of its Exit
Term Loan Backstop Commitment to any creditworthy Related Purchaser, provided, that such
Exit Term Loan Commitment Party shall (A) provide written notice to the Company and
Milbank of such Transfer as far in advance thereof as practicable and (B) to the extent such
Related Purchaser is not an Exit Term Loan Commitment Party hereunder deliver to the
Company and Milbank a joinder to this Agreement, substantially in the form attached hereto as
Exhibit E, executed by such Exit Term Loan Commitment Party, such Related Purchaser and the
Company, and (ii) Transfer a proportional amount of its Exit Term Loan Backstop Commitment
to any Person in connection with any Transfer of all or any portion of such Party’s Commitments
to such Person in accordance with Sections 2.6(c) through (e).
Section 2.7 Exit Term Loan Purchase Commitments. On and
subject to the terms and conditions hereof, including entry of the Confirmation Order, each
Commitment Party identified on Schedule 2 to this Agreement (each an “Exit Term Loan
Commitment Party”) agrees to, on the Closing Date, severally and not jointly, purchase (or
cause certain of its and its affiliates’ managed funds and/or accounts to purchase) Exit Term
Loans in the principal amount set forth opposite such Commitment Party’s name on Schedule 2
to this Agreement from the lenders under the RBL Credit Agreement that elect treatment under
“Option 1” as defined in the Restructuring Term Sheet, on a pro rata basis at par. Such purchase
shall be effected by making a payment to the agent for the Exit Term Loan for the benefit of such
lenders pursuant to Section 2.5(d). The obligations of the Exit Term Loan Commitment Parties
to purchase such Exit Term Loans as described in this Section 2.7 shall be referred to as the
“Exit Term Loan Backstop Commitment”. To the extent a Joinder Commitment Party agrees
to backstop their Required Exit Term Loan Share of the Exit Term Loan Backstop Commitment
by the Required Exit Term Loan Commitment Date, the Exit Term Loan Backstop Commitment
of each Senior Commitment Party shall be ratably reduced and Schedule 2 shall be amended to
add the Exit Term Loan Backstop Commitment of such Joinder Commitment Party, provided
that before and after such adjustment, the sum of the Exit Term Loan Backstop Commitments
shall equal $31,250,000.
ARTICLE III
BACKSTOP COMMITMENT PREMIUM AND EXPENSE REIMBURSEMENT
Section 3.1 Premium Payable by the Company. Subject to
Section 3.2, in consideration for the Commitments and the other agreements of the Commitment
Premium Parties in this Agreement, the Debtors shall pay or cause to be paid a nonrefundable
aggregate premium in an amount equal to $15,345,000, which represents 6.0% of the Total
Commitment Amount, payable in accordance with Section 3.2, to the Commitment Premium
Parties (including any Replacing Commitment Party, but excluding any Defaulting Commitment
Party) or their designees based upon their respective Commitment Percentages at the time such
payment is made (the “Commitment Premium”).
The provisions for the payment of the Commitment Premium and Expense
Reimbursement, and the indemnification provided herein, are an integral part of the
27
transactions contemplated by this Agreement and without these provisions the
Commitment Parties would not have entered into this Agreement.
Section 3.2 Payment of Commitment Premium. The
Commitment Premium shall be fully earned, nonrefundable and non-avoidable upon entry of the
BCA Approval Order and shall be paid by the Debtors, free and clear of any withholding or
deduction for any applicable Taxes, on the Closing Date as set forth above. For the avoidance of
doubt, to the extent payable in accordance with the terms of this Agreement, the Commitment
Premium will be payable regardless of the amount of Unsubscribed Units (if any) actually
purchased. The Company shall satisfy its obligation to pay the Commitment Premium on the
Closing Date, in lieu of any cash payment, by issuing the number of additional Common Units
(rounding down to the nearest whole unit solely to avoid fractional units) to each Commitment
Premium Party equal to such Commitment Premium Party’s Commitment Premium Share
Amount; provided, that if the Closing does not occur, the Commitment Premium shall be payable
in cash and only to the extent provided in (and in accordance with) Section 9.4. The
Commitment Premium and the Expense Reimbursement shall, pursuant to the BCA Approval
Order, constitute allowed administrative expenses of the Debtors’ estate under sections 503(b)
and 507 of the Bankruptcy Code.
Section 3.3 Expense Reimbursement.
(a) In accordance with and subject to the BCA Approval Order, the Debtors
agree to pay, in accordance with Section 3.3(b) below, all reasonable and documented out-of-
pocket fees and expenses (including travel costs and expenses) of the following attorneys,
accountants, other professionals, advisors, and consultants incurred on behalf of the Commitment
Parties: (i) Milbank as primary counsel to the Senior Commitment Parties, (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇
LLP, as co-counsel to the Senior Commitment Parties, (iii) ▇.▇. ▇▇▇ ▇▇▇▇▇▇ & Co. as
consultants to the Senior Commitment Parties, (iv) PJT Partners LP as financial advisor to the
Senior Commitment Parties, (v) a search consulting firm (for services related to the selection of
the New Board (as defined in the Restructuring Term Sheet)) and (vi) such other professionals,
advisors, and consultants as may be reasonably retained after notice to the Debtors, the Official
Committee of Unsecured Creditors, the agent for the Debtors’ prepetition secured “RBL” debt,
and the ad hoc equity committee (such payment obligations, the “Expense Reimbursement”).
The Expense Reimbursement shall, pursuant to the BCA Approval Order, constitute allowed
administrative expenses against each of the Debtors’ estates under sections 503(b) and 507 of the
Bankruptcy Code. For the avoidance of doubt, the amount payable pursuant to this Section 3.3
shall be determined without duplication of recovery under the Restructuring Support Agreement.
(b) The Expense Reimbursement accrued through the date on which the BCA
Approval Order is entered shall be paid in accordance with the DIP Orders and BCA Approval
Order as promptly as reasonably practicable after the date of the entry of the BCA Approval
Order. The Expense Reimbursement shall thereafter be payable on a monthly basis by the
Debtors in accordance with the BCA Approval Order; provided, that the Debtors’ final payment
shall be made contemporaneously with the Closing or the termination of this Agreement
pursuant to Article IX.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as set forth in the corresponding section of the Company Disclosure
Schedules or (ii) as disclosed in the Company SEC Documents filed with the SEC on or after
December 31, 2016 and publicly available on the SEC’s Electronic Data-Gathering, Analysis and
Retrieval system prior to the date hereof (excluding the exhibits, annexes and schedules thereto,
any disclosures contained in the “Forward-Looking Statements” or “Risk Factors” sections
thereof, or any other statements that are similarly predictive, cautionary or forward looking in
nature), the Company, on behalf of itself and each of the other Debtors, jointly and severally,
hereby represents and warrants to the Commitment Parties (unless otherwise set forth herein, as
of the date of this Agreement and as of the Closing Date) as set forth below.
Section 4.1 Organization and Qualification. Each of the
Debtors (a) is a duly organized and validly existing corporation, limited liability company or
limited partnership, as the case may be, and, if applicable, in good standing (or the equivalent
thereof) under the Laws of the jurisdiction of its incorporation or organization, (b) has the
corporate or other applicable power and authority to own its property and assets and to transact
the business in which it is currently engaged and presently proposes to engage and (c) except
where the failure to have such authority or qualification would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, is duly qualified and is
authorized to do business and is in good standing in each jurisdiction where the conduct of its
business as currently conducted requires such qualifications.
Section 4.2 Corporate Power and Authority.
(a) The Company has the requisite corporate power and authority
(i) (A) subject to entry of the BCA Approval Order and the Confirmation Order, to enter into,
execute and deliver this Agreement and to perform the BCA Approval Obligations and
(B) subject to entry of the BCA Approval Order and the Confirmation Order, to perform each of
its other obligations hereunder and (ii) subject to entry of the BCA Approval Order, the Plan
Solicitation Order, and the Confirmation Order, to consummate the transactions contemplated
herein and in the Plan, to enter into, execute and deliver all agreements to which it will be a party
as contemplated by this Agreement and the Plan (this Agreement, the Plan, the Disclosure
Statement, the Restructuring Support Agreement, any debtor-in-possession credit agreement for
the DIP Facility entered into in accordance with the DIP Orders, the Exit RBL Facility, the Exit
Term Loans, and such other agreements and any Plan supplements or documents referred to
herein or therein or hereunder or thereunder, collectively, the “Transaction Agreements”) and
to perform its obligations under each of the Transaction Agreements (other than this Agreement).
Subject to the receipt of the foregoing Orders, as applicable, the execution and delivery of this
Agreement and each of the other Transaction Agreements and the consummation of the
transactions contemplated hereby and thereby have been or will be duly authorized by all
requisite corporate action on behalf of the Company, and no other corporate proceedings on the
part of the Company are or will be necessary to authorize this Agreement or any of the other
Transaction Agreements or to consummate the transactions contemplated hereby or thereby.
29
(b) Subject to entry of the BCA Approval Order, the Plan Solicitation Order,
and the Confirmation Order, each of the other Debtors has the requisite power and authority
(corporate or otherwise) to enter into, execute and deliver each Transaction Agreement to which
such other Debtor is a party and to perform its obligations thereunder. Subject to entry of the
BCA Approval Order, the Plan Solicitation Order, and the Confirmation Order, the execution
and delivery of this Agreement and each of the other Transaction Agreements and the
consummation of the transactions contemplated hereby and thereby have been or will be duly
authorized by all requisite action (corporate or otherwise) on behalf of each other Debtor party
thereto, and no other proceedings on the part of any other Debtor party thereto are or will be
necessary to authorize this Agreement or any of the other Transaction Agreements or to
consummate the transactions contemplated hereby or thereby.
Section 4.3 Execution and Delivery; Enforceability. Subject to
entry of the BCA Approval Order, this Agreement will have been, and subject to the entry of the
BCA Approval Order, the Plan Solicitation Order, and the Confirmation Order, each other
Transaction Agreement will be, duly executed and delivered by the Company and each of the
other Debtors party thereto. Upon entry of the BCA Approval Order and assuming due and valid
execution and delivery hereof by the Commitment Parties, the BCA Approval Obligations will
constitute the valid and legally binding obligations of the Company and, to the extent applicable,
the other Debtors, enforceable against the Company and, to the extent applicable, the other
Debtors in accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar Laws now or hereafter in effect relating to
creditor’s rights generally and subject to general principles of equity. Upon entry of the BCA
Approval Order and assuming due and valid execution and delivery of this Agreement and the
other Transaction Agreements by the Commitment Parties and, to the extent applicable, any
other parties hereof and thereof, each of the obligations of the Company and, to the extent
applicable, the other Debtors hereunder and thereunder will constitute the valid and legally
binding obligations of the Company and, to the extent applicable, the other Debtors, enforceable
against the Company and, to the extent applicable, the other Debtors, in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other similar
Laws now or hereafter in effect relating to creditor’s rights generally and subject to general
principles of equity.
Section 4.4 Authorized and Issued Equity Interests.
(a) On the Closing Date, (i) the total issued equity interests of the Company
will consist solely of the Common Units issued pursuant to the Plan, which shall include the
Common Units issued under the Rights Offering, the Common Units issued in respect of the
Commitment Premium pursuant to Article III and the Common Units issued in respect of the
4(a)(2) Backstop Commitment Investment, (ii) no Common Units will be held by the Company
in its treasury, (iii) no Common Units will be reserved for issuance upon exercise of stock
options and other rights to purchase or acquire Common Units granted in connection with any
employment arrangement entered into in accordance with Section 6.3, except as reserved in
respect of the EIP, and (iv) no warrants to purchase Common Units will be issued and
outstanding other than warrants for 6% of the Common Units issued under the Plan in
accordance with the Restructuring Support Agreement. Except as set forth in the prior sentence,
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as of the Closing Date, no shares of capital stock or other equity securities or voting interest in
the Company will have been issued, reserved for issuance or outstanding.
(b) Except as described in this Section 4.4 and except as set forth in the
Registration Rights Agreement, the Company Organizational Documents and this Agreement, as
of the Closing Date, none of the Debtors will be party to or otherwise bound by or subject to any
outstanding option, warrant, call, right, security, commitment, Contract, arrangement or
undertaking (including any preemptive right) that (i) obligates the Debtors to issue, deliver, sell
or transfer, or repurchase, redeem or otherwise acquire, or cause to be issued, delivered, sold or
transferred, or repurchased, redeemed or otherwise acquired, any shares of the capital stock of, or
other equity or voting interests in, any of the Debtors or any security convertible or exercisable
for or exchangeable into any capital stock of, or other equity or voting interest in, any of the
Debtors, (ii) obligates any of the Debtors to issue, grant, extend or enter into any such option,
warrant, call, right, security, commitment, Contract, arrangement or undertaking, (iii) restricts
the Transfer of any shares of capital stock of any of the Debtors (other than any restrictions
included in the Exit RBL Facility, Exit Term Loans, or any corresponding pledge agreement) or
(iv) relates to the voting of any equity interests in any of the Debtors.
Section 4.5 Issuance. The Common Units to be issued pursuant
to the Plan, including the Common Units to be issued in connection with the consummation of
the Rights Offering, the 4(a)(2) Backstop Commitment Investment and pursuant to the terms
hereof, will, when issued and delivered on the Closing Date in exchange for the aggregate Per
Unit Purchase Price therefor, be duly and validly authorized, issued and delivered and shall be
fully paid and non-assessable, and free and clear of all Taxes, Liens (other than Transfer
restrictions imposed hereunder or under the Company Organizational Documents or by
applicable Law), preemptive rights, subscription and similar rights (other than any rights set
forth in the Company Organizational Documents, and the Registration Rights Agreement).
Section 4.6 No Conflict. Assuming the consents described in
clauses (a) through (g) of Section 4.7 are obtained, the execution and delivery by the Company
and, if applicable, any other Debtor, of this Agreement, the Plan and the other Transaction
Agreements, the compliance by the Company and, if applicable, any other Debtor, with the
provisions hereof and thereof and the consummation of the transactions contemplated herein and
therein will not (a) conflict with, or result in a breach, modification or violation of, any of the
terms or provisions of, or constitute a default under (with or without notice or lapse of time, or
both), or result, except to the extent specified in the Plan, in the acceleration of, or the creation of
any Lien under, or cause any payment or consent to be required under any Contract to which any
Debtor will be bound as of the Closing Date after giving effect to the Plan or to which any of the
property or assets of any Debtor will be subject as of the Closing Date after giving effect to the
Plan, (b) result in any violation of the provisions of any of the Debtors’ organizational
documents (other than, for the avoidance of doubt, a breach or default that would be triggered as
a result of the Chapter 11 Cases or the Company’s or any Debtor’s undertaking to implement the
Restructuring Transactions through the Chapter 11 Cases), or (c) result in any violation of any
Law or Order applicable to any Debtor or any of their properties, except in each of the cases
described in clause (a) or (c) for any conflict, breach, modification, violation, default,
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acceleration or Lien which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.7 Consents and Approvals. No consent, approval,
authorization, Order, registration or qualification of or with any Governmental Entity having
jurisdiction over any of the Debtors or any of their properties (each, an “Applicable Consent”)
is required for the execution and delivery by the Company and, to the extent relevant, the other
Debtors, of this Agreement, the Plan and the other Transaction Agreements, the compliance by
the Company and, to the extent relevant, the other Debtors, with the provisions hereof and
thereof and the consummation of the transactions contemplated herein and therein, except for
(a) the entry of the BCA Approval Order authorizing the Company to assume this Agreement
and perform the BCA Approval Obligations, (b) entry of the Plan Solicitation Order, (c) entry by
the Bankruptcy Court, or any other court of competent jurisdiction, of Orders as may be
necessary in the Chapter 11 Cases from time-to-time; (d) the entry of the Confirmation Order,
(e) filings, notifications, authorizations, approvals, consents, clearances or termination or
expiration of all applicable waiting periods under any Antitrust Laws in connection with the
transactions contemplated by this Agreement, (f) such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or “Blue Sky” Laws in
connection with the purchase of the Unsubscribed Units by the Commitment Parties, the issuance
of the Subscription Rights, the issuance of the Rights Offering Units pursuant to the exercise of
the Subscription Rights, the issuance of Common Units as payment of the Commitment Premium
or the issuance of 4(a)(2) Backstop Commitment Units pursuant to the 4(a)(2) Backstop
Commitment Investment, and (g) any Applicable Consents that, if not made or obtained, would
not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.8 Arm’s-Length. The Company acknowledges and
agrees that (a) each of the Commitment Parties is acting solely in the capacity of an arm’s-length
contractual counterparty to the Company with respect to the transactions contemplated hereby
(including in connection with determining the terms of the Transactions) and not as a financial
advisor or a fiduciary to, or an agent of, the Company or any of its Subsidiaries and (b) no
Commitment Party is advising the Company or any of its Subsidiaries as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.
Section 4.9 Financial Statements. The (a) audited consolidated
balance sheets of the Company as at December 31, 2016 and the related consolidated statements
of operations and of cash flows for the fiscal year then ended, accompanied by a report thereon
by BDO USA LLP (collectively, the “Financial Statements”), in each case, present fairly the
consolidated financial condition of the Company as at such date, and the consolidated results of
its operations and its consolidated cash flows for the fiscal year then ended. All such Financial
Statements, including the related schedules and notes thereto, have been prepared in accordance
with GAAP applied consistently throughout the periods involved (except as disclosed therein).
Section 4.10 Company SEC Documents and Disclosure
Statement. The Company has filed with or furnished to the SEC all reports, schedules,
forms, statements and other documents (including exhibits and other information incorporated
therein) required to be filed or furnished by it since December 31, 2016 under the Exchange Act
or the Securities Act. As of their respective dates, and, if amended, as of the date of the last such
32
amendment, each of the Company SEC Documents, including any financial statements or
schedules included therein, (i) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated in such Company SEC Document or necessary in order
to make the statements in such Company SEC Document, in light of the circumstances under
which they were made, not misleading.
Section 4.11 Absence of Certain Changes. Since December 31,
2016 to the date of this Agreement, no Event has occurred or exists that has had or would be
reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.12 No Violation; Compliance with Laws. (i) The
Company is not in violation of its certificate of formation or limited liability company operating
agreement, and (ii) no other Debtor is in violation of its respective charter or bylaws, certificate
of formation or limited liability company operating agreement or similar organizational
document in any material respect. None of the Debtors is or has been at any time since January 1,
2014 in violation of any Law or Order, except for any such violations that have not had and
would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect.
Section 4.13 Legal Proceedings. Other than the Chapter 11 Cases
and any adversary proceedings or contested motions commenced in connection therewith, there
are no material legal, governmental, administrative, judicial or regulatory investigations, audits,
actions, suits, claims, arbitrations, demands, demand letters, claims, notices of noncompliance or
violations, or proceedings (“Legal Proceedings”) pending or, to the Knowledge of the
Company, threatened to which any of the Debtors is a party or to which any property of any of
the Debtors is the subject, in each case that in any manner draws into question the validity or
enforceability of this Agreement, the Plan or the other Transaction Agreements or that would
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
Section 4.14 Labor Relations. Except as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect: (a) there are no
strikes or other labor disputes pending or threatened against any of the Debtors; (b) the hours
worked and payments made to employees of any of the Debtors have not been in violation of the
Fair Labor Standards Act or any other applicable Law dealing with such matters; and (c) all
payments due from any of the Debtors or for which any claim may be made against any of the
Debtors on account of wages and employee health and welfare insurance and other benefits have
been paid or accrued as a liability on the books of any of the Debtors to the extent required by
GAAP. Except as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, the consummation of the transactions contemplated by the Transaction
Agreements will not give rise to a right of termination or right of renegotiation on the part of any
union under any material collective bargaining agreement to which any of the Debtors (or any
predecessor) is a party or by which any of the Debtors (or any predecessor) is bound.
Section 4.15 Intellectual Property. Except as would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, (a)
each of the Debtors owns, or possesses the right to use, all of the patents, patent rights,
trademarks, service marks, trade names, copyrights, mask works, domain names, and any and all
33
applications or registrations for any of the foregoing (collectively, “Intellectual Property
Rights”) that are reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person, (b) to the Knowledge of the Company, none of the
Debtors nor any Intellectual Property Right, proprietary right, product, process, method,
substance, part, or other material now employed, sold or offered by or contemplated to be
employed, sold or offered by such Person, is interfering with, infringing upon, misappropriating
or otherwise violating any valid Intellectual Property Rights of any Person, and (c) no claim or
litigation regarding any of the foregoing is pending or, to the Knowledge of the Company,
threatened.
Section 4.16 Title to Real and Personal Property.
(a) Real Property. Each of the Debtors has good and valid title to its
respective Real Properties, in each case, except for Permitted Liens and except for defects in title
that do not materially interfere with its ability to conduct its business as currently conducted or to
utilize such properties and assets for their intended purposes, and except where the failure (or
failures) to have such title would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; provided, however, the enforceability of such leased Real
Properties may be limited by applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditor’s rights generally or general
principles of equity, including the Chapter 11 Cases. To the Knowledge of the Company, all
such properties and assets are free and clear of Liens, other than Permitted Liens and such Liens
as would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
(b) Leased Real Property. Each of the Debtors is in compliance with all
obligations under all leases to which it is a party that have not been rejected in the Chapter 11
Cases, except where the failure to comply would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, and none of the Debtors has received
written notice of any good faith claim asserting that such leases are not in full force and effect,
except leases in respect of which the failure to be in full force and effect would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. Each of the
Debtors enjoys peaceful and undisturbed possession under all such leases, other than leases in
respect of which the failure to enjoy peaceful and undisturbed possession would not reasonably
be expected to materially interfere with its ability to conduct its business as currently conducted.
(c) Personal Property. Each of the Debtors owns or possesses the right to use
all Intellectual Property Rights and all licenses and rights with respect to any of the foregoing
used in the conduct of their businesses, without any conflict (of which any of the Debtors has
been notified in writing) with the rights of others, and free from any burdensome restrictions on
the present conduct of the Debtors, as the case may be, except where such conflicts and
restrictions would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
Section 4.17 No Undisclosed Relationships. Other than
Contracts or other direct or indirect relationships between or among any of the Debtors, there are
no Contracts or other direct or indirect relationships existing as of the date hereof between or
34
among any of the Debtors, on the one hand, and any director, officer or greater than five percent
(5%) stockholder of any of the Debtors, on the other hand, that is required by the Exchange Act
to be described in the Company’s filings with the SEC and that is not so described, except for the
transactions contemplated by this Agreement. Any Contract existing as of the date hereof
between or among any of the Debtors, on the one hand, and any director, officer or greater than
five percent (5%) stockholder of any of the Debtors, on the other hand, that is required by the
Exchange Act to be described in the Company’s filings with the SEC is filed as an exhibit to, or
incorporated by reference as indicated in, the Annual Report on Form 10-K for the year ended
December 31, 2016 that the Company filed on March 15, 2017, as amended on April 25, 2017,
or any other Company SEC Document filed between March 15, 2016 and the date hereof.
Section 4.18 Licenses and Permits. The Debtors possess all
licenses, certificates, permits and other authorizations issued by, have made all declarations and
filings with and have maintained all financial assurances required by, the appropriate
Governmental Entities that are necessary for the ownership or lease of their respective properties
and the conduct of the business, except where the failure to possess, make or give the same
would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect. None of the Debtors (i) has received notice of any revocation or modification of any such
license, certificate, permit or authorization or (ii) has any reason to believe that any such license,
certificate, permit or authorization will not be renewed in the ordinary course, except to the
extent that any of the foregoing would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
Section 4.19 Environmental. Except as to matters that would not
reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:
(a) no written notice, claim, demand, request for information, Order, complaint or penalty has
been received by any of the Debtors, and there are no Legal Proceedings pending or, to the
Knowledge of the Company, threatened which allege a violation of or liability under any
Environmental Laws, in each case relating to any of the Debtors, (b) each Debtor has received
(including timely application for renewal of the same), and maintained in full force and effect, all
environmental permits, licenses and other approvals, and has maintained all financial assurances,
in each case to the extent necessary for its operations to comply with all applicable
Environmental Laws and is, and since January 1, 2014, has been, in compliance with the terms of
such permits, licenses and other approvals and with all applicable Environmental Laws, (c) to the
Knowledge of the Company, no Hazardous Material is located at, on or under any property
currently or formerly owned, operated or leased by any of the Debtors that would reasonably be
expected to give rise to any cost, liability or obligation of any of the Debtors under any
Environmental Laws other than future costs, liabilities and obligations associated with
remediation at the end of the productive life of a well, facility or pipeline that has produced,
stored or transported Hydrocarbons, (d) no Hazardous Material has been Released, generated,
owned, treated, stored or handled by any of the Debtors, and no Hazardous Material has been
transported to or Released at any location in a manner that would reasonably be expected to give
rise to any cost, liability or obligation of any of the Debtors under any Environmental Laws other
than future costs, liabilities and obligations associated with remediation at the end of the
productive life of a well, facility or pipeline that has produced, stored or transported
Hydrocarbons, and (e) there are no agreements in which any of the Debtors has expressly
35
assumed responsibility for any known obligation of any other Person arising under or relating to
Environmental Laws that remains unresolved other than future costs, liabilities and obligations
associated with remediation at the end of the productive life of a well, facility or pipeline that has
produced, stored or transported Hydrocarbons, which has not been made available to the
Commitment Parties prior to the date hereof. Notwithstanding the generality of any other
representations and warranties in this Agreement, the representations and warranties in this
Section 4.16 constitute the sole and exclusive representations and warranties in this Agreement
with respect to any environmental, health or safety matters, including any arising under or
relating to Environmental Laws or Hazardous Materials.
Section 4.20 Tax Returns.
(a) Except as would not reasonably be expected to be material to the Debtors
taken as a whole, (i) each of the Debtors has filed or caused to be filed all U.S. federal, state,
provincial, local and non-U.S. Tax returns required to have been filed by it and (ii) taken as a
whole, each such Tax return is true and correct;
(b) Each of the Debtors has timely paid or caused to be timely paid all Taxes
shown to be due and payable by it on the returns referred to in clause (a) and all other Taxes or
assessments (or made adequate provision (in accordance with GAAP) for the payment of all
Taxes due) with respect to all periods or portions thereof ending on or before the date hereof
(except Taxes or assessments that are being contested in good faith by appropriate proceedings
and for which the Debtors (as the case may be) has set aside on its books adequate reserves in
accordance with GAAP or with respect to the Debtors only, except to the extent the non-payment
thereof is permitted by the Bankruptcy Code), which Taxes, if not paid or adequately provided
for, would reasonably be expected to be material to the Debtors taken as a whole; and
(c) As of the date hereof, with respect to the Debtors, other than in connection
with the Chapter 11 Cases and other than Taxes or assessments that are being contested in good
faith and are not expected to result in significant negative adjustments that would be material to
the Debtors taken as a whole, (i) no claims have been asserted in writing with respect to any
material Taxes, (ii) no presently effective waivers or extensions of statutes of limitation with
respect to Taxes have been given or requested and (iii) no Tax returns are being examined by,
and no written notification of intention to examine has been received from, the IRS or any other
Governmental Entity.
Section 4.21 Employee Benefit Plans.
(a) None of the Debtors nor any of their ERISA Affiliates sponsor, maintain
or contribute to any Multiemployer Plan or a plan that is subject to Title IV of ERISA and, in the
last six years, neither the Debtors nor any ERISA Affiliate has sponsored, maintained or
contributed to any Multiemployer Plan or plan that is subject to Title IV of ERISA. No
condition exists that could reasonably be expected to result in any Liability to the Debtors under
Title IV of ERISA.
(b) None of the Debtors has established, sponsored or maintained, or has any
liability with respect to, any employee pension benefit plan or other material employee benefit
36
plan, program, policy, agreement or arrangement governed by or subject to the Laws of a
jurisdiction other than the United States of America.
(c) Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect to the Debtors, there are no pending, or to the
Knowledge of the Company, threatened claims, sanctions, actions or lawsuits, asserted or
instituted against any Company Benefit Plan or any Person as fiduciary or sponsor of any
Company Benefit Plan, in each case other than claims for benefits in the normal course.
(d) Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect all compensation and benefit arrangements of the
Debtors and all Company Benefits Plans comply and have complied in both form and operation
with their terms and all applicable Laws and legal requirements. None of the Debtors, has any
obligation to provide any individual with a “gross up” or similar payment in respect of any Taxes
that may become payable under Section 409A or 4999 of the Code.
(e) Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, all liabilities (including all employer contributions
and payments required to have been made by any of the Debtors) under or with respect to any
compensation or benefit arrangement of any of the Debtors have been properly accounted for in
the Company’s financial statements in accordance with GAAP.
(f) Except as would not reasonably be expected to result, individually or in
the aggregate, in a Material Adverse Effect, (i) each of the Debtors has complied and is currently
in compliance with all Laws and legal requirements in respect of personnel, employment and
employment practices; (ii) all service providers of each of the Debtors are correctly classified as
employees, independent contractors, or otherwise for all purposes (including any applicable tax
and employment policies or law); and (iii) the Debtors have not and are not engaged in any
unfair labor practice.
Section 4.22 Internal Control Over Financial Reporting. Except
as would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, the Company has established and maintains a system of internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange
Act) that complies with the requirements of the Exchange Act and has been designed to provide
reasonable assurances regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP and to the Knowledge of
the Company, there are no weaknesses in the Company’s internal control over financial reporting
as of the date hereof.
Section 4.23 Disclosure Controls and Procedures. Except as
would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect, the Company maintains disclosure controls and procedures (within the meaning of
Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) designed to ensure that
information required to be disclosed by the Company in the reports that it files and submits under
the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms, including that information required to be disclosed by the
37
Company in the reports that it files and submits under the Exchange Act is accumulated and
communicated to management of the Company as appropriate to allow timely decisions
regarding required disclosure.
Section 4.24 Material Contracts. Other than as a result of a
rejection motion filed by any of the Debtors in the Chapter 11 Cases, all Material Contracts are
valid, binding and enforceable by and against the Debtor party thereto and, to the Knowledge of
the Company, each other party thereto (except where the failure to be valid, binding or
enforceable does not constitute a Material Adverse Effect), and no written notice to terminate, in
whole or part, any Material Contract has been delivered to any of the Debtors (except where such
termination would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect). Other than as a result of the filing of the Chapter 11 Cases or any
rejection motion filed by any of the Debtors in the Chapter 11 Cases, none of the Debtors nor, to
the Knowledge of the Company, any other party to any Material Contract, is in material default
or breach under the terms thereof, in each case, except for such instances of material default or
breach that would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
Section 4.25 No Unlawful Payments. Since January 1, 2015,
none of the Debtors nor, to the Knowledge of the Company, any of their respective directors,
officers or employees has in any material respect: (a) used any funds of any of the Debtors for
any unlawful contribution, gift, entertainment or other unlawful expense, in each case relating to
political activity; (b) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (c) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977; or (d) made any bribe, rebate,
payoff, influence payment, kickback or other similar unlawful payment.
Section 4.26 Compliance with Money Laundering and Sanctions
Laws.
(a) The operations of the Debtors are and, since January 1, 2014 have been at
all times, conducted in compliance in all material respects with applicable financial
recordkeeping and reporting requirements of the U.S. Currency and Foreign Transactions
Reporting Act of 1970, the money laundering statutes of all jurisdictions in which the Debtors
operate (and the rules and regulations promulgated thereunder) and any related or similar Laws
(collectively, the “Money Laundering Laws”) and no material Legal Proceeding by or before
any Governmental Entity or any arbitrator involving any of the Debtors with respect to Money
Laundering Laws is pending or, to the Knowledge of the Company, threatened.
(b) None of the Debtors nor, to the Knowledge of the Company, any of their
respective directors, officers, employees or other Persons acting on their behalf with express
authority to so act is currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department. The Company will not directly or
indirectly use the proceeds of the Transactions, or lend, contribute or otherwise make available
such proceeds to any other Debtor, joint venture partner or other Person, for the purpose of
financing the activities of any Person that, to the Knowledge of the Company, is currently
38
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department.
Section 4.27 Reserve Report. The Debtors have furnished the
Commitment Parties and their advisors at ▇.▇. ▇▇▇ ▇▇▇▇▇▇ & Co.with true and complete copies
of the report covering the Company’s ▇▇▇▇▇ and oil and gas property prepared by the Company
captioned “Management Presentation, dated as of January 7, 2017”, together with the database of
well-by-well information that such report summarizes (together, the “Reserve Report”). The
Debtors are not aware of any material changes to the information contained in the Reserve
Report. The factual, non-interpretative data (other than title information) on which the Reserve
Report was based for purposes of estimating the reserves of Hydrocarbons set forth therein was
accurate and complete as of the date of the Reserve Report. All financial projections, forecasts,
assumptions and other forward-looking information with respect to the Debtors and their oil and
gas assets that were embodied in the Reserve Report or have otherwise been provided to the
Commitment Parties by or on behalf of the Debtors (including the lease operating expense
assumptions used in such reserve report) were, as of their respective dates, prepared in good faith
and reasonable.
Section 4.28 No Broker’s Fees. None of the Debtors is a party to
any Contract with any Person (other than this Agreement) that would give rise to a valid claim
against the Commitment Parties for a brokerage commission, finder’s fee or like payment in
connection with the Transactions, the sale of the Unsubscribed Units or the sale of the 4(a)(2)
Backstop Commitment Units.
Section 4.29 Investment Company Act. None of the Debtors is
an “investment company” as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended (the “Investment Company Act”), and this conclusion is based on one
or more bases or exclusions other than Sections 3(c)(1) and 3(c)(7) of the Investment Company
Act, including that none of the Debtors comes within the basic definition of ‘investment
company’ under section 3(a)(1) of the Investment Company Act.
Section 4.30 Insurance. Except as would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect: (i) Debtors have
insured their properties and assets against such risks and in such amounts as are customary for
companies engaged in similar businesses and have made available to the Commitment Parties a
schedule of such insurance policies in force; (ii) all premiums due and payable in respect of
insurance policies maintained by the Debtors have been paid; (iii) the Company reasonably
believes that the insurance maintained by or on behalf of the Debtors is adequate in all respects;
and (iv) as of the date hereof, to the Knowledge of the Company, none of the Debtors has
received notice from any insurer or agent of such insurer with respect to any insurance policies
of the Debtors of cancellation or termination of such policies, other than such notices which are
received in the ordinary course of business or for policies that have expired in accordance with
their terms.
Section 4.31 Alternative Transactions. As of the date hereof, the
Company is not pursuing, or in discussions or negotiations regarding, any solicitation, offer, or
proposal from any Person concerning any actual or proposed Alternative Transaction and, as
39
applicable, has terminated any existing discussions or negotiations regarding any actual or
proposed Alternative Transaction.
Section 4.32 ▇▇▇▇▇▇▇ Compliance.
(a) None of the Debtors nor their respective “Affiliates” (as defined in Section
2(k) of the BHC Act) have: (i) taken any action to acquire or retain an ownership interest in or to
sponsor, or omitted to take any action necessary to prevent themselves from acquiring or
retaining an ownership interest in or sponsoring, a Covered Fund for purposes the ▇▇▇▇▇▇▇ Rule
(the terms “sponsor” and “covered fund” having the meanings set forth in Section 13 of the BHC
Act and the rules and regulations adopted thereunder (collectively, the “▇▇▇▇▇▇▇ Rule”)), (ii)
engaged in proprietary trading as defined in the ▇▇▇▇▇▇▇ Rule, (iii) provided a line of credit,
guarantee or other form of credit support or backstop in favor of a Covered Fund, or (iv)
provided services in favor of a Covered Fund, except, in each case, as otherwise permitted under
an exemption or exclusion from the ▇▇▇▇▇▇▇ Rule and disclosed to the Commitment Parties in
Section 4.32 of the Company Disclosure Schedules (which disclosure shall list each such activity
and describe the exemption or exclusion applicable thereto).
(b) The Company is not, and after giving effect to the Transactions, the sale of
the Units thereunder and the application of the proceeds thereof, the Company will not be, a
Covered Fund.
Section 4.33 Equity Investment Documents. The Company has
provided true and correct copies of all definitive documentation relating to the 2L Investment,
including the Equity Commitment Agreement and all schedules and exhibits thereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMMITMENT PARTIES
Each Commitment Party, severally (in accordance with its Commitment
Percentage) and not jointly, represents and warrants as to itself only (unless otherwise set forth
herein, as of the date of this Agreement and as of the Closing Date) as set forth below.
Section 5.1 Organization. Such Commitment Party is a legal
entity duly organized, validly existing and, if applicable, in good standing (or the equivalent
thereof) under the Laws of its jurisdiction of incorporation or organization.
Section 5.2 Organizational Power and Authority. Such
Commitment Party has the requisite power and authority (corporate or otherwise) to enter into,
execute and deliver this Agreement and each other Transaction Agreement to which such
Commitment Party is a party and to perform its obligations hereunder and thereunder and has
taken all necessary action (corporate or otherwise) required for the due authorization, execution,
delivery and performance by it of this Agreement and the other Transaction Agreements.
Section 5.3 Execution and Delivery. This Agreement and each
other Transaction Agreement to which such Commitment Party is a party (a) has been, or prior to
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its execution and delivery will be, duly and validly executed and delivered by such Commitment
Party and (b) upon entry of the BCA Approval Order and assuming due and valid execution and
delivery hereof and thereof by the Company and the other Debtors (as applicable), will constitute
valid and legally binding obligations of such Commitment Party, enforceable against such
Commitment Party in accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar Laws limiting creditors’ rights
generally or by equitable principles relating to enforceability.
Section 5.4 No Conflict. Assuming that the consents referred to
in clauses (a) and (b) of Section 5.5 are obtained, the execution and delivery by such
Commitment Party of this Agreement and each other Transaction Agreement to which such
Commitment Party is a party, the compliance by such Commitment Party with all of the
provisions hereof and thereof and the consummation of the transactions contemplated herein and
therein (a) will not conflict with, or result in breach, modification, termination or violation of,
any of the terms or provisions of, or constitute a default under (with or without notice or lapse of
time or both), or result in the acceleration of, or the creation of any Lien under, any Contract to
which such Commitment Party is party or is bound or to which any of the property or assets or
such Commitment Party are subject, (b) will not result in any violation of the provisions of the
certificate of incorporation or bylaws (or comparable constituent documents) of such
Commitment Party and (c) will not result in any material violation of any Law or Order
applicable to such Commitment Party or any of its properties, except in each of the cases
described in clauses (a) or (c), for any conflict, breach, modification, termination, violation,
default, acceleration or Lien which would not reasonably be expected, individually or in the
aggregate, to prohibit or materially and adversely impact such Commitment Party’s performance
of its obligations under this Agreement.
Section 5.5 Consents and Approvals. No consent, approval,
authorization, Order, registration or qualification of or with any Governmental Entity having
jurisdiction over such Commitment Party or any of its properties is required for the execution
and delivery by such Commitment Party of this Agreement and each other Transaction
Agreement to which such Commitment Party is a party, the compliance by such Commitment
Party with the provisions hereof and thereof and the consummation of the transactions (including
the purchase by such Commitment Party of its Commitment Percentage of the Unsubscribed
Units, its portion of the Rights Offering Units or its portion of the 4(a)(2) Backstop Commitment
Units) contemplated herein and therein, except (a) any consent, approval, authorization, Order,
registration or qualification which, if not made or obtained, would not reasonably be expected,
individually or in the aggregate, to prohibit or materially and adversely impact such Commitment
Party’s performance of its obligations under this Agreement and each other Transaction
Agreement to which such Commitment Party is a party and (b) filings, notifications,
authorizations, approvals, consents, clearances or termination or expiration of all applicable
waiting periods under any Antitrust Laws in connection with the transactions contemplated by
this Agreement.
Section 5.6 No Registration. Such Commitment Party
understands that (a) the Unsubscribed Units, the 4(a)(2) Backstop Commitment Units and the
Accredited Investor Rights Offering Units, have not been registered under the Securities Act by
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reason of a specific exemption from the registration provisions of the Securities Act, the
availability of which depends on, among other things, the bona fide nature of the investment
intent and the accuracy of such Commitment Party’s representations as expressed herein or
otherwise made pursuant hereto, and (b) the foregoing units cannot be sold unless subsequently
registered under the Securities Act or an exemption from registration is available.
Section 5.7 Purchasing Intent. Such Commitment Party is
acquiring the Unsubscribed Units and any Common Units issued to such Commitment Party in
satisfaction of the Commitment Premium for its own account or accounts or funds over which it
holds voting discretion, not otherwise as a nominee or agent, and not otherwise with the view to,
or for resale in connection with, any distribution thereof not in compliance with applicable
securities Laws, and such Commitment Party has no present intention of selling, granting any
other participation in, or otherwise distributing the same, except in compliance with applicable
securities Laws.
Section 5.8 Sophistication; Investigation. Such Commitment
Party has such knowledge and experience in financial and business matters such that it is capable
of evaluating the merits and risks of its investment in the Unsubscribed Units and any Common
Units issued to such Commitment Party in satisfaction of the Commitment Premium. Such
Commitment Party is an “accredited investor” within the meaning of Rule 501(a) of the
Securities Act or a “qualified institutional buyer” within the meaning of Rule 144A of the
Securities Act. Such Commitment Party understands and is able to bear any economic risks
associated with such investment (including the necessity of holding such units for an indefinite
period of time). Except for the representations and warranties expressly set forth in this
Agreement or any other Transaction Agreement, such Commitment Party has independently
evaluated the merits and risks of its decision to enter into this Agreement and disclaims reliance
on any representations or warranties, either express or implied, by or on behalf of any of the
Debtors.
Section 5.9 No Broker’s Fees. Such Commitment Party is not a
party to any Contract with any Person (other than the Transaction Agreements and any Contract
giving rise to the Expense Reimbursement hereunder) that would give rise to a valid claim
against any of the Debtors for a brokerage commission, finder’s fee or like payment in
connection with the Transactions, the sale of the Unsubscribed Units or the sale of the 4(a)(2)
Backstop Commitment Units.
Section 5.10 Sufficient Funds. Such Commitment Party has
sufficient assets and the financial capacity to perform all of its obligations under this Agreement,
including the ability to fully exercise all Subscription Rights that are issued to it pursuant to the
Rights Offering, fund such Commitment Party’s Commitments.
ARTICLE VI
ADDITIONAL COVENANTS
Section 6.1 Orders Generally. The Company shall support and
make commercially reasonable efforts, consistent with the Restructuring Support Agreement and
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the Plan, to (a) obtain the entry of the BCA Approval Order, the Plan Solicitation Order, the
Confirmation Order, and any DIP Orders supported by the Requisite Commitment Parties, and
(b) cause the BCA Approval Order, the Plan Solicitation Order, the Confirmation Order, and any
DIP Orders supported by the Requisite Commitment Parties to become Final Orders (and request
that such Orders become effective immediately upon entry by the Bankruptcy Court pursuant to
a waiver of Rules 3020 and 6004(h) of the Bankruptcy Rules, as applicable), in each case, as
soon as reasonably practicable, consistent with the Bankruptcy Code, the Bankruptcy Rules, and
the Restructuring Support Agreement, following the filing of the respective motion seeking entry
of such Orders. The Company shall comply with Section 3 of the Restructuring Support
Agreement with respect to providing each of the Commitment Parties and its counsel copies of
the proposed motions seeking entry of the BCA Approval Order, the Plan Solicitation Order, the
Confirmation Order, and the DIP Orders (together with the proposed Plan Solicitation Order, the
proposed BCA Approval Order and the DIP Orders), and the BCA Approval Order, the Plan
Solicitation Order, the Confirmation Order and the DIP Orders must be consistent with the
Restructuring Term Sheet and this Agreement and otherwise in form and substance reasonably
satisfactory to the Requisite Commitment Parties and satisfactory to the Company. Any
amendments, modifications, changes, or supplements to the BCA Approval Order, Plan
Solicitation Order, Confirmation Order, and DIP Orders, and any of the motions seeking entry of
such Orders, shall be consistent with Restructuring Term Sheet and this Agreement and
otherwise in form and substance reasonably satisfactory to the Requisite Commitment Parties
and satisfactory to the Company; provided, that notwithstanding the foregoing, it shall not be a
breach of this Section 6.1 for the Debtors to have proposed or supported entry of an Interim DIP
Order, prior to May 1, 2017, that was not supported by the Requisite Commitment Parties.
Section 6.2 Confirmation Order; Plan and Disclosure Statement.
The Debtors shall use their commercially reasonable efforts to obtain entry of the Confirmation
Order. The Company shall provide to each of the Commitment Parties and its counsel a copy of
the proposed Plan and the Disclosure Statement and any proposed amendment, modification,
supplement or change to the Plan or the Disclosure Statement, and a reasonable opportunity to
review and comment on such documents (and in no event less than 48 hours prior to filing the
Plan and/or the Disclosure Statement, as applicable, with the Bankruptcy Court), and each such
amendment, modification, supplement or change to the P lan or the Disclosure Statement must be
consistent with the Restructuring Term Sheet and this Agreement and otherwise in form and
substance reasonably satisfactory to each of the Requisite Commitment Parties and satisfactory
to the Company. The Company shall provide to each of the Commitment Parties and its counsel
a copy of the proposed Confirmation Order (together with copies of any briefs, pleadings and
motions related thereto), and a reasonable opportunity to review and comment on such Order,
briefs, pleadings and motions prior to such Order, briefs, pleadings and motions being filed with
the Bankruptcy Court (and in no event less than 48 hours prior to a filing of such Order, briefs,
pleadings or motions with the Bankruptcy Court), and such Order, briefs, pleadings and motions
must be consistent with the Restructuring Term Sheet and this Agreement and otherwise in form
and substance reasonably satisfactory to each of the Requisite Commitment Parties and
satisfactory to the Company.
Section 6.3 Conduct of Business. Except as expressly set forth
in this Agreement, the Restructuring Support Agreement, the Plan or with the prior written
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consent of Requisite Commitment Parties (requests for which, including related information,
shall be directed to the counsel and financial advisors to the Commitment Parties), during the
period from the date of this Agreement to the earlier of the Closing Date and the date on which
this Agreement is terminated in accordance with its terms (the “Pre-Closing Period”), (a) the
Company shall, and shall cause each of the other Debtors to, carry on its business in the ordinary
course and use its commercially reasonable efforts to: (i) preserve intact its business,
(ii) preserve its material relationships with customers, suppliers, licensors, licensees, distributors
and others having material business dealings with any of the Debtors in connection with their
business, (iii) keep available the services of its officers and employees and (iv) file Company
SEC Documents within the time periods required under the Exchange Act, in each case in
accordance with ordinary course practices, and (b) each of the Debtors shall not enter into any
transaction that is material to the Debtors’ business other than (A) transactions in the ordinary
course of business in a manner consistent with prior business practices of the Debtors, (B) other
transactions after prior notice to the Commitment Parties to implement tax planning which
transactions are not reasonably expected to materially adversely affect any Commitment Party
and (C) transactions expressly contemplated by the Transaction Agreements.
For the avoidance of doubt, the following shall be deemed to occur outside of the
ordinary course of business of the Debtors and shall require the prior written consent of the
Requisite Commitment Parties unless the same would otherwise be permissible under the
Restructuring Support Agreement, the P lan or this Agreement (including the preceding
clause (B) or (C)): (1) entry into, or any amendment, modification, termination, waiver,
supplement, restatement or other change to, any Material Contract or any assumption of any
Material Contract in connection with the Chapter 11 Cases (other than any Material Contracts
that are otherwise addressed by clause (4) below), (2) entry into, or any amendment,
modification, waiver, supplement or other change to, any employment agreement to which any
of the Debtors is a party or any assumption of any such employment agreement in connection
with the Chapter 11 Cases, (3) any (x) termination by any of the Debtors without cause or
(y) reduction in title or responsibilities, in each case, of the individuals who are as of the date of
this Agreement the Chief Executive Officer, the Chief Financial Officer or the Executive Vice
President of Operations of the Company, (4) the adoption or amendment of any management or
employee incentive or equity plan by any of the Debtors except for the EIP in accordance with
the Restructuring Term Sheet and in a manner consistent with the process set forth in the
definitive forms and (5) make, or cause to be made, any payment with respect to any amounts
owed under the RBL Credit Agreement. Except as otherwise provided in this Agreement,
nothing in this Agreement shall give the Commitment Parties, directly or indirectly, any right to
control or direct the operations of the Debtors. Prior to the Closing Date, the Debtors shall
exercise, consistent with the terms and conditions of this Agreement, complete control and
supervision of the business of the Debtors.
Section 6.4 Access to Information; Confidentiality.
(a) Subject to applicable Law and Section 6.4(b), upon reasonable notice
during the Pre-Closing Period, the Debtors shall afford the Commitment Parties and their
Representatives upon request reasonable access, during normal business hours and without
unreasonable disruption or interference with the Debtors’ business or operations, to the Debtors’
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employees, properties, books, Contracts and records and, during the Pre-Closing Period, the
Debtors shall furnish promptly to such parties all reasonable information concerning the Debtors’
business, properties and personnel as may reasonably be requested by any such party, provided
that the foregoing shall not require the Company (i) to permit any inspection, or to disclose any
information, that in the reasonable judgment of the Company, would cause any of the Debtors to
violate any of their respective obligations with respect to confidentiality to a third party if the
Company shall have used its commercially reasonable efforts to obtain, but failed to obtain, the
consent of such third party to such inspection or disclosure, (ii) to disclose any legally privileged
information of any of the Debtors or (iii) to violate any applicable Laws or Orders. All requests
for information and access made in accordance with this Section 6.4 shall be directed to an
executive officer of the Company or such Person as may be designated by the Company’s
executive officers.
(b) From and after the date hereof until the date that is one (1) year after the
expiration of the Pre-Closing Period, each Commitment Party shall, and shall cause its
Representatives to, (i) keep confidential and not provide or disclose to any Person any
documents or information received or otherwise obtained by such Commitment Party or its
Representatives pursuant to Section 6.4(a), Section 6.5 or in connection with a request for
approval pursuant to Section 6.3 (except that provision or disclosure may be made to any
Affiliate or Representative of such Commitment Party who needs to know such information for
purposes of this Agreement or the other Transaction Agreements and who agrees to observe the
terms of this Section 6.4(b) (and such Commitment Party will remain liable for any breach of
such terms by any such Affiliate or Representative)), and (ii) not use such documents or
information for any purpose other than in connection with this Agreement or the other
Transaction Agreements or the transactions contemplated hereby or thereby. Notwithstanding
the foregoing, the immediately preceding sentence shall not apply in respect of documents or
information that (A) is now or subsequently becomes generally available to the public through no
violation of this Section 6.4(b), (B) becomes available to a Commitment Party or its
Representatives on a non-confidential basis from a source other than any of the Debtors or any of
their respective Representatives, (C) becomes available to a Commitment Party or its
Representatives through document production or discovery in connection with the Chapter 11
Cases or other judicial or administrative process, but subject to any confidentiality restrictions
imposed by the Chapter 11 Cases or other such process, or (D) such Commitment Party or any
Representative thereof is required to disclose pursuant to judicial or administrative process or
pursuant to applicable Law or applicable securities exchange rules; provided, that, such
Commitment Party or such Representative shall provide the Company with prompt written notice
of such legal compulsion and cooperate with the Company to obtain a protective Order or similar
remedy to cause such information or documents not to be disclosed, including interposing all
available objections thereto, at the Company’s sole cost and expense; provided, further, that, in
the event that such protective Order or other similar remedy is not obtained, the disclosing party
shall furnish only that portion of such information or documents that is legally required to be
disclosed and shall exercise its commercially reasonable efforts (at the Company’s sole cost and
expense) to obtain assurance that confidential treatment will be accorded such disclosed
information or documents.
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Section 6.5 Financial Information. During the Pre-Closing
Period, the Company shall deliver to the counsel and financial advisors to each Commitment
Party that so requests, all statements and reports the Company is required to deliver to the RBL
Agent pursuant to Section 8.01(a) of the RBL Credit Agreement (as in effect on the date hereof)
(the “Financial Reports”). Neither any waiver by the parties to the RBL Credit Agreement of
their right to receive the Financial Reports nor any amendment or termination of the RBL Credit
Agreement shall affect the Company’s obligation to deliver the Financial Reports to the
Commitment Parties in accordance with the terms of this Agreement.
Section 6.6 Commercially Reasonable Efforts.
(a) Without in any way limiting any other respective obligation of the
Company or any Commitment Party in this Agreement, each Party shall use (and the Company
shall cause the other Debtors to use) commercially reasonable efforts to take or cause to be taken
all actions, and do or cause to be done all things, reasonably necessary, proper or advisable in
order to consummate and make effective the transactions contemplated by this Agreement and
the Plan, including using commercially reasonable efforts in:
(i) timely preparing and filing all documentation reasonably necessary
to effect all necessary notices, reports and other filings of such Person and to
obtain as promptly as practicable all consents, registrations, approvals, permits
and authorizations necessary or advisable to be obtained from any third party or
Governmental Entity;
(ii) cooperating with the defense of any Legal Proceedings in any way
challenging (A) this Agreement, the Plan, the Registration Rights Agreement or
any other Transaction Agreement, (B) the BCA Approval Order, the P lan
Solicitation Order, the Confirmation Order or the DIP Orders or (C) the
consummation of the transactions contemplated hereby and thereby, including
seeking to have any stay or temporary restraining Order entered by any
Governmental Entity vacated or reversed; and
(iii) working together in good faith to finalize the Company
Organizational Documents, Transaction Agreements, the Registration Rights
Agreement and all other documents relating thereto for timely inclusion in the
Plan and filing with the Bankruptcy Court.
(b) Subject to applicable Laws or applicable rules relating to the exchange of
information, and in accordance with the Restructuring Support Agreement, the Commitment
Parties and the Company shall have the right to review in advance, and to the extent practicable
each will consult with the other on all of the information relating to Commitment Parties or the
Company, as the case may be, and any of their respective Subsidiaries, that appears in any filing
made with, or written materials submitted to, any third party and/or Governmental Entity in
connection with the transactions contemplated by this Agreement or the P lan; provided,
however, that the Commitment Parties are not required to provide for review in advance
declarations or other evidence submitted in connection with any filing with the Bankruptcy
46
Court. In exercising the foregoing rights, the Parties shall act as reasonably and as promptly as
practicable.
(c) Nothing contained in this Section 6.6 shall limit the ability of any
Commitment Party to consult with the Debtors, to appear and be heard, or to file objections,
concerning any matter arising in the Chapter 11 Cases to the extent not inconsistent with the
Restructuring Support Agreement.
Section 6.7 Registration Rights Agreement; Company
Organizational Documents.
(a) The Plan will provide that from and after the Effective Date each
Commitment Party shall be entitled to registration rights that are customary for a transaction of
this nature, pursuant to a registration rights agreement to be entered into as of the Effective Date,
which agreement shall be in form and substance consistent with the terms set forth in the
Restructuring Term Sheet and this Agreement and otherwise reasonably acceptable to the
Requisite Commitment Parties and the Company (the “Registration Rights Agreement”). A
form of the Registration Rights Agreement shall be filed with the Bankruptcy Court as part of the
Plan Supplement or an amendment thereto.
(b) The Plan will provide that on the Effective Date, the Company
Organizational Documents will be duly authorized, approved, adopted and in full force and
effect. Forms of the Company Organizational Documents shall be filed with the Bankruptcy
Court as part of the Plan Supplement or an amendment thereto.
Section 6.8 Blue Sky. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is necessary in order
to obtain an exemption for, or to qualify the offer and sale of the Accredited Investor Rights
Offering Units and the offer and sale of the Unsubscribed Units and 4(a)(2) Backstop
Commitment Units to the Commitment Parties pursuant to this Agreement under applicable
securities and “Blue Sky” Laws of the states of the United States (or to obtain an exemption from
such qualification) and any applicable foreign jurisdictions, and shall provide evidence of any
such action so taken to the Commitment Parties on or prior to the Closing Date. The Company
shall timely make all filings and reports relating to the offer and sale of the Accredited Investor
Rights Offering Units, Unsubscribed Units and 4(a)(2) Backstop Commitment Units issued
hereunder required under applicable securities and “Blue Sky” Laws of the states of the United
States following the Closing Date. The Company shall pay all fees and expenses in connection
with satisfying its obligations under this Section 6.8.
Section 6.9 DTC Eligibility. Unless otherwise requested by the
Requisite Commitment Parties, the Company shall use commercially reasonable efforts to
promptly make, when applicable from time to time after the Closing, all Common Units eligible
for deposit with The Depository Trust Company.
Section 6.10 Use of Proceeds. The Debtors will apply the
proceeds from the exercise of the Subscription Rights, the sale of the Unsubscribed Units and the
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sale of 4(a)(2) Backstop Commitment Units for the purposes identified in the Disclosure
Statement and the Plan.
Section 6.11 Unit Legend. Each certificate evidencing
Accredited Investor Rights Offering Units, Unsubscribed Units and 4(a)(2) Backstop
Commitment Units issued hereunder shall be stamped or otherwise imprinted with a legend (the
“Legend”) in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON [DATE OF ISSUANCE], HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
OTHER APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM
REGISTRATION THEREUNDER.”
In the event that any such Accredited Investor Rights Offering Units, Unsubscribed Units or
4(a)(2) Backstop Commitment Units are uncertificated, such Accredited Investor Rights Offering
Units, Unsubscribed Units and 4(a)(2) Backstop Commitment Units shall be subject to a
restrictive notation substantially similar to the Legend in the unit ledger or other appropriate
records maintained by the Company or agent and the term “Legend” shall include such
restrictive notation. The Company shall remove the Legend (or restrictive notation, as
applicable) set forth above from the certificates evidencing any such units (or the unit register or
other appropriate Company records, in the case of uncertified units), upon request, at any time
after the restrictions described in such Legend cease to be applicable, including, as applicable,
when such units may be sold under Rule 144 of the Securities Act. The Company may
reasonably request such opinions, certificates or other evidence that such restrictions no longer
apply as a condition to removing the Legend.
Section 6.12 Antitrust Approval.
(a) Each Party agrees to use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary to consummate and
make effective the transactions contemplated by this Agreement, the Plan and the other
Transaction Agreements, including (i) if applicable, filing, or causing to be filed, the Notification
and Report Form pursuant to the HSR Act with respect to the transactions contemplated by this
Agreement with the Antitrust Division of the United States Department of Justice and the United
States Federal Trade Commission and any filings (or, if required by any Antitrust Authority, any
drafts thereof) under any other Antitrust Laws that are necessary to consummate and make
effective the transactions contemplated by this Agreement as soon as reasonably practicable (and
with respect to any filings required pursuant to the HSR Act, no later than fifteen (15) Business
Days following the date hereof) and (ii) promptly furnishing any documents or information
reasonably requested by any Antitrust Authority.
(b) The Company and each Commitment Party subject to an obligation
pursuant to the Antitrust Laws to notify any transaction contemplated by this Agreement, the
Plan or the other Transaction Agreements that has notified the Company in writing of such
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obligation (each such Commitment Party, a “Filing Party”) agree to reasonably cooperate with
each other as to the appropriate time of filing such notification and its content. The Company
and each Filing Party shall, to the extent permitted by applicable Law: (i) promptly notify each
other of, and if in writing, furnish each other with copies of (or, in the case of material oral
communications, advise each other orally) of any material communications from or with an
Antitrust Authority; (ii) not participate in any meeting with an Antitrust Authority unless it
consults with each other Filing Party and the Company, as applicable, in advance and, to the
extent permitted by the Antitrust Authority and applicable Law, give each other Filing Party and
the Company, as applicable, a reasonable opportunity to attend and participate thereat;
(iii) furnish each other Filing Party and the Company, as applicable, with copies of all material
correspondence and communications between such Filing Party or the Company and the
Antitrust Authority; (iv) furnish each other Filing Party with such necessary information and
reasonable assistance as may be reasonably necessary in connection with the preparation of
necessary filings or submission of information to the Antitrust Authority; and (v) not withdraw
its filing, if any, under the HSR Act without the prior written consent of the Requisite
Commitment Parties and the Company.
(c) Should a Filing Party be subject to an obligation under the Antitrust Laws
to jointly notify with one or more other Filing Parties (each, a “Joint Filing Party”) any
transaction contemplated by this Agreement, the P lan or the other Transaction Agreements, such
Joint Filing Party shall promptly notify each other Joint Filing Party of, and if in writing, furnish
each other Joint Filing Party with copies of (or, in the case of material oral communications,
advise each other Joint Filing Party orally of) any communications from or with an Antitrust
Authority.
(d) The Company and each Filing Party shall use their commercially
reasonable efforts to obtain all authorizations, approvals, consents, or clearances under any
applicable Antitrust Laws or to cause the termination or expiration of all applicable waiting
periods under any Antitrust Laws in connection with the transactions contemplated by this
Agreement at the earliest possible date after the date of filing. The communications
contemplated by this Section 6.12 may be made by the Company or a Filing Party on an outside
counsel-only basis or subject to other agreed upon confidentiality safeguards. The obligations in
this Section 6.12 shall not apply to filings, correspondence, communications or meetings with
Antitrust Authorities unrelated to the transactions contemplated by this Agreement, the Plan or
the other Transaction Agreements.
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Section 6.13 Alternative Transactions. The Company and the
other Debtors shall not, without the prior written consent of the Requisite Commitment Parties,
directly or indirectly: (i) seek, solicit, or support any Alternative Transaction, and (ii) cause or
allow any of their affiliates or any of their respective Representatives to solicit any agreements
(or continue any existing solicitation) relating to an Alternative Transaction; provided that the
sale of the assets related to ▇▇▇▇▇▇▇▇▇ County Texas shall not constitute an Alternative
Transaction; provided, further, however, that the Debtors shall provide prior written notice to the
Commitment Parties, Milbank and PJT Partners LP promptly, but in no event less than five (5)
Business Days prior to, the closing of sale of any and all material assets, including the assets
related to ▇▇▇▇▇▇▇▇▇ County Texas, which notice shall include a reasonably detailed description
of the asset(s) or parcels of real property sold, including the net acreage thereof.
Notwithstanding anything to the contrary in this Section 6.13, the Company’s and the other
Debtor’s boards of directors’ shall comply with Section 6(c) of the Restructuring Support
Agreement and any action taken in compliance with Section 6(c) of the Restructuring Support
Agreement will not be a breach of this Section 6.13.
Section 6.14 Hedging Arrangements. In accordance with the
Restructuring Support Agreement, the Debtors shall file a motion seeking to implement a
comprehensive hedging program with one or more RBL Lenders (or affiliates of RBL Lenders)
that is reasonably acceptable to the Requisite Commitment Parties (an “Acceptable Hedging
Program”) as promptly as practicable, but in no event later than May 31, 2017, obtain an order
(the "Hedging Order") granting authority to enter into the Acceptable Hedging Program by June
14, 2017 and then shall use commercially reasonable efforts to implement and maintain an
Acceptable Hedging Program through the Closing Date.
Section 6.15 Reorganized Company.
(a) The Requisite Commitment Parties have the right at any time prior to the
Disclosure Statement hearing, to elect to require that as of the Effective Date, the Company be
organized in a different corporate form or a Person other than the Company (a “New Parent”)
serve as the parent entity of the Debtors and the issuer of equity interests in the Transactions (in
each case, a “Company Restructuring”).
(b) Unless otherwise determined by the Requisite Commitment Parties, the
Debtors shall, and hereby agree to, use reasonably best efforts to cause the reorganized Company
(A) to be registered under Section 12 of the Exchange Act on the Effective Date or as promptly
as practicable thereafter and/or (B) to be qualified for quotation and have its securities regularly
traded (as defined by the Code) on the OTC Bulletin Board (or other available over the counter
market) or listed on a national securities exchange, as determined by the Requisite Commitment
Parties.
(c) If the Requisite Commitment Parties determine to cause a Company
Restructuring, then this Agreement shall be amended as necessary to reflect such determination,
and the Company shall use its 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 in order to effectuate
the Company Restructuring, including, if applicable, causing the New Parent to enter into and
become a party to this Agreement and become fully bound by the agreements and obligations of
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the Company hereunder and make the representations and warranties made by the Company
hereunder.
Section 6.16 Withdrawal of Commitment Party. In the event
there is any waiver or extension of the Outside Date beyond the End Date pursuant to
Section 9.2(a), then any Commitment Party that did not consent to such amendment (each, a
“Non-Consenting Commitment Party”) may elect, within seven (7) days of such change, to
withdraw as a Commitment Party by delivering written notice to the Company and Milbank of
such election. Upon such election, (i) the Senior Commitment Parties (other than the Non-
Consenting Commitment Parties) shall automatically assume the Commitments of the Non-
Consenting Commitment Party on a pro rata basis according to such Senior Commitment Parties’
Commitment Percentages (relative to the aggregate Commitments provided by the Senior
Commitment Parties (other than the Non-Consenting Commitment Parties)) at the time of the
election by the Non-Consenting Commitment Party to withdraw (ii) the Exit Term Loan
Commitment Parties (other than the Non-Consenting Commitment Parties that are Exit Term
Loan Commitment Parties) shall automatically assume the Exit Term Loan Backstop
Commitment of any Non-Consenting Commitment Party that is an Exit Term Loan Commitment
Party on a pro rata basis according to such Exit Term Loan Commitment Party’s Exit Term Loan
Backstop Commitment (relative to the aggregate Exit Term Loan Backstop Commitments
provided by the Exit Term Loan Commitment Parties (other than the Non-Consenting
Commitment Parties that is an Exit Term Loan Commitment Party)) at the time of the election by
the Non-Consenting Commitment Party to withdraw and (iii) the Non-Consenting Commitment
Parties shall automatically cease to be a party to this Agreement and the Restructuring Support
Agreement and will no longer have any rights as a Commitment Party (and, for the avoidance of
doubt, the Non-Consenting Commitment Parties shall not be entitled to receive any portion of
the Commitment Premium). Any Commitments assumed by a Senior Commitment Party in
accordance with this Section 6.16 shall be included, among other things, in the determination of
(x) the Commitment Percentage of such Commitment Party for purposes of Section 2.3(e),
Section 2.4(b), Section 3.1 and Section 3.2 and (y) the Rights Offering Backstop Commitment of
such party for purposes of the definition of Requisite Commitment Parties.
Section 6.17 Equity Investment Defaults. In the event that all of
the Common Units being issued in connection with the 2L Investment are not purchased by the
2L Investors (such Common Units, the “2L Available Units”) in accordance with the terms of
the Equity Commitment Agreement (a “2L Undersubscription”), the Company and the
Commitment Parties hereby agree that upon the occurrence of a 2L Undersubscription, the
Commitment Parties and their respective Affiliated Funds, shall, within five (5) Business Days
after receipt of written notice from the Company to all Commitment Parties of such 2L
Undersubscription, which notice shall be given promptly following the occurrence of such 2L
Undersubscription and to all Commitment Parties concurrently, make arrangements for the
Commitment Parties and their respective Affiliated Funds to purchase all of the 2L Available
Units based upon their relative applicable Commitment Percentages.
Section 6.18 Continued ▇▇▇▇▇▇▇ Compliance. None of the
Debtors nor their respective “Affiliates” (as defined in Section 2(k) of the BHC Act) shall: (a)
take any action to acquire or retain an ownership interest in or to sponsor, or fail to take any
51
action necessary to prevent themselves from acquiring or retaining an ownership interest in or
sponsoring, a Covered Fund for purposes the ▇▇▇▇▇▇▇ Rule, (b) engage in proprietary trading as
defined in the ▇▇▇▇▇▇▇ Rule, (c) provide a line of credit, guarantee or other form of credit support
or backstop in favor of a Covered Fund, or (d) provide services in favor of a Covered Fund,
except, in each case, as otherwise permitted under an exemption or exclusion from the ▇▇▇▇▇▇▇
Rule.
Section 6.19 Reserve Information. During the Pre-Closing
Period, the Debtors shall promptly deliver, and in no event more than five (5) Business Days
following completion and/or circulation thereof, to the counsel and financial advisors to
Commitment Parties, true, correct and complete copies of all updated information concerning the
Debtors’ ▇▇▇▇▇ and oil and gas property prepared by the Debtors for their internal purposes,
external uses or otherwise.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
Section 7.1 Conditions to the Obligations of the Commitment
Parties. The obligations of each Commitment Party to consummate the transactions
contemplated hereby shall be subject to (unless waived in accordance with Section 7.2) the
satisfaction of the following conditions prior to or at the Closing:
(a) BCA Approval Order. The Bankruptcy Court shall have entered the BCA
Approval Order consistent with the Restructuring Term Sheet and this Agreement and otherwise
in form and substance reasonably acceptable to the Requisite Commitment Parties, and such
Order shall be a Final Order.
(b) Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan
Solicitation Order consistent with the Restructuring Term Sheet and this Agreement and
otherwise in form and substance reasonably acceptable to the Requisite Commitment Parties, and
such Order shall be a Final Order.
(c) Confirmation Order. The Bankruptcy Court shall have entered the
Confirmation Order consistent with the Restructuring Term Sheet and this Agreement and
otherwise in form and substance reasonably acceptable to the Requisite Commitment Parties, and
such Order shall be a Final Order.
(d) Plan. The Company and all of the other Debtors shall have complied, in
all material respects, with the terms of the Plan (as amended or supplemented from time to time)
that are to be performed by the Company and the other Debtors on or prior to the Effective Date
and the conditions to the occurrence of the Effective Date (other than any conditions relating to
occurrence of the Closing) set forth in the Plan shall have been satisfied or waived in accordance
with the terms of the Plan.
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(e) Transactions. The Transactions shall have been conducted, in all material
respects, in accordance with the P lan Solicitation Order, the Rights Offering Procedures and this
Agreement, as applicable.
(f) Effective Date. The Effective Date shall have occurred, or shall be
deemed to have occurred concurrently with the Closing, as applicable, in accordance with the
terms and conditions in the Plan and in the Confirmation Order.
(g) Registration Rights Agreement; Company Organizational Documents.
(i) The Registration Rights Agreement shall have been executed and
delivered by the Company, shall otherwise have become effective with respect to
the Commitment Parties and the other parties thereto, and shall be in full force
and effect.
(ii) The Company Organizational Documents shall have been duly
approved and adopted and shall be in full force and effect.
(h) Expense Reimbursement. The Debtors shall have paid all Expense
Reimbursements accrued through the Closing Date pursuant to Section 3.3; provided, that
invoices for such Expense Reimbursement must have been received by the Debtors at least three
(3) Business Days prior to the Closing Date in order to be required to be paid on the Closing
Date.
(i) Antitrust Approvals. All waiting periods imposed by any Governmental
Entity or Antitrust Authority in connection with the transactions contemplated by this Agreement
shall have terminated or expired and all authorizations, approvals, consents or clearances under
the Antitrust Laws or otherwise required by a Governmental Entity in connection with the
transactions contemplated by this Agreement shall have been obtained.
(j) No Legal Impediment to Issuance. No Law or Order shall have become
effective or been enacted, adopted or issued by any Governmental Entity that prohibits the
implementation of the Plan or the transactions contemplated by this Agreement;
(k) Representations and Warranties.
(i) The representations and warranties of the Debtors contained in
Sections 4.11 (Absence of Certain Changes) and 4.29 (Investment Company Act)
shall be true and correct in all respects on and as of the Closing Date with the
same effect as if made on and as of the Closing Date (except for such
representations and warranties made as of a specified date, which shall be true and
correct only as of the specified date).
(ii) The representations and warranties of the Debtors contained in
Sections 4.1 (Organization and Qualification), 4.2 (Corporate Power and
Authority), 4.3 (Execution and Delivery; Enforceability), 4.4 (Authorized and
Issued Equity Interests), 4.5 (Issuance), 4.6(b) (No Conflict), 4.25 (No Unlawful
53
Payments), 4.26 (Compliance with Money Laundering and Sections Laws), 4.27
(Reserve Report) and 4.28 (No Broker’s Fees) shall be true and correct in all
material respects on and as of the Closing Date after giving effect to the Plan
(except for such representations and warranties made as of a specified date, which
shall be true and correct in all material respects only as of the specified date).
(iii) The representations and warranties of the Debtors contained in this
Agreement other than those referred to in clauses (i) and (ii) above shall be true
and correct (disregarding all materiality or Material Adverse Effect qualifiers) on
and as of the Closing Date after giving effect to the Plan with the same effect as if
made on and as of the Closing Date after giving effect to the Plan (except for such
representations and warranties made as of a specified date, which shall be true and
correct only as of the specified date), except where the failure to be so true and
correct does not constitute, individually or in the aggregate, a Material Adverse
Effect.
(l) Covenants. The Debtors shall have performed and complied, in all
material respects, with all of their respective covenants and agreements contained in this
Agreement that contemplate, by their terms, performance or compliance prior to the Closing
Date.
(m) Material Adverse Effect. Since the date of this Agreement, there shall not
have occurred, and there shall not exist, any Event that has had or would be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect.
(n) Officer’s Certificate. The Commitment Parties shall have received on and
as of the Closing Date a certificate of the chief executive officer or chief financial officer of the
Company confirming that the conditions set forth in Sections 7.1(k) (Representations and
Warranties), (l) (Covenants) and (m) (Material Adverse Effect) have been satisfied.
(o) Funding Notice. The Noteholders shall have received the Funding Notice
in accordance with the terms of Section 2.4.
(p) Exit RBL Facility. The Exit RBL Facility shall, as provided in the
Restructuring Support Agreement, have become effective, and upon emergence the reorganized
Debtors shall have an aggregate of $100,000,000 of cash on hand and undrawn capacity under
the Exit RBL Facility.
(q) Key Contracts. The assumption or rejection (in each case, pursuant to
section 365 of the Bankruptcy Code) and/or amendment of the Contracts described in Section 1.1
of the Company Disclosure Schedules as of the Closing Date and the liabilities of the Company
after the Closing with respect to such Contracts shall, in the aggregate, be reasonably satisfactory
to the Requisite Commitment Parties.
(r) Restructuring Support Agreement. The Restructuring Support Agreement
remains in full force and effect in accordance with its terms and shall not have been terminated
as to the Debtors or the Consenting Senior Note Holders.
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(s) DIP Orders. The Debtors shall not, after May 23, 2017, have proposed or
supported entry of any DIP Order that is not in form and substance reasonably satisfactory to the
Requisite Commitment Parties.
(t) Acceptable Hedging Program. The Hedging Order shall be in full force
and effect, the Debtors shall have used commercially reasonable efforts to implement an
Acceptable Hedging Program, and the reorganized Debtors shall be able to maintain a similar
program following the Effective Date under the terms of the Exit RBL Facility, Exit Term
Loans, and any other financing arrangements entered into by the Debtors on the Effective Date.
(u) ▇▇▇▇▇▇▇▇▇ County Assets. The Debtors shall have received net proceeds of
no less than $75 million from the sale of their assets in ▇▇▇▇▇▇▇▇▇ County, Texas, and such
proceeds shall be available to pay RBL Facility Claims (as defined in the Restructuring Support
Agreement).
Section 7.2 Waiver of Conditions to Obligations of
Commitment Parties. All or any of the conditions set forth in Section 7.1 may only be
waived in whole or in part with respect to all Commitment Parties by a written instrument
executed by the Requisite Commitment Parties in their sole discretion and if so waived, all
Commitment Parties shall be bound by such waiver; provided, however, that the conditions set
forth in subsections (c) (Confirmation Order), (f) (Effective Date), (i) (Antitrust Approvals), (j)
(No Legal Impediment) and (l) (Covenants) of Section 7.1 shall not be subject to waiver except
by a written instrument executed by all Commitment Parties.
Section 7.3 Conditions to the Obligations of the Debtors. The
obligations of the Debtors to consummate the transactions contemplated hereby with the
Commitment Parties is subject to (unless waived by the Company) the satisfaction of each of the
following conditions:
(a) BCA Approval Order. The Bankruptcy Court shall have entered the BCA
Approval Order and such Order shall be a Final Order.
(b) Plan Solicitation Order. The Bankruptcy Court shall have entered the Plan
Solicitation Order, and such Order shall be a Final Order.
(c) Confirmation Order. The Bankruptcy Court shall have entered the
Confirmation Order, and such Order shall be a Final Order.
(d) Effective Date. The Effective Date shall have occurred, or shall be
deemed to have occurred concurrently with the Closing, as applicable, in accordance with the
terms and conditions in the Plan and in the Confirmation Order.
(e) Antitrust Approvals. All waiting periods imposed by any Governmental
Entity or Antitrust Authority in connection with the transactions contemplated by this Agreement
shall have terminated or expired and all authorizations, approvals, consents or clearances under
the Antitrust Laws or otherwise required by any Governmental Entity in connection with the
transactions contemplated by this Agreement shall have been obtained.
55
(f) No Legal Impediment to Issuance. No Law or Order shall have become
effective or been enacted, adopted or issued by any Governmental Entity that prohibits the
implementation of the Plan or the transactions contemplated by this Agreement.
(g) Representations and Warranties.
(i) The representations and warranties of the Commitment Parties
contained in this Agreement that are qualified by “materiality” or “material
adverse effect” or words or similar import shall be true and correct in all respects
on and as of the Closing Date with the same effect as if made on and as of the
Closing Date (except for such representations and warranties made as of a
specified date, which shall be true and correct in all respects only as of the
specified date).
(ii) The representations and warranties of the Commitment Parties
contained in this Agreement that are not qualified by “materiality” or “material
adverse effect” or words or similar import shall be true and correct in all material
respects on and as of the Closing Date with the same effect as if made on and as
of the Closing Date (except for such representations and warranties made as of a
specified date, which shall be true and correct in all material respects only as of
the specified date).
(h) Covenants. The Commitment Parties shall have performed and complied,
in all material respects, with all of their covenants and agreements contained in this Agreement
and in any other document delivered pursuant to this Agreement.
(i) Exit RBL Facility. The Exit RBL Facility, as provided in the
Restructuring Support Agreement, shall have become effective.
(j) Restructuring Support Agreement. The Restructuring Support Agreement
remains in full force and effect in accordance with its terms and shall not have been terminated
as to the Debtors or the Consenting Senior Note Holders.
ARTICLE VIII
INDEMNIFICATION AND CONTRIBUTION
Section 8.1 Indemnification Obligations. Following the entry
of the BCA Approval Order, the Company and the other Debtors (the “Indemnifying Parties”
and each, an “Indemnifying Party”) shall, jointly and severally, indemnify and hold harmless
each Commitment Party and its Affiliates, equity holders, members, partners, general partners,
managers and its and their respective Representatives and controlling persons (each, an
“Indemnified Person”) from and against any and all losses, claims, damages, liabilities and
costs and expenses (other than Taxes of the Commitment Parties except to the extent otherwise
provided for in this Agreement) arising out of a claim asserted by a third-party (collectively,
“Losses”) that any such Indemnified Person may incur or to which any such Indemnified Person
may become subject arising out of or in connection with this Agreement, the Plan and the
56
transactions contemplated hereby and thereby, including the Rights Offering Backstop
Commitment, the Rights Offering, the 4(a)(2) Backstop Commitment, the 4(a)(2) Backstop
Commitment Investment, the payment of the Commitment Premium or the use of the proceeds of
the Transactions, or any claim, challenge, litigation, investigation or proceeding relating to any
of the foregoing, regardless of whether any Indemnified Person is a party thereto, whether or not
such proceedings are brought by the Company, the other Debtors, their respective equity holders,
Affiliates, creditors or any other Person, and reimburse each Indemnified Person upon demand
for reasonable documented (with such documentation subject to redaction to preserve attorney
client and work product privileges) legal or other third-party expenses incurred in connection
with investigating, preparing to defend or defending, or providing evidence in or preparing to
serve or serving as a witness with respect to, any lawsuit, investigation, claim or other
proceeding relating to any of the foregoing (including in connection with the enforcement of the
indemnification obligations set forth herein), irrespective of whether or not the transactions
contemplated by this Agreement or the Plan are consummated or whether or not this Agreement
is terminated; provided, that the foregoing indemnity will not, as to any Indemnified Person,
apply to Losses (a) as to a Defaulting Commitment Party, its Related Parties or any Indemnified
Person related thereto, caused by a Commitment Party Default by such Commitment Party, or
(b) to the extent they are found by a final, non-appealable judgment of a court of competent
jurisdiction to arise from the bad faith, willful misconduct or gross negligence of such
Indemnified Person.
Section 8.2 Indemnification Procedure. Promptly after receipt
by an Indemnified Person of notice of the commencement of any claim, challenge, litigation,
investigation or proceeding (an “Indemnified Claim”), such Indemnified Person will, if a claim
is to be made hereunder against the Indemnifying Party in respect thereof, notify the
Indemnifying Party in writing of the commencement thereof; provided, that (a) the omission to
so notify the Indemnifying Party will not relieve the Indemnifying Party from any liability that it
may have hereunder except to the extent it has been materially prejudiced by such failure and
(b) the omission to so notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability that it may have to such Indemnified Person otherwise than on account of this
Article VIII. In case any such Indemnified Claims are brought against any Indemnified Person
and it notifies the Indemnifying Party of the commencement thereof, the Indemnifying Party will
be entitled to participate therein, and, at its election by providing written notice to such
Indemnified Person, the Indemnifying Party will be entitled to assume the defense thereof, with
counsel reasonably acceptable to such Indemnified Person; provided, that if the parties
(including any impleaded parties) to any such Indemnified Claims include both such Indemnified
Person and the Indemnifying Party and based on advice of such Indemnified Person’s counsel
there are legal defenses available to such Indemnified Person that are different from or additional
to those available to the Indemnifying Party, such Indemnified Person shall have the right to
select separate counsel to assert such legal defenses and to otherwise participate in the defense of
such Indemnified Claims. Upon receipt of notice from the Indemnifying Party to such
Indemnified Person of its election to so assume the defense of such Indemnified Claims with
counsel reasonably acceptable to the Indemnified Person, the Indemnifying Party shall not be
liable to such Indemnified Person for expenses incurred by such Indemnified Person in
connection with the defense thereof or participation therein (other than reasonable costs of
investigation) unless (i) such Indemnified Person shall have employed separate counsel (in
57
addition to any local counsel) in connection with the assertion of legal defenses in accordance
with the proviso to the immediately preceding sentence (it being understood, however, that the
Indemnifying Party shall not be liable for the expenses of more than one separate counsel
representing the Indemnified Persons who are parties to such Indemnified Claims (in addition to
one local counsel in each jurisdiction in which local counsel is required)), (ii) the Indemnifying
Party shall not have employed counsel reasonably acceptable to such Indemnified Person to
represent such Indemnified Person within a reasonable time after the Indemnifying Party has
received notice of commencement of the Indemnified Claims from, or delivered on behalf of, the
Indemnified Person, (iii) after the Indemnifying Party assumes the defense of the Indemnified
Claims, the Indemnified Person determines in good faith that the Indemnifying Party has failed
or is failing to defend such claim and provides written notice of such determination and the basis
for such determination, and such failure is not reasonably cured within ten (10) Business Days of
receipt of such notice, or (iv) the Indemnifying Party shall have authorized in writing the
employment of counsel for such Indemnified Person. Notwithstanding anything herein to the
contrary, the Debtors shall have sole control over any Tax controversy or Tax audit relating to
the Taxes of the Debtors and shall be permitted to settle any liability for Taxes of the Debtors;
provided that the Debtors shall not settle any such liability without the prior written consent of
the Requisite Commitment Parties (such consent not to be unreasonably withheld, conditioned or
delayed).
Section 8.3 Settlement of Indemnified Claims. In connection
with any Indemnified Claim for which an Indemnified Person is assuming the defense in
accordance with this Article VIII, the Indemnifying Party shall not be liable for any settlement of
any Indemnified Claims effected by such Indemnified Person without the written consent of the
Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
If any settlement of any Indemnified Claims is consummated with the written consent of the
Indemnifying Party or if there is a final judgment for the plaintiff in any such Indemnified
Claims, the Indemnifying Party agrees to indemnify and hold harmless each Indemnified Person
from and against any and all Losses by reason of such settlement or judgment to the extent such
Losses are otherwise subject to indemnification by the Indemnifying Party hereunder in
accordance with, and subject to the limitations of, this Article VIII. The Indemnifying Party
shall not, without the prior written consent of an Indemnified Person (which consent shall be
granted or withheld, conditioned or delayed in the Indemnified Person’s sole discretion), effect
any settlement of any pending or threatened Indemnified Claims in respect of which indemnity
or contribution has been sought hereunder by such Indemnified Person unless (i) such settlement
includes an unconditional release of such Indemnified Person in form and substance satisfactory
to such Indemnified Person from all liability on the claims that are the subject matter of such
Indemnified Claims and (ii) such settlement does not include any statement as to or any
admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.
Section 8.4 Contribution. If for any reason the foregoing
indemnification is unavailable to any Indemnified Person or insufficient to hold it harmless from
Losses that are subject to indemnification pursuant to Section 8.1, then the Indemnifying Party
shall contribute to the amount paid or payable by such Indemnified Person as a result of such
Loss in such proportion as is appropriate to reflect not only the relative benefits received by the
Indemnifying Party, on the one hand, and such Indemnified Person, on the other hand, but also
58
the relative fault of the Indemnifying Party, on the one hand, and such Indemnified Person, on
the other hand, as well as any relevant equitable considerations. It is hereby agreed that the
relative benefits to the Indemnifying Party, on the one hand, and all Indemnified Persons, on the
other hand, shall be deemed to be in the same proportion as (a) the total value received or
proposed to be received by the Company pursuant to the issuance and sale of the Unsubscribed
Units in the Rights Offering or the sale of the 4(a)(2) Backstop Commitment Units in the 4(a)(2)
Backstop Commitment Investment contemplated by this Agreement and the P lan bears to (b) the
Commitment Premium paid or proposed to be paid to the Commitment Parties. The
Indemnifying Parties also agree that no Indemnified Person shall have any liability based on their
comparative or contributory negligence or otherwise to the Indemnifying Parties, any Person
asserting claims on behalf of or in right of any of the Indemnifying Parties, or any other Person
in connection with an Indemnified Claim.
Section 8.5 Treatment of Indemnification Payments. All
amounts paid by an Indemnifying Party to an Indemnified Person under this Article VIII shall, to
the extent permitted by applicable Law, be treated as adjustments to the Per Unit Purchase Price
for all Tax purposes. The provisions of this Article VIII are an integral part of the transactions
contemplated by this Agreement and without these provisions the Commitment Parties would not
have entered into this Agreement. The BCA Approval Order shall provide that the obligations of
the Company under this Article VIII shall constitute allowed administrative expenses of the
Debtors’ estate under sections 503(b) and 507 of the Bankruptcy Code and are payable without
further Order of the Bankruptcy Court, and that the Company may comply with the requirements
of this Article VIII without further Order of the Bankruptcy Court.
Section 8.6 No Survival. All representations, warranties,
covenants and agreements made in this Agreement shall not survive the Closing Date except for
covenants and agreements that by their terms are to be satisfied after the Closing Date, which
covenants and agreements shall survive until satisfied in accordance with their terms.
ARTICLE IX
TERMINATION
Section 9.1 Consensual Termination. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time prior to the
Closing Date by mutual written consent of the Company and the Requisite Commitment Parties.
Section 9.2 Automatic Termination. Notwithstanding anything
to the contrary in this Agreement, unless and until there is an unstayed Order of the Bankruptcy
Court providing that the giving of notice under and/or termination of this Agreement in
accordance with its terms is not prohibited by the automatic stay imposed by section 362 of the
Bankruptcy Code, and except as otherwise provided in this Section 9.2, at which point this
Agreement may be terminated by the Requisite Commitment Parties upon written notice to the
Company upon the occurrence of any of the following Events, this Agreement shall terminate
automatically without any further action or notice by any Party at 5:00 p.m., New York City time
on the fifth Business Day following the occurrence of any of the following Events; provided that,
59
the Requisite Commitment Parties may waive such termination or extend any applicable dates in
accordance with Section 10.7:
(a) the Closing Date has not occurred by 11:59 p.m., New York City time on
July 6, 2017 (as it may be extended pursuant to this Section 9.2(a) or Section 2.3, the “Outside
Date”), unless prior thereto the Effective Date occurs and each of the Transactions have been
consummated; provided, that the Outside Date may be waived or extended with the prior written
approval of the Requisite Commitment Parties; provided, further, that if any Commitment Party
does not consent to a waiver or extension of the Outside Date beyond 5:00 p.m., New York City
time on February 24, 2018 the (“End Date”) within seven (7) days of a written request being
made either by the Company or by any other Commitment Party for such a waiver or extension
(which request was made no later than the date seven (7) days prior to the Outside Date and has
not been withdrawn) and such waiver or extension is duly approved by the Requisite
Commitment Parties, such Commitment Party shall be deemed a Non-Consenting Commitment
Party who has elected to withdraw from its Commitments and Exit Term Loan Backstop
Commitment, as applicable, pursuant to Section 6.16 (Withdrawal of Commitment Party) and
shall no longer be a party to this Agreement or the Restructuring Support Agreement (and, for
the avoidance of doubt, such Commitment Party shall not be entitled to receive any portion of
the Commitment Premium);
(b) the Restructuring Support Agreement is terminated as to the Debtors or
the Consenting Senior Note Holders (as defined in the Restructuring Support Agreement) in
accordance with its terms;
(c) the Company or any of the other Debtors files any motion, application or
adversary proceeding (or any of the Company, any of the other Debtors or other Restructuring
Support Party supports any such motion, application, or adversary proceeding filed or
commenced by any third party) (i) challenging the validity, enforceability, or priority of, or
seeking avoidance or subordination of the Note Claims, or (ii) asserting any other cause of action
against and/or with respect to or relating to such claims;
(d) (i) the Company or the other Debtors shall have breached any
representation, warranty, covenant or other agreement made by the Company or the other
Debtors in this Agreement or any such representation or warranty shall have become inaccurate
and such breach or inaccuracy would, individually or in the aggregate, cause a condition set forth
in Section 7.1(k) (Representations and Warranties), Section 7.1(l) (Covenants) or Section 7.1(m)
(Material Adverse Effect) not to be satisfied, (ii) the Commitment Parties shall have delivered
written notice of such breach or inaccuracy to the Company, (iii) such breach or inaccuracy is
not cured by the Company or the other Debtors by the tenth (10th) Business Day after receipt of
such notice, and (iv) as a result of such failure to cure, any condition set forth in Section 7.1(k)
(Representations and Warranties), Section 7.1(l) (Covenants), or Section 7.1(m) (Material
Adverse Effect) is not capable of being satisfied; provided, that, this Agreement shall not
terminate automatically pursuant to this Section 9.2(d) if the Commitment Parties are then in
willful or intentional breach of this Agreement;
(e) any Law or final and non-appealable Order shall have been enacted,
adopted or issued by any Governmental Entity that prohibits the implementation of the Plan or
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the Transactions or the transactions contemplated by this Agreement or the other Transaction
Agreements, in a way that cannot be remedied by the Debtors in a manner reasonably acceptable
to the Requisite Commitment Parties;
(f) (i) the Debtors have materially breached their obligations under
Section 6.13 (Alternative Transactions); (ii) the Bankruptcy Court approves or authorizes an
Alternative Transaction; or (iii) any of the Debtors enters into any Contract providing for the
consummation of any Alternative Transaction or files any motion or application seeking
authority to propose, join in or participate in the formation of, any actual or proposed Alternative
Transaction;
(g) the Company or any other Debtor (i) amends or modifies, or files a
pleading seeking authority to amend or modify, the Definitive Documentation in a manner that is
materially inconsistent with this Agreement; (ii) suspends or revokes the Transaction
Agreements; or (iii) publicly announces its intention to take any such action listed in sub-clauses
(i) or (ii) of this subsection;
(h) any of the BCA Approval Order, P lan Solicitation Order or Confirmation
Order is terminated, reversed, stayed, dismissed, vacated, or reconsidered, or any such Order is
modified or amended after entry without the prior written consent (not to be unreasonably
withheld, conditioned or delayed) of the Requisite Commitment Parties in a manner that prevents
or prohibits the consummation of the transactions contemplated by this Agreement or the other
Transaction Agreements in a way that cannot be remedied by the Debtors in a manner reasonably
acceptable to the Requisite Commitment Parties;
(i) any of the Orders approving the Exit RBL Facility, the Exit Term Loans,
this Agreement, the Rights Offering Procedures, the Plan or the Disclosure Statement or the
Confirmation Order are reversed, stayed, dismissed, vacated or reconsidered or modified or
amended without the acquiescence or written consent (not to be unreasonably withheld,
conditioned or delayed) of the Requisite Commitment Parties (and such action has not been
reversed or vacated within thirty (30) calendar days after its issuance) in a manner that prevents
or prohibits the consummation of the Restructuring Transactions contemplated in this Agreement
or any of the Definitive Documents in a way that cannot be remedied by the Debtors subject to
the reasonable satisfaction of the Requisite Commitment Parties; or
(j) an acceleration of the obligations or termination of commitments under the
DIP Facility.
Section 9.3 Termination by the Company.
This Agreement may be terminated by the Company upon written notice to each
Commitment Party upon the occurrence of any of the following Events, subject to the rights of
the Company to fully and conditionally waive, in writing, on a prospective or retroactive basis
the occurrence of such Event:
(a) any Law or final and non-appealable Order shall have been enacted,
adopted or issued by any Governmental Entity that prohibits the implementation of the Plan or
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the Transactions or the transactions contemplated by this Agreement or the other Transaction
Agreements in a way that cannot be remedied by the Debtors in a manner reasonably acceptable
to the Requisite Commitment Parties;
(b) subject to the right of the Commitment Parties to arrange a Commitment
Party Replacement in accordance with Section 2.3(a) (which will be deemed to cure any breach
by the replaced Commitment Party pursuant to this subsection (b)), (i) any Commitment Party
shall have breached any representation, warranty, covenant or other agreement made by such
Commitment Party in this Agreement or any such representation or warranty shall have become
inaccurate and such breach or inaccuracy would, individually or in the aggregate, cause a
condition set forth in Section 7.3(g) (Representations and Warranties) or Section 7.3(h)
(Covenants) not to be satisfied, (ii) the Company shall have delivered written notice of such
breach or inaccuracy to such Commitment Party, (iii) such breach or inaccuracy is not cured by
such Commitment Party by the tenth (10th) Business Day after receipt of such notice, and (iv) as
a result of such failure to cure, any condition set forth in Section 7.3(g) (Representations and
Warranties) or Section 7.3(h) (Covenants) is not capable of being satisfied; provided, that the
Company shall not have the right to terminate this Agreement pursuant to this Section 9.3(b) if it
is then in willful or intentional breach of this Agreement;
(c) the Debtors determine, after receiving advice from counsel, that
proceeding with the Restructuring Transactions (including, without limitation, the Plan or
solicitation of the Plan) would be inconsistent with the exercise of the fiduciary duties of the
board of directors or analogous governing body of the Debtors; provided, that, concurrently with
such termination, the Company pays the Commitment Premium pursuant to Section 9.4(b)(ii).
(d) the BCA Approval Order, Plan Solicitation Order, or Confirmation Order
is terminated, reversed, stayed, dismissed, vacated, or reconsidered, or any such Order is
modified or amended after entry without the prior acquiescence or written consent (not to be
unreasonably withheld, conditioned or delayed) of the Company in a manner that prevents or
prohibits the consummation of the Restructuring Transactions contemplated in this Agreement or
any of the Definitive Documents in a way that cannot be remedied by the Commitment Parties
subject to the reasonable satisfaction of the Debtors;
(e) the Restructuring Support Agreement is terminated in accordance with its
terms;
(f) any of the Orders approving the Exit RBL Facility, the Exit Term Loans,
this Agreement, the Rights Offering Procedures, the Plan or the Disclosure Statement or the
Confirmation Order are reversed, stayed, dismissed, vacated or reconsidered or modified or
amended without the acquiescence or consent (not to be unreasonably withheld, conditioned or
delayed) of the Company (and such action has not been reversed or vacated within thirty (30)
calendar days after its issuance) in a manner that prevents or prohibits the consummation of the
Restructuring Transactions contemplated in this Agreement or any of the Definitive Documents
in a way that cannot be remedied by the Commitment Parties subject to the reasonable
satisfaction of the Debtors; or
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(g) the Closing Date has not occurred by the earlier of (i) the Outside Date (as
the same may be extended pursuant to Section 9.2(a) or Section 2.3), and (ii) the date that is two
hundred seventy (270) days from the date hereof, in either case, unless prior thereto the Effective
Date occurs and each of the Transactions have been consummated; provided, that the Company
shall not have the right to terminate this Agreement pursuant to this Section 9.3(g) if it is then in
material breach of this Agreement.
Section 9.4 Effect of Termination.
(a) Upon termination of this Agreement pursuant to this Article IX, this
Agreement shall forthwith become void and there shall be no further obligations or liabilities on
the part of the Parties; provided, that (i) the obligations of the Debtors to pay the Expense
Reimbursement pursuant to Article III and to satisfy their indemnification obligations pursuant to
Article VIII shall survive the termination of this Agreement and shall remain in full force and
effect, in each case, until such obligations have been satisfied, (ii) the provisions set forth in
Article VIII, this Section 9.4 and Article X shall survive the termination of this Agreement in
accordance with their terms and (iii) subject to Section 10.10 (Damages), nothing in this Section
9.4 shall relieve any Party from liability for its gross negligence or any willful or intentional
breach of this Agreement. For purposes of this Agreement, “willful or intentional breach”
means a breach of this Agreement that is a consequence of an act undertaken by the breaching
Party with the knowledge that the taking of such act would, or would reasonably be expected to,
cause a breach of this Agreement.
(b) The Debtors shall make payments to the Commitment Premium Parties or
their designees based upon their respective Commitment Premium Share Amount on the date of
payment, by wire transfer of immediately available funds to such accounts as the Requisite
Commitment Parties may designate, if this Agreement is terminated as follows:
(i) upon termination pursuant to: (A) Section 9.2(c) (Adversary
Proceeding), Section 9.2(d) (Breach) (unless such termination is the result of a
breach not within the control of the Debtors) or Section 9.2(f) (Alternative
Transactions); (B) Section 9.2(a) (Outside Date) where the failure of the Closing
Date to occur prior to the Outside Date results from the Company’s breach of this
Agreement (it being understood that a failure of the Closing Date to occur prior to
the Outside Date arising from events not within the control of the Debtors (such
as, for example, the failure to satisfy the condition set forth in Section 7.1(t)
(Hedging) notwithstanding the Company’s compliance with its obligations under
Section 6.14) shall not constitute a termination covered by this clause (B)); or (C)
Section 9.2(b) (Restructuring Support Agreement) or Section 9.3(e)
(Restructuring Support Agreement), in either case as a result of (x) a termination
of the Restructuring Support Agreement pursuant to Section 9(c) thereof or (y) a
termination of the Restructuring Support Agreement by the Required Consenting
Senior Note Holders (as defined therein) arising from a breach of the
Restructuring Support Agreement by the Debtors unless such breach is the result
of (I) actions of the Bankruptcy Court not arising from any action or omission by
the Debtors or (II) any other events not within the control of the Debtors (such as,
for example, the failure to meet any Milestone (as defined in the Restructuring
63
Support Agreement) notwithstanding the fact that the Company has taken all
reasonably necessary actions to comply with the Milestone and has otherwise
complied with its obligations under the Restructuring Support Agreement, it being
understood and agreed that in the event that revisions or modifications to the Plan
are required to render it confirmable, the failure of the Parties to agree to such
modifications or amendments or the failure of the Parties to agree on the
resolution of any blank or bracketed terms in the P lan prior to the Outside Date
shall not constitute a termination covered by this clause (C)); then, in the case of
each of clauses (A), (B) and (C), the Company shall pay the Commitment
Premium, in cash, on or prior to the second (2nd) Business Day following such
termination; and
(ii) if the Company shall terminate this Agreement pursuant to
Section 9.3(c) (Fiduciary Duties), then the Company shall pay the Commitment
Premium, in cash, concurrently with such termination.
To the extent that all amounts due in respect of the Commitment Premium
pursuant to this Section 9.4(b) have actually been paid by the Debtors to the Commitment
Premium Parties in connection with a termination of this Agreement, the Commitment Parties
shall not have any additional recourse against the Debtors for any obligations or liabilities
relating to or arising from this Agreement, except for liability for gross negligence or willful or
intentional breach of this Agreement pursuant to Section 9.4(a). Except as set forth in this
Section 9.4(b), the Commitment Premium shall not be payable upon the termination of this
Agreement.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Notices. All notices and other communications in
connection with this Agreement shall be in writing and shall be deemed given if delivered
personally, sent via electronic facsimile (with confirmation), mailed by registered or certified
mail (return receipt requested) or delivered by an express courier (with confirmation) to the
Parties at the following addresses (or at such other address for a Party as may be specified by like
notice):
(a) If to the Company or any of the other Debtors:
Vanguard Natural Resources, LLC
San ▇▇▇▇▇▇ Plaza
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇. #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (832) 327-220
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President and Chief Executive Officer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
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with copies (which shall not constitute notice) to:
▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
(b) If to the Commitment Parties:
To each Commitment Party at the addresses or e-mail addresses set forth
below the Commitment Party’s signature in its signature page to this
Agreement.
with a copy (which shall not constitute notice) to:
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Email: ▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇
Section 10.2 Assignment; Third Party Beneficiaries. Neither this
Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned
by any Party (whether by operation of Law or otherwise) without the prior written consent of the
Company and the Requisite Commitment Parties, other than an assignment by a Commitment
Party expressly permitted by Section 2.3 or 2.6 and any purported assignment in violation of this
Section 10.2 shall be void ab initio. Except as provided in Article VIII with respect to the
Indemnified Persons, this Agreement (including the documents and instruments referred to in
65
this Agreement) is not intended to and does not confer upon any Person any rights or remedies
under this Agreement other than the Parties.
Section 10.3 Prior Negotiations; Entire Agreement.
(a) This Agreement (including the agreements attached as Exhibits to and the
documents and instruments referred to in this Agreement) constitutes the entire agreement of the
Parties and supersedes all prior agreements, arrangements or understandings, whether written or
oral, among the Parties with respect to the subject matter of this Agreement, except that the
Parties hereto acknowledge that any confidentiality agreements heretofore executed among the
Parties and the Restructuring Support Agreement (including the Restructuring Term Sheet) will
each continue in full force and effect.
(b) Notwithstanding anything to the contrary in the Plan (including any
amendments, supplements or modifications thereto) or the Confirmation Order (and any
amendments, supplements or modifications thereto) or an affirmative vote to accept the P lan
submitted by any Commitment Party, nothing contained in the Plan (including any amendments,
supplements or modifications thereto) or Confirmation Order (including any amendments,
supplements or modifications thereto) shall alter, amend or modify the rights of the Commitment
Parties under this Agreement unless such alteration, amendment or modification has been made
in accordance with Section 10.7.
Section 10.4 Governing Law; Venue. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT REGARD TO SUCH STATE’S CHOICE OF
LAW PROVISIONS WHICH WOULD REQUIRE OR PERMIT THE APPLICATION OF THE
LAW OF ANY OTHER JURISDICTION. BY ITS EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY
AGREES FOR ITSELF THAT ANY LEGAL ACTION, SUIT, OR PROCEEDING AGAINST
IT WITH RESPECT TO ANY MATTER ARISING UNDER, ARISING OUT OF, OR IN
CONNECTION WITH THIS AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT RENDERED IN ANY SUCH ACTION, SUIT, OR PROCEEDING,
SHALL BE BROUGHT IN THE BANKRUPTCY COURT AND BY EXECUTING AND
DELIVERING THIS AGREEMENT, EACH OF THE PARTIES IRREVOCABLY ACCEPTS
AND SUBMITS ITSELF TO THE EXCLUSIVE JURISDICTION OF SUCH COURT,
GENERALLY AND UNCONDITIONALLY, WITH RESPECT TO ANY SUCH ACTION,
SUIT OR PROCEEDING. THE PARTIES HEREBY AGREE THAT MAILING OF PROCESS
OR OTHER PAPERS IN CONNECTION WITH ANY SUCH ACTION OF PROCEEDING TO
AN ADDRESS PROVIDED IN WRITING BY THE RECIPIENT OF SUCH MAILING, OR IN
SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND
SUFFICIENT SERVICE THEREOF AND HEREBY WAIVE ANY OBJECTIONS TO
SERVICE ACCOMPLISHED IN THE MANNER HEREIN PROVIDED.
Section 10.5 Waiver of Jury Trial. EACH PARTY HEREBY
WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY JURISDICTION IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE AMONG THE
66
PARTIES UNDER THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR
OTHERWISE.
Section 10.6 Counterparts. This Agreement may be executed in
any number of counterparts, all of which will be considered one and the same agreement and will
become effective when counterparts have been signed by each of the Parties and delivered to
each other Party (including via facsimile or other electronic transmission), it being understood
that each Party need not sign the same counterpart.
Section 10.7 Waivers and Amendments; Rights Cumulative;
Consent. This Agreement may be amended, restated, modified or changed only by a
written instrument signed by the Company and the Requisite Commitment Parties; provided, that
(a) any Commitment Party’s prior written consent shall be required for any waiver or amendment
that would, directly or indirectly: (i) modify such Commitment Party’s Commitment Percentage,
provided, however, a Commitment Party’s written consent shall not be required in the event that
each Commitment Party’s Commitments are being affected pro rata in accordance with their
relative Commitment Percentages, (ii) increase the Per Unit Purchase Price, (iii) decrease the
Commitment Premium or adversely modify in any material respect the method of payment
thereof, (iv) increase the Commitment of such Commitment Party, (v) change the End Date or
(vi) have a materially adverse and disproportionate effect on such Commitment Party; (b) any
Exit Term Loan Commitment Party’s prior written consent shall be required for any waiver or
amendment that would, directly or indirectly modify such Exit Term Loan Commitment Party’s
Exit Term Loan Backstop Commitment, provided, however, an Exit Term Loan Commitment
Party’s written consent shall not be required in the event that each Exit Term Loan Commitment
Party’s Exit Term Loan Backstop Commitment is being reduced pro rata relative to the
aggregate Exit Term Loan Backstop Commitments provided by the Exit Term Loan
Commitment Parties and (c) the prior written consent of each Senior Commitment Party that was
an original signatory hereto that is still a Commitment Party as of such date of amendment shall
be required for any amendment to the definition of “Requisite Commitment Parties”.
Notwithstanding the foregoing, the Commitment Schedule shall be revised as necessary without
requiring a written instrument signed by the Company and the Requisite Commitment Parties to
reflect changes in the composition of the Commitment Parties and Commitment Percentages as a
result of Transfers permitted in accordance with the terms and conditions of this Agreement.
Other than as set forth in the first sentence of this Section 10.7, the terms and conditions of this
Agreement (other than the conditions set forth in Sections 7.1 and 7.3, the waiver of which shall
be governed solely by Article VII) may be waived (A) by the Debtors only by a written
instrument executed by the Company and (B) by the Requisite Commitment Parties only by a
written instrument executed by the Requisite Commitment Parties. No delay on the part of any
Party in exercising any right, power or privilege pursuant to this Agreement will operate as a
waiver thereof, nor will any waiver on the part of any Party of any right, power or privilege
pursuant to this Agreement, nor will any single or partial exercise of any right, power or
privilege pursuant to this Agreement, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege pursuant to this Agreement.
67
Section 10.8 Headings. The headings in this Agreement are for
reference purposes only and will not in any way affect the meaning or interpretation of this
Agreement.
Section 10.9 Specific Performance. The Parties agree that
irreparable damage would occur if any provision of this Agreement were not performed in
accordance with the terms hereof and that the Parties shall be entitled to an injunction or
injunctions without the necessity of posting a bond to prevent breaches of this Agreement or to
enforce specifically the performance of the terms and provisions hereof, in addition to any other
remedy to which they are entitled at law or in equity. Unless otherwise expressly stated in this
Agreement, no right or remedy described or provided in this Agreement is intended to be
exclusive or to preclude a Party from pursuing other rights and remedies to the extent available
under this Agreement, at law or in equity.
Section 10.10 Damages. Notwithstanding anything to the contrary
in this Agreement, none of the Parties will be liable for, and none of the Parties shall claim or
seek to recover, any punitive, special, indirect or consequential damages or damages for lost
profits.
Section 10.11 No Reliance. No Commitment Party or any of its
Related Parties shall have any duties or obligations to the other Commitment Parties in respect of
this Agreement, the Plan or the transactions contemplated hereby or thereby, except those
expressly set forth herein. Without limiting the generality of the foregoing, (a) no Commitment
Party or any of its Related Parties shall be subject to any fiduciary or other implied duties to the
other Commitment Parties, (b) no Commitment Party or any of its Related Parties shall have any
duty to take any discretionary action or exercise any discretionary powers on behalf of any other
Commitment Party, (c) no Commitment Party or any of its Related Parties shall have any duty to
the other Commitment Parties to obtain, through the exercise of diligence or otherwise, to
investigate, confirm, or disclose to the other Commitment Parties any information relating to the
Company or any of its Subsidiaries that may have been communicated to or obtained by such
Commitment Party or any of its Affiliates in any capacity, (d) no Commitment Party may rely,
and each Commitment Party confirms that it has not relied, on any due diligence investigation
that any other Commitment Party or any Person acting on behalf of such other Commitment
Party may have conducted with respect to the Company or any of its Affiliates or any of their
respective securities, and (e) each Commitment Party acknowledges that no other Commitment
Party is acting as a placement agent, initial purchaser, underwriter, broker or finder with respect
to its Unsubscribed Units, 4(a)(2) Backstop Commitment Units or Commitment Percentage of its
Commitments.
Section 10.12 Publicity. At all times prior to the Closing Date or
the earlier termination of this Agreement in accordance with its terms, the Company and the
Commitment Parties shall consult with each other prior to issuing any press releases (and provide
each other a reasonable opportunity to review and comment upon such release) or otherwise
making public announcements with respect to the transactions contemplated by this Agreement,
it being understood that nothing in this Section 10.12 shall prohibit any Party from filing any
motions or other pleadings or documents with the Bankruptcy Court in connection with the
Chapter 11 Cases.
68
Section 10.13 Settlement Discussions. This Agreement and the
transactions contemplated herein are part of a proposed settlement of a dispute between the
Parties. Nothing herein shall be deemed an admission of any kind. Pursuant to Section 408 of
the U.S. Federal Rules of Evidence and any applicable state rules of evidence, this Agreement
and all negotiations relating thereto shall not be admissible into evidence in any Legal
Proceeding, except to the extent filed with, or disclosed to, the Bankruptcy Court in connection
with the Chapter 11 Cases (other than a Legal Proceeding to approve or enforce the terms of this
Agreement).
Section 10.14 No Recourse. Notwithstanding anything that may
be expressed or implied in this Agreement, and notwithstanding the fact that certain of the
Parties may be partnerships or limited liability companies, each Party covenants, agrees and
acknowledges that no recourse under this Agreement or any documents or instruments delivered
in connection with this Agreement shall be had against any Party’s Affiliates, or any of such
Party’s Affiliates’ or respective Related Parties in each case other than the Parties to this
Agreement and each of their respective successors and permitted assignees under this
Agreement, whether by the enforcement of any assessment or by any legal or equitable
proceeding, or by virtue of any applicable Law, it being expressly agreed and acknowledged that
no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any of
the Related Parties, as such, for any obligation or liability of any Party under this Agreement or
any documents or instruments delivered in connection herewith for any claim based on, in
respect of or by reason of such obligations or liabilities or their creation; provided, however,
nothing in this Section 10.14 shall relieve or otherwise limit the liability of any Party hereto or
any of their respective successors or permitted assigns for any breach or violation of its
obligations under this Agreement or such other documents or instruments. For the avoidance of
doubt, prior to the Effective Date, none of the Parties will have any recourse, be entitled to
commence any proceeding or make any claim under this Agreement or in connection with the
transactions contemplated hereby except against any of the Parties or their respective successors
and permitted assigns, as applicable.
[Signature Page Follows]
69
[Signature page to Backstop Commitment Agreement]
IN WITNESS WHEREOF, the undersigned Parties have duly executed this Agreement as
of the date first above written.
VANGUARD NATURAL RESOURCES, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and Chief Executive Officer
[Signature page to Backstop Commitment Agreement]
CONTRARIAN CAPITAL FUND I, L.P.
By: Contrarian Capital Management, L.L.C., its
Investment Manager
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
CCM PENSION-A, L.L.C.
By: Contrarian Capital Management, L.L.C., its
Managing Member
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
CCM PENSION-B, L.L.C.
By: Contrarian Capital Management, L.L.C., its
Managing Member
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
CONTRARIAN DOME DU GOUTER
MASTER FUND, LP
By: Contrarian Capital Management, L.L.C., its
Investment Manager
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
CONTRARIAN CENTRE STREET
PARTNERSHIP, L.P.
By: Contrarian Capital Management, L.L.C., its
Investment Manager
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
CONTRARIAN OPPORTUNITY FUND, L.P.
By: Contrarian Capital Management, L.L.C., its
Investment Manager
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
CONTRARIAN CAPITAL SENIOR
SECURED, L.P.
By: Contrarian Capital Management, L.L.C., its
Investment Manager
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
CONTRARIAN CAPITAL TRADE
CLAIMS, L.P.
By: Contrarian Capital Management, L.L.C., its
Investment Manager
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
CONTRARIAN ADVANTAGE-B, LP
By: Contrarian Capital Management, L.L.C., as
General Partner
By: /s/ ▇▇▇ ▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇
Title: Managing Member
Notice Information
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇
#4842-7987-2321
Fidelity Summer Street Trust: Fidelity Capital &
Income Fund
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
#4842-7987-2321
Variable Insurance Products Fund V: Strategic Income
Portfolio
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
#4842-7987-2321
Fidelity School Street Trust: Fidelity Strategic Income
Fund
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
#4842-7987-2321
Fidelity Advisor Series II: Fidelity Advisor Strategic
Income Fund
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
Attention: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇.▇▇▇
[Signature page to Backstop Commitment Agreement]
▇.▇. ▇▇▇▇ Partners, LP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CFO
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇. ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
ATTN: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
#4842-7987-2321
▇.▇. ▇▇▇▇▇▇ Securities LLG, with respect to only its
Credit Trading group
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Attorney-In-Fact
Notice Information:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇.▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
COMMITMENT PARTY
Latigo Partners, L.P.
By: /s/ ▇▇▇ ▇▇▇▇
Name: ▇▇▇ ▇▇▇▇
Title: Authorized Signatory
Notice Information
Latigo Partners, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Email: ▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇ ▇▇▇▇
#4842-7987-2321
Marathon Asset Management, LP, solely on behalf of
certain of its affiliated funds and managed accounts
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
Notice Information
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇▇▇▇ ▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
Monarch Alternative Capital LP, on behalf of certain of
its advisory clients and related entities
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
#4842-7987-2321
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., LLC, on behalf of its New York
Distressed Debt Trading Desk and not any of its other
trading desks or business units, or those of its affiliates
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director
Notice Information
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
#4842-7987-2321
ARISTEIA CAPITAL, L.L.C.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
Aristeia Capital, L.L.C.
Notice Information
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
Cross Sound Management LLC, as investment advisor to
the Cross Sound Energy Opportunity Fund, L.P.
By: /s/ ▇▇▇▇▇ Lovely ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ Lovely ▇▇▇▇▇▇▇
Title: Chief Operating Officer
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
P.O. Box 400, Wilton, CT 06897
Attn: ▇▇▇▇▇ Lovely ▇▇▇▇▇▇▇, ▇▇▇▇▇▇@▇▇▇▇▇-▇▇▇▇▇.▇▇▇;
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇@,▇▇▇▇▇-▇▇▇▇▇.▇▇▇
#4842-7987-2321
[First Ballanytne LLC and Principals]
By: /s/ ▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Partner
Notice Information
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
[Signature page to Backstop Commitment Agreement]
Reef Road Series E Blocker, LLC, a wholly owned
subsidiary of Reef Road Master Fund Ltd
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Person
Notice Information: ▇▇▇ ▇▇▇▇▇ ▇▇▇ – ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
#4842-7987-2321
SUNRISE PARTNERS LIMITED PARTNERSHIP
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President of Paloma Partners
Management Company, General Partner of Sunrise
Partners Limited Partnership
Notice Information
c/o Paloma Partners Management Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: 203-861 -3210
Contact: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
[Signature page to Backstop Commitment Agreement]
Sierra Pacific Securities, LLC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Co-President
Notice Information: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Email address: ▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
#4842-7987-2321
Silver Point Capital Fund, L.P.
By: Silver Point Capital, L.P. as its Investment Manager
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
Notice Information:
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
FEDS@.▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: Credit Admin
#4842-7987-2321
SPCP Offshore, Ltd.
By: Silver Point Capital Offshore Master Fund, L.P. as its
sole shareholder
By: Silver Point Capital Offshore General Partner, LLC as
its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
Notice Information:
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: Credit Admin
#4842-7987-2321
WHITEBOX MULTI-STRATEGY PARTNERS, LP,
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer & General Counsel
Notice Information
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
#4842-7987-2321
WHITEBOX ASYMMETRIC PARTNERS, LP,
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer & General Counsel
Notice Information
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
#4842-7987-2321
WHITEBOX INSTITUTIONAL PARTNERS, LP,
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Operating Officer & General Counsel
Notice Information
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attention to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention to: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
Company Disclosure Schedule
Section 4.32
▇▇▇▇▇▇▇ Compliance
None.
Schedule 1
Commitment Schedule
Party Commitment
Percentage
Incremental
Commitment
Percentage
Rights Offering
Backstop
Commitment
4(a)(2)
Backstop
Commitment
Joinder Commitment Parties:
SILVER POINT CAPITAL 3.695577% $4,725,719.09 $4,725,719.09
ARISTEIA CAPITAL 0.781845% $999,784.30 $999,784.30
CROSS SOUND
MANAGEMENT
2.021019% $2,584,378.05 $2,584,378.05
WHITEBOX ADVISORS 1.847788% $2,362,858.91 $2,362,858.91
FIRST BALLANTYNE 0.523386% $669,279.85 $669,279.85
SIERRA PACIFIC SECURITIES 0.410671% $525,145.54 $525,145.54
REEF ROAD MASTER FUND,
LTD
0.679986% $869,532.10 $869,532.10
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 0.890634% $1,138,898.23 $1,138,898.23
Senior Commitment Parties
MARATHON 29.935246% $38,279,695.82 $38,279,695.82
CONTRARIAN 1.154868% $1,476,787.46 $1,476,787.46
Party Commitment
Percentage
Incremental
Commitment
Percentage
Rights Offering
Backstop
Commitment
4(a)(2)
Backstop
Commitment
CONTRARIAN CAPITAL FUND
I, L.P.
8.221430% $10,513,153.61 $10,513,153.61
CCM PENSION-A, L.L.C. 0.600632% $768,058.17 $768,058.17
CCM PENSION-B, L.L.C. 0.111772% $142,928.44 $142,928.44
CONTRARIAN DOME DU
GOUTER MASTER FUND, LP
1.533568% $1,961,050.08 $1,961,050.08
CONTRARIAN CENTRE
STREET PARTNERSHIP, L.P.
2.776604% $3,550,582.36 $3,550,582.36
CONTRARIAN OPPORTUNITY
FUND, L.P.
3.489384% $4,462,049.79 $4,462,049.79
CONTRARIAN CAPITAL
SENIOR SECURED, L.P.
0.292036% $373,441.03 $373,441.03
CONTRARIAN CAPITAL TRADE
CLAIMS, L.P.
0.848637% $1,085,194.56 $1,085,194.56
CONTRARIAN ADVANTAGE-B,
LP
0.295047% $377,291.35 $377,291.35
MONARCH 11.718129% $14,984,557.46 $14,984,557.46
▇.▇. ▇▇▇▇▇▇ 8.589862% $10,984,286.03 $10,984,286.03
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 10.748425% $13,744,548.47 $13,744,548.47
LATIGO 2.069847% $2,646,816.85 $2,646,816.85
▇.▇. ▇▇▇▇ 1.129007% $1,443,717.70 $1,443,717.70
Party Commitment
Percentage
Incremental
Commitment
Percentage
Rights Offering
Backstop
Commitment
4(a)(2)
Backstop
Commitment
FIDELITY SUMMER STREET
TRUST: CAPITAL & INCOME
FUND
3.250953% $4,157,156.15 $4,157,156.15
FIDELITY ADVISOR SERIES II:
FIDELITY ADVISOR
STRATEGIC INCOME FUND
1.183740% $1,513,707.53 $1,513,707.53
FIDELITY SCHOOL STREET
TRUST: FIDELITY STRATEGIC
INCOME FUND
1.089040% $1,392,609.90 $1,392,609.90
VARIABLE INSURANCE
PRODUCTS FUND V:
STRATEGIC INCOME
PORTFOLIO
0.110867% $141,771.17 $141,771.17
Incremental Senior Commitment Parties
CONTRARIAN 1.154868%
MONARCH 2.309736%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2.277861%
FIDELITY SUMMER STREET
TRUST: CAPITAL & INCOME
FUND
3.250953%
FIDELITY ADVISOR SERIES II:
FIDELITY ADVISOR
STRATEGIC INCOME FUND
1.183740%
FIDELITY SCHOOL STREET
TRUST: FIDELITY STRATEGIC
INCOME FUND
1.089040%
VARIABLE INSURANCE
PRODUCTS FUND V:
STRATEGIC INCOME
PORTFOLIO
0.110867%
Total 100.0% $127,875,000 127,875,000
Schedule 2
Exit Term Loan Backstop Commitment Schedule
Party Exit Term Loan Backstop
Commitment
Percentage of Exit Term Loan
Backstop Commitment
MARATHON $8,206,720.63 26.261506%
CONTRARIAN $515,860.31 1.650753%
CONTRARIAN CAPITAL FUND
I, L.P $2,253,897.50 7.212472%
CCM PENSION-A, L.L.C. $164,662.50 0.526920%
CCM PENSION-B, L.L.C. $30,642.19 0.098055%
CONTRARIAN DOME DU
GOUTER MASTER FUND, LP $420,426.25 1.345364%
CONTRARIAN CENTRE
STREET PARTNERSHIP, L.P. $761,203.75 2.435852%
CONTRARIAN OPPORTUNITY
FUND, L.P. $956,611.56 3.061157%
CONTRARIAN CAPITAL
SENIOR SECURED, L.P. $ 80,061.56 0.256197%
CONTRARIAN CAPITAL TRADE
CLAIMS, L.P. $232,653.12 0.744490%
CONTRARIAN ADVANTAGE-B,
LP $80,886.87 0.258838%
MONARCH $3,611,023.13 11.555274%
▇.▇. ▇▇▇▇▇▇ $2,354,902.81 7.535689%
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $3,737,512.19 11.960039%
LATIGO $567,446.56 1.815829%
▇.▇. ▇▇▇▇ $309,516.25 0.990452%
FIDELITY SUMMER STREET
TRUST: CAPITAL & INCOME
FUND
$1,452,147.19 4.646871%
FIDELITY ADVISOR SERIES II:
FIDELITY ADVISOR
STRATEGIC INCOME FUND
$528,756.88 1.692022%
FIDELITY SCHOOL STREET
TRUST: FIDELITY STRATEGIC
INCOME FUND
$486,456.25 1.556660%
Party Exit Term Loan Backstop
Commitment
Percentage of Exit Term Loan
Backstop Commitment
VARIABLE INSURANCE
PRODUCTS FUND V:
STRATEGIC INCOME
PORTFOLIO
$49,522.50 0.158472%
SILVER POINT CAPITAL $1,650,753.44 5.282411%
ARISTEIA CAPITAL $349,237.50 1.117560%
CROSS SOUND
MANAGEMENT $902,755.94 2.888819%
WHITEBOX ADVISORS $825,376.56 2.641205%
FIRST BALLANTYNE $233,787.81 0.748121%
SIERRA PACIFIC SECURITIES $183,440.00 0.587008%
REEF ROAD MASTER FUND,
LTD $303,738.75 0.971964%
Total 100%
Exhibit A-1
1145 Rights Offering Procedures
See attached.
VANGUARD NATURAL RESOURCES, LLC (THE “COMPANY”),
ON BEHALF OF VNR FINANCE CORP. (AS REORGANIZED PURSUANT TO AND
UNDER THE PLAN, OR ANY SUCCESSOR THERETO)
1145 RIGHTS OFFERING PROCEDURES
The 1145 Rights Offering Equity is being distributed and issued by the Debtors
without registration under the Securities Act of 1933, as amended (the “Securities
Act”)1, in reliance upon the exemption provided in Section 1145 of the Bankruptcy
Code. None of the rights being offered in the 1145 Rights Offering (the “Rights”) or
the 1145 Rights Offering Equity issuable upon exercise of such rights distributed
pursuant to these offering procedures (the “1145 Rights Offering Procedures”) have
been or will be registered under the Securities Act, nor any state or local law requiring
registration for offer and sale of a security.
The record ownership of the Rights is not transferable.
The Disclosure Statement (as defined below) has previously been distributed in
connection with the Debtors’ solicitation of votes to accept or reject the Plan (as
defined below) and that document sets forth important information, including risk
factors, that should be carefully read and considered by each 1145 Eligible Holder (as
defined below) prior to making a decision to participate in the 1145 Rights
Offering. Additional copies of the Disclosure Statement are available upon request
from Prime Clerk LLC (the “Rights Offering Subscription Agent”).
The 1145 Rights Offering is being conducted by the Company on behalf of
Reorganized VNR in good faith and in compliance with the Bankruptcy Code. In
accordance with Section 1125(e) of the Bankruptcy Code, a debtor or any of its agents
that participate, in good faith and in compliance with the applicable provisions of the
Bankruptcy Code, in the offer, issuance, sale, or purchase of a security offered or sold
under the plan of the debtor, of an affiliate participating in a joint plan with the
debtor, or of a newly organized successor to the debtor under the plan, is not liable, on
account of such participation, for violation of any applicable law, rule, or regulation
governing the offer, issuance, sale or purchase of securities.
1 Terms used and not defined herein shall have the meaning assigned to them in the Joint
Plan of Reorganization of Vanguard Natural Resources, LLC, et al., Pursuant to Chapter 11
of the Bankruptcy Code (as may be amended, modified, or supplemented from time to time,
the “Plan”).
1145 Eligible Holders should note the following times relating to the 1145 Rights Offering:
Date Calendar Date Event
Record Date………………………. June 7, 2017 The date and time fixed by the
Company for
the determination of the
holders eligible to
participate in the 1145 Rights
Offering.
Subscription Commencement Date .. June 12, 2017 Commencement of the 1145
Rights Offering.
Subscription Expiration Deadline … 4:00 p.m. Central
Time on June 30,
2017
The deadline for 1145
Eligible Holders to subscribe
for 1145 Rights Offering
Equity. An 1145 Eligible
Holder’s applicable 1145
Beneficial Holder
Subscription Form(s) (as
defined below) must be
received by the 1145 Eligible
Holder’s Nominee (as defined
below) in sufficient time to
allow such Nominee to
deliver the Master 1145
Subscription Form (as defined
below) to the Rights Offering
Subscription Agent by the
Subscription Expiration
Deadline.
1145 Eligible Holders who
are not Backstop Parties must
deliver the aggregate
Purchase Price (as defined
below) by the Subscription
Expiration Deadline.
1145 Eligible Holders who
are Backstop Parties must
deliver the aggregate
Purchase Price no later than
the deadline specified in the
Funding Notice (as defined
below) in accordance with the
terms of the Backstop
Agreement.
To 1145 Eligible Holders and Nominees of 1145 Eligible Holders:
On May 31, 2017, the Debtors filed the Plan with the United States Bankruptcy Court
for the Southern District of Texas and the Disclosure Statement Relating to the Joint Plan of
Reorganization of Vanguard Natural Resources, LLC, et al., Pursuant to Chapter 11 of the
Bankruptcy Code (as may be amended from time to time in accordance with its terms, the
“Disclosure Statement”). Pursuant to the Plan, each holder of an Allowed Senior Notes Claim
as of the Record Date (as defined in the 1145 Beneficial Holder Subscription Form) (each such
holder, an “1145 Eligible Holder”) has a right to participate in the 1145 Rights Offering, in
accordance with the terms and conditions of these 1145 Rights Offering Procedures.
Pursuant to the Plan, in the 1145 Rights Offering, each 1145 Eligible Holder will
receive rights to subscribe for its pro rata portion of a rights offering of 1145 Rights Offering
Equity in an aggregate amount of $10,176,081 provided that it timely and properly executes and
delivers the attached 1145 Beneficial Holder Subscription Form (with accompanying IRS Form
W-9 or appropriate IRS Form W-8, as applicable) (the “1145 Beneficial Holder Subscription
Form”) to the Rights Offering Subscription Agent or its Nominee, as applicable, in advance of
the Subscription Expiration Deadline. Included with the 1145 Beneficial Holder Subscription
Form, each such Nominee will receive a Master 1145 Subscription Form (a “Master 1145
Subscription Form”) which it shall use to summarize the Rights exercised by each 1145 Eligible
Holder that timely returns the applicable properly filled out 1145 Beneficial Holder
Subscription Form(s) to such Nominee. 1145 Beneficial Holder Subscription Forms should
only be returned directly to the Rights Offering Subscription Agent if the 1145 Eligible Holder
is the direct holder of record on the books of the applicable indenture trustee and does not hold
its Allowed Senior Notes Claim through a Nominee.
Please note that all 1145 Beneficial Holder Subscription Forms must be returned to the
applicable Nominee in sufficient time to allow such Nominee to process and deliver the Master
1145 Subscription Form and copies of all 1145 Beneficial Holder Subscription Forms, and the
accompanying IRS Forms prior to the Subscription Expiration Deadline. To the extent of any
discrepancy between the Master 1145 Subscription Form and the 1145 Beneficial Holder
Subscription Form(s) regarding the 1145 Eligible Holder’s principal amount, the Master 1145
Subscription Form shall govern. While the amount of time necessary for a Nominee to process
and deliver the Master 1145 Subscription Form to the Rights Offering Subscription Agent will
vary from Nominee to Nominee, 1145 Eligible Holders are urged to consult with their
Nominees to determine the necessary deadline to return their 1145 Beneficial Holder
Subscription Forms. Failure to submit such 1145 Beneficial Holder Subscription Forms on a
timely basis will result in forfeiture of an 1145 Eligible Holder’s rights to participate in the
1145 Rights Offering. None of the Company, the Rights Offering Subscription Agent or any of
the Backstop Parties will have any liability for any such failure.
No 1145 Eligible Holder shall be entitled to participate in the 1145 Rights Offering
unless the aggregate Purchase Price (as defined below) for the 1145 Rights Offering Equity it
subscribes for is received by the Rights Offering Subscription Agent (i) in the case of an 1145
Eligible Holder that is not a Backstop Party, by the Subscription Expiration Deadline, and (ii)
in the case of an 1145 Eligible Holder that is a Backstop Party, no later than the deadline
specified in a written notice (a “Funding Notice”) delivered by or on behalf of the Debtors to
the Backstop Parties in accordance with Section 2.4 of the Backstop Agreement (the “Backstop
Funding Deadline”), provided that the Backstop Parties may deposit their aggregate Purchase
Price in the Escrow Account (as defined below), in accordance with the terms of the Backstop
Agreement. No interest is payable on any advanced funding of the Purchase Price. If the 1145
Rights Offering is terminated for any reason, the aggregate Purchase Price previously received
by the Rights Offering Subscription Agent will be returned to 1145 Eligible Holders as
provided in Section 6 hereof. No interest will be paid on any returned Purchase Price. Any
1145 Eligible Holder who is not a Backstop Party submitting payment via its Nominee must
coordinate such payment with its Nominee in sufficient time to allow the Nominee to forward
such payment to the Rights Offering Subscription Agent by the Subscription Expiration
Deadline.
In order to participate in the 1145 Rights Offering, an 1145 Eligible Holder must
complete all of the steps outlined below. If all of the steps outlined below are not completed
by the Subscription Expiration Deadline or the Backstop Funding Deadline, as applicable,
an 1145 Eligible Holder shall be deemed to have forever and irrevocably relinquished and
waived its right to participate in the 1145 Rights Offering.
1. 1145 Rights Offering
1145 Eligible Holders have the right, but not the obligation, to participate in the 1145
Rights Offering.
1145 Eligible Holders shall receive rights to subscribe for their pro rata portion of the
1145 Rights Offering Equity.
Subject to the terms and conditions set forth in the Plan and these 1145 Rights
Offering Procedures, each 1145 Eligible Holder is entitled to subscribe for up to:
1.550362 1145 Rights Offering Equity per $1,000 of principal amount of the
8 3/8% Senior Notes due 2019; and
1.569156 1145 Rights Offering Equity per $1,000 of principal amount of the
7.875% Senior Notes due 2020;
in each case at a purchase price of $15 per share (the “Purchase Price”). The difference in the
number of 1145 Rights Offering Equity that an 1145 Eligible Holder is entitled to subscribe
for with respect to each series of Senior Notes is to take into account the differing amounts
of pre-petition accrued and unpaid interest thereon.
There will be no over-subscription privilege in the 1145 Rights Offering. Any
1145 Rights Offering Equity that are unsubscribed by the 1145 Eligible Holders entitled
thereto will not be offered to other 1145 Eligible Holders but will be purchased by the
applicable Backstop Parties in accordance with the Backstop Agreement. Subject to the
terms and conditions of the Backstop Agreement, each Backstop Party is obligated to
purchase its pro rata portion of the applicable 1145 Rights Offering Equity.
Any 1145 Eligible Holder that subscribes for 1145 Rights Offering Equity and is deemed
to be an “underwriter” under 1145(b) of the Bankruptcy Code will be subject to restrictions
under the Securities Act on its ability to resell those securities. Resale restrictions are discussed
in more detail in Article XII of the Disclosure Statement, entitled “Certain Securities Law
Matters.”
SUBJECT TO THE TERMS AND CONDITIONS OF THE 1145 RIGHTS
OFFERING PROCEDURES AND THE BACKSTOP AGREEMENT IN THE CASE OF
ANY BACKSTOP PARTY, ALL SUBSCRIPTIONS SET FORTH IN THE APPLICABLE
1145 BENEFICIAL HOLDER SUBSCRIPTION FORM(S) ARE IRREVOCABLE.
2. Subscription Period
The 1145 Rights Offering will commence on the Subscription Commencement Date and
will expire at the Subscription Expiration Deadline. Each 1145 Eligible Holder intending to
purchase 1145 Rights Offering Equity in any 1145 Rights Offering must affirmatively elect to
exercise its Rights in the manner set forth in the applicable 1145 Beneficial Holder Subscription
Form by the Subscription Expiration Deadline.
Any exercise of Rights by an 1145 Eligible Holder after the Subscription Expiration
Deadline will not be allowed and any purported exercise received by the Rights Offering
Subscription Agent after the Subscription Expiration Deadline, regardless of when the
documents or payment relating to such exercise were sent, will not be honored, except that the
Company shall have the discretion, with the consent of the Senior Commitment Parties holding
at least two-thirds of the aggregate Backstop Commitments (as identified in Schedule 1 to the
Backstop Agreement) as of the date on which such consent is solicited (the “Requisite
Commitment Parties”), to allow any exercise of Rights after the Subscription Expiration
Deadline.
The Subscription Expiration Deadline may be extended with the consent of the Requisite
Commitment Parties, or as required by law.
3. Delivery of Subscription Documents
Each 1145 Eligible Holder may exercise all or any portion of such 1145 Eligible Holder’s
Rights, but subject to the terms and conditions contained herein. In order to facilitate the exercise
of the Rights, beginning on the Subscription Commencement Date, the applicable 1145
Beneficial Holder Subscription Form and these 1145 Rights Offering Procedures will be sent to
each 1145 Eligible Holder, together with appropriate instructions for the proper completion, due
execution and timely delivery of the executed 1145 Beneficial Holder Subscription Form and the
payment of the applicable aggregate Purchase Price for its 1145 Rights Offering Equity.
Distribution by the Rights Offering Subscription Agent of the 1145 Beneficial Holder
Subscription Form and these procedures to the Nominees reflected on the securities position
report provided by DTC as of the Record Date (with instructions to forward such documents to
the Nominees’ beneficial holder clients) and/or posting of these procedures and 1145 Beneficial
Holder Subscription Form on DTC’s LENS Noticing System shall constitute valid and sufficient
delivery of such documents, and satisfy the obligations of the Rights Offering Subscription
Agent with respect thereto. Nominees may utilize an agent to distribute the 1145 Subscription
Form and these procedures to their beneficial holder clients and seek reasonable reimbursement
of the costs associated therewith by submitting a timely invoice to the Rights Offering
Subscription Agent.
4. Exercise of Rights
(a) In order to validly exercise its Rights, each 1145 Eligible Holder that is not a
Backstop Party must:
i. return duly completed and executed applicable 1145 Beneficial Holder Subscription
Form(s) to the Rights Offering Subscription Agent or its Nominee, as applicable, so
that, if applicable, such documents may be transmitted to the Rights Offering
Subscription Agent by the Nominee, so that such documents are actually received by
the Rights Offering Subscription Agent by the Subscription Expiration Deadline; and
ii. at the same time it returns its 1145 Beneficial Holder Subscription Form(s) to its
Nominee, but in no event later than the Subscription Expiration Deadline, arrange for
the payment by its Nominee of, the applicable Purchase Price to the Rights Offering
Subscription Agent by wire transfer ONLY of immediately available funds in
accordance with the instructions included in the applicable 1145 Beneficial Holder
Subscription Form(s).
(b) In order to validly exercise its Rights, each 1145 Eligible Holder that is a
Backstop Party must:
i. return duly completed and executed applicable 1145 Beneficial Holder Subscription
Form(s) to the Rights Offering Subscription Agent or its Nominee, as applicable so
that, if applicable, such documents may be transmitted to the Rights Offering
Subscription Agent by the Nominee, so that such documents are actually received by
the Rights Offering Subscription Agent by the Subscription Expiration Deadline;
and
ii. no later than the Backstop Funding Deadline, pay the applicable Purchase Price to
the Rights Offering Subscription Agent or to the escrow account established and
maintained by a third party satisfactory to the Backstop Parties and the Company
(the “Escrow Account”) by wire transfer ONLY of immediately available funds in
accordance with the wire instructions included in the Funding Notice.
ALL BACKSTOP PARTIES MUST COORDINATE PAYMENT (WHETHER
DIRECTLY OR THROUGH THEIR NOMINEES) OF THEIR APPLICABLE
PURCHASE PRICE DIRECTLY TO THE SUBSCRIPTION AGENT OR TO THE
ESCROW ACCOUNT, AS APPLICABLE.
(c) With respect to 4(a) and (b) above, each 1145 Eligible Holder must duly
complete, execute and return the applicable 1145 Beneficial Holder Subscription
Form(s) in accordance with the instructions herein to its Nominee in sufficient
time to allow its Nominee to process its instructions and deliver to the Rights
Offering Subscription Agent the Master 1145 Subscription Form, its completed
1145 Beneficial Holder Subscription Form(s), and, solely with respect to the 1145
Eligible Holders that are not Backstop Parties, payment of the applicable Purchase
Price, payable for the 1145 Rights Offering Equity elected to be purchased by
such 1145 Eligible Holder, by the Subscription Expiration Deadline. 1145
Eligible Holders that are Backstop Parties must deliver their payment of the
applicable Purchase Price payable for the 1145 Rights Offering Equity elected to
be purchased by such Backstop Party directly to the Rights Offering Subscription
Agent or to the Escrow Account, as applicable, no later than the Backstop
Funding Deadline.
(d) In the event that the funds received by the Rights Offering Subscription Agent or
the Escrow Account, as applicable, from any 1145 Eligible Holder do not
correspond to the Purchase Price payable for the 1145 Rights Offering Equity
elected to be purchased by such 1145 Eligible Holder, the number of the 1145
Rights Offering Equity deemed to be purchased by such 1145 Eligible Holder will
be the lesser of (a) the number of the 1145 Rights Offering Equity elected to be
purchased by such 1145 Eligible Holder and (b) a number of the 1145 Rights
Offering Equity determined by dividing the amount of the funds received by the
Purchase Price, in each case up to such 1145 Eligible Holder’s pro rata portion of
1145 Rights Offering Equity.
(e) The cash paid to the Rights Offering Subscription Agent in accordance with these
1145 Rights Offering Procedures will be deposited and held by the Rights
Offering Subscription Agent in a segregated account until released to the Debtors
in connection with the settlement of the 1145 Rights Offering on the Effective
Date. The Rights Offering Subscription Agent may not use such cash for any
other purpose prior to the Effective Date and may not encumber or permit such
cash to be encumbered with any lien or similar encumbrance. The cash held by
the Rights Offering Subscription Agent hereunder shall not be deemed part of the
Debtors’ bankruptcy estates.
5. Transfer Restriction; Revocation
The record ownership in the Rights is not transferable. If any Rights are transferred by
an 1145 Eligible Holder in contravention of the foregoing, the Rights will be cancelled, and
neither such 1145 Eligible Holder nor the purported transferee will receive any 1145 Rights
Offering Equity otherwise purchasable on account of such transferred 1145 Rights. Any Senior
Notes traded after the Record Date will not be traded with the Rights attached.
Once an 1145 Eligible Holder has properly exercised its Rights, subject to the terms and
conditions contained in these 1145 Rights Offering Procedures and the Backstop Agreement in
the case of any Backstop Party, such exercise will be irrevocable.
6. Termination/Return of Payment
Unless the Effective Date has occurred, the 1145 Rights Offering will be deemed
automatically terminated without any action of any party upon the earlier of (i) termination of the
Plan or rejection of the Plan by all classes entitled to vote, (ii) termination of the RSA in
accordance with its terms, (iii) termination of the Backstop Agreement in accordance with its
terms and (iv) the Outside Date (as defined in the Backstop Agreement) (as such date may be
extended pursuant to the terms of the Backstop Agreement). In the event the 1145 Rights
Offering is terminated, any payments received pursuant to these 1145 Rights Offering
Procedures will be returned, without interest, to the applicable 1145 Eligible Holder as soon as
reasonably practicable, but in any event, within six (6) Business Days after the date of
termination.
7. Settlement of the 1145 Rights Offering and Distribution of the 1145 Rights
Offering Equity
The settlement of the 1145 Rights Offering is conditioned on confirmation of the Plan by
the Bankruptcy Court, compliance by the Debtors with these 1145 Rights Offering Procedures,
and the simultaneous occurrence of the Effective Date. The Debtors intend that the 1145 Rights
Offering Equity will be issued to the 1145 Eligible Holders and/or to any party that an 1145
Eligible Holder so designates in the 1145 Beneficial Holder Subscription Form(s), in book-entry
form, and that DTC, or its nominee, will be the holder of record of such 1145 Rights Offering
Equity. To the extent DTC is unwilling or unable to make the 1145 Rights Offering Equity
eligible on the DTC system, the 1145 Rights Offering Equity will be issued directly to the 1145
Eligible Holder or its designee.
8. Fractional Shares
No fractional rights or 1145 Rights Offering Equity will be issued in the 1145 Rights
Offering. All share allocations (including each 1145 Eligible Holder’s 1145 Rights Offering
Equity) will be calculated and rounded down to the nearest whole share.
9. Validity of Exercise of Rights
All questions concerning the timeliness, viability, form and eligibility of any exercise of
Rights will be determined in good faith by the Debtors in consultation with the Requisite
Commitment Parties, and, if necessary, subject to a final and binding determination by the
Bankruptcy Court. The Debtor, with the consent of the Requisite Commitment Parties, may
waive or reject any defect or irregularity in, or permit such defect or irregularity to be corrected
within such time as they may determine in good faith, the purported exercise of any Rights.
Subscription Forms will be deemed not to have been received or accepted until all irregularities
have been waived or cured within such time as the Debtors determine in good faith in
consultation with the Requisite Commitment Parties.
Before exercising any Rights, 1145 Eligible Holders should read the Disclosure
Statement and the Plan for information relating to the Debtors and the risk factors to be
considered.
All calculations, including, to the extent applicable, the calculation of (i) the value of any
1145 Eligible Holder’s Allowed Senior Notes Claims for the purposes of the 1145 Rights
Offering and (ii) any 1145 Eligible Holder’s 1145 Rights Offering Equity, shall be made in good
faith by the Company with the consent of the Requisite Commitment Parties and in each case in
accordance with any Claim amounts included in the Plan, and any disputes regarding such
calculations shall be subject to a final and binding determination by the Bankruptcy Court.
10. Modification of Procedures
With the prior written consent of the Requisite Commitment Parties, the Debtors reserve
the right to modify these 1145 Rights Offering Procedures, or adopt additional procedures
consistent with these 1145 Rights Offering Procedures to effectuate the 1145 Rights Offering
and to issue the 1145 Rights Offering Equity, provided, however, that the Debtors shall provide
prompt written notice to each 1145 Eligible Holder of any material modification to these 1145
Rights Offering Procedures made after the Subscription Commencement Date. In so doing, and
subject to the consent of the Requisite Commitment Parties, the Debtors may execute and enter
into agreements and take further action that the Debtors determine in good faith is necessary and
appropriate to effectuate and implement the 1145 Rights Offering and the issuance of the 1145
Rights Offering Equity.
The Debtors shall undertake reasonable procedures to confirm that each participant in the
1145 Rights Offering is in fact an 1145 Eligible Holder.
11. Inquiries And Transmittal of Documents; Rights Offering Subscription
Agent
The 1145 Rights Offering Instructions for 1145 Eligible Holders attached hereto should
be carefully read and strictly followed by the 1145 Eligible Holders.
Questions relating to the 1145 Rights Offering should be directed to the Rights Offering
Subscription Agent via email to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ (please reference
“Vanguard Subscription” in the subject line) or at the following phone number: (▇▇▇) ▇▇▇-▇▇▇▇.
The risk of non-delivery of all documents and payments to the Rights Offering
Subscription Agent, the Escrow Account and any Nominee is on the 1145 Eligible Holder
electing to exercise its Rights and not the Debtors, the Rights Offering Subscription Agent, or the
Backstop Parties.
VANGUARD NATURAL RESOURCES, LLC,
ON BEHALF OF AN ENTITY TO BE FORMED LATER
1145 RIGHTS OFFERING INSTRUCTIONS FOR 1145 ELIGIBLE HOLDERS
Terms used and not defined herein shall have the meaning assigned to them in the Plan.
To elect to participate in the 1145 Rights Offering, you must follow the instructions set out
below:
1. Insert the principal amount of the Allowed Senior Notes Claims that you held as of the
Record Date in Item 1 of your applicable 1145 Beneficial Holder Subscription Form(s)
(if you do not know such amount, please contact your Nominee immediately).
2. Complete the calculation in Item 2a of your applicable 1145 Beneficial Holder
Subscription Form(s), which calculates the maximum number of 1145 Rights Offering
Equity available for you to purchase. Such amount must be rounded down to the nearest
whole share.
3. Complete the calculation in Item 2b of your applicable 1145 Beneficial Holder
Subscription Form(s) to indicate the number of 1145 Rights Offering Equity that you
elect to purchase and calculate the aggregate Purchase Price for the 1145 Rights Offering
Equity that you elect to purchase.
4. Confirm whether you are a Backstop Party pursuant to the representation in Item 3 of
your applicable 1145 Beneficial Holder Subscription Form(s). (This section is only for
Backstop Parties, each of whom is aware of their status as a Backstop Party).
5. Read, complete and sign the certification in Item 5 of your applicable 1145 Beneficial
Holder Subscription Form(s). Such execution shall indicate your acceptance and
approval of the terms and conditions set forth in these 1145 Rights Offering Procedures.
6. Read, complete and sign an IRS Form W-9 if you are a U.S. person. If you are a non-
U.S. person, read, complete and sign an appropriate IRS Form W-8. These forms may be
obtained from the IRS at its website: ▇▇▇.▇▇▇.▇▇▇.
7. Return your applicable signed 1145 Beneficial Holder Subscription Form(s) to your
Nominee in sufficient time to allow your Nominee to process your instructions and
prepare and deliver the Master 1145 Subscription Form to the Rights Offering
Subscription Agent by the Subscription Expiration Deadline.
8. Arrange for full payment of the aggregate Purchase Price by wire transfer of
immediately available funds, calculated in accordance with Item 2b of your applicable
1145 Beneficial Holder Subscription Form(s). For 1145 Eligible Holders that are not
Backstop Parties, please instruct your Nominee to coordinate payment of the Purchase
Price and transmit and deliver such payment to the Rights Offering Subscription Agent
by the Subscription Expiration Deadline. An 1145 Eligible Holder that is not a Backstop
Party should follow the payment instructions as provided in the Master 1145 Subscription
Form. Any Backstop Party should follow the payment instructions that will be provided
in the Funding Notice, except to the extent of any aggregate Purchase Price previously
paid by such 1145 Eligible Holder to the Rights Offering Subscription Agent or the
Escrow Account in accordance with the terms of the Backstop Agreement.
The Subscription Expiration Deadline is 4:00 p.m. Central Time on June 30, 2017.
Please note that the 1145 Beneficial Holder Subscription Form(s) must be received by your
broker, bank, commercial bank, transfer agent, trust company, dealer, or other agent or
nominee (as applicable, the “Nominee”) in sufficient time to allow such Nominee to process
and deliver the Master 1145 Subscription Form to the Rights Offering Subscription Agent,
by the Subscription Expiration Deadline, along with the appropriate funding (with respect
to 1145 Eligible Holders that are not Backstop Parties) or the subscription represented by
your applicable 1145 Beneficial Holder Subscription Form(s) will not be counted and you
will be deemed forever to have relinquished and waived your right to participate in the
1145 Rights Offering.
1145 Eligible Holders that are Backstop Parties must deliver the appropriate funding
directly to the Rights Offering Subscription Agent or to the Escrow Account, as applicable,
pursuant to the Funding Notice (except to the extent of any funding previously provided by
any such 1145 Eligible Holder to the Rights Offering Subscription Agent or the Escrow
Account in accordance with the terms of the Backstop Agreement) no later than the
Backstop Funding Deadline.
Exhibit A-2
Accredited Investor Rights Offering Procedures
See attached.
VANGUARD NATURAL RESOURCES, LLC (THE “COMPANY”),
ON BEHALF OF VNR FINANCE CORP. (AS REORGANIZED PURSUANT TO AND
UNDER THE PLAN, OR ANY SUCCESSOR THERETO)
ACCREDITED INVESTOR RIGHTS OFFERING PROCEDURES
The Accredited Investor Rights Offering Equity is being distributed and issued by the
Debtors without registration under the Securities Act of 1933, as amended (the
“Securities Act”)1, in reliance upon the exemption provided by Section 4(a)(2) thereof
and/or Regulation D promulgated thereunder. None of the Rights being offered in the
Accredited Investor Rights Offering (the “Accredited Investor Rights”) or the
Accredited Investor Rights Offering Equity issuable upon exercise of such rights
distributed pursuant to these offering procedures (the “Accredited Investor Rights
Offering Procedures”) have been or will be registered under the Securities Act, nor
any state or local law requiring registration for offer and sale of a security, and
Accredited Investor Rights Offering Equity may not be sold or transferred absent
registration under the Securities Act or pursuant to an exemption from registration
under the Securities Act.
The record ownership of the Accredited Investor Rights is not transferable.
The Disclosure Statement (as defined below) has previously been distributed in
connection with the Debtors’ solicitation of votes to accept or reject the Plan (as
defined below) and that document sets forth important information, including risk
factors, that should be carefully read and considered by each Accredited Investor
Eligible Holder (as defined below) prior to making a decision to participate in the
Accredited Investor Rights Offering. Additional copies of the Disclosure Statement
are available upon request from Prime Clerk LLC (the “Rights Offering Subscription
Agent”).
Each certificate representing Accredited Investor Rights Offering Equity issued upon
exercise of an Accredited Investor Right, and each certificate issued in exchange for or
upon the transfer, sale or assignment of any such Accredited Investor Rights Offering
Equity, shall be stamped or otherwise imprinted with a legend in substantially the
following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
ORIGINALLY ISSUED ON [ISSUANCE DATE], HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
OTHER APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD
1 Terms used and not defined herein shall have the meaning assigned to them in the Joint
Plan of Reorganization of Vanguard Natural Resources, LLC, et al., Pursuant to Chapter 11
of the Bankruptcy Code (as may be amended, modified, or supplemented from time to time,
the “Plan”).
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN AVAILABLE EXEMPTION FROM
REGISTRATION THEREUNDER.”
The Accredited Investor Rights Offering is being conducted by the Company on behalf
of Reorganized VNR in good faith and in compliance with the Bankruptcy Code. In
accordance with Section 1125(e) of the Bankruptcy Code, a debtor or any of its agents
that participate, in good faith and in compliance with the applicable provisions of the
Bankruptcy Code, in the offer, issuance, sale, or purchase of a security offered or sold
under the plan of the debtor, of an affiliate participating in a joint plan with the
debtor, or of a newly organized successor to the debtor under the plan, is not liable, on
account of such participation, for violation of any applicable law, rule, or regulation
governing the offer, issuance, sale or purchase of securities.
Accredited Investor Eligible Holders should note the following times relating to the Accredited
Investor Rights Offering:
Date Calendar Date Event
Record Date………………………. June 7, 2017 The date and time fixed by the
Company for
the determination of the
holders eligible to
participate in the Accredited
Investor Rights Offering.
Subscription Commencement Date .. June 12, 2017 Commencement of the
Accredited Investor Rights
Offering.
Subscription Expiration Deadline … 4:00 p.m. Central
Time on June 30,
2017
The deadline for Accredited
Investor Eligible Holders to
subscribe for Accredited
Investor Rights Offering
Equity. An Accredited
Investor Eligible Holder’s
applicable Accredited
Investor Beneficial Holder
Subscription Form(s) (as
defined below) must be
received by the Accredited
Investor Eligible Holder’s
Nominee (as defined below)
in sufficient time to allow
such Nominee to deliver the
Master Accredited Investor
Subscription Form (as
defined below) to the Rights
Offering Subscription Agent
by the Subscription
Expiration Deadline.
Accredited Investor Eligible
Holders who are not Backstop
Parties must deliver the
aggregate Purchase Price (as
defined below) by the
Subscription Expiration
Deadline.
Accredited Investor Eligible
Holders who are Backstop
Parties must deliver the
aggregate Purchase Price no
later than the deadline
specified in the Funding
Notice (as defined below) in
accordance with the terms of
the Backstop Agreement.
To Accredited Investor Eligible Holders and Nominees of Accredited Investor Eligible Holders:
On May 31, 2017, the Debtors filed the Plan with the United States Bankruptcy Court
for the Southern District of Texas and the Disclosure Statement Relating to the Joint Chapter
11 Plan of Reorganization of Vanguard Natural Resources, LLC, et al., Pursuant to Chapter 11
of the Bankruptcy Code (as may be amended from time to time in accordance with its terms,
the “Disclosure Statement”). Pursuant to the Plan, each holder of an Allowed Senior Notes
Claim as of the Record Date that is an “accredited investor” (as defined in Rule 501(a) of
Regulation D promulgated under the Securities Act) and that is acquiring the Accredited
Investor Rights Offering Equity for its own account or for the account of a “qualified
institutional buyer” (as defined in Section (a)(1) of Rule 144A promulgated under the
Securities Act) and makes certain certifications in connection with such acquisition (each such
holder, a “Accredited Investor Eligible Holder”) has a right to participate in the Accredited
Investor Rights Offering, in accordance with the terms and conditions of these Accredited
Investor Rights Offering Procedures. Only holders of Allowed Senior Notes Claims that timely
and validly complete and return the Accredited Investor Questionnaire included as Exhibit A to
the Accredited Investor Beneficial Holder Subscription Form(s) may participate in the
Accredited Investor Rights Offering of the Accredited Investor Rights Offering Equity.
Pursuant to the Plan, each Accredited Investor Eligible Holder that has timely and
validly completed and returned the Accredited Investor Questionnaire to the Rights Offering
Subscription Agent or its Nominee, as applicable, in advance of the Subscription Expiration
Deadline will receive rights to subscribe for its pro rata portion of a rights offering of
Accredited Investor Rights Offering Equity in an aggregate amount of $117,698,919, provided
that it timely and properly executes and delivers the attached Accredited Investor Beneficial
Holder Subscription Form (with accompanying IRS Form W-9 or appropriate IRS Form W-8,
as applicable, and Accredited Investor Questionnaire) (the “Accredited Investor Beneficial
Holder Subscription Form”) to the Rights Offering Subscription Agent or its Nominee, as
applicable, in advance of the Subscription Expiration Deadline. Included with the Accredited
Investor Beneficial Holder Subscription Form, each such Nominee will receive a Master
Accredited Investor Subscription Form (a “Master Accredited Investor Subscription Form”)
which it shall use to summarize the Accredited Investor Rights exercised by each Accredited
Investor Eligible Holder that timely returns the applicable properly filled out Accredited
Investor Beneficial Holder Subscription Form(s) to such Nominee. Accredited Investor
Beneficial Holder Subscription Forms should only be returned directly to the Rights Offering
Subscription Agent if the Accredited Investor Eligible Holder is the direct holder of record on
the books of the applicable indenture trustee and does not hold its Allowed Senior Notes Claim
through a Nominee.
Please note that all Accredited Investor Beneficial Holder Subscription Forms must be
returned to the applicable Nominee in sufficient time to allow such Nominee to process and
deliver the Master Accredited Investor Subscription Form and copies of all Accredited Investor
Beneficial Holder Subscription Forms, and the accompanying IRS Forms and Accredited
Investor Questionnaires prior to the Subscription Expiration Deadline. To the extent of any
discrepancy between the Master Accredited Investor Subscription Form and the Accredited
Investor Beneficial Holder Subscription Form(s) regarding the Accredited Investor Eligible
Holder’s principal amount, the Master Accredited Investor Subscription Form shall govern.
While the amount of time necessary for a Nominee to process and deliver the Master
Accredited Investor Subscription Form to the Rights Offering Subscription Agent will vary
from Nominee to Nominee, Accredited Investor Eligible Holders are urged to consult with their
Nominees to determine the necessary deadline to return their Accredited Investor Beneficial
Holder Subscription Forms. Failure to submit such Accredited Investor Beneficial Holder
Subscription Forms on a timely basis will result in forfeiture of an Accredited Investor Eligible
Holder’s rights to participate in the Accredited Investor Rights Offering. None of the Company,
the Rights Offering Subscription Agent or any of the Backstop Parties will have any liability for
any such failure.
No Accredited Investor Eligible Holder shall be entitled to participate in the Accredited
Investor Rights Offering unless the aggregate Purchase Price (as defined below) for the
Accredited Investor Rights Offering Equity it subscribes for is received by the Rights Offering
Subscription Agent (i) in the case of an Accredited Investor Eligible Holder that is not a
Backstop Party, by the Subscription Expiration Deadline, and (ii) in the case of an Accredited
Investor Eligible Holder that is a Backstop Party, no later than the deadline specified in a
written notice (a “Funding Notice”) delivered by or on behalf of the Debtors to the Backstop
Parties in accordance with Section 2.4 of the Backstop Agreement (the “Backstop Funding
Deadline”), provided that the Backstop Parties may deposit their aggregate Purchase Price in
the Escrow Account (as defined below), in accordance with the terms of the Backstop
Agreement. No interest is payable on any advanced funding of the Purchase Price. If the
Accredited Investor Rights Offering is terminated for any reason, the aggregate Purchase Price
previously received by the Rights Offering Subscription Agent will be returned to Accredited
Investor Eligible Holders as provided in Section 6 hereof. No interest will be paid on any
returned Purchase Price. Any Accredited Investor Eligible Holder who is not a Backstop Party
submitting payment via its Nominee must coordinate such payment with its Nominee in
sufficient time to allow the Nominee to forward such payment to the Rights Offering
Subscription Agent by the Subscription Expiration Deadline.
In order to participate in the Accredited Investor Rights Offering, an Accredited
Investor Eligible Holder must complete all of the steps outlined below. If all of the steps
outlined below are not completed by the Subscription Expiration Deadline or the Backstop
Funding Deadline, as applicable, an Accredited Investor Eligible Holder shall be deemed to
have forever and irrevocably relinquished and waived its right to participate in the
Accredited Investor Rights Offering.
1. Accredited Investor Rights Offering
Accredited Investor Eligible Holders have the right, but not the obligation, to participate
in the Accredited Investor Rights Offering. Only holders of Allowed Senior Notes Claims that
are Accredited Investor Eligible Holders that complete the Accredited Investor Questionnaire
included as Exhibit A to the Accredited Investor Beneficial Holder Subscription Form(s) may
participate in the Accredited Investor Rights Offering.
Accredited Investor Eligible Holders shall receive rights to subscribe for their pro rata
portion of the Accredited Investor Rights Offering Equity.
Subject to the terms and conditions set forth in the Plan and these Accredited
Investor Rights Offering Procedures, each Accredited Investor Eligible Holder is entitled
to subscribe for up to:
17.931847 Accredited Investor Rights Offering Equity per $1,000 of principal
amount of the 8 3/8% Senior Notes due 2019; and
18.149225 Accredited Investor Rights Offering Equity per $1,000 of principal
amount of the 7.875% Senior Notes due 2020;
in each case at a purchase price of $15 per share (the “Purchase Price”). The difference in the
number of Accredited Investor Rights Offering Equity that an Accredited Investor Eligible
Holder is entitled to subscribe for with respect to each series of Senior Notes is to take into
account the differing amounts of pre-petition accrued and unpaid interest thereon.
There will be no over-subscription privilege in the Accredited Investor Rights
Offering. Any Accredited Investor Rights Offering Equity that are unsubscribed by the
Accredited Investor Eligible Holders entitled thereto will not be offered to other
Accredited Investor Eligible Holders but will be purchased by the applicable Backstop
Parties in accordance with the Backstop Agreement. Subject to the terms and conditions
of the Backstop Agreement, each Backstop Party is obligated to purchase its pro rata
portion of the applicable Accredited Investor Rights Offering Equity.
Any Accredited Investor Eligible Holder that subscribes for Accredited Investor
Rights Offering Equity, will be subject to restrictions under the Securities Act on its ability
to re-sell those securities. Resale restrictions are discussed in more detail in Article XII of
the Disclosure Statement, titled “Certain Securities Law Matters.”
SUBJECT TO THE TERMS AND CONDITIONS OF THE ACCREDITED
INVESTOR RIGHTS OFFERING PROCEDURES AND THE BACKSTOP
AGREEMENT IN THE CASE OF ANY BACKSTOP PARTY, ALL SUBSCRIPTIONS
SET FORTH IN THE APPLICABLE ACCREDITED INVESTOR BENEFICIAL
HOLDER SUBSCRIPTION FORM(S) ARE IRREVOCABLE.
2. Subscription Period
The Accredited Investor Rights Offering will commence on the Subscription
Commencement Date and will expire at the Subscription Expiration Deadline. Each Accredited
Investor Eligible Holder intending to purchase Accredited Investor Rights Offering Equity in any
Accredited Investor Rights Offering must affirmatively elect to exercise its Accredited Investor
Rights in the manner set forth in the applicable Accredited Investor Beneficial Holder
Subscription Form by the Subscription Expiration Deadline.
Any exercise of Accredited Investor Rights by an Accredited Investor Eligible Holder
after the Subscription Expiration Deadline will not be allowed and any purported exercise
received by the Rights Offering Subscription Agent after the Subscription Expiration Deadline,
regardless of when the documents or payment relating to such exercise were sent, will not be
honored, except that the Company shall have the discretion, with the consent of the Senior
Commitment Parties holding at least two-thirds of the aggregate Backstop Commitments (as
identified in Schedule 1 to the Backstop Agreement) as of the date on which such consent is
solicited (the “Requisite Commitment Parties”), to allow any exercise of Accredited Investor
Rights after the Subscription Expiration Deadline.
The Subscription Expiration Deadline may be extended with the consent of the Requisite
Commitment Parties, or as required by law.
3. Delivery of Subscription Documents
Each Accredited Investor Eligible Holder may exercise all or any portion of such
Accredited Investor Eligible Holder’s Accredited Investor Rights, but subject to the terms and
conditions contained herein. In order to facilitate the exercise of the Accredited Investor Rights,
beginning on the Subscription Commencement Date, the applicable Accredited Investor
Beneficial Holder Subscription Form and these Accredited Investor Rights Offering Procedures
will be sent to each Accredited Investor Eligible Holder, together with appropriate instructions
for the proper completion, due execution and timely delivery of the executed Accredited Investor
Beneficial Holder Subscription Form and the payment of the applicable aggregate Purchase Price
for its Accredited Investor Rights Offering Equity.
Distribution by the Rights Offering Subscription Agent of the Accredited Investor Beneficial
Holder Subscription Form and these procedures to the Nominees reflected on the securities
position report provided by DTC as of the Record Date (with instructions to forward such
documents to the Nominees’ beneficial holder clients) and/or posting of these procedures and
Accredited Investor Beneficial Holder Subscription Form on DTC’s LENS Noticing System
shall constitute valid and sufficient delivery of such documents, and satisfy the obligations of the
Rights Offering Subscription Agent with respect thereto. Nominees may utilize an agent to
distribute the Accredited Investor Beneficial Holder Subscription Form and these procedures to
their beneficial holder clients and seek reasonable reimbursement of the costs associated
therewith by submitting a timely invoice to the Rights Offering Subscription Agent.
4. Exercise of Accredited Investor Rights
(a) In order to validly exercise its Accredited Investor Rights, each Accredited
Investor Eligible Holder that is not a Backstop Party must:
i. return duly completed and executed applicable Accredited Investor Beneficial Holder
Subscription Form(s) (including the Accredited Investor Questionnaire) to the Rights
Offering Subscription Agent or its Nominee, as applicable, so that, if applicable, such
documents may be transmitted to the Rights Offering Subscription Agent by the
Nominee, so that such documents are actually received by the Rights Offering
Subscription Agent by the Subscription Expiration Deadline; and
ii. at the same time it returns its Accredited Investor Beneficial Holder Subscription
Form(s) to its Nominee, but in no event later than the Subscription Expiration
Deadline, arrange for the payment by its Nominee of, the applicable Purchase Price to
the Rights Offering Subscription Agent by wire transfer ONLY of immediately
available funds in accordance with the instructions included in the applicable
Accredited Investor Beneficial Holder Subscription Form(s).
(b) In order to validly exercise its Accredited Investor Rights, each Accredited
Investor Eligible Holder that is a Backstop Party must:
i. return duly completed and executed applicable Accredited Investor Beneficial
Holder Subscription Form(s) to the Rights Offering Subscription Agent or its
Nominee, as applicable so that, if applicable, such documents may be transmitted to
the Rights Offering Subscription Agent by the Nominee, so that such documents are
actually received by the Rights Offering Subscription Agent by the Subscription
Expiration Deadline; and
ii. no later than the Backstop Funding Deadline, pay the applicable Purchase Price to
the Rights Offering Subscription Agent or to the escrow account established and
maintained by a third party satisfactory to the Backstop Parties and the Company
(the “Escrow Account”) by wire transfer ONLY of immediately available funds in
accordance with the wire instructions included in the Funding Notice.
ALL BACKSTOP PARTIES MUST COORDINATE PAYMENT (WHETHER
DIRECTLY OR THROUGH THEIR NOMINEES) OF THEIR APPLICABLE
PURCHASE PRICE DIRECTLY TO THE SUBSCRIPTION AGENT OR TO THE
ESCROW ACCOUNT, AS APPLICABLE.
(c) With respect to 4(a) and (b) above, each Accredited Investor Eligible Holder must
duly complete, execute and return the applicable Accredited Investor Beneficial
Holder Subscription Form(s) in accordance with the instructions herein to its
Nominee in sufficient time to allow its Nominee to process its instructions and
deliver to the Rights Offering Subscription Agent the Master Accredited Investor
Subscription Form, its completed Accredited Investor Beneficial Holder
Subscription Form(s), and, solely with respect to the Accredited Investor Eligible
Holders that are not Backstop Parties, payment of the applicable Purchase Price,
payable for the Accredited Investor Rights Offering Equity elected to be
purchased by such Accredited Investor Eligible Holder, by the Subscription
Expiration Deadline. Accredited Investor Eligible Holders that are Backstop
Parties must deliver their payment of the applicable Purchase Price payable for
the Accredited Investor Rights Offering Equity elected to be purchased by such
Backstop Party directly to the Rights Offering Subscription Agent or to the
Escrow Account, as applicable, no later than the Backstop Funding Deadline.
(d) In the event that the funds received by the Rights Offering Subscription Agent or
the Escrow Account, as applicable, from any Accredited Investor Eligible Holder
do not correspond to the Purchase Price payable for the Accredited Investor
Rights Offering Equity elected to be purchased by such Accredited Investor
Eligible Holder, the number of the Accredited Investor Rights Offering Equity
deemed to be purchased by such Accredited Investor Eligible Holder will be the
lesser of (a) the number of the Accredited Investor Rights Offering Equity elected
to be purchased by such Accredited Investor Eligible Holder and (b) a number of
the Accredited Investor Rights Offering Equity determined by dividing the
amount of the funds received by the Purchase Price, in each case up to such
Accredited Investor Eligible Holder’s pro rata portion of Accredited Investor
Rights Offering Equity.
(e) The cash paid to the Rights Offering Subscription Agent in accordance with these
Accredited Investor Rights Offering Procedures will be deposited and held by the
Rights Offering Subscription Agent in a segregated account until released to the
Debtors in connection with the settlement of the Accredited Investor Rights
Offering on the Effective Date. The Rights Offering Subscription Agent may not
use such cash for any other purpose prior to the Effective Date and may not
encumber or permit such cash to be encumbered with any lien or similar
encumbrance. The cash held by the Rights Offering Subscription Agent hereunder
shall not be deemed part of the Debtors’ bankruptcy estates.
5. Transfer Restriction; Revocation
The record ownership in the Accredited Investor Rights is not transferable. If any
Accredited Investor Rights are transferred by an Accredited Investor Eligible Holder in
contravention of the foregoing, the Accredited Investor Rights will be cancelled, and neither
such Accredited Investor Eligible Holder nor the purported transferee will receive any
Accredited Investor Rights Offering Equity otherwise purchasable on account of such transferred
Accredited Investor Rights. Any Senior Notes traded after the Record Date will not be traded
with the Rights attached.
Once an Accredited Investor Eligible Holder has properly exercised its Accredited
Investor Rights, subject to the terms and conditions contained in these Accredited Investor
Rights Offering Procedures and the Backstop Agreement in the case of any Backstop Party, such
exercise will be irrevocable.
6. Termination/Return of Payment
Unless the Effective Date has occurred, the Accredited Investor Rights Offering will be
deemed automatically terminated without any action of any party upon the earlier of (i)
termination of the Plan or rejection of the Plan by all classes entitled to vote, (ii) termination of
the RSA in accordance with its terms, (iii) termination of the Backstop Agreement in accordance
with its terms and (iv) the Outside Date (as defined in the Backstop Agreement) (as such date
may be extended pursuant to the terms of the Backstop Agreement). In the event the Accredited
Investor Rights Offering is terminated, any payments received pursuant to these Accredited
Investor Rights Offering Procedures will be returned, without interest, to the applicable
Accredited Investor Eligible Holder as soon as reasonably practicable, but in any event, within
six (6) Business Days after the date of termination.
7. Settlement of the Accredited Investor Rights Offering and Distribution of the
Accredited Investor Rights Offering Equity
The settlement of the Accredited Investor Rights Offering is conditioned on confirmation
of the Plan by the Bankruptcy Court, compliance by the Debtors with these Accredited Investor
Rights Offering Procedures, and the simultaneous occurrence of the Effective Date. The Debtors
intend that the Accredited Investor Rights Offering Equity will be issued to the Accredited
Investor Eligible Holders and/or to any party that an Accredited Investor Eligible Holder so
designates in the Accredited Investor Beneficial Holder Subscription Form(s), in book-entry
form, and that DTC, or its nominee, will be the holder of record of such Accredited Investor
Rights Offering Equity. To the extent DTC is unwilling or unable to make the Accredited
Investor Rights Offering Equity eligible on the DTC system, the Accredited Investor Rights
Offering Equity will be issued directly to the Accredited Investor Eligible Holder or its designee.
8. Fractional Shares
No fractional rights or Accredited Investor Rights Offering Equity will be issued in the
Accredited Investor Rights Offering. All share allocations (including each Accredited Investor
Eligible Holder’s Accredited Investor Rights Offering Equity) will be calculated and rounded
down to the nearest whole share.
9. Validity of Exercise of Accredited Investor Rights
All questions concerning the timeliness, viability, form and eligibility of any exercise of
Accredited Investor Rights will be determined in good faith by the Debtors in consultation with
the Requisite Commitment Parties, and, if necessary, subject to a final and binding determination
by the Bankruptcy Court. The Debtor, with the consent of the Requisite Commitment Parties,
may waive or reject any defect or irregularity in, or permit such defect or irregularity to be
corrected within such time as they may determine in good faith, the purported exercise of any
Accredited Investor Rights. Subscription Forms will be deemed not to have been received or
accepted until all irregularities have been waived or cured within such time as the Debtors
determine in good faith in consultation with the Requisite Commitment Parties.
Before exercising any Accredited Investor Rights, Accredited Investor Eligible Holders
should read the Disclosure Statement and the Plan for information relating to the Debtors and
the risk factors to be considered.
All calculations, including, to the extent applicable, the calculation of (i) the value of any
Accredited Investor Eligible Holder’s Allowed Senior Notes Claims for the purposes of the
Accredited Investor Rights Offering and (ii) any Accredited Investor Eligible Holder’s
Accredited Investor Rights Offering Equity, shall be made in good faith by the Company with
the consent of the Requisite Commitment Parties and in each case in accordance with any Claim
amounts included in the Plan, and any disputes regarding such calculations shall be subject to a
final and binding determination by the Bankruptcy Court.
10. Modification of Procedures
With the prior written consent of the Requisite Commitment Parties, the Debtors reserve
the right to modify these Accredited Investor Rights Offering Procedures, or adopt additional
procedures consistent with these Accredited Investor Rights Offering Procedures to effectuate
the Accredited Investor Rights Offering and to issue the Accredited Investor Rights Offering
Equity, provided, however, that the Debtors shall provide prompt written notice to each
Accredited Investor Eligible Holder of any material modification to these Accredited Investor
Rights Offering Procedures made after the Subscription Commencement Date. In so doing, and
subject to the consent of the Requisite Commitment Parties, the Debtors may execute and enter
into agreements and take further action that the Debtors determine in good faith is necessary and
appropriate to effectuate and implement the Accredited Investor Rights Offering and the issuance
of the Accredited Investor Rights Offering Equity.
The Debtors shall undertake reasonable procedures to confirm that each participant in the
Accredited Investor Rights Offering is in fact an Accredited Investor Eligible Holder, including,
but not limited to, requiring certifications by such participant to that effect and other diligence
measures as the Debtors deem reasonably necessary.
11. Inquiries And Transmittal of Documents; Rights Offering Subscription
Agent
The Accredited Investor Rights Offering Instructions for Accredited Investor Eligible
Holders attached hereto should be carefully read and strictly followed by the Accredited Investor
Eligible Holders.
Questions relating to the Accredited Investor Rights Offering should be directed to the
Rights Offering Subscription Agent via email to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇ (please
reference “Vanguard Subscription” in the subject line) or at the following phone number: (▇▇▇)
▇▇▇-▇▇▇▇.
The risk of non-delivery of all documents and payments to the Rights Offering
Subscription Agent, the Escrow Account and any Nominee is on the Accredited Investor Eligible
Holder electing to exercise its Accredited Investor Rights and not the Debtors, the Rights
Offering Subscription Agent, or the Backstop Parties.
VANGUARD NATURAL RESOURCES, LLC,
ON BEHALF OF AN ENTITY TO BE FORMED LATER
ACCREDITED INVESTOR RIGHTS OFFERING INSTRUCTIONS FOR
ACCREDITED INVESTOR ELIGIBLE HOLDERS
Terms used and not defined herein shall have the meaning assigned to them in the Plan.
To elect to participate in the Accredited Investor Rights Offering, you must follow the
instructions set out below:
1. Insert the principal amount of the Allowed Senior Notes Claims that you held as of the
Record Date in Item 1 of your applicable Accredited Investor Beneficial Holder
Subscription Form(s) (if you do not know such amount, please contact your Nominee
immediately).
2. Complete the calculation in Item 2a of your applicable Accredited Investor Beneficial
Holder Subscription Form(s), which calculates the maximum number of Accredited
Investor Rights Offering Equity available for you to purchase. Such amount must be
rounded down to the nearest whole share.
3. Complete the calculation in Item 2b of your applicable Accredited Investor Beneficial
Holder Subscription Form(s) to indicate the number of Accredited Investor Rights
Offering Equity that you elect to purchase and calculate the aggregate Purchase Price for
the Accredited Investor Rights Offering Equity that you elect to purchase.
4. Read and Complete the certification in Item 2c and Exhibit A of your Accredited
Investor Beneficial Holder Subscription Form(s) certifying that you are an “accredited
investor” and you are acquiring the Accredited Investor Rights Offering Equity for your
own account or for the account of a qualified institutional buyer.
5. Confirm whether you are a Backstop Party pursuant to the representation in Item 3 of
your applicable Accredited Investor Beneficial Holder Subscription Form(s). (This
section is only for Backstop Parties, each of whom is aware of their status as a Backstop
Party).
6. Read, complete and sign the certification in Item 5 of your applicable Accredited
Investor Beneficial Holder Subscription Form(s). Such execution shall indicate your
acceptance and approval of the terms and conditions set forth in these Accredited
Investor Rights Offering Procedures and your agreement with the representations and
acknowledgements by you contained therein.
7. Read, complete and sign an IRS Form W-9 if you are a U.S. person. If you are a non-
U.S. person, read, complete and sign an appropriate IRS Form W-8. These forms may be
obtained from the IRS at its website: ▇▇▇.▇▇▇.▇▇▇.
8. Return your applicable signed Accredited Investor Beneficial Holder Subscription
Form(s) to your Nominee in sufficient time to allow your Nominee to process your
instructions and prepare and deliver the Master Accredited Investor Subscription Form to
the Rights Offering Subscription Agent by the Subscription Expiration Deadline.
9. Arrange for full payment of the aggregate Purchase Price by wire transfer of
immediately available funds, calculated in accordance with Item 2b of your applicable
Accredited Investor Beneficial Holder Subscription Form(s). For Accredited Investor
Eligible Holders that are not Backstop Parties, please instruct your Nominee to
coordinate payment of the Purchase Price and transmit and deliver such payment to the
Rights Offering Subscription Agent by the Subscription Expiration Deadline. An
Accredited Investor Eligible Holder that is not a Backstop Party should follow the
payment instructions as provided in the Master Accredited Investor Subscription Form.
Any Backstop Party should follow the payment instructions that will be provided in the
Funding Notice, except to the extent of any aggregate Purchase Price previously paid by
such Accredited Investor Eligible Holder to the Rights Offering Subscription Agent or
the Escrow Account in accordance with the terms of the Backstop Agreement.
The Subscription Expiration Deadline is 4:00 p.m. Central Time on June 30, 2017.
Please note that the Accredited Investor Beneficial Holder Subscription Form(s) must be
received by your broker, bank, commercial bank, transfer agent, trust company, dealer, or
other agent or nominee (as applicable, the “Nominee”) in sufficient time to allow such
Nominee to process and deliver the Master Accredited Investor Subscription Form to the
Rights Offering Subscription Agent, by the Subscription Expiration Deadline, along with
the appropriate funding (with respect to Accredited Investor Eligible Holders that are not
Backstop Parties) or the subscription represented by your applicable Accredited Investor
Beneficial Holder Subscription Form(s) will not be counted and you will be deemed forever
to have relinquished and waived your right to participate in the Accredited Investor Rights
Offering.
Accredited Investor Eligible Holders that are Backstop Parties must deliver the
appropriate funding directly to the Rights Offering Subscription Agent or to the Escrow
Account, as applicable, pursuant to the Funding Notice (except to the extent of any funding
previously provided by any such Accredited Investor Eligible Holder to the Rights Offering
Subscription Agent or the Escrow Account in accordance with the terms of the Backstop
Agreement) no later than the Backstop Funding Deadline.
Exhibit B
Form of Joinder Agreement for Related Purchaser
JOINDER TO BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT
JOINDER TO BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT (this “Joinder”) dated as of [____], 2017, by and among [____________] (the
“Transferor”) and [____________] (the “Transferee”).
W I T N E S S E T H:
WHEREAS, Vanguard Natural Resources, LLC, on behalf of itself and each of the other
Debtors and the Commitment Parties party thereto have heretofore executed and delivered a
Backstop Commitment and Equity Investment Agreement, dated as of February 24, 2017 (as
amended, supplemented restated or otherwise modified from time to time, the “Agreement”);
WHEREAS, pursuant to Section 2.6(b) of the Agreement, each Commitment Party shall
have the right to Transfer all or any portion of its Commitments to any creditworthy Affiliate or
Affiliated Fund (other than any portfolio company of such Commitment Party or its Affiliates),
subject to the terms and conditions set forth in the Agreement;
WHEREAS, Transferor desires to sell to Transferee and Transferee desires to purchase
from Transferor $[●] of its Commitment, of which $[●] is an Incremental Commitment and $[●]
is a Joinder Commitment (the “Subject Transfer”);
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which his hereby acknowledged, the Transferor, the Transferee and
the Company covenant and agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement. The “General Provisions” set forth
in Article X of the Agreement shall be deemed to apply to this Joinder and is incorporated herein
by reference, mutatis mutandis.
2. Agreement to Transfer. The Transferor hereby agrees to Transfer to the
Transferee, pursuant and subject to the terms and conditions set forth in the Agreement and the
BCA Approval Order, $[●] of its Commitment, of which $[●] is an Incremental Commitment
and $[●] is a Joinder Commitment (and Schedule 1 to the Agreement shall be deemed to have
been revised in accordance with the Agreement).
3. Agreement to be Bound. The Transferee hereby agrees (a) to become a party to
the Agreement as a Commitment Party and Party and as such will have all the rights and be
subject to all of the obligations and agreements of a Commitment Party under the Agreement and
(b) to purchase, pursuant and subject to the terms and conditions set forth in the Agreement and
the BCA Approval Order, such number of Unsubscribed Units and 4(a)(2) Backstop
Commitment Units as corresponds to the Transferee’s Commitment Percentage. For the
avoidance of doubt, the Transferee’s Commitment Percentage as of the date hereof is set forth on
the signature page hereto (and Schedule 1 to the Agreement shall be deemed to have been
revised in accordance with the Agreement); provided, however, that such Transferee’s
Commitment Percentage may be increased or decreased after the date hereof as provided in the
Agreement and the BCA Approval Order.
4. Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants that (a) the Transferee is an Affiliate or an Affiliated Fund of the
Transferor; (b) the Transferee is not a portfolio company of the Transferor or the Transferor’s
Affiliates and (c) the Subject Transfer does not violate any of the provisions contained in
Section 2.6(e) of the Agreement.
5. Representations and Warranties of the Transferee. The Transferee hereby makes,
to each of the other Parties, as to itself only and (unless otherwise set forth therein) as of the date
hereof and as of the Closing Date, the representations and warranties set forth in Article V of the
Agreement.
6. Governing Law. This Joinder shall be governed by and construed in accordance
with the laws of the State of New York without regard for any conflict of law principles that
would apply the laws of any other jurisdiction.
7. Notice. All notices and other communications given or made to the Transferee in
connection with the Agreement shall be made in accordance with Section 10.1 of the Agreement,
to the address set forth under the Transferee’s signature in the signature pages hereto (and the
Agreement shall be deemed to have been updated to include such notice information for the
Transferee).
[Signature pages follow]
IN WITNESS WHEREOF, each of the undersigned parties has caused this Joinder to be
executed as of the date first written above.
TRANSFEROR:
[ ]
By: ______________________________________
Name:
Title:
Address 1:
Address 2:
Attention:
Facsimile:
Email:
Commitment Percentage:
Commitment: $[●], of which $[●] is an
Incremental Commitment and $[●] is a Joinder
Commitment
TRANSFEREE:
[ ]
By: ______________________________________
Name:
Title:
Address 1:
Address 2:
Attention:
Facsimile:
Email:
Commitment Percentage:
Commitment: $[●], of which $[●] is an
Incremental Commitment and $[●] is a Joinder
Commitment
Acknowledged and Agreed to:
VANGUARD NATURAL RESOURCES, LLC
As a Debtor
By: ______________________________________
Name:
Title:
Exhibit C-1
Form of Joinder Agreement for Existing Commitment Party
JOINDER TO BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT
JOINDER TO BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT (this “Joinder”) dated as of [____], 2017, by and among [____________] (the
“Transferor”) and [____________] (the “Transferee”).
W I T N E S S E T H:
WHEREAS, Vanguard Natural Resources, LLC, on behalf of itself and each of the other
Debtors and the Commitment Parties party thereto have heretofore executed and delivered a
Backstop Commitment and Equity Investment Agreement, dated as of February 24, 2017 (as
amended, supplemented restated or otherwise modified from time to time, the “Agreement”);
WHEREAS, pursuant to Section 2.6(c) of the Agreement, each Commitment Party shall
have the right to Transfer all or any portion of its Commitments to any other Commitment Party
or such other Commitment Party’s Affiliate or Related Purchaser, subject to the terms and
conditions set forth in the Agreement;
[WHEREAS, pursuant to Section 2.6(g) of the Agreement, each Commitment Party may
Transfer a proportional amount of its Exit Term Loan Backstop Commitment to any Person in
connection with any Transfer of all or any portion of such Party’s Commitments to such Person
in accordance with Sections 2.6(c) through (e);]
WHEREAS, the Subject Transfer has been consented to be the Requisite Commitment
Parties; and
WHEREAS, Transferor desires to sell to Transferee and Transferee desires to purchase
from Transferor $[●] of its Commitment, of which $[●] is an Incremental Commitment and $[●]
is a Joinder Commitment (the “Subject Transfer”);
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which his hereby acknowledged, the Transferor, the Transferee and
the Company covenant and agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement. The “General Provisions” set forth
in Article X of the Agreement shall be deemed to apply to this Joinder and is incorporated herein
by reference, mutatis mutandis.
2. Agreement to Transfer. The Transferor hereby agrees to Transfer to the
Transferee, pursuant and subject to the terms and conditions set forth in the Agreement and the
BCA Approval Order, $[●] of its Commitment, of which $[●] is an Incremental Commitment
and $[●] is a Joinder Commitment [and the Exit Term Loan Backstop Commitment set forth
beneath its signature in the signature page hereto] (and Schedule[s] 1 [and 2] to the Agreement
shall be deemed to have been revised in accordance with the Agreement).
3. Agreement to be Bound. The Transferee hereby agrees (a) to become a party to
the Agreement as a Commitment Party and Party and as such will have all the rights and be
subject to all of the obligations and agreements of a Commitment Party under the Agreement
[and] (b) to purchase, pursuant and subject to the terms and conditions set forth in the Agreement
and the BCA Approval Order, such number of Unsubscribed Units and 4(a)(2) Backstop
Commitment Units as corresponds to the Transferee’s Commitment Percentage [and (c) to
purchase the Exit Term Loan Backstop Commitment]. For the avoidance of doubt, the
Transferee’s Commitment Percentage [and Exit Term Loan Backstop Commitment] as of the
date hereof is set forth on the signature page hereto (and Schedule[s] 1[ and 2] to the Agreement
shall be deemed to have been revised in accordance with the Agreement); provided, however,
that such Transferee’s Commitment Percentage [and Exit Term Loan Backstop Commitment]
may be increased or decreased after the date hereof as provided in the Agreement and the BCA
Approval Order.
4. Release of Obligations of Transferor. Upon consummation of the Subject
Transfer, the Transferor shall be deemed to relinquish its rights (and be released from its
obligations, except for any claim for breach of the Agreement that occurs prior to consummation
of the Subject Transfer) under the Agreement to the extent of the Commitments [and Exit Term
Loan Backstop Commitment] Transferred in the Subject Transfer.
5. Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants that (a) the Transferee is not a portfolio company of the Transferor or the
Transferor’s Affiliates and (b) the Subject Transfer does not violate any of the provisions
contained in Section 2.6(e) of the Agreement.
6. Representations and Warranties of the Transferee. The Transferee hereby makes,
to each of the other Parties, as to itself only and (unless otherwise set forth therein) as of the date
hereof and as of the Closing Date, the representations and warranties set forth in Article V of the
Agreement.
7. Governing Law. This Joinder shall be governed by and construed in accordance
with the laws of the State of New York without regard for any conflict of law principles that
would apply the laws of any other jurisdiction.
8. Notice. All notices and other communications given or made to the Transferee in
connection with the Agreement shall be made in accordance with Section 10.1 of the Agreement,
to the address set forth under the Transferee’s signature in the signature pages hereto (and the
Agreement shall be deemed to have been updated to include such notice information for the
Transferee).
[Signature pages follow]
IN WITNESS WHEREOF, each of the undersigned parties has caused this Joinder to be
executed as of the date first written above.
TRANSFEROR:
[ ]
By: ______________________________________
Name:
Title:
Address 1:
Address 2:
Attention:
Facsimile:
Email:
Commitment Percentage:
Commitment: $[●], of which $[●] is an
Incremental Commitment and $[●] is a Joinder
Commitment
Exit Term Loan Backstop Commitment:
TRANSFEREE:
[ ]
By: ______________________________________
Name:
Title:
Address 1:
Address 2:
Attention:
Facsimile:
Email:
Commitment Percentage:
$[●] of its Commitment, of which $[●] is an
Incremental Commitment and $[●] is a Joinder
Commitment
Exit Term Loan Backstop Commitment:
Acknowledged and Agreed to:
VANGUARD NATURAL RESOURCES, LLC
As a Debtor
By: ______________________________________
Name:
Title:
Exhibit C-2
Form of Amendment for Existing Commitment Party
AMENDMENT TO BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT
AMENDMENT TO BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT (this “Amendment”) dated as of [____], 2017, by and among [____________]
(the “Transferor”) and [____________] (the “Transferee”).
W I T N E S S E T H:
WHEREAS, Vanguard Natural Resources, LLC, on behalf of itself and each of the other
Debtors and the Commitment Parties party thereto have heretofore executed and delivered a
Backstop Commitment and Equtiy Investment Agreement, dated as of February 24, 2017 (as
amended, supplemented restated or otherwise modified from time to time, the “Agreement”);
WHEREAS, pursuant to Section 2.6(c) of the Agreement, each Commitment Party shall
have the right to Transfer all or any portion of its Commitments to any other Commitment Party
or such other Commitment Party’s Affiliate or Related Purchaser, subject to the terms and
conditions set forth in the Agreement;
[WHEREAS, pursuant to Section 2.6(g) of the Agreement, each Commitment Party may
Transfer a proportional amount of its Exit Term Loan Backstop Commitment to any Person in
connection with any Transfer of all or any portion of such Party’s Commitments to such Person
in accordance with Sections 2.6(c) through (e);]
WHEREAS, the Subject Transfer has been consented to be the Requisite Commitment
Parties; and
WHEREAS, Transferor desires to sell to Transferee and Transferee desires to purchase
from Transferor $[●] of its Commitment, of which $[●] is an Incremental Commitment and $[●]
is a Joinder Commitment [and the Exit Term Loan Backstop Commitment set forth beneath its
signature in the signature page hereto] (the “Subject Transfer”);
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which his hereby acknowledged, the Transferor, the Transferee and
the Company covenant and agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement. The “General Provisions” set forth
in Article X of the Agreement shall be deemed to apply to this Amendment and is incorporated
herein by reference, mutatis mutandis.
2. Agreement to Transfer. The Transferor hereby agrees to Transfer to the
Transferee, pursuant and subject to the terms and conditions set forth in the Agreement and the
BCA Approval Order, $[●] of its Commitment, of which $[●] is an Incremental Commitment
and $[●] is a Joinder Commitment [and the Exit Term Loan Backstop Commitment set forth
beneath its signature in the signature page hereto] (and Schedule[s] 1 [and 2] to the Agreement
shall be deemed to have been revised in accordance with the Agreement).
3. Agreement to be Bound. The Transferee hereby agrees to purchase, pursuant and
subject to the terms and conditions set forth in the Agreement and the BCA Approval Order,
such number of Unsubscribed Units and 4(a)(2) Backstop Commitment Units as corresponds to
the Transferee’s Commitment Percentage [and the Exit Term Loan Backstop Commitment set
forth on the signature page hereto]. For the avoidance of doubt, the Transferee’s Commitment
Percentage [and the Exit Term Loan Backstop Commitment] as of the date hereof is set forth on
the signature page hereto (and Schedule[s] 1 [and 2] to the Agreement shall be deemed to have
been revised in accordance with the Agreement); provided, however, that such Transferee’s
Commitment Percentage [and the Exit Term Loan Backstop Commitment] may be increased or
decreased after the date hereof as provided in the Agreement and the BCA Approval Order.
4. Release of Obligations of Transferor. Upon consummation of the Subject
Transfer, the Transferor shall be deemed to relinquish its rights (and be released from its
obligations, except for any claim for breach of the Agreement that occurs prior to consummation
of the Subject Transfer) under the Agreement to the extent of the Commitments [and the Exit
Term Loan Backstop Commitment] Transferred in the Subject Transfer.
5. Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants that (a) the Transferee is not a portfolio company of the Transferor or the
Transferor’s Affiliates and (b) the Subject Transfer does not violate any of the provisions
contained in Section 2.6(e) of the Agreement.
6. Representations and Warranties of the Transferee. The Transferee hereby makes,
to each of the other Parties, as to itself only and (unless otherwise set forth therein) as of the date
hereof and as of the Closing Date, the representations and warranties set forth in Article V of the
Agreement.
7. Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of New York without regard for any conflict of law
principles that would apply the laws of any other jurisdiction, and, to the extent applicable, the
Bankruptcy Code.
8. Notice. All notices and other communications given or made to the Transferee in
connection with the Agreement shall be made in accordance with Section 10.1 of the Agreement,
to the address set forth under the Transferee’s signature in the signature pages hereto (and the
Agreement shall be deemed to have been updated to include such notice information for the
Transferee).
[Signature pages follow]
IN WITNESS WHEREOF, each of the undersigned parties has caused this Amendment
to be executed as of the date first written above.
TRANSFEROR:
[ ]
By: ______________________________________
Name:
Title:
Address 1:
Address 2:
Attention:
Facsimile:
Email:
Commitment Percentage:
Commitment: $[●], of which $[●] is an
Incremental Commitment and $[●] is a Joinder
Commitment
Exit Term Loan Backstop Commitment:
TRANSFEREE:
[ ]
By: ______________________________________
Name:
Title:
Address 1:
Address 2:
Attention:
Facsimile:
Email:
Commitment Percentage:
Commitment: $[●], of which $[●] is an
Incremental Commitment and $[●] is a Joinder
Commitment
Exit Term Loan Backstop Commitment:
Acknowledged and Agreed to:
VANGUARD NATURAL RESOURCES, LLC
As a Debtor
By: ______________________________________
Name:
Title:
#4842-7987-2321
Exhibit D
Form of Joinder Agreement for New Purchaser
JOINDER TO BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT
JOINDER TO BACKSTOP COMMITMENT AND EQUITY INVESTMENT
AGREEMENT (this “Joinder”) dated as of [____], 2017, by and among [____________] (the
“Transferor”) and [____________] (the “Transferee”).
W I T N E S S E T H:
WHEREAS, Vanguard Natural Resources, LLC, on behalf of itself and each of the other
Debtors and the Commitment Parties party thereto have heretofore executed and delivered a
Backstop Commitment and Equity Investment Agreement, dated as of February 24, 2017 (as
amended, supplemented restated or otherwise modified from time to time, the “Agreement”);
WHEREAS, pursuant to Section 2.6(d) of the Agreement, each Commitment Party shall
have the right to Transfer all or any portion of its Commitments to any Person, subject to the
terms and conditions set forth in the Agreement;
WHEREAS, Transferor desires to sell to Transferee and Transferee desires to purchase
from Transferor the percentage of its Commitments set forth beneath its signature in the
signature page hereto (the “Subject Transfer”);
WHEREAS, the Subject Transfer has been consented to be the Requisite Commitment
Parties; and
WHEREAS, [the Subject Transfer has been consented to by the Company]/[the
Transferor has agreed to remain obligated to fund the portion of the Commitments to be
Transferred in the Subject Transfer;]
NOW, THEREFORE, in consideration of the foregoing and for good and valuable
consideration, the receipt of which is hereby acknowledged, the Transferor, the Transferee and
the Company covenant and agree as follows:
1. Defined Terms. Capitalized terms used but not otherwise defined herein shall
have the meanings ascribed to such terms in the Agreement. The “General Provisions” set forth
in Article X of the Agreement shall be deemed to apply to this Joinder and is incorporated herein
by reference, mutatis mutandis.
2. Agreement to Transfer. The Transferor hereby agrees to Transfer to the
Transferee, pursuant and subject to the terms and conditions set forth in the Agreement and the
BCA Approval Order, the Commitment Percentage set forth beneath its signature in the signature
page hereto (and Schedule 1 to the Agreement shall be deemed to have been revised in
accordance with the Agreement).
#4842-7987-2321
3. Agreement to be Bound. The Transferee hereby agrees (a) to become a party to
the Agreement as a Commitment Party and Party and as such will have all the rights and be
subject to all of the obligations and agreements of a Commitment Party under the Agreement and
(b) to purchase, pursuant and subject to the terms and conditions set forth in the Agreement and
the BCA Approval Order, such number of Unsubscribed Units and 4(a)(2) Backstop
Commitment Units as corresponds to the Transferee’s Commitment Percentage. For the
avoidance of doubt, the Transferee’s Commitment Percentage as of the date hereof is set forth on
the signature page hereto (and Schedule 1 to the Agreement shall be deemed to have been
revised in accordance with the Agreement); provided, however, that such Transferee’s
Commitment Percentage may be increased or decreased after the date hereof as provided in the
Agreement and the BCA Approval Order.
4. [Continuing Obligations of Transferor. Nothing in this Joinder shall be construed
to relieve the Transferor from any of its obligations under the Agreement.]/[Release of
Obligations of Transferor. Upon consummation of the Subject Transfer, the Transferor shall be
deemed to relinquish its rights (and be released from its obligations, except for any claim for
breach of the Agreement that occurs prior to consummation of the Subject Transfer) under the
Agreement to the extent of the Commitments Transferred in the Subject Transfer.]4
5. Representations and Warranties of the Transferor. The Transferor hereby
represents and warrants that (a) the Subject Transfer has been approved by the Requisite
Commitment Parties; (b) [the Subject Transfer has been consented to by the Company]/[it has
agreed to remain obligated to fund the Commitments to be Transferred in the Subject Transfer]
and (c) the Subject Transfer does not violate any of the provisions contained in Section 2.6(e) of
the Agreement.
6. Representations and Warranties of the Transferee. The Transferee hereby makes,
to each of the other Parties, as to itself only and (unless otherwise set forth therein) as of the date
hereof and as of the Closing Date, the representations and warranties set forth in Article V of the
Agreement.
7. Governing Law. This Joinder shall be governed by and construed in accordance
with the laws of the State of New York without regard for any conflict of law principles that
would apply the laws of any other jurisdiction, and, to the extent applicable, the Bankruptcy
Code.
8. Notice. All notices and other communications given or made to the Transferee in
connection with the Agreement shall be made in accordance with Section 10.1 of the Agreement,
to the address set forth under the Transferee’s signature in the signature pages hereto (and the
Agreement shall be deemed to have been updated to include such notice information for the
Transferee).
[Signature pages follow]
4 NTD: For the avoidance of doubt, the Transferor will only be released from its obligations if there has been a
consent to the Transfer.
#4842-7987-2321
I IN WITNESS WHEREOF, each of the undersigned parties has caused this
Joinder to be executed as of the date first written above.
TRANSFEROR:
[ ]
By: ______________________________________
Name:
Title:
Address 1:
Address 2:
Attention:
Facsimile:
Email:
Commitment Percentage:
TRANSFEREE:
[ ]
By: ______________________________________
Name:
Title:
Address 1:
Address 2:
Attention:
Facsimile:
Email:
Commitment Percentage:
Acknowledged and Agreed to:
VANGUARD NATURAL RESOURCES, LLC
As a Debtor
By: ______________________________________
Name:
Title: